You CAN Get A Ruling From A Superior Court Judge After Your Case Is Designated To The Business Court

I wrote yesterday about the arbitration aspects of Gaylor, Inc. v. Vizor, LLC, 2015 NCBC 98.

But there is a significant aspect of Business Court procedure addressed in that case which deserved its own post.

It concerns the authority of a non-Business Court Judge (i.e. a regular Superior Court Judge) to make a ruling in a case after the case is designated to the Business Court.

Business Court Rule 15.1 seems to preclude that kind of ruling. It says that:

[a]fter a case has been assigned or designated to the Business Court . . . parties shall seek rulings on all motions in the case from this Court, and not from Superior Court Judges or Clerks in the counties where cases originate."

I''ve written before about getting a ruling from a Superior Court Judge after designation to the Business Court, but that post was based on emails from two of the Business Court Judges' law clerks and the Business Court TCA (for the many otolaryngologists* who read this blog and who may not know what a TCA is, it is a "Trial Court Administrator," who is charged with managing civil cases as they move through the judicial system).  I cautioned then against relying too heavily on the statements of persons who were not Judges.

But now you've got the Business Court's interpretation of its Rules straight from a Judge.  Here's what Judge Bledsoe said In the Vizor decision:

[w]here, as here, a Notice of Designation requesting designation of a matter as a complex business  case has been filed after a motion has been calendared for hearing before the presiding Superior Court Judge of the county in which the action is pending, the policy of the Business Court has been that the judge before whom the matter was calendared may, in his or her discretion, elect to rule on the motion or defer resolution of the motion to the Business Court judge assigned to the case.

Op. ¶12 & n.4 (emphasis added).

If this practice now bears Business Court approval, it still won't be an easy trick to pull off.  Even if you can get a motion calendared for hearing in Superior Court before the designation of the case to the Business Court, my guess is that most Superior Court Judges probably will decide not to rule in a case that is headed to the Business Court.

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*Well, there really is at least one.  And if you don't know what an otolaryngologist is, it is an ear, nose, and throat doctor.

 

 

Complying With The Rules Is Important In The Business Court

There's an ominous sounding sentence in a Business Court decision this week:

A party practicing before the North Carolina Business Court should take the deadlines imposed by its orders and the rules of practice very seriously.

Estate of Capps v. Blondeau. 2014 NCBC 24 at 36.  It is so ominous sounding that you would expect that sentence to be followed by punishment of the non-compliant party.  But Judge Jolly exercised mercy over the party which hadn't followed the rules.

What was the rule violation?  Two of the Defendants in the case (the Knights) hadn't filed their brief in support of their motion for summary judgment until more than 24 hours after the filing deadline set by the Court in its Case Management Order (requires all motions to be accompanied by a brief).  Also, the Knights never filed with the Court the exhibits referenced in their brief (BCR 15.5 requires a party to provide documents supporting allegations of fact in a brief).  Adding to their disregard of the Business Court Rules, the Knights never filed their Motion with the Wake County Superior Court (required by BCR 8.1)and they did not pay the required twenty dollar motion fee (dictated by N.C. Gen. Stat. § 7A-305(f)).

Plaintiffs demanded that the Business Court summarily deny the Knights' Motion for Summary Judgment due to the rules violations, which is permitted under BCR 15.11.  That rule says that:

[t]he failure to file a brief or response within the time specified in [BCR 15] shall constitute a waiver of the right thereafter to file such a brief or response.  . . .   A motion unaccompanied by a required brief may, in the discretion of the Court, be summarily denied.

Judge Jolly, in his discretion, opted to consider the Knights' Motion for Summary Judgment notwithstanding the Rules violations.  He referenced an appellate court decision -- Hammonds v. Lumbee River Elec. Membership Corp., 178 N.C. App. 1, 15 (2006) -- as support for his holding that:

[i]n deciding whether to dismiss a filing for procedural error, courts should weigh the impact of the rule violations on the non- violating party and the importance of upholding the integrity of the rules against the broader public policy favoring the resolution of disputes on the merits.

Op. Par. 37.  He noted the "relatively short delay" in meeting the deadline and the "relatively minor impact on Plaintiffs due to the delay."  Op. 37.

But after all that procedural hoopla, Judge Jolly went ahead, considered the motion for summary judgment and denied it without much discussion. 

So the only valuable lesson out of this decision is to follow the Business Court Rules.  A complete set of thos Rules is available here.

Harvey v. Schwartz, April 14, 2009 (Diaz)(unpublished)

After a case is designated to the Business Court, the Clerk of Court in the county in which the case is pending no longer has the authority to grant a motion for extension of time.  In this case, per Business Court Rule 9.2, the Court struck the Order entered by the Clerk granting an extension of time and directed the party to re-file a motion in compliance with the rules of the Court.

Order

Estwanik v. Gudeman, March 6, 2009 (Diaz)(unpublished)

The Court struck an Entry of Default which had been signed by an assistant clerk of court in the county where the case had been filed.  The entry of default was signed after the case was designated to the Business Court.  Judge Diaz cited Business Court Rule 15.1, stating:

Because the above-captioned cases are Business Court cases, the Clerk of Court had no authority to enter this Order and Entry of Default. See BCR 15.1 (“After a case has been assigned or designated to the Business Court, and for as long as the case is pending in [the Business] Court, parties shall seek rulings on all motions in the case from [the Business] Court, and not from Superior Court Judges or Clerks in the counties where the cases originate.”).

Full Opinion

Medicus Healthcare, LLC v. Nazemetz, February 25, 2009 (Diaz)(unpublished)

The Court struck Defendants' Motion for Summary Judgment because it violated Business Court Rule 15.2, which requires that "[]ll motions, unless made orally during a hearing or trial, . . . be in paper writing or electronic form and . . . be accompanied by a brief . . . set out in a separate paper."  Defendants had incorporated their Motion and the arguments in support of the Motion into a single filing. 

The Court granted leave to refile the Motion, but observed that it had been filed before the close of discovery, and stated that "[w]hile it is true that, pursuant to Rule 56, '[a] party seeking to recover upon a claim . . . may, at any time after the expiration of 30 days from the commencement of the action . . . move with or without supporting affidavits for a summary judgment in his favor[,]' N.C. R. Civ. P. 56(a) (2007), a 'motion filed at the outset of a case that is not limited to purely legal issues should be carefully scrutinized because at least some discovery is usually warranted where factual contentions are in dispute,' 2 G. Gray Wilson, North Carolina Civil Procedure § 56-7 (3d ed. 2007)."

The Court said that it would "carefully scrutinize any such Motion to determine whether it should be heard before the close of discovery."

Full Opinion

Camper v. Brooks, October 27, 2008 (Diaz)(unpublished)

The parties failed to submit their designation of mediator to the Court by the deadline provided for in the Case Management Order, and also after an inquiry from the Court.  The Court held that the parties had as a result "forfeited their right" to select a mediator. 

The parties were also delinquent in filing their good faith estimate of costs.  The Court ordered that document to be filed by a set date, and held that if the parties did not complete that filing that they would be required to show cause why they should not be held in contempt.

Full Opinion

Velocity Fiber Broadband, LLC v. Lang Management, Inc., Sept. 10, 2007 (Jolly)(unpublished)

Business Court Rule 9.2 says that "the movant shall have a good faith basis for requesting any . . . extension of time and, except in extraordinary cases, the movant shall first consult with any opposing party and reflect that party's position in the motion and indicate whether the opposing party wishes to be heard on the motion."

If you don't follow the Rules, you aren't going to get your extension.  In Velocity Fiber Broadband, LLC v. Lang Management, Inc., the required consultation hadn't occurred.  Judge Jolly, in denying the plaintiff's motion to respond to a counterclaim, stated "notwithstanding that the . . . reporting requirements of Rule 9.2 of the Business Court Rules may be viewed by some as merely a technicality and not substantive, the requirements are clear and simple, and compliance with them promotes efficiency in case administration by the court and counsel."

Full Opinion

Other cases denying a Motion for Extension of Time for the same reason are TelSouth Solutions, Inc. v. Voyss Liquidation Co., October 17, 2008 (Diaz)(unpublished); Cape Fear Realty, LLC v. Cape Fear Trading Group, LLC, November 12, 2008 (Jolly)(unpublished); and A-1 Pavement Marking, LLC v. APMI Corp.January 2, 2009 (Diaz)(unpublished).

Rules Are Rules, Make Sure To Comply With Those Of The Business Court

In North Carolina Superior Court, there is no civil procedure tradition more respected than the courtesy of a thirty day extension of time to answer a Complaint or to respond to discovery.  Like it or not, motions seeking the extra month are granted almost without exception, and are so routine that the requesting party usually doesn't even bother to ask for the consent of opposing counsel.

The same courtesy applies in the Business Court, but there are rules to be followed.  Business Court Rule 9.2 says that "the movant shall have a good faith basis for requesting any such extension of time and, except in extraordinary cases, the movant shall first consult with any opposing party and reflect that party's position in the motion and indicate whether the opposing party wishes to be heard on the motion."

If you don't follow the Rules, you aren't going to get your extension. That's the message of a short ruling today in Velocity Fiber Broadband, LLC v. Lang Management, Inc., in which the required consultation hadn't occurred.  Judge Jolly, in denying the plaintiff's motion to respond to a counterclaim, stated "notwithstanding that the . . . reporting requirements of Rule 9.2 of the Business Court Rules may be viewed by some as merely a technicality and not substantive, the requirements are clear and simple, and compliance with them promotes efficiency in case administration by the court and counsel."

There are hyperlinked Business Court Rules available on the sidebar of this blog.  By hyperlinked, I mean that you can click on a section of the table of contents of the Rules and you'll get taken to the particular Rule, and then you can click back again.

Wicks v. Moody, May 14, 2008 (Tennille)(unpublished)

Compliance with the meet and confer obligations contained in Business Court Rule 18.6 is essential before the filing of a discovery motion.

In this case, the Court denied the Plaintiff's Motion for a Protective Order because of counsel's failure to comply with the certification requirements of that Rule.  Judge Tennille held that "this reason alone is sufficient for the Court to deny Plaintiff's motion."

Full Opinion

Gateway Management Services, Inc. v. Advanced Lubrication Technology, Inc., 2008 NCBC 11 (N.C. Super. Ct. May 5, 2008)(Tennille)

When you have an additional three days to respond to a filing served by mail, and the response period ends on a weekend or holiday, this is how you calculate the response period:

"The correct formula for the computation of a time period during which a filing is required is as follows: number of days allowed under applicable statute + three days under Rule 6(e) + any weekend or holiday under Rule 6(a). The Court notes that the three days under Rule 6(e) is added to the end of the time period allowed by statute regardless of whether that time period ends on a Saturday, Sunday, or legal holiday. It is at the end of the additional three days that Rule 6(a) applies."

Also, when the response is due to a document which has been e-filed, but the party who has to respond has not yet registered to e-file and no Order requiring e-filing has yet been entered, the count for the response starts when the party from which the response is due is served pursuant to North Carolina Rule of Civil Procedure 5(b). If an Order has been entered requiring e-filing, however, service will be complete when the party filing the document to which the response is due receives notice of its own e-filing.  Business Court Rule 6.4 says that an electronic filing is complete when the person filing the paper gets a Notice of Electronic Filing.  Business Court Rule 6.5 says that e-filing is an "adequate and timely substitute for service" under the Rules of Civil Procedure.

It makes no difference in this situation if the party from whom the response is due is unaware of the e-filed document.  The Court held that "all parties have an affirmative duty to check the status of cases they have in front of the Business Court before they are registered to e-file as the Court’s filings are all made via the electronic system." 

Full Opinion