MECHANICAL SYSTEMS & SERVICES
INC.,
Plaintiff,
v
.
Mecklenburg County
No. 02 CVS 8572
CAROLINA AIR SOLUTIONS, L.L.C.,
LARRY D. COPELAND and RODNEY
L. GORDON,
Defendants.
Knox, Brotherton, Knox & Godfrey, by Lisa G. Godfrey, for
plaintiff.
Roberts & D'Agostino, by Daniel D. D'Agostino, for defendants.
LEVINSON, Judge.
Plaintiff Mechanical Systems & Services, Inc., is in the
business of the construction and maintenance of mechanical systems
for commercial customers. The company was founded in 1996 by
Hunter Edwards. Defendants Larry D. Copeland and Rodney L. Gordon
were two of the first employees of Mechanical. As an inducement to
join Mechanical, Edwards offered Copeland and Gordon various
incentives, including a five percent ownership interest in the
company if they remained employed there for two years. On 14 May 1998, Mechanical amended its articles of
incorporation to create two classes of stock. Holders of Class One
stock were given voting rights while holders of Class Two stock
were not. On 1 June 1998, Mechanical's Board of Directors
authorized the issuance of Class Two stock to certain employees for
$1 per share. Mechanical issued fifty shares of Class Two stock,
which allegedly represented a five percent ownership interest, to
both Copeland and Gordon.
Pursuant to authorization from its board of directors,
Mechanical executed a stock restriction agreement with the holders
of Class Two Stock, including Copeland and Gordon. Under the
agreement, a Class Two shareholder, who is also a Mechanical
employee, must sell his shares back to the company upon termination
of employment for $1 per share. The agreement states that
Mechanical has sixty days following termination of employment to
notify an employee-shareholder of the company's intent to
repurchase outstanding shares. The agreement further provides that
it supersedes all prior agreements between the parties.
On 25 March 2002, Copeland and Gordon terminated their
employment to start Carolina Air Solutions, L.L.C., which is also
named as a defendant in the instant case. Several days later,
Mechanical sent a letter to Copeland and Gordon stating that it
intended to repurchase all of their Class Two Shares at $1 per
share as provided in the stock restriction agreement. Copeland and
Gordon each responded via letter indicating that they did not
intend to sell the shares back to Mechanical at $1 per share. On the day that they terminated their employment with
Mechanical, Copeland and Gordon placed a bid for mechanical
contract work at the Jonas Federal Building in Charlotte. The
project involved rebuilding and replacing a defective chiller,
which Gordon had discovered while working as a service technician
for Mechanical. The project was a publicly bid contract, and
Mechanical had previously placed a bid for the work. The trial
court found that the bid placed by Copeland and Gordon did not
incorporate any confidential information obtained during their
tenure at Mechanical.
On 15 May 2002, Mechanical filed a complaint against Carolina
Air, Copeland, and Gordon seeking enforcement of a contractual
right to buy back Copeland and Gordon's stock in Mechanical and
damages for misappropriation of trade secrets, breach of fiduciary
duty, tortious interference with a business relationship, repayment
of advance commissions, and unfair and deceptive trade practices.
On 10 July 2002, defendants filed an answer and counterclaims
seeking production of corporate documents and damages for breach of
contract, misrepresentation, and fraud. Defendants also sought a
monetary award equal to the value of Copeland and Gordon's five
percent ownership interest in Mechanical.
Plaintiff and defendants moved for partial summary judgment.
Following arguments, the trial court entered an order in which it
made the following ruling:
The mandatory sell[-]back at $1 per share is
unconscionable and therefore unenforceable. There is
neither an enforceable buy[-]back provision at fair
market value nor any statutory basis upon which the[c]ourt could order a buy[-]back based on the allegations
in the counterclaims. The parties are left with Copeland
and Gordon owning their Class Two stock on an
unrestricted basis. Defendants are entitled to summary
judgment on all of plaintiff's claims.
The trial court's order did not dispose of defendants' claims
for misrepresentation or fraud. Both parties have taken an appeal
from the trial court's order. For the reasons that follow, we
conclude that the parties' appeals must be dismissed as
interlocutory.
An order “is either interlocutory or the final determination
of the rights of the parties.” N.C.G.S. § 1A-1, Rule 54(a) (2003).
A final judgment “disposes of the cause as to all the parties,
leaving nothing to be judicially determined between them in the
trial court[,]” while an interlocutory order “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.
City of Durham, 231 N.C. 354, 361-62, 57 S.E.2d 377, 381 (1950).
In general, there is no right to appeal from an interlocutory
order. N.C.G.S. § 1A-1, Rule 54(b) (2003); Jeffreys v. Raleigh
Oaks Joint Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252, 253
(1994). However, there are two significant exceptions to this
rule. First, an interlocutory order is immediately appealable
“when the trial court enters 'a final judgment as to one or more
but fewer than all of the claims or parties' and the trial court
certifies in the judgment that there is no just reason to delay the
appeal.” Id. (quoting Rule 54(b)). Second, an interlocutory order
may be immediately appealed if “the order deprives the appellant ofa substantial right which would be jeopardized absent a review
prior to a final determination on the merits.” Southern Uniform
Rentals, Inc. v. Iowa Nat'l Mutual Ins. Co., 90 N.C. App. 738, 740,
370 S.E.2d 76, 78 (1988).
In the instant case, the order appealed from does not dispose
of defendants' claims for misrepresentation and fraud. As these
claims are still pending, the trial court's order is interlocutory.
The trial court has not made a certification pursuant to Rule
54(b), and the instant case does not implicate a substantial right.
Accordingly, we have no alternative except to dismiss the parties'
interlocutory appeals. In addition, we observe that as a part of
its final order, the trial court should expressly state whether
defendants' Class Two shares are voting or non-voting.
Dismissed.
Judges HUNTER and CALABRIA concur.
Report per Rule 30(e).
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