Court Opinion

ID: 2765834
Source: CourtListenerOpinion
Date Created: 2014-12-31 15:05:30.11879+00
Date Added: 2024-06-11T11:27:25.274937
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                                NO. COA14-684
                       NORTH CAROLINA COURT OF APPEALS

                            Filed:    31 December 2014

JACOB L. WITCHER,
     Plaintiff,

      v.                                      Guilford County
                                              No. 13-CVS-1470
ALISHA PARSONS,
WR STARKEY MORTGAGE, L.L.P.,
CITY OF HIGH POINT, NORTH
CAROLINA,
     Defendants/Third-Party
     Plaintiffs,

      v.

MICHAEL LEE GOODSON and wife,
TERESA GOODSON,
     Third-Party Defendants.

      Appeal by plaintiff from order entered 28 February 2014 by

Judge Vance Bradford Long in Guilford County Superior Court.

Heard in the Court of Appeals 23 October 2014.

      Craige Brawley Liipfert & Walker LLP, by William W. Walker,
      for plaintiff-appellant.

      Jones, Childers, McLurkin & Donaldson, PLLC, by Dennis W.
      Dorsey, Mark L. Childers and Elise B. McLurkin Horton, for
      defendants/third party plaintiffs-appellees.

      Roberson Haworth & Reese, P.L.L.C., by Alan B. Powell,
      Christopher C. Finan and Andrew D. Irby, for third-party
      defendants-appellees.
                                         -2-

    BELL, Judge.

    Jacob       L.    Witcher    (“Plaintiff”)        appeals     from    the   trial

court’s order dismissing his complaint to quiet title against

Alisha Parsons, WR Starkey Mortgage, LLP, and the City of High

Point, North Carolina (collectively, “Defendants”) pursuant to

Rule 12(b)(6) of the North Carolina Rules of Civil Procedure.

After careful review, we              vacate the trial court’s order and

remand for entry of an order consistent with this opinion.

                                Factual Background

    Plaintiff’s grandfather, S.L. Witcher (“S.L.”), died on 15

May 1999.       S.L.’s will devised his real property in three equal

shares    to    his   children:       Joel    L.   Witcher    (“Joel”),    David   R.

Witcher        (“David”),       and     Alyson       W.      Frazier     (“Alyson”).

Accordingly, Joel, David, and Alyson each became the owner of an

undivided one-third interest in S.L.’s former house located at

2715 Triangle Lake Road in High Point, North Carolina (“the

house”).

    On 14 May 2000, Joel passed away.                     Joel was not married at

the time of his death and Plaintiff, who was six years old at

the time, was his only child.                Prior to his death, Joel executed

a will that devised all of his real and personal property to
                                           -3-
Plaintiff, including his one-third interest in the house.                                 The

will also appointed Alyson as executrix of Joel’s estate.                                 The

will further provided that if Plaintiff had not reached the age

of 18 at the time of Joel’s death, his share of Joel’s estate

was   to    be    transferred     to   and    held      in   a   trust    created         for

Plaintiff’s        benefit.       Alyson     was    named      as   trustee        and    was

directed to hold the property in trust until Plaintiff reached

18 years of age and use funds from the trust for Plaintiff’s

“support,        maintenance,     education      and    general     welfare”        in    her

discretion.        Joel’s will also granted Alyson, as trustee, “the

right, with respect to all property . . . to sell . . . without

court order.”        Although Alyson filed Joel’s will with the Clerk

of Superior Court of Guilford County, North Carolina, the will

was never formally admitted to probate.

      On    29    March   2001,    Alyson     and      David     executed      a    general

warranty deed conveying the house to Bennie and Dinah Williams

(“the      Williamses”).        Alyson     and      David      signed    the       deed    as

grantors, individually, and Alyson signed the deed as executor

of Joel’s estate.

      On 25 November 2008, Wells Fargo Financial (“Wells Fargo”)

purchased the house at a foreclosure sale after the Williamses

defaulted on their mortgage.               On 16 January 2009, Wells Fargo
                                         -4-
sold the house to Michael Goodson.                     On 31 July 2009, Michael

Goodson and his wife, Teresa Goodson, (“Third-Party Defendants”)

sold the house to Alisha Parsons (“Defendant”).                         Alisha Parsons

gave deeds of trust to WR Starkey Mortgage, LLP and the City of

High    Point,    North    Carolina      (“Defendants1”)           as     part   of    this

conveyance.

       On 13 November 2012, Plaintiff filed a complaint against

Alyson in Forsyth County Superior Court (“the Forsyth County

action”),     asserting         claims   for:    (1)     an     accounting        of     all

transactions conducted as Plaintiff’s fiduciary; (2) breach of

fiduciary     duty;       (3)     constructive         fraud;       (4)     fraud;       (5)

conversion;       and     (6)     imposition      of     a    constructive         trust.

Plaintiff’s       complaint       alleged       that     after       the     house       was

originally sold on 29 March 2001, Alyson “received a share of

the    proceeds    from    the    sale   of     the    House       which    belonged     to

Plaintiff” and that she “failed to distribute any assets from

[Plaintiff’s]      Trust    for    Plaintiff’s         use    or    benefit      prior    to

Plaintiff reaching eighteen years of age on 17 June 2011.”

       On 29 August 2013, Plaintiff filed a Complaint to Quiet

Title in Guilford County Superior Court.                     Plaintiff also sought

1
  Throughout the remainder of the opinion, “Defendants” refers
collectively to Alisha Parsons, WR Starkey Mortgage, LLP, and
the City of High Point, North Carolina.
                                        -5-
a declaratory judgment that Defendants “have no right, title, or

interest        adverse    to    Plaintiff’s    one-third      interest   in    the

House.”     In his Complaint to Quiet Title, Plaintiff alleged that

Alyson was not executor of Joel’s estate because his will was

never admitted to probate.             Plaintiff further alleged that he

retained a one-third interest in the house because, pursuant to

N.C. Gen. Stat. § 28A-15-2(b), Joel’s one-third interest in the

house     had     passed    to   Plaintiff     upon   Joel’s     death    and   was

therefore no longer an asset of Joel’s estate when the house was

conveyed on 29 March 2001.            As a result, according to Plaintiff,

the attempted conveyance of Joel’s one-third interest in the

house was ineffective.

    On 12 November 2013, Plaintiff moved for summary judgment

in the Forsyth County action, alleging that there was no genuine

issue as to any material fact because the documents of record

showed that: (1) Joel left all of his estate to Plaintiff in

trust, with Alyson as trustee; (2) Alyson received funds as

trustee, including $20,000 from the sale of Joel’s one-third

interest in the house; (3) Alyson deposited the funds into her

personal bank account; and (4) Alyson never used any of the

funds for Plaintiff’s benefit.
                                       -6-
    On     16   January   2014   and    24    January   2014,   respectively,

Defendants and Third-Party Defendants each filed a motion to

dismiss Plaintiff’s Complaint to Quiet Title pursuant to Rule

12(b)(6) of the North Carolina Rules of Civil Procedure                    for

failure to state a claim upon which relief may be granted.                  In

their motions to dismiss, Defendants and Third-Party Defendants

alleged that Plaintiff was judicially estopped from denying the

validity of the conveyance of the house in his Complaint to

Quiet Title because he had already acknowledged the validity of

the conveyance in the Forsyth County action against Alyson.

    Defendants’ and Third-Party Defendants’ motions to dismiss

came on for hearing on 3 February 2014, and the trial court

entered an order dismissing Plaintiff’s complaint on 28 February

2014.    Plaintiff filed a timely notice of appeal to this Court.

    On 16 April 2014, while this appeal was pending, the trial

court    granted   partial   summary    judgment    for   Plaintiff   in   the

Forsyth County action.        In particular, the trial court granted

summary judgment against Alyson on the following claims: (1)

breach    of    fiduciary    duty;      (2)     constructive     fraud;    (3)

conversion; and (4) imposition of a constructive trust.                    The

trial court subsequently entered a consent judgment on 28 April

2014 that awarded Plaintiff a $20,000 judgment against Alyson
                                         -7-
and deemed Plaintiff’s claims in the Forsyth County action fully

adjudicated.

    On 23 September 2014, Third-Party Defendants filed a motion

to dismiss Plaintiff’s appeal.             On 24 September 2014, Defendants

joined with Third-Party Defendants in their motion to dismiss

Plaintiff’s appeal.

                                    Analysis

    As     an     initial      matter,     we      must       address     Third-Party

Defendants’      and    Defendants’       motion    to        dismiss    the    present

appeal.    These parties move to dismiss Plaintiff’s appeal on the

basis    that   the    trial   court   entered      a     final      judgment   in   the

Forsyth County action on 16 April 2014, rendering the present

action moot.          The parties also request that we take judicial

notice    of    the    final   judgment    entered       in    the    Forsyth   County

action as a predicate to the relief sought in their motion to

dismiss the present appeal.

    Although the final judgment in the Forsyth County action

was not part of the record on appeal, it was included in the

appendix of Plaintiff’s brief.              We have held that “this Court

can take judicial notice of certain documents even though they

were not included in the record on appeal.”                     In re Hackley, 212
N.C. App. 596, 601, 713 S.E.2d 119, 123 (2011).
                                             -8-
      Rule 201 of the North Carolina Rules of Evidence provides

that “[a] court shall take judicial notice if requested by a

party   and    supplied       with    the    necessary    information.”         N.C.R.

Evid. 201(d).         Rule 201(b) further provides that “[a] judicially

noticed fact must be one not subject to reasonable dispute in

that it is either (1) generally known within the territorial

jurisdiction of the trial court or (2) capable of accurate and

ready determination by resort to sources whose accuracy cannot

reasonably      be    questioned.”      N.C.R.      Evid.    201(b).      The    final

judgment in the Forsyth County action falls under this second

category of facts not subject to reasonable dispute.                         Thus, we

elect   to    take    judicial       notice    of   the   final   judgment      in   the

Forsyth County action.

      While     we    elect    to     take     judicial     notice   of   the    final

judgment entered in the Forsyth County action, we disagree that

it   renders     Plaintiff’s         appeal    moot   and,     therefore,       address

Plaintiff’s          arguments on       the merits.          In their motions to

dismiss,      Defendants      and    Third-Party      Defendants     asserted        that

Plaintiff’s claim to quiet title was barred by the doctrine of

judicial estoppel.         In support of their motions, Defendants and

Third-Party Defendants asked the trial court to take judicial

notice of the pleadings in the Forsyth County action. In its
                                    -9-
order dismissing Plaintiff’s quiet title action, the trial court

concluded that it was permitted to take judicial notice of the

contents of the pending Forsyth County action and “that such

consideration [did] not convert either the Defendants’ Motion to

Dismiss or the Third-Party Defendants’ Motion to Dismiss to a

Summary Judgment Motion.”

    Plaintiff argues that the trial court acted prematurely or,

in the alternative, was required to make findings of fact to

support its application of the doctrine of judicial estoppel

when it dismissed Plaintiff’s complaint.          A careful review of

the record and those documents of which we have taken judicial

notice   leads   us   to   agree   with   Plaintiff’s   assertion   that,

assuming without deciding that the trial court was permitted to

take judicial notice of the pleadings in the Forsyth County

action without converting the motions to dismiss to motions for

summary judgment, based on the pleadings before it, the trial

court acted prematurely in granting Defendants’ and Third-Party

Defendants’ motions to dismiss pursuant to Rule 12(b)(6).

           When a party files a motion to dismiss
           pursuant to Rule 12(b)(6), the question for
           the court is whether the allegations of the
           complaint, treated as true, are sufficient
           to state a claim upon which relief may be
           granted under some legal theory, whether
           properly labeled or not. A complaint may be
           dismissed pursuant to Rule 12(b)(6) where
                                      -10-
             (1) the complaint on its face reveals that
             no law supports a plaintiff’s 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 a plaintiff’s claim. An
             appellate court reviews de novo a trial
             court’s dismissal of an action under Rule
             12(b)(6).

    Horne v. Cumberland Cty. Hosp. Sys. Inc., __ N.C. App. __,

__, 746 S.E.2d 13, 16 (2013) (internal citations and quotation

marks   omitted).      In    ruling    on    a   motion   to   dismiss,   “the

allegations of the complaint must be viewed as admitted, and on

that basis the court must determine as a matter of law whether

the allegations state a claim for which relief may be granted.”

Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615

(1979) (citation omitted).

    Although Plaintiff makes inconsistent factual assertions in

his two complaints, at the time the trial court entered its

order dismissing Plaintiff’s quiet title action, none of the

assertions     in   either    of   Plaintiff’s       complaints    had    been

established as true. “[E]stoppel is a bar which precludes a

person from denying or asserting anything to the contrary of

that which has, in contemplation of law, been established as the

truth.”      28 Am.Jur.2d Estoppel and Waiver § 1(2000)(emphasis

added).   Given that none of Plaintiff’s inconsistent assertions
                                        -11-
had been established as the truth at the time the trial court

ruled on Defendants’ motions to dismiss, his quiet title action

was not barred by judicial estoppel at that time.                       “[J]udicial

estoppel . . . should not be applied to prevent the assertion of

inconsistent      legal    theories.”      Whitacre     P’ship    v.     Biosignia,

Inc., 358 N.C. 1, 32 591 S.E.2d 870, 890 (2004).                         “[S]uch a

limitation is necessary to avoid interference with our liberal

pleading rules, which permit a litigant to assert inconsistent,

even    contradictory,      legal   positions       within   a   lawsuit.”        Id.

(citations      omitted).      Therefore,      we   conclude     that    the    trial

court    erred    by      dismissing    Plaintiff’s      quiet     title       action

pursuant to Rule 12(b)(6).

       However, in light of the final disposition entered in the

Forsyth County action during the pendency of this appeal, we

conclude that Plaintiff is now estopped from pursuing the case

before us in the trial court.             Where a party assumes a certain

position in a legal proceeding, and succeeds in maintaining that

position, he may not thereafter, simply because his interests

have changed, assume a contrary position . . . .”                  Whitacre, 358

N.C at 22, 591 S.E.2d           at 884 (emphasis added)(citations                 and

quotation marks omitted).           Judicial estoppel, which prevents a

party    from    making    inconsistent     factual     assertions,       seeks    to
                                      -12-
protect the integrity of judicial proceedings by “prevent[ing] a

party from acting in a way that is inconsistent with its earlier

position before the court.”           Powell v. City of Newton, 364 N.C.
562, 569, 703 S.E.2d 723, 728 (2010) (citation omitted).

      Although “the circumstances under which judicial estoppel

may appropriately be invoked are probably not reducible to any

general    formulation    of     principle,”     our    Supreme   Court   has

enumerated    three    factors    that   may    serve   as   guideposts   for

applying the doctrine. Whitacre, 358 N.C. at 28, 591 S.E.2d at

888 (citation and quotation marks omitted).

            First, a party’s subsequent position must be
            clearly   inconsistent   with    its   earlier
            position.   Second, courts regularly inquire
            whether   the    party   has    succeeded   in
            persuading a court to accept that party’s
            earlier    position,   so     that    judicial
            acceptance of an inconsistent position in a
            later proceeding might pose a threat to
            judicial    integrity     by     leading    to
            inconsistent court determinations      or the
            perception that either the first or the
            second court was misled.        Third, courts
            consider whether the party seeking to assert
            an inconsistent position would derive an
            unfair advantage . . . if not estopped.

Id.   at   29,   591   S.E.2d    at    888-89   (citations    and   internal

quotation marks omitted).

      In his motion for summary judgment in the Forsyth County

action,    Plaintiff assumed the position that the sale of the
                                      -13-
house   was    valid.     Plaintiff    alleged,   in   pertinent   part,    as

follows:

              3.   Defendant received funds as trustee for
              Plaintiff

                  a.   $20,000 from the sale of Joel’s
                  interest in real property in Guilford
                  County, North Carolina[.]

              . . . .

              8.   Defendant was a fiduciary to Plaintiff,
              as she acted as trustee of funds for
              Plaintiff.

         9.    Defendant’s transfer to herself of the
         trust    funds  raises  a   presumption that
         Defendant breached her fiduciary duty to
         Plaintiff, and Defendant has presented no
         evidence to rebut the presumption and raise
         a disputed issue of material fact.
    In the final judgment entered in the Forsyth County action,

which was entered during the pendency of Plaintiff’s appeal in

the subject action, the trial court concluded that Plaintiff was

entitled to partial summary judgment and monetary damages for,

among other things, Alyson’s breach of fiduciary duty.                As such,

Plaintiff succeeded before the trial court on his position that

the sale of the house was valid, as the trial court’s order of

summary    judgment     necessarily   required    a   determination    by   the

trial court that a valid sale of the house had occurred.               In the

present action, Plaintiff seeks a declaration that the sale of

the house was invalid — a position that is inconsistent with the
                                            -14-
factual allegations Plaintiff relied on in the Forsyth County

action, in which he ultimately succeeded.

    Having established before the trial court that a valid sale

occurred, Plaintiff cannot now seek to have this Court determine

that he maintains a one-third interest in the house because the

sale was invalid.             Not only would this pose a threat to judicial

integrity,      but      it    would    also    permit    Plaintiff        to     derive    an

unfair advantage, as he has already recovered his interest in

the house from the final judgment in the Forsyth County action

against Alyson.

    Plaintiff argues that because he has been unable to recover

anything on this judgment, he should be entitled to use another

legal    theory     to    be    made    whole.      However,        a    party’s    current

inability to pay a judgment does not justify permitting the

other party to obtain judgments on two legally contradictory

claims.     It is still possible that Alyson may be able to pay the

judgment       in   the       future,   and     even     if   she       cannot,    judicial

integrity      prevents        us   from    upholding     two     judgments        based    on

contradictory         facts      and    legal    claims.          If     Plaintiff     were

concerned about Alyson’s ability to pay a judgment, he had the

option    to    pursue        his   quiet      title     action     before        seeking    a

judgment against Alyson.                Thus, we conclude that Plaintiff is
                                    -15-
now judicially estopped from alleging that the sale of the house

was invalid.

                              Conclusion

    For the reasons stated above, we vacate trial court’s order

dismissing   Plaintiff’s   appeal    and   remand   for   entry   of   order

consistent with this opinion.

    VACATED AND REMANDED.

    Judges GEER and STROUD concur.

    Report per Rule 30(e).