Source: http://ncattorneys.blogspot.com/2015/01/recent-north-carolina-appellate.html
Timestamp: 2017-12-12 11:54:42
Document Index: 498633893

Matched Legal Cases: ['§45', '§24', '§24', '§24', '§24', '§24', '§24', '§24']

Legal Issues in North Carolina: Recent North Carolina Appellate Decisions
Recent North Carolina Appellate Decisions
Opinions of the North Carolina Court of Appeals
Khwaja v. Khan, COA 14-728. The plaintiff was a commercial tenant of the defendant pursuant to a 15 year lease with an option to renew for 5-10 years. The lease contained a provision that said that should the landlord/owner ever attempt to sell the property, then the tenant would have the first right of refusal. In late 2011, the defendant landlord asked the plaintiff tenant if he had an interest in purchasing the property, but the tenant did not. A short time later, the landlord actually entered into a contract to sell and did sell the building to a third party. Thereafter, the third party sold the building back to the original owner and financed the purchase. When the tenant discovered the sale, he filed suit to force the landlord to sell him the property for the amount the building had originally been sold. When the landlord refused, the tenant filed suit to force the sale. The trial judge ordered the property to be sold to the tenant for the price sold to the third party. However, the Court of Appeals reversed, holding that the provision in the lease violated the Rule against Perpetuities. This Rule provides that if it is possible for a grant of an interest in property could occur more than 21 years, plus a life in being, then any provision granting the future right is void. Therefore, there was no valid right of first refusal.
Bottom v. Bailey, COA 14-564. The plaintiffs owned real property in Buncombe County. To help facilitate a 1031 exchange, the plaintiffs used 1031 Exchange, LLC to manage the funds. This company was owned by Bailey. Bailey had accounts with Hometrust Bank and Morgan Stanley, a brokerage firm. Bailey then used a check "kiting" scheme to pass funds between the accounts, thus writing checks on accounts with insufficient funds. Under this scheme $13,000,000 were affected, $224,000 of which belonged to the plaintiff. When Bailey's fraud was finally discovered, and he was indicted, the plaintiffs apparently had lost their funds. They filed suit against Hometrust and Morgan Stanley alleging that they had a duty to uncover the criminal conduct of Bailey. In affirming the trial court's dismissal of the action, the Court held that a bank owes no duty to a third person. Therefore, since the Bottoms were not customers of either the bank or the investment firm, they had no standing to bring an action.
Carolina Marlin Club Marina Association v. Preddy. COA 14-377. The defendants in this case owned one of seventy-three boat slips at the plaintiff's marina. The marina's association was subject to the North Carolina Condominium Act and was also governed by restrictions and bylaws put in place by the original declarant. The marina was first formed in the late 1980's and over time areas of the marina became shallow due to sediment. The Association published notice of a meeting for an assessment to dredge the marina and the assessment passed. The defendant objected to the notice and refused to allow dredging to occur under their slip. Although the defendants had objected to the notice, the real issue was whether the slip was two dimensional or three dimensional. The Court held that while the area between the moorings in the slip belonged to the defendant, the slip was indeed two dimensional and the Association maintained the ownership of the ground under the water of the slip.
Feltman v. City of Wilson, COA 14-585. The plaintiff was a benefits manager for the City of Wilson. The plaintiff discovered that her supervisor, Allen, was using city employees to babysit her children during working hours and reported this to the City. The City at first denied the accusations. However, the plaintiff produced time stamped photographs of the cars of city employees at Allen's home during the work day. The plaintiff contended that after that, she was continually harassed at work and subject to more restrictions and scrutiny than other employees. She was eventually terminated. She brought an action for breach of the right of freedom of speech and assembly and other constitutional issues. The trial court dismissed the claims against the City for lack of specificity, but certified the issue for immediate appeal. On appeal, the Court of Appeals held that under notice pleading, the plaintiff had sufficiently stated a cause of action and reversed the trial judge.
Jackson v. Charlotte Mecklenburg Hospital Authority, COA 13-1338. The Authority settled a lawsuit with a financial institution. The settlement contained a confidentiality agreement. Attorney Gary Jackson, on his own behalf, filed suit under the North Carolina Public Records Act to discover the terms of the settlement. The Court held that the Act was to be interpreted broadly, and reversed the trial judge in ordering the settlement documents to be made public.
Lacey v. Kirk, COA 14-688. The defendant was the executrix of the will of Frances Longest. In the will, 50% of the estate was left to her daughter, Kirk and 50% was left to her grandchildren, the plaintiffs. It was alleged that Kirk breached her fiduciary duty and defamed the plaintiffs by alleging, among other things, that the plaintiffs had "murdered" the deceased. The parties entered into a settlement agreement, which Kirk refused to honor. The plaintiffs won compensatory and punitive damages. Kirk alleged the trial judge made derogatory comments about her during the trial, but the Court of Appeals found this to be harmless. The plaintiffs cross appealed the judge's decision to reduce the plaintiff's attorney fees which he reduced in lieu of the large punitive award. The Court did reverse that decision indicating where the judge found the fees to be reasonable, that just because there was a large punitive damages award, should not be a reason to reduce the right to recover those fees.
Steele v. Bowden, COA 14-573. Plaintiff, ex-husband, had possession of a vehicle co-owned with his ex-wife which had been purchased before their marriage and subsequent divorce. The husband agreed to pay off the existing car loan, but did not do so. The ex-wife, defendant, then attempted to have the car repossessed. During a high speed chase to get away from the tow truck, the plaintiff wrecked the car. The defendant then repossessed the car in a second attempt and had the damage repaired. When she refused to pay for the repairs, the automobile repair company sold the car pursuant to its mechanic's lien. Plaintiff husband sued for conversion and trespass to personal property. The Court, in a divided decision, affirmed summary judgment on the conversion issue, stating that since both parties had the right of possession, repossession was not a remedy available to the wife. Likewise, however, the trespass claim failed because the wife had equal right to possess the vehicle.
TSG Finishing, LLC v. Bollinger, COA14-623. The Court of Appeals reversed the trial judge's decision to not grant a preliminary injunction. It was alleged that Bollinger, a former employee of TSG, provided information to his new employee, and competitor, over certain textile coding methods used by TSG. He did so after entering a non-compete agreement. Judge Murphy had ruled that because the plaintiff could not establish the likelihood of success on the merits, that the injunction should be denied. The Court of Appeals, applying the tests for a preliminary injunction, disagreed and ordered the matter remanded for the purposes of entering an injunction to prevent further use of the confidential processes.
Wright v. WakeMed, COA14-695. Due to an error, the plaintiff received the wrong medication which she contends caused her to become somnolent and lethargic. The plaintiff sued under a theory of res ipsa loquitur. The defendant obtained a dismissal at the trial court level for failure to file a Rule 9(j) certification of medical negligence. In affirming the dismissal, the Court of Appeals held that res ipsa loquitur only applied when there was no direct evidence of negligence. In this case, there was direct evidence of negligence. Furthermore, the Court held that expert testimony was needed to prove that the plaintiff's condition was related to ingestion of the wrong medication.
Decision of the North Carolina Supreme Court
Hammond v. Saira Saini, MD, Plastic Surgery of Fayetteville. 492 PA 13. The plaintiff was admitted into surgery for the removal of a possible basal cell carcinoma from her face. During the operation, oxygen was inadvertently allowed to build up under the tent of drapes over her face. The oxygen ignited during the operation causing severe burns and scarring to her face. After the fire, the hospital did its own investigation into the fire. The plaintiff sought release of the findings of their investigation but the hospital contended that the information was protected under Section 131E-95 of the North Carolina General Statutes which allows for confidentiality in proceedings of a medical review committee. The hospital submitted an affidavit quoting sections of the statute in an effort to establish a medical review committee. The Court held that a recitation of the statute in the pleadings was not factually specific to establish a medical review committee and ordered the records released.
Lunsford v. Crowder: 385 PA 13. Lunsford was a volunteer fire fighter who responded to a tractor trailer accident when the truck driver had lost control of his vehicle and flipped. As Lunsford was attempting a rescue of the truck driver, another vehicle struck Lunsford causing serious injuries. Lunsford filed suit against the truck driver and the driver of the second vehicle. The trucking company had a million dollar automobile liability policy. The driver of the second vehicle had a $50,000 policy which it tendered. At issue was whether Lunsford could make an underinsurance claim under his own Farm Bureau automobile underinsurance claim, or whether he had to wait until he received a tender offer from the trucker's carrier. In reversing the Court of Appeals, the Supreme Court said that Lunsford did not have to wait - that a tender of a single liability policy was sufficient under the statute to trigger underinsurance coverage. Otherwise, every injured person would have to sue every possible joint tortfeasor before applying for their underinsurance coverage.
Christie v. Hartley Construction: 359 A 13. The plaintiffs were given a 20 year warranty on a stucco like product for their home. The Court of Appeals held that notwithstanding the express language of the 20 year warranty, that the 6 year statute of repose trumped any claim made after 6 years. The Supreme Court reversed the Court of Appeals and held that the 20 year warranty could be enforced.
Falk v. Fannie Mae: 197 PA13. N.C. Gen. Stat. §45-37(b) provides that a prior lien, such as a deed of trust, expires fifteen years from the later of two dates: (1) the date on which the instrument requires performance; or (2) the date of maturity of the last payment. For liens after October 2011, the fifteen years can be extended by the recording of an affidavit. In this case, which was decided under prior law, the fifteen year rule extinguishing the lien applied.
Debaun v. Kuszaj and City of Durham: COA 12-1520-2. The plaintiff in this case was stopped by a police officer who suspected him of being intoxicated. When the officer attempted to handcuff the plaintiff, the plaintiff asked whether he was under arrest. When he was told he was not under arrest, the plaintiff broke away from the office and was "tasered." In his fall he suffered injuries. Having been unable to prevail against the officer because of public officer immunity, the plaintiff sought to make a claim directly under the North Carolina Constitution. Such claims are allowed if there is no other adequate remedy available. However, the Court said that since the plaintiff had remedies, such as the excessive force claims, the Constitutional claim could not survive. The fact that there are complete defenses to the Constitutional claims does not make them inadequate remedies.
Charlotte Pavilion v. NC CVS Pharmacy: COA 14-658. The owner of a 15 acre tract of land, contracted to lease two acres to CVS Pharmacy and as a condition to the lease, agreed that no other pharmacy could be developed on the remaining 13 acres. Walmart purchased land adjacent to the 15 acres and purchased some of the remaining 13 acres for its parking lot. Walmart has a pharmacy in the store. The issue was whether the construction of the parking lot violated the covenants and restricts against the development of a competing pharmacy. The original owners filed a declaratory judgment action to interpret the restriction. The Court of Appeals affirmed the trial judge in holding that the parking lot for the Walmart did not violate the covenants and restrictions.
Tracey Cline v. David Hoke: COA14-428. The plaintiff is a former district attorney against whom the State Bar is investigating a grievance. The plaintiff sought certain emails from the Administrative Office of the Courts (AOC) through the Freedom of Information Act in order to defend against the grievance. Hoke is the assistant director of the AOC. While some emails were provided, the plaintiff contended that she did not have access to all of her emails on her computer which existed while she was a DA. Hoke was sued in his individual and official capacity. The Court held that there was no right to sue him individually. The Court also found that Hoke was not the custodian of the plaintiff's personal emails, and therefore the case was dismissed.
NC Farm Bureau v. Burns: COA 14-741. Plaintiff insurance company filed a declaratory judgment action to determine whether injuries to minor child were covered in a commercial general liability insurance policy. The 11 year old plaintiff was told by his father, the owner of a grain company, to help his brothers clean a storage area. The child fell into a hole used in the grain business and his leg was caught and severed by a grain auger. Under the policy, bodily injuries to a volunteer were covered. The term volunteer was defined not to include injured persons who had "donated" their time. The term "donated" was not defined. The insurance carrier took the position that there was no coverage because the child donated his time to the company. The Court concluded since the child was working at the direction of his father that he had not donated his time, since the term implies that someone donating his time has the option of working or not working. The child under his father's control, did not have that option, therefore, coverage existed.
Pruett v. Bingham v. Wiggins and Mountain Home Fire & Rescue Dept.: COA14-191. The plaintiff was injured when a vehicle driven by Bingham rear-ended the vehicle in which he was driving. Bingham said that he was driving on I-26 when a vehicle owned by Mountain Fire & Rescue and driven by Wiggins, suddenly stopped in the inside lane of travel and attempted to cross over at an emergency median. Wiggins was responding to an emergency call. Bingham filed a third party complaint against Wiggins and the emergency department. The third party complaint was dismissed based on governmental immunity. The Court of Appeals affirmed the dismissal in a 2-1 decision. The dissent argued that Wiggins had not activated any of the emergency lights or flashers on the vehicle before abruptly stopping in the lane of travel where the speed limit was 65 mph. The dissent argued that these acts violated the statute regarding the operation of emergency vehicles and at least gave rise to a jury question as to whether Wiggin's conduct was so reckless that it overcame governmental immunity. In a second issue, Bingham contended that he was unaware of the governmental immunity defense until a month before trial. The Court held that it was error for Bingham not to move to amend his third party complaint to address the immunity issue and that when that motion was finally made, it was not timely.
Town of Black Mountain v. Lexon Insurance: COA 14-740. Lexon provided a subdivision bond to Buncombe County which agreed to pay for certain infrastructure if the developer of the subdivision became insolvent. The subdivision became annexed into the Town of Black Mountain. After the builder became insolvent and unable to perform, Black Mountain sought to enforce the bond. The carrier argued that its contract was with the county, not the town, therefore the town did not have standing to enforce the bond. The Court of Appeals disagreed and said that the bond had been properly assigned from the county to the town.
Tucker v. Fayetteville State University: COA 14-178. Tucker was the women's basketball coach at FSU for 16 years. He had a contract of employment that provided that he could only be fired for cause. After players complained of inappropriate language, assault on a team member, and threats to terminate scholarships, the university terminated him for cause. He filed suit for wrongful termination. However, his employment contract required him to go through an administrative appeal before filing suit. His failure to exhaust his administrative remedies caused his lawsuit to be dismissed. Court of Appeals affirmed the trial judge's dismissal.
Wells Fargo Bank v. John Coreneal: COA 14-660. When defendant debtor failed to make a balloon payment on a note secured by a deed of trust, the bank sued for foreclosure. The defendant counterclaimed for unfair and deceptive trade practices and other claims - all of which were eventually dismissed by the trial judge. The defendant then filed an immediate appeal. The Court of Appeals held that the appeal was interlocutory and did not affect a substantial right, therefore the appeal was dismissed.
Duke Energy v. Gray 14-283. Duke Energy maintained a 200 foot easement for its high transmission wires. A developer subdivided a parcel next to the easement for single family residences. A builder built a home on one of the lots that adjoined the easement and Duke Energy contended that a corner of the home encroached into the easement. Duke filed an action against the owner of the home to have the home removed. The homeowner sued the builder, who in turn, sued the surveyors. The Court held that because the encroachment into the easement had existed more than six years from the time that Duke knew, or should have known of the easement - and the filing of the suit, that their claim was barred by the statute of limitation. Our firm represented the builder.
In Re Powell: 14-498. The Court of Appeals affirmed notice by posting was sufficient notice in a foreclosure proceeding.
Mohr v. Matthews: 14-271. The 19 year deceased plaintiff, Sam, attended a cookout at his grandparents' home. Also present was the deceased father and stepmother. The grandparents and parents served Sam a substantial amount of alcoholic beverages. There were other occasions where the parents provided Sam with alcohol despite him being underage. At the cookout, an argument arose of college expenses. After everyone but Sam went to bed. Around 1:30, Sam drove a car away from the home, but before he could get out of the neighborhood, his car hit a tree, burst into flame and Sam was killed. His blood alcohol level was 0.17. The estate filed a lawsuit against the grandparents and parents alleging negligence in serving him alcohol. The defendants filed a motion to dismiss claiming that contributory negligence barred the claim. At the motion, the plaintiff argued that because of the special relationship between parents and a child that the parents had a higher duty. However, the Court of Appeals held this duty ended when Sam turned 18 and affirmed the trial court's dismissal of the lawsuit.
Ademovic v. Taxi: USA - 14-356 When a taxi cab driver was shot at work, the issue arose as to whether he was an employee with workers compensation benefits, or an independent contractor. In reversing the Full Industrial Commission, the Court of Appeals ruled that the driver was an independent contractor and not entitled to workers compensation benefits.
Clifford Wheeless, MD v. Maria Parham Medical Center: 14-612: The plaintiff physician filed an unfair and deceptive trade practices claim against a hospital where he had consulting privileges for alleging disclosing the contents of an earlier negative peer review. Pursuant to the agreement of the parties, the peer review was to remain confidential. In affirming the trial court's dismissal of the claim, the Court of Appeals stated that unfair and deceptive trade practices could not be brought against a "learned profession."
Wilmoth v. Hemric: 14-459: The plaintiff observed two cows in his sister's garden. He moved the cows to a nearby wooded area. Later that day, he observed the same two cows near the sister's driveway. The plaintiff and his brother-in-law went to search for the cows but could only find one. The other one suddenly charged the plaintiff from behind causing him serious injuries. The plaintiff called the person he thought owned the cows, but had to leave a message. Eleven days later, one of the same cows was struck and killed by a vehicle, and the cow was identified as being owned by the person with whom the message was left. The plaintiff sued the owner of the cows in negligence and obtained a $350,000 verdict. In reversing the trial court's decision to deny a directed verdict, the Court held that the plaintiff had not proved sufficient facts to establish negligence by the owner in failing to properly maintain the cow's fence, or that the owner had knowledge before the accident that the cows were out of the enclosure. Verdict was reversed.
Barnes v. Scull COA 14-264 - In a declaratory judgment action, the Court was asked to interpret the provisions of a will where testator gave a life estate in property to his wife and children. Upon the death of the wife and children, the property was to be deeded to his heirs. The question was whether the term "heirs" was to be determined at the time of the testator's death or at the time of the death of the owners of the life estate. While admitting that there is law supporting both arguments, the Court of Appeals chose to follow the most recent Supreme Court case which suggested that you determine the heirs at the time the owners of the life estate died - and not at the time of the testator's death.
Santiago Estrada v. Zurich COA 14-468 - Estrada was injured on the job and made an application for workers compensation benefits. His employer had allowed his workers compensation insurance to lapse for non-payment of the premium. After the accident, the employer renewed his policy and Zurich agreed to retroactively reinstate the policy. However, Zurich would not reinstate retroactively to the date of the accident. Therefore, the Court concluded, there was no workers compensation coverage at the time of the accident.
Robertson v. Steris COA 14-253,254. Attorney Temple represented the plaintiffs in a workers compensation action for over four years. After a settlement was seemingly reached, the plaintiffs refused to abide by the agreement, fired Temple, and hired a new attorney. Temple then filed a motion in the existing action for payment of his attorney fees on a quantum meruit (quasi-contract) theory (he did not have a written fee contract) - and for interest on those fees. North Carolina General Statute §24-5 controls the award of interest. §24-5(a) applies to breach of contract actions and interest begins to run from the date of breach. §24-5(b) applies to pre-judgment interest on all other action, which begins to run from the date of filing. Temple petitioned the Court for interest under §24-5(a). The plaintiffs content that since the award of attorney fees was in quasi-contract and not contract, the court erred in awarding fees. However, the Court of Appeals found that this was a clerical error and that Temple really meant to petition pursuant to §24-5(b), therefore the error was correctable. The plaintiffs then argued, that since Temple only filed a motion for attorney fees, and not a separate lawsuit, that under §24-5(b), he was not entitled to attorney fees, since fees under that section run from "the date of filing." The Court of Appeals again disagreed, and determined that filing a motion in the cause in the existing action was sufficient to satisfy the requirements of §24-5(b).
Adcox v. Clarkson: Commissioners' silence in order regarding attorney fees did not preclude recovery of attorney fees.
Gregory v. Old Republic: Plaintiff died as a result of carbon monoxide poisoning. Decedent had criminal convictions which the judge excluded from the jury pursuant to a motion in limine. However, during the course of the trial, plaintiff's attorney put on evidence of what a good father he was, so the judge allowed the admission of the criminal convictions. Court of Appeals found no error.
Commscope Credit Union v. Butler and Burke, LLP, COA 14-273 (November 4, 2014) Plaintiff credit union sued their audit firm based on a breach of a fiduciary relationship theory, among other theories. The trial court ruled that no fiduciary relationship existed and dismissed the case pursuant to Rule 12(b)(6). In reversing the trial court's the Court of Appeal held that while just being an accountant for the credit union would not have given rise to a fiduciary relationship, the fact that the accountants were hired to perform an audit created a higher burden on the defendant and thus stated a cause of action.
Neil v. Kuester Real Estate Services, COA 14-513 (November 4, 2014). The Court of Appeals affirmed the trial court's decision not to certify a class of Appalachian students who claimed a violation of the North Carolina Security Deposit Act.
Daniel Skinner v. Wake Forest Law School, COA 14-325. Skinner, a Wake Forest Law Student, received a scholarship to attend law school. A condition of the financial aid was the Skinner remained in the top two-thirds of his class. When his rank fell below two-thirds, he challenged the right of the school to alter his scholarship. He complained to all levels of administration within the school. One of the administrators provided him with a letter, copied to other administrators that stated while Skinner certainly had the right to appeal decisions about his scholarship, he must do so without violating the school's Code of Conduct. It was alleged that Skinner had claimed a conspiracy among the administrators and had emailed his classmates to join him in trying to remove the dean of the law school. Skinner filed a pro se complaint alleging libel. The Court of Appeals affirmed the trial judge's dismissal of the lawsuit, holding, "'Libel per se is a publication which, when considered alone without explanatory circumstances: (1) charges that a person has committed an infamous crime; (2) charges a person with having an infectious disease; (3) tends to impeach a person in that person's trade or profession; or (4) otherwise tends to subject one to ridicule, contempt or disgrace.'" Plaintiff failed to meet this test.
Governmental Immunity: Bynum v. Wilson Cnty., 758 S.E.2d 643 (N.C.) reh'g denied, 761 S.E.2d 904 (N.C. 2014) Pedestrian brought action against Wilson County after he allegedly fell down the front exterior stairs of a county building, suffering paralysis in both legs and an arm. He died before trial. In this case, Wilson County had leased a building for several of its offices, including the water department. After paying his bill, the plaintiff fell on the stairs of the leased building and filed suit alleging, among other things, that the County failed to maintain the stairs and that the stairs did not comply with the building code. The County’s motion for summary judgment based on governmental immunity was allowed at the trial court level, reversed by the Court of Appeals, but then reinstated by the Supreme Court.
In allowing summary judgment, the Court explained that in determining when governmental immunity applies, the Court must make a determination as to what is considered a governmental activity or a proprietary activity. If it is a governmental activity, then governmental immunity applies. The difference in the two activities is that a governmental function is an action by the government in the ordinary course of business. A proprietary action is where the governmental unit is acting more in the nature of a commercial business. An example of a proprietary activity might be a county charging parking fees at the county fair to raise money. If an injury was related to that activity, immunity would not apply.
Immunity can also be waived by the purchase of insurance or the failure of a city or county to comply with a safety statute.
Inman v. City of Whiteville, 763 S.E.2d 332 (N.C. Ct. App. 2014). In another immunity type case, an injured motorist brought action against city of Whiteville, alleging that city police officers were negligent in their accident investigation because they failed to ascertain the identity of driver who allegedly ran motorist off the road. It is alleged that the person who caused the accident was interviewed by the investigating officer, but the officer failed to record the person’s name on the accident form. Two plaintiffs were severely injured when their car was forced off of the road. In affirming the trial court’s granting of the officer’s summary judgment motion, the Court of Appeals relied on the Public Duty Doctrine. This doctrine basically says that a police officer owes no duty to the public at large. There are two exceptions: (1) if a special relationship has been created with the police (i.e. an informant is assisting the police; or (2) the police promise protection to a person and does not provide it. In this case, the Court ruled neither exception applied.
Service on Uninsured Carrier: Kahihu v. Brunson, 758 S.E.2d 648 (N.C. Ct. App. 2014). In this case, plaintiff’s counsel obtained an entry of default against an uninsured motorist. The attorney said via affidavit, that he served the uninsurance carrier with a copy of the complaint and summons via certified mail. However, the registered agent of the insurance company who signed for the documents, said that the carrier was only served with an amended complaint and no summons. The Court said that the failure of the plaintiff to prove service of the complaint and the summons entitled the uninsurance carrier to a directed verdict, thus eliminating any insurance coverage.
Posted by Fred DeVore at 8:51 AM