Naddeo v. Allstate Ins. Co.

• Decision Date: 01 August 2000
• Docket Number: No. COA99-629.,COA99-629.
• Citation: 139 NC App. 311,533 S.E.2d 501
• Parties: Linda NADDEO, Administratrix for the Estate of Patricia Ann Teel, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee. Allstate Insurance Company, Plaintiff-Appellee, v. Liston S. Darby, Administrator of the Estate of Dwaine Lydell Darby; Linda M Naddeo, Administrator for the Estate of Patricia Ann Teel; and Kathy Dixon, Administrator of the Estate of Jacqueline Melissa Mullis, Defendant-Appellants.
• Court: North Carolina Court of Appeals

533 S.E.2d 501

139 NC App. 311

Linda NADDEO, Administratrix for the Estate of Patricia Ann Teel, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, Defendant-Appellee.

Allstate Insurance Company, Plaintiff-Appellee, v. Liston S. Darby, Administrator of the Estate of Dwaine Lydell Darby; Linda M Naddeo, Administrator for the Estate of Patricia Ann Teel; and Kathy Dixon, Administrator of the Estate of Jacqueline Melissa Mullis, Defendant-Appellants.

No. COA99-629.

Court of Appeals of North Carolina.

August 1, 2000.

Weaver, Bennett & Bland, P.A., by Michael David Bland, Howard M. Labiner, and Christopher M. Vann, Matthews, for plaintiff/defendant-appellant Naddeo.

Morris York Williams Surles & Barringer, L.L.P., by John P. Barringer and Christa C. Pratt, Charlotte, for defendant/plaintiff-appellee Allstate.

EDMUNDS, Judge.

This dispute arises out of a single-car accident. During the evening of 30 April 1993, Dwaine Lydell Darby, Patricia Ann Teel, and Jacqueline Melissa Mullis were passengers in a vehicle driven by Otis Blount, who had consumed two pints of alcohol. After leaving a night club and heading toward a friend's house, at some time around midnight between 30 April and 1 May, the automobile left the roadway and struck a tree, killing all four occupants. Police received a report of the accident at 12:15 a.m. on 1 May 1993.

On 7 October 1994, Linda M. Naddeo (Naddeo), administratrix of the estate of passenger Teel, filed a complaint against, inter alia, Liston S. Darby (Darby), the administrator of the estate of Dwaine Darby, who owned the automobile. That suit, brought in Union County, was assigned civil number 94-CvS-1333.

Naddeo's original complaint had alleged that the accident occurred at 12:15 a.m. on 1 May 1993. However, on 9 March 1995, Naddeo filed a motion to amend her complaint. This motion was granted, and Naddeo filed an amended complaint alleging that the time of the accident was "approximately 11:00 p.m." on 30 April 1993.

Having received no response from Darby, Naddeo filed a motion for entry of default, and later for default judgment, which was entered on 21 August 1996. Upon entering default judgment, the trial court found that the allegations in the amended complaint were deemed admitted as a matter of law. Darby and his insurance carrier Allstate Insurance Company (Allstate) moved to set aside the entry of default and default judgment on 11 November 1996. Although Allstate was not a named party to the suit, its actions as Darby's insurer were critical to the case. Allstate denied coverage, contending that the automobile policy issued to Darby (which plaintiff contended also covered Dwaine Darby) had been canceled at 12:01 a.m. on 1 May 1993. Darby's motion to set aside the default judgment was denied by order entered 28 February 1997. Darby appealed to this Court, which affirmed the ruling of the trial court, holding that (1) Allstate was aware of information that indicated that Darby's policy covered the accident, (2) Allstate's decision not to answer the complaint or defend the action constituted inexcusable neglect, and (3) Darby's own failure to follow up on the complaint after he turned it over to his attorney also constituted inexcusable neglect. See Estate of Teel v. Darby, 129 N.C.App. 604, 500 S.E.2d 759 (1998)

. No further appeal was taken.

Subsequently, on 10 June 1998, Allstate brought suit against the estates of all the individuals killed in the accident. The complaint originally was filed in Mecklenburg County and assigned the civil number 98-CvS-8292, but later was transferred to Union County and assigned the number 98-CvS-1400. In this action, Allstate denied coverage of the claims and sought a declaratory judgment. On 21 December 1998, Naddeo filed a "Motion to Dismiss, Answer, Special Defenses and Counterclaims," wherein she asserted "[p]laintiff's claims fail to state a claim upon which relief can be granted under North Carolina Rules of Court 12(b)(2), 12(b)(3) and 12(b)(6)." Additionally, she denied all material allegations made by Allstate and asserted the defenses of issue preclusion, claim preclusion, and abatement. Finally, she counterclaimed seeking a "declaratory judgment and adjudication concerning the rights and liabilities of Allstate to pay damages as entered in 94 CVS 01333," and asserting a claim of unfair and deceptive trade practices. Allstate answered Naddeo's counterclaim and made a motion to dismiss for failure to state a claim. Thereafter, Naddeo made a motion for summary judgment. On the day of the summary judgment hearing, Allstate submitted an affidavit by a witness who purportedly observed Darby's vehicle being driven shortly before the accident at a time after midnight. After considering the affidavit over Naddeo's objection, the trial court denied Naddeo's motion in an amended order entered 16 February 1999.

Meanwhile, because she had not received service and therefore was not immediately aware that Allstate had brought the action numbered 98-CvS-1400, Naddeo filed suit against Allstate on 24 June 1998 in an action assigned number 98-CvS-931, seeking a declaratory judgment ordering Allstate to pay pursuant to the judgment entered in 94-CvS-1333, as well as compensatory damages, punitive damages, costs, interest, and attorneys fees. Allstate answered and made a motion to dismiss pursuant to Rules 12(b)(6), 12(b)(1), and 12(b)(3). On 7 December 1998, Naddeo made a motion for summary judgment, and on 14 December 1998, Allstate made a motion to dismiss and/or abate, referencing its pending action in 98-CvS-1400. The trial court denied both parties' motions on 1 February 1999. Naddeo filed notices of appeal in both 98-CvS-1400 and 98-CvS-931 on 25 February 1999.

I.

We note at the outset that the record on appeal fails to comply with N.C. R.App. P. 10(c)(1), which requires that assignments (and cross-assignments) of error include "clear and specific record or transcript references." Appellate judges find such references invaluable in directing the court's attention to the pertinent portions of the record demonstrating alleged error. Although failure to comply with the appellate rules subjects an appeal to dismissal, see Steingress v. Steingress, 350 N.C. 64, 511 S.E.2d 298 (1999),

for reasons of judicial economy, we elect to consider the appeal pursuant to N.C. R.App. P. 2.

II.

Due to the interlocutory nature of the orders appealed, we must determine whether to consider the issues asserted on appeal. The orders from which Naddeo appeals are denials of motions for summary judgment in both 98-CvS-1400 and 98-CvS-931. "As a general rule, a moving party may not appeal the denial of a motion for summary judgment because ordinarily such an order does not affect a `substantial right.'" Bockweg v. Anderson, 333 N.C. 486, 490, 428 S.E.2d 157, 160 (1993) (citation omitted). In fact, "[w]ithholding appeal of denial of summary relief at the early stages of litigation in the trial court is generally favored." Country Club of Johnston County, Inc. v. U.S. Fidelity and Guar. Co., 135 N.C.App. 159, 161, 519 S.E.2d 540, 542 (1999) (citation omitted), disc. review denied, 351 N.C. 352, ___ S.E.2d ___ (2000). However, interlocutory orders may be appealed in two instances:

first, where there has been a final determination of at least one claim, and the trial court certifies there is no just reason to delay the appeal; and second, if delaying the appeal would prejudice a "substantial right."

Liggett Group v. Sunas, 113 N.C.App. 19, 23-24, 437 S.E.2d 674, 677 (1993) (internal citations omitted).

In 98-CvS-931, the denial of Naddeo's motion for summary judgment is interlocutory, no claim has been determined, and the trial court has made no certification. See N.C. Gen.Stat. § 1A-1, Rule 54(b) (1999). Additionally, in that case, Naddeo is seeking "[a] declaratory judgment ordering Allstate to pay Plaintiff for the damages granted, costs and interest in 94-CVS-01333" as well as compensatory and punitive damages, costs, interest, and attorney's fees. Because no substantial right will be prejudiced by delaying the appeal until a final adjudication of the merits, Naddeo's appeal in this case is dismissed.

In 98-CvS-1400, Allstate seeks a declaratory judgment, raising policy defenses to liability. Naddeo answered, raised defenses, and counterclaimed, seeking declaratory judgment requiring Allstate to pay pursuant to the earlier suit (94-CvS-1333) and asserting a claim of unfair and deceptive trade practices. Although Naddeo moved unsuccessfully for summary judgment on all issues, her arguments on appeal relate solely to Allstate's claims and defenses. Accordingly, we do not address the denial of Naddeo's motion as it relates to her counterclaims. As to Allstate's claims and defenses, Naddeo asserts that they are barred by reason of issue or claim preclusion.

Our Supreme Court has stated that the possibility of having to retry an issue already litigated can be a substantial right. See Green v. Duke Power Co., 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982)

. Accordingly, "the denial of a motion for summary judgment based on the defense of res judicata may affect a substantial right, making the order immediately appealable." Bockweg, 333 N.C. at 491,

428 S.E.2d at 161 (citations omitted); cf. Community Bank v. Whitley, 116 N.C.App. 731, 449 S.E.2d 226 (1994) (dismissing appeal as interlocutory because facts of case would not lead to "possibility of inconsistent verdicts"). With regard to Naddeo's motion for summary judgment as it pertains to Allstate's claims and defenses in 98-CvS-1400, because of the possibility of inconsistent verdicts, a substantial right may be affected. Accordingly, we will consider Naddeo's appeal in that case.

Finally, as to Allstate's cross-assignment of error regarding denial of its motion to dismiss and/or abate in 98-CvS-931, the order appealed is interlocutory and does not affect a substantial right. See Myers v. Myers, 61...