Let's take a look at the decisions that have been issuing recently from the Maine SJC and First Circuit. Starting with the SJC, there's a reach-and-apply decision worth mentioning, Langevin v. Allstate, 2013 ME 55
http://www.courts.state.me.us/opinions_orders/supreme/lawcourt/2013/13me55la.pdf
There are lots of interesting things to discuss about reach and apply actions – when is an agreed-upon judgment between an insured tortfeasor and the injured party deemed collusion; what sort of notice needs to be given to the insurer, when; what happens to burdens of proof if insured's rights are assigned to the injured party; what kind of duty, if any, the insured has to enter a reasonable settlement amount when the insurer refuses to defend; and so on. But none of these issues were discussed in or relevant to this particular decision, so we'll save that discussion for another day.
The decision basically holds that "bodily injury" in a homeowner's policy doesn't include emotional distress from a property-based claim (caveat, of course, that this is based on the specific language of the policy.). Previous case law seemed to say there would be a duty to defend. Here, the insurer won on summary judgment after refusing to defend or indemnify, and the judgment was sustained. The insured tortfeasor had misrepresented property that the plaintiffs bought, resulting in a $330,000 judgment against the tortfeasor (with an agreement not to pursue the tortfeasor, but rather to chase the insurer in a reach and apply action.) So this decision could be important to those folks in the tort world, dealing with this sort of homeowner's policy.
But the riveting aspect of the decision to me was a footnote that was pure dicta. Allstate won on the grounds it had argued and the trial court had accepted below. Footnote 4 provides:
"Allstate also contends on appeal that the [trial] court erred in concluding that the policy’s contract exclusion did not apply to preclude coverage for the Langevins’ claims. Allstate, however, did not file a cross-appeal. Because it failed to preserve its argument regarding the policy’s contract exclusion, we do not address it on appeal. See Lyle v. Mangar, 2011 ME 129, ¶ 22, 36 A.3d 867 (declining to disturb a conclusion of the court when the appellee failed to file a cross-appeal); Millien v. Colby Coll., 2005 ME 66, ¶ 9 n.3, 874 A.2d 397 (same)." (emphasis supplied)
I have blogged multiple times on the murky question of when an appellee can raise alternative grounds in support of a judgment and when it must cross-appeal to assert that ground in a Maine state court. As a public service, I am blogging on this again, and will repeat my warning. The bottom line, as I expressed in those entries, and as I wrote in an ABA practictioner's guide on Maine courts, is you'd better file a cross-appeal.
This footnote only reinforces this conclusion. If the trial court rules against you on any argument that you raised below, then even if the ultimate judgment is in your favor, if the other side appeals, prudency dictates a cross-appeal if you want to raise that argument before the SJC.
Generally speaking, in most other courts, you can raise any "argument" you want on appeal as an appellee to sustain a judgment in your favor. Alternate ground arguments are fine. The usual test for having to cross-appeal is whether you want anything in the judgment itself changed (e.g. another penny more or less of damages). I blogged on a decision in the First Circuit a few years ago that seemed to blur the line between seeking a change in the judgment and raising an argument, so appellees, beware in that court as well, but the general rule is as I've set forth if you wander about appellate texts. Indeed, the Federal Circuit gets quite cranky if you do file a cross-appeal in this context.
There is even some Maine SJC case law that says the same thing: arguing an alternate argument to sustain a judgment is fine.
To me, the general rule allowing alternate arguments makes sense, because you don't have standing to file an appeal unless you are adversely impacted by a judgment. If you win a $1 million judgment, but don't like the basis for it cited by the trial court, you can't appeal (unless you want more $$$). Given this rule of standing, how can alternate bases to sustain a judgment be a sufficient to ground a cross-appeal?
But no one crowned Cathy the Queen of Law. What matters is what the SJC says. The Maine case law that allows alternate grounds arguments isn't very recent. And the language in this footnote, referring to "argument," seems to me fairly ominous; so, to be safe, file a cross-appeal. It could be, if squarely presented with a true alternate grounds argument that mattered to the outcome of a decision, that the SJC might not demand a cross-appeal, and might return to its earlier decisions allowing alternate ground arguments (interestingly, these earlier decisions overruled still earlier case law that did explictly require a cross-appeal). But do you want to be the test case?
This raises the interesting question of whether as an appellee you can raise an alternate argument that wasn't raised below at all. Obviously, such an argument can't be the subject of a cross-appeal, because the trial court never heard it. But if it's only a legal argument, then why can't it be raised to sustain the judgment?
In this action, the trial court, while granting judgment for appellee Allstate, didn't explicitly rule on one coverage argument (based on emotional distress). The SJC didn't remand for the trial court to explain itself, because it found that this omission on the trial court's part was at most harmless error, because the policy was unambiguous. In short, the issue was purely legal, so it made sense to address it on appeal.
That's the basic thinking behind the alternate grounds rule as a general concept as well – if it's a legal argument, why not address it in the appellate court? (This assumes that the case doesn't involve an administrative appeal, where separation of powers rules affect the analysis of what arguments can be raised in the judicial appeal if not preserved.)
But if you can raise an alternate legal ground to sustain a judgment that wasn't raised below, it would seem a little odd that you can't raise an alternate legal ground to sustain a judgment that was raised below, unless you file a cross-appeal.
In any event, as an appellate lawyer, I of course will always make the pitch that the appellate lawyer should always take a gander at what's going on in a suit as early as possible, long before any notices of appeal, if only to ensure everything that can be raised to support the client's position is preserved for appeal. Footnote 4 in this SJC decision only underscores this point.
