FRED BAARS and CAROLE BAARS,
Plaintiffs,
v
.
Harnett County
No. 00 CvS 1006
CAMPBELL UNIVERSITY, INC.,
NORMAN A. WIGGINS, Individually
and as Executor of the Estate of
Gladys Campbell, Deceased and
WILLIAM A. JOHNSON,
Defendants.
Appeal by plaintiffs from orders entered 7 November 2000 by
Judge E. Lynn Johnson in Harnett County Superior Court. Heard in
the Court of Appeals 17 October 2001.
Everett and Everett, by Robinson O. Everett; and Everett,
Gaskins, Hancock & Stevens, by Hugh Stevens, for plaintiff
appellants.
Adams Kleemeier Hagan Hannah & Fouts, by Daniel W. Fouts and
Margaret Shea Burnham; and Stott, Hollowell, Palmer & Windham,
LLP, by James C. Windham, Jr., for Norman A. Wiggins and
Campbell University, Inc., defendant appellees.
Patterson, Dilthey, Clay & Bryson, L.L.P., by Ronald C.
Dilthey and Charles George, for William A. Johnson defendant
appellee.
McCULLOUGH, Judge.
This case concerns the will of Gladys Campbell, who died on 16
May 1996 at the age of eighty-seven. At the time of her death,
Mrs. Campbell was a widow with no children. Plaintiffs are brother
and sister, respectively, and a nephew and niece of Mrs. Campbell.
On 6 June 1984, Mrs. Campbell executed a will in Florida which gavemost of her estate to two charities, her brother-in-law, and
several of her nieces and nephews. This will remained in effect
until 1988. In 1986, Mrs. Campbell responded to a fundraising
campaign by Campbell University, located in Buies Creek, North
Carolina. Mrs. Campbell attended the school from 1923-24, though
she was not related to the Campbells for whom the school was named.
Mrs. Campbell made a $10,000.00 donation to the school's
scholarship fund, and during the next two years, officials from
Campbell University visited her in Florida on numerous occasions.
In early 1988, University officials personally moved Mrs.
Campbell to a neighborhood near the campus, and thereafter she
signed several legal documents which transferred the bulk of her
sizeable estate to Campbell University. On 25 January 1988
defendant William A. Johnson (Johnson), counsel for Campbell
University, drafted a new will for Mrs. Campbell. The will
contained bequests to Mrs. Campbell's nieces and nephews, two
charities, and Campbell University, as well as a provision naming
defendant Norman A. Wiggins (Wiggins), in his capacity as President
and Chief Executive Officer of the named executor, Campbell
University, the executor of her estate. Mrs. Campbell executed a
codicil to her 1988 will on 11 January 1990. The codicil bequeathed
$100,000.00 to Campbell University's law school building fund.
That sum had previously been designated for one of Mrs. Campbell's
sisters, but she passed away shortly after the 1988 will was
drafted.
Due to the amounts and the nature of Mrs. Campbell's assets,her estate plan was intricate. In addition to the 25 January 1988
will and the 11 January 1990 codicil, Mrs. Campbell made several
inter vivos transfers. On 10 March 1988, Mrs. Campbell executed
two documents: (1) a Contract and Agreement, in which Mrs. Campbell
agreed to move to Buies Creek, North Carolina, and Campbell
University agreed to long-term care for her; and (2) a Charitable
Remainder Annuity Trust Agreement. Mrs. Campbell then executed a
Revocable Asset Management Trust Agreement, dated 1 April 1988. On
7 April 1989, Mrs. Campbell executed a Power of Attorney, in which
Wiggins obtained a power of attorney from Mrs. Campbell for Frank
Upchurch, Campbell University's Vice President of Advancement;
Wiggins was named in the alternative. The power of attorney was
activated on 30 June 1993. On 28 November 1990, Mrs. Campbell
executed a Deed Reserving a Life Estate for her home in North
Carolina. All these documents were prepared by defendant Johnson
and executed by defendant Wiggins. Finally, in 1993, Mrs. Campbell
gave approximately $180,000.00 to Campbell University.
Upon Mrs. Campbell's death on 16 May 1996, Wiggins presented
her 1988 will and the 1990 codicil to the probate court. The
Harnett County Clerk of Superior Court issued Letters Testamentary,
which appointed Campbell University, by Wiggins, as the executor of
Mrs. Campbell's estate. Soon thereafter, Wiggins took the "Oath of
Executor" and has served in that capacity up to the present time.
Plaintiffs filed a caveat to their aunt's will on 16 May 1999.
During discovery, plaintiffs learned for the first time about some
of the documents their aunt had signed, and the extent to whichCampbell University benefited from Mrs. Campbell's will. After
they discovered this information, plaintiffs filed a civil
complaint in Harnett County on 15 June 2000. Their complaint
alleged that defendants unduly influenced Mrs. Campbell and
breached their fiduciary duty to her while acquiring inter vivos
transfers of Mrs. Campbell's assets in favor of Campbell
University. In their prayer for relief, plaintiffs requested the
following remedies:
1. That the Court impose a constructive
trust on all assets that Campbell University
has acquired, directly or indirectly, from
Gladys Campbell during her life or after her
death and that this trust also include any
interest, profits or other proceeds received
from investment or transfer of assets obtained
from Gladys Campbell.
2. That the requested constructive
trust be for the benefit of those persons who
would be the beneficiaries under the last will
of Gladys Campbell not obtained by the
exercise of unlawful influence or, in the
event that no such will qualifies for probate,
then for the benefit of those persons who are
the heirs at law of Gladys Campbell.
3. From the assets of the constructive
trust, the plaintiffs recover any costs and
expenses, including any attorney fees,
incurred either in connection with this
litigation or in the caveat proceedings
involving the estate of Gladys Campbell and
that defendants be ordered to reimburse the
constructive trust for any such payments.
4. That compensatory damages be awarded
against the defendants to compensate the
plaintiffs for any losses they may have
incurred, directly or indirectly as a result
of the defendants' actions.
5. That punitive damages, up to
$250,000 per defendant, be awarded to theplaintiffs by reasons of defendants' conduct,
with these damages to be in such amount as
shall be appropriate under all the
circumstances in light of such acts on the
part of each defendant as may constitute a
breach of the fiduciary obligation owed by
such defendant to Gladys Campbell or as may
constitute part of a more widely extended plan
or scheme to obtain assets by the use of undue
influence.
6. That plaintiffs recover from the
defendants the costs of this action, including
reasonable attorney fees.
7. That this case be consolidated for
trial and further disposition with the pending
caveat proceeding which concerns the purported
will of Gladys Campbell, deceased.
Defendant Johnson filed an answer on 9 August 2000, which
contained both a response to the allegations of plaintiffs'
complaint and a motion to dismiss (based on six defenses) pursuant
to N.C. Gen. Stat. § 1A-1, Rule 12(b) (1999). The first defense
was based on the fact that there was a prior pending action (the
caveat proceeding) in existence; defendant Johnson also asserted
three defenses based on the statutes of limitations, one defense
based on a lack of subject matter jurisdiction, and one defense
asserting that plaintiffs were not real parties in interest.
Finally, Johnson asserted that plaintiffs' claims were barred by
the doctrines of res judicata and election of remedies.
Defendants Wiggins and Campbell University filed their joint
answer on 19 September 2000, which contained both a response to the
allegations of plaintiffs' complaint and a motion to dismiss
pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b). In support of
their motion to dismiss, defendants recounted the same six defensespropounded by defendant Johnson, and further asserted that the case
should be dismissed because plaintiffs failed to allege wrongdoing
by defendant Wiggins in his individual capacity. Defendants also
maintained plaintiffs' claim that Wiggins violated the Revised
Rules of Professional Conduct did not constitute a cognizable cause
of action. Defendants moved to strike a portion of plaintiffs'
complaint and denied exerting undue influence upon Mrs. Campbell.
Defendants reiterated the fact that many of the documents executed
by Mrs. Campbell were revocable in nature; as to the documents
which were not unilaterally revocable, defendants pointed out that
Mrs. Campbell received valuable consideration and did not file a
lawsuit to set them aside. Finally, defendants asserted that N.C.
Gen. Stat. § 84-5 (1999) (prohibiting the practice of law by a
corporation) went into effect on 1 October 1997, long after the
1988 will and the 1990 codicil were executed, and was irrelevant to
the case.
On 7 November 2000, the trial court filed two orders in which
it allowed defendants' motions to dismiss on six of the defenses.
The trial court agreed that plaintiffs' lawsuit was barred by the
statutes of limitations and allowed defendants' motions to dismiss
on those three defenses. Additionally, the trial court dismissed
plaintiffs' complaint because the trial court lacked subject matter
jurisdiction, since the caveat proceeding was still pending in
Harnett County at the time the complaint was filed. The trial
court also agreed that defendant Wiggins could not be sued
individually because all actions he took were done in his capacityas President and CEO of Campbell University, and plaintiffs did not
allege misconduct on his part in his role as Mrs. Campbell's
attorney-in-fact. The only document in which Wiggins was
individually named was the Power of Attorney. Finally, the trial
court agreed plaintiffs' claim that Wiggins violated the Revised
Rules of Professional Conduct was not a cognizable cause of action;
moreover, the trial court was persuaded by defendants' argument
that unauthorized practice of law did not state a cognizable cause
of action. The trial court's orders then dismissed plaintiffs'
complaint against defendants Wiggins and Campbell University with
prejudice, and dismissed plaintiffs' complaint against defendant
Johnson with prejudice in its entirety. Plaintiffs appealed.
On appeal, plaintiffs argue that the trial court erred by (I)
granting defendants' motions to dismiss based on the statutes of
limitations; (II) granting defendants' motions to dismiss based on
a lack of subject matter jurisdiction; (III) granting defendants'
motion to dismiss on the ground that plaintiffs did not allege a
cause of action against defendant Wiggins in his individual
capacity; and (IV) granting defendants' motion to dismiss on the
ground that plaintiffs' allegations that defendant Wiggins violated
the North Carolina Rules of Professional Conduct was not a
cognizable cause of action. For the reasons set forth herein, we
agree with defendants and affirm the trial court's dismissal of
plaintiffs' complaint.
From the outset, we note that plaintiffs' lawsuit was
dismissed by the trial court pursuant to N.C. Gen. Stat. § 1A-1,Rule 12(b). When ruling on such a motion, the trial court must
decide "'"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. . . ."'"
Liptrap v. City of High Point, 128 N.C. App. 353, 355, 496 S.E.2d
817, 818 (quoting Soderlund v. N.C. School of the Arts, 125 N.C.
App. 386, 389, 481 S.E.2d 336, 338 (1997) (quoting Harris v. NCNB,
85 N.C. App. 669, 670, 355 S.E.2d 838, 840 (1987))), disc. review
denied, 348 N.C. 73, 505 S.E.2d 873 (1998).
| Document | Date | Expiration of Three-Year Statute of Limitations |
| Will | 25 January 1988 | 25 January 1991 |
| Contract and Agreement | 10 March 1988 | 10 March 1991 |
|
Charitable Remainder Annuity Trust |
10 March 1988 | 10 March 1991 |
|
Revocable Asset Management Trust |
1 April 1988 | 1 April 1991 |
| Power of Attorney | 7 April 1989 | 7 April 1992 |
| Codicil | 11 January 1990 | 11 January 1993 |
| Deed | 28 November 1990 | 28 November 1993 |
Plaintiffs' lawsuit was not filed until June 2000, more than three
years after each document was executed. Plaintiffs' lawsuit istime-barred with respect to all the documents of which plaintiffs
complain. Plaintiffs' first assignment of error is, therefore,
overruled.
Throughout their second assignment of error, plaintiffs argue
they are not challenging the validity of the will as part of this
appeal; however, after careful examination of the record below, we
conclude that plaintiffs are challenging not only the inter vivos
transfers made by their aunt, but also the underlying will.
In their brief to this Court, plaintiffs assert that "the
caveat is concerned with the validity of the will and the civil
complaint that is the subject of this action is only attacking the
validity of the inter vivos transactions." We do not agree.
Paragraph 9 of plaintiffs' complaint makes the following
allegation:
9. The execution of the purported will
(in January 1988) was the result of a plan on
the part of agents and representatives of
Campbell University to have her transfer to
Campbell University, by will, contract and
agreement, trust agreement, and otherwise
almost all of the assets which belonged to
Gladys Campbell and thereby inevitably deprive
the members of her family, who were the
natural objects of her affection, of
opportunity for benefit from these transferred
assets during her life or at her death.
(Emphasis added.) This language indicates that the will itself was
under attack by plaintiffs in both their complaint and in the
caveat proceeding.
To the extent that plaintiffs' complaint states CampbellUniversity obtained property from the probate of Mrs. Campbell's
will, we conclude their exclusive remedy is the caveat proceeding.
We also take judicial notice of the fact that Mrs. Campbell's 1988
will and her 1990 codicil were deemed valid by the Harnett County
Superior Court on 24 April 2001, as part of the disposition of the
caveat proceeding. (In the Matter of the Will of Gladys Baars
Campbell, No. 96 E 227; appealed to the North Carolina Court of
Appeals, No. COA01-1223; filed 28 September 2001 and docketed 5
October 2001.) Therefore, until such time as the will and codicil
are deemed invalid, we will treat them as the valid last will and
codicil of Mrs. Campbell.
N.C. Gen. Stat. § 31-32 (1999) states:
At the time of application for probate of
any will, and the probate thereof in common
form, or at any time within three years
thereafter, any person entitled under such
will, or interested in the estate, may appear
in person or by attorney before the clerk of
the superior court and enter a caveat to the
probate of such will: Provided, that if any
person entitled to file a caveat be within the
age of 18 years, or insane, or imprisoned,
then such person may file a caveat within
three years after the removal of such
disability.
Notwithstanding the provisions of the
first paragraph of this section, as to persons
not under disability, a caveat to the probate
of a will probated in common form prior to May
1, 1951, must be filed within seven years of
the date of probate or within three years from
May 1, 1951, whichever period of time is
shorter.
In general, "[t]he purpose of a caveat is to determine whether
the paperwriting purporting to be a will is in fact the last willand testament of the person for whom it is propounded." In re
Spinks, 7 N.C. App. 417, 423, 173 S.E.2d 1, 5 (1970). "The filing
of a caveat is the customary and statutory procedure for an attack
upon the testamentary value of a paperwriting which has been
admitted by the clerk of superior court to probate in common form."
Id. An attack upon a will offered for probate must be direct and
by caveat; a collateral attack is not permitted. In re Will of
Charles, 263 N.C. 411, 415, 139 S.E.2d 588, 591 (1965); see also
Johnson v. Stevenson, 269 N.C. 200, 202, 152 S.E.2d 214, 216
(1967); and Casstevens v. Wagoner, 99 N.C. App. 337, 338, 392
S.E.2d 776, 778 (1990). Additionally, a direct attack by caveat
has been held a complete and adequate remedy at law, such that a
plaintiff is not entitled to equitable relief. Johnson, 269 N.C.
at 204, 152 S.E.2d at 217.
Plaintiffs requested the imposition of a constructive trust in
their complaint, as well as damages. To the extent that such
relief is predicated upon the provisions of Mrs. Campbell's will,
those issues were properly dismissed by the trial court, as they
constituted an attack on the validity of the will and should have
been raised in the caveat proceeding, rather than in this lawsuit.
We further note that "[a]n attack on the validity of a will most
commonly deals with issues involving undue influence and
testamentary capacity." Brickhouse v. Brickhouse, 104 N.C. App.
69, 72, 407 S.E.2d 607, 609-10 (1991). Thus, plaintiffs'
allegations of undue influence by defendants upon their aunt should
also have been made in the caveat proceeding, rather than in thiscomplaint. Such action is the correct method of disposition under
N.C. Gen. Stat. § 1A-1, Rule 12(h)(3) (1999), which states:
Whenever it appears by suggestion of the
parties or otherwise that the court lacks
jurisdiction over the subject matter, the
court shall dismiss the action.
Therefore, to the extent the complaint and the caveat deal
with the same issues and request resolution of those issues, the
trial court did not have subject matter jurisdiction to consider
the later filed complaint when the caveat proceeding was still
pending in Harnett County. As the trial court lacked subject
matter jurisdiction to decide the propriety of the transfers
effectuated by Mrs. Campbell's will, plaintiffs' second assignment
of error is overruled.
(See footnote 2)
Plaintiffs next argue it was proper for them to assert causes
of action against defendant Wiggins in his individual capacity
because "a person is personally liable for all torts committed by
him, notwithstanding that he may have acted as an agent for another
or as an officer for a corporation." Baker v. Rushing, 104 N.C.
App. 240, 247, 409 S.E.2d 108, 112 (1991). Plaintiffs also assert
that Wiggins is liable to plaintiffs for "facilitation of fraud."
Defendant Wiggins maintains that the claims against him in hisindividual capacity were properly dismissed because "'[d]ismissal
of a complaint is proper under the provisions of Rule 12(b)(6) of
the North Carolina Rules of Civil Procedure . . . when some fact
disclosed in the complaint necessarily defeats the plaintiff's
claim.'" Hooper v. Liberty Mut. Ins. Co., 84 N.C. App. 549, 551,
353 S.E.2d 248, 250 (1987) (quoting Oates v. JAG, Inc., 314 N.C.
276, 278, 333 S.E.2d 222, 224 (1985)).
Examination of the 4 June 1996 Letters Testamentary indicates
that the Clerk of Harnett County Superior Court named Campbell
University, Inc., by Norman A. Wiggins, as the Executor of the
Estate of Gladys Baars Campbell. Wiggins asserts that plaintiffs'
complaint alleges no facts which demonstrate any wrongdoing by
Wiggins himself. Since conclusions of law or unwarranted
deductions of fact are not considered during a motion to dismiss,
plaintiffs' failure to allege such facts is fatal to this claim.
Plaintiffs' complaint specifically refers to Wiggins as President
of Campbell University. There are many examples in plaintiffs'
complaint wherein they describe actions by Wiggins as done "on
behalf of Campbell University." Wiggins did not derive any
personal benefit from his actions with respect to Mrs. Campbell.
Also, the simple fact that defendant Wiggins was Mrs. Campbell's
alternate attorney-in-fact does not mean that he can be sued
individually, unless plaintiffs show he committed some wrongdoing
as her attorney-in-fact. We also note that, aside from the fact
that Wiggins was named as alternate attorney-in-fact under Mrs.
Campbell's Power of Attorney, plaintiffs have failed to show thateither Wiggins or Campbell University acted in a fiduciary
relationship to Mrs. Campbell. See In re Estate of Ferguson, 135
N.C. App. 102, 105, 518 S.E.2d 796, 798-99 (1999) ("trial court's
jury instruction that a power of attorney creates a fiduciary
relationship between principal and attorney-in-fact held error when
the power of attorney did not exist when the will was executed"),
id. (quoting In re Will of Atkinson, 225 N.C. 526, 529-30, 35
S.E.2d 638, 640 (1945)). Therefore, because plaintiffs were unable
to allege facts showing wrongdoing by Wiggins as an individual
against Mrs. Campbell, their third assignment of error is
overruled.
Finally, plaintiffs assert Wiggins and Campbell University
exercised undue influence over Mrs. Campbell, violated the Rules of
Professional Conduct, and engaged in the unauthorized practice of
law, all in furtherance of their "goal" of unduly influencing Mrs.
Campbell. Plaintiffs argue they are not suing defendants for
violating specific aspects of the law, but rather for unduly
influencing Mrs. Campbell into executing documents favoring
Campbell University.
This Court has held that "a breach of a provision of the Code
of Professional Responsibility is not 'in and of itself . . . a
basis for civil liability . . . .'" Webster v. Powell, 98 N.C.
App. 432, 439, 391 S.E.2d 204, 208 (1990), aff'd, 328 N.C. 88, 399
S.E.2d 113 (1991) (quoting McGee v. Eubanks, 77 N.C. App. 369, 374,
335 S.E.2d 178, 181 (1985), disc. review denied, 315 N.C. 589, 341S.E.2d 27 (1986)). Also, evidence of purported rules violations is
properly excluded when a case is subject to dismissal. Id. This
rule of law was incorporated into Revised Rule of Professional
Conduct 0.2 as follows:
Violation of a Rule should not give rise
to a cause of action nor should it create any
presumption that a legal duty has been
breached. The Rules are designed to provide
guidance to lawyers and to provide a structure
for regulating conduct through disciplinary
agencies. They are not designed to be a basis
for civil liability. Furthermore, the purpose
of the Rules can be subverted when they are
invoked by opposing parties as procedural
weapons. The fact that a Rule is a just basis
for a lawyer's self-assessment, or for
sanctioning a lawyer under the administration
of a disciplinary authority, does not imply
that an antagonist in a collateral proceeding
or transaction has standing to seek
enforcement of the Rule. Accordingly, nothing
in the Rules should be deemed to augment any
substantive legal duty of lawyers or the
extra-disciplinary consequences of violating
such a duty.
Plaintiffs also cite N.C. Gen. Stat. § 84-5 (1999) in their
complaint and argue it prohibits unauthorized practice of law by a
corporation. However, that statute does not provide a private
cause of action. Since plaintiffs are private citizens, they
cannot recover for any alleged violation of this statutory
provision. See Vanasek v. Duke Power Co., 132 N.C. App. 335, 338,
511 S.E.2d 41, 44, cert. denied, 350 N.C. 851, 539 S.E.2d 13
(1999). We also agree with defendants' position that the Clerk of
Harnett County Superior Court issued Letters Testamentary and such
action invokes a presumption of validity until a reviewing court
states otherwise. We will therefore treat the 1988 will and the1990 codicil as the valid last will of Mrs. Campbell until such
time as it is overturned by a reviewing court.
Based on a careful review of the record and the arguments
presented by the parties, we conclude the trial court properly
dismissed plaintiffs' action.
Affirmed.
Judges WYNN and BRYANT concur.
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