Court Opinion

ID: 2728793
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:36:19.839049+00
Date Added: 2024-06-11T15:43:59.946125
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                               NO. COA13-1189
                       NORTH CAROLINA COURT OF APPEALS

                                Filed: 15 April 2014

BRYANT/SUTPHIN PROPERTIES, LLC AND
DONALD H. SUTPHIN,
     Plaintiffs,

      vs.                                     Guilford County
                                              No. 13 CVS 5523

J. SCOTT HALE, ROBERT E. BOYDOH,
JR., AND BOYDOH & HALE, PLLC,
     Defendants.

      Appeal by Plaintiffs from order entered 8 August 2013 by

Judge Richard L. Doughton in Guilford County Superior Court.

Heard in the Court of Appeals 19 February 2014.

      Benson, Brown         &    Faucher,     PLLC,    by    Drew    Brown,     for
      Plaintiff.

      Yates, McLamb & Weyher, L.L.P., by Dan J. McLamb and Andrew
      C. Buckner, for Defendants.

      DILLON, Judge.

      Bryant/Sutphin       Properties,      LLC,    and     Donald    H.   Sutphin

(together, “Plaintiffs”), were the defendants in a lawsuit filed

against them by SunTrust Bank (the “SunTrust suit”).                   Plaintiffs

were represented in the SunTrust suit by attorneys J. Scott Hale
                                       -2-
and Robert E. Boydoh, Jr., and their law firm Boydoh & Hale,

PLLC   (together,    “Defendants”).           Plaintiffs           filed    the    present

action against Defendants, alleging that Defendants committed

legal malpractice in the SunTrust suit.                       Plaintiffs’ complaint

against Defendants was dismissed by the trial court pursuant to

Rule   12(b)(6)     by   order     entered        8       August   2013,    from    which

Plaintiffs appeal.       We affirm the trial court’s order.

                                  I. Background

       On 3 February 2010, SunTrust Bank filed the SunTrust suit

against Plaintiffs alleging Plaintiffs’ default on a commercial

note    in   the    original       principal          amount       of    $2,150,000.00.

Plaintiff Bryant/Sutphin Properties, LLC, was the borrower on

the note, and Plaintiff Mr. Sutphin was a guarantor on the note.

Defendants, who were retained to represent Plaintiffs, filed a

responsive    pleading    on      behalf     of       Plaintiffs,        which    included

counterclaims      against        SunTrust        for       unfair/deceptive         trade

practices pursuant to N.C. Gen. Stat. § 75-1.1                             (“Chapter 75

counterclaim”) and for breach of contract.                         In the Chapter 75

counterclaim, Plaintiffs alleged that SunTrust had engaged in

wrongful conduct which adversely affected Plaintiffs’ day-to day

business     operations      by     “placing          a     hold    on     [Plaintiffs’]

corporate accounts so that no funds could be withdrawn from such
                                              -3-
Accounts . . . .”           Suntrust Bank v. Bryant/Sutphin Prop., LLC,

__ N.C. App. __, __, 732 S.E.2d 594, 597, disc. review denied,

366 N.C. 417, 735 S.E.2d 180 (2012).

       At the end of the SunTrust suit trial, the jury found in

favor of Plaintiffs on their Chapter 75 counterclaim, awarding

$700,000.00, which was trebled to $2,100,000.00.                            However, the

jury    found   in     favor      of    Suntrust       on    Plaintiffs’        breach   of

contract counterclaim, determining that no breach of contract

had occurred.        Id. at __, 732 S.E.2d at 597.                 All parties in the

SunTrust suit appealed.

       On appeal in the SunTrust suit, we stated that Plaintiffs’

Chapter 75 counterclaim must be based on either a breach of

contract accompanied by “substantial aggravating circumstances”

or a claim separate and apart from a breach of contract; and,

accordingly,        since   the    jury       had   ruled     against      Plaintiffs    on

their breach of contract counterclaim, the only basis upon which

their Chapter 75 counterclaim could succeed would be conduct by

SunTrust      separate      and        apart    from    a     breach       of   contract.

Ultimately, we held that the trial court erred by entering an

award on Plaintiffs’ Chapter 75 counterclaim because Plaintiffs

had    made   “no    allegations         or    claims       for   fraud,    constructive
                                           -4-
fraud, misrepresentation or the like on the part of [SunTrust].”

Id. at __, 732 S.E.2d at 599.

    On 2 May 2013, Plaintiffs filed the present action against

Defendants for breach of contract and professional negligence,

alleging that their Chapter 75 counterclaim against SunTrust in

the SunTrust suit ultimately failed on appeal because Defendants

had failed to amend the Chapter 75 counterclaim to allege a

distinct       tort,    separate    from     the   breach    of   contract    claim.

Essentially,       Plaintiffs’       lawsuit       against    Defendants     in   the

present    case    hinges    upon     Plaintiffs’      belief     that    Defendants

committed malpractice by not alleging fraud, constructive fraud,

or misrepresentation in the SunTrust suit, such that Plaintiffs’

favorable judgment pertaining to the Chapter 75 counterclaim –

having a separate founding basis other than breach of contract -

would not have been reversed by this Court.

    On 18 July 2013, Defendants filed a Rule 12(b)(6) motion in

the present action to dismiss Plaintiffs’ action for failure to

state a claim upon which relief can be granted.                          On 8 August

2013,    the    trial    court     entered    an   order     granting    Defendants’

motion    and     dismissing       Plaintiffs’      complaint     with    prejudice.

From this order, Plaintiffs appeal.

                                    II.    Analysis
                                    -5-
       In Plaintiffs’ sole argument on appeal, they contend the

trial court erred by granting Defendants’ Rule 12(b)(6) motion

to dismiss.      We disagree.

       “The motion to dismiss under N.C. R. Civ. P. 12(b)(6) tests

the legal sufficiency of the complaint.”           Stanback v. Stanback,

297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979).                “In ruling on

the motion the allegations of the complaint must be viewed as

admitted, and on that basis the court must determine as a matter

of law whether the allegations state a claim for which relief

may be granted.”        Id. (citations omitted).           “This Court must

conduct a de novo review of the pleadings to determine their

legal sufficiency and to determine whether the trial court’s

ruling on the motion to dismiss was correct.”                Leary v. N.C.

Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4,

aff’d per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).

       “In   a   professional   malpractice   case    predicated     upon   a

theory of an attorney’s negligence, the plaintiff has the burden

of proving by the greater weight of the evidence: (1) that the

attorney breached the duties owed to his client . . ., and that

this    negligence    (2)   proximately   caused     (3)    damage   to   the

plaintiff.”      Rorrer v. Cooke, 313 N.C. 338, 355, 329 S.E.2d 355,

365-66 (1985).       A plaintiff in a legal malpractice action “must
                                        -6-
establish that the loss would not have occurred but for the

attorney’s conduct.”          Id. at 361, 329 S.E.2d at 369.                       Said

plainly, a plaintiff in a legal malpractice suit must allege and

prove the following: “(1) The original claim was valid; (2) It

would have resulted in a judgment in his favor; and (3) The

judgment    would    have   been      collectible.”         Id.      “A     plaintiff

alleging a legal malpractice action must prove a ‘case within a

case,’ meaning a showing of the viability and likelihood of

success of the underlying action.”                  Formyduval v. Britt, 177

N.C. App. 654, 658, 630 S.E.2d 192, 194 (2006).

    In this case, except for Plaintiffs’ breach of contract

claim   that    Defendants         charged     “excessive         fees,”     all    of

Plaintiffs’ claims appear to be based on Plaintiffs’ failure to

amend the counterclaim in the SunTrust suit.                     Plaintiffs allege

the original Chapter 75 claim against SunTrust was valid and

would   have   resulted     in    a   judgment      in   their     favor     but    for

Defendants’ negligent failure to amend the counterclaim with a

“distinct   tort    claim[]      separate     and   apart    from    a     breach   of

contract[.]”        Specifically,      Plaintiffs        state    that     Defendants

should have amended the counterclaim in the SunTrust suit to

allege “Negligent and/or Fraudulent Representation.”                         However,

it was also incumbent on Plaintiffs to allege in their complaint
                                       -7-
the circumstances that would have given rise to a valid claim

against SunTrust for negligent or fraudulent misrepresentation.

However, the only representation which Plaintiffs allege that

SunTrust made was that SunTrust had “falsely led [Plaintiff Mr.

Sutphin] to believe they would be fair to [Plaintiffs] in [their

banking] relationship.”

      We believe that SunTrust’s alleged representation - that

Plaintiffs would be treated fairly in their future dealings - is

too vague to form the basis for fraud or misrepresentation based

on the facts of this case.           See Timothy L. Hardin v. York Mem’l

Park, __ N.C. App. __, __, 730 S.E.2d 768, 778 (2012), disc.

review denied, 366 N.C. 571, 738 S.E.2d 376 (2013) (stating that

the   “[p]laintiffs’       allegations     regarding    fraud    are   vague   and

general — they essentially parrot the elements of a fraud claim

without     providing   any      specifics”   and    holding    that   the   trial

court did not err by dismissing the compliant).                 In other words,

we believe that Plaintiffs failed to support their “case within

a   case”   by   failing    to    allege   exactly     what    misrepresentation

SunTrust made that would have sustained Plaintiffs’ Chapter 75

counterclaim.

      Assuming arguendo that SunTrust’s representation to treat

Plaintiffs fairly was a legitimate basis for fraud in this case,
                                      -8-
Plaintiffs   have       nonetheless   failed        to    show    how     SunTrust’s

subsequent actions by placing a hold on Plaintiffs’ account –

which was the conduct Plaintiffs assert was unfair - constituted

a breach of the fairness representation.                  Rather, we held just

the   opposite    in    Plaintiffs’   appeal     in      the   SunTrust     suit   as

follows:

           There is no doubt that [SunTrust’s] placing
           a hold on [Plaintiffs’ corporate] accounts
           without   prior   notice,   failing    to   make
           written demands for payment [on the loans
           Plaintiffs allegedly defaulted on], and
           acting in a different manner than [SunTrust]
           had in the past would be surprising to
           [Plaintiffs]    and   likely   disruptive     to
           [Plaintiffs’]    business(es)    .    .   .    .
           [However,] this does not make [SunTrust’s]
           actions   “immoral,   unethical,    oppressive,
           unscrupulous, or substantially injurious to
           consumers” or accurately described as having
           “the capacity or tendency to deceive.”

Bryant/Sutphin,        __   N.C.   App.     at   __,     732     S.E.2d    at   600.

Accordingly, Plaintiffs have failed to allege facts to show that

they had a valid claim for misrepresentation against SunTrust

where Plaintiffs have merely alleged SunTrust’s representation

that it would treat them fairly and the subsequent hold placed

on Plaintiffs’ deposit accounts by SunTrust.

      Regarding    Plaintiffs’      claim    that      Defendants’      legal   fees

were excessive, Plaintiffs make no allegations regarding what

the fee agreement was, how Defendants breached the agreement or
                                    -9-
the   amount   of   damages,   if   any,   resulting      from   the   breach.

Rather, there is only a naked allegation that Defendants had

billed over $200,000.00 in their representation of Plaintiffs in

the SunTrust suit and that “[t]he fee charged in the matter

[was]   excessive.”     Accordingly,       we   believe   the    trial   court

properly dismissed this claim as well.

      AFFIRMED.

      Judge BRYANT and Judge STEPHENS concur.

      Report per Rule 30(e).