Bruns v. N.C. Farm Brueau Mut. Ins. Co., Inc. ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA14-52
NORTH CAROLINA COURT OF APPEALS
Filed: 1 July 2014
NICOLE J. BRUNS,
Plaintiff,
v. Craven County
No. 12 CVS 1495
NORTH CAROLINA FARM BUREAU MUTUAL
INSURANCE COMPANY, INC.,
Defendant.
Appeal by defendant and cross-appeal by plaintiff from
judgment entered 25 March 2013 by Judge Jay D. Hockenbury in
Craven County Superior Court. Heard in the Court of Appeals 19
May 2014.
William F. Ward, III, P.A., by William F. Ward, III, for
plaintiff-appellee.
Harris, Creech, Ward & Blackerby, P.A., by Jay C. Salsman,
C. David Creech, and Heather M. Beam, for defendant-
appellant.
STEELMAN, Judge.
Where Farm Bureau was dismissed from the original
litigation, and was not a party when the judgment was entered,
it is not bound by the original judgment. Where plaintiff has
-2-
not shown that the partial denial of her summary judgment motion
affected a substantial right, plaintiff’s interlocutory appeal
is dismissed.
I. Factual and Procedural Background
In November 2010, Nicole J. Bruns (plaintiff) noticed water
damage to the floor of her kitchen. At the time, her
homeowner’s insurance policy was with North Carolina Farm Bureau
Mutual Insurance Company, Inc. (Farm Bureau). Plaintiff
contacted James B. Flanagan (Flanagan), a repairman, who met
with plaintiff and a Farm Bureau claims adjuster to assess the
damage. On 30 November 2010, Flanagan began work on plaintiff’s
kitchen. Flanagan removed plaintiff’s countertops, kitchen
cabinets, sink, island, and other personal property from the
kitchen, and after stripping the kitchen down to the floor
joists and drywall, did not return.
On 13 June 2011, Flanagan filed suit against plaintiff,
seeking payment for services to plaintiff’s residence. (Craven
County action 11 CVS 937). On 19 September 2011, plaintiff
filed answer, counterclaims, and a third-party complaint against
Farm Bureau. On 24 October 2011, Farm Bureau moved to dismiss
plaintiff’s third-party complaint, based upon plaintiff’s
-3-
failure to comply with Rules 13(h) and 14(a) of the North
Carolina Rules of Civil Procedure. On 17 January 2012, the
trial court granted Farm Bureau’s motion to dismiss, without
prejudice to plaintiff filing an independent action against Farm
Bureau.
On 18 March 2013, case 11 CVS 937 was called for trial
before the Superior Court of Craven County, Judge Alford
presiding. Flanagan failed to appear for trial. Trial court
dismissed Flanagan’s claims against plaintiff. Plaintiff then
waived her right to a jury trial. On 25 March 2013, the trial
court entered judgment on plaintiff’s counterclaims, and found
that Flanagan had converted the property of plaintiff. The
court awarded damages of $47,024.77, which it trebled to
$141,074.31, pursuant to N.C. Gen. Stat. § 75-16. In addition,
the trial court awarded damages of $97,060.19 to plaintiff for
breach of contract, and $ 79,378.17 for attorney’s fees pursuant
to N.C. Gen. Stat. § 75-16.1.
On 9 October 2012, plaintiff filed the complaint in the
instant case against Farm Bureau, alleging breach of the
insurance contract, bad faith, and unfair and deceptive trade
practices. On 13 December 2012, Farm Bureau filed its answer,
and counterclaims for attorney’s fees pursuant to N.C. Gen.
-4-
Stat. §§ 1D-45 and 75-16.1. Farm Bureau also counterclaimed for
a declaratory judgment pursuant to N.C. Gen. Stat. § 1-253 et
seq. that it had no liability to plaintiff under the terms of
the homeowner’s insurance policy.
On 25 April 2013, plaintiff filed a motion for summary
judgment, alleging that the 25 March 2013 judgment against
Flanagan in case 11 CVS 937 precluded the relitigation of the
issues decided therein under the doctrines of res judicata,
collateral estoppel and claims splitting. On 14 August 2013,
the trial court entered an order of partial summary judgment.
This order granted summary judgment in favor of plaintiff on
plaintiff’s breach of contract claim, and awarded to plaintiff
the sum of $97,060.19 together with statutory interest from the
date of breach, 7 December 2010. It also certified that issue
for immediate appellate review, pursuant to Rule 54(b) of the
North Carolina Rules of Civil Procedure. The order also denied
plaintiff’s motion for summary judgment as to plaintiff’s claims
of bad faith and unfair and deceptive trade practices.
From the grant of summary judgment on the issue of the
breach of contract claim, Farm Bureau appeals. From the denial
of summary judgment on all other issues, plaintiff cross-
appeals.
-5-
II. Appeal of Farm Bureau
In its arguments on appeal, Farm Bureau contends that the
trial court erred in entering summary judgment against it with
regard to plaintiff’s breach of contract claim. We agree.
A. Standard of Review
“Our standard of review of an appeal from summary judgment
is de novo; such judgment is appropriate only when the record
shows that ‘there is no genuine issue as to any material fact
and that any party is entitled to a judgment as a matter of
law.’” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572,
576 (2008) (quoting Forbis v. Neal, 361 N.C. 519, 524, 649
S.E.2d 382, 385 (2007)).
B. Analysis
In its order of partial summary judgment, the trial court
held that:
The Court, after hearing arguments of
counsel, considering the memoranda filed by
counsel and reviewing the notebooks of
relevant materials and cases submitted both
in support of and in opposition to the
motion, has determined that there is no
genuine issue as to any material fact as to
the plaintiff’s first cause of action, to
wit: breach of contract and contract
damages, based on res judicata.
It then granted summary judgment in favor of plaintiff on
the breach of contract claim, and certified the grant of summary
-6-
judgment as a final judgment pursuant to Rule 54(b) of the North
Carolina Rules of Civil Procedure.
Farm Bureau contends that summary judgment was improperly
granted for multiple reasons: (1) the doctrines of res judicata
and collateral estoppel do not apply; (2) there were genuine
issues of material fact; and (3) the damages awarded by the
trial court constituted an impermissible double recovery. We
address only the grounds stated by the trial court as the basis
for its ruling: res judicata.
The essential elements of res judicata are:
(1) a final judgment on the merits in an
earlier lawsuit; (2) an identity of the
cause of action in the prior suit and the
later suit; and (3) an identity of parties
or their privies in both suits. See Hogan v.
Cone Mills Corp., 315 N.C. 127, 135, 337
S.E.2d 477, 482 (1985). “Under the doctrine
of res judicata, a final judgment on the
merits in a prior action in a court of
competent jurisdiction precludes a second
suit involving the same claim between the
same parties or those in privity with them.”
Bockweg v. Anderson, 333 N.C. 486, 491, 428
S.E.2d 157, 161 (1993) (citing Thomas M.
McInnis & Assoc., Inc. v. Hall, 318 N.C.
421, 428, 349 S.E.2d 552, 556 (1986)).
Green v. Dixon, 137 N.C. App. 305, 307, 528 S.E.2d 51, 53 aff'd
per curiam, 352 N.C. 666, 535 S.E.2d 356 (2000).
“For res judicata to apply, a party must
show that the previous suit resulted in a
final judgment on the merits, that the same
cause of action is involved, and that both
-7-
the party asserting res judicata and the
party against whom res judicata is asserted
were either parties or stand in privity with
parties.” State ex rel. Tucker v. Frinzi,
344 N.C. 411, 413–14, 474 S.E.2d 127, 128
(1996) (quotation omitted). “The doctrine
prevents the relitigation of all matters ...
that were or should have been adjudicated in
the prior action.” Whitacre P'ship, 358 N.C.
at 15, 591 S.E.2d at 880 (quotation
omitted).
Williams v. Peabody, 217 N.C. App. 1, 5, 719 S.E.2d 88, 92
(2011).
In the instant case, the trial court explicitly based its
grant of summary judgment upon the doctrine of res judicata, in
effect holding that the scope of Farm Bureau’s coverage under
plaintiff’s homeowner’s insurance was a matter settled during
the previous lawsuit between plaintiff and Flanagan in case 11
CVS 937. However, in case 11 CVS 937, the trial court granted
the motion to dismiss Farm Bureau as a third-party defendant.
Farm Bureau was not a party to the original litigation at the
time that judgment was entered.
Even assuming arguendo that the lawsuit between plaintiff
and Flanagan concerned the same cause of action, and resulted in
a judgment on the merits, it is clear that it did not involve
the same parties. The original lawsuit was between plaintiff
and Flanagan, and concerned plaintiff’s contract with Flanagan.
-8-
In that case, the trial court addressed Flanagan’s conversion,
Flanagan’s breach of contract, and Flanagan’s unfair and
deceptive trade practices. The trial court determined that,
based upon this misconduct, plaintiff was entitled to damages
from Flanagan. Apart from mentioning Flanagan’s contract with
Farm Bureau, the original judgment made no reference to Farm
Bureau’s liability or its involvement in the case. The issue of
whether plaintiff’s damages were within the scope of plaintiff’s
homeowner’s insurance policy coverage with Farm Bureau was not
before the trial court in case 11 CVS 937.
Because Farm Bureau was not a party to the original case,
it could not be bound by that judgment. There was no evidence
of privity between Flanagan and Farm Bureau to support entry of
a judgment based upon res judicata.
We hold that the trial court erred in granting partial
summary judgment in favor of plaintiff with regard to
plaintiff’s breach of contract action, and vacate the trial
court’s summary judgment order.
III. Cross-Appeal
In her cross-appeal, plaintiff contends that the trial
court erred in denying her motion for summary judgment with
regard to bad faith and unfair and deceptive trade practices.
-9-
Because this cross-appeal is interlocutory, we dismiss it as
premature.
A. Standard of Review
“The denial of summary judgment is not a
final judgment, but rather is interlocutory
in nature. We do not review interlocutory
orders as a matter of course.” McCallum v.
N.C. Coop. Extension Serv., 142 N.C. App.
48, 50, 542 S.E.2d 227, 230, appeal
dismissed and disc. review denied, 353 N.C.
452, 548 S.E.2d 527 (2001). “If, however,
‘the trial court's decision deprives the
appellant of a substantial right which would
be lost absent immediate review[,]’ we may
review the appeal....” Id. (quoting N.C.
Dept. of Transportation v. Page, 119 N.C.
App. 730, 734, 460 S.E.2d 332, 334 (1995)).
“The moving party must show that the
affected right is a substantial one, and
that deprivation of that right, if not
corrected before appeal from final judgment,
will potentially injure the moving party.
Whether a substantial right is affected is
determined on a case-by-case basis.” Id.(internal citation omitted).
Barfield v. N.C. Dep't of Crime Control & Pub. Safety, 202 N.C.
App. 114, 117, 688 S.E.2d 467, 469 (2010).
B. Analysis
In the order granting partial summary judgment in favor of
plaintiff with regard to her breach of contract claim, the trial
court also denied summary judgment with regard to plaintiff’s
claims for bad faith, punitive damages, and unfair and deceptive
trade practices. Unlike the breach of contract claim, these
-10-
issues were not certified by the trial court pursuant to Rule
54(b) of the North Carolina Rules of Civil Procedure, nor do
they constitute a final judgment. Plaintiff’s appeal from the
denial of her motion for summary judgment on these issues is
interlocutory. Barfield, 202 N.C. App. at 117, 688 S.E.2d at
469.
Plaintiff has not argued that the denial of her summary
judgment motion has violated a substantial right. “It is not
the duty of this Court to construct arguments for or find
support for appellant's right to appeal from an interlocutory
order; instead, the appellant has the burden of showing this
Court that the order deprives the appellant of a substantial
right which would be jeopardized absent a review prior to a
final determination on the merits.” Jeffreys v. Raleigh Oaks
Joint Venture, 115 N.C. App. 377, 380, 444 S.E.2d 252, 254
(1994). Because plaintiff has not shown that the denial of a
portion of her summary judgment motion affected a substantial
right, plaintiff’s argument is dismissed.
VACATED IN PART, DISMISSED IN PART.
Chief Judge MARTIN and Judge DILLON concur.
Report per Rule 30(e).