Grasinger v. Williams , 788 S.E.2d 624 ( 2016 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-518
Filed: 5 July 2016
Wake County, No. 13 CVS 13297
JOHN L. GRASINGER and LAWRENCE BENUCK, Plaintiffs
v.
JASON A. WILLIAMS and CAMERON L. PERKINS, Defendants
Appeal by plaintiffs from an order entered 16 January 2015 by Judge Gregory
P. McGuire in Wake County Superior Court. Heard in the Court of Appeals 13
January 2016.
Jordan Price Wall Gray Jones & Carlton, by Paul T. Flick and Lori P. Jones,
for plaintiff-appellants.
Wyrick Robbins Yates & Ponton LLP, by Tobias S. Hampson, K. Edward
Greene, and Charles George, for defendant-appellees.
CALABRIA, Judge.
John L. Grasinger and Lawrence Benuck (collectively, “plaintiff-appellants”)
appeal from an order granting Jason A. Williams’ and Cameron L. Perkins’
(collectively, “defendant-appellees”) motions to dismiss. Because plaintiff-appellants
failed to include in the record on appeal the date upon which this case was designated
as a mandatory complex business case, we are unable to determine whether we have
jurisdiction over this appeal. Therefore, we dismiss.
I. Background
GRASINGER V. WILLIAMS
Opinion of the Court
In early 2009, plaintiff-appellants became interested in establishing a
partnership to open and operate an urgent care facility in Boone, North Carolina.
Grasinger had experience in real estate development, and Benuck had experience in
building and operating urgent care clinics. Subsequently, plaintiff-appellants began
negotiating with defendant-appellees, who owned and operated several urgent care
clinics in North Carolina, through their ownership in Urgent Cares of America, Inc.
Plaintiff-appellants and defendant-appellees agreed to form a corporation, Boone
Urgent Care, Inc. (“Boone UC”), in which each participant would own an equal
interest. According to plaintiff-appellants, defendant-appellees represented that
they were not contemplating or negotiating any mergers, consolidations, or asset
sales involving Boone UC.
In forming Boone UC, the four parties entered into a shareholders’ agreement,
in which each shareholder held twenty-five percent (25%) ownership interest in
exchange for a capital contribution of $37,500.00. The shareholders’ agreement
established a three-person board of directors with voting power, comprising
defendant-appellees and Grasinger; Benuck held a non-voting position of “Board
Observer.” In addition, the shareholders’ agreement contained a “drag-along rights”
provision, whereby all shareholders would be forced to sell their shares and vote in
favor of any merger, consolidation, or asset sale approved by a majority of Boone UC’s
Board of Directors.
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Opinion of the Court
After each party signed the shareholders’ agreement, Boone UC opened and
operated with success from January until October 2010, when defendant-appellees
called a special meeting of the board of directors to discuss a potential sale of Boone
UC. During this meeting, plaintiff-appellants objected to the sale, but defendant-
appellees, comprising a majority of the board of directors, voted in favor of the sale
and exercised their drag-along rights to approve the sale. Urgent Cares of America
Holdings, LLC purchased Boone UC and seven other urgent care facilities for a total
purchase price of $22,000,000.00, of which $165,000.00 was assigned to Boone UC
without an independent business valuation. Defendant-appellees unilaterally
dissolved Boone UC and each shareholder received payment for the value of his initial
contribution plus ten percent from the proceeds of the transaction, totaling
$41,250.00. Defendant-appellees had ownership interests in the other urgent care
facilities involved in the transaction.
Plaintiffs filed a verified complaint on 2 October 2013 and an amended
complaint on 6 November 2013, asserting causes of action for (1) breach of fiduciary
duty; (2) breach of contract; (3) constructive fraud, constructive trust and accounting;
(4) civil conspiracy; (5) unfair trade practices; (6) conversion; and (7) unjust
enrichment. On 9 December 2013, defendants filed an answer and motion to dismiss
all claims under Rule 12(b)(1) for lack of subject matter jurisdiction and Rule 12(b)(6)
for failure to state a claim upon which relief could be granted. On 16 January 2015,
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Opinion of the Court
the trial court entered an order granting defendant-appellees’ motion to dismiss as to
all claims except the breach of contract claim. On some date after the filing of the
complaint, this case was designated as a mandatory complex business case pursuant
to N.C. Gen. Stat. § 7A-45.4(b), but the approval of designation is not included in the
record on appeal. On 13 February 2015, plaintiff-appellants voluntarily dismissed,
without prejudice, their remaining breach of contract claim. Plaintiff-appellants
appeal from the trial court’s 16 January 2015 order.
II. Analysis
As an initial matter, we must examine our jurisdiction over this appeal. Even
when not raised by the parties, this Court has a duty to examine its jurisdiction, and,
if jurisdiction is unclear from the record, we must dismiss the appeal. Dogwood Dev.
& Mgmt. Co., LLC v. White Oak Transp. Co., 362 N.C. 191, 197, 657 S.E.2d 361, 365
(2008) (“A jurisdictional default . . . precludes the appellate court from acting in any
manner other than to dismiss the appeal.”) (citations omitted).
“[A] default precluding appellate review on the merits necessarily arises when
the appealing party fails to complete all of the steps necessary to vest jurisdiction in
the appellate court. It is axiomatic that courts of law must have their power properly
invoked by an interested party.” Id. at 197, 657 S.E.2d at 364 (citations omitted).
Regarding an appellant’s failure to include in the record on appeal the evidence
necessary to understand all issues presented, we have stated:
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GRASINGER V. WILLIAMS
Opinion of the Court
[I]t is the appellant’s responsibility to make sure that the
record on appeal is complete and in proper form. It is
incumbent upon the appellant to see that the record on
appeal is properly made up and transmitted to the
appellate court. The Rules of Appellate Procedure are
mandatory and failure to follow the rules subjects [the]
appeal to dismissal.
Smith v. Heath, 208 N.C. App. 467, 470, 703 S.E.2d 194, 196 (2010) (citations and
quotation marks omitted). Regarding an appellant’s failure to include the notice of
appeal in the record, our Supreme Court has stated: “The appellant has the burden
to see that all necessary papers are before the appellate court.” Crowell Constructors,
Inc. v. State ex rel. Cobey, 328 N.C. 563, 563, 402 S.E.2d 407, 408 (1991) (citation
omitted).
This Court is only conferred with “such appellate jurisdiction as the General
Assembly may prescribe.” N.C. Const. art. IV, § 12. N.C. Gen. Stat. § 7A-27 (2015)
establishes jurisdiction of this State’s appellate courts. Effective 1 October 2014, our
General Assembly amended N.C. Gen. Stat. § 7A-27, transferring jurisdiction over an
appeal from a case designated as complex business from this Court to our Supreme
Court. See Christenbury Eye Ctr., P.A. v. Medflow, Inc., __ N.C. App. __, __, 783
S.E.2d 264, 265 (2016) (explaining the amendment). The statute now provides, in
pertinent part: “Appeal lies of right directly to the Supreme Court . . . [f]rom any final
judgment in a case designated as a mandatory complex business case pursuant to
G.S. 7A-45.4[.]” N.C. Gen. Stat. § 7A-27(a)(2) (emphasis added). This change to N.C.
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Opinion of the Court
Gen. Stat. § 7A-27(a) applies to “actions designated as mandatory complex business
cases on or after” 1 October 2014. 2014 N.C. Sess. Laws 621, 629, ch. 102, § 9.
In the instant case, the complaint was filed on 2 October 2013, amended on 6
November 2013, answered by defendant-appellees on 9 December 2013, and the order
appealed from was entered on 16 January 2015. Although the face of the order makes
clear it is a judgment in a case designated as mandatory complex business pursuant
to N.C. Gen. Stat. § 7A-45.4(b), there is no indication of when designation occurred.
More importantly, the record contains no notice of designation, approval for
designation, opposition to designation, or any other pleading from which this Court
can determine precisely when this action was designated as a mandatory complex
business case.
Defendant-appellees acknowledge in a footnote to their brief that plaintiff-
appellants did not “focus on the fact that this case was designated as a Business Court
case or its potential impact on their appellate rights” in light of the 2014 amendment
to N.C. Gen. Stat. § 7A-27. Defendant-appellees cite N.C. Gen. Stat. § 7A-45.4(d) to
support their assertion that designation must have occurred no later than thirty days
after 2 October 2013, the date upon which plaintiff-appellants filed their complaint.
We are not persuaded.
It is true that, generally, the notice of designation for mandatory complex
business cases should be filed within thirty days of filing the complaint, or when a
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Opinion of the Court
third party intervenes or causes the amount in controversy to equal or exceed
$5,000,000.00. N.C. Gen. Stat. § 7A-45.4(d). However, circumstances may occur after
the notice of designation that could extend the actual date of designation well beyond
the general thirty-day timeframe.
After the moving party files a notice of designation, it must be approved by the
Chief Justice of our Supreme Court, and the non-moving party may file an opposition
to designation within thirty days. N.C. Gen. Stat. § 7A-45.4(e) (“Within 30 days after
service of the Notice of Designation, any other party may . . . file and serve an
opposition to the designation of the action as a mandatory complex business case.”).
If an opposition to designation is filed and has merit, the business court judge must
enter a written order on designation. Id. Additionally,
[i]f an action required to be designated as a mandatory
complex business case . . . is not so designated, the Superior
Court in which the action has been filed shall, by order
entered sua sponte, stay the action until it has been
designated as a mandatory complex business case by the
party required to do so in accordance with subsection (b) of
this section.
N.C. Gen. Stat. § 7A-45.4(g). Additionally, after a party files a notice of designation,
the business court judge may “on its own motion . . . determine whether the action
should be designated as a mandatory complex business case” and order that the case
not be so designated. Id. Finally, a business court judge’s decision on designation
“may [be] appeal[ed] in accordance with G.S. 7A-27(a),” N.C. Gen. Stat. § 7A-45.4(e),
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Opinion of the Court
or, at any time, the Chief Justice may revoke the approval of designation. In light of
these procedural possibilities, even if the notice of designation was filed within thirty
days of the complaint, actual designation may have occurred much later. Because
appellants failed to include an approval of designation or an order on designation, or
provide any other record evidence that specifies the exact designation date, whether
this case was actually designated prior to 1 October 2014 is speculative.
Where a party fails to file proper notice of appeal, an appellate court acquires
no jurisdiction and must dismiss. Williams, 218 N.C. App. at 366, 724 S.E.2d at 548
(“Without proper notice of appeal, this Court acquires no jurisdiction.”) (quoting
Brooks v. Gooden, 69 N.C. App. 701, 707, 318 S.E.2d 348, 352 (1984) (citations
omitted)). Where a party appeals an interlocutory order or judgment and fails to
allege sufficiently he or she would be deprived of a substantial right absent immediate
review, this Court acquires no jurisdiction and must dismiss. See, e.g., Larsen v.
Black Diamond French Truffles, Inc., __ N.C. App. __, __, 772 S.E.2d 93, 95 (2015)
(holding that this defect in an appellant’s principal brief cannot be cured in their reply
brief). Regarding an appeal from an interlocutory orders, this Court has stated: “It
is not the duty of this Court to construct arguments for or find support for [an]
appellant’s right to appeal[.]” Id. (quoting Jeffreys v. Raleigh Oaks Joint Venture, 115
N.C. App. 377, 380, 444 S.E.2d 252, 254 (1994)). The proper disposition in those cases
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Opinion of the Court
is to dismiss because the appellant failed to confer jurisdiction on this Court. We
adopt the same logic here.
Without the precise date upon which this action was designated as a
mandatory complex business case, we cannot determine with certainty whether
jurisdiction lies with this Court or our Supreme Court. When a party appeals an
order or judgment from an action designated as complex business, he or she bears the
burden of showing the actual designation date. Particularly for actions initiated
before 1 October 2014 that have been designated as complex business, a party
appealing from an order or judgment entered after that date must include in the
record a copy of the dated designation and explicitly note the date of designation in
the statement of grounds for appellate review portions of their brief in order to confer
jurisdiction on this Court. In the instant case, because plaintiff-appellants failed to
include the designation approval or a designation order in the record on appeal and
failed to note the date of designation in their brief, they have failed to confer
jurisdiction on this Court and we dismiss. In light of our disposition, we do not
address the merits of the case.
III. Conclusion
Although the record on appeal contains information supporting an inference
that the case was designated prior to 1 October 2014, an inference cannot confer
jurisdiction. Because the record contains no evidence from which this Court can
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Opinion of the Court
determine precisely when this action was designated as a mandatory complex
business case, we are unable to determine whether jurisdiction lies with this Court
or our Supreme Court. Therefore, we dismiss.
DISMISSED.
Judges DAVIS and TYSON concur.
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