Court Opinion

ID: 9850197
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:53:17.700687+00
Date Added: 2024-06-11T09:20:32.938339
License: Public Domain

HUNTER, Judge.
Pinewood Homes, Inc., and Pinewood Homes, Inc., as trustee (“plaintiffs” or “Pinewood”) have asserted claims against Julie and Duane Harris (“defendants”) for interference with contracts and business relationships as well as abuse, of process. The purported cause of action arose after defendants received a judgment in the amount of $326,901.00 against Pinewood Development Corp., Willow Creek, LLP, and Ray Ritchie (“Ritchie”) for allegedly engaging in fraudulent conduct in the course of a land sale. See Harris et al. v. Pinewood Development Corp. et al., file 00 CVS 3117, Rowan County Superior Court. That judgment was not against plaintiffs in the instant case. Ritchie, however, was a shareholder and the president of Pinewood on the date of the judgment between Ritchie and defendants.
After the judgment, defendants were granted a preliminary injunction against Ritchie and all companies in which he maintains an ownership interest “from selling, disposing of, secreting, transferring or encumbering any assets until the post-judgment collection proceedings are completed[.]” Among those entities enjoined by the lower court was Pinewood, and, by extension, the assets Pinewood holds as trustee. Pinewood was not a named defendant in the injunction. According to the complaint, neither Ritchie nor Pinewood maintain an ownership interest in those trust assets. The preliminary injunction was later vacated by this Court. Harris v. Pinewood Dev. Corp., 176 N.C. App. 704, 707-08, 627 S.E.2d 639, 642 (2006) (holding that N.C. Gen. Stat. § 1-355 does not allow a preliminary *600injunction to be entered until either a judgment has been returned wholly or partially unsatisfied or the terms of N.C. Gen. Stat. § 1-355 are met).
Plaintiffs allege that while that appeal was pending defendants used the preliminary injunction to try to coerce Pinewood to pay the judgment that had been entered against Ritchie. Thus, plaintiffs brought two claims: (1) interference with contracts and business relationships; and (2) abusé of process, essentially arguing that Pinewood’s business ventures had been shut down because of the injunction.
Defendants moved to dismiss plaintiffs’ complaint for failure to state a claim under N.C.R. Civ. P. (12)(b)(6). Defendants also argued that Pinewood’s suit was a collateral attack on the injunction. At the Rule 12 hearing, plaintiffs made a motion to amend their complaint under N.C.R. Civ. P. 15(a).
The trial court granted the motions to dismiss on the grounds that granting Pinewood’s relief “would necessarily require this court to interpret and either affirm or limit and redefine the preliminary injunction^]” The complaint was also dismissed because after taking all allegations as true, there had been no legitimate claim stated in the complaint. Finally, the trial court rejected plaintiffs’ motion to amend because they could not correct a fatal defect, and dismissed the complaint with prejudice.
Plaintiffs present the following issues for review: (1) whether plaintiffs’ cause of action is barred by the rule against collateral attacks and whether the trial court erred in dismissing plaintiffs’ complaint for failure to state a claim; and (2) whether the trial court erred in denying plaintiffs’ motion to amend the complaint. After careful consideration we affirm in part, reverse in part, and remand.
I.
The standard of review on a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure “ ‘is whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory.’ ” Cabaniss v. Deutsche Bank Secs., Inc., 170 N.C. App. 180, 182, 611 S.E.2d 878, 880 (2005) (quoting Block v. County of Person, 141 N.C. App. 273, 277-78, 540 S.E.2d 415, 419 (2000)). The complaint must be liberally construed and should not be dismissed unless it appears beyond a doubt that plaintiffs could not *601prove any set of facts to support the claim which would entitle them to relief. Id.
Dismissal is proper “ ‘when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiffs claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff’s claim.’ ” Newberne v. Department of Crime Control & Pub. Safety, 359 N.C. 782, 784, 618 S.E.2d 201, 204 (2005) (citation omitted). Before addressing whether plaintiffs’ complaint adequately states a cause of action, we must first address whether the complaint is barred by the rule against collateral attacks.
Defendants argue that plaintiffs’ cause of action is a collateral attack on the preliminary injunction that had been previously granted between the parties. We disagree. A collateral attack is one “ ‘in which a plaintiff is not entitled to the relief demanded in the complaint unless the judgment in another action is adjudicated invalid.’ ” Thrasher v. Thrasher, 4 N.C. App. 534, 540, 167 S.E.2d 549, 553 (1969) (citation omitted). “A collateral attack on a judicial proceeding is ‘an attempt to avoid, defeat, or evade it, or deny its force and effect, in some incidental proceeding not provided by law for the express purpose of attacking it.’ ” Regional Acceptance Corp. v. Old Republic Surety Co., 156 N.C. App. 680, 682, 577 S.E.2d 391, 392 (2003) (citation omitted). “North Carolina does not allow collateral attacks on judgments.” Id.
In this case, a monetary judgment in favor of defendants was entered against Ritchie and several companies in which he has an ownership interest on 27 August 2004. None of those companies, however, were plaintiffs in the current action. After the judgment, the trial court entered an order on 12 January 2005 granting a preliminary injunction against Ritchie and all companies in which he has an ownership interest to prevent him “from selling, disposing of, secreting, transferring or encumbering any assets” until the judgment was satisfied. While the injunction was still in place, plaintiffs filed the current cause of action and the trial court ruled plaintiffs’ action to be a collateral attack and dismissed the case. After the dismissal of plaintiffs’ complaint by the trial court, and while the present case was pending, we vacated the injunction. Harris, 176 N.C. App. at 708, 627 S.E.2d at 642. The issue raised by the parties to this Court is whether Pinewood, a non-party to the first judgment, may attack the preliminary injunction arising out of that judgment in a collateral proceed*602ing. Because we vacated this injunction in Harris, we need not fully reach this issue. Id.
When something is “vacated,” it is nullified and made void. Alford v. Shaw, 327 N.C. 526, 543 n.6, 398 S.E.2d 445, 455 n.6 (1990); see also Black’s Law Dictionary 1584 (8th ed. 2004); Stewert v. Oneal, 237 F. 897, 906 (6th Cir. 1916) (“Vacate means to annul, set aside, or render void; suspend, to stay. When a thing is vacated it is devitalized”). Accordingly, “[o]nce [a] judgment [is] vacated, no part of it could thereafter be the law of the case.” Alford, 327 N.C. at 543 n.6, 398 S.E.2d at 455 n.6. Thus, it cannot be said that plaintiffs are attempting to set aside a “judgment,” as required by the rule against collateral attacks, because the prior order granting the preliminary injunction has been voided and is no longer part of the case between plaintiffs and defendants.
The dissent contends that “[p]laintiffs should either have filed a counter-complaint for tortious interference at the time the injunction was sought, or should have waited until after the injunction had been vacated to file their claim.” The dissent, however, fails to recognize that plaintiffs were neither a party to the original dispute between Ritchie and defendants nor were they a party before this Court when we vacated the injunction. See Harris, 176 N.C. App. 704, 627 S.E.2d 639. Accordingly, we cannot say that plaintiffs engaged in a collateral attack when they filed this current cause of action. Having determined that there was no collateral attack, we next address whether plaintiffs’ complaint has stated a claim upon which relief may be granted.
A.
Plaintiffs argue that the trial court erred in dismissing their cause of action for abuse of process. We agree. “Abuse of process is the misapplication of civil or criminal process to accomplish some purpose not warranted or commanded by the process.” David A. Logan & Wayne A. Logan, North Carolina Torts § 19.40 at 432 (1996) (citing Ellis v. Wellons, 224 N.C. 269, 29 S.E.2d 884 (1944)). Two elements must be proved to find abuse of process: (1) that the defendant had an ulterior motive to achieve a collateral purpose not within the normal scope of the process used, and (2) that the defendant committed some act that is a “ ‘malicious misuse or misapplication of that process after issuance to accomplish some purpose not warranted or commanded by the writ.’ ” Stanback v. Stanback, 297 N.C. 181, 200, 254 S.E.2d 611, 624 (1979) (citation omitted).
*603The ulterior motive requirement is satisfied when the plaintiff alleges that the prior action was initiated by the defendant or used by him to achieve a collateral purpose not within the intended scope of the process used. The act requirement is satisfied when the plaintiff alleges that during the course of the prior proceeding, the defendant committed some wilful act whereby he sought to use the proceeding as a vehicle to gain advantage of the plaintiff in respect to some collateral matter.
Hewes v. Wolfe and Hewes v. Johnston, 74 N.C. App. 610, 614, 330 S.E.3d 16, 19 (1985) (citations omitted); see also Stanback, 297 N.C. at 201, 254 S.E.2d at 624.
In Hewes, this Court held that a complaint alleging that “defendants maliciously filed notices of lis pendens and notices of lien on property owned by plaintiffs ‘for the purpose of injuring and destroying the credit business of the plaintiffs and in general to oppress the plaintiffs[]’ ” satisfied the ulterior motive and act requirements. Hewes, 74 N.C. App. at 614, 330 S.E.2d at 19. These allegations were sufficient because plaintiffs had alleged that the prior action was filed: (1) to coerce plaintiffs and (2) to achieve a collateral purpose— oppression. Id.
Here, plaintiffs argue that our holding in Hewes requires us to hold that plaintiffs have stated a claim upon which relief may be granted. We agree. Plaintiffs’ complaint alleged that: (1) “[defendants . . . had an ulterior purpose of coercing plaintiffs to pay a judgment they were not obligated to pay”; (2) defendants “maliciously refused to recognize the validity” of the trusts; and (3) have therefore gained “an advantage over the assets” held by plaintiffs. (Emphasis added.) As in Hewes, these allegations, if proven, show that the injunction was sought to coerce plaintiffs to pay a judgment for which they were not responsible and to oppress their business activities until such judgment was paid. Thus, defendants’ motion to dismiss for failure to state a claim should have been denied, and we therefore reverse as to this issue. To hold otherwise would allow a party who has a judgment against a debtor to seek an injunction against any company in which the debtor holds stock without serving the company and making them a party in the proceeding.
The dissent attempts to distinguish Hewes on the ground that the plaintiffs in this case have, according to the dissent, not alleged an act beyond the filing of the injunction. In Hewes, however, the act requirement was satisfied by the filing of the notices of lien and lis *604pendens. Id. The dissent correctly points out that the mere filing of a lien or lis pendens would cloud title to property. We disagree, however, with the implication that an injunction which plaintiffs alleged to have shut down its business activities could not have the same impact on their trust assets. Indeed, the plaintiffs alleged that the injunction caused “plaintiffs to refrain from conducting all lawful activities relating to the trust assets.” If proven, this is more severe than a lis pendens which merely puts potential buyers of property on notice that the property is subject to litigation and that if they buy it they will take the property subject only to the result of that pending judgment. Hill v. Memorial Park, 304 N.C. 159, 164, 282 S.E.2d 779, 782 (1981).
The dissent’s reliance on Lyon v. May, 108 N.C. App. 633, 424 S.E.2d 655, disc. review denied, 333 N.C. 791, 431 S.E.2d 25 (1993), is misplaced. In that case, we held that defendant1 was entitled to a judgment notwithstanding the verdict because there was “no evidence that [defendant] tried to use the attachment for anything other than its real purpose — to prevent the transfer of money which [defendant] believed he was entitled, albeit mistakenly.” Id. at 640, 424 S.E.2d at 659. It could very well be that at a later stage in this case plaintiffs will not have established sufficient evidence to prevail on the abuse of process claim, but we are reviewing this case at the motion to dismiss phase. As stated, in reviewing a motion to dismiss plaintiffs are entitled to have all allegations treated as true and to have the complaint liberally construed. Cabaniss, 170 N.C. App. at 182, 611 S.E.2d at 880. Accordingly, we do not find Lyon persuasive on this issue.
B.
Plaintiffs next argue that the trial court erred in dismissing their cause of action for tortious interference with a contract. The elements of a tortious interference with a contract claim are: (1) a valid contract existed between the plaintiff and a third person, conferring upon the plaintiff some contractual right against the third person; (2) the defendant knows of the contract; (3) the defendant intentionally induces the third person not to perform the contract; (4) the defendant acts without justification; and (5) the defendant’s conduct causes actual pecuniary harm to the plaintiffs. Childress v. Abeles, 240 N.C. *605667, 674, 84 S.E.2d 176, 181-82 (1954). Defendants attack only the fourth element (lack of justification) in plaintiffs’ complaint; consequently, we address only that issue and express no opinion as to whether plaintiffs have established the other elements of tortious interference with a contract.
A motion to dismiss a claim of tortious interference is properly granted where the complaint shows the interference was justified or privileged. Peoples Security Life Ins. Co. v. Hooks, 322 N.C. 216, 220, 367 S.E.2d 647, 650 (1988). “ ‘In general, a wrong purpose exists where the act is done other than as a reasonable and bona fide attempt to protect the interest of the defendant which is involved.’ ” Id. (citation omitted).
Interference of the contract must be without justification. “The interference is ‘without justification’ if the defendants’ motives . . . were ‘not reasonably related to the protection of a legitimate business interest’ of the defendant.” Privette v. University of North Carolina, 96 N.C. App. 124, 134, 385 S.E.2d 185, 190 (1989) (quoting Smith v. Ford Motor Co., 289 N.C. 71, 94, 221 S.E.2d 282, 292 (1976)). Accordingly, we have held that the complaint must admit of no motive for interference other than malice. Privette, 96 N.C. App. at 134-35, 385 S.E.2d at 191; Sides v. Duke University, 74 N.C. App. 331, 346, 328 S.E.2d 818, 829 (1985), rev’d on other grounds, Kurtzman v. Applied Analytical Industries, Inc., 347 N.C. 329, 493 S.E.2d 420 (1997).
At the outset, we note that plaintiffs’ complaint has alleged that the actions of defendants in seeking the injunction were taken maliciously and without justification. Defendants correctly point out, however, that general allegations of malice are insufficient as a matter of pleading. See Equipment Co. v. Equipment Co., 263 N.C. 549, 559, 140 S.E.2d 3, 11 (1965). Thus, we must determine whether plaintiffs’ have alleged a factual basis to support the claim of malice. We conclude that they have.
Here, plaintiffs have alleged that the seeking of the injunction was the malicious act. This is a factual basis supporting plaintiffs’ assertion of malice. Specifically, the complaint makes the following allegations:
38. Plaintiffs were not parties to Harris v. Ritchie, file 00 CVS 3117, Rowan County.
*60639. The real estate title held in trust by plaintiffs is not subject to the money judgment entered in Harris v. Ritchie, file 00 CVS 3117, Rowan County.
40. In an effort to coerce payment of the judgment in 00 CVS 3117, defendants Harris have unlawfully pursued a course of action culminating in an injunction against plaintiffs. . . . Said injunction was obtained without notice to plaintiffs or the holders of deed of trust liens described herein.
41. Pursuant to a court order obtained by defendants Harris in Harris v. Ritchie . . . , plaintiffs produced trust documents and corporate records for inspection by defendants Harris. Despite reviewing the documents, defendants Harris have continued to pursue a course of action to make the assets held in trust subject to the judgment in 00 CVS 3117.
42. For the further purpose of coercing plaintiffs to pay the judgment in 00 CVS 3117, defendants Harris have intentionally and maliciously refused to recognize the validity of plaintiffs corporate status and the status of the trusts.
43. The actions of defendants Harris have been without just cause or excuse with the intent to injure plaintiffs and reach the assets held in trusts.
44. Defendants Harris knew or should have known that the trust assets are subject to deed of trust liens. Said deed of trust liens are a matter of public record.
45. The actions of defendants Harris have threatened and continue to threaten the viability of the trusts and the trust assets and will cause a default under the .terms of the security instruments executed by plaintiffs to secure payment of the deed of trust notes.
46. As a result of the wrongful acts of defendants Harris, plaintiffs have been prevented from conducting business and the value of the trust assets have been adversely affected. Plaintiffs have been damaged in an amount in excess of $10,000.00.
In summation, the complaint alleges the following factual allegations: (1) that a preliminary injunction against plaintiffs was obtained in relation to a prior judgment not between the parties; (2) that the trusts involved in this case are not owned by Ritchie; and (3) that defendants did not respond to plaintiffs’ request to modify the injunc*607tion so that it would not impact the trusts. If proved, these factual allegations tend to support plaintiffs’ accusation of malice. Thus, assuming without deciding that plaintiffs’ complaint establishes the other elements of interference with a contract, defendants’ motion to dismiss for failure to state a claim should have been denied and we therefore reverse as to this issue.
II.
Lastly, plaintiffs argue that the trial court erred in denying their motion to amend their complaint. We disagree.
We review a denial of a motion to amend under Rule 15(a) for abuse of discretion. Smith v. McRary, 306 N.C. 664, 671, 295 S.E.2d 444, 448 (1982). An abuse of discretion will be found where a trial court’s ruling “ ‘is manifestly unsupported by reason or is so arbitrary that it could not have been the result of a reasoned decision.’ ” State v. Campbell, 359 N.C. 644, 673, 617 S.E.2d 1, 19 (2005), cert. denied, 547 U.S. 1073, 164 L. Ed. 2d 523 (2006) (citation omitted).
In the instant case, plaintiffs moved to amend their complaint as a matter of course under N.C.R. Civ. P. 15(a). In substance, plaintiffs sought to amend the complaint “to make it clear that plaintiffs seek a judgment declaring that (a) the trusts are valid and (b) the assets of the trusts are not subject to the judgment.” All of the proposed language was related to their first claim for relief for a declaratory judgment that the money judgment against Ritchie was not a lien against the assets or trusts held by plaintiffs. That claim for relief, however, was subsequently dismissed on 27 June 2006. It would follow then, that plaintiffs’ motion to amend would be rendered moot. Plaintiffs’ complaint, however, contained a sentence in each section that “[t]he allegations of the preceding paragraphs are adopted, re-alleged and incorporated herein by reference.” Accordingly, the language in the proposed amendments would apply to all of plaintiffs’ remaining claims for relief. That said, we are unable to say that the trial court abused its discretion in denying plaintiffs’ request to amend their complaint.
Plaintiffs argue in their brief to this Court that no responsive pleadings had been filed prior to their motion to amend their complaint because the three parties who had filed answers at that point were “only joined in the action to afford complete relief and to make them bound by the outcome,” not for any affirmative relief. Rule 15(a), however, refers only to a party’s right to amend once as a mat*608ter of course “at any time before a responsive pleading is served,” and makes no distinction among how named parties should be treated under the rule. N.C.R. Civ. P. 16(a). Plaintiff cites no authority to the contrary. Thus, plaintiffs’ right to amend as a matter of course terminated when one of the parties filed a responsive pleading.
In light of the substance of plaintiffs’ motion to amend their complaint, it being filed at the same time as the hearing on defendants’ Rule 12(b)(6) motion, the fact that answers had been filed by parties to the case, and this Court’s applicable standard of review, we cannot say that the trial court abused its discretion in ruling on plaintiffs’ motion to dismiss. Thus, we affirm the ruling of the trial court as to this issue.
III.
In summary, we hold that plaintiffs’ cause of action is not barred by the rule against collateral attacks. We also hold that plaintiffs have stated a valid claim for abuse of process and that they have sufficiently alleged that defendants acted without justification in seeking the injunction. Finally, we hold that the trial court did not err when it denied plaintiffs’ motion to amend their complaint. Therefore, we reverse the judgment of the trial court and remand for further proceedings consistent with this opinion.
Affirmed in part; reversed in part and remanded.
Judge STEELMAN concurs.
Judge WYNN concurs in part and dissents in part in a separate opinion.

. In that case, we were actually addressing the defendant’s counterclaim against the plaintiff for intentional interference with a contract. To remain consistent with the rest of this opinion, we refer to the plaintiff in Lyon as “defendant.”