North Carolina Lawyers Weekly 9-27-21

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SEPTEMBER 27, 2021 ■ $8.50

School board not liable for sexual assault of student ■ BY CORREY E. STEPHENSON BridgeTower Media Newswires

or “STOLI” schemes persist to this day. In a case of first impression, a North Carolina Business Court judge has found that such schemes are so offensive to public policy that an insurer could challenge the validity of a life insurance policy outside of its two-year incontestability period because the challenge was based on the lack of an insurable interest and a stranger’s gamble on an insured’s life.

The Sept. 2 order will allow Columbus Life Insurance Company to move forward with its action against

The North Carolina Court of Appeals has put the brakes on a lawsuit that was filed against a school district on behalf of a vulnerable special needs student who was sexually assaulted on an outsourced vehicle that transported her to school.

The court affirmed on Sept. 7 the dismissal of the student’s claims under Section 1983 of the Civil Rights Act and summary judgment with respect to her Title IX claim.

“Lauren,” a 20-year-old special needs student who attended West Stokes High School, is severely disabled with an IQ of 41 and the functional capacity of a first grade student. For many years, she rode a school bus that was designated for special needs students with an assigned bus monitor.

In 2013, the Stokes County Board of Education elected to contract with Yadkin Valley Economic Development District, Inc. (YVEDDI) to provide transportation for some of its special needs students. Lauren began riding a YVEDDI van that did not have a safety monitor.

On two separate days in December 2015, while transporting Lauren and other students, YVEDDI driver Robert King stopped the van multiple times and sexually assaulted Lauren a total of 21 times. A concerned resident reported King’s driving to YVEDDI. The company discovered King’s actions when it reviewed the video footage on the van, reported

See Gamble Page 6 ►

See Assault Page 5 ►

INSURER COULD VOID GAMBLE ON STRANGER’S LIFE AT ANY TIME ■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com H.H. Holmes, considered by some to be America’s first serial killer, would sometimes take out life insurance policies on his intended victims. This entrepreneurialism had several consequences, one of which was Holmes’ execution in 1896. It also helped motivate states across the country to pass laws against taking out insurance policies against strangers as a means of wagering on their deaths.

Nevertheless, such stranger-oriented life insurance,

Waiver of revocation hearing also waived right to appeal ■ BY HEATH HAMACHER hhamacher@nclawyersweekly.com A defendant whose probation was revoked by a district court judge won’t be able to appeal that decision to superior court because he waived his right to a revocation hearing, the North Carolina Court of Appeals has unanimously ruled in a case of first impression.

Leaning on the plain language of state law and relevant state Supreme Court decisions, the appeals court found in its Sept.7 opinion that when a defendant assents during a conviction, he generally may not later appeal on the basis of that to which he

previously assented.

“After careful review, we find the Stokes County Superior Court lacked jurisdiction to hear Defendant’s appeal,” Judge April Wood wrote for the court. “To hold otherwise would permit the Superior Court to exceed its jurisdiction and operate beyond the jurisdictional boundaries established by our General Assembly.”

In 2018 and 2019, Jared Flanagan pleaded guilty in Forsyth County and Stokes County to numerous crimes, including attempted assault with a deadly weapon on a government official, trespassing, shoplifting, larceny, possession of drug paraphernalia, and eluding arrest.

Courts in both counties sentenced Flanagan to jail but suspended those sentences to supervised probation with special conditions, including serving 10 weekends in the Forsyth County Jail.

Flanagan did not comply with those conditions, according to court documents stating that he failed to appear in court, failed to report to the county jail, and failed to attend court-ordered substance abuse treatment and other mandated management services. Flanagan’s probation officer repeatedly recommended probation revocation, telling the court that Flanagan was “a danger to himself and to the S e e Wa i ve r P a g e 5 ►

INSIDE CASE LAW

VERDICTS & SETTLEMENTS

WORKPLACE

DuPont faces successor liability in state’s contamination suit

Feds to pay $32M to Duplin Co. farmers for hurricane damage

The ‘morning huddle’: short and sweet — and powerful

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2 / NEWS LAWYERS IN THE NEWS Benjamin L. Snowden and David T. Drooz have joined Fox Rothschild in the firm’s energy and natural resources practice in its Raleigh office as a partner and as counsel, respectively.

Snowden represents companies involved in the development and operation of renewable and other energy projects and comes to the firm from Kilpatrick Townsend. Drooz is experienced in utility regulatory matters and was previously chief counsel of the public staff for the North Carolina Utilities Commission.

Jeremy Falcone has rejoined Ellis & Winters after several years as in-house employment counsel at Wells Fargo. Falcone’s employment law practice includes litigation and general employment counseling on a variety of matters. He also focuses his practice on data privacy and security issues and commercial litigation, including product liability, tort defense, and medical malpractice defense.

Scott Hazelgrove has also joined Ellis & Winters, in the firm’s Raleigh office. Hazelgrove’s practice focuses on complex commercial litigation, antitrust, medical malpractice, and product liability.

Jonathan M. Prytherch has joined Moore & Van Allen as counsel in the firm’s financial regulatory advice and response group in its Charlotte office. Prytherch’s practice focuses on securities regulatory and enforcement matters involving broker-dealers and their registered representa-

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 Se pt e m be r 27, 2021

tives.

Elaine (Lainie) M. Moyer has joined Young Moore in Raleigh. Moyer focuses her practice on complex civil litigation involving transportation and general liability matters. Prior to joining the firm, Moyer spent 12 years practicing in Pennsylvania.

Rachel H. Boyd has also joined Young Moore, as an associate. Boyd represents businesses on matters involving commercial litigation, including complex business disputes, employment, products liability, and premises liability.

Doug McClanahan has joined Harris & Hilton in Raleigh. McClanahan concentrates his practice on litigation and construction law. He had been a solo practitioner for the past 20 years.

Coltrane Henderson, Kayla McDaniel, Austin Sistrunk, Ani Whittington, and Ella Zulman have joined Cranfill Sumner as associate attorneys. Henderson is based in Raleigh and focuses on workers’ compensation. McDaniel is based in Charlotte and focuses on civil litigation.

Sistrunk is based in Wilmington and focuses on medical malpractice, products liability litigation, and general civil litigation. Whittington is based in Wilmington and focuses on civil litigation and admiralty and maritime matters. Zulman is based in Charlotte and focuses on civil litigation.

FordHarrison announced that Julie Adams has been named the managing partner of the firm’s Charlotte office.

BAR DISCIPLINE

ROUNDUP Attorney: Daniel C. Flint Location: Charlotte Bar membership: Member since 2016 Disciplinary action: Disbarred on Sept. 7 Background: On Oct. 19, 2018, Flint was found guilty by a jury in the U.S. District Court for the Central District of California of entering an airport area in violation of security requirements, which is a felony. Flint had entered a secured area of an airport carrying a pouch containing approximately $148,145 that had not been screened by TSA, falsely claiming that it was a diplomatic courier. Flint presented fraudulent documents purporting to support his false claims of diplomatic status and made false statements to the same effect to TSA agents. On Sept. 16, 2019, Flint was sentenced to 14 months incarceration in the Bureau of Prisons. The next month, his license to practice law was suspended until the conclusion of all disciplinary matters pending against him.

Previous discipline: None prior to the indefinite suspension All information contained in the Bar Discipline Roundup is compiled and edited by Lawyers Weekly editor-in-chief David Donovan. He can be reached at david.donovan@ nclawyersweekly.com.

NEWS BRIEFS COA rescinds first grant of en banc hearing Anyone who’s spent the last few years waiting for the North Carolina Court of Appeals to hold its first-ever

en banc rehearing of a case will have to keep waiting at least a little bit longer.

On July 30, the court granted a father’s motion for an en banc rehearing of a case in which a three-judge panel had affirmed a permanency planning order granting guardianship of a minor to his foster parents. It was the first

Mary Aiken Barrow

Lynn P. Burleson

time the court had ever granted such a motion since legislators passed a law granting the court the power to do so in December 2016 in the dying hours of Gov. Pat McCrory’s administration.

More than 100 motions for en banc rehearing had been unsuccessfully filed in that time.

The historic occasion was not to be, however. On Aug. 31 the court rescinded its order allowing the en banc rehearing and returned the appeal to the original panel for further consideration.

Because the case involved a minor, See Page 6 ►

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NEWS / 3

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 S ep tember 27, 2021

DuPont faces successor liability in state’s contamination suit ■ BY CORREY E. STEPHENSON BridgeTower Media Newswires North Carolina’s courts have jurisdiction over a company whose predecessor stands accused of dumping hazardous “forever chemicals” into the land, air, and water around the Cape Fear River in Fayetteville, a Business Court judge has ruled in a case of first impression.

The North Carolina Attorney General’s office filed suit in its parens patriae capacity over the alleged contamination caused by the operations of a chemical manufacturing facility known as Fayetteville Works in Bladen and Cumberland Counties.

According to the state, the defendants caused the contamination through the use of per- and polyfluoroalkyl substances (PFAS), discharging “vast quantities” of the substances into the environment, with profoundly negative effects.

Defendant E.I. du Pont de Nemours and Company – referred to as “Old DuPont” by the court – purchased the property and began the manufacturing facility in 1969.

Beginning in 2015, Old DuPont engaged in a multi-step process to restructure its business that could place it in a position where it is unable to pay for the liabilities related to PFAS contamination.

The process included separation agreements, the creation of new business entities, and the transfer of Old DuPont’s PFAS contamination liability. In the end, Corteva and Du Pont de Nemours, Inc. (New DuPont) assumed certain direct financial liability of Old DuPont.

Old DuPont allegedly transferred valuable assets and business lines to New DuPont and Corteva for less than the assets’ value, and the value of Old DuPont has continued to decrease—at one point, it declined to a net worth of negative $1.125 billion.

Corteva and New DuPont filed a

motion to dismiss that lawsuit, arguing that the court lacked personal jurisdiction over them as successor corporations.

In a Sept. 9, opinion, Special Superior Court Judge for Complex Business Cases Michael L. Robinson disagreed.

“While North Carolina courts have not directly addressed the issue of imputing a predecessor’s contacts to the successor for the purposes of personal jurisdiction, to hold otherwise would allow a corporation ‘to avoid all consequences … by just reforming in some other jurisdiction and avoiding any accountability,’” Robinson wrote. “Accordingly, the Court follows the federal courts and concludes that personal jurisdiction over a defendant based on a theory of successor liability comports with due process.”

Due Process satisfied

Although determining whether personal jurisdiction exists is usually a two-step analysis, Robinson focused his inquiry into whether the exercise of personal jurisdiction over Corteva and New DuPont was allowed under the Due Process Clause.

The state argued that the court had specific jurisdiction over Corteva and New DuPont by imputing Old DuPont’s jurisdictional contacts because they assumed Old DuPont’s PFAS liabilities pursuant to one of the separation agreements. As a fallback argument, the state told the court that Corteva and New DuPont participated in fraudulent transfers purposefully directed at North Carolina.

With a “paucity” of case law from North Carolina on whether a predecessor corporation’s contacts with the forum that establish personal jurisdiction over it may be imputed to a successor corporation for the purposes of establishing personal jurisdiction over the successor corporation,

Robinson turned to other jurisdictions for guidance.

Federal courts in the state have permitted the imputation of a predecessor’s actions upon its successor for jurisdictional purposes, as have courts in Iowa and the 4th and 7th U.S. Circuit Courts of Appeals, Robinson found. “’The theory underlying these cases is that, because the two corporations are the same entity, the jurisdictional contacts of one are the jurisdictional contacts of the other for the purposes of International Shoe,’” he wrote.

In North Carolina, there are four exceptions to the general rule against successor liability, Robinson said. He found that two applied to Corteva and New DuPont: an express or implied agreement by the purchasing corporation to assume the debt or liability and a transfer of assets done for the purpose of defrauding the corporation’s creditors.

“As to the first exception, Corteva and New DuPont expressly agreed to assume Old DuPont’s PFAS liabilities,” he wrote.

Corteva and New DuPont objected, pointing the finger at a separate entity that they said assumed PFAS liabilities and arguing that they agreed to indemnify each other for PFAS-related losses but did not assume PFAS liabilities.

Robinson wasn’t persuaded, relying on language from a separation agreement and letter agreement (both of which were redacted in the opinion) to hold that the state had established by a preponderance of the evidence that Corteva and New DuPont agreed to assume Old DuPont’s PFAS-related liabilities. As such, imputing Old DuPont’s contacts to Corteva and New DuPont based on the exceptions to successor liability was appropriate.

Third exception also applies

Even if the first exclusion hadn’t applied, Robinson found that the

third exception would also permit successor liability.

The state alleged that Old DuPont undertook a series of transactions to shield itself from billions of dollars in liabilities related to its discharge of PFAS at its manufacturing facilities, including Fayetteville Works, Robinson noted. It further alleged that the transactions resulted in Old DuPont having a negative net worth, the transfer of valuable assets from Old DuPont to Corteva and New DuPont for far less consideration than those assets were worth, and that Corteva and New DuPont “acted with the actual intent to hinder, delay and defraud creditors or future creditors.”

“At this stage of the proceeding, all of these allegations are sufficient to show that Old DuPont transferred assets to Corteva and New DuPont for the purpose of defrauding its potential creditors,” Robinson said. “It is clear and uncontested that Old DuPont has sufficient minimum contacts with the state through its operation of Fayetteville Works. The Court concludes that, at this stage of the proceeding, [the state] has established successor liability by the preponderance of the evidence as to Corteva and New DuPont under the first and third [successor liability] exceptions.”

Attorney General’s Office spokesperson Laura Brewer said the “office is encouraged by this decision and looks forward to continuing our work on this case.”

Jonathan D. Sasser and Thomas H. Segars of Ellis & Winters in Raleigh represented Corteva and New DuPont. They did not respond to a request for comment.

The 22-page decision is State ex rel. Stein v. E.I. DuPont de Nemours & Co. (Lawyers Weekly No. 020-054-21). The full text of the opinion is available online at nclawyersweekly.com.

Feds to pay $32M to Duplin Co. farmers for hurricane damage ■ BY DAVID BAUGHER Farmers in Duplin County and adjacent areas should see an estimated $32 million in federal compensation after the resolution of a court case over a hurricane wind endorsement to an insurance policy, the farmers’ attorneys report.

J. Scott Flowers and Damon Gray II of Hutchens Law Firm in Fayetteville report that Duplin County had initially been excluded from coverage for damage from Hurricane Isaias, which made landfall near Myrtle Beach, South Carolina, in August 2020. Although Isaias hit Duplin County, there was a dispute over the formula to be used J. Scott Flowers in deciding whether farmers were due compensation for crop damage.

Flowers said that the National Oceanic and Atmospheric Administration publishes a data point for hurricanes every three hours, and the first point at which the weakening weather system was classified as a tropical storm was inside the county. His clients contended that the language of the endorsement indicated that this required the government to cover Duplin as well as adjacent counties.

“The farmers in Duplin County were confused about why they were excluded because all the news reports said that Hurricane Isaias had gone right through Duplin County,” Flowers said. “We

started looking into this, and we found that the RMA [Risk Management Agency] had published a formula to determine which counties were triggered.”

Flowers said the government employed a process of “interpolation” to determine where the hurricane strength winds had weakened, but he argued that such a methodology wasn’t what had initially been published when the farmers purchased the insurance.

He said the language has since been changed to reflect the new policy.

Flowers represented only two individuals in the matter, which wasn’t filed as a class action.

But many more farmers are expected to reap compensation from coverage both in Duplin and in adjacent counties, which would also be covered by Duplin’s inclusion. The exact number of beneficiaries was unclear, but Flowers said it could include hundreds of people.

Flowers said that federal crop insurance for hurricane damage doesn’t involve an adjuster or an exact assessment of damage.

“You automatically get paid whatever the percentage amount that you purchased was,” he said.

The U.S. Attorney’s Office filed an answer which agreed in part and denied in part the allegations in the suit. No official settlement was made, but Flowers said that the government ultimately agreed to cover the farmers in the disputed area, and the parties stipulated to a dismissal of the lawsuit on Aug. 3.

Flowers said that he is from Duplin County

SETTLEMENT REPORT – FEDERAL ADMINISTRATIVE PROCEDURE ACT

Amount: Approximately $32 million Injuries alleged: Failure to pay federal crop insurance claims Case name: Thomas Bradley Frederick; Thomas Leroy Frederick v. United States Department of Agriculture; Risk Management Agency; Federal Crop Insurance Corporation Court: U.S. District Court for the Eastern District of North Carolina Case No.: 7:20-CV-239-M Date of settlement: Aug. 3 Attorneys for plaintiffs: J. Scott Flowers and Damon Gray II of Hutchens Law Firm in Fayetteville Attorneys for defendant: Assistant U.S. Attorney Neal Fowler of the U.S. Attorney’s Office for the Eastern District of North Carolina in Raleigh and his brother-in-law is still a farmer there.

“That’s how I found out about all this and got involved,” he said.

Assistant U.S. Attorney Neal Fowler of the U.S. Attorney’s Office for the Eastern District of North Carolina represented the government. The U.S. Attorney’s office could not be reached for comment on the settlement.

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 Se pt e m be r 27, 2021

The ‘morning huddle’: short and sweet — and powerful

"Helping lawyers practice better, more efficiently, and more profitably."

■ BY CHRISTOPHER F. EARLEY

■ PUBLISHER Liz Irwin

“If everyone is moving forward together, then success takes care of itself.”

— Henry Ford I am a big believer in the power of small daily tweaks and adjustments to improve my practice. Small hinges can open big doors. The challenge for me is always finding and identifying those hinges. But once that happens, good things usually follow.

The morning huddle is something I have discovered to be a powerful and yet really simple method of improving my practice. While it brings numerous benefits, its principal benefit for me is that it creates and maintains daily alignment in my firm.

I found that as we added new team members, it was getting hard to maintain alignment. The left hand didn’t know what the right hand was doing.

I quickly learned that was not exactly a recipe for success.

I read about the morning huddle and decided to give it a shot. It was one of the best decisions I have ever made in running my practice.

The morning huddle is a quick stand-up meeting held each and every morning at a dedicated time. Each team member comes ready to discuss three specific things: 1) his/her biggest success yesterday, 2) biggest challenge yesterday, and 3) goal for today.

That is the entire meeting. Short and sweet and to the point.

It is important that each team member always brings these three talking points so that the huddle accomplishes its ultimate objective of

lirwin@bridgetowermedia.com ■ EXECUTIVE EDITOR Andy Owens aowens@scbiznews.com ■ EDITOR IN CHIEF David Donovan david.donovan@nclawyersweekly.com ■ EDITORIAL Heath Hamacher, Reporter hhamacher@nclawyersweekly.com Scott Baughman, Digital Media Manager sbaughman@mecktimes.com

keeping everyone accountable for: 1) rowing in the same direction each day, and 2) getting done the things we say we are going to get done.

As the facilitator, it is my job to make sure the huddle is quick and does not veer off topic. We don’t want to get caught in the weeds and have the meeting go longer than planned.

Keeping the meeting moving along is important so that team members remain engaged.

The huddle also reveals problems that need to be addressed. For example, I often learn in these meetings who the difficult clients are that we may need to part ways with. I also learn valuable ways we can improve the delivery of our client services.

You want to listen really carefully because you can glean valuable insight at these huddles from the entire staff, and especially from your support staff.

Here are some things to keep in

mind to make the huddle as effective as possible: 1. Keep it brief. It should not last longer than seven to 10 minutes.

2. Encourage each team member to come to the huddle with a notepad.

3. It is always a standup meeting (sitting changes the entire tone of the meeting).

4. Be consistent about it. We do ours each day at exactly 9:30 a.m.

5. If you have numerous departments, consider having each department conduct its own internal huddle each day.

If you are not already doing a morning huddle, consider giving it a try. I would love to hear from you, so please email me at cearley@chrisearley.com and let me know how the morning huddle goes for you.

Christopher F. Earley is a Boston attorney and author who concentrates his practice on the representation of the seriously injured and their families.

Paul Fletcher, Contributing Editor paul.fletcher@nclawyersweekly.com ■ ADVERTISING Sheila Batie-Jones, Advertising Account Executive sheila.batie-jones@nclawyersweekly.com ■ ACCOUNTING & ADMINISTRATIVE Michael McArthur, Business Manager mmcarthur@bridgetowermedia.com ■ CIRCULATION Disa Ehrler, Audience Development Manager dehrler@bridgetowermedia.com Circulation: 1-877-615-9536 service@bridgetowermedia.com ■ PRODUCTION & OPERATIONS Jason Reckamp, Designer jreckamp@molawyersmedia.com ©2021 BridgeTower Media. Material published in North Carolina Lawyers Weekly is compiled at substantial expense and is for the sole and exclusive use of purchasers and subscribers.

The importance of technology competence

The material may not be republished, resold,

■ BY NICOLE BLACK Bridgetower Media Newswire

consent. Any infringement will be subject to

Technology competence: Nowadays it’s a must for lawyers. Five years ago, you may have been able to convince yourself that there was no need to be technologically competent, but no more.

The writing has been on the wall ever since the American Bar Association amended the comments to Model Rule 1.1 in 2012 to include technology competence as part of the ethical obligation of lawyers to maintain competency. Since that time, 39 jurisdictions have adopted the duty of technology competence. As a result, in 2021 it’s clear that lawyers in the majority of jurisdictions now have an ethical obligation to understand technology and make educated decisions about using it in their practices.

If you remain unconvinced about the importance of technology competence, perhaps a recent federal appeals court decision will do the trick. Earlier this month, the United States Court of Appeals for the Fifth Circuit considered the issue of e-filing competence in Rollins v. Home Depot, No. 20-50736.

In this case, the appellant was injured while moving a bathtub for his employer, Home Depot. He subsequently filed a lawsuit in state court seeking to recover for his injuries. The lawsuit was removed to federal district court, and the appellant’s trial attorney provided an email address, and

as is customary these days, agreed to receive e-filings to that email address.

This was a decision he would later regret, as foretold by the court in the opening line to its decision: “This is a cautionary tale for every attorney who litigates in the era of e-filing.”

After filing suit, Home Depot filed a motion for summary judgment on May 7, within the timeframe set forth in the scheduling order. Unfortunately, the appellant’s trial attorney did not receive notification of the motion since “by all accounts, his computer’s email system placed that notification in a folder that he does not regularly monitor. Nor did he check the docket after the deadline for dispositive motions had elapsed.”

Because appellant’s trial attorney was unaware of the pending motion, he failed to file and serve a response to the motion within the 14-day time period established in the scheduling order. Accordingly, because no reply papers were filed, the district court granted Home Depot’s motion for summary judgment.

Shortly thereafter, appellant’s trial counsel filed a motion pursuant to Federal Rule of Civil Procedure 59(e) seeking to alter or amend the district court’s order granting summary judgment. The district court denied the motion. Appellant appealed the decision, asserting that the district court abused its discretion when it denied the motion since the failure to respond to the motion was “due to a glitch in

his email system.”

The court disagreed, in essence concluding that appellant’s trial attorney was a victim of his own technology incompetence, and therefore had to pay the price. The court determined that it was not “manifest error to deny relief when failure to file was within … counsel’s ‘reasonable control … (and he) was plainly in the best position to ensure that his own email was working — certainly more so than either the district court or Home Depot.”

In other words, these days there’s no excuse for technology incompetence. Technologies like e-filing, cloud computing, video conferencing, and e-signature have become the norm, and email has been commonplace for decades now. Lawyers have an ethical duty to understand how these technologies work, or to retain the services of someone who does. The failure to meet this obligation can have dire consequences, including disciplinary actions and legal malpractice.

Given that technology competence is a necessary part of practicing law in 2021, what steps can you take today to increase your technology literacy?

After all, there’s no better time than the present, and you have everything to gain — and nothing to lose — from your efforts!

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 S ep tember 27, 2021

ASSAULT / Board’s duty ceased once it delegated function C o nt inu e d f r o m 1 ►

him to law enforcement, and terminated his contract.

YVEDDI didn’t notify the board of the assaults, King’s arrest, or his termination. Instead, school officials first learned about the sexual assaults from Lauren’s mother after she was contacted by law enforcement after King’s arrest.

On Lauren’s behalf, her mother sued the board and individual board members, asserting claims for negligence, negligence per se, negligent infliction of emotional distress, Section 1983 claims, Title IX damages, and negligent hiring, training, supervision and retention.

Two Stokes County superior court judges granted the defendants’ motion to dismiss the Section 1983 claims and their motion for summary disposition on the remaining claims. In an opinion written by Judge April Wood, the appeals court affirmed both rulings.

“Plaintiffs’ Title IX claim fails because no school employee or Board member had actual knowledge of King’s sexual abuse of Lauren until after he had been arrested and terminated,” Wood wrote. “The undisputed evidence shows school officials learned that King had abused Lauren only after the sheriff notified [her mother], who in turn, contacted the school principal. In the absence of any evidence that a school official or Board member with authority to remedy alleged discrimination had actual knowledge of King’s abuse of Lauren, there is no genuine issue of material fact as to Plaintiffs’ Title IX claim against the Board.”

Insufficient allegations

Beginning with the motion to dismiss the Section 1983 claims, Wood found the defendants didn’t violate Lauren’s constitutional right to equal protection because the complaint was devoid of any factual allegations sufficient to establish that Lauren had been treated differently from similarly situated male stu-

dents, thus failing to state the first element of an equal protection violation based on her gender.

Disabled individuals are not a suspect or quasi-suspect class entitled to special protection under the Equal Protection Clause, Wood added, relying on caselaw from the U.S. Supreme Court.

As for Lauren’s substantive due process claim, Wood wrote that to establish Section 1983 liability based on a state-created danger theory, a plaintiff must show that the state actor created or increased the risk of private danger and did so directly through affirmative acts—not merely through inaction or omission.

The complaint “does not contain factual allegations that would establish conduct by the Board that was so intentional or affirmative that it shocks the conscience,” Wood wrote.

Similarly, the failure to train allegations were insufficient to survive.

“Plaintiffs do not allege there were prior incidents of this kind, nor are there any factual allegations showing that the Board or school officials demonstrated a deliberate indifference that was likely to lead to a contracted bus driver’s sexual abuse of a student,” Wood wrote.

While the failure to train municipal personnel may rise to the level of an unconstitutional custom or policy where there is a history of widespread abuse, the complaint only contained “general contentions” of the failure to provide training or supervision, Wood said. “Allegations of mere negligence with regard to training are insufficient to state a claim for municipal liability.”

The failure to supervise claim met the same fate.

“King is the only individual Plaintiffs allege to have abused Lauren,” Wood wrote. “King was not a subordinate of the Board. No school employee is alleged to have committed acts upon Lauren that violated her substantive due process rights to bodily integrity and to be free from sexual abuse. Thus, a claim that the Board failed to properly train or

supervise its employees or subordinates fails.”

Board delegated to contractor

Turning to the negligence and Title IX claims, Wood affirmed the trial court’s grant of summary judgment, despite sympathizing with the plaintiffs for the “irreparable harm” Lauren suffered.

The board had delegated its duty to safely transport Stokes County students pursuant to N.C. Gen. Stat § 115C-253. Although Wood recognized that the state owes a duty of care “relative to the [victim’s] maturity,” the board didn’t retain the right to control the manner in which YVEDDI would transport students such as Lauren, and the court declined to extend tort liability where the harm occurred to a student not in the school’s physical custody.

“Absent guidance by our legislature, we are obliged to hold the trial court did not err in granting summary judgment,” Wood wrote. “To hold otherwise would be to ignore the independent contractor rule, that states when an employer properly delegates a duty pursuant to a statutory authority, its duty ceases.

Because we are bound by our precedent, we hold the trial court did not err in granting summary judgment.”

Finally, Wood affirmed summary judgment in favor of the defendants on the Title IX claim.

To survive a summary judgment motion, a Title IX plaintiff must present evidence from which a reasonable jury could conclude the school’s deliberate indifference to the initial discrimination subjected the plaintiff to further discrimination—a “rigorous and hard to meet” standard, Wood said.

But no school employee or board member had actual knowledge of King’s sexual abuse of Lauren until after he had been arrested and terminated, she said. The undisputed evidence showed that school officials learned about the abuse only when Lauren’s mother informed the school principal, leaving the plain-

tiffs unable to meet the standard for a Title IX claim.

Two members of the three-judge panel filed concurring opinions.

Judge Richard Dietz took the position that felony sexual assault of a vulnerable special needs student is not always foreseeable to school officials as a matter of law, while Judge John Arrowood wrote separately to express his concern that the statute authorizing delegation of the duty to transport public school students has effectively permitted boards of education to contract out of the heightened standard of care that the court has previously held them to.

Kirk Sanders and Joshua Dearman of Hendrick Kirk Sanders Bryant Nerhood Sanders & Otis in Winston-Salem, who represented the plaintiffs, plan on filing a petition for discretionary review to the Supreme Court.

“This decision has terrible poliJoshua cy ramifications,” Dearman Sanders said.

“From a broad policy position, if this case stands, then it is going to allow every school system across the state to abdicate their duties by outsourcing to independent contractors, including the duties owed to our most vulnerable students.”

Deborah Stagner of Tharrington Smith in Raleigh represented the defendant. Stagner said that “the Board of Education was gratified that the Court of Appeals affirmed the correct decision of the trial court.”

The 33-page decision is Osborne v. Yadkin Valley Economic Development District, Inc. (Lawyers Weekly No. 011-168-21). The full text of the opinion is available online at nclawyersweekly.com.

WAIVER / Superior court had no jurisdiction over appeal C o nt inu e d f r o m 1 ►

community.”

Finally, on Dec. 12, 2019, the Stokes County District Court revoked Flanagan’s probation, sentencing him to several months in jail. Upon hearing the news, Flanagan bolted from the courtroom but was quickly apprehended and ordered to serve an additional 30 days in jail for criminal contempt of court.

Flanagan appealed to Stokes County Superior Court, claiming that the trial court failed to find good cause to revoke his probation.

At his Feb. 5, 2020 hearing, Flanagan admitted to willfully violating his probation.

The court revoked his probation and activated the suspended sentences.

On appeal, Flanagan failed to specify which court his appeal was taken from, as required by the rules of appellate procedure, but the appeals court agreed to review the re-

vocation on certiorari. It determined that state law limits a court’s ability to review a probationer’s compliance with the terms of his probation, noting that a defendant may not appeal a probation violation, the activation of a sentence, or the imposition of special probation to the superior court after waiving a revocation hearing.

“Despite Defendant’s waiver of his violation hearing in the District Court, the Stokes County Superior Court heard Defendant’s appeal on February 5, 2020,” Woods wrote.

The state’s appellate courts had never considered whether the statute in question functions as a jurisdictional bar, but the appeals courts cited several cases that provided some useful guidance.

In the state Supreme Court’s 1945 ruling in State v. Miller, the court held that because a suspended sentence is favorable to a defendant, he impliedly consents and abandons his right to appeal on the principal issue of guilt or innocence

when he “sits by as the order is entered and does not then appeal.”

Five years after Miller, the Supreme Court held in State v. Smith that a defendant who didn’t object when a condition of probation was implemented “impliedly consented and … committed himself to abide by the terms.” And more recently, the appeals court held in State v.

Tozzi and State v. Romero (1987 and 2013, respectively) that a defendant waives a challenge when he fails to object to probation requirements at some point during the revocation hearing.

The upshot of this line of cases, Wood wrote, was that Flanagan’s waiver of his violation hearing likewise precluded him from appealing the activation of his suspended sentence.

“Defendant assented to waiving the violation hearing and admitted violating the conditions of his probation,” Woods wrote. “Defendant in no way contested the charges against him.”

Judges Lucy Inman and Jefferson Griffin concurred in the decision.

Attorney General Josh Stein and Assistant Attorney General Robert Ennis represented the state. Ennis did not immediately return a request for comment.

Flanagan’s attorney, Jason Yoder of Carrboro, said that he’s unsure whether Flanagan will seek discretionary review from the Supreme Court, but noted a small victory for his client that wasn’t evident from the opinion.

“The district court revocations were ordered differently than the superior court revocations,” Yoder said. “As a result of this difference, the opinion reduces Mr. Flanagan’s total time by 60 days, so he obtained real relief from this opinion.”

The 12-page decision is State v.

Flanagan (Lawyers Weekly No. 011-171-21). The full text of the opinion is available online at nclawyersweekly.com.

Follow Heath Hamacher on Twitter @NCLWHamacher

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 Se pt e m be r 27, 2021

GAMBLE / Policy was wagering contract, void from the start C o nt inu e d f r o m 1 ►

Wells Fargo seeking to invalidate a 2005 life insurance policy that the insurer claims should be void from its inception as a STOLI scheme.

Judge Mark Davis wrote that even though North Carolina law requires life insurance policies to contain an incontestability clause, the state’s Supreme Court has held that policies deemed to be “invalid wagering contracts” go against public policy and are never legally operative or enforceable.

Davis cited the high court’s 1934 decision in Wharton v. Home Sec. Life Ins. Co. as controlling authority.

“Wharton makes clear that the presence of an incontestability clause in a life insurance policy that is lacking an insurable interest from its inception does not preclude an attack on the policy’s validity even after the expiration of the contestability period,” Davis wrote.

Unfriendly wager

In 2005, Columbus Life issued a life insurance policy to 81-year-old Earl Trevathan, a policy applied for by insurance broker Wesley Chesson. Trevathan was the purported owner of the policy, and his estate the beneficiary, though Trevathan knew that he bore no financial responsibility for the premiums.

Chesson paid the first premium, of more than $94,000, drawn on the account of an entity named E&W, LLC. Columbia Life didn’t know at the

C o nt inu e d f r o m 2 ►

all of the briefs, records, and motions in the case remain sealed, so neither the order granting the motion for a rehearing nor the one rescinding the order shed any light on the court’s reasoning for its decisions.

The court’s unpublished July 6 opinion in the case, In re A.C., has been withdrawn.

North Carolina Lawyers Weekly staff

N.C. judges strike down state’s voter ID law RALEIGH (AP) — North Carolina judges struck down the state’s latest photo voter identification law on Sept.

17, agreeing with minority voters that Republicans rammed through rules tainted by racial bias as a way to remain in power.

Two of the three trial judges declared the December 2018 law is unconstitutional, even though it was designed to implement a photo voter ID mandate added to the North Carolina Constitution in a referendum just weeks earlier.

They said the law was rushed and intentionally discriminates against Black voters, violating their equal protections.

The law “was motivated at least in part by an unconstitutional intent to target African American voters,” Superior Court Judges Michael O’Foghludha and Vince Rozier wrote in their 102page order.

The majority decision, which followed a three-week trial in April, will be appealed, Republicans at the legislature said. A state appeals court had previously blocked the law’s enforcement last year. The law remains unenforceable with this ruling.

With a similar lawsuit in federal court set to go to trial this January and another state court lawsuit now on appeal, it’s looking more unlikely that the

North Carolina’s appellate courts had never considered whether the statute categorically bars an insurer from seeking to terminate a policy issued more than two years earlier because the policy is void as an illegal wagering contract, Davis found rulings from other jurisdictions instructive. Some

states expressly prohibit STOLIs, while others hold that technical compliance with anti-wagering and insurable interest laws sufficiently validate the policy. Others outright deny challenges beyond two years.

For instance, in 2006 the Supreme Court of Delaware decided in PHL Variable Insurance Co. v. Price Dawe Insurance Trust that without an insurable interest, a life insurance policy “never comes into force, making the incontestability provision inapplicable.” But in 2015, the 8th U.S. Circuit of Appeals decided that a Utah insurance company couldn’t challenge a four-year-old policy because it had collected substantial premiums on a facially valid policy.

Closer to home, Davis cited a string of North Carolina cases holding that taking out policies without an insurable interest in the insured is an illegal public wagering contract that goes against good morals and public policy and should be voided. In 1968, the state’s Supreme Court held in Bryan Builders Supply v. Midyette that a void contract is “no contract at all; it binds no one and is a mere nullity.”

In Wharton, the high court held that an incontestability clause drafted by the parties in a life insurance policy lacking insurable interest was void and that the insurer could challenge the policy’s validity beyond the incontestability period.

Wells Fargo argued that Wharton was superseded by the 1995 statute,

which, Wells Fargo argued, represented the legislature’s declaration of public policy that any and all challenges to the validity of a life insurance policy must be made within two years of the date it was issued.

Davis wasn’t persuaded, however, writing that while lawmakers are free to change public policy at any time, the statute wasn’t intended to do so.

“Unless and until our General Assembly changes the public policy of North Carolina, life insurance policies that lack an insurable interest are ‘wagering contracts’ and thus not merely voidable but rather void ab initio—that is, they never take effect,” Davis wrote.

“Our Supreme Court has never overruled Wharton; accordingly, it remains binding precedent.”

Tracy Eggleston and Michael Broadbent of Cozen O’Connor in Charlotte and Philadelphia represented Columbus Life. Zachary Buckheit, Matthew Houston, and Lee Hogewood of K&L Gates in Raleigh and Harry Davis and Robert Griffin of Schulte Roth & Zabel in New York represented Wells Fargo.

None of the attorneys for the plaintiff or the defendant responded to requests for comment.

The 26-page decision is Columbus Life Insurance Co. v. Wells Fargo Bank, N.A. (Lawyers Weekly No. 020-052-21).

The full text of the opinion is available online at nclawyersweekly.com.

Follow Heath Hamacher on Twitter @NCLWHamacher

current voter ID law will be enforced in the 2022 elections.

Allison Riggs, the plaintiffs’ lead attorney, praised the decision. Riggs said the ruling reflects “how the state’s Republican-controlled legislature undeniably implemented this legislation to maintain its power by targeting voters of color.”

Republicans have said voter ID laws are needed to build public confidence in elections and to prevent voter fraud, which remains rare nationwide. Many Democrats see the mandates as attempts at voter suppression.

In July 2016, a federal appeals court struck down several portions of a 2013 North Carolina law that included a voter ID mandate, saying GOP lawmakers had written them with “almost surgical precision” to discourage voting

by Black residents, who tend to support Democrats.

Lawyers for the voters who sued over the 2018 law said it suffered from similar racial defects as the 2013 law — following a long effort by North Carolina elected officials to weaken African American voting as a way to retain control the General Assembly. The 2013 law was carried out briefly in 2016 primary elections.

GOP legislative leaders and their attorneys disagreed, saying the latest ID rules were approved with noteworthy Democratic support and improved to retain ballot access while ensuring only legal citizens can vote.

The categories of qualifying IDs were greatly expanded compared to the 2013 law to include college student and government-employee IDs. Free IDs also were made available, and people without IDs can still vote if they fill out a form.

Sam Hayes, an attorney for House Speaker Tim Moore, said “liberal judges have defied the will of North Carolinians on election integrity” with the decision.

Moore and Senate leader Phil Berger are among defendants in the lawsuit.

“Photo voter ID laws are designed to bolster confidence in elections. Calling

this law irredeemably racist does the exact opposite,” Sen. Paul Newton of Cabarrus County said.

In the dissenting opinion, Judge Nathaniel Poovey wrote there was “not one scintilla of evidence” presented that any legislator acted with racially discriminatory intent.

The plaintiffs’ evidence relied “heavily on the past history of other lawmakers and used an extremely broad brush to paint the 2018 General Assembly with the same toxic paint,” Poovey wrote.

But the panel’s majority wrote that while they found no legislator harboring racial animus toward Black voters, Republicans targeted voters “who, based on race, were unlikely to vote for the majority party” as the federal court also ruled in 2016.

About three dozen states have laws requesting or requiring voters to show some form of identification at the polls, and about half want photo ID only, according to the National Conference of State Legislatures.

Six voters — five Black and one biracial — sued in Wake County court on the same day GOP lawmakers overrode Democratic Gov. Roy Cooper’s veto of the 2018 voter ID bill.

Some plaintiffs testified at trial about difficulties obtaining an ID or voting when the earlier photo ID law was in effect. Lawyers for the GOP said all voters would continue to be able to vote under the 2018 law.

The plaintiffs’ case emphasized the state’s history of discriminatory voting laws, as well as an analysis from a University of Michigan professor who said Black voters are 39% more likely to lack a qualifying photo ID than white registered voters. The analysis, however, left out data on some categories of qualifying IDs. Changes to these and other voting procedures in North Carolina once needed federal preapproval. But a 2013 U.S. Supreme Court ruling meant such “preclearance” actions were no longer required. The 2013 voter ID law was

approved shortly after that ruling.

time that Trevathan wasn’t seeking life insurance and procured the policy only because E&W, which received an immediate collateral assignment of the policy, would pay the premiums through a non-recourse premium finance loan. In 2012, Wells Fargo became the policy’s owner and beneficiary.

When Columbia Life became aware of the circumstances under which the policy was taken out, it sought to have the policy declared void ab initio (from the start) as the product of a STOLI scheme. Ironically, since STOLIs are often taken out for individuals known to be in poor health, Trevathan, a 97-yearold former pediatrician, was still alive at the time Columbia Life filed its action.

Wells Fargo’s sole argument was that the action should be dismissed pursuant to the state’s two-year incontestability rule, enacted by the General Assembly in 1995 and stating that a policy’s validity “shall not be contested, except for nonpayment of premium, once it has been in force for two years after its date of issue.”

Knowin’ what to throw away

Angry over 2020 ballot deal, N.C. GOP votes to limit AG RALEIGH (AP) — The flap over absentee ballots in North Carolina’s 2020 election resurfaced at the General Assembly on Sept. 15 as Republicans gave final approval to legislation that would limit Democratic Attorney General Josh Stein’s ability to enter future legal settlements following a party-line vote in the state House of Representatives.

The bill was introduced by GOP lawmakers angry about being left out of negotiations last year between Stein’s office and a labor-affiliated group that sued state election officials. Republican legislative leaders had already intervened to become defendants in the lawsuit.

The enforced settlement, which ultimately was challenged all the way to the U.S. Supreme Court, increased from three to nine the number of days mailed absentee ballots could be received after Election Day and still count.

To prevent what they call “collusive settlements” in the future, GOP members passed the bill stating legal settlements challenging state law or the constitution must be backed by the Senate leader and House speaker when they are named parties.

The 2020 settlement broke up bipartisan legislation approved to carry out the fall elections during the pandemic that had kept the ballot grace period at three days.

The bill was presented to Gov. Roy Cooper on Sept. 17. As Lawyers Weekly went to press on Sept. 23, Cooper had yet to take any action on the bill.

Cooper’s office didn’t immediately respond to a request for comment on the measure, but a veto is likely, especially given that Cooper served as attorney general for 16 years, and because the bill attempts to erode the AG’s powers while representing state agencies in court.

OPINION DIGESTS / 7

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Opinions N.C. COURT OF APPEALS

7

N.C. BUSINESS COURT

N.C. COURT OF APPEALS

Administrative Judicial Review – Service of Process – Pleadings Amendment – Good Cause Argument In order to appeal the respondentagency’s administrative ruling, petitioner was required to comply with G.S. § 150-46, which requires service of process upon the parties of record to the administrative proceedings. Although petitioner served counsel of record, it failed to timely serve the agency’s service of process agent and therefore failed to invoke the superior court’s jurisdiction to review the agency decision.

We affirm the superior court’s grant of respondent’s motion to dismiss.

Although petitioner subsequently amended its petition and served respondent’s agent on the same day that it filed the amended petition, service of the amended petition on the agent did not relate back under N.C. R. Civ. P. 15.

To allow Rule 15 to control timeliness of service, when a party did not complete service pursuant to § 150B-46, would contravene our prior precedents and the legislative intent, and could lead to gamesmanship to overcome dilatory lapses. Rule 15 applies “to all proceedings in superior court except when a differing procedure is prescribed by statute.” N.C. R. Civ. P. 1.

Petitioner’s arguments would effectively nullify § 150B-46. The amended petition did not assert additional or amend any causes of action. It was “amended” merely in an attempt to avoid the strict application of § 150B46. Petitioner’s argument is overruled.

The superior court has the authority to grant an extension of time, for good cause shown, to a party to serve its petition beyond the 10 days provided for under § 150B-46. Here, the superior court’s refusal to grant an extension was not arbitrary. It was a reasoned decision rendered after careful evaluation of the parties’ competing positions.

13

N.C. COURT OF APPEALS UNPUBLISHED

In particular, petitioner failed to simply “own up” to a critical mistake in perfecting mandatory service of its petition on opposing parties. Petitioner has shown no abuse of discretion in the superior court’s good cause determination.

Affirmed.

Aetna Better Health of North Carolina, Inc. v. North Carolina Department of Health & Human Services (Lawyers Weekly No. 011-173-21, 12 pp.) (John Tyson, J.) Appealed from Wake County Superior Court (Keith Gregory, J.) Patricia Shields, Linda Stephens, Duane Jones, Tatiana Terry, Nash Long, Kevin Cosgrove, Marc Kessler and Sean Medina for petitioner; Robert Knowlton, Elizabeth Black, Boyd Nicholson, Collen Crowley and John Green respondent; Rodney Alexander, Mary Mandeville, Rodger Abbot, Luke Levasseur, Marcia Madesen, Jennifer Van Zant, Jessica Thaller-Moran, Eric Fletcher, Lee Whitman, Paul Puryear, Jessica Sharron, Hill Allen, Colin Shive, Shannon Joseph, Karen Walker, Matthew Wolfe, Robert Leandro, and Melanie Black Dubis for intervenors. 2021-NCCOA-486

Domestic Relations Contempt Motion – Civil or Criminal – Notice – Child Custody – Purge Conditions Even though the plaintiff-Mother’s contempt motion alleged that the defendant-Father’s actions—which prevented the parties’ children from communicating with Mother as contemplated by the parties’ child custody order—constituted both civil and criminal contempt, since Mother’s motion and the trial court’s show cause order gave Father detailed notice of the factual allegations regarding his failure to allow phone or FaceTime access, and since the trial court only heard Mother’s claim of civil contempt, we need not consider Father’s argument that his due process rights were violated by the trial court’s failure to grant him a

15 ther ignored Mother’s emails, in which she informed him that she was unable to reach the children. Father unilaterally, and without informing Mother, decided that the children’s iPad would be turned on only from 6:00 to 6:30 each evening while the children were with him.

The evidence supports the trial court’s findings, and the findings support its conclusions that the custody order was still valid and enforceable, that the purposes of the custody order could still be served by Father’s compliance, that Father had “at all times, been fully aware” of the requirements of the custody order, and that Father’s failure to comply with the custody order’s telephone and FaceTime provisions was willful and constituted civil contempt of court.

Rather than requiring Father to report to jail immediately (and arranging for someone else to bring him into compliance with the custody order), the trial court gave Father the option of unblocking Mother’s number from his phone and ensuring that Mother could FaceTime with the children. If he did so, he was not required to report to jail.

This did not render the order internally contradictory. Whichever option Father chose, he had the present ability to comply with the custody order and with the purge conditions in the contempt order.

It is true that the custody order did not require that the parties communicate by telephone or consult to determine when Mother can FaceTime the children. However, the custody order did provide that “each party shall generally have unrestricted but reasonable telephone contact with the minor children. The parties agree to make the minor children available to the non-custodial parent for phone or FaceTime contact for fifteen minutes each evening.” The purge conditions in the contempt order do not change this provision of the custody order but only set out the actions Father must take to purge the contempt by setting up the iPad in a manner to allow the reasonable contact directed by the custody order.

The purge provisions of the con-

continuance to prepare an appropriate defense after he was informed which allegations were related to civil contempt, which were related to criminal contempt, and which would be considered at the show-cause hearing.

We affirm the trial court’s civil contempt order.

Father argues Mother should have been required to elect before the hearing whether to pursue civil or criminal contempt, and although we do not address whether Mother was required by law to make this election, she did in fact inform Father, prior to the hearing, which allegations would form the basis of her action for civil contempt.

Although the contempt motion did present other allegations of violations of the custody order, and in it Mother requested criminal contempt, the trial court did not address those issues at the contempt hearing or in its contempt order. Father’s arguments ask this court to speculate about issues which might have arisen if the trial court had denied his motion to continue and his motion to dismiss and then held a hearing on both civil and criminal contempt on all the allegations in Mother’s contempt motion. However, the trial court considered only civil contempt based on the two specifically identified allegations.

Our review is limited to the proceedings that actually occurred, are relevant to the trial court’s findings, conclusions, and rulings resulting in the contempt order, and the contempt order itself.

We dismiss Father’s due process arguments.

Although the parties’ custody order did not specify an exact time for telephone contact between the children and the noncustodial parent, the order did provide for “unrestricted but reasonable telephone contact” and for the parties “to make the minor children available to the non-custodial parent for phone or Facetime contact for fifteen minutes each evening.” The parties used this provision successfully for three and a half years, until Father remarried.

After he remarried, Father blocked Mother’s number from his phone; therefore, her only way communicate with him was via email. However, Fa-

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8 / OPINION DIGESTS tempt order apply only until Father has taken the actions required to purge the contempt. The contempt order does not modify the custody order.

Affirmed.

Blanchard v. Blanchard (Lawyers Weekly No. 011-174-21, 31 pp.)

(Donna Stroud, C.J.) Appealed from the District Court in Mecklenburg County (Paige McThenia, J.) Preston Odom, Jonathan Feit and Haley White for plaintiff; Rebecca Watts for defendant.

2021-NCCOA-488

Domestic Relations Attorney’s Fee Award – Appeals – Jurisdiction – G.S. § 50-13.6 The plaintiff-Mother’s entitlement to attorneys’ fees under G.S. § 50-13.6 was not dependent upon her being the prevailing party on her contempt motion. Therefore, even though the defendant-Father appealed the trial court’s contempt order, the trial court retained jurisdiction, while Father’s appeal was pending, to rule on Mother’s request for attorneys’ fees.

We affirm the award of attorneys’ fees.

G.S. § 1-294 states, “When an appeal is perfected ... it stays all further proceedings in the court below upon the judgment appealed from ... but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from.”

Father cites Balawejder v. Balawejder, 216 N.C. App. 301, 721 S.E.2d 679 (2011), for the proposition that his appeal deprived the trial court of juris-

diction to consider Mother’s request for attorneys’ fees. However, Balawejder noted, “When, as in the instant case, the award of attorney’s fees was based upon the plaintiff being the ‘prevailing party’ in the proceedings, the exception set forth in N.C. Gen. Stat. § 1–294 is not applicable.”

Conversely, when an award of attorney’s fees will not be affected by the ultimate decision in the appeal of the underlying action, no matter which party prevails nor how the issues are decided, the exception in § 1–294 is applicable, and jurisdiction to decide the issue of attorney’s fees remains with the trial court—without regard to the appellate status of the underlying substantive ruling of the trial court. Our clear precedent demonstrates that the trial court is not divested of jurisdiction if the award of attorney’s fees is not dependent upon the outcome of the appeal of the rulings on the substantive issues.

Nothing in the plain language of G.S. § 50-13.6 suggests a determination that an interested party has acted in good faith or has insufficient means to cover the costs associated with the action are determinations contingent on the ultimate outcome of an appeal, by either party, from the underlying judgment. In prior cases, awards of attorney’s fees under § 50-13.6 have been upheld even for the party who did not prevail at trial.

The clear intent of § 50-13.6 is to allow the trial court the discretion to ensure one parent in a custody action will not have an inequitable advantage over the other parent—based upon a parent’s inability to afford qualified counsel. The trial court’s authority to award attorney’s fees under § 50-13.6 does not

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 Se pt e m be r 27, 2021

depend upon who “wins” any particular ruling in a custody proceeding.

Since the award of attorney’s fees in the trial court’s fee order was not dependent upon the outcome of the contempt proceeding in the underlying custody action, Father’s appeal of the trial court’s contempt order did not divest the trial court of jurisdiction to enter the fee order granting Mother attorney’s fees under § 50-13.6.

Given that Father’s sole argument on appeal was that the trial court lacked jurisdiction to enter its fee order, we affirm the fee order.

Blanchard v. Blanchard (Lawyers Weekly No. 011-175-21, 16 pp.)

(Donna Stroud, C.J.) Appealed from the District Court in Mecklenburg County (Paige McThenia, J.) Preston Odom, Jonathan Feit and Haley White for plaintiff; Rebecca Watts for defendant.

2021-NCCOA-487

Tort/Negligence Abuse of Process – Statute of Limitations – Conspiracy & Malicious Prosecution – Municipal – Internal Police Investigation Where plaintiffs allege that—after plaintiffs were charged with wrongfully accessing a government computer and other crimes—defendants withheld exculpatory information, plaintiffs’ abuse of process claim did not accrue until the last tortious act after process was instituted. As a result, plaintiffs’ abuse of process claim was timely filed.

We reverse the trial court’s dismissal of plaintiffs’ abuse of process claim.

We affirm the dismissal of their con-

spiracy claim and summary judgment for defendants on plaintiffs’ malicious prosecution claim.

After an investigation into racial discrimination in the Greensboro Police Department, plaintiff Sanders was indicted for one count of accessing a government computer in violation of G.S. § 14-454.1(b); felonious obstruction of justice; and felonious conspiracy “to undermine a legitimate criminal investigation.” Plaintiff Fox was indicted for felonious obstruction of justice and felonious conspiracy to obstruct justice.

Plaintiffs were arrested on September 21, 2007.

Sanders was acquitted of accessing a government computer. The remaining charges against both plaintiffs were dismissed on February 23, 2009.

Abuse of Process

Plaintiffs rely on Barnette v. Woody, 242 N.C. 424, 88 S.E.2d 223 (1955), to argue that the applicable statute of limitations only started to run upon the last tortious act after process was instituted. We agree.

Plaintiffs pleaded continuing tortious acts after their arrest date, the last such act only concluding upon the dismissal of all remaining charges against plaintiffs on February 23, 2009. Thus, the statute of limitations for plaintiffs’ abuse of process cause of action did not run until February 23, 2012, three years after the termination of the last alleged act of abuse of process of which the plaintiffs complained.

While our dissenting colleague proposes that we conclude the limitations period commenced upon the institution of the process, to do so would muddle the distinction between the claims of

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OPINION DIGESTS / 9

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 S ep tember 27, 2021

malicious prosecution and abuse of process and would ignore precedent establishing an improper act after the initiation of the process as an essential element of a colorable abuse of process claim.

In addition to their allegations regarding the continued withholding of exculpatory information, plaintiffs alleged that defendants Johnson, Bellamy, and Hastings “acted with an ulterior motive” by failing to produce such information in order to gain “leverage to pressure Fox and Sanders out of the [Greensboro Police Department],” and “in an attempt to elicit information from Fox and Sanders.” These acts constitute continuous actions by defendants Johnson, Bellamy, and Hastings, as the duty to provide exculpatory information arose during the investigation of the administration of former GPD Chief David Wray and did not cease until plaintiffs were no longer under the threat of criminal prosecution. Because plaintiffs sufficiently alleged defendants Johnson, Bellamy, and Hastings acted with an ulterior motive, the trial court erred in dismissing plaintiffs’ abuse of process claim.

Malicious Prosecution

In support of their malicious prosecution claim, plaintiffs allege defendant Johnson wrongfully ordered the investigation of plaintiffs, directed city attorneys to lie to plaintiffs, controlled the flow of information to the SBI, instigated plaintiffs’ arrest, and failed to provide the SBI with exculpatory information. They further allege that defendant Johnson provided city council with false and misleading information and improperly provided the media and

public with false and misleading information.

Nevertheless, plaintiffs do not argue the actions taken by defendants Johnson, Bellamy, and Hastings were against GPD policy or standard procedure where there are concerns of racial and criminal misconduct within a police department. Because plaintiffs failed to show any statement was made maliciously, in the sense of personal ill-will, plaintiffs’ malicious prosecution claim against defendants Johnson, Bellamy, and Hastings in their official capacities is barred by the doctrine of governmental immunity.

Civil Conspiracy

Nelson Mullins welcomes

Plaintiffs’ civil conspiracy claims are essentially derived from allegations that defendants knowingly gave false information to an independent investigation firm and SBI. However, a civil action may not be maintained for a conspiracy to give false testimony in order to secure plaintiffs’ arrest.

Affirmed in part, reversed in part and remanded.

Joshua Walthall in Raleigh Joshua is an experienced trial attorney who brings a professional licensing background to the Raleigh office, representing lawyers, physicians, nurses, dentists, land surveyors, engineers, real estate agents, accountants, and other professionals in legal proceedings before administrative licensing boards. Joining after nearly a decade as a prosecutor at the North Carolina State Bar, he assists clients in navigating issues related to highly regulated professions, including the unauthorized practice of law and issues before the Board of Law Examiners. Joshua also provides confidential, practical advice to lawyers and law firms facing professional ethics dilemmas, including Bar or criminal investigations, employee theft, unfair competition and business practices, firm dissolutions, and other risk management.

Dissent

(Jackson, J.): Plaintiffs’ complaint alleges two separate abuse of process claims: (1) for the threat and initiation of criminal proceedings against plaintiffs in September 2007 and (2) for alleged violations of Brady v. Maryland, 373 U.S. 83 (1963), in the trial of plaintiff Sanders, while plaintiff Fox was awaiting trial.

With respect to the first claim, I would hold that the statute of limitations had run on 17 September 2010— three years after plaintiffs were indicted on these charges. I would therefore

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10 / OPINION DIGESTS affirm the trial court’s grant of the motion to dismiss this claim because it was tolled until 20 September 2011, and plaintiffs did not initiate this action until January 2012—well after September 2010, when the three-year statute of limitations had run, and several months after the September 2011 re-filing deadline, when the tolling period had expired.

With respect to the second claim, however, I would hold that the allegations in the complaint fail to demonstrate whether or when the second claim for abuse of process accrued. I would therefore vacate the trial court’s order granting the motion to dismiss in part and remand the case to the trial court for further proceedings on this claim. Accordingly, I respectfully dissent from the portion of the majority opinion related to the statute of limitations on plaintiffs’ abuse of process claim(s).

Fox v. City of Greensboro (Lawyers Weekly No. 011-176-21, 53 pp.)

(April Wood, J.) (Darren Jackson, J., concurring in part & dissenting in part) Appealed from Guilford County Superior Court (Joseph Turner & David Hall, JJ.) John Vermitsky for plaintiffs; Lorin Lapidus for defendants. 2021-NCCOA-489

Tort/Negligence Medical Malpractice – Bifurcated Trial – Damages Evidence – Relevance & Authentication During the liability phase of plaintiff’s bifurcated medical malpractice trial, damages evidence—concerning plaintiff’s current ability to engage in certain activities—would not normally have been admissible. However, plaintiff opened the door to such evidence.

The trial court properly allowed defendants to introduce a surveillance video showing plaintiff engaging in activities such as walking, lifting, navigating a curb, and opening the driver’s side door of her car as relevant to contradict her testimony about unremitting pain, that her toes cannot touch anything, and implying that she needed a scooter to move after the foot surgery performed by the defendant-surgeon.

We affirm the judgment for defendants.

With regard to authentication, defendants offered no testimony from the creator of the video to show that the recording process was reliable and that the video was what its proponent claimed. Furthermore, defendants’ attempts to authenticate the video—via plaintiff’s confirmation, during crossexamination, (1) that the surveillance video apparently portrayed her, (2) of the video’s indications of time and date and (3) that the time period was relevant to show her current health status—without more, would have been insufficient.

Yet, plaintiff’s testimony regarding her grandchild, who was with her in some of the videos, constitutes an admission regarding her health status at a relevant time period–2017 and 2018–as she admits when her grandchild was born and approximately how old he was in the video. Plaintiff’s admission regarding a depiction of her at a relevant time period vis-à-vis her health status, years after the surgery and close to the trial date, constituted an authentication of the portions of the videotape surveillance that included her grandchild, and were appropriate to use, if relevant, for impeachment purposes. The videotape surveillance was authenticated via plaintiff’s admissions regarding her grandchild.

Furthermore, the video was also relevant. Plaintiff’s statement that her toes cannot touch anything allowed defendants to impeach her testimony via the surveillance video.

The video, which showed plaintiff engaging in activities such as walking, lifting, navigating a curb, and opening the driver’s side door of her car, was relevant to contradict her credibility, particularly her truthfulness about unremitting pain, that her toes cannot touch anything, and implications that she needed a scooter to move after her injury and surgery. The trial court did not err in allowing defendants to play the videotape surveillance for the jury while impeaching plaintiff’s testimony.

Since plaintiff did not request a limiting instruction regarding the video, the trial court did not err by failing to provide one.

Affirmed.

Hill v. Boone (Lawyers Weekly No. 011-177-21, 23 pp.) (Hunter Murphy, J.) Appealed from Wake County Superior Court (Stephan Futrell, J.) Ellis Boyle and Benjamin Van Steinburgh for plaintiff; John Minier and Alexandra Couch for defendants. 2021-NCCOA-490

Domestic Relations Parent & Child – Guardianship – Constitutional Right to Parent – Conduct Inconsistent The respondent-Mother does not challenge the trial court’s adjudication of “James” and “Justin” as neglected and dependent. The neglect adjudication was premised on a finding that the children lived “in an environment injurious to their welfare because they ... live[d] in the home where their brother [“Jackson”] died as a result of abuse.” The trial court further found that Mother had previously called a medical hotline for advice on treating a burn to Jackson “instead of taking the child to the doctor because she did not want another DSS case.” These findings, plus evidence that Mother’s housing was too small for James and Justin and that she repeatedly refused to engage in therapy, domestic violence services, and other parts of her plan, support the trial court’s conclusion that Mother had acted in a manner inconsistent with her constitutionally protected status as a parent.

We affirm the trial court’s order awarding guardianship of James and Justin to their maternal grandfather and ceasing reunification efforts. We vacate the visitation portion of the order and remand to the trial court to specify the minimum frequency and duration of visitation.

Although the visitation provision specified a minimum amount of visitation of four hours per month, the provision does not unambiguously articulate the minimum frequency and length of the visits, as required by G.S. § 7B905.1(c).

Finally, contrary to Mother’s argument, the trial court did not grant the guardian any unfettered discretion to modify or suspend visitation. Instead, the trial court left only the day and time of each visit to be agreed upon by Mother and the guardian. The trial court did not abuse its discretion by granting this limited degree of flexibility to the parties.

In re J.R. (Lawyers Weekly No. 011178-21, 23 pp.) (Allegra Collins, J.) Appealed from Mecklenburg County District Court (David Strickland, J.) Keith Smith for petitioner; Coker Holmes for guardian ad litem; Christopher Watford for respondent. 2021-NCCOA-491

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Civil Practice Involuntary Commitment – Danger to Others – Insufficient Showing Respondent was involuntarily committed after he posted a Facebook rant threatening a judge. At his hearing, the attending psychiatrist testified that he was a danger to others; however, she also testified that he had “not been aggressive,” that he had not made any threats to others since his admission, and that she had not forced medication on him because “[i]t’s unethical to force medication on a patient who is not a danger to himself or others.” The state concedes that its evidence was insufficient to support the trial court’s finding and conclusion that respondent was a danger to others.

We reverse the involuntary commitment order.

In re K.V. (Lawyers Weekly No. 011-179-21, 5 pp.) (Lucy Inman, J.) Appealed from Burke County District Court (Richard Holloway, J.) Erin McKee for the state; John Carella for respondent. 2021-NCCOA-492

Domestic Relations DVPO Denial – Bench Hearing – Insufficient Findings The trial court held a hearing without a jury on the minor plaintiffs’ claims for domestic violence protective orders against their stepmother. Despite the requirement of N.C. R. Civ. P. 52(a)(1) that “in all actions tried upon the facts without a jury ... the court shall find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment,” and despite entering its order on a DVPO form which provides multiple locations for the trial judge to include preprinted and freeform findings of fact, the trial court did not make any findings of fact other than who was present at the hearing.

The trial court’s failure to make findings of fact prevents us from meaningfully reviewing the court’s denial of plaintiffs’ claims for DVPOs. We vacate the trial court’s orders and remand for findings of fact and conclusions of law based on those findings.

D.C. v. D.C. (Lawyers Weekly No. 011-180-21, 8 pp.) (Hunter Murphy, J.) Appealed from Cabarrus County District Court (S. A. Grossman, J.) Austin Entwistle for plaintiffs; no brief for defendant. 2021-NCCOA-493

Criminal Practice Rape & Sexual Assault – Inconsistent Verdicts – Not Mutually Exclusive Though defendant was indicted for first-degree rape and sexual assault—both requiring proof of serious injury—he was convicted of firstdegree rape and second-degree sexual assault (which does not require proof of serious injury). Even if these verdicts are inconsistent, they are permissible because they are not mutually exclusive.

We find no error in defendant’s convictions for first-degree rape and second-degree sexual assault.

These crimes are not mutually exclusive because guilt of one criminal act does not exclude guilt of the other.

If defendant required greater specificity, he could have moved for a bill of particulars under G.S. § 15A-925 and/ or for a special verdict sheet under G.S.

§ 15A-1340.16.

State v. Brake (Lawyers Weekly No. 011-181-21, 15 pp.) (John Tyson, J.) Appealed from Wilson County Superior Court (Marvin Blount, J.) Denise Stanford for the state; Daniel Shatz for defendant. 2021-NCCOA-496

Criminal Practice Murder – Evidence – Other Victim – Discovery of Body Where victim Tucker’s body was discovered while police were investigating the disappearance of victim Rippy, evidence of Rippy’s disappearance was relevant in defendant’s trial for the murder of Tucker.

We find no error in defendant’s conviction for first-degree murder.

Relevance

It was not possible to provide a natural and complete development of the facts without testimony concerning Rippy’s disappearance and the police investigation that followed, leading to the discovery of Tucker’s body. The disappearances and investigations are inextricably intertwined, and evidence of Rippy’s disappearance was necessary to complete the story of the charged crime for the jury.

Without such evidence, witnesses’ credibility could have been called into question, and the probity of the state’s physical evidence could have been diminished.

Both victims (1) were residents of the Wilmington area; (2) were of the same sex; (3) disappeared within nine months of each other at most, prompting missing persons reports from their mothers; (4) had legal, financial, and substance abuse problems, facts particularly pertinent given witness Sitosky’s testimony that defendant supplied her with money under like circumstances; (5) relied on defendant for transportation; (6) had “sustained relationships” with defendant; and (7) were subjects of his sexual attention. The similarities noted by the trial court were sufficient to warrant admission of evidence about Rippy under N.C. R. Evid. 404(b).

Closing Argument

In the state’s summation, the prosecutor repeatedly argued that victim Tucker’s blood was present in defendant’s car, and defendant objected to these statements numerous times. The trial court overruled these objections.

The state introduced expert testimony and lab results showing the conclusive presence of human blood on sections of carpeting and padding of the driver’s seat flooring in defendant’s car, though no DNA samples were recoverable from those sections. Other evidence produced opposite results, as Tucker’s DNA was found on a section of the floor padding that returned inconclusive (but not negative) results for human blood. The state’s experts testified that these discrepancies may well have been the result of chemical cleaners, and other evidence showed defendant had (1) cleaned his car several times after Tucker disappeared and (2) had bleach in his workshop and carpet cleaners in his home.

Finally, the section of flooring containing Tucker’s DNA does not appear prone to incidental contact with other sources of DNA, as it was located beneath both a rubber floormat and a layer of carpeting below the driver’s seat.

All of this evidence leads to a reasonable inference that the DNA—found alongside sections testing positive for human blood—was sourced from Tucker’s blood. The trial court did not err

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in overruling defendant’s objections to this portion of closing argument.

Defendant also argues that the trial court erred in allowing the prosecutor, over defendant’s objections, to argue that Rippy was dead.

Despite defendant’s argument to the contrary, the trial court’s evidentiary rulings did not preclude the state from arguing in closing that Rippy was deceased. From our review of the record, it appears the trial court only limited evidence of defendant’s conviction for Rippy’s murder and did not intend to bar evidence suggesting—or arguments asserting—that she was dead.

Defendant also asserts that the trial court erred in denying his motion for a mistrial after it sustained defendant’s objections to comments from the prosecutor that suggested defendant (1) bore the burden of proving his own innocence and (2) was responsible for the inclusion of second-degree murder as a lesser-included offense on the verdict sheet. Defendant’s counsel immediately objected to the comments, the trial court sustained the objections after hearing arguments outside the presence of the jury, and the trial court gave curative instructions to the jury once closing statements resumed. Under our precedent, the trial court did not err in denying defendant’s motions for mistrial under these circumstances.

The prosecutor’s closing argument referred to “evil” several times. Presuming, arguendo, the prosecutor’s statements were referring to defendant—rather than the murder itself— as evil, such derogatory comments do not rise to the level of gross impropriety requiring the trial court’s intervention ex mero motu.

The jury was already well aware of the races of defendant, who is Black, and Tucker, Sitosky, and Rippy—all of whom are white—without the use of the state’s visual aid, which included photos of defendant, Tucker, Sitosky and Rippy. Defendant was present in the courtroom for trial, Sitosky testified before the jury, and the state introduced photographs of Tucker and Rippy into evidence and published them to the jury. Finally, the prosecutor never drew attention to or referenced the races of defendant or the three women in closing. While we are cognizant of racial bias, we do not see any gross impropriety in the prosecutor’s conduct given that (1) defendant did not object to the prosecutor’s comments about evil or the use of the posterboard; (2) neither the prosecutor nor the posterboard commented on race; (3) the posterboard did not implicate race beyond the inclusion of photographs of persons the jury had already observed over the several days of trial; and (4) defendant points to no caselaw where gross impropriety has been found on this theory. We decline to hold that the trial court erred in failing to intervene ex mero motu.

Premeditation & Deliberation

The state introduced substantial evidence of (1) undignified treatment and concealment of Tucker’s body and (2) efforts to destroy evidence of the murder.

Police located Tucker’s body in a shallow grave beneath a tree stump in the back corner of a rural field. The body had been stripped naked, arranged in a fetal position, and was bound with duct tape. Tucker’s corpse was wrapped in three black trash bags before being transported to the grave and buried.

The state introduced additional evidence suggesting defendant sought to conceal his handling of the body by using chemical cleaners to wash the interior of his vehicle following Tucker’s disappearance. The above conduct, coupled with the brutal nature of the killing, suffices to support a reasonable inference of premeditation and deliberation.

No error.

State v. Bradley (Lawyers Weekly No. 011-182-21, 43 pp.) (Lucy Inman, J.) Appealed from New Hanover County Superior Court (Douglas Sasser, J.) Joseph Hyde for the state; Heidi Reiner for defendant. 2021-NCCOA-495

Criminal Practice Search & Seizure – Traffic Stop – Unreasonable Extension – Search of Pockets – Racial Disparity Argument Where a sheriff’s lieutenant stopped defendant for a seatbelt infraction and did not articulate any reasonable suspicion of other criminal activity, the lieutenant’s request to search defendant unreasonably extended the duration of the traffic stop.

We reverse the trial court’s denial of defendant’s motion to suppress, vacate his conviction for felony possession of cocaine, and remand.

It might not have been unreasonable for the lieutenant to conduct an external frisk of defendant for officer safety as a part of the traffic stop’s mission.

However, the lieutenant never conducted an external frisk and possibly missed locations where defendant could have concealed weapons. Instead, after

the lieutenant requested permission to search defendant and defendant raised his hands, the lieutenant searched only defendant’s pockets, in one of which he found a plastic wrapper containing what appeared to be powder cocaine.

Indeed, the state makes no argument that—absent defendant’s alleged consent—the search in this case would have been permissible under the Fourth Amendment. Rather, the state contends the lieutenant’s act of requesting consent to search did not measurably extend the traffic stop. However, without additional reasonable articulable suspicion of additional criminal activity, an officer’s request for consent exceeds the scope of the traffic stop and the prolonged detention violates the Fourth Amendment.

The lieutenant had no reasonable suspicion of criminal activity unrelated to the initial reason for the traffic stop.

Without any additional reasonable suspicion of unrelated criminal activity, Lieutenant Stone’s request for consent for a full search unreasonably delayed the stop and tainted the consent defendant gave. Therefore, the lieutenant had not lawfully detained defendant such that the state only had to show defendant’s consent was freely given and not the product of coercion.

The request to search and the full search of defendant were not related to the mission of the stop and were wholly unsupported by any reasonable, articulable suspicion of other criminal activity afoot beyond the seatbelt infraction for which the lieutenant initially stopped defendant. Thus, because the lieutenant’s request for consent and his subsequent search of defendant measurably prolonged the traffic stop for

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12 / OPINION DIGESTS reasons unrelated to the stop’s mission without reasonable suspicion, any consent defendant gave for this full search was involuntary as a matter of law.

Therefore, the trial court erred in denying defendant’s motion to suppress the cocaine found as a result of this unreasonable search.

Vacated and remanded.

Concurrence

(Carpenter, J.): Defendant’s choice to inject arguments of disparate treatment due to race into matters where such treatment is not at issue functioned only to overshadow the other important constitutional issues of this case and was not helpful to maintaining public confidence in the judiciary or the practice of law generally.

Concurrence

(Griffin, J.): The lieutenant articulated no additional reasonable suspicion of criminal activity for asking to search defendant, thereby illegally delaying the stop.

Defendant’s brief implies that U.S. citizens are treated differently under our laws based on the color of their skin. I reject this argument. The law is color blind and applies equally to every citizen in the United States of America.

This argument in defendant’s brief is inflammatory and unnecessary.

It is hard to blame defendant for raising this argument. The brief quoted former North Carolina Chief Justice Beasley, who also implied in a speech on 2 June 2020 that our justice system does not treat people equally in the courtroom based on the color of their skin.

Defendant’s statement highlights the problem with the judiciary becoming involved in public policy. The speech by the former Chief Justice states our justice system does not treat people equally based on the color of their skin. It also encourages and charges the courts to become an active body by involving our judicial branch in policy decisions.

The judiciary should at all times practice judicial restraint. Here, this court reaches the correct legal outcome regardless of the color of defendant.

We are fortunate to live in the United States of America where the law is applied the same to all citizens.

State v. Johnson (Lawyers Weekly No. 011-183-21, 31 pp.) (Toby Hampson, J.) (Jeff Carpenter & Jefferson Griffin, JJ., concurring separately) Appealed from Iredell County Superior Court (Joseph Crosswhite, J.) Jarrett McGowan and Robert Pickett for the state; Michele Goldman for defendant.

2021-NCCOA-501

Criminal Practice Murder – Castle Doctrine – ‘Immunity’ – Jury Determination – Jury Instructions Where the castle doctrine provides immunity from “criminal liability” but not immunity from prosecution, and where, as here, there are fact questions concerning the applicability of the castle doctrine, defendant was not entitled to have the trial judge, rather than a jury, determine whether she was immune under G.S. § 14-51.2. The trial court properly permitted the case to proceed to trial so that a jury could resolve the disputed facts.

We find no error in defendant’s conviction for first-degree murder.

Under the castle doctrine, lawful occupants of a home are presumed to believe the use of deadly force was necessary to prevent imminent death or serious bodily injury to themselves or

others.

The evidence indicated that the victim knew he was unwelcome at the home of defendant (grandmother to his child), he came onto her property anyway, an altercation ensued, defendant drew a gun, and the gun went off. Then, a bystander saw defendant standing over the victim, who was lying unarmed in defendant’s driveway and pleading, “Please, please, just let me go.

Let me go.” The bystander saw defendant take several steps back and then shoot the victim in the head from three to six feet away.

Taken in the light most favorable to the state, this was sufficient evidence from which the jury could determine that the state had rebutted the presumption of the castle doctrine and shown that defendant did not have a reasonable fear of imminent death or serious bodily harm when she shot the victim in the head as he lay on the ground in her driveway.

State v. Cook, 254 N.C. App. 150, 802 S.E.2d 575 (2017), held that “a defendant who testifies that he did not intend to shoot the attacker is not entitled to an instruction under N.C. Gen. Stat. § 14-51.2 because his own words disprove the rebuttable presumption that he was in reasonable fear of imminent harm.” Our Supreme Court affirmed the Court of Appeals in a per curiam decision.

Here, the trial court’s jury instructions did not include Cook or any other non-statutory method for overcoming the castle doctrine’s presumption.

Instead, the trial court’s instructions mirrored § 14-51.2. The trial court’s instructions were accurate and not erroneous.

No error.

State v. Austin (Lawyers Weekly No. 011-184-21, 19 pp.) (Richard Dietz, J.) Appealed from Caldwell County Superior Court (Lisa Bell, J.) Mary Carla Babb for the state; Daniel Shatz for defendant. 2021-NCCOA-494

Criminal Practice Search & Seizure – Traffic Stop – Extension – Armed Passenger’s Arrest Warrant Although the defendant-driver was stopped because of a broken taillight, the traffic stop was not unnecessarily extended. One of defendant’s passengers, Antoine Bishop, had an outstanding arrest warrant, and he was armed; accordingly, the detective who initiated the stop had to watch over defendant and his other passenger while Bishop was being arrested and his gun was being secured. The detective then returned to her car to conduct warrant checks on defendant and his other passenger and to begin the process of issuing a citation to defendant for the broken taillight and driving with a revoked license. Although the detective’s request for a canine sniff of the vehicle—made early during the stop—was unrelated to the reasons for the traffic stop, the request did not measurably extend the duration of the stop and was therefore permissible.

We affirm the trial court’s denial of defendant’s motion to suppress. However, given the trial court’s failure to personally address defendant, we vacate the civil judgment ordering defendant to pay attorney’s fees, and we remand for further proceedings.

Assuming arguendo that any of the officers’ actions unreasonably extended the duration of the stop, those actions were justified by reasonable suspicion of criminal activity. The trial court’s findings of fact state, “The traffic stop was recorded on Body Worn Camera ... and

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the footage was admitted as State’s Exhibit 1.” A review of that footage shows that when Detective Veal walked over to greet the officer with the canine, she informed the officer that she had previously encountered defendant’s vehicle that evening and witnessed “a hand-tohand transaction.”

The traffic stop also occurred late in the evening and in a high crime area.

Bishop had multiple active warrants for his arrest and a loaded gun on his person. Moreover, after Officer LaValley collected the other passenger’s identification, that passenger stated, “I can walk home … I’m just saying I can walk.”

Although each of these factors standing alone might not have provided the officers with reasonable suspicion, the totality of the circumstances indicates that reasonable suspicion justified prolonging the stop.

State v. France (Lawyers Weekly No. 011-185-21, 20 pp.) (Jefferson Griffin, J.) Appealed from Forsyth County Superior Court (William Wood, J.) Adrian Dellinger for the state; Michelle Liguori for defendant. 2021-NCCOA-498

Criminal Practice Appeals – Remand – Standard of Review – Video Footage Our Supreme Court has already evaluated the strength of the evidence in this case, and it did so while applying a “reasonable possibility” standard of review. In light of our Supreme Court’s interpretation of the evidence, any alleged error does not rise to the level of plain error (under a reasonable probability standard of review) in the face of “virtually uncontested” evidence that defendant shot at a police officer.

On remand from our Supreme court “to address the remaining issues raised by defendant on appeal,” we find no plain error.

State v. Goins (Lawyers Weekly No. 011-186-21, 5 pp.) (Hunter Murphy, J.) Appealed from Cabarrus County Superior Court (Christopher Bragg, J.) On remand from the N.C. Supreme Court.

Catherine Jordan for the state; Joseph Lattimore for defendant. 2021-NCCOA-499

Criminal Practice Jury Instructions – Self-Defense – Lack of Notice – Appeals – Waiver Defendant did not give notice that he intended to present the affirmative defense of self-defense, he waited until the day after the charge conference to request a jury instruction on selfdefense, and he failed to object when given the opportunity to do so after the trial court gave a jury charge that did not instruct on self-defense. Defendant waived appellate review of the lack of a self-defense jury instruction.

We find no error in defendant’s convictions of assault by strangulation, communicating threats, assault on a female, interfering with emergency communication, and attaining habitual felon status.

In any event, defendant cannot show prejudice because the evidence against him was both overwhelming and uncontroverted.

Dissent

(Murphy, J.): Where defendant specifically requested a jury instruction on self-defense and argued that point before the trial court, he properly preserved this issue for appellate review.

There was conflicting testimony as

to whether defendant assaulted Ashley Thomas, the mother of his child, before she picked up a gun or whether Thomas was already pointing the gun at defendant when he caused injuries to Thomas. With conflicting evidence, if was for the jury to determine which individual was the initial aggressor. The trial court erred by failing to include an instruction on self-defense in its final mandate to the jury.

Defendant agreed to voluntarily provide reciprocal discovery in compliance with G.S. § 15A-905. As a result, § 15A-905(c)(1) required him to provide the state with notice of his intent to offer the defense of self-defense at trial “within 20 working days after the date the case is set for trial.”

The trial court implicitly found defendant violated § 15A-905(c)(1) because “there was no notice given of [an] affirmative defense[.]” It appears the trial court used this violation as part of its basis for its refusal to submit the issue of self-defense to the jury.

However, if a trial court imposes discovery sanctions, it must make specific findings justifying the imposed sanction. Presuming the trial court intended to deny the self-defense instruction as a sanction for a discovery violation, it made no specific findings justifying the imposed sanction to deny defendant’s requested instruction on self-defense in accordance with G.S. § 15A-910(d).

The trial court abused its discretion in refusing to instruct the jury on selfdefense when it failed to properly make findings and consider the appropriateness of the sanction for the failure of defendant to provide notice of his intent to assert the defense of self-defense. Defendant is entitled to a new trial.

State v. Hooper (Lawyers Weekly No. 011-187-21, 33 pp.) (John Tyson, J.) (Hunter Murphy, J., dissenting) Appealed from Rockingham County Superior Court (Stanley Allen, J.) Jasmine McGhee for the state; John Carella for defendant. 2021-NCCOA-500

Criminal Practice False Pretenses – Valuation – First Impression – Defendant’s Payments – ‘Person within This State’ Even though our caselaw has not defined “value” in the context of G.S. § 14-100(a) (obtaining property by false pretenses), our caselaw has defined the term in the context of property crimes to be synonymous with “fair market value.” We hold that the term “value,” as used in § 14-100, means the fair market value of the item at the time it was falsely obtained.

We find no error in defendant’s conviction for four counts of obtaining property by false pretenses valued at $100,000 or more.

Defendant obtained iPhones from AT&T by falsely representing that a (nonexistent) charity needed a large quantity of the phones for telemarketing purposes. Defendant then sold the iPhones for cash.

AT&T’s senior fraud case manager, Pam Tyler, testified that the actual fraud loss value—shown on a spreadsheet entered into evidence as State’s Exhibit #1—represents the actual retail value of the iPhone, not the price AT&T charges the customer. The jury was free to either consider these values or not consider them in determining the iPhones’ fair market value, and whether it considered them does not affect the outcome of our analysis.

Based on Tyler’s testimony, a reasonable mind could have interpreted State’s Exhibit #1 as representing the prices which AT&T had paid to its supplier for the iPhones before defendant

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falsely obtained them. There was sufficient evidence presented to the jury to allow it to conclude the fair market value of the iPhones was equivalent to the “actual fraud loss” figures in State’s Exhibit #1.

Even if defendant made some payments to AT&T, thereby reducing the amount she swindled AT&T out of, the essence of the crime of obtaining property by false pretenses is the intentional false pretense. The ultimate loss to the victim is an issue which is irrelevant to the purpose of the criminal statute and is an issue properly within the province of the civil courts. State v.

Hines, 36 N.C. App. 33, 243 S.E.2f 782, appeal dismissed and disc. rev. denied, 295 N.C. 262, 245 S.E.2d 779 (1978).

Under the reasoning of Hines, the intent of § 14-100 is to focus on the act of the false pretense and the perpetrator’s intent to deceive, not on any particular economic damage to the victim.

Any payment that may or may not have been made toward the iPhones that were falsely obtained is irrelevant for resolution of this issue. Hines establishes that we are only concerned with the gross fair market valuation of the property obtained, not the net gain in value to the criminal.

Finally, assuming § 14-100 requires the victim to be a “person within this State,” since the iPhones were shipped to an AT&T store in Greenville, and AT&T’s agent relinquished possession of iPhones in Wilson and Goldsboro, the state presented substantial evidence that AT&T is a “person with this State.”

No error.

State v. Pierce (Lawyers Weekly No. 011-188-21, 18 pp.) (Hunter Murphy, J.) Appealed from Wake County Superior Court (Rebecca Holt, J.) Teresa Townsend for the state; Mark Hayes for defendant. 2021-NCCOA-502

Criminal Practice Witness Intimidation – Indictment – Variance – Not Fatal – Jury Instructions The witness intimidation indictment alleged that the “intimidation consisted of [defendant] telling Darryl Derstine to tell Nicholas Ramos that he would have Nicholas Ramos deported if he testified against the Defendant.” Although no evidence tended to show defendant expressly told Derstine to convey the message to Ramos, and although evidence tended to show that Ramos did not actually receive the message, the variance was not fatal because it did not relate to “the gist” of the offense.

We find no error in defendant’s convictions for assault with a deadly weapon inflicting serious injury and intimidating a witness. We vacate the restitution order and remand.

Derstine testified that, during a phone conversation, defendant said he had told his lawyer that Ramos was “illegal,” implied that ICE would be coming around, and said, “I know Nick has a family here, and that’s too bad … I’m going to look out for my interest first. I will not have him testify against me.”

The gist of the offense of intimidating a witness is the obstruction of justice. Whether a witness actually receives the threatening communication is irrelevant to the crime of intimidating a witness. The indictment’s reference to defendant “telling Darryl Derstine to tell Nicholas Ramos” was mere surplusage, and the variance between that reference and the evidence does not merit reversal.

Defendant challenges the trial court’s inclusion of the phrase “attempted to deter” from pattern jury instruction N.C.P.I.—Crim. 230.65. Although

defendant argues that “intimidating” versus “interfering with” a witness are two different theories of liability with distinct elements, defendant cites no case law that construes G.S. § 14-226 this way.

Even if the trial court’s use of the phrase “attempted to deter” was an erroneous deviation, defendant has failed to show that it was likely, in light of the entire charge, to mislead the jury. The jury was informed that the charge involved intimidation and was provided a definition of “intimidating.”

Where the state concedes that it presented no evidence to support the amount of the trial court’s restitution order, we vacate the order and remand for a rehearing on the issue.

No error in part; vacated and remanded in part.

State v. Clagon (Lawyers Weekly No. 011-189-21, 15 pp.) (Jefferson Griffin, J.) Appealed from Washington County Superior Court (Walter Godwin, J.) Creecy Johnson for the state; Wyatt Orsbon for defendant. 2021-NCCOA-497

Real Property Easements – ‘Open’ – Fencing for Horses – Unreasonable Interference Since defendants’ easement over plaintiffs’ property does not require that the easement remain “open,” plaintiffs are entitled to erect a gate on the easement if a gate is necessary to the reasonable enjoyment of plaintiffs’ servient estate, provided the gate is not of such nature as to materially impair or unreasonably interfere with defendants’ use of the easement. The gates plaintiffs erected across the easement are an integral component of the fencing system necessary to contain the horses on their agricultural land; however, the gates, as constructed by plaintiffs, constituted an unreasonable obstruction. The key boxes were located well off the road, plaintiffs refused to provide defendants a remote control, the keypads were temperamental, the gates would sometimes not function in cold weather, and plaintiffs’ horses sometimes congregated around the gates, making it difficult for defendants to open the gates while keeping the horses from escaping.

As a result, the trial court did not err in ordering plaintiffs to remove the gates. However, the trial court did err when it ruled that plaintiffs were barred from installing gates across the easement.

Plaintiffs have the right to erect gates across the easement; however, the gates cannot be erected in a way that interferes with defendants’ easement rights.

We affirm the trial court’s order as modified.

Taylor v. Hiatt (Lawyers Weekly No. 011-190-21, 8 pp.) (Chris Dillon, J.) Appealed from Alamance County Superior Court (Thomas Lambeth, J.) Geoffrey Oertel for plaintiffs; Timothy Gray for defendants. 2021-NCCOA-502

N.C. BUSINESS COURT

Tort/Negligence Breach of Fiduciary Duty – LLC – Partnership & Franchise Contracts Although the parties did not enter into operating agreements for their limited liability companies, defendants have sufficiently alleged that the parties’ partnership and franchise agree-

ments function as the operating agreements for their LLCs. The court denies plaintiff’s motion to dismiss defendants’ counterclaim for breach of fiduciary duty.

Allegations

In contemplation of opening day care centers in North Carolina, the individual parties entered into a partnership agreement. The parties formed two limited liability companies, one for a Chapel Hill day care and one for a Wake Forest day care, but did not enter into operating agreements for the LLCs. The parties entered into a franchise agreement with The Learning Experience (TLE) for each day care.

The franchise agreements contain a cross-default provision giving TLE the right, in the event of default, not just to terminate the franchise agreement of the defaulting franchise, but also to terminate (or pursue other available remedies against) any other TLE franchise owned by any franchisee “affiliate”—i.e., an individual bound by the franchise agreement or an entity organized by such individual(s)—even if that other franchise was co-owned by a party who had no ownership interest in the defaulting franchise.

Plaintiff asked the individual defendants (defendants) to join him in opening another TLE franchise, this time in New Jersey, but defendants declined.

Plaintiff formed a New Jersey LLC and opened the New Jersey franchise alone.

It faltered.

Bound by the cross-default provisions of their North Carolina franchises, defendants reluctantly joined in the ownership of the New Jersey LLC and signed a franchise agreement for the New Jersey day care. Despite defendants’ capital and management contributions, TLE eventually declared the New Jersey franchise in default.

Defendants have contributed $100,000 of their personal funds; assumed a $165,000 debt of the New Jersey franchise; and personally guaranteed all the debt of the New Jersey franchise. Their counterclaim alleges that plaintiff breached a fiduciary duty owed to defendants.

Discussion

Defendants contend that, although the parties did not enter into operating agreements for their LLCs, their partnership agreement and the franchise agreements function as LLC operating agreements, imposing fiduciary duties on members.

In general, LLC members do not owe fiduciary duties to their fellow members. However, LLC members are free to define their relationship.

Typically, the relationship among and between the members and the LLC is defined in an operating agreement.

However, the North Carolina Limited Liability Company Act does not require an operating agreement, nor does it prescribe the form that an operating agreement must take. Furthermore, nothing in the LLC Act forbids the formation of an operating agreement prior to organization of the LLC itself.

The parties’ partnership agreement expressly contemplates the formation of an entity to operate as a day care center under TLE. The partnership agreement was executed only seven days before the organization of the Chapel Hill LLC. The short period of time between execution of the partnership agreement and the formation of the first LLC contemplated under the partnership agreement suggests that the partnership agreement, at the very least, concerned the LLC. In addition, the parties’ franchise agreements, which also contemplate

the existence of TLE childcare centers and contain the cross-default provisions, were likewise executed in close proximity to the time the LLCs were organized. The court cannot ignore the parties’ pleading stating that they intended for the several agreements in combination to establish their duties to each other.

Furthermore, defendants allege that their relationship began with the partnership agreement and that they continued to abide by its terms. In fact, they followed the partnership agreement first to add and then to subtract a fourth member after the LLCs were organized. The parties’ continued reliance on the partnership agreement and its terms, even after formation of the LLCs, could indicate that the parties still considered the partnership agreement to govern their relationship and explain why they never refashioned the documents into a more traditional operating agreement.

The court cannot say as a matter of law, then, that the partnership agreement, alone or in combination with the franchise agreements, constitutes or does not constitute an operating agreement that created fiduciary duties between and among the parties.

While it would be an unusual set of circumstances that would lead a fact-finder to conclude that the parties intended portions of commercial agreements, particularly those agreements that involve third parties such as the franchise agreements at issue here, to serve as the governing documents for a limited liability company, on this record the court cannot as a matter of law rule out that possibility. This is particularly so when each of the documents explicitly references the business to be formed as the LLC. Motion denied.

Sivadhanam v. 7 Hills Learning, LLC (Lawyers Weekly No. 020-05321, 19 pp.) (Julianna Theall Earp, J.) Christopher Graebe and John William Graebe for plaintiff; Thomas Sparks for defendants. 2021 NCBC 53

Civil Practice Personal Jurisdiction – Corporate – Successor Liability – First Impression Where (1) a predecessor company allegedly polluted North Carolina’s air, water and land; (2) a contract and its amendment can be read to say successor corporations assumed the predecessor company’s liabilities; and (3) the complaint alleges that the predecessor company’s mergers and spinoffs were undertaken to defraud its potential creditors, the court concludes that it has personal jurisdiction over the successor corporations by virtue of the predecessor company’s contacts with North Carolina.

The court denies defendants Corteva, Inc.’s and DuPont de Nemours, Inc.’s motion to dismiss for lack of personal jurisdiction.

Plaintiff alleges that some defendants have contaminated North Carolina’s environment through the use of per- and polyfluoroalkyl substances (PFAS). Plaintiff also alleges that defendant E.I. DuPont De Nemours & Co. (Old DuPont) engaged in a series of transactions to shield its assets from potential creditors, like plaintiff.

Two corporations—defendants Corteva, Inc. (Corteva) and DuPont de Nemours, Inc. (New DuPont)—which resulted from such transactions, challenge this court’s jurisdiction over them.

The appellate courts of North Carolina have not spoken directly to the issue raised here: whether a predecessor corporation’s contacts with the forum that

14 / OPINION DIGESTS establish personal jurisdiction over it may be imputed to a successor corporation for the purposes of establishing personal jurisdiction over the successor corporation.

However, federal courts have consistently acknowledged that it is compatible with due process for a court to exercise personal jurisdiction over an individual or a corporation that would not ordinarily be subject to personal jurisdiction in that court when the individual or corporation is an alter ego or successor of a corporation that would be subject to personal jurisdiction in that court.

The theory underlying these cases is that, because the two corporations are the same entity, the jurisdictional contacts of one are the jurisdictional contacts of the other for the purposes of the International Shoe due process analysis.

While North Carolina courts have not directly addressed the issue of imputing a predecessor’s contacts to the successor for the purposes of personal jurisdiction, to hold otherwise would allow a corporation to avoid all consequences by just reforming in some other jurisdiction and avoiding any accountability. Accordingly, the court follows the federal courts and concludes that personal jurisdiction over a defendant based on a theory of successor liability comports with due process.

Pursuant to North Carolina law, a corporation which purchases all, or substantially all, of the assets of another corporation is generally not liable for the old corporation’s debts or liabilities.

However, there are exceptions to this general rule against successor liability.

A successor corporation may be liable for the debts of its predecessor where there is an express or implied agreement by the successor corporation to assume the debt or liability. Here, Corteva and New DuPont expressly agreed to assume Old DuPont’s PFAS liabilities in a spinoff or “Separation Agreement,” as amended by a “Letter Agreement.”

Although a separate spinoff company, The Chemours Co., also assumed the PFAS liabilities, Chemours’ assumption of PFAS liabilities does not preclude Corteva and New DuPont from assuming those same PFAS liabilities.

Corteva and New DuPont also rely on the Letter Agreement’s language that the parties “wish to enter into certain additional agreements in a manner effective as between the Letter Parties [Corteva and New DuPont] ... but not ... Third-Party Beneficiaries.” However, a successor corporation may not shield itself from liability it expressly assumed by virtue of a clause negating third-party beneficiary rights.

Pursuant to the Separation Agreement, as amended by the Letter Agreement, Corteva and New DuPont agreed to assume Old DuPont’s PFAS-related liabilities. Therefore, imputing Old DuPont’s contacts to Corteva and New DuPont is appropriate.

Another exception to the general noimputation rule exists when the transfer of assets was done for the purpose of defrauding the company’s creditors.

Plaintiff alleges that Old DuPont undertook a series of transactions to shield itself from billions of dollars in liabilities related to its discharge of PFAS at its manufacturing facilities, including one in Fayetteville. Plaintiff further alleges that these transactions have resulted in (1) Old DuPont having a negative net worth; (2) Chemours being undercapitalized and unable to satisfy Old DuPont’s PFAS liabilities; and (3) the transfer of valuable assets from Old DuPont to Corteva and New

DuPont for far less consideration than those assets were worth. Lastly, plaintiff alleges that Corteva and New DuPont “acted with the actual intent to hinder, delay, and defraud creditors or future creditors.”

At this stage of the proceeding, all of these allegations are sufficient to show that Old DuPont transferred assets to Corteva and New DuPont for the purpose of defrauding its potential creditors.

It is uncontested that Old DuPont has sufficient minimum contacts with the state through its operation in Fayetteville. At this stage of the proceeding, plaintiff has established successor liability by the preponderance of the evidence as to Corteva and New DuPont. Therefore, the court may impute Old DuPont’s contacts with the state to Corteva and New DuPont to establish personal jurisdiction over them.

Motion denied.

State ex rel. Stein v. E.I. DuPont de Nemours & Co. (Lawyers Weekly No. 020-054-21, 22 pp.) (Michael Robinson, J.) Janet Coleman, Martin Ramey, Joel Rhine, Marc Bernstein, Daniel Stuart Hirschman, Robert Alan Bilott, David Butler, Gary Jay Douglas, Tate James Kunkle, Michael London, Rebecca Newman, Ashley Campbell, Wesley Bowden, Melissa Byroade, Kenneth Corley, Steven Humphreys, William James Jackson, Lauren Hudson Shah and David Zalman for plaintiff; Jonathan Sasser, Thomas Segars, Bailey King, Robert Marcus, Lanny Steven Kurzweil, John McAleese, Connor Phalon, Katherine Hacker, John Phillips, Katharine Roin, Steven DeGeorge, Joel Gross, Brian Israel, Allison Rumsey, Martha Donovan, Margaret RaymondFlood for defendants. 2021 NCBC 54

Tort/Negligence Fraud – Insufficient Particularity – Unfair Trade Practices Counterclaimants allege that counterclaim defendant Greg “Lindberg and his representatives fraudulently and intentionally misled [counterclaimant John] Rodgers into believing that Lindberg had, at all times operated his business portfolio in a prudent and lawful manner.” There are no particular allegations concerning when or where the misrepresentation occurred; furthermore, it is not at all clear what the misrepresentation is.

The counterclaims are dismissed without prejudice.

The fraud counterclaim also alleges that Lindberg falsely represented “his willingness to serve as a co-guarantor of [counterclaimant GoPrime Mortgage, Inc.’s] warehouse lines of credit.”

However, at no point does the counterclaim allege the time or place that Lindberg made this false representation.

Therefore, the allegations do not meet the particularity requirements of N.C. R. Civ. P. 9(b).

The counterclaim alleges that Lindberg concealed that he and his companies were “engaged in risky and unscrupulous investment practices.” Lacking are particularized allegations to show that Lindberg had a duty to disclose information about his insurance businesses and their investment practices.

Finally, the counterclaim for violation of G.S. § 75-1.1 is based on the same allegations of fraud. Having concluded that the allegations of fraud are inadequate, the court further concludes that the § 75-1.1 claims must also be dismissed.

TAC Investments, LLC v. Rodgers (Lawyers Weekly No. 020-055-21, 10 pp.) (Adam Conrad, J.) Matthew

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 Se pt e m be r 27, 2021

McGuire and Kelsey Kingsbery for counterclaimants; Matthew Leerberg, Troy Shelton, Aaron Tobin and Jared Pace for counterclaim defendants. 2021 NCBC 55

Civil Practice Motion to Stay – Criminal Practice – Constitutional – Fifth Amendment Privilege – First Impression Although the third-party defendants (Movants) are under grand jury investigation, since they have not been indicted, the degree of overlap between the civil and criminal cases against them is speculative. Plaintiffs have shown that Movant Brasser’s testimony is relevant to their claims against defendants, and plaintiffs and defendants have shown that they would be prejudiced by an undue, and indefinite, delay if a stay were granted. Finally, the court and the public would benefit from resolving this dispute expeditiously. While Movants may face some hardship if they invoke the Fifth Amendment in this action, all other factors weigh against a stay of this action.

The court denies Movants’ motion for a stay and defendant McDowell’s motion for sanctions.

Plaintiffs allege that defendants breached their fiduciary duty as directors of the nominal corporate defendant by failing to oversee Movants’ actions, resulting in the demise of the corporation. Defendants seek indemnity and contribution from Movants.

A federal grand jury is investigating Movants’ conduct concerning the corporation. Movants seek a stay of the claims against them in this action so that they will not be required to exercise their Fifth Amendment right against self-incrimination to their detriment in this civil action.

Neither the court nor the parties have identified any North Carolina appellate decisions addressing the precise situation presented here. The court adopts the six-factor balancing test used by the federal courts.

Factor one is the degree of overlap between the civil and criminal proceedings. Because neither Movant has received a subpoena, a request for an interview, or a target letter, much less been indicted, the degree of overlap between this action and the criminal investigation is purely speculative. This weighs against the entry of a stay.

Factor two is the status of the crimi-

nal case. Where Movants have not shown any specific targeted investigatory or prosecutorial activity against either of them, and where they offer no evidence that either of them has been served with subpoenas or search warrants, much less a target letter or an indictment, this factor weighs against granting a stay.

Factor three is the interests of and burdens on the plaintiff. Given that (1) plaintiffs contend that Brasser possesses information relevant to their claims, (2) Movants have produced no case law showing that their procedural posture in this action should tilt the balancing analysis in favor of a stay, and (3) a stay would indefinitely delay a case that has been pending for nearly two years, this factor weighs against granting a stay.

Factor four is the interests of and burdens on the defendant. Movants argue if Brasser were compelled to appear at his deposition, he would have no option but to invoke his Fifth Amendment privilege, while he might not ultimately need to do so if the federal grand jury does not issue an indictment. Thus, Movants complain, faced with the possibility (but not certainty) of criminal prosecution, Brasser could later learn that invoking the Fifth Amendment in his civil deposition unnecessarily harmed his defense in this action.

However, the fact that Brasser may not ultimately need to invoke the Fifth Amendment is precisely why this factor weighs against granting a stay—his criminal jeopardy is speculative while the delay from granting a stay is certain. The burden on Movants, while real, is substantially reduced where no investigatory action has been directed against them and no indictment has issued. Accordingly, this factor should not be afforded great weight in the balancing test; furthermore, the burden on Movants is outweighed by the burden the other parties would suffer from the delay attendant to the requested stay.

Factor five is the interest of the court. The court’s interest in resolving disputes expeditiously weighs against the entry of a stay.

Factor six is the public interest. It is not in the public interest to require plaintiffs, who have promptly asserted their causes of action, to wait indefinitely because Movants may also be subject to a criminal investigation or criminal prosecution on the same or substantially the same underlying allegations.

This factor, too, weighs against granting a stay.

LEGAL EMPLOYMENT

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 S ep tember 27, 2021

In the exercise of its discretion, the court denies the motion to stay.

Upon its review of the record, the court also denies defendant McDowell’s request for sanctions.

Lee v. McDowell (Lawyers Weekly No. 020-056-21, 22 pp.) (Louis Bledsoe, C.J.) Christopher Donald Tomlinson and William Butler for plaintiffs; John Buric for nominal defendant; Mackenzie Willow-Johnson, Erik Rosenwood and Carl Burchette for defendants.

2021 NCBC 56

Tort/Negligence Abuse of Process Claim – Tortious Interference – Civil Practice – Res Judicata In the latest of several lawsuits among neighbors in a subdivision, defendants assert an abuse of process counterclaim. The elements of an abuse of process claim are (1) that the defendant had an ulterior motive to achieve

OPINION DIGESTS / 15 a collateral purpose not within the normal scope of the process used and (2) that the defendant committed some act that is a malicious misuse or misapplication of that process after issuance to accomplish some purpose not warranted or commanded by the writ. Although defendants’ counterclaim alleges an ulterior motive for plaintiffs’ initiation of various prior legal proceedings (i.e., forcing defendants out of the neighborhood), there are no allegations that plaintiffs committed a subsequent act

inconsistent with the process they had issued. The mere filing of a civil action with an ulterior motive is not sufficient to sustain a claim for abuse of process.

The court denies defendants’ motion to dismiss. The court grants in part and denies in part plaintiffs’ motion to dismiss defendants’ counterclaims.

Two of the plaintiffs in this action (the Parameswars) previously sued and settled with one of the defendants (Neal Choquette). Assuming the settlement agreement and consent order in the

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16 / OPINION DIGESTS previous action could have res judicata effect, (1) only the claims asserted by the Parameswars would be implicated; (2) the settlement agreement only concerns acts or omissions occurring on or before December 20, 2018, and it cannot be said that all of Neal’s alleged acts that form the basis of plaintiffs’ claims occurred before December 20, 2018; and (3) at this stage, the court is unable to resolve plaintiffs’ assertion that the Parameswars’ obligations were terminated due to Neal’s alleged repudiation of the settlement agreement. Defendants have not shown that they are entitled to dismissal based on res judicata.

In their counterclaim for intentional interference with pr0spective business advantage, defendants allege that the numerus disputes and legal actions among the parties have caused third parties to shy away from buying property in the parties’ subdivision. Defendants have made no allegations of purposeful conduct by plaintiffs intentionally directed at actual potential buyers; consequently, defendants have failed to state a claim for intentional interference with prospective business advantage.

In their counterclaim for breach of contract, defendants allege that the Parameswars breached the settlement agreement they entered into with Neal.

Plaintiffs contend that this claim is invalid because Neal previously repudiated the settlement agreement by filing a defamation lawsuit, thereby terminating any obligations the Parameswars had under the settlement agreement.

The court is unable to resolve the parties’ differing contentions at this stage.

Motions granted in part, denied in part.

Bloxsom v. Choquette (Lawyers Weekly No. 020-057-21, 22 pp.) (Mark Davis, J.) Andrew Fitzgerald, Stuart Punger and Bo Caudill for plaintiffs; William DeVore, Aaron Lay and Graham Morgan for defendants; Keith Nichols and Amy Hunt for nominal defendant. 2021 NCBC 57

N.C. COURT OF APPEALS, UNPUBLISHED

Workers’Compensation ‘Arising out of’ & ‘Course of’ Employment – Idle Time – ATV Accident While waiting for park visitors to leave so they could start their clean-up duties, plaintiff and his co-workers rode a Bobcat ATV to the park dumpsters.

During the ride, the ATV overturned, leaving plaintiff seriously injured. Defendant did not challenge the Industrial Commission’s finding that “the trip in the Bobcat was for the dual purpose of taking trash to the ... Park Dumpsters (part of Plaintiff’s regular job duties) and filling idle time between work assignments (which was customary and expected of the part-time employees).”

This and other unchallenged findings support the Commission’s conclusion that plaintiff’s injury was compensable because it arose out of and in the course of his employment with defendant.

We affirm the Commission’s determination of compensability. However, we remand for findings as to the date when plaintiff returned to work.

An injury is compensable under the Workers’ Compensation Act if it is fairly traceable to the employment or any reasonable relationship to the employment exists.

The Commission’s Finding of Fact No. 3 notes in part that “Plaintiff and other park employees regularly used the Bobcat to transport trash to the dumpsters at Baker[’]s Creek Park,

which was approximately one mile from Village Park. It was common for multiple park employees to ride in the Bobcat at the same time.” Finding of Fact No. 10 states, “It was customary for Plaintiff and other Bobcat operators to drive trash to the dumpsters at Baker[’]s Creek Park without asking permission ... Plaintiff’s actions ... bore a reasonable relationship to the accomplishment of a task for which Plaintiff was hired.” Finding of Fact No. 14 states that “the trip in the Bobcat was for the dual purpose of taking trash to the Baker[’]s Creek Park Dumpsters (part of Plaintiff’s regular job duties) and filling idle time between work assignments (which was customary and expected of the part-time employees).”

The unchallenged findings of fact are sufficient to support the Commission’s conclusion of law.

However, the Commission awarded plaintiff temporary total disability from 21 July 2017 through 12 June 2018 or until the date he returned to work, whichever was earlier. The Commission did not include the date that plaintiff returned to work in its findings. In order for defendant to calculate payment of benefits, it needs to know whether plaintiff began work before or after 12 June 2018. We remand for further findings on the precise date of plaintiff’s return to work.

Affirmed in part; remanded in part.

Barrier v. City of Kannapolis (Lawyers Weekly No. 012-279-21, 11 pp.) (Jefferson Griffin, J.) Appealed from the Industrial Commission.

William Acton and Daniel Grist for plaintiff; Jason Toups for defendants.

2021-NCCOA-459

Arbitration Motion to Compel – Non-signatory – Independent Claims Plaintiff bought a business and then saw 30 percent of its clients disappear when employees, who were brought over from the former owner, formed a new business and left plaintiff’s employ. The claims that plaintiff asserts against the sellers of the business are subject to the arbitration clause in the sales contract; however, plaintiff’s claims against its former employees are not dependent on the sales contract and are not subject to that contract’s arbitration clause. We affirm the trial court’s denial of the former employees’ motion to compel arbitration.

Epes Logistics Services, Inc. v.

Marcuslund (Lawyers Weekly No. 012-280-21, 6 pp.) (Chris Dillon, J.) Appealed from Guilford County Superior Court (Stuart Albright, J.) Andrew Rodenbough and James Adams for plaintiff; Brent Powell for defendants.

2021-NCCOA-460

Domestic Relations Parent & Child – GAL – Permanency Planning Order – Reunification Efforts Cessation Despite some concerns about the respondent-mother’s mental capacity, where respondent consistently participated in permanency planning hearings, testified on her own behalf, and communicated effectively with the trial court, and especially where she appeared before three different judges, none of whom made any indication that a review of respondent’s competence was warranted, the trial court did not abuse its discretion in choosing not to inquire into respondent’s competency.

We affirm the trial court’s order granting guardianship to “Alan’s” foster mother.

In re A.P. (Lawyers Weekly No.

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 Se pt e m be r 27, 2021

012-281-21, 14 pp.) (John Arrowood, J.) Appealed from Orange County District Court (Samantha Cabe, J.) Deana Fleming for petitioner; Richard Croutharmel for respondent; Matthew Wunsche for guardian ad litem.

2021-NCCOA-461

Domestic Relations Parent & Child – Neglect – Infant – Sibling’s Death Infant “Daphne” was found to be neglected after her elder brother, “Nicholas,” died while still a baby as a result of suspected abuse or neglect while in the sole care of the respondent-father. It is true that the fact of prior abuse, standing alone, is not sufficient to support an adjudication of neglect. However, the trial court’s findings sufficiently demonstrate the presence of other factors to suggest that the neglect or abuse would be repeated: The trial court found that Nicholas had been removed from the respondent-parents’ care in a previous abuse case, Nicholas died in the father’s care less than two weeks after being returned to respondents’ physical custody, respondents had failed to acknowledge the abuse and neglect of Nicholas, the respondent-mother believed Nicholas’ death was an accident, and she expressed no safety concerns about Daphne being in the father’s care, despite the previous adjudication of abuse, Nicholas’ death and resulting criminal charges against the father. These findings support the trial court’s conclusion that Daphne was a neglected juvenile as defined by G.S. § 7B-101(15).

We affirm the trial court’s adjudication of Daphne as neglected.

In re D.R. (Lawyers Weekly No. 012-282-21, 12 pp.) (Allegra Collins, J.) Appealed from Moore County District Court (Warren McSweeney, J.) Stephan Lapping for petitioner; Anita Foss for guardian ad litem; Robert Ewing and Leslie Rawls for respondents.

2021-NCCOA-462

Domestic Relations Parent & Child – Dependency Adjudication – Inability to Locate Father After the “scared, anxious, emotional, and angry” respondent-mother incorrectly told Charlotte police that Pineville police had kidnapped and killed her husband E.M., she was involuntarily committed, and social workers were unable to reach her. Accordingly, respondent could not provide for her three children’s care or supervision, nor could she communicate to social workers any appropriate alternative child care plan. Even though it was later discovered that T.D. was “Sarah’s” father, social workers did not know that at the time and were unable to locate E.M. (“Hannah” and “Zeke’s” father).

As a result, the trial court’s findings as to these facts supported its conclusion that the children were dependent. We affirm the adjudication of dependency.

In re H.M. (Lawyers Weekly No. 012-283-21, 10 pp.) (Toby Hampson, J.) Appealed from Mecklenburg County District Court (David Strickland, J.) Rebekah Spaulding for petitioner; Lisa Anne Wagner for respondent; Matthew Wunsche for guardian ad litem.

2021-NCCOA-463

Criminal Practice Juvenile – Mental Health Exam – Gun’s Altered Serial Number – Unpreserved Issue Even though there is a comprehen-

sive clinical assessment (CCA) and addendum thereto in the record, since (1) neither is signed, (2) it is unclear whether a mental health professional completed the form, and (3) there was no testimony as to whether the interdisciplinary evaluation and mobilization of resources required by G.S. § 7B-2502(c) is the same as or equivalent to either the CCA or its addendum admitted by the trial court in this case, we cannot conclude that the CCA or the CCA addendum satisfied the statutory mandate of § 7B-2052(c).

We affirm the adjudication of delinquency but remand for a new disposition hearing that includes a referral to the area mental health services director.

The juvenile argues on appeal that the trial court’s verdict was unclear because the trial court failed to rule on whether the state was required to prove that the juvenile knew the gun he possessed had an altered serial number.

However, the juvenile failed to preserve this issue for appeal.

In re L.T.B. (Lawyers Weekly No. 012-284-21, 11 pp.) (Valerie Zachary, J.) Appealed from Pitt County District Court (Brian DeSoto, J.) Ameshia Cooper for the state; Kellie Mannette for respondent. 2021-NCCOA-465

Domestic Relations Parent & Child – Guardianship – Constitutional – Conduct Inconsistent The trial court found that (1) the respondent-parents’ “children are still at a high risk if returned because the parents have yet to remediate the areas of concern that brought the children into [DSS] custody”; (2) “reunification efforts ... clearly would be unsuccessful and/or would be inconsistent with the juveniles’ health or safety”; (3) the respondent-Father’s progress under the plan was negatively affected by “his inability to appropriately control his behaviors”; (4) Father was compliant in only one area of his Out-of-Home Family Services Agreement; (5) the respondentparents “[continued] to associate with inappropriate persons ... which would present a risk of harm to the juveniles”; and (6) the parents had not “adequately addressed issues of concern or remediated issues which led to the removal of the juveniles.” The trial court’s findings of fact support its conclusion that the parents had acted inconsistently with their constitutionally protected parental rights.

We affirm the trial court’s award of guardianship of the children to their foster parents. The trial court awarded the parents supervised visitation on the first Saturday of the month from 9:00 a.m. to noon. The order added, “That if all parties agree, the visit may be moved to another day.”

This order met the minimum requirements of G.S. § 7B-905.1(c) in that the order specifies both (1) “the minimum frequency and length of the visits” and (2) whether the visits shall be supervised.” Although the order allows either Lisa Walton or the children’s custodians to supervise visitation, it does not vest discretion in any party to choose whether visitation shall occur or to alter “the minimum length and frequency of the visits.” Accordingly, the trial court did not abuse its discretion in setting the terms of visitation.

In re R.W. (Lawyers Weekly No. 012-285-21, 12 pp.) (Jefferson Griffin, J.) Appealed from Alamance County District Court (Kathryn Overby, J.) Jamie Hamlett for petitioner; Michelle FormyDuval Lynch for guardian ad litem; Thomas Diepenbrock and Peter Wood for respondents. 2021-NCCOA-466