Woodard v. SUN BAY CONDOMINIUM OWNERS'ASSOCIATION, INC.
SUN BAY CONDOMINIUM OWNERS' ASSOCIATION, INC., and GRADY FULCHER, Defendants.
Court of Appeals of North Carolina.
Armstrong & Armstrong, P.A., by L. Lamar Armstrong Jr.;, and Ledolaw, by Michele A. Ledo, for plaintiffs-appellants.
Teague Campbell Dennis & Gorham, LLP, by Bryan T. Simpson, Edward S. Schenk III, and Brian M. Love, for defendants-appellees.
Plaintiffs Jerry C. Woodard and Wanda Woodard appeal an order allowing defendants Sun Bay Condominium Owners' Association, Inc.'s and Grady Fulcher's motion to dismiss plaintiffs' claim for unfair and deceptive trade practices ("UDTP"). As acknowledged by plaintiffs, this appeal is interlocutory because plaintiffs' claims for breach of contract and negligence remain pending before the trial court. We dismiss the appeal as the trial court's order does not contain a certification pursuant to Rule 54(b) of the Rules of Civil Procedure, and plaintiffs have not demonstrated that any substantial right is at stake.
Plaintiffs are owners of Unit #11 of the Sun Bay Villas, a condominium complex located in Pine Knoll Shores, North Carolina. On 16 October 2007, a pipe in the unit directly above plaintiffs' unit burst, and water poured into plaintiffs' condominium. On 8 September 2010, plaintiffs filed suit against defendants, the condominium owners association and the property manager, asserting claims for breach of contract, negligence, UDTP, and punitive damages.
Plaintiffs alleged that defendants failed to promptly, properly, and completely repair their condo to its condition prior to the water intrusion. Further, according to plaintiffs, defendants recklessly ignored recommendations of contractors and experts who evaluated and worked on plaintiffs' condo. As a result, defendants failed to prevent the development of dangerous mold that rendered the unit uninhabitable for two years.
Because of defendants' actions, plaintiffs were required to incur the expense of hiring their own contractors to evaluate, repair, and restore their condominium, as well as move, clean, and store personal property damaged by mold. Plaintiffs also alleged that the serious nature of the toxic mold and the period of time that the hazardous conditions persisted have substantially reduced the fair market value of their unit.
Plaintiffs' complaint alleges that defendants acted in this manner to avoid having to treat expenses in excess of insurance coverage as a common expense taxable to all unit owners in Sun Bay. According to plaintiffs, defendants failed to handle the insurance claim with reasonable care and then tried to shift responsibility to plaintiffs for the consequences of defendants' conduct, including making misrepresentations that defendants had no responsibility beyond insurance coverage.
On 22 November 2010, defendants filed an Answer, Motion to Change Venue, and Motion to Dismiss. On 15 February 2011, the trial court granted the motion to dismiss as to plaintiffs' UDTP claim only pursuant to Rule 12(b)(6) of the Rules of Civil Procedure. Plaintiffs filed a notice of appeal to this Court on 11 March 2011.
Plaintiffs concede that since their claims for breach of contract and negligence remain pending, this appeal is interlocutory. See Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) ("An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy.").
As our Supreme Court has held, "[i]n general, a party may not seek immediate appeal of an interlocutory order." Dep't of Transp. v. Rowe, 351 N.C. 172, 174, 521 S.E.2d 707, 709 (1999). More recently, the Supreme Court has explained: "Interlocutory orders may be appealed immediately under two circumstances. The first is when the trial court certifies [under Rule 54(b)] no just reason exists to delay the appeal after a final judgment as to fewer than all the claims or parties in the action. The second is when the appeal involves a substantial right of the appellant and the appellant will be injured if the error is not corrected before final judgment." N.C. Dep't of Transp. v. Stagecoach Vill., 360 N.C. 46, 47-48, 619 S.E.2d 495, 496 (2005) (internal citation omitted).
The trial court in this case did not certify the order allowing the motion to dismiss pursuant to Rule 54(b). Plaintiffs instead argue that a substantial right exists due to the potential for inconsistent verdicts, as the UDTP claim and the pending claims for breach of contract, negligence, and punitive damages have the same factual basis. In order to determine if a possibility of inconsistent verdicts exists, "we examine whether the facts before us dictate that plaintiff[s] would be required to undergo separate trials on the same issues, and, if so, whether there is a possibility of inconsistent verdicts, should [they] be ultimately successful on the appeal" of the issue before us. Moose v. Nissan of Statesville, Inc., 115 N.C. App. 423, 427-28, 444 S.E.2d 694, 697 (1994).
Here, although plaintiffs' statement of grounds for appellate review asserts that in the absence of an interlocutory appeal, they would face the possibility of two trials on the same issues, they do not provide any explanation regarding why that would be so in this case. Under Rule 28(b)(4) of the Rules of Appellate Procedure, "[w]hen an appeal is interlocutory, the statement must contain sufficient facts and argument to support appellate review on the ground that the challenged order affects a substantial right."
A review of plaintiffs' complaint and their brief on appeal reveals that the acts on which plaintiffs base their UDTP claim are the same acts that support their claims for breach of contract, negligence, and punitive damages. The parties to the pending claims and the UDTP claim are identical, and the parties will all be motivated to litigate vigorously whether the acts underlying those claims occurred. Plaintiffs have failed to explain why, given these circumstances, the doctrine of collateral estoppel would not protect them from the potential for inconsistent verdicts should they prevail in an appeal from the final judgment. See Stetser v. TAP Pharm. Prods., Inc., 165 N.C. App. 1, 29, 598 S.E.2d 570, 589 (2004) ("If all defendants are found not liable in the first trial, no second trial for the crossclaim of contribution need take place as the issue of unfair trade practice will have been decided and further trial will be precluded by collateral estoppel. Therefore, defendant TAP has not shown that it would be subject to two trials on the same issue or that inconsistent verdicts would result if it was involved in two trials as a result of the trial court's denial of its motion to amend. Accordingly, TAP has not demonstrated that a substantial right is affected and this interlocutory order is not immediately appealable.").
Plaintiffs, however, point to First Atl. Mgmt., Corp. v. Dunlea Realty, Co., 131 N.C. App. 242, 507 S.E.2d 56 (1998), as justifying their interlocutory appeal. Although First Atlantic involved an interlocutory appeal from the dismissal of a UDTP claim, the trial court had certified that dismissal for immediate appeal pursuant to Rule 54(b). 131 N.C. App. at 245, 507 S.E.2d at 59 ("The court's order further provided that, upon plaintiff's motion, `this Order is hereby... certified for immediate appeal' pursuant to N.C.G.S. § 1A-1, Rule 54(b) (1990)...."). Any discussion of the existence of a substantial right — which did not consider the application of collateral estoppel — was dicta and is not controlling here.
Since the trial court's order was not certified for immediate appeal under Rule 54(b) and since plaintiffs have failed to demonstrate the existence of a substantial right, we are required to dismiss the appeal. While plaintiffs have also asked that we review the dismissal of the UDTP claim pursuant to a petition for writ of certiorari, in our discretion, we decline to do so.
Judges STEELMAN and BEASLEY concur.
Report per Rule 30(e).