It’s been a few months since I last posted here, and my last post involved what I thought, at the time, was a unique scenario in which the Court was required to first determine the merits of a claim in order to determine the appealability of a lower court decision. However, as I scrolled the decisions released by the Court of Appeals this week, I immediately came across a decision that presented a similar scenario. Perhaps it is not as “unique” as I originally believed.
In Cameron Hospitality, Inc. v. Cline Design Associates, PA, defendant-appellants appealed from the denial of their motion for summary judgment. Recognizing that as a general rule a denial of a motion for summary judgment is ordinarily not immediately appealable, the defendant-appellants argued that because their motion for summary judgment was based on a defense of res judicata, the denial of the motion affected a substantial right and the order denying the motion was immediately appealable. The plaintiff-appellee moved in the trial court to dismiss the appeal as interlocutory. After the trial court denied that motion on the grounds that the order affected a substantial right, the plaintiff-appellee moved the Court of Appeals to dismiss the appeal on the grounds that the denial of the motion for summary judgment did not affect a substantial right.
In analyzing the plaintiff-appellee’s motion to dismiss the appeal, the Court acknowledged that “the denial of a motion for summary judgment based on the defense of res judicata may involve a substantial right so as to permit immediate appeal only where a possibility of inconsistent verdicts exists if the case proceeds to trial.” Quoting Heritage Operating L.P. v. N.C. Propane Exch., LLC, __ N.C. App. __, __, 727 S.E.2d 311, 314 (2012) (emphasis added). Thus, to determine whether a substantial right was affected, the Court was required to analyze whether or not the possibility of inconsistent verdicts existed because of res judicata. However, in doing so, the Court ultimately had to determine whether res judicata applied in the case at all and the merits of the defense asserted on summary judgment by the defendant-appellants.
The defendant-appellants were two subcontractors working on a construction project at plaintiff-appellee’s restaurant. The architect and general contractor were also sued in the underlying matter, but the plaintiff-appellee voluntarily dismissed those two parties with prejudice, leaving only the defendant-appellants in the case. The defendant-appellants moved for summary judgment on the ground that under the doctrine of respondeat superior, the dismissal of the architect and general contractor served as res judicata to the plaintiff-appellee’s claims against them as well.
The Court analyzed the merits of this argument and rejected it, concluding (1) that the dismissal of the architect and general contractor did not serve as res judicata with respect to the defendant-appellants, and (2) that the doctrine of respondeat superior did not apply because the defendant-appellants were subcontractors as opposed to agents of the architect and contractor. As such, after review of the merits of the defense proffered by the defendant-appellants, the Court concluded that the denial of their motion for summary judgment did not affect a substantial right and the Court dismissed the appeal as interlocutory.
While this scenario is not as complicated as the one presented by Doe v. Charlotte-Mecklenberg Board of Education, it is another reminder that the determination of whether or not a case is appealable is not always simple.