• North Carolina Court of Appeals Holds Whether Insurer Has Duty to Defend in Underlying Action Does Not Affect Substantial Right if Underlying Action Has Already Concluded
  • September 27, 2013 | Author: George B. Hall
  • Law Firm: Phelps Dunbar LLP - New Orleans Office
  • The North Carolina Court of Appeals recently refused to consider an interlocutory appeal from an insurer with respect to its duty to defend, finding the issue of whether an insurer has a duty to defend in an underlying action does not affect a substantial right (such that the court can consider an interlocutory appeal) if the underlying action has been concluded. Paradigm Consultants, LTD v. Builders Mutual Insurance Co., 745 S.E.2d 69 (N.C. App. 2013).

    After the insurer denied coverage for its insured contractor with respect to the insured’s dispute with homeowners, the insured settled with the homeowners and sued its insurer, alleging breach of contract, bad faith and unfair and deceptive trade practices. After the trial court denied the insurer’s motion for summary judgment with respect to its duty to defend, the insurer brought an interlocutory appeal.

    Dismissing the insurer’s appeal, the North Carolina Court of Appeals recognized that while it had previously held that an order of summary judgment on the issue of whether an insurer has a duty to defend affects a substantial right such that the insurer can immediately appeal when the underlying action is ongoing, there is no such substantial right affected when the underlying litigation has been concluded. Accordingly, with no substantial right at issue, the court found that the insurer had no right to an interlocutory appeal.