Justice McConnell holds here that parties cannot create an appealable judgment by stipulating to dismiss the remaining claims without prejudice, even if the parties simultaneously agree that the dismissal will be with prejudice if the appeal is unsuccessful. (The classic situation in which such stipulations are employed is when the trial court grants a dispositive motion on a major portion of the case, leaving only a tiny part of the suit for trial).
This ruling is not at all surpising. Facially, it's exactly what you'd think the right result should be. But I think that if you consider the issue more deeply, a contrary holding would be preferable.
First, the practical effect of this rule either grants an unjust windfall to the appellee or results in inefficient and potentially unnecessary adjudication. Imagine that the trial court just gutted your case by dismissing a major component, leaving only a tiny part left for trial. How do you respond? Obviously, one choice is to settle the tiny part and then appeal. But what if the other side won't agree to settle (or the opposing parties can't agree on a proper valuation)?
Under Justice McConnell's rule, you have two choices. You can choose to dismiss the remaining part with prejudice and then appeal, but this will result in an unjust windfall to the appellee (and undercompensates your client) if the appellate court reverses the dimissal, since now a part of your case -- potentially an entirely legitimate part -- is permanently gone even though the trial court was wrong. Or you can instead choose to take the tiny case to trial and then appeal. But the transaction costs of a trial on the tiny part alone may make such a choice irrational, and hence again undercompensate your client and underdeter the appellee and others like it. Alternately, you might decide to take the tiny part to trial. But this choice both may be socially deleterious (becuase the benefits of adjudication of this tiny part alone aren't worth the attendant costs) and also result in potentially unnecessary adjudication, because you might have been willing to drop the tiny part if the dismissal of the large part is upheld. But under Justice McConnell's rule, you can't enter into such an agreement and still have a permissible appeal, thereby forcing you to litigate the tiny part even though you might have been willing to abandon it. Hence unnecessary adjudication.
Those are fairly big downsides of the rule. The other problem with the rule is that the line between legitimate and illegitimate stipulations is both unclear and problematic. For example, what if the parties stipulate to dimiss the tiny part with prejudice, but simultaneously agree -- perhaps in a separate document -- that in any future suit involving the tiny part, the defendant agrees not to interpose the defense of res judicata (after all, res judicata is an affirmative defense, and waived if not asserted). Are courts really going to start interposing such waived defenses sua sponte? And what about stipulations that settle the tiny part for $X if the appeal is successful and $Y (or $0) if it is unnsuccessful? Do those also preclude appeal? What if the valuation of X is based upon subsequent arbitration? Or is based upon the "degree" of success in the appeal? Or is based upon a number to be "determined in good faith by the parties" -- with the potential that a subsequent dispute over the proper "good faith" number would be resolved in court? Would these settlements also preclude an appeal? The line between legitimate and illegitimate settlements seems both a fairly arbitrary one and one that may be readily manipulated by the parties.
By contrast, I don't see a huge problem at all with letting parties dismiss part of their case and taking the rest on appeal. Especially if -- as here -- the dismissed part goes away forever if the appeal is unsuccessful. This seems the more efficient and equitable rule, rather than forcing a party either to drop the remaining causes of action entirely or try them even though the party doesn't want to.
So I'm not at all surprised by this result, but I think it's a bad policy choice.
