Goldstonv.American Motors Corp.

Supreme Court of North CarolinaJun 1, 1990
326 N.C. 723 (N.C. 1990)

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No. 487PA89

Filed 13 June 1990

Appeal and Error 134 (NCI4th) — disqualification of attorney — interlocutory order — right of appeal Where counsel had been properly admitted pro hac vice under N.C.G.S. 84-4.1 and was actively engaged in plaintiff's products liability suit for several years, plaintiff had a substantial right to the continuation of representation by that counsel and could immediately appeal the trial court's interlocutory order disqualifying counsel from further representation of plaintiff.

Am Jur 2d, Appeal and Error 47, 50, 51, 856, 859; Attorneys at Law 184, 189.

ON plaintiff's petition for discretionary review of the order of the Court of Appeals, entered 20 October 1989, granting defendants' motion to dismiss plaintiff's interlocutory appeal of an order disqualifying counsel by Farmer, J., entered 21 April 1989 in the Superior Court of DURHAM County. Heard in the Supreme Court 12 April 1990.

Michael E. Mauney and Charles Darsie for plaintiff-appellant.

Yates, Fleishman, McLamb Weyher, by Joseph W. Yates, III, for defendant-appellees.


Justice MEYER dissenting.


Our decision does not require an extensive recital of the facts. In brief, on 7 February 1982 the plaintiff, an East Carolina University coed, was rendered a quadriplegic when the 1979 Jeep CJ-7 Golden Eagle in which she was riding flipped over on the sand dunes of Radio Island. She filed suit on 18 May 1984 against American Motors Corporation ("AMC"), and two of its subsidiaries, American Motors Sales Corporation and American Motors (Canada), Inc. for negligent design of the factory-mounted roll bar, negligent construction, negligent marketing, negligent failure to warn, and negligent failure to recall. Her lawsuit further alleged breach of warranties by AMC, its subsidiaries and East Carolina Honda-Volvo. Two years later, R. Ben Hogan of the Alabama Bar was admitted pro hac vice to represent plaintiff along with her present counsel, Norman Williams, Michael Mauney and Charles Darsie. Hogan is nationally known for his active involvement in product liability litigation and specifically in liability actions arising from accidents involving AMC or Jeep vehicles.

In 1988 Hogan was contacted by Rahn Huffstutler, a former AMC attorney and engineer who had assisted AMC in the defense of similar product liability suits. Upon his departure from AMC, Huffstutler had retained several confidential and protected documents. Huffstutler met with Hogan on various occasions to discuss the probable use of the documents at trial and the potential use of Huffstutler as an expert witness for plaintiff. Upon learning of these meetings, AMC moved to enjoin Huffstutler from disclosing the confidential and privileged information obtained during his employment with AMC. The Court of Common Pleas of Ohio (Huffstutler's residence) granted AMC's prayer for permanent injunctive relief. That decision was reviewed by the Court of Appeals of Wood County, and the issue is presently before the Supreme Court of Ohio.

At the same time, AMC moved to have Hogan disqualified as counsel in each of the Jeep cases in which he was involved across the country. Because of his involvement in this case, a series of hearings was conducted in the trial court between October 1988 and April 1989 to determine the extent of Hogan's contacts with Huffstutler. Judge Manning conditionally denied the motion by defendants to disqualify Hogan upon the express requirement that Hogan file an affidavit verifying that his contacts with Huffstutler were limited to those admitted by him during the hearings. Upon reviewing the submitted affidavit which enumerated substantially greater contacts than previously disclosed, Judge Farmer, in accordance with Judge Manning's order, ruled that Hogan must be disqualified from any further representation of plaintiff.

Plaintiff appealed the ruling and the Court of Appeals dismissed the appeal. Plaintiff then filed a notice of appeal and a petition for discretionary review with this Court. We dismissed the appeal but allowed the petition limited to the sole issue of the appealability of the trial court's interlocutory order. The issue before us is whether plaintiff has a substantial right to counsel of her own choosing and, if so, whether plaintiff may immediately appeal when her chosen counsel is disqualified.

Generally, there is no right of immediate appeal from interlocutory orders and judgments. The North Carolina General Statutes set out the exceptions under which interlocutory orders are immediately appealable. Relevant here are the following statutes:

N.C.G.S. 1-277(a) provides:

An appeal may be taken from every judicial order or determination of a judge of a superior or district court, upon or involving a matter of law or legal inference, whether made in or out of session, which affects a substantial right claimed in any action or proceeding . . . .

N.C.G.S. 7A-27 (d) provides:

From any interlocutory order or judgment of a superior court or district court in a civil action or proceeding which affects a substantial right . . . appeal lies of right directly to the Court of Appeals.

This Court, speaking through Justice Huskins, said: "Ordinarily, an appeal from an interlocutory order will be dismissed as fragmentary and premature unless the order affects some substantial right and will work injury to appellant if not corrected before appeal from final judgment." Stanback v. Stanback, 287 N.C. 448, 453, 215 S.E.2d 30, 34 (1975). Therefore, plaintiff is not entitled to appeal from the interlocutory order disqualifying her counsel unless the order deprived her of a "substantial right which [s]he would lose absent a review prior to final determination." Robins Weill v. Mason, 70 N.C. App. 537, 540, 320 S.E.2d 693, 696, cert. denied, 312 N.C. 495, 322 S.E.2d 559 (1984). Essentially a two-part test has developed — the right itself must be substantial and the deprivation of that substantial right must potentially work injury to plaintiff if not corrected before appeal from final judgment. See Wachovia Realty Investments v. Housing, Inc., 292 N.C. 93, 232 S.E.2d 667 (1977).

"Normally, a litigant has a fundamental right to select the attorney who will represent him in his lawsuit." Hagins v. Redevelopment Commission, 275 N.C. 90, 102, 165 S.E.2d 490, 498 (1969). This is a basic premise of the adversary system in judicial proceedings. We hold that plaintiff had a substantial right to have R. Ben Hogan represent her in her lawsuit against AMC. We are mindful of the apparent disharmony with the decision in Leonard v. Johns-Manville Corp., 57 N.C. App. 553, 291 S.E.2d 828, cert. denied, 306 N.C. 558, 294 S.E.2d 371 (1982). There the Court of Appeals denied the appeal on the basis that the trial court's interlocutory order denying a motion for admission of counsel pro hac vice did not involve a substantial right and was not immediately appealable as a matter of right. In Leonard, the subject matter of the appeal was to have been whether the trial court erred in its determination that the out-of-state counsel failed to meet the conditions precedent for admission pro hac vice set forth in N.C.G.S. 84-4.1. "[P]arties do not have a right to be represented in the courts of North Carolina by counsel who are not duly licensed to practice in this state. Admission of counsel in North Carolina pro hac vice is not a right but a discretionary privilege." 57 N.C. App. at 555, 291 S.E.2d at 829. In the case at bar, R. Ben Hogan had been properly admitted pro hac vice under the statute and was actively involved in plaintiff's lawsuit for several years. The distinction is thus: once the attorney was admitted under the statute, plaintiff acquired a substantial right to the continuation of representation by that attorney — just as with any other attorney duly admitted to practice law in the State of North Carolina. We also note that the trial court did not summarily remove Hogan pursuant to N.C.G.S. 84-4.1. The order removing Hogan as counsel affected a substantial right of the plaintiff.

Depriving plaintiff of her counsel of choice, who is an alleged expert in cases of this nature, certainly exposed her to potential injury unless corrected before trial and appeal from final judgment. Plaintiff is faced with an extremely difficult task of showing harm in the event that she should receive a favorable verdict. How does one prove the actual amount of damages sustained in the loss of representation by counsel with the years of experience and know-how which Mr. Hogan allegedly has developed through his practice of suing major manufacturers of jeeps and related vehicles for tort liability? Thus, when the trial court's order disqualifying counsel was entered, plaintiff correctly moved to appeal that decision immediately before proceeding with further discovery and the trial.

We are cognizant of the United States Supreme Court decision in Richardson-Merrell, Inc. v. Koller, 472 U.S. 424, 86 L.Ed.2d 340 (1985), which held that appellate courts do not have jurisdiction to review on appeal an order disqualifying counsel in a civil case because it is not a collateral order subject to immediate appeal under 28 U.S.C.A. 1291. The federal statute grants the courts of appeals jurisdiction of appeals from all "final decisions of the district courts," except where a direct appeal lies to the United States Supreme Court. The United States Supreme Court has consistently held that the finality requirement means that a party may not appeal until there has been a decision on the merits. Firestone Tire Rubber Co. v. Risjord, 449 U.S. 368, 66 L.Ed.2d 571 (1981) (citations omitted). The narrow exception to this rule is called the "collateral order doctrine." For a case to fall within this doctrine and be immediately appealable, it must: (1) conclusively determine the disputed question; (2) resolve an important issue completely separate from the merits of the action; and (3) be effectively unreviewable on appeal from a final judgment. Coopers Lybrand v. Livesay, 437 U.S. 463, 57 L.Ed.2d 351 (1978).

Richardson-Merrell is inapposite because the issue before us is controlled by our interpretation of the North Carolina statutes. Our statutes setting forth the appeals process do not include the same jurisdictional "finality" requirement as does the federal statute. As a result, our Court has taken a different approach and developed the Wachovia two-prong test. As we have previously stated, for an interlocutory order to be immediately appealable, it must: (1) affect a substantial right and (2) work injury if not corrected before final judgment. Wachovia, 292 N.C. 93, 232 S.E.2d 667. Here, these requirements have been met by plaintiff.

The trial court's order is appealable, and the Court of Appeals was in error in dismissing plaintiff's appeal without first passing on the merits thereof. The cause is remanded to the Court of Appeals for a decision on the merits.

Reversed and remanded.