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Does Res Judicata Raise a Substantial Right? Depends.

There is perhaps no topic more frequently covered on this blog than that of the appeal of an interlocutory order and the substantial rights that will permit such an appeal to be immediately reviewed by the appellate court.  That this is a recurring topic on the blog is unsurprising, as it is an recurring issue addressed by North Carolina’s appellate opinions.  True to form, the issue was addressed by the Court of Appeals in its opinion in Brown v. Thompson released this morning.  The appellant there sought immediate review of the denial of his summary judgment motion, arguing that the order affected a substatial right because his motion was based on the principles of res judicata.  He was moving to dismiss a complaint against him in Superior Court that contained claims of defamation, intentional and negligent infliction or emotional distress, and sexual harrassment.  He argued that a “Complaint for No-Contact Order for Stalking or Nonconsensual Sexual Contact,” filed by the planitiff against him but dismissed by the district court for failure to prosecute, constituted res judicata of the claims in Planitiff’s Superior Court action.

The Court of Appeals acknowledged that the denial of a motion based on the defense of res judicata may affect a substantial right and provide an avenue for immediate appeal.  But not always.  Whether or not it does depends on whether if the case were to go forward, a party would twice have to defend against the same claim by the same plaintiff or where the possibility exists of inconsistent verdicts if the case proceeds to trial.  Absent that actual risk, simply having raised the defense of res judicata as a basis for a motion will not create substantial right jurisdiction over an order denying that motion.

In Brown, the Court determined that no such risk existed.  The district court’s dismissal for failure to prosecute the complaint for a no-contact order had not determined the underlying issues that would raise the specter of an inconsistent verdict in the present case.  Further, the issues raised and the relief sought in that complaint were significantly narrower than those in the Superior Court action.  Thus, the Court held that the doctrine of res judicata did not raise a substantial right and the appeal was dismissed as impermissibly interlocutory.

Of course, Brown was not the only case in today opinions addressing the substantial right issue.  In Lake v. State Health Plan for Teachers and State Employees, the Court of Appeals held that the grant of partial summary judgment to the plaintiffs, while ordinarily not immediately appealable because it did not dispose of the entire case, was appealable in this instance because it operated to prevent the State from enforcing its statutes and imposed economic impacts on the state budget.  As the Supreme Court of North Carolina has previously held, a defendant’s right to carry out its statutory duties is substantial.  Further, the Court of Appeals has held that the protection of the stability of the state’s budget is also a substantial right.  Thus, the Lake Court asserted jurisdiction over the partial summary judgment grant.

–Patrick Kane

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One Response to "Does Res Judicata Raise a Substantial Right? Depends."

  • Capree : Standing for justice,if not you will fall for anything!!!
    March 8, 2019 - 12:26 pm Reply

    Interesting Article. Seems like Res judicata does not apply when there is a change in circumstances
    A new Court of Appeals opinion, Automotive Group, LLC v. A-1 Charlotte, LLC, COA13-608 (N.C. App. Nov. 19, 2013), seems to be at odds with this line of cases. Automotive Group involved a one-year commercial lease with a renewal provision requiring 180 days’ notice. The tenant failed to give timely notice of renewal, but nevertheless stayed on after the year ended. Significantly, the landlord accepted the tenant’s rent payment for the month immediately following the expiration of the lease term.


    …..”The Court of Appeals affirmed. The Court recognized that under res judicata principles, a final judgment on the merits in one action precludes another lawsuit based on the same cause of action between the same parties or their privies. The Court, however, determined that there had been a change in circumstances, preventing application of res judicata, because the landlord did not accept a rent payment from the tenant after the dismissal of the first lawsuit….”

    Source: https://greensborolaw.com/new-opinion-involving-landlords-acceptance-of-rent-from-holdover-tenant-muddies-water/

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