Tuesday, May 01, 2007, 3:57 PM

Another Deficient Assignment Of Error

We've posted a lot about Court of Appeals decisions dismissing appeals or issues for rules violations. Sometimes the decisions are puzzling.

Take this case decided today. The plaintiff sued his insurer after an accident. The complaint alleged the insurer willfully refused to pay plaintiff under the terms of the insurance policy. The complaint pleaded that the insurer's actions constituted "unfair" practice as defined by G.S. 58-63-15, based on the insurer's alleged failure to conduct a reasonable investigation of the claim and to make a reasonable settlement. It's well settled that Chapter 75 (providing a private right of action for "unfair" acts and practices) is the vehicle for obtaining a remedy for an insurer's alleged "unfair" claim settlement practices in violation of 58-63-15(11).

The defendant moved for summary judgment, and the motion was granted. The trial court issued a bland summary judgment order with no findings and only the generic conclusion that there were no genuine factual issues and the insurer was entitled to judgment as a matter of law. Presumably the trial court held that plaintiff's evidence couldn't establish a violation of Chapter 58, with the consequence that plaintiff had no remedy under Chapter 75. Neither the motion for summary judgment nor the trial court's order cited Chapter 75.

Plaintiff assigned error to the "Trial Court's entry of Summary Judgment in favor of the Defendant on the grounds that there were material issues of fact and therefore the granting of the Defendant's Motion was erroneous as a matter of law."

The Court of Appeals held that the plaintiff's assignment of error was deficient because it didn't mention Chapter 75. But why does this matter? By way of analogy, it's as if the Court held that when a trial court grants summary judgment on a First Amendment claim, the assignment of error must mention 42 U.S.C. 1983. This seems to be a hyper-technicality. What's particularly odd is that the Court of Appeals held this past year, in an insurance case, that assignments of error are essentially irrelevant when an appeal is taken from a summary judgment order. See Nelson v. Hartford Underwriters Ins. Co., 630 S.E.2d 221, 226-28 (N.C.App. 2006). In fact, in another case today decided by a different panel, Nelson was cited for the proposition that "assignments of error related to summary judgment will be heard on the merits despite technical deficiencies where those deficiencies do not prevent a review of the issues." What could be more technical than demanding that an assignment of error in a Chapter 58 unfair-claim-settlement case must cite Chapter 75?

The Court of Appeals also faulted the plaintiff because his appellate brief didn't cite Chapter 75 or argue that the trial court erred on Chapter 75. (It bears note that neither the defendant's summary judgment motion nor the trial court's order mentioned Chapter 75.) But the issue was whether the insurer was entitled to summary judgment on a 58-63-15(11) violation, as the trial court held; the plaintiff's appellate brief addressed the merits of that Chapter 58 issue, and the viability of a private action under Chapter 75 apparently turned on the resolution of that issue. In fact, the plaintiff's appellate brief discussed Gray v. N.C. Ins. Underwriting Ass'n, 529 S.E.2d 676 (N.C. 2000), which held that a violation of 58-63-15(11) is a violation of Chapter 75. Yet the Court of Appeals held that "Plaintiff's discussion of Chapter 58 is insufficient to satisfy preservation of his Chapter 75 claim." It's not clear what the plaintiff's brief could've argued about Chapter 75 in addition to his argument that there was a genuine issue of material fact whether the insurer committed an act prohibited by 58-63-15(11).

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