August 19, 2024
Until the middle of 2022, the conventional wisdom was that almost every interlocutory order could be addressed on an appeal from a judgment. Then, the Court of Appeals decided Bonczar v American Multi-Cinema, Inc. (38 NY3d 1023 [2022]) and changed what was once considered a simple rule. After Bonczar, only arguments about an order that would result in a reversal of the judgment can be raised on a post-judgment appeal. This limits the potential arguments that can be raised after the entry of judgment and impacts the attorney’s strategic decision-making. If an appeal is lost after the entry of judgment, the risk of not taking an appeal dramatically increases.
At the heart of Bonczar’s paradigm shift are two critical words within CPLR 5501(a): “necessarily affects.” The interpretation of these words has historically lacked clear definition. “Various tests have been proposed, but how to apply them to particular cases is not self-evident, and [the Court of Appeals’] decisions in this area may not all be consistent” (Oakes v Patel, 20 NY3d 633, 644 [2013]). When the Court of Appeals acknowledges its own inconsistencies, it serves as a stark warning to litigators to exercise meticulousness in their decision-making processes.
Bonczar began with the plaintiff obtaining summary judgment on the issue of liability from the motion court, only for the Appellate Division to find that there were questions of fact. Rather than ask the Appellate Division for permission to appeal to the Court of Appeals, the plaintiff proceeded to trial. The jury rendered a defendant’s verdict, and the Appellate Division affirmed the judgment of dismissal. The Court of Appeals gave the plaintiff permission to appeal at that point.
Unfortunately for the plaintiff, the Court of Appeals granted permission to appeal to interpret the words “necessarily affects,” not whether the plaintiff was entitled to summary judgment. Even more unfortunate, the Court of Appeals concluded that the summary judgment appeal did not “necessarily affect” the judgment and refused to consider the Appellate Division’s order, which found that the plaintiff had to proceed to trial. The Appellate Division’s summary judgment order did not “necessarily affect” the judgment because it found that there were questions of fact. Thus, “[t]he parties had further opportunity to litigate those issues and did so during the trial” (Bonczar at 1026). In fact, at the trial, the parties presented evidence that was not presented to the motion court during summary judgment (id. n1).
After the Court of Appeals decided Bonczar, the Appellate Division began to use it as a basis to dismiss appeals. For example, in Stanescu v Stanescu (206 AD3d 1031 [2d Dept 2022]), the Second Department dismissed a plaintiff’s post-judgment appeal from an order denying summary judgment to the plaintiff. The court adopted the reasoning in Bonczar, holding that the: “[t]he [summary judgment] order did not strike at the foundation on which the final judgment was predicated, nor did it necessarily remove any legal issues from the case, since the parties had further opportunity to litigate those issues and did so during the trial” (Stanescu, 206 AD3d at 1034 [internal citations and quotation marks omitted]).
Bonczar and its progeny provide an added incentive for taking interlocutory appeals. The right to raise those arguments may be lost forever if the appeal is not resolved before a judgment is entered. This risk is exceptionally high when it comes to summary judgment motions. While, in theory, the trial record should not look much different from the summary judgment record, the reality is that trials are unpredictable. It is unclear what new evidence will arrive. A witness may change their story, or a piece of evidence may be precluded. Also, there is a procedural component to be considered as well. Can your appeal be resolved before the trial without getting a stay of the trial? Ordinarily, a plaintiff would not want a stay of the trial pending appeal. However, Bonczar may alter the analysis. When making that decision, the lawyer needs to think hard about the trial strategy and weigh the risks of the trial against a potentially successful appeal. While a plaintiff obtaining a stay might initially seem like an adverse event, it can be a positive for settlement purposes. The Appellate Division does not routinely hand out orders granting stay motions. If the plaintiff succeeds in getting a stay, it indicates that the plaintiff’s summary judgment appeal has merit. This can be used as solid leverage during settlement negotiations.
Navigating the evolving legal landscape post-Bonczar has increased the significance of a litigator’s strategic decisions. The shift in the interpretation of “necessarily affects” within CPLR 5501(a) has reshaped the parameters of post-judgment appeals, underscoring the critical timing and nature of interlocutory appeals.
Each case demands a tailored, strategic approach, especially considering evolving precedents like Bonczar. Consulting with appellate counsel can provide a unique perspective, helping litigators form their strategy. Contact us to discuss the strategy of your case.