1. Appeal and Error_contract on behalf of a minor--law of the case doctrine
The law of the case doctrine does not preclude the Court of Appeals' consideration of the
issues of whether plaintiff's attorney had authority to contract on behalf of the minor and whether
the alleged contract on behalf of the minor required court approval in a medical malpractice
action, because: (1) neither of the two prior appellate opinions in this same case addressed either
of these issues; and (2) the prior appellate decisions only established that defendant doctor was
not entitled to summary judgment.
2. Minors--implied contract--covenant not to sue--medical malpractice--court approval
required
The trial court erred in a medical malpractice action by allowing the jury to find that there
was a valid contract on behalf of a minor not to sue defendant doctor, because: (1) neither the
record on appeal nor the brief on behalf of the doctor points to any evidence showing that the
alleged implied contract on behalf of the minor was reviewed or approved by the trial court; and
(2) it is well-established in North Carolina that a covenant not to sue negotiated for a minor is
invalid without investigation and approval by the trial court.
Wade E. Byrd for the plaintiffs-appellants.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P
by James Y. Kerr, II, Samuel G. Thompson, William H. Moss for
the defendant-appellee.
WYNN, Judge.
Previously, our courts discussed the facts of this case in
Creech v. Melnik, 347 N.C. 520, 495 S.E.2d 907, (1998) (Creech II);
Creech v. Melnik, 124 N.C. App. 502, 477 S.E.2d 680 (1996) (Creech
I). In brief, Sharon and Travis Creech, in their capacities as
guardians ad litem, brought a medical malpractice action againstDr. Evelyn H. Melnik, M.D., alleging that she provided negligent
birthing treatment to their son, Justin, on 12 October 1980.
Dr. Melnik, a neonatologist, directed the newborn nursery at
the hospital where Justin was born. Justin's birth began with
unstable vital signs necessitating care in the intensive care
nursery. Indisputably, oxygen deprivation caused Justin to suffer
brain damage, blindness, quadriplegia, cerebral palsy, profound
mental retardation, and microcephaly. Plaintiffs alleged that
after Justin's admission to intensive care, his condition was
significantly worsened by Dr. Melnik's failure to properly care for
him from 2:30 p.m. to 4:30 p.m. on 23 September 1980.
Before filing this action, W. Paul Pulley, Jr., plaintiffs'
attorney, talked with Dr. Melnik on several occasions. Dr. Melnik
contended that during those conversations, Mr. Pulley assured her
that if she spoke with him concerning the events surrounding
Justin's birth, plaintiffs would not sue her. She stated that with
that assurance, she gave information and opinions concerning the
care provided for Justin.
Based on evidence of that assurance, the trial court granted
summary judgment in favor of Dr. Melnik under the affirmative
defenses of equitable estoppel and breach of implied contract not
to sue. This Court affirmed, see Creech I; however, our Supreme
Court remanded the action for trial to resolve genuine issues of
material fact that precluded summary judgment. See Creech II.
This appeal by plaintiffs arises from the resulting jury verdict in
favor of Dr. Melnik on the grounds that plaintiffs breached theirimplied contract not to sue her.
(See footnote 1)
Plaintiffs challenge the jury's verdict of breach of an
implied contract on the grounds that (1) no evidence showed that
Mr. Pulley had authority to contract on behalf of the minor with
Dr. Melnik, and (2) no evidence showed that a court reviewed and
approved the alleged contract on behalf of the minor.
[1]Preliminarily, we address the issue of whether the earlier
decisions in Creech I and II set forth a doctrine of law that
decides the issues in this appeal--whether Mr. Pulley had authority
to contract on behalf of the minor, and whether the alleged
contract on behalf of the minor required court approval. We
conclude that they do not.
As a general rule, when an appellate court
passes on questions and remands the case for
further proceedings to the trial court, the
questions therein actually presented and
necessarily involved in determining the case,
and the decision on those questions become the
law of the case . . . .
Tennessee-Carolina Transp. Inc. v. Strick Corp., 286 N.C. 235, 239,
210 S.E.2d 181, 183 (1974); see also North Carolina Nat. Bank v.
Virginia Carolina Builders, 307 N.C. 563, 299 S.E.2d 629 (1983);
Sloan v. Miller Bldg. Corp., 128 N.C. App. 37, 41, 493 S.E.2d 460,
463 (1997); Weston v. Carolina Medicorp, Inc., 113 N.C. App. 415,
417, 438 S.E.2d 751, 753 (1994). Under the law of the case
doctrine, an appellate court ruling on a question governs the
resolution of that question both in subsequent proceedings in thetrial court and on a subsequent appeal, provided the same facts and
the same questions, which were determined in the previous appeal,
are involved in the second appeal. See Weston v. Carolina
Medicorp, Inc., 113 N.C. App. at 417, 438 S.E.2d at 753. However,
the law of the case doctrine does not apply to dicta, but only to
points actually presented and necessary for the determination of
the case. See Southland Assoc. Realtors, Inc. v. Miner, 73 N.C.
App. 319, 321, 326 S.E.2d 107, 108 (1985) (holding that the
doctrine did not apply because the prior appellate decision
established “only that plaintiff was not entitled to summary
judgment; it did not establish that plaintiff was not entitled to
present its evidence with regard to the disputed issues.”).
In this case, neither Creech I nor Creech II addressed issues
concerning the attorney's authority to act on behalf of the minor,
and whether the contract made on behalf of the minor required court
approval. Indeed, in Creech I, this Court observed that “[s]ince
neither party addresses the question of whether the attorney under
the facts of this case could lawfully bind his clients to a
contract, we need not reach that issue in this appeal.” Creech I,
124 N.C. App. at 505, 477 S.E.2d at 682. Likewise, Creech II did
not address whether the attorney had authority to enter into a
contract with Dr. Melnik and whether the contract on behalf of a
minor would require court approval. As in Southland, the sole
question before our Supreme Court in Creech II was whether the
pleadings, depositions, admissions and affidavits contained in therecord proper showed that there were genuine issues of material
fact. See Creech II. The case was not before our Supreme Court
for a decision on the merits; accordingly as in Southland, the
doctrine of law of the case does not preclude our consideration of
these issues.
(See footnote 2)
We therefore hold that the prior appellate
decisions of Creech I and II established only that Dr. Melnik was
not entitled to summary judgment; they did not establish whether
Mr. Pulley had authority to contract on behalf of the minor, nor
did they uphold the validity of a contract made on behalf of a
minor without court approval.
[2]Although plaintiff brings forth two issues, we need only
address the one that disposes of this appeal: Whether court
approval was required to find a valid contract involving a minor.
We answer, yes; the failure to present proof of court approval of
a contract on behalf of a minor is fatal at any stage of aproceeding seeking to enforce such a contract. Since the record
shows no evidence that the “implied” contract with the subject
minor was approved by a court, we must reverse the jury verdict
finding a breach of an implied contract not to sue.
Historically, courts have long provided special protections
for minors in general contractual relationships. “Recognized at
common law as early as 1292, and little changed in this century,
the . . . infancy doctrine allows the minor to avoid or disaffirm
contracts . . . The common law's view has traditionally been that
children are naive and unsophisticated, especially in the
marketplace.” Robert E. Richards, Children and the Recorded-
Message Industry: The Need for a New Doctrine, 72 VA. L.R. 1325,
1332-33 (1986). “From our earliest history infants have been
regarded as entitled to the especial protection of the State and as
wards of the court. In a sense courts . . . are the supreme
guardians of all infants and are charged with the protection alike
of their personal and property rights.” Latta v. Trustees of Gen.
Assembly of Presbyterian Church in United States, 213 N.C. 462,
469, 196 S.E. 862, 866 (1938). Consequently, the judiciary's role
in protecting the “interest of infants is broad, comprehensive and
plenary. In all suits or legal proceedings of whatever nature, in
which the personal or property rights of a minor are involved, the
protective powers of a court . . . may be invoked whenever it
becomes necessary to fully protect such rights.” Id.
The general rule is that the contract of an infant is not
binding on him. See Freeman v. Bridger, 49 N.C. 1 (1856). [S]o careful is the
law to guard the rights of
infants, and to protect them against hasty,
irregular and indiscreet judicial action.
Infants are, in many cases, the wards of the
courts, and these forms, enacted as safeguards
thrown around the helpless, who are often the
victims of the crafty, are enforced as being
mandatory, and not directory only. Those who
venture to act in defiance of them must take
the risk of their action being declared void,
or set aside.
Moore v. Gidney, 75 N.C. 34, 39 (1876). “'By the fifteenth century
it seems to have been well settled that an infant's bargain was in
general void at his election (that is voidable), and also that he
was liable for necessaries.'” Gastonia Personnel Corp. v. Rogers,
276 N.C. 279, 281, 172 S.E.2d 19, 20 (1970) (quoting 2 Williston,
Contracts § 223 3rd ed. 1959). “'The law considers his contract
a voidable one on account of its tender solicitude for his rights
and the fear that he may be imposed upon in his bargain.'” Weeks
v. Wilkins, 134 N.C. 516, 522, 47 S.E. 24, 26 (1904) (quoting
Devlin on Deeds, Vol. I, sec. 91).
“Consequently, ancient common-law rules regarding an infant's
lack of contractual capacity have endured in the United States and
in North Carolina with considerable vitality.” John N. Hutson, Jr.
& Scott A. Miskimon, North Carolina Contract Law § 1-26, 30
(2001).
(See footnote 3)
In North Carolina, agreements or contracts, except forthose dealing with necessities and those authorized by statute,
“are voidable at the election of the infant and may be disaffirmed
by the infant during minority or within a reasonable time of
reaching majority.” Bobby Floars Toyota, Inc. v. Smith, 48 N.C.
App. 580, 582, 269 S.E.2d 320 (1980). See also Jackson v. Beard,
162 N.C. 105, 78 S.E. 6 (1913). “[W]hat is a reasonable time
depends upon the circumstances of each case, no hard-and-fast rule
regarding precise time limits being capable of definition.”
Nationwide Mut. Ins. Co. v. Chantos, 25 N.C. App. 482, 490, 214
S.E.2d 438, 444, disc. review denied, 287 N.C. 465, 215 S.E.2d 624
(1975).
Our courts continue to afford special safeguards to minors and
incompetents when it comes to contracting away their interests.
The rationale for allowing minors to avoid contracts is that until
they are adults “they are not supposed to have the mental capacity
to make them.” Nationwide Mut. Ins. Co. v. Chantos, 293 N.C. 431,
443, 238 S.E.2d 597, 605 (1977). The avoidability of the contract
can be asserted defensively when an adult brings an action to
enforce the contract or offensively based on his infancy, when the
infant is, for whatever reason, dissatisfied. See Hutson, supra,
§ 1-26 at 30-31. However, “if the infant elects to enforce the
contract it is binding on the other party.” Id. § 1-25 at 29.
“Because of the need to protect children, in a contractual dispute
between an infant and an adult, the law comes down squarely on the
side of the infant.” Id. In contrast, when competent adults are conducting business, a
binding contract is created by an agreement involving mutual assent
of two parties who are in possession of legal capacity, where the
agreement consists of an exchange of legal consideration (mutuality
of obligation). Richard A. Lord, Williston on Contracts § 1:20
(4th ed. 1993). “Infancy, fraud, mistake, duress and some kinds of
illegality all afford grounds for rescinding or refusing to perform
a contract.” Id. However, because a minor lacks legal capacity
there cannot be a valid contract in most transactions, unless it is
for necessaries or the statutes make the contract valid. See
Nationwide Mutual Ins. Co. v. Chantos, 293 N.C. at 443, 238 S.E.2d
at 605.
Therefore, courts have “inherent authority over the property
of infants and will exercise this jurisdiction whenever necessary
to preserve and protect children's estates and interests. The
court looks closely into contracts or settlements materially
affecting the rights of infants [.]” Sigmund Sternberger
Foundation, Inc. v. Tannenbaum, 273 N.C. 658, 674, 161 S.E.2d 116,
128 (1968). Thus, in addressing the impropriety of a covenant not
to sue on behalf of a minor, our Supreme Court in Sell v.
Hotchkiss, 264 N.C. 185, 191, 141 S.E.2d 259, 264 (1965), stated:
Although this point was not addressed in
the briefs, we note that, irrespective of
what construction is put on the covenant
signed by Marguerite M. Hotchkiss, mother
and natural guardian of plaintiff Barbara
Sell, minor, defendant could not use it
as a defense to the minor's suit against
such a covenant as the one we have here.
The settlement of an infant's tort claimbecame effective and binding upon him
only upon judicial examination and
adjudication.
Id. (citations omitted); see also, Gillikin v. Gillikin, 252 N.C.
1, 113 S.E.2d 38 (1960) (holding that a minor could not be bound
by a compromise or settlement of his personal injury claim except
in a manner provided by law); Payseur v. Rudisill, 15 N.C. App. 57,
63, 189 S.E.2d 562, 566 (holding that “the settlement of a minor's
tort claim becom[e]s effective and binding upon him only upon
judicial examination and adjudication”), cert. denied, 281 N.C.
758, 191 S.E.2d 356 (1972); In re Reynolds Guardianship, 206 N.C.
276, 173 S. E. 789, 795 (1934) (holding that “In the case of infant
parties, the next friend, guardian ad litem, or guardian cannot
consent to a judgment or compromise without the investigation and
approval by the Court.”).
In the present case, neither the record on appeal nor the
brief on behalf of Dr. Melnik points to any evidence showing that
the alleged implied contract on behalf of the minor was reviewed or
approved by the trial court. Since it is well established in North
Carolina that a covenant not to sue negotiated for a minor is
invalid without investigation and approval by the trial court, we
must reverse the jury's finding of a contract on behalf of the
minor not to sue Dr. Melnik, and remand for a new trial.
Reversed and remanded.
Judges TIMMONS-GOODSON and HUDSON concur.
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