entered 18 January 2012, 20 March 2014, 21 July 2014, 16
in the Court of Appeals 14 November 2018.
by Plaintiff-Appellant from Orders entered 18 January 2012,
20 March 2014, 21 July 2014, and 16 November 2017 by Judge
James L. Gale, Chief Special Superior Court Judge for Complex
Business Cases, in Superior Court, Brunswick County No. 11
Law Firm, by Kenneth W. King, Jr., plaintiff-appellant.
Law Offices of Oliver & Cheek, LLC, by George M. Oliver
& Ciara L. Rogers, for Edwin L. Burnett, III, Daniel
Hilla, Lenhil, Inc., Lennon Hills, L.L.C., and Viable Corp.,
Cranfill Sumner & Hartzog, LLP, by Carl Newman and
Richard T. Boyette, for Gary Lawrence, defendant-appellee.
Baynard, Morton, Medlin & Brown, P.A., by Maynard M.
Brown and B. Danforth Morton, for Martin J. Evans and
Homeplace Realty Associates, Inc., defendants-appelslees.
HUNTER, JR., ROBERT N., JUDGE.
appeals from Orders entered 18 January 2012, 20 March 2014,
21 July 2014, and 16 November 2017 in which Judge James L.
Gale, Chief Special Superior Court Judge for Complex Business
Cases, in Superior Court, Brunswick County, granted
Defendants' motions to dismiss and motions for summary
judgment and dismissed the case. We affirm.
Factual Background and Procedural History
Record shows the following facts. Plaintiff-Appellant BDM
Investments Inc. ("Plaintiff" or "BDM")
is a general partnership, engaged exclusively in purchasing
and holding real estate. Plaintiff's managing partner,
Kenneth W. King, Jr. ("King"), and its two other
partners, Leah L. King and Richard A. Mu, are licensed
attorneys. Plaintiffs purchased undeveloped land on 1
March 2007 and subsequently lost their investment and
the early 1990s, Glenn Hollingsworth
("Hollingsworth") served as King's personal and
business financial agent and advisor, preparing King's
tax returns and "occupy[ing] a position of close
personal trust" with King. In 2001, Hollingsworth also
began providing personal and business financial advice to
around 2004, Hollingsworth informed King he had sold his
accounting business and acquired a provisional real estate
license. Hollingsworth's provisional real estate license
required supervision by Martin J. Evans/Homeplace Realty
Associates, Inc. ("Evans/Homplace"). At the same time,
Hollingsworth intended to continue serving certain clients by
including them in favorable investment opportunities. Based
on their relationship of trust and confidence, King
"believed that [Hollingsworth] would be acting in
King's best interests in all respects related to matters
of a personal and business financial nature."
2006, Hollingsworth contacted King regarding an
"'unbelievable opportunity'" to invest in
land in the Lennon Hills subdivision in Brunswick County.
Defendants Lenhil, Inc. and Lennon Hills L.L.C. developed and
sold the Lennon Hills Lots. Hollingsworth told King that
plaintiffs could buy ten undeveloped lots in the subdivision
for $850, 000 with a ten percent down payment. After
plaintiffs held the lots for one year, during which time the
developer would pay the interest on the loan for the land,
they could then sell the lots back to the developer for a
profit. Hollingsworth further represented that it was such a
favorable investment, he had purchased lots in the
subdivision. Hollingsworth "offered to take all
necessary actions to complete BDM's investment."
on Hollingsworth's representations about the
"particularly choice lots[, ]" plaintiffs decided
to purchase ten lots from the developer (the "Lennon
Hills transaction"). On 5 December 2006, Plaintiff BDM
signed a contract to purchase the lots for $850, 000 and
deposited $30, 000 earnest money with closing attorney, Gary
Lawrence ("Lawrence"), who was serving as an
"impartial 'escrow agent' for the parties"
to the transaction. At the time BDM signed the contract, the
Lennon Hills plat map had not yet been recorded with the
Brunswick County Register of Deeds.
the Lennon Hill transaction, Hollingsworth assisted
plaintiffs with securing financing, first through Cooperative
Bank, and when that failed, through Wachovia Bank and Trust
Company, Inc. Hollingsworth was also working with Defendant
Edwin L. Burnett, III ("Burnett") and Defendant
Daniel Hilla III ("Hilla"), shareholders of Lenhil
Inc. and Lennon Hills, L.L.C. Hollingsworth had been
preparing Burnett's tax returns, among other services,
for over 20 years. Additionally, Hollingsworth was a W-2
employee of Viable Corp. ("Viable"), a North
Carolina corporation of which Burnett is the sole
shareholder. Viable paid Hollingsworth approximately $3000
per month for his services. According to Plaintiff, Burnett,
a licensed real estate agent, "appointed himself
BDM's agent in the transaction and arranged for his half
of the commission [$42, 500] to be paid through Viable"
to Hollingsworth Further, Burnett "as BDM's agent
arranged for [Lawrence] to represent BDM."
drafted the restrictive covenants for Lennon Hills and the
custom Homesite Purchase Agreement for signing. Plaintiffs
did not know about Lawrence's prior work for Lennon
Hills, but claimed Burnett, "BDM's agent in the
transaction, was aware of this relationship."
contract for the Lennon Hills transaction, which was attached
to each of plaintiffs' complaints: listed the closing
date for plaintiffs' purchase as 6 February 2007; listed
Lawrence as the escrow agent for the transaction; included no
promise by the developer to repurchase the lots; and listed
Lenhil, Inc. as seller. King gave the earnest money check to
Hollingsworth at "First Citizens [Bank] in Porters
Neck[.]" In discussing a closing date with
Hollingsworth, King indicated that his schedule would delay
him coming to Brunswick County; Hollingsworth subsequently
agreed to pick up the documents and meet to sign them.
acted as the closing agent on the Lennon Hills transaction,
preparing all the documents for the closing on behalf of
plaintiffs, pursuant to the contract and the instructions of
the lender. He "treated [the closing] as a 'mail
away' closing . . . [a] common practice in Brunswick
County for real estate transactions . . . ."
deposition indicates he was aware at the date of closing that
Lawrence was the closing attorney. King also stated he did no
due diligence investigation as to the viability of the
developer, made no effort to contact Lawrence as to the
developer or any loans needing to be paid off in connection
to the closing, nor spoke to any attorneys of his choosing
about the transaction.
February 2007, King received "a good faith estimate and
a proposed HUD," which Lawrence had faxed to Lumina
Mortgage broker Nick Frank, who then faxed the statement to
King's bookkeeper. The good faith estimate, which was not
prepared by Lawrence,  reflected the $850, 000 purchase price for
the ten lots, and listed a ten percent commission, split in
two equal parts: $42, 500 to Viable Corp., and $42, 500 to
Lawrence Sales & Marketing.
Sales & Marketing is operated by Pam Lawrence, a real
estate agent who is also Gary Lawrence's wife. Pam
Lawrence and Burnett previously worked together in marketing
and developing the Lennon Hills subdivision and other real
estate ventures. During the development of Lennon Hills, Pam
Lawrence asked Gary Lawrence to draft a form contract for
sales, restrictive covenants, and bylaws for the future
homeowners' association. Lawrence did so. Plaintiff
asserts it did not know of Pam and Gary Lawrence's
deposition, Lawrence explained that in performing the title
search in order to close the loan, he found a prior mortgage
from BB&T Bank to Lennon Hills, L.L.C. as well as a deed
of trust on the entire development from Lennon Hills, L.L.C.
to Lenhil Inc., which Lawrence knew were essentially
duplicate entities. Lawrence asked Alton Lennon, Lennon
Hills' attorney, to release all ten lots that Plaintiff
was purchasing from the deed of trust; Lennon agreed to do
so. Lawrence further stated Burnett, "apparently"
as Plaintiff's agent, was aware of the Lawrence's
marriage, the covenants for the development, and the
homeowners' association bylaws.
Lennon Hills transaction closed on 1 March 2007, when King
met Hollingsworth in a parking lot and signed documents
closing Plaintiff's purchase of the ten lots. King knew
Lawrence was the closing attorney but had had no
communications with Lawrence at that time. Lawrence did not
attend the parking lot closing.
closing documents included a Wachovia Bank closing statement
and a final HUD settlement statement, prepared by Lawrence as
the settlement agent, and signed by King. King also affirmed
during his deposition that he "had seen a draft HUD a
week or so earlier that indicated [Lawrence] was the closing
attorney[.]" The statement, which was included as an
exhibit to plaintiffs' complaints, lists a $42, 500
commission payment each to Lawrence Sales & Marketing and
Viable. Hollingsworth's commission was concealed in the
sales commission paid to other defendants.
the transaction, King admitted "BDM never reduced any
binding repurchase agreement with the developers to
writing," nor did plaintiffs perform any "due
diligence investigation into the lot purchase" or
"visit or look at the property before signing the
homesite purchase agreement or closing the transaction."
No documents included the promise by the seller to pay the
first year's interest on the loan or to buy back the lots
at a profit. King also admitted he "didn't pay any
particular attention" to the entities receiving
commission, nor did he raise questions with Hollingsworth
about the commission for the transaction. At the closing,
King gave Hollingsworth a check for $63, 526.48 covering the
remaining balance of the ten percent down payment and
additional closing costs.
March 2007, Viable Corp. paid $42, 500 to Hollingsworth; this
payment was not disclosed to Lawrence. Hollingsworth did not
disclose the transaction to Evans/Homeplace, and upon
questioning by Evans, he "denied receiving the $42, 500
letter of 30 March 2007, Lawrence "sent correspondence
to plaintiffs enclosing a General Warranty Deed." The
mailing included deeds for the ten lots in the Lennon Hills
subdivision. Lawrence performed no further representation,
nor did he and King communicate directly until this
February 2011, plaintiffs filed the original complaint and
issuance of summons against 29 defendants. The complaint
included 19 causes of action and a separately pled claim for
punitive damages against all defendants. On 16 March 2011,
plaintiffs filed the First Amended Complaint against 29
defendants, with 19 causes of action and a claim for punitive
damages against all defendants. On 8 April 2011, the North
Carolina Supreme Court designated the case a Complex Business
Case, and assigned the case on 14 April 2011 to the Honorable
James L. Gale, Special Superior Court Judge for Complex
April and November of 2011, defendants filed answers to the
complaints, motions to strike, and numerous motions to
January 2012, the trial court dismissed by order the
following claims pursuant to motions to dismiss under N.C.
Gen. Stat. § 1A-12(b)(6): Legal Malpractice and Breach
of Fiduciary Duty against Lawrence; Negligent
Misrepresentation and Unfair and Deceptive Trade Practices
against Lennon Hills Defendants; and all claims against
not dismissed were subject to discovery. After discovery
concluded, the trial court heard oral arguments on 17
December 2013. On 20 March 2014, the trial court issued an
order and opinion on six motions: (1) Plaintiff's motion
for summary judgment against Lennon Hills Defendants, which
the court denied; (2) Plaintiff's motion for summary
judgment against the Estate of Hollingsworth, which the court
denied; (3) Defendant Judith Hollingsworth's, as
Executrix of the Estate of Hollingsworth, motion for summary
judgment on all claims, which the court granted in part and
denied in part; (4) Lennon Hills Defendants' motion for
summary judgment, which the court granted in part and denied
in part; (5) Defendant Lawrence's motion for summary
judgment, which the court granted; and (6) Plaintiff's
motion to amend complaint and to rescind and/or amend
pursuant to Rules 15 and 54(b), which the court granted in
part and denied in part.
May 2014, the Lennon Hills Defendants filed a motion for
summary judgment as to Plaintiff's claim for piercing the
corporate veil. The trial court issued an order and opinion
on 21 July 2014 explaining that after the 20 March 2014
order, the parties disagreed as to whether Plaintiff's
claim for piercing the corporate veil survived that order.
The court determined the claim remained and allowed the
Lennon Hills Defendants to file a motion as to the claim. The
court granted the motion as to Plaintiff's claim for
piercing the corporate veil and dismissed the claim with
prejudice, leaving no other claims against Defendants Burnett
October 2017, Plaintiff filed a Notice of Dismissal with
Prejudice, dismissing its claims against Judith Hollingsworth
individually and as Executrix of the Estate of Glenn
Opinion and Final Order filed 16 November 2017, the trial
court dismissed Plaintiff's action by denying its motions
for summary judgment as to all defendants, granting the
defendants' cross-motions, and resolving all claims in
the action. Accordingly, the court dismissed the following
claims pursuant to defendants' motions for summary
judgment: Constructive Fraud and Negligent Misrepresentation
against Lawrence; Civil Conspiracy against all defendants;
Aiding and Abetting Breach of Fiduciary Duty against all
defendants; and Punitive Damages.
December 2017, Plaintiff filed a Notice of Appeal as to Judge
Gale's 18 January 2012, 20 March 2014, 21 July 2014
interlocutory orders and 16 November 2017 Final Order and
Opinion dismissing all remaining defendants.
Gale's orders of 18 January 2012, 20 March 2014, and 21
July 2014 were interlocutory; his Opinion and Final Order of
16 November 2017 is a final judgment. The North Carolina
Supreme Court designated this a Complex Business Case on 8
April 2011. Because the designation was prior to 1 October
2014, this Court reviews the appeal pursuant to N.C. Gen.
Stat. § 7A-27(b).
Standards of Review
Motion to Dismiss
appeal of a [Rule] 12(b)(6) motion to dismiss, this Court
conducts a de novo review of the pleadings to
determine their legal sufficiency and to determine whether
the trial court's ruling on the motion to dismiss was
correct." Podrebarac v. Horack, Talley, Pharr, &
Lowndes, P.A., 231 N.C.App. 70, 74, 752 S.E.2d 661,
663-64 (2013) (citation omitted). This Court views the
allegations in the complaint in the light most favorable to
the non-moving party. Donovan v. Fiumara, 114
N.C.App. 524, 526, 442 S.E.2d 572, 574 (1994); N.C. Gen.
Stat. § 1A-1, Rule 12(b)(6). This Court considers
"whether, as a matter of law, the allegations of the
complaint, treated as true, are sufficient to state a claim
upon which relief may be granted under some legal theory[.]
Harris v. NCNB Nat. Bank of North Carolina, 85
N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987). Under North
Carolina's notice pleading requirements, "[a]
complaint is sufficient to withstand a motion to dismiss
where no insurmountable bar to recovery on the claim alleged
appears on the face of the complaint and where allegations
contained therein are sufficient to give a defendant notice
of the nature and basis of [a plaintiff's] claim so as to
enable [them] to answer and prepare for trial."
McAllister v. Ha, 347 N.C. 638, 641, 496 S.E.2d 577,
580 (1998) (citation omitted).
this Court takes factual allegations in the complaint as
true, Hargett. v. Holland, 337 N.C. 651, 653, 447
S.E.2d 784, 786 (1994) (citation omitted), we are not
required to "accept as true allegations that are merely
conclusory, unwarranted deductions of fact, or unreasonable
inferences." Good Hope Hosp., Inc. v. N.C.
Dep't of Health and Human Svcs., 174
N.C.App. 266, 274, 620 S.E.2d 873, 880 (2005). In North
Carolina, dismissal pursuant to Rule 12(b)(6) is appropriate
when one of three conditions is satisfied:
(1) when on its face the complaint reveals no law that
supports plaintiff's claim; (2) when on its face the
complaint reveals the absence of fact sufficient to make a
good claim; and (3) when some fact disclosed in the complaint
necessarily defeats plaintiff's claim.
Johnson v. Bollinger, 86 N.C.App. 1, 3, 356 S.E.2d
378, 380 (1987).
statute of limitations can be the basis for dismissal on a
Rule 12(b)(6) motion if the face of the complaint discloses
that plaintiff's claim is so barred." Reunion
Land Co. v. Village of Marvin, 129 N.C.App. 249, 250,
497 S.E.2d 446, 447 (1998) (citation omitted). "Whether
a statute of repose has run is a question of law."
Glens of Ironduff Prop. Owners Ass'n v. Daly,
224 N.C.App. 217, 220, 735 S.E.2d 445, 447 (2012) (citation
omitted). It is well settled that "[q]uestions of
statutory interpretation are ultimately questions of law for
the courts and are reviewed de novo." In re Summons
of Ernst & Young, 363 N.C. 612, 616, 684 S.E.2d 151,
154 (2009) (citation omitted). B. Summary Judgment
to Rule 56 of the North Carolina Rules of Civil Procedure,
this Court reviews de novo a claim for a motion for
summary judgment. Stanback v. Stanback, 297 N.C.
181, 185, 254 S.E.2d 611, 615 (1979). Such review requires a
two-part analysis of whether: the pleadings, depositions,
answers to interrogatories, and admissions on file, together
with the affidavits, show that no genuine issue as to any
material fact exists, and that the movant is entitled to
judgment as a matter of law. N.C. Gen. Stat. § 1A-1,
Rule 56(c); Andresen v. Progress Energy, Inc., 204
N.C.App. 182, 184, 696 S.E.2d 159, 160-61 (2010). The moving
party must demonstrate the absence of a triable issue:
"(1) by showing that an essential element of the
opposing party's claim is nonexistent; or (2) [by]
demonstrating that the opposing party cannot produce evidence
sufficient to support an essential element of the claim or
overcome an affirmative defense which would work to bar [its]
claim." Wilhelm v. City of Fayetteville, 121
N.C.App. 87, 89, 464 S.E.2d 299, 300 (1995) (citing
Roumillat v. Simplistic Enters., Inc., 331 N.C. 57,
63, 414 S.E.2d 339, 342 (1992)).
moving party is able to meet this burden, the non-moving
party "must 'produce a forecast of evidence
demonstrating that the [non-moving party] will be able to
make out at least a prima facie case at trial.'"
Roumillat, 331 N.C. at 63, 414 S.E.2d at 342
(quoting Collingwood v. Gen. Elec. Real Estate Equities,
Inc., 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989)). This
forecast "may not rest upon the mere allegations or
denials of [a] pleading," N.C. R. Civ. P. 56(e), nor may
it rest upon unsworn affidavits or other inadmissible
materials, see Rankin, 210 N.C.App. at 218-22, 706
S.E.2d at 314-16 (affirming summary judgment where only
inadmissible, unauthenticated documents and no affidavits or
sworn testimony were submitted in response to summary