North Carolina Consumers Power, Inc. v. Duke Power Co.

Decision Date01 July 1974
Docket NumberNo. 87,87
Citation285 N.C. 434,206 S.E.2d 178
CourtNorth Carolina Supreme Court
PartiesNORTH CAROLINA CONSUMERS POWER, INC. and the City of Shelby, a municipal corporation of the State of North Carolina, Petitioners-Plaintiffs, v. DUKE POWER COMPANY et al., Respondents-Defendants, and Charles R. McBrayer et al., Additional Respondents-Defendants.

Crisp, Bolch & Smith by Thomas J. Bolch, Raleigh, Tally & Tally by J. O. Tally, Jr. and James D. Garrison, Fayetteville, Wood, Dawson, Love & Sabatine, New York City, of counsel, for petitioners-plaintiffs.

Joyner & Howison by R. C. Howison, Jr., Raleigh, and William I. Ward, Jr., Charlotte, of counsel; Fleming, Robinson & Bradshaw by Robert W. Bradshaw, Jr., Charlotte, and Horn, West, Horn & Wray, Shelby, for respondents-defendants.

BRANCH, Justice.

At the threshold of this appeal we are confronted with the question of whether an appeal lies from the trial judge's refusal to dismiss the action.

G.S. § 1--277 in effect provides that no appeal lies to an appellate court from an interlocutory order or ruling of the trial judge unless such ruling or order deprives the appellant of a substantial right which he would lose if the ruling or order is not reviewed before final judgment. Raleigh v. Edwards, 234 N.C. 528, 67 S.E.2d 669; Veazey v. Durham, 231 N.C. 357, 57 S.E.2d 377.

Many decisions of this Court hold that refusal of a Motion to Dismiss is not a final determination within the meaning of the statute and, therefore, is not appealable. G.M.C. Trucks v. Smith, 249 N.C. 764, 107 S.E.2d 746; Cox v. Cox, 246 N.C. 528, 98 S.E.2d 879; Johnson v. Pilot Life Ins. Co., 215 N.C. 120, 1 S.E.2d 381; Clements v. Southern R.R., 179 N.C. 225, 102 S.E. 399; Plemmons v. Southern Improvement Co., 108 N.C. 614, 13 S.E. 188.

Johnson v. Pilot Life Ins. Co., Supra, was an action to set aside a release and recover on an insurance policy. The insurer appealed from an Order denying its Motion to Dismiss. The Court dismissed the appeal and Chief Justice Stacy, writing for the Court, stated:

'No appeal lies from a refusal to dismiss an action. Goldsboro v. Holmes, 183 N.C. 203, 111 S.E. 1; Farr v. Babcock Lumber & Sand Co., 182 N.C. 725, 109 S.E. 833; Goode v. Rogers, 126 N.C. 62, 35 S.E. 185. In such case there is no judgment--only the refusal of a judgment. Brandhaw v. Citizens' Nat. Bank, 172 N.C. 632, 90 S.E. 789. Of course, if the motion had been allowed and the action dismissed, the plaintiff could not have proceeded in the court below, and in that event an appeal by the plaintiff would have been in order. Royster v. Wright, 118 N.C. 152, 24 S.E. 746. Such a ruling would have been just the reverse of the one we are now considering. Batson v. City Laundry Co., 206 N.C. 371, 174 S.E. 90, Supra.'

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"It is only when the judgment or order appealed from in the course of the action puts an end to it, or may put an end to it, or has the effect to deprive the party complaining of some substantial right, or will seriously impair such right if the error shall not be corrected at once, and before the final hearing, that an appeal lies before final judgment.' Merrimon, J., in Leak v. Covington, 95 N.C. 193.'

Duke relies upon the cases of Kilby v. Dowdle, 4 N.C.App. 450, 166 S.E.2d 875, and Elliott v. Ballentine, 7 N.C.App. 682, 173 S.E.2d 552, to support its contention that the denial of its Motions to Dismiss is immediately appealable.

Kilby is distinguishable from the case before us. In Kilby plaintiff instituted an action to recover for personal injuries allegedly resulting from the negligent operation of a motor vehicle owned by defendant, Carolina Truck and Body Company, Inc., and operated by its employee Dowdle. Defendant, Carolina Truck and Body Company, alleged, as a plea in bar, that plaintiff was its employee at the time of the accident and that the North Carolina Industrial Commission had exclusive jurisdiction of the claim. The trial judge overruled the plea in bar and set the cause for trial.

Defendant Truck Company appealed from this ruling and the Court of Appeals held that an appeal lies immediately from refusal to dismiss a cause of action for Want of jurisdiction. However, no such jurisdictional question arises in instant case.

We are unable to find a valid distinction between instant case and Elliott. In Elliott the cause of action involved an interpretation of a will under the Declaratory Judgment Act. Defendants demurred on the grounds that the complaint did not state a cause of action, and that there was a misjoinder of parties and causes of action. The trial court overruled the demurrer and the Court of Appeals considered defendant's appeal. It would seem that the holding in Elliott would, by implication, support Duke's position. On the other hand, the Court of Appeals in the later case of Acorn v. Jones Knitting Corp., 12 N.C.App. 266, 182 S.E.2d 862, flatly held, and we think correctly so, that no immediate right of appeal lay from the trial court's order denying defendant's Motion to Dismiss because of a prior action pending in another jurisdiction between the same parties. In dismissing the action the Court, Inter alia, quoted from Johnson v. Pilot Life Ins. Co., Supra, the following: 'No appeal lies from a refusal to dismiss an action.'

Judge Friday's refusal to allow Duke's Motion to Dismiss did not put an end to the action or seriously impair any substantial right of Duke that could not be corrected upon appeal from final judgment. The Court of Appeals incorrectly denied petitioners-plaintiffs' Motion to Dismiss Duke's appeal. Nevertheless since the Court of Appeals decided this case upon its merits and because we believe that decision of the principal question presented would expedite the administration of justice, we elect, in the exercise of our supervisory jurisdiction, to consider the principal question. Moses v. State Highway Commission, 261 N.C. 316, 134 S.E.2d 664; Allred v. Graves, 261 N.C. 31, 134 S.E.2d 186.

We are thus brought to the consideration of whether the trial judge correctly denied defendant's Motion to Dismiss.

A Motion to Dismiss pursuant to Rule 12(b)(6) performs the same function as the old common law general demurrer. Sutton v. Duke, 277 N.C. 94, 176 S.E.2d 161. Thus well pleaded allegations in the Complaint and such relevant inferences of fact which might be deduced therefrom are taken as true. The Motion to Dismiss will be allowed only when the Complaint affirmatively shows that plaintiff has no cause of action. Forrester v. Garrett, Comr. of Motor Vehicles, 280 N.C. 117, 184 S.E.2d 858; Sutton v. Duke, Supra. The Motion is seldom an appropriate pleading in actions for declaratory judgments, and will not be allowed simply because the plaintiff may not be able to prevail. It is allowed only when the record clearly shows that there is no basis for declaratory relief as when the complaint does not allege an actual, genuine existing controversy. Newman Machine Company v. Newman, 275 N.C. 189, 166 S.E.2d 63; Woodard v. Carteret County, 270 N.C. 55, 153 S.E.2d 809; Walker v. Charlotte, 268 N.C. 345, 150 S.E.2d 493; Hubbard v. Josey, 267 N.C. 651, 148 S.E.2d 638; Nationwide Mut. Insurance Company v. Roberts, 261 N.C. 285, 134 S.E.2d 654; 22 Am.Jur.2d, Declaratory Judgments, § 91 (1965).

Since this action is bottomed on the System Contract (Exhibit C--1) between Consumers and Shelby we quote pertinent portions of the contract to which reference will hereinafter be made:


Section 1.01 Preamble

'. . . Consumers Power and the municipal and EMC Participants also desire and intend to provide for the bulk power requirements of the Participants which are in excess of the capability of the Consumers Power system. This will be done through various methods, including assumption by Consumers Power of rights and obligations of Participants in any contracts with other bulk power suppliers at the time Consumers Power goes into commercial operation, purchase and resale of supply from other bulk power suppliers and, if such proves feasible and desirable, by N.C. EMC's acquisition of power generation or transmission facilities and their utilization on an integrated basis with the Consumers Power facilities. . . .

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Several years will be required to bring the proposed initial system of Consumers Power to reality. Numerous governmental approvals will be required; planning, designing, financing and construction must be arranged for and completed. These interim measure will of course require substantial expenditures, which Consumers Power will fund by issuance of its short-term obligations that will be refinanced by the issuance of long-term obligations.

Section 1.02 Premises

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(6) Additional work and proceedings are required in order (a) to obtain from the North Carolina Utilities Commission a certificate of convenience and necessity . . ., (b) to obtain other governmental approvals, permits and licenses required in connection with the Initial System, . . . and (c) to firmly establish the engineering, legal and financial feasibility of the Initial System sufficient to support long-term financing of the cost of the Initial System. . . .

(7) It will be necessary, in order to enable Seller to issue its bonds, notes or other evidences of indebtedness to pay the costs of acquiring and constructing the Initial System, to have binding contracts with the Participants.

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(9) Seller proposes to enter into agreements with the other Participants containing terms and conditions substantially identical to those contained herein.

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(12) Seller and Participants desire and intend by this and other substantively similar agreements to provide for the Participants' payment for, and for the performance by the Seller of, first, the services necessary to secure required governmental approvals for, and to plan, design, finance and construct to point of commercial...

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