C.W. RICHARDSON, Greg Richardson, and CWR Construction, Inc. v. Carl and Norlene RODGERS

Arkansas Supreme Court1997-07-14No. 96-483

329 Ark. 402947 S.W.2d 778

Summary · law.co

Holding. The appeal is dismissed because the trial court's judgment is not final and appealable under Arkansas Rule of Civil Procedure 54(b), as it fails to adjudicate all claims, including the intervening workers' compensation insurer's subrogation claim.

Carl Rodgers and his wife sued contractors C.W. Richardson, Greg Richardson, and CWR Construction, Inc. for injuries sustained when a water pipe fell on Mr. Rodgers during courthouse renovation work. After CWR failed to file a responsive pleading, a default judgment was entered against them for $1.45 million in damages to Mr. Rodgers and $50,000 for Mrs. Rodgers's loss of consortium. American States Insurance Company, the workers' compensation carrier for Mr. Rodgers's employer, had intervened in the lawsuit seeking subrogation rights to recover amounts it had paid in medical and disability benefits. CWR appealed the default judgment, arguing that the defendant insurance company's answer denying liability should have protected them from default.

The appellate court dismissed the appeal because the judgment did not address the disposition of American's intervening claim and lacked findings that would justify a piecemeal appeal under the civil procedure rules. The court determined that American's subrogation claim was not merely collateral to the underlying dispute between the Rodgerses and CWR, and therefore the trial court was required to resolve it before issuing a final, appealable judgment. Because the record did not show what happened to American's claim—or even whether its intervention was formally granted—the judgment was incomplete and not properly before the appellate court.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Finality of judgment when intervenor's claim is not addressed
Jurisdiction of appellate court over incomplete judgment
Application of Rule 54(b) requirements for piecemeal appeals

Procedural posture

CWR appealed a default judgment entered against them for failure to answer the Rodgerses' negligence complaint, arguing the defendant insurer's answer should have protected them from default.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

majority opinion

David Newbern, Justice.

This is an appeal from a default judgment. The appeal is dismissed for failure to comply with Ark. R. Civ. P. 54(b).

Carl Rodgers alleged he was seriously injured by a falling water pipe while working on renovation of the Pulaski County Courthouse. Mr. Rodgers was employed by IK Electric Service Co., a subcontractor on the project. Mr. Rodgers and his wife, Norlene Rodgers, brought a negligence action to recover damages resulting from his injury and Ms. Rodgers’s loss of consortium. The defendants were C.W. Richardson, Greg Richardson, CWR Construction, Inc. (referred to collectively as “CWR”), and Central Arkansas Risk Management (“CARM”). CWR Construction, Inc., was named as the prime contractor. The action against CARM was a direct action against the County’s insurer.

In a timely answer, CARM denied liability. American States Insurance Company (“American”), the workers’ compensation insurance carrier for IK Electric Service Co., filed a motion to intervene and a complaint in intervention. CWR failed to answer, and a default judgment was entered against them. A hearing was held on damages only, and awards totaling $1,450,000 and $50,000 were awarded to Mr. and Mrs. Rodgers, respectively, against CWR.

Based on its contention that CARM’s answer denying negligence inured to CWR’s benefit, and thus that there had been no default, CWR moved to set the default judgment aside pursuant to Ark. R. Civ. P. 55(c).

American’s intervention complaint sought subrogation to the rights of Mr. Rodgers against the defendants. It stated that American had paid Mr. Rodgers $10,783.95 in medical payments and $19,192.42 in temporary total disability and permanent disability payments. The complaint also alleged that the payments to Mr. Rodgers were for the injuries he received due to CWR’s negligence. The record does not disclose the disposition of American’s claim.

The parties have not raised the question of the finality of the judgment or the failure to comply with Rule 54(b). When counsel were asked about the matter during oral argument, the response was that the claim of American was only a subrogation matter somehow subsumed in the position taken by the Rodgerses.

While it is true that American and the Rodgerses are on the same side vis-á-vis CWR and CARM, that is not so as between them, and we have no idea whether American’s intervention claim was adjudicated.

The failure to comply with Rule 54(b), indicated by the absence of an order adjudicating the rights of all parties is a jurisdictional issue that we are obligated to raise on our own. Maroney v. City of Malvern, 317 Ark. 177, 876 S.W.2d 585 (1994); State Farm Mut. Auto Ins. Co. v. Thomas, 312 Ark. 429, 850 S.W.2d 4 (1993). To be final and appealable, an order must cover all of the parties and all of the claims. Maroney v. City of Malvern, supra; Williamson v. Misemer, 316 Ark. 192, 871 S.W.2d 396 (1994).

An order is not appealable when it fails to mention an intervenor’s claim and contains no recitation of facts which would allow a piecemeal appeal under Ark. R. Civ. P. 54(b). Kinkead v. Spillers, 321 Ark. 552, 940 S.W.2d 437 (1997); Maroney v. City of Malvern, 317 Ark. 177, 876 S.W.2d 585 (1994); Martin v. National Bank of Commerce, 316 Ark. 83, 870 S.W.2d 738 (1994); South County, Inc. v. First Western Loan Co., 311 Ark. 501, 845 S.W.2d 3 (1993).

In Martin v. National Bank of Commerce, supra, we wrote,

We do not reach the merits of appellant’s claim because the trial court did not dispose of the intervenor’s claim as is necessary-pursuant to ARCP Rule 54(b). The order appealed from does not mention the intervenor’s claim nor does it mention any facts that would allow a piecemeal appeal under Rule 54(b). As was the situation in South County, Inc. v. First Western Loan Co., 311 Ark. 501, 845 S.W.2d 3 (1993), the record does not reflect what happened to the intervenor’s claim. Therefore the order appealed from disposes of less than all the claims in this suit and is not a final, appealable order. Id.

Most recently in Kinkead v. Spillers, supra, we again dismissed because we found no mention of the disposition of the claim of an intervening lienor, Boatmen’s Bank, in a property dispute between two other parties. We noted that intervention had been granted and thus there was no issue in that respect but we could not tell what had happened to the claim. Here we cannot even tell whether the intervention of American was allowed or whether there may be issues concerning the intervention which may be subject to appeal. In the Kinkead case we wrote that the lien of Boatmen’s Bank could not be protected by one of the parties to the underlying litigation and that “Boatmens’ claim is not merely collateral to the [underlying dispute] and should be decided when disposing of the [underlying dispute].” The same is true of American’s subrogation claim.

CWR has failed to meet its burden of producing a record showing that the jurisdictional requirements of Rule 54(b) have been met. See Cortese v. Atlantic Richfield, 320 Ark. 639, 898 S.W.2d 467 (1995).

Appeal dismissed.

Glaze, Imber, and Thornton, JJ., not participating.

Special Justices Warren E. Dupwe, Paul E. Lindsey, and David G. Nixon join in this opinion.