BOWLES AUTOMOTIVE v. DIV. OF MOTOR VEHICLES

• Decision Date: 16 March 2010
• Docket Number: No. COA08-1411.,COA08-1411.
• Citation: 690 S.E.2d 728
• Parties: BOWLES AUTOMOTIVE, INC., Plaintiff, v. NORTH CAROLINA DIVISION OF MOTOR VEHICLES, Defendant.
• Court: North Carolina Court of Appeals

690 S.E.2d 728

BOWLES AUTOMOTIVE, INC., Plaintiff, v. NORTH CAROLINA DIVISION OF MOTOR VEHICLES, Defendant.

No. COA08-1411.

Court of Appeals of North Carolina.

March 16, 2010.

Ott Cone & Redpath, P.A., by Melanie M. Hamilton, Greensboro, for Plaintiff.

Attorney General Roy Cooper, by Special Deputy Attorney General Neil Dalton and Assistant Attorney General John W. Congleton, for the State.

STEPHENS, Judge.

I. Procedural History and Factual Background

A. The Division's Eleven Actions

The litigation surrounding this case began in May 2004 when, pursuant to N.C. Gen. Stat. § 20-108 (2009),¹ the North Carolina Division of Motor Vehicles ("Defendant" or "the Division") filed eleven "dispositional civil actions" in the District Court of Iredell County² to determine the ownership and proper disposition of stolen motorcycles and parts, which had been seized by the Division during the investigation of a motorcycle theft ring and were being held in storage by Bowles Automotive, Inc. ("Plaintiff" or "Bowles"). Plaintiff filed counterclaims in each of the eleven actions, seeking to enforce its storage lien under N.C. Gen.Stat. § 44A. In March 2006, Bowles amended its counterclaims, asserting a claim for breach of contract against the Division for failure to pay towing and storage fees to Plaintiff.

On 6 March 2007, Bowles filed a motion in district court for summary judgment on the Division's eleven actions. Judge April Wood denied Bowles' motion in an order entered 13 July 2007 finding that "neither party was entitled to judgment as a matter of law."

B. Background of Plaintiff's Separate Claim

On 9 May 2006, Plaintiff filed a separate lawsuit for breach of contract against Defendant, and it is this action which forms the basis for Defendant's appeal. The procedural history of Plaintiff's lawsuit is confusing at best, and it has taken an exorbitant amount of this Court's energy to decipher the record on appeal and to determine how this matter was resolved at the trial court level. The caption on Plaintiff's original complaint, "IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION," indicates that Plaintiff filed its action in superior court.³ On 26 June 2006, by a pleading entitled "Motion to Strike, Motions to Dismiss and Answer" bearing the court file number "06 CRS 1249" and indicating that the document was filed in the "Superior Court Division," Defendant responded to Plaintiff's complaint and filed motions to dismiss Plaintiff's lawsuit on the grounds: (1) of sovereign immunity; (2) that Plaintiff failed to state a claim upon which relief can be granted; (3) that Plaintiff never entered into a legally enforceable contract with the State; (4) that the statute of limitations had expired; and (5) under the doctrine of laches on the grounds of undue prejudice and unreasonable delay. Subsequent court documents contained in the record on appeal, however, reveal that Plaintiff's action was eventually disposed of in district court, although no order transferring the matter from superior court to district court appears in the record.

Despite the amount of damages sought by Plaintiff, it is clear that Plaintiff's original action could have been brought in either the district court or the superior court division of the General Court of Justice. "Original general jurisdiction of all justiciable matters of a civil nature cognizable in the General Court of Justice is vested in the aggregate in the superior court division and the district court division as the trial divisions of the General Court of Justice." N.C. Gen.Stat. § 7A-240 (2007).

For the efficient administration of justice in respect of civil matters as to which the trial divisions have concurrent original jurisdiction, the respective divisions are constituted proper or improper for the trial and determination of specific actions and proceedings in accordance with the allocations provided in this Article. But no judgment rendered by any court of the trial divisions in any civil action or proceeding as to which the trial divisions have concurrent original jurisdiction is void or voidable for the sole reason that it was rendered by the court of a trial division which by such allocation is improper for the trial and determination of the civil action or proceeding.

N.C. Gen.Stat. § 7A-242 (2007). "It is, therefore, evident that except for areas specifically placing jurisdiction elsewhere (such as claims under the Workers' Compensation Act) the trial courts of North Carolina have subject matter jurisdiction over all justiciable matters of a civil nature." Harris v. Pembaur, 84 N.C.App. 666, 668, 353 S.E.2d 673, 675 (1987) (internal quotation marks omitted).

However, the superior court and the district court are two different divisions of the General Court of Justice, and one division cannot obtain jurisdiction over a matter that originates in the other division without a resolution of some kind in the original division. Thus, for the district court to obtain jurisdiction over a superior court case, the matter would have to be transferred either by written motion of one of the parties or by the judge's own motion. N.C. Gen.Stat. §§ 7A-258, -259 (2007). Accordingly, because no order appears in the record on appeal to establish that Plaintiff's action had been transferred from the superior court division to the district court division, this Court's initial impression was that the district court had not obtained authority to dispose of this matter. See Obo v. Steven B., ___ N.C.App. ___, ___, 687 S.E.2d 496, 500 (2009) ("Subject matter jurisdiction may not be waived, and this Court has not only the power, but the duty to address the trial court's subject matter jurisdiction on its own motion or ex mero motu.").

Reluctant to dismiss the appeal and further prolong a matter which has been ongoing for more than eight years, this Court eventually, after several requests, obtained the court file from the Iredell County district court to determine how an action apparently originating in superior court came to be resolved in district court without an order to transfer. A careful review of documents in the district court file which were not made a part of the record on appeal revealed that Plaintiff's action was originally filed in district court and not in superior court as the caption on Plaintiff's complaint and the Division's answer thereto indicate. It appears that several of the pleadings in this case were erroneously captioned for the superior court division, although this matter remained in the district court at all times. Thus, through extensive efforts of this Court, we ascertained that Plaintiff's case originated and was therefore properly disposed of in district court, despite the contrary indication of the record on appeal.⁴ Having established that Plaintiff brought its breach of contract claim in district court, we now address the issues raised on this appeal regarding the disposition of this matter at the trial court level.

C. Disposition of Plaintiff's Claim

In its complaint, Plaintiff alleged that at a 2 March 2006 hearing on the Division's motions to dismiss Bowles' counterclaims in the eleven dispositional matters,⁵ Assistant Attorney General Jeff Edwards opined that Plaintiff's claim for payment could only be brought as a separate lawsuit outside of N.C. Gen.Stat. § 20-108. Thus, Plaintiff believed that a separate action for breach of contract was necessary to preserve Plaintiff's rights, and Plaintiff accordingly filed the current breach of contract action against the Division.

On 31 December 2007, the Division filed a motion for summary judgment on Plaintiff's breach of contract claim. Iredell County District Court Judge Jimmy Myers entered an order on 5 February 2008 denying the Division's motion for summary judgment. On 19 May 2008, the matter came on for trial by a jury in Iredell County District Court, Judge Royster presiding. The evidence presented at trial tended to show the following:

In October 2000, Division Inspector Dan Lowrance ("Lowrance") contacted Thomas Bowles, Jr. ("Tommy") regarding Plaintiff's ability to assist the Division with towing and storage of motorcycles and component parts seized in the course of the Division's investigation. Tommy informed Lowrance that his company was capable of providing the requested services, and over the next several days, Plaintiff towed and began storage of twelve motorcycles and various motorcycle frames and parts. The motorcycles and parts were housed in a storage facility on Plaintiff's premises while their origins were investigated.

Within the first two weeks that the motorcycles and parts were being stored by Bowles, Tommy asked Lowrance how to complete the ten-day reports, which are used in these cases to establish a storage lien on the stored property. Lowrance instructed Tommy not to submit the ten-day reports in this instance because the volume of reports associated with this particular investigation would overwhelm the DMV in Raleigh.

In December 2000, about 30 days after most of the motorcycles had been placed in storage, Tommy asked the Division how he was going to be paid for Bowles' services. Through Lowrance, the Division informed Tommy that they did not know how Bowles would be paid or how long the motorcycles would need to be stored because the theft case was pending in federal court. Over the next year, Tommy repeatedly contacted Lowrance and Inspector Scott Dayvault ("Dayvault") from the Division, attempting to obtain information and instructions as to the status and disposition of the motorcycles and parts in Plaintiff's storage facility. Tommy also inquired as to payment for the towing and storage and was informed by Lowrance that Lowrance was uncertain how Bowles would be paid.

The investigation and prosecution of the criminal matter regarding the stolen motorcycles and parts eventually spanned three and a half years, and involved the Division, the Federal...