Court Opinion

ID: 9363618
Source: CourtListenerOpinion
Date Created: 2023-01-17 13:03:40.367439+00
Date Added: 2024-06-11T17:15:32.965011
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                  2023-NCCOA-3

                                  No. COA22-463

                              Filed 17 January 2023

Mecklenburg County, No. 20-CVS-10754

SR AUTO TRANSPORT, INC., Plaintiff,

            v.

ADAM’S AUTO GROUP, INC. AND ALI DARWICH, Defendants/Third-Party
Plaintiffs,

            v.

ALFIDA ANTONIA RODRIGUEZ, DARIANA SAMALOT, SORANA RUIZ, LUIS
GUILLERMO MARTINEZ, JORGE LUIS MARTINEZ, LUIS HERMINIO
MARTINEZ, and SAGA AUTO SALES, INC., Third-Party Defendants.

      Appeal by Defendants from Order entered 29 November 2021 by Judge Donnie

Hoover in Mecklenburg County Superior Court. Heard in the Court of Appeals 19

October 2022.

      James, McElroy, & Diehl, P.A. by Preston O. Odom, III, J. Alexander Heroy,
      and Alexandra B. Bachman, for plaintiff-appellee SR Auto Transport, Inc. and
      third-party defendants-appellees Dariana Samalot, Sorana Ruiz, Luis
      Guillermo Martinez, Jorge Luis Martinez, and Saga Auto Sales, Inc.

      Alexander Ricks PLLC, by Nathan A. White and John (Jack) Spencer, for
      defendants-appellants Adam’s Auto, Inc. and Ali Darwich.

      DeVore, Acton, & Stafford, P.A., by Derek P. Adler, for third-party defendants-
      appellees Alfida Antonia Rodriguez and Luis Herminio Martinez.

      HAMPSON, Judge.
                        SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                         2023-NCCOA-3

                                       Opinion of the Court

                              Factual and Procedural Background

¶1         Adam’s Auto Group, Inc. and Ali Darwich (collectively, Defendants) appeal

     from an Order entered 29 November 2021 dismissing Defendants’ third-party claims

     against Dariana Samalot, Sorana Ruiz, Luis Guillermo Martinez, Jorge Luis

     Martinez, Saga Auto Sales, Inc., Alfida Antonia Rodriguez, and Luis Herminio

     Martinez (collectively, Third-Party Defendants) pursuant to Rules 12(b)(6) and 14(a)

     of the North Carolina Rules of Civil Procedure. SR Auto Transport, Inc. (Plaintiff)

     along with Third-Party Defendants have filed Motions to Dismiss Defendants’ Appeal

     in this Court arguing the trial court’s Order dismissing the third-party claims is

     interlocutory and Defendants have not shown a right to an immediate appeal. The

     Motions to Dismiss Appeal were referred to this panel for decision. For the reasons

     that follow, we allow the Motions to Dismiss Appeal. The Record before us tends to

     reflect the following:

¶2         On 11 August 2020, Plaintiff filed a Complaint and Motion for Injunctive Relief

     alleging, among numerous claims, Defendants had breached an agreement with

     Plaintiff regarding the purchase of a Ferrari Spider. The Record does not include

     Defendants’ initial responsive pleading; however, it appears Defendants filed an

     Answer which included third-party claims and named the Third-Party Defendants.

     The Record does reflect Third-Party Defendants filed Motions to Dismiss a Third-

     Party Complaint. It further appears Defendants then filed a Motion for Leave to
                        SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                         2023-NCCOA-3

                                       Opinion of the Court

     Amend their initial responsive pleading and third-party complaint. On 12 July 2021,

     the parties filed what they termed a “Consent Stipulation Regarding Defendants’

     Motion to Amend and Third-Party Defendants’ Motions to Dismiss.” In this filing,

     the parties stipulated that Defendants would be permitted to amend their responsive

     pleading and that the Third-Party Defendants’ previously filed Motions to Dismiss

     would constitute valid responsive pleadings to the Amended Answer, Counterclaims,

     and Third-Party Complaint.

¶3            The same day, 12 July 2021, Defendants filed their Amended Answer,

     Counterclaims, and Third-Party Complaint. The Amended Answer, Counterclaims,

     and Third-Party Complaint asserted counterclaims against Plaintiff and third-party

     claims against Third-Party Defendants for fraud and civil conspiracy to commit

     fraud.    Additionally, the amended pleading also asserted additional third-party

     claims for conversion, as well as seeking punitive damages against Third-Party

     Defendants.      The counterclaims and third-party claims related to several

     transactions not alleged in Plaintiff’s Complaint and included allegations Third-Party

     Defendants had provided over $200,000 in worthless checks to Defendants and owed

     Defendants other debts related to a Lamborghini and a Land Rover.

¶4            On 2 August 2021, the trial court heard and orally granted the Third-Party

     Defendants’ Motions to Dismiss. On 14 September 2021—before the trial court’s

     written Order was entered—Defendants filed a Motion Requesting Certification that
                      SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                          2023-NCCOA-3

                                      Opinion of the Court

     the Court’s Order Dismissing Defendants’ Claims Against Third-Party Defendants is

     Final pursuant to Rule 54(b) of the North Carolina Rules of Civil Procedure.

¶5         On 22 November 2021, the trial court heard the Motion to Certify its Order

     dismissing the claims against Third-Party Defendants for immediate appeal. The

     trial court declined to certify the yet-to-be filed Order dismissing the third-party

     claims for immediate appeal pursuant to Rule 54(b). On 24 November 2021, the trial

     court entered an Order granting Third-Party Defendants’ Motions to Dismiss,

     dismissing all claims against Third-Party Defendants pursuant to Rules 12(b)(6) and

     14(a) of the North Carolina Rules of Civil Procedure on the basis the third-party

     claims constituted improper third-party practice.       Specifically, the trial court

     dismissed the third-party claims without prejudice to Defendants filing a separate

     action against any or all Third-Party Defendants, asserting the same claims. The

     Order did not address the status of Defendants’ counterclaims against Plaintiff. On

     22 December 2021, Defendants filed written Notice of Appeal from the Order

     dismissing the third-party claims.

                                     Appellate Jurisdiction

¶6         On 14 June 2022, Plaintiff and Third-Party Defendants filed Motions to

     Dismiss the Appeal for lack of appellate jurisdiction, contending the trial court’s

     Order was not a final order or judgment, but rather an interlocutory order and not

     subject to immediate appeal. On 24 June 2022, Defendants responded to these
                        SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                           2023-NCCOA-3

                                         Opinion of the Court

     Motions, arguing the Order is final as to Third-Party Defendants and the “Order

     impairs [Defendants’] substantial right to have this common issue of fact heard in the

     same forum.” Thus, Defendants submit the Order is subject to immediate appellate

     review.

¶7          As a general matter, with certain exceptions not applicable here: “appeal lies

     of right directly to the Court of Appeals . . . [f]rom any final judgment of a superior

     court.” N.C. Gen. Stat. § 7A-27(b)(1) (2021). An appeal may also be taken to this

     Court from “any interlocutory order or judgment of a superior court or district court

     in a civil action or proceeding that . . . [a]ffects a substantial right.” N.C. Gen. Stat.

     § 7A-27(b)(2) (2021). “A final judgment is one which disposes of the cause as to all

     the parties, leaving nothing to be judicially determined between them in the trial

     court.” Veazey v. Durham, 231 N.C. 354, 361-62, 57 S.E.2d 377, 381 (1950). On the

     other hand, “an interlocutory order is one made during the pendency of an action,

     which does not dispose of the case, but leaves it for further action by the trial court

     in order to settle and determine the entire controversy.” Id.

¶8          Here, Defendants seek an immediate appeal of the Order granting Third-Party

     Defendants’ Motions to Dismiss. “An order granting a motion to dismiss certain

     claims in an action, leaving other claims to go forward, is an interlocutory order.”

     Mills Pointe Homeowner’s Ass’n v. Whitmire, 146 N.C. App. 297, 298, 551 S.E.2d 924,

     926 (2001). In the case sub judice, the trial court’s Order left Plaintiff’s claims against
                           SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                              2023-NCCOA-3

                                            Opinion of the Court

       Defendants, as well as Defendants’ counterclaims against Plaintiff, to go forward. As

       such, the trial court’s Order is interlocutory.

¶9           Generally, there is no right to appeal from an interlocutory order. Jeffreys v.

       Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252, 253 (1994).

       “However, immediate appeal of interlocutory orders and judgments is available in at

       least two instances: when the trial court certifies, pursuant to N.C.G.S. § 1A-1, Rule

       54(b), that there is no just reason for delay of the appeal; and when the interlocutory

       order affects a substantial right under N.C.G.S. §§ 1-277(a) and 7A-27(d)(1).” Turner

       v. Hammocks Beach Corp., 363 N.C. 555, 558 681 S.E.2d 770, 773 (2009) (citation and

       quotation marks omitted). “It is appellant’s burden to present appropriate grounds

       for . . . acceptance of an interlocutory appeal . . . .” Hanesbrands, Inc. v. Fowler, 369

       N.C. 216, 218, 794 S.E.2d 497, 499 (2016) (citation and quotation marks omitted).

¶ 10          Here, the trial court declined to certify the Order pursuant to Rule 54(b).

       Defendants contend this decision was error. This Court has, however, previously

       observed:

                   Although a trial court’s decision to grant a Rule 54(b) certification
                   is not binding on our Court and is fully reviewable on appeal,
                   Giles v. First Virginia Credit Services, Inc., 149 N.C. App. 89, 94-
                   95, 560 S.E.2d 557, 561 (2002), a trial court’s denial of a motion
                   for a Rule 54(b) certification has not previously been directly
                   reviewed by our Court in that our rules do not provide an
                   appellant with relief from the denial of a motion for a Rule 54(b)
                   certification. Rather, the proper methods for appealing an
                   underlying interlocutory order are to argue the interlocutory
                          SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                             2023-NCCOA-3

                                           Opinion of the Court

                 order affects a substantial right, or to petition our Court for a writ
                 of certiorari pursuant to N.C.R. App. P. 21(b).

       Van Engen v. Que Scientific, Inc., 151 N.C. App. 683, 686-87, 567 S.E.2d 179, 182

       (2002) (emphasis added).       Defendants did not petition our Court for a Writ of

       Certiorari pursuant to Rule 21 of the North Carolina Rules of Appellate Procedure.1

¶ 11          In the absence of a valid Rule 54(b) certification or Petition for Writ of

       Certiorari, Defendants must, therefore, demonstrate the trial court’s Order affects a

       substantial right in order to establish a right of immediate appeal. Rule 28(b)(4) of

       the North Carolina Rules of Appellate Procedure expressly requires an appellant to

       include a statement of grounds for appellate review. N.C.R. App. P. 28(b)(4). “When

       an appeal is interlocutory, the statement must contain sufficient facts and argument

       to support appellate review on the ground that the challenged order affects a

       substantial right.”    Id.   Here, Defendants’ principal brief contains no facts or

       argument to support appellate review on the ground the challenged order affects a

       substantial right. Instead, Defendants contend in conclusory fashion that the Order

       was final as to their third-party claims or was otherwise appealable as an

       interlocutory order. It is true, “[o]ur Supreme Court has held that noncompliance

       with ‘nonjurisdictional’ rules such as Rule 28(b) ‘normally should not lead to dismissal

       1 At oral argument, Defendants requested we treat this appeal as a Petition for Writ of
       Certiorari. Defendants have not filed a Petition for Writ of Certiorari with this Court, and
       we decline to invoke N.C.R. App. P. 2 and waive the requirements of N.C.R. App. P. 21.
                         SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                            2023-NCCOA-3

                                          Opinion of the Court

       of the appeal.’ ” Larsen v. Black Diamond French Truffles, Inc., 241 N.C. App. 74, 77-

       78, 772 S.E.2d 93, 95-96 (2015) (quoting Dogwood Dev. & Mgmt. Co., LLC v. White

       Oak Transp. Co., Inc., 362 N.C. 191, 198, 657 S.E.2d 361, 365 (2008)).

¶ 12         “However, when an appeal is interlocutory, Rule 28(b)(4) is not a

       ‘nonjurisdictional’ rule. Rather, the only way an appellant may establish appellate

       jurisdiction in an interlocutory case, absent Rule 54(b) certification, is by showing

       grounds for appellate review based on the order affecting a substantial right.” Id. As

       such, Defendants’ failure to comply with Rule 28(b)(4) in this case subjects their

       appeal to dismissal.

¶ 13         Having failed to establish any right to an immediate appeal in their principal

       brief, Defendants did file a reply brief in which they summarily contend the trial

       court’s Order affects a substantial right.        Defendants’ reply brief purports to

       incorporate their arguments advanced in their response to the Motions to Dismiss

       Appeal.   It is well-established in this Court, however, that “[w]e will not allow

       Defendants to use their reply brief to independently establish grounds for appellate

       review.” Id. at 78, 772 S.E.2d at 96.

¶ 14         Nevertheless, presuming without deciding, Defendants properly raised the

       allegation of a substantial right deprivation in their response to Plaintiff’s and Third-

       Party Defendants’ Motions to Dismiss the Appeal, Defendants have not met their
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                                            2023-NCCOA-3

                                          Opinion of the Court

       burden of demonstrating the Order deprives them of a substantial right.2 “Whether

       an interlocutory appeal affects a substantial right is determined on a case by case

       basis.” McConnell v. McConnell, 151 N.C. App. 622, 625, 566 S.E.2d 801, 803 (2002)

       (citation omitted).

¶ 15         “In order to determine whether a particular interlocutory order is appealable

       pursuant to N.C. Gen. Stat. §§ 1-277(a) and 7A-27(d)(1), we utilize a two-part test,

       with the first inquiry being whether a substantial right is affected by the challenged

       order and the second being whether this substantial right might be lost, prejudiced,

       or inadequately preserved in the absence of an immediate appeal.” Hamilton v.

       Mortg. Info. Servs., Inc., 212 N.C. App. 73, 78, 711 S.E.2d 185, 189 (2011). “A

       substantial right is one which will clearly be lost or irremediably adversely affected

       if the order is not reviewable before final judgment.” Turner v. Norfolk S. Corp., 137

       N.C. App. 138, 142, 526 S.E.2d 666, 670 (2000) (citation and quotation marks

       omitted).

¶ 16         Defendants contend the trial court’s Order affects a substantial right because

       the trial court’s dismissal without prejudice of the third-party claims may lead to

       inconsistent verdicts. Indeed, “[a] party has a substantial right to avoid two trials on

       the same facts in different forums where the results would conflict.” Clements v.

       2 We observe that both the Motions to Dismiss Appeal and Defendants’ Responses were filed
       before Defendants’ principal brief was filed with this Court.
                         SR AUTO TRANSP., INC. V. ADAM’S AUTO GRP., INC.

                                           2023-NCCOA-3

                                         Opinion of the Court

       Clements, 219 N.C. App. 581, 585, 725 S.E.2d 373, 376 (2012) (citing Hamby v. Profile

       Prods., L.L.C., 361 N.C. 630, 639, 652 S.E.2d 231, 237 (2007)). “Where a party is

       appealing an interlocutory order to avoid two trials, the party must ‘show that (1) the

       same factual issues would be present in both trials and (2) the possibility of

       inconsistent verdicts on those issues exists.’ ” Id. (quoting N.C. Dep’t. of Transp. v.

       Page, 119 N.C. App. 730, 736, 460 S.E.2d 332, 335 (1995)).

¶ 17         In the case sub judice, Defendants have not demonstrated the same factual

       issues in the various claims alleged by Plaintiff against Defendants would be present

       in a separate trial litigating the Defendants’ fraud, civil conspiracy to commit fraud,

       and conversion claims against Third-Party Defendants, which arise from different

       factual allegations than those made by Plaintiff. Further, Defendants have also not

       demonstrated the possibility of inconsistent verdicts arising from the factual

       allegations made in their third-party claims involving a completely different set of

       transactions and different parties than the transaction alleged in Plaintiff’s

       Complaint.

¶ 18         Moreover, to the extent Defendants are entitled to any set-off or recovery

       arising from their pending counterclaims against Plaintiff, that too may be litigated

       in the underlying case and would not necessarily be inconsistent with any verdict in

       a separate action against Third-Party Defendants.        At this preliminary stage of

       litigation, we simply conclude Defendants have not adequately demonstrated the
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                                            2023-NCCOA-3

                                          Opinion of the Court

       possibility that inconsistent verdicts exist for these separate issues against different

       parties justifying immediate review.       Thus, Defendants’ appeal in this case is

       interlocutory, and Defendant has not demonstrated any substantial right would be

       lost absent immediate appeal. Therefore, we are without jurisdiction to review this

       matter on immediate appeal. Consequently, we must dismiss Defendants’ appeal.

                                            Conclusion

¶ 19         Accordingly, for the foregoing reasons, we allow Plaintiff’s and Third-Party

       Defendants’ Motions to Dismiss this appeal as interlocutory.

             APPEAL DISMISSED.

             Judges TYSON and ZACHARY concur.