Bailey v. Gooding

• Decision Date: 07 October 1980
• Docket Number: No. 88,88
• Court: North Carolina Supreme Court
• Parties: Patricia T. BAILEY and Elbert L. Bailey, Jr. v. Marvin C. GOODING et al.

Page 431

270 S.E.2d 431

301 N.C. 205

Patricia T. BAILEY and Elbert L. Bailey, Jr. v. Marvin C. GOODING et al.

No. 88.

Supreme Court of North Carolina.

Oct. 7, 1980.

Freeman, Edwards & Vinson by George K. Freeman, Jr., Goldsboro, and Narron, Holdford, Babb, Harrison & Rhodes, P.A. by William H. Holdford, Wilson, for plaintiffs-appellants.

Young, Moore, Henderson & Alvis by B. T. Henderson, II, and Walter E. Brock, Jr., Raleigh, for defendants-appellees.

CARLTON, Justice.

I.

The procedural quagmire that confronts us here is best unraveled by a chronological account of the proceedings in the trial court.

This controversy arose from a collision between a bus and an automobile on 6 February 1977. The plaintiffs filed complaint on 16 June 1977 and all defendants were duly served. On 7 July 1977, W. S. Pearce, Jr., a representative of defendants' insurance carrier, called on plaintiffs' attorney, George K. Freeman, Jr. The following day Freeman wrote Pearce confirming their understanding that no default judgment would be taken "until our negotiations break down." Pearce was to get back in touch with Freeman around the first of August. Freeman also wrote, "At that time if the negotiations break down we will give you additional time within which to secure counsel and file answer." For reasons not important to this decision, Pearce and Freeman did not get back together and on 6 October 1977 plaintiffs filed a calendar request for a hearing on a motion in the case and mailed a copy to each defendant. The request did not specify the nature of the motion.

On 17 October 1977 plaintiffs' attorney filed motion for entry of default pursuant to Rule 55, N. C. Rules of Civil Procedure. The motion was allowed by the clerk on that date. On 18 October 1977 Freeman received a letter from B. T. Henderson stating that his firm had been retained in the case to represent defendants. Enclosed with the letter was a stipulation extending the time for answer for thirty days which Henderson requested Freeman to sign. Instead, Freeman called Henderson and advised "that default had been entered the previous day."

On 20 October 1977 plaintiffs filed motion for default judgment. On 28 October defendants filed a motion pursuant to Rule 55, N. C. Rules of Civil Procedure, for an order setting aside the entry of default and a "Response to Motion For Default Judgment." These motions were brought before Judge Friday on 9 November 1977 who deferred ruling until receipt of medical evidence. Defendants filed answer on 22 November 1977.

A hearing was held on 6 February 1978 before Judge David I. Smith who entered (1) an order denying defendants' motion to set aside the clerk's entry of default because defendants' failure to plead or appear "was not due to any of the reasons justifying relief set out in Rule 60(b)" and because good cause had not been shown, and (2) a judgment that plaintiffs have and recover such damages as a jury might determine. It was also ordered that the matter be placed on the trial calendar for determination of damages by the jury. Defendants excepted to both. No jury trial for damages has been held.

On 2 June 1978, defendants filed a motion pursuant to Rule 60(b), N. C. Rules of Civil Procedure, to set aside the default judgment. On 5 March 1979, prior to the hearing on the motion, defendants filed an Offer of Judgment in the amount of $4,500.00, pursuant to Rule 68 of the N. C. Rules of Civil Procedure. The motion was heard by Judge Stevens. He entered an order filed 9 May 1979 that entry of default on 17 October 1977 and default judgment entered on 6 February 1978 both be stricken on grounds of mistake, inadvertence, surprise and excusable neglect.

Plaintiffs excepted and appealed to the Court of Appeals. That court vacated Judge Stevens' order granting the Rule 60(b) motion, noting that a Rule 60(b) motion is proper only when a final default judgment has been entered (as opposed to a judgment that requires that damages be determined by a jury trial) and that one superior court judge cannot overrule another. The Court of Appeals also remanded the cause to the trial court to determine whether good cause was shown to set aside the entry of default, noting that Judge Smith erred in applying the stricter standards of Rule 60(b) in lieu of the "good cause" standard of Rule 55(d).

Judge Clark concurred in the result only "because it more closely approximates the result that would be reached if the appeal should be dismissed." He would have dismissed the appeal because the judgment appealed from was interlocutory and not appealable. Judge Hedrick dissented, voting to vacate Judge Stevens' order and to remand the proceeding to the superior court for trial on the issue of damages.

We think the Court of Appeals improperly considered the case on its merits and reverse.

II.

The threshold question which should have been considered by the Court of Appeals, although not argued by either party before that court, ¹ was whether an appeal lies from Judge Stevens' order. It is well established in this jurisdiction that if an appealing party has no right of appeal, an appellate court on its own motion should dismiss the appeal even though the question of appealability has not been raised by the parties themselves. Dickey v. Herbin, 250 N.C. 321, 108 S.E.2d 632 (1959); Rogers v. Brantley, 244 N.C. 744, 94 S.E.2d 896 (1956). We therefore do not address the various matters considered by the Court of Appeals. This appeal was premature and the action should first run its course in the trial court.

Judicial judgments, orders and decrees are either "interlocutory or the final determination of the rights of the parties." G.S. 1A-1, Rule 54(a) (1969). Judge Ervin noted the difference between the two in Veazey v. Durham :

A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court. . . . 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.

231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950) (citations omitted). While final judgments are always appealable, interlocutory decrees are immediately appealable only when they affect some substantial right of the appellant and will work an injury to him if not corrected before an appeal from final judgment. Id. at 362, 57 S.E.2d at 381; G.S. 1-277 (Cum.Supp.1979). "A nonappealable interlocutory order . . . which involves the merits and necessarily affects the judgment, is reviewable . . . on appropriate exception upon an appeal from the final judgment in the cause." Veazey v. Durham, 231 N.C. at 362, 57 S.E.2d at 381.

These rules are designed to prevent fragmentary and premature appeals that unnecessarily delay the administration of justice and to ensure that the trial divisions fully and finally dispose of the case before an appeal can be heard. Waters v. Personnel, Inc., 294 N.C. 200, 240 S.E.2d 338 (1978); Raleigh v. Edwards, 234 N.C. 528, 67 S.E.2d 669 (1951). "There is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders." Veazey v. Durham, 231 N.C. at 363, 57 S.E.2d at 382; see also Industries, Inc. v. Insurance Co., 296 N.C. 486, 251 S.E.2d 443 (1979).

Unquestionably, the order of Judge Stevens setting aside the default judgment is interlocutory; it does not finally dispose of the case and requires further action by the trial court. Because the order is interlocutory we will not review it unless it "affects some substantial right claimed by the appellant and will work an injury to him if not corrected before an appeal from the final judgment." Veazey v. Durham, 231 N.C. at 362, 57 S.E.2d at 381; see G.S. 1-277.

The "substantial right" test for...