Timber Integrated Invs., LLC v. Welch
| Decision Date | 01 July 2014 |
| Docket Number | No. COA13–1034.,COA13–1034. |
| Citation | 763 S.E.2d 17 (Table) |
| Court | North Carolina Court of Appeals |
| Parties | TIMBER INTEGRATED INVESTMENTS, LLC, A North Carolina limited liability company and Mountain Works Enterprises, LLC, a North Carolina limited liability company, Plaintiffs, v. Larry WELCH, Joan Mishkin, Ronald Mishkin and The Balsam Group, LLC, Defendants. |
Jeffrey W. Norris & Associates, PLLC, by Jeffrey W. Norris, for plaintiffs-appellees.
McGuire, Wood & Bissette, P.A., by Joseph P. McGuire, for defendants-appellants Joan Mishkin and Ronald Mishkin.
Defendants Joan Mishkin and Ronald Mishkin appeal from a judgment allowing plaintiffs to pierce the corporate veil of Balsam Group, LLC and imposing joint and several liability on the individual defendants for all sums owed by Balsam for its unfair and deceptive practices as a result of a previous judgment.1 On appeal, the Mishkin defendants contend that the trial court erred in denying their motion to enforce a settlement agreement entered into by all the parties, including Balsam. The trial court denied their motion, concluding that the parties never entered a valid settlement agreement and, furthermore, that defendants were estopped from raising the settlement issue.
We hold that the undisputed evidence establishes that the parties entered an enforceable settlement agreement. The trial court, therefore, erred in concluding otherwise. With respect to the trial court's conclusion regarding estoppel, the trial court's findings of fact do not support the application of any estoppel doctrine recognized as part of North Carolina's common law. Consequently, the trial court's denial of defendants' motion to enforce the settlement agreement is not supported by either basis relied upon in the trial court's order, and we, therefore, reverse the order.
Plaintiffs, however, have argued on appeal that the order may be supported by an alternative basis in law. Although plaintiffs also argued at the trial level that defendants' motion should be denied based on the doctrine of laches, the trial court did not address that argument. Our review of the record reveals evidence from which the trial court should determine whether defendants are precluded from seeking enforcement of the settlement agreement based on laches. Because it is within the province of the trial court to weigh the equities of the case under the doctrine of laches, we remand for the trial court to address whether enforcement of the settlement agreement should be denied based on laches.
Facts
This dispute arose out of the sale by defendants to plaintiffs of a tract of environmentally-contaminated land. On 27 July 2006, plaintiffs filed an action alleging fraud and unfair or deceptive practices and seeking to pierce the corporate veil of defendant Balsam and hold defendants Welch and the Mishkins individually liable. Defendants, including the individual defendants, denied the material allegations of the complaint, asserted multiple affirmative defenses, and sought attorneys' fees and costs. Defendant Welch also asserted a counterclaim for breach of a promissory note in the amount of $100,000.00 plus interest. The underlying facts of the case are set forth in more detail in Timber Integrated Invs., LLC v. Welch,––– N.C.App. ––––, 737 S.E.2d 809 (2013).
On 29 October 2010, the trial court entered an order granting summary judgment to the individual defendants and denying summary judgment as to defendant Balsam. Plaintiffs filed a notice of appeal from this interlocutory order. Subsequently, plaintiffs' counsel reached out to defendants' counsel in an attempt to settle the litigation. Plaintiffs offered to withdraw their appeal and dismiss their lawsuit as to all defendants if defendant Welch would dismiss his counterclaim. Plaintiffs indicated that their purpose in attempting to reach a settlement was to avoid the time and expense associated with pursuing the appeal.
After plaintiffs' counsel confirmed that the dismissals would be with prejudice, defendants' counsel asked plaintiffs' counsel to prepare the necessary documentation for his clients to consider. On 9 March 2011, plaintiffs' counsel sent defendants' counsel a proposed Joint Dismissal with Prejudice and a Mutual Release and Settlement Agreement.
The following day, on 10 March 2011, plaintiffs' counsel sent a fax, following up on the 9 March 2011 letter and a subsequent phone call, in which counsel stated that “[i]t appears that we are in agreement and that you are simply waiting on the documents to be returned from your clients.” Plaintiffs' counsel asked that “in the event that your clients are delayed in getting the papers back to you, would you at a minimum give me the signed Dismissal for filing with the Court as your clients' signatures are not necessary for that document?” The Joint Dismissal with Prejudice was signed by both attorneys that day. On 22 March 2011, defendants returned the Mutual Release and Settlement Agreement, which defendants had signed.
Thereafter, on 1 April 2011, plaintiffs' counsel sent defendants' counsel a letter stating that after receiving the signed settlement agreement, plaintiffs “have taken more time to consider the proposed settlement” and “have reconsidered their previous position and wish to continue the appeal.” Therefore, the letter stated, “we will not be filing the dismissal, they are not going to execute the Settlement Agreement, and we will proceed with the appeal....”
As represented, plaintiffs did not file the voluntary dismissal and proceeded with their appeal. That appeal was dismissed as interlocutory on 6 December 2011. Timber Integrated Invs., LLC v. Welch,217 N.C.App. 402, 720 S.E.2d 29, 2011 WL 6047094, 2011 N.C.App. LEXIS 2523 (2011) (unpublished). A bench trial was then held as to plaintiffs' claims against defendant Balsam on 23 January 2012. The trial court concluded that Balsam “ ‘committed fraud [,] ... violated the Unfair and Deceptive Trade Practices statute[,] ... [and] made negligent misrepresentations.” ’ Timber,––– N.C.App. at ––––, 737 S.E.2d at 814. The trial court entered judgment against Balsam on 22 February 2012 in the amount of $5,442,785.12, which was trebled to $16,328,355.36.
Plaintiffs appealed the 2012 judgment “ ‘to the extent that the individual defendants Larry Welch, Joan Mishkin, and Ronald Mishkin were not subject to the judgment because of the [2010 trial court order] granting summary judgment in [Defendants'] favor prior to the trial.’ “ Id.at, 737 S.E.2d at 814. On 19 February 2013, this Court reversed summary judgment for the individual defendants and remanded for a trial on the issue of Balsam's status as a legitimate limited liability company and whether the individual defendants could be held individually liable. Id.at ––––, 737 S.E.2d at 818.
On 20 March 2013, defendants filed a motion to enforce the settlement agreement. The motion asked for specific performance, dismissal of all claims against the individual defendants with prejudice pursuant to Rule 41 of the Rules of Civil Procedure, sanctions against plaintiffs, and attorneys' fees. On 29 April 2013, the trial court entered an order denying defendants' motion, concluding that
A jury subsequently found that each of the individual defendants controlled Balsam with regard to the acts or omissions that damaged the plaintiffs. Based on the jury's verdict, the trial court entered judgment against the individual defendants jointly and severally for all sums set forth in the 22 February 2012 judgment against Balsam.
On 14 May 2013, defendants filed a Motion for Judgment Notwithstanding the Verdict and Motion for New Trial, which the trial court denied in an order filed 31 May 2013. On 27 June 2013, defendants Joan and Ronald Mishkin filed a notice of appeal of the order denying their motion to enforce the settlement agreement, the order denying their motion for directed verdict, the final judgment, and the order denying their motion for judgment notwithstanding the verdict and motion for new trial.
Discussion
On appeal, defendants have chosen only to challenge the trial court's denial of their motion to enforce the settlement agreement, arguing that it was error for the trial court to conclude (1) that a settlement was never reached between the parties and (2) that defendants were estopped from raising the settlement issue. Generally, “a settlement agreement may be enforced by filing a new action or by filing a motion in the cause, even if ‘the parties and their settlement agreement [are] still before the trial court.’ “ Currituck Assocs.-Residential P'Ship v. Hollowell,166 N.C.App. 17, 24, 601 S.E.2d 256, 261 (2004) ), aff'd,360 N.C. 160, 622 S.E.2d 493 (2005). “ ‘A motion to enforce a settlement agreement is treated as a motion for summary judgment’ for purposes of appellate review.” Williams v. Habul,––– N.C.App. ––––, ––––, 724 S.E.2d 104, 109 (2012) (quoting Hardin v. KCS Int'l, Inc.,199 N.C.App. 687, 695, 682 S.E.2d 726, 733 (2009) ).
Summary judgment is appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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.” N.C.R. Civ. P. Rule 56(c). “The moving party has the burden of demonstrating the lack of any triable issue of fact and entitlement to judgment as a matter of law.” Hardin,199 N.C.App. at 695, 682 S.E.2d at 733.
A. Formation of an Enforceable Settlement Agreement
“A settlement...
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