North Carolina Lawyers Weekly December 6, 2021

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DECEMBER 6, 2021 ■ $8.50

Loans for grown child are marital debt

FIGHTING FOR A

SECOND CHANCE

■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com The North Carolina Court of Appeals has unanimously ruled in a case of first impression that both parents are on the hook for student loans taken out for an adult child because the debt benefits both parties and is therefore classified as marital debt.

The appeals court’s Nov. 16 ruling affirms the order of Moore County District Judge Warren McSweeney classifying the loans as marital property where both the mother and the father agreed to take out nearly $145,000 in loans rather than pay out-of-pocket for their daughter’s education at a private college in Virginia.

In the opinion, Judge April Wood wrote that debt isn’t treated differently than assets under North Carolina law, but that the novel question before the court was whether educational loans incurred during marriage for adult children are presumed marital.

The appeals court determined that they are, leaning on the reasoning of two out-of-state appellate court decisions opining that parents who mutually agree to finance their child’s education should each honor the agreement even after divorcing.

The plaintiff’s attorney, Whitney Foushee of Van Camp, Meacham & Newman in Pinehurst, said that she was “dumbfounded” by the idea that a parent would want a child to have certain things and later argue that they didn’t benefit from providing them.

“My main argument was the intangible pride of being able to give your daughter that college education that she very much wanted and they wanted her to have,” Foushee said. “Otherwise, she wouldn’t have been able to go to the school of her dreams.”

According to the complaint, the

■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com Inside the walls of North Carolina’s prisons sit aging men and women, decades removed from crimes they committed as adolescents, waiting for the chance to tell their stories of redemption in hopes of being paroled in a system where parole has effectively been abolished.

The state’s Structured Sentencing Act of 1994 was passed to ensure that criminal defendants are incarcerated for as long as the trial court intended them to be. As a result, those convicted of crimes committed after Oct. 1, 1994, are likely to serve every day meted out by the judge.

But for a select few, primarily those convicted as adults for crimes they committed as juveniles more than a quarter century ago, remnants of the state’s parole system still offers a possibility—slim, some say—of early release and a second chance at freedom.

A prime argument for parole is that these crimes were committed by individuals who at the time were unequipped to fully appreciate the seriousness of their actions or to comprehend the consequences.

American jurisprudence has long held that children are different; less culpable and more malleable than adult offenders. Emerging scientific research suggests that the underdeveloped brains of adolescents often render them incapable of making well-informed decisions and more likely to demonstrate impulsive and ill-considered behaviors.

At the University of North Carolina School of Law’s Pro Bono Initiatives program, director Allison Constance leads groups of volunteer lawyers and law students toward advocacy for a population of individuals whose voice often isn’t loud enough to clearly project their plight.

“There’s been a lot of research in last 10 or 15 years about how juvenile brains are different and how they shouldn’t be treated the same as adults,” said Constance, a former postconviction attorney who also manages the North Carolina Prisoner Legal Services’ Juvenile Parole Project.

According to North Carolina Department of Public Safety statistics compiled by Ben Finholt, director of Duke Law S e e Fr e s h s t a r t P a g e 7 ►

See Loans Page 8 ►

As-applied challenge dodges three-judge panel review ■ BY CORREY E. STEPHENSON BridgeTower Media Newswires A defendant’s as-applied challenge to the constitutionality of a state law extending the time period for a minor to bring an action based on sexual abuse can’t be heard by a three-judge panel, a divided panel of the North Carolina Court of Appeals has ruled, vacating an order transferring the dispute.

In 2019, the General Assembly enacted Section 1-17(e), which allows a person who was a victim of sexual abuse when they were a minor to bring an ac-

tion for claims “related to [the] sexual abuse” within two years of the date of a criminal conviction of the perpetrator of the sexual abuse.

Michael Todd Pegram was convicted of various sexual offenses in 2019. In February 2020, nine victims filed suit against the Young Men’s Christian Association of Northwest North Carolina (YMCA), alleging that Pegram sexually assaulted them while he worked as an employee of the YMCA in the late 1990s and early 2000s. The YMCA filed a motion to dismiss the suit on the basis that the claims were time-barred and that § 1-17(e) violated the state’s constitution.

In response, the plaintiffs filed a motion to transfer the case to Wake County Superior Court for the appointment of a three-judge panel to determine the constitutionality of § 1-17(e), pursuant to § 1-267.9(a1) and North Carolina Rule of Civil Procedure 42(b)(4). The trial court granted the motion to transfer and the YMCA appealed.

Judge Fred Gore, writing for the Court of Appeals’ majority in its Nov. 16 decision, first granted the YMCA’s petition for a writ of certiorari—since the See Review Page 6 ►

INSIDE VERDICTS & SETTLEMENTS

VERDICTS & SETTLEMENTS

VERDICTS & SETTLEMENTS

Estate settles car crash death for $6.5M

Board of Education pays $1.55M in vehicle crash suit

Sheriff’s office to pay $725K after suicide in jail

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2 / NEWS

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

NEWS BRIEFS COA stops order to spend $1.7B on education RALEIGH, N.C. (AP) — A North Carolina appeals court has blocked enforcement of parts of a trial judge’s recent order that demanded $1.75 billion in state taxpayer funds be spent—without express legislative approval—to address public education inequities.

The majority on a three-judge panel on Nov. 30 sided with a request by State Controller Linda Combs that it prevent Superior Court Judge David Lee’s order from being enforced. It agreed Lee crossed the line by appropriating money—a job the majority said rests solely with the General Assembly.

Combs leads one of three state offices that Lee directed to transfer funds from state coffers to education and health agencies to carry out portions of a remedial plan Lee said would address longstanding school funding litigation. The remedial plan is supported by Democratic Gov. Roy Cooper’s administration, but Republican legislative leaders have said Lee lacked authority to act.

Combs’ attorney wrote that she and her staff were worried they could violate the state constitution if they carried out Lee’s Nov. 10 order.

Appeals court Judges Chris Dillon and Jefferson Griffin declared that Lee erred by stating a portion of the constitution addressing the right to education amounted to “an ongoing constitutional appropriation of funds.”

The ruling could be appealed to the full 15-member Court of Appeals if a majority of those judges agreed to hear it, or to the state Supreme Court.

Judge John Arrowood, in a dissenting opinion, said he would have voted only for a temporary delay of the order, which Lee already had pushed back enforcing until Dec. 10. Arrowood criticized his colleagues for shortening unnecessarily the time that others in the case could respond to Combs’ motions, filed last week, until Tuesday morning.

“This is a classic case of deciding a matter on the merits using a shadow docket of the courts,” Arrowood wrote. Dillon and Griffin were elected to the state’s intermediate level appeals court in 2020 as Republicans. Arrowood is a Democrat.

The ruling puts another notch in the litigation known as “Leandro” for one of the original student plaintiffs when it was first filed in 1994. By 2004, the state Supreme Court had ruled that while North Carolina’s children have a fundamental right to the “opportunity to receive a sound basic education” under the constitution, the state had not lived up to that mandate.

Interest in the case picked up when Lee began monitoring the state’s response to the ruling, and a consultant’s report released in 2019 declared the state was still woefully behind in meeting the 2004 standard. The remedial plan, created from the report and input from Cooper and the State Board of Education, calls for at least $5.6 billion in new education funding by 2028. The $1.75 billion would address funds needed through mid-2023.

Lee said he had little choice but to act now because the other branches of state government had failed to address the inequities when given every opportunity to do so.

New judges named in Meck. Co., District 11 Gov. Roy Cooper has appointed Kimberly Best to serve as a superior court judge in Judicial District 26B (Mecklenburg County). Best will fill the vacant

seat created by the retirement of Judge W. Robert Bell. She had served as a district court judge in Mecklenburg County since 2009.

Cooper also appointed Brad Salmon to serve as a district court judge in Judicial District 11 (Harnett, Johnston, and Lee counties). Salmon will fill the vacant seat created by the retirement of Caron H. Stewart. He is a founding partner at the Salmon Law Firm and previously served as a member of the state’s House of Representatives for District 51.

Staff reports

High court to consider if GOP leaders can join voter ID suit RALEIGH (AP) — The U.S. Supreme Court will consider whether North Carolina Republican legislative leaders can intervene in a federal court battle over a 2018 state voter ID mandate.

House Speaker Tim Moore and Senate leader Phil Berger want to formally step into a pending federal case to defend the law. They have argued Democratic Attorney General Josh Stein, whose office is representing the state in the lawsuit brought by the NAACP, won’t adequately fight for the law.

The high court said in a brief order issued on Nov. 24 that it will hear the case at a later date. The case before the court won’t decide the underlying dispute over voter ID, and will focus on whether the GOP leaders can enter the case.

A federal trial had been set for January over the NAACP lawsuit arguing that the law is tainted by racial bias. That proceeding will most likely be delayed.

Berger and Moore appealed to the high court after the 4th U.S. Circuit Court of Appeals ruled in June that the state was already adequately represented by Stein.

The case is part of a thicket of litigation over the state’s voter ID mandate, which was approved by voters in November 2018 as a constitutional amendment and then formally written into law by the legislature. In September, a state judicial panel ruled that the law was unconstitutional. The North Carolina Supreme Court is hearing a third case challenging how legislators put the constitutional amendment on the ballot.

Judge throws out lawsuit from Charlotte police shooting CHARLOTTE (AP) — A federal judge has thrown out a lawsuit that accused a North Carolina police officer of needlessly escalating a 2019 standoff before fatally shooting a Black man.

Senior U.S. District Judge Graham Mullen threw out the lawsuit filed in June 2020 by Deborah Franklin, the mother of Danquirs Franklin, who was shot and killed by Charlotte-Mecklenburg police Officer Wende Kerl outside a Burger King restaurant.

The federal lawsuit claimed Kerl panicked, violated her training and “shocked” the other officer on the scene when she opened fire on Franklin outside the restaurant on March 25, 2019.

In his ruling, Mullen said Kerl probably made errors on the day of the shooting. But under the law, the judge said, they were reasonable ones, making Kerl immune to the claims in the lawsuit.

Franklin appeared to be complying with orders to lay down his weapon when Kerl shot him, according to video and a report by District Attorney Spencer Merriweather. However, Merriweather ruled the Franklin shooting was legally justified, saying his office couldn’t prove that Kerl and the Burger King manager

didn’t have a reasonable fear for their safety given Franklin’s erratic behavior and the fact that he was armed.

Statewide database on police use of force won’t be public RALEIGH (AP) — Incidents in which police officers kill or injure someone in North Carolina are going to be recorded statewide for the first time in a database.

But the information will not be made available to the public.

WRAL reported that the General Assembly authorized the database earlier this year as part of legislation on policing.

The database will be for law enforcement agencies to use in an effort to weed out problem officers.

Police reform advocates have been pushing for the database to be made public.

“This is another example of so-called reform that doubles down on the false idea that the police can police themselves, when what we really need is public accountability and oversight,” Ann Webb, senior policy counsel at the American Civil Liberties Union, told WRAL in an email.

Jury awards man $6M after finding police fabricated evidence WINSTON-SALEM (AP) — A federal jury has awarded a North Carolina man $6 million after finding a detective made up evidence and performed an inadequate investigation that led to convictions that sent him to prison for more than 20 years.

In a Dec. 1 verdict, the jury in Winston-Salem found that former Durham police detective Darryl Dowdy fabricated evidence in the case and trial that resulted in Darryl Howard being convicted in 1995 of killing a woman and her daughter in 1991, The News & Observer of Raleigh reported.

Howard’s 80-year sentence was cut short in 2016 when a Durham County judge vacated his convictions, citing police and prosecutorial misconduct. In 2017, Howard filed a federal civil rights lawsuit that accused Dowdy, the city of Durham and others of actions that resulted in Howard being wrongfully convicted.

Howard and one of his attorneys said they were glad the jury recognized Dowdy’s actions but had hoped for a figure much closer to the $48 million in damages they requested.

Dowdy, 65, who denies the accusations in the lawsuit, worked for the Durham Police Department for 36 years before he retired in 2007. His attorney, Nick Ellis, said they accept the jury’s decision but disagree with its conclusions.

NC inmate safety, juvenile justice changes take effect RALEIGH (AP) — Some North Carolina laws that took effect on Dec. 1 are designed to protect expectant mothers behind bars, keep more elementary school-age children accused of misdeeds out of court and force police officers to speak up about excessive force.

The measures, among over two dozen the General Assembly approved this year that contain a Dec. 1 start date, also reduce lifetime satellite monitoring of those declared dangerous sex offenders to 10 years and allow some people to get more felonies removed from their records.

The legislation addressing pregnant

women inside North Carolina’s prisons and county jails—and ultimately the newborns they deliver—received wide support from across the political spectrum.

Under the new law, correctional officers and sheriff’s deputies are now largely barred from using physical restraints on women serving time or awaiting trial from their second trimester through several weeks after delivery. While shackling pregnant women had been barred by state prison policy since 2017, enforcement wasn’t always uniform, and county jails had a patchwork of procedures.

Once a baby is delivered, the prisoner or inmate must have time with her newborn at the hospital, and once back behind bars a prisoner can receive routine visitations with the baby in certain lowersecurity prisons.

Another bipartisan measure now lifts the minimum age that children can be prosecuted in juvenile courts from 6 to 8. North Carolina had the lowest age for juvenile adjudication set by law in the country. Supporters of the change said the youngest offenders lack the intellectual capacity to understand the juvenile court proceedings and assist in their defense.

Some 8- or 9-year-olds who commit the most severe felonies would still have to go to juvenile court and before a judge, who could require intensive treatment and even probation. Otherwise, children in this age range could still receive several months of counseling.

Police reform measures passed and signed by Gov. Roy Cooper contain several items also starting Dec. 1. They came in response to recent deadly law enforcement confrontations with citizens around the country, including the death of George Floyd in Minnesota.

One provision now places a duty on all law enforcement officers to report a fellow officer’s apparent excessive force to a superior within 72 hours of the occurrence.

Another item alters the process by which family members can privately view police body camera footage of a death or serious injury in a way that removes a law office’s discretion to refuse the family’s request, and instead puts the issue quickly before a judge. The change stems from the aftermath of April’s fatal shooting of Andrew Brown Jr. by Pasquotank County sheriff’s deputies.

A broad criminal justice measure also caps at 10 years the amount of time that a convicted sex offender could be forced to wear an electronic device monitoring their whereabouts. A lifetime mandate, with opportunities to ask a judge to end the requirement, had been in place for “aggravated offenders” and certain others convicted of sex crimes. The changes were largely in response to a 2019 state Supreme Court ruling focusing on people subject to lifetime tracking only because the person has been convicted of multiple sex offenses.

Other laws that took effect Dec. 1: • toughen current laws that make stealing catalytic converters from a car a felony, in part by adding a $1,000 fine to anyone who buys or sells the emission control device improperly.

• increase the penalty for breaking into a law enforcement vehicle and create new felonies for stealing police equipment.

• prohibit the possession, and not just the use, of a “skimming device” that can steal financial information from a credit card that’s entered into an ATM or gas pump.

• allow people to ask a court to remove up to three nonviolent felony convictions from their record if they happened relatively close together and were settled at least 20 years ago. Previous law limited expunctions to one such felony or multiple nonviolent misdemeanors.

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

NEWS / 3

Estate settles car crash death for $6.5M ■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com The estate of a person who was killed when their vehicle was rear-ended has settled its wrongful death suit for $6.5 million, the estate’s attorney reports.

Earl Taylor of Taylor Law Office in Wilson, who represented the estate, said that the victim died instantly from blunt force trauma injuries. Many details of the case, including the names of the parties and their counsel and the venue, were withheld pursuant to a confidentiality agreement.

Taylor said the case settled before trial after unsuccessful preEarl Taylor suit and court-ordered mediations, and the defendant’s videotaped deposition was an important piece of evidence that Taylor said he had planned to use at trial.

Taylor said that the defendant alleged contributory negligence. Taylor said he didn’t think that the

defense was supported by the evidence, and even if it had been it would have been trumped by the last clear chance doctrine.

“The accident reconstruction expert testified that the defendant had more than enough time and distance to easily and safely avoid the collision,” Taylor said.

The medical examiner testified that the death was immediate, so there was no evidence of pain and suffering, but Taylor said that N.C.G.S. 28A18-2—which covers death by the wrongful act of another and compensation for the relationship between the decedent and his beneficiaries—helped establish the value of the case.

The statutory language makes clear that an estate can pursue damages commensurate with the decedent’s value to their family, not to society at large or to a reasonable person.

“But rather what this person’s value actually was to his family as shown by the closeness, daily interaction, love, affection, and the importance each family member placed on that relationship before the collision and the tremendous loss each felt af-

SETTLEMENT REPORT — MOTOR VEHICLE CRASH

Amount: $6.5 million Injuries alleged: Death Case name: Withheld Court: Withheld Date of settlement: Fall 2021 Attorney for plaintiff: Earl Taylor of Taylor Law Office in Wilson Attorneys for defendant: Withheld terwards,” Taylor said. “The entire family had lived lives of service to the community.”

Taylor added that his twin sons, first-year law students at the University of North Carolina School of Law, were instrumental in preparing the case, attending mediations and assisting in making presentations to focus groups.

Follow Heath Hamacher on Twitter @NCLWHamacher

Board of Education pays $1.55M in vehicle crash suit ■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com The Cumberland County Board of Education has paid a $1.55 million settlement to a woman who was injured when a work truck owned by the school district jack-knifed across the road, causing the woman to broadside the attached trailer.

Shawn Howard of Maginnis Howard in Raleigh and Rebecca Britton of Britton Law in Fayetteville represented the plaintiff, Deborah Terry. The attorneys said that on the morning of Feb. 8, 2017, Terry and her adult daughter were traveling along the two-lane road in Stedman when the other driver lost control of the dump truck and overcorrected.

Terry’s compact car T-boned the trailer, damaging both vehicles and injuring Terry and her daughter.

Howard said that Terry suffered multiple traumatic injuries requiring several surgeries on her rotator cuff, cervical spine, and ankle that required the use of a wheelchair for months, including during her son’s wedding three weeks after the crash.

Terry has numerous surgical scars and permanent injuries, Howard said, including chronic ankle pain and a permanent gait issue.

“Her injuries drastically changed her life, limiting many of her previous activities, including her

love of volunteer fire-fighting and decorating cakes,” Howard said.

Mary Webb of Ragsdale Liggett in Raleigh represented the defendants. Webb said that several factors led to the mediated settlement approximately one month before trial.

“She’s got significant future mediShawn cal care, so that’s why the settlement Howard was in the seven figures,” Webb said. “It is a serious, significant injury with significant property damage … and there is a significant life care plan and economic losses.”

Howard called Terry a humble, loving mother who continues to work full-time even after enduring the pain and physical limitations associated with the crash and mulRebecca tiple surgeries.

Britton “She is one of those clients who instantly endears herself to you and becomes like family,” Howard said. “One of the main reasons we were able to obtain a good outcome for Ms. Terry is because she is simply a fantastic person and that was evident at every stage of the case.”

SETTLEMENT REPORT — MOTOR VEHICLE CRASH

Amount: $1.55 million Injuries alleged: Right distal fibular fracture at the malleolus with displacement, rotator cuff tear, compression of spinal nerve at C5-6 Case name: Terry v. Jackson and Cumberland County Board of Education Court: Cumberland County Superior Court Case No.: 19-CVS-5936 Date of settlement: October 2021 Special damages: $125,000 for medical expenses and lost wages Most helpful experts: Cynthia Wilhelm (vocational expert), Julius Poindexter (economist), Dr. Thomas Harbin (psychologist), and Dr. Douglas McFarlane (orthopedic surgeon) Attorneys for plaintiff: Shawn Howard of Maginnis Howard in Raleigh and Rebecca Britton of Britton Law in Fayetteville Attorney for defendant: Mary Webb of Ragsdale Liggett in Raleigh

Sheriff’s office to pay $725K after suicide in jail ■ BY DAVID BAUGHER The estate of a woman who set a police car on fire while she was inside it and later hanged herself to death in custody will receive $725,000 under the terms of a settlement with the Jackson County Sheriff’s Office.

Tom Ramer of Ganly & Ramer in Asheville said that the decedent, Melissa Rice, was arrested while she was heavily intoxicated and attempting to break into her estranged husband’s Jackson County residence.

Rice struggled with the responding officer before being put Tom Ramer in the back of the patrol vehicle, where she managed to set the back seat ablaze using a cigarette lighter in what the suit describes as an apparent suicide attempt.

The flames ultimately became intense enough to melt the car’s acrylic glass divider and endanger the K-9 officer in back with Rice.

After the fire was extinguished, Rice was taken to the hospital to treat finger injuries sustained during the attempted break-in. Medical staff were evidently not informed of Rice’s behavior.

“The folks at the hospital testified that had they been made aware that she set the car on fire, they

would have been required to undertake a full psychological examination,” Ramer said.

Rice was later transported to a detention facility, where the suit alleges she wasn’t screened for any mental health issues or suicidal tendencies despite her actions in the vehicle. Rice was also allegedly not placed under enhanced supervision as required by policy while detained in a room where she ultimately hung herself with a metal payphone cord.

Ramer said that Rice was left alone in the room for over an hour despite procedure dictating that heavily intoxicated prisoners should be checked on every 15 minutes. He also said that the 2019 incident represented the third time someone had killed themselves in that facility over the past three years.

“The state Department of Health and Human Services, which regulates jails, had cited them for almost the same things in the two previous suicides,” Ramer said.

Rice’s estate filed suit in federal court alleging wrongful death, failure to train, 14th Amendment violation, and contravention of both state law and internal department policies.

Ramer said he feels that the negligence of the defendants was well established by facts uncovered in a probe by the state’s bureau of investigation, which he said proved helpful.

“It is very tragic because it is so preventable,” Ramer said of Rice’s death.

SETTLEMENT REPORT – WRONGFUL DEATH

Amount: $725,000 Injuries alleged: Death Case name: Matthew Dillard, administrator of the Estate of Melissa Rice v. Chip Hall, in his official capacity as Sheriff of Jackson County, et al.

Court: U.S. District Court for the Western District of North Carolina Case No.: 1:20-cv-57 Date of settlement: Sept. 8 Mediator: Bill Brazil Insurance: Travelers Insurance Most helpful experts: James Aiken of Brevard (prisons) and Lindsay Hayes of Mansfield, Massachusetts (suicide) Attorney for plaintiff: Thomas Ramer of Ganly & Ramer in Asheville Attorneys for defendants: Patrick Flanagan and Jake Stewart of Cranfill Sumner in Charlotte Pat Flanagan and Jake Stewart of Cranfill Sumner in Charlotte represented the defendants. They did not return a request for comment.

4 / NEWS

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

When does alternative dispute resolution make sense?

■ BY MICHAEL BRIER BridgeTower Media Newswires Not infrequently, businesses find themselves enmeshed in disputes that cannot be resolved through informal negotiation. Those disputes can always be litigated in the courts, but the path to resolution is often timeconsuming and expensive.

In recent decades, the burdensome nature of litigation has led many businesses and their in-house counsel to consider alternative dispute resolution as a way to avoid the court system.

But what exactly is ADR? Many business owners (and maybe even some in-house counsel who come from a transactional background) do not have a clear answer to that question.

Far more will wonder if ADR makes sense for them in a given situation.

Types of ADR

ADR is a general term that encompasses any means of settling a dispute through the assistance of an outside neutral. Of these, by far the most important are mediation and

arbitration. (Other types of ADR, like engaging a panel to issue a non-binding verdict following a “mini trial,” are much less common).

In mediation, the parties engage a mediator to help broker a settlement at some point in the litigation process.

In arbitration, the parties engage an arbitrator who hears the evidence and then acts as judge and jury, eventually issuing a binding judgment.

Thus, while mediation and arbitration both involve the assistance of a third-party neutral, they are fundamentally different from one another.

So the question of why use ADR is really the two distinct questions of why mediate and why arbitrate.

Why mediate?

Every litigant sees a case from his or her own perspective. Good counsel aim to be more objective, but they are not immune from the natural human inclination to see the case from the prospective of their clients. Nor are lawyers as a rule especially effective at communicating the weakness of a case to their clients: after all, clients like to hear good news, and the law-

yers work for them.

Mediation seeks to ameliorate these problems by having a neutral lawyer read a summary of the evidence from both sides and sometimes hear oral statements from the parties.

Then the two sides move to separate breakout rooms, and the mediator shuttles between them in an effort to broker the settlement.

Good mediators don’t just convey settlement offers — anyone can do that. Rather, they help to encourage settlement by speaking frankly to each side about the strengths and weaknesses of the case, the amount of a possible recovery, and the costs of further litigation. At the end of the process, both parties hopefully walk out of the mediation with a signed settlement that they may not be happy about but can live with.

At its best, mediation can help parties reach a settlement that they would have trouble negotiating on their own. Why then shouldn’t parties mediate every case as soon as a dispute arises? After all, whether you See ADR Page 7 ►

Survey results: Law firm resiliency increased during the remote work transition ■ BY NICOLE BLACK BridgeTower Media Newswires The pandemic and its effects have dramatically affected the legal industry and will undoubtedly continue to have a long-term impact on how legal work is conducted in the years to come. For lawyers, it hasn’t always been easy navigating the practice of law during a worldwide pandemic.

Nevertheless, they’ve adopted new technologies into their firms at rates never before seen, and are increasingly relying on technology to ensure newfound business resiliency, productivity and profitability.

While it’s unclear how many of these changes will persist post-pandemic, a new report released earlier this week offers evidence that the legal industry has changed for good and the pandemic’s effects will undoubtedly have a long-lasting impact on the practice of law.

The Legal Industry Report 2021: Lessons Learned from the Pandemic, was published by MyCase. (Online: https://info.mycase.com/industry).

The report is based on the results of a survey of over 2,000 legal professionals that was conducted in August and September of this year. (Note: I am the Legal Technology Evangelist for MyCase).

The report provides in-depth insight into how the pandemic impacted law firms, the steps lawyers took to continue to grow their firms during this unprecedented time, and how those tactical decisions helped build the foundation for long-term sustainability. Some of the most interesting survey results focused on how the technology choices that lawyers made during the pandemic helped to keep their law firms afloat despite the many challenges presented by pandemic-related uncertainty.

From the shift to remote work and

choosing new technology to implement and using legal software, law firms were able to adapt and thrive during this challenging time. And most notably, the technology choices they made allowed them to continue to provide their clients with the best possible service even when working remotely.

For example, survey respondents were asked about their firms’ use of remote working software. Nearly half (46%) reported that their firms invested in remote working software as a direct result of the pandemic. And, according to the survey results, the most popular remote-working tools firms used due to the pandemic were video conferencing tools (32%), e-signature (22%), law practice management software (14%), time and billing software (13%), and communication software (16%).

Cloud computing software usage was also addressed. The results indicated that the vast majority of lawyers now use cloud computing software. Before the pandemic, 76% of law firms used cloud-based computing, and that percentage has now increased to 88%. The types of cloudbased software that law firms adopted due to the pandemic included law practice management software (23%), document management software (13%), calendar management software (12%), and credit card online payment tools (12%).

Notably, for the vast majority of respondents, their firms’ investment in cloud-based remote working software has been beneficial. About 73% reported that the remote working tools had increased productivity, and 80% reported that remote working tools were part of their firm’s long-term business continuity strategy.

Law firms invested in several different types of software to enable remote work during the past two years.

For example, during the pandemic,

getting paid was challenging for many firms due to social distancing requirements. As a result, the adoption of touch-less payment processes was necessary to keep firms profitable during the pandemic. For that reason, it’s not surprising that the vast majority of respondents (77%) reported that their firms now use online payment processing tools to accept credit card payments from clients.

The good news is that the majority of survey respondents reported that this transition to online payments increased profit or revenue stability for their firms. According to the survey results, 60% of law firms’ revenue stayed the same or increased in 2020.

E-signature tools were another time-saving remote-working tool that law firms increasingly relied on during the pandemic. Because social distancing requirements prevented inperson meetings, e-signature software was the best option for obtaining the necessary signatures on documents.

For that reason, it’s no surprise that the survey results showed that the overwhelming majority of respondents (79%) reported that their firms used e-signature tools. Of those firms, 67% saved time as a result, and 28% saved six or more hours each month.

The bottom line: remote working technology is here to stay. The pandemic pushed many law firms to acquire and implement technology that enables remote working. This technology investment not only bridged the remote working gap, but also increased the productivity and profitability of many firms, and laid the groundwork for long-term business resiliency. So no matter what happens in the future, those law firms will be prepared.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Legal Technology Evangelist at MyCase legal practice management software.

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NEWS / 5

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

Exemplary Evidence: Exciting advances in IP theft investigations ■ BY JOHN J. CARNEY AND KEVIN V. BLUML BridgeTower Media Newswires Are you concerned your company’s intellectual property or proprietary data may have been misappropriated or otherwise lost or shared with unauthorized parties, intentionally or negligently?

Typically, IP theft occurs shortly before or after the employee tenders their employment termination notice. Creating a timeline of events is a key requirement for securing a successful outcome.

One of the biggest challenges during an IP theft investigation is narrowing down the vast amount of document, email, and message evidence residing on computers, phones, and online cloud accounts. Focusing on relevant evidence artifacts is critical to ensure the investigation moves forward smoothly.

Determining where documents were saved and identifying with whom they were shared are important tasks to build your case and prove intent.

Three scenarios for proving IP theft

Documents must be copied or sent somewhere to make unauthorized use of them. This can be done in a variety of ways from simple printing of documents and taking the paper copies to copying the documents to several devices or storage options including, but not limited to: • USB removable storage devices such as thumb/flash drives that easily slip into a pocket or purse, to larger removable disk drives commonly used for backups.

• Emailing the documents to a personal email account, or a competitor’s email address.

• “Cloud” or online storage accounts such as Dropbox, Google Drive, Microsoft OneDrive and many others.

• Let’s look at what we can determine from each of the above scenarios.

Removable storage devices

One of the most common ways documents are taken or misappropriated today is by removable storage devices.

Most computers do a good job of tracking the use of removable devices, especially the first and most recent time a device is connected to the computer. Information such as the actual or a virtual serial number of the device is recorded along with known manufacturer data such as the name and model number, when it was attached to the computer, and what drive letter was assigned. Other metadata that may be available includes file names and original locations of files, the location documents were copied (on the removable device), the size and date and time stamps associated with the original document and its copy.

Any device can contain data, and not just the data you might expect. A camera could have an email file on it.

A music player could have photos or documents on it. A phone could store any type of data from documents, pictures, spreadsheets, emails, to AutoCAD drawings. Anything digital can reside on most any device. Even file names can be misleading or intentionally hiding something. Who would expect an email file to be called “hello.txt” or a confidential business spreadsheet to be called “ourhouse.jpg”? Changing the name of the file does not change the data in the file, but it does change a specific date and time stamp that could be helpful in creating a timeline.

If a removable device is found to have been connected to a former employee’s computer on his or her last day in the office, it’s probably a cause for concern. If the device can be recovered, it is straightforward to determine if the

device recovered is the actual device at issue and then to identify which documents reside on the device.

For example, if you see an executive connected a USB backup device to his or her computer on the last day in the office and you find evidence that shows a file called “FullBackup.bkf” was on that device, you will most likely want to consult with your internal counsel.

Hint; FullBackup.bkf is a common name for, you guessed it, a full backup of the computer to which it is attached.

Email accounts

Email is ubiquitous and used by nearly everyone these days particularly in the business world. Its widespread use makes it a prime avenue for data theft, often without the realization of the many ways that email is tracked and audited.

Businesses should have robust tools and practices in place to constantly track and document any email activity, especially email to or from external email addresses. Auditing should be enabled and routinely backed up to allow extended look-back if needed. In Microsoft Office 365 for example, default auditing is only retained for 90 days. This limited amount of time can be problematic if an issue is not discovered soon enough to be examined while logs are still available.

There are several Data Loss Prevention (DLP) options available that can help prevent or at least alert staff to potential proprietary data loss via email. Determine the most at-risk data and develop rules or criteria that can be checked against any outgoing email to help stop this theft or inadvertent loss of important data. Simple checks for identifiers like Social Security numbers, credit or debit card numbers, driver’s licenses, medical ID numbers, or passports are other examples to watch.

DLP solutions can even check more broadly for emails with attachments, or specific types of attachments such as Excel spreadsheets or Zip files. DLP can also check for or limit destination addresses. For example, is there any business reason to send emails to a Gmail or Hotmail or Yahoo email address? (There may be, but it is something to consider.)

Investigating deleted email

Typical business email systems will usually contain an email server that does the bulk of the work regarding sending and receiving email messages and the related artifacts. This server will be one of the primary places to look for evidence. This will include logs, potential drafts of messages, copies of the actual messages and potentially any replies or responses to the messages, or even failure notices if there was a problem with the original message.

Deleted email may be recoverable depending on the specific circumstances and the type of email system. Server based email is usually backed up regularly so if backups exist, the email may be on one or more backups. Also, if setup properly, email servers can be configured to require an email to be backed up prior to allowing any deletion of the message. Even if the email was deleted, it is very similar to regular files in that the data itself may still be there even if it is not readily visible to the normal user.

As part of an ongoing investigation or if you have reason to be concerned about email message deletion, another option may be available to help limit that concern. Using Microsoft Office 365 as an example, within that system, administrators can implement legal hold functionality that will prevent the user from deleting or otherwise tam-

pering with any current or future email messages or activity.

Email can also be found on the user’s local system either due to the way it was configured or to allow “offline” viewing of email (useful for times when either out of the office or away from a stable network for example, on a plane). Also, if the recipients of the message of concern are known and cooperative, you may obtain a copy of the message from them, either voluntarily or via legal means such as a subpoena or document request.

If the email of concern went to a large online email provider like Google or Microsoft, it may also be possible to request copies of the email from them via subpoena or a preservation order.

This same idea can be used if the email went to another company. Odds are good that their email system still has evidence of the email activity, at least in logs, even if the email itself is no longer readily available.

Cloud service accounts

The best and simplest explanation we have heard for “cloud” services and what it means is “someone else’s computer”.

Evidence of cloud service use is usually apparent. The specific website with some associated history of recent activity or the cloud application may be found on the computer. Logs of what was recently done with that service may exist either on the subject computer or the cloud service provider’s systems. Other artifacts may exist within the computer that show recent activity or files involved with the service. There is often a folder structure with associated files for the cloud service on the local computer.

With the appropriate authority or permission, a forensic collection of the actual cloud account at issue is possible.

The service provider may also provide other artifacts or evidence of recent or historical activity on the subject account. The account holder’s cooperation is needed for the cloud service provider to inform a third party. An appropriate legal request such as a subpoena or preservation order may be used.

Starting the investigation

When an investigation is warranted, often the first thought goes to how to quickly and cost effectively it can be performed. It is common to think that handling things in-house will be the most cost-effective way to accomplish the investigation, especially if you have an investigative team already in place.

The biggest caveat with that plan is that it will succeed only if the team has

the proper training and tools needed to perform the highly technical and process critical investigation in a forensically sound manner.

Digital forensics is a highly specialized field, one with new forms of evidence to recover and new methods and tools to do it. Think of the number of updates that occur with a computer system, sometimes dozens of changes in a month or even more often. Or, a cellphone with new model is coming out regularly besides the monthly updates, as just a couple examples. Each new update or version of new software brings new challenges, potentially new artifacts to learn about and recover, even new logs or data locations that must be understood to take advantage of the plethora of information that must be analyzed.

First commandment of electronic evidence

The first of the 10 commandments of electronic evidence by Sharon D. Nelson, Esq. and John W. Simek of Sensei Enterprises, Inc. states, “Thou shalt not stomp all over the evidence.” As digital forensics experts they opine, “When computer forensics specialists get together and swap war stories, one recurrent theme is the unbelievable number of times that clients have fouled themselves up by trampling electronic evidence. Typically, as soon as a potential legal matter is recognized, a law firm or corporation authorizes someone from its IT department to ‘look through’ the evidence. Unbeknownst to them, while their IT staff is busy finding golden nuggets of evidence, they are also changing the dates and times of the files they are accessing and possibly altering information that indicates which user ID did what. While it may not entirely discredit the case, you have now given fodder to opposing counsel at the very least—and you will have to spend more money on the forensic examination because unraveling dates and times and explaining ‘the stomping’ effect is now part of the examiner’s job.”

Nelson and Simek conclude with this sage advice for clients and lawyers, “It is a very foolish client that contaminates evidence by having in-house folks look at it — from a judge’s point of view, the client has a vested interest in that evidence. Far more credible is an initial, independent forensic examination by a certified third party.”

John J. Carney, Esq., is chief technology officer, and Kevin V. Bluml is chief computer forensic examiner with Carney Forensics, www.carneyforensics.com.

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Competitive compensation package. Salary commensurate with experience. NC bar license required and Family Law experience preferred.

Please reach out to sanan@ganttfamilylaw.com for additional information.

6 / NEWS

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

Justices signal they’ll OK new abortion limits, may toss Roe WASHINGTON (AP) — The Supreme Court’s conservative majority signaled it would uphold Mississippi’s 15week ban on abortion and may go much further to overturn the nationwide right to abortion that has existed for nearly 50 years.

The fate of the court’s historic 1973 Roe v. Wade decision legalizing abortion throughout the United States and its 1992 ruling in Planned Parenthood v.

Casey, which reaffirmed Roe, probably won’t be known until next June.

But after nearly two hours of arguments on Dec. 1, all six conservative justices, including three appointed by former President Donald Trump, indicated they would uphold the Mississippi law.

At the very least, such a decision would undermine Roe and Casey, which allow states to regulate but not ban abortion up until the point of viability, at roughly 24 weeks.

And there was also substantial support among the conservative justices for getting rid of Roe and Casey altogether.

Justice Brett Kavanaugh, a Trump appointee, asked a series of questions about whether the court would be better off withdrawing from the abortion debate and letting states decide.

“Why should the court be the arbiter?” Kavanaugh asked. “There’ll be different access in Mississippi and New York, Alabama and California.”

Abortion would soon become illegal or severely restricted in roughly half the states if Roe and Casey are overturned, according to the Guttmacher Institute, a research organization that supports abortion rights. Legislatures in many Republican-led states are poised for action depending on the Supreme Court’s next decision.

The court’s three liberal justices said that reversing Roe and Casey would significantly damage the court’s legitimacy.

“Will this institution survive the stench that this creates in the public perception that the Constitution and its

reading are just political acts?” Justice Sonia Sotomayor asked.

Justice Elena Kagan said the abortion decisions are “part of the fabric of women’s place in this country.”

Among the conservatives, Chief Justice John Roberts appeared most interested in a less sweeping ruling that would uphold the Mississippi law, but not explicitly overrule Roe and Casey.

“That may be what they’re asking for, but the thing at issue before us today is 15 weeks,” Roberts said, alluding to Mississippi’s call to overturn the broader cases.

Even upholding the 15-week ban would mean rejecting the decades-old viability line. Abortion rights supporters say that would still effectively overturn Roe and leave no principled line for when abortions might be banned.

Justice Neil Gorsuch, another Trump appointee, suggested the lack of a rigorous alternative might be a reason to overrule Roe and Casey entirely.

Supporters of both sides in the abortion debate filled the sidewalk and street in front of the court, their dueling rallies audible even from inside the building.

Opposing signs read such sentiments as “Her Body Her Choice” and “God Hates the Shedding of Innocent Blood.” The court stepped up security measures, including closing off some streets around the building.

The case came to a court with a 6-3 conservative majority that has been transformed by the justices named by Trump, who had pledged to appoint justices who oppose abortion rights.

The court had never agreed to hear a case over an abortion ban so early in pregnancy until all three Trump appointees—Justice Amy Coney Barrett, Gorsuch and Kavanaugh—were on board.

A month ago, the justices also heard arguments over a uniquely designed Texas law that has succeeded in getting around the Roe and Casey decisions and

banned abortions in the nation’s secondlargest state after about six weeks of pregnancy. The legal dispute over the Texas law revolves around whether the law can be challenged in federal court, rather than the right to an abortion.

Despite its unusually quick consideration of the issue, the court has yet to rule on the Texas law, and the justices have refused to put the law on hold while the matter is under legal review.

The Mississippi case poses questions central to the abortion right. Mississippi argues that viability of the fetus is an arbitrary standard that doesn’t take sufficient account of the state’s interest in regulating abortion. It also contends that scientific advances have allowed some babies who were born earlier than 24 weeks to survive, though it does not argue that the line is anywhere near 15 weeks.

More than 90 percent of abortions are performed in the first 13 weeks of pregnancy, well before viability, according to the federal Centers for Disease Control and Prevention.

About 100 patients per year get abortions after 15 weeks at the Jackson Women’s Health Organization, Mississippi’s lone abortion clinic. The facility does not provide abortions after 16 weeks.

But the clinic argues that the court doesn’t normally assess constitutional rights based on how few people are affected, and that the justices shouldn’t do so in this case.

Joined by the Biden administration, the clinic also says that since Roe, the Supreme Court has consistently held that the “Constitution guarantees ‘the right of the woman to choose to have an abortion before viability.’”

Erasing viability as the line between when abortions may and may not be banned would effectively overrule Roe and Casey, even if the justices do not explicitly do that, the clinic says.

Justice Clarence Thomas is the only

member of the court who has openly called for Roe and Casey to be overruled.

One question is how many of his conservative colleagues are willing to join him.

Among the questions justices ask when they consider jettisoning a previous ruling is not just whether it is wrong, but egregiously so.

That’s a formulation Kavanaugh has used in a recent opinion, and Mississippi and many of its allies have devoted considerable space in their court filings to argue that Roe and Casey fit the description of being egregiously wrong.

“The conclusion that abortion is a constitutional right has no basis in text, structure, history, or tradition,” Mississippi says.

The clinic responds by arguing that the very same arguments were considered and rejected by the court nearly 30 years ago in Casey. Only the membership of the court has changed since then, the clinic and its allies argue.

In its earlier rulings, the court has rooted the right to abortion in the section of the 14th Amendment that says states cannot “deprive any person of life, liberty, or property, without due process of law.”

Same-sex marriage and other rights, based on the same provision but also not explicitly mentioned in the Constitution, could be threatened if Roe and Casey fall, the administration argues. Mississippi and its supporters dispute that those other decisions would be at risk.

Abortion arguments normally would find people camped out in front of the court for days in the hope of snagging some of the few seats available to the public. But with the courthouse closed because of COVID-19, there was only a sparse audience of reporters, justices’ law clerks and a handful of lawyers inside the courtroom.

A decision is expected by late June, a little more than four months before next year’s congressional elections, and could become a campaign season rallying cry.

REVIEW / Court couldn’t impute facial challenge to plaintiff C o nt inu e d f r o m 1 ►

appeal was interlocutory—before vacating the transfer order.

“The plain language of the statutory scheme clearly provides that a party must affirmatively raise a facial challenge, and that facial challenge must be raised in either the claimant’s complaint/ amended complaint or the defendant’s answer, responsive pleading, or within 30 days of the defendant’s answer or responsive pleading,” Gore wrote. “No such facial challenge was raised here.

As a result, we conclude the trial court erred by transferring defendant’s motion to dismiss to a three-judge panel.”

Gore began by considering whether the court had the jurisdiction to hear the case. According to the YMCA, when the trial court granted the motion to transfer, it changed the venue of the case, which impacted a substantial right, making its presence before the court jurisdictionally proper. The plaintiffs countered that the appeal was interlocutory because venue wasn’t impacted by the transfer.

Gore sided with the plaintiffs. While he acknowledged that the right to venue established by statute is a substantial right, “the order did not grant, deny, change, or otherwise affect venue, and therefore did not affect a substantial right,” he wrote. “The order entered addressed and sought to resolve an issue of subject matter jurisdiction, not an is-

sue of venue.”

However, Gore granted the YMCA’s petition for a writ of certiorari, finding the impact of the lawsuit significant and the issues involved important and presenting interests of the efficient administration justice.

“The issue defendant raises on appeal presents the central question of what the appropriate requirements for a trial court are to transfer a case to be heard by a three-judge panel,” Gore wrote. “Granting defendant’s petition would afford this court the opportunity to consider a relatively new statutory scheme which has limited jurisprudence surrounding it. In considering the issues raised by defendant this court will have the opportunity to provide guidance and clarity to trial courts across North Carolina when evaluating the merits of a potential transfer of a case to a three-judge panel.”

Having agreed to consider the merits, Gore made quick work of the YMCA’s argument that the case was improperly transferred to a three-judge panel.

Section 1-267.1 only applies to facial challenges to the validity of an act of the General Assembly, not as-applied challenges, he noted, with Rule of Civil Procedure 42(b)(4) requiring that for a facial challenge to the validity of an act of the General Assembly to be transferred to a three-judge panel, it must be raised by a claimant in the complaint

(or amended complaint) or by the defendant in the defendant’s answer, responsive pleading or within 30 days of filing the defendant’s answer or responsive pleading.

The YMCA specifically stated that it was raising an as applied challenge, Gore said. No mention of a facial challenge was made until the plaintiffs’ motion to transfer, when they asserted that the YMCA was making a facial challenge to § 1-17(e). Even then, the YMCA reaffirmed that it was making an as-applied challenge.

“While the trial court is free to transfer an action to a three-judge panel on its own motion based on a facial challenge to an act of the General Assembly, a trial court is not free to impute a facial challenge argument on a party,” Gore wrote. “Nor is a trial court free to transfer a matter to a three-judge panel so that the three-judge panel may decide whether a facial challenge was raised.”

The trial court erred by transferring the YMCA’s motion to dismiss to a three-judge panel, Gore said, vacating the transfer order and remanding to the trial court.

Judge Chris Dillon concurred in the decision, while Judge Jeffery Carpenter dissented, expressing concern that the panel had created “an avenue for a party to draw out litigation, contrary to our goal of promoting judicial economy,” by incentivizing parties seeking to delay a

trial on the merits to petition the court for a decision as to whether the referral of an issue to the three-judge panel was proper in every instance.

The decision also established precedent that appellate panels will be deciding whether a constitutional challenge is “facial” or “as applied,” with “the potential to eliminate the role of the statutory three-judge panel in future constitutional challenges,” he wrote.

Bobby Jenkins of Lanier Law Group represented the plaintiffs.

“Although the defendants couched it as an as-applied challenge, we contended that it doesn’t matter what you call it—this is a facial challenge that would knock the statute out,” he said. “It also appears to be well within the authority of the trial court to make the determination as to the type of challenge.”

Jenkins also agreed with the dissent’s worries, as “it remains to be seen if the ruling opens the door to an appellate challenge every time a court refers a case to a three-judge panel.”

Winston-Salem attorney Lorin J. Lapidus of Nelson Mullins Riley & Scarborough, who represented the YMCA, did not respond to a request for comment.

The 20-page decision is Cryan v. National Council of Young Men’s Christian Associations of the United States of America (Lawyers Weekly No. 011-22921). The full text of the opinion is available online at nclawyersweekly.com.

NEWS / 7

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

FRESH START / New review board may offer hope for some C o nt inu e d f r o m 1 ►

said.

School’s Just Sentencing Project, approximately 1,000 state inmates at any given time were convicted of crimes committed before their 18th birthday. Nearly 200 of them are serving life sentences and will serve on average 23 years before becoming eligible for parole.

Finholt has represented parole and clemency seekers for approximately five years, striving to free the ones he can and give hope and guidance to the ones he can’t.

“I was drawn to the work because I saw how many people had been given life sentences and then just forgotten about,” said Finholt. “They weren’t on death row and had no right to counsel, so they had no way to get anyone’s attention.”

Because counsel is neither required nor provided for parole review, the state’s Post-Release Supervision and Parole Commission often issues its decisions based solely on black and white documents before it, a less-than-ideal procedure where the injection of mitigating evidence and humanity can prove vital when confronting a criminal record, years of incarceration, and a host of additional risk factors faced by a high percentage of prison inmates.

Constance said that the process, overseen by a powerful decision-making commission, is less meaningful without representation.

“It’s a system that can very easily reduce someone to a file,” Constance

Some things to consider

Where a trial judge or jury sits to determine guilt or innocence, the commission considers those who stand before it guilty as charged. So parole counsel will present evidence regarding a client’s age and mental capacity at the time of the crime, but also must fashion a persuasive argument of rehabilitation and promise.

It must present the best version of its client to a body that can grant or deny freedom.

“It’s an opportunity to help them tell their stories in the most effective way possible … why someone should be released, what their life would look like if they were released,” Constance said. “And talk about all the support systems in place to show that they have stability and will be successful, if released.”

Such intimate accounts are perhaps not best shared via video conference with a single commission member, but it’s the process that’s in place.

And while not ideal, it’s an improvement.

A federal judge in 2015 ruled in Hayden v. Keller that North Carolina’s parole process was unconstitutional because it failed to distinguish parole reviews for juvenile offenders from adults by considering the “diminished culpability and heightened capacity for change” of young offenders, thus denying them a meaningful opportunity for release based on demonstrated maturity and rehabili-

tation.

The process offered no advance notice or opportunity—either in writing or in person—to be heard on the question of maturity and rehabilitation, the court held.

“The offender is an entirely passive participant in North Carolina’s parole review process,” U.S. District Judge Terrence Boyle wrote.

Post-Keller, Finholt still describes the review system as “terrible.” Although inmates are allowed to submit documents on their behalf, they receive no feedback from the commission and have no way of knowing whether anyone has read them.

“This is not like The Shawshank Redemption, where Morgan Freeman sits in a room talking to the parole board,” Finholt said. “People eligible for parole simply get a form letter after each review that tells them that they have been rejected and when their next hearing is, generally two or three years later. Then, they get the same form letter two or three years later.”

Better days ahead?

In April, Gov. Roy Cooper signed an executive order creating a fourperson Juvenile Sentence Review Board to review the sentences of juvenile offenders tried and sentenced as adults. Cooper cited research regarding the fundamental differences between the juvenile and adult mind and said in a press release that the process can provide a “meaningful opportunity for release and a life outside

of prison” for those who have taken significant steps toward reformation and rehabilitation.

The panel will consider factors including the individual’s prison record, evidence of developmental immaturity and mental health at the time of the offense, and whether race might’ve had an undue influence at trial or sentencing.

Constance said that while it remains to be seen how many former juveniles will gain freedom through the new initiative, she is excited to see the acknowledgement of “some ugly issues” within the system.

“This is something that is near and dear to my heart, and I feel like I can help provide a little bit of support because there is such a big access to justice gap when it comes to parole,” Constance said.

Over the last three years, a handful of motivated law students and volunteer attorneys from various practice areas working with the Juvenile Parole Project have represented approximately 20 parole-seekers, three of them successfully.

It’s been, and will continue to be, a team effort that doesn’t require complex legal analysis or years of criminal law experience, Constance said, only the ability to portray as human individuals who might otherwise remain unacknowledged.

“It’s more about figuring out the system and helping someone tell their story,” Constance said.

Follow Heath Hamacher on Twitter @NCLWHamacher

ADR / Good advice can sort out pros and cons of arbitration C o nt inu e d f r o m 4 ►

are the plaintiff or the defendant, you can save a lot of time and money by settling right away instead of on the courthouse steps (or while the jury is out)! Sometimes courts even compel mediation in an effort to get the parties to settle.

The first reason is lack of information. When a dispute comes up, each party typically doesn’t know much about the other party’s case. (Sometimes, they don’t even know much about their own case). The strengths and weaknesses of each will become apparent only through the discovery process of document productions, interrogatory answers and depositions.

By the same token, lawyers will often not have a full picture of the other side’s legal arguments until summary judgment.

In many instances, in-house counsel would be wise to skip the arbitration provision in their contracts or put off mediation, at least for the time being. This can make it hard to mediate early, despite the obvious advantages of settlement before costs begin to pile up. Parties are essentially being asked to settle “blind,” which can be quite risky as either a plaintiff or a defendant.

Moreover, the mediator has less ammunition to try to move parties away from their entrenched positions, making the mediation more likely to fail (and potentially making settlement harder later on).

Mediations after significant discovery (or the denial of a motion for summary judgment) tend to have a better shot at success.

The second reason mediation may not make sense is that — even after

discovery — the sides are just too far apart to reasonably expect mediation to be successful. Sometimes it is entirely rational for the parties to be far apart. For example, the case may turn on a novel legal issue the courts haven’t addressed before. Or the evidence may be too finely balanced to predict how a jury is going to view it.

In such instances, it can be a hard sell to convince either party to settle for half a loaf and call it a day.

Arguably just as common is a situation in which one party is so convinced that it is right that it is not willing to compromise, regardless of the evidence. There’s not much the other party can do in such an instance besides go to trial. A mediator isn’t going to be able to bridge the gap where a plaintiff’s demand is for $10 million and the defendant’s offer is for $5,000.

Why arbitrate?

Arbitration generally begins long before a dispute arises, when the parties to a contract agree to a provision by which they agree to submit any conflicts they might have to an arbitrator rather than go to court.

Parties are free to agree to arbitrate after a dispute arises as well, but this is much less common, since once the contours of a dispute become apparent, one party will usually conclude that it is more advantageous to proceed in court. (This is why it is highly unusual for tort litigation to be resolved by arbitrators.)

In either case, arbitration has several possible advantages over traditional litigation.

First, arbitration is confidential: The case documents and trial are not open to the public, as court proceedings are. This is often the biggest at-

traction of arbitration for businesses that do not want their confidential documents or ex-employees’ allegations of wrongdoing appearing in court documents.

Second, arbitration can be cheaper than litigation, primarily because it usually involves less discovery.

Whereas in court parties can generally seek production of documents about any matter relevant to the claims at issue, in arbitration the scope of document productions tends to be narrower. Interrogatories are uncommon, and depositions tend to be confined to the parties themselves, rather than to anyone who might know relevant information.

On the other hand, arbitration isn’t guaranteed to be cheaper than traditional litigation: The parties need to pay the arbitrator, which isn’t the case in court, and the summary judgment procedure — which can eliminate or narrow many disputes prior to trial — is disfavored.

Third, arbitrations are decided by a trained lawyer, rather than a jury (although a waiver of jury trial provision in a contract can achieve a similar affect).

Finally, arbitration is usually faster than traditional litigation, often being completed in a year or less rather than the two or three common in court.

What then are the drawbacks that in-house counsel should consider as they are negotiating contracts with business partners and employees?

Arguably, the biggest drawback is that there generally is no appeal from the decision of the arbitrator.

Of course, the winning party loves the lack of appellate rights. But the losing party is out of luck, even if the

arbitrator got the law entirely wrong.

This allows the arbitrator to decide cases based on what he or she believes is the “right” result as opposed to what the law says. This makes arbitration less predictable than traditional litigation.

Also, in-house counsel will need to consider a few drawbacks particular to arbitration agreements with employees and consumers. Under the terms of the Federal Arbitration Act and many state analogues, these agreements are usually enforceable and, as an added bonus, can prohibit class action lawsuits.

However, the law does permit courts to refuse to enforce arbitration agreements that are unconscionable, for example because they require plaintiffs to foot too much of an arbitration bill. As a result, companies often end up being required to pay for the whole cost of arbitrations in which they are the defendant. They also can be drawn into costly and time-consuming side litigation about whether the arbitration provision they crafted is enforceable in the first place.

Conclusion

In sum, ADR can be a useful tool in a variety of situations. But it is not a panacea. In many instances, in-house counsel would be wise to skip the arbitration provision in their contracts or put off mediation, at least for the time being. The key in any instance is having good advice to determine what the best choice is for the business.

Michael Brier is an attorney at Gesmer Updegrove in Boston, where he maintains a diverse litigation practice with a particular emphasis on complex business and employment disputes.

8 / NEWS // OPINION DIGESTS

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

LOANS / Student loans benefited both parents, court says C o nt inu e d f r o m 1 ►

daughter of plaintiff Eddie Purvis and his then-wife, Constance Purvis, took out student loans in her own name while attending college from 20092013. Eddie claims that while he and Constance made a joint decision to take out additional loans, they did so solely in his name because of a “discrepancy” in his and Constance’s credit scores.

Eddie said that Constance completed and submitted the loan applications, listing her personal email address, and that Constance’s mother co-signed on one of the loans.

The couple used its joint bank account to make loan payments before their separation in 2017. By that time, the loan balance had grown to more than $164,000.

In 2019, Constance sought summary judgment, asserting that the loans were separate property. The trial court denied the motion, instead ordering

partial summary judgment for Eddie and finding that the loans were marital property as a matter of law. The court entered an equitable distribution order, assigning 75 percent of the loan balance to Eddie and 25 percent to Constance.

Constance didn’t appeal the equitable distribution order, but argued on appeal that the trial court had erred in awarding partial summary judgment for Eddie because the legislature had excluded educational degrees from marital property for the purpose of equitable distribution.

The appeals court agreed with the argument as worded, citing prior decisions holding that educational degrees (and associated loans) and business licenses are personal to their holder and not property for the purposes of equitable distribution. But it noted that no North Carolina court had ever addressed the matter of student loans acquired for an adult child.

Seeking guidance from other jurisdictions, the court found contrasting holdings. The Nebraska Court of Appeals and Rhode Island Supreme Court have found that these loans are separate property and not marital debt, though the appeals court pointed out that those cases, unlike the instant case, featured parties who didn’t know or consent to the loans.

Ultimately, the appeals court was persuaded by two unpublished Ohio Court of Appeals decisions, Vergitz v.

Vergitz and Cooper v. Cooper, in holding that because both parties benefitted from not having to pay out of pocket for their daughter’s tuition, books, and living expenses and allowing them to provide her the education they each agreed to, the loans are marital property.

The Vergitz court reasoned that a loan agreement incurred during marriage can be treated as any other expenditure, and Cooper held that student loan debt incurred during marriage

was presumed marital because it benefitted the couple’s son.

Constance’s attorney, Jonathan Kreider of Greensboro, said that he is disappointed with the ruling because while his client knew of the loans, it’s the plaintiff who signed on as a debtor for loans that were not beneficial to the marriage.

“The main distinction I see is that the burden of proof in Ohio is the opposite of North Carolina’s,” Kreider said.

“In Ohio, the burden is on the party to show that a debt incurred during the marriage did not benefit the marriage.

In North Carolina, the burden is on the party to show that a debt incurred during the marriage did benefit the marriage.”

The nine-page decision is Purvis v.

Purvis (Lawyers Weekly No. 011-23021). The full text of the opinion is available online at nclawyersweekly.com.

Follow Heath Hamacher on Twitter @NCLWHamacher

Opinions N.C. COURT OF APPEALS

8

N.C. BUSINESS COURT

N.C. COURT OF APPEALS

Domestic Relations Parent & Child – Appeals – Brief & Exhibits – Unredacted Confidential Information – Sanctions Defendant’s appendix to her opening brief and the documentary exhibits requested by plaintiff contained unredacted confidential information, such as the parties’ unredacted social security numbers, bank account numbers, credit card numbers, and employer identification numbers, as well as the unredacted social security numbers of the parties’ three minor children. The exposure of the minor children’s unredacted social security numbers alongside their full names and dates of birth in multiple places throughout both parties’ documents created an opportunity for third parties to use our public records and filing system as a source for potential identity theft. The children were not in a position to protect themselves from this harm, and it was the parties’ duty to shield this confidential information from public disclosure.

After considering other available sanctions, we conclude that this substantial failure and gross rule violation warrants dismissal of the appeal and the imposition of double costs on the parties’ attorneys. Plaintiff’s counsel shall pay one-half of the double costs, and defendant’s counsel shall pay onehalf of the double costs.

The order from which defendant appeals requires plaintiff to pay defendant child support in an amount calculated using the North Carolina Child Support Guidelines. Nothing inherent in these circumstances indicates the exceptionality or manifest injustice necessary to justify suspending the appellate rules in order to reach the merits of defendant’s appeal.

Mughal v. Mesbahi (Lawyers Weekly No. 011-234-21, 11 pp.) (Hunter Murphy, J.) Appealed from Wake County District Court (Brian Ratledge, J.) Bryant Duke Paris for plaintiff; David Harris for defendant. 2021-NCCOA-615

10

N.C. COURT OF APPEALS UNPUBLISHED

Criminal Practice Search & Seizure – Search Warrant – Probable Cause – Staleness – Child Exploitation In his affidavit in support of an application for a warrant to search defendant’s residence, a police detective relied on screenshots of defendant’s Facebook posts, but the posts do not include dates and times, nor did the affidavit say when a witness provided the information to the police. It is true that an interval of two or more months between the alleged criminal activity and the affidavit has been held to be such an unreasonably long delay as to vitiate the search warrant; however, courts have expanded these time limits when the items to be seized include items with enduring utility to the defendant beyond criminal activity and the defendant is not likely to dispose of the items.

The search warrant said the items to be seized were electronic devices, including cell phones, computers, tablets, hard drive devices, USB drives, CDs, and disks; written documentation to include any handwritten notes, printed notes, photographs, or other documents; and weapons to include handguns, long guns, weapons of mass destruction, or explosives. Because the items to be seized included items with enduring utility, we conclude the information was not stale, despite the lack of date and time information.We affirm the trial court’s denial of defendant’s motion to suppress.

State v. Kochetkov (Lawyers Weekly No. 011-235-21, 10 pp.) (Fred Gore, J.) Appealed from Wake County Superior Court (Graham Shirley, J.) Tamika Henderson for the state; Michele Goldman for defendant. 2021-NCCOA-617

11

that defendant’s counsel was from the public defender’s office. The jury could not reasonably infer the trial court’s introduction of the parties to be an opinion on a factual issue in the case.

Although defendant speculates that

the status of a public defender might prejudice a defendant—citing only a single law review article to support this assumption—it is apparent that the jury participated in reasoned decisionmaking based on the merits, as the

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10 / OPINION DIGESTS jury convicted defendant of involuntary manslaughter but failed to convict on negligent child abuse.

We find no error in defendant’s conviction of involuntary manslaughter.

The state’s evidence showed that (1) defendant took time off from work to care for her boyfriend’s three-year-old nephew, Archie, while Archie’s mother was in the hospital giving birth to another child; (2) despite being Archie’s caregiver, defendant took more Xanax than she was prescribed; (3) when her trailer home caught fire, she ran outside to look for water, leaving Archie inside the burning home; (4) when neighbors and firefighters asked if anyone was inside the home, defendant told them the children were with their father; and (5) Archie’s airway was coated with soot, and his blood contained a lethally high level of carbon monoxide, showing that he was alive during the fire. The state’s evidence was sufficient to go to the jury on the questions of whether defendant owed a duty to Archie and whether her actions or inactions proximately caused his death.

While citizens generally have no duty to come to the aid of one who is in harm’s way, as Archie’s intended caretaker for the morning of his death and as a creator of risk by over-consuming Xanax, defendant had duties to Archie.

Assuming all inferences in favor of the state, there is substantial evidence in the record sufficient for a reasonable juror to conclude that a person in the exercise of reasonable care would have foreseen Archie’s potential injury or death resulting from defendant’s failure to remove Archie from the burning home with defendant upon her exiting the home. Additionally, there is substantial evidence that a reasonable per-

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

son would foresee that stating “the kids are with their daddy” while failing to mention Archie’s presence in the fire to anyone would likely stifle potential rescue attempts, thereby causing injury or death. Furthermore, there is substantial evidence that Archie was alive during defendant’s exit from the home and for some time as the fire escalated, due to the soot in Archie’s airway and carbon monoxide in Archie’s blood. While the specific moment of death is uncertain, there was substantial evidence of foreseeability and causation which was properly weighed by the jury to determine the element of proximate cause.

No error.

State v. Metcalf (Lawyers Weekly No. 011-236-21, 18 pp.) (Jefferson Griffin, J.) Appealed from Buncombe County Superior Court (Marvin Pope, J.) Thomas Moore for the state; Anne Bleyman for defendant. 2021-NCCOA-618

N.C. BUSINESS COURT

Insurance Commercial Liability – Assignability – Excess Coverage Where (1) plaintiff purchased an already-burned chicken processing plant, (2) the seller assigned to plaintiff its right to recover under various commercial liability policies, and (3) plaintiff seeks to recover from the defendantexcess insurers (after recovering from the seller’s primary insurer), North Carolina law does not bar the excess insurers from asserting their policies’

restrictions on assignments, even when the assignment was made post-loss.

The court grants in part and denies in part defendants’ motions to dismiss.

Plaintiff Brakebush Brothers Inc. argues that First-Citizens Bank and Trust Co. v. Universal Underwriters Ins. Co., 113 N.C. App. 792 (1994), establishes that the validity of a postloss assignment of proceeds can never be restricted by the language of an insurance policy. The excess insurers, in turn, cite Terrell v. Lawyers Mut. Liab.

Ins. Co., 131 N.C. App. 655 (1998), a later decision, for the proposition that North Carolina courts do, in fact, enforce such provisions.

Based on a careful review of applicable case law, the court concludes that insurance policy provisions prohibiting or restricting post-loss assignments are enforceable under North Carolina law.

Brakebush’s reliance on First-Citizens Bank is misplaced as the decision in that case was based on an interpretation of the specific language used in the insurance policy at issue.

Brakebush contends the excess insurers waived their right to enforce anti-assignment provisions because the excess insurers have already made a partial payment to Brakebush. However, the excess insurers made the partial payment pursuant to an express reservation of rights. In a letter to Brakebush’s counsel, counsel for the excess insurers stated, “The Insurers have and continue to reserve all rights under the relevant policy language regarding an assignment of rights under the subject Policies.”

Although the court has been unable to identify a North Carolina case involving the issue of whether a reservation of rights letter was effective to preclude

waiver of an anti-assignment clause in an insurance policy, North Carolina courts have recognized the ability of an insurer to take action favorable to the insured subject to a reservation of rights.

Moreover, the court is not persuaded

by Brakebush’s contention that the excess insurers’ demand that Brakebush fill out a standard proof of loss form constituted a waiver of their right to contest the validity of the assignment at issue. Even though the proof of loss forms may have identified Brakebush as “Assignee,” the mere use of this form—without more—is simply insufficient to show an intentional waiver by the excess insurers of their right to challenge Brakebush’s status as an assignee.

Upon review of the language of the excess insurers’ various policies, the court rules that the broad anti-assignment language of three of the policies deprives Brakebush of standing to assert claims thereunder. Brakebush is likewise barred from bringing claims for bad faith or unfair trade practices against these defendants.

With respect to the remaining excess insurers—whose policies’ antiassignment language is ambiguous or inapplicable—the court rejects their arguments that Brakebush may not bring bad faith and unfair trade practices claims against them on the basis that Brakebush is a “stranger” to the policies.

The bad faith and unfair trade practices claims at issue are not claims that previously belonged to the seller and were then assigned to Brakebush.

Rather, they are claims that never belonged to the seller. Instead, Brakebush seeks to bring these claims based on the

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OPINION DIGESTS / 11

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

insurers’ conduct toward Brakebush in the course of its attempt to collect postloss proceeds under the policies as an assignee. Indeed, the conduct forming the basis for Brakebush’s bad faith and unfair trade practices claims occurred after the assignment from the seller to Brakebush.

The excess insurers cite cases which arose in the context of a claim against an insurer brought by an adverse third-party claimant. In those cases, our Court of Appeals held that a bad faith claim is unavailable to an adverse third-party claimant suing under an insurance policy of another. Similarly, the Court of Appeals has stated that “North Carolina law does not recognize a cause of action for third-party claimants against the insurance company of an adverse party based on unfair and deceptive trade practices under N.C.G.S. § 75-1.1.”

Brakebush cannot properly be viewed as a third-party claimant. By virtue of the assignment from the seller, Brakebush stepped into the seller’s shoes with respect to the right to collect post-loss proceeds under the excess policies. The excess insurers have not cited any case from North Carolina’s appellate courts holding that a bad faith or unfair trade practices claim was barred under the circumstances presented here.

Moreover, a contrary ruling would mean that even though a party in Brakebush’s position possessed a legal right as an assignee to seek proceeds under an insurance policy, it would lack any remedy in tort for bad faith conduct by the insurer. Such a result would run counter to the goal of preventing unlawful conduct by insurers with regard to the adjusting and payment of insurance claims. The remaining excess insurers’ motion to dismiss the bad faith and Chapter 75 claims under N.C. R. Civ. P. 12(b)(1) is denied.

Their motion to dismiss under N.C. R. Civ. P. 12(b)(6) is also denied. Among other allegations, the complaint asserts that the excess insurers’ own documents showed that the extent of the damage incurred from the fire was approximately $1.5 million higher than the amount they paid to Brakebush and that the excess insurers subsequently refused to provide an explanation for their refusal to pay the higher amount.

Construing the allegations in the light most favorable to Brakebush, as the court is required to do at this stage, the court concludes that Brakebush’s allegations are sufficient to state claims for bad faith and unfair trade practices.

Motions granted in part, denied in part.

Brakebush Bros., Inc. v. Certain Underwriters of Lloyd’s of London (Lawyers Weekly No. 020-070-21, 38 pp.) (Mark Davis, J.) Susan Boyles, Eric Weisenburger and Vernle Durocher for plaintiff; Gray Wilson, Stuart Russell, Timothy Jabbour, Anthony Tessitore, Kiera Fitzpatrick, Clark Schirle, Khrystyne Smith, Andrew Watson, and Bryan Scott for defendants. 2021 NCBC 70

Civil Practice Discovery – Sanctions – Real Property Purchase – Funding Source This case arises from a failed real estate deal, and the identity of plaintiff’s lender was an important issue. Up until the last moment of discovery, plaintiff represented that Ameris Bank was its lender. Plaintiff then changed this assertion, stating that Ameris Bank was only a potential refinancing lender while the purchase money would be

lent to plaintiff by one of its principal’s father and the father’s undisclosed partner. Especially considering plaintiff’s history of noncompliance with discovery and its dilatory actions, the court declines to allow plaintiff to swap horses at the far bank of the stream.

The court grants defendant’s motion for sanctions. Plaintiff shall not be permitted to present evidence or argument regarding its intention to use funding from Bernard Rubin and his partner or any source other than Ameris Bank.

Defendant is awarded its expenses with respect to this motion, including reasonable attorney’s fees.

Miriam Equities, LLC v. LB-UBS 2007-C2 Millstream Road, LLC (Lawyers Weekly No. 020-071-21, 15 pp.) (Julianna Theall Earp, J.) Scott Meyers for plaintiff; James Pulliam and Elizabeth Winters for defendant.

2021 NCBC 71

Tort/Negligence Fraud – Corporate – Self-Dealing – Punitive Damages – Post-Trial Motions In order to prove fraud, a plaintiff need not show that the defendant’s misrepresentation was made on a specific date. Where plaintiff presented evidence that (1) defendant Rives made a definite and specific promise not to spend more than $25,000 unless plaintiff agreed; (2) Rives made the promise at a board of directors’ meeting on 6 February 2015 or around that time; and (3) Rives confirmed that he discussed a spending limit with plaintiff in February 2015, plaintiff presented more than enough evidence to support the jury’s finding of fraud by Rives.

Defendants’ post-trial motions are denied.

Defendant Rives bought Roy Lazenby’s half-interest in nominal defendant Steel Tube, Inc.; used Steel Tube’s funds to pay Lazenby for his shares; diverted Steel Tube’s funds and assets to Rives’ family businesses; and depleted Steel Tube’s funds to the point of (according to plaintiff’s expert) insolvency.

Plaintiff sued, and the jury entered a verdict in his favor.

Fraud

In addition to evidence of when Rives’s misrepresentation was made, plaintiff also offered considerable evidence of Rives’s intent to deceive. The evidence showed, for example, that Rives owed $600,000 to Roy Lazenby as the purchase price for his shares.

Rives did not put any of his own money toward that debt. Rather, he paid for Lazenby’s shares with Steel Tube’s money.

Rives began making these transfers and withdrawals just after the February 2015 meeting with plaintiff. This short period between promise and breach suggests that Rives never intended to keep his promise, and the use of company funds to pay his sizeable personal debt is strong evidence of motive to deceive.

Punitive Damages

Defendant Rives & Associates, LLP, is the accounting firm of Rives’ family.

Rives & Associates argues that limited liability partnerships may never be held vicariously liable for punitive damages. G.S. § 1D-15(c) states that punitive damages “shall not be awarded against a person solely on the basis of vicarious liability for the acts or omissions of another” except “if, in the case of a corporation, the officers, directors, or managers of the corporation participated in or condoned the conduct con-

stituting the aggravating factor giving rise to punitive damages.” According to Rives & Associates, this means that punitive damages may not be awarded “against entities other than corporations”—presumably including limited liability partnerships, limited liability companies, and all other entities other than those organized under the North Carolina Business Corporation Act. However, numerous cases have applied the statute to partnerships and other entities.

Because the statute does not define “corporation,” the term takes its ordinary meaning. Dictionaries offer various formulations, but all say roughly the same thing: “a single person or object treated by the law as having a legal individuality or entity other than that of a natural person.” This expansive definition is broad enough to apply when, as here, a partnership exists as an entity distinct from its members.

Section 1D-15(c) does not bar an award of punitive damages against Rives & Associates on a theory of vicarious liability.

And there was ample evidence that Rives, a CPA, performed faulty tax work (that benefited him to Steel Tube’s detriment) on behalf of Rives & Associates. Cover letters received by Steel Tube carried a Rives & Associates logo and referred to “professional services rendered in connection with the preparation of” tax filings that “we” (Rives & Associates) compiled. In addition, others at Rives & Associates, including partners, reviewed the documents. And the documents identified the firm itself and a partner other than Rives as the “paid preparer.”

There is evidence that Rives falsified the tax documents at issue to advance and to conceal his fraud and other wrongdoing.

Moreover, some evidence suggests that Rives had the support of the firm.

Other partners and employees of Rives & Associates reviewed and approved filings over an extended period of time.

There was also evidence, apart from the negligent tax work, to show that the firm’s partners and employees participated in and benefited from Rives’s wrongdoing: his brothers were not only the undisclosed owners of KEL but also insiders at Rives & Associates.

Over a period of about two years, the partners and employees of Rives & Associates reviewed and helped prepare negligent tax documents that furthered the fraud of the firm’s managing partner, all while failing to adopt even the most basic, industry-standard conflict-of-interest guardrails. From this evidence, the jury could have reasonably found a repeated course of conduct which constituted a callous or intentional indifference to the plaintiff’s rights.

Notice of Sale

When Rives defaulted on his payments to Lazenby, plaintiff formed Avalon1, LLC, to acquire Lazenby’s security interest in Rives’ shares. Avalon1 sent a notification of a public sale of Rives’ shares to a known address for Rives. He did not receive the notification, however, because he had separated from his wife and no longer lived at the address. According to Rives, it was well known that he had moved to a new address, and the notification was not reasonable as a result.

Before disposing of collateral, a secured party must send the debtor “an authenticated notification of disposition.” G.S. § 25-9-611(c)(1). Notice may be sent by mail “addressed to any address reasonable under the circumstances,” G.S. § 25-9-102(77)(a), and may be valid “whether or not the other

person actually comes to know of it,” G.S. § 25-1-202(d).

Hatchell testified that she used the address that appeared in Rives’s K-1 and company life insurance policy and that Rives himself had confirmed in his answer in this litigation. She further testified that Rives had not informed her that he had relocated.

Rives maintains that, given the uncertainty over his living arrangements, Avalon1 should have sent notice to his counsel, but that is not required by the statute. Whether notification is reasonable is a fact-intensive inquiry that demands consideration of the circumstances as a whole. Weighing all the evidence, the jury could have concluded that Avalon1 sent the notification to Rives’s last known address and that it was reasonable to do so.

Motions denied.

Potts v. KEL, LLC (Lawyers Weekly No. 020-072-21, 53 pp.) (Adam Conrad, J.) Mark Nebrig, John Floyd and Benjamin Shook for plaintiff and counterclaimant; Frederick Sharpless and Pamela Duffy for defendants Rives and Rives & Associates, LLP. No counsel appeared for defendant KEL, LLC or for nominal defendant Steel Tube, Inc. 2021 NCBC 72

N.C. COURT OF APPEALS, UNPUBLISHED

Municipal Zoning – Special Use Permit – Traffic & Stormwater Runoff – Lay Testimony Petitioners made out a prima facie case that they were entitled to a special use permit, and lay testimony about traffic, stormwater runoff and generalized concerns was insufficient to rebut petitioners’ prima facie case.

We reverse the superior court’s ruling, which upheld the denial of the permit.

Lay testimony concerning traffic conditions is not competent in conditional use permit proceedings. Further, the rebuttal evidence regarding an increase in traffic was not substantial.

No evidence specified the amount the traffic would purportedly increase, and a mere increase in traffic does not necessarily mean an intensification of traffic congestion or a traffic hazard that would materially endanger the public safety.

Petitioners’ project abuts Lendire Road, and there was evidence concerning the poor condition of Lendire Road.

The road would have been in poor condition regardless of whether the special use permit was issued. No competent evidence showed that the road’s condition would be worsened beyond its designed lifespan if the permit were allowed.

Lay testimony and public comments described past flooding and poor drainage in the area, but they did not articulate any causal connection between these problems and the proposed development or explain relevant similarities to other causes of flooding, except to speculate that any further development would exacerbate flooding. Further, the opposing evidence did not address petitioners’ expert testimony that the proposed development would actually reduce stormwater runoff (for all storms less than a 100-year storm) compared to leaving the land undeveloped. One resident disagreed with this expert testimony by testifying that the stormwater would “not stay in [petitioners’] 100-year flood retention pond.” As sup-

12 / OPINION DIGESTS port for his prediction, the resident only stated that “[t]here are retention ponds back here that are cresting at any summer rain at any time.” This “vague” and “speculative” evidence was insufficient to oppose issuance of the special use permit.

Finally, opponents of the development expressed additional fears about public safety, namely that there was a rapist in the neighborhood, that the residents were afraid to let their dogs out, and that a child had been hit by a car while crossing the street. This testimony was incompetent to rebut petitioners’ prima facie case. The speculative comments of neighborhood residents relating their “generalized fears” and impressions that crime would be affected by the project cannot be characterized as substantial evidence and were insufficient to support the denial of the petition.

Reversed and remanded.

Coswalld, LLC v. New Hanover County (Lawyers Weekly No. 012360-21, 17 pp.) (Jefferson Griffin, J.) Appealed from New Hanover County Superior Court (George Jones, J.) Kip Nelson and Thomas Terrell for petitioners; Sharon Huffman for respondents.

2021-NCCOA-596

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

Domestic Relations Parent & Child – Neglect Evidence – Insufficient Findings Even though there was evidence that respondent’s daughter, “Mallory,” was exposed to drug usage, homelessness, theft, inadequate education, and domestic violence, and even though Mallory asked that she not be returned to her parents’ custody, since the trial court’s conclusion that Mallory was neglected does not refer to the statutory basis for that conclusion or cite any one incident or a series of incidents as a basis for a determination of neglect, we must remand for further findings.

Vacated and remanded.

In re M.J. (Lawyers Weekly No. 012-362-21, 11 pp.) (Lucy Inman, J.) Appealed from Forsyth County District Court (Denise Hartsfield, J.) Melissa Starr Livesay for petitioner; Kathleen Joyce for respondent; Matthew Wunsche for guardian ad litem. 2021-NCCOA-600

Trusts & Estates Domestic Relations – Parent & Child – Illegitimate Child – Chapter 7B Order

Real Property Mortgages – Appeals – Abandoned Issue The trial court granted defendants’ motion to dismiss on several grounds: (1) the complaint was not timely filed, (2) the claims were barred by judicial estoppel because plaintiff had failed to disclose the alleged claims in his pending bankruptcy case, and (3) the complaint failed to state a claim upon which relief could be granted. On appeal, plaintiff challenges the trial court’s rulings as to the statute of limitations and the doctrine of judicial estoppel, but he does not challenge the trial court’s ruling that the complaint fails to state a claim upon which relief could be granted. Since plaintiff has abandoned any challenge to the trial court’s conclusion that his complaint was subject to dismissal for failure to state a claim, we affirm the dismissal on that basis.

Grier v. RoundPoint Mortgage Servicing Corp. (Lawyers Weekly No. 012-361-21, 7 pp.) (Lucy Inman, J.) Appealed from Mecklenburg County Superior Court (Karen Eady-Williams & Forrest Bridges, JJ.) Anthony Grier, pro se; William Esser, Jeffrey Bunda, Felton Parrish, Aaron Lay and Zipporah Basile Edwards for defendants.

2021-NCCOA-598

Although decedent never married respondent’s mother, when respondent was adjudicated neglected, the district court entered an order under G.S. Chapter 7B awarding custody to decedent. Decedent held himself out as respondent’s biological father, consented to such designation in the court of law, and cared for respondent for much of her life. The trial court in this case did not err in concluding as a matter of law that decedent was adjudged to be the father of respondent in a prior civil action within the meaning of G.S. §§ 4914 and 29-19(b)(1).

We affirm summary judgment for respondent, dismissing petitioners’ petition for revocation of the Letters of Administration issued to respondent.

A child born out of wedlock, who has not been legitimated under law, is legally unable to take from their father through intestate succession unless they have fulfilled one of the provisions under G.S. § 29-19(b). And G.S. § 49-14 states, “The paternity of a child born out of wedlock may be established by civil action at any time prior to such child’s eighteenth birthday.”

The filing of a petition alleging abuse and neglect commences a civil action.

An establishment of paternity in an abuse, neglect and dependency proceeding under Chapter 7B is binding in

future proceedings. Although the law states that paternity can be established in juvenile proceedings, there is no specifically outlined procedure to establish paternity.

Although orders entered under G.S. Chapter 49 and orders entered under Chapter 7B have different purposes, both can establish paternity. Section 29-19 does not limit the chapter under which paternity must be established to allow intestate succession.

Prior to 1973, children born out of wedlock were unable to inherit from their fathers unless they were legitimated. In 1973, the General Assembly enacted subsections 29-19(b), (c), and (d), which provide methods for children born out of wedlock to take from their fathers through intestate succession.

This illustrates the legislature’s intent to increase the ability for children born out of wedlock to inherit from their fathers even where the children were not formally legitimated. In accordance with this movement towards accessibility for children born out of wedlock, this court has held that § 49-14, being a remedial statute, not a penal statute, is to be construed liberally so as to assure fulfillment of the beneficial goal for which it was enacted.

In this case, decedent held himself out as respondent’s biological father, consented to such designation in the court of law, and cared for respondent for much of her life. This court will not impose a limitation on a statute that was enacted as a means of providing relief and access to children born out of wedlock. Therefore, the trial court did not err in concluding as a matter of law that decedent was adjudged to be the father of respondent in a prior civil action under §§ 49-14 and 29-19(b)(1).

Affirmed.

In re Estate of Chambers (Lawyers Weekly No. 012-363-21, 10 pp.)

(Jefferson Griffin, J.) Appealed from Iredell County Superior Court (Mark Klass, J.) David Parker and Carey Parker for petitioners; Michael Lassiter for respondent. 2021-NCCOA-599

Civil Practice Appeals – Interlocutory – Party Misnomer – No Risk of Inconsistent Verdicts After plaintiff amended its complaint to substitute defendant Royal Steamers Coastal Carolina Inc. (Royal Steamers) for former defendant Royal Roofing & Restoration, LLC (Royal Roofing), defendants moved to dismiss.

The trial court’s order, which granted the motion to dismiss all tort claims but

not the breach of contract claim, mistakenly referred to former defendant Royal Roofing. Contrary to plaintiff’s argument, the trial court’s simple misnomer does not leave all claims pending against Royal Steamers and the breach of contract claim pending against Royal Roofing. Plaintiff’s amendment dismissed Royal Roofing from the case, and the only remaining claim is the breach of contract claim against Royal Steamers; consequently, there is no risk of inconsistent verdicts.

We dismiss plaintiff’s appeal from the trial court’s interlocutory order.

The trial court’s order also dismissed all claims against the individual defendant, Royal Feathers. However, since the breach of contract claim was not asserted against Feathers, and since plaintiff does not allege any factual issues that overlap between its tort and contract claims, plaintiff has failed to show the trial court’s interlocutory order affects a substantial right.

IzMaCo Investments, LLC v.

Royal Roofing & Restoration, LLC (Lawyers Weekly No. 012-364-21, 11 pp.) (Lucy Inman, J.) Appealed from Onslow County Superior Court (Paul Quinn, J.) Casey Starling on brief for plaintiff; Sarah Sherrington, Brett DeSelms and Timothy Wilson for defendants. 2021-NCCOA-602

Civil Practice Appeals – Interlocutory – Attorney Fee Award The trial court entered an interlocutory order requiring plaintiff to pay defendants $1,129.99 in attorney’s fees. This award is several magnitudes lower than awards which our appellate courts have held to affect a substantial right.

We dismiss plaintiff’s appeal.

Plaintiff asserts that the trial court’s order affects a substantial right because it requires immediate payment of a “substantial sum.” In support of this argument, plaintiff cites Estate of Redden ex rel. Morely v. Redden, in which the appellant was ordered to pay $150,000 plus costs in a partial summary judgment order. 179 N.C. App. 113, 632 S.E.2d 794 (2006). We held that the appellant in that case established a substantial right sufficient to allow interlocutory review because the order appealed required “immediate payment of a significant sum of money.”

Though this court does not appear to have ever defined what minimum sum of money suffices to impact an appellant’s substantial rights, we have no difficulty concluding that the $1,129.99

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OPINION DIGESTS / 13

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

award—which plaintiff has already paid without any assertion of financial difficulty—does not rise to such a level.

IzMaCo Investments, LLC v.

Royal Roofing & Restoration, LLC (Lawyers Weekly No. 012-365-21, 5 pp.) (Lucy Inman, J.) Appealed from Onslow County Superior Court (Henry Stevens, J.) Casey Starling on brief for plaintiff; Timothy Wilson, Brett DeSelms and Sarah Sherrington for defendants. 2021-NCCOA-601

Zoning Appeals – Mootness – Conditional Use Permit – Asphalt Plant The defendant-county’s board of adjustment denied petitioner’s application for a conditional use permit to build an asphalt plant. Upon review, the superior court reversed and remanded, and the board of adjustment granted the application. Although they have appealed several rulings of the superior court, the respondent-neighbors did not appeal the board of adjustment’s grant of the conditional use permit. Accordingly, respondents’ appeal is moot.

Appeal dismissed.

Where the rulings appealed were oral pronouncements, not reduced to writing and entered in accordance with N.C. R. Civ. P. 58, such rulings are nonexistent and thus cannot support an appeal.

Madison Asphalt, LLC v. Madison County (Lawyers Weekly No. 012-366-21, 11 pp.) (Jeffery Carpenter, J.) Appealed from Madison County Superior Court (Gary Gavenus, J.) Craig

Justus for petitioner; James Kilbourne for respondents-appellants; Ann-Patton Hornthal for respondent-appellee.

2021-NCCOA-603

Administrative Adult Care Home – Door Alarm Violations – Type A or B Violation In an adult care home where 38 of the 66 residents were intermittently disoriented, non-working door alarms, along with a documented lack of resident supervision, posed a substantial risk of death or serious harm to disoriented residents, including plaintiff’s decedent. Since the deficiencies at the facility posed a substantial risk of death or physical harm to residents, the Industrial Commission could find that the defendant-agency violated a duty to decedent when it failed to properly assess the facility’s regulatory violations and when it failed to take reasonable steps to address the deficiencies.

We affirm the award of $500,000 to decedent’s estate.

At the urging of the local DSS, defendant inspected the adult care home, revealing that the alarms on seven of the facility’s nine doors did not work.

Although the agency found a Type B violation and instructed the facility to repair the alarms, the agency did not order the interim step of having employees monitor the doors.

During the Type-B correction period, plaintiff’s decedent went missing, never to be found, and later declared dead.

The Commission found that, after decedent’s disappearance, the agency’s

inspection revealed substantially the same conditions, yet the agency labeled the conditions a Type A violation and soon thereafter shut down the facility.

There was competent evidence for the Commission to find that defendant breached its duty to plaintiff in failing to properly assess the violations at the facility and in failing to take reasonable steps to address the deficiencies.

There was also competent evidence to support the Commission’s findings that there were no intervening or superseding causes and that decedent sustained significant pain and suffering before her death.

The Commission’s findings of fact justify the conclusion that defendant’s breach directly and proximately caused plaintiff’s injury. As the Commission concluded, it was foreseeable that defendant’s failure to exercise its regulatory authority to address the door alarms—at a facility known for past deficiencies and non-compliance—would result in decedent’s injury. Defendant was aware that the facility had previous violations and cared for disoriented residents yet failed to adequately address the issue. The Commission did not err in concluding that defendant breached its duty to decedent, nor in concluding that the breach was a proximate cause of plaintiff’s injury.

Affirmed.

Estate of Tang v. North Carolina Department of Health & Human Services (Lawyers Weekly No. 012-367-21, 14 pp.) (John Arrowood, J.) Appealed from the Industrial Commission. Christopher Duggan and William Goldfarb for plaintiff; Donna Wojcik for defendant. 2021-NCCOA-611

Domestic Relations Alimony – Modification Motion – Same Income & Expenses On the defendant-wife’s 2018 motion to modify alimony, the trial judge found that the plaintiff-husband’s income was similar to what it was at the time of the 2015 alimony order and that the wife’s needs were similar. However, noting that the 2015 order egregiously “underpaid” the wife, the trial judge increased the husband’s alimony obligation from $1,800 per month to $3,249 per month.

The trial judge did not have the authority to retry the wife’s original alimony claim, and the record shows there was not a distinct and definite change in the financial circumstances of the parties sufficient to warrant modification.

We reverse the trial court’s order modifying alimony.

Du Plessis v. Du Plessis (Lawyers Weekly No. 012-368-21, 10 pp.) (John Arrowood, J.) Appealed from Mecklenburg County District Court (Tracy Hewett, J.) Richard Johnson for plaintiff; Rebecca Wofford for defendant.

2021-NCCOA-597

Criminal Practice Competence – Psych Reports – Passage of Time – Hearing Required Defendant initially was found not competent to proceed to trial, then found “barely” competent in successive reports that warned the critical turning point in his competency likely would be

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14 / OPINION DIGESTS the stress of the court proceeding itself, when defendant was forced to confront his actions. More than a year passed between defendant’s last competency evaluation and his return to court when he pleaded guilty to murder. In light of these facts, we hold that there was substantial evidence from the existing mental health reports indicating that defendant was at a significant risk of competency issues at the time of the sentencing proceeding.

We vacate defendant’s sentence and remand for the trial court to conduct a new sentencing proceeding after first evaluating defendant’s capacity to proceed. We uphold the trial court’s decision to allow defendant’s waiver of his right to a jury trial on the existence of aggravated sentencing factors.

In reliance on the reasoning of the dissenting opinion in State v. Hamer, 272 N.C. App. 116, 845 S.E.2d 846 (2020), defendant argues that the trial court erred by failing to follow the procedure set out in G.S. § 15A-1201(c)(2).

After this appeal commenced, our Supreme Court rejected that reasoning.

State v. Hamer, 377 N.C. 502, 2021NCSC-67. Under our Supreme Court’s holding in Hamer, defendant cannot show any prejudicial error in the trial court’s decision to proceed without a jury.

State v. Rojas (Lawyers Weekly No. 012-369-21, 12 pp.) (Richard Dietz, J.) Appealed from Gaston County Superior Court (Nathaniel Poovey, J.) Orlando Rodriguez for the state; Nicholas Woomer-Deters for defendant.

2021-NCCOA-609

Criminal Practice Jury Trial Waiver – Judge’s Colloquy When the trial court explained to defendant the differences between a jury trial and a bench trial, the court failed to identify the class of defendant’s felony and the maximum possible punishment for her crime. However, we will not require a trial court to ask a particular set of questions to satisfy G.S. § 15A-1201(d)(1).

The trial court personally addressed defendant to explain the differences between a bench trial and a jury trial.

Defendant was informed that in a bench trial the judge would be the sole fact-finder, whereas a jury consists of 12 fellow citizens who must all be “[satisfied].” When asked if she understood the differences between the two types of trials and if she wished to waive her right to a jury trial, defendant answered, “Yes.” The trial court’s colloquy established that defendant fully understood and appreciated the consequences of her decision to waive the right to trial by jury.

We find no reversible error in defendant’s convictions of possession of five or more counterfeit instruments.

State v. French (Lawyers Weekly No. 012-370-21, 6 pp.) (Chris Dillon, J.) Appealed from Craven County Superior Court (Joshua Willey, J.) Scott Beaver for the state; Emily Holmes Davis for defendant. 2021-NCCOA-606

Criminal Practice Expert Testimony – Fentanyl Classification – ‘Opiate’ Under G.S. § 90-87(18), an opiate is “any substance having an addictionforming or addiction-sustaining liability similar to morphine or being capable of conversion into a drug having addiction-forming or addiction-sustaining liability.” The state’s forensic chemist

testified that she “didn’t think it was incorrect’ to classify fentanyl as an opiate, that she only possessed a “general overview” and had no “specifics” about the addiction-forming or addiction-sustaining liabilities of fentanyl, and that her training did not include “addictingforming or sustaining liability.” Given such testimony, the trial court abused its discretion in finding the chemist was qualified to render an opinion on whether fentanyl was an opiate.

We reverse defendant’s conviction of trafficking by possession of an opiate.

We find no error in defendant’s conviction of resisting, obstructing, and delaying a public officer and remand for resentencing.

Law enforcement officers observed defendant walking in a high-crime neighborhood near midnight, when he approached a house, walked around it, knocked at its door, but did not gain entrance to the residence. Defendant gave the officers a false name, threw his backpack on the ground, and raised his hands. When the officers attempted to detain him, he fled. The officers also believed defendant acted erratically before taking flight. Taking the evidence in the light most favorable to the state, we hold the officers had reasonable suspicion to conclude criminal activity was afoot, giving them the authority to detain defendant.

Dissent

(Stroud, C.J.): An expert witness need only be better qualified than the jury as to the subject at hand. Given (1) the low bar an expert must meet, (2) the chemist’s extensive training and experience, and (3) the high bar to finding an abuse of discretion, I would hold the trial court did not abuse its discretion in allowing the chemist to testify as to whether fentanyl is an opiate.

The majority did not reach defendant’s argument that the trial court erred by ruling that the state had not violated the discovery statutes by failing to disclose that the chemist would testify that fentanyl was an opiate.

However, defense counsel admitted that he had received everything required under G.S. § 15A-903(a)(2), thereby negating any discovery issue.

The question of whether the state provided the required information in discovery is distinct from the sufficiency of the expert opinions stated in discovery to provide the evidence the state needs to make its prima facie case.

Finally, I note that the statutory amendments regarding fentanyl were merely clarifications. Fentanyl fits within the definition of “opiate” as that term is used in G.S. § 90-95(h)(4) as that statute was written on defendant’s offense date in April 2018.

I would find no error.

State v. Gibbs (Lawyers Weekly No. 012-371-21, 26 pp.) (April Wood, J.) (Donna Stroud, C.J., concurring in part & dissenting in part) Appealed from New Hanover County Superior Court (Joshua Willey, J.) Zachary Dunn for the state; Wyatt Orsbon for defendant.

2021-NCCOA-607

Criminal Practice IAC Claim – Sexual Assault – State’s Summation Defendant argues that he received ineffective assistance of counsel because his trial counsel failed to object during the state’s final argument when the prosecutor improperly vouched for the victim’s credibility and improperly accused defendant of using discovery and the delay in the victim’s reporting of the crime to falsely craft his trial tes-

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

timony. We cannot say, based on the record before us, whether the trial court would have sustained such objections or whether counsel may have refrained from objecting for strategic reasons.

We dismiss defendant’s appeal without prejudice to his right to reassert his claim through a motion for appropriate relief before the trial court.

State v. Cody (Lawyers Weekly No. 012-372-21, 7 pp.) (John Arrowood, J.) Appealed from Wake County Superior Court (Rebecca Holt, J.) James Bernier for the state; Craig Cooley for defendant. 2021-NCCOA-605

Criminal Practice Probation Revocation – Multiple Convictions – Different Counties The record reflects that defendant was a resident of Catawba County, and no evidence was presented to show that defendant violated the terms of his Catawba County probation while in Burke County. Accordingly, the trial court in Burke County did not have subject matter jurisdiction to revoke defendant’s Catawba County probation.

We vacate the order activating defendant’s sentence in 20 CRS 156.

While G.S. § 15A-1344(c) addresses the procedures required for trial courts altering or revoking probation originating in a different county, it does not provide the trial court authority to review and revoke probation that originated in a different county. Rather, the trial court’s authority is set out in G.S. § 15A1344(a).

State v. Campbell (Lawyers Weekly No. 012-373-21, 8 pp.) (John Arrowood, J.) Appealed from Burke County Superior Court (Daniel Kuehnert, J.) Jessica Price for the state; Drew Nelson for defendant. 2021-NCCOA-604

Criminal Practice Death by Motor Vehicle – Sentencing – Deadly Weapon – Plea Agreement “Evidence necessary to prove an element of the offense shall not be used to prove any factor in aggravation…”

G.S. § 15A-1340.16(d). In order to prove felony death by motor vehicle based on driving while impaired, the state was required to prove defendant was driving a motor vehicle. The state could not then assert as an aggravating factor that defendant was armed with a deadly weapon, when that deadly weapon was the same motor vehicle that defendant was driving while impaired.

In his plea agreement, defendant stipulated to the aggravating factor that he “was armed with a deadly weapon at the time of the crime.” Since essential and fundamental terms of the plea agreement have become unfulfillable, we vacate defendant’s plea agreement in its entirety.

Vacated and remanded for a new disposition.

State v. Mason (Lawyers Weekly No. 012-374-21, 9 pp.) (Jeffery Carpenter, J.) Appealed from Wake County Superior Court (Keith Gregory, J.) Christopher Brooks for the state; Anne Bleyman for defendant. 2021-NCCOA-608

Criminal Practice Assault on a Female – Hearsay – Explanation – Excited Utterance – Constitutional – Confrontation Clause The trial court ruled that an investigating officer could testify to the out-of-

court statement of the victim’s mother, who did not testify. The mother identified defendant as the person who had assaulted the victim, and the trial court said this was admissible to explain why the victim then spelled defendant’s first name for the officer. Our review of case law has not yielded any support for the proposition that an out-of-court statement is admissible to explain the subsequent conduct of another non-testifying declarant.

Although the mother’s statement was inadmissible hearsay, since defendant admitted to striking the victim, the admission of the mother’s statement did not prejudice defendant.

We find no prejudicial error in defendant’s convictions of violating a domestic violence protective order and assault on a female.

The victim’s statement to the officer was admissible as an excited utterance.

When the victim made the challenged statements, she was bleeding from the face. An ambulance took her to the hospital soon after she made the statements. Furthermore, the officer stated that the victim “was extremely upset and crying[.]”

Although the evidence does not indicate exactly how much time elapsed between the alleged assault and the victim’s statements, the evidence suggests a timespan of only a few minutes: The victim called her mother immediately after the alleged assault, the mother and the mother’s boyfriend met the victim within two minutes after defendant stopped his car and let the victim out, and the officer arrived on the scene about three or four minutes after receiving the service call.

This was not a situation wherein the declarant had time to reflect and fabricate untruthful answers. The victim’s statements were excited reactions to a startling event. The admission of her statements did not violate the rule against hearsay.

Even assuming the out-of-court statements were testimonial and their admission violated the Confrontation Clause, their admission was harmless beyond a reasonable doubt. The identity of the person who hit the victim was not in question.

Defendant himself admitted that he “[used] force” against the victim and that his elbow made contact with her body. He testified that the victim was “grabbing her face” when she got out of his car. An investigating officer identified defendant in court. Given the other evidence against defendant, there is no reasonable possibility that the jury would have reached a different conclusion had the challenged statements not been admitted.

No prejudicial error.

State v. White (Lawyers Weekly No. 012-375-21, 16 pp.) (Jefferson Griffin, J.) Appealed from Mecklenburg County Superior Court (Donnie Hoover, J.) Phyllis Turner for the state; Edward Eldred for defendant.

2021-NCCOA-610

Civil Practice Service of Process – Certified Mail – Actual Notice – Default Plaintiff opted to serve defendant via certified mail to the address defendant had listed on his employment forms seven months earlier. Defendant’s brother signed for the documents and forwarded them to defendant in Georgia, where defendant admittedly received them two months prior to the hearing on plaintiff’s motion for default judgment. Under these circumstances, the trial court did not err in determin-

N O R T H C A R O L I N A L A W Y E R S W E E K LY I Decem ber 6, 2021

ing that defendant was properly served.

We affirm the trial court’s denial of defendant’s motion to set aside the default judgment.

N.C. R. Civ. P. 4 provides that the affidavit of a plaintiff stating that she indeed properly served the defendant by certified mail, return receipt requested in accordance with Rule 4(j) “raises a presumption that the person who received the mail or delivery and signed the receipt was an agent of the addressee authorized [to accept service

for the defendant].”

By affidavit, defendant asserted that he had never authorized his brother “to accept any legal service on [his] behalf.”

However, a defendant who seeks to rebut the presumption of proper service generally must present evidence that service of process failed to accomplish its goal of providing defendant with notice of the suit, rather than simply questioning the role or authority of the person who signed for delivery of the summons. The crucial issue is not

OPINION DIGESTS / 15 whether the individual signing for the summons was formally employed by defendant as his agent, but whether or not defendant in fact received the summons.

Defendant’s brother admits to mailing the summons and complaint to defendant a few days after they were delivered to him, and defendant admits that he received them two months before judgment was entered against him.

Defendant also takes issue with the fact that the mailing was served at a lo-

cation that was not his residence. However, it is not fatal that the mailing was not delivered to defendant’s residence, as Rule 4 contains no such requirement where service is attempted by certified mail, return receipt requested.

Even if defendant himself did not receive the summons and complaint until after default was entered against him, his brother received them long before default was entered. Also, defendant had two months after receiving the summons and complaint to have the

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16 / OPINION DIGESTS entry of default set aside before the default judgment was entered.

This case is not extraordinary, requiring the trial court to set aside the default judgment. Defendant was given procedural notice in January 2020 and received actual notice by mid-February.

These dates precede the public pandemic response that did not occur until mid-March. Further, defendant has not shown how the pandemic hindered him from filing an answer. Moreover, defendant has failed to show a meritorious defense to plaintiff’s claims.

Affirmed.

A Maynor Heating & Air Conditioning, Inc. v. Gardner (Lawyers Weekly No. 012-376-21, 10 pp.) (Chris Dillon, J.) Appealed from Wake County Superior Court (Bryan Collins, J.) Paul Flick for plaintiff; J.D. Hensarling and Ian Richardson for defendant.

2021-NCCOA-619

Civil Practice Appeals – Motion in Limine – Real Property – Boundary Line In this boundary dispute, in response to plaintiffs’ motion in limine, the trial court ruled that the boundary line set by defendants’ surveyor was excluded, but the trial court also forbade the court-appointed surveyor from offering an opinion as to the location of the disputed boundary line. The plaintiff-appellant’s principal brief does not mention the interlocutory nature of the appeal nor the issue of a substantial right deprivation or any statement of grounds for appellate review. Plaintiff may not use her reply brief to independently establish grounds for appellate review.

Appeal dismissed.

Ayscue v. Griffin (Lawyers Weekly No. 012-377-21, 8 pp.) (John Tyson, J.) Appealed from Bertie County Superior Court (Cy Grant, J.) Joseph McKellar and Joseph Bell for plaintiff; Ernest Carter and Cecelia Jones for defendants. 2021-NCCOA-620

Domestic Relations Parent & Child – Custody Order – Best Interests – Insufficient Conclusion Although the trial court made many evidentiary findings of fact and imposed numerous conditions on the parties’ custodial time—parts of which were clearly designed to address plaintiff’s concerns about defendant’s drinking and “Rachel’s” exposure to certain people—the trial court’s joint custody order did not (1) make sufficient ultimate findings of fact, (2) conclude that the parties are fit and proper persons to exercise legal or physical custody, or (3) resolve the legal issue disputed by the parties: whether an award of custody to plaintiff and/or defendant will best promote the interest and welfare of the child.

We vacate the joint custody order and remand for further findings and conclusions.

Jones v. Jones (Lawyers Weekly No. 012-378-21, 14 pp.) (Toby Hampson, J.) Appealed from Davie County District Court (Carlton Terry, J.) Kyla Sipprell for plaintiff; no brief filed for defendant. 2021-NCCOA-632

Civil Practice Appeals – Constitutional – Due Process – Service of Process Although

plaintiffs

incorrectly

named Regional Imaging, P.A., as the entity doing business as Valley Regional Imaging and unsuccessfully attempted to serve Regional Imaging, P.A., defendant The Medical Imaging Center, LLC (TMIC), d/b/a Valley Regional Imaging, apparently received notice of plaintiffs’ claim, as TMIC’s counsel and plaintiffs’ counsel communicated about plaintiffs’ claim prior to the filing of the lawsuit. Moreover, Valley Regional Imaging, the entity which plaintiffs subsequently named and timely served, was not unrelated to TMIC; in fact, it was TMIC’s registered trade name. TMIC has failed to show that the trial court’s interlocutory order—denying TMIC’s motion to dismiss and allowing plaintiffs’ motion to amend their complaint—affects a substantial right.

Appeal dismissed.

Although TMIC defines its right to due process as “a right to be free from the court’s assertion of power over it when that court has no personal jurisdiction over it,” TMIC’s argument centers on its allegation that plaintiffs failed to properly serve TMIC with process, and thus the trial court never acquired personal jurisdiction over TMIC. Thus, TMIC is appealing questions of technical error involving service and process, which do not warrant immediate review.

Cambre v. Regional Imaging, P.A. (Lawyers Weekly No. 012-379-21, 6 pp.) (Jefferson Griffin, J.) Appealed from Cumberland County Superior Court (Mary Ann Tally, J.) Stewart Butler and Allen Smith for plaintiffs; Carrie Meigs and Justin May for defendant. 2021-NCCOA-621

Domestic Relations Civil Practice – Contempt – College Fund Contributions – Burden of Proof Even though the college fund account for the parties’ child was held solely in the name of the plaintiffmother, the record shows that (1) the parties’ divorce judgment incorporated the terms of their separation agreement, which required the defendantfather to pay $2,000 per year into the college fund and (2) defendant admitted in an email to plaintiff that he had used money from the college fund to pay for child support and “didn’t replace it,” and “I’m not covering [the child’s] college expenses this year. His college fund with me is all tapped out.”

This record was sufficient for the trial court to conclude that defendant had the ability to comply with the divorce judgment and that he deliberately failed to do so.

We affirm the trial court’s order holding defendant in contempt.

Defendant’s argument that plaintiff failed to set up a specific account for the college fund, thereby preventing defendant from making payments, is without merit given the evidence that he understood his obligation to pay $2,000 annually, had the ability to do so, and chose not to.

Although it is true defendant had no obligation to present evidence to the trial court, nothing in the record indicates he objected to the evidence provided by plaintiff. Further, the evidence provided by plaintiff satisfied the statutory requirement by setting forth the reasons defendant should be held in civil contempt. Any inference that may have been drawn by the trial court from defendant’s failure to respond is fundamentally different than a misallocation of the burden of proof.

Scott v. Scott (Lawyers Weekly No. 012-380-21, 11 pp.) (Jeffery Car-

N O R T H C A R O L I N A L A W Y E R S W E E K LY I D e c e m be r 6, 2021

penter, J.) Appealed from Orange County District Court (Joseph Buckner, J.) Michael Harrell for defendant; Joseph Nanney for plaintiff. 2021-NCCOA-636

Arbitration Stay Order – Insufficient Analysis – Texas Contract In an action arising out of defendants’ purchase of the assets of plaintiff’s pawn shops, the trial court did not state with any particularity its basis for granting plaintiff’s motion to stay arbitration proceedings in Texas and in denying defendants’ motions to dismiss and to stay this state-court action. Accordingly, we are compelled to remand for entry of an order which analyzes (1) whether the parties had a valid agreement to arbitrate and (2) whether the specific dispute falls within the scope of that agreement.

The order must also include findings and conclusions necessary to resolve defendants’ motions.

Reversed and remanded.

Sharpe v. FCFS NC, Inc. (Lawyers Weekly No. 012-381-21, 6 pp.)

(Fred Gore, J.) Appealed from Alamance County Superior Court (Andrew Hanford, J.) Patti Ramseur for defendants; Richard Pinto and Lenneka Feliciano for plaintiff. 2021-NCCOA-637

Constitutional Facial Challenge – Administrative – Substantiation of Child Abuse – Central Registry After an allegation of child abuse was substantiated against plaintiff, the substantiation was reported to the Central Registry maintained by the Department of Health and Human Services, as required by G.S. § 7B-302, and plaintiff mounted a facial challenge to the constitutionality of § 7B-302. Although § 7B-302 requires DHHS to disclose confidential information to any government entity or licensed adoption agency in order to protect a juvenile from abuse or neglect, the placement of the alleged offender’s name on the Central Registry is governed by G.S. § 7B-311; moreover, § 7B-302 does not address the disclosure of an alleged perpetrator’s name from the Central Registry.

Furthermore, there are numerous instances in which § 7B-302 could be applied constitutionally, such as when a child was abused or neglected but a county department of social services is unable to confirm the identity of the perpetrator.

The three-judge panel did not err in concluding that § 7B-302 is facially constitutional.

Because plaintiff was not timely notified of the substantiation of abuse, his name was not placed on the Responsible Individuals List.

Although plaintiff contends the disclosures of § 7B302(a1)(1) would permit a county department of social services to disclose the identity of an individual on the Central Registry, § 7B-302(a1)(1) does not use the term “perpetrator.” Moreover, only the state Department of Health and Human Services may disclose information on the Central Registry under certain enumerated circumstances.

Accordingly, Cabarrus County DSS was without the authority to disclose plaintiff’s information on the Central Registry.

Gorlesky v. Cabarrus County

Department of Social Services (Lawyers Weekly No. 012-382-21, 11 pp.) (April Wood, J.) Appealed from Wake County Superior Court (William Bell, Phyllis Gorham & Rebecca Holt, JJ.) Sydney Batch and Patrick Williams for plaintiff; Richard Koch for defendant; John Schaeffer for amicus curiae. 2021-NCCOA-625

Civil Practice Discovery – Sanctions – Work Product Doctrine – Insufficient Arguments Defendants attempt to appeal a discovery sanction, which requires them to respond to this interrogatory: “Please identify and describe all documents, which relate to or support in any way the defenses contained in your answer to the Complaint, including, without limitation, the defenses of statute of limitations, laches, estoppel, waiver, unclean hands or business judgment rule.”

Defendants describe how this interrogatory “patently seeks” protected work product in the form of their attorneys’ mental impressions, legal reasoning, and trial strategies. Apart from this blanket assertion of work product immunity, defendants do not explain how this interrogatory violates a privilege. Nor do defendants specifically object to any of the numerous documents that the trial court ordered them to produce. Therefore, defendants have failed to demonstrate that the assertion of this privilege is not frivolous or insubstantial such that it would entitle them to an immediate appeal of the trial court’s discovery sanctions order.

Appeal dismissed.

As an additional sanction, the trial court ordered defendants to pay plaintiffs’ attorney’s fees and costs in the sum of $20,637.50. Defendants cite Feeassco, LLC v. Steel Network, Inc., 264 N.C. App. 327, 826 S.E.2d 202 (2019), and In re Pedestrian Walkway Failure, 173 N.C. App. 254, 618 S.E.2d 796 (2005), which both held that “when a discovery order is enforced by sanctions pursuant to N.C. Gen. Stat. § 1A-1, Rule 37(b), the order affects a substantial right and is immediately appealable.”

However, defendants argue only, “Given the severity of the sanctions imposed in the Sanctions Order, and in light of Feeassco and In re Pedestrian Walkway Failure, this Court should rule that the Sanctions Order affects a substantial right and, therefore, is immediately appealable.” Defendants do not explain why the rule proposed in Feeassco and In re Pedestrian Walkway Failure should apply to the particular facts of this case, which concerns different sanctions and potentially different substantial rights affected.

Defendants either expect this court to expand the holdings of Feeassco and In re Pedestrian Walkway Failure or uncover why the facts of these cases parallel defendants’ case, fundamentally putting the burden on this court to construct arguments on their behalf. We reject defendants’ argument and decline to apply the Feeassco rule to grant immediate appeal in this case.

Dismissed.

Davis v. Vista North Carolina Ltd. Partnership (Lawyers Weekly No. 012-383-21, 14 pp.) (Darren Jackson, J.) Appealed from Rutherford County Superior Court (Thomas Davis, J.) Alexandra Cury, William Cannon and Craig Dixon Justus for plaintiffs; John Spainhour, Joshua Offutt and Paul Culpepper for defendants.

2021-NCCOA-622