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Change to Automatic Stay Statute Portends Future Appellate Rules Fixes

The “automatic stay” statute seems simple enough at first glance.  “When an appeal is perfected as provided by this Article it stays all further proceedings in the court below upon the judgment appealed from, or upon the matter embraced therein; but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from.”  N.C. Gen. Stat. § 1-294.  The idea is that the trial court and appellate court should not attempt to exercise concurrent jurisdiction over the same questions, but the trial court can move forward on unrelated matters.  Instead, for the questions on appeal, the trial court is “functus officio”–its work is done for now.

There are many instances, however, where the trial court really ought to be able to move forward, instead of waiting a year and a half for the appellate process to play out.  What about an unresolved motion for new trial or for attorneys’ fees for the prevailing party?  Should the trial court be able to conduct contempt proceedings for non-compliance with an appealed order?  What if the order on appeal should be changed or clarified under Rule 60?  Our current system does not have systematic, clean answers to these questions.  (Click here for a more detailed discussion of these problems.)

Last week, we took a giant step forward towards establishing predictable and efficient solutions to these questions.  Many months (years?) of planning by the Appellate Practice Section of the NCBA and the Appellate Rules Committee culminated in the Governor’s signing of House Bill 79.  The bill makes a simple change to Section 1-294.  After “therein,” the statute now includes the phrase, “unless otherwise provided by the Rules of Appellate Procedure.”

To be sure, the statutory change does not, by itself, solve the conundrums caused by a broad interpretation of the automatic stay statute.  But the bill does empower the Supreme Court of North Carolina to promulgate rules-based solutions.  Hopefully, within a year or two, we will have clear, easily accessible roadmaps set forth in the appellate rules for each of the above questions, with the flexibility to respond to new problems by rule as they arise.

I am incredibly grateful to Kim Crouch of the NCBA and to the bill’s sponsors for their service to the bar.  This small statutory change will pay dividends for years to come.

If an issue comes up in your practice related to the automatic stay that could be addressed by rule, please get in touch with a member of the Appellate Rules Committee or leave a comment below.

–Matt Leerberg

 

 

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