This Is Not A Pipe. This Is Not A Final, Appealable Order

July 1, 2019

This is not the Broke And Broker Blog. This is not an article in that blog. This is not an article about a FINRA Arbitration. This is not an article about the appeal of that FINRA Arbitration. This is not an article about the appeal of a court's order about the arbitration. This is not a pipe.

2013 FINRA Arbitration Decision

In a FINRA Arbitration Statement of Claim filed in July 2012, FINRA member firm Barclays Capital, Inc. asserted breach of contract against associated person Respondent Schwartz arising from his alleged failure to repay an unpaid balance on a promissory note that was triggered upon his May 2012 termination. Claimant sought $342,857.14 in compensatory damages plus interest, fees, and costs. 
In the Matter of the Arbitration Between Barclays Capital, Inc., Claimant, v. Michael Schwartz, Respondent (FINRA Arbitration Decision 12-02453 / September 19, 2013).

Respondent Scwhartz generally denied the allegations, asserted various affirmative defenses, and file a Counterclaim asserting  breaches of oral agreement and the implied covenant of good faith and fair dealing; fraudulent inducement; declaratory judgment; tortious interference with prospective economic advantage; unjust enrichment; and violation of Illinois Wage Payment and Collection Act. Further, Respondent sought the expungement of the matter from his Central Registration Depository record. As set forth in the the FINRA Arbitration Decision:

The causes of action related to Respondent's allegations that Claimant had no intention of allowing him to pursue his business model. Respondent alleged that Claimant's sole aim was to induce Respondent to bring his client relationships to the firm so that Claimant could exploit those relationships. Respondent also alleged that once Claimant was successful, it tried to drive Respondent out by denying to pay Respondent origination fees.  

The FINRA Arbitration Decision states that:

Michael Schwartz ("Respondent") was represented by Jonathan F. Feinstein, Esq., Tressler LLP, Chicago, Illinois until June 5, 2013. After that date, Respondent appeared pro se.

In August 2013, after the law firm's representation had cease and Respondent Smith proceeded pro se, he filed a Request for Sanctions, which was opposed and subsequently withdrawn by Smith at the hearing.

The FINRA Arbitration Panel denied Respondent Schwartz's Counterclaim and his request for an expungement. The Panel found Schwartz liable and ordered him to pay to Claimant Barclays $314,286 in compensatory damages, $9,603 in interest, $244,679 in attorneys' fees. 

2017 Tressler Illinois Circuit Court Lawsuit

Schwartz's former law firm, Tressler LLP, filed a breach of contract action against him pursuant to its writtein fee agreement under which it was retained to represent him during the FINRA Arbitration involving Barclays. Tressler asserted that it had performed $83,573.43 in hourly work and was owed a balance of $27,475.93 plus additional fees and costs. Schwartz argued that the parties had "orally" agreed to a $60,000 cap on attorneys' fees, and, accordingly, he did not owe any money to his former law firm because he had, in fact, paid $71,097.50. The law firm denied having entered into the alleged oral fee-cap agreement. 

On August 28, 2017, the Circuit Court entered judgment in favor of Tressler in the amount of $27,475.93, with costs of $536; and, the Court further awarded attorneys' fees in an amount to be subsequently determined. The Court's Order provided for Tressler to submit a bill of particulars setting out its fees and costs, and a future hearing date on the fees' award was set for November 13, 2017. The Circuit Court Order had a box checked which stated: "Order Final and Appealable."

2017 Schwartz Appeal

September 27, 2017, filed a Notice of Appeal of what he characterized as the "final order of August 28, 2017;" and also the Order of the same date denying his pretrial verbal motion to suppress evidence, and the July 31, 2017, order denying his motion to suppress evidence. 

Also on September 27, 2017, Tressler filed a motion requesting leave to file a bill of particulars, which requested $20,375 for attorney fees.

On November 15, 2017, Schwartz filed a Motion to Vacate the August 28, 2017, judgment. Schwartz alleged that upon reviewing Tressler's bill of particulars and itemized billing, he discovered that the law firm had violated his federal bankruptcy stay between the dates of May 6 and June 1, 2015, at which time the law firm had allegedly engaged a special process server, drafted a motion and a second alias summons, and attended court to present the same. Schwartz asserted that these collection actions violated the bankruptcy stay and rendered the judgment void. 

On January 17, 2018, the Circuit Court entered an Order awarding Tressler $22,650 in attorneys' fee. The Circuit Court made no ruling on Schwartz's motion because he had filed an appeal to the Appellate Court. 

Schwartz Appeal

In appealing the Circuit Court's judgment, Schwartz representing himself pro se, argued that:

 On appeal, Schwartz, who proceeded pro se in the circuit court and before this court, contends that the Circuit Court:
(1) had jurisdiction to review his motion to vacate; 
(2) should have found its order void due to violation of the bankruptcy stay; and 
(3) abused its discretion with respect to evidentiary rulings at trial. 

Tressler, LLP, Plaintfiff/Appellee, v. Michael Schwartz, Defendant/Apellant (Opinion, Illinois Appellate Court, 1-17-2367, June 29, 2019)

In considering Schwartz's appeal, the Appellate Court only addressed whether it had jurisdiction. As set forth in part in the Appellate Court's Opinion:

The initial question, then, is whether this was a final judgment. We find that the August 28, 2017, order was not a final, appealable order. "A judgment or order is final for purposes of appeal if it disposes of the rights of the parties, either on the entire case or on some definite and separate part of the controversy, and, if affirmed, the only task remaining for the trial court is to proceed with execution of the judgment." Brentine v. DaimlerChrysler Corp., 356 Ill. App. 3d 760, 765 (2005). ¶ 17 

The August 28, 2017, order found in favor of Tressler on the breach of contract claim and awarded Tressler $27,475.93, in damages and $536 in costs. It further ordered that Tressler was awarded attorney fees incurred in pursuing the matter. Thus, the order made a final determination on the breach of contract claim, but it did not determine the amount of attorney fees that Schwartz owed for Tressler's pursuit of the claim. The order set forth a schedule for submission of a bill of particulars, a response, and a hearing date on the attorney fees issue. 

Ummm . . . what?  The Order that was checked-off with the notation "Order Final and Appealable," was not final and, accordingly, not appealable?

I'll let the Appellate Court offer its own answer to my question:

The form judgment order that defendant appeals from has a checked box, which states "Order Final and Appealable," with no additional notations. This is insufficient to confer jurisdiction under Rule 304(a). Rule 304(a) allows an appeal from an order that fails to dispose of all claims only if the trial court has made an express written finding that there is no just reason for delaying the enforcement or appeal of the order. See id. Because the August 28 order contained no such notation, language, or express written finding, the notice of appeal was premature and does not give us jurisdiction.  

We conclude that the judgment became final the following year when the circuit court entered the January 17, 2018, order awarding Tressler $22,650 in attorney fees. This order disposed of all the rights and claims of the parties and the only task remaining was execution of the judgment. See Brentine, 356 Ill. App. 3d at 765. 

Schwartz has taken contradictory positions with respect to whether the August 28, 2017, order was the final and appealable order. In his notice of appeal and in his motion to vacate filed in the trial court, he asserted that the August 28, 2017, order was the final and appealable order. On appeal, he contends that the August 28, 2017, order became final and appealable when the trial court entered the January 17, 2018, order and retroactively rendered his notice of appeal effective. Schwartz argues that, under Illinois Supreme Court Rule 303(a)(2) (eff. July 1, 2017), his notice of appeal filed on September 27, 2017, became effective upon entry of the January 17, 2018, order. 

At Page 5 of the Appellate Court Opinion

In dismissing Schwartz's appeal based upon lack of jurisdiction, the Appellate Court made this finding:

[S]chwartz filed what was purported to be a section 2-1301 motion attacking the August 28 order, on November 15, 2017. A Section 2-1301 motion to vacate a final order or judgment must be filed within 30 days of entry of the order. 735 ILCS 5/2-1301(e) (West 2016). However, because this was not a final judgment, this motion was not an attack on the final judgment; it was, in essence, a motion to reconsider an interlocutory order on the judgment amount that was entered in August. Schwartz also did not attempt to file this motion again when the actual final judgment was entered in January 2018. If he had done so, and the court denied the motion, the judgment then becomes final, and the notice of appeal then becomes effective. Schwartz failed to file a timely motion attacking the judgment in order to take advantage of this rule. The only way to toll the time for filing an appeal from a final judgment under Rule 303(a)(2) is to file a timely postjudgment motion attacking the final judgment that was entered in January, not August. Thus, the circuit court and this court lack jurisdiction to consider it. See Northern Illinois Gas Co. v. Midwest Mole, Inc., 199 Ill. App. 3d 109, 114 (1990) ("A post-judgment motion to vacate must be actually filed within 30 days of the entry of judgment for the trial court to have jurisdiction to consider it."). Rule 303(a)(2) requires that such postjudgment motions be "timely" filed in order to take advantage of the delayed effectiveness of a premature notice of appeal. Ill. S. Ct. R. 303(a)(2) (eff. July 1, 2017). " ‘To vest the appellate court with jurisdiction a party must file a notice of appeal within 30 days after entry of the judgment appealed from, or within 30 days after entry of an order disposing of a timely post-[judgment] - 6 - motion.' " (Emphasis in original.) Goral, 2014 IL App (1st) 133236, ¶ 20 (quoting Archer Daniels Midland Co. v. Barth, 103 Ill. 2d 536, 538 (1984)). 

Bill Singer's Comment

What we got here is a court document that has a box checked off, and that box advises a pro se litigant that the court's Order is "final and appealable." Except its wasn't actually final. And it wasn't, therefore, appealable. And the way a pro se litigant is supposed to know that is how? Some unsympathetic types might say that a pro se litigant should be aware that by not retaining a lawyer, that the litigant may be charged with knowing stuff that a lawyer would know. Fair enough. But for the fact that attributing such legal knowledge to a lay party isn't all that fair. Frankly, I would have preferred if the Circuit Court had stated in its Order that given the pro se status of the Plaintiff that he is admonished that the Order will only become "final" when that court enters an Order awarding Tressler attorney fees, which would effectively dispose of all the rights and claims of the parties. At that time, pro se litigant Schwartz would have been warned, the Circuit Court's Order becomes "final"and in the eyes of the law "appealable."

Imagine a Court Order

Imagine the admonition in the Order that "This ORDER is FINAL and APPEALABLE"

Imagine a Check Box on that Order next to the admonition

Imagine that the Box is check to indicate "YES" as in "This ORDER is FINAL and APPEALABLE"

Next, imagine a painting of a pipe

Imagine that underneath the painting of a pipe is the admonition "THIS IS NOT A PIPE"