Boykin v. Selco Constr., 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An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-405
NORTH CAROLINA COURT OF APPEALS
Filed: 21 October 2014
KIMBERLY D. BOYKIN, EXECUTRIX OF
THE ESTATE OF ALFRED D. STEWART,
Plaintiff,
v. Johnston County
No. 13 CVS 531
SELCO CONSTRUCTION, INC.
FRANKLIN WADE EASON,
Defendants.
Appeal by defendant from order entered 9 January 2014 by
Judge Thomas H. Lock in Johnston County Superior Court. Heard
in the Court of Appeals 24 September 2014.
The Armstrong Law Firm, P.A., by L. Lamar Armstrong, Jr.,
and Ashley & Ashley, by Emery D. Ashley, for plaintiff-
appellee.
Harris Sarratt & Hodges, LLP, by John L. Sarratt, for
defendant-appellant Selco.
STEELMAN, Judge.
Where the trial court granted partial summary judgment in
favor of plaintiff on only one of the issues pertaining to one
of the claims raised in plaintiff’s complaint, defendant’s
appeal is interlocutory, and not properly before this Court.
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I. Factual and Procedural Background
Alfred D. Stewart (Stewart), Franklin Wade Eason (Eason),
and Ricky Lee Lundquist (Lundquist), formed Selco Construction,
Inc. (Selco). On 1 March 1995, Stewart, Eason, and Lundquist,
owners of all of the capital stock of Selco, entered into an
agreement with Selco (the Agreement) that the company would
purchase the stock of a deceased shareholder from his estate.
The Agreement recited that Selco was the owner of life insurance
policies on each of the shareholders, and reserved the right to
purchase additional insurance. Further, the Agreement placed
restrictions on the sale of the capital stock of Selco.
With respect to the redemption of stock by Selco upon the
death of a shareholder, the Agreement provided that:
Within thirty days after the end of each
fiscal year of the Company, or as soon
thereafter as possible, the parties shall
re-determine the fair market value per share
of their stock for the then current fiscal
year and shall endorse such re-determined
value with signatures. The agreed fair
market value will be arrived at by taking
the book value of the Company and then
adjusting the book value with the actual
appraised value of equipment and fixtures
and by using the actual cost or market value
of inventory, whichever is less. If the
parties have failed to re-determine such
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value for a particular fiscal year, the
Company accountant will arrive at said fair
market value in accordance with the above-
stated formula. In arriving at the fair
market value, no amount will be included for
good will.
In March of 2002, Lundquist left Selco, and the company
redeemed his stock for the sum of $792,453.52, in a negotiated
transaction. This left Stewart and Eason as the only
shareholders of Selco.
Stewart died on 25 March 2012, owning one-half of the
capital stock of Selco. Selco retained the services of Oliver
Wall (Wall) to perform an appraisal of Selco’s assets and a
valuation of Stewart’s stock (the Wall report). This report,
dated 1 June 2012, valued Stewart’s stock at $584,154.47.
On 31 July 2013, Kimberly D. Boykin, executrix of Stewart’s
estate (plaintiff), filed an amended complaint against Selco and
Eason, alleging the following claims: (1) a declaratory judgment
that funds received by Selco from the life insurance on Stewart
and funds from the “Honaker settlement” be included in the
valuation of Selco and Stewart’s stock; (2) for breach of the
Agreement by Selco; (3) for tortious interference with the
Agreement by Eason; and (4) for punitive damages against Eason.
On 1 October 2013, Selco and Eason (collectively, defendants)
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filed an answer, counterclaim, and motion to dismiss. On 10
October 2013, plaintiff replied to defendants’ counterclaim.
On 30 December 2013, plaintiff filed a second amended
complaint, alleging the same underlying facts, but seeking only
a declaratory judgment and breach of contract by Selco and
Eason. On 24 January 2014, defendants filed answer and
counterclaim to plaintiff’s second amended complaint. On 4
February 2014, plaintiff replied to defendants’ counterclaim.
On 18 April 2013, Selco filed a motion for judgment on the
pleadings or, in the alternative, a motion for summary judgment.
On 26 November 2013, plaintiff filed a motion for partial
summary judgment with respect to the date of valuation of
Stewart’s stock.
On 3 January 2014, the trial court entered an order
containing the following rulings: (1) granting plaintiff’s
motion for leave to file a second amended complaint; (2) denying
as moot Eason’s motion to dismiss the counts of plaintiff’s
complaint that were eliminated in the second amended complaint;
and (3) denying Selco’s motion for summary judgment. On 9
January 2014, the trial court entered an order on plaintiff’s
motion for partial summary judgment with respect to the issue of
the date of valuation of Stewart’s stock. This order declared
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that the date of valuation under the Agreement was 25 March
2012, the date of Stewart’s death. The trial court thus granted
plaintiff’s motion for partial summary judgment and denied
defendant’s motion for partial summary judgment. The trial
court did not certify this order pursuant to Rule 54(b) of the
North Carolina Rules of Civil Procedure.
From the 9 January 2014 order granting partial summary
judgment in favor of plaintiff, Selco appeals.
II. Interlocutory Appeal
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.” Cagle v. Teachy, 111 N.C.
App. 244, 247, 431 S.E.2d 801, 803 (1993). “There is generally
no right to appeal an interlocutory order.” N.C. Dept. of
Transp. v. Page, 119 N.C. App. 730, 733, 460 S.E.2d 332, 334
(1995).
“A grant of partial summary judgment,
because it does not completely dispose of
the case, is an interlocutory order from
which there is ordinarily no right of
appeal.” Liggett Group, Inc. v. Sunas, 113
N.C. App. 19, 23, 437 S.E.2d 674, 677
(1993). “The reason for this rule is to
prevent fragmentary, premature and
unnecessary appeals by permitting the trial
court to bring the case to final judgment
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before it is presented to the appellate
courts.” Fraser v. Di Santi, 75 N.C. App.
654, 655, 331 S.E.2d 217, 218, disc. review
denied, 315 N.C. 183, 337 S.E.2d 856 (1985).
“Nonetheless, in two instances a party is
permitted to appeal interlocutory
orders....” Liggett Group Inc., 113 N.C.
App. at 23, 437 S.E.2d at 677 (emphasis by
underline added). First, a party is
permitted to appeal from an interlocutory
order when the trial court enters “a final
judgment as to one or more but fewer than
all of the claims or parties” and the trial
court certifies in the judgment that there
is no just reason to delay the appeal.
N.C.R. Civ. P. 54(b); Liggett Group Inc.,
113 N.C. App. at 23, 437 S.E.2d at 677.
Second, a party is permitted to appeal from
an interlocutory order when “the order
deprives the appellant of a substantial
right which would be jeopardized absent a
review prior to a final determination on the
merits.” Southern Uniform Rentals, Inc. v.
Iowa Nat'l Mut. Ins. Co., 90 N.C. App. 738,
740, 370 S.E.2d 76, 78 (1988); N.C. Gen.
Stat. § 1-277. Under either of these two
circumstances, it is the appellant's burden
to present appropriate grounds for this
Court's acceptance of an interlocutory
appeal and our Court's responsibility to
review those grounds.
Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379,
444 S.E.2d 252, 253 (1994).
In the instant case, the trial court did not certify its
order on partial summary judgment for immediate appeal. Selco
nonetheless contends that the order affects a substantial right.
Specifically, Selco argues that the valuation date of Stewart’s
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stock is the sole material fact in dispute, and “[t]he only
matter as to which both parties seek declaratory relief from the
court[.]” This is not correct.
Plaintiff’s second amended complaint sought a declaratory
judgment. However, the declaratory judgment sought by plaintiff
included a declaration that: (1) Wall was not the “company
accountant” authorized to value the stock; (2) Wall did not
properly enforce the Agreement; (3) the Wall report was obtained
by fraud and duress; (4) Selco waived any right to rely on the
Wall report; (5) Selco’s breach of the Agreement and its
covenant of good faith and fair dealing prevent it from
enforcing the Wall report; (6) the proper date of valuation is
the date of Stewart’s death; (7) Selco’s insurance and
settlement proceeds are Selco assets that must be included in
the valuation of stock; (8) the value of the stock was at least
$1,525,887; (9) the Stewart estate remains a shareholder in
Selco; and (10) by its acts or omissions, Selco has impaired
Stewart’s interest in Selco. Of these ten issues raised in the
declaratory judgment portion of the complaint, only one
pertained to the date of valuation. Plaintiff’s second amended
complaint also alleged breach of contract by Selco and Eason for
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failure to act in good faith, failure to pay the proper value of
the stock, and manipulation of the valuation process.
Of the issues raised in plaintiff’s complaint, the trial
court’s order on partial summary judgment resolved only the date
of valuation. The order did not resolve whether plaintiff’s or
Selco’s valuation method was correct, whether Selco’s valuation
constituted a breach of contract, whether the Wall report was
authorized or obtained fraudulently, nor any other issue raised
by plaintiff’s complaint. Those issues are still pending before
the trial court. Selco’s bare assertion that this issue “goes
to the very heart of the matter” is unpersuasive. Further,
Selco’s argument for the existence of a substantial right is
based solely upon the materiality of this single issue. Selco
has therefore failed to successfully argue for the existence of
a substantial right which would be prejudiced absent review by
this Court.
We hold that this appeal is not properly before us.
DISMISSED.
Judges CALABRIA and McCULLOUGH concur.
Report per Rule 30(e).