Leary v. NC Forest Products, Inc.

Decision Date06 May 2003
Docket NumberNo. COA02-599.,COA02-599.
CourtNorth Carolina Court of Appeals
PartiesOliver Wright LEARY, Plaintiff, v. N.C. FOREST PRODUCTS, INC., Canal Wood Corporation, Moses Lasitter, Joseph Wetherington, Christopher L. Wetherington, Tammy Wetherington, Mamie E. Leary, T. Barbara Leary, Mamie Ruth Leary Claggett, Elmer Lee Leary, Sr., Pattie Leary, Linwood Richard Leary, Sr., Sandra Leary Grissom, Laura M. Leary Elliott, Allen R. Elliott, Shirley Leary Staten, Harold J.R. Leary, Richard Smith, Elmer Lee Leary, Jr., Patrick L. Leary, Kenneth Leary, Arlene P. Smith, and the Law Firm of Lee, Hancock, Lasitter & King, Defendants.

Oliver W. Leary, plaintiff appellant pro se.

Lee, Hancock and Lasitter, P.A. by Moses D. Lasitter, Newbern, for defendants-appellees N.C. Forest Products, Inc., Moses Lasitter, Joseph Wetherington, Christopher L. Wetherington, Tammy Wetherington, and Lee, Hancock, Lasitter & King.

Dees, Smith, Powell, Jarrett, Dees & Jones by Tommy W. Jarrett, Goldsboro, for defendant-appellee Canal Wood Corporation.

Gregory K. James, P.A. by David C. Sutton, Greenville, for defendants-appellees T. Barbara Leary, Mamie Ruth Leary Claggett, Elmer Lee Leary, Sr. and wife, Pattie Leary, Linwood Richard Leary, Sr., Sandra Leary Grissom, Laura M. Leary Elliott, Allen R. Elliott, Shirley Leary Staten, Harold J.R. Leary, Elmer Leary, Jr., Patrick L. Leary, Kenneth Leary, Richard Smith and wife Arlene P. Smith and Mamie E. Leary.

GEER, Judge.

Oliver Wright Leary appeals an order filed 30 July 2001 dismissing his complaint for failure to state a claim upon which relief can be granted. This appeal primarily involves the question whether a judgment debtor may file a separate lawsuit to collaterally attack an order confirming an execution sale based on errors in the conduct of that sale. We hold that he cannot. Any challenge of the judgment debtor to the confirmation order should have been by appeal from the order or by a motion to set aside the order filed in the original lawsuit.

On 4 November 1991, defendant N.C. Forest Products, Inc. ("N.C. Forest") obtained a judgment in case number 89 CVD 1966 against Oliver Wright Leary, the plaintiff in this case. Mr. Leary apparently did not appeal and does not otherwise challenge the validity of that judgment. On 14 May 1992, in order to satisfy that judgment, the Pitt County sheriff held a sale of Mr. Leary's 1/13 interest in two tracts of land pursuant to a writ of execution issued on 23 January 1992. At that sale, there were no bidders. The sheriff filed a Report regarding the sale on 15 May 1992.

On 30 April 1993, the deputy clerk of court issued a second writ of execution to the sheriff, stating that $24,275.00 was due and commanding the sheriff to satisfy the judgment out of the personal property of the defendant or, if sufficient personal property could not be found, then out of real property belonging to the defendant. The writ of execution noted that "debtor has waived exemptions."

In a Report of Sale of Real Property filed 14 June 1993, the sheriff stated that "after due and legal notice," Mr. Leary's 1/13 interest was sold at public auction on 14 June 1993 to Christopher L. Wetherington for $100.00. According to plaintiff's complaint in this case, Mr. Wetherington was the Assistant Secretary for the judgment creditor N.C. Forest. On 21 July 1993, the assistant clerk of court filed an order directing that the sale be confirmed and that the sheriff deliver to the purchaser a good and sufficient deed.

On 6 July 1993, the sheriff executed a deed conveying Mr. Leary's 1/13 interest to Mr. Wetherington. The deed recited that the sheriff had sold the property at public auction "after having first given notice of the time and place of such sale, and advertised the same according to law."

On 22 April 1996, Mr. Wetherington and his wife executed a quitclaim deed of the 1/13 interest to N.C. Forest. A year later, on 17 June 1997, N.C. Forest in turn executed a quitclaim deed to defendants Patrick L. Leary, Elmer L. Leary, Jr., and Kenneth L. Leary. On 26 November 1998, the Leary defendants1 then executed a timber deed granting Canal Wood Corporation ("Canal") the timber rights on the property for 2½ years.

Mr. Leary filed this action four years later on 10 October 2000 in Pitt County Superior Court against N.C. Forest, Canal, Joseph Wetherington, Christopher L. Wetherington, Tammy Wetherington, the Leary defendants, the law firm of Lee, Hancock, Lasitter and King (the "law firm"), and Moses Lasitter.

The complaint alleges (1) a claim against N.C. Forest and arguably the Wetheringtons based on "a fraudulent sale in the Sheriff's manner of handling" the execution sale; (2) trespass against Canal for removing timber without plaintiff's consent; (3) malpractice against Moses Lasitter and the law firm for non-client third-party liability; and (4) "promissory" and "equitable" fraud against the Leary defendants for executing the timber deed. With the exception of the malpractice claim, each cause of action is derivative of plaintiff's claim that the execution sale was invalid.

With respect to his claim against N.C. Forest and the Wetheringtons, plaintiff Leary alleged:

39. [A]ll interests and rights to [plaintiff's property] conveyed by [the sheriff] ... was in violation of "due process" of law.
40. Defendant, N.C. Forest Products, Inc.'s request presented to [the sheriff] to sale [sic] the property ... was a fraudulent sale as a result of its grossly low sale price, Hundred Dollars ($100.00), an agent of the "Judgment Creditor" [N.C. Forest Products, Inc.] purchased at the "Sale," the amount of the judgment debt TWENTY FOUR THOUSAND TWO HUNDRED AND SEVENTY-FIVE DOLLARS and NO/100 ($24,275.00) was not bid[ ] at the "Sale", and "Notice" requirements set forth in G.S. 1-339.54 of the North Carolina General Statutes were not followed.
41. The plaintiff, Oliver Wright Leary, owns a one-thirteenth (1/13th) undivided remainderman's interest in fee of the property sold ... by [the sheriff].
42. Plaintiff alleges [sic] N.C. Forest Products, Inc. "defrauded" [plaintiff] of his one-thirteenth (1/13th) interest ... by its conduct of "Sale" as fraudulent action as a result of the grossly inadequate sale price, an agent of N.C. Forest Products, Inc[.], son and son's wife purchased at the sale, Christopher Wetherington is the Assistant Secretary for N.C. Forest Products, Inc., and "Notice" requirements set forth in N.C.G.S. 1-339.54 [were] not followed by N.C. Forest Products, Inc.

As to the malpractice claim, plaintiff stated attorney Moses Lasitter and the law firm

without justification and ... knowingly committed a fraudulent act by not following the prerequisite procedural steps in their advi[c]e to their client N.C. Forest Products, Inc., requesting a sheriff sale of plaintiff's one-thirteenth ... property interest and the manner of the sale, therefore, causing injury to [plaintiff].

In his prayer for relief, plaintiff seeks to have the superior court set aside the sheriff sale; to recover from the Leary defendants and Canal the fair market value of timber and trees removed from the land pursuant to the timber deed and to have that amount trebled as to the Leary defendants and doubled as to Canal; and to recover compensatory and punitive damages from N.C. Forest, the Wetheringtons, and the law firm. In support of his claims, plaintiff attached to the complaint various documents filed in 89 CVD 1966 and copies of the pertinent deeds. On 6 November 2000, plaintiff also submitted an affidavit by the assistant clerk of court of Pitt County stating that the court file in 89 CVD 1966 had been searched and contained no indication that Mr. Leary had been served with notices "of the attached `Report of Sale of Real Property' dated May 15, 1992 and June 14, 1993...."

Defendants each moved to dismiss the complaint under Rule 12(b)(6) for failure to state a claim upon which relief can be granted on the grounds that: (1) plaintiff was barred from attacking the confirmation order in an independent action; (2) the applicable statutes of limitations had run; (3) the doctrine of laches barred plaintiff's claims; and (4) Canal was a bonafide purchaser for value without notice. The trial court granted defendants' motions by its order filed 30 July 2001.

When considering a motion to dismiss under Rule 12(b)(6) of the Rules of Civil Procedure, "[t]he question for the court is whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory, whether properly labeled or not." Grant Constr. Co. v. McRae, 146 N.C.App. 370, 373, 553 S.E.2d 89, 91 (2001) (quoting Harris v. NCNB, 85 N.C.App. 669, 670-71, 355 S.E.2d 838, 840 (1987)). The court must construe the complaint liberally and "should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief." Block v. County of Person, 141 N.C.App. 273, 277-78, 540 S.E.2d 415, 419 (2000). This Court must conduct a de novo review of the pleadings to determine their legal sufficiency and to determine whether the trial court's ruling on the motion to dismiss was correct.

I

Defendants argue that the superior court action was properly dismissed because it represents a collateral attack on the clerk of court's order of confirmation. We agree.

The confirmation order was entered in case 89 CVD 1966. Plaintiff has not argued and nothing in the record suggests that he was not properly served in 89 CVD 1966 or that the district court in any other manner lacked jurisdiction. Further, plaintiff has not challenged the validity of the judgment or the writ of execution, which he incorporated by reference in his complaint. Because of these undisputed facts, the clerk had authority under N.C. Gen.Stat. § 1-339.67 to confirm any execution sale...

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