Bumgarner v. Tomblin, 8229SC550
| Decision Date | 06 September 1983 |
| Docket Number | No. 8229SC550,8229SC550 |
| Citation | 306 S.E.2d 178,63 N.C.App. 636 |
| Parties | Ernest L. BUMGARNER and George Griffin v. A. Clyde TOMBLIN and wife, Janet L. Tomblin. |
| Court | North Carolina Court of Appeals |
Yelton, Farfour & McCartney by Charles E. McCartney, Jr., Shelby, for plaintiffs-appellants.
Robert W. Wolf, Forest City, and Hamrick, Bowen, Nanney & Dalton by Louis W. Nanney, Jr., Rutherfordton, for defendants-appellees.
A final judgment on all the claims of all the parties has not been entered. Nor will the plaintiffs suffer loss of a substantial right without an immediate appeal. Therefore, plaintiffs' appeal is interlocutory and premature under Rule 54(b), N.C. Rules Civ.Proc. But in our view the administration of justice will be served by us treating the appeal as a writ of certiorari in accordance with Rule 21(a), N.C. Rules App.Proc.
Plaintiffs contend the trial court erred in granting defendant's summary judgment motion on the claims involving the Duncan's Creek Township land. Summary judgment lies where a claim can be resolved as a matter of law and no genuine issue of material fact exists. Plaintiffs claim that the defendant agreed to take care of the remaining indebtedness on the land through long term financing, negotiations with the sellers, and sales of timber from the property until it could be developed. Defendant maintains that the parties agreed to share the liabilities as well as the profits of the land. The basis for a breach of contract recovery is plaintiffs' lost profits from potential sales of the land due to defendant's mismanagement of his alleged duty to finance the land purchase. Since defendant denies ever having such a contractual duty, a genuine issue of material fact exists. Moreover, each side accuses the other of stymieing sales to potential buyers. These accusations raise a genuine issue as to the material fact of who was responsible for the lost profits. The plaintiffs' first cause of action depends on the terms of a disputed oral contract and whether either party frustrated performance of the contract. These issues of credibility should be resolved by a jury.
Nor does the statute of frauds, G.S. 22-2, defeat plaintiffs' claim for contract damages regarding the Duncan's Creek Township land. Plaintiffs do not seek to enforce an oral contract by defendant to sell them land; instead, they seek to enforce an alleged promise by defendant to take care of debt payments and to achieve a profitable resale. The North Carolina Supreme Court has declared that "the statute [of frauds] has no application to those contracts whereby two persons agreed to purchase land, either generally or as a single venture, for the purpose of reselling the same at a profit and sharing the same between them." Newby v. Atlantic Coast Realty Co., 182 N.C. 34, 38, 108 S.E. 323, 325 (1921).
For the same reason, the statute of frauds does not bar the claim for contract damages regarding the Morgan Township land. The breach of contract alleged in the second cause of action relates to defendant's failure to divide the profits as agreed. The statute of frauds clearly does not apply to an oral contract to divide profits from the sale of land. Whitley v. O'Neal, 5 N.C.App. 136, 168 S.E.2d 6 (1969).
The plaintiffs' claims for fraud in their first and second causes of action are not barred by the statute of frauds. Kent v. Humphries, 303 N.C. 675, 281 S.E.2d 43 (1981).
The pleadings and depositions forecast enough evidence of constructive fraud to survive a summary judgment motion. Constructive fraud may arise where the plaintiffs have reposed a special confidence in the defendant which creates a fiduciary relationship. Vail v. Vail, 233 N.C. 109, 63 S.E.2d 202 (1951). Constructive fraud is presumed from the breach of a fiduciary duty; it does not require intentional deception as an essential element. Miller v. First National Bank of Catawba County, 234 N.C. 309, 67 S.E.2d 362 (1951).
From 1973 to 1976 the defendant had legal title to land beneficially owned, in part, by the plaintiffs. According to the plaintiffs: Defendant promised to take care of the financing until they could turn a profit; defendant and plaintiffs agreed to hold the land for resale; because of the defendant's legal skills, proximity to the land, and knowledge of real estate, the plaintiffs reposed a special confidence in him. Thus, sufficient evidence of a fiduciary relationship exists to create a jury issue. Furthermore, there is a genuine issue of material fact as to whether defendant breached any fiduciary duty since plaintiffs allege he turned away prospective buyers, resulting in eventual foreclosure and loss of profits. The facts that defendant did not benefit from the deals on the land and that he no longer has an interest in the land are no barrier to a constructive fraud claim. Plaintiffs have shown enough facts supporting a constructive fraud claim to defeat a summary judgment motion.
Defendant argues that plaintiffs' first cause of action amounts to a collateral attack on the foreclosure sale and should be barred by laches; however, the foreclosure sale was merely the consequence of defendant's actions. Plaintiffs' suit charges the defendant's actions, not the foreclosure, as being a breach of contractual or fiduciary duties.
Plaintiff Bumgarner contends the trial court erred in ordering summary judgment against his second cause of action, based upon allegations that defendant used some of the profits from the sale of the Morgan Township land for his own benefit rather than sharing the profits equally with the plaintiffs.
Both sides admit to an agreement to divide the profits three ways. Defendant argues that plaintiffs' failure to put any money into purchasing the land constituted a lack of valuable consideration to support their agreement, thereby justifying any nonperformance on his part; but valuable consideration need not be money. Any benefit to the promisor or any loss to the promisee, including the promisee doing something he is not bound to do or refraining from exercising a right, suffices as consideration for a promise. Carolina Helicopter Corp. v. Cutter Realty Co., Inc., 263 N.C. 139, 147, 139 S.E.2d 362, 368 (1964). Plaintiff Bumgarner...
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...fact that a defendant did not benefit from a fiduciary breach is not a barrier to a constructive fraud claim. See Bumgarner v. Tomblin, 63 N.C.App. 636, 306 S.E.2d 178 (1983). Unlike plaintiffs' claims to recover damages for the loss in the value of their shares, the record as to plaintiffs......
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