Tuesday’s batch of opinions from the Court of Appeals contained a smorgasbord of jurisdictional issues pertaining to interlocutory appeals. In no particular order:

Department of Transportation v. Riddle

This condemnation proceeding involved a partial taking by the North Carolina Department of Transportation (“DOT”). The Riddles owned a parcel of land that they had subdivided into seven separate lots. The DOT originally commenced the action by filing a complaint and declaration of taking for portions of Lot 2 and Lot 7.  The Riddles contended that all seven lots constituted a single tract and therefore should be considered together by the jury that would be charged with determining just compensation constitutionally due to the Riddles for the State’s taking of their property.  After the trial court entered an order that the jury could only consider the effect of the taking on Lots 2 and 7, the Riddles appealed.  The Court of Appeals remanded and ordered the trial court to determine whether any of the other five lots should be considered with Lots 2 and 7 for the purpose of determining just compensation.  On remand, the trial court ordered that Lot 1 be unified with Lots 2 and 7.  The Riddles appealed again, arguing that the effect of the taking on all seven lots should be considered by the jury.  The DOT, attempting to minimize the amount of compensation the State had to pay to the Riddles for taking their property, cross-appealed seeking to limit damages to the effect the taking had on Lots 2 and 7.

These cross-appeals were from an interlocutory order entered by the trial court after a hearing pursuant to N.C.G.S. § 136-108. Two decisions from the Supreme Court of North Carolina, N.C. State Highway Commission v. Nuckles, 271 N.C. 1, 155 S.E.2d 772 (1967) and Department of Transportation v. Rowe, 351 N.C. 172, 521 S.E.2d 707 (1999), address interlocutory appeals arising from a section 136-108 order. Nuckles directs that an interlocutory order that determines the land actually taken must be appealed immediately in order to be preserved for appellate review. Rowe then clarified the ruling in Nuckles, holding that the determination of the land affected, i.e. what constitutes the “entire tract,” could be appealed after a jury trial on just compensation.  However, Rowe was subsequently interpreted by the Court of Appeals in Department of Transportation v. Airlie Park, Inc., 156 N.C. App. 63, 576 S.E.2d 341 (2003) to leave open the question of whether the determination of what constitutes an entire tract affects a substantial right thereby allowing for immediate appellate review.  The Court in Arlie Park held that depending on the particular facts of a case, the issue could be “vital” and therefore affect a substantial right.

Against this backdrop, the Riddle Court held that the trial court’s determination on the issue of lot unification in this case affected a substantial right and thus appellate jurisdiction over the interlocutory order was appropriate. The Court further reasoned that a different panel of the Court of Appeals had previously determined that appellate jurisdiction over this issue was appropriate in this case, and noted the rule that once a panel of the Court of Appeals has decided a question in a given case, that decision becomes the law of the case and is binding on subsequent panels.  However, the Court also noted that whether that rule applies to an issue of appellate jurisdiction has not been definitively decided by the Supreme Court of North Carolina.  Regardless, the Court proceeded to the merits of the cross-appeals.

Moon Wright & Houston, PLLC v. Cole

In Cole the plaintiff law firm brought a number of claims against a husband and wife stemming from a fee dispute.  After both defendants filed a motion for summary judgment as to all claims, the wife filed for bankruptcy.  That filing triggered an automatic stay of the state court case as against her.  Thereafter, the trial court granted summary judgment in favor of the husband and plaintiff appealed.  However, because the case was stayed as against the wife who had filed for bankruptcy, the Court of Appeals held that plaintiff’s claims against her remained alive.  The order granting summary judgment to the other defendant thus did not resolve all claims in the action, the order was interlocutory.  Although neither appellant nor appellee raised the jurisdictional issue, the Court of Appeals did so sua sponte and, finding appellate jurisdiction lacking, dismissed the appeal.

Providence Volunteer Fire Department v. Town of Weddington

This case arose from a factually and procedurally complex relationship between a municipality and a volunteer fire department. After a dispute arose between the parties, the Fire Department sued the Town in both contract and tort.  The Town moved to dismiss the tort claims (fraud and unfair and deceptive trade practices) on the basis of governmental immunity.  The trial court granted the motion as to the unfair and deceptive trade practice claim but denied it as to the fraud claim.  The trial court further denied the Town’s motion to dismiss pursuant to Rule 12(b)(6) and allowed the Fire Department’s motion to amend its complaint.  The trial court additionally imposed a preliminary injunction on the Town.

The Town appealed all of the trial court’s adverse orders. The Court of Appeals noted that all of the orders from which the Town appealed were interlocutory, but held that pursuant to the well-established rule that an order denying a motion to dismiss for lack of personal jurisdiction based on governmental immunity affects a substantial right, the Court had jurisdiction over the order denying the Town’s motion to dismiss the fraud claim on the basis of governmental immunity.  (However, the Court dismissed the Town’s efforts to also take an immediate appeal of that order based on a subject matter jurisdiction argument.)

What is most interesting about this case, however, is what the Court chose to do with the remaining issues on appeal. Even though those orders did not affect a substantial right and were not otherwise appealable, the Court, citing the notorious (at least in the world of appellate practitioners) case of RPR & Assocs., Inc. v. State, invoked its rarely used discretion to exercise appellate jurisdiction over non-appealable interlocutory orders when doing so would avoid “fragmentary appeals.”  The Court determined that because the other issues that the Town sought to appeal were “closely interrelated” to the issue properly before the Court, it would address all of the Town’s additional arguments.

Page v. Chaing

Chaing was a medical malpractice and negligence case against North Carolina Department of Health and Human Services employees in the State Laboratory of Public Health.  Defendants moved to dismiss asserting a number of immunity defenses, including that they were being sued in their official capacities and thus afforded sovereign immunity, that plaintiffs failed to allege a waiver of sovereign immunity, and that the defendants were public officials entitled to public official immunity.  The defendants also moved to dismiss pursuant to Rule 12(b)(6) on the ground that they owed no duty to plaintiffs.  After plaintiffs were allowed to amend their complaint to assert that they were suing defendants in their individual capacities, the trial court determined that the sovereign immunity portion of the defendants’ motion was moot and denied defendants’ Rule 12(b)(6) motion.  The argument that defendants’ were entitled to public official immunity was not advanced by the defendants at the hearing. Subsequently, the trial court entered an order denying all of defendants’ motions to dismiss.

The defendants noticed an appeal from the order, specifically referencing “motions to dismiss based on claims of public official and sovereign immunity under Rule 12(b)(6) of the North Carolina Rules of Appellate Procedure.”  Defendants argued that the interlocutory order was appealable because their motion was based on public official immunity, and thus a substantial right was affected.  The Chaing Court noted that while ordinarily an order denying a motion to dismiss based on public official immunity does affect a substantial right and is immediately appealable, in determining whether a particular order is immediately appealable the Court must look at the manner in which the immunity argument was presented to the trial court. The reason that this analysis matters is because although immunity arguments made pursuant to Rule 12(b)(2) for lack of personal jurisdiction or Rule 12(b)(6) for failure to state a claim are immediately appealable, immunity arguments made pursuant to Rule 12(b)(1) for lack of subject matter jurisdiction are not immediately appealable. See Murray v. Univ. of North Carolina at Chapel Hill, __ N.C. App. ___, 782 S.E. 2d 531 (2016) (discussing Can Am South, LLC v. State, 234 N.C. App, 119, 759 S.E. 2d 304 (2014)).  Because in this case, the record and transcript of proceedings indicated that the defendants had only advanced immunity arguments in the trial court based on lack of subject matter jurisdiction, the Court determined that it lacked jurisdiction.  The fact that the defendants referenced personal jurisdiction and Rule 12(b)(6) in their notice of appeal was immaterial—what mattered was what was actually presented to the trial court.  (Note: we have previously blogged on this issue or related issues: see here and here, and also here.)  Thus, the defendants’ appeal was dismissed.

–Patrick Kane