Joe Dye Culik
The Advantages of Narrowing Issues for Trial in Business Court Under Rule 56(d)
A judge of the North Carolina Business Court recently took advantage of a seldom-used court rule to save time in a dispute between litigants and narrow the issues for trial.
The North Carolina Business Court was established to deal with complex business issues that arise in the Superior Courts of North Carolina. The Business Court officially sits in three locations throughout the state, though the court’s judges will go to whichever county the dispute is actually filed in.
Litigating cases in the Business Court has many advantages, including judges with specialized knowledge about business law, electronic filing, and having a single judge assigned to your case (in contrast, judges in Superior Court rotate every few months so you could have multiple judges decide a single case).
Under Rule 56 of the North Carolina Rules of Civil Procedure, parties may file a motion for “summary judgment.” This asks the judge to decide the case without a trial. Summary judgment may only be granted if there is no dispute about the material facts of the case (i.e., the facts that would determine the outcome of the case). Given that a trial is typically the most time-consuming and costly part of any lawsuit, summary judgment can be a welcome time-saver for the parties.
If there is a material fact in dispute, however, the judge is not permitted to order judgment for either party. The case must proceed to trial.
A subsection of Rule 56, Rule 56(d), allows the judge to narrow the issues for trial, even if he or she does not grant summary judgment. Under Rule 56(d), if there is no real dispute about a particular fact of the case, the judge may deem that fact admitted at the trial. It then does not need to be proven by evidence such as documents or testimony.
This is a little-used but extremely useful time-saving device for parties to litigation. Hours or even days may sometimes be spent by the parties and their attorneys trying to establish (or not) various important facts at trial. Narrowing the facts under Rule 56(d) may therefore save important, valuable time for the parties, their attorneys, the judge, and the jury.
The full text of Rule 56(d) is as follows:
Case not fully adjudicated on motion. - If on motion under this rule judgment is not rendered upon the whole case or for all the relief asked and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel, shall if practicable ascertain what material facts exist without substantial controversy and what material facts are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. Upon the trial of the action the facts so specified shall be deemed established.
In the case referred to here, Pender Farm Dev., LLC v. NDCO, LLC, 2019 NCBC 67, the dispute was between two owners of a limited liability company and involved a number of other business-law issues. The takeaway for our purposes, though, is that litigants in complex and expensive business disputes should take more frequent advantage of Rule 56(d) to save time and money in the resolution of any case.
DYE CULIK PC is a Charlotte, North Carolina business law firm that represents entrepreneurs, businesses, and franchisees. If you have any business question, call us at 980-999-3557 to see how we can help.