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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Car
olina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be consid
ered authoritative.
WINSTON-SALEM WRECKER ASSOCIATION, INC., HARVEY DAVIS d/b/a DAVIS
GARAGE AND BODY SHOP, DEAN'S ROBINHOOD GULF, INC., FRITTS MOTOR
COMPANY, INC., DAVID GRUBBS d/b/a PARKWAY TEXACO, ROBERT R.
MATHIS d/b/a RAY'S PAINT & BODY SHOP AND WRECKER SERVICE, A.C.
REYNOLDS, SR. d/b/a REYNOLDS GARAGE & USED PARTS, RONALD E. JONES
d/b/a SOUTHSIDE GARAGE TOWING, SPAUGH MOTOR COMPANY, INC. and
STEVE VENABLE, INC., Plaintiffs, v. RON BARKER, Sheriff of
Forsyth County, North Carolina in his official and individual
capacity, JAMES HORN d/b/a HORN'S GARAGE AND WRECKER SERVICE
and/or HORN'S GARAGE AND TOWING, JAMES HORN, individually, HORN'S
GARAGE, INC., and THE HARTFORD FIRE INSURANCE COMPANY, Defendants
No. COA01-67
(Filed 28 December 2001)
1. Costs_-attorney fees--findings of fact
The trial court did not err in an unfair and deceptive trade practices and civil conspiracy
action by allegedly failing to make findings of fact and conclusions of law to support its order
awarding attorney fees to defendant sheriff under N.C.G.S. § 6-21.5, because: (1) the trial court
adopted the grounds for its award set forth in defendant's motion and in the billing statements
attached to defense counsel's affidavit; and (2) a review of the order, motion, and affidavit along
with its attachments provides sufficient findings of fact to support the award.
2. Costs_attorney fees--justiciable issue_-survival from motion to dismiss
The trial court did not err in awarding attorney fees in an unfair and deceptive trade
practices and civil conspiracy action by finding that there was a complete absence of a justiciable
issue of either law or fact in plaintiffs' action, because: (1) the mere fact that plaintiffs' complaint
survived a N.C.G.S. § 1A-1, Rule 12(b)(6) motion to dismiss is not determinative proof of
justiciability; (2) the insurmountable defenses raised by defendants foreclosed any reasonable
expectation of an affirmative recovery by plaintiffs; (3) the trial court entered summary judgment
in favor of defendant, the Court of Appeals affirmed summary judgment, and the Supreme Court
dismissed plaintiffs' appeal and denied the petition for discretionary review; and (4) plaintiffs'
claims were brought in bad faith.
3. Costs-_attorney fees_-preparation and argument of motion to dismiss
The trial court did not err in an unfair and deceptive trade practices and civil conspiracy
action by awarding attorney fees to defendant sheriff under N.C.G.S. § 6-21.5 for preparing to
argue and arguing the N.C.G.S. § 1A-1, Rule 12(b)(6) motion to dismiss heard on 28 August
1998 even though the motion was denied, because the trial court properly concluded that
plaintiffs failed to raise justiciable issues.
Appeal by plaintiffs from order entered 11 October 2000 by
Judge L. Todd Burke in Forsyth County Superior Court. Heard in the
Court of Appeals 26 November 2001.
White and Crumpler, by Dudley A. Witt, for plaintiff-
appellants.
Womble Carlyle Sandridge & Rice, P.L.L.C., by Allan R. Gitter
and Stacey M. Stone, for defendant-appellees.
EAGLES, Chief Judge.
Plaintiff Winston-Salem Wrecker Association, Inc. (Wrecker
Association) coordinates vehicle towing, recovery, and storage
services in Forsyth County. The Wrecker Association negotiated a
procedure with the Winston-Salem Police Department, North Carolina
Highway Patrol, and the North Carolina Department of Transportation
to allow any wrecker service operator, that complies with certain
minimum requirements, to participate in the towing and storing of
seized, abandoned, and wrecked automobiles. The Wrecker
Association uses a rotating call procedure for its participating
operators.
Plaintiffs, however, have not provided towing services to the
Forsyth County Sheriff's Department because Sheriff Ron Barker
(Sheriff Barker) has employed only the services of defendant James
Horn d/b/a Horn's Garage and Wrecker Service (Horn) since 1990.
Because of the arrangement between Sheriff Barker and Horn,
plaintiffs have not provided any of the towing services required by
the Forsyth County Sheriff's Department.
Plaintiffs filed a complaint on 4 May 1998 that asserted five
causes of action: (1) Sheriff Barker, in his official capacity,
violated plaintiffs' rights guaranteed by Article I, Section 34 of
the North Carolina Constitution; (2) Horn engaged in unfair and
deceptive trade practices; (3) Sheriff Barker, in his individual
capacity, and Horn entered into a civil conspiracy creating amonopoly of the towing and storage business, damaging plaintiffs
due to the unlawful agreement; (4) Sheriff Barker, in his official
and individual capacities, violated plaintiffs' Fifth and
Fourteenth Amendment constitutional rights; and (5) Sheriff
Barker's conduct entitles plaintiffs to compensatory damages from
Hartford Insurance, Sheriff Barker's surety.
On 2 June 1998, defendants filed an answer and a Rule 12(b)(6)
motion to dismiss. The Honorable Russell G. Walker, Jr. denied
defendants' motion on 26 August 1998. Plaintiffs amended their
complaint on 3 September 1998. On 14 September 1998, defendants
filed a motion for summary judgment and included supporting
affidavits. Plaintiffs filed affidavits in opposition to
defendants' motion. The Honorable L. Todd Burke granted
defendants' motion for summary judgment on 28 October 1998.
Plaintiffs appealed to the North Carolina Court of Appeals and
on 21 March 2000, in an unpublished opinion, this Court affirmed
the trial court's order of summary judgment in favor of defendants.
On 25 April 2000, plaintiffs filed a notice of appeal raising
constitutional issues and also petitioned the Supreme Court of
North Carolina for discretionary review. Our Supreme Court
dismissed plaintiffs' notice of appeal and denied plaintiffs'
petition for discretionary review on 29 August 2000.
On 11 September 2000, defendants Hartford Insurance and
Sheriff Barker filed a motion for an order in conformity.
Additionally, Sheriff Barker moved for an award of attorney fees
pursuant to N.C.G.S. § 6-21.5. On 11 October 2000, Judge Burke
ordered the action dismissed with prejudice and awarded SheriffBarker $17,390.37 in attorney's fees. Plaintiffs filed timely
notice of appeal of the order granting the award of attorney's
fees.
Plaintiffs raise three issues on appeal: (1) whether the
trial court erred in failing to make findings of fact and
conclusions of law to support its order awarding attorney's fees
pursuant to N.C.G.S. § 6-21.5; (2) whether the trial court erred in
finding that there was a complete absence of a justiciable issue of
either law or fact in plaintiffs' action; and (3) whether the trial
court erred in awarding as attorney's fees any sums representing
fees incurred by the defendant for preparing to argue and arguing
the Rule 12(b)(6) motion to dismiss that was denied on 26 August
1998 by Judge Russell G. Walker, Jr.
I.
North Carolina General Statute § 6-21.5 provides:
In any civil action or special proceeding
the court, upon motion of the prevailing
party, may award a reasonable attorney's fee
to the prevailing party if the court finds
that there was a complete absence of a
justiciable issue of either law or fact raised
by the losing party in any pleading. The
filing of a general denial or the granting of
any preliminary motion, such as a motion for
judgment on the pleadings pursuant to G.S. 1A-
1, Rule 12, a motion to dismiss pursuant to
G.S. 1A-1, Rule 12(b)(6), a motion for a
directed verdict pursuant to G.S. 1A-1, Rule
50, or a motion for summary judgment pursuant
to G.S. 1A-1, Rule 56, is not in itself a
sufficient reason for the court to award
attorney's fees, but may be evidence to
support the court's decision to make such an
award. A party who advances a claim or
defense supported by a good faith argument for
an extension, modification, or reversal of law
may not be required under this section to pay
attorney's fees. The court shall make
findings of fact and conclusions of law tosupport its award of attorney's fees under
this section.
In granting Sheriff Barker's motion for award of attorney's
fees, Judge Burke's order stated the following:
[T]he Court being of the opinion that said
motions should be granted in accordance with
the provisions of G.S. § 6-21.5 upon the
grounds raised in said motions and affidavit
of Allan R. Gitter.
[I]t is . . . ORDERED that attorney's fees in
the amount of $17,390.37 be paid by the
plaintiffs to attorney Allan R. Gitter,
attorney for defendants Ron Barker and
Hartford Fire Insurance Company.
[1]Plaintiffs argue that the award of attorney's fees cannot
be sustained on appeal because Judge Burke failed to make findings
of fact and conclusions of law as required by N.C.G.S. § 6-21.5.
Plaintiffs contend that since Judge Walker denied defendants' Rule
12(b)(6) motion to dismiss and thereby determined that plaintiffs'
complaint stated a claim upon which relief could be granted, it was
incumbent upon Judge Burke, in entering an award of attorney's
fees, to make findings of fact to support the award.
In the order, Judge Burke holds that attorney's fees should
be granted in accordance with the provisions of G.S. § 6-21.5 upon
the grounds raised in said motions and affidavit of Allan R.
Gitter. The grounds stated in defendant's motion for attorney's
fees are as follows:
NOW COMES defendant Ron Barker and . . .
moves, pursuant to N.C.G.S. § 6-21.5 and
N.C.G.S. § 75-16.1, for an award of a
reasonable attorney's fee on the grounds that
Superior Court Judge L. Todd Burke's entry of
summary judgment against plaintiffs, having
been affirmed by the North Carolina Court of
Appeals on
every single one of the plaintiffs'
multiple grounds, and said opinion having beenre-affirmed by the North Carolina Supreme
Court's dismissal
ex mero motu of plaintiffs'
notice of appeal and dismissal of plaintiffs'
petition for discretionary review, both dated
August 24, 2000, clearly demonstrate that
there was a complete absence of a justiciable
issue of either law or fact raised by the
losing party plaintiffs in their complaint,
and that although the granting of summary
judgment pursuant to Rule 56 is not in itself
a sufficient reason for this court to award
attorney's fees, such action by three (3)
different courts (Superior, Court of Appeals,
and Supreme Court) constitutes overwhelming
evidence to support such an award.
In support of the motion for attorney's fees, defendant provided
the trial court with the affidavit of defendants' attorney Allan R.
Gitter. The affidavit included forty-four pages of attorney
billing statements indicating attorney's fees aggregating
$17,390.37.
In
Mashburn v. First Investors Corp., 111 N.C. App. 398, 432
S.E.2d 869 (1993), plaintiff raised as an issue the trial court's
failure to find facts as required by Rule 52 of the North Carolina
Rules of Civil Procedure. This Court noted that the requirement
that facts be specifically found is merely to provide a basis for
appellate review. This Court reviewed the trial court's findings
of fact, which were not specifically stated but were adopted from
the parties' stipulations, and determined that the trial court's
conclusion to award attorney's fees was adequately supported.
Here, in his order, Judge Burke adopted the grounds for an
award of attorney's fees set forth in defendant's motion and in the
billing statements attached to Allan R. Gitter's affidavit.
Comprehensive review of the order, the motion, and the affidavit
and its attachments provides sufficient findings of fact to supportthe award of attorney's fees. As a result, this assignment of
error fails.
II.
[2]Plaintiffs next contend that the trial court erred in
finding that there was a complete absence of a justiciable issue of
either law or fact in plaintiffs' action. Plaintiffs' argue that
Judge Walker's denial of defendants' motion to dismiss is prima
facie evidence that the case raised justiciable issues.
The mere fact that plaintiffs' complaint survived a Rule
12(b)(6) motion to dismiss is not determinative proof of
justiciability. The purpose of a Rule 12(b)(6) motion to dismiss
is to test the legal sufficiency of the complaint.
Brown v.
Friday, 119 N.C. App. 753, 755, 460 S.E.2d 356, 358 (1995). Here,
Judge Walker examined the complaint to determine whether it was
sufficient to survive dismissal. The trial court presumed the
allegations in the complaint to be true and determined that
plaintiffs' allegations raised some actionable claim. Judge Walker
did not examine additional pleadings.
In
Sunamerica Financial Corp. v. Bonham, 328 N.C. 254, 400
S.E.2d 435 (1991), our Supreme Court considered the propriety of an
award of attorney's fees. In that case the Court stated:
[I]t is . . . possible that a pleading which,
when read alone sets forth a justiciable
controversy, may, when read with a responsive
pleading, no longer present a justiciable
controversy . . . . Had defendant failed to
answer, the allegations in plaintiff's
complaint would have been deemed admitted, and
a default judgment would have been possible.
See N.C.G.S. § 1A-1, Rules 8 and 55 (1990).
Thus, until an answer was filed, plaintiff'scomplaint in this case did set forth a
justiciable issue. However, when defendant's
answer . . . was filed and served, it should
have become apparent to plaintiff that . . .
the complaint no longer contained a
justiciable issue.
Id. at 258, 400 S.E.2d at 438. In deciding whether a party is
entitled to attorney's fees under N.C.G.S. § 6-21.5, the trial
court is required to evaluate whether the losing party persisted in
litigating the case after a point where he should reasonably have
become aware that the pleading he filed no longer contained a
justiciable issue.
Sunamerica, 328 N.C. at 258, 400 S.E.2d at
438.
Here, defendants, in their answer, denied the existence of a
contract evidencing a relationship between Sheriff Barker and Horn,
and affirmatively pled the defense of sovereign immunity.
Furthermore, defendants argued that the action against Sheriff
Barker is barred by sovereign immunity because plaintiffs did not
affirmatively plead that Sheriff Barker purchased liability
insurance.
After learning of these defenses, plaintiffs persisted in
pursuing the litigation by propounding discovery and seeking
admissions. Defendants filed a motion for summary judgment on all
claims. Judge Burke granted defendants' motion for summary
judgment on 26 October 1998. The insurmountable defenses raised
by defendants foreclosed any reasonable expectation of an
affirmative recovery by plaintiffs.
Id. at 259, 400 S.E.2d at
438. The non-existence of a justiciable issue in plaintiffs' suit
is further evinced by Judge Burke's entry of summary judgment, thisCourt's decision affirming summary judgment, and the Supreme
Court's dismissal of plaintiffs' appeal and denial of the petition
for discretionary review. Accordingly, Judge Burke acted
reasonably in concluding that there was a complete absence of a
justiciable issue.
Plaintiffs also contend that this case presents a good faith
argument for the extension of law as set forth by our Supreme Court
in
Corum v. University of North Carolina, 330 N.C. 761, 413 S.E.2d
276 (1992).
See N.C.G.S. § 6-21.5 (1999). In
Corum, our Supreme
Court held that when there is a clash between . . . constitutional
rights and sovereign immunity, the constitutional rights must
prevail.
Corum, 330 N.C. at 786, 413 S.E.2d at 292. Here
plaintiffs argued that their rights under Article I, Section 19 of
the North Carolina Constitution, as well as their Fifth and
Fourteenth Amendment rights, had been violated.
Careful review of the record, however, demonstrates the
frivolity of plaintiffs' claims. In their motion for attorney's
fees, defendants specifically asked the trial court to take
judicial notice of the fact that plaintiffs' lawsuit was commenced
by plaintiffs on the eve of the primary election for Sheriff, in
which Sheriff Barker was a candidate. This finding is evidence of
plaintiffs' bad faith and supports the trial court's decision to
award attorney's fees. Plaintiffs' contention that their claims
were in good faith and based on existing law fails.
In light of our determination that Judge Burke did not err in
concluding that plaintiffs failed to raise justiciable issues andthat plaintiffs' claims were brought in bad faith, we hold that the
trial court did not err in granting Sheriff Barker's motion for an
award of attorney's fees.
III.
[3]Plaintiffs' final assignment of error on appeal is that
the trial court erred in awarding attorney's fees for that portion
incurred by Sheriff Barker in preparing to argue and arguing the
motion to dismiss heard on 20 August 1998. Plaintiffs contend that
because defendants' motion was denied, defendants are not entitled
to attorney's fees incurred up to that point in time.
Because statutes awarding an attorney's fee to the prevailing
party are in derogation of the common law, N.C.G.S. § 6-21.5 must
be strictly construed.
Sunamerica, 328 N.C. at 257, 400 S.E.2d at
437. Here, we have determined that the trial court was correct in
concluding that plaintiffs' failed to raise justiciable issues.
Judge Walker's determination that the complaint was facially valid
does not equate to a finding of justiciability. Accordingly, we
hold that the ultimate determination, made by the trial court and
affirmed by this Court, that plaintiffs failed to raise any
justiciable issue entitles defendant Sheriff Barker to the full
amount of attorney's fees awarded by the court below.
Affirmed.
Judges MARTIN and BIGGS concur.
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