The North Dakota Future Fund appeals an order joining the Fund as a defendant to satisfy the unsecured wage claims of former employees of Safe Corporation International, Inc. We hold the order joining the Fund is not an appealable order. Under our supervisory jurisdiction, however, we direct the district court to dismiss the Fund as a party defendant.
The North Dakota Future Fund (the Fund) entered into a loan agreement with Safe Corporation International, Inc. (SCI) on September 10, 1992. The loan agreement gave the Fund a security interest in SCI’s accounts receivable, inventory, machinery and equipment, enabling the Fund to take possession of the collateral and dispose of it upon default of SCI’s loan repayment obligations. SCI defaulted on the loan. On February 14, 1995, SCI transferred its personal property, equipment, and assets to the Fund under a Bill of Sale. The Bill of Sale gave SCI ninety days to make payments or the assets would be sold. On June 8, 1995, after no payments were made, the Fund held a liquidation sale.
Simultaneous to the Fund’s actions, employees of SCI brought an action in small claims court against SCI for unpaid wages. The claim was removed to district court. On March 13, 1996, the district court, acting on
Before we examine the matter on the merits, we must first determine whether the order from which the Fund seeks to appeal is an appealable order. “The right to appeal is a jurisdictional matter which we may consider sua sponte.”
Johnson v. King,
This is an interlocutory appeal and is ordinarily not appealable because it is not the final disposition of the action on appeal.
B.H. v. KD.,
However, some orders are appealable even though they are not a final disposition of a case. In order to successfully appeal an interlocutory order, the order must fall within the list of appealable orders codified in N.D.C.C. § 28-27-02.
The Fund cites
Wosepka v. Dukart,
Wosepka
was decided almost thirty years ago. Since that time, the finality doctrine, limiting the appealability of interlocutory issues, has been further developed in North Dakota. The prevailing rule under this doctrine is that most orders which are not final judgments are not appealable.
See, e.g., Vinje v. Sabot,
In the event this court found the join-der order is not appealable, the Fund requested supervision of the case during oral argument, under Article VI, § 2, of the North Dakota Constitution. The power to issue a supervisory writ and exercise jurisdiction over a case is discretionary.
B.H.,
The district court joined the Fund as a party defendant on its own initiative. No motions or pleadings were made by either party asserting the Fund should be joined. We understand the district court’s reason for joining the Fund was, no doubt, pursuit of justice for the unpaid wage earners. But, in acting on its own motion, the district court stepped beyond the bounds of its role as an impartial adjudicator. Because the court joined the Fund sua sponte, pleadings were not filed concerning the joinder. This handicaps the Fund’s procedural options in the district court. Without pleadings, the Fund cannot ask for a judgment on the pleadings, move for summary judgment, or even argue the joinder is a frivolous action, violating Rule 11, N.D.R.Civ.P. There is no way for the Fund to test the legality of the claim before the matter goes to trial. Consequently, we believe supervision is appropriate.
The Fund has established a perfected security interest under N.D.C.C. chapter 41-09. Section 41-09-50, N.D.C.C., provides secured creditors with priority in the proceeds of the disposition of collateral; there is no obligation to pay the unsecured creditors from the proceeds of secured collateral. See also N.D.C.C. § 41-09-38 (providing the mere existence of a security interest does not impose contract or tort liability upon the secured party for the debtor’s acts or omissions.) Accordingly, the Fund is entitled to the proceeds from SCI’s personal property, equipment, and assets, before the unsecured wage earners. Under Rule 19, N.D.R.Civ.P., “a person ... must be joined as a party in the action if (i) in the person’s absence complete relief cannot be accorded among those already parties.” Here, although the employee’s recovery against SCI may be limited due to the Fund’s security interest, there appears to be no legal basis to make the Fund liable to unsecured creditors. Because the Fund’s absence will not affect the employee’s relief against SCI, the Fund is not a party “needed for just adjudication” of the employees’ claim under Rule 19, N.D.R.Civ.P. We, therefore, grant the supervisory writ and direct the court to dismiss the Fund as a party defendant and return the sale proceeds to the Fund.
