This week, the Court of Appeals reiterated the bounds of Rule 54(b) certification, highlighting that the language of the rule—which allows a party to immediately appeal from “a final judgment as to one or more but fewer than all of the claims or parties”—is only applicable when a judgment is, in fact, final.

In Lennar Carolinas, LLC v. County of Union, the Court of Appeals was asked to review the denial of a summary judgment motion by the County. In 1997, Union County enacted an ordinance that governed residential real estate developments and their integration into the County-operated sewer and water system. The ordinance imposed capacity fees for both water and sewer. Fifteen years later, in 2012, the County Commissioners enacted an ordinance requiring developers to pay fees for prospective water and sewer capacity as a precondition to the construction of water and sewer lines connecting a development to the County-operated system.

In 2016, the Supreme Court of North Carolina held that, due to a lack of explicit language in the statutes authorizing such prospective capacity fees, cities were only authorized to charge for the contemporaneous use of water and sewer services. See Quality Built Homes, Inc. v. Town of Carthage, 369 N.C. 15, 789 S.E.2d 454 (2016). After the Carthage decision, several developers sued Union County, seeking refunds for fees previously collected by the County.

The County Commissioners reacted to the suits by creating the Union County Water and Sewer District under a statute that does empower the collection of prospective fees.  The County also made the formation of the District, and the County’s ability to collect such fees, retroactive to 2013 in an attempt to time-bar the developers’ claims.

After doing so, the County moved for summary judgment on the developers’ claims, arguing that they were barred because any defect in assessing the fees had been cured. The trial court denied the motion on the basis that the County had not “demonstrate[d] a lack of material facts entitling it to judgment as a matter of law.” The trial court then purported to certify its order for immediate appeal under Rule 54(b), and the County appealed.

The Court of Appeals determined that it had no jurisdiction under Rule 54(b) and dismissed the appeal. Rule 54(b) applies only to orders that “dispose of one or more claims of the parties.” However, a denial of summary judgment does not actually “dispose” of anything.  Rather, it simply means that the claims that were the subject of the motion are still viable and must go to trial for actual resolution. Thus, the trial court erred in attempting to certify its order, and the Court of Appeals could not hear the appeal.

For similar reasons, the Court of Appeals also found that the summary judgment denial did not affect the County’s substantial rights—the only other suggested path to an immediate appeal. The County identified three possible substantial rights that were allegedly impaired by the trial court’s order: (1) the enforcement of legislative authority free from judicial restraint or interference; (2) the financial stability of the County; and (3) the availability of the County’s retroactive legislation defense.

All three arguments failed for essentially the same reason as the 54(b) appeal: a denial of summary judgment does not actually decide anything about a claim. As the Court of Appeals noted, the only “right” that the denial affected was the right to be free from a trial resolving the issues. However, it has long been settled that “avoiding the time and expense of a trial is not a substantial right justifying immediate appeal.”

Finally, the Court of Appeals denied the County’s alternative petition for writ of certiorari, noting that such grants are exceedingly rare and that the County had failed to show how immediate review would aid the case or judicial economy.

Trials are becoming increasingly rare, and losing a summary judgment motion after all of the related time and expense involved can certainly feel like a final resolution. However, as the Court of Appeals reminds us, it is not actually the end of the case.

Thoughts? Leave them below!