Bueltel v. Lumber Mutual Insurance

518 S.E.2d 205, 134 N.C. App. 626, 1999 N.C. App. LEXIS 865
CourtCourt of Appeals of North Carolina
DecidedAugust 17, 1999
DocketCOA98-1006
StatusPublished
Cited by50 cases

This text of 518 S.E.2d 205 (Bueltel v. Lumber Mutual Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bueltel v. Lumber Mutual Insurance, 518 S.E.2d 205, 134 N.C. App. 626, 1999 N.C. App. LEXIS 865 (N.C. Ct. App. 1999).

Opinion

HUNTER, Judge.

Briefly, the evidence presented to the trial court indicates that in April 1994, plaintiff Steven Bueltel (“Bueltel”) was hired as a sales associate by defendant Lumber Mutual Insurance Company (“Lumber Mutual”), a company engaged in the business of writing insurance policies to lumber and related industries. At that time, Lumber Mutual asked Bueltel to execute an employment contract which contained confidentiality and non-competition restrictions, and he complied. Bueltel was promoted to sales associate in November 1994 and to account representative in February 1995. In 1996, Lumber Mutual requested that Bueltel sign a second, amended employment contract (“Agreement”), which he did on 25 February 1996. The Agreement was necessary because Lumber Mutual was in the process of standardizing its employment contract with its employees, who would thereafter be subject to standard terms and conditions of employment. Bueltel was not offered a promotion or additional compensation, commission, bonuses or sales territory in exchange for his signature on the Agreement. The Agreement contained a more restrictive non-competition provision, a more expansive description of “policyholder,” and a clause which stated that it was to be construed and enforced under the laws of Massachusetts.

On 1 April 1997, Bueltel was promoted to account executive; however, he resigned from his position with Lumber Mutual on 24 June 1997. On 1 July 1997, Bueltel began a new job selling insurance for Indiana Lumbermens Mutual, a competitor of Lumber Mutual. Lumber Mutual corresponded with Bueltel several times from June to August 1997, informing him that he had continuing obligations to *628 Lumber Mutual pursuant to the Agreement and requesting that he discontinue violating confidentiality and non-competition clauses found therein. Bueltel filed a declaratory judgment action against Lumber Mutual on 26 November 1997, asking the court to construe the rights and liabilities of the parties and declare the Agreement unenforceable. Beultel moved for summary judgment, which was granted on 1 April 1998. Lumber Mutual appeals.

Defendant Lumber Mutual first contends that the trial court did not have jurisdiction under the North Carolina Declaratory Judgment Act to hear Bueltel’s action because no actual controversy existed between the parties at the time his action was filed.

“Although the North Carolina Declaratory Judgment Act does not state specifically that an actual controversy between the parties is a jurisdictional prerequisite to an action thereunder, our case law does impose such a requirement.” Sharpe v. Park Newspapers of Lumberton, 317 N.C. 579, 583, 347 S.E.2d 25, 29 (1986). “[T]he existence of an actual controversy is necessary to the court’s subject matter jurisdiction.” Id. at 585, 347 S.E.2d at 30. For there to be an “actual controversy,” there must be more than a mere disagreement between the parties and litigation must “appear unavoidable.” Id. at 589, 347 S.E.2d at 32 (quoting Gaston Bd. of Realtors v. Harrison, 311 N.C. 230, 234, 316 S.E.2d 59, 61 (1984)).

Our review indicates that future or anticipated action of a litigant does not give subject matter jurisdiction to our courts under the Declaratory Judgment Act. Like the present case, non-competition provisions were at issue in Sharpe, where plaintiffs sought a declaration that such provisions were an unfair restraint on trade. However, our Supreme Court held that because there was no evidence of a practical certainty that the plaintiffs would compete with the defendant or that they had the intention of doing so if the provisions in the note were declared invalid, no justiciable controversy existed between the parties at the time the action was filed. Sharpe, 317 N.C. at 590, 347 S.E.2d at 32.

In Wendell v. Long, 107 N.C. App. 80, 418 S.E.2d 825 (1992), plaintiffs were property owners in a residential subdivision and asked the court, under the Declaratory Judgment Act, to declare the restrictive covenants in their neighbors’ deeds valid. This action would prohibit the defendants’ proposed construction project. This Court held that no actual controversy existed between the parties that would satisfy the jurisdictional requirement, because the plaintiffs complaint did *629 “not allege that defendants have acted in violation of these covenants, but [rather] that they anticipate some future action to be taken by defendants which would result in a violation.” Id. at 83, 418 S.E.2d at 826.

Unlike Wendell and Sharpe, the present case was not instituted because action in violation of the Agreement was anticipated or likely. Lumber Mutual communicated to Bueltel in the months prior to suit that he was actually in the process of violating the Agreement and that legal action may be taken against him. We have examined the pleadings and record in the present case to determine whether there is an actual controversy sufficient to confer jurisdiction under the Declaratory Judgment Act. Plaintiff seeks a judgment as to whether or not his past and present actions violate the contract. Lumber Mutual, in its answer, asks the Court to find the contract valid and grant it injunctive relief by prohibiting the plaintiff from further action in violation thereof. The parties were not asking the court to interpret the document in anticipation of future acts, but in light of past and present action. Therefore, an actual controversy exists and we find no error by the trial court on this issue.

Secondly, defendant relies on Farthing v. Farthing for its contention that the trial court erred because it did not have the power to declare the Agreement void and unenforceable under the North Carolina Declaratory Judgment Act.

The Declaratory Judgment Act provides:

Any person interested under a deed, will, written contract or other writings constituting a contract, or whose rights, status or other legal relations are affected by a statute, municipal ordinance, contract or franchise, may have determined any question of construction or validity arising under the instrument, statute, ordinance, contract, or franchise, and obtain a declaration of rights, status, or other legal relations thereunder. A contract may be construed either before or after there has been a breach thereof.

N.C. Gen. Stat. § 1-254 (1996). “The Declaratory Judgment Act... is designed to provide an expeditious method of procuring a judicial decree construing wills, contracts, and other written instruments and declaring the rights and liabilities of parties thereunder. It is not a vehicle for the nullification of such instruments.” Farthing v. Farthing, 235 N.C. 634, 635, 70 S.E.2d 664, 665 (1952). In Farthing, *630

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Bluebook (online)
518 S.E.2d 205, 134 N.C. App. 626, 1999 N.C. App. LEXIS 865, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bueltel-v-lumber-mutual-insurance-ncctapp-1999.