Whiteheart v. Waller

• Decision Date: 18 August 2009
• Docket Number: No. COA08-1261.,COA08-1261.
• Citation: 681 S.E.2d 419
• Court: North Carolina Court of Appeals
• Parties: William WHITEHEART d/b/a Whiteheart Advertising Company, Plaintiff-Appellant, v. Betty Strother WALLER and Waller & Stewart, LLP (formerly known as Waller, Stroud, Stewart, & Araneda, LLP), Defendants-Appellees.

681 S.E.2d 419

William WHITEHEART d/b/a Whiteheart Advertising Company, Plaintiff-Appellant, v. Betty Strother WALLER and Waller & Stewart, LLP (formerly known as Waller, Stroud, Stewart, & Araneda, LLP), Defendants-Appellees.

No. COA08-1261.

Court of Appeals of North Carolina.

August 18, 2009.

Appeal by plaintiff from order entered 13 August 2008 by Judge Catherine C. Eagles in Forsyth County Superior Court. Heard in the Court of Appeals 6 April 2009.

Randolph M. James, P.C., by Randolph M. James, Winston-Salem, for plaintiff-appellant.

Poyner & Spruill, LLP, by E. Fitzgerald Parnell, III and Cynthia L. Van Horne, Charlotte, for defendants-appellees.

CALABRIA, Judge.

William Whiteheart d/b/a Whiteheart Advertising Company ("plaintiff") appeals an order dismissing his complaint pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. We affirm the trial court.

Plaintiff is in the business of billboard advertising on the highways of North Carolina. Beginning in 1983, the predecessor to plaintiff's company maintained a billboard on Interstate 77, near Statesville, North Carolina, located on land owned by a predecessor of the Beroth Oil Company ("Beroth"). The original lease for this billboard expired on 30 June 1998. The lease could have been renewed by agreement of the parties for additional terms; however, plaintiff failed to pay rent from July 1998 until 25 July 2000. Despite notices from Beroth for past due rent, plaintiff continued to use the billboard on Beroth's property ("the Beroth property") during this time.

Sometime before July 2000, a competitor of plaintiff, Darlene Payne ("Ms. Payne"), through her company Skyad, LLC ("Skyad"), offered to lease the billboard location from Beroth. On or about 13 July 2000, Ms. Payne's attorney, pursuant to instructions received from Beroth, sent plaintiff a letter requesting the removal of his billboard from the Beroth property. Plaintiff responded by sending Beroth a check in the amount of $2,000 for past due rent for the period from 1 July 1999 to 30 June 2000. In addition to the check, plaintiff enclosed a proposed lease for the period from 1 July 2000 to 30 June 2001. Beroth rejected the lease offer on 5 February 2001 and returned plaintiff's unnegotiated check with the unsigned lease. At that time, Beroth gave plaintiff thirty days notice to remove his billboard from the property. Plaintiff failed to comply with this demand, as well as several others from Beroth in the ensuing months.

On 26 March 2001, plaintiff sent a letter to his various competitors "alerting" them about Ms. Payne. In this letter, plaintiff asserted that Ms. Payne was a "lease jumper" and that she and her business practices were unprofessional, unethical, and despicable. Plaintiff also referred to Ms. Payne personally in additional derogatory terms. Although plaintiff's attorney, Betty Waller ("defendant"), reviewed the letter before it was sent, she failed to advise plaintiff of the potential liability that could result from sending such a per se defamatory document.

On 4 May 2001, plaintiff, through the services of defendant, obtained a Temporary Restraining Order that permitted plaintiff to continue to maintain his sign on the Beroth property, while at the same time preventing Ms. Payne from either leasing the property or obtaining a North Carolina Department of Transportation ("NCDOT") outdoor advertising permit for the property. Plaintiff also filed a verified complaint against, inter alios, Ms. Payne and Beroth in Iredell County Superior Court requesting a declaratory judgment.

On 7 May 2001, plaintiff submitted a check to NCDOT to pay the renewal fee for his permit on the Beroth property. Plaintiff falsely asserted in his renewal certification that he had Beroth's permission and consent to continue to maintain his billboard. Ms. Payne subsequently applied for an NCDOT permit on the Beroth property, but her application was denied because plaintiff already held a permit for the property.

On 14 May 2001, the trial court denied plaintiff's motion to convert the Temporary Restraining Order into a preliminary injunction. Plaintiff then removed his billboard from the Beroth property on 4 June 2001. Beroth and Ms. Payne subsequently moved for summary judgment against plaintiff, at which time plaintiff filed a voluntary dismissal of his claims in the Iredell County action.

After plaintiff voluntarily dismissed his claims, both Beroth and Ms. Payne filed actions against plaintiff in the Superior Court of Forsyth County ("Forsyth County cases") for, inter alia, malicious prosecution, abuse of process, libel per se, slander of title, unfair and deceptive trade practices, unjust enrichment, and quantum meruit. Defendant served as plaintiff's counsel in the Forsyth County cases. The jury returned a verdict against plaintiff. Beroth and Ms. Payne were awarded combined damages in excess of $700,000. On appeal, these judgments were affirmed by this Court in Beroth Oil Co. v. Whiteheart; Am. Adver. Consultants, Inc. v. Whiteheart, 173 N.C.App. 89, 618 S.E.2d 739 (2005).

After satisfying the judgments against him, plaintiff filed an action in Forsyth County Superior Court against defendant and her law firm Waller & Stewart, LLP (formerly known as Waller, Stroud, Stewart, & Araneda, LLP) (collectively "defendants") for legal malpractice, seeking to recover damages sufficient to cover the judgments noted above. Defendants moved to dismiss the action pursuant to N.C. Gen.Stat. § 1A-1, Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, and on 7 August 2008, the court granted defendants' motion. Plaintiff appeals.

I. Standard of Review

Pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, the standard of review for a motion to dismiss 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." Harris v. NCNB Nat'l Bank of N.C., 85 N.C.App. 669, 670, 355 S.E.2d 838, 840 (1987) (citation omitted). The complaint must be liberally construed, and the court 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. See Dixon v. Stuart, 85 N.C.App. 338, 354 S.E.2d 757, 758 (1987). Dismissal under Rule 12(b)(6) is proper when one or more of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiff's claim; (2) the complaint on its face reveals the absence of facts sufficient to make a good claim; or (3) the complaint discloses some fact that necessarily defeats the plaintiff's claim. Oates v. JAG, Inc., 314 N.C. 276, 278, 333 S.E.2d 222, 224 (1985). A superior court's decision to dismiss a complaint under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure is reviewed de novo by this Court. Leary v. N.C. Forest Prods., Inc., 157 N.C.App. 396, 400, 580 S.E.2d 1, 4 (2003), aff'd per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).

II. Collateral Estoppel

Plaintiff contends that the trial judge erred when she concluded that the verdicts against the plaintiff in the Forsyth County cases "establish as a matter of law [plaintiff's] intentional wrongdoing." The doctrine of collateral estoppel, also referred to as "issue preclusion" or "estoppel by judgment", precludes relitigation of a fact, question or right in issue:

when there has been a final judgment or decree, necessarily determining [the] fact, question or right in issue, rendered by a court of record and of competent jurisdiction, and there is a later suit involving an issue as to the identical fact, question or right theretofore determined, and involving identical parties or parties in privity with a party or parties to the prior suit.

King v. Grindstaff, 284 N.C. 348, 355, 200 S.E.2d 799, 805 (1973) (quoting Masters v. Dunstan, 256 N.C. 520, 524, 124 S.E.2d 574, 576 (1962)). The requirements for the identity of issues to which collateral estoppel may be applied have been established by the Supreme Court as follows: (1) the issues must be the same as those involved in the prior action; (2) the issues must have been raised and actually litigated in the prior action; (3) the issues must have been material and relevant to the disposition of the prior action; and (4) the determination of the issues in the prior action must have been necessary and essential to the resulting judgment. Id. at 358, 200 S.E.2d at 806.

The judgments against the plaintiff in Forsyth County necessarily decided his liability for his actions. The issue regarding whether plaintiff engaged in intentional acts giving rise to legal liability was litigated and was necessary for the jury's verdicts and the superior court's judgments against plaintiff. Plaintiff is not permitted to re-litigate the issue in the hope of obtaining a better...