In ALC Manufacturing, Inc., v. J. Streicher & Co., 2020 NCBC 55, the Business Court dispatched a case that started off with bad timing, and ended that way too.

Plaintiff claimed defendant BBP Bandenia, PLC breached a settlement agreement under which it, and other parties, owed plaintiff $850,000. Plaintiff brought suit over non-payment, and while Bandenia was served it neither filed a response nor appeared in a Mecklenburg Superior Court case designated to the Business Court. Id. at ¶¶ 3, 5. The Business Court entered a default judgment on June 4, 2019.

Timing Issue No. 1: Bandenia waited seven months and thirteen days to move to set aside the default.

The Court found the motion was not brought “within a reasonable time” under Rule 60(b), but also noted that it was not the appropriate procedural vehicle in any event.  Bandenia’s challenge that the underlying settlement lacked consideration should have been advanced as “a properly-noticed appeal, not a motion under Rule 60(b). Id. at ¶ 10. The Court entered a final judgment on May 20, 2020 and that was the starting point for . . .

Timing Issue No. 2: Bandenia did not timely file a Notice of Appeal in the superior court of the county of origin.

Instead, defendant e-filed with the Business Court a Notice of Appeal of the May 20 judgment to the North Carolina Court of Appeals. Id. at ¶ 12. This time around, the June 19 notice could have been calendar timely – if it had been filed in the correct trial court and noticed to the correct appellate court. North Carolina appellate courts have viewed these issues with a reasonably strict lens. See, e.g., Taylor v. City of Lenoir 536 S.E.2d 848, 850 (N.C. Ct. App. 2000) (“The time deadlines set out in our appellate rules are important and should be followed.”).

The Business Court first noted its jurisdiction to entertain plaintiff’s motion to dismiss Bandenia’s notice of appeal because no appeal had yet been docketed in an appellate court. See Carter v. Clements Walker PLLC, 2014 NCBC 12. As the Court explained, “[U]ntil an appeal is docketed, the trial court retains jurisdiction to decide a motion to dismiss a notice of appeal as improperly filed.” 2020 NCBC at ¶ 19.

In granting plaintiff’s motion to dismiss Bandenia’s notice of appeal, the Business Court explained the errant geography of Bandenia’s appeal succinctly, as a cautionary note to practitioners before the Court.  Id. at ¶¶ 21-25, 27-29.

First, Rule 3(a) of the North Carolina Rules of Appellate Procedure required the Notice of Appeal to be filed in the originating court – Mecklenburg County Superior Court:

“Any party entitled by law to appeal from a judgment or order of a superior or district court rendered in a civil action or special proceeding may take appeal by filing notice of appeal with the clerk of superior court and serving copies thereof upon all other parties within the time prescribed by subsection (c) of this rule.

Perhaps because Rule 3(a) is not a model of clarity for cases arising from the Business Court, the Court’s rules offer clarification. North Carolina Business Court Rule 14.1 specifies that the Business Court is not the filing destination:

“An appeal from an order or judgment of the Court is taken by filing a written notice of appeal with the Clerk of Superior Court in the county of venue.

Second, as required by N.C. Gen. Stat. § 7A-27(a)(2), a direct appeal of a Business Court judgment in a mandatory designation case lies with the North Carolina Supreme Court for all cases designated to the Business Court after October 1, 2014. 2020 NCBC at ¶ 27.

The Court previously has concluded that while an appellate court “may have discretion to excuse a notice of appeal’s noncompliance with Appellate Rule 3,” the Business Court believes it does not have such leeway. Id. at ¶ 29 (citing Zloop, Inc. v. Parker Poe Adams & Bernstein, LLP, 2018 NCBC 39). Thus, litigants who see an opponent take a wrong turn on either of these issues may wish to consider prompt motions to dismiss in the Business Court.

Our colleagues Beth Scherer and Matt Leerberg, over at the North Carolina Appellate Practice Blog, discuss both of these pitfalls in their excellent treatise – North Carolina Appellate Practice and Procedure, § 33.05 (Special Considerations When Noticing Appeal in the Business Court) North Carolina Appellate Practice and Procedure (2019).

Takeaways:

• Appeals of Business Court judgments can only be filed in the county of venue.
• Appeals from Business Court cases with mandatory designations after October 1, 2014 lie with the North Carolina Supreme Court.

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