RICHARD C. WILSON, Plaintiff,
PERSHING, LLC; BANK OF NEW YORK MELLON CORPORATION; JBS LIBERTY SECURITIES, INC.; THE PNC FINANCIAL SERVICES GROUP, INC.; SYNERGY INVESTMENT GROUP, LLC; JBS GROUP, LLC; RBC CAPITAL MARKETS CORPORATION; and JOHN DOE 1, Defendants.
in the Court of Appeals 7 March 2017.
by plaintiff from order entered 17 December 2015 by Judge
Timothy S. Kincaid in Catawba County Superior Court No. 15
Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for
McGuireWoods, LLP, Charlotte, by Brian P. Troutman, Wm.
Grayson Lambert, and Anita Foss, for defendants-appellees
Pershing, LLC and Bank of New York Mellon Corporation.
Law Firm, by Jeffrey D. Jones, for defendants-appellees JBS
Liberty Securities, Inc. and Synergy Investment Group, LLC.
Spruill LLP, Charlotte, by Thomas L. Ogburn III and John M.
Durnovich, for defendant-appellee The PNC Financial Services
Carlyle Sandridge & Rice, LLP, by W. Clark Goodman, for
defendant-appellee RBC Capital Markets Corporation.
Plaintiff Richard C. Wilson appeals from an order dismissing
his civil claims against Pershing, LLC (Pershing), Bank of
New York Mellon (BNY Mellon), JBS Liberty Securities, Inc.
(JBS Liberty), Synergy Investment Group, LLC (Synergy), JBS
Group, LLC (JBS Group), RBC Capital Markets Corporation
(RBCCMC), and John Doe I (collectively, defendants) pursuant
to Rules 12(b)(1), (4), and (6) of the North Carolina Rules
of Civil Procedure. For the reasons that follow, we affirm
the trial court's order in its entirety.
is the founder of Ipswich Bay, LLC (Ipswich), a real estate
development company. In 1996, Wilson sought to purchase and
develop 112 acres of real property located on Lake Norman.
This development project was entitled "Harbor
Cove." After Wilson obtained a revolving line of credit
from Centura Bank (the Centura Loan) to finance the Harbor
Cove project, he engaged a tax attorney to provide tax
treatment and planning advice related to the Centura Loan.
Working with Centura, Wilson's legal team determined that
Wilson could obtain certain tax advantages if funds to be
used as security for the Centura Loan were held in a trust
to Wilson, on 28 February 1996, Centura Bank Vice President
Greg Grier stated that $250, 000.00 could be deposited into a
trust account at Centura Bank, and that the funds would serve
as collateral for the Centura Loan as well as other potential
loans. These funds were subsequently invested in mutual fund
investment accounts (the Ipswich Security Account) that were
managed by either Centura Bank or Centura Securities, Inc.
(Centura Securities). As part of Wilson's tax strategy,
the funds in the Ipswich Security Account were held for his
benefit, but not in his name. It appears that Chris Teague, a
Centura employee, was responsible for managing the Ipswich
Security Account. Wilson understood that the $250, 000.00
deposit would remain invested in mutual funds until he
requested that the money be returned to him, that he would
benefit from mutual fund appreciation, and that no taxes
would be levied on funds in the Ipswich Security Account or
on any gains accruing while those monies were held in trust.
not clear how long the Harbor Cove project lasted, but Wilson
alleges that he "continued to sell property in Harbor
Cove through and after 2006." Wilson also alleges that
while he met with his accountant, attorneys, and bankers
concerning the Harbor Cove project "on a quarterly basis
for many years[, ]" none of Wilson's "trusted
advisors" ever indicated that the funds from the Ipswich
Security Account needed to be transferred or liquidated. In
2013, Wilson met with his accountant to discuss potential tax
write-offs related to Ipswich's developments at Lake
Norman. While gathering information concerning Ipswich's
depreciation schedules reaching back to 1985, Wilson
"discovered Ipswich's detailed documentary records
that had been kept in storage for [him]." Wilson found
within the Ipswich files a certified check issued by Centura
Securities in the amount of $250, 000.00. The check, dated 23
October 1998, was made payable to "Richard Gregg
Wilson" and stated on its face that it was
"void after 180 days." In addition, the check
displayed references to defendant BNY Mellon and defendant
Pershing, a wholly owned subsidiary of BNY Mellon. Wilson
later learned that Pershing was a service provider on the
Ipswich Security Account.
contacted PNC Bank, N.A. (PNC)-an entity that Wilson believed
was the successor in interest to Centura Securities-in late
2013 regarding the check, and PNC indicated that it would
research the matter. While his inquiry was pending with PNC,
Wilson presented the check to Wells Fargo, N.A., which
refused to honor it and referred Wilson to the check's
maker. By letter dated 15 January 2014, PNC informed Wilson
that "[a]lthough the assets in the account with Centura
Securities, Inc. [(i.e., the Ipswich Securities Account)]
secured a loan made by Centura Bank, Centura Bank never had
possession of the funds or the account other than its
security interest." The letter further stated that PNC
never acquired any portion of Centura Securities; rather,
Centura Securities became RBC Centura Securities, an entity
that sold some of its assets to RBC Dain Rausher, which was
later acquired by defendants Synergy and JBS Group in 2007.
After Wilson filed a complaint with the U.S. Consumer
Financial Protection Bureau, PNC reiterated that it never
acquired any part of Centura Securities, and that
Wilson's claim had to be directed to Synergy or JBS.
eventually retained legal counsel, who presented the check to
and demanded payment from BNY Mellon in August 2014.
Pershing's general counsel, Jane Myers, responded to this
demand by letter dated 10 September 2014. Myers explained
that Pershing acted as a "clearing" firm for the
investment account managed by Centura Securities. In this
capacity, Pershing was limited to providing "custodial,
execution[, ] and clearance services" for the Ipswich
Security Account. Myers also rejected Wilson's demand for
payment on the check as follows:
[T]he check here was not a "certified casher's"
check as you claim, but was drawn against the assets held in
the Account. On its face, the check stated that is was
"void after 180 days" when it was issued 15 years
ago. . . .
Because the age of the check exceeds the record retention
period, [Pershing has] very limited information about the
check and the Account. However, [Pershing's] records
reflect that the check was stopped on or about October 26,
1998. The Account was subsequently closed in July
1999.Accordingly, there are no funds on deposit
with Pershing and/or BNY Mellon purportedly owed to [Wilson]
on the check. [Pershing] must direct you to the drawer of the
check for any amounts allegedly owed.
to negotiate the check or otherwise locate the Ipswich
Security Account funds, Wilson filed a verified complaint
(original complaint) in Catawba County Superior Court against
Pershing, BNY Mellon, Synergy, JBS Liberty, JBS Group,
RBCCMC, and John Doe I. The original complaint, filed 22 May
2015, alleged claims for breach of fiduciary duty,
constructive fraud, unjust enrichment, breach of contract,
fraud, and unfair and deceptive trade practices. Defendants
all filed motions to dismiss ...