Court Opinion

ID: 8891924
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:22:27.076495+00
Date Added: 2024-06-11T17:07:15.726674
License: Public Domain

Judge GREENE
dissenting.
I disagree with the majority that Skyland’s denials, in its answer, of certain allegations of the complaint were based on reasonable *217inquiries, as required by Rule 11. The relevant allegations in the complaint are:
10. . . . all of Bayne’s work was performed in a professional, and workmanlike manner. . . .
12. Bayne substantially performed all its obligations under the contract.
Skyland answered in relevant part as follows:
10. . . . the allegations of paragraph 10 of Plaintiff’s complaint are denied ....
12. As in a related lawsuit, the owner of the project has raised broad allegations concerning the failure of the work at Merrimon Square to meet the requirements of the contract documents and has refused to pay the Bayne invoice date December 9, 1989, this defendant denies the allegations of paragraph 12 of plaintiff’s complaint.
The issue presented is whether Skyland made a reasonable inquiry into the facts prior to denying the allegations in paragraphs 10 and 12 of the complaint. If not, Skyland’s answer was signed in violation of Rule 11, and some sanction must be imposed. Gregory P. Joseph, Sanctions, The Federal Law of Litigation Abuse § 7(B) (1989) (hereinafter Joseph) (inquiry must precede the signing, as a pleading “may not be signed first and the basis investigated thereafter”); Turner v. Duke Univ., 325 N.C. 152, 171, 381 S.E.2d 706, 717 (1989) (sanctions clause of Rule 11(a) is mandatory). The adequacy of a pre-signing investigation must be judged under a standard of objective reasonableness. Turner, 325 N.C. at 164, 381 S.E.2d at 713. Some factors recognized as relevant to a determination of whether the inquiry is reasonable include: (1) the amount of time available to investigate the facts; (2) the complexity of the factual issues in question; (3) the extent to which the investigation is feasible; (4) the extent to which pertinent facts are available to the signer; (5) the resources reasonably available to the signer to devote to the inquiry; and (6) the extent to which the signer was on notice that further inquiry might be appropriate. Joseph at § 8(A).
*218At the time its answer was signed, Skyland, through its president, had previously executed a “note of affirmation” certifying that the work completed by plaintiff was satisfactory and timely. Skyland also was aware at the time its answer was signed that the owner of the land had some “general objections” to the quality of the work at the shopping center project, however, Skyland did not know whether any of those objections involved the masonry work completed by plaintiff. Under Rule 11, Skyland’s knowledge of the owner’s general objections to the quality of work at the construction project cannot serve as a proper basis for its denial of plaintiff’s allegations that plaintiff performed its work in a professional and workmanlike manner and substantially performed all of its obligations under the contract. Rather, particularly in light of Skyland’s previous certification of plaintiff’s work as satisfactory, such information should have put Skyland on notice that further inquiry was necessary in order to determine the veracity of plaintiff’s allegations regarding its compliance with the masonry contract. Furthermore, the record indicates that the masonry work in question was readily available for inspection by Skyland, and the amount of time and resources necessary to make such additional investigation was not unreasonable or burdensome. The fact that Skyland made inquiries regarding the quality of plaintiff’s work after signing and filing its answer is immaterial, as a violation of Rule 11 is complete when the paper is signed. Bryson v. Sullivan, 330 N.C. 644, 656, 412 S.E.2d 327, 333 (1992). Thus, the trial court’s conclusion that Skyland and its counsel “acted reasonably” is not supported by the court’s finding that, at the time Skyland filed its answer, Skyland “had not yet ascertained from the Owners their specific objections to the work at the shopping center project,” and therefore cannot serve as a proper basis for the court’s denial of plaintiffs motion for sanctions. In fact, the court’s finding supports the opposite conclusion.
Accordingly, I would reverse the order of the trial judge denying plaintiff’s motion for sanctions and remand for an appropriate entry of sanctions.