Opinion
No. COA12–36.
2012-07-17
TASZ, INC., Plaintiff v. James A. WILLIAMS, Defendant.
Law Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for plaintiff-appellee. Pope McMillan Kutteh Privette Edwards Schieck & Taylor, P.A., by William H. McMillian and Larissa J. Erkman, for defendant-appellant.
Appeal by defendant from order entered 12 August 2011 by Judge James W. Morgan in Caldwell County Superior Court. Heard in the Court of Appeals 7 June 2012. Law Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for plaintiff-appellee. Pope McMillan Kutteh Privette Edwards Schieck & Taylor, P.A., by William H. McMillian and Larissa J. Erkman, for defendant-appellant.
CALABRIA, Judge.
James A. Williams (“defendant”) appeals the trial court's “Order for Default Judgment” in favor of Tasz, Inc. (“plaintiff”). We dismiss the appeal as interlocutory.
I. Background
Plaintiff is a North Carolina corporation with its principal place of business in Caldwell County, North Carolina. Defendant is a resident of Napa County, California. In May 2008, defendant entered into an employment agreement (“the agreement”) with plaintiff for the position of general manager. The agreement included a forum selection clause stating that all disputes resulting from the agreement would be heard in Caldwell County, North Carolina. On 20 September 2010, defendant's employment was terminated for violating the terms of the agreement.
On 4 October 2010, plaintiff initiated a civil action against defendant in Caldwell County Superior Court alleging breach of contract, fraud, and unfair and deceptive practices. Defendant was served with a civil summons and plaintiff's complaint on or before 15 October 2010.
On 10 November 2010, defendant filed a notice of removal in the United States District Court for the Western District of North Carolina. On that same day, default was entered against defendant by the Caldwell County Clerk of Superior Court. The default was entered and filed before plaintiff received defendant's notice of removal.
On 13 December 2010, plaintiff filed a motion to remand the case pursuant to the forum selection clause included in the agreement. On 15 December 2010, plaintiff filed a motion for entry of default in federal court. Plaintiff's motion to remand was granted on 22 March 2011.
On 12 April 2011, defendant filed a motion to set aside the entry of default, a motion to dismiss, answer, counterclaim, and a third-party complaint. Plaintiff filed a motion for default judgment and sanctions on 14 April 2011. On 12 August 2011, the trial court entered an order denying defendant's motion to set aside default and granting plaintiff's motion for default judgment on the issue of defendant's liability. The trial court also ordered that the issue of plaintiff's damages was to be determined at a future hearing. Defendant appeals.
II. Interlocutory Appeal
As an initial matter, we note that defendant appeals from an interlocutory order. “An order or judgment is interlocutory if it is made during the pendency of an action and does not dispose of the case but requires further action by the trial court in order to finally determine the entire controversy.” N.C. Dept. of Transp. v. Page, 119 N.C.App. 730, 733, 460 S.E.2d 332, 334 (1995). In the instant case, the trial court expressly stated in its order that “[t]he Defendant shall have [the] opportunity to dispute damages amounts and evidence thereof at a damages hearing.” Since the trial court must still determine plaintiff's damages, the order defendant appeals was interlocutory. As this Court has previously explained:
Generally, there is first an interlocutory entry of default, and then a final judgment by default only after the requisites to its entry, including a jury trial on damages, have occurred. SeeG.S. 1A–1, Rule 55 comment. In Pendley v. Ayers, 45 N.C.App. 692, 263 S.E.2d 833 (1980), as here, the trial court had ordered a default judgment and a trial on damages. This Court held: “The purported judgment entered herein was an entry of default. An entry of default is not a final order or a final judgment.” Id. at 694, 263 S.E.2d at 834.
Duncan v. Duncan, 102 N.C.App. 107, 111, 401 S.E.2d 398, 400 (1991)(quoting Stone v. Martin, 69 N.C.App. 650, 652–53, 318 S.E.2d 108, 110 (1984)). Therefore, although the trial court referred to its order as an “Order for Default Judgment,” it was merely an interlocutory entry of default.
“Generally, there is no right to appeal from an interlocutory order.” Autec, Inc. v. Southlake Holdings, LLC, 171 N.C.App. 147, 149, 613 S.E.2d 727, 729 (2005). However, an interlocutory order may be appealed if
(1) the order is final as to some claims or parties, and the trial court certifies pursuant to N.C.G.S. § 1A–1, Rule 54(b) that there is no just reason to delay the appeal, or (2) the order deprives the appellant of a substantial right that would be lost unless immediately reviewed.
Myers v. Mutton, 155 N.C.App. 213, 215, 574 S.E.2d 73, 75 (2002).
In the instant case, there has been no Rule 54(b) certification. Thus, defendant's appeal is only properly before this Court if it affects a substantial right of defendant. “A substantial right is ‘one which will clearly be lost or irremediably adversely affected if the order is not reviewable before final judgment.’ “ Turner v. Norfolk S. Corp., 137 N.C.App. 138, 142, 526 S.E.2d 666, 670 (2000)(quoting Blackwelder v. Dept. of Human Resources, 60 N.C.App. 331, 335, 299 S.E.2d 777, 780 (1983)). “The burden is on the appealing party to establish that a substantial right will be affected.” Turner, 137 N.C.App. at 142, 526 S.E.2d at 670.
Defendant contends that his appeal affects a substantial right in that defendant has been deprived of an opportunity to answer the allegations in the complaint and to defend the action because the 10 November 2010 entry of default was made prematurely. Defendant argues that the trial court's actions amount to a deprivation of due process of law guaranteed by the North Carolina and United States Constitutions, the Federal Rules of Civil Procedure, and the North Carolina Rules of Civil Procedure.
Defendant cites McIlwaine v. Williams, 155 N.C.App. 426, 573 S.E.2d 262 (2002), to support his argument. In McIlwaine, this Court reversed the trial court's order denying the defendant's motion to set aside a default judgment. Id. at 431, 573 S.E.2d at 265. Contrary to defendant's contentions, McIlwaine does not demonstrate that the improper denial of a motion to set aside an entry of default affects a substantial right. The defendant in McIlwaine was appealing from a motion to set aside a final default judgment, which included an award of seventy thousand dollars against the defendant. Id. at 427, 573 S.E.2d at 263. Thus, the trial court's order was final and immediately appealable on that basis. McIlwaine is wholly inapplicable to cases, such as the instant case, where the defendant is attempting to appeal from the denial of a motion to set aside an interlocutory entry of default.
Ultimately, our Courts have never held that an interlocutory appeal from either an entry of default or the denial of a motion to set aside entry of default is permissible. To the contrary, this Court has previously dismissed such appeals when the cases were brought prior to final judgment. See Duncan, 102 N.C.App. at 111, 401 S.E.2d at 400 (entry of default); First–Citizens Bank & Trust Co. v. R & G Constr. Co., 24 N.C.App. 131, 132–33, 210 S.E .2d 97, 98 (1974)(denial of motion to set aside entry of default). Since defendant's appeal is interlocutory and does not affect a substantial right, it must be dismissed.
III. Writ of Certiorari
In the alternative, defendant has petitioned this Court for a writ of certiorari to allow us to review the trial court's order. N.C.R.App. P. 21 permits this Court to grant discretionary review “of the judgments and orders of trial tribunals when ... no right of appeal from an interlocutory order exists[.]” N.C.R.App. P. 21(a)(1) (2011). However, we do not believe that the circumstances of the instant case justify the issuance of the writ. Therefore, we deny defendant's petition.
IV. Conclusion
Defendant has failed to demonstrate that his appeal affects a substantial right. Accordingly, defendant's appeal must be dismissed.
Dismissed. Judges STROUD and McCULLOUGH concur.
Report per Rule 30(e).