Court Opinion

ID: 3195362
Source: CourtListenerOpinion
Date Created: 2016-04-19 12:04:44.284264+00
Date Added: 2024-06-11T07:39:09.720608
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA 15-533

                                  Filed: 19 April 2016

Halifax County, No. 10 CVS 1051

ALEX D. McLENNAN, JR., DOROTHY N.

McLENNAN, and RUFUS T. CARR, JR., Plaintiffs,

               v.

C. K. JOSEY, JR., DEBORAH G. JOSEY,

JOSEY PROPERTIES, LLC, THOMAS D.

TEMPLE, IV, CRYSTAL TEMPLE, BETTY JO

TEMPLE, and JOSEPH LANIER RIDDICK, III, Defendants.

        Appeal by Defendants from order entered 15 December 2014 by Judge Alma L.

Hinton in Halifax County Superior Court. Heard in the Court of Appeals 21 October

2015.

        Charles S. Roundtree, III, for Plaintiff-Appellees.

        Etheridge, Hamlett & Murray, LLP, by Ernie K. Murray, for Defendant-
        Appellants.

        HUNTER, JR., Robert N., Judge.

        Defendants appeal an order awarding Plaintiffs attorneys fees, costs, and

litigation expenses on the grounds that their claims presented justiciable issues

contemplated by N.C. Gen. Stat. § 6-21.5. Defendants request we reverse the trial

court. In addition, the Plaintiffs have requested that this Court award fees for filing
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                                   Opinion of the Court

a frivolous appeal. For the following reasons, we affirm in part, reverse in part, and

remand the case to the trial court to take further action consistent with this opinion.

                     I. Factual and Procedural Background

      Our Court previously reviewed the legal merits of this boundary line dispute

in McLennan v. Josey, __ N.C. App. __, 758 S.E.2d 888 (2014). In the first appeal,

after de novo review this Court affirmed the trial court’s summary judgment holding

Plaintiffs had established superior record title to the res in question and Defendants’

parol evidence to the contrary was inadmissible.          Id. at __, 758 S.E.2d at 891–892.

Because Defendants’ evidence did not meet their burden of proof to show their

ownership was superior, we held no genuine issue of material fact existed as to the

location of the boundary line between Plaintiffs’ and Defendants’ property. Id. at __,

758 S.E.2d at 892.

        On 24 July 2013, during the pendency of the first appeal, Plaintiffs filed a

Motion to Tax Costs, Including Reasonable Attorney’s Fees and Expenses in trial

court. In support of their motion, Plaintiffs attached a list of legal services rendered

and associated legal fees dating back from 17 May 2010, totaling $112,740.00.

Plaintiffs also attached a list of disbursements, including court costs totaling

$3,458.38, and fees associated with expert witnesses totaling $24,708.86.

Additionally, Plaintiffs attached affidavits attesting to the reasonableness of the fees.

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                                  Opinion of the Court

      Following our decision in the first appeal, Plaintiffs filed a Supplement to their

Motion to Tax Costs on 17 October 2014. In support of their motion, Plaintiffs

attached invoices related to the appeal totaling $55,660.00 in attorneys fees and

$1,130.18 for out of pocket expenses and court costs.

      On 15 December 2014, the trial court entered an order taxing costs and

reasonable attorneys fees to Defendants. The trial court concluded:

             A. Plaintiffs are entitled as a matter of law to recover the
             costs incurred in this action in the sum of $3,716.25.

             B. The court has the authority to award reasonable
             attorneys fees and out of pocket expenses to Plaintiffs in
             this case pursuant to N.C. Gen. Stat. § 6-21.5 (2014).

             C. The court concludes as a matter of law that plaintiffs’
             reasonable attorneys fees and litigation expenses incurred
             as a result of the complete absence of a justiciable issue of
             either law or fact raised by Defendants in any pleading
             total $215,828.12.

      Defendants filed a written notice of appeal on 13 January 2015, contesting the

order awarding costs and attorneys fees. On 14 August 2015, Plaintiffs filed a motion

seeking sanctions against Defendants for pursuing a frivolous appeal. Defendants

filed a reply brief 19 August 2015. The Clerk of the North Carolina Court of Appeals

referred Plaintiffs’ motion to this panel on 31 August 2015.

                                  II. Jurisdiction

      Jurisdiction lies in this Court from a final order of a superior court pursuant

to N.C. Gen. Stat. § 7A-27.

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                              III. Standard of Review

      Our decision requires we apply differing standards of review to the questions

arising from the lower court’s award. We decide these issues consecutively.

      First, we must determine whether or not the Plaintiffs presented a justiciable

issue in their pleadings. Our case law has held that “[i]n reviewing an order granting

a motion for attorneys’ fees pursuant to N.C. Gen. Stat. § 6-21.5, ‘[t]he presence or

absence of justiciable issues in the pleadings is . . . a question of law that this Court

reviews de novo.’” Wayne St. Mobile Home Park, LLC v. N. Brunswick Sanitary Dist.,

213 N.C. App. 554, 561, 713 S.E.2d 748, 753 (2011) (citing Free Spirit Aviation v.

Rutherford Airport, 206 N.C. App. 192, 197, 696 S.E.2d 559, 563 (2010)).

      Second, “[t]he [trial court’s] decision to award or deny attorney’s fees under

[s]ection 6-21.5 is a matter left to the sound discretion of the trial court.” Persis Nova

Constr., Inc. v. Edwards, 195 N.C. App. 55, 67, 671 S.E.2d 23, 30 (2009). “An abuse

of discretion occurs when a decision is ‘either manifestly unsupported by reason or so

arbitrary that it could not have been the result of a reasoned decision.’” Exgelhof ex

rel. Red Hat, Inc. v. Szulik, 193 N.C. App. 612, 668 S.E.2d 367 (2008) (citing Country

Club of Johnston Cty., Inc. v. U.S. Fidelity & Guar. Co., 150 N.C. App. 231, 248, 563
S.E.2d 269, 280 (2002)).

      Next, we examine the award of costs and expenses to the prevailing party.

“Whether a trial court has properly interpreted the statutory framework applicable

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                                   Opinion of the Court

to costs is a question of law . . . .” Peters v. Pennington, 210 N.C. App. 1, 25, 707
S.E.2d 724, 741 (2011). We therefore review the trial court’s interpretation de novo.

However, the “reasonableness and necessity” of costs is reviewed for abuse of

discretion. Id. at 26, 707 S.E.2d at 741.

                                     IV. Analysis

                                 A. Attorneys Fees

      In North Carolina, parties to litigation are generally responsible for their own

attorneys fees unless a statute provides otherwise. Hicks v. Albertson, 284 N.C. 236,

238, 200 S.E.2d 40, 42 (1973). Statutes awarding attorneys fees to prevailing parties

are “in derogation of the common law” and therefore must be strictly construed.

Sunamerica Financial Corp. v. Bonham, 328 N.C. 254, 256, 400 S.E.2d 435, 437

(1991).

      N.C. Gen. Stat. § 6-21.5 states, “. . . the court, upon motion of the prevailing

party, may award a reasonable attorney’s fee to the prevailing party if the court finds

that there was a complete absence of a justiciable issue of either law or fact raised by

the losing party in any pleading.” N.C. Gen. Stat. § 6-21.5 (2015). Fees related to an

appeal to this Court or to the North Carolina Supreme Court are not recoverable

under N.C. Gen. Stat. § 6-21.5. See Hill v. Hill, 173 N.C. App. 309, 318, 622 S.E.2d
503, 509 (2005). The purpose behind N.C. Gen. Stat. § 6-21.5 is to “discourage

frivolous legal action.” Short v. Bryant, 97 N.C. App. 327, 329, 388 S.E.2d 205, 206

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                                   Opinion of the Court

(1990).

      A justiciable issue is one that is “real and present, as opposed to imagined or

fanciful.” Sunamerica, 328 N.C. at 257, 400 S.E.2d at 437 (citations omitted). “In

order to find a complete absence of a justiciable issue it must conclusively appear that

such issues are absent even giving the pleadings the indulgent treatment they receive

on motions for summary judgment or to dismiss.” K & K Development Corp. v.

Columbia Banking Fed. Savings & Loan, 96 N.C. App. 474, 479, 386 S.E.2d 226, 229

(1989) (citations omitted). “Under this deferential review of the pleadings, a plaintiff

must either: (1) ‘reasonably have been aware, at the time the complaint was filed,

that the pleading contained no justiciable issue’; or (2) be found to have ‘persisted in

litigating the case after the point where [he] should reasonably have become aware

that pleading [he] filed no longer contained a justiciable issue.’” Credigy Receivables,

Inc. v. Whittington, 202 N.C. App. 646, 655, 689 S.E.2d 889, 895 (2010) (citing Brooks

v. Giesey, 334 N.C. 303, 309, 432 S.E.2d 339, 342 (1993)); see also Sunamerica, 328
N.C. 254 at 258, 400 S.E.2d at 438. A trial court must make one or both of these

findings to support its award of section 6-21.5 attorneys fees. See Sunamerica, 328
N.C. 254 at 260, 400 S.E.2d at 439 (“[A trial court] shall make findings of fact and

conclusions of law to support its award of attorneys’ fees.”).

      The granting or denial of a motion for summary judgment is “not in itself a

sufficient reason for the court to award attorney’s fees.” N.C. Gen. Stat. § 6-21.5

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                                   Opinion of the Court

(2015). However, granting a Rule 12(b)(6) motion or entering summary judgment

may be evidence that a pleading lacks a justiciable issue. Sunamerica, 328 N.C. 254

at 259, 400 S.E.2d at 439. Moreover, “action by the losing party which perpetuated

litigation in the face of events substantially establishing that the pleadings no longer

presented a justiciable controversy may also serve as evidence for purposes of 6-21.5.”

Id. at 259, 400 S.E.2d at 439.

      Defendants argue that they presented a justiciable issue in their counterclaim,

contending they were the fee simple owners of the property at issue and that they did

so in good faith. Additionally, Defendants point out the award of attorneys fees

includes $55,660.00 for “responding to Defendants’ appeal” as well as attorneys fees

for another case between the parties, 11-CVS-973. Defendants contend the fees

related to the appeal and case number 11-CVS-973 were erroneously awarded. We

address each of Defendants’ arguments in turn.

      To review whether attorneys fees are proper, we first determine whether the

pleadings contained a justiciable issue. The trial court made the following findings

related to whether the pleadings contained a justiciable issue:

             2. Defendants knew at the time they recorded the map in
             2009 that the deed descriptions in the deeds by which
             Defendants acquired their property excluded the more
             than two hundred acres belonging to Plaintiffs.

             3. Defendants’ deeds stated that their titles were subject to
             a 1909 deed by Defendants’ predecessors in title to Wilts
             Veneer Company that described by metes and bounds the

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                                  Opinion of the Court

             location of the boundary between their property and
             Plaintiffs’ adjoining property in a different location than
             that shown on the 2009 map Defendants recorded.

             4. Before Plaintiffs filed the Complaint in this case in 2010
             Defendants had a copy of the recorded 1918 boundary
             survey of Plaintiffs’ property showing the more than two
             hundred acres was owned by Plaintiffs’ predecessor in title.

             5. The Complaint filed by Plaintiffs in the summer of 2010
             includes references to recorded maps and deeds describing
             the boundary on the ground between their property and
             Defendants’ property.

Thus, the trial court’s order contains the necessary findings to support its award of

attorneys fees. We note that the Defendants did not challenge these factual findings

on appeal as unsupported by competent evidence. It is unlikely that such a challenge

could be made, since the matters establishing a title are contained in the county

register of deeds vaults. Questions of title are questions of law and where the law is

settled in regard to titles, the law of this case is that the Defendants submitted no

admissible evidence to meet their burden. This result was foreseeable from the title

records and routine application of settled law. We agree with the trial court that the

counterclaim contained no justiciable issue at the time it was filed.

      Defendants relied on a map recorded in 2010 and subsequent deeds to

determine the location of Gaynor’s Gut, the boundary between Plaintiffs’ and

Defendants’ land. As this Court reasoned in the previous appeal:

             [D]efendants present no evidence by way of deeds in their
             chain of title to establish their superior claim to the

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                                   Opinion of the Court

               disputed land. Moreover, defendants’ recorded map in
               2010 and subsequent deeds using the map’s boundary
               description to convey the disputed land are junior to the
               1909 and 1918 documents that describe the run of Gaynor’s
               Gut. Thus, the descriptions found in the 1909 and 1918
               documents control.

McLennan v. Josey, __ N.C. App. __, __, 758 S.E.2d 888, 892 (2014). Moreover, as the

trial court pointed out in finding number 3, Defendants’ deeds made reference to the

1909 deed, alerting Defendants to the existence of the deed prior to filing their

counterclaim. Plaintiffs’ Complaint also referenced the 1909 deed as well as a 1918

map, informing Defendants of their existence prior to filing their counterclaim.

         Defendants’ 2010 map is based on a survey obtained by Defendants.

Surveyors have a duty to always check the county records in which the land is located.

Walter G. Robillard & Lane J. Bouman, Clark on Surveying and Boundaries 119 (7th

Ed. 1997). Thus, in a routine title search, the senior documents should have been

discovered by a surveyor or attorney prior to the drafting of the 2010 survey. As a

rule of surveying “no following surveyor may establish new corners or lines or correct

erroneous surveys of the earlier surveyors,” the run of Gaynor’s Gut in the senior

deeds and maps controls. Id. at 23 (emphasis removed from original). Therefore,

after our de novo review of the pleadings, we hold the pleadings lacked a justiciable

issue.

         Since the trial court properly held the pleadings lacked a justiciable issue

pursuant to N.C. Gen. Stat. § 6-21.5, it is within the trial court’s discretion whether

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                                   Opinion of the Court

to award attorneys fees. See Persis Nova Constr., 195 N.C. App. at 67, 671 S.E.2d at

30. Although the order does not explicitly state why the court exercised its discretion

we hold that it was in furtherance of the policy of the statute to discourage frivolous

litigation. As the prevailing party, Plaintiffs are entitled to attorneys fees at the

discretion of the trial court. The court had authority pursuant to N.C. Gen. Stat. § 6-

21.5 to award Plaintiffs attorneys fees, and made the required findings to support

such an award. Therefore, we hold the trial court did not abuse its discretion in

awarding attorneys fees under N.C. Gen. Stat. § 6-21.5 to Plaintiffs.

      Finally, we review the trial court’s award of attorneys fees to determine

whether they were authorized under the statute. Within the award of attorneys fees,

the trial court awarded $55,898.18 for “responding to Defendants’ appeal.”

Defendants argue attorneys fees may not be awarded under N.C. Gen. Stat. § 6-21.5

for appeals to this Court. See Hill, 173 N.C. App. at 318, 622 S.E.2d at 509. We agree.

Because attorneys fees related to an appeal are not recoverable under N.C. Gen. Stat.

§ 6-21.5, we hold any fees connected with the appeal were awarded in error.

      Defendants also claim a portion of the awarded attorneys fees are related to

another case between the parties, case number 11-CVS-973. Defendants specifically

point to entries on the attorneys fees invoices for drafting a complaint in August 2011.

Plaintiffs filed the Complaint in the case appealed to this Court on 27 August 2010,

approximately one year earlier than the invoice entry in question.

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                                    Opinion of the Court

       In its order taxing costs and reasonable attorneys fees, the trial court

specifically allowed attorneys fees for both cases by finding:

              22. The legal services in preparing pleadings in 2011 to add
              additional claims for relief by amendment to the pleadings
              in this case or by the filing of a companion law suit, being
              strategic in nature and designed to litigate all issues raised
              by Defendants’ actions at the same time, were related to
              the prosecution of this civil action and the attorney’s fees
              and litigation expenses incurred are properly recoverable
              in this action.

However, the motion to consolidate the cases was denied. Further, no final judgment

or order from case 11-CVS-973 was appealed to this Court.

       N.C. Gen. Stat. § 6-21.5 allows a court to award “a reasonable attorney’s fee to

the prevailing party.” N.C. Gen. Stat. § 6-21.5 (2015) (emphasis added). The record

on appeal does not contain the final result of the other case nor is that case before

this Court. Should Plaintiffs be successful in the other case and should that case also

lack a justiciable issue, then Plaintiffs may pursue attorneys fees separately for that

case. Unfortunately, based on the record, we cannot distinguish between fees charged

for the case on appeal and fees charged for 11-CVS-973. Therefore, we remand this

issue to the trial court to limit the fees applicable to this case.

                         B. Costs and Litigation Expenses

       Defendants contend N.C. Gen. Stat. § 6-21.5 only allows an award of attorneys

fees, not costs. However, costs are allowed as of course in actions “for the recovery of

real property, or when a claim of title to real property arises on the pleadings, or is

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                                   Opinion of the Court

certified by the court to have come in question at the trial.” N.C. Gen. Stat. § 6-18

(2015). Even so, Defendants contend that “numerous items the trial court ordered to

be paid have been held not to be recoverable.”

      N.C. Gen. Stat. § 7A-305(d) provides a “complete and exclusive . . . limit on the

trial court’s discretion to tax costs.” The statute allows for the “reasonable and

necessary fees of expert witnesses solely for actual time spent providing testimony at

trial, deposition, or other proceedings.” N.C. Gen. Stat. §7A-305(d)(11) (2015). In

light of the North Carolina Supreme Court’s recent decision in Lassiter ex rel Baize

v. North Carolina Baptist Hospitals, Inc., expert witness fees are taxable as costs even

though the expert was not compelled by subpoena. Lassiter ex rel Baize v. North

Carolina Baptist Hospitals, Inc., 368 N.C. 367, 378–379, 778 S.E.2d 68, 75–76 (2015).

      The trial court order includes “$26,283.49 in reasonable and necessary

litigation expenses” without explanation of what the total includes. Defendants

contend this contains expert fees in the amount of $24,708.86, including preparation

time for trial. Plaintiffs acknowledge the use of experts in the case, but do not specify

whether expert fees were included in the costs or litigation expenses awarded by the

trial court order.   Thus, we remand this issue to the trial court to make additional

findings of fact regarding costs and litigation expenses consistent with this opinion

and the Supreme Court opinion.

                              C. Motion for Sanctions

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                                  Opinion of the Court

      Plaintiffs contend Defendants are currently pursuing a frivolous appeal before

this Court. As such, Plaintiffs seek sanctions against Defendants under N.C. R. App.

P. 34 to reimburse Plaintiffs for attorneys fees and costs incurred during this appeal.

Pursuant to Rule 34, this Court may impose sanctions against an appellant where

“the appeal was not well grounded in fact and was not warranted by existing law or

a good faith argument for the extension, modification, or reversal of existing law.”

ACC Const., Inc. v. SunTrust Mortg., Inc. __ N.C. App. __, __, 769 S.E.2d 200, 213–

214 (2015).

      Here, the appeal was well grounded in existing law. In fact, Defendants

succeeded in arguing a portion of the attorney’s fees were granted in error. Moreover,

Defendants pointed to potential problems in the award of costs and litigation

expenses. Thus, we deny Plaintiffs’ motion for sanctions.

                                   V. Conclusion

      For the foregoing reasons, we affirm in part, reverse in part, and remand the

award of attorneys fees pursuant to N.C. Gen. Stat. § 6-21.5. We also remand the

award of costs for further findings consistent with this opinion.

      AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.

      Judges GEER and DILLION concur.

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