Travco Hotels, Inc. v. Piedmont Natural Gas Co., Inc.

• Decision Date: 07 May 1991
• Docket Number: No. 9021SC437,9021SC437
• Citation: 403 S.E.2d 593,102 N.C.App. 659
• Court: North Carolina Court of Appeals
• Parties: TRAVCO HOTELS, INC., Plaintiff, v. PIEDMONT NATURAL GAS COMPANY, INC., Defendant. K & W RESTAURANT, INC., Plaintiff, v. PIEDMONT NATURAL GAS COMPANY, INC., Defendant, v. TRAVCO HOTELS, INC., Third Party Defendant.

Page 593

403 S.E.2d 593

102 N.C.App. 659

TRAVCO HOTELS, INC., Plaintiff, v. PIEDMONT NATURAL GAS COMPANY, INC., Defendant.

K & W RESTAURANT, INC., Plaintiff, v. PIEDMONT NATURAL GAS COMPANY, INC., Defendant, v. TRAVCO HOTELS, INC., Third Party Defendant.

No. 9021SC437.

Court of Appeals of North Carolina.

May 7, 1991.

Womble Carlyle Sandridge & Rice by Jimmy H. Barnhill, Michael E. Ray and Jack B. Hicks, Winston-Salem, Wyatt, Early, Harris, Wheeler & Hauser by Kim R. Bauman, High Point, Bailey & Thomas by David W. Bailey, Jr., Winston-Salem, for plaintiff-appellee Travco Hotels, Inc.

McKenzie & McPhail by Jefferson C. McConnoughey, Atlanta, McCall & James by Randolph M. James, Winston-Salem, for K & W Restaurant, Inc.

Hedrick, Eatman, Gardner & Kincheloe by J.A. Gardner III, Scott M. Stevenson and Brian D. Lake, Charlotte, for defendant-appellant Piedmont Natural Gas Co., Inc.

ORR, Judge.

The dispositive issue on appeal is whether Piedmont's appeal is interlocutory. For the reasons below, we hold that it is and grant Travco's motion to dismiss the appeal.

On 22 June 1990, Travco filed a motion to dismiss the appeal on several grounds, including that the appeal is interlocutory. Because the trial court filed two separate orders on Piedmont's two separate motions, we shall address them separately for purposes of finding the appeal of both orders interlocutory.

A. Motion for Partial Summary Judgment

Piedmont contends that the trial court erred in denying its motion for partial summary judgment on the issue of punitive damages.

Under N.C.Gen.Stat. §§ 1-277 and 7A-27, an order is immediately appealable if the order affects a substantial right and the loss of that right will injure the party appealing if not corrected prior to final judgment. Horne v. Nobility Homes, Inc., 88 N.C.App. 476, 363 S.E.2d 642 (1988). Further, this Court has held that an order denying a defendant's motion to dismiss a plaintiff's claim for punitive damages does not affect a substantial right, and the party appealing is not injured if it cannot appeal until after the final judgment. Williams v. East Coast Sales, 50 N.C.App. 565, 274 S.E.2d 276 (1981).

We are bound by this rule and therefore hold that defendant's appeal of the order denying its motion for partial summary judgment on the issue of punitive damages is interlocutory.

B. Motion to Disqualify Womble Carlyle

In deciding whether an appeal is interlocutory, §§ 1-277 and 7A-27 require this Court to apply a two-part test: (1) does the trial court's order affect a substantial right; and (2) if so, will the loss of that right injure the party appealing if it is not corrected prior to final judgment. Tridyn Industries, Inc. v. American Mutual Insurance Co., 296 N.C. 486, 251 S.E.2d 443 (1979); J & B Slurry Seal Co. v. Mid-South Aviation, Inc., 88 N.C.App. 1, 362 S.E.2d 812 (1987); Robins & Weill v. Mason, 70 N.C.App. 537, 320 S.E.2d 693, disc. review denied, 312 N.C. 495, 322 S.E.2d 559 (1984).

To determine what constitutes a "substantial right," this Court must look at the facts of each case individually, as well as the procedural history of the order from which the appealing party seeks relief. Patterson v. DAC Corp., 66 N.C.App. 110, 112, 310 S.E.2d 783, 785 (1984) (citation omitted).

In Lowder v. All Star Mills, Inc., 60 N.C.App. 275, 279, 300 S.E.2d 230, 232, aff'd in part and rev'd in part, 309 N.C. 695, 309 S.E.2d 193 (1983), this Court held that a denial of the motion to disqualify plaintiffs' attorneys "affect[s] [a] substantial right[s] which will work injury to the appellants if not corrected before an appeal from a final judgment." We must assume that this holding applied only to the facts in Lowder, in view of the general rule stated above that this Court must determine each alleged interlocutory appeal on a case by case basis. 66 N.C.App. at 112, 310 S.E.2d at 785. See also J & B Slurry Seal Co. (for a thorough analysis of the conflicting decisions applying this rule in determining interlocutory appeals).

In Lowder, the law firm defendant sought to disqualify from representing plaintiffs had represented W. Horace Lowder in the criminal appeal of a conviction for tax evasion. One of the attorneys involved in that appeal then sought to associate a related law firm to represent Lowder's brother against Lowder in a related corporate matter. 60 N.C.App. at 279-80, 300 S.E.2d at 233. Lowder alleged that the attorney furnished the associated law firm with confidential information gleaned from the criminal trial. Id. After a thorough analysis of the N.C.Code of Professional Responsibility, the Lowder Court found, however, that the trial court did not abuse its discretion in denying Lowder's motion because of the extensive findings of fact, including that the "exchanges of information with the [attorney's] firm were confined to matters of public record or matters not related to the present action." Id. at 280, 300 S.E.2d at 233. Therefore, the order denying Lowder's motion to disqualify his former attorney was affirmed. Id. at 282, 300 S.E.2d at 234.

The present case is substantially different. Here, defendant maintains that because Womble Carlyle represented defendant in previous matters of a similar nature (but not involving plaintiff), Womble Carlyle could not represent plaintiff in the present matter. Defendant alleged that in the previous action, Womble Carlyle became privy to information concerning personnel, operational procedures, technical records and defendant's general attitude as a corporate gas utility.

Piedmont further argues that it has a substantial right to prevent prior counsel from using confidential information gleaned from a prior representation and utilizing it against the client in subsequent litigation in alleged violation of the N.C. Rules of Professional Conduct. We agree with Piedmont that this is a substantial right in the present case.

We cannot find, however, that the deprivation of this right would injure Piedmont if not corrected before a final judgment. Piedmont will not lose its right to appeal the denial of the motion to disqualify Womble Carlyle after final judgment. See In re Condemnation of Lee, 85 N.C.App. 302, 354 S.E.2d 759, disc. review denied, 320 N.C. 513, 358 S.E.2d 520 (1987) (this Court considered a party's appeal of a trial court's denial of its motion to disqualify opposing counsel who had represented the appealing party in a prior related case after the trial of the action.) Second, if Piedmont loses at trial, it can still challenge the verdict and assign as error the trial court's denial of its motion to disqualify Womble Carlyle.

Therefore, we hold that Piedmont's appeal of the trial court's order denying its motion to disqualify Womble Carlyle is interlocutory. We note, however, that here, the cases involved are much less related to each other than those in Lowder, where this Court held that the trial court did not abuse its discretion. The trial court in the present case concluded that the scope of the previous case (in which Womble Carlyle was involved representing Piedmont) was limited, that the Womble Carlyle attorneys were not privy to any information about Piedmont that was unusual, unexpected or unique and that no true secrets or real confidences were involved.

For the above reasons, we grant Travco's motion to dismiss the appeal.

Appeal dismissed.

GREENE, J., concurs.

PHILLIPS, J., concurs in part and dissents in part.

PHILLIPS, Judge, concurring in...