In re Cranor

• Decision Date: 17 May 2016
• Docket Number: No. COA15–541.,COA15–541.
• Citation: 786 S.E.2d 379,247 N.C.App. 565
• Court: North Carolina Court of Appeals
• Parties: In the Matter of Carole Winifred CRANOR, Respondent.

247 N.C.App. 565

786 S.E.2d 379

In the Matter of Carole Winifred CRANOR, Respondent.

No. COA15–541.

Court of Appeals of North Carolina.

May 17, 2016.

Wyrick Robbins Yates & Ponton LLP, Raleigh, by K. Edward Greene and Tobias S. Hampson, for the Appellant Lynn Andrews.

West Law Offices, P.C., Raleigh, by James P. West, for the Petitioner–Appellee Frank Taylor Cranor.

DILLON, Judge.

Lynn Andrews ("Attorney Andrews")—who was retained by Carole Cranor in this incompetency proceeding—appeals from an order entered 12 September 2014 (the "September Order") in which the trial court imposed judicial discipline on her, pursuant to Rule 11 and its inherent authority, and ordered her to pay attorneys' fees to the Petitioner Frank Cranor and his attorney ("Attorney West"). Attorney Andrews also appeals two subsequent orders entered 17 December 2014 (the "December Orders") in which the trial court set the amount of the attorneys' fee award and denied Attorney Andrews' Rule 60 motion for relief from the September Order.

I. Background

This matter involves an incompetency proceeding commenced by Frank Cranor to have his sister Carole Cranor declared incompetent and to have him appointed as her general guardian. Carole Cranor is a retired pharmacist residing in Durham who was diagnosed with early onset dementia. At the time of her diagnosis, Carole and her brother Frank Cranor were not close. There is evidence that they had a contentious relationship due to a past disagreement concerning the care of their mother and that they had very little contact with each other.

Carole Cranor consulted her long-time, close attorney-friend, Harriet Hopkins ("Ms. Hopkins"), for help in choosing a long-term care facility and in getting her legal and financial affairs in order. Carole Cranor also appointed Ms. Hopkins as her attorney-in-fact via a durable power of attorney ("DPOA") that Ms. Hopkins drafted. The DPOA that Ms. Hopkins drafted contained a gifting provision which allowed Ms. Hopkins to make gifts to herself from Carole Cranor's estate. However, there is no evidence that Ms. Hopkins ever made any such gifts, and the DPOA was subsequently replaced by another DPOA drafted by an independent attorney.

Frank Cranor, who resides in Arkansas, learned of his sister's deteriorating condition and became aware that Ms. Hopkins was acting as Carole's attorney-in-fact. On 3 June 2013, Frank Cranor filed the petition to have his sister Carole adjudicated incompetent and requested that he be appointed as her general guardian, citing a concern that his sister was being taken advantage of by Ms. Hopkins.

On 8 June 2013, Carole Cranor hired Attorney Andrews to represent her in the incompetency proceeding.¹

After a period of litigation, which included discovery and a series of motions, Attorney Andrews was successful in obtaining a Rule 12(b)(6) dismissal of Frank Cranor's incompetency petition. This appeal, however, is unrelated to the dismissal or the issue of Carole Cranor's competency. Rather, this appeal arises from orders entered after the dismissal of the incompetency petition.

Following the dismissal, Attorney Andrews filed motions seeking attorneys' fees, costs, and sanctions against Frank Cranor and Attorney West. In these motions, Attorney Andrews alleged that Frank Cranor's incompetency petition did not contain justiciable issues of fact or law, and thus was non-justiciable. In response, Frank Cranor and Attorney West filed motions for attorneys' fees, costs, and Rule 11 sanctions against Attorney Andrews, contending that Attorney Andrews' motions for fees, costs, and sanctions were filed in violation of Rule 11 because they were not well grounded in fact and were filed for the purpose of harassing Frank Cranor and Attorney West.

The clerk denied all motions. Specifically, the clerk determined that Frank Cranor's incompetency petition was justiciable and that Attorney Andrews had acted in good faith in seeking fees, costs, and sanctions.² ALL PARTIES APPEALed to superior court.

Following a hearing on the matter, the superior court entered its September Order denying Attorney Andrews' motions but allowing Attorney West's motion for sanctions against Attorney Andrews. Specifically, in allowing Attorney West's motions, the court ordered that (1) Attorney Andrews be prohibited from accepting any fees or expenses from Carole Cranor; (2) Attorney Andrews be removed as attorney for Carole Cranor and be barred from representing her in any action or proceeding in any court in the State of North Carolina; and (3) Attorney Andrews pay the attorneys' fees and costs of Frank Cranor and Attorney West incurred in defending against Attorney Andrews' motions for fees, costs and sanctions, with the amount of the award to be determined in a future hearing.³

In December 2014, the superior court entered its December Orders in which it denied Attorney Andrews' Rule 60(b) motion for relief from the September Order and set the amount of attorneys' fees and costs awarded in the September Order at $122,987.72. In January 2015, Attorney Andrews filed her notice of appeal to this Court from the September Order and from both December Orders.

II. Jurisdiction

As a preliminary matter, we address Frank Cranor's contention that this Court lacks jurisdiction to consider Attorney Andrews' arguments concerning the September Order. Specifically, Frank Cranor contends that the September Order was a final order (notwithstanding the later December Orders) and that Attorney Andrews failed to file her notice of appeal from that order within the thirty (30) day period prescribed by Rule 3 of the North Carolina Rules of Civil Procedure. See N.C. R.App. P. 3(c)(1) ; N.C. R. Civ. P. 58. We disagree, and hold that we have jurisdiction to consider Ms. Andrews' arguments regarding the September Order.

Frank Cranor's argument turns on whether the September Order was a "final" order, notwithstanding the subsequent December Orders. Our Supreme Court has held that "[a]n order that completely decides the merits of an action [ ] constitutes a final judgment for purposes of appeal even when the trial court reserves for later determination collateral issues such as attorney's fees and costs." Duncan v. Duncan, 366 N.C. 544, 546, 742 S.E.2d 799, 801 (2013).

The gist of Frank Cranor's argument is that the December Orders dealt only with collateral matters and, therefore, did not affect the status of the September Order as being a "final" order. However, we note that the September Order, itself, did not decide any substantive issue concerning Carole Cranor's competency, but rather only dealt with "collateral issues," including an award of attorneys' fees. See Bryson v. Sullivan, 330 N.C. 644, 653, 412 S.E.2d 327, 331 (1992) (noting that sanctions are collateral issues that "require consideration after the action has been terminated"). Where an order imposes judicial discipline, an appeal from such order is interlocutory if the order involves the imposition of attorneys' fees and if the amount of the fee award was not set in the order. See, e.g., Sanders v. State Pers. Comm'n, 236 N.C.App. 94, 99, 762 S.E.2d 850, 854 (2014) (stating that "an appeal of the [ ] issue of attorney fees, itself, is interlocutory if the trial court has not set the amount to be awarded").

Because the September Order was an order for attorneys' fees which did not set the amount of the fee award, instead leaving the issue for later determination, it was not a final order. Rather, the December Order, which did set the amount of the attorneys' fees, was the final order. Thus, since Attorney Andrews noticed her appeal from the December Orders within the time allowed by our Rules, we reject Frank Cranor's argument concerning our jurisdiction and address the merits of Attorney Andrews' appeal.

III. Analysis

A. Rule 11 Sanctions

We first review the superior court's award based on Rule 11. N.C. Gen.Stat. § 1A–1, Rule 11 (2014). Our Supreme Court has held that a trial court's decision to impose sanctions under Rule 11 "is reviewable de novo as a legal issue." Turner v. Duke Univ., 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989). That is not to say that the reviewing court reweighs the evidence and makes new factual findings. Rather, the Supreme Court instructs that "[i]n the de novo review, the appellate court will determine (1) whether the trial court's conclusions of law support its judgment or determination, (2) whether the trial court's conclusions of law are supported by its findings of fact, and (3) whether the findings of fact are supported by a sufficiency of the evidence." Id. The Supreme Court further instructs that if the appellate court makes these determinations in the affirmative, "it must uphold the trial court's decision to impose or deny the imposition of mandatory sanctions under [ Rule 11 ]." Id. The trial court's decision concerning the type of sanction(s) to impose, however, is reviewed for an abuse of discretion. Id.

Based on our review, we hold that Rule 11 sanctions against Attorney Andrews were not warranted in this case.

First, many of the superior court's findings are not supported by the evidence. For instance, the court found that Attorney Andrews "has repeatedly argued to [the superior court] that because [Frank Cranor] refused to consent to a limited guardianship with Harriet Hopkins as the guardian, that he was seeking to take away all of [Carole Cranor's] rights. This argument is a misrepresentation of the facts and the law." However, in his petition, Frank Cranor specifically stated that he was seeking to be named his sister's general guardian, which would legally allow him great control over Carole's life. Such relief, if granted, would have deprived Carole of her authority to choose Ms. Hopkins as her guardian or attorney-in-fact. Throughout the litigation, the record shows that Mr. Cranor persisted in objecting to Ms. Hopkins acting as Carole's attorney-in-fact. Therefore, we hold that this finding is...