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Braswell v. Medina

Court of Appeals of North Carolina

September 5, 2017

PHILLIP BRASWELL, Plaintiff,
v.
BRANDON MEDINA, JOHN W. DENTON, MICHAEL A. WHITLEY, in their individual and official capacities; THE CITY OF ROCKY MOUNT, N.C. AND THE STATE OF NORTH CAROLINA, Defendants.

          Heard in the Court of Appeals 17 May 2017.

         Appeal by plaintiff from order entered 24 August 2016 by Judge Allen Baddour in Nash County No. 16 CVS 412 Superior Court.

          Ekstrand & Ekstrand LLP, by Robert C. Ekstrand, for plaintiff-appellant.

          Poyner Spruill LLP, by J. Nicholas Ellis, for defendants-appellees Medina, Denton, Whitley, and the City of Rocky Mount.

          Attorney General Joshua H. Stein, by Special Deputy Attorney General David J. Adinolfi II, for defendant-appellee State of North Carolina.

          DAVIS, Judge.

         In this appeal, we consider whether the plaintiff's complaint stated valid claims for relief both under 42 U.S.C. § 1983 and North Carolina common law based on his allegations that the defendants caused him to be arrested and indicted without probable cause by concealing and fabricating evidence. Plaintiff Phillip Braswell appeals from the trial court's order granting the motions to dismiss of Brandon Medina, John W. Denton, Michael A. Whitley and the City of Rocky Mount (collectively the "Rocky Mount Defendants") and the State of North Carolina pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. For the following reasons, we affirm in part and reverse in part.

         Factual and Procedural Background

         We have summarized - and, at times, quoted - the pertinent facts below using Plaintiff's statements from his complaint, which we treat as true in reviewing the trial court's order granting a motion to dismiss under Rule 12(b)(6). Feltman v. City of Wilson, 238 N.C.App. 246, 247, 767 S.E.2d 615, 617 (2014).

         After working at a Ford dealership for 19 years, Braswell left that job to become a self-employed investor in 1997. Braswell's uncle, William Greene, subsequently loaned Plaintiff $10, 000 in 1998 for investment purposes. The loan was memorialized by an agreement in which Braswell agreed to repay the loan at an interest rate of 10%. Between 1998 and 2009, this loan was extended or "rolled over" each year by agreement between Mr. Greene and Braswell. At no time was Braswell a licensed investment advisor, and he did not hold himself out to be one.

         Between 1998 and 2006, Mr. Greene made additional loans to Braswell.[1]Braswell's aunt, Ola Beth Greene, also lent him money during this time period.

         In August or September of 2009, the Greenes requested repayment of one of the loans, and Braswell responded that he "did not have the money, but he was working on it." In December of that year, Braswell explained to the Greenes that he could not repay the loans because their money had been "lost along with [Braswell's] own money in a collapse of investment markets that finance experts called a 'global financial meltdown.'"

         On 4 February 2010, the Greenes reported the loss of these funds - which they claimed totaled $112, 500 - to Officer Medina of the Rocky Mount Police Department. Officer Medina subsequently secured a search warrant for Braswell's home, which was executed on 9 February 2010. During the search, Officer Medina seized computers; thumb drives; tax returns for the years 2003 through 2008; financial statements from RBC, Bank of America, First South, Fidelity Investments, and MBNA; delinquency notices; and two blank Fidelity Investments checkbooks.

         These records revealed that Braswell's account with Fidelity Investments had contained over $100, 000 in early 2008, but by the end of that year "the financial crisis had taken its toll on [Braswell]'s investments and the account had essentially no value." None of the records "seized from [Braswell's] home tended to show that [he] had done anything with the money he received from the Greenes other than invest it in legitimate financial institutions."

         Officer Medina proceeded to arrest Braswell pursuant to an arrest warrant he had obtained. After being read his Miranda rights, Braswell gave the following statement to Officer Medina:

I began investing in stocks to try to make a living in late 1998. I had mentioned to my uncle, Willie Greene, that I could pay him higher interest than a CD so he started investing some money with me too. I took this money and invested [in] stocks along with my own. I did real well for a while but then things started to change. I started losing money. I began to borrow from real estate [] my mom owned with her permission to recoup my losses. . . . Eventually I had lost my money along with my mom's and my uncle's and aunt's. In May 2008, I had an accident [from] which I was expecting a settlement. I haven't received the settlement yet, but between that [and] work I was expecting to make some or all of what I . . . owed my uncle and aunt. They had been rolling over their investments with me and I thought I would have several years to come up with the money. In September 2009, Willie said that he wanted to cash in one of his investments. I asked him to wait a while and I was going to try to come up with money but didn't. My aunt asked me on December 8, 2009 about their investments and I told them that I had lost their money. I had taken my money that I borrowed from my mom's property and some other money she had to try to invest to rectify the situation. But sadly it went from bad to worse when I had lost that too.

(Brackets and ellipses in original.)

         In addition to this statement, Braswell "provided [Officer] Medina [with] records, documents and electronically stored information proving that he invested his and the Greenes' funds in legitimate financial institutions." Nevertheless, Officer Medina instituted criminal proceedings against Braswell, which ultimately resulted in a grand jury indicting him on 5 April 2010 on the charge of obtaining property by false pretenses in excess of $100, 000.

         Specifically, the indictment alleged that Braswell "unlawfully, willfully and feloniously did knowingly and designedly with the intent to cheat and defraud, obtain $112, 500.00 in U.S. Currency from William Irvin Green [sic] and Ola Beth Green [sic], by means of a false pretense which was calculated to deceive and did deceive" - the false pretense being that the "property was obtained by [Braswell] guaranteeing a six percent return on all invested monies from William Irvin Green [sic] and Ola Beth Green [sic], when in fact [Braswell] did not invest the monies into legitimate financial institutions." (Emphasis added.)

         Braswell was held in pre-trial detention until his trial on 6 February 2012. He was convicted and sentenced to 58 to 79 months imprisonment. On appeal, this Court vacated his conviction, explaining as follows:

[T]he "false pretense" or "false representation" which [Braswell] allegedly made to the Greenes consisted of a statement that [Braswell] was borrowing money from the Greenes for investment-related purposes despite the fact that he did not actually intend to invest the money that he received from them in any "legitimate financial institution." A careful review of the record developed at trial reveals the complete absence of any support for this allegation.

State v. Braswell, 225 N.C.App. 734, 741, 738 S.E.2d 229, 234 (2013).

         We noted that the State did not present any records seized from the search of Braswell's home showing that he had failed to invest the Greenes' money in legitimate financial institutions and observed that "the fact that [Braswell]'s account with Fidelity Investments contained $100, 000 in early 2008 suggests that he did, in fact, make investments with such institutions." Id. Moreover, we explained, "the State offered no direct or circumstantial evidence tending to show that, instead of investing the money he borrowed from the Greenes, [Braswell] converted it to his own use." Id. at 742, 738 S.E.2d at 234.

         On 24 March 2016, Braswell filed a civil lawsuit in Nash County Superior Court from which the present appeal arises. In his complaint, Braswell alleged, in pertinent part, that

[o]n 5 April 2010, Defendants Medina, Denton, and . . . Whitley[ ] fabricated probable cause to mislead a Nash County grand jury into returning a bill of indictment charging [Braswell] with felony obtaining property by false pretenses. At the time they caused the indictment to issue, Medina, Denton, and Whitley knew they did not have probable cause to believe [Braswell] committed that or any other crime.

         Braswell alleged federal claims under 42 U.S.C. § 1983 against Officers Medina, Denton, and Whitley (collectively the "Officers") in their individual capacities.[2] Additionally, Braswell asserted state law claims against the Rocky Mount Defendants for malicious prosecution, obstruction of justice, negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress. Finally, his complaint contained claims against the City and the State of North Carolina for violations of the North Carolina Constitution.

         On 6 April 2016, the State filed a motion to dismiss pursuant to Rules 12(b)(1) and (6). The Rocky Mount Defendants filed a motion to dismiss on 15 April 2016 seeking dismissal of all of Braswell's claims against them pursuant to Rule 12(b)(6). Following a hearing before the Honorable Allen Baddour on 5 August 2016, the trial court issued an order on 24 August 2016 dismissing this entire action pursuant to Rule 12(b)(6). Braswell filed a timely notice of appeal.[3]

         Analysis

         As an initial matter, we conclude that Braswell has abandoned any challenges to the trial court's dismissal of his claims against the Rocky Mount Defendants for negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress because he failed to address the dismissal of these claims in his principal brief on appeal. See N.C. R. App. P. 28(b)(6) ("Issues not presented in a party's brief, or in support of which no reason or argument is stated, will be taken as abandoned.").[4]

         Accordingly, we consider only whether the trial court erred in dismissing Braswell's § 1983 claims; state law claims for malicious prosecution and obstruction of justice; and claim under the North Carolina Constitution.

The standard of review of an order granting a Rule 12(b)(6) motion is whether the complaint states a claim for which relief can be granted under some legal theory when the complaint is liberally construed and all the allegations included therein are taken as true. On appeal, we review the pleadings de novo to determine their legal sufficiency and ...

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