Johnson v. Lucas

TYSON, Judge

dissenting.

The majority’s opinion dismisses defendant Lucas’s appeal for failing to: (1) state in his brief the grounds for appellate review of an interlocutory appeal; and (2) discuss the substantial rights that will be affected if this appeal is not reviewed at this time. Neither party raised the issue of the interlocutory nature of this appeal in their respective briefs. The majority’s opinion reached that issue ex mero motu. In my view, defendant Lucas sufficiently argues the applicable substantial rights that would be adversely affected without this Court’s review. I vote to reach the merits of the case, vacate the trial court’s judgment, and remand the matter for further proceedings. I respectfully dissent.

I. Interlocutory Anneals

Interlocutory appeals are those “made during the pendency of an action which do not dispose of the case, but instead leave it for further action by the trial court to settle and determine the entire controversy.” Sharpe v. Worland, 351 N.C. 159, 161, 522 S.E.2d 577, 578 (1999) (quoting Carriker v. Carriker, 350 N.C. 71, 73, 511 S.E.2d 2, 4 (1999)); accord Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381, reh’g denied, 232 N.C. 744, 59 S.E.2d 429 (1950).

A. Rules of Appellate Procedure

Rule 28(b)(4) of the North Carolina Rules of Appellate Procedure requires the appellant’s brief to include a “statement of the grounds for appellate review.” N.C.R. App. P. 28(b)(4) (2004); see Chicora *520Country Club, Inc., et al. v. Town of Erwin, 128 N.C. App. 101, 105, 493 S.E.2d 797, 800 (1997). If the appeal is interlocutory, the statement must contain sufficient facts and argument to support appellate review on the grounds that the challenged judgment either affects a substantial right, or was certified by the trial court for immediate appellate review. Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379-80, 444 S.E.2d 252, 254 (1994).

Defendant Lucas does not specifically address appellate review of an interlocutory appeal in his “statement of the grounds for appellate review.” He argues the trial court violated his constitutional due process and statutory rights when it entered summary judgment against him based solely on the findings of fact contained in a judgment in a prior case in which he never received service of process.

B. Appellate Review of Interlocutory Judgments

Interlocutory judgments may only be appealed in the following two situations: (1) certification by the trial court for immediate review under N.C. Gen. Stat. § 1A-1, Rule 54(b); or (2) a substantial right of the appellant is affected. Tinch v. Video Industrial Services., 347 N.C. 380, 381, 493 S.E.2d 426, 427 (1997) (citing Bailey v. Gooding, 301 N.C. 205, 209, 270 S.E.2d 431, 434 (1980)); N.C. Gen. Stat. §§ 1-277A and 7A-27(d) (2003). Here, the trial court did not certify its judgment from which defendant Lucas appeals under Rule 54(b).

1. Substantial Right

In determining whether a substantial right is affected “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.” Goldston v. American Motors Corp., 326 N.C. 723, 726, 392 S.E.2d 735, 736 (1990); N.C. Gen. Stat. § 1-277A; N.C. Gen. Stat. § 7A-27(d).

Our Supreme Court adopted the dictionary definition of “substantial right” in Oestreicher v. American Nat’l Stores, Inc.: “ ‘a legal right affecting or involving a matter of substance as distinguished from matters of form: a right materially affecting those interests which a [person] is entitled to have preserved and protected by law: a material right.’ ” 290 N.C. 118, 130, 225 S.E.2d 797, 805 (1976) (quoting WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY at 2280 (1971)).

*521a. Service of Process

The Constitutional right of “ ‘[d]ue process of law’ requires that a defendant shall be properly notified of the proceeding against him, and have an opportunity to be present and to be heard.” B-W Acceptance Corp. v. Spencer, 268 N.C. 1, 10, 149 S.E.2d 570, 577 (1966). The parties stipulate that defendant Peacock failed to serve defendant Lucas with the crossclaim. It is also undisputed that the findings of fact from the 12 July 2001 judgment that ruled on defendant Peacock’s crossclaim were the basis of the 9 June 2003 judgment from which defendant Lucas appeals.

Defendant Peacock failed to satisfy the requirements of Rules 4 and 5 of the N.C. Rules of Civil Procedure governing proper service of process. N.C. Gen. Stat. § 1A-1, Rule 4 (2003); N.C. Gen. Stat. § 1A-1, Rule 5 (2003); see also County of Wayne ex. rel. Williams v. Whitley, 72 N.C. App. 155, 158, 323 S.E.2d 458, 461 (1984) (an action may be continued against that defendant by either: (1) the plaintiff securing an endorsement upon the original summons for an extension of time to complete service of process; or (2) the plaintiff may sue out an alias or pluries summons within 90 days after the issuance of the previous summons or prior endorsement).

If a party fails to extend time for service, the suit is discontinued, and treated as if it had never been filed. Johnson v. City of Raleigh, 98 N.C. App. 147, 148-49, 389 S.E.2d 849, 851, disc. rev. denied, 327 N.C. 140, 394 S.E.2d 176 (1990) (citing Hall v. Lassiter, 44 N.C. App. 23, 26-27, 260 S.E.2d 155, 158 (1979)). Without service of process, the court has no jurisdiction. Columbus County v. Thompson, 249 N.C. 607, 610, 107 S.E.2d 302, 305 (1959) (citing Collins v. Highway Com., 237 N.C. 277, 74 S.E.2d 709 (1953); Moore v. Humphrey, 247 N.C. 423, 101 S.E.2d 460 (1958)). A subsequent judgment entered against the unserved party after the action is discontinued for want of valid service of process is void. Bowman v. Ward, 152 N.C. 602, 602-03, 68 S.E. 2, 2 (1910) (citations omitted).

“A void judgment is not a judgment and may always be treated as a nullity ... it has no force whatever.” Clark v. Carolina Homes, Inc., 189 N.C. 703, 708, 128 S.E. 20, 23 (1925) (citations omitted). No matter how much time has passed, a void judgment will never become valid. Columbus County, 249 N.C. at 610, 107 S.E.2d at 305 (citations omitted).

The judgment entitling defendant Peacock to recover damages from defendant Lucas was discontinued for want of service of *522process and is void as a matter of law. Locklear v. Scotland Memorial Hosp., 119 N.C. App. 245, 247-48, 457 S.E.2d 764, 766 (1995); see also Bowman, 152 N.C. at 602-03, 68 S.E. at 2; N.C. Gen. Stat. § 1A-1, Rule 4(e). The 9 June 2003 judgment defendant Lucas appeals from was based solely on findings of fact from defendant Peacock’s discontinued action and void judgment. Defendant Peacock’s failure to provide defendant Lucas any notice of the crossclaim violated his due process rights under Section I of the Fourteenth Amendment to the United States Constitution and Article I, Section 19 of the North Carolina Constitution.

Failure to review the judgment appealed from would deprive defendant Lucas an opportunity to protect his constitutional and substantial right to due process of law and result in substantial financial and legal injury to him. Defendant Lucas has shown that both a constitutional and substantial right exist, which will be lost if not corrected before appeal from final judgment. See Goldston, 326 N.C. at 726, 392 S.E.2d at 736.

b. Monetary Judgment.

Alternatively, defendant Lucas also argues the entry of a monetary judgment, the result of the appealed judgment, further affects his substantial rights. This Court held in Equitable Leasing Corp. v. Myers that a “trial court’s entry of summary judgment for a monetary sum against [a] defendant . . . affects a ‘substantial right’ of [the] defendant.” 46 N.C. App. 162, 172, 265 S.E.2d 240, 247 (1980) (citation omitted). The 9 June 2003 judgment decreed plaintiffs are entitled to recover judgment against defendants, jointly and severally, in the amount of $77,000.00 for the unlawful cutting of timber. Stipulated facts show that defendant Lucas and his mother, Lovie H. Jones, received only $32,413.20 in proceeds from the sale of the timber. Both the award and the amount of the monetary sum against defendant Lucas affect a substantial right and are immediately appealable.

Further, the trial court did not stay its judgment pending resolution of the remaining claims against defendant Lucas and failed to rule on pending dispositive motions. This subjects defendant Lucas to immediate execution of the judgment.

Defendant Lucas sufficiently argued two substantial rights that will be adversely affected without this Court’s immediate review of the case. The merits of the issues presented by this appeal are ripe for resolution.

*523II. Necessary Parties

Defendant Lucas contends the judgment is void for failure to join a necessary party under Rule 19 of the N.C. Rules of Civil Procedure. N.C. Gen. Stat. § 1A-1, Rule 19 (2003). He argues William Lucas, his brother and the fifth remainderman, is necessary to protect his rights and interests in the case. I disagree.

A necessary party is one who has or claims a material interest in the subject matter of the controversy and whose interests will be directly affected by the outcome of the case. N.C. Monroe Constr. Co. v. Guilford County Bd. of Educ., 278 N.C. 633, 638-39, 180 S.E.2d 818, 821 (1971) (citing Gaither Corp. v. Skinner, 238 N.C. 254, 256, 77 S.E.2d 659, 661 (1953)). Rights of the necessary party must be ascertained and settled before the rights of the parties to the suit can be determined. Wall v. Sneed, 13 N.C. App. 719, 724, 187 S.E.2d 454, 457 (1972) (quoting Equitable Life Assur. Soc. of United States et al. v. Basnight, 234 N.C. 347, 67 S.E.2d 390 (1951)).

Plaintiffs argue William Lucas is a proper party, but that his participation in the suit is not necessary or required to protect either his or defendant Lucas’s rights and interests. Proper parties are those whose interests may be affected by the outcome of the case, but whose presence is not necessary to go forward. N.C. Monroe Constr. Co., 278 N.C. at 638-39, 180 S.E.2d at 821 (quoting Gaither Corp., 238 N.C. at 256, 77 S.E.2d at 661).

William Lucas was an equal remainderman under his father’s will and became a joint tenant upon the death of the life tenant, his mother, Lovie H. Jones. While his interest in the Property will be affected by the outcome, that interest does not require his entry into the case for determination of possible damages.

Our Supreme Court addressed a similar issue in Winborne v. Elizabeth City Lumber Co., 130 N.C. 32, 40 S.E. 825 (1902). A single co-tenant sought compensation for the harvesting of timber from property. Id. at 33, 40 S.E. at 825. The Court awarded him a pro rata part of the damages, reserving the remaining shares for the other co-tenants. Id. Winborne’s logic applies to the case at bar.

Should plaintiffs be awarded damages for some or all of their claims against defendants, each remainderman will receive their pro rata share, including defendant Lucas and William Lucas. Their shares will be separated to protect their interest in the Property. I *524would hold that William Lucas is a proper but not a necessary party to this action. This assignment of error should be overruled.

III. Life Tenancy and Waste

Defendant Lucas’s final assignment of error asserts the trial court erred by granting partial summary judgment when genuine issues of material fact exist regarding the amount of damages. I agree.

The existence and amount of damages rest on two factors. First, the 9 June 2003 partial summary judgment awarding damages was based on findings of fact in the void 12 July 2001 judgment. This included the $77,000.00 in damages. It is undisputed that the 12 July 2001 judgment is void for lack of service of process on defendant Lucas. Thus, the amount of damages against defendant Lucas, if any, was not properly determined.

Second, the foundation of all claims in plaintiffs’ complaint asserts that a life tenant may not sell timber from the property without the authorization of all remaindermen and the sharing of proceeds. Thomas v. Thomas, 166 N.C. 627, 631, 82 S.E. 1032, 1034 (1914) (citing Dorsey v. Moore, 100 N.C. 41, 44, 6 S.E. 270, 271 (1888)). Plaintiffs argue such behavior constitutes waste and impairs the substance of the inheritance. Dorsey, 100 N.C. at 44, 6 S.E. at 271. However, a long standing exception allows a life tenant to harvest and sell sufficient timber to maintain the property for the proper enjoyment of the land. Fleming v. Sexton, 172 N.C. 250, 257, 90 S.E. 247, 250-51 (1916) (citing Thomas, 166 N.C. at 631, 82 S.E. at 1034 (citations omitted)). This right includes physically using the timber or the proceeds from its sale to maintain or repair the life estate. Id.

Defendant Lucas contends this exception applies to him. In his Motion to Set Aside Entry of Default filed on 5 May 2003, which the trial court did not rule upon, he asserts the proceeds from the sale of the timber were given to the life tenant, plaintiff Lovie H. Jones, for the maintenance of the Property. He argues this issue again on appeal to this Court. This defense to allegations of waste also affects the determination of damages.

Both the failure to complete service of process of the crossclaim by defendant Peacock and defendant Lucas’s defense to waste are questions of fact in calculating damages. Defendant Lucas argues his mother received the full contract price of $32,413.20, while he is liable under the void judgment for $77,000.00 plus costs. The issue of damages is a question of fact. Olivetti Corp. v. Ames Business *525Systems, Inc., 319 N.C. 534, 548, 356 S.E.2d 578, 586, reh’g denied by, 320 N.C. 639, 360 S.E.2d 92 (1987). Since a genuine issue of material fact exists, partial summary judgment awarding damages was improper. Frank H. Conner Co. v. Spanish Inns Charlotte, Ltd., 294 N.C. 661, 677, 242 S.E.2d 785, 794 (1978); N.C. Gen. Stat. § 1A-1, Rule 56(d). A judgment that rests upon a void judgment for its validity is itself void. See Clark, supra. I would vacate the trial court’s decision and remand for further proceedings consistent with this opinion.

IV. Hearings for Defendant Lucas’s Motions

Defendant Lucas filed three separate motions for relief during the course of this action: (1) Motion for Relief of Judgment dated 10 March 2003; (2) Motion to Set Aside Entry of Default dated 5 May 2003; and (3) Motion to Dismiss Crossclaim dated 5 May 2003. Although these dispositive motions were filed and pending, the record does not disclose whether any of the three were ruled upon prior to entry of the appealed judgment.

All three motions are dispositive of issues present in the case. Upon remand, these motions should be heard.

V. Conclusion

Defendant Lucas sufficiently argued that his substantial rights will be adversely affected without this Court’s review of the case. In accordance with my discussion of the merits, I would: (1) vacate the trial court’s entry of partial summary judgment against defendant Lucas, as it was based solely on findings of fact from a void judgment entered without jurisdiction over defendant Lucas; and (2) remand this case for further proceedings. I respectfully dissent.