Mecklenburg Roofing, Inc. v. Antall

895 S.E.2d 877

MECKLENBURG ROOFING, INC., Plaintiff,

v.Jeremy ANTALL & Johnson’s Roofing Service, Inc., Defendants.

No. COA23-255

Court of Appeals of North Carolina.

Filed November 21, 2023

Appeal by plaintiff from order entered 17 November 2022 by Judge Hugh B. Lewis in Mecklenburg County Superior Court. Heard in the Court of Appeals 23 August 2023. Mecklenburg County, No. 22 CVS 17751

Safran Law Offices, Raleigh, by Brian J. Schoolman, and Hendrick, Phillips, Salzman & Siegel, P.C., by Philip J. Siegel, for plaintiff-appellant.

Smith, Currie & Hancock LLP, Charlotte, by Matthew E. Cox, for defendants-appellees.

ZACHARY, Judge.

Plaintiff Mecklenburg Roofing, Inc., ("MRI") appeals from the trial court’s order denying its motion for a preliminary injunction. After careful review, we dismiss the interlocutory appeal for lack of jurisdiction.

I. Background

In May 2019, MRI hired Defendant Jeremy Antall. MRI is a roofing contractor, and Mr. Antall first worked in the MRI service department as a superintendent and then was promoted to project manager. Mr. Antall described his responsibilities as "ensur[ing] that job materials were delivered to job sites, that safety was being adhered to, and that the job was completed per the plans and specifications."

In July 2021, MRI promoted Mr. Antall to the position of estimator. According to Alexander Ray, MRI’s Vice President, Mr. Antall "estimated over $64,000,000 worth of roofing projects for MRI across most of the states" that MRI served. Mr. Ray averred that "Mr. Antall worked closely with MRI’s customers and potential customers" and "was given increased access to MRI’s confidential information and trade secrets, and estimated projects with the benefit of MRI’s pricing strategies, gross profit percentage targets, man-hour targets, overhead allocation targets, and net profit percentage targets."

As part of this promotion, Mr. Antall and MRI entered into an "Employment Covenants Agreement" ("the Agreement"), which included the following non-compete clause:

[F]or so long as [Mr. Antall] is employed by [MRI] and for a period of two (2) years thereafter, [Mr. Antall] will not, individually or on behalf of any person, firm, partnership, association, business organization, corporation or other entity engaged in the "Business" (as defined above), engage or participate in the actual Estimating or Selling of commercial roofing services, including but not limited to roof removal, roof retrofit, roof replacement, and roof maintenance and repair, the retrofit, renovation or repair of the exterior building envelope and waterproofing including above and below grade, of commercial or public buildings and other operations incidental to the roofing and construction services described herein and provided by [MRI]; provided that the restrictions set forth in this section shall only apply within the one hundred (100) mile radius from [MRI]’s office ….

In August 2022, Mr. Antall terminated his employment with MRI and accepted a position as an estimator with Defendant Johnson’s Roofing Service, Inc. ("JRS") in Fort Mill, South Carolina, located within ten miles of MRI’s office.

On 5 October 2022, MRI filed a verified complaint against Defendants alleging claims for misappropriation of trade secrets, tortious interference with contract, and tortious interference with existing and prospective relations. MRI also sought injunctive relief to enforce the non-compete clause and other provisions of the Agreement, and moved for the issuance of a preliminary injunction. Along with its complaint, MRI filed an affidavit from Mr. Ray. Before filing their responsive pleadings, on 10 November 2022, Defendants submitted affidavits from Mr. Antall and Drew Brashear, the owner of JRS. The parties also submitted memoranda of law opposing MRI’s motion for a preliminary injunction.

On 15 November 2022, MRI’s motion for a preliminary injunction came on for hearing in Mecklenburg County Superior Court. After hearing the arguments of counsel and reviewing the pleadings, affidavits, and memoranda submitted, the trial court denied MRI’s motion by order entered on 17 November 2022. MRI timely filed notice of appeal from the trial court’s order denying its motion for a preliminary injunction.

II. Appellate Jurisdiction

MRI acknowledges the interlocutory nature of the order from which it appeals, but asserts that this Court may properly exercise jurisdiction because the trial court’s order affects a substantial right of MRI. We disagree.

[1–3] Ordinarily, this Court only hears appeals from final judgments. See N.C. Gen. Stat. § 7A-27(b)(1)–(2) (2021). "A preliminary injunction is interlocutory in nature." Clark v. Craven Reg’l Med. Auth., 326 N.C. 15, 23, 387 S.E.2d 168, 173 (1990). "An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action by the trial court in order to settle and determine the entire controversy." Hanesbrands Inc. v. Fowler, 369 N.C. 216, 218, 794 S.E.2d 497, 499 (2016) (citation omitted). "An appeal from an interlocutory order will be dismissed as fragmentary and premature unless the order affects some substantial right and will work injury to [the] appellant if not corrected before appeal from final judgment." Id. (cleaned up); see N.C. Gen. Stat. §§ 1-277(a), 7A-27(b)(3)(a).

Our Supreme Court has consistently defined a "substantial right" as "a legal right affecting or involving a matter of substance as distinguished from matters of form: a right materially affecting those interests which one is entitled to have preserved and protected by law: a material right." Hanesbrands, 369 N.C. at 219, 794 S.E.2d at 499–500 (cleaned up). Granted, this nebulous test is admittedly "more easily stated than applied"; thus, "it is usually necessary to resolve the question in each ease by considering the particular facts of that case and the procedural context in which the order from which appeal is sought was entered." Id. at 219, 794 S.E.2d at 500 (cleaned up); see also Radiator Specialty Co. v. Arrowood Indem. Co., 253 N.C. App. 508, 520, 800 S.E.2d 452, 460 (2017) ("Generally, each interlocutory order must be analyzed to determina whether a substantial right is jeopardized by delaying the appeal." (cleaned up)).

[4, 5] "To confer appellate jurisdiction based on a substantial right, the appellant must include in its opening brief, in the statement of the grounds for appellate review, sufficient facts and argument to support appellate review on the ground that the challenged order affects a substantial right." Doe v. City of Charlotte, 273 N.C. App. 10, 21, 848 S.E.2d 1, 9 (2020) (cleaned up); N.C.R. App. P. 28(b)(4) ("When an appeal is interlocutory, the statement must contain sufficient facts and argument to support appellate review on the ground that the challenged order affects a substantial right."). "[I]f the appellant’s opening brief fails to explain why the challenged order affects a substantial right, we must dismiss the appeal for lack of appellate jurisdiction." Denney v. Wardson Constr., Inc., 264 N.C. App. 15, 17, 824 S.E.2d 436, 438 (2019).

Although this rule seems straightforward in the abstract, it is complicated by different rules concerning how a litigant must show that a substantial right is affected. Some rulings by the trial court affect a substantial right essentially as a matter of law. Sovereign immunity is an example. A litigant appealing the denial of a sovereign immunity defense need only show that they raised the issue below and the trial court rejected it—there is no need to explain why, on the facts of that particular case, the ruling affects a substantial right. By contrast, most interlocutory issues require more than a categorical assertion that the issue is immediately appealable. In these (more common) situations, the appellant must explain, in the statement of the grounds for appellate review, why the facts of that particular case demonstrate that the challenged order affects a substantial right.

Id. at 17–18, 824 S.E.2d at 438 (citation omitted).

Here, in its statement of the grounds for appellate review, MRI fails to offer the requisite explanation. Instead of explaining why the facts of this case demonstrate that the trial court’s order affects a substantial right, MRI simply parrots the oft-repeated proposition that "[i]n cases involving an alleged breach of a non-competition agreement and an agreement prohibiting disclosure of confidential information, North Carolina appellate courts have routinely reviewed interlocutory court orders both granting and denying preliminary injunctions, holding that substantial rights have been affected." Kennedy v. Kennedy, 160 N.C. App. 1, 5–6, 584 S.E.2d 328, 331 (citation omitted), appeal dismissed, 357 N.C. 658, 590 S.E.2d 267 (2003). However, MRI’s simple reliance on such bare statements of law—absent a clear and articulable demonstration of the factual basis underlying MRI’s asserted substantial right—is insufficient.

[6, 7] Our appellate courts have consistently reiterated that mere citation to precedent is generally insufficient to invoke this Court’s interlocutory jurisdiction. Indeed, a "fixation on … published case[s] that [the appellant] believe[s] to be controlling" is "a mistake our Court has warned against for years." Doe, 273 N.C. App. at 22, 848 S.E.2d at 10. Rather, "[w]hether a particular ruling affects a substantial right must be determined on a case-by-case basis." Id. (cleaned up). "Consequently, … the appellant cannot rely on citation to precedent to show that an order affects a substantial right. Instead, the appellant must explain, in the statement of the grounds for appellate review, why the facts of that particular case demonstrate that the challenged order affects a substantial right." Id. (cleaned up).

And as explained below, here, MRI’s misguided fixation on existing caselaw—at the expense of any context that might aid in our...