Stone Group Holdings LLC v. Ellison.
2024 COA 10. No. 23CA0004. Remedies—Damages—Prejudgment Interest—Final Appealable Order—Lack of Appellate Jurisdiction.
January 25, 2024
MC2 Boulder LLC, d/b/a Marquis Cannabis (MC2), was a licensed marijuana business whose principals, Ellison and Quinn, agreed to sell two-thirds of their company to Stone Group Holdings LLC (Stone Group). Stone Group subsequently filed a complaint alleging breach of contract against Ellison and Quinn, and for unjust enrichment against MC2, Ellison, and Quinn (defendants). Quinn never responded to the complaint, and the district court entered a default judgment against him. Ultimately, the district court entered three orders that (1) granted summary judgment to Stone Group on its breach of contract claim; (2) awarded attorney fees based on fee-shifting language in the parties’ contract; and (3) sanctioned Ellison, MC2, and their attorney Marcus for failing to disclose certain information during discovery. Stone Group subsequently filed a motion requesting that “final judgment be entered in the present matter,” which the court granted. Ellison, MC2, and Marcus filed a notice of appeal 49 days after the final judgment was entered.
On appeal, Ellison, MC2, and Marcus sought appellate review of three different and separately appealable judgments: the merits ruling on the breach of contract claim, the attorney fees award, and the $6,000 discovery sanction. Defendants filed only a single notice of appeal 49 days after the district court ostensibly entered final judgment on those claims. Here, however, the court’s order entering “final judgment” was superfluous because each of these issues had been fully and finally resolved weeks or months earlier. Accordingly, the court of appeals lacked jurisdiction over this appeal because it was not timely filed.
Stone Group requested an award of appellate attorney fees, arguing that the appeal was frivolous due to lack jurisdiction or, alternatively, that the fee-shifting provision in the parties’ contract requires the losing party to cover the prevailing party’s attorney fees on appeal. The court declined to award fees because (1) the parties misunderstood finality in this case, so the late appeal cannot be considered frivolous, and Stone Group did not allege any misconduct during the appellate proceedings; and (2) when the district court determined that the contract was rescinded, Stone Group was no longer able to receive the benefit of the fee-shifting provision.
The appeal was dismissed and the request for appellate attorney fees was denied.