County of Catawba v. Frye Reg'l Med. Ctr., Inc.

County of Catawba v. Frye Reg’l Med. Ctr., Inc., 2015 NCBC 17.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
CATAWBA COUNTY 11 CVS 2780

COUNTY OF CATAWBA d/b/a
CATAWBA VALLEY MEDICAL
CENTER,

Plaintiff,

v.

FRYE REGIONAL MEDICAL CENTER, ORDER AND OPINION
INC., and TATE SURGERY CENTER,
LLC,

Defendants.

{1} THIS MATTER is before the Court upon Plaintiff County of Catawba’s
(“Plaintiff”) Motion for Revision of Summary Judgment Order on Plaintiff’s Fraud
and Unfair and Deceptive Trade Practices Claims (the “Motion for Revision”) and
Defendants Frye Regional Medical Center, Inc. (“Frye”) and Tate Surgery Center,
LLC’s (“Tate”) (collectively, “Defendants”) Motion to Strike or Disregard Portions of
Reply Brief (the “Motion to Strike”) in the above-captioned case. Having considered
the Motions, affidavits and supporting briefs, the Court hereby DENIES Defendants’
Motion to Strike and DENIES Plaintiff’s Motion for Revision.
Brooks, Pierce, McLendon, Humphrey & Leonard LLP by James C. Adams, II,
Justin N. Outling, and Forrest W. Campbell, Jr. for Plaintiff.

Van Laningham Duncan PLLC by Alan W. Duncan and Poyner & Spruill, LLP by
S. Todd Hemphill, Matthew A. Fisher, and David R. Broyles for Defendants.

Bledsoe, Judge.
I.

FACTUAL AND PROCEDURAL BACKGROUND

{2} The factual and procedural background of this case is recited in detail in
County of Catawba v. Frye Reg’l Med. Ctr., Inc., 2014 NCBC 27 (N.C. Super. Ct. June
26, 2014), www.ncbusinesscourt.net/opinions/2014_NCBC_27.pdf (granting in part
and denying in part Defendants’ Motion for Summary Judgment). The facts
pertinent for purposes of resolving the present Motions are set forth below.
{3} Plaintiff filed the Complaint in this action on September 8, 2011, asserting
claims against Defendants for breach of four separate contracts (claims 1 – 4), fraud
(claim 5), and unfair and deceptive trade practices under N.C.G.S. § 1-75.1 (“UDTP”)
(claim 6). Defendants filed a Motion for Summary Judgment (the “SJ Motion”) on
October 21, 2013, seeking dismissal of each of Plaintiff’s six claims.
{4} On June 27, 2014, this Court (Murphy, J.) issued an Order and Opinion
granting Defendants’ SJ Motion on Plaintiff’s claims for fraud and unfair and
deceptive trade practices (the “SJ Order”). County of Catawba, 2014 NCBC 27 at ¶¶
57, 59. In dismissing those claims, Judge Murphy stated that Plaintiffs had not
brought forward evidence of injury caused by the alleged actions of Defendants. Id.
at ¶¶ 56, 59. Judge Murphy did not dismiss Plaintiff’s fourth claim for relief – for
breach of the parties’ Private Party Settlement Agreement (the “PPSA”) – stating
that “there is a question of material fact as to whether the parties intended the PPSA
to serve as a binding agreement . . . .” Id. at ¶ 48.
{5} On June 30, 2014, Judge Murphy retired from the bench upon expiration of
his term as a Business Court judge (technically, a Special Superior Court Judge for
Complex Business Cases).
{6} After Judge Murphy’s retirement, on July 25, 2014, Defendants moved the
Court to consider Defendants’ contention that Plaintiff’s claim for breach of the PPSA
was barred by the applicable statute of limitations – an issue Defendants argued
Judge Murphy left unresolved in his SJ Order and on which Defendants claimed they
were entitled to a favorable ruling (the “Motion for Consideration”). The Court denied
Defendants’ Motion for Consideration, finding that the Court had the authority to
consider arguments not previously considered by Judge Murphy in his Opinion on the
SJ Motion, but ultimately concluding that summary judgment should not be entered
dismissing Plaintiff’s breach of PPSA claim on statute of limitations grounds. See
County of Catawba v. Frye Reg’l Med. Ctr., Inc., 2014 NCBC 57 (N.C. Super. Ct. Nov.
13, 2014), www.ncbusinesscourt.net/opinions/2014_NCBC_57.pdf.
{7} On October 10, 2014, Plaintiff filed a Motion for Reconsideration of
Summary Judgment Order on Fraud and Unfair Trade Practices Claim under Rule
60(b)(6) of the North Carolina Rules of Civil Procedure seeking reconsideration of
Judge Murphy’s Summary Judgment ruling dismissing Plaintiff’s claims for fraud
and UDTP (the “Motion for Reconsideration”). Plaintiff subsequently withdrew its
Motion for Reconsideration on October 17, 2014.
{8} Twelve days later on October 29, 2014, Plaintiff filed the Motion for Revision
under Rule 54(b). Both the Motion for Reconsideration and the Motion for Revision
seek the same relief – reversal of Judge Murphy’s SJ Order dismissing Plaintiff’s
claims for fraud and UDTP. Defendants filed their Response to Plaintiff’s Motion for
Revision on November 14, 2014. Plaintiff filed its Reply on December 1, 2014,
advancing for the first time that N.C.R.C.P. 63, in combination with N.C.R.C.P. 54(b),
permits the Court to revisit and reverse Judge Murphy’s SJ Order based on what
Plaintiff contends are clear errors of law.
{9} Defendants subsequently filed a Motion to Strike on December 10, 2014,
requesting that Plaintiff’s newly-advanced arguments based on N.C.R.C.P. 63 not be
considered on Plaintiff’s Motion for Revision. Plaintiff responded to the Motion to
Strike on January 2, 2015, and Defendants filed their Reply on January 7, 2015.
{10} The Motions are now ripe for resolution. Pursuant to Rule 15.4(a) of the
Business Court Rules, the Court elects, in its discretion, to decide the Motions
without a hearing. The Court takes each Motion in turn.
II.
ANALYSIS
a. Motion to Strike
{11} Based on the particular procedural facts here, without intending to create
a rule of general application, without prejudice to future challenges under Business
Court Rule 15.7 concerning reply briefs, and in light of the Court’s resolution of the
Motion for Revision, the Court elects, in its discretion, to consider all the arguments
presented in Plaintiff’s Reply Brief in considering Plaintiff’s Motion for Revision.
Accordingly, Defendants’ Motion to Strike is DENIED.
b. Motion for Revision
{12} Plaintiff asks the Court to revise Judge Murphy’s SJ Order under Rules
54(b) and 63 and reverse Judge Murphy’s dismissal of Plaintiff’s fraud and UDTP
claims. (Pl.’s Mot. Revision, p. 1.) In support of its Motion, Plaintiff argues that
Judge Murphy’s retirement vested this Court with the authority to change Judge
Murphy’s SJ Order because (i) Rule 54(b) provides that where, as here, a final
judgment has not been entered, “any order or other form of decision is subject to
revision at any time before the entry of judgment adjudicating all the claims and
rights and liabilities of all the parties” and (ii) according to Plaintiff, Rule 63
authorizes a substitute judge to reconsider an order entered by a judge who has since
retired. (Pl.’s Reply Supp. Mot. Revision, p. 5 (quoting Springs v. City of Charlotte,
730 S.E.2d 803, 805 (N.C. Ct. App. 2012) and In re Expungement for Kearney, 174
N.C. App. 213, 214–15, 620 S.E.2d 276, 277 (2005).).
{13} Our Supreme Court has held that “[t]he well established rule in North
Carolina is that no appeal lies from one Superior Court judge to another; that one
Superior Court judge may not correct another’s errors of law; and that ordinarily one
judge may not modify, overrule, or change the judgment of another Superior Court
judge previously made in the same action.” Calloway v. Ford Motor Co., 281 N.C.
496, 501, 189 S.E.2d 484, 488 (1972).
{14} This Court has previously observed that North Carolina law has long
recognized that “‘[o]ne superior court judge may only modify, overrule, or change the
order of another superior court judge where the original order was (1) interlocutory,
(2) discretionary, and (3) there has been a substantial change of circumstances since
the entry of the prior order.’” DeGorter v. Capitol Bancorp Ltd., 2014 NCBC 62 (N.C.
Super. Ct. Nov. 26, 2014), www.ncbusinesscourt.net/opinions/2014_NCBC_62.pdf
(denying motion for reconsideration) (quoting Crook v. KRC Mgmt. Corp., 206 N.C.
App. 179, 189, 697 S.E.2d 449, 456 (2010)).
{15} Rule 63 does not change this oft-applied North Carolina rule. That Rule
provides, in relevant part, that:
[i]f by reason of death, sickness or other disability, resignation, retirement,
expiration of term, removal from office, or other reason, a judge before whom . . .
a hearing has been held is unable to perform the duties to be performed by the
court under these rules after a . . . hearing is otherwise concluded, then those
duties . . . may be performed . . . by the judge senior in point of continuous service
on the superior court regularly holding the courts of the district.”

{16} Plaintiff essentially contends that Rules 54(b) and 63, taken together, treat
Judge Murphy’s retirement at the expiration of his term of office as an invitation to
this Court to decide Defendants’ SJ Motion anew. The Court disagrees. Not only
would such a reading ignore the North Carolina rule that one Superior Court judge
generally cannot overrule another, but read in context, the Court concludes that Rule
63 is intended for situations where, for example, a Superior Court judge leaves the
bench prior to entering a written order on a matter that has been heard, or before a
matter is remanded from the appellate courts with instructions for further action.
The Court does not read Rule 63 to address the situation here, where Judge Murphy
received the parties’ briefs, held a hearing, issued a written order ruling on the
parties’ arguments and dismissing claims, and then left the bench.
{17} The Court recognizes that its construction of Rule 63 effectively results in a
party losing its right to seek revision of a summary judgment ruling by the trial court
under Rule 54(b) when the issuing Superior Court judge retires or otherwise leaves
the bench prior to the entry of a final judgment.1 In that circumstance, however, the
Court concludes that the party’s redress is with the North Carolina appellate courts
and not with another Superior Court judge.2

1 Whether a substitute Superior Court judge may certify under Rule 54(b) a judgment entered by a

since-retired Superior Court judge as a final judgment “as to one or more but fewer than all of the
claims or parties in an action” based on a determination that “there is no just reason for delay” is not
an issue before the Court or intended to be resolved by the Court’s ruling.

2 The Court also notes that Plaintiff’s interpretation of Rule 63 would create great uncertainty and
confusion whenever a Business Court judge were to resign, retire or depart from the bench by inviting
a potential sea of motions to the newly-assigned Business Court judge from disappointed litigants
seeking to overturn adverse decisions issued in the last weeks of the departing judge’s service on the
bench.
{18} Accordingly, to permit this Court to review the prior order, Plaintiff must
show that Judge Murphy’s SJ Order was interlocutory and discretionary, and that
there has been a substantial change of circumstances since its entry. The parties
agree that the SJ Order here is interlocutory but disagree as to whether the SJ Order
is discretionary and whether there has been a substantial change in circumstances
since the entry of Judge Murphy’s prior order.
{19} First, as to the nature of the SJ Order, the Court of Appeals has held that
an order on a motion for summary judgment involves an issue of law and is not
discretionary. See Iverson v. TM One, Inc., 92 N.C. App. 161, 164, 374 S.E.2d 160,
163 (1988) (“Although the denial of a motion for summary judgment is an
interlocutory order, it is not a discretionary order so as to give a second judge the
power to modify or change it even where there has been a change of circumstances.”);
Whitley’s Electric Serv., Inc. v. Walston, 105 N.C. App. 609, 611, 414 S.E.2d 47, 48
(1992) (“Even though it is interlocutory in terms of appealability, a ruling on a motion
for summary judgment involves an issue of law, not discretion.”).
{20} Plaintiff attempts to salvage its claim by relying on federal case law and
arguing in its Reply Brief that “[t]he discretionary aspect of Judge Murphy’s Order
on Summary Judgment was his decision, ex mero motu, to consider an issue not
raised or briefed by the parties on the cross-motions for summary judgment – the
issue of damages and harm on CVMC’s fraud claim.” (Pl.’s Reply Supp. Mot. Revision,
p. 7.) Plaintiff does not point to any North Carolina cases to support its contention,
however, and the Court fails to see how a trial court’s decision to consider an issue it
raises on its own motion somehow changes the character of the trial court’s resulting
order. North Carolina case law makes clear that a ruling on a motion for summary
judgment is not discretionary, and this Court concludes that it therefore may not
modify, overrule or change Judge Murphy’s prior order.
{21} Even if the SJ Order was discretionary, as Plaintiff contends, the Court
further concludes that Plaintiff has not shown a substantial change in circumstances
since the entry of the SJ Order that would permit the Court to revise the Order. “A
substantial change in circumstances exists if since the entry of the prior order, there
has been an ‘intervention of new facts which bear upon the propriety’ of the previous
order. The burden of showing the change in circumstances is on the party seeking a
modification or reversal of an order previously entered by another judge.” First Fin.
Ins. Co. v. Commercial Coverage, 154 N.C. App. 504, 507, 572 S.E.2d 259, 262 (2002).
{22} Plaintiff contends a substantial change in circumstances exists here because
“the Court, through its ex mero motu decision to consider the issue of damages,
changed the pleading and proof requirements of the parties, and CVMC in particular
without notice or an opportunity to respond and present evidence.” (Pl.’s Reply Supp.
Mot. Revision, p. 7–9.) By its own formulation, however, Plaintiff has asserted that
the alleged change in circumstances occurred prior to the entry of the SJ Order.
Because Plaintiff has failed to identify, as it must, circumstances that have
substantially changed since the entry of Judge Murphy’s Order, Plaintiff has failed
to meet its burden, and the Court finds that it is without authority to modify or revise
the SJ Order. See Taidoc Tech. Corp. v. OK Biotech Co., Ltd., 2014 NCBC 48 ¶ 11
(N.C. Super. Ct. Oct. 9, 2014),
http://www.ncbusinesscourt.net/opinions/2014_NCBC_48.pdf (“‘[W]here the trial
court fails to find that there has been a material change in circumstances, it has no
authority to modify the order of another judge.’”). For this additional reason, the
Court concludes that Plaintiff’s Motion for Revision should be DENIED.
III.
CONCLUSION
{23} For the reasons stated above, the Court DENIES Defendants’ Motion to
Strike and DENIES Plaintiff’s Motion for Revision. All other requested relief is also
DENIED.

SO ORDERED, this the 25th day of February 2015.