Rauch v. Urgent Care Pharmacy, Inc.

632 S.E.2d 211, 178 N.C. App. 510, 2006 N.C. App. LEXIS 1566
CourtCourt of Appeals of North Carolina
DecidedJuly 18, 2006
DocketNo. COA05-472.
StatusPublished
Cited by9 cases

This text of 632 S.E.2d 211 (Rauch v. Urgent Care Pharmacy, Inc.) 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
Rauch v. Urgent Care Pharmacy, Inc., 632 S.E.2d 211, 178 N.C. App. 510, 2006 N.C. App. LEXIS 1566 (N.C. Ct. App. 2006).

Opinion

JACKSON, Judge.

On 9 January 2003, Virginia Rauch ("plaintiff") filed a complaint alleging that she developed serious health problems, including fungal meningitis, as a result of receiving injections of contaminated methylprednisolone. The contaminated methylprednisolone had been compounded by Urgent Care Pharmacy, Inc. ("Urgent Care"), and sold to FirstHealth of the Carolinas, Inc. ("FirstHealth") for use in FirstHealth's hospital and pain clinic. As alleged by plaintiff, Urgent Care's compounded methylprednisolone injections had been contaminated with a fungus which caused individuals receiving the injections to contract fungal meningitis and other serious health conditions.

Plaintiff's complaint contained multiple claims against defendants Urgent Care and FirstHealth, Urgent Care's president Ray Burns ("Burns"), Urgent Care's head pharmacist Ken Mason ("Mason"), and Professional Compounding Centers of America, Ltd. ("PCCA"), the seller of raw materials used by Urgent Care in compounding the methylprednisolone. Plaintiff's claims included: (1) negligence on the part of defendants Urgent Care, Mason, and Burns; (2) liability on the part of defendants Urgent Care, Mason, and Burns under North Carolina General Statutes, section 99B-6; (3) Urgent Care's breach of the implied warranties of merchantability and fitness for a particular purpose; (4) negligence on the part of PCCA; (5) negligence on the part of FirstHealth; (6) FirstHealth's breach of the implied warranties of merchantability and fitness for a particular purpose; and (7) a claim seeking to pierce Urgent Care's corporate *214veil and hold defendant Burns liable as Urgent Care's "alter ego."

On 16 January 2003, Urgent Care filed for bankruptcy in South Carolina, and was appointed a bankruptcy trustee. An order lifting the automatic stay of plaintiff's claims against Urgent Care was entered 6 June 2003, permitting plaintiff to move forward with her claims, but limiting her recovery from Urgent Care to the funds available under Urgent Care's liability insurance policy.

Upon being served with plaintiff's complaint, defendant Burns sent a copy of the complaint to the attorneys at Poyner and Spruill, LLP who were representing defendants Burns and Urgent Care in a separate, similar action. Defendant Burns also notified his personal liability insurance carrier of the action. Unbeknownst to defendant Burns or his counsel at Poyner and Spruill, defendant Burns' personal liability insurance carrier retained attorney Melissa Garrell ("Garrell") of Teague, Campbell, Dennis and Gorham, LLP. Garrell filed a motion for extension of time to answer for defendant Burns on 24 February 2003, but failed to inform defendant Burns or Poyner and Spruill of her actions. Defendant Burns' counsel from Poyner and Spruill learned of Garrell's motion the following day, and shortly thereafter notified Garrell that Poyner and Spruill already was representing defendant Burns in a similar action, and also would be representing him in the present action. Counsel from Poyner and Spruill filed a motion for substitution of counsel on 28 March 2003, and a consent order allowing the motion was entered on 4 April 2003.

We note initially that Garrell's motion for an extension of time to answer does not constitute a general appearance, and does not serve as a waiver of defendant Burns' objection to the trial court's exercise of personal jurisdiction over him. See Williams v. Williams, 46 N.C.App. 787, 789, 266 S.E.2d 25, 27 (1980); Swenson v. Thibaut, 39 N.C.App. 77, 89, 250 S.E.2d 279, 288 (1978). Similarly, we note that Poyner and Spruill's motion for substitution of counsel also does not constitute a general appearance thereby waiving defendant Burns' objection to personal jurisdiction. When a defendant "invokes the adjudicatory powers of the court in any other matter not directly related to the questions of jurisdiction, he has made a general appearance and has submitted himself to the jurisdiction of the court whether he intended to or not." Swenson, 39 N.C.App. at 89, 250 S.E.2d at 288. In the present case defendant did not seek any determination on the merits of the case nor did he participate in any actions invoking the adjudicatory powers of the court. Defendant Burns' motion for substitution of counsel was simply a ministerial action which did not constitute a participation by defendant Burns in the present action or general appearance for purposes of the trial court's exercising personal jurisdiction over him.

Defendant Burns answered plaintiff's claims on 30 March 2003, asserting numerous affirmative defenses and moving to dismiss plaintiffs' claims for multiple reasons, including lack of subject matter and personal jurisdiction, and plaintiff's failure to comply with Rule 9(j) of our Rules of Civil Procedure. Defendant Urgent Care answered plaintiff's claims on 31 July 2003, also asserting numerous affirmative defenses and moving to dismiss plaintiff's claims for failure to comply with Rule (9)(j). On 11 October 2004, Urgent Care filed a separate motion to dismiss plaintiff's complaint, and in the alternative Urgent Care sought a grant of partial summary judgment on plaintiff's warranty claims.

A hearing on the parties' motions was held on 11 October 2004. At the hearing, the trial court granted summary judgment for PCCA, and plaintiff's claims against PCCA were dismissed with prejudice. Defendant Burns' motion to dismiss plaintiff's claims on the basis of a lack of personal jurisdiction over defendant Burns and a lack of subject matter jurisdiction over plaintiff's "alter ego" claim was also granted. The trial court found that due to Urgent Care being in bankruptcy proceedings, the bankruptcy trustee was the proper party to bring a claim to pierce Urgent Care's corporate veil and hold defendant Burns liable as its alter ego, thus plaintiff lacked standing to bring the claim herself. The trial court also found that *215defendant Urgent Care is a "health care provider" subject to the provisions of Article 1B of Chapter 90 of the North Carolina General Statutes, but that it was not a merchant or a seller of goods subject to the warranty provisions of the Uniform Commercial Code. Plaintiff's claims alleging Urgent Care's breach of the implied warranties of merchantability and fitness for a particular purpose were dismissed with prejudice as the trial court granted partial summary judgment in favor of Urgent Care. On 6 December 2004, plaintiff dismissed her claims against defendant FirstHealth with prejudice.

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Bluebook (online)
632 S.E.2d 211, 178 N.C. App. 510, 2006 N.C. App. LEXIS 1566, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rauch-v-urgent-care-pharmacy-inc-ncctapp-2006.