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Resisting the Urge To Give The Trial Court One Last Chance: Dangers of Using N.C. R. Civ. P. 59 To Revisit Final Judgments Entered Without A Trial

Most attorneys have had a least one unfavorable final judgment entered before trial.  The attorney may feel that the trial court completely misunderstood her argument. Perhaps the trial court entered a summary judgment order that missed a key appellate case.  Or perhaps the trial court issued a Rule 12(b)(6) dismissal that appeared inconsistent with an earlier ruling.  The natural inclination is to devise a motion that will give the trial court the opportunity to fix its mistakes without having to take an appeal.  Indeed, a well-used rulebook almost instinctively opens to N.C. R. Civ. P. 59, which allows a trial court to alter or amend a judgment if a Rule 59 motion is filed within 10 days after entry of that judgment.

According to a recent Court of Appeals’ opinion, attorneys should resist the urge to file a Rule 59 motion for anything other than a final judgment entered after a trial–at least if you need the Rule 59 motion to toll your deadline for filing a notice of appeal.  Indeed, improperly relying on a Rule 59 motion to toll a party’s deadline for filing a notice of appeal could have fatal consequences!

In TD Bank v. Eagles Crest, the defendants contended that their filing of a Rule 59 motion, which sought to modify a prior summary judgment order, tolled their 30-day deadline for appealing the summary judgment order.  The Court of Appeals disagreed, stating that “Rule 59 is not a valid means to challenge pretrial orders.”  While TD Bank is unpublished, it relies on Bodie Island Beach Club Ass’n, Inc. v. Wray, 215 N.C. App. 283, 294-95, 716 S.E.2d 67, 77 (2011), a published Court of Appeals opinion holding that Rule 59(a)(8) and (9) speak only to post-trial motions and, therefore, cannot be used to amend a summary judgment order.  Because the TD Bank defendants sought to rely on an “improper” Rule 59 motion to toll their notice of appeal deadline, the Court of Appeals dismissed their appeal as untimely.

The proposition that a Rule 59 motion can only be used in a post-trial situation arises from the text of Rule 59.  For example, Rule 59(a)(1) allows a trial court to grant a new trial based on “any irregularity by which any party was prevented from having a fair trial.”  Subsections 59(a)(2) through (a)(9) contain similar phrases relating to post-trial proceedings. N.C. R. Civ. P. 59(a) (using phrases like “misconduct of the jury,” “manifest disregard of the jury instructions by the jury,” conduct that happened “at trial,” “the verdict,” and “grounds for a new trial.”).  In turn, Rule 59(e), which permits amendments to judgments, arguably incorporates by reference the trial-related criteria contained under Rule 59(a).  (“A motion to alter or amend the judgment under section (a) of this rule shall be served not later than 10 days after entry of judgment.” (emphasis added)).

The Federal Rules of Civil Procedure contain a similar rule allowing a trial court to alter or amend a final judgment.  However, N.C. R. Civ. P. 59 is different from Fed. R. Civ. P. 59 in two key respects. First, Fed. R. Civ. P. 59(e) does not incorporate by reference the new trial grounds listed under Fed. R. Civ. P. 59(a). See Fed. R. Civ. P. 59(e) (“A motion to alter or amend a judgment must be filed no later than 28 days after the entry of the judgment.”). Second, the post-judgment motions that can toll a party’s deadline for filing a notice of appeal in federal court are much broader than in state court.  For example, both a Rule 60 motion and a motion for attorneys’ fees can toll a party’s deadline for filing a notice of appeal in federal court, but not state court.

Perhaps the federal court system places a greater emphasis on giving a trial court “one last chance” to correct mistakes in its final judgment. On the other hand, our state court system may value finality of final judgments over giving parties the opportunity to “pester” a trial court to change its prior order “one last time.”  Indeed, North Carolina cases speak disapprovingly of parties who seek to use improper, post-judgment motions as a substitute for an appeal.

Moreover, in the federal courts, the same district court judge (with the help of judicial law clerks) is assigned to a particular case from start to finish.  With the exception of Business Court cases, our state trial court system generally relies on rotating judges to decide cases.  Liberal post-judgment rules that encouraged litigants to take an additional shot at every final judgment could place an additional burden on our state court system.

At this point, the Supreme Court has not yet decided this issue, although it had an opportunity to do so in 2014.  In Rutherford Plantation, LLC v. The Challenge Golf Grp. of Carolinas, LLC, 225 N.C. App. 79, 86, 737 S.E.2d 409, 414 (2013), Judge Stroud, relying on Bodie, issued a dissenting opinion contending that “a motion under any of the subsections of Rule 59 … is proper only after a trial.” Id. at 88, 737 S.E.2d at 415.  Interestingly, the Rutherford Court of Appeals’ majority opinion completely ignored the Rule 59 tolling issue—and Bodie. On appeal from Judge Stroud’s dissent, an equally divided Supreme Court split 3-3, leaving the decision of the Court of Appeals to stand, but without precedential value.  Rutherford Plantation, LLC v. The Challenge Golf Grp. of the Carolinas, LLC, 367 N.C. 197, 753 S.E.2d 152, 153 (2014).  (Interesting side note: Judge Elmore wrote the Court of Appeals’ majority opinion in Rutherford, but joined Judge Stroud in dismissing the appeal in TD Bank).

Rutherford’s non-voting 7th justice was Justice Cheri Beasley.  Then Judge Beasley concurred with Rutherford’s majority opinion right before she left the Court of Appeals to join the Supreme Court in 2012.  Therefore, she did not participate in the case when it reached the Supreme Court. However, after Rutherford was decided, Chief Justice Sarah Parker retired, with Justice Sam Ervin taking the vacant seat on the Supreme Court.  (Final side note: Justice Ervin also has a history with Rutherford).  Therefore, how this issue might be resolved by the current Supreme Court justices is unknown.

What are your thoughts regarding the scope and intent of Rule 59(e)?  Are you aware of other cases relevant to this issue? Let us know in the comments below.

–Beth Scherer

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