Robertson v. Steris Corp.

• Decision Date: 01 July 2014
• Docket Number: No. COA13–1301.,COA13–1301.
• Citation: 760 S.E.2d 313
• Court: North Carolina Court of Appeals
• Parties: Terri Lynn ROBERTSON and Mary Dianne Daniel, Plaintiffs, v. STERIS CORPORATION, a Delaware Corporation, et al., Defendants.

760 S.E.2d 313

Terri Lynn ROBERTSON and Mary Dianne Daniel, Plaintiffs,

v.STERIS CORPORATION, a Delaware Corporation, et al., Defendants.

No. COA13–1301.

Court of Appeals of North Carolina.

July 1, 2014.

Appeal by Plaintiffs from order entered 7 February 2013 by Judge D. Jack Hooks, Jr., in Brunswick County Superior Court. Heard in the Court of Appeals 9 April 2014.

The Lorant Law Firm, by D. Bree Lorant, and Womble, Carlyle, Sandridge & Rice, LLP, by Burley B. Mitchell, Jr., Raleigh, and Robert T. Numbers, II, for Plaintiffs.

No brief for Defendants.

Young Moore and Henderson P.A., Raleigh, by Walter E. Brock, Jr., and Andrew P. Flynt, for Intervenors G. Henry Temple, Jr., and Temple Law Firm, PLLC.

STEPHENS, Judge.

Procedural History and Factual Background

In 2004, Plaintiffs Terri Lynn Robertson and Mary Dianne Daniel were allegedly injured by the release of toxic liquids and gases from a sterilization machine while they were at work at Brunswick County Hospital. On 19 January 2007, G. Henry Temple, Jr., of the Temple Law Firm, PLLC, filed a complaint in Brunswick County Superior Court on behalf of Plaintiffs seeking damages for personal injuries against various defendants (“the underlying lawsuit”). No written contract regarding legal representation was executed between Temple and Plaintiffs. Plaintiffs asserted that Temple never discussed his contingency fee rate with them and Temple himself could not recall doing so, but Travis Harper, an attorney working for the Temple Law Firm, testified that Temple did tell Plaintiffs that “their individual recoveries would be after costs and attorney fees[.]” Temple did explain that, if he lost the case, he would pay all costs of the litigation. The underlying lawsuit was designated as exceptional by the Chief Justice pursuant to Rule 2.1 of the General Rules of Practice for the Superior and District Courts, and the Honorable D. Jack Hooks, Jr., was appointed as presiding judge.

When Plaintiffs first approached Temple in November 2006, Temple had concerns about the viability of their claims. He was particularly concerned that the statute of repose for product liability claims would operate to bar the lawsuit. Two other attorneys had already declined to take case, and Temple told Plaintiffs he would need to investigate before making a decision. As the case proceeded, it proved even more complex and problematic than Temple had anticipated. Early on, Judge Hooks ruled that all product liability claims were barred by the applicable statute of repose, and Temple shifted his theory of the case to an attempt to prove inadequate maintenance of the sterilization machine. By the time of the first round of mediation in May 2010, the costs that Temple had incurred in pursuit of the lawsuit were approximately $150,000, but Plaintiffs were offered only $270,000 total to settle. Plaintiffs did receive workers' compensation benefits and settlements of several hundred thousand dollars each for their workers' compensation claims. During pendency of the litigation, claims against all defendants except Steris Corporation and Seal Master Corporation ¹ were dismissed. Trial was set for 14 March 2011, and a second round of mediation was ordered for 2 March 2011.

Temple's research with two mock juries indicated that Plaintiffs would likely lose the case based on problems with Plaintiffs' credibility and other issues. Consultants working with Temple urged him to settle, and Temple reached a confidential settlement with Seal Master before mediation. During mediation, Temple also reached a confidential settlement with Steris for an amount the consultants considered surprisingly high. However, a dispute arose between Plaintiffs and Temple regarding Temple's fees and costs. Temple sought 40% of Plaintiffs' recovery after costs, and Plaintiffs felt that percentage was too high. Plaintiffs signed releases of their claims as to Steris and Seal Master, but due to the fee dispute, Plaintiffs refused to authorize Temple to deliver the signed releases or dismiss the underlying lawsuit. Plaintiffs terminated their relationship with Temple and retained attorney D. Bree Lorant in early September 2011.

The fee dispute and termination of his services led Temple to file motions in the underlying lawsuit to intervene and to recover attorneys' fees and costs on 5 October 2011. On 11 October 2011, Judge Hooks entered an “Order and Notice of Hearing” stating, inter alia, that claims by Plaintiffs against Steris and Seal Master had “been announced as settled, but ha[d] not been dismissed as a number of issues ha[d] arisen beyond the matters” in the underlying lawsuit. The order specifically referenced the dispute regarding Temple's fees. On 26 October 2011, Plaintiffs agreed to dismiss the underlying lawsuit with prejudice. On 1 November 2011, a consent order was entered to allow dismissal of all claims against the remaining defendants as “a full and final settlement of the causes of action” had been reached in the underlying lawsuit. ² However, the order did not resolve the fee dispute between Temple and Plaintiffs, and Temple's motions in the cause and to intervene remained pending.

On 20 August 2012, Plaintiffs moved to dismiss the matter or, in the alternative, to stay Temple's motions.³ On 9 and 10 October 2012, Judge Hooks, under a new commission, held a hearing on the pending motions. By order entered 7 February 2013, Judge Hooks granted Temple's motion to intervene, denied Plaintiffs' motion to dismiss or stay proceedings, and awarded Temple reimbursement of certain costs and an attorneys' fee of one-third of Plaintiffs' net recovery in the underlying lawsuit less the amount of workers' compensation lien and common costs payments previously made by Temple. From that order, Plaintiffs appeal.

Discussion

On appeal, Plaintiffs make eleven arguments: that Judge Hooks erred in (1) hearing Temple's claims without having subject matter jurisdiction, (2) asserting authority over Plaintiffs without having personal jurisdiction, (3) asserting authority over Plaintiffs' settlement funds without having jurisdiction, (4) hearing and ruling on Temple's claims which should have been asserted in a separate action, (5) conducting a bench trial that deprived Plaintiffs of their due process rights, right of immediate appellate review, and a fair hearing on the merits, (6) finding Temple to be a real party in interest in the underlying action, (7) granting Temple's motion to intervene, (8) awarding Temple fees and costs in violation of public policy, (9) awarding Temple fees and costs in violation of the North Carolina Rules of Professional Conduct, (10) awarding Temple fees and costs without legal authority, and (11) reaching conclusions of law that are not supported by the court's findings of fact. We affirm.

I. Jurisdiction

In Plaintiffs' first four arguments, they contend that Judge Hooks erred in hearing Temple's claims without having subject matter jurisdiction, personal jurisdiction over Plaintiffs, or jurisdiction over Plaintiffs' settlement funds, and assert that Temple was required to bring his claims for costs and fees against Plaintiffs in a separate action. Because these arguments are related, we consider them together and reject each contention.

Whether a trial court has subject[ ]matter jurisdiction is a question of law, reviewed de novo on appeal. Subject[ ]matter jurisdiction involves the authority of a court to adjudicate the type of controversy presented by the action before it. Subject[ ]matter jurisdiction derives from the law that organizes a court and cannot be conferred on a court by action of the parties or assumed by a court except as provided by that law. When a court decides a matter without the court's having jurisdiction, then the whole proceeding is null and void, i.e., as if it had never happened. Thus the trial court's subject[ ]matter jurisdiction may be challenged at any stage of the proceedings.

McKoy v. McKoy, 202 N.C.App. 509, 511, 689 S.E.2d 590, 592 (2010) (citations and internal quotation marks omitted; italics added).

Plaintiffs cite In re Transportation of Juveniles for the proposition that Judge Hooks had subject matter jurisdiction only over the issues raised in Plaintiffs' complaint which they contend did not include Temple's alleged entitlement to fees for his services. 102 N.C.App. 806, 808, 403 S.E.2d 557, 558 (1991) (“A court cannot undertake to adjudicate a controversy on its own motion; rather, it can adjudicate a controversy only when a party presents the controversy to it, and then, only if it is presented in the form of a proper pleading. Thus, before a court may act there must be some appropriate application invoking the judicial power of the court with respect to the matter in question.”) (citation omitted). We find that case easily distinguishable.

There, a district court judge “entered an order [regarding who would transport juveniles in secure custody to and from court], ex mero motu and without an action or proceeding having been filed.” Id. at 807, 403 S.E.2d at 558. We vacated the order because, “without an action pending before it, the district court was without jurisdiction to enter an order.” Id. at 808, 403 S.E.2d at 559. Here, in contrast, there was an action pending before Judge Hooks, to wit, the underlying lawsuit. As Judge Hooks noted in his order filed 7 February 2013, due to the dispute between Plaintiffs and Temple over Temple's costs and fees, the trial court was “unable to have final dismissals entered” after Plaintiffs and the remaining defendants reached a settlement. The November 2011 consent order providing for final dismissal of all pending claims between Plaintiffs and the remaining defendants pursuant to the mediated settlement placed the resulting settlement funds with the Clerk of Superior Court in Brunswick County pending resolution of the dispute over Temple's costs and fees.

For the same reason, we also reject Plaintif...