Sunday, August 24, 2014

When does the fat lady sing?

Appeals can only be taken from a final order of the trial court. A non-lawyer may well presume that a court order saying "you lose" on a motion is final, and will send the case to Annapolis (where our appellate courts are located).


The court order declaring "you lose" is often just an early step in a battle to get to the final-final decision, and your right of appeal. In fact, one of the most common questions our law firm gets from potential clients is "when may I appeal?"  The Maryland Court of Special Appeals explained how this works in a very recent appeal arising from a foreclosure, called Baltimore Home Alliance v. Geesing.

In this case, the third-party purchaser put down $27,000 dollars at the auction but failed to close the deal.  The foreclosing lender declared the third-party in default and asked the circuit court to enter an order permitting a second auction sale, and forfeiture of the deposit.   The circuit court granted the motion, and the property went back up for auction, where it was purchased by another party. The deposit was forfeited to the foreclosing lender.

Seems pretty final, right?  A broken deal, a court order of default and forfeiture of the $27,000 deposit and a resale of the property.The Baltimore Home Alliance thought so, and it filed an appeal with the Maryland Court of Special Appeals.

The case was not final, and the appeal was premature.  But why?

In the context of foreclosures, it is the final auditor's report that signals the fat lady to tune up. Once the court approves the audit, then all prior decisions are deemed final for purposes of appeal. And so while the court ordered that the third-party buyer's $27,000 was forfeited to the foreclosing lender, it did not say whether it would be a credit against other damages incurred because of the lost sale.  That would show up in the auditor's report. And even then, the parties could object to the auditor's treatment of the court's order and make argument for their positions at a hearing. Only after disposition of those objections is the forfeiture order, entered much earlier in the case, deemed final.

And so, "finality" is not the same in every case.  It depends on the nature of the action, the number of parties, and the stage of the proceeding when the adverse ruling was made. What seems final to you may just be the beginning of the next fight.

The Fat Lady sings a different tune in every case.