Court Opinion

ID: 9587021
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:17:24.489439+00
Date Added: 2024-06-11T17:32:59.468464
License: Public Domain

JOHNSON, Judge.
Plaintiff contends that the court erred in denying his request for attorneys’ fees under G.S. 55-55(d), which provides that a court “may award” a successful plaintiff in a shareholders’ derivative action “the reasonable expenses of maintaining the action, including reasonable attorneys’ fees. . . .”
*42However, since this was not a shareholders’ derivative action, we need not reach the arguments presented by plaintiff concerning the court’s exercise of discretion. In his original complaint, plaintiff did allege damage to the corporations and unsuccessful efforts to obtain relief within the corporation, as required to maintain a derivative action. G.S. 55-55(a), (b). However, plaintiff did not allege that he was bringing the suit as a derivative action. More importantly, plaintiff apparently realized that as the dissenting shareholder of two shareholders, relief on behalf of the corporations would be futile. Accordingly, plaintiff did not ask for any relief on behalf of Ruth’s. Instead, he requested “appointment of a receiver in accordance with G.S. 55-127 to effect the liquidation and involuntary dissolution” of the Ruth’s corporate defendants. Plaintiff prayed for an accounting and recovery by the receiver of amounts for which the other defendants might be liable. As “an alternative to dissolution and liquidation” he asked for the forced purchase of his shares.
Four years later, after extensive discovery litigation, plaintiff moved to amend his complaint. He sought in essence to reallege his case in two claims, one derivatively as a shareholder and one in his individual capacity. He requested extensive relief on behalf of Ruth’s, as well as again asking for individual relief. The court denied the motion,1 although it allowed plaintiff to file a supplemental complaint alleging new matters. Plaintiff then moved for leave to file such a complaint, patterned after his motion to amend. Again, the court denied his motion.2 Apparently the nature of the case came up again when it was called for trial: the court issued an order, noting plaintiffs contention that this was a derivative action, but ruling that only the issues of appointment of a receiver or alternative equitable relief were before it. The court was the finder of the fact and ruled in plaintiffs favor, citing its authority under the dissolution statutes, G.S. 55-125, G.S. 55-125.1. The court subsequently denied plaintiffs motion for attorneys’ fees under G.S. 55-55(d).
*43Undaunted by these contrary rulings, plaintiff contends that this was nevertheless a derivative action. He relies on a single sentence in the court’s order to the effect that his action sought redress for injury to the corporations and not just injury to himself. Under Hoyle v. Carter, 215 N.C. 90, 1 S.E. 2d 93 (1939), he argues, such an action to protect the value of stock and to preserve assets is maintainable solely in the right of the corporation and is not maintainable in the right of the individual shareholder. Plaintiff overlooks the subsequent enactment of G.S. 55-125 which authorizes such relief in actions by individual shareholders. Furthermore, there is also authority for individual actions by minority shareholders where the corporation is “so dominated and controlled by a wrongdoer as to be powerless to act.” Fulton v. Talbert, 255 N.C. 183, 185, 120 S.E. 2d 410, 412 (1961); see also Parrish v. Brantley, 256 N.C. 541, 124 S.E. 2d 533 (1962).3 Certainly this condition was met here. Therefore, the court could properly rule that this was not a derivative action; plaintiff suffered no loss of rights as a result. In light of the extensive procedural history outlined above and the availability of individual actions, plaintiffs reliance on the one sentence is misplaced. A fortiori, then, the court could not and did not abuse its discretion under G.S. 55-55(d).
Plaintiff also alleges error in the court’s refusal to award him attorneys’ fees as a discovery sanction pursuant to G.S. § 1A-1, Rule 37. His motions were, however, granted in part and denied in part; he has not shown that the court abused its discretion in apportioning costs. This assignment is also without merit.
Affirmed.
Judge Phillips concurs.
Judge Arnold concurs in the result.

. Plaintiff does not assign error to this ruling on this appeal. Even if he had, we do not believe that it amounted to an abuse of discretion. See Flores v. Caldwell, 14 N.C. App. 144, 187 S.E. 2d 377 (1972). Nor is there any indication that plaintiff was unjustly deprived of any right to relief by the court’s order.

. See note 1, supra.

. The corporation must be joined as a party; this condition was met here as to both Ruth’s corporations.