East Bay Co. v. Baxley Commercial Props. LLC, COA11-18 0

• Decision Date: 16 August 2011
• Docket Number: Wake County No. 08 CVS 14349,NO. COA11-18 0,COA11-18 0
• Court: North Carolina Court of Appeals
• Parties: EAST BAY COMPANY, LTD., Plaintiff, v. BAXLEY COMMERCIAL PROPERTIES, LLC, BAXLEY DEVELOPMENT, INC. and BRANDON BAXLEY, Individually, Defendants.

EAST BAY COMPANY, LTD., Plaintiff, v. BAXLEY COMMERCIAL PROPERTIES, LLC BAXLEY DEVELOPMENT, INC. and BRANDON BAXLEY Individually, Defendants.

NO. COA11-18 0

Wake County No. 08 CVS 14349

NORTH CAROLINA COURT OF APPEALS

Filed: August 16 2011

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.

Appeal by defendant from judgment entered 30 July 2010 by Judge Paul Gessner in Wake County Superior Court. Heard in the Court of Appeals 8 June 2011.

McGuire Woods LLP, by Christian M. Kennedy and Monica E. Webb, for plaintiff-appellee.

Unti & Lumsden LLP, by Michael L. Unti, for defendant-appellant Brandon Baxley.

HUNTER, Robert C, Judge.

Defendant Brandon Baxley appeals from the trial court's judgment as well as several intermediate orders entered in this action by plaintiff East Bay Company, Ltd. to collect on twopromissory notes guaranteed by Mr. Baxley. After careful review, we dismiss in part and affirm in part.

Facts

Mr. Baxley is the sole member and manager of Baxley Commercial Properties, LLC ("BCP"), a North Carolina corporation that was the developer of Salterbeck Village, a condominium development in Charleston, South Carolina. In connection with the development, BCP executed and delivered a promissory note on 19 March 2007 for $1,127, 750.00 ("March note") to Regions Bank, an Alabama banking corporation. On 30 May 2007, BCP executed and delivered a second promissory note to Regions Bank in the amount of $296,500.00 ("May note"). Mr. Baxley signed the guaranty agreements, personally guaranteeing BCP's obligations under the March and May notes. As additional security for the loans, Baxley Development, Inc. ("BDI"), a North Carolina corporation of which Mr. Baxley is the founder, president, and sole shareholder, executed a commercial guaranty agreement that also guaranteed BCP's obligations.

Disputes arose between BCP and Regions Bank about the progress of the Salterbeck Village development. Regions Bank asserted that BCP had defaulted under the terms of the March and May notes by failing to make timely payments. Regions Bank initiated an action against BCP in South Carolina state court on8 July 2008 to foreclose on the real property securing the promissory notes ("South Carolina action"). On 15 August 2008, Regions Bank filed a complaint against BCP, BDI, and Mr. Baxley in Wake County Superior Court, seeking to recover for BCP's breach of the March and May promissory notes and BDI's and Mr. Baxley's breach of the guaranty agreements ("North Carolina action") (08 CVS 14349). BCP and Mr. Baxley filed an answer in the North Carolina action, generally denying the allegations in the complaint. BDI did not file an answer in the North Carolina action.¹

Sometime around 10 February 2009, East Bay, a South Carolina corporation and real estate developer, purchased Region Bank's interests in the March and May notes. On 8 May 2009, an entry of final judgment and decree of foreclosure was entered in the South Carolina action against BCP. After the foreclosure sale was completed, a deficiency judgment was entered against BCP for $359,998.43 plus interest ("South Carolina judgment").

On 31 July 2009, East Bay filed a motion to compel discovery against BCP and Mr. Baxley for failure to respond to East Bay's discovery requests. The trial court, after conducting a hearing on the motion to compel, entered an order on 6 October 2009, directing BCP and Mr. Baxley to respond to the discovery requests, prohibiting them from introducing any evidence in their defense not produced within 14 days of the order, and imposing $7,421.80 in costs and expenses and attorneys' fees.

On 22 December 2009, East Bay filed a Notice of Filing of Foreign Judgment in the North Carolina action to domesticate the South Carolina Judgment (09 CVS 25392). BCP filed a Motion for Relief from Foreign Judgment on 25 January 2010. On 4 March 2010, East Bay filed in the North Carolina action: (1) a motion to enforce the South Carolina judgment; (2) a motion for consolidation of the action to enforce the South Carolina judgment (09 CVS 25392) with the North Carolina action (08 CVS 14349); and (3) a motion to strike BCP's and Mr. Baxley's answer and for further sanctions under Rule 37 of the Rules of Civil Procedure. The trial court held a hearing on the parties' respective motions on 16 March 2010 and subsequently entered an order on 22 March 2010 in which the court: (1) granted East Bay's motion for enforcement of the South Carolina judgment anddenied BCP's motion for relief from the judgment; (2) denied East Bay's motion for consolidation; (3) substituted East Bay for Regions Bank as the party plaintiff in the North Carolina action (08 CVS 14349); and (4) denied East Bay's motion to strike and for further sanctions.

On 23 April 2010, East Bay moved for summary judgment against Mr. Baxley on the breach of guaranty claim. Mr. Baxley filed in writing his opposition to the summary judgment motion. After conducting a hearing on 25 May 2010, the trial court entered an order on 27 May 2010 granting East Bay's motion for summary judgment. On 3 June 2010, East Bay filed a motion for entry of judgment against Mr. Baxley, seeking to collect $359,998.43, "representing the indebtedness of BCP that Brandon Baxley unconditionally guaranteed," plus post-judgment interest, costs and expenses, and attorneys' fees. The trial court entered judgment against Mr. Baxley on 30 July 2010, awarding East Bay "the principal amount of $359,998.43, plus $24,097.70 in interest accrued from August 27, 2009 at the South Carolina legal rate of 7.25% per annum . . . , plus $123,197.96, representing East Bay's reasonable attorneys' fees, costs and expenses, for a total judgment of $507,294.09, plus interest at the North Carolina legal rate from the date of entry of th[e] Final Judgment until the Final Judgment is satisfied . . . ."Mr. Baxley noticed appeal from the trial court's 30 July 2010 judgment.

I

On appeal, Mr. Baxley argues for reversal of the trial court's (1) 6 October 2009 order compelling discovery; (2) 22 March 2010 order substituting East Bay as party plaintiff; (3) 27 May 2010 order granting East Bay's motion for summary judgment; and (4) 30 July 2010 judgment awarding damages, interest, attorneys' fees, and costs. Mr. Baxley's notice of appeal, however, only designates the 30 July 2010 judgment as the trial court's ruling from which appeal was taken: "PLEASE TAKE NOTICE that, pursuant to Rule 3 of the North Carolina Rules of Appellate Procedure, Defendant Brandon Baxley appeals to the North Carolina Court of Appeals from the Final Judgment entered against him individually on July 30, 2010." Mr. Baxley's notice of appeal thus does not specifically designate the trial court's intermediate orders.

Rule 3(d) of the Rules of Appellate Procedure requires that an appellant's notice of appeal "designate the judgment or order from which appeal is taken and the court to which appeal is taken . . . ." N.C. R. App. P. 3(d); Boger v. Gatton, 123 N.C. App. 635, 637, 473 S.E.2d 672, 675 (1996). "Proper notice of appeal is a jurisdictional requirement that may not bewaived[,]" Chee v. Estes, 117 N.C. App. 450, 452, 451 S.E.2d 349, 350 (1994), and thus "[a]n appellant's failure to designate a particular judgment or order in the notice of appeal generally divests this Court of jurisdiction to consider that order[,]" Yorke v. Novant Health, Inc., 192 N.C. App. 340, 347, 666 S.E.2d 127, 133 (2008), disc. review denied, 363 N.C. 260, 677 S.E.2d 461 (2009).

An appellate court may nonetheless obtain jurisdiction to review an order not included in a notice of appeal pursuant to N.C. Gen. Stat. § 1-278 (2009), which provides that "[u]pon an appeal from a judgment, the court may review any intermediate order involving the merits and necessarily affecting the judgment." See Brooks v. Wal-Mart Stores, Inc., 139 N.C. App. 637, 641, 535 S.E.2d 55, 59 (2000) (explaining that N.C. Gen. Stat. § 1-278 "provides another avenue by which an appellate court may obtain jurisdiction to review an interlocutory order absent compliance with Rule 3(d)." (internal citation and quotation marks omitted)). Review under N.C. Gen. Stat. § 1-278 is permissible if three requirements are satisfied: "(1) the appellant must have timely objected to the order; (2) the order must be interlocutory and not immediately appealable; and (3) the order must have involved the merits and necessarily affectedthe judgment." Gaunt v. Pittaway, 135 N.C. App. 442, 445, 520 S.E.2d 603, 606 (1999).

As for the first requirement, Rule 46(b) of the Rules of Civil Procedure provides, as to interlocutory orders not directed to the admissibility of evidence, that "formal objections and exceptions are unnecessary." N.C. R. Civ. P. 46(b). Instead,

[i]n order to preserve an exception to any such ruling or order or to the court's failure to make any such ruling or order, it shall be sufficient if a party, at the time the ruling or order is made or sought, makes known to the court the party's objection to the action of the court or makes known the action that the party desires the court to take and the party's grounds for its position.

N.C. R. Civ. P. 46(b). "The opposition must specify 'what action [the non-movant] wanted the trial court to take and the grounds for that action.'" Dixon v. Hill, 174 N.C. App. 252, 258, 620 S.E.2d 715, 719 (2005) (quoting Inman v. Inman, 136 N.C. App. 707, 712, 525 S.E.2d 820, 823, cert. denied, 351 N.C. 641, 543 S.E.2d 870 (2000)), disc. review denied, 360 N.C. 289, 627 S.E.2d 619, cert. denied, 548 U.S. 906, 165 L. Ed. 2d 954 (2006).

With respect to the 6 October 2009 order, the record on appeal contains no written opposition to East Bay's motion to compel discovery. Nor is there any indication that Mr. Baxleyorally objected...