Appeal Procedure

Topic Appeal TopicsAppealProcedure

How appeals of charging orders (and foreclosures thereof) are taken provide a myriad of issues that litigants and the courts have struggled with, including:

1. Whether a charging order is a final appealable order.

2. What is the correct appellate procedure.

3. Whether the entity as a non-party to the case has standing to appeal the order.

The courts have reached conflicting results on whether the charging order is an immediate appealable order. Some courts treat charging orders as final appealable orders. Other courts disagree, and typically rationalize something to the effect that the "final order" will be that which results in the final satisfaction of the judgment, or at least something like that. These courts treat charging orders as in the nature of interlocutory orders, which makes little sense because the judgment has already been entered in the case. Where the courts do not treat charging orders as a final order, any effective appeal of the charging order must be made by an extraordinary writ.

It is suggested that § 503 be amended to provide that a charging order is a final appealable order, and that the parties to the charging order have an immediate appeal as of right. An expanded Comment to this effect will likely be of dubious effect.

Where the charging order affects the entity in some incorrect way, e.g., the court gives the creditor management rights, the entity itself may need to appeal the charging order and this issue should also be considered.