Court Opinion

ID: 9624396
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:01:56.903086+00
Date Added: 2024-06-11T11:52:22.495273
License: Public Domain

TYSON, Judge
dissenting.
The trial court’s Judgment fails to: (1) set forth proper conclusions of law; (2) make a finding of fact regarding whether plaintiff *131was obligated to pay $2,000.00 to Ratley; and (3) address whether plaintiff should have had notice of the dismissal taken by in the earlier action. I would reverse and remand the trial court’s judgment. I respectfully dissent.
I. De Novo Review at the District Court
The majority’s opinion holds that “the legislature intended that the informal processes of the small claims court continue in the de novo appeal” and relies largely upon the case of Duke Power Co. v. Daniels, 86 N.C. App. 469, 358 S.E.2d 87 (1987). I disagree.
In Duke Power Co., the plaintiff originally brought an action in small claims court. 86 N.C. App. at 470, 358 S.E.2d at 88. The defendant appealed to the District Court, and again appealed from that order granting summary judgment. Id. This Court recognized the parties conducted discovery and were represented by counsel in the district court, despite the lack of either of these procedures before the small claims court. Id. at 470-71, 358 S.E.2d at 88. In affirming the trial court’s judgment, we reviewed the applicable North Carolina Rules of Civil Procedure and the North Carolina Rules of Appellate Procedure. Id. at 471, 358 S.E.2d at 88-89. We indicated the triggering of these rules upon appeal to the district court from a decision in small claims court. Id.
Here, the majority’s opinion avers “the informal processes of the small claims court continue in the de novo appeal.” Contrary to the holding of the majority’s opinion, Duke Power Co. supports the application of the general rules to all cases in district court, including those that originate in small claims court but are appealed for trial de novo. Id.
“Any judgment rendered by the magistrate is a judgment of the district court and is appealable to the district court for a trial de novo." Chandak v. Electronic Interconnect Corp., 144 N.C. App. 258, 263, 550 S.E.2d 25, 29 (2001) (citing N.C. Gen. Stat. § 7A-224 (1999); N.C. Gen. Stat. § 7A-228 (1999)). In explaining “the nature of the district court de novo trial” on appeal from a magistrate’s judgment rendered in small claims court, this Court looked to “cases construing the nature of the de novo trial in superior court following an adjudication in district court.” First Union National Bank v. Richards, 90 N.C. App. 650, 653, 369 S.E.2d 620, 621-22 (1988). Precedent shows, “[W]hen an appeal as of right is taken to the [trial court], in contemplation of law it is as if the case had been brought there originally *132and there had been no previous trial. The judgment appealed from is completely annulled and is not thereafter available for any purpose.’ ” Id. at 653, 369 S.E.2d at 621-22 (emphasis supplied) (quoting State v. Sparrow, 276 N.C. 499, 507, 173 S.E.2d 897, 902 (1970)). This Court summarized, “[W]hen plaintiff gave notice of appeal for trial de novo in district court, it was as if the case had been brought there originally." First Union National Bank, 90 N.C. App. at 653, 369 S.E.2d at 622 (emphasis supplied). Following the reasoning in Duke Power Co., we review the district court’s order anew and apply the standards normally employed in reviewing an order entered by the trial court following a trial without a jury. Id.
II. Standard of Appellate Review
The trial court must enter an order such that the appellate court can readily understand the basis of the order or judgment. In Coble v. Coble, 300 N.C. 708, 714, 268 S.E.2d 185, 190 (1980), our Supreme Court held:
Effective appellate review of an order entered by a trial court sitting without a jury is largely dependent upon the specificity by which the order’s rationale is articulated. Evidence must support findings; findings must support conclusions; conclusions must support the judgment. Each step of the progression must be taken by the trial judge, in logical sequence; each link in the chain of reasoning must appear in the order itself. Where there is a gap, it cannot be determined on appeal whether the trial court correctly exercised its function to find the facts and apply the law thereto.
Here, the trial court failed to make adequate findings of fact and conclusions of law to support its judgment. “Under our rules, where a case is tried before a court without a jury, findings of fact and conclusions of law sufficient to support a judgment are essential parts of the decision making process.” Bank v. Easton, 12 N.C. App. 153, 155, 182 S.E.2d 645, 646, cert. denied, 279 N.C. 393, 183 S.E.2d 245 (1971); see also Department of Transp. v. Byerly, 154 N.C. App. 454, 458, 573 S.E.2d 522, 524-25 (2002) (“one mixed finding of fact and conclusion of law regarding defendant’s adverse possession claim . . . forms an inadequate basis for this Court to conduct a review and assess appellant’s contentions.”).
Here, the trial court found that “[Ratley] received a check . . . based upon the representation and belief that a valid judgment was of *133record . . . .” The trial court further found “that said Judgment or claim had in fact been dismissed . . . The record on appeal includes only an “Order of Dismissal Pursuant to Rule 41(b).” Although the Order dismisses Ratley’s action “under Rule 41(b) of the Rules of Civil Procedure,” the Order states, “Upon the call of the case, the Plaintiff [Ratley, defendant in this action] informed the Court that he/she did not wish to proceed with this action.” Further, plaintiff, who was the defendant in the earlier action, did not move for dismissal as contemplated under Rule 41. See N.C. Gen. Stat. § 1A-1, Rule 41(b) (2003). The dismissal is a voluntary dismissal pursuant to Rule 41(a), not an involuntary dismissal pursuant to Rule 41(b).
No portion of Rule 41 permits a trial court to “dismiss” a judgment already entered. Neither a judgment from the prior case, nor an order vacating the judgment, appears in the record on appeal, other than Ratley’s reference in his letter offering to release the judgment “recorded in Deed Book 57, page 36.” The trial court erred by finding that “said Judgment. . . had been dismissed ...” pursuant to Rule 41(b).
Additionally, no evidence supports the trial court’s finding that “Plaintiff over paid [sic] [Ratley] in an amount not less than $2,000.00.” The evidence showed that plaintiff made only one payment to Ratley in the amount of $2,000.00. The trial court’s Judgment errs by finding an “overpayment.”
The trial court also failed to make findings of fact, or state a basis to support its only conclusion of law that stated, “Plaintiff is entitled to recover of [Ratley] the principal sum of $2,000.00 plus interest at the legal rate from July 1, 2002.”
III. Notice
The trial court also failed to make a finding of fact regarding whether plaintiff was estopped from seeking a return of the monies paid based on notice and his own actions. Plaintiff was a party to the prior action, and the record shows plaintiff received a letter dated 5 July 2000 from Ratley agreeing to release the judgment recorded in “Deed Book 57, page 36” upon receipt of payment. Plaintiff failed to verify Ratley’s dismissal prior to remitting the $2,000.00 payment to him.
Even if payment was made after Ratley took a voluntary dismissal, plaintiff failed to produce any evidence that the debt never *134existed or that the sum he paid was not in satisfaction of a valid debt or pursuant to a contractual agreement between the parties. As a party to the first action, plaintiff was on notice of Ratley’s claims. Although Ratley took a voluntary dismissal, he was free to file “a new action based on the same claim . . . within one year.” N.C. Gen. Stat. § 1A-1, Rule 41(a)(1). The act of a voluntary dismissal did not adjudicate the merits of Ratley’s claim or create a judicial determination that Ratley was not lawfully owed the money that plaintiff had paid to him. See N.C. Gen. Stat. § 1A-1, Rule 41(a)(2) (2003) (“Unless otherwise specified in the order, a dismissal under this subsection is without prejudice.”).
Public notice of the dismissal was available to plaintiff prior to payment. The trial court’s Judgment rewards plaintiff for his failure to fulfill his obligations and to know what actions were pending against him without a finding that his actions were proper under the law.
IV. Conclusion
The abbreviated procedures that are permissible in small claims court allow prompt resolution of disputes that do not exceed $4,000.00, while allowing for a full de novo review upon appeal by the party against whom judgment was entered by the magistrate. N.C. Gen. Stat. § 7A-210 (2003); N.C. Gen. Stat. § 7A-228 (2003); see also 2004 N.C. Sess. Law c. 128, § 1 (increasing amount to $5,000.00 effective 1 October 2004). The majority’s opinion abolishes the de novo aspect of the appeal, with all its attendant procedural rights and processes. Magistrates are not required to be attorneys, and some litigants in small claims court do not avail themselves of counsel or procedural processes in reliance on the right to de novo appeal to district court.
The trial court’s error in failing to make adequate findings of fact and state the basis for its conclusion of law limits our ability to review this Judgment. The Judgment fails to contain “essential parts of the decision making process.” Bank, 12 N.C. App. at 155, 182 S.E.2d at 646.1 would reverse and remand the Judgment for entry of findings of fact supported by the evidence presented and conclusions of law upon which the trial court relied in ordering Ratley to return $2,000.00 “over paid” to plaintiff. I respectfully dissent.