Gaston Bd. of Realtors, Inc. v. Harrison, 514A83

Decision Date05 June 1984
Docket NumberNo. 514A83,514A83
Citation311 N.C. 230,316 S.E.2d 59
CourtNorth Carolina Supreme Court
PartiesGASTON BOARD OF REALTORS, INC., a North Carolina Corporation v. Charles A. HARRISON.

Mullen, Holland & Cooper, P.A. by Graham C. Mullen and William E. Moore, Jr., Gastonia, for plaintiff-appellee.

Lloyd T. Kelso, P.A. by Lloyd T. Kelso, Gastonia, for the defendant-appellant.

Smith, Moore, Smith, Schell & Hunter by Richmond G. Bernhardt, Jr. and Peter J. Covington, Greensboro, amicus curiae for the North Carolina Ass'n of Realtors, Inc.

Rufus L. Edmisten, Atty. Gen. by Harry H. Harkins, Jr., Asst. Atty. Gen., Raleigh, amicus curiae for the North Carolina Real Estate Com'n.

MITCHELL, Justice.

This appeal arises out of an action taken under the Declaratory Judgment Act, G.S. 1-253 to 1-267, to determine whether the plaintiff, the Gaston County Board of Realtors, Inc., conducted lawful disciplinary proceedings against one of its members, the defendant, Charles A. Harrison. The trial court found that the proceedings were lawful and in accordance with due process. A divided panel of the Court of Appeals affirmed. We find no actual controversy between the parties sufficient to invoke a court's jurisdiction under the Declaratory Judgment Act. Therefore, we reverse the Court of Appeals.

The Gaston Board of Realtors, Inc. [hereinafter "Board"] is a voluntary trade organization consisting of licensed real estate brokers who are also members of the state and national associations of realtors. The defendant Harrison was a member of the plaintiff Board until Larry and Phyllis Hamrick, prospective home buyers, filed a complaint against him with the Board. They contended that he improperly kept a $2,090.00 deposit that should have been returned to them. The Board arranged for a hearing before a hearing panel consisting of five members of the Board's Professional Standards Committee to determine whether Harrison had violated any Board rules. The panel made findings of fact and concluded that the defendant had violated certain portions of the organization's Code of Ethics. The hearing panel recommended that the defendant Harrison be expelled from membership in the organization until "such time as he makes full restitution to the Complainants, ... at which time he may be automatically reinstated." In a letter to the plaintiff's Executive Secretary, the defendant petitioned for a rehearing and stated in the letter "Be advised that I plan to take such actions as are necessary to protect myself and General Homes Corporation from harm by the actions of individuals in this matter."

On September 10, 1979, the plaintiff's directors met and adopted the hearing panel's decision but ruled that the defendant would be suspended pending the outcome of a judicial determination of whether the plaintiff had violated the defendant's rights. The plaintiff Board subsequently filed the complaint in this action, seeking a declaratory judgment that its disciplinary proceedings were in accordance with due process. In the complaint the plaintiff stated that an actual controversy exists between the parties in that the defendant Harrison "has threatened to sue the plaintiff, its officers, directors, members, or some of them for damages in the event the plaintiff expels the defendant."

Before trial the Board made a motion for summary judgment. Harrison opposed the motion and moved to dismiss the action on the ground that there was no actual justiciable controversy between the parties sufficient to invoke the court's jurisdiction. The trial court denied the motions of both parties.

On January 25, 1982, the trial court heard evidence and ruled that the Board had properly conducted its disciplinary proceedings against Harrison. The trial court found as a fact that the plaintiff Board had brought the action for declaratory judgment "because the defendant had threatened action against the people involved in the disciplinary process." The trial court, in a conclusion of law, concluded that a controversy existed between the parties which was justiciable under the Declaratory Judgment Act. The defendant appealed to the North Carolina Court of Appeals.

The Court of Appeals held that the trial court properly refused to dismiss the action for lack of a justiciable controversy. The majority held the controversy between the parties to be real and present, and found that the defendant's threat to take action was substantial evidence that litigation appeared unavoidable. The majority held that the procedure conducted by the Board was lawful and comported with due process. Judge Johnson, in dissent, expressed doubt about the sufficiency of the controversy to confer jurisdiction upon the courts and concluded that the trial court failed to conduct a proper judicial review of the Board's decision.

We need not consider the merits of this action because we conclude there was no actual controversy sufficient to invoke the jurisdiction of the courts under our Declaratory Judgment Act. The authority of our courts to render declaratory judgments is set forth in G.S. 1-253:

Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations, whether or not further relief is or could be claimed. No action or proceeding shall be open to objection on the ground that a declaratory judgment or decree is prayed for. The declaration may be either affirmative or negative in form and effect; and such declarations shall have the force and effect of a final judgment or decree.

While the statute does not expressly so provide, this Court has held on a number of occasions that courts have jurisdiction to render declaratory judgments only when the pleadings and evidence disclose the existence of an actual controversy between parties having adverse interests in the matter in dispute. Adams v. North Carolina Dept. of Natural and Economic Resources, 295 N.C. 683, 249 S.E.2d 402 (1978); North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 206 S.E.2d 178 (1974); Lide v. Mears, 231 N.C. 111, 56 S.E.2d 404 (1949).

We have described an actual controversy as a "jurisdictional prerequisite" for a proceeding under the Declaratory Judgment Act, the purpose of which is to "preserve inviolate the ancient and sound juridic concept that the inherent function of judicial tribunals is to adjudicate genuine controversies between antagonistic litigants with respect to their rights, status or other legal relations." Adams v. North Carolina Dept. of Natural and Economic Resources, 295 N.C. at 703, 249 S.E.2d at 414 (quoting Lide v. Mears, 231 N.C. at 118, 56 S.E.2d at 409). In Town of Tryon v. Duke Power Co., 222 N.C. 200, 22 S.E.2d 450 (1942) this Court acknowledged that, although the actual controversy rule may be difficult to apply in some cases and the definition of a "controversy" must depend on the facts of each case, "[a] mere difference of opinion between the parties" does not constitute a controversy within the meaning of the Declaratory Judgment Act. Id. at 205, 22 S.E.2d at 453.

Although it is not necessary that one party have an actual right of action against another to satisfy the jurisdictional requirement of an actual controversy, it is necessary that litigation appear unavoidable. North Carolina Consumers Power, Inc. v. Duke Power Co., 285 N.C. 434, 206 S.E.2d 178. Mere apprehension or the mere threat of an action or a suit is not enough. Newman Machine Co. v. Newman, 2 N.C.App. 491, 163 S.E.2d 279 (1968), rev'd on other grounds, 275 N.C. 189, 166 S.E.2d 63 (1969). Thus the Declaratory Judgment Act does not "require the court to give a purely advisory opinion which the parties might, so to speak, put on ice to be used if and when occasion might arise." Town of Tryon v. Power Co., 222 N.C. at 204, 22 S.E.2d at 453 (1942).

When the record shows that there is no basis for declaratory relief, or the complaint does not allege an actual, genuine existing controversy, a motion for dismissal under G.S. 1A-1, Rule 12(b)(6) will be granted. Kirkman v. Kirkman, 42 N.C.App. 173, 256 S.E.2d 264, cert. denied, 298 N.C. 297, 259 S.E.2d 300 (1979). Having examined the evidence...

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