Wrongful Interference--interference with business relations--
collateral estoppel--res judicata--bail bondsman
The trial court did not err by granting defendant clerk of
superior court's motion to dismiss plaintiff licensed bail
bondsman's interference with business relations claim under
N.C.G.S. § 1A-1, Rule 12(b)(6) based on defendant's actions in
suspending the ability of plaintiff's licensed bail bond runner
to write bonds in the pertinent county, because: (1) privity
between plaintiff and his licensed bail bond runner means the
doctrines of res judicata and collateral estoppel barred
plaintiff's claim since the bond runner's prior lawsuit against
defendant was for the lost profits of plaintiff; (2) even if
plaintiff's actions were not barred by res judicata and
collateral estoppel, there were no allegations that defendant
harbored any ill-will towards plaintiff or the bond runner, or
that defendant's actions were self-serving; and (3) defendant's
actions were not a complete bar to plaintiff conducting business
in that county since defendant only ordered suspension of
plaintiff's bond runner until his criminal charges were resolved
and plaintiff could have continued conducting his business in
that county through the assistance of another agent.
Jack E. Carter, for plaintiff-appellant.
Attorney General Roy Cooper, by Assistant Attorney General C.
Norman Young, Jr., for defendant-appellee.
CAMPBELL, Judge.
Plaintiff appeals from an order dismissing his interference
with business relations claim against defendant pursuant to Rules
12(b)(1) and 12(b)(6) of the North Carolina Rules of Civil
Procedure. We affirm. Plaintiff is a licensed bail bondsman in North Carolina with
his principal place of business in Cumberland County. Plaintiff
also issues bail bonds in other North Carolina counties, including
Sampson County. During all times relevant to this action,
plaintiff conducted his business in Sampson County through Herbert
S. Tindall (“Tindall”), a licensed bail bond runner, who had the
authority to write bonds on behalf of plaintiff. Tindall was
plaintiff's only bail bond runner in Sampson County.
In September of 1997, while in the employment of plaintiff,
Tindall was charged with felony possession of cocaine and
misdemeanor possession of drug paraphernalia. Upon learning of
these charges, defendant, the elected Clerk of Superior Court for
Sampson County, instructed the Sampson County Magistrate's Office
to suspend Tindall's ability to write bonds in Sampson County until
March of 1998 when the felony charges against him were dismissed
and he pled guilty to the misdemeanor. Defendant believed that as
the Clerk of Court, he was lawfully authorized to make this
decision.
Tindall subsequently filed an action against defendant in his
official capacity based on defendant's refusal to allow him to
write bonds in Sampson County. The court dismissed Tindall's
action on or about 4 May 1999.
Thereafter, plaintiff filed a complaint against defendant on
2 November 1999 alleging that “from September 9, 1997 until March
27, 1998 the Plaintiff was prevented from doing business in Sampson
County, North Carolina and as a direct result of the actions of the
Defendant, the Plaintiff was unable to use his agent to write bailbonds in Sampson County, North Carolina . . . .” The complaint
further alleged that defendant's actions “were taken in his private
capacity” with “reckless disregard for the rights of the Plaintiff
and directly interfered with the Plaintiff's ability to conduct his
business in Sampson County, North Carolina.”
On 27 November 1999, defendant submitted a motion to dismiss
plaintiff's action (accompanied by a supporting brief) pursuant to:
(I) Rule 12(b)(1) because plaintiff failed to allege injury or
damages sufficient to invoke the jurisdiction of the court; and
(II) Rule 12(b)(6) for failure to state a claim upon which relief
could be granted because plaintiff's action was barred by the
doctrines of res judicata and collateral estoppel. On 30 May 2000,
the trial court filed a written order granting both of defendant's
motions by holding that plaintiff's suit was precluded because:
(I) plaintiff was in privity with Tindall under the doctrines of
res judicata and collateral estoppel; and (II) defendant was
entitled to both sovereign and quasi-judicial immunities because he
was a judicial officer engaged in a governmental function.
Plaintiff appeals this order.
Although the trial court granted defendant's Rule 12(b)(1)
motion for lack of subject matter jurisdiction and Rule 12(b)(6)
motion to dismiss, plaintiff argues only that the court erred in
granting defendant's Rule 12(b)(6) motion. We disagree.
In reviewing a Rule 12(b)(6) motion, a court must determine
“whether, as a matter of law, the allegations of the complaint,
treated as true, are sufficient to state a claim upon which reliefmay be granted under some legal theory, whether properly labeled or
not.” Miller v. Nationwide Mutual Ins. Co., 112 N.C. App. 295,
300, 435 S.E.2d 537, 541 (1993) (citation omitted), disc. review
denied, 335 N.C. 770, 442 S.E.2d 519 (1994). The trial court may
grant this motion if “there is a want of law to support a claim of
the sort made, an absence of facts sufficient to make a good claim,
or the disclosure of some fact which will necessarily defeat the
claim.” Garvin v. City of Fayetteville, 102 N.C. App. 121, 123,
401 S.E.2d 133, 135 (1991) (citation omitted). However, a claim
should not be dismissed unless it appears beyond a doubt that the
plaintiff can prove no set of facts in support of his claim that
would entitle him to relief. Id.
The central issue presented to this Court on appeal is whether
privity existed between plaintiff and Tindall, his agent, which
allowed the trial court to properly dismiss plaintiff's action
based on the doctrines of res judicata and collateral estoppel. We
conclude that there was privity between them.
The doctrines of res judicata and collateral estoppel are
companion doctrines developed by the courts "for the dual purposes
of protecting litigants from the burden of relitigating previously
decided matters and promoting judicial economy by preventing
needless litigation." Bockweg v. Anderson, 333 N.C. 486, 491, 428
S.E.2d 157, 161 (1993). Under the doctrine of res judicata,
sometimes referred to as “claim preclusion,” "a final judgment on
the merits in a prior action will prevent a second suit based onthe same cause of action between the same parties or those in
privity with them." Thomas M. McInnis & Assoc., Inc. v. Hall, 318
N.C. 421, 428, 349 S.E.2d 552, 556 (1986). Under the doctrine of
collateral estoppel, sometimes referred to as “issue preclusion,”
"parties and parties in privity with them - even in unrelated
causes of action - are precluded from retrying fully litigated
issues that were decided in any prior determination and were
necessary to the prior determination.” King v. Grindstaff, 284
N.C. 348, 356, 200 S.E.2d 799, 805 (1973) (citations omitted).
“Like res judicata, collateral estoppel only applies if the
prior action involved the same parties or those in privity with the
parties and the same issues.” Goins v. Cone Mills Corp., 90 N.C.
App. 90, 93, 367 S.E.2d 335, 337 (1988) (citing King, 284 N.C. at
356, 200 S.E.2d at 805) (emphasis added).
As this Court has recognized, the meaning of
'privity' for purposes of res judicata and
collateral estoppel is somewhat elusive.
Indeed, '[t]here is no definition of the word
`privity' which can be applied in all cases.'
The prevailing definition that has emerged
from our cases is that 'privity' for purposes
of res judicata and collateral estoppel
'denotes a mutual or successive relationship
to the same rights of property.'
State ex rel. Tucker v. Frinzi, 344 N.C. 411, 416-17, 474 S.E.2d
127, 130 (1996) (citations omitted).
In the case sub judice, Tindall was a bond runner for
plaintiff and received a fifty percent commission on all bonds
written by him in Sampson County. As a bond runner, Tindall
“execute[ed] bonds on behalf of the licensed bondsman when thepower of attorney has been duly recorded.” N.C. Gen. Stat. §
58-
71-1(9) (1999). Tindall's rights to his commission were granted to
him based on the power of attorney he received from plaintiff.
Therefore, in Tindall's earlier lawsuit against defendant, he was
in essence suing for the lost profits of plaintiff from whom he
derived his commission. This successive or mutual relationship in
the same rights in property establishes that the interests of both
Tindall and plaintiff are so intertwined that privity exists
between them.
Additionally, privity also exists where one not actually a
party to the previous action controlled the prior litigation and
had a proprietary interest in the judgment or in the determination
of a question of law or facts on the same subject matter. Thompson
v. Lassiter, 246 N.C. 34, 97 S.E.2d 492 (1957). In such a case,
the one who was not a party to the prior action is bound by the
previously litigated matters as if he had been a party to that
action. Id. In its order, the trial court in this case found that
plaintiff was aware of Tindall's earlier lawsuit because he had
attended a law office meeting with Tindall and defendant's counsel
to discuss Tindall's case. The court further found that plaintiff
was “actively involved in the discussions that took place in that
meeting.” Although there is insufficient evidence to show that
plaintiff controlled the prior litigation between Tindall and
defendant, the court's findings do establish that plaintiff had a
substantial interest, which in light of the fifty-fifty sharing of
commission, constituted a proprietary interest in the judgment. Thus, these findings can be used to support our earlier
determination that plaintiff and Tindall were in privity.
However, even if plaintiff's actions were not barred by res
judicata and collateral estoppel because he and Tindall were not in
privity with one another, the trial court's dismissal of this
action was still proper.
Article I, section 1 of North Carolina's State Constitution
“creates a right to conduct a lawful business or to earn a
livelihood that is 'fundamental' for purposes of state
constitutional analysis.” Treants Enterprises, Inc. v. Onslow
County, 83 N.C. App. 345, 354, 350 S.E.2d 365, 371 (1986), aff'd,
320 N.C. 776, 360 S.E.2d 783 (1987). In order “to maintain an
action for interference with business relations in North Carolina,
plaintiff[] must show that defendant[] 'acted with malice and for
a reason not reasonably related to the protection of a legitimate
business interest of [defendant].'” Cameron v. New Hanover
Memorial Hospital, 58 N.C. App. 414, 439, 293 S.E.2d 901, 916
(1982) (quoting Smith v. Ford Motor Co., 289 N.C. 71, 94, 221
S.E.2d 282, 296 (1976)). “Malice in law is not necessarily
personal hate or ill will, but it is that state of mind which is
reckless of law and of the legal rights of the citizen.” Black's
Law Dictionary with Pronunciations 956-57 (6th ed. 1990).
In the present case, plaintiff's complaint alleged that
defendant had no authority to prevent plaintiff's agent from
engaging in the bail bonding business in Sampson County because
that authority rests solely with the Commissioner of Insurance. See N.C. Gen. Stat. § 58-71-80 (1999). It further alleged that
defendant's actions were taken with reckless disregard of
plaintiff's rights and directly interfered with plaintiff's ability
to conduct business in Sampson County. However, there were no
allegations that defendant harbored any ill will towards plaintiff
or Tindall, or that his actions were self-serving. Additionally,
defendant's actions were not a complete bar to plaintiff conducting
business in Sampson County; defendant only ordered suspension of
plaintiff's agent from writing bonds in Sampson County until his
criminal charges were resolved. Plaintiff could have continued
conducting his business in Sampson County through the assistance of
another agent. Thus, plaintiff's allegations fail to establish any
malice or reckless disregard on the part of defendant.
Since the grounds for affirming the trial court's order can
be supported by addressing only the Rule 12(b)(6) motion and this
is the only motion against which plaintiff brought forth arguments,
we need not address the Rule 12(b)(1) motion. Additionally, there
are adequate grounds to affirm the order without addressing the
other issues argued by plaintiff involving whether defendant was
entitled to sovereign immunity and/or quasi-judicial immunity.
Thus, for the aforementioned reasons, the trial court did not err
in granting defendant's motion to dismiss plaintiff's claim.
Affirmed.
Chief Judge EAGLES and Judge HUDSON concur.
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