Smith v. Smith
| Decision Date | 21 July 2020 |
| Docket Number | No. COA19-807,COA19-807 |
| Parties | Carter Tankard SMITH and Amanda Bramble, as Administratrix, C.T.A. of the Estate of Ruth B. Smith Waters, Plaintiffs, v. Charles B. SMITH, Individually and as Executor of the Estate of Ruth B. Smith Waters, Defendant. |
| Court | North Carolina Court of Appeals |
Fitzgerald Litigation, by Andrew L. Fitzgerald and D. Stuart Punger, Jr., Winston-Salem, and Colombo, Kitchin, Dunn, Ball & Porter, LLP, Greenville, by Micah D. Ball, for plaintiff-appellant Carter Tankard Smith.
Ward and Smith, P.A., Winterville, by John M. Martin, for defendant-appellee.
Plaintiff Carter Tankard Smith appeals from an order entered granting summary judgment in favor of Defendant Charles B. Smith, and denying Plaintiffs’ motion for partial summary judgment. After careful review, we affirm in part, and reverse in part.
This appeal arises out of the division of the property of Ruth B. Smith Waters. Plaintiff Carter Tankard Smith is one of Ruth's grandchildren, and a beneficiary of Ruth's estate; Defendant Charles B. Smith is Ruth's only living son, and a beneficiary of Ruth's estate. He served as Ruth's attorney-in-fact and as a former co-executor of Ruth's estate.
In 2007, Ruth executed a power of attorney naming Charles as her attorney-in-fact. Charles acted as Ruth's attorney-in-fact from that time until her death in 2011. In 2007, Ruth and Charles opened a joint account with right of survivorship; they opened another joint account—this one, without right of survivorship—in 2008. These accounts were funded with Ruth's money, and the bank statements were mailed to Ruth. Charles had online access to all of Ruth's accounts. While serving as Ruth's attorney-in-fact, Charles transferred substantial amounts of Ruth's funds from her individual accounts to the joint accounts, and he spent a portion of Ruth's funds on his expenses, as well as some of his wife's and stepdaughter's expenses.
In 2010, Ruth prepared her holographic will. In her will, Ruth named Charles and her cousin, Betty Gurganus, to serve as co-executors of her estate. She also directed that her residuary estate be divided equally between Charles and Carter. Ruth died on 24 December 2011, and her will was offered for probate on 4 January 2012. That same day, Charles and Betty qualified as co-executors of Ruth's estate. Betty resigned as co-executor in 2013.
Upon Ruth's death, several valuable parcels of real property that she owned passed by operation of law, outside of the administration of the estate, to Charles and Carter as tenants in common. In 2013, Carter told Charles that she wanted to work on "settling the estate and ... divid[ing] the assets." However, shortly after Ruth's death, Carter began to have suspicions regarding Charles's handling of the administration of the estate. Carter shared her misgivings with Betty, who implied that Charles could not be trusted. Upon Betty's advice, Carter hired an attorney to protect her interest in the estate. Carter and her attorney began negotiating the property division with Charles.
Charles testified at his deposition that he "talked to [Carter] about [thinning the timber on the property] and told her that ... it needed to be thinned." However, Carter averred that Charles merely "mentioned there would be money available if it was cut, but not the value and not any details." In May 2013, Charles had the timber thinned on the "Jackson Swamp parcel." Charles deposited the proceeds from the timber sale into the estate checking account. Thereafter, Charles periodically sent checks to Carter's attorney, which Carter eventually confirmed were for her half of the proceeds from the timber sale.
Later, Charles, Carter, and Carter's attorney agreed to have the real property appraised, both for tax purposes and to facilitate a division. The appraisal of all of the real property was completed on 18 September 2013; however, the appraisal noted that "[i]t is not the intent of this report to evaluate any standing timber or wood products present on any of the tracts." According to the appraiser, wooded land is typically valued as if it were "cut over."
The appraisal also provided that "only the value of the underlying land [was] considered" in estimating the value of the wooded portions of the properties, and that "[t]he client is in the process of obtaining an independent timber valuation." Although she was represented by counsel, Carter assumed that this language indicated that "a general value, instead of a specific value, for the timber had been applied to the full appraised value of the real property." Charles emailed Carter's attorney and asked whether he and Carter wanted to have the timber valued in addition to the real property appraisal, offering to "do whatever [Carter and her attorney] wish[ed,]" but neither party asserts that the topic was broached again.
With appraisal in hand, and after extensive negotiation, on 2 April 2014, the parties reached an agreement regarding the division of the real property, with Charles receiving the Jackson Swamp parcel and house, which were appraised at $1,119,816.00, and Carter receiving two other pieces of real property, which were appraised at $1,119,500.00. After the requisite deeds were executed and recorded, Charles sold the timber on the Jackson Swamp parcel for $258,004.96.
On 16 June 2016, Carter filed a complaint against Charles, asserting claims for (1) constructive fraud while acting as attorney-in-fact, (2) breach of fiduciary duty while acting as attorney-in-fact, (3) actual fraud, (4) constructive fraud while acting as executor, (5) negligent misrepresentation, (6) intentional interference with inheritance, (7) constructive trust, (8) accounting, (9) conversion while acting as attorney-in-fact, (10) undue influence, (11) breach of fiduciary duty while acting as executor, (12) conversion while acting as executor, (13) punitive damages, and (14) injunctive relief. Charles filed his answer to Carter's complaint on 3 August 2016, and his amended answer on 26 January 2017.
At some point in 2016, Charles resigned as executor. Amanda Bramble was appointed to serve as administratrix c.t.a. of the estate, and on 19 April 2017, the trial court ordered that Bramble, in her capacity as administratrix c.t.a., be joined as a necessary plaintiff in the instant action. On 5 December 2018, the Chief Justice of the North Carolina Supreme Court designated this matter as an exceptional civil case pursuant to Rule 2.1 of the General Rules of Practice, and assigned the Honorable Jeffery B. Foster to preside over the case.
On 4 February 2019, Charles moved for summary judgment on all claims. The following day, Plaintiffs moved for partial summary judgment. Judge Foster held a hearing on both parties’ motions on 14 February 2019 in Beaufort County Superior Court. By order entered 2 April 2019, the trial court granted Charles's motion for summary judgment on all claims, and denied Plaintiffs’ motion for partial summary judgment. Carter timely appealed the order on 24 April 2019.1
Carter raises two arguments on appeal in support of her position that the trial court erred by granting summary judgment in favor of Charles. She asserts that there exists a genuine issue of material fact as to (1) whether Charles improperly transferred Ruth's assets to himself and others while he was acting as her attorney-in-fact; and (2) whether Charles "misrepresented and failed to disclose" the true value of the Jackson Swamp parcel while the parties negotiated the division of real property.
"Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." In re Will of Jones , 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation and internal quotation marks omitted). Forbis v. Neal , 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007) (internal quotation marks and citations omitted).
"The party moving for summary judgment bears the burden of establishing that there is no triable issue of material fact": either that "an essential element of the opposing party's claim is nonexistent," or that "the opposing party cannot produce evidence to support an essential element of his claim[.]" Badin Shores Resort Owners Ass'n v. Handy Sanitary Dist. , 257 N.C. App. 542, 549, 811 S.E.2d 198, 204 (2018) (citation omitted). "Once the party seeking summary judgment makes the required showing, the burden shifts to the nonmoving party to produce a forecast of evidence demonstrating specific facts, as opposed to allegations, showing that he can at least establish a prima facie case at trial." Gaunt v. Pittaway , 139 N.C. App. 778, 784-85, 534 S.E.2d 660, 664 (emphasis omitted), disc. review denied , 353 N.C. 262, 546 S.E.2d 401 (2000).
At the outset, we address Carter's assertion that pursuant to Rule 601(c) of the North Carolina Rules of Evidence, "[e]ven if the authority granted under a power of attorney could be orally expanded by a principal, an attorney-in-fact cannot testify as to those statements if the principal is dead." She then states that Charles "repeatedly testified as to his oral communications with Ruth," and that this Court should disregard those statements.
Commonly referred to as the "Dead Man's Statute," Rule 601 "exclude[s] evidence of the acts or statements of deceased persons, since those persons are not available to respond." Culler v. Watts , 67 N.C. App. 735, 737, 313 S.E.2d 917, 919 (1984) ; see also N.C. Gen. Stat. § 8C-1, Rule 601 (2019). However, Carter does not allege that the trial court erred by...
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