Last week I wrote about the Court of Appeals’ holding in SED Holdings, LLC v. 3 Star Properties, LLC regarding the jurisdiction of the trial court while an interlocutory appeal is pending. See here. A few weeks prior, before the SED II opinion was released, Mack Sperling provided some excellent insight on his blog as to what was happening in the trial court in SED and how the court’s jurisdiction was impacted by the Petition for Discretionary Review that defendants had filed (and that was subsequently allowed) regarding the Court of Appeals’ decision in SED I. By that point the case was venued in the North Carolina Business Court, and Judge Robinson had determined that while the PDR was pending before the Supreme Court of North Carolina, he retained jurisdiction to proceed with the case at the trial court level. However, once the Supreme Court allowed the PDR, Judge Robinson sua sponte determined that the trial court was without jurisdiction to proceed. His reasoning was that the trial court’s denial of defendants’ motion to dismiss for lack of subject matter jurisdiction and improper venue became an “issue on appeal” to the Supreme Court upon the allowance of the PDR, and that divested the trial court of jurisdiction.
While that decision certainly makes sense, one must wonder if, in light of RPR, and now SED II (which had not been decided at the time of Judge Robinson’s order), Judge Robinson could have properly proceeded with the case while the issue is pending before the Supreme Court. After all, just a few weeks after he decided he was without jurisdiction, the Court of Appeals in SED II blessed the trial court’s decision to retain jurisdiction while that exact same appeal was pending at the Court of Appeals. (Note: the decision to retain jurisdiction while SED I was pending before the Court of Appeals was made by Judge Abernathy in Durham County Superior Court–the case had not yet made its way into the Business Court at that time.) What do you think? Could Judge Robinson have retained jurisdiction? Does RPR apply differently when the appeal is pending before the Supreme Court as opposed to the Court of Appeals?
Further, even though the SED II Court discussed the appeal in SED I in the context of the trial court’s underlying order granting a preliminary injunction, it is notable that also pending before the Court of Appeals in SED I was the trial court’s interlocutory order denying defendants’ motion to dismiss for lack of subject matter jurisdiction/improper venue. And it is the subject matter jurisdiction/improper venue issue (based on a forum selection clause in a contract) that was the crux of defendants’ PDR. How should this impact the analysis? The SED II Court appears not to have considered the issue. The Court did note that there were two interlocutory orders that the defendants’ were appealing in SED I–an order denying defendants’ motion to dismiss based on a forum selection clause and the order entering a preliminary injunction. But when the it discussed the “reasonableness” of the trial court’s decision to retain jurisdiction while these appeals were pending, it discussed only the immediate appealability of the preliminary injunction order. Why wasn’t the reasonableness of the trial court’s implied determination that the order denying the motion to dismiss based on the forum selection clause was not immediately appealable discussed and analyzed? And if it had been addressed, would the trial court’s decision still have been found to be reasonable? It appears fairly well-settled that an interlocutory order denying motion to dismiss based on a forum selection clause is immediately appealable. See, e.g., Hickox v. R & G Group Int’l, Inc., 161 N.C.App. 510, 588 S.E.2d 566 (2003); Mark Grp. Int’l, Inc. v. Still, 151 N.C.App. 565, 566 S.E.2d 160 (2002); L.C. Williams Oil Co. v. NAFCO Capital Corp., 130 N.C. App. 286, 502 S.E.2d 415 (1998).
As always, please weigh in with your comments!