Court Opinion

ID: 3167111
Source: CourtListenerOpinion
Date Created: 2016-01-05 13:05:39.376811+00
Date Added: 2024-06-11T12:06:07.390802
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA15-416

                                Filed: 5 January 2016

Watauga County, No. 14 CVD 463

JULIE MORGAN-MCCOART, Plaintiff,

              v.

CLAUDIA LEE MATCHETTE, Individually, as Guardian of the Estate of Ruth T.
Simpson, and as Trustee of the Trust of Ruth T. Simpson, Defendants.

        Appeal by Plaintiff from order entered 6 February 2015 by Judge F. Warren

Hughes in Watauga County District Court. Heard in the Court of Appeals 7 October

2015.

        Walker DiVenere Wright, by Anne C. Wright, for the Plaintiff-Appellant.

        Bruce L. Kaplan for the Defendants-Appellees.

        DILLON, Judge.

        Julie Morgan-McCoart (“Plaintiff”) appeals from an order dismissing her

claims for lack of subject matter jurisdiction.

                                    I. Background

        The facts relevant to this appeal as alleged in Plaintiff’s complaint are as

follows: Plaintiff and Claudia Lee Matchette (“Defendant”) are sisters. Their mother

is Ruth T. Simpson.
                         MORGAN-MCCOART V. MATCHETTE

                                 Opinion of the Court

      In 2008, Ms. Simpson created a revocable trust (the “Trust”), funding it

primarily with the proceeds derived from the sale of her residence.

      Also in 2008, Ms. Simpson executed a Durable Power of Attorney (the “Durable

POA”), designating Plaintiff as her attorney-in-fact and Defendant as her alternate

attorney-in-fact.

      In 2009, Ms. Simpson was declared incompetent by the Superior Court of

Watauga County. At the time, Plaintiff served as the trustee of Ms. Simpson’s Trust

and Defendant served as the alternate trustee.

      Plaintiff lived in California, which made it difficult for her to carry out her

duties under the Trust and the Durable POA.             Accordingly, in November 2009,

Plaintiff and Defendant entered into an agreement (the “Resignation Agreement”)

and submitted it to the Clerk of Superior Court (the “Clerk”). The Resignation

Agreement provided, in part, that:

      (1) Defendant would assume the role of trustee under the Trust;

      (2) Plaintiff would submit a request to the Clerk for reimbursement of
      expenses she incurred while she served as Ms. Simpson’s attorney-in-fact and
      as trustee of the Trust;

      (3) Plaintiff would not contest Defendant being named as their mother’s
      guardian by the Clerk in the incompetency proceeding; and

      (4) Defendant would keep Plaintiff informed of their mother’s address and
      mental and physical status.

                                        -2-
                               MORGAN-MCCOART V. MATCHETTE

                                          Opinion of the Court

        In 2010, Plaintiff petitioned the Clerk to be paid $22,405.56 by Ms. Simpson

and the Trust.       Specifically, Plaintiff requested to be reimbursed $13,856.76 for

certain expenses that she claims to have incurred while serving as the trustee of the

Trust and as Ms. Simpson’s attorney-in-fact under the Durable POA, and to receive

an “annual distribution” of $8,548.80 as a beneficiary under the Trust. The Clerk

entered an order allowing Plaintiff to recover only $1,906.04 in expense

reimbursements and $0 for a beneficiary distribution from the Trust, rejecting the

remaining $20,499.52 she had sought.

        In September 2014, Plaintiff filed a complaint for breach of contract in District

Court against Defendant, individually, as trustee of the Trust, and as Ms. Simpson’s

general guardian.1         Upon Defendant’s motion, the trial court entered an order

dismissing Plaintiff’s complaint pursuant to Rule 12(b)(1) of the Rules of Civil

Procedure, concluding that it did not have subject matter jurisdiction over Plaintiff’s

claims but that jurisdiction lay with the Clerk. Plaintiff timely appealed.

                                      II. Standard of Review

        1Plaintiff’s original complaint also alleged a claim for breach of fiduciary duty and constructive
fraud. Based on the allegations, it appears that this claim was directed, at least in part, against
Defendant in her capacity as guardian of and attorney-in-fact for their mother and as trustee of the
Trust. In this prayer for relief, Plaintiff requested that Defendant be ordered to make whole their
mother’s estate for Defendant’s failure to comply with her fiduciary duties. However, Plaintiff has
voluntarily dismissed this claim.

                                                  -3-
                          MORGAN-MCCOART V. MATCHETTE

                                   Opinion of the Court

      The standard of review on a motion to dismiss under Rule 12(b)(1) for lack of

subject matter jurisdiction is de novo. Fuller v. Easley, 145 N.C. App. 391, 395, 553

S.E.2d 43, 46 (2001).

                                     III. Analysis

      On appeal, Plaintiff argues that the trial court erred in granting Defendant’s

motion to dismiss for lack of subject matter jurisdiction.        Specifically, Plaintiff

contends that her breach of contract claim is not a “related proceeding” as defined by

N.C. Gen. Stat. § 35A-1203, and therefore, she was not required to file the claim with

the Clerk.

      In her complaint, Plaintiff seeks relief in various forms and names Defendant

as a party, not only in her individual capacity, but also in her capacity as trustee of

the Trust and in her capacity as general guardian of their mother. Our Court has

noted the distinction between claims which are “justiciable matters of a civil nature,”

for which original general jurisdiction is vested in the trial division, and claims which

are properly before the Clerk pursuant to North Carolina statutory authority. See

N.C. Gen. Stat. § 35A-1203 (2014) (providing that the Clerk has original jurisdiction

for the appointment of “general guardians for incompetent persons and of related

proceedings,” and retains jurisdiction in order to ensure compliance with the Clerk’s

orders) (emphasis added); see also N.C. Gen. Stat. § 36C-2-203 (2014) (providing that

                                          -4-
                            MORGAN-MCCOART V. MATCHETTE

                                     Opinion of the Court

the Clerk shall have “original jurisdiction over all proceedings concerning the internal

affairs of trusts”).

          In analyzing the merits of Plaintiff’s argument, here, we are tasked to review

each prayer for relief sought by Plaintiff to determine whether the District Court

properly dismissed each individual claim for want of subject matter jurisdiction. See

Ingle v. Allen, 53 N.C. App. 627, 281 S.E.2d 406 (1981) (looking to the prayer for relief

to determine which claims against the administrator of an estate were properly

brought in superior court and which claims should have been brought before the

clerk).

                                 A. Claim for $20,499.52

          In her first prayer for relief, Plaintiff seeks the following:   “She recover

judgment against Defendant, individually, or as Trustee, in the amount of

$20,499.52, plus interest at the legal rate[.]” This amount appears to represent the

full amount Plaintiff sought, but which was rejected from the Clerk. In any event,

because her claim against Defendant as trustee differs from her claim against

Defendant individually, we address each claim separately.

                       1. Against Defendant as Trustee of the Trust

          Plaintiff appears to make two claims against the Trust: (1) reimbursement for

expenses she incurred while she served as the trustee of the Trust before resigning

as trustee in 2009; and (2) an annual gift she claims she is entitled to as a beneficiary

                                            -5-
                          MORGAN-MCCOART V. MATCHETTE

                                  Opinion of the Court

under the Trust. N.C. Gen. Stat. § 36C-2-203 provides that the Clerk shall have

“original jurisdiction over all proceedings concerning the internal affairs of trusts,”

which include “the administration and distribution of trusts . . . and the

determination of other matters involving trustees and trust beneficiaries[.]” N.C.

Gen. Stat. § 36C-2-203 (2014).       Here, Plaintiff has already submitted to the

jurisdiction of the Clerk for the adjudication of these claims. Therefore, we hold that

the District Court properly dismissed these claims, concluding that the Clerk had

jurisdiction.   Accordingly, we affirm the portion of the District Court’s order

dismissing Plaintiff’s claim for $20,499.52 against Defendant, in her capacity as

trustee of the Trust.

                         2. Against Defendant, Individually

       Plaintiff also seeks to “recover judgment against Defendant, individually . . .

in the amount of $20,499.52[.]”     This claim appears to be based on Plaintiff’s

assumption that Defendant became contractually obligated, personally, to reimburse

Plaintiff’s expenses submitted to the Clerk pursuant to the Resignation Agreement,

whether approved or denied by the Clerk. Therefore, we treat Plaintiff’s claim as one

based in contract against Defendant, in her individual capacity.

       We agree with Plaintiff that the District Court has jurisdiction to hear this

claim regarding her contractual relationship with Defendant, in her individual

capacity. See Ingle, 53 N.C. App. at 629, 281 S.E.2d at 408. Accordingly, we reverse

                                         -6-
                               MORGAN-MCCOART V. MATCHETTE

                                         Opinion of the Court

the District Court’s order to the extent that it dismissed Plaintiff’s claim against

Defendant, in her individual capacity, for $20,499.52.2

                        B. Claim for Specific Performance of Contract

        In her complaint, Plaintiff prays that “Defendant, individually, be ordered to

comply with the terms of the Resignation Agreement . . . to ensure reasonable

communication and information is given to Plaintiff from Defendant concerning their

mother’s health, care, status, location, and contact information.”                      In her brief,

Plaintiff argues that Defendant has a contractual obligation under the Resignation

Agreement to keep her informed of their mother’s well-being and whereabouts, apart

from any obligation Defendant might otherwise have to do so in her capacity as

guardian, attorney-in-fact, or as trustee. Therefore, as with her claim discussed in

section (A)(2) above, we treat Plaintiff’s claim here as one based in contract against

Defendant, in her individual capacity. As such, the District Court has subject matter

jurisdiction to hear this claim. Accordingly, we reverse the District Court’s order to

the extent that it dismissed Plaintiff’s claim against Defendant, in her individual

capacity, for specific performance to keep Plaintiff advised of their mother’s health

and whereabouts under the Resignation Agreement. See footnote 2, supra.

                              C. Costs and Expenses of the Action

        2 We take no position as to the merits of Plaintiff’s claims against Defendant, in her individual
capacity, or as to whether these claims would survive a motion to dismiss for failure to state a claim
under N.C. Gen. Stat. § 1A-1, Rule 12(b)(6). Rather, our review is limited to whether the District Court
has subject matter jurisdiction.

                                                  -7-
                           MORGAN-MCCOART V. MATCHETTE

                                   Opinion of the Court

      In her complaint, Plaintiff prays that she “recover the costs and expenses of

this action from Defendant[.]” Here, Plaintiff is not specific as to whether she seeks

this relief from Defendant, individually, or in some other capacity. Because Plaintiff

has dismissed her claim for breach of fiduciary duty/constructive trust; see footnote

1, supra; the only claims remaining are (1) against Defendant, individually, for

$20,499.52, and for specific performance, both pursuant to the Resignation

Agreement, and (2) against Defendant, as trustee of the Trust, for $20,499.52. We

hold that any claim for costs and expenses associated with Plaintiff’s claims against

Defendant, individually, is properly in District Court, and any claim for costs and

expenses associated with Plaintiff’s claim against Defendant, in her capacity as

trustee of the Trust, must be heard by the Clerk. Accordingly, we affirm, in part, and

reverse, in part, the District Court’s order with respect to Plaintiff’s claim for costs

and expenses.

                                     IV. Conclusion

      We affirm the trial court’s grant of Defendant’s motion to dismiss Plaintiff’s

claim against Defendant, in her capacity as trustee of the Trust. However, to the

extent that Plaintiff seeks relief from Defendant for breach of the Resignation

Agreement, in her individual capacity only (and not against Defendant in her capacity

as trustee, guardian, or attorney-in-fact), the ruling of the trial court is reversed, and

                                          -8-
                         MORGAN-MCCOART V. MATCHETTE

                                 Opinion of the Court

the matter is remanded to the District Court for further proceedings not inconsistent

with this opinion.

      AFFIRMED IN PART, REVERSED AND REMANDED IN PART.

      Judges GEER and HUNTER, JR., concur.

                                        -9-