Court Opinion

ID: 9340128
Source: CourtListenerOpinion
Date Created: 2022-12-16 19:46:23.768142+00
Date Added: 2024-06-11T17:15:21.414037
License: Public Domain

TYSON, Judge,
dissenting.
I would hold that the trial court did not err in denying defendants’ motions to dismiss and judgment notwithstanding the verdict, or new trial, on plaintiffs claims for conversion, malicious prosecution, and abuse of process. I would therefore reach defendants’ additional assignments of error to the following trial court rulings: (1) the admission of rebuttal testimony from Hill’s ex-wife; (2) the failure to allow counsel for the parties to make closing arguments on the issue of punitive damages; (3) the admission of hearsay statements; and (4) the failure to find that plaintiffs counsel violated the North Carolina Rules of Professional Conduct by referring to Hill as a “liar”.
I would hold that defendants received a trial free of prejudicial error. Accordingly, I respectfully dissent.
I. Denial of motions to dismiss
I disagree with the majority’s opinion that the trial court erred in denying defendants’ motions to dismiss at the close of plaintiff’s evidence, and at the close of all evidence. The standard of review for this Court on the trial court’s denial of a motion for directed verdict is “whether, upon examination of all the evidence in the light most favorable to the nonmoving party, and that party being given the benefit of every reasonable inference drawn therefrom, the evidence is sufficient to be submitted to the jury.” Fulk v. Piedmont Music Center, 138 N.C. App. 425, 429, 531 S.E.2d 476, 479 (2000) (citing Abels v. Renfro Corp., 335 N.C. 209, 214-15, 436 S.E.2d 822, 825 (1993)) (emphasis supplied).
A directed verdict should be granted in favor of the moving party only where “ ‘the evidence so clearly establishes the fact in issue that no reasonable inferences to the contrary can be drawn,’ and ‘if the credibility of the movant’s evidence is manifest as a matter of law.’ ” Law Offices of Mark C. Kirby, PA. v. Industrial Contractors, Inc., 130 N.C. App. 119, 123, 501 S.E.2d 710, 713 (1998) (quoting Lassiter v. English, 126 N.C. App. 489, 493, 485 S.E.2d 840, 842-43, disc. review denied, 347 N.C. 137, 492 S.E.2d 22 (1997)).
The majority fails to review the evidence in the light most favorable to plaintiff, nor does it afford plaintiff the benefit of every reasonable inference to be drawn therefrom. I cannot agree that the credibility of the evidence in this case is manifest as a matter of law, or that the evidence so clearly establishes the matters at issue that no *534reasonable inference to the contrary may be drawn. The jury’s verdict in favor of plaintiff, and the trial court’s denial of judgment notwithstanding the verdict, or new trial, establishes that reasonable inferences to the contrary were, in fact, drawn by those who viewed the witnesses, heard the testimony, and personally examined the evidence presented at trial.
The vast majority of the evidence presented was witness testimony. The testimony was often contradictory. I cannot agree with the majority that the credibility of the crucial and sometimes contradictory evidence in this case is so clear that it can be ruled upon as a matter of law. The effect of the majority is to usurp the jury’s function in weighing credibility of the witnesses and the other evidence presented.
A. Evidence of gift
I disagree with the majority that the evidence of gift, viewed in the light most favorable to plaintiff, conclusively establishes that there is no reasonable inference that Hill gifted the store to plaintiff, thereby precluding plaintiff’s claim for conversion. Both the trial court and the finders of fact found to the contrary.
“In order to constitute a valid gift, there must be present two essential elements: 1) donative intent; and 2) actual or constructive delivery.” Huskins v. Huskins, 134 N.C. App. 101, 104, 517 S.E.2d 146, 148 (1999), cert, denied, 351 N.C. 355,-S.E.2d-(2000). There is “no absolute rule as to the sufficiency of a delivery which is applicable to all cases.” Id. at 105, 517 S.E.2d at 148. Delivery may be actual, constructive, or symbolic, and must only be “ ‘as perfect and as complete as the nature of the property and attendant circumstances will permit.’ ” Id. (quoting 38A C.J.S. Gifts § 94 (1996)).
The evidence presented showed that in late 1995, Hill contacted Ellis Nelson at the certified public accounting firm of McGladrey & Pullen to inquire about the procedure for transferring the store to plaintiff. Mr. Nelson sent Hill a letter in November 1995 detailing the procedure for transferring the store to plaintiff. The accounting firm prepared documents by which plaintiff obtained a federal employer identification number in his name, doing business as (“d/b/a”) “Discount City Super Store.” The accountants also prepared an application for the State Revenue Department for a sales tax number in plaintiff’s name, d/b/a Discount City Super Store. Said application was filed and the tax number was issued.
*535Plaintiff testified that in December 1995, Hill told plaintiff he wished to transfer the store to plaintiffs name effective 1 January 1996. Plaintiff testified that Hill agreed to gift to plaintiff the entire store, including its accounts receivable, inventory, bank account, and use of the building owned bv the Corporation. On 7 December 1995, McGladrey & Pullen sent plaintiff a letter describing how the transfer would occur.
Plaintiff testified that the transfer process began in December 1995 when Hill contacted First Citizens Bank. Hill told bank officials to transfer the store’s account to plaintiff, d/b/a Discount City Super Store. Thereafter, plaintiff went to First Citizens Bank and the store’s checking account was transferred to plaintiff’s ownership. Plaintiff ordered new checks and executed signature cards reflecting plaintiff’s ownership of the store.
Michael Thompson, a Vice-President at the First Citizens Bank in Havelock verified his signature on a bank document stating the following:
In late December, 1995, per a phone conversation with Bob Hill of Bob Hill Enterprises, Inc., First Citizens was authorized to change the name of the account to 27822 70469 from Bob Hill Enterprises, Inc., DBA Discount City to Discount City Super Store, which is the name Kevin E. Hill assumed for his business.
(emphasis supplied).
Joseph Simpson, store employee, testified to a conversation he had with Hill wherein Mr. Simpson told Hill about a customer complaint. Hill responded that “starting first of the year, you can refer all of [the complaints] to [plaintiff] because the store is going to be his and all of the headaches that come with it.”
Beginning 1 January 1996, plaintiff operated the store, paid the store’s bills, and employees’ wages and social security taxes, purchased and sold new inventory, and filed sales tax reports in the name of Kevin E. Hill d/b/a Discount City Super Store. Plaintiff testified that during January 1996, Hill came by the store occasionally to give plaintiff advice on running the store. At no time during these visits did Hill indicate that he had not transferred the store to plaintiff, or that the business still belonged to the corporate defendant. Rather, after 1 January 1996, Hill regularly discussed with plaintiff the details of the transfer and of setting up the new accounts in plaintiff’s name. There is no evidence that Hill ever expressed a belief that he *536maintained control over the store prior to the disagreement and ensuing physical altercation between plaintiff and Hill on 5 February 1996.
Prior to January 1996, the store’s employees were paid by payroll checks issued from the corporate defendant. After 1 January 1996, the Corporation no longer issued payroll checks to the store employees. Plaintiff paid all store employees from store accounts that had been transferred into his name. Mr. Simpson testified that he received his last pay check from the Corporation in December 1995. He testified that he was told by an employee of the corporate defendant that the reason for the change was that “the store is [plaintiffs] January 1st. [Hill] gave it to [plaintiff] and he will be paying you from now on.”
The majority’s opinion relies heavily on the fact that after 1 January 1996, the store’s new inventory was still being purchased from supplier accounts under the corporate defendant’s name. The fact that not all accounts had been officially changed to plaintiff’s name only five weeks into a transfer of a business does not support a conclusion that a valid transfer of the business did not occur. See Huskins v. Huskins, 134 N.C. App. at 105, 517 S.E.2d at 148 (there is “no absolute rule as to the sufficiency of a delivery which is applicable to all cases.”). Delivery may be actual, constructive, or symbolic, and must only be “ ‘as perfect and as complete as the nature of the property and attendant circumstances will permit.’ ” Id. (quoting 38A C.J.S. Gifts § 94 (1996)) (emphasis supplied).
Plaintiff testified that various purchase accounts and supplier accounts were in the process of being changed to plaintiff’s name, and that sale revenues were placed in the store’s account under plaintiffs ownership. Plaintiff testified that the paperwork on changing ownership on all accounts was in the process of being completed when plaintiff was arrested for trespass and prevented from returning to the store, at Hill’s direction. The majority’s reliance on supplier accounts is misplaced.
The majority’s focus on the fact that no lease was executed for the premises between plaintiff and Hill is also misplaced. Assuming no lease existed, that issue is irrelevant to whether Hill gifted the business and all of its assets to plaintiff. The presence of a gratuitous lease, given the familial relationship between the parties, is not unusual, nor is it of consequence to the issue of a valid gift of the business, which is personal property.
*537Also unpersuasive is defendants’ argument that Hill did not have the authority to transfer the store to plaintiff because the store was owned by the Corporation. The evidence establishes that Hill was the Corporation’s sole stockholder and sole member of its board of directors. He had complete authority and dominion over the functioning of his business, and he maintained the ability to transfer the corporate assets as he deemed necessary. I would also overrule this assignment of error.
This Court must view this evidence in the light most favorable to plaintiff, giving plaintiff the benefit of every reasonable inference to be drawn therefrom. See Fulk, 138 N.C. App. at 429, 531 S.E.2d at 479. The evidence was sufficient to warrant the jury’s consideration on the issues of Hill’s intent to give plaintiff the business as of 1 January 1996, and Hill’s actual or constructive delivery of that business to plaintiff as of that date. The majority must assume that every item in the store, including plaintiff’s checks and bank records, belonged to defendants in order to defeat plaintiff’s claim for conversion, when viewed in the light most favorable to plaintiff. I would hold that plaintiff’s claim, based on conversion of the store’s assets, was appropriately submitted to the jury.
B. Malicious prosecution
I disagree with the majority’s holding that the jury was not entitled to consider the issue of malicious prosecution. In order to survive a motion for directed verdict on a claim of malicious prosecution, a plaintiff must show evidence that the defendant “ ‘(1) instituted, procured or participated in the criminal proceeding against [the] plaintiff; (2) without probable cause; (3) with malice; and (4) the prior proceeding terminated in favor of [the] plaintiff.’ ” Moore v. Evans, 124 N.C. App. 35, 42, 476 S.E.2d 415, 421 (1996) (quoting Williams v. Kuppenheimer Manufacturing co., 105 N.C. App. 198, 200, 412 S.E.2d 897, 899 (1992)). A plaintiff may establish the element of malice by showing that the defendant “was motivated by personal spite and a desire for revenge” or that the defendant acted in a manner showing “ ‘reckless and wanton disregard’ ” for the plaintiff’s rights. Moore v. City of Creedmoor, 345 N.C. 356, 371, 481 S.E.2d 14, 24 (1997) (quoting Jones v. Gwynne, 312 N.C. 393, 405, 323 S.E.2d 9, 16 (1984)).
On this claim, plaintiff produced evidence that a dispute arose between plaintiff and Hill in February 1996. Plaintiff claimed that he needed to pay supplier invoices from $17,000.00 paid by the United *538States government for appliances sold by the store to the Department of Defense in December 1995. Plaintiff testified that, prior to transfer of the store, it was customary for the Corporation to deposit all revenues into the account of the particular store from which the sales were made. Plaintiff testified that the corporate cashier called him and told him a $17,000.00 check was there for him to retrieve. Plaintiff went to the corporate office on 5 February 1996 to get the check, but upon arrival, was told that Hill had instructed the cashier not to give plaintiff the check.
Plaintiff testified that, upon his return to the store, Hill called to berate him for attempting to retrieve the check. Plaintiff testified that Hill “cussed” at him and told plaintiff the money was Hill’s. Plaintiff responded that the money was for merchandise sold, and that the money was needed to pay the bills. Plaintiff testified that Hill was “cussing [him] out so bad” that he hung up the phone.
Hill arrived at the store moments later. Plaintiff testified that Hill continued to “cuss” at him, while plaintiff informed Hill that the money belonged in the store’s account and was needed to pay bills. Plaintiff testified that Hill swung at him with his fists. A physical altercation ensued, in front of the store’s employees, during which Hill told plaintiff he was “out of here” and that Hill would “cut [plaintiff] out of [the] inheritance.” Plaintiff left the store to avoid further spectacle.
The following day, plaintiff arrived at the store and continued to run the business as usual. Hill came to the store days later and informed plaintiff that he was closing the store. Plaintiff responded that Hill could not close the store because the store belonged to plaintiff. Hill left the store. For several weeks afterward, plaintiff ran the store as usual.
On 12 March 1996, the Havelock Chief of Police, Michael Campbell, came to see plaintiff at the store. Chief Campbell informed plaintiff that Hill had requested by letter that plaintiff be removed from the store. The letter advised plaintiff that as of 1 February 1996, plaintiff’s employment with the Corporation was terminated and he was required to vacate the premises. Plaintiff showed Chief Campbell the documents revealing plaintiff’s ownership of the store, including the bank account and sale’s tax identification numbers.
Plaintiff testified that, upon viewing plaintiff’s documentation, Chief Campbell responded, “I am not going to do this. . . . This is *539wrong .... I am going to go back and tell [Hill] that I am not going to tell you to leave the premises or remove you from here.” Chief Campbell then warned plaintiff that if Hill “sees a magistrate and convinces him somehow . . . the Havelock police might have to come back.”
The following day, 13 March 1996, a Havelock police officer came to the store with a warrant charging plaintiff with trespass. The officer arrested plaintiff at the store and took him to the magistrate, Thomas Mylett. Magistrate Mylett placed plaintiff under a $2,000.00 secured bond. As a condition of the bond, plaintiff was prohibited from going to the store, from going upon any of the Corporation’s property, and from having contact with Hill. Plaintiff testified that at the time he was arrested and taken from the store, the store had approximately $190,000.00 in inventory, and $100,000.00 in accounts receivable.
Upon his release on bond, plaintiff returned to the store to find that it was locked, with no employees or customers inside. The store locks had been changed, and “no trespass” signs were posted on the premises. Plaintiff never returned to the store again. He testified that Hill transferred some of the store’s inventory to other stores that still belonged to the Corporation, and sold the remainder of the business. Plaintiff was tried on the trespass charge in Havelock District Court. The case was dismissed for lack of State’s evidence.
I would hold that, viewing this evidence in the light most favorable to plaintiff, as we are required to do, sufficient evidence exists of each element of plaintiff’s malicious prosecution claim to submit the issue to the jury. The evidence is conclusive that Hill initiated the prosecution, and that the charge was eventually dismissed in favor of plaintiff. The evidence further established that on 12 March 1996, Chief Campbell came to the store to remove plaintiff from the premises upon Hill’s request. Upon review of the documentation of Kevin’s ownership, Chief Campbell did not remove Kevin. Instead, he stated to Kevin that he was “not going to do this,” that removing plaintiff from the store was “wrong,” and that he would tell Hill that plaintiff could not be removed from the premises.
Nevertheless, plaintiff was arrested and physically removed from the store at Hill’s request on 13 March 1996. Plaintiff was placed under a $2,000.00 secured bond at Magistrate Mylett’s office, and detained for several hours. Plaintiff’s bond was conditioned upon his *540not returning to any corporate premises, including plaintiffs own store, and having no contact with Hill. Evidence was introduced to show that the warrant and bond were issued as a result of Hill’s personal relationship with Magistrate Mylett, as Chief Campbell had warned.
After being released on bond, plaintiff returned to the store to find that “no trespass” signs had been posted. The store locks had been changed, and plaintiff was unable to gain access to the store. Plaintiff was unable to obtain his records or personal effects from the store. The store’s inventory was transferred to other stores still owned by the Corporation. After his arrest, plaintiff never re-entered the store. He lost his inventory, his accounts receivable and records, and he lost any interest he had in the business, which defendants later sold.
This evidence, viewed as to give plaintiff the benefit of every reasonable inference, is sufficient to overcome a motion for directed verdict on the elements of probable cause and malice. Defendants used criminal process to obtain a de facto injunction prohibiting plaintiff from accessing the store. Plaintiff’s arrest, detention, and prosecution enabled Hill to obtain the desired result without having to submit to civil process. The majority’s ruling on this issue as a matter of law again disregards the proper standard of review, which requires that a motion for directed verdict be denied where, in the light most favorable to plaintiff, there exists a reasonable inference to the contrary. See, e.g., Fulk, supra; Abels, supra; Law Offices of Mark C. Kirby, P.A., supra; Lassiter, supra. Again, the jury’s verdict on this issue, and the trial court’s rulings, establish the presence of a reasonable inference to the contrary.
I am also unpersuaded by defendants’ argument that plaintiff cannot obtain compensatory damages for malicious prosecution where plaintiff failed to show pecuniary loss. This again assumes that everything in the store belonged to defendants, including the store’s checkbook and bank records, which undisputedly belonged to plaintiff. At the time of plaintiff’s arrest, the store had approximately $190,000.00 in inventory and $100,000.00 in accounts receivable. Defendants changed the store locks and prohibited plaintiff from recovering any of the store’s assets. After the trial at which plaintiff’s trespass charge was dismissed, the store no longer existed. I would overrule defendants’ assignment of error.
*541C. Abuse of process
I disagree with the majority that the trial court erred in submitting plaintiffs claim for abuse of process to the jury where the evidence was insufficient to support the claim. Our Supreme Court described the tort of abuse of process in Fowle v. Fowle, 263 N.C. 724, 140 S.E.2d 398 (1965):
‘[A]buse of process is the misuse of legal process for an ulterior purpose. It consists in the malicious misuse or misapplication of that process after issuance to accomplish some purpose not warranted or commanded by the writ. It is the malicious perversion of a legally issued process whereby a result not lawfully or properly obtainable under it is attended to be secured.’
Id. at 728, 140 S.E.2d at 401 (quoting Melton v. Rickman, 225 N.C. 700, 36 S.E.2d 236 (1945).
The same evidence that supports plaintiffs malicious prosecution claim applies here. This evidence tends to establish that defendants used the criminal process for the ulterior purpose of prohibiting plaintiff from accessing the store. During the hours that plaintiff was detained by Magistrate Mylett, the store locks were changed and the store was closed. Plaintiff no longer had access to the store or its contents. In essence, the prosecution, detention, and bond functioned as defendants’ opportunity to resolve the ownership dispute in their favor. When considered in the light most favorable to plaintiff, this evidence is sufficient to allow the jury to consider the issue.
II. Admission of rebuttal testimony
Defendants also assign error to the trial court’s admission of rebuttal testimony from Hill’s ex-wife and plaintiff’s mother, Evelyn Mallnauskas. Specifically, defendants argue that Ms. Mallnauskus’ testimony was improper because she was not named on the pre-trial order witness list, and her testimony was not rebuttal testimony, but was offered for the sole purpose of “inflaming the jury.”
Ms. Mallnauskus was called as a witness in response to defendants’ calling of Rhonda Hill Collins. Ms. Collins also was not designated as a witness on the pre-trial order. Ms. Collins, daughter of Hill, and Ms. Mallnauskus, testified to witnessing a physical fight between her parents, which she described as “a mutual fight.” Ms. Mallnaukus was called in rebuttal and testified that Hill was the aggressor in their physical fights, and that he had broken her nose with his fist.
*542“Whether to admit evidence not listed in a pretrial order is entrusted to the discretion of the trial court.. .. The trial court’s decision will not be reviewed unless an abuse of discretion is shown.” Beam, 120 N.C. App. at 214, 461 S.E.2d at 920 (citing Pittman v. Barker, 117 N.C. App. 580, 588, 452 S.E.2d 326, 331 (1995)). Defendants have failed to show any such abuse of discretion. Ms. Mallnauskus was called in rebuttal to the defense’s witness, who was also not listed on the pre-trial order.
Defense counsel generally objected to Ms. Mallnauskus testifying on grounds that it was only for the purpose of inflaming the jury. The trial court correctly limited the testimony to rebuttal purposes. Despite defense counsel’s initial general objection, at no time during direct examination did counsel object to any specific question or answer as being outside the trial court’s instruction. The transcript reveals that Ms. Mallnauskus testified about matters defendants elicited initially through Collins’ testimony. I would overrule this assignment of error.
III. Closing arguments on punitive damages
Defendants assign error to the trial court’s failure to “allow counsel for the parties to make a jury argument regarding the punitive damage issue.” The record reveals that neither party ever requested or moved the trial court to allow for such arguments. Defendants also did not object at trial to the absence of arguments pertaining to punitive damages. See N.C. R. App. P. 10(b)(1) (“In order to preserve a question for appellate review, a party must have presented to the trial court a timely request, objection or motion, stating the specific grounds for the ruling the party desired the court to make if the specific grounds were not apparent from the context.”). I would hold that defendants failed to preserve this argument for our review.
IV. Introduction of hearsay statements
Defendants argue that the trial court erred in allowing plaintiff to testify at various times to what bank officials told him regarding transfer of the store’s account from the corporate name to plaintiff’s name. Defendants argue that such statements were for the purpose of proving the truth of the transfer of the account, and thus, were prejudicial hearsay.
In reviewing the admission of the evidence at trial, “[t]he burden is on the appellant not only to show error but also to show that the *543error was prejudicial and probably influenced the jury verdict.” FCX, Inc. v. Caudill, 85 N.C. App. 272, 280, 354 S.E.2d 767, 773 (1987). “Where evidence is properly admitted through one witness, the defendant will not be heard to complain that the same evidence, improperly admitted through a different witness, was prejudicial error.” State v. Kimble,-N.C. App.-,-, 535 S.E.2d 882, 888 (2000) (citing State v. Washington, 131 N.C. App. 156, 163-64, 506 S.E.2d 283, 288 (1998) (error in admitting hearsay testimony harmless where improper testimony was repetitive of properly admitted testimony of other witnesses at trial)).
I would hold that any error in allowing plaintiffs testimony was harmless, in light of the testimony of First Citizens Bank Vice-President, Mr. Thompson, and the accompanying documents introduced. Mr. Thompson’s testimony clearly established that a transfer of the store account occurred at Hill’s direction. Mr. Thompson verified his signature on a bank document stating that the account was transferred from the corporate name to plaintiff as a result of a December 1995 phone call from Hill. Any statements made by plaintiff which were offered to show that the transfer occurred at Hill’s direction were cumulative or repetitive and were not prejudicial to defendants.
V. Violation of Rules of Professional Conduct
Defendants also assign error to the trial court’s failure to find that plaintiff’s counsel violated the State Rules of Professional Conduct. Specifically, defendants argue that counsel’s use of the word “liar” to describe Hill in a written response to defendants’ motion for judgment notwithstanding the verdict was a violation of Rule 3.4(e) of the Rules of Professional Conduct. Under this rule, an attorney is prohibited from stating in trial a personal opinion as to a party’s culpability or credibility.
However, plaintiff’s counsel did not make the statement before the jury, or “in trial.” The statement was written and submitted to the trial court following the jury’s verdict after defendants moved for judgment notwithstanding the verdict and in response to a question from the trial court. In Stiller v. Stiller, 98 N.C. App. 80, 82-83, 389 S.E.2d 619, 620 (1990), this Court rejected the appellant’s argument that counsel’s sending of letters to the trial court after conclusion of the hearing unduly influenced the court and violated various Rules of Professional Conduct. We stated:
*544Although the letters arguably may contain remarks and references that were not absolutely necessary to carry out the court’s business, plaintiff has failed to show that these remarks resulted in ‘undue influence’ on the trial court. Additionally, we note that if plaintiff feels that defendant’s counsel has violated a Rule of Professional Conduct the appropriate forum for that inquiry is the State Bar.

Id.

Defendants failed to forecast any evidence that plaintiff’s counsel’s describing Hill as a “liar” in a document to the trial court in any way unduly influenced the court’s ruling on defendants’ post-trial motions. In fact, following the alleged violation, the trial court further significantly remitted the jury’s award in favor of defendants. Defendants have also failed to show how the trial court’s failure to find a violation was more than harmless error. See H.B.S. Contractors, Inc. v. Cumberland County Board of Educ., 122 N.C. App. 49, 56, 468 S.E.2d 517, 522, disc. review improvidently granted, 345 N.C. 178, 477 S.E.2d 926 (1996) (even if trial court erred in failing to find violation of Rules of Professional Conduct, remedy is unavailable unless appellant “can establish the error was prejudicial and, without the error, a different result would likely have ensued.”). I would overrule this assignment of error.
I would hold that defendants received a fair trial, free from prejudicial error. I respectfully dissent.