Union Cty. v. Town of Marshville , 255 N.C. App. 441 ( 2017 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA17-37
Filed: 5 September 2017
Union County, No. 16CVS938
UNION COUNTY, Plaintiff,
v.
TOWN OF MARSHVILLE, Defendant.
Appeal by defendant from orders entered 24 and 27 October 2016 by Judge
Robert C. Ervin in Union County Superior Court. Heard in the Court of Appeals 3
May 2017.
Erwin, Bishop, Capitano & Moss, PA, by J. Daniel Bishop and Scott A. Hefner,
for plaintiff-appellee.
Turrentine Law Firm, PLLC, by Karlene S. Turrentine, and Stark Law Group,
PLLC, by S.C. Kitchen, for defendant-appellant.
BERGER, Judge.
The Town of Marshville (“Defendant Town”) appeals from two orders ruling on
motions made in its dispute with Union County (“Plaintiff County”) over the disposal
of wastewater. The appealed orders are interlocutory, and Defendant Town must
therefore establish grounds for appellate review. Interlocutory review of these orders
is argued by Defendant Town to be proper because the orders affect the substantial
rights of governmental immunity and the avoidance of the possibility of inconsistent
verdicts, and these substantial rights would be lost without immediate review.
UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
Because Defendant Town is unable to establish that either ground for appellate
review applies to the appealed orders, we dismiss as interlocutory.
Factual & Procedural Background
In 1978, Plaintiff County and Defendant Town entered into a contract under
which the wastewater and sewage of Defendant Town was collected, transported,
monitored, and treated in exchange for payment of the costs incurred by Plaintiff
County to carry out these duties. Since 1981, when the municipal collection system
became operational, the system has transported Defendant Town’s sewage up to
thirty miles to the treatment plant owned by the City of Monroe.
Federal law requires that a user charge system be implemented under which
each user pays a proportional share of the costs of operations and maintenance, which
includes necessary replacement of capital assets. The 1978 Contract implemented
the payment structure used by the parties. In 1994, an agreement was reached
extending the contract term until 2011. In the early 2000’s, the system needed repair,
to the point that state regulators required corrective action to be taken by the County.
Between 2005 and 2011, Plaintiff County spent more than $12 million in improving
the system, although some of this cost was funded through federal grants.
In 2011, Plaintiff County notified Defendant Town that their contract term had
ended. A new contract was proposed in 2012 to Defendant Town, but no agreement
was reached. For several years both parties operated under the terms of the original
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
contract. However, in 2014, Defendant Town ceased its payment of the required user
fees for its use of the sewage system. It was for the collection of over $467,000.00 of
unpaid fees owed by Defendant Town that Plaintiff County filed this lawsuit on April
11, 2016.
Defendant Town moved to dismiss the lawsuit, denying any obligation in
contract or restitution. It also filed counterclaims asserting equitable ownership of
the sewage system. Plaintiff County responded by formally revoking its permission
for Defendant Town to discharge it sewage into the county system. It also amended
its complaint to add claims, and it sought a preliminary injunction against Defendant
Town to stop any further discharge into its system. The parties then cross-filed a
motion to dismiss by Defendant Town and for judgment on the pleadings by Plaintiff
County.
On October 7, 2016, a motions hearing was held in Union County Superior
Court. Three orders were entered as a result of the hearing. First, on October 10,
the trial court entered a preliminary injunction order requiring the Defendant Town
to cease discharging sewage into the system. This injunction order was previously
appealed, but the parties entered into a consent order causing that appeal to be moot
and it was therefore dismissed. Then, on October 24, the trial court entered an order
on the Plaintiff County’s motion for judgment on the pleadings. In this order, the
trial court granted in part and denied in part the motion, dismissing the Defendant
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
Town’s counterclaims for constructive and resulting trust and those labeled
“Exclusive Emoluments” and “Clean Water Act.” Finally, on October 27, the trial
court entered an order granting in part and denying in part the Defendant Town’s
motion to dismiss, allowing a breach of contract claim to continue, but dismissing a
separate breach claim and an unjust enrichment claim. It is from these last two
orders that Defendant Town appeals.
Analysis: Grounds for Appellate Review
“The appeals process is designed to eliminate the unnecessary delay and
expense of repeated fragmentary appeals, and to present the whole case for
determination in a single appeal from the final judgment.” Stanford v. Paris, 364
N.C. 306, 311, 698 S.E.2d 37, 40 (2010) (citation and quotation marks omitted).
North Carolina General Statutes Sections 1-277 and 7A-27 provide “that no
appeal lies to an appellate court from an interlocutory order or ruling of the trial
judge unless such ruling or order deprives the appellant of a substantial right which
he would lose if the ruling or order is not reviewed before final judgment.” Consumers
Power v. Power Co., 285 N.C. 434, 437, 206 S.E.2d 178, 181 (1974) (citations omitted).
“An appeal is interlocutory when noticed from an order entered during the pendency
of an action, which does not dispose of the entire case and where the trial court must
take further action in order to finally determine the rights of all parties involved in
the controversy.” Peterson v. Dillman, ___ N.C. App. ___, ___, 782 S.E.2d 362, 365
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
(2016) (citation omitted). “Accordingly, interlocutory appeals are discouraged except
in limited circumstances.” Stanford, 364 N.C. at 311, 698 S.E.2d at 40 (citations
omitted).
The appealing party bears the burden of demonstrating
that the order from which he or she seeks to appeal is
appealable despite its interlocutory nature. Thus, the
extent to which an appellant is entitled to immediate
interlocutory review of the merits of his or her claims
depends upon his or her establishing that the trial court's
order deprives the appellant of a right that will be
jeopardized absent review prior to final judgment.
Richmond Cnty. Bd. of Educ. v. Cowell, 225 N.C. App. 583, 585, 739 S.E.2d 566, 568,
disc. review denied, 367 N.C. 215, 747 S.E.2d 553 (2013) (citations and quotation
marks omitted). “[T]he appellant has the burden of showing this Court that the order
deprives the appellant of a substantial right which would be jeopardized absent a
review prior to a final determination on the merits.” Jeffreys v. Raleigh Oaks Joint
Venture, 115 N.C. App. 377, 380, 444 S.E.2d 252, 254 (1994) (citations omitted).
This requirement that appellant establish a right to review is codified in our
Appellate Rules. Rule 28(b)(4) of the North Carolina Rules of Appellate Procedure
requires that an appellant’s brief include, inter alia:
A statement of the grounds for appellate review. Such
statement shall include citation of the statute or statutes
permitting appellate review. . . . When an appeal is
interlocutory, the statement must contain sufficient facts
and argument to support appellate review on the ground
that the challenged order affects a substantial right.
N.C.R. App. P. 28(b)(4) (2017).
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
As grounds for appellate review of the first order dismissing some, but not all,
of Plaintiff County’s claims pursuant to Rules 12(b)(1), (2), and (6) of the North
Carolina Rules of Civil Procedure, Defendant Town asserts that the trial court erred
in not dismissing Plaintiff County’s remaining tort claims because governmental
immunity shields it from liability. Generally, “[u]nder the doctrine of governmental
immunity, a county or municipal corporation is immune from suit for the [torts
committed by] its employees in the exercise of governmental functions absent waiver
of immunity.” Estate of Williams v. Pasquotank Cnty. Parks & Recreation Dep't, 366
N.C. 195, 198, 732 S.E.2d 137, 140 (2012) (citations and quotation marks omitted).
However, governmental immunity has limits, and it is inapplicable here as a
defense to the tort claims asserted by Plaintiff County.
Governmental immunity covers only the acts of a
municipality or a municipal corporation committed
pursuant to its governmental functions. Governmental
immunity does not, however, apply when the municipality
engages in a proprietary function. In determining whether
an entity is entitled to governmental immunity, the result
therefore turns on whether the alleged tortious conduct of
the county or municipality arose from an activity that was
governmental or proprietary in nature.
We have long held that a “governmental” function is
an activity that is discretionary, political, legislative, or
public in nature and performed for the public good in behalf
of the State rather than for itself. A “proprietary” function,
on the other hand, is one that is commercial or chiefly for
the private advantage of the compact community.
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
Id. at 199, 732 S.E.2d at 141 (citations, emphasis, quotation marks, and brackets
omitted).
“The law is clear in holding that the operation and maintenance of a sewer
system is a proprietary function where the municipality sets rates and charges fees
for the maintenance of sewer lines.” Harrison v. City of Sanford, 177 N.C. App. 116,
121, 627 S.E.2d 672, 676, disc. review denied, ___ N.C. ___, 639 S.E.2d 649 (2006)
(citations omitted). See also Bostic Packaging, Inc. v. City of Monroe, 149 N.C. App.
825, 829, 562 S.E.2d 75, 79, disc. review denied, 355 N.C. 747, 565 S.E.2d 192 (2002)
(in reversing summary judgment of claims dismissed on governmental immunity
grounds, we held “defendant [town] is not immune from tort liability in the operation
and maintenance of its sewer system”). Regardless of the clarity of North Carolina
law, Defendant Town herein appeals to have this Court apply governmental
immunity to claims that arose out of the operation of its sewer system. We decline to
do so, and Defendant Town is, thus, unable to establish grounds for our interlocutory
review because governmental immunity does not apply. We therefore dismiss this
portion of the appeal.
Defendant Town’s second argument on appeal is not grounded in governmental
immunity, but rather addresses the order dismissing its counterclaims as affecting
its substantial right to avoid inconsistent verdicts. In attempting to establish
grounds for our review of the second order, which ruled on Plaintiff County’s motion
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
for judgment on the pleadings pursuant to Rules 12(c) and (h)(2) of the North Carolina
Rules of Civil Procedure, Defendant Town makes a circular argument. Defendant
Town asserts that (1) the trial court erred in dismissing its counterclaims; (2) a
successful appeal of the dismissal order based on the merits of the counterclaims
could possibly create inconsistent verdicts; (3) the avoidance of inconsistent verdicts
is a substantial right; (4) a substantial right establishes grounds for appellate review;
and, therefore, (5) because there are grounds for appellate review, this Court should
review the merits of the dismissed counterclaims.
To support its argument that immediate appeal from an otherwise un-
appealable interlocutory order is proper, Defendant Town only cites Hartman v.
Walkertown Shopping Center, in which we stated that “[t]he right to avoid the
possibility of two trials on the same issues can be a substantial right. A judgment
which creates the possibility of inconsistent verdicts on the same issue – in the event
an appeal eventually is successful – has been held to affect a substantial right.”
Hartman, 113 N.C. App. 632, 634, 439 S.E.2d 787, 789, disc. review denied, 336 N.C.
780, 447 S.E.2d 422 (1994) (citations, emphasis, brackets, and ellipses omitted).
However, the order appealed from in Hartman could have had the effect of bifurcating
adjudication of “identical factual claims” into distinct, and potentially inconsistent,
resolutions for different defendants, although similarly situated. Id. Our facts differ,
and Hartman is inapplicable.
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UNION CTY. V. TOWN OF MARSHVILLE
Opinion of the Court
Although Defendant Town argues that, if its appeal is successful, there could
be the potential for inconsistent verdicts on the issues here, it never explains how
these inconsistent verdicts about which it complains could truly become realities.
This Court will not construct appellant’s arguments in support of a right to
interlocutory appeal. Jeffreys, 115 N.C. App at 380, 444 S.E.2d at 254 (citations
omitted). This argument does not establish grounds for appellate review and we
dismiss this portion of the appeal as well.
Conclusion
For the reasons given above, Defendant Town has not established grounds for
appellate review for either challenged order. Therefore, this appeal is dismissed as
interlocutory.
DISMISSED.
Judges ELMORE and INMAN concur.
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