Tridyn Industries, Inc. v. American Mut. Ins. Co.

• Decision Date: 05 February 1979
• Docket Number: No. 101,101
• Citation: 296 N.C. 486,251 S.E.2d 443
• Parties: TRIDYN INDUSTRIES, INC. v. AMERICAN MUTUAL INSURANCE COMPANY.
• Court: North Carolina Supreme Court

Page 443

251 S.E.2d 443

296 N.C. 486

TRIDYN INDUSTRIES, INC. v. AMERICAN MUTUAL INSURANCE COMPANY.

No. 101.

Supreme Court of North Carolina.

Feb. 5, 1979.

Turner, Enochs, Foster & Burnley, P. A., by James R. Turner and E. Thomas Watson, Greensboro, for plaintiff appellee.

Smith, Moore, Smith, Schell & Hunter by Bynum M. Hunter, Ben F. Tennille, and Michael E. Kelly, Greensboro, for defendant appellant.

EXUM, Justice.

The question presented is whether an order of the trial court allowing plaintiff's motion for partial summary judgment on the issue of liability, reserving for trial the issue of damages, and denying defendant's motion for summary judgment is appealable. We hold that it is not. The Court of Appeals correctly allowed plaintiff's motion to dismiss defendant's appeal. Its order is affirmed.

Plaintiff Tridyn is a North Carolina corporation which manufactures and sells polyvinyl chloride pipes and pipe couplings for use in fresh water supply systems. Defendant is a corporation registered and doing business in North Carolina. On 10 December 1971 it issued to plaintiff a comprehensive general liability insurance policy which was in force at all times material to this dispute. On 17 November 1975 plaintiff filed an amended complaint in which it alleged that defendant was obligated under this insurance policy to defend plaintiff against and, ultimately to pay certain claims made against plaintiff by two construction firms, namely, Pierce Ditching Company and Satterfield Construction Company. Defendant answered, admitting the issuance of its insurance policy but denying that this policy afforded coverage to plaintiff for the claims made against it by Pierce and Satterfield.

The insurance policy in question and the claims filed against plaintiff by Pierce and Satterfield were attached to and made a part of Tridyn's complaint. The two claims were similar. They in essence alleged that Tridyn had furnished defective couplings which, in turn, caused water systems which the two companies, respectively, had installed to leak. Both Pierce and Satterfield alleged they sustained substantial damages in replacing the defective couplings and repairing the water systems. Pierce ultimately recovered judgment against Tridyn on its claim in the sum of $30,011.92. Satterfield's claim against Tridyn was settled for $26,446.59.

Both plaintiff and defendant moved for summary judgment. The single dispute on the question of defendant's liability was whether the terms of the insurance policy covered the types of claims made against Tridyn. Plaintiff contended that the policy afforded coverage to it for the claims brought against it by Pierce and Satterfield. Defendant contended that no coverage was provided for these claims. Plaintiff at first sought summary judgment on all issues, presenting to the court the sums which it had expended in paying the Pierce judgment and settling the Satterfield claim. Ultimately, however, plaintiff moved only for partial summary judgment on the issue of liability.

The trial court, having before it the pleadings, the insurance policy, the claims filed against Tridyn by Pierce and Satterfield, and the amounts allegedly spent by Tridyn to satisfy these claims, concluded as a matter of law that the Pierce and Satterfield claims were covered by defendant's policy and that defendant's refusal to defend these claims was a breach of its insurance contract. The trial court further concluded that plaintiff was entitled to recover against defendant the reasonable attorneys' fees it incurred in defense of these claims together with the amounts plaintiff had paid on the claims "which was for damage to the (respective) water system(s), in an amount to be determined." In the decretal portion of its judgment, the court ordered that plaintiff "is entitled to a declaratory judgment in its favor as a matter of law on the issue of liability." It then allowed plaintiff's motion for partial summary judgment "on the issue of liability; " denied defendant's motion for summary judgment; and ordered that "the amount of damages suffered by plaintiff by reason of reasonable attorneys' fees, costs, expenses, and judgment and settlement amounts incurred and paid by plaintiff as a result of said claims for damages to said water system" be determined. The trial court further recited, "this is a final judgment and there is no just reason for delay."

Defendant appealed this judgment to the Court of Appeals. That court, on plaintiff's motion, dismissed the appeal. We allowed defendant's petition for further review of the Court of Appeals' ruling.

Judicial judgments, orders and decrees are "either interlocutory or the final determination of the rights of the parties." G.S. 1A-1, Rule 54(a). The difference between the two was stated in Veazey v. Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950): "A final judgment is one which disposes of the cause as to all the parties, leaving nothing to be judicially determined between them in the trial court. . . . An interlocutory order is one made during an pendency of an action, which 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." Justice Ervin, writing for the Court in Veazey, then set out the rules regarding appeals, Id. at 362, 57 S.E.2d at 381-82:

"1. An appeal lies . . . from a final judgment . . . .

"2. An appeal does not lie . . . from an interlocutory order . . . unless such order affects some substantial right claimed by the appellant and will work an injury to him if not corrected before an appeal from the final judgment.

"3. A nonappealable interlocutory order . . . which involves the merits and necessarily affects the judgment, is reviewable . . . on appropriate exception upon an appeal from the final judgment in the cause. . . . An earlier appeal from such an interlocutory order is fragmentary and premature, and will be dismissed."

These rules derive in part from G.S. 1-277 ¹ and are embodied in part in the more recently enacted G.S. 7A-27. ²

"The reason for these rules is to prevent fragmentary, premature and unnecessary appeals by permitting the trial divisions to have done with a case fully and finally before it is presented to the appellate division. 'Appellate procedure is designed to eliminate the unnecessary delay and expense of repeated fragmentary appeals, and to present the whole case for determination in a single appeal from the final judgment.' Raleigh v. Edwards, 234 N.C. 528, 529, 67 S.E.2d 669, 671 (1951)." Waters v. Personnel, Inc., 294 N.C. 200, 207-08, 240 S.E.2d 338, 343 (1978). "There is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders." Veazey v. Durham, supra, 231 N.C. at 363, 57 S.E.2d at 382.

In addition to the foregoing, Rule 54(b) of the Rules of Civil Procedure provides:

"(b) Judgment upon multiple claims or involving multiple parties. When more than one claim for relief is presented in an action, whether as a claim, counterclaim, crossclaim, or third-party claim, or when multiple parties are involved, the court may enter a final judgment as to one or more but fewer than all of the claims or parties only if there is no just reason for delay and it is so determined in the judgment. Such judgment shall then be subject to review by appeal or as otherwise provided by these rules or other statutes. In the absence of entry of such a final judgment, any order or other form of decision, however designated, which adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties shall not terminate the action as to any of the claims or parties and shall not then be subject to review either by appeal or otherwise except as expressly provided by these rules or other statutes. Similarly, in the absence of entry of such a final judgment, any order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims and the rights and liabilities of all the parties."

Rule 54(b) modifies the traditional notion that a case could not be appealed until the trial court had finally and entirely disposed of it all. Oestreicher v. Stores, 290 N.C. 118, 225 S.E.2d 797 (1976). The rule should be seen as a companion to other rules of procedure which permit liberal joinder of claims and parties. See particularly G.S. 1A-1, Rules 13, 14, 17-24. In multiple claim or multiple party cases the trial court may enter a judgment which is final and which fully terminates fewer than all the claims or claims as to fewer than all the parties. Rule 54(b) permits the trial judge by determining in such a judgment that "there is no just reason for delay" to release it for immediate appeal before the litigation is complete as to all claims or all parties. Bogosian v. Gulf Oil Corp., 561 F.2d 434 (3rd Cir. 1977), Cert. denied, 434 U.S. 1086, 98 S.Ct. 1280, 55 L.Ed.2d 791 (1978). Whether a case involves multiple parties is not difficult to determine. In a case involving only two parties, however, it is important in applying Rule 54(b) to distinguish the true multiple claim case from the case in which only a single claim based on a single factual occurrence is asserted but in which various kinds of remedies may be sought. See Liberty Mutual Insurance Co. v. Wetzel, 424 U.S. 737, 96 S.Ct. 1202, 47 L.Ed.2d 435 (1976); Bogosian v. Gulf Oil Corp., supra, 561 F.2d 434.

The decree of the trial court in this case is properly denominated a partial summary judgment rendered on the issue of liability alone, the court determining that there was a genuine issue as to the amount of damages. Such a judgment is authorized by Rule 56(c) of the Rules of Civil Procedure which provides, "(a) summary judgment, interlocutory in character, may be rendered on the issue of...