Medport, Inc. v. Hazlehurst

• Citation: 871 S.E.2d 879 (Table)
• Decision Date: 17 May 2022
• Docket Number: COA21-695
• Parties: MEDPORT, INC., Plaintiff, v. John L. HAZLEHURST and Hazlehurst and Blake, PLLC, Defendants.
• Court: Court of Appeal of North Carolina (US)

871 S.E.2d 879 (Table)

MEDPORT, INC., Plaintiff,

v.John L. HAZLEHURST and Hazlehurst and Blake, PLLC, Defendants.

No. COA21-695

Court of Appeals of North Carolina.

Filed May 17, 2022

Offit Kurman, P.A., by Zipporah Basile Edwards and Robert B. McNeill, for defendants-appellants.

James, McElroy & Diehl, P.A., by John R. Buric, John. R. Brickley, and Preston O. Odom, III, for plaintiff-appellee.

GORE, Judge.

¶ 1 On 6 November 2019 plaintiff Medport, Inc., initiated this action to recover damages from one or more negligent acts of attorney John L. Hazlehurst and his law firm, Hazlehurst and Blake, LLC, (collectively, "defendants"), arising from a commercial real estate transaction.

¶ 2 In 2016, defendants represented a buyer in connection with the purchase of commercial property in Mecklenburg County. Plaintiff was a third-party lender to the seller. No attorney-client relationship existed between plaintiff and defendants. In the instant case, plaintiff asserted claims for negligence and gross negligence, alleging defendants recorded a forged satisfaction of a deed of trust against the property for which plaintiff was the beneficiary. Plaintiff contends defendants made such recordation despite notice that the satisfaction was potentially fraudulent.

¶ 3 On 10 January 2020 defendants filed a Motion to Dismiss, which was denied by order entered 2 March 2020. Defendants filed an Answer on 17 March 2020. Defendants moved for summary judgment on plaintiffs’ claims on 15 March 2021, which the trial court heard on 5 April 2021. The trial court subsequently entered an order denying defendants’ motion on 20 September 2021, "[s]pecifically, because [p]laintiff is suing under a theory of common law negligence, rather than professional negligence, which only requires that the defendants breach a duty of care as to a reasonably foreseeable plaintiff that caused damages ...." Defendants timely filed written notice of appeal.

¶ 4 An order denying a motion for summary judgment is not a final judgment for purposes of appeal. Rather, such an order is interlocutory because it "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." Veazey v. Durham , 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950) (citation omitted). "The denial of a motion for summary judgment is interlocutory and not immediately appealable unless it affects a substantial right." Moody v. Able Outdoor, Inc. , 169 N.C. App. 80, 83, 609 S.E.2d 259, 261 (2005) (citation omitted); see also N.C. Gen. Stat. §§ 1-277(a) and 7A-27(b)(3)(a) (2021).

¶ 5 Our Supreme Court has stated, "the substantial right test for appealability of interlocutory orders is more easily stated than applied." Waters v. Qualified Pers., Inc. , 294 N.C. 200, 208, 240 S.E.2d 338, 343 (1978). "No hard and fast rules exist for determining which appeals affect a substantial right." Estrada v. Jaques , 70 N.C. App. 627, 640, 321 S.E.2d 240, 249 (1984). "In order to resolve the question of the existence of a substantial right it is usually necessary to consider the particular facts of a case and the procedural context in which the interlocutory order arose." Barnes v. St. Rose Church of Christ, Disciples of Christ , 160 N.C. App. 590, 591, 586 S.E.2d 548, 550 (2003). "In determining the appealability of interlocutory orders under the substantial right exception, a two-part test has evolved: (1) the right itself must be substantial, and (2) the enforcement of the substantial right must be lost, prejudiced or be less than adequately protected by exception to entry of the interlocutory order." Beroth Oil Co. v. N.C. Dep't of Transp. , 256 N.C. App. 401, 411, 808 S.E.2d 488, 496-97 (2017) (quotation marks omitted).

¶ 6 This Court has consistently held that denial of a motion for summary judgment does not affect a substantial right except in limited situations involving claims of sovereign immunity, Thompson v. Town of Dallas , 142 N.C. App. 651, 653, 543 S.E.2d 901, 903 (2001), the doctrines of res judicata or collateral estoppel, Hedgepeth v. Parker's Landing Property Owners Ass'n, Inc. , 236 N.C. App. 56, 65-66, 762 S.E.2d 865, 871 (2014), or the possibility of inconsistent verdicts, McKenzie v. Charlton , 262 N.C. App. 410, 412, 822 S.E.2d 159, 161 (2018).

¶ 7 Defendants argue they are exempt/immune from a negligence claim against them for their actions in representing their client's interests because plaintiff and defendant never had an attorney-client relationship, and plaintiff's claims do not fall into any of the limited exceptions to the general rule requiring an attorney-client relationship. Thus, it is defendants’ contention that the right not to be sued will be lost if not addressed expeditiously, and that right cannot be reclaimed after a full trial on the merits and a final judgment. Further, a post-trial appeal cannot "adequately protect" their substantial rights, which will be lost without immediate review.

¶ 8 In support of their position, defendants cite several cases pertaining to sovereign/public official immunity, lack of subject matter jurisdiction, and professional malpractice cases predicated upon the theory of an attorney's negligence. However, defendants’ immunity/exemption from suit contention falls short. As stated in the trial court's Order, plaintiff asserted claims under a theory of common law negligence, not professional malpractice. Moreover, defendants’ prior representation of their client was not undertaken in a judicial or quasi-judicial capacity, where the issue of "immunity"...