McLennan v. C.K. Josey, Jr., COA 15–533.

• Decision Date: 19 April 2016
• Docket Number: No. COA 15–533.,COA 15–533.
• Citation: 247 N.C.App. 95,785 S.E.2d 144
• Court: North Carolina Court of Appeals
• Parties: Alex D. McLENNAN, Jr., Dorothy N. McLennan, and Rufus T. Carr, Jr., Plaintiffs, v. C.K. JOSEY, JR., Deborah G. Josey, Josey Properties, LLC, Thomas D. Temple, IV, Crystal Temple, Betty Jo Temple, and Joseph Lanier Riddick, III, Defendants.

247 N.C.App. 95

785 S.E.2d 144

Alex D. McLENNAN, Jr., Dorothy N. McLennan, and Rufus T. Carr, Jr., Plaintiffs,

v.C.K. JOSEY, JR., Deborah G. Josey, Josey Properties, LLC, Thomas D. Temple, IV, Crystal Temple, Betty Jo Temple, and Joseph Lanier Riddick, III, Defendants.

No. COA 15–533.

Court of Appeals of North Carolina.

April 19, 2016.

Charles S. Rountree, III, Tarboro, for Plaintiff–Appellees.

Etheridge, Hamlett & Murray, LLP, by Ernie K. Murray, Rocky Mount, for Defendant–Appellants.

HUNTER, JR., ROBERT N., Judge.

Defendants appeal an order awarding Plaintiffs attorneys fees, costs, and litigation expenses on the grounds that their claims presented justiciable issues contemplated by N.C. Gen.Stat. § 6–21.5. Defendants request we reverse the trial court. In addition, the Plaintiffs have requested that this Court award fees for filing a frivolous appeal. For the following reasons, we affirm in part, reverse in part, and remand the case to the trial court to take further action consistent with this opinion.

I. Factual and Procedural Background

Our Court previously reviewed the legal merits of this boundary line dispute in McLennan v. Josey, 234 N.C.App. 45, 758 S.E.2d 888 (2014). In the first appeal, after de novo review this Court affirmed the trial court's summary judgment holding Plaintiffs had established superior record title to the res in question and Defendants' parol evidence to the contrary was inadmissible. Id. at 48–49, 758 S.E.2d at 891–892. Because Defendants' evidence did not meet their burden of proof to show their ownership was superior, we held no genuine issue of material fact existed as to the location of the boundary line between Plaintiffs' and Defendants' property. Id. at 50, 758 S.E.2d at 892.

On 24 July 2013, during the pendency of the first appeal, Plaintiffs filed a Motion to Tax Costs, Including Reasonable Attorney's Fees and Expenses in trial court. In support of their motion, Plaintiffs attached a list of legal services rendered and associated legal fees dating back from 17 May 2010, totaling $112,740.00. Plaintiffs also attached a list of disbursements, including court costs totaling $3,458.38, and fees associated with expert witnesses totaling $24,708.86. Additionally, Plaintiffs attached affidavits attesting to the reasonableness of the fees.

Following our decision in the first appeal, Plaintiffs filed a Supplement to their Motion to Tax Costs on 17 October 2014. In support of their motion, Plaintiffs attached invoices related to the appeal totaling $55,660.00 IN ATTORNEYS FEES AND $1,130.18 for out of pocket expenses and court costs.

On 15 December 2014, the trial court entered an order taxing costs and reasonable attorneys fees to Defendants. The trial court concluded:

A. Plaintiffs are entitled as a matter of law to recover the costs incurred in this action in the sum of $3,716.25.

B. The court has the authority to award reasonable attorneys fees and out of pocket expenses to Plaintiffs in this case pursuant to N.C. Gen.Stat. § 6–21.5 (2014).

C. The court concludes as a matter of law that plaintiffs' reasonable attorneys fees and litigation expenses incurred as a result of the complete absence of a justiciable issue of either law or fact raised by Defendants in any pleading total $215,828.12.

Defendants filed a written notice of appeal on 13 January 2015, contesting the order awarding costs and attorneys fees. On 14 August 2015, Plaintiffs filed a motion seeking sanctions against Defendants for pursuing a frivolous appeal. Defendants filed a reply brief 19 August 2015. The Clerk of the North Carolina Court of Appeals referred Plaintiffs' motion to this panel on 31 August 2015.

II. Jurisdiction

Jurisdiction lies in this Court from a final order of a superior court pursuant to N.C. Gen.Stat. § 7A–27.

III. Standard of Review

Our decision requires we apply differing standards of review to the questions arising from the lower court's award. We decide these issues consecutively.

First, we must determine whether or not the Plaintiffs presented a justiciable issue in their pleadings. Our case law has held that "[i]n reviewing an order granting a motion for attorneys' fees pursuant to N.C. Gen.Stat. § 6–21.5, ‘[t]he presence or absence of justiciable issues in the pleadings is ... a question of law that this Court reviews de novo. ’ " Wayne St. Mobile Home Park, LLC v. N. Brunswick Sanitary Dist., 213 N.C.App. 554, 561, 713 S.E.2d 748, 753 (2011) (citing Free Spirit Aviation v. Rutherford Airport, 206 N.C.App. 192, 197, 696 S.E.2d 559, 563 (2010) ).

Second, "[t]he [trial court's] decision to award or deny attorney's fees under [s]ection 6–21.5 is a matter left to the sound discretion of the trial court." Persis Nova Constr., Inc. v. Edwards, 195 N.C.App. 55, 67, 671 S.E.2d 23, 30 (2009). "An abuse of discretion occurs when a decision is ‘either manifestly unsupported by reason or so arbitrary that it could not have been the result of a reasoned decision.’ " Egelhof ex rel. Red Hat, Inc. v. Szulik, 193 N.C.App. 612, 668 S.E.2d 367 (2008) (citing Country Club of Johnston Cty., Inc. v. U.S. Fidelity & Guar. Co., 150 N.C.App. 231, 248, 563 S.E.2d 269, 280 (2002) ).

Next, we examine the award of costs and expenses to the prevailing party. "Whether a trial court has properly interpreted the statutory framework applicable to costs is a question of law...." Peters v. Pennington, 210 N.C.App. 1, 25, 707 S.E.2d 724, 741 (2011). We therefore review the trial court's interpretation de novo. However, the "reasonableness and necessity" of costs is reviewed for abuse of discretion. Id. at 26, 707 S.E.2d at 741.

IV. Analysis

A. Attorneys Fees

In North Carolina, parties to litigation are generally responsible for their own attorneys fees unless a statute provides otherwise. Hicks v. Albertson, 284 N.C. 236, 238, 200 S.E.2d 40, 42 (1973). Statutes awarding attorneys fees to prevailing parties are "in derogation of the common law" and therefore must be strictly construed. Sunamerica Financial Corp. v. Bonham, 328 N.C. 254, 256, 400 S.E.2d 435, 437 (1991).

N.C. Gen.Stat. § 6–21.5 states, "... the court, upon motion of the prevailing party, may award a reasonable attorney's fee to the prevailing party if the court finds that there was a complete absence of a justiciable issue of either law or fact raised by the losing party in any pleading." N.C. Gen.Stat. § 6–21.5 (2015). Fees related to an appeal to this Court or to the North Carolina Supreme Court are not recoverable under N.C. Gen.Stat. § 6–21.5. See Hill v. Hill, 173 N.C.App. 309, 318, 622 S.E.2d 503, 509 (2005). The purpose behind N.C. Gen.Stat. § 6–21.5 is to "discourage frivolous legal action." Short v. Bryant, 97 N.C.App. 327, 329, 388 S.E.2d 205, 206 (1990).

A justiciable issue is one that is "real and present, as opposed to imagined or fanciful." Sunamerica, 328 N.C. at 257, 400 S.E.2d at 437 (citations omitted). "In order to find a complete absence of a justiciable issue it must conclusively appear that such issues are absent even giving the pleadings the indulgent treatment they receive on motions for summary judgment or to dismiss." K & K Development Corp. v. Columbia Banking Fed. Savings & Loan, 96 N.C.App. 474, 479, 386 S.E.2d 226, 229 (1989) (citations omitted). "Under this deferential review of the pleadings, a plaintiff must either: (1) ‘reasonably have been aware, at the time the complaint was filed, that the pleading contained no justiciable issue’; or (2) be found to have ‘persisted in litigating the case after the point where [he] should reasonably have become aware that pleading [he] filed no longer contained a justiciable issue.’ " Credigy Receivables, Inc. v. Whittington, 202 N.C.App. 646, 655, 689 S.E.2d 889, 895 (2010) (citing Brooks v. Giesey, 334 N.C. 303, 309, 432 S.E.2d 339, 342 (1993) ); see also Sunamerica, 328 N.C. 254 at 258, 400 S.E.2d at 438. A trial court must make one or both of these findings to support its award of section 6–21.5 attorneys fees. See Sunamerica, 328 N.C. 254 at 260, 400 S.E.2d at 439 ("[A trial court] shall make findings of fact and conclusions of law to support its award of attorneys' fees.").

The granting or denial of a motion for summary judgment is "not in itself a sufficient reason for the court to award attorney's fees." N.C. Gen.Stat. § 6–21.5 (2015). However, granting a Rule 12(b)(6) motion or entering summary judgment may be evidence that a pleading lacks a justiciable issue. Sunamerica, 328 N.C. 254 at 259, 400 S.E.2d at 439. Moreover, "action by the losing party which perpetuated litigation in the face of events substantially establishing that the pleadings no longer presented a justiciable controversy may also serve as evidence for purposes of 6–21.5." Id. at 259, 400 S.E.2d at 439.

Defendants argue that they presented a justiciable issue in their counterclaim, contending they were the fee simple owners of the property at issue and that they did so in good faith. Additionally, Defendants point out the award of attorneys fees includes $55,660.00 for "responding to Defendants' appeal" as well as attorneys fees for another case between the parties, 11–CVS–973. Defendants contend the fees related to the appeal and case number 11–CVS–973 were erroneously awarded. We address each of Defendants' arguments in turn.

To review whether attorneys fees are proper, we first determine whether the pleadings contained a justiciable issue. The trial court made the following findings related to whether the pleadings contained a justiciable issue:

2. Defendants knew at the time they recorded the map in 2009 that the deed descriptions in the deeds by which Defendants acquired their property excluded the more than two hundred acres belonging to Plaintiffs.

3. Defendants' deeds stated that their titles were subject to a 1909 deed by Defendants' predecessors in title to Wilts Veneer Company that described by metes and bounds the location of the boundary between their property and Plaintiffs' adjoining property in a different

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