Orders entered prior to a judgment typically are not appealable unless they are separately listed in Code of Civil Procedure section 904.1, the statute defining what orders are appealable. One exception is for collateral orders. A collateral order an order that has nothing to do with the merits of the lawsuit. So when a collateral order is also a final order, it is really more like a final judgment on that particular tangent than it is an interlocutory order along the way to the judgment in the main case. In which case, there is no point in waiting until the end of the lawsuit before appealing that final order.
One example of a collateral order is in the relatively rare published order (in contrast to an opinion) dismissing the appeal in Dr. V Products v. Rey (D2d5 Sep. 8, 2021) 2021 WL 4129463 no. B312605. The collateral order there is an order denying a motion for attorney fees following dismissal of a misappropriation claim, which claim allegedly was filed in bad faith, thus entitling the prevailing defendant to fees under Civil Code 3426.4. The order denying fees was collateral to the merits. And it was final. But still, the Second District Court of Appeal held — and rather unequivocally — that the order was not appealable as a collateral order.
Why? Because the order, though final and collateral, did not order the payment of money or performance of an act. And that is a necessary element in making a collateral order appealable.
Except, that is, in courts subscribing to the minority view.
The Two Required Elements for Appealability of a Collateral Order, and the Controversial Third Element:
The court first set out the standard for what constitutes an appealable collateral order: “An appeal is allowed if the order is a final judgment against a party in a collateral proceeding growing out of the action.” (Sjoberg v. Hastorf (1948) 33 Cal.2d 116, 119 (Sjoberg).) “To qualify as appealable, the interlocutory order must be a final determination of a matter that is collateral — i.e., distinct and severable — from the general subject of the litigation.” (Koshak v. Malek (2011) 200 Cal.App.4th 1540, 1545.)
The court then went on to note a third requirement: collateral orders in this context typically involve the direct payment of money or performance of an act. (See, e.g., Apex LLC v. Korusfood.com (2013) 222 Cal.App.4th 1010, 1016 (Apex); Marsh v. Mountain Zephyr, Inc. (1996) 43 Cal.App.4th 289, 297-298.) The court noted "the present case involves neither — the court refused to order respondent to pay attorney fees; the court did not order the performance of any other act."
But the court also noted that this is merely the "majority view," and that there is another supported view that a final collateral order may be appealable even if it does not involve the payment of money or performance of an act. (See Muller v. Fresno Comm. Hosp. & Med. Ctr. (2009) 172 Cal.App.4th 887, 901-905 [order denying sanctions appealable because "there is no judgment and there may never be a judgment"].)
Dr. V made the point that appealability statutes are not always reciprocal, so neither need be the collateral order doctrine. For example, orders denying a motion to compel arbitration are appealable, but not orders granting a motion to compel arbitration.
Shaking its head at the minority view, Dr. V had this to say: "As for those courts that have not faithfully followed the Supreme Court's opinion in Sjoberg, the [Conservatorship of Rich (1996) 46 Cal.App.4th 1233] court had this to say: “We consider this line of cases aberrant. In the seminal case articulating the exception, Sjoberg [citation], Justice Traynor could not have been more clear that such an order must pass two tests to be appealable: ‘It is not sufficient that the order determine finally for the purposes of further proceedings in the trial court some distinct issue in the case; it must direct the payment of money by the appellant or the performance of an act by or against him.' ” (Rich, supra, at p. 1237.)"
Two Comments:
One important wrinkle that Dr. V did not address concerning the requirement that there be a payment of money or performance of an act is in the example of orders on motions to tax costs. Such orders do not literally direct payment of money, so they are not appealable as a collateral order, said the Second District in Barnes v. Litton Systems, Inc. (1994) 28 Cal.App.4th 681, 685, fn. 4. Yet there is "no meaningful distinction between an order awarding costs and an order denying a motion to tax costs," so orders denying motions to tax are appealable collateral orders, said the Fourth District in Krikorian Premiere Theatres, LLC v. Westminster Central, LLC (2011) 193 Cal.App.4th 1075, 1083-1085.
Another concern is that any uncertainty in appealability doctrines can present big problems. If an order is collateral, and it is final, then that may mean the trial court has no jurisdiction to revisit it later. The finality of an order also means that the order may not be appealed from a subsequent judgment. Here, the court says that the order denying the defendant's motion for fees was not truly final or collateral, because only one of six causes of action had been adjudicated, so there was no need for piecemeal appeals: "Appellant has an adequate remedy on appeal, just not at this time." But can we be so sure?
In this, the court is referencing the general rule that "Intermediate rulings . . . are reviewable on an appeal of the final judgment." (Johnson v. Alameda County Medical Center (2012) 205 Cal.App.4th 521, 531.) But not so fast. First, this rule only applies to prior orders that are nonappealable. So litigants must be certain about appealability before relying on this rule. And second, the rule is codified at Code of Civil Procedure section 906, which provides the rule only applies to orders that involve the merits or the rights of a party — i.e., specifically not collateral orders. Section 906 states, in part, that the appeal from the ultimate judgment subsumes "any intermediate ruling, proceeding, order or decision which involves the merits or necessarily affects the judgment or order appealed from or which substantially affects the rights of a party...."
So if there is any doubt whether an order is a final collateral order, cautious litigants should assume the affirmative and proceed as if the order is appealable. Uncertainty in the law is deadly.
Tim Kowal helps trial attorneys and clients win their cases and avoid error on appeal. He co-hosts the Cal. Appellate Law Podcast at www.CALPodcast.com, and publishes a newsletter of appellate tips for trial attorneys at www.tvalaw.com/articles. His appellate practice covers all of California's appellate districts and throughout the Ninth Circuit, with appellate attorneys in offices in Orange County and Monterey County. Contact Tim at tkowal@tvalaw.com or (714) 641-1232.