Opinion
No. COA09-1025
Filed 3 August 2010 This case not for publication
Appeal by the State from orders entered 29 April 2009 by Judge Robert H. Hobgood in Wake County Superior Court. Heard in the Court of Appeals 26 January 2010.
Attorney General Roy Cooper, by Assistant Attorney General K. D. Sturgis, for the State. Bailey Dixon, L.L.P., by Charles F. McDarris, M. Denise Stanford, and Adam N. Olls, for defendant-appellee.
Wake County No. 08 CVS 11186.
Because the State failed to demonstrate that the trial court's order affected a substantial right as provided in N.C. Gen. Stat. § 1-277, its appeal must be dismissed.
I. Factual and Procedural Background
Blue Ridge Tank Company, Inc. (Blue Ridge) is a North Carolina corporation, which repairs and alters used liquefied petroleum gas tanks (propane tanks) and sells them to the general public. Prior to his death on 26 August 2005, Roy H. Fouts was the president of Blue Ridge and owned ninety-five percent of its stock. Richard S. Jones, Jr. (Jones) is the personal representative of the estate of Roy H. Fouts. Terry P. Fouts (Terry) is the son of Roy H. Fouts and managed Blue Ridge for approximately eighteen months following the death of his father. On 27 June 2008, the State filed a complaint against defendants seeking recovery pursuant to N.C. Gen. Stat. § 75-1.1 for consumers injured by defendants' unfair or deceptive practices in the sale of unlawfully modified propane tanks. The complaint reveals that Jones, acting as a personal representative of the estate of Roy H. Fouts, entered into a written agreement in which the statute of limitations and other time-based defenses were tolled beginning on July 12, 2007. On 16 June 2008, the tolling agreement expired.
The complaint alleges that Blue Ridge began selling propane tanks "in or before 1988," and that some or all of these propane tanks were unlawfully modified. The State claims that Blue Ridge neglected to comply with N.C. Gen. Stat. § 119-58(a) and 2 N.C.A.C. 38.0701 (adopting by reference the National Fire Protection Association Pamphlet 58), which set forth the applicable national standards for modification of propane tanks.
The complaint alleges that Blue Ridge did not disclose to its customers that "(1) it did not have certification to alter or repair the tanks it sold, (2) it did not comply with applicable laws, regulations and codes when it altered or repaired the tanks, and (3) the tanks it sold could not lawfully be sold in North Carolina." The complaint further alleges that on 31 January 2007, the North Carolina Department of Agriculture and Consumers Services (Department) conducted a site visit at Blue Ridge and determined that "defendants were unlawfully altering and repairing propane tanks and selling them to the public."
On 22 August 2008, Blue Ridge and Terry filed a motion to dismiss and to change venue, arguing that the State's action was time-barred by the applicable statute of limitations (N.C. Gen. Stat. § 75-16.2). On 13 April 2009, after hearing oral arguments from counsel, the trial court partially allowed defendants' motion to dismiss. On 16 April 2009, the State made a motion to reconsider the trial court's ruling on the statute of limitations, or in the alternative, to stay the rulings pending appellate review. On 29 April 2009, the trial court entered orders, which (1) partially granted defendants' motion to dismiss based on the statute of limitations as to any propane tank that was sold on or before 31 January 2003; (2) granted defendants' motion for change of venue to Macon County; and (3) denied the State's motion to reconsider or stay.
The State appeals.
II. Interlocutory Appeal
We must first address the interlocutory nature of the State's appeal.
"`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.'" Edwards v. GE Lighting Systems, Inc., ___ N.C. App. ___, ___, 668 S.E.2d 114, 116 (2008) (quoting Veazey v. Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950)). Appealing an interlocutory order is permitted in only two instances: (1) the trial court makes a Rule 54(b) certification and "enter[s] a final judgment as to one or more but fewer than all of the claims or parties only if there is no just reason for delay and it is so determined in the judgment[,]" N.C.R. Civ. P. 54(b), or (2) "`the order deprives the appellant of a substantial right which would be jeopardized absent a review prior to a final determination on the merits.'" Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252, 253 (1994) (citations omitted). In the instant case, the trial court did not make a Rule 54(b) certification. Our review is thus limited to whether a substantial right is affected.
The State acknowledges that its appeal is interlocutory but contends that the trial court's order partially granting defendants' motion to dismiss based upon the statute of limitations affects a substantial right.
III. Substantial Right
The State argues that its appeal of an interlocutory order should be heard pursuant to N.C. Gen. Stat. §§ 1-277 or 7A-27(d)(1). To be appealable, the State must be able to clearly articulate why the order affects a substantial right as provided in N.C. Gen. Stat. § 1-277.
In support of its contention, the State makes three arguments: (1) the trial court's order imposes a substantial burden on the State by requiring an additional element of proof not otherwise required by law; (2) the right to bring all of the State's related claims about defendants' course of conduct before the same judge and jury; and (3) the right not to face two trials between the same parties based on overlapping facts with the possibility of inconsistent verdicts.
A. Additional Element of Proof
In its first argument, the State contends that the trial court's order will require that: "the Attorney General will have to ascertain and prove the date of sale for each of the approximately 500 tanks illegally modified by the defendants," and this requires the State to prove an additional element not required by law.
In support of its argument, the State cites the case of Hunter v. Guardian Life Ins. Co., 162 N.C. App. 477, 593 S.E.2d 595, disc. review denied, 358 N.C. 543, 599 S.E.2d 49 (2004) for the proposition that "the exact date of the deceptive conduct is not a required element of the plaintiff's proof to avoid being barred by the statute of limitations." We find this case to be inapposite. In Hunter, this Court held that when an unfair and deceptive trade practices claim is based on fraud, the four-year limitations period begins to run when the plaintiff discovers or should have discovered the fraud. Id. at 485, 593 S.E.2d at 601. In Hunter, plaintiffs alleged in their complaint that they had only recently discovered the acts of defendants and could not have discovered, with reasonable diligence, such acts until then. The date plaintiffs cited as discovering the fraud, and the date on which the lawsuit was filed, both fell within the applicable statute of limitations period. This Court held that the allegation was sufficient to withstand a Rule 12(b)(6) motion to dismiss. This Court did not hold, as the State argues, that the exact date of the deceptive conduct is not a required element of the plaintiff's proof to avoid being barred by the statute of limitations.
A statute of limitations defense may be raised in a Rule 12(b)(6) motion to dismiss "if it appears on the face of the complaint that such a statute bars the claim." Hargett v. Holland, 337 N.C. 651, 653, 447 S.E.2d 784, 786 (citations omitted), disc. review denied, 338 N.C. 672, 453 S.E.2d 177 (1994). "Once a defendant raises a statute of limitations defense, the burden of showing that the action was instituted within the prescribed period is on the plaintiff." Horton v. Carolina Medicorp, Inc., 344 N.C. 133, 136, 472 S.E.2d 778, 780 (1996) (citing Pembee Mfg. Corp. v. Cape Fear Constr. Co., 313 N.C. 488, 491, 329 S.E.2d 350, 353 (1985)). "A plaintiff sustains this burden by showing that the relevant statute of limitations has not expired." Id. (citation omitted).
In the instant case, once defendant raised the statute of limitations defense, the burden shifted to the State to prove that its action was instituted within the prescribed period. The State had to prove that the propane tanks were sold within the applicable statute of limitations period. The trial court's order requires the State to prove that its cause of action was commenced within the applicable statute of limitations period; it does not impose an additional element of proof.
The State further argues that the trial court's order creates a "unique harm" because defendants "lost or destroyed their own records showing the dates when the majority of the tanks in issue were sold." The State claims that there are approximately 300 propane tanks for which the date of sale is unknown.
The issue of whether defendants lost or destroyed their own records is not before us on appeal; however, we note that the spoliation doctrine may be applicable before the trial court. "The spoliation doctrine recognizes that where a party fails to produce certain evidence relevant to the litigation, the finder of fact may infer that the party destroyed the evidence because the evidence was harmful to its case." Panos v. Timco Engine Center, Inc., ___ N.C. App. ___, ___, 677 S.E.2d 868, 876 (2009) (citation and internal quotations omitted).
This argument is without merit.
B. Possibility of Inconsistent Verdicts
In its second argument, the State contends that the trial court's order deprived it of the right to bring all of its related claims before the same judge and jury. Specifically, the State claims that its "case about defendants' single, continuous business practice will be arbitrarily split into two pieces which will be tried before different judges and different juries." In its third argument, the State claims that the trial court's order deprived it of the right not to face two trials between the same parties based on overlapping facts with the possibility of inconsistent verdicts. We disagree. Because these two arguments are virtually identical, we address them together.
In Green v. Duke Power Co., our Supreme Court held that the right to avoid a trial is not a substantial right, but avoiding two trials on the same issues may be a substantial right. 305 N.C. 603, 606, 290 S.E.2d 593, 595 (1982). Our Supreme Court established a two-part test, stating that "the possibility of undergoing a second trial affects a substantial right only when the same issues are present in both trials, creating the possibility that a party will be prejudiced by different juries in separate trials rendering inconsistent verdicts on the same factual issue." Id. at 608, 290 S.E.2d at 596. "In other words, not only must the same issues be present in both trials, but it must be shown that a possibility of inconsistent verdicts may result before a substantial right is affected." Moose v. Nissan of Statesville, 115 N.C. App. 423, 426, 444 S.E.2d 694, 697 (1994). Appellate review could be warranted when the right in question "might be lost, prejudiced, or not fully and adequately protected by taking exception to the order's entry." Id. At 427, 444 S.E.2d at 697 (citation omitted).
In the instant case, we first note that the State failed to demand a trial by jury in its complaint. This Court will not speculate as to whether a jury trial will occur in this case, nor as to the possible interpretations a jury would give the evidence. See State v. Whittington, 318 N.C. 114, 123, 347 S.E.2d 403, 408 (1986).
Second, Paragraph 30 of the State's complaint states:
Subsequently, over the course of many months, [North Carolina Department of Agriculture and Consumer Services (NCDACS)] located and inspected approximately 496 tanks sold by defendant Blue Ridge Tank Company. NCDACS condemned the overwhelming majority of those tanks based on their having been unlawfully modified.
This paragraph demonstrates that not every propane tank discovered by the State was determined to be unlawfully modified, and the State never claimed or argued that the same modifications were performed on each propane tank. Third, nowhere in the complaint does the State assert that Blue Ridge actively concealed the modifications on each propane tank, or that Blue Ridge attempted to defraud each consumer.
The State will have to prove what modifications, if any, were performed on each individual propane tank, and whether those modifications were unlawful and deceptive. The State's evidence will accordingly be different for each modified propane tank, and each propane tank must be considered separately, regardless of the applicable statute of limitations period. The State has failed to show how it will be prejudiced by different judges or juries in separate trials rendering inconsistent verdicts on the same factual issue.
The State has failed to demonstrate that the admittedly interlocutory orders of the trial court affect a substantial right pursuant to N.C. Gen. Stat. §§ 1-277 and 7A-27(d)(1). The State's appeal must be dismissed.
DISMISSED.
Judges CALABRIA and HUNTER, JR., ROBERT N. concur.
Report per Rule 30(e).