Stevenson v. North Carolina Department of Insurance

262 S.E.2d 378 (1980)

E. Alexander STEVENSON, Jr.
v.
NORTH CAROLINA DEPARTMENT OF INSURANCE and John Randolph Ingram, Commissioner of Insurance.

No. 7910SC410.

Court of Appeals of North Carolina.

February 5, 1980.

Atty. Gen. Rufus L. Edmisten by Sp. Deputy Atty. Gen. T. Buie Costen, Raleigh, for defendants-appellants.

Bailey, Dixon, Wooten, McDonald & Fountain by Ralph McDonald and Gary S. Parsons, Raleigh, for plaintiff-appellee.

CLARK, Judge.

DEFENDANTS' APPEAL

The single issue raised by this appeal is whether the trial court erred in limiting defendants' recovery to the amount of the bond ($1,000) even though defendants were damaged in the amount of $3,803.02.

N.C.Gen.Stat. § 1A-1, Rule 65(e) provides:

"(e) Damages on dissolution.—An order or judgment dissolving an injunction or restraining order may include an award of damages against the party procuring the injunction and the sureties on his undertaking without a showing of malice or want of probable cause in procuring the injunction. The damages may be determined by the judge, or he may direct that they be determined by a referee or jury."

It is well-established law that a party who has been wrongfully restrained by a court order which is subsequently dissolved as improvidently entered has two remedies: (1) He may seek damages against the opposing party and his sureties on his undertaking without a showing of malice or want of probable cause, or (2) he may pursue an independent action for malicious prosecution without being limited to the amount of the bond. Local 755, International Brotherhood of Electrical Workers v. Country Club East, Inc., 283 N.C. 1, 194 S.E.2d 848 (1973); W. Shuford, N.C. Civil Practice and Procedure § 65-8 (1975).

If the party damaged by the improvidently issued restraining order elects to proceed by motion in the cause on the bond of the opposing party and his sureties, his recovery is limited to the amount of the penalty of the injunction bond. Shute v. Shute, 180 N.C. 386, 104 S.E. 764 (1920); In re Simon, 36 N.C.App. 51, 243 S.E.2d 163 (1978); Annot., 45 A.L.R. 1517 (1926).

In their brief, defendants argue that "the bond set by Judge Smith was ridiculously low and could not possibly afford adequate protection," and that "it was impossible to move to increase the bond because the extent of the damage could not be determined." There is nothing in the record tending to show that Judge Smith, when the restraining order was entered and the bond set, had any knowledge that there was no open position in the Department comparable to his former position and that plaintiff would have to be placed in a position of less importance with a substantially lower pay scale. Plaintiff was employed in this lower position for more than five months. Thus defendants suffered damages at the rate of about $760.00 per month. Defendants could have determined when the restraining order had been in effect for one month that its damage was approaching the bond limit and could have justifiably moved for an increase in the bond. We find no merit in defendants' argument.

PLAINTIFF'S CROSS-ASSIGNMENTS OF ERROR

Rule 10(d), N.C.Rules App.Proc., under which plaintiff files his cross-assignments of error, provides:

"(d) Exceptions and Cross Assignments of Error by Appellee. Without taking an appeal an appellee may set out exceptions to and cross-assign as error any action or omission of the trial court to which an exception was duly taken or as to which an exception was deemed by rule or law to have been taken, and which deprived the appellee of an alternative basis in law for supporting the judgment, order, or other determination from which appeal has been taken. Portions of the record necessary to an understanding of such cross-assignments of error may be included in the record on appeal by agreement of the parties under Rule 11(a), or may be included by the appellee in a proposed alternative record on appeal under Rule 11(b)." (Emphasis added.)

Appellate Rule 10(d) introduces a new procedure designed to protect appellees who have been deprived in the trial court of an alternative basis in law upon which their favorable judgment might be supported and who face the possibility that on appeal prejudicial error will be found in the ground upon which their judgment was actually based.

In his cross-assignments of error plaintiff challenges (1) the finding that defendants' actual damages exceeded $1,000, and (2) the exclusion of evidence relating to the value of plaintiff's services to the defendants. It is obvious that these cross-assignments of error constitute an attack on the judgment and not an "alternative basis in law for supporting the judgment." This type of conditional appeal is not allowed. Waters v. Qualified Personnel Inc., 32 N.C. App. 548, 233 S.E.2d 76 (1977), rev'd on other grounds, 294 N.C. 200, 240 S.E.2d 338 (1978). See also, Commentary, Rule 10(d), N.C.Rules App.Proc.

At hearing for settlement of the record on appeal defendants sought to exclude from the record on appeal the plaintiff's cross-assignments of error. The trial judge in the order of settlement ruled that "it is not within the Superior Court's jurisdiction to determine whether such cross-assignments of error are permitted under Rule 10(d)." The trial court erred in this ruling. Appellate Rule 11(c), in part, provides: "At the hearing the judge shall settle the record on appeal by order." In the case before us the trial judge should have settled the record on appeal and should have excluded plaintiff's cross-assignments of error on the ground that they were not authorized by Appellate Rule 10(d).

A party aggrieved by the order of the trial judge settling the record on appeal may file a motion in the Appellate Court under Rule 9(b)(6), N.C.Rules App.Proc., to add to, amend, or correct the record on appeal.

We find error in the order settling the record on appeal. Since plaintiff failed to sustain his position on this phase of the case, it is ordered that plaintiff pay one-third and defendants pay two-thirds of the appeal costs.

The judgment is

Affirmed.

ARNOLD and ERWIN, JJ., concur.