July 23, 2018

By: Kevin McKeon

The Supreme Court surprised most Pennsylvania lawyers in 2000 by construing Section 7532 of the Declaratory Judgments Act, which provides that a requested declaration “shall have the force and effect of a final judgment or decree” to mean that a declaration is immediately appealable as a final order under then Rule 341(b)(2) even if other claims in the case remained pending, and that failure to appeal immediately results in a waiver of the right to do so after the case concludes.  Nationwide Mut. Ins. Company v. Wickett, 763 A.2d 813 (Pa. 2000).

In part because Wickett created such a treacherous waiver trap, Rule 341(b)(2) was rescinded in 2016.  The resulting state of the law is that declaratory judgment orders that do not resolve all claims involving all parties and thus are interlocutory can still be appealed as of right under Wickett and its progeny, but failure to appeal immediately no longer results in a waiver of the right to do so after the case concludes.

Meanwhile, in 2008, and again in 2011, the Supreme Court used Wickett’s progeny to narrow its sweep.  In Pennsylvania Bankers Association v. Pennsylvania Department of Banking, 948 A.2d 790 (Pa. 2008), the Court limited Wickett to mean that an order is appealable as an affirmative declaration of rights only if its effect on the ultimate relief requested in the declaratory judgment action is certain (as opposed to the effect the order may have on some but not all alternative theories of relief). Thus, even if an order clearly decides an issue in a declaratory judgment context—rejecting a claim that a statute violates a particular provision of the Constitution, for example—it will not be deemed appealable unless it disposes of all claims by that party that the statute be declared unconstitutional. The Court followed this narrowed application of Wickett in U.S. Organization for Bankruptcy Alternatives, Inc. v. Department of Banking, 26 A.3d 474 (Pa. 2011), holding that a Commonwealth Court order declaring that some but not all of the provisions of a statute regulating debt settlement service providers were unconstitutional on improper delegation grounds, but leaving undecided the plaintiff’s equal protection and due process attacks on the remaining statutory provisions, could not be appealed because the order “simply narrowed the scope of USOBA’s declaratory judgment action, without ultimately deciding the case.” In both cases, the Court focused only the plaintiff’s declaratory judgment theories, not on other claims by the plaintiff or on claims made by other parties that remained unresolved.  The Court also declined to overrule Wickett.

Fast forward to July 2018.  In Pennsylvania Manufacturers’ Assn. Ins. Co. v. Johnson Matthey, Inc., __A.3d __ (Pa. 2018), the Court quashed a direct appeal from a Commonwealth Court order denying an insurer’s request for a declaration that it has no obligation to defend or indemnify its insured, effectively denying all of the relief the plaintiff sought in its complaint. The Court reasoned that even though Commonwealth Court denied the plaintiff’s request for declaratory relief, the defendant’s declaratory judgment counterclaim remained pending, and that because the order “does not resolve the parties’ competing claims for declaratory relief” but merely “narrows the dispute” it cannot be appealed under Wickett as modified by USOBA.  As Chief Justice Saylor, joined by Justice Todd, pointed out in dissent, however, the majority’s decision suggests that Wickett does not apply if “something remains pending in the court of original jurisdiction.”  That rationale essentially would obliterate Wickett, as it is the general rule of finality in Pennsylvania. It may be that the majority’s rationale preserves Wickett because the counterclaim that remains in this case is a declaratory judgment claim, and that the Court would have decided differently if the counterclaim did not fall under the Declaratory Judgments Act.  But that is a thin reed.  One wonders, along with the dissent, why the Court did not take this opportunity to overrule Wickett. What is clear, however, is that there is little left of Wickett’s once broad sweep, and lawyers would be wise to think twice before relying solely on it as the basis for a direct appeal as of right in future cases.

About the Author:

Kevin McKeon, partner at Hawke, McKeon & Sniscak, LLP, represents a diverse array of clients before Pennsylvania state agencies, and state and federal appellate courts. A co-author of West’s Pennsylvania Appellate Practice and immediate past chair of the Pennsylvania Appellate Court Procedural Rules Committee, Kevin uses his comprehensive knowledge of Pennsylvania appellate procedural rules to guide clients through complex appellate proceedings.