Collier v. Bryant (In re Collier)

• Decision Date: 01 November 2011
• Docket Number: No. COA10–1579.,COA10–1579.
• Citation: 719 S.E.2d 70
• Court: North Carolina Court of Appeals
• Parties: James Michael COLLIER, Kimberly Collier and Cheryl Dette, Plaintiffs v. Angela Collier BRYANT, Daniel Christopher Bryant, Southern Homes, LLC and Cathe Henderson, Defendants.

719 S.E.2d 70

James Michael COLLIER, Kimberly Collier and Cheryl Dette, Plaintiffs

v.Angela Collier BRYANT, Daniel Christopher Bryant, Southern Homes, LLC and Cathe Henderson, Defendants.

No. COA10–1579.

Court of Appeals of North Carolina.

Nov. 1, 2011.

Appeal by plaintiffs from order entered 29 September 2010 by Judge John O. Craig III in Guilford County Superior Court. Heard in the Court of Appeals 18 August 2011.

Higgins, Benjamin, Eagles & Adams, PLLC, Greensboro, by Gilbert J. Andia, Jr., for plaintiff-appellants.

Forman Rossabi Black, P.A., by Amiel J. Rossabi and Gavin J. Reardon, Greensboro, for defendant-appellees, Angela Collier Bryant, Daniel Christopher Bryant and Southern Homes, LLC.

No brief filed for defendant-appellee Cathe Henderson.CALABRIA, Judge.

James Michael Collier (“Michael”), Kimberly Collier (“Kimberly”), and Cheryl Dette (“Dette”) (collectively “plaintiffs”) appeal from an order granting summary judgment in favor of Angela Collier Bryant (“Ms. Bryant”), Daniel Christopher Bryant (“Mr. Bryant”), Southern Homes, LLC (“Southern”) (collectively “defendants”) and Cathe Henderson (“Henderson”) and denying plaintiffs' motion for partial summary judgment. We affirm in part and reverse and remand in part.

I. Background

James O. Collier (“Mr. Collier”) died testate on or about 9 January 2005. His will listed his four children as his beneficiaries. The three plaintiffs are his children and the fourth child, Ms. Bryant, is one of the defendants as well as the Executrix of the Collier Estate.

The will directed the Executrix to sell any owned real estate and divide the proceeds equally among the four children, “unless there is unanimous consent of [the] children to a division of the real estate.” Ms. Bryant, as Executrix, had the power to sell the estate property, which included a tract of land, approximately 22.41 acres, located at 1809 Alamance Church Road, Guilford County, North Carolina (“the Farm”). The sale of the Farm is the only estate property that is the subject of the present appeal.

On 3 February 2005, Faye M. Overly, a residential real estate appraiser, performed an appraisal on the Farm (“the Overly appraisal”) and estimated the value of the property between $88,000 and $95,000. Since all four children agreed to sell the property and divide the proceeds, early in 2005, Ms. Bryant listed the property with Alicia Hausler (“Hausler”), a real estate agent. Ms. Bryant initially listed the price for the Farm at $1,154,900 even though Greensboro Water Resources estimated the cost to supply water and sewer was $2,664,768. On 2 September 2005, Hausler notified Ms. Bryant that there was some interest but when no offers were submitted after three months, Ms. Bryant reduced the listing price to $800,000.

On 3 January 2006, Articles of Organization were filed in Alabama for Southern, a limited liability company. Mr. and Ms. Bryant were initial members and organizers. Only a month later, on 3 February 2006, the listing agreement for the Farm was terminated.

After the termination of the listing agreement with Hausler, Ms. Bryant contacted plaintiffs. Michael declined to make an offer but Dette offered to purchase the Farm for $100,000. Ms. Bryant was unable to reach Kimberly. According to the settlement statement, dated 17 March 2006, Ms. Bryant, as Executrix of the estate, sold the Farm to Southern for $102,000, yet Ms. Bryant failed to disclose her personal interest in Southern to her siblings. Ms. Bryant signed both the settlement statement and the general warranty deed recorded on 23 March 2006 as the Executrix of the estate. After the sale of the Farm, checks in the amount of $25,347.13 were distributed to each of the plaintiffs.

On 8 August 2006, plaintiffs filed a petition to remove Ms. Bryant as Executrix of the estate. Three days later, unaware of the pending petition and believing the estate was closed, Ms. Bryant sent plaintiffs' final disbursement checks in the amount of $12,063.22. Plaintiffs held these checks rather than cashing them, per their lawyers' instructions. After Ms. Bryant discovered plaintiffs had filed a petition to remove her as Executrix, she requested a stop payment on the checks. Subsequently, Ms. Bryant closed the Collier Estate's bank account with Wachovia Bank and transferred $31,414.87 to another bank account. On 7 September 2006, Dalrymple Associates, Inc. performed a commercial appraisal (“Dalrymple appraisal”) of the Farm, at plaintiffs' request. According to the Dalrymple appraisal, the total value of the Farm was $615,000.

On 30 October 2006, Anne P. Ring, Assistant Clerk of Superior Court (“Clerk Ring”), conducted a hearing on the petition to remove Ms. Bryant as Executrix. Clerk Ring concluded Ms. Bryant had violated her fiduciary duty and issued an order on 28 December 2006, revoking the Letters Testamentary that established Ms. Bryant as Executrix. Ms. Bryant appealed Clerk Ring's order. On appeal, Judge Thomas D. Haigwood affirmed Ms. Bryant's removal as Executrix of the Collier Estate. Following Ms. Bryant's removal, Henderson, the public administrator for Guilford County, was appointed the personal representative of the Collier Estate. On 12 September 2006, Southern executed and subsequently recorded a deed transferring ownership of the Farm to Ms. Bryant in her individual capacity.

Plaintiffs filed a complaint on 16 October 2009 requesting a Declaratory Judgment or in the alternative a Claim to Set Aside the Transfer of the Property and alleged Fraud, Fraud in Fiduciary Capacity, Breach of Fiduciary Duty, Civil Conspiracy, and Wrongful Conversion. On 4 February 2010, defendants filed an Answer and Counterclaims alleging Breach of Contract, Conversion, Unjust Enrichment or alternatively Constructive Trust, Abuse of Process, Malicious Filing of Lis Pendens, Partition, and Civil Conspiracy. Between 11 March 2010 and 20 July 2010, Ms. Bryant offered to re-sell the Farm to plaintiffs, or the Estate, for essentially the price she had paid in March 2006. Plaintiffs did not accept any of Ms. Bryant's offers. On 7 May 2010, defendants' previously filed Motion to Dismiss was denied.

In July 2010, plaintiffs moved for a partial summary judgment on the claims of breach of fiduciary duty and wrongful conversion. Plaintiffs also moved to set aside the transfer of property. Defendants moved for Summary Judgment alleging plaintiffs had suffered no compensable damages as a result of defendants' acts. On 29 September 2010, the trial court granted summary judgment in favor of defendants and Henderson, denied plaintiffs partial summary judgment, and dismissed all of plaintiffs' claims as well as defendants' counterclaims. Plaintiffs appeal.

II. Standard of Review

Summary judgment is proper when there is no genuine issue of material fact and a party is entitled to judgment as a matter of law. Finova Capital Corp. v. Beach Pharm. II, Ltd., 175 N.C.App. 184, 187, 623 S.E.2d 289, 291 (2005). Review of summary judgment on appeal is de novo. Id. The evidence must be evaluated in the light most favorable to the non-moving party. Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003).

III. Collateral Estoppel

Plaintiffs argue the trial court erred in denying their motion for summary judgment on the issue of collateral estoppel. Specifically, plaintiffs claim that the issue of breach of fiduciary duty cannot be relitigated because it was previously determined at the time Ms. Bryant was removed as Executrix of the Collier Estate. We disagree.

Collateral estoppel bars relitigation of the same issue already decided by administrative or judicial proceedings “provided the party against whom the prior decision was asserted enjoyed a full and fair opportunity to litigate that issue in an earlier proceeding.” Rymer v. Estate of Sorrells, 127 N.C.App. 266, 268, 488 S.E.2d 838, 840 (1997) (citing In re McNallen, 62 F.3d 619, 624 (4th Cir.1995)). Offensive collateral estoppel occurs when “a plaintiff seeks to foreclose a defendant from relitigating an issue that the defendant has previously litigated unsuccessfully in another action....” Id. at 269, 488 S.E.2d at 840.

North Carolina recognizes a policy exception to collateral estoppel for civil actions that follow the statutory removal of an executor. Shelton v. Fairley, 72 N.C.App. 1, 5, 323 S.E.2d 410, 414 (1984). In Jones v. Palmer, the Court limited the clerk of court's findings and conclusions to the action that removed the executor. 215 N.C. 696, 699, 2 S.E.2d 850, 853 (1939). The Court stated it did “not intend to make the findings of fact and conclusions of the [c]lerk ... or the judge reviewing them on appeal effective for any other purpose.” Id. (emphasis added).

In Shelton, the plaintiff-beneficiaries attempted to remove the executor but were unsuccessful. Shelton, 72 N.C.App. at 2, 323 S.E.2d at 412. Later, the plaintiffs filed a civil action for damages and the defendants contended the action was barred by res judicata and collateral estoppel. Id. at 2–3, 323 S.E.2d at 413. This Court held that “orders entered in a proceeding ... in which an executor must show cause why he should not be removed, do not constitute res judicata as to a later civil action for damages between the parties or collaterally estop the bringing of such an action.” Id. at 5, 323 S.E.2d at 414. In its reasoning, the Court noted that the removal was “purely statutory, with probate jurisdiction vested in the clerk ... [a] civil suit for damages involves a full trial with the right to have factual issues resolved by a jury.” Id. at 8, 323 S.E.2d at 416.

In the instant case, the order revoking letters testamentary included findings of fact and conclusions of law. The court concluded that Ms. Bryant violated her fiduciary duty. Plaintiffs sought to collaterally estop Ms. Bryant from relitigating the breach of fiduciary duty issue. Just as the Court held in Shelton and Jones, the order entered by Clerk Ring, and affirmed by the...