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August 14th, 2015

Appealability Step One: What is the Effect of this Order?

One of the first things an appellate court looks for when considering an appeal is whether the issues raised are appealable.  If an issue is not appealable, the court does not have jurisdiction to hear the case.  How do you determine is an issue is appealable?  Section 14-3-330 of the South Carolina Code governs the immediate appealability of a trial court’s order.  Unfortunately, the statute is not all that helpful in figuring out whether an order is appealable because it contains imprecise language such as “affecting a substantial right” and “in effect determines the action.”  Why can’t the statute list the exact types of orders that are immediately appealable, for example, orders granting summary judgment, compelling discovery, or ordering arbitration?  This would not work because an order is not always what it seems or, rather, what it is labeled.

The Supreme Court’s recent opinion in Morrow v. Fundamental Long-Term Care Holdings, LLC, Op. No. 27532, 24 (Sup. Ct. June 17, 2015) (Shearouse Adv. Sh. No. 23), is a great example of why appealability is decided on a case-by-case basis focused on the effect of an order, not its label.  It is an attorney’s role to determine the actual effect of an order and explain that to the appellate court.

Morrow is a nursing home abuse case in which the Plaintiffs alleged negligence claims against the home, Magnolia Place of Spartanburg, LLC, and vicarious and direct corporate liability claims against various related corporate entities.  The corporate entities made a motion to bifurcate the nursing home negligence and direct corporate negligence claims under Rule 42(b), SCRCP.  The trial court granted the motion, holding the Plaintiffs could pursue the direct corporate negligence claims against the entities only if they first successfully proved a negligence claim against the nursing home.  The Plaintiffs appealed, and the Court of Appeals held the “bifurcation” order not immediately appealable.

The Supreme Court granted the Plaintiffs’ writ of certiorari and reversed the Court of Appeals.  The Plaintiffs argued the trial court conflated their vicarious and direct corporate liability claims by holding that the ability to move forward on both depended on first proving the negligence of Magnolia Place.  The Supreme Court agreed, and held the “bifurcation” order immediately appealable because it “effectively grants the Fundamental Entities potential summary judgment on the issues of direct corporate liability.”  The Court disregarded the characterization of the order as one of bifurcation and, instead, looked to the effect of the order.  It held the “effect of this order is to prevent the Morrows from being architects of their own complaint, and deprives them of bringing their case against the defendant of their own choosing.”

Morrow emphasizes the importance of determining the true effect of an order, regardless of its title or supposed effect, to establish appealability.