Opinion
No. COA15-382
11-01-2016
THOMAS A. STOKES, III, Plaintiff v. DRUG SAFETY ALLIANCE, INC., a wholly owned subsidiary of UDG HEALTHCARE plc; CATHERINE CRUMPTON, DOUGLAS TOWNSEND, JR.; and TEMPUSDURHAM, LLC; Defendants
Shanahan Law Group, PLLC, by Kieran J. Shanahan, Christopher S. Battles, and Kenzie M. Rakes, for plaintiff-appellant. Cheshire Parker Schneider & Bryan, PLLC, by Amy L. Britt, for defendant-appellee Drug Safety Alliance, Inc. Wyrick Robbins Yates & Ponton LLP, by Tobias S. Hampson, K. Edward Greene, and Robert A. Ponton, Jr., for defendant-appellees Catherine Crumpton, Douglas Townsend, Jr., and TempusDurham, LLC.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. Chatham County, No. 14 CVS 533 Appeal by plaintiff from orders entered 11 December 2014 by Judge Carl R. Fox in Chatham County Superior Court. Heard in the Court of Appeals 20 October 2015. Shanahan Law Group, PLLC, by Kieran J. Shanahan, Christopher S. Battles, and Kenzie M. Rakes, for plaintiff-appellant. Cheshire Parker Schneider & Bryan, PLLC, by Amy L. Britt, for defendant-appellee Drug Safety Alliance, Inc. Wyrick Robbins Yates & Ponton LLP, by Tobias S. Hampson, K. Edward Greene, and Robert A. Ponton, Jr., for defendant-appellees Catherine Crumpton, Douglas Townsend, Jr., and TempusDurham, LLC. CALABRIA, Judge.
Plaintiff filed a complaint against defendants stemming from a fraud allegedly committed during an equitable distribution proceeding. The trial court erred in granting defendants' motions to dismiss plaintiff's complaint with prejudice, and the matter is reversed and remanded to the trial court. However, because the matter is so closely interwoven with a pending equitable distribution proceeding, the trial court shall hold this case in abeyance until the resolution of the equitable distribution proceeding.
I. Factual and Procedural Background
The facts of this case are established in its companion case, Stokes v. Crumpton, ___ N.C. App. ___, 784 S.E.2d 537, review allowed, ___ N.C. ___, ___ S.E.2d ___, 2016 WL 5335800, and review allowed, ___ N.C. ___, ___ S.E.2d ___, 2016 WL 5339508 (2016) (hereinafter Stokes I). In summary, Thomas A. Stokes, III ("Stokes") and Catherine Crumpton ("Crumpton") were married in June of 1989, separated in April of 2011, and arbitrated their separation. As part of this proceeding, the arbitrator valued and distributed Crumpton's company, Drug Safety Alliance, Inc. ("DSA") between the parties. Subsequently, Stokes filed a motion to vacate the arbitration award, set aside the trial court's order upholding the award, and engage in discovery, alleging that Crumpton defrauded Stokes and the arbitrator by offering inaccurate evidence of the value of DSA. The trial court denied Stokes' motion, and Stokes appealed. On appeal, a majority of this Court held that the appeal was interlocutory, and dismissed it. In a dissent, however, Judge Calabria noted:
Although the majority correctly cites Dworsky v. Travelers Ins. Co., 49 N.C. App. 446, 271 S.E.2d 522 (1980) regarding the substantial right justifying immediate appeal of an interlocutory order denying discovery, I do not believe the
majority correctly applies the law to the facts of this case. Plaintiff has demonstrated he would be deprived of the substantial right contemplated by Dworsky sufficient to justify immediate review. Alternatively, I would allow plaintiff's petition for a writ of certiorari to address his appeal on the merits. Either way, the trial court erred by concluding there is no pending action within which discovery may be propounded and abused its discretion by denying plaintiff's limited discovery requests. The trial court's ruling should be reversed and this case should be remanded. For these reasons, I respectfully dissent.Stokes I, ___ N.C. App. at ___, 784 S.E.2d at 543. The matter was then appealed to the Supreme Court of North Carolina, where it remains pending as of this time.
On 31 July 2014, Stokes filed the complaint in the instant case, and on 27 August 2014, filed an amended complaint. This complaint listed as defendants DSA and Crumpton, as well as Douglas Townsend ("Townsend") and TempusDurham, LLC ("TempusDurham"), who were responsible for DSA's subsequent sale. This complaint alleged that, when Crumpton had presented her valuation of DSA to the arbitrator, she was already in negotiations to sell the company for a much higher price.
DSA, Crumpton, Townsend, and TempusDurham (collectively, "defendants") filed motions to dismiss Stokes' complaint, alleging lack of subject matter jurisdiction, improper division, failure to state a claim, abatement, election of remedies, res judicata, and collateral estoppel. On 11 December 2014, the trial court entered orders granting these motions to dismiss with prejudice.
Stokes appeals.
II. Motion to Dismiss
Stokes contends that the trial court erred in granting defendants' motions to dismiss with prejudice. We agree.
A. Standard of Review
When considering a motion to dismiss under Rule 12(b)(6) of the Rules of Civil Procedure, " '[t]he question for the court is whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory, whether properly labeled or not.' " Grant Constr. Co. v. McRae, 146 N.C. App. 370, 373, 553 S.E.2d 89, 91 (2001) (quoting Harris v. NCNB, 85 N.C. App. 669, 670-71, 355 S.E.2d 838, 840 (1987)). The court must construe the complaint liberally and "should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief." Block v. County of Person, 141 N.C. App. 273, 277-78, 540 S.E.2d 415, 419 (2000). This Court must conduct a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court's ruling on the motion to dismiss was correct.Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4, aff'd per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).
B. Analysis
Crumpton's motions to dismiss were predicated entirely upon the fact that the issues raised in Stokes' complaint were addressed in the equitable distribution proceeding. Similarly, Townsend's and TempusDurham's motions to dismiss cite the prior equitable distribution action as the basis for dismissal. DSA's motion to dismiss was merely a summary recitation of bases, rather than a complete argument, but it relied upon the same principles as the other motions. In essence, all of the motions to dismiss which the trial court granted were premised upon the notion that the prior equitable distribution between Stokes and Crumpton precluded any review.
We find the recent decision of this Court, Baldelli v. Baldelli, ___ N.C. App. ___, ___ S.E.2d ___, 2016 WL 5724866 (2016), enlightening on this matter. In Baldelli, the wife and the husband engaged in equitable distribution of their respective corporate assets. Subsequently, the wife and her corporate holdings filed a complaint against the husband and his corporate holdings, alleging breach of fiduciary duty, demand for accounting, breach of contract, and quantum meruit. The defendants moved to dismiss the plaintiffs' complaint, arguing that there was an ongoing district court action for equitable distribution, that the pending action encompassed substantially similar claims, and that therefore the trial court lacked jurisdiction. The trial court granted the defendants' motion to dismiss, holding that it lacked subject matter jurisdiction.
On appeal, we noted the case of Ward v. Fogel, 237 N.C. App. 570, 768 S.E.2d 292 (2014), disc. review denied, ___ N.C. ___, 771 S.E.2d 302 (2015). In Ward, the plaintiff and the defendant "were already involved in an action for equitable distribution when the plaintiff filed a second action in superior court, alleging, inter alia, '(1) fraudulent inducement; (2) constructive fraud; (3) and breach of fiduciary duty[.]' " Baldelli, ___ N.C. App. at ___, ___ S.E.2d at ___, 2016 WL 5724866 at *3 (quoting Ward, 237 N.C. App. at 573, 768 S.E.2d at 296). This Court, in Ward, acknowledged that "an equitable distribution proceeding would not be able to provide plaintiff the relief she requests[,]" specifically a jury trial, compensatory and punitive damages, and a judgment against the defendant's separate property. Id. at ___, ___ S.E.2d at ___, 2016 WL 5724866 at *3 (quoting Ward, 237 N.C. App. at 577-78, 768 S.E.2d at 299).
Based on its review of Ward, this Court in Baldelli held that "the prior pending action doctrine did not serve to divest the superior court of jurisdiction over Plaintiffs' breach of fiduciary duty claim, and we reverse the order of the trial court and remand for further action as provided below." Id. at ___, ___ S.E.2d at ___, 2016 WL 5724866 at *3. We went on to hold, however, that:
because the parties and subject matter of Plaintiffs' breach of fiduciary duty claim are closely related-when not identical-to the parties and the subject matter to be decided in a portion of the [equitable distribution] action, and because there is a clear interrelationship between the issues in both actions, we do not believe it is in the interest of judicial economy or clarity for both of these actions to proceed simultaneously. To allow both actions to proceed concurrently would be to invite conflict between the resolution of interrelated issues in the two actions.Id.
We therefore held that the plaintiffs' fiduciary duty claim "should be held in abeyance by the superior court until the district court equitable distribution action is resolved." Id. at ___, ___ S.E.2d at ___, 2016 WL 5724866 at *4. We further held that:
we believe it is appropriate, based upon the facts before us, to hold all of Plaintiffs' superior court claims in abeyance so that the record can be more fully developed through resolution of the district court action. Following resolution of the equitable distribution action in district court, Plaintiffs can decide whether to proceed with any unresolved claims in the present superior court case. If Plaintiffs decide to advance any of their superior court claims, the superior court, based in part on the resolution of the equitable distribution action, will then decide which claims, if any, should be allowed to proceed.Id. at ___, ___ S.E.2d at ___, 2016 WL 5724866 at *4. We therefore reversed the trial court's order dismissing the plaintiffs' complaint, and remanded for the action to be held in abeyance. Id.
In the instant case, as in Baldelli, Stokes' complaint was dismissed based upon the prior pending action doctrine, pursued relief not normally available in equitable distribution, and was closely related to the subject of the equitable distribution proceeding. As in Baldelli, therefore, we reverse the trial court's order dismissing Stokes' complaint, and remand this matter to the trial court, with instructions to hold this case in abeyance until the resolution of Stokes I by our Supreme Court.
III. Additional Issues
Stokes raises additional arguments. Because we reverse and remand this matter to be held in abeyance pending the resolution of Stokes I, we decline to address these arguments, and dismiss them.
REVERSED AND REMANDED IN PART, DISMISSED IN PART.
Judges BRYANT and ZACHARY concur.
Report per Rule 30(e).