in the Court of Appeals 21 March 2017.
by plaintiff from order entered 25 July 2016 by Senior
Resident Judge Robert H. Hobgood in New Hanover County
Superior Court No. 14 CVS 4219
Randolph M. James, PC, by Randolph M. James, for
Cranfill Sumner & Hartzog LLP, by Melody J. Jolly and
Patrick M. Mincey, for defendant-appellee Wayne James Payne.
Dickie, McCamey & Chilcote, PC, by Joseph L. Nelson, for
defendant-appellee Michael R. Ramos.
Barry Freedman (appellant) appeals from an order of the trial
court dismissing his claims for breach of fiduciary duty,
breach of contract, constructive fraud, and fraud brought
against Wayne James Payne and Michael R. Ramos (defendants).
On appeal, appellant argues that the trial court erred by
dismissing his claims "based upon the law of the case
and in pari delicto doctrines." After careful
review of appellant's arguments in light of the record on
appeal and the applicable law, we conclude that the trial
court did not err.
December 2014, appellant and Freedman Farms filed a complaint
against defendants "in New Hanover County Superior Court
following defendants' representation of appellant in
federal district court. In the complaint, appellant alleged
professional malpractice, breach of fiduciary duty,
constructive fraud, breach of contract, and fraud. Freedman
Farms alleged fraud and breach of contract by a third-party
beneficiary." Freedman v. Payne, __ N.C.App.
__, __, 784 S.E.2d 644, 646 (2016) (Freedman I). On
18 December 2014, our Supreme Court granted defendants'
motion to designate the case as exceptional and assigned the
case to Senior Resident Superior Court Judge Robert H.
filed separate motions to dismiss the complaint pursuant to
N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) for failure to
state a claim upon which relief could be granted. On 19 March
2015, the court entered an order concluding that
defendants' motions to dismiss appellant's claim for
legal malpractice "should be allowed with prejudice
based on in pari delicto[.]" The trial court
denied defendants' motions to dismiss the remaining
claims, and certified the matter for appellate review
pursuant to N.C. Gen. Stat. § 1A-1, Rule 54(b) (2015).
Plaintiff appealed the dismissal of his claim of legal
malpractice to this Court, which affirmed the trial
court's order in Freedman I. The factual
background of this case was summarized in Freedman
Appellant and his parents manage Freedman Farms, a
multi-county farming operation in which they . . . operate
several hog farms. . . . [In] December 2007, Freedman Farms
discharged approximately 332, 000 gallons of liquefied hog
waste . . . into Browder's Branch, a water of the United
States. . . . [A]ppellant and Freedman Farms were charged
with intentionally violating the Clean Water Act. Appellant
retained defendants to represent him.
The trial began on 28 June 2011, and the prosecution put on
evidence for five days. In appellant's complaint, he
alleges that prior to the resumption of trial on 6 July 2011,
defendant Ramos told appellant that the Assistant United
States Attorney (AUSA) had approached him with a plea deal. .
. . [A]ppellant states [that] defendant "Ramos asked
AUSA Williams whether the government, in exchange for both
[appellant] and Freedman Farms pleading guilty and agreeing
to pay $1, 000, 000 in restitution and a $500, 000 fine,
would reduce the charges against [appellant] to a misdemeanor
negligent violation of the Clean Water Act." . . .
[A]ppellant claims that he asked defendant Ramos to negotiate
the fines and restitution to $500, 000, to take incarceration
"completely off the table, " and to make AUSA
Williams agree that neither appellant nor Freedman Farms
would be debarred from federal farm subsidies.
Appellant further states in his complaint that when defendant
Ramos returned from negotiating, he told appellant the
following: the government was not interested in active time,
the prosecutor agreed to "stand silent" at
sentencing, appellant and Freedman Farms would avoid
debarment from federal farm subsidies, and these promises
were "part of a side-deal with [the prosecutor]-a
wink-wink, nudge-nudge-and that [appellant] must not disclose
this side-deal to the court, " as it "would cost
[appellant] the chance to assure that he would not be
Accordingly, . . . appellant pleaded guilty to negligently
violating the Clean Water Act. On 6 July 2011, the district
court approved [the] plea agreement. Contrary to the terms
of the alleged side-deal, in appellant's plea agreement,
"the government expressly reserve[d] the right to make a
sentence recommendation . . . and made no representations as
to the effects of the guilty plea on debarment from Federal
On 13 February 2012, . . . [a]ppellant was sentenced to six
months in prison and six months of house arrest[.] . . .
Appellant obtained a new attorney[.] . . . The district court
held a resentencing hearing on 1 October 2013 in which it
vacated appellant's previous conviction. Pursuant to a
new plea agreement, appellant again pleaded guilty to
negligently violating the Clean Water Act. The district court
imposed a sentence of "five years of probation . . . and
ten months going forward of home detention[.]" . . .
Appellant was also required to pay the remaining restitution
that Freedman Farms owed[.] . . .
Freedman I, __ N.C.App. at __, 784 S.E.2d at 646-47.
Our opinion in Freedman I, which is discussed in
greater detail below, held that certain allegations in
appellant's complaint established that appellant had
participated in the wrongdoing of which he accused
defendants, and affirmed the trial court's dismissal of
appellant's legal ...