It’s a fairly common maneuver by plaintiffs’ attorneys: the trial court dismisses claims against some, but not all, defendants in a multi-defendant lawsuit, so the plaintiff voluntarily dismisses the remaining defendants in order to pursue an immediate appeal of the dismissal order.  The reason for this procedural wrangling is that while the lawsuit against the non-dismissed defendants is still pending, the dismissal order is interlocutory and, absent Rule 54(b) certification or an affected substantial right, that order is not immediately appealable.  Once the remainder of the case is voluntarily dismissed, however, the dismissal order becomes a final judgment that can be appealed.  See Combs & Assocs. v. Kennedy, 147 N.C. App. 362, 367, 555 S.E.2d 634, 638 (2001).

The Court of Appeals released an opinion today in Parmley v. Barrow, a case in which the Plaintiff had attempted the strategy described above.  After the trial court in Pamlico County entered a partial summary judgment order dismissing five of the seven named defendants, the Plaintiff filed a notice of appeal from that order and then filed a voluntary dismissal without prejudice of the claims against the remaining two defendants.  The voluntary dismissal rendered the trial court’s summary judgment order a final judgment, and the Court of Appeals therefore had jurisdiction to hear the case.  Simple, right?  Not so fast.  This jurisdiction was short-lived because a month after filing the voluntary dismissal, the Plaintiff filed a new action in Durham County against the two defendants that had been voluntarily dismissed from the Pamlico County action.  The new Complaint contained allegations that were “substantially similar to the allegations contained in [the] action’s original complaint.”

The dismissed Defendants filed a Rule 9(b)(5) supplement to the Record on Appeal containing the newly filed Durham County complaint.  Although the Plaintiff moved to strike this supplement as improper, the Court of Appeals denied that motion.  The Court held that because the new lawsuit was filed after the order being appealed, and the existence of that suit was “a determinative fact in [its] analysis as to whether [the] Court has jurisdiction over Plaintiff’s appeal,” it could take judicial notice of the Durham County lawsuit.

The result was that the Plaintiff’s appeal was dismissed as having been taken from a non-appealable interlocutory order.  The Court held that while the filing of the initial voluntary dismissal made the trial court’s partial summary judgment order a “final judgment” for the purposes of appellate jurisdiction, once the Plaintiff refilled its claims against the remaining defendants in the new action, that final judgment was “no longer a final judgment.”  The rationale for this decision was that the rights of the Plaintiff and the two remaining defendants “are still pending in the trial division.”  Thus, the Court viewed the procedural posture of the case as not materially different than if the original claims against the defendants had never been dismissed.  The Plaintiff was prevented from creating appellate jurisdiction through artful filing when no jurisdiction would have otherwise existed.  However, the Court noted that the dismissal of the appeal was without prejudice to the appeal being pursued at the conclusion of the Durham County lawsuit.

Was this the correct result?  Do you see any potential procedural problems that could arise from this decision?  Weigh in below!

–Patrick Kane