Parties must move for a directed verdict to preserve their right to request judgment notwithstanding the verdict (JNOV*) after an unfavorable verdict is returned.  Friday’s batch of Supreme Court opinions includes a Masterclass by Justice Dietz on how that requirement can be a trap—particularly in a complex case involving multiple claims, issues, and theories. 

Vanguard Pai Lung, LLC v. Moody was a direct Supreme Court appeal from the Business Court’s denial of a JNOV motion.  But before the Supreme Court could touch the merits of the JNOV argument, it had to decide whether the JNOV arguments has been preserved for review.

The phrase “preserved for review” might trigger thoughts of an appellate court refusing to address issues not raised in the trial court.  But in the JNOV context, a trial court may refuse to hear arguments not previously raised in a timely directed verdict motion.  And that is why Vanguard Pai Lung doesn’t once mention Appellate Rule 10—which is a rule directed to error preservation barriers to appellate review.

Rather, Civil Rule 50 governs JNOV error preservation.  Under that rule, a party must have previously moved for a directed verdict at the close of all evidence to obtain JNOV in the trial court.  And under Civil Rule 50(a), the directed verdict motion must “state the specific grounds” on which the request is based—with any later JNOV request being appropriate only when “it appears that the motion for directed verdict could properly have been granted.” Which brings us to our first refresher course from the Supreme Court.

• JNOV 101: A “JNOV motion is limited to the specific grounds raised in the motion for direct verdict that is being renewed.”  (Slip op. at 5-6).

But what are the contours of the Rule 50 “specific grounds” requirement?  Is it enough to move for a direct verdict on every claim the party may want to challenge on JNOV?  Or is the requirement more granular that that?

The defendants in Vanguard Pai Lung orally moved for a directed verdict which included a series of arguments as to specific claims and defenses being asserted in the case.  Generally moving for a directed verdict on each claim is not enough.

• JNOV 102.:  To preserve a specific issue for JNOV review, a party must have timely moved for a direct verdict based on the same issue.  (Slip op. at 2).

While the Court of Appeals has a long line of cases adopting this holding, the North Carolina Supreme Court hadn’t expressly endorsed that same interpretation—until Friday.  (Slip op. at 7).

But that leads to another question: How “does a court determine what ‘specific issues’ a litigant raised in a motion for directed verdict?”  (Slip.  op. at 7-8)?

The Supreme Court explained that courts should not “inflexibly enforce the [specific issue requirement] when the grounds from the motion are apparent to the court and the parties.”  (Slip op. at 8).  In other words, in an uncomplicated, single-issue case where the grounds for the directed verdict motion are obvious, the Supreme Court is not going to elevate form over substance.  (Slip op. at 9).

• Error Preservation 105 (Online Course):  Appellate Rule 10 contains an apparent from the context exception.  Whether an argument is apparent from the context is usually an elusive and case-specific concept—not something a party wants to hinge their appeal rights on.   See generally North Carolina Appellate Practice & Procedure, § 4.03[5] [General Versus Specific Objections].

To avoid this problem, the Supreme Court offered this guidance:

• JNOV 201: “In a case involving multiple claims or defenses, an issue is raised at the directed verdict stage only if the movant expressly articulates that specific argument or theory to the trial court.”  In contrast, “[w]hen a specific argument or theory that forms a ground for relief is not expressly stated in a directed verdict motion, that issue is waived both at the directed verdict stage and later at the JNOV stage.  (Slip op. at 8). 

The facts of Vanguard Pai Lung show how nuanced the specific argument or issues requirement can be.  The Vanguard Pai Lung articulated Fact Theory A as to Claim 1 at the directed verdict stage, but then at the JNOV stage argued that Fact Theory A had been incorporated into defendant’s directed verdict request as to Claim 2 as well.  That wasn’t enough. 

Also, the Supreme Court acknowledged that trial counsel’s oral directed verdict request was “confusingly worded” as to whether it applied to all the fraud elements, or just some.   But the confusion didn’t help the moving party.

• JNOV 202:  When there’s confusion on precisely what counsel was arguing for in a directed verdict motion, “that confusion results in waiver.”  (Slip op. at 12).

The Supreme Court wasn’t unsympathetic to the plight of battle-worn, trial court litigants.  Justice Dietz acknowledged that during a lengthy and complicated trial, the last thing litigants (and the trial courts) may want to do is spend “a substantial amount of time outside the presence of the jury reading a lengthy list of directed verdict issues in open court—particularly when it seems obvious that the trial court will defer ruling on the motions” until after a verdict is returned.  (Slip op. at 12). 

To avoid this scenario, the Supreme Court provided this practical advice:

• JNOV 301: “The best practice in these multi-claim, multi-defense cases is to prepare and file a written motion for directed verdict.  This provides the opposing parties and the court with notice of the specific grounds for the motion.  The key issues can then be highlighted for the court’s consideration in open court without raising concerns about preservation and waiver.” (Slip op. at 13-14).

Consider pulling out Vanguard Pai Lung next time you or a team member head to trial.

But what if you get to the JNOV stage and realize you might be in the dreaded “apparent from the context” territory? Assess whether the trial court might be willing to help you out.

• Error Preservation Symposium 406:   Not addressed by the Supreme Court’s opinion is how appellate standards of review work for an “apparent from the context” JNOV argument.  My strong suspicion is that appellate courts would give considerable deference to a trial court’s determination that an argument was not apparent from the context.  If the trial judge says he didn’t understand the party to be making an argument not specifically articulately, then the party would effectively have to show that the trial court was not being completely truthful or was clueless.  What I can’t predict is whether the appellate courts would be deferential to a trial court’s assessment that an argument was apparent from the context?  My gut says the answer should be yes–but guts don’t make the law.

Patiently waiting for the Supreme Court’s next Masterclass on procedural issues.

I’d love to hear your thoughts.  Share them at this LinkedIn post.

–Beth Scherer

* No Masterclass is complete without a historical detour.   Ever wondered why judgment notwithstanding the verdict is abbreviate JNOV, rather than JNV?  Justice Dietz explained that JNOV is an abbreviation for “judgment non obstante veredicto.”

The Latin phrase “non obstante veredicto” directly translates to “notwithstanding the verdict.”  But since the English language is already hopelessly complicated, the legal community commonly abbreviates judgment notwithstanding the verdict to JNOV.  To further complicate the topic, the federal rules have replaced “judgment notwithstanding the verdict” with “judgment as a matter of law,” which should have the JML abbreviation.  But even in federal circles, JNOV sometimes roll off the tongue with greater ease.