Whitworth v. Estate of Whitworth
| Decision Date | 04 September 2012 |
| Docket Number | No. COA11–989.,COA11–989. |
| Citation | 731 S.E.2d 721 |
| Parties | Marie Wyatt WHITWORTH, Plaintiff, v. ESTATE OF Wesley Todd WHITWORTH; Tammy Whitworth, individually and as Executor of the Estate of Wesley Todd Whitworth; and Window World, Inc., Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by plaintiff from order entered 4 April 2011 by Judge A. Moses Massey in Wilkes County Superior Court. Heard in the Court of Appeals 25 January 2012.
Robinson & Lawing, L.L.P., by Michael L. Robinson, Kevin L. Miller, and H. Stephen Robinson; and The McElwee Firm, by William H. McElwee, III, for plaintiff-appellant.
Sigmon, Clark, Mackie, Hanvey & Ferrell, PA, by Forrest A. Ferrell and Matthew J. Middleton, for defendants-appellees.
Plaintiff Marie Wyatt Whitworth appeals from an order granting defendants' motion to dismiss for lack of subject matter jurisdiction. Defendants—the Estate of Wesley Todd Whitworth (“the Estate”), Tammy Whitworth, and Window World, Inc.—argue that because plaintiff's claims arise out of agreements and orders entered in an equitable distribution action, plaintiff was required to proceed in district court, and the superior court, therefore, lacked subject matter jurisdiction.
Because we find the superior court had jurisdiction over plaintiff's claims against the Estate and Tammy Whitworth, we reverse as to those defendants. We also hold, based on N.C. Gen.Stat. § 75D–8 (2011), that the superior court has jurisdiction over plaintiff's claims against all defendants under the North Carolina RICO Act. We agree with the trial court, however, that the remaining claims asserted against Window World had to be brought in the district court. We, therefore, affirm in part and reverse in part.
Plaintiff and Ruben Leon Whitworth, her husband at that time, incorporated Window World in 1995. Their son, Todd, was appointed president in 2002. The business grew to have gross sales in excess of $250 million in 2006. Todd managed day-to-day operations, while Leon served as CEO and director and plaintiff served as corporate secretary and director.
Plaintiff and Leon Whitworth separated on 23 May 2007. On 6 August 2007, plaintiff filed an action in district court against Leon, seeking equitable distribution, injunctive relief, and an interim distribution. Window World moved to intervene in the equitable distribution action on 8 August 2007. Although the trial judge indicated during the hearing on the motion to intervene that she was allowing the motion, no order was signed until after the case was concluded with a final equitable distribution judgment.
On or about 11 September 2007, plaintiff, Leon, and Window World entered into a Redemption Agreement. That agreement noted that plaintiff and Leon each owned 29,885 shares of Window World stock. Under the agreement, Window World was required to purchase Leon's shares at a price of $33,000,000.00 plus interest at the rate of 2% per annum, with $3,000,000.00 paid as a down payment and the remainder paid in equal monthly installments of $276,040.36 per year over a 10–year period. Window World was required to purchase plaintiff's shares for
On 6 November 2007, the district court entered a consent order (the “Window World Consent Order”) signed by plaintiff, Leon, and Window World “resolv[ing] all pending issues, claims, and contentions of each party in [the district court action] which relate specifically to Window World, Inc.” The order further stated that “[n]othing in this Consent Order shall be deemed to waive any rights the Plaintiff or Defendant have to any issues, claims, or contentions in [the district court action] other than those specifically set forth in this Consent Order.”
The Window World Consent Order provided that Leon would give plaintiff 5,000 shares of Window World stock, with the effect that each spouse would then own 30,000 shares of stock. Plaintiff and Leon were then required to each transfer to their son Todd 115 shares of stock. Following the transfer of the stock, plaintiff and Leon were required to enter into a Redemption Agreement pursuant to which Window World would redeem all the stock held by plaintiff and Leon. The order recited the same terms set forth in the Redemption Agreement that had already been signed. The order further provided that upon execution of the Redemption Agreement, plaintiff and Leon would resign their positions as officers and directors of Window World and would give up rights to various pieces of property.
At some point after the signing of the Window World Consent Order, plaintiff and Leon signed a document entitled “CONSENT TO REPRESENTATION.” That document stated that attorney Jay Vannoy had represented Window World in the district court action and had acted as Window World's corporate counsel prior to the filing of the district court action. Nevertheless, plaintiff and Leon agreed to have Mr. Vannoy represent plaintiff, who had discharged her attorney, in finally resolving the equitable distribution issues still pending through a consent order.
On 24 January 2008, the district court entered a consent order/judgment “[i]n full, final and complete Equitable Distribution of marital property” between plaintiff and Leon. Among the property distributed to plaintiff and to Leon was “[a]ll property or rights to property as set out in that Consent Order filed in this cause November 6, 2007.” The terms of the consent order (the “final Equitable Distribution Consent Order/Judgment”) were “in total, absolute and complete satisfaction of the rights of either party under and pursuant to the provision of the Equitable Distribution statute of the State of North Carolina, N.C.G.S. § 50–20, et seq., as well as all other issues raised by the pleadings, and that neither party shall hereafter assert any claim, action or cause of action whatsoever arising out of or through said statute or otherwise arising out of any claims raised by the pleadings....” The order closed by stating: “This settles and resolves all claims raised by the pleadings.”
On 5 February 2010, Todd Whitworth died. On 22 June 2010, plaintiff filed this action against (1) Todd's Estate, (2) Todd's wife Tammy, individually and as executrix of the Estate, and (3) Window World. The complaint asserted claims for breach of fiduciary duty, constructive fraud, fraud, rescission, breach of contract, conversion, and violation of the North Carolina RICO Act. These claims were based on allegations that, beginning in 2007, Todd “embarked with his wife Tammy, upon a course of conduct which was calculated to, and in fact did, place unbearable mental and emotional duress upon Marie in order to wrest Marie's ownership of [Window World] from Marie.” The complaint alleged that the Redemption Agreement and Window World Consent Order were part of a “Takeover Scheme” and that plaintiff and Leon signed the documents under duress due to threats by Todd that he would otherwise commit suicide and threats by Tammy that plaintiff and Leon would never see their grandchildren again.
On 12 August 2010, more than two years following entry of the final Equitable Distribution Order/Judgment and without notice to plaintiff or Leon, Window World returned to district court and had the district court judge enter an order allowing Window World's motion to intervene nunc pro tunc to 14 August 2007. The district court subsequently denied plaintiff's motion pursuant to Rule 60 of the Rules of Civil Procedure to set aside the intervention order. Plaintiff appealed that denial. In an opinion filed simultaneously with this opinion, this Court has reversed the trial court's order denying the Rule 60 motion and has vacated the 12 August 2010 order. See Whitworth v. Whitworth, ––– N.C.App. ––––, ––– S.E.2d –––– (Sept. 4, 2012).
On 10 September 2010, after obtaining the district court intervention order, defendants filed an answer denying the material allegations of the complaint and asserting numerous affirmative defenses based on the Redemption Agreement and the Window World Consent Order. Defendants also counterclaimed for unjust enrichment. On 4 March 2011, defendants filed a motion to dismiss pursuant to Rule 12(b)(1) of the Rules of Civil Procedure for lack of subject matter jurisdiction, attaching plaintiff's district court equitable distribution complaint, Window World's motion to intervene in the equitable distribution action, the 12 August 2010 order granting the motion to intervene, the Redemption Agreement, the Window World Consent Order, the Consent to Representation, the Final Equitable Distribution Consent Order/Judgment, and plaintiff's responses to defendants' first request for admissions.
On 4 April 2011, the trial court, after reviewing all of the exhibits, concluded “that the district court action filed by the Plaintiff on August 6, 2007, in Wilkes County District Court, whereby the Plaintiff invoked the subject matter jurisdiction over her claim for equitable distribution of her marital property, which she identifies as all of her Window World stock and her interest in Window World, deprives the superior court from exercising jurisdiction over the subject matter raised by the Plaintiff's Complaint filed June 22, 2010.” The court further concluded that, for the same reasons, the superior court lacked subject matter jurisdiction over defendants' counterclaim. The trial court, therefore, dismissed this action. Plaintiff timely appealed to this Court.
Subject matter jurisdiction is a “threshold requirement for a court to hear and adjudicate a controversy brought before it.” In re M.B., 179 N.C.App. 572, 574, 635 S.E.2d 8, 10 (2006). Subject matter jurisdiction “ ‘is conferred upon the courts by either the North Carolina Constitution or by statute.’ “ In re McKinney, 158...
To continue reading
Request your trial