Court Opinion

ID: 2728100
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:29:03.031815+00
Date Added: 2024-06-11T10:09:40.583533
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                                 NO. COA14-52
                        NORTH CAROLINA COURT OF APPEALS

                                Filed: 1 July 2014

NICOLE J. BRUNS,

      Plaintiff,

      v.                                      Craven County
                                              No. 12 CVS 1495
NORTH CAROLINA FARM BUREAU MUTUAL
INSURANCE COMPANY, INC.,

      Defendant.

      Appeal    by     defendant   and    cross-appeal      by   plaintiff     from

judgment entered 25 March 2013 by Judge Jay D. Hockenbury in

Craven County Superior Court.             Heard in the Court of Appeals 19

May 2014.

      William F. Ward, III, P.A., by William F. Ward, III, for
      plaintiff-appellee.

      Harris, Creech, Ward & Blackerby, P.A., by Jay C. Salsman,
      C. David Creech, and Heather M. Beam, for defendant-
      appellant.

      STEELMAN, Judge.

      Where     Farm     Bureau     was    dismissed      from    the     original

litigation, and was not a party when the judgment was entered,

it is not bound by the original judgment.                  Where plaintiff has
                                       -2-
not shown that the partial denial of her summary judgment motion

affected a substantial right, plaintiff’s interlocutory appeal

is dismissed.

                  I. Factual and Procedural Background

    In November 2010, Nicole J. Bruns (plaintiff) noticed water

damage     to   the   floor   of     her    kitchen.        At     the    time,    her

homeowner’s insurance policy was with North Carolina Farm Bureau

Mutual     Insurance      Company,    Inc.       (Farm   Bureau).          Plaintiff

contacted James B. Flanagan (Flanagan), a repairman, who met

with plaintiff and a Farm Bureau claims adjuster to assess the

damage.     On 30 November 2010, Flanagan began work on plaintiff’s

kitchen.        Flanagan    removed    plaintiff’s         countertops,      kitchen

cabinets, sink, island, and other personal property from the

kitchen,    and   after    stripping       the   kitchen    down     to    the    floor

joists and drywall, did not return.

    On 13 June 2011, Flanagan filed suit against plaintiff,

seeking payment for services to plaintiff’s residence.                       (Craven

County action 11 CVS 937).                 On 19 September 2011, plaintiff

filed answer, counterclaims, and a third-party complaint against

Farm Bureau.       On 24 October 2011, Farm Bureau moved to dismiss

plaintiff’s       third-party      complaint,       based     upon        plaintiff’s
                                        -3-
failure    to   comply   with    Rules      13(h)   and   14(a)    of     the       North

Carolina Rules of Civil Procedure.                  On 17 January 2012, the

trial court granted Farm Bureau’s motion to dismiss, without

prejudice to plaintiff filing an independent action against Farm

Bureau.

      On 18 March 2013, case 11 CVS 937 was called for trial

before    the     Superior     Court   of     Craven   County,         Judge    Alford

presiding.      Flanagan failed to appear for trial.                    Trial court

dismissed Flanagan’s claims against plaintiff.                    Plaintiff then

waived her right to a jury trial.               On 25 March 2013, the trial

court entered judgment on plaintiff’s counterclaims, and found

that Flanagan had converted the property of plaintiff.                                The

court     awarded    damages     of    $47,024.77,     which      it     trebled      to

$141,074.31, pursuant to N.C. Gen. Stat. § 75-16.                      In addition,

the trial court awarded damages of $97,060.19 to plaintiff for

breach of contract, and $ 79,378.17 for attorney’s fees pursuant

to N.C. Gen. Stat. § 75-16.1.

      On 9 October 2012, plaintiff filed the complaint in the

instant    case     against     Farm   Bureau,      alleging      breach       of     the

insurance contract, bad faith, and unfair and deceptive trade

practices.      On 13 December 2012, Farm Bureau filed its answer,

and   counterclaims      for   attorney’s      fees    pursuant    to     N.C.       Gen.
                                       -4-
Stat. §§ 1D-45 and 75-16.1.        Farm Bureau also counterclaimed for

a declaratory judgment pursuant to N.C. Gen. Stat. § 1-253 et

seq. that it had no liability to plaintiff under the terms of

the homeowner’s insurance policy.

      On 25 April 2013, plaintiff filed a motion for summary

judgment,   alleging   that     the    25    March   2013   judgment      against

Flanagan in case 11 CVS 937 precluded the relitigation of the

issues   decided   therein     under   the    doctrines     of    res   judicata,

collateral estoppel and claims splitting.               On 14 August 2013,

the trial court entered an order of partial summary judgment.

This order granted summary judgment in favor of plaintiff on

plaintiff’s breach of contract claim, and awarded to plaintiff

the sum of $97,060.19 together with statutory interest from the

date of breach, 7 December 2010.             It also certified that issue

for immediate appellate review, pursuant to Rule 54(b) of the

North Carolina Rules of Civil Procedure.              The order also denied

plaintiff’s motion for summary judgment as to plaintiff’s claims

of bad faith and unfair and deceptive trade practices.

      From the grant of summary judgment on the issue of the

breach of contract claim, Farm Bureau appeals.                   From the denial

of   summary   judgment   on    all    other    issues,     plaintiff      cross-

appeals.
                                    -5-
                      II. Appeal of Farm Bureau

      In its arguments on appeal, Farm Bureau contends that the

trial court erred in entering summary judgment against it with

regard to plaintiff’s breach of contract claim.              We agree.

                          A. Standard of Review

      “Our standard of review of an appeal from summary judgment

is de novo; such judgment is appropriate only when the record

shows that ‘there is no genuine issue as to any material fact

and that any party is entitled to a judgment as a matter of

law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572,

576   (2008)   (quoting   Forbis   v.   Neal,   361   N.C.    519,   524,   649

S.E.2d 382, 385 (2007)).

                              B. Analysis

      In its order of partial summary judgment, the trial court

held that:

           The   Court,  after   hearing   arguments   of
           counsel, considering the memoranda filed by
           counsel and reviewing the notebooks of
           relevant materials and cases submitted both
           in support of and in opposition to the
           motion, has determined that there is no
           genuine issue as to any material fact as to
           the plaintiff’s first cause of action, to
           wit:   breach   of  contract    and   contract
           damages, based on res judicata.

      It then granted summary judgment in favor of plaintiff on

the breach of contract claim, and certified the grant of summary
                                -6-
judgment as a final judgment pursuant to Rule 54(b) of the North

Carolina Rules of Civil Procedure.

    Farm Bureau contends that summary judgment was improperly

granted for multiple reasons: (1) the doctrines of res judicata

and collateral estoppel do not apply; (2) there           were genuine

issues of material fact; and (3) the damages awarded by the

trial court constituted an impermissible double recovery.           We

address only the grounds stated by the trial court as the basis

for its ruling: res judicata.

         The essential elements of res judicata are:
         (1) a final judgment on the merits in an
         earlier lawsuit; (2) an identity of the
         cause of action in the prior suit and the
         later suit; and (3) an identity of parties
         or their privies in both suits. See Hogan v.
         Cone Mills Corp., 315 N.C. 127, 135, 337
         S.E.2d 477, 482 (1985). “Under the doctrine
         of res judicata, a final judgment on the
         merits in a prior action in a court of
         competent jurisdiction precludes a second
         suit involving the same claim between the
         same parties or those in privity with them.”
         Bockweg v. Anderson, 333 N.C. 486, 491, 428
         S.E.2d 157, 161 (1993) (citing Thomas M.
         McInnis & Assoc., Inc. v. Hall, 318 N.C.
         421, 428, 349 S.E.2d 552, 556 (1986)).

Green v. Dixon, 137 N.C. App. 305, 307, 528 S.E.2d 51, 53 aff'd

per curiam, 352 N.C. 666, 535 S.E.2d 356 (2000).

         “For    res judicata to apply,      a party     must
         show    that the previous suit     resulted    in a
         final    judgment on the merits,    that the    same
         cause    of action is involved,    and that     both
                               -7-
           the party asserting res judicata and the
           party against whom res judicata is asserted
           were either parties or stand in privity with
           parties.” State ex rel. Tucker v. Frinzi,
           344 N.C. 411, 413–14, 474 S.E.2d 127, 128
           (1996) (quotation omitted). “The doctrine
           prevents the relitigation of all matters ...
           that were or should have been adjudicated in
           the prior action.” Whitacre P'ship, 358 N.C.
           at   15,  591   S.E.2d  at   880  (quotation
           omitted).

Williams v. Peabody, 217 N.C. App. 1, 5, 719 S.E.2d 88, 92

(2011).

    In the instant case, the trial court explicitly based its

grant of summary judgment upon the doctrine of res judicata, in

effect holding that the scope of Farm Bureau’s coverage under

plaintiff’s homeowner’s insurance was a matter settled during

the previous lawsuit between plaintiff and Flanagan in case 11

CVS 937.   However, in case 11 CVS 937, the trial court granted

the motion to dismiss Farm Bureau as a third-party defendant.

Farm Bureau was not a party to the original litigation at the

time that judgment was entered.

    Even assuming arguendo that the lawsuit between plaintiff

and Flanagan concerned the same cause of action, and resulted in

a judgment on the merits, it is clear that it did not involve

the same parties.    The original lawsuit was between plaintiff

and Flanagan, and concerned plaintiff’s contract with Flanagan.
                                      -8-
In that case, the trial court addressed Flanagan’s conversion,

Flanagan’s      breach   of   contract,       and     Flanagan’s        unfair    and

deceptive trade practices.            The trial court determined that,

based upon this misconduct, plaintiff was entitled to damages

from Flanagan.      Apart from mentioning Flanagan’s contract with

Farm Bureau, the original judgment made no reference to Farm

Bureau’s liability or its involvement in the case.                    The issue of

whether plaintiff’s damages were within the scope of plaintiff’s

homeowner’s insurance policy coverage with Farm Bureau was not

before the trial court in case 11 CVS 937.

    Because Farm Bureau was not a party to the original case,

it could not be bound by that judgment.                There was no evidence

of privity between Flanagan and Farm Bureau to support entry of

a judgment based upon res judicata.

    We hold that the trial court erred in granting partial

summary   judgment       in   favor    of     plaintiff        with     regard     to

plaintiff’s     breach   of   contract      action,    and     vacate    the     trial

court’s summary judgment order.

                              III. Cross-Appeal

    In    her    cross-appeal,    plaintiff         contends    that     the     trial

court erred in denying her motion for summary judgment with

regard to bad faith and unfair and deceptive trade practices.
                              -9-
Because this cross-appeal is interlocutory, we dismiss it as

premature.

                      A. Standard of Review

         “The denial of summary judgment is not a
         final judgment, but rather is interlocutory
         in nature. We do not review interlocutory
         orders as a matter of course.” McCallum v.
         N.C. Coop. Extension Serv., 142 N.C. App.
         48,   50,  542   S.E.2d   227,  230,  appeal
         dismissed and disc. review denied, 353 N.C.
         452, 548 S.E.2d 527 (2001). “If, however,
         ‘the trial court's decision deprives the
         appellant of a substantial right which would
         be lost absent immediate review[,]’ we may
         review the appeal....” Id. (quoting N.C.
         Dept. of Transportation v. Page, 119 N.C.
         App. 730, 734, 460 S.E.2d 332, 334 (1995)).
         “The moving party must show that the
         affected right is a substantial one, and
         that deprivation of that right, if not
         corrected before appeal from final judgment,
         will potentially injure the moving party.
         Whether a substantial right is affected is
         determined on a case-by-case basis.” Id.
         (internal citation omitted).

Barfield v. N.C. Dep't of Crime Control & Pub. Safety, 202 N.C.

App. 114, 117, 688 S.E.2d 467, 469 (2010).

                          B. Analysis

    In the order granting partial summary judgment in favor of

plaintiff with regard to her breach of contract claim, the trial

court also denied summary judgment with regard to plaintiff’s

claims for bad faith, punitive damages, and unfair and deceptive

trade practices.   Unlike the breach of contract claim, these
                                        -10-
issues were not certified by the trial court pursuant to Rule

54(b) of the North Carolina Rules of Civil Procedure, nor do

they constitute a final judgment.                Plaintiff’s appeal from the

denial of her motion for summary judgment on these issues is

interlocutory.       Barfield, 202 N.C. App. at 117, 688 S.E.2d at

469.

       Plaintiff has not argued that the denial of her summary

judgment motion has violated a substantial right.                   “It is not

the    duty   of   this    Court   to   construct    arguments    for   or     find

support for appellant's right to appeal from an interlocutory

order; instead, the appellant has the burden of showing this

Court that the order deprives the appellant of a substantial

right which would be jeopardized absent a review prior to a

final determination on the merits.”                Jeffreys v. Raleigh Oaks

Joint   Venture,     115   N.C.    App.   377,    380,   444   S.E.2d   252,    254

(1994).       Because plaintiff has not shown that the denial of a

portion of her summary judgment motion affected a substantial

right, plaintiff’s argument is dismissed.

       VACATED IN PART, DISMISSED IN PART.

       Chief Judge MARTIN and Judge DILLON concur.

       Report per Rule 30(e).