Who Says So? The Court—Or Does It?

Reprinted with permission of Minnesota Lawyer ©2014

Last month I wrote about the precedential value of an appellate decision issued by an evenly divided court. I raised some questions regarding precedent, including who makes it and how it is made. Continuing the theme, this month we take a look from a slightly different perspective. What do you do when the appellate courts say directly contradictory things on the same legal issue?

It doesn’t happen often, but once in a while, a question arises that reveals two lines of Minnesota appellate cases on the same subject that reach inconsistent results. Of course, district courts sometimes reach inconsistent results, and different jurisdictions often are divided on a particular question of law.  And on occasion, an appellate court that sits in panels may have two panels that just don’t agree, and they state that disagreement directly.  In Gray v. Commissioner of Public Safety, 505 N.W.2d 357 (Minn. Ct. App. 1993) and Ascher v. Commissioner of Public Safety, 505 N.W.2d 362 (Minn. Ct. App. 1993), two panels of the Court of Appeals issued opinions on the same day, reaching diametrically opposite conclusions regarding the constitutionality of “sobriety checkpoints.” That conflict was short-lived, however, as the Supreme Court granted further review in both cases, reversing Gray and affirming Ascher.

But a direct and unresolved conflict between two lines of Minnesota appellate cases on the same subject is a rarity.  And it is nearly unheard of when the two lines of cases fail completely to recognize each other. Not two trains passing in the night, but two trains ostensibly going to the same place, but on different tracks with different destinations. Which ticket do you buy?

A recent case revealed one such rare unresolved conflict, but did not result in a resolution. In Owens v. Voyager Financial Services Corp., Owens’ employment claims were heard by a panel of three arbitrators. Voyager moved to vacate an award for Owens based in part on the evident partiality of one of the arbitrators. The district court granted Voyager’s motion to vacate the arbitration award. The respondents then asked the court to order a new hearing before a different panel of arbitrators, asserting that the propriety of the vacatur would be reviewable on any appeal from confirmation of a second award. The district court denied the request for a hearing, citing its desire to permit Owens to appeal immediately. An order vacating an award and directing a new hearing is not appealable under the Minnesota Uniform Arbitration Act; the statute does not address the appealability of a vacatur with no rehearing, although without one, the party seeking relief has no remedy.  Owens appealed.

The Court of Appeals questioned its jurisdiction to hear the case, raising, among other issues, the issue of whether the vacatur order was reviewable on appeal from any subsequent judgment after a new hearing. The court pointed the parties to its prior decision in Minnesota Teamsters Public & Law Enforcement Employees Union, Local No. 320 v. County of Carver, 571 N.W.2d 598, 599-600 (Minn. Ct. App. 1997), which held that in an arbitration proceeding, because a rehearing on all issues supersedes the original hearing, the order that vacated the original award and directed a rehearing is not reviewable on appeal from a judgment confirming the second award.
In providing their answer to the question, the respondents identified an unrecognized conflict between two lines of Minnesota cases addressing whether an order granting a new trial can be reviewed after a final judgment following the second trial. They then urged the Court of Appeals to follow the line of cases that allowed review, arguing that appellate jurisprudence favored a single unitary appeal, and the contrary rule would in many instances result in two appeals in the same case.

In one line of cases, the appellate courts concluded that an order granting a new trial makes the first trial a nullity and all that matters is the second trial.  Under that reasoning, the order granting the new trial is not reviewable after the second trial since the first trial no longer exists and whatever happened during that trial to warrant a new trial is no longer relevant. The Minnesota Supreme Court reached this conclusion in Patton v. Minneapolis Street Railway Co., 245 Minn. 396, 71 N.W.2d 861 (1955).  Patton relied on a series of cases stating that the effect of an order granting a new trial is to set all the evidence and proceedings aside as if there had been no trial.  More than twenty years later, the Minnesota Supreme Court again refused to review an order granting a new trial on all issues in Quast v. Prudential Property & Casualty Co., 267 N.W.2d 493 (Minn. 1978). The Quast court acknowledged that an order granting a new trial is appealable if it vacates a judgment. But the court went on to say that “the fact that the appeal is taken after the second trial makes the order granting that trial nonreviewable.” 267 N.W.2d at 495. The Court of Appeals cited Patton and Quast in Minnesota Teamsters, as though the issue were settled.  But wait, there’s more.

While not saying anything about them in Quast or Minnesota Teamsters, both courts had reached exactly the opposite conclusion in cases decided after Patton.  In Jangula v. Klocek, 284 Minn. 477, 170 N.W.2d 587 (Minn. 1969), the Minnesota Supreme Court, without citing its opinion in Patton, reviewed a district court’s order granting a new trial on the issue of damages on appeal from the judgment entered after the second trial. Jangula relied instead on the proposition that, on appeal from a judgment, the court can “review any intermediate order involving the merits or necessarily affecting the judgment.”  284 Minn. at 482, 170 N.W.2d at 591. The Minnesota Court of Appeals reached a similar conclusion in Muehlstadt v. City of Lino Lakes, 466 N.W.2d 56 (Minn. Ct. App. 1991). There the appeal initially was taken from an order denying a motion for a new trial on damages after the second trial. In that context, the Court of Appeals questioned its jurisdiction to review the order granting a new trial after the first trial. The appellants then perfected appeals from the final judgment entered after the second trial. On appeal from the final judgment, the Court of Appeals had no trouble concluding that the order granting a new trial after the first trial was comfortably within the scope of its review. Muehlstadt, 466 N.W.2d at 58.  Like the Supreme Court in Jangula, the Court of Appeals never even mentioned its earlier decision that reached a directly opposite conclusion.

In Owens, the court of appeals was faced with this seemingly irreconcilable conflict between not only its own cases, but the precedent established by the Minnesota Supreme Court.  On top of that, there was the fact that the refusal of the trial court to order a new hearing raised serious questions as to the finality, and appealability, of the vacatur order.  After all, the case was clearly not over, and the usual rule is that all merits proceedings in the district court have to be finished before an appeal can be taken. Faced with this procedural morass, the Court of Appeals decided to grant discretionary review under Minn. R. Civ. App. P. 105, so that the appeal could proceed, and the issue of the propriety of the vacatur could be addressed on appeal. Whether that decision was right or wrong, it was profoundly practical.  The case settled shortly afterward.
Precedent is not always so easy to identify and apply.  Finding a case that supports your client’s position may not be the end of your research, if there are other cases that seem to go the other way.  And if you do find one of those rare instances, the best course is to lay it all out for the court, and then argue for your client’s position as the right way to resolve the conflict.  After all, that is what lawyers are supposed to do.