SR Auto Transp., Inc. v. Adam's Auto Grp.

• Court: Court of Appeals of North Carolina
• Decided: January 17, 2023
• Docket: 22-463
• Status: Published

Opinion

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,

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.

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.

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.

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.

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.

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.

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.

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

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.

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

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.