Appeal and Error--appealability--interlocutory order--grant of a preliminary injunction--
no substantial right
Defendant's appeal from a preliminary injunction enjoining defendant from proceeding
with a foreclosure by power of sale on the pertinent property until the litigation is resolved is
dismissed, because: (1) an order granting or refusing a preliminary injunction is an interlocutory
order; (2) the trial court did not certify the case for appeal; (3) a substantial right is not affected
since defendant's right to a power of sale foreclosure still exists even though it has been delayed
and must wait for resolution of the litigation; and (4) the trial court adequately protected
defendant's right by requiring plaintiffs to post a significant security bond in the amount of
$15,000.
Erwin and Bernhardt, P.A., by Fenton T. Erwin, Jr. and Peter
F. Morgan, for plaintiff-appellees.
Smith Helms Mulliss & Moore, L.L.P., by Thomas D. Myrick and
Laura T. Beyer, for defendant-appellant.
HUNTER, Judge.
Jack Douglas Stogner (“defendant”) appeals from a preliminary
injunction entered by Judge Mark E. Klass enjoining the foreclosure
under a power of sale contained in the deed of trust given by Mary
Ellison Little and Robert J. Ellison (“plaintiffs”) at the time of
their purchase of real estate from defendant. Defendant brings
forward several assignments of error. However, we are unable to
reach the merits of these arguments as defendant's appeal is notimmediately appealable and must be dismissed.
Plaintiffs commenced this action against defendant,individually and as Administrator of the Estate of Peggy W.
Stogner, and Jeffrey W. Malickson, trustee, on 31 December 1998,
alleging fraud, deception, and breach of an implied warranty
arising from the sale of certain real property described as lots
fifteen and sixteen of Lake Wylie Recreational Lots, section forty-
three in Mecklenburg County, North Carolina. Plaintiffs sought
rescission of the contract of sale, deed, promissory note, and deed
of trust regarding said property; plaintiffs also prayed for a
restraining order enjoining Malickson, trustee, or any successor
trustee from initiating foreclosure proceedings on the property
during the pendency of the suit.
Originally, the parties entered into an offer to purchase and
contract for the property in question, and executed it on 1 June1998. Defendant conveyed the property to plaintiffs via a general
warranty deed on 3 August 1998, for which plaintiffs paid defendant
$75,000.00 in cash and $295,000.00 in the form of a promissory note
which was secured by a deed of trust on the property. Believing
that a fraud had been perpetrated against them by defendant,
plaintiffs stopped making payments on the promissory note. In
response, defendant began foreclosure proceedings on the property.
On 29 June 1999, plaintiffs filed a motion for a temporary
restraining order and preliminary injunction to stop the
foreclosure. After a hearing, Superior Court Judge Jesse Caldwell
granted the motion for the temporary restraining order on 30 June
1999. Then after a subsequent hearing, Superior Court Judge Mark
E. Klass entered a preliminary injunction on 26 July 1999 enjoining
defendant from proceeding with the foreclosure on the property
during the entire pendency of this action. On 25 August 1999,
defendant filed his notice of appeal.
“An order granting or refusing a preliminary injunction is an
interlocutory order governed by the requirements of G.S. 1-277.”
Gunkel v. Kimbrell, 29 N.C. App. 586, 589, 225 S.E.2d 127, 129
(1976); see also Clark v. Craven Regional Medical Authority, 326
N.C. 15, 23, 387 S.E.2d 168, 173 (1990). “An interlocutory order
is one made during the pendency of an action, which does not
dispose of the case, but leaves it for further action by the trial
court in order to settle and determine the entire controversy.” Veazey v. 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). Here, Judge Mark E.
Klass issued a preliminary injunction enjoining defendant from
proceeding with a foreclosure by power of sale on the property at
issue until the litigation is resolved. Therefore, by its very
nature, this preliminary injunction is an interlocutory order.
“Generally, there is no right of immediate appeal from an
interlocutory order.” Abe v. Westview Capital, 130 N.C. App. 332,
334, 502 S.E.2d 879, 881 (1998). There are two methods by which an
interlocutory order can be immediately appealed. N.C. Dept. of
Transportation v. Page, 119 N.C. App. 730, 734, 460 S.E.2d 332, 334
(1995). First, an interlocutory order can be immediately appealed
if the order is final as to some but not all of the claims or
parties, and the trial court certifies the case for appeal pursuant
to N.C. Gen. Stat. § 1A-A, Rule 54(b). Id. Second, an
interlocutory order can be immediately appealed under N.C. Gen.
Stat. §§ 1-277(a) and 7A-27(d)(1) if the trial court's decision
deprives the appellant of a substantial right which would be lost
absent immediate review. Id. Stated another way, review is
allowed “if the right affected is 'substantial' and the right will
'be lost, prejudiced, or be less than adequately protected' if the
order is not reviewed before final judgment.” T'ai Co. v. Market
Square Limited Partnership, 92 N.C. App. 234, 235-36, 373 S.E.2d
885, 886 (1988) (quoting J & B Slurry Seal Co. v. Mid-South
Aviation, Inc., 88 N.C. App. 1, 6, 362 S.E.2d 812, 815 (1987)). For a defendant “to have a right of appeal
from a mandatory
preliminary injunction, 'substantial rights' of the appellant must
be adversely affected.” Dixon v. Dixon, 62 N.C. App. 744, 744, 303
S.E.2d 606, 607 (1983). “Otherwise, an appeal from such an
interlocutory order is subject to being dismissed.” Id. at 744-45,
303 S.E.2d at 607. In determining what is a “substantial right,”
the North Carolina Supreme Court has stated that “the 'substantial
right' test for appealability of interlocutory orders is more
easily stated than applied.” Waters v. Personnel, Inc., 294 N.C.
200, 208, 240 S.E.2d 338, 343 (1978); see also Blackwelder v.
Dept. of Human Resources, 60 N.C. App. 331, 334, 299 S.E.2d 777,
780 (1983). “It is usually necessary to resolve the question in
each case by considering the particular facts of that case and the
procedural context in which the order from which appeal is sought
was entered.” Waters, 294 N.C. at 208, 240 S.E.2d at 343; see also
Blackwelder, 60 N.C. App. at 334, 299 S.E.2d at 780.
Here, defendant asserts that his statutory right to
foreclosure by power of sale is a “substantial right,” which is at
risk as a result of the preliminary injunction, therefore giving
him grounds for an immediate appeal to this Court. Viewing the
facts in the light most favorable to the defendant and assuming
that defendant's right to foreclosure by power of sale is a
“substantial right,” defendant's right is by no means “'. . . lost,
prejudiced, or . . . less than adequately protected[.]'” T'ai Co.
v. Market Square Limited Partnership, 92 N.C. App. at 236, 373
S.E.2d at 886 (quoting J & B Slurry Seal Co. v. Mid-South Aviation,Inc., 88 N.C. App. at 6, 362 S.E.2d at 815). Defendant's rig
ht to
a power of sale foreclosure still exists, however it has just been
delayed and must wait for the resolution of the litigation.
Furthermore, the trial court adequately protected defendant's right
by requiring plaintiffs to post a significant security bond in the
amount of $15,000.00. Therefore this appeal is dismissed because
the issuance of the preliminary injunction at issue here is not
properly before this Court for review.
Dismissed.
Judges LEWIS and WYNN concur.
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