BLOGS: North Carolina Appellate Blog
Wednesday, May 30, 2007, 6:50 PM
Thursday, May 24, 2007, 8:28 PM
Superior Court Issues Ruling In Religious Oath Case
Tuesday, May 22, 2007, 1:26 PM
COA Heard Argument Today In Lottery Suit
Tuesday, May 15, 2007, 3:55 PM
The Horseplay Defense
Staffmark assigned a temp, Richardson, to Briggs to work as a material handler. One day, after his shift ended, Richardson walked toward the breakroom behind employee Laynoina Baker. Richardson jumped onto Baker's back and put him in a "hold" for several minutes. When Richardson finally released the hold, Baker fell to the ground and suffered a broken wrist, requiring the payment of medical benefits under a workers' comp policy.
Staffmark had signed an indemnification agreement with Briggs which required Staffmark to indemnify Briggs for any claims arising from acts of temps "in the course of their employment."
Staffmark argued that Richardson was not acting in the course of his employment but instead was merely engaging in "horseplay" when he jumped Baker and put him in a hold for several minutes.
The Court of Appeals agreed with the horseplay defense. Thus, Staffmark had no duty to indemnify Briggs.
COA Decisions Today
* expounded on the contract doctrines of impossibility and frustration of purpose (see here);
* suggested that if a plaintiff doesn't discount its damages to present value for the jury, the burden my be on the defendant to present present-value evidence or risk being stuck with the full (non-discounted) amount sought by the plaintiff (see here);
* suggested that a discovery admission per Rule 36 may be changed from admit to deny (or vice versa) via a Rule 26(e) "supplement" (see here);
* held that a defendant's objection to the trial court's failure to charge the jury with defendant's proposed instructions isn't sufficient to preserve an appellate challenge to the trial court's decision to charge the jury with plaintiff's proposed instructions; the defendant must object to the instructions delivered to preserve the appellate challenge (see here); and
* affirmed a Rule 11 sanction for a plaintiff's attorney's filing of a charging lien (see here).
Thursday, May 10, 2007, 9:51 AM
What Is A Manifest Injustice Under Appellate Rule 2?
But this raises the question: What is a "manifest injustice" in a civil case, particularly in private litigation (as opposed to public litigation brought by or against the government)? In such cases typically it is money or property rights at stake. How could there be a "manifest injustice" if the appellate court declined to review the merits of an appeal involving money or property? What would the standard be for determining what is and is not a "manifest injustice"?
Who knows? As Justice Scalia once commented, "manifest injustice" might mean “almost anything” and “is just a surrogate for policy preferences.” Kaiser Aluminum & Chemical Corp. v. Bonjorno, 494 U.S. 827, 857 (1990) (Scalia, J., concurring).
A strong argument could be made that a “manifest injustice” in this context would be something tantamount to a “plain error,” so that Rule 2 would permit the appellate court to entertain the merits of an appeal to prevent a party from being subjected to a plain error by the lower court. (Federal courts have held that, in the context of a motion for reconsideration, a “manifest injustice” is defined as an error by the court that is direct and obvious—i.e., manifest.) Under this meaning, the appellate court would, after finding a rule violation, have to determine whether the lower court committed an obvious mistake before invoking Rule 2 to issue a disposition on the merits.
One might argue that a "manifest justice" could include the dismissal of an appeal for a technical rule violation that doesn't impede comprehension of the issues on appeal or prejudice the other party. But there are problems with such a gloss on Rule 2, not the least of which is that it would embroil the courts in controversies over which rules and violations are "technical" and likely lead to a crazy quilt of inconsistent decisions on that front--undermining the policy of "uniformity," contrary to the Supreme Court's admonition in Hart.
(The State, in its appellate brief in Hart, argued: "[I]t is not the perceived innocuous nature of a rules violation that matters when an appellate court decides whether to exercise its discretion under Rule 2. The question is not how bad the violation is; the question is whether there is a significant issue of importance in the public interest that should be reached despite the rules violation or an injustice which appears manifest to the court.")
One may predict that the judges who took a zero-tolerance view of rules violations after Viar likely will continue that approach by emphasizing the narrowness of Rule 2 and by finding no "manifest injustice" in private civil appeals.
NC Supreme Court "Welcome Home Gala" Tomorrow
Tuesday, May 08, 2007, 10:55 PM
Hearing Today On ACLU Suit Over Christian Bible In Courtrooms
SCT Issues First Amendment Decision In Suit Against Pastor
The Majority Decision
Plaintiffs, as members of a non-profit corporation Baptist church, brought a derivative action against their pastor, alleging that he converted church funds, breached a fiduciary duty owed to the church and its members, and engaged in a civil conspiracy to convert money and assets of the church. The majority held the case must be dismissed on the basis that it's an internal church governance dispute, the adjudication of which would entangle the courts in ecclesiastical matters in violation of the First Amendment's religion clauses. The majority held that "in order to address plaintiffs' claims, the trial court would be required to interpose its judgment as to both the proper role of these church officials and whether each expenditure was proper in light of [the church's] religious doctrine and practice, to the exclusion of the church's duly constituted leadership.”
Justice Brady's Concurrence: Jefferson's Metaphor Of A "Wall Of Separation Between Church And State" Has Been Misused; Government Need Not Be Neutral Between Religion And Irreligion
Justice Brady presumably knows a thing or two about church operations: according to his official bio, "Justice Brady is a conservative Southern Baptist" who serves on the personnel committee of his church and on the board of a Baptist seminary. In this case Justice Brady was compelled to write separately to share his views on the metaphor of a "wall of separation" between church and state. He put it this way: "as Joshua and the tribes of Israel were compelled to march around the walls of Jericho as the priests blew the horns, I am compelled to write separately to provide a word of caution: While the metaphor of a 'wall of separation between church and state' may fit nicely in a case such as the one sub judice, it is generally a misplaced metaphor that should not occupy such a lofty position in religious freedom jurisprudence." Justice Brady then reviewed the exchange of correspondence between Thomas Jefferson and the Danbury Association of Baptists to show that Jefferson's metaphor "'has been wrenched torturously out of context in many circumstances to require 'neutrality on the part of government between religion and irreligion.'"
Friday, May 04, 2007, 4:04 PM
NC SCT Grants PDR To Review "Easement Within Easement" Jury Charge In Condemnation Case
Level 3, a telecommunications company, possesses by statute the power of eminent domain. In exercising that power in this case to condemn an easement for laying fiber optic cable, a controversy arose about valuing the easement.
At trial, Level 3 requested the following instruction: "You are instructed that if you find that the Level 3 easement is within land already burdened by an existing easement, you are to award damages only for the additional burden caused by the Level 3 easement. In other words, you are to consider the Respondents' land not in its pristine and [u]nencumbered state, but encumbered by any easements exist[ing] prior to the Level 3 easement. You are to award the difference in the fair market value of Respondents' land subject to the existing easement, immediately before and immediately after subjecting it to the additional easement imposed by Level 3."
The trial court declined to give that instruction. The jury returned a verdict exponentially larger than should've been the case. The Court of Appeals affirmed, unanimously holding in an unpublished decision that the trial court's charge conveyed the substance of the charge requested by Level 3.
This is an important case, because easement-within-easement condemnations are quite common. They arise with telecommunications, powerline, railroad, and highway easements. The Court of Appeals' decision, if left standing, could encourage more valuation disputes if landowners sense that they might be able to capture in litigation a higher value than the minimal value of the marginal additional burden (if any) imposed by an easement running over an already existing easement.
SCT Applies U.S. Constitution's Contract Clause Against County
When Officer Wiggs retired, he began receiving a special separation allowance. When he applied for a new job with the RDU Airport Authority, the County passed an ordinance providing for the termination of a retiree's benefits if the retiree becomes employed by a local government participating in the retirement system. As a result, Wiggs didn't seek employment with the Airport Authority.
Instead he sued the County and challenged the ordinance. The Contract Clause says, "No State shall . . . pass any . . . Law impairing the Obligation of Contracts . . . ." The SCT held that the Clause precluded the County from retroactively changing the terms and conditions of Wiggs' special separation allowance. The SCT held that the ordinance would do just that and, therefore, it would be unconstituitonal to apply the ordinance to Wiggs.
For the NC SCT's landmark Contract Clause case, see Faulkenbury v. Teachers' & State Employees' Ret. Sys., 345 N.C. 683, 690, 483 S.E.2d 422, 427 (1997).
SCT Issues Major Decisions On Rule Violations
Two of those cases were appealed to the SCT based on dissenting opinions: Walsh v. Town of Wrightsville Beach (civil case) and State v. Hart (criminal case). In each case the majority dismissed arguments briefed on appeal (refusing to address the merits). They did so because they concluded that Viar required dismissal when the appellant fails to comply with the appellate rules. Both cases concerned problems related to assignments of error.
Today the SCT issued its decisions in the two cases. In Hart the SCT addressed the scope of Viar and unanimously held that the COA has misunderstood Viar. The SCT reversed and remanded to the COA to determine Appellate Rule 2 (permitting suspension of the rules to prevent "manifest injustice") warranted a consideration of the merits of the appeal and whether the appellant should receive a less severe sanction than dismissal. Hart was written by Justice Hudson, who witnessed first-hand the COA's struggle with Viar when she was on the COA.
In Walsh the SCT, in a one-sentence per curiam order, reversed and remanded for reconsideration in light of the reasoning in Hart.
The SCT Holds That The COA Has Misinterpreted And Misapplied Viar
In today's Hart decision the SCT said it needed to correct a "misapplication" of Viar. The SCT clarified (as Judge Geer and others on the COA have maintained) that Viar was not such significant decision. According to the unanimous SCT today:
- Viar held (only) that the COA "acted improperly when it reviewed issues not raised or argued by the appellant," i.e., that the COA "improperly applied Rule 2 when it created an appeal for the appellant and addressed issues not raised or argued."
- Viar held that the COA "improperly applied Rule 2 under those particular circumstances," but "the Viar holding does not mean that the Court of Appeals can no longer apply Rule 2 at all."
- When Viar said that an appeal is “subject to” dismissal for rules violations, it didn't mean that an appeal "shall be" dismissed for any violation. Rather, “subject to” means that dismissal is one possible sanction.
- The COA has "misapplied" and "misinterpreted and improperly extended Viar": "In Viar, we neither admonished the Court of Appeals to avoid applying Rule 2, nor did we state that the court may not review an appeal that violates the Rules, even when rules violations 'd[o] not impede comprehension of the issues on appeal or frustrate the appellate process.'"
- "To the extent that the Court of Appeals has interpreted [Viar and other SCT cases] to require dismissal in every case in which there is a violation of the Rules of Appellate Procedure, we expressly disavow this interpretation."
- "[E]very violation of the rules does not require dismissal of the appeal or the issue, although some other sanction may be appropriate, pursuant to Rule 25(b) or Rule 34 of the Rules of Appellate Procedure."
But Rule 2 Still Governs
Having disavowed the strict interpretation of Viar, the SCT nonetheless suggested that an appeal must be dismissed unless the case warrants application of Rule 2.
The SCT offered these guideposts on Rule 2:
- "Rule 2 must be applied cautiously."
- "Rule 2 was intended to be limited to occasions in which a 'fundamental purpose' of the appellate rules is at stake, which will necessarily be '"rare occasions."'"
- Although the SCT has applied Rule 2 in civil cases, "the Court has done so more frequently in the criminal context when severe punishments were imposed."
- "While an appellate court has the discretion to alter or suspend its rules, exercise of this discretion should only be undertaken with a view toward the greater object of the rules."
- "Before exercising Rule 2 to prevent a manifest injustice, [the Court] must be cognizant of the appropriate circumstances in which the extraordinary step of suspending the operation of the appellate rules is a viable option. Fundamental fairness and the predictable operation of the courts * * * depend upon the consistent exercise of this authority." Inconsistent application of the rules may detract from the deference which federal habeas courts will accord to their application in cases invoking a procedural bar to review. "Therefore, it follows that our appellate courts must enforce the Rules of Appellate Procedure uniformly. "
The SCT in Hart (a criminal case) thus remanded to the COA to consider whether to exercise such Rule 2 discretion and whether other sanctions should be imposed pursuant to Rule 25(b) or Rule 34. And, as noted, the SCT reversed Walsh (a civil case) and remanded for reconsideration in light of Hart.
We'll have more commentary about today's decisions later. But suffice it to say for now that Rule 2's "manifest injustice" standard is no panacea for those troubled by the fallout from Viar.
Wednesday, May 02, 2007, 7:05 AM
Split COA Panel Uses Non-Delegable Duty To Make Arguable Independent Contractor Agent
In Wilson, the defendant was a prison health care provider found guilty of committing sexual acts with an inmate. A statute the defendant was found to have violated applied to "a person . . . who is an agent or employee" of an institution having custody of the the victim of the sexual act. N.C. Gen. Stat. sec. 14-27.7. At trial, the defendant sought to introduce evidence that he was not an agent or employee of the sheriff's department that ran the prison but was instead an independent contractor. The trial excluded the evidence, and the COA upheld the ruling.
In upholding the exclusion of independent contractor evidence, the COA looked to the non-delegable duty doctrine. Under the non-delegable duty doctrine, certain duties, like access to medical care for prisoners or a safe workplace for employees, are considered so important that they are deemed non-delegable, and the employer or party with that non-delegable duty may not escape liability for failure to fulfill that duty by, for example, out-sourcing the duty to an independent contractor.
In Wilson, the COA used the non-delegable duty in reverse. The COA reasoned that if the defendant is considered an agent of the party with the non-delegable duty for purposes of holding the party with the non-delegable duty liable, then the defendant is also considered an agent of that party under Section 14-27.7, which applies to agents and employees.
Judge Wynn dissented. Judge Wynn noted that Wilson was not a case like the precedent the majority used in its reasoning, where the issue was whether the State could be absolved of liability for a non-delegable duty by out-sourcing to an independent contrator, but that this case presented a different question of whether an independent contractor may be deemed an agent of the State based on the State's non-delegable duty.
Judge Wynn said that the implications of the Wilson holding could be far-reaching. Indeed they could. For example, in the employment context, employers have a non-delegable duty to maintain a safe workplace for employees. If an employer outsources that non-delegable duty to an independent contractor, under the non-delegable duty doctrine, the employer remains on the hook for the independent contractor's failure to provide for workplace safety. Applying the logic of Wilson, the independent contractor would, however, be deemed an agent of the employer. And employer's agents are covered by the employer's workers' compensation exclusivity and not exposed to ordinary tort liability. Does the Wilson logic mean that such independent contractors are shielded from exposure and that workers' comp. insurers are covering different folks than they may realize?
Tuesday, May 01, 2007, 3:57 PM
Another Deficient Assignment Of Error
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).
Challenging The Dismissal Of An Appeal
Multiple Sovereign Immunity Decisions Today
In one of the cases, a putative class action, the plaintiffs are individuals who have worked for state agencies under the classification of "temporary" employee for more than a year, and they allege they've been unlawfully denied the same benefits and privileges (leave, service credit, retirement benefits, and health insurance benefits) accorded to permanent employees of the State. The case reaffirms that sovereign immunity is not a defense to a claim brought directly under the NC Constitution or for a breach of contract claim (although sovereign immunity is not waived for an "implied contract" claim). The Court also held that sovereign immunity may not be waived by implication from the text of an administrative rule or regulation. On this issue the Court said: "If we were to hold, as plaintiffs request, that the Executive Branch's adoption of regulations bestowing rights on certain parties constitutes an implied waiver of sovereign immunity, we would in essence be allowing the Executive Branch to authorize suit against the State. To do so would be inconsistent with the well-established principle that '[i]t is for the General Assembly to determine when and under what circumstances the State may be sued.'"
Poker Is A Game Of Chance, The COA Holds
The case arose when plaintiff sought permission from the government to open a poker club in Durham County. The government responded that the club would be illegal under N.C.G.S. 14-292. That statute, which has been on the books since the 19th Century (and which now explicitly exempts the state lottery), says that "any person or organization that operates any game of chance or any person who plays at or bets on any game of chance at which any money, property or other thing of value is bet, whether the same be in stake or not, shall be guilty of a Class 2 misdemeanor."
Plaintiff sought a declaratory judgment that poker is a game of skill, not a game of chance, and thus falls outside the statute. His witnesses included a consultant who runs poker tournaments, a casino manager from the Bahamas, and a professional poker player from Vegas. They testified that skill will prevail over luck in a poker tournament; that there are strategies a poker player may employ to improve mathematical odds; and that the skills include patience, self control, memory, the ability to analyze odds, and the ability to read people. One witness, a poker player from North Carolina, testified that his poker skills improved greatly since he began studying poker and reading books on winning poker strategies.
The State's witness, a law enforcement officer, testified that he has played poker for more than 39 years and that luck ultimately prevailed.
The Court of Appeals, in an opinion by Judge Calabria, held that poker is predominantly a game of chance, not skill, and contrasted billiards, chess, and bowling. The Court said that poker "presents players with different hands, making the players unequal in the same game and subject to defeat at the turn of a card." Poker, she said, is a game where more skilled players may defeat novices, but "novices may yet prevail with a simple run of luck," because a skilled player "is always subject to defeat at the turn of a card, an instrumentality beyond his control."
During oral argument the plaintiff analogized poker to golf, arguing that while a weekend golfer might by luck beat a professional like Tiger Woods on one hole, Tiger would prevail over 18 holes. The Court rejected the analogy.
This decision might come as a surprise to the fans of ESPN's televised poker tournaments. But it is consistent with the law of other jurisdictions.