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NO. COA98-1419
NORTH CAROLINA COURT OF APPEALS
Filed:  5 October  1999
THE COUNTRY CLUB OF JOHNSTON COUNTY, INC.,
Plaintiff,
v.
UNITED STATES FIDELITY AND GUARANTY COMPANY,
Defendant.
Appeal by defendant from order entered  2 September  1998 by
Judge Robert L. Farmer in Johnston County Superior Court.      Heard
in the Court of Appeals  26 August  1999.
Armstrong & Armstrong, P.A., by L. Lamar Armstrong,
Jr., and W. Brian Howell, P.A., by W. Brian Howell, for
plaintiff-appellee.
Wilson & Iseman, L.L.P., by G. Gray Wilson and
Elizabeth Horton, for defendant-appellant.
JOHN, Judge.
Defendant United States Fidelity and Guaranty Company
(USF&G) purports to appeal the trial court’s order denying its
motion to dismiss pursuant to N.C.G.S.  §  1A-1, Rule  12(b)(1) and
Rule  12(b)(6)  (1990)  (Rule  12(b)(1) and Rule  12(b)(6)).
Defendant’s appeal is interlocutory and must be dismissed.
In view of our disposition and the extensive factual
rendition in the first of now three appeals to this Court by the
parties, see U.S. Fidelity & Guaranty Co. v. Country Club of
Johnston County,  119 N.C. App.  365,  367-70,  458 S.E.2d  734,  736-
38, disc. review denied,  341 N.C.  656,  462 S.E.2d  527  (1995)
(USF&G I), and U.S. Fidelity and Guar. Co. v. Country Club of
Johnston Co.,  126 N.C. App.  633,  491 S.E.2d  569  (unpublished




opinion), disc. review    denied,  347 N.C.  141,  492 S.E.2d  38
(1997)  (USF&G II),    lengthy exposition of the underlying facts is
unnecessary herein.    Pertinent procedural and factual history is
as follows:
After consuming several alcoholic drinks at the premises of
plaintiff Country Club of Johnston County  (the Club) on  18
October  1991, a member of the Club was operating an automobile
involved in a fatal collision.    On the date of the collision,
USF&G insured the Club under a master insurance policy  (the
policy) including commercial general liability coverage.    Suit
was instituted in May  1993 against both the member and the Club
in Wake County Superior Court.    See Sanders et al. v. Upton,  93
CVS  4415  (Sanders).    USF&G defended Sanders on behalf of the Club
under a reservation of rights regarding coverage by the policy
and subsequently brokered a settlement.
During the settlement phase of Sanders, USF&G filed a
declaratory judgment action seeking judicial determination that
it was not obligated to defend or afford coverage to the Club
under the policy because of an alcohol liability exclusion
(alcohol exclusion) therein related to serving of alcohol by the
Club.    The Club filed answer and counterclaim, asserting coverage
“under the  [p]olicy  .  .  . and all attendant circumstances.”    In
that suit, the trial court granted summary judgment in favor of
USF&G and the Club thereafter voluntarily dismissed its
counterclaim and appealed.
Two separate opinions were subsequently rendered by this
Court.    The first provided that the policy excluded coverage,




but, upon noting that  “[t]he doctrines of waiver and estoppel may
.  .  . apply to disallow  [USF&G] from denying coverage,” USF&G I,
119 N.C. App. at  374,  458 S.E.2d at  740, remanded to the trial
court for resolution of those issues, id. at  375,  458 S.E.2d at
741.
Following remand, USF&G appealed the trial court’s grant of
the Club’s subsequent summary judgment motion, contending, inter
alia, that
(I) USF&G did not, as a matter of law, waive
the liquor liability exclusion;  [and that]
(II) USF&G is not, as a matter of law,
estopped from asserting the liquor liability
exclusion.
USF&G II,  126 N.C. App.  633,  491 S.E.2d  569.    In our second
opinion involving the parties, we affirmed the trial court’s
ruling that, by virtue of its actions and those of its agents,
USF&G had waived its right to rely upon the alcohol exclusion,
and                                                                   “conclude[d that] USF&G’s remaining contentions  [we]re
wholly without merit.”    Id.
On  23 January  1995, prior to our decision in USF&G I, the
Club instituted the instant proceeding against USF&G alleging, in
an amended complaint, bad faith, tortious breach of contract,
unfair claim settlement practices, and unfair and deceptive trade
acts or practices.    The case lay dormant while the appeals in
USF&G I and USF&G II were pending.    However, USF&G filed Rule
12(b)(1) and Rule  12(b)(6) motions to dismiss  5 November  1997,
which motions were denied by the trial court  3 September  1998.
USF&G filed timely notice of appeal, and the Club moved to
dismiss the appeal as interlocutory  15 March  1999.




An order of the trial court
is interlocutory if it is made during the
pendency of an action and does not dispose of
the case but requires further action by the
trial court in order to finally determine the
entire controversy.  .  .                                                . There is generally
no right to appeal an interlocutory order.
Howerton v. Grace Hospital, Inc.,  124 N.C. App.  199,  201,  476
S.E.2d  440,  442  (1996)  (citations omitted).
Withholding appeal of denial of summary relief at the early
stages of litigation in the trial court is generally favored.
See Waters v. Personnel, Inc.,  294 N.C.  200,  209,  240 S.E.2d  338,
344  (1978)  (upon denial of early appeal, the  “trial court and the
parties will be given an opportunity to develop more fully the
facts in  .  .  . dispute and to put the merits of the claim in
bolder relief”; delayed appeal  “w[ill] give the reviewing court a
more complete picture, factually and legally, of the entire
controversy between the parties”).    Indeed, the rule prohibiting
interlocutory appeals
prevent[s] fragmentary, premature and
unnecessary appeals by permitting the trial
court to bring the case to final judgment
before it is presented to the appellate
courts.
Fraser v. Di Santi,  75 N.C. App.  654,  655,  331 S.E.2d  217,  218,
disc. review denied,  315 N.C.  183,  337 S.E.2d  856  (1985)
(citation omitted).
As our Supreme Court has noted,
[t]here is no more effective way to
procrastinate the administration of justice
than that of bringing cases to an appellate
court piecemeal through the medium of
successive appeals from intermediate orders.
Veazey v. Durham,  231 N.C.  357,  363,  57 S.E.2d  377,  382  (1950).




Notwithstanding, interlocutory orders may be appealed in two
instances:
first, where there has been a final
determination of at least one claim, and the
trial court certifies there is no just reason
to delay the appeal,  [N.C.G.S.  §  1A-1, Rule
54(b)  (1990)  (Rule  54(b))];    and second, if
delaying the appeal would prejudice a
“substantial right.”
Liggett Group v. Sunas,  113 N.C. App.  19,  23-24,  437 S.E.2d  674,
677  (1993)  (citations omitted).    In either instance,  “it is the
appellant’s burden to present appropriate grounds for this
Court’s acceptance of an interlocutory appeal,” Jeffreys v.
Raleigh Oaks Joint Venture,  115 N.C. App.  377,  379,  444 S.E.2d
252,  253  (1994), and  “not the duty of this Court to construct
arguments for or find support for appellant’s right to appeal,”
id. at  380,  444 S.E.2d at  254.
In the case sub judice, the trial court’s order denying
USF&G’s motion to dismiss is interlocutory in that it  “does not
dispose of the case but requires further action by the trial
court in order to finally determine the entire controversy.”
Howerton,  124 N.C. App. at  201,  476 S.E.2d at  442.    Moreover, as
in Liggett,  “the court below made no certification  [under Rule
54(b) and] the first avenue of appeal is closed” to USF&G.
Liggett,  113 N.C. App. at  24,  437 S.E.2d at  677.
Under the second  “avenue,” the substantial right exception,
see N.C.G.S.  §  1-277(a)  (1996) and N.C.G.S.  §  7A-27(d)(1)  (1995),
an otherwise interlocutory order may be appealed upon a showing
by the appellant that:                                                    (1) the order affects a right that is
indeed  “substantial,” and  (2)  “enforcement of that right, absent




immediate appeal,  [will] be  ‘lost, prejudiced or be less than
adequately protected by exception to entry of the interlocutory
order.’”    First Atl. Mgmt. Corp. v. Dunlea Realty Co.,  131 N.C.
App.  242,  250,  507 S.E.2d  56,  62  (1998)  (quoting J & B Slurry
Seal Co. v. Mid-South Aviation, Inc.,  88 N.C. App.  1,  6,  362
S.E.2d  812,  815  (1987)).    Nonetheless, the substantial right test
is more easily stated than applied  [and]  [i]t
is usually necessary to resolve the question
in each case by considering the particular
facts of that case and the procedural context
in which the order from which appeal is
sought was entered.
Waters,  294 N.C. at  208,  240 S.E.2d at  343.
In any event, it is well-settled that
[d]enial of a motion to dismiss under Rule
12(b)(1) for lack of subject matter
jurisdiction is interlocutory  .  .  ., as is
the denial of a Rule  12(b)(6) motion for
failure to state a claim for which relief can
be granted.  .  .                                                        .    Neither affects a
substantial right and neither is immediately
appealable.
Burlington Industries, Inc. v. Richmond County,  90 N.C. App.  577,
579,  369 S.E.2d  119,  121  (1988); see also State v. School,  299
N.C.  351,  355,  261 S.E.2d  908,  911  (1980)  (denial of motion to
dismiss generally does not deprive movant of any substantial
right).
Notwithstanding, under the instant circumstances, see
Waters,  294 N.C. at  208,  240 S.E.2d at  343, USF&G asserts
implication of the substantial rights of avoidance of trial and
appeal of denial of a dismissal motion grounded upon the defense
of res judicata.    We consider USF&G’s arguments ad seriatim.
This Court recently reiterated the long-standing rule that




“[a]voidance of trial is not a substantial right entitling a
party to immediate appellate review.”    Anderson v. Atlantic
Casualty Ins. Co.,  ___ N.C. App.  ___,  ___,  ___ S.E.2d  ___,  ___  (7
Sept.  1999)  (No. COA98-1466)  (citation omitted).    However, where
a claim has been finally determined, delaying
the appeal of that final determination will
ordinarily affect a substantial right if
there are overlapping factual issues between
the claim determined and any claims which
have not yet been determined,
Davidson v. Knauff Ins. Agency,  93 N.C. App.  20,  26,  376 S.E.2d
488,  492, disc. review denied,  324 N.C.  577,  381 S.E.2d  772
(1989), thereby
creating the possibility that a party will be
prejudiced by different juries in separate
trials rendering inconsistent verdicts on the
same factual issue.
Green v. Duke Power Co.,  305 N.C.  603,  608,  290 S.E.2d  593,  596
(1982).
Therefore, to demonstrate that a second trial will affect a
substantial right, USF&G must show, see Jeffreys,  115 N.C. App.
at  379,  444 S.E.2d at  253, not only that one  “claim has been
finally determined,” Davidson,  93 N.C. App. at  26,  376 S.E.2d at
492, and others remain  “which have not yet been determined,” id.,
but that  “(1) the same factual issues would be present in both
trials and  (2) the possibility of inconsistent verdicts on those
issues exists,” N.C. Dept. of Transportation v. Page,  119 N.C.
App.  730,  736,  460 S.E.2d  332,  335  (1995)  (emphasis added)
(citation omitted).    USF&G is unable to meet this test.
USF&G purports to appeal the trial court’s denial of its
motion to dismiss.    An order denying a motion to dismiss




do[es] not determine even one claim, but
simply require[s] subsequent trial of the
fact issues underlying that claim,  [and is]
generally not appealable.
Davidson,  93 N.C. App. at  26,  376 S.E.2d at  492; see also School,
299 N.C. at  355,  261 S.E.2d at  911  (denial of Rule  12(b)(6)
motion to dismiss  “merely serves to continue the action then
pending  [and no] final judgment is involved”).    No final
dismissal of claims or parties occurred in the trial court in the
instant case; thus, there exists no possibility that, upon
reversal of such dismissal, a second trial might produce an
inconsistent verdict.    See Davidson,  93 N.C. App. at  27,  376
S.E.2d at  492  (while dismissal of plaintiff’s claims was
immediately appealable, denial of defendant’s motion to dismiss
plaintiff’s remaining claim was not immediately appealable  “since
there ha[d] been no final disposition whatsoever of that claim”);
cf. First Atl. Mgmt. Corp.,  131 N.C. App. at  251,  507 S.E.2d at
62  (appeal of grant of defendant’s partial summary judgment
motion proper even though interlocutory because of potential
inconsistent verdicts); Hoots v. Pryor,  106 N.C. App.  397,  402,
417 S.E.2d  269,  273, disc. review denied,  332 N.C.  345,  421
S.E.2d  148  (1992)  (in case of multiple defendants, potential for
inconsistent verdicts on issue of plaintiff’s contributory
negligence  “if  .  .  . case were to be tried in  .  .  . separate
proceedings” compels holding that  “plaintiffs’ appeal of  [the
trial court’s] order is not premature and should not be
dismissed”);    J & B Slurry Seal Co.,  88 N.C. App. at  9,  362
S.E.2d at  817  (appeal allowed of grant of defendant’s summary
judgment motion dismissing plaintiff’s claim, but leaving




defendant’s counterclaim intact, because of possible inconsistent
verdicts); Bernick v. Jurden,  306 N.C.  435,  439,  293 S.E.2d  405,
408  (1982)  (plaintiff’s appeal of grant of defendant’s partial
summary judgment motion allowed even though interlocutory because
inconsistent verdicts possible).
Interestingly, USF&G both in its appellate brief and in oral
argument to this Court, essentially advocated that we render an
“inconsistent” opinion herein.    In USF&G II, this Court affirmed
the trial court’s ruling that  “USF&G ha[d] waived its right to
rely on the  [alcohol] exclusion,” USF&G II,  126 N.C. App.  633,
491 S.E.2d  569, and held that USF&G’s argument that it  “[wa]s
not, as a matter of law, estopped from asserting the  [alcohol]
exclusion” was  “wholly without merit,” id.    However, USF&G has
continued to insist the policy afforded no coverage and that the
Club therefore may not assert a bad faith claim.
USF&G first ignores the principle that a panel of this Court
“may not overrule the decision of another panel on the same
question in the same case.”    In the Matter of Appeal from Civil
Penalty,  324 N.C.  373,  384,  379 S.E.2d  30,  36  (1989).    We note in
passing that this principle was previously reiterated in USF&G
II.    USF&G II,  126 N.C. App.  633,  491 S.E.2d  569  (this Court in
USF&G I, by which decision the Court is now bound,  “considered,
and found meritless, the exact argument USF&G attempts to re-
assert in the present appeal  --  [that] the doctrines of waiver
and estoppel cannot expand the scope of an insurance policy to
include risks expressly excluded by the plain language of the
policy”).




USF&G also overlooks the estoppel effect of conduct
comprising waiver.    It is not that the conduct of USF&G and that
of its agents has operated to write into the policy coverage
previously excluded; rather, conduct comprising waiver has
created a disability on the part of USF&G thereby precluding it
from thereafter denying that such coverage is included within the
policy.
As this Court explained in Chance v. Henderson,  ___ N.C.
App.  ___,  ___,  ___ S.E.2d  ___,  ___  (7 Sept.  1999)  (No. COA98-889)
(citation omitted), estoppel effects a  “personal disability
[upon] the party attacking the  [court order]; it is not a
function of the  [order] itself.”    Accordingly, the defendant in
Chance who by his conduct  “in essence ratified and affirmed  [a
court] Order  [was thereafter] estopped from seeking to avoid its
effect,” id.    Similarly, herein, USF&G, whose waiver of its right
to rely on the alcohol exclusion in the policy has been
judicially determined, see USF&G II,  126 N.C. App.  633,  491
S.E.2d  569, is thereby  “disallow[ed]  .  .  . from denying
coverage,” USF&G I,  119 N.C. App. at  374,  458 S.E.2d at  740,
under the policy on grounds of said exclusion.
In short, the issue in the instant case is no longer one of
coverage, but rather USF&G’s liability for alleged bad faith,
tortious breach of contract, unfair claim settlement practices,
or unfair and deceptive trade acts or practices in its handling
of the Club’s claim and the resulting litigation.    There is no
possibility of any verdict inconsistent with previous judicial
determinations.




USF&G also argues that because it relies on the principles
of res judicata and claim-splitting as barring the Club’s lawsuit
in the instant case, a substantial right is thereby affected and
it is entitled to an immediate appeal of denial of its motions to
dismiss which asserted those grounds.    USF&G cites Bockweg v.
Anderson,  333 N.C.  486,  428 S.E.2d  157  (1993) and Northwestern
Financial Group v. County of Gaston,  110 N.C. App.  531,  430
S.E.2d  689, disc. review denied,  334 N.C.  621,  435 S.E.2d  337
(1993), as support.    USF&G’s reliance on Bockweg and Northwestern
is unfounded.
In Bockweg, our Supreme Court held  “that the denial of a
motion for summary judgment based on the defense of res judicata
may affect a substantial right” because of the  “possibility that
a successful defendant  .  .  . will twice have to defend against
the same claim by the same plaintiff.”    Bockweg,  333 N.C. at  491,
428 S.E.2d at  161; accord, Northwestern,  110 N.C. App. at  536,
430 S.E.2d at  692.
First, we do not read Bockweg as mandating in every instance
immediate appeal of the denial of a summary judgment motion based
upon the defense of res judicata.    The opinion pointedly states
reliance upon res judicata  “may affect a substantial right.”
Bockweg,  333 N.C. at  491,  428 S.E.2d at  161  (emphasis added).
In addition, we note the reliance in Bockweg on the line of
cases, see Green,  305 N.C. at  608,  290 S.E.2d at  596, and
Patterson v. DAC Corp.,  66 N.C. App.  110,  113,  310 S.E.2d  783,
785  (1984), noting that the potential for inconsistent verdicts
in two trials affects a substantial right so as to permit




immediate appeal of an otherwise interlocutory order.    Indeed,
this Court, in an opinion issued shortly after Bockweg, Community
Bank v. Whitley,  116 N.C. App.  731,  449 S.E.2d  226, disc. review
denied,  338 N.C.  667,  453 S.E.2d  175  (1994), interpreted the
permissive language of Bockweg as allowing, under the substantial
right exception, immediate appeal of the denial of a motion for
summary judgment based, inter alia, upon defense of res judicata
“where a possibility of inconsistent verdicts exists if the case
proceeds to trial.”    Id. at  733,  449 S.E.2d at  227  (emphasis
added); see also Little v. Hamel,  ___ N.C. App.  ___,  ___ S.E.2d
___  (3 Aug.  1999)  (No. COA98-1110)  (appeal of denial of summary
judgment motion based upon res judicata considered to affect
substantial right where, although not directly noted by the
Court, defendants had been absolved of liability in previous suit
between the parties and faced possibility of inconsistent
verdicts).
In short, denial of a motion for summary judgment based upon
the defense of res judicata may involve a substantial right so as
to permit immediate appeal only  “where a possibility of
inconsistent verdicts exists if the case proceeds to trial.”
Community Bank,  116 N.C. App. at  733,  449 S.E.2d at  227.    We have
established that the current case presents no possibility of
inconsistent verdicts.
Finally, Bockweg involved appeal from denial of a summary
judgment motion, whereas we are concerned herein with denial of a
motion to dismiss.    As earlier noted, withholding of appeal of
summary relief at the early stages of trial court litigation is




generally favored.    See Waters,  294 N.C. at  209,  240 S.E.2d at
344.
We also note that the decision in Northwestern, relied upon
by USF&G, supports our interpretation of Bockweg.    In
Northwestern, this Court observed there was no possibility of
inconsistent verdicts, thus making the facts therein
“distinguishable from those in Bockweg.”    Northwestern,  110 N.C.
App. at  536,  430 S.E.2d at  692.    We nonetheless  “chose[] to
consider the merits of defendants’ appeal.”    Id.; see N.C.R. App.
P.  2  (“[t]o prevent manifest injustice to a party,” appellate
court  “may  .  .  . suspend or vary the requirements” of the Rules
of Appellate Procedure).
Suffice it to state we do not perceive it as  “manifest” that
injustice will result herein absent immediate appeal.    See
Steingress v. Steingress,  350 N.C.  64,  66,  511 S.E.2d  298,  299-
300  (1999)  (“Rule  2 relates to the residual power of our
appellate courts  .  .  .  , in exceptional circumstances,  .  .  . to
prevent injustice which appears manifest to the Court and only in
such instances”  (emphasis added)).    Significantly, USF&G has
failed to show that
enforcement of  [a substantial] right, absent
immediate appeal,  [will] be  “lost, prejudiced
or be less than adequately protected by
exception to entry of the interlocutory
order.”
First Atl. Mgmt. Corp.,  131 N.C. App. at  250,  507 S.E.2d at  62
(citation omitted).    On the contrary, USF&G’s
rights  .  .  . are fully and adequately
protected by an exception to the order which
may then be assigned as error on appeal
should final judgment in the case ultimately




go against it.
Waters,  294 N.C. at  208,  240 S.E.2d at  344.
Appeal dismissed.
Judges WYNN and EDMUNDS concur.

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