Just because you disagree with a ruling of a trial judge does not mean you get to appeal right away. This is true even if both sides to the appeal think the time is now. In the recent decision of Paradigm Consultants v. Builders Mutual, the North Carolina Court of Appeals decided that an order denying summary judgment to both parties, on claims regarding the carrier's duty to defend another suit, did not affect a substantial right and thus the appeal was not timely.
Paradigm sued their customers the Raymonds to recover amounts it claimed was due for construction work. The Raymonds counterclaimed, alleging construction defects under both contract and tort theories. Paradigm tendered defense of the counterclaim to its insurer Builders Mutual, which refused to defend Paradigm because it claimed not such a defense was not owed under the policy. After that, Paradigm settled up with the Raymonds on various terms, including an amount of damages that would be owed from Paradigm to the Raymonds for the defects. The agreement required Paradigm to pursue coverage litigation against Builders Mutual, to be funded by the Raymonds. Paradigm then filed this action against its insurer.
At the summary judgment stage, the trial court ruled that neither party was entitled to summary judgment on the coverage issues, though it did grant summary judgment on another issue. Both parties appealed, alleging that prior case law stood for the proposition that the duty to defend another action affects a substantial right and thus denial of summary judgment on that issue justifies an immediate appeal. In ruling otherwise, the Court of Appeals emphasized that the trial judge had not certified his ruling for immediate appeal pursuant to Rule 54. In addition, the Court of Appeals decided that there was no immediacy to the appeal since, unlike in previous cases, the underlying case about which the duty to defend was being litigated was no longer pending - it had been settled prior to the filing of the coverage litigation, and thus there was no good reason to expedite an appeal before final judgment.
Practice point - if the parties to a dispute want to pursue coverage litigation as a resolution to that dispute, particularly as a team, the parties had best not officially end the underlying litigation prior to filing the coverage complaint, so that the legal issue on coverage can be submitted to the appellate courts more quickly.
