North Carolina Appellate Blog

DRI Appellate Advocacy Seminar - June 21-22

2012-05-21T08:39:00.002-05:00

Womble Carlyle is actively involved with DRI, an international organization of defense attorneys and corporate counsel that is recognized as a thought leader and an advocate for the defense bar at the national and state level, as well as in Europe. Due to this involvement, we wanted to let our readers know about DRI’s 2012 Appellate Advocacy Seminar.

This year’s seminar will be held June 21-22 at the Hyatt Regency Cambridge in Cambridge, Massachusetts. This two day seminar will feature experienced appellate practitioners, in-house counsel, as well as distinguished faculty of judges, in-house counsel and leading practitioners, all of whom will provide valuable instruction and insight on effective strategies, advocacy and business tactics.

Seminar attendees will learn specific aspects of good writing from the judges who read the briefs and rule on the cases; tips on effective oral advocacy from the judges who hear the arguments; how in-house counsel effectively manage their appellate dockets and relationships with outside appellate counsel; compelling historical context for appellate practice and growth of the nation; recent developments in law from the appellate courts that are important to businesses; tips on building an appellate practice, as well as how to handle review of interlocutory orders effectively.

In-house counsel will learn how to better manage their appellate litigation by improving their skills in evaluating outside counsel’s work and by learning about specific appellate issues recently decided as well as those that will arise in the future. They will also be able to network and discuss insights with other in-house counsel regarding the retaining of outside law firms in order to improve their contractual negotiations.

Womble Carlyle Attorneys Win Tax Case in U.S. Supreme Court

2012-05-01T09:29:00.002-05:00

WASHINGTON, D.C.—A Womble Carlyle team successfully represented a taxpayer before the U.S. Supreme Court in a potentially landmark tax case. At issue was the amount of time the IRS has to pursue audits against taxpayers—normally three years, although that can be extended to six years in certain circumstances. The Supreme Court’s decision in United States vs. Home Concrete & Supply LLC helps define and limit when the IRS can audit taxpayers beyond the normal three-year statute of limitations.

Greensboro News & Record Report on Supreme Court Output

2012-04-06T09:52:00.001-05:00

Doug Clark, author of the Greensboro News and Record's Off the Record Blog, recently interviewed Chief Justice Sarah Parker of the North Carolina Supreme Court and others regarding the number of opinions produced by the Court. Clark's piece seems to conclude that the Supreme Court is not publishing enough opinions.

Clark also published a piece on the United States Supreme Court's opinion in Goodyear Dunlop Tires v. Brown. The North Carolina Supreme Court declined to review the case, but the United States Supreme Court heard the case and reversed the opinion of the North Carolina Court of Appeals. In Clark's view the North Carolina Supreme Court's refusal to hear the case and the subsequent reversal by the United States Supreme Court "led to an embarrassment for the N.C. Supreme Court."

The North Carolina Supreme Court's level of output has been a source of much debate in the last few years. Clark's writings echo concerns raised in a white paper entitled The North Carolina Supreme Court in 2010: Is it Time for Reform by Elon University Law School Professor Scott Gaylord.

In my opinion, the Supreme Court should not take cases and issue opinions just to reach some arbitrary number of opinions that is deemed appropriate by practitioners and the media. It does not serve the interest of the citizens of North Carolina for the Supreme Court to issue opinions just for the sake of issuing opinions. However, the Supreme Court's output should be subject to scrutiny and criticism if it is failing to address issues of importance to the jurisprudence of the state or if it is failing to address issues of law have resulted in confusion or conflicting opinions in the lower courts.

If you think that there are specific issues the Supreme Court should be taking up, but it is not, mention it in the comments. If we get a number of interesting issues, we may see if we can get guest authors to discuss these issues in future blog posts.

COA: Joint Bank Account May Create a Fiduciary Relationship

2012-04-03T10:38:00.001-05:00

Today, in Dixon v. Gist, a unanimous panel of the Court of Appeals (Stephens, Chief Judge Martin, and Robert C. Hunter) addressed the circumstances surrounding when a party should have become aware of a fraudulent transfer of property and discussed whether entering into a joint bank account creates a fiduciary relationship between the account holders.

The Court of Appeals summed up Dixon's allegations as follows:

In her complaint, Dixon alleged that she was “befriended” by the Gists, “tricked into believing a special relationship of trust and confidence had been established with [the Gists],” “induced” by the Gists to “convert[ her] bank account into a joint account with rights of survivorship” with the Gists, and, ultimately, “defrauded” by the Gists “out of sixteen [] acres of land and property” and many thousands of dollars in cash. Based on Dixon’s allegedly fraud-induced conveyance of real property to the Gists and on the Gists’ allegedly fraudulent withdrawal of money from Dixon’s bank account, Dixon asserted claims against the Gists for constructive fraud, civil conspiracy, undue influence, conversion, and declaratory judgment voiding conveyances.

The Gists answered and asserted, in a Motion for Judgment on the Pleadings, that Dixon's claims were barred by the statute of limitations. The trial court agreed and dismissed Dixon's claims. On appeal, the trial court's opinion was affirmed in part, reversed in part, and vacated in part.

The Court of Appeals held that Dixon's claims that arose from the alleged fraudulent conveyance of real property were barred by the statute of limitations because "the allegations presented by the Gists in their answer (supported by attached exhibit evidence) show that, in the exercise of due diligence, Dixon should have discovered the alleged fraud by July 2007." The supporting allegations and documents demonstrated that Dixon was present at a July 16, 2007 meeting of the Lexington, North Carolina Planning Board where "(1) the planning board discussed rezoning the property in question, (2) it was explained to the planning board that the property was owned by the Gists, and (3) it was stated that Dixon 'previously owned the [property] recently purchased by [the Gists].'" Thus, when Dixon filed her initial complaint on September 20, 2007, these claims were already barred by the three year statute of limitations.

However, the Court of Appeals disagreed with the trial court's assessment that the Complaint's allegations regarding the fraudulent withdrawal of funds from Dixon's bank account were barred by the statute of limitations. As an initial matter, the Court noted that "the statute of limitations for the constructive fraud claim regarding the withdrawal of money from Dixon's account is subject to a ten-year statue of limitations." These claims differed from the claims regarding the fraudulent conveyance of property because the "fraud-induced conveyance claims do not allege, beyond vague averments of trust and confidence, the existence of some other fiduciary relationship ... and the abuse of that relationship ... in procuring the conveyance."

Then the Court proceeded to discuss whether Dixon had alleged sufficient facts to establish that a fiduciary relationship existed between the parties in the context of the joint bank account. With respect to these claims,

Dixon has alleged that a fiduciary relationship existed between her and the Gists by virtue of the Gists “becoming joint account holders on [Dixon’s] primary banking account with the purported purpose of helping [Dixon] with her daily necessities and monthly obligations.” Dixon supports this allegation with assertions that (1) the Gists told Dixon that “it would be in her best interest to add them as signatories on her [] bank checking account so that they could make purchases for her with her debit card and/or write checks from her bank account”; (2) the Gists were, in fact, added to Dixon’s account; and (3) the Gists helped take care of Dixon’s “daily needs” between June 2007 and June 2010.

These allegations, taken as true, "are sufficient at least to raise an issue of act as to whether a fiduciary relationship existed between the parties with respect to the joint bank account." Combining those allegations with the allegations that the Gists improperly withdrew funds from Dixon's account were sufficient to establish a claim that was brought within the applicable limitations period. Thus, that part of the trial court's ruling was reversed.

Relevant Documents:
Record on Appeal
Appellant's Brief
Appellee's Brief

COA: Mergers of Less-Well-Known Banks May Not Be Judicially Noticed

2012-03-20T08:52:00.010-05:00

Today the COA found that courts may not take judicial notice of mergers between smaller or lesser-known banks. The case is TD Bank, N.A. v. Mirabella. Smaller or lesser-known banks seeking to prove a merger should therefore provide affidavits and evidence of the merger to the trial court.

Plaintiff TD Bank sued borrower Mirabella on a Promissory Note on which Mirabella defaulted. The Note was between Mirabella and First Carolina Bank as lender, not TD Bank. TD Bank got summary judgment on the amount owed. On appeal the borrower claimed that TD Bank failed to show that it was the owner and holder of the Note.

The Court of Appeals found that there was insufficient evidence that TD Bank was the holder of the Note, and therefore summary judgment was improper. TD Bank claimed that it stood in the place of First Carolina Bank due to a merger between the two banks. The COA noted that neither the complaint nor any other documents in the record provided any evidence of the merger. TD Bank's inclusion of the merger documents as an appendix to its appellate brief was not a proper method of presenting evidence of the merger to the Court, especially since the borrower contested the validity of the documents. The COA noted that TD Bank could have filed the documents or an affidavit with the trial court.

The COA also found that it could not take judicial notice of the merger between Carolina First Bank and TD Bank because it did not fall within the realm of “common and general knowledge.” The COA noted that this merger could not be analogized to that of Wachovia and Wells Fargo (which has been judicially noticed by at least one federal court) because TD Bank and First Carolina Bank "are not quite so well-known as Wells Fargo and Wachovia as this panel has never heard of TD Bank or First Carolina Bank, much less of their merger[.]"

COA: StubHub not liable for ticket scalping under NC law

2012-03-06T11:06:00.028-05:00

Today, in Hill v. StubHub, Inc., the North Carolina Court of Appeals (Ervin, Beasley, and Thigpen) held that resale of athletic and other event tickets for a fee on the internet does not violate North Carolina law prohibiting ticket “scalping.” Womble Carlyle attorneys Burley Mitchell and Bob Numbers represented eBay Inc. as amicus curiae.

The case involved Defendant StubHub, Inc., a company that operates an online marketplace enabling third parties to buy and sell tickets to sporting contests, concerts, and similar events. In September 2007, Plaintiffs Jeffrey and Lisa Hill purchased four tickets to a "Miley Cyrus as Hannah Montana" concert through StubHub's website for $149.00 each, plus a shipping fee of $11.95 and a service fee of $59.60, bringing the total to $667.55. The face value of the tickets was $56.00 each. The Hills subsequently filed a complaint, both individually and as representatives of a proposed class, against StubHub and other defendants, claiming in part that StubHub had engaged ticket scalping and had violated fee provisions of N.C. Gen. Stat § 14-344.

The case presented an issue of first impression for the Court of Appeals: was StubHub entitled to immunity from liability pursuant to 47 U.S.C. § 230? Given that the United States Supreme Court has not addressed the scope of immunity under § 230 and that the North Carolina appellate courts had not yet construed the statute, the Court looked to persuasive decisions from lower federal courts and other state courts, which have broadly construed § 230 immunity.

In order to qualify for § 230 immunity, StubHub was required to meet three criteria: (1) StubHub must be a provider or user of an interactive computer service; (2) StubHub's liability must be based on its having acted as a publisher or speaker; and (3) StubHub could only claim immunity with respect to information provided by another information content provider. There was no dispute that StubHub met the first and second criteria. The issue was whether StubHub functioned as an "information content provider" with respect to the ticket price at issue.

That inquiry, the Court explained, hinges upon the extent to which a website materially contributed to the development of unlawful content. To materially contribute to the creation of unlawful material, a website must effectively control the content posted by third parties or take other actions which essentially ensure the creation of unlawful material. Merely encouraging the posting of market-based ticket prices or being congnizant of the risk that tickets are priced in excess of face value will not suffice to strip a website of § 230 immunity.

Here, the evidence showed that the seller, Defendant Justin Holohan, set the price of the concert tickets. StubHub did not price the tickets, require Holohan to sell them at a particular price, or act as Holohan's agent in making the price determination. Therefore, StubHub was not responsible for creating or developing the content at issue, which was the price at which Holohan sold the tickets. Accordingly, the Court held that pursuant to § 230, StubHub was immune from liability for claims based on that particular content. In so holding, the Court emphasized that the § 230 immunity analysis must focus on the specific content at issue in the case, rather than the website as a whole.

Finally, the Court held that the fees StubHub charged for its services did not violate N.C. Gen. Stat. § 14-344 because that statute applies only to sellers or sellers' agents, and StubHub was not the seller or Holohan's agent.

Click here for access to the record on appeal, parties' briefs, and amicus brief.

COA Opinions (2/21/12)

2012-02-21T09:08:00.001-05:00

This morning, the NC Court of Appeals published 20 opinions. We will have more on any opionions of interest later.

Federalist Society Event on Judicial Selection in NC

2012-02-15T09:55:00.002-05:00

The Triangle Lawyers Chapter of the Federalist Society for Law and Public Policy Studies will be holding an event on February 16, 2012 at Campbell Law School in Raleigh, North Carolina to discuss the various proposed changes to the way North Carolinians select the members of their judiciary. The event will begin with a reception from 5:30-6:30 and the event running from 6:30-7:30. Please feel free to attend.

Race for Newby Seat Shaping Up

2012-02-15T09:53:00.002-05:00

Monday marked the official start of the 2012 campaign season in North Carolina because it was the first day when candidates could officially file to run for office.

Although he has not official filed yet, Justice Paul Newby is running for a second term on the North Carolina Supreme Court. Court of Appeals Judge Sam Ervin, IV has announced that he will challenge Newby for the seat.

Although the races are officially nonpartisan, the Supreme Court is currently comprised of 4 Republicans (Martin, Edmunds, Newby, and Jackson) and three Democrats (Chief Justice Parker, Timmons-Goodson, and Hudson). If Ervin were to defeat Newby, it would tilt the balance of the court to a majority of Democrats.

While the filing period runs until the end of the month, Justice Newby and Judge Ervin will likely be the two main candidates in the race. Doug Clark of the Greensboro News and Record had an interesting piece on this race in his Off the Record Blog on February 2, 2012.

North Carolina Appellate Judges Mentioned as Possible Supreme Court Nominees

2012-02-15T09:32:00.000-05:00

Tom Goldstein of SCOTUSBlog recently published a post discussing potential Supreme Court nominees if President Obama is reelected. Among the long list of potential candidates were two members of North Carolina's appellate bench:

The President could also reach into the state court systems.... I limited myself to the highest courts of California, New York, Texas, and Florida. I also know about Cheri Beasley (N.C. Ct. App.); Yvette McGee Brown (Ohio S. Ct.); and Patricia Timmons-Goodson (N.C. S. Ct.). I am sure I am missing others. But state appellate judges will generally fly under the radar of the President’s staff, as the process tends to revolve around known commodities who have been involved in the federal system.

While the list is highly speculative, it is good to see that North Carolina's appellate judges are well regarded enough to be included in this type of conversation.

COA Opinions

2012-01-17T10:19:00.003-05:00

The Court of Appeals posted 29 opinions today, 16 of them civil. We'll be back to you shortly with posts on the relevant opinions.

COA: EMTs do not have public officer's immunity

2011-12-23T12:14:00.007-05:00

This week, a panel of the North Carolina Court of Appeals (Calabria, Martin, Bryant) held in Fraley v. Griffin that emergency medical technicians (EMTs) are not entitled to public officer's immunity and can be personally liable for claims brought against them.

In January 2010, after returning home from football practice, 17-year-old Atlas Fraley called 911 and reported that he was experiencing full body cramps and dehydration. His parents were at work at the time. Defendant James Griffin, an EMT, went to Atlas's home. Griffin conducted a brief examination of Atlas and determined his condition was not serious and that his pain was not severe. Defendant advised Atlas to orally hydrate and watched him do so successfully. Griffin then gave Atlas oral and written instructions to contact his parents and 911 if his symptoms worsened and left Atlas home alone. A few hours later, Atlas’s parents arrived home and found him lying on their living room. Orange County Emergency Services personnel responded and pronounced him dead. A cause of death could not be determined. Atlas's parents, as administrators of his estate, sued Griffin for wrongful death.

The issue before the Court was whether Griffin was entitled to public officer's immunity. In North Carolina, "public officers" are shielded from liability unless their actions are corrupt or malicious, whereas "public employees" can be held personally liable for mere negligence. In distinguishing between a public officer and a public employee, our courts have held that (1) a public office is a position created by the constitution or statutes; (2) a public official exercises a portion of the sovereign power; and (3) a public official exercises discretion, while public employees perform ministerial duties. Additionally, an officer is generally required to take an oath of office while an agent or employee is not required to do so.

Here, the Court determined that North Carolina statutes do not create the position of EMT. The Court also concluded that because EMTs are required to execute specific treatment protocol and cannot deviate from such protocol without physician approval, an EMT's duties are ministerial rather than discretionary. Therefore, the Court concluded, EMTs are not public officers, and Griffin could be liable in his individual capacity.

Related links: Record on appeal (vol. 1, vol. 2, vol. 3); Fraleys' brief; Griffin's brief; amicus brief (NC Advocates for Justice); amicus brief (NC Ass'n of Rescue and EMS and NC Ass'n of EMS Administrators).

COA Opinions Today

2011-12-20T12:05:00.002-05:00

Today the COA released 28 published opinions, 19 of them civil. We will report further on some of these cases shortly.

COA: Divorce under Islamic law is not a valid divorce in North Carolina

2011-12-12T21:03:00.009-05:00

Last week, a divided panel of the Court of Appeals (Calabria and Martin, majority; Bryant, dissenting) held in Mussa v. Palmer-Mussa that a woman's divorce pursuant to Islamic law was not a valid divorce under North Carolina law.

In 1997, Nikki Palmer-Mussa participated in a wedding ceremony with Khalil Braswell. The couple consented to become husband and wife, but they did not obtain a marriage license because they only sought to comply with Islamic marriage requirements. A friend of the couple, who was not an imam, conducted the ceremony. Afterward, the couple lived together in Maryland, but the marriage was never consummated. Palmer-Mussa divorced Braswell in the manner required by Islamic law by returning the dowry and declaring that she was divorced from her husband. At the time, she believed she was divorced since the marriage was entered into under Islamic law and ended under Islamic law. However, she never sought a judicial divorce or annulment.

Palmer-Mussa subsequently returned to North Carolina, where she met and married Juma Mussa in November 1997. During their marriage, the parties had three children, purchased property as husband and wife, and filed joint tax returns, and Palmer-Mussa was listed as Mussa's wife on his insurance policy. In 2008, Palmer-Mussa filed for divorce and was awarded child support, postseparation support, and attorney’s fees. Mussa later sought an annulment based on bigamy. He argued that his marriage was void from the start because Palmer-Mussa was still married to Braswell when she married Mussa.

The Court of Appeals held that because Palmer-Mussa and Braswell did not have a marriage license and the ceremony failed to meet statutory requirements, their marriage was merely voidable--not void. A voidable marriage is valid until a tribunal annuls the marriage in a direct proceeding, in contrast to a void marriage, which is a nullity and impeachable at any time. In North Carolina, the only type of marriage that is absolutley void is a bigamous marriage.

Although Palmer-Mussa claimed she and Braswell were divorced according to the laws of Islam, the Court held that under North Carolina law, there is no authority supporting the dissolution of a marriage by religious means that can be deemed to be the equivalent of a judicial determination regarding the validity of a marriage. Therefore, at the time of Palmer-Mussa's marriage to Mussa, she was still married to Braswell, rendering the marriage between Palmer-Mussa and Mussa bigamous and void.

Related links: Record on appeal; Mussa's brief; Palmer-Mussa's brief.

Supreme Court Opinions (12/9/11)

2011-12-09T14:14:00.001-05:00

Today the North Carolina Supreme Court released six opinions. This group of opinions is likely the last of the year. We will post on any decisions of interest later.

COA: Stamp Evidencing Transfer of Note Must Be Signed In Order to Be Effective

2011-12-06T16:04:00.008-05:00

In another foreclosure-related ruling issued by the COA today, the Court held that a stamp evidencing the transfer of a note must be signed by someone with authority to transfer it in order to be effective. The case is In re Bass.

Here the borrower claimed that the foreclosing party, U.S. Bank National Association, was not the legal holder of the Note and could thus not foreclose on her property. The Note was transferred several times before coming into the possession of U.S. Bank. The evidence of transfer of the Note between previous holders Mortgage Lenders and Emax Financial Group included a stamp but did not include a signature of an authorized representative transferring it. Emax then transferred the Note to Residential Funding Corporation, and Residential transferred it to U.S. Bank. All other stamps showing transfers of the Note between various parties bore handwritten signatures of the individuals with authority to effect the transfers.

The COA held that a stamp may constitute a valid indorsement of a note, but only if the stamp is executed by a person having the intent and authority to do so. U.S. Bank did not introduce any evidence to establish that the stamp purportedly indorsing and transferring the Note from Mortgage Lenders to Emax was an authorized signature. U.S. Bank introduced only the Note itself which bore a stamp stating "PAY TO THE ORDER OF: EMAX FINANCIAL GROUP, LLC, WITHOUT RECOURSE, BY: MORTGAGE LENDERS NETWORK USA, INC. This stamp was unsigned. The stamp itself did not count as a signature because the person placing the stamp must act with authorization and with the intent to indorse the instrument in order to effect a valid transfer. The stamp at issue only showed the name of Mortgage Lenders, but did not contain a countersignature indicating the capacity in which the signor acted in executing the stamp on behalf of Mortgage Lenders. The COA deemed the lack of signature evidencing of authority of an individual executing the stamp "a troublesome omission," and held that U.S. Bank had thus not presented sufficient evidence that it was the holder of the Note.

COA: Upon Merger, Surviving Bank Becomes Holder of Note By Operation of Law

2011-12-06T16:00:00.008-05:00

Today the COA held that when evidence is presented that a merger between two banks took place, the surviving bank succeeds by operation of law to the status of holder of the previous bank's note. The case is In re Carver Pond I.

This was a foreclosure case in which the borrower claimed that Bank of America was not the holder of the Note and thus had no power to foreclose. BoA had merged with LaSalle Bank, who was the previous holder of the Note.

BoA presented three documents to evidence the merger between it and LaSalle: an Affidavit executed by the loan servicer stating that BoA was successor by merger to LaSalle; a certified statement from the assistant secretary of BoA that the merger took place; and a letter from the Comptroller of the Currency Administrator of National Banks certifying that LaSalle merged with BoA. The COA held that these documents were sufficient evidence of the merger between LaSalle and BoA, and as the surviving corporation, BoA succeeded by operation of law as the holder of the Note, and had standing to enforce the Note in its own name.

COA Opinions (11/15/11)

2011-11-15T11:20:00.001-05:00

Today the Court of Appeals issued 21 opinions. We will post on any cases of interest later.

Matching Funds Provision of Judicial Campaign Financing Program May Be Repealed

2011-11-14T14:00:00.005-05:00

We previously mentioned that North Carolina Right to Life PAC filed a lawsuit seeking to have North Carolina's system of providing matching funds to judicial candidates who participate in public financing declared unconstitutional. A recent filing by the State of North Carolina indicates that the case may come to an end much sooner than anyone anticipated.

Today, the State of North Carolina filed its Second Motion for Extension of Time to respond to NC Right to Life PAC's Complaint. While the filing of such a motion is fairly routine, the State's reason for seeking an extension in this case is not.

According to the State's Motion, on July 21, 2011, Gary Bartlett, the Executive Director of the State Board of Elections wrote a letter to the John Locke Foundation stating that a matching funds provision utilized by the Town of Chapel Hill should not be implemented. Chapel Hill's matching funds provision was very similar to the one challenged by NC Right to Life PAC. The State Board of Elections subsequently removed the matching funds provisions from the Town of Chapel Hill's campaign finance guidelines.

Finally, and most importantly, the State reported that "Mr. Bartlett has met with leaders of the General Assembly and requested that the matching funds provision for the public financing of appellate judicial elections and the concomitant reporting requirements be repealed." The State indicated that it has "been informed by legislative leadership that repeal of the statutes will be take up at [the General Assembly's] November 27, 2011 session."

The repeal of the matching funds provision and the reporting requirements would most likely moot NC Right to Life PAC's case and deprive the Court of subject matter jurisdiction to hear the matter. While the case would end without a judgment in NC Right to Life PAC's favor, a complete repeal of the matching funds provision would be the functional equivalent of a victory on the merits.

The repeal of these provisions would also present serious questions regarding the viability of North Carolina's system of public financing for judicial elections. The public financing system, and the fundraising and spending restrictions that come with it, may seem less appealing to judicial candidates if they cannot receive the matching funds for money spent by privately financed opponents or third parties. It will be interesting to see how the General Assembly proceeds on the issue of repeal and what it does, if anything, to incentivize judicial candidates to participate in the public financing system in the absence of matching funds.

Supreme Court: Note Holder Need Not Present Original Note In Foreclosure Proceedings

2011-11-11T14:59:00.012-05:00

Yesterday the Supreme Court affirmed the Court of Appeals' holding that a lender does not need to present the original note to show that it is the note holder where the borrower plaintiff presents no evidence to the contrary. The case is Dobson v. Substitute Trustee Services, et al.

In the Court of Appeals case, Plaintiff Dobson executed a promissory note in favor of Equivantage which provided that Dobson would be in default under the note if she failed to make monthly loan payments. Dobson also executed a deed of trust on her property to secure the note. Equivantage assigned the note and deed of trust to Defendant Wells Fargo. Dobson defaulted, and Wells Fargo bean foreclosure proceedings.

Dobson filed suit against Wells Fargo and other defendants, seeking an injunction to stop foreclosure. Wells presented two affidavits from its employees and a copy of the note and the assignment of the note to show that it was the note holder and had a right to foreclose. Dobson claimed that Wells had not proven that it was the holder of the note because it failed to produce the original note. The trial court granted Dobson's motion for summary judgment by enjoining defendants from foreclosing on Dobson's property until Wells could establish that it was the holder of the note.

The Supreme Court affirmed the COA's reversal of the trial court's ruling. The COA noted that Dobson presented no evidence to dispute that Wells was the note holder. Dobson's assertion that she could not confirm that the copy of the note presented by Wells was a true and correct copy of the original was "insufficient to cast doubt on Defendants' evidence that Wells Fargo is the holder of the note and does not serve as evidence that the copies are not exact reproductions." The COA qualified this holding by noting that it "should be viewed in the context of summary judgment," and the trial court could ultimately conclude that Defendants' evidence regarding Wells' status as holder of the note was unconvincing at some point after the summary judgment stage.

Supreme Court Opinions (11/10/11)

2011-11-10T13:03:00.000-05:00

On Thursday, November 10, 2011, the Supreme Court issued three opinions:

In State v. Yencer, the Supreme Court held that an arrest by the Davidson College campus police force, pursuant to North Carolina's Campus Police Act, did not violate the First Amendment to the United States Constitution.
In Amward Homes v. Town of Cary, an equally divided Supreme Court affirmed the Court of Appeals' opinion which held that local governments do not have the authority to impose a fee on residential builders to fund the construction of local schools without explicitly authority from the General Assembly. Justice Barbara Jackson did not take part in the consideration or deliberation of the case. While the opinion does not provide the reason for Justice Jackson's recusal, it is most likely because she wrote a dissenting opinion in the Court of Appeals opinion that was under review by the Supreme Court. Womble Carlyle represented the Town of Cary in this matter.
Finally, in Dobson v. Substitute Trustee Services, Inc., the Supreme Court issued a per curiam opinion affirming the Court of Appeals' decision dealing with the evidence that is necessary to establish that a financial institution is the holder of a promissory note and the amount owed by a debtor in a foreclosure proceeding. A more detailed post on this one is forthcoming.

While the Supreme Court has not indicated when it will issue its next set of opinions, the Court's practice over the last few years would indicate that there will be one more set of opinions released in December. While you await this year's final set of opinions, take some time to review our post on which justices have authored opinions this year.

COA: Party Who Allegedly Made Warranties and Provided Maintenance on Equipment Not Liable to Equipment Lessee

2011-11-01T15:16:00.003-05:00

Today the COA held that a lesee of equipment cannot bring claims against a party who provided maintence on that equipment and allegedly made warranties about the equipment, where that party was not mentioned in the equipment lease and did not actually supply the equipment. The case is Moore Printing, Inc. v. Automated Print Solutions, LLC.

Defendant APS performed a demonstration of the printer for Plaintiff Moore Printing and submitted a proposal for the lease and maintenance of the printer. Moore did not end up leasing the printer from APS, even though Moore's president signed the proposed lease that APS presented to Moore. Moore unltimately executed a different lease with Wells Fargo Financial Leasing, under which Wells Fargo would lease the printer to Moore and Network Data Systems would be the supplier of the printer. APS was not mentioned in the Wells Fargo lease agreement, and Moore entered into a separate maintenance agreement for the printer with APS. The lease between Wells Fargo and Moore stated that Moore “may be entitled to the promises and warranties (if any) provided to [Wells Fargo] by the Supplier,” and that Wells Fargo “transfer[red] to [Moore] all automatically transferable warranties, if any, made to [Wells Fargo] by the Supplier.”

Moore began having problems with the printer, and pursuant to the maintenance contract, APS attempted to resolve the problems, but was ultimately unable to do so to Moore's satisfaction. Moore sued APS for breach of contract, breach of fitness for a particular purpose, conversion, and unfair and deceptive trade practices. Moore also sought rescission of the lease agreement and quantum meruit, alleging that APS made certain warranties related to the printer.

The COA held that because the Wells Fargo lease was only signed by Moore's president and not APS, it was insufficient to form an enforceable lease between Moore and APS. The COA further held that the Wells lease did not establish privity of contract between Moore and APS. The Court noted that a lessee and a supplier/seller can be in privity of contract with the lessor, and the lessee could try to prove that the equipment seller’s representations and warranties made to the lessor were part of the inducement to enter into the lease. However, this is only true where the equipment lease directs the lessee to seek relief exclusively from the supplier/seller of the equipment and identifies the supplier/seller by name, and the supplier/seller is a party to the suit for breach of warranty. In this case, the Wells lease agreement specified that Network Data Systems was the supplier/seller of the printer, not APS, and APS was not mentioned anywhere in the Wells lease. It is unclear why, but Moore did not bring suit against Network Data Systems. Recission of the lease was also not proper because the parties to the lease agreement were Moore and Wells Fargo, and Wells was not a party to the suit.

COA Opinions for November 1, 2011

2011-11-01T13:14:00.000-05:00

Today the COA published 15 opinions, seven of them civil. We will post on relevant cases shortly.

NC Supreme Court Historical Society Annual Meeting

2011-10-23T09:26:00.000-05:00

An announcement that may be of interest to our readers:

The North Carolina Supreme Court Historical Society is holding its 20th Annual Meeting and Dinner on Thursday, October 27, 2011. The dinner will be at the Carolina Country Club, 2500 Glenwood Avenue, in Raleigh, North Carolina. The reception starts at 6:00 PM and dinner starts at 7:00 PM. The speaker will be Scott A. Miskimon of Smith Anderson. To register, go to this web page.

The NC Supreme Court Historical Society was established in 1991 for the purpose of preserving the legal heritage of North Carolina. The Society’s sole purpose is to collect and preserve the history of the court, including attorneys and others who interact with the judicial system, as well as the cases that may be generated from those interactions.

COA Opinions (10/18/11)

2011-10-19T14:22:00.002-05:00

Yesterday the COA posted 11 opinions, 5 of them civil. We will have more on any cases of note shortly.