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You Can’t Have One Without The Other: Court of Appeals Dismisses Notice of Appeal That Designates Interlocutory Order But Not Final Judgment

The state appellate rules are clear: your notice of appeal must “designate the judgment or order from which appeal is taken.”  N.C. R. App. P. 3(d).  So, if you want to appeal an interlocutory order, you identify it in the notice of appeal, and you have complied with the rule, right?

Apparently not.  In the unpublished opinion of Majerske v. Majerske, the Court of Appeals held that an appellant seeking to challenge an interlocutory order after entry of a final judgment must also designate the final judgment in the notice of appeal to confer appellate jurisdiction.

The holding further complicates an already complicated question in North Carolina appellate practice: what, if anything, must the notice of appeal say in order to confer appellate jurisdiction over a given order?

A party’s ability to challenge an interlocutory order after a final judgment is entered is based on N.C. Gen. Stat. § 1-278, which states:

Upon an appeal from a judgment, the court may review any intermediate order involving the merits and necessarily affecting the judgment.

Id. Our state appellate courts’ first reference to § 1-278 occurred in 1950 when the Supreme Court mentioned in passing that a non-appealable interlocutory order involving the merits and necessarily affecting the judgment could be reviewable on appeal from a final judgment pursuant to § 1-278. Veazey v. City of Durham, 57 S.E.2d 377, 383, 231 N.C. 357, 364 (1950); see also City of Raleigh v. Edwards, 234 N.C. 528, 531, 67 S.E.2d 669, 672 (1951) (dismissing nonappealable interlocutory order, but noting that the appellant could obtain review of the interlocutory order under § 1-278 in any future appeal after entry of a final judgment).

For almost four decades, § 1-278 eluded any substantive attention from our appellate courts. Then, in 1987, the Court of Appeals dismissed a party’s challenge to an earlier-entered interlocutory personal jurisdiction order, appealed after entry of final judgment. Gualtieri v. Burleson, 84 N.C. App. 650, 654-55, 353 S.E.2d 652, 655-56 (1987).  In Gualtieri, the appellant’s notice of appeal designated the final judgment, but did not include a specific reference to the earlier interlocutory order on personal jurisdiction.  The Gualtieri court held that while “§ 1–278 does provide that interlocutory orders affecting a judgment appealed from can be reviewed with the judgment, that statute applies only to interlocutory orders that are not [immediately] appealable.” Id. (citing Veazy).  Because the personal jurisdiction order in Gualtieri had been subject to immediately appellate review under § 1–277(b), the Gualtieri court held that § 1-278 did not apply and dismissed the appeal based on the appellant’s failure to specifically designate the interlocutory order in the notice of appeal.

Surprisingly, neither the text of § 1-278 nor Veazy say that § 1-278 applies only to interlocutory orders that are not immediately appealable.  Substantial right jurisprudence is chaotic enough without having to undertake that analysis to determine whether a notice of appeal is effective under § 1-278 to cover earlier orders.

Regardless, any criticism of the Gualtieri analysis is likely now water under North Carolina’s appellate bridge.  In 1999, the North Carolina Supreme Court in Floyd stated in dicta (citing Gualtieri) that § 1-278 applies only to interlocutory orders which are not immediately appealable. Charles Vernon Floyd, Jr. & Sons, Inc. v. Cape Fear Farm Credit, ACA, 350 N.C. 47, 51, 510 S.E.2d 156, 158-59 (1999), abrogated on other grounds by Dep’t of Transp. v. Rowe, 351 N.C. 172, 521 S.E.2d 707 (1999).

In any event, the Supreme Court in Floyd expressly reaffirmed that an appellant is still “entitled to appellate review” pursuant to § 1-278 of any non-appealable interlocutory order “not specifically mentioned in the notice of appeal” as long as the notice of appeal designates the trial court’s final judgment.

After Floyd, the Court of Appeals provided sage advice on crafting notices of appeal challenging interlocutory orders.

Although nonappealable interlocutory orders can sometimes be reviewed upon appeal of a final judgmentthe better practice without doubt would be to designate each order appealed from in an appellant’s notice of appeal.”

Wells v. Wells, 132 N.C. App. 401, 405, 512 S.E.2d 468, 471 (1999) (emphasis added). In 1999, the Court of Appeals adopted a three-part test for utilizing § 1-278 to exercise review of interlocutory orders not specifically referenced in a party’s notice of appeal from a final judgment, which has been used by the Court of Appeals ever since:

  1. the appellant must have timely objected to the order;
  2. the order must be interlocutory and not immediately appealable; and
  3. the order must have involved the merits and necessarily affected the judgment.

Gaunt v. Pittaway, 135 N.C. App. 442, 445, 520 S.E.2d 603, 606 (1999). See also, e.g., Brooks v. Wal-Mart Stores, Inc., 139 N.C. App. 637, 641, 535 S.E.2d 55, 59 (2000); Yorke v. Novant Health, Inc., 192 N.C. App. 340, 666 S.E.2d 127 (2008).

In short, this brief history lesson explains how interlocutory orders that are not specifically designated in the notice of appeal can still be reviewed by the appellate courts under § 1-278.  Based on this history, you might think that an interlocutory order that is specifically designated in the notice of appeal would be reviewable by the appellate courts on appeal from a final judgment under Appellate Rule 3.

Under Majerske, that is no longer enough.

Majerske is an unpublished family law opinion, but its holding has broad application to all interlocutory appeals from final judgments.  In Majerske the trial court in July 2013 entered an alimony modification order which the appellant did not immediately appeal.  In December 2014, the trial court entered two custody and child support orders “resolving all pending matters in an action”—i.e., the final judgment.

Within 30 days of entry of the December 2014 orders, Plaintiff filed a notice of appeal specifically designating and seeking appellate review of the July 2013 alimony order. Plaintiff’s notice of appeal, however, did not specifically reference the December 2014 orders that constituted the “final judgment” in the trial court.

On appeal, the Plaintiff statement of appellate jurisdiction “acknowledged that the July 2013 alimony modification order was interlocutory when it was entered,” but contended that entry of the December 2014 orders “made the July 2013 alimony modification order a final judgment.” The Court of Appeals called this an incorrect statement of law, explaining that the final judgment is the “one which disposes of the cause as to all parties, leaving nothing to be judicial determined between them in the trial court.” (emphasis in the original).

I appreciate the Court of Appeals’ attempt to clarify the difference between judgments and orders. Generally speaking, there should be one final judgment in every case that arises when the trial court enters an order resolving all the claims as to all parties.  While earlier interlocutory orders become final (and hence appealable) once a final judgment is entered, those interlocutory orders are not the “final judgment.”  Rather, they become part of the final judgment package that the appellate court is entitled to review now that the entire case is finished in the trial court.

However, more than a fair share of appellate opinions reference interlocutory orders as “judgments.”  Indeed, this meshing of the terms “orders” and “judgments” is found in the text of the Appellate Rules. See, e.g., Appellate Rule 3(c)(1) & (2) (stating that a party may file a notice of appeal within “30 days after entry of judgment,” but providing no time period for appealing from entry of an appealable order, leading the appellate courts to assume “judgment” means “judgment or order” here).

My concern regarding Majerske begins with the statement that “when appealing from a final judgment, however, an appellant must reference that judgment in its notice of appeal because an appellate court ordinarily ‘obtains jurisdiction only over the rulings specifically designated in the notice of appeal as the ones from which the appeal is being taken.”  According to the Court of Appeals, because N.C. Gen. Stat. § 7A-27 allows appeals from “any final judgment,” the failure to specifically reference the December 2014 orders/final judgment in Plaintiff’s notice of appeal deprives the appellate courts of jurisdiction under § 7A-27 even though the interlocutory order which the appellant was challenging on appeal is specifically referenced in the notice of appeal.

Majerske relies heavily on the language of § 7A-27 in determining what information the notice of appeal was required to contain. However, in 1989 the General Assembly repealed § 1-279, adopted 1-279.1, and amended several appellate statutes to provide that the Rules of Appellate Procedure—rather than the appellate statutes—governed the time, manner, and effect of noticing an appeal. Under Appellate Rule 3(d) a notice of appeal is sufficient if it designates the judgment or order from which appeal is taken.  While I agree that the better practice is to designate both the final judgment and the interlocutory order in your notice of appeal, it is not clear to me that specifically naming the final judgment in your notice of appeal is a jurisdictional requirement under Appellate Rule 3.  After all, Rule 3 requires that the notice of appeal designate “the judgment or order from which appeal is taken”–not “judgment and order.”

Moreover, our appellate courts have applied a “functional equivalent” analysis to Appellate Rule 3(d)’s requirements. For example, in Smith v. Indep. Life Ins. Co., 43 N.C. App. 269, 273-74, 258 S.E.2d 864, 867 (1979), the Court of Appeals noted that Appellate Rule 3(d)’s Drafting Committee commentary indicated that only the most misleading of errors should led to dismissal of an appeal.  In refusing to dismiss an under-inclusive notice of appeal, the Smith court favorably quoted federal authority stating that the “rule is now well settled that a mistake in designating the judgment, or in designating the part appealed from if only a part is designated, should not result in loss of the appeal as long as the intent to appeal from a specific judgment can be fairly inferred from the notice and the appellee is not mislead by the mistake.”

It is unlikely that the appellee was misled by the notice of appeal in Majerske.   The notice of clearly informed the appellee which order the appellant would be challenging on appeal.  And isn’t it the function of an appellate brief’s statement of appellate jurisdiction to inform the appellate courts why the court has jurisdiction to review that intermediate order (i.e., because a final judgment has now been entered)?  In addition, Majerske moves our appellate courts another step away from the liberal construction of notices of appeal afforded by most other appellate systems.

Majerske, although unpublished, is a warning shot for appellate practitioners. It announces an important new requirement for notices of appeal that practitioners should follow.

If after entry of a final judgment you want to challenge on appeal an earlier entered interlocutory order, you must designate the final judgment in your notice of appeal. The best practice is also to designate the interlocutory order in your notice of appeal. 

What are your thoughts about Majerske?  Ideas on how you would comply with Majerske where the document that constituted the final judgment was not an order of the court—for example, a party’s voluntary dismissal of the remaining claims and parties?  Let me know in the comments below.

–Beth Scherer

h/t to Gary Beaver for bringing this opinion to my attention.

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One Response to "You Can’t Have One Without The Other: Court of Appeals Dismisses Notice of Appeal That Designates Interlocutory Order But Not Final Judgment"

  • Beth Scherer
    May 24, 2017 - 11:07 am Reply

    One other thought: How does Majerske fit in with the functional equivalent doctrine?

    “We may liberally construe a notice of appeal in one of two ways to determine whether it provides jurisdiction . . . . First, a mistake in designating the judgment or in designating the part appealed from if only a part is designated, should not result in loss of the appeal as long as the intent to appeal from a specific judgment can be fairly inferred from the notice and the appellee is not misled by the mistake. Second, if a party technically fails to comply with procedural requirements in filing papers with the court, the court may determine that the party complied with the rule if the party accomplishes the functional equivalent of the requirement.”

    Dafford v. JP Steakhouse LLC, 210 N.C. App. 678, 681, 709 S.E.2d 402, 405 (2011).

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