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Jacobs v. John W. Dees-Dees Law Firm

United States District Court, E.D. North Carolina, Western Division

December 21, 2017




         This matter is before the court upon defendant John W. Dees's (“Dees”) motion to dismiss or for judgment on the pleadings, (DE 22), and upon plaintiffs' motions for default judgment and preliminary injunction. (DE 28, 30). The issues presented are ripe for ruling. For the reasons that follow, plaintiffs' motions are denied, and Dees's motion is granted in part, denied in part, and converted to a motion for summary judgment.


         The court proceeds here immediately to discussion of issues pertinent to the pending motions where the case background is a matter of record.[1] Following extension of deadlines to make proof of service, (DE 17), plaintiffs lodged on the docket affidavits executed by plaintiff James Jacobs (“James Jr.”), which provide adequate evidence of service as to all defendants. (See DE 20). Following expiration of the deadline for responsive pleadings, with no such responsive pleadings having been received except with respect to defendant Dees, [2] the court, on plaintiffs' motion, directed the clerk to enter default against the non-responding defendants, (Aug. 24, 2017, Text Order; Nov. 6, 2017, Text Order), but denied plaintiffs' motions for default judgment where proceedings involving Dees remain ongoing and where claims against Dees are intertwined with claims against other defendants.

         Following these procedures, defendant Dees filed the instant motion to dismiss or for judgment on the pleadings. (DE 22). Plaintiffs responded to the motion by way of two separate responsive memoranda. (DE 26, 31). Dees made no reply.

         In addition, following defendant Dees's motion to dismiss, plaintiffs renewed previous motions for default judgment and moved for preliminary injunction by two separately-filed motions. (DE 28, 30). The latter filing restates the contentions set forth in the former filing in slightly different language, adds a sentence expanding upon the motion for preliminary injunction, which was referenced in the former motion only in its caption, and includes a certificate of service and proposed order, which documents were not integrated with the former motion. No defendant has responded to either motion for default judgment or preliminary injunction.


         The facts alleged in the pleadings may be summarized as follows. Plaintiffs James Jr. and Barbara Stephens (“Stephens”) are brother and sister. (DE 10 ¶ 9). Plaintiff Stephens is also known as Barbara Ann Jacobs. (DE 14 ¶ 12). James R. Jacobs (“James Sr.”) is the deceased husband of Erma Jo Jacobs (“Erma”). James Sr. and Erma are plaintiffs' parents. (DE 10 ¶ 12; DE 14 ¶ 33).

         Defendant Philyaw approached Erma in 2002 offering to purchase timber on certain land in which plaintiffs also had an interest (“the subject property”), which offer was increased in scope so as to include the property itself. (DE 10 ¶ 16). Defendant Philyaw hired defendant Dees, an attorney, to represent him in this matter. (Id. ¶¶ 17, 18). Two deeds dated August 26, 2002 (the “August deed”) and September 3, 2002 (the “September deed”) were each filed simultaneously with the Cumberland County Register of Deeds on September 4, 2002, and purport to transfer ownership of the subject property to Raleigh Land & Timber Associates (the “2002 transaction”). (DE 1-1; DE 1-4).[3] At all times while Erma and Philyaw negotiated and executed the 2002 transaction, Erma suffered a cognitive impairment later diagnosed and dementia and Alzheimer's disease. (DE 10 ¶ 14).

         The August and September deeds bear the signatures of Erma, James Sr. and plaintiff Stephens. (DE 1-1; DE 1-4). According to the complaint, plaintiffs and James Sr. were not alerted to the 2002 transaction when it took place. (DE 10 ¶ 33). Plaintiffs allege they first learned of the 2002 transaction in February, 2016. (DE 10 ¶ 28).

         Plaintiffs complain also of the actions of the deceased non-party Victor Bose (“Bose”), a notary. Although plaintiffs do not allege that signatures appearing on the August and September deeds are forgeries, plaintiffs allege that Bose participated in the scheme to effect the 2002 transaction by notarizing presence of plaintiff Stephens and James Sr. when those individuals were not in Bose's presence at time of signing. (DE 10 ¶¶ 22-24).

         After the 2002 transaction, defendant Philyaw transferred the subject property to defendant Robert and Henrietta Bethea. (DE 14 ¶ 24). Plaintiff alleges that defendant Daughtry perpetrated some manner of foreclosure scam against plaintiffs unrelated to the facts at issue in this case except insofar as plaintiffs' investigation of that matter led them to discover the facts in issue here. (See DE 14 ¶ 28). Embedded in the amended complaint is a request to restrain George Autry and/or Farm and Land Realty, neither of which is a defendant, from conveying the subject property, now being offered for sale. (DE 10 ¶ 35).

         Only defendant Dees has answered. (DE 12). In his answer he asserts, among other things, that only Erma and plaintiff Stephens owned the subject property at time of its transfer. (Id. at 3 ¶ 20). He attaches a deed identifying the two as receiving the subject property in February 1979 (the “1979 deed”), which deed was re-recorded to reflect the correct spelling of Erma's name. (DE 12-1; DE 12-2). The deed to Raleigh Land & Timber Associates references prior deed recorded in 1979, by book and page for further description. (DE 1-1 at 1 (“See Book 2706, Page 57, for chain of title.”)).

         By their reply, [4] plaintiffs' admit that the two deeds attached to defendant Dees's answer are authentic. (DE 14 at 6 ¶ 2 (“Plaintiffs agree that the two deeds mentioned by [Dees] were recorded as he mentioned.”)). Moreover, plaintiffs allege that, “[t]he listing of added grantors came afterwards[, ]” which statement sounds as allegation that plaintiff James Jr. acquired an interest in the subject property after it was transferred to Erma and Stephens in 1979. (DE 14 at 6 ¶ 2). Indeed, the reply discloses that document attached thereto as exhibit A1, (DE 14-2), which document plaintiffs obtained from the Cumberland County Register of Deeds in Fayetteville, North Carolina, (DE 14 at 5 ¶ 29), is the touchstone of plaintiffs' contention that plaintiff James Jr. was a part owner of the subject property before 2002 (the “Cumberland County detail”). The Cumberland County detail reads as follows:

         (Image Omitted).

         Plaintiffs' reply includes also a signed copy of the September deed with a handwritten note attached stating “copies for each family group[, ]” (DE 14-4), and an unsigned document titled “Lien Waiver” with language constituting representation of Erma, James Sr., and Stephens, that the subject property is free of any cloud on the title. (DE 14-5). The lien waiver includes two handwritten notes stating, “This lien waiver original & copy is just for your records. What we have already signed is good” and “You can sign this to match timber deed if you'd like. Our faxed lien waiver is good however.” (Id.). Plaintiffs point to these notes as evidence that defendants Philyaw and Dees improperly “coached Erma [] by prompting her where and when to sign intended documents.” (DE 14 at 4 ¶ 24).

         Following discovery of the foregoing facts, plaintiffs initiated this action.


         A. Standard of Review

         A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the complaint but “does not resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses.” Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir.1992); see also Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir.1999). A complaint states a claim under 12(b)(6) if it contains “sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). ÔÇťAsking for plausible grounds . . . does not impose a probability ...

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