Appeal and Error--appealability--sanctions in arbitration--
underlying issues still pending--interlocutory
An appeal was dismissed as interlocutory where the appeal
was solely from a grant of attorney's fees imposed as a sanction
for failing to participate in arbitration in good faith and for
failing to produce an individual with authority to settle the
case at the arbitration proceeding. The appeal of the
arbitration award is still pending before the trial court and the
issues in this appeal are best left until the underlying action
has been resolved.
Pope, McMillan, Kutteh, Simon & Privette, P.A., by Anthony S.
Privette and Ryan D. Bolick, for plaintiff-appellee.
Steven J. Colombo, P.A., by Steven J. Colombo, Kenneth M.
Gondek and Marc. H. Amin, for defendant-appellant.
EAGLES, Chief Judge.
Defendant is appealing from a sanctions order that the trial
court issued based on defendant's conduct in an arbitration
proceeding.
On or about 14 May 1998, plaintiff, Frances Andaloro, was
waiting in her automobile at a stoplight. Defendant, Rhonda Sawyer,
was directly behind her. When the light turned green, defendant
began to move forward without noticing that the plaintiff remained
still. Defendant hit plaintiff's car. Plaintiff alleged that the
impact injured her. Consequently, she filed suit seeking $3,000 in
damages. Defendant admitted that she breached her duty but deniedthat the plaintiff suffered any injuries.
On 10 August 1999, the trial court notified the parties that
they must attend court-ordered non-binding arbitration pursuant to
G.S. § 7A-37.1 (1999). Plaintiff's attorney only raised the issue
of “damages for injury” on the pre-arbitration submission. The only
individuals present at the hearing were counsel and the parties.
Following the hearing, the arbitrator entered an award for the
plaintiff for $5,500. Defendant timely appealed this award to the
trial court. The record does not indicate that the trial court took
any further action on the appeal from the arbitration award.
Subsequent to the award, plaintiff's counsel moved for
sanctions against the defendant. Plaintiff alleged that the
defendant had failed to participate in the proceedings in good
faith violating N.C.R. Arbitration 3(p) and 3(l) as promulgated by
the North Carolina Supreme Court. Specifically, plaintiff contended
that the defendant had failed to produce someone with authority to
settle the claim and that defendant's counsel commented that the
defendant had never intended to settle the claim during
arbitration.
On 17 November 1999, the trial court held an evidentiary
hearing on the motion for sanctions. On 11 January 2000, the court
granted attorney's fees to the plaintiff for $1,823.75. The court
concluded that the defendant had failed to participate in good
faith and failed to produce an individual with authority to settle
the case at the arbitration proceeding. Defendant appeals from the
grant of sanctions. Because we hold that the defendant's appeal is
interlocutory, we dismiss. Generally, there is no immediate appeal from the entry of an
interlocutory order. Summey v. Barker, 142 N.C. App. 688, 544
S.E.2d 262 (2001). “The purpose of this rule is to prevent
fragmentary and premature appeals that unnecessarily delay the
administration of justice and to ensure that the trial divisions
fully and finally dispose of the case before an appeal can be
heard.” Sharpe v. Worland, 351 N.C. 159, 161, 522 S.E.2d 577, 578-
79 (1999)(citation omitted). However, a party may appeal from an
interlocutory order in two instances. First, if the order is final
as to some but not all claims or parties and the trial court
certifies there is no just reason to delay appeal pursuant to North
Carolina Rule of Civil Procedure 54(b), an immediate appeal may
lie. Bishop v. Lattimore, 137 N.C. App. 339, 343, 530 S.E.2d 554,
558 (2000). Second, an appeal is permissible if the trial court's
decision deprives a party of a substantial right that will be lost
absent immediate review. Id.
In her brief, defendant admits that the appeal is
interlocutory. However, defendant contends that she has a
substantial right under Sharpe v. Worland, 351 N.C. 159, 522 S.E.2d
577 (1999) and Willis v. Power Co., 291 N.C. 19, 229 S.E.2d 191
(1976). We disagree. In Sharpe, our Supreme Court defined a
substantial right as being, “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.”
Sharpe, 351 N.C. at 162, 522 S.E.2d at 579. However, our Courtshave stressed that it is necessary to resolve the substantial right
question by considering the particular facts and procedural context
of each case. Id. at 162-63, 522 S.E.2d at 577. We also note that
this Court has determined that we should strictly construe the
concept of “substantial right” to uphold the purposes underlying
the rule preventing interlocutory appeals. Buchanan v. Rose, 59
N.C. App. 351, 352, 296 S.E.2d 508, 509 (1982).
We conclude that Sharpe and Willis are distinguishable from
the present case and therefore they do not bind us here. In Sharpe,
the Supreme Court held that a hospital had a substantial right to
appeal from a discovery order compelling them to produce allegedly
privileged documents. Sharpe, 351 N.C. at 166, 522 S.E.2d at 581.
According to the Court, the hospital's alleged statutory privilege
amounted to a substantial right that the hospital could lose by
complying with the order. Id. The Sharpe Court cited the earlier
Willis decision as a basis for its holding. Id. at 163, 522 S.E.2d
at 580. In Willis, the Supreme Court determined that an
interlocutory discovery order was immediately appealable when the
trial court accompanied that order with a court order of contempt.
Willis, 291 N.C. at 30, 229 S.E.2d at 198. The Court wrote:
[W]hen a civil litigant is adjudged to be in
contempt for failing to comply with an earlier
discovery order, the contempt proceeding is
both civil and criminal in nature and the
order is immediately appealable for the
purpose of testing the validity both of the
original discovery order and the contempt
order itself where, as here, the contemnor can
purge himself of the adjudication of contempt
only by, in effect, complying with thediscovery order of which he essentially
complains.
Id.
First, we note that the present case does not deal with an
order compelling discovery. Defendant contends that the common
thread between the cases is that both trial courts used N.C.R. Civ.
Pro. 37(b) to sanction the respective defendants. Likewise,
defendant contends that the trial court used Rule 37(b) to sanction
her in the present case. Defendant's argument misapprehends the
facts here and the Sharpe and Willis decisions.
The Rules of Arbitration provide that a court may sanction a
party for failing or refusing to participate in arbitration
proceedings in good faith. N.C.R. Arbitration 3(l). Once the court
makes that determination, then the court may choose to use any of
the sanctioning methods prescribed in N.C.R. Civ. P. 11,
37(b)(2)(A) - 37(b)(2)(C) or G.S. § 6-21.5. Id. Contrary to the
defendant's contention, the trial court did not cite any particular
rule when it sanctioned the defendant. Notably, the three rules
referred to in Arbitration Rule 3(l) all permit the award of
attorney's fees. Therefore, the Court could have used any of the
authorized sanctioning methods and was not necessarily limited to
Rule 37.
Further contrary to defendant's argument, the Willis Court did
not rely solely on the trial court's use of Rule 37. The Court
found that the trial court's use of a finding of contempt
accompanying an order compelling discovery created a substantial
right. Willis, 291 N.C. at 30, 229 S.E.2d at 197. The only way torelieve the contempt order was to comply with the discovery order.
Id. In effect, the Willis trial court used the sanction as an
enforcement mechanism. In that instance, the Supreme Court held
that the defendant had a substantial right to appeal. Id. Here, the
trial court did not use the payment of attorney's fees as an
enforcement mechanism. The trial court did not hold the defendant
in contempt and did not include any condition by which the
defendant could relieve herself of the penalty. Given the
differences between Sharpe and Willis and the instant case and our
emphasis to construe substantial rights strictly, we do not believe
that those cases bind us.
This Court has stated that an order imposing sanctions is
ordinarily interlocutory and not appealable. Routh v. Weaver, 67
N.C. App. 426, 428, 313 S.E.2d 793, 795 (1984). Additionally, this
Court has stated that an “order granting attorney's fees is
interlocutory as it does not finally determine the action nor
affect a substantial right which might be lost, prejudiced or be
less than adequately protected by exception to entry of the
interlocutory order.” Benfield v. Benfield, 89 N.C. App. 415, 419,
366 S.E.2d 500, 503 (1988) (citation omitted). Here, the defendant
is appealing solely from a grant of attorney's fees. The
defendant's appeal of the arbitration award is still pending before
the trial court. The very purpose of the interlocutory appeals rule
is to prevent appeals of this preliminary nature. The issues here
are best left until the underlying action has been resolved and the
appeals process can address all the issues in the case in oneappeal.
Appeal dismissed.
Judges McGEE and TYSON concur.
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