Summary Judgment In Declaratory Judgment Action Final Despite Pending Questions

Universal Insurance Co. sued Judge & James for legal malpractice. Universal claimed that J&J did not file a timely notice of appeal after a summary judgment against Universal was entered in a declaratory judgment action.

J&J had represented Universal in the declaratory judgment case brought by Heflin, an auto accident victim, to determine underinsured insurance coverage. In a summary judgment proceeding, the court declared that Universal owed insurance coverage. J&J’s motion to reconsider that ruling was denied. Instead of appealing the summary judgment, J&J filed certain discovery motions. The trial court ruled that its order on the motion to reconsider was final. Because that final order was more than 30 days old, the court also ruled that it did not have jurisdiction to rule on J&J’s discovery motions.

Universal and Heflin were ordered to arbitrate the insurance claim. That ended in an award of more than $2.9 million, which Universal was ordered to pay.

Universal then sued J&J for malpractice, raising, among other things, the failure to perfect the appeal from the summary judgment that declared insurance coverage existed. In this malpractice lawsuit, J&J prevailed on summary judgment. But Universal appealed, and the First District Appellate Court reversed.

The parties disputed whether the trial court’s declaration of coverage in Hefin’s underlying case was a final order that ought to have been appealed within 30 days. J&J argued that the coverage declaration was not final because it did not award money damages, did not state the precise nature of the coverage, and did not order the parties to arbitrate.

The appellate court rejected those arguments, stating, “. . . [A] declaratory judgment has the force of a final judgment with respect to the rights of the parties to that judgment . . . Finality attaches to a declaratory judgment on the date judgment is entered.” Heflin’s underlying complaint asked only for a declaration of coverage – not damages, or an order to arbitrate, or anything else. “Accordingly, the court’s July 31, 1995 order granted Heflin all of the relief she sought in her declaratory judgment action. The order fixed absolutely the rights of the parties on the issues raised in Heflin’s complaint concerning the issue of coverage and left no issues remaining. Therefore, the judgment was final and appealable as of the date of its entry.

See the whole opinion, Universal Underwriters Insurance Co.v. Judge & James, Ltd., No. 1-05-4138 (3/30/07), by clicking here.