Love v. Moore

Decision Date04 May 1982
Docket NumberNo. 158A81,158A81
Citation291 S.E.2d 141,305 N.C. 575
CourtNorth Carolina Supreme Court
PartiesNancy Carol LOVE formerly Nancy Love Mills v. Frank William MOORE and Nationwide Mutual Insurance Company.

John D. Warren, Charlotte, for plaintiff-appellee.

Kennedy, Covington, Lobdell & Hickman by William C. Livingston, Charlotte, and Franklin V. Adams, Raleigh, for defendant-appellant Nationwide Mut. Ins. Co.

CARLTON, Justice.

I.

The legal issues presented by this appeal can be understood only in the context of the unusual factual circumstances which surround this case.

On 30 October 1970 plaintiff was injured when her 1970 Cadillac automobile collided with a 1956 Chevrolet automobile driven by defendant Frank Willard Moore. Moore was insured by defendant Nationwide Mutual Insurance Company (Nationwide), and plaintiff's attorney began settlement negotiations with Nationwide. Efforts to settle proved futile and negotiations were ended without resolution of the claim in October of 1972. At no time during these negotiations was plaintiff or her attorney informed that Moore was insured as an assigned risk, nor were they told that Moore's name was erroneously written on the accident report as Frank William Moore. Frank William Moore was the name used by plaintiff to refer to Nationwide's insured during the settlement negotiations.

On 29 October 1973 plaintiff filed this action for personal injury and property damage arising from the 30 October 1970 accident and named Frank William Moore as the sole defendant. Plaintiff attempted without success to effect personal service on Moore and finally gave notice by publication. The notice referred to the defendant as Frank William Moore and gave the date and circumstances of the accident. No notice of the action was given Nationwide by either plaintiff or Moore.

No answer was filed and judgment was entered for plaintiff on 30 April 1975. Plaintiff obtained this judgment by presenting her proof before Judge Thornburg, who sat without a jury.

On 31 May 1977 plaintiff sought to enforce the 1975 judgment against Nationwide as Moore's automobile liability insurance carrier. Nationwide defended by claiming that the 1975 judgment was in essence a default judgment which was unenforceable against it because it had not received notice of the action as required by G.S. 20-279.21(f) (Cum.Supp.1981). That statute prohibits the use, in an action against the insurer, of a default judgment against an assigned risk insured unless the insurer received notice of the action. On 4 March 1980 the Court of Appeals held that the 1975 judgment was a default judgment and that it was unenforceable against the insurer and affirmed the dismissal of the suit against Nationwide. 45 N.C.App. 444, 263 S.E.2d 337, cert. denied, 300 N.C. 198, 269 S.E.2d 617 (1980). On 25 July 1978, while the case was pending in the Court of Appeals, Moore died. Thereafter, on 10 June 1980, plaintiff successfully moved to vacate the 1975 judgment. It was also ordered that Nationwide be given the statutorily required notice so that it might file a defense or otherwise plead on behalf of its insured. Plaintiff gave the required notice and on 16 July 1980 Nationwide filed motions to intervene, to strike the order vacating the default judgment and to dismiss the action for lack of personal jurisdiction because of improper service on its insured. The trial court granted the motion to intervene but denied the other motions.

Defendant appealed the adverse rulings to the Court of Appeals. That court, in an opinion by Judge Arnold in which Judge Webb concurred, affirmed the trial court's rulings. Judge Vaughn dissented, reasoning that the facts of the case did not justify the relief requested by plaintiff under Rule 60(b)(6).

Defendant appeals to this Court as of right pursuant to G.S. 7A-30(2). This Court is of the opinion that defendant's appeal is premature; therefore, we vacate the decision of the Court of Appeals, dismiss the appeal and remand for appropriate proceedings.

II.

The threshold question which should have been considered by the Court of Appeals, although not presented to that court, was whether an immediate appeal lies from the trial court's orders. 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. Bailey v. Gooding, 301 N.C. 205, 270 S.E.2d 431 (1980); 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) (per curiam). In our opinion, this appeal was premature and the case should first run its course in the trial court. Therefore, we neither consider nor address the questions discussed by the Court of Appeals.

Nationwide appeals from two rulings of the trial court: (1) the refusal to strike the order vacating the default judgment and (2) the denial of its motion to dismiss for lack of personal jurisdiction.

Both of these rulings are interlocutory in nature because neither disposes entirely of the cause of action as to all parties and both rulings leave matters for further action by the trial court in order to settle and determine the entire controversy. Veazey v. City of Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950). As a general rule, interlocutory decrees are immediately appealable only when they affect a substantial right of the appellant and will work an injury to him if not corrected before an appeal from a final judgment. Id.; see G.S. § 1-277(a) (Cum.Supp.1981). An interlocutory decree which does not affect a substantial right is reviewable only on appropriate exception upon an appeal from the final judgment in the cause. Veazey v. City of Durham, 231 N.C. at 362, 57 S.E.2d at 382.

We first consider whether the denial of a motion to strike an order vacating a default judgment affects a substantial right within the meaning of G.S. 1-277. An exception to an order denying a motion to strike an order vacating a default judgment is tantamount to an exception to the entry of the order vacating the default judgment. Cf. Waters v. Qualified Personnel, Inc., 294 N.C. 200, 240 S.E.2d 338 (1978) (order setting aside summary judgment tantamount to denial of summary judgment). An order vacating a default judgment is interlocutory and not immediately appealable because "[n]o right of [defendant] will be lost by delaying [its] appeal until after final judgment ...." Bailey v. Gooding, 301 N.C. at 210, 270 S.E.2d at 434. Under the authority of Bailey, we hold that defendant's attempted appeal from the setting aside of the default judgment was premature and that it must be dismissed.

That issue, however, is not dispositive of this appeal; defendant also appealed from the trial court's adverse ruling on its motion to dismiss for lack of personal jurisdiction, Rule 12(b)(2), and for insufficiency of service of process, Rule 12(b)(5). Such rulings do not put an end to the action and are unquestionably interlocutory. 2A J. Moore and J. Lucas, Moore's Federal Practice p 12.14, at 2338 (2d ed. 1981); C. Wright and A. Miller, Federal Practice and Procedure § 1351 (1969). Nor can these rulings be said to "affect a substantial right": defendant's objections to the court's jurisdiction have been preserved and can be fully reviewed on appeal from a final judgment. The delay in hearing the appeal of these rulings will not " 'work injury to appellant if not corrected before appeal from the final judgment,' " Cole v. Farmers Bank & Trust Co., 221 N.C. 249, 251, 20 S.E.2d 54, 55 (1942) (quotingLeak v. Covington, 95 N.C. 193 (1886)); accord, Veazey v. City of Durham, 231 N.C. 357, 57 S.E.2d 377.

G.S. 1-277(b) provides for "the right of immediate appeal from an adverse ruling as to the jurisdiction of the court over the person or property of defendant." Here, defendant characterized its Rule 12 motion as one to dismiss for lack of personal jurisdiction. Nothing else appearing, it would seem that G.S. 1-277(b) provides the authority for defendant's appeal.

The true character of defendant's motion, however, is not one attacking personal jurisdiction as contemplated by Rule 12(b)(2). Defendant's motion, although denominated as one challenging the court's jurisdiction over the person of Frank Willard Moore, in reality challenges the sufficiency of the service as contemplated by Rule 12(b)(5) and the sufficiency of the process as contemplated by Rule 12(b)(4). Specifically, Nationwide contended that use of the incorrect middle name in the published notice made the process itself insufficient and that service by publication was unconstitutional under the peculiar facts of this case and, thus, was defective. Again, these challenges are encompassed by Rule 12(b)(4) and Rule 12(b)(5), respectively. A challenge to the court's jurisdiction over the person, Rule 12(b)(2), concerns whether the court has power, assuming it is properly invoked, to require the defendant to come into court to adjudicate the claim, a test which has come to be known as "minimum contacts." Challenges to sufficiency of process and service do not concern the state's fundamental power to bring a defendant before its courts for trial; instead they concern the means by which a court gives notice to the defendant and asserts jurisdiction over him. C. Wright & A. Miller, supra, § 1353. G.S. 1-277(b) applies to the state's authority to bring a defendant before its courts, not to technical questions concerned only with whether that authority was properly invoked from a procedural standpoint. This is not a mere technical distinction; it has far-reaching substantive effect. If the court has no personal jurisdiction over the defendant, it has no right to require the defendant to come into court. A trial court determination concerning such an important fundamental question is made immediately appealable by G.S. 1-277(b). However, if the court has the...

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