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Lacey v. Kirk

Court of Appeals of North Carolina

December 31, 2014

MARY LACEY and JONATHAN LUCAS, Plaintiffs
v.
BONNIE KIRK, Individually and as Attorney-in-Fact, BONNIE KIRK as Trustee of the Mary Frances Cochran Longest Testamentary Trust, and BONNIE KIRK as Executrix of the Estate of Mary Frances Cochran Longest, Defendant

Heard in the Court of Appeals 5 November 2014.

Editorial Note:

This Decision is not final until expiration of the twenty-one day rehearing period. [North Carolina Rules of Appellate Procedure 32(b)]

Appeal by defendant from judgment entered 24 February 2014 and orders entered 10 March 2014 by Judge G. Wayne Abernathy in Alamance County Superior Court and cross-appeal by plaintiffs from order entered 10 March 2014 by Judge G. Wayne Abernathy in Alamance County Superior Court.

Alamance County. No. 12 CVS 1982.

AFFIRMED IN PART, VACATED AND REMANDED IN PART.

Wishart Norris Henninger & Pittman, PA, by Molly A. Whitlatch and Pamela S. Duffy, for Plaintiffs.

Robert A. Hassell Attorney At Law, P.A., by Robert A. Hassell, for Defendant.

ERVIN, Judge. Judge ELMORE and Judge DAVIS concur.

OPINION

ERVIN, Judge.

Defendant Bonnie Kirk appeals from a judgment awarding compensatory and punitive damages to Plaintiffs based on Plaintiffs' claim for breach of fiduciary duty and awarding Plaintiff Lacey compensatory and punitive damages for defamation, from an order denying Defendant's post-trial motions, and from an order awarding attorneys' fees and costs to Plaintiffs. On appeal, Defendant argues that this Court should order a new trial on the grounds that the trial court made inappropriate remarks to Defendant and Defendant's counsel that violated her right to a fair trial and that the trial court's decision to award compensatory and punitive damages for breach of fiduciary duty and compensatory damages for defamation lacked adequate record support and was contrary to law. Plaintiffs Mary Lacey and Jonathan Lucas cross-appeal from an order awarding attorneys' fees and costs to Plaintiffs. On appeal, Plaintiffs argue that the trial court erred by reducing the amount of the attorneys' fee award based on the jury's decision to award punitive damages in Plaintiffs' favor. After careful consideration of the parties' challenges to the trial court's judgment and orders in light of the record and the applicable law, we conclude that the trial court's judgment awarding damages based on Plaintiffs' claims for breach of fiduciary duty and defamation should be affirmed, that the trial court's order denying Defendant's post-trial motions should be affirmed, and that the trial court's order awarding attorneys' fees should be vacated and that this case should be remanded to the Alamance County Superior Court for further proceedings not inconsistent with this opinion.

I. Factual Background

On 24 June 2011, Mary Frances C. Longest died in Alamance County. Ms. Longest's last will and testament was admitted to probate in common form on or about 6 July 2011. Ms. Longest's will devised fifty percent of her estate to her daughter, Defendant Bonnie Kirk, and fifty percent of her estate to Plaintiffs, who were her grandchildren, with one-third of the fifty percent share allotted to the grandchildren having been devised to Plaintiff Lacey and the remaining two-thirds of the fifty percent share allotted to the grandchildren having been devised to Plaintiff Lucas. Defendant was named executrix in Ms. Longest's will.

On 18 September 2012, Plaintiffs filed a complaint, petition for partition, petition for declaratory judgment, and motion for preliminary injunction against Defendant, individually and as attorney-in-fact for Ms. Longest, as trustee of the Mary Frances Cochran Longest Testamentary Trust, and as executrix of the estate of Mary Frances Cochran Longest. In their complaint, Plaintiffs asserted a number of claims for relief, including claims for breach of the fiduciary duty that Defendant owed to Plaintiffs as executrix of Ms. Longest's estate and for defamation of Plaintiff Lacey based on Defendant's assertion that Plaintiff Lacey had murdered Ms. Longest.[1] On 19 November 2012, Defendant filed an answer in which she denied that she was liable to Plaintiffs for breach of fiduciary duty and defamation and asserted that Plaintiffs had stolen from Ms. Longest and that Plaintiff Lacey had murdered Ms. Longest.

On 5 June 2013, following a mediated settlement conference, the parties entered into and signed a memorandum of settlement. On 25 July 2013, Plaintiffs filed a motion to enforce the settlement agreement. At a hearing held on 6 August 2013, Defendant stated that she would not comply with the terms of the settlement agreement. As a result, Plaintiffs withdrew their motion to enforce the settlement agreement, indicated that they would seek a trial on the merits in this case, and announced their intention to prosecute a petition before the Clerk of Superior Court seeking to have the letters testamentary that had been issued to Defendant revoked. On 29 August 2013, the Clerk of Superior Court entered an order revoking the letters testamentary that had been issued to Defendant.

On 7 January 2014, the trial court granted summary judgment in favor of Plaintiff Lacey with respect to the defamation claim.[2] The issue of liability for breach of fiduciary duty and the issue of the amount of compensatory and punitive damages that should be awarded to Plaintiffs for breach of fiduciary duty and defamation came on for trial before the trial court and a jury at the 7 January 2014 civil session of Alamance County Superior Court. On 10 January 2014, the jury returned a verdict finding that Defendant had breached her fiduciary duty to Plaintiffs in the course of administering Ms. Longest's estate and awarding each Plaintiff $6,569.02 in compensatory damages and $300,000 in punitive damages. In addition, the jury awarded Plaintiff Lacey $50,000 in compensatory damages and $100,000 in punitive damages based upon her defamation claim.

At the conclusion of the trial, Defendant made oral motions to set aside the verdict and for a new trial, both of which the trial court indicated would be denied. On 23 January 2014, Plaintiffs filed a motion seeking an award of attorneys' fees and costs that was accompanied by a number of supporting affidavits. On 24 February 2014, the trial court entered a written judgment based upon the jury's verdict.[3] On 10 March 2014, the trial court entered orders granting Plaintiffs' motion for an award of attorneys' fees, in part, and an order denying Defendant's post-trial motions. Defendant noted an appeal to this Court from the trial court's judgment, the order denying Defendant's post-trial motions, and the order awarding attorneys' fees and costs. On 28 March 2014, Plaintiffs filed a notice of cross-appeal from the trial court's attorneys' fee order.

II. Substantive Legal Analysis

Although Defendant noted an appeal from the denial of the post-trial motions that she made pursuant to N.C. Gen. Stat. § 1A-1, Rules 50, 59, and 60, the arguments advanced in Defendant's brief before this Court are directed solely at the denial of the motion for a new trial that she made pursuant to N.C. Gen. Stat. § 1A-1, Rule 59. As a result, Defendant's appeal from the denial of her other post-trial motions is deemed abandoned. N.C. R. App. P. 28(b)(6) (stating that " [i]ssues not presented in a party's brief, or in support of which no reason or argument is stated, will be taken as abandoned" ).

" [A]n appellate court's review of a trial judge's discretionary ruling either granting or denying a motion to set aside a verdict and order a new trial is strictly limited to the determination of whether the record affirmatively demonstrates a manifest abuse of discretion by the judge." Worthington v. Bynum, 305 N.C. 478, 482, 290 S.E.2d 599, 602 (1982). As a result, " a trial judge's discretionary order pursuant to [N.C. Gen. Stat. § ] 1A-1, Rule 59 for or against a new trial upon any ground may be reversed on appeal only in those exceptional cases where an abuse of discretion is clearly shown." Id. at 484, 290 S.E.2d at 603 (emphasis omitted). An abuse of discretion has occurred in the event that a trial court's discretionary decision is " manifestly unsupported by reason," a standard that requires the party seeking appellate relief to " show[] that it was so arbitrary that it could not have been the result of a reasoned decision." White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985). " 'However, where the motion [made pursuant to N.C. Gen. Stat. § 1A-1, Rule 59] involves a question of law or legal inference, our standard of review is de novo.'" N.C. Alliance for Transportation Reform, Inc. v. N.C. Dept. of Transp., 183 N.C.App. 466, 469, 645 S.E.2d 105, 107 (quoting Kinsey v. Spann, 139 N.C.App. 370, 372, 533 S.E.2d 487, 490 (2000) (citation omitted)), disc. review denied, 361 N.C. 569, 650 S.E.2d 812 (2007). " 'Under a de novo review, the court considers the matter anew and freely substitutes its own judgment' for that of the lower tribunal." State v. Williams, 362 N.C. 628, 632-33, 669 S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen, Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)).

A. Conduct of Trial Judge

In her initial challenge to the trial court's order, Defendant argues that she is entitled to a new trial on the grounds that the trial court made inappropriate remarks to and about Defendant and her counsel which deprived Defendant of her right to a fair trial. More specifically, Defendant argues that the trial court's repeated expressions of impatience with the manner in which Defendant and her counsel participated in the trial and expressions of opinions indicating that the trial court had a low opinion of Defendant's truthfulness unfairly prejudiced her chances for a more favorable outcome at trial. Defendant is not entitled to relief from the trial court's judgment on the basis of this set of arguments.

1. Relevant Legal Principles

" It is fundamental to due process that every defendant be tried 'before an impartial judge and an unprejudiced jury in an atmosphere of judicial calm.'" State v. Brinkley, 159 N.C.App. 446, 450, 583 S.E.2d 335, 338 (2003) (quoting State v. Carter, 233 N.C. 581, 583, 65 S.E.2d 9, 10 (1951)). In view of the fact that " 'jurors entertain great respect for [a judge's] opinion, and are easily influenced by any suggestion coming from him,'" a trial judge " 'must abstain from conduct or language which tends to discredit or prejudice' any litigant in his courtroom." McNeill v. Durham County ABC Bd., 322 N.C. 425, 429, 368 S.E.2d 619, 622 (1988) (quoting Carter, 233 N.C. at 583, 65 S.E.2d at 10). Put another way, " [t]he expression of opinion by the trial court on an issue of fact to be submitted to a jury . . . is a legal error." Nowell v. Neal, 249 N.C. 516, 520, 107 S.E.2d 107, 110 (1959) (citations omitted). A trial court's " duty of impartiality extends [from the litigant] to [her] counsel," so that a trial judge " should refrain from remarks which tend to belittle or humiliate counsel since a jury hearing such remarks may tend to disbelieve evidence adduced in [the party's] behalf." State v. Coleman, 65 N.C.App. 23, 29, 308 S.E.2d 742, 746 (1983), cert. denied, 311 N.C. 404, 319 S.E.2d 275 (1984). However, a trial judge is permitted to " question a witness for the purpose of clarifying his [or her] testimony and promoting a better understanding of it." State v. Whittington, 318 N.C. 114, 125, 347 S.E.2d 403, 409 (1986).

" '[N]ot every improper remark made by the trial judge requires a new trial. When considering an improper remark in light of the circumstances under which it was made, the underlying result may manifest mere harmless error.'" Brinkley, 159 N.C.App. at 447-48, 583 S.E.2d at 337 (quoting State v. Summerlin, 98 N.C.App. 167, 174, 390 S.E.2d 358, 361 (1990) (citation omitted)). We use a totality of the circumstances test in evaluating whether a judge's comments were improper and will consider any erroneous statement to be harmless " [u]nless it is apparent that such infraction of the rules might reasonably have had a prejudicial effect on the result of the trial." State v. Larrimore, 340 N.C. 119, 155, 456 S.E.2d 789, 808 (1995) (quoting State v. Perry, 231 N.C. 467, 471, 57 S.E.2d 774, 777 (1950)). Among the factors that have been considered in determining the prejudicial effect of a trial judge's comments are " whether the comment occurred in isolation, any ambiguity in the comment, and the degree to which the comment suggested lack of impartiality." Marley v. Graper, 135 N.C.App. 423, 426, 521 S.E.2d 129, 132 (1999), cert. denied, 351 N.C. 358, 542 S.E.2d 214 (2000). " Where a construction can properly and reasonably be given to a remark which will render it unobjectionable, it will not be regarded as prejudicial[,]" Colonial Pipeline Co. v. Weaver, 310 N.C. 93, 104, 310 S.E.2d 338, 345 (1984), with the burden of establishing that the trial judge's remarks were prejudicial resting on Defendant. State v. Blackstock, 314 N.C. 232, 236, 333 S.E.2d 245, 248 (1985).

2. Trial Court's Statements to Defendant

a. " Tell the Truth"

In her brief, Defendant challenges the comment that the trial court made to Defendant during the following exchange, which addressed the ownership of a particular asset held by the estate:

[Plaintiffs' Counsel]: So when you got this letter, did you understand that Ms. Lacey was just asking for information about the estate?
[Defendant]: Not when there were things on here that Ms. Lacey knew were not true.
[Plaintiffs' Counsel]: Objection, move to stike.
[The Court]: Overruled, go ahead.
[Defendant]: Does that mean I'm supposed to go ahead?
[The Court]: You can answer the question.
[Defendant]: Okay. For instance, the coin collection that was supposed to be Mother's, that was not Mother's. They should have known it had belonged to Daddy.
[The Court]: Your father is dead.
[Defendant]: Do you want me to finish or not?
[The Court]: I want you to tell the truth. Your father was dead -
[Defendant]: That's what I'm -
[The Court]: -- and your mother had inherited the coin ...

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