Appeal by plaintiffs from order entered 1 June 2001 by Judge
Narley L. Cashwell in Wake County Superior Court. Heard in the
Court of Appeals 15 May 2002.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P.,
by Robin K. Vinson; Greenspoon Marder Hirschfeld Rafkin Ross
& Berger by Gerald Greenspoon, Esq., Richard W. Epstein, Esq.,
and Robby H. Birnbaum, Esq., for plaintiff appellants.
Attorney General Roy Cooper, by Assistant Attorney General
Harriet F. Worley, for defendant appellee.
McCULLOUGH, Judge.
Plaintiffs National Travel Services, Inc. and Plaza Resorts,
Inc., d/b/a Ramada Plaza Resorts Orlando/Ft. Lauderdale Vacations,
appeal from an order by Judge Cashwell dismissing their complaint
for Declaratory Judgment on 30 May 2001.
Plaintiff National Travel is a Nevada corporation that
promotes and sells vacation packages throughout the country.
Plaintiff Plaza Resorts is a Florida corporation that also promotes
and sells vacation packages throughout the country.
The State of North Carolina has had dealings and litigation
with plaintiffs prior to this suit. North Carolina, along withfifteen other states and the District of Columbia, filed actions
for unfair and deceptive business practices against plaintiffs.
All parties settled and consent judgments were filed in the
respective states. The North Carolina consent judgment, filed in
Wake County Superior Court on 8 February 2000, enjoined plaintiffs
from engaging in certain vacation marketing and sales practices
used to lure consumers to Florida so they could be solicited to
purchase time share properties there. The consent judgment set
forth parameters and guidelines for future solicitations and
advertisements by plaintiffs. In addition, plaintiffs had to
reimburse some previous customers and pay further damages and
penalties.
As for the present controversy, plaintiffs developed and
prepared a new advertisement package which they believed complied
with the parameters set by the consent judgment. Rather than
proceed with distribution of the package to the public, plaintiffs
submitted it to the North Carolina Attorney General's Office. This
was done “to ensure that the Attorney General would not
inadvertently bring an enforcement action without thoroughly
considering the mailing.”
According to the Attorney General's Office, it consulted other
states while reviewing the package. On 3 November 2000, it sent a
detailed letter to plaintiffs outlining ways in which the proposed
solicitations did not comply with the consent judgment. The letter,
in pertinent part, read:
If Ramada Plaza insists on attempting to usesolicitations of this type in North Carolina,
this office will take whatever action
necessary to enjoin their use and seek to have
the Court exercise its contempt powers for
violations of the Consent Judgment.
Plaintiffs filed a complaint for declaratory judgment on 1
February 2001. Essentially, plaintiffs' complaint asked the trial
court to determine whether or not the advertisement package
complied with the parameters set by the consent judgment. On 13
March 2001, the State made its motion to dismiss the complaint
pursuant to Rule 12(b)(6) for failure to state a claim upon which
relief can be granted on the grounds that this matter is not one
that can be determined in a declaratory judgment under the
provisions of N.C. Gen. Stat. § 1-253, et seq. On 30 May 2001, the
trial court entered an order allowing the State's motion and
dismissing the complaint. Plaintiffs appeal.
Plaintiffs' only assignment of error is that the trial court
erred by dismissing the complaint pursuant to Rule 12(b)(6) in that
the record shows that the complaint states a valid claim for relief
under Rule 8 of North Carolina Rules of Civil Procedure and that
the trial court had jurisdiction over the subject matter of the
case.
We hold that there is no actual controversy to invoke the
jurisdiction of the trial court, and therefore we need not address
the merits of this appeal.
As mentioned above, plaintiff brought this action under NorthCarolina's Uniform Declaratory Judgment Act, N.C. Gen. Stat. §§
1-253 through 1-267 (2001). N.C. Gen. Stat. § 1-253 provides that
our courts “shall have power to declare rights, status, and other
legal relations, whether or not further relief is or could be
claimed.” N.C. Gen. Stat. § 1-253 (2001). N.C. Gen. Stat. § 1-254
states:
Any person interested under a deed, will,
written contract or other writings
constituting a contract, or whose rights,
status or other legal relations are affected
by a statute, municipal ordinance, contract or
franchise, may have determined any question of
construction or validity arising under the
instrument, statute, ordinance, contract, or
franchise, and obtain a declaration of rights,
status, or other legal relations thereunder.
A contract may be construed either before or
after there has been a breach thereof.
N.C. Gen. Stat. § 1-253 (2001).
In actions involving a request for a declaratory judgment, our
Supreme Court “has required that an actual controversy exist both
at the time of the filing of the pleading and at the time of
hearing.”
Sharpe v. Park Newspapers of Lumberton, Inc., 317 N.C.
579, 585, 347 S.E.2d 25, 30 (1986).
Our Supreme Court has stated that:
We have described an actual controversy
as a “jurisdictional prerequisite” for a
proceeding under the Declaratory Judgment Act,
the purpose of which is to “preserve inviolate
the ancient and sound juridic concept that the
inherent function of judicial tribunals is to
adjudicate genuine controversies between
antagonistic litigants with respect to their
rights, status or other legal relations.”
Adams v. North Carolina Dept. of Natural and
Economic Resources, 295 N.C. [683] at 703, 249
S.E.2d [402] at 414 (quoting
Lide v. Mears,231 N.C. [111] at 118, 56 S.E.2d [404] at 409
[(1949)]). In
Town of Tryon v. Duke Power Co.,
222 N.C. 200, 22 S.E.2d 450 (1942) this Court
acknowledged that, although the actual
controversy rule may be difficult to apply in
some cases and the definition of a
“controversy” must depend on the facts of each
case, “[a] mere difference of opinion between
the parties” does not constitute a controversy
within the meaning of the Declaratory Judgment
Act.
Id. at 205, 22 S.E.2d at 453.
Although it is not necessary that one
party have an actual right of action against
another to satisfy the jurisdictional
requirement of an actual controversy, it is
necessary that litigation appear unavoidable.
North Carolina Consumers Power, Inc. v. Duke
Power Co., 285 N.C. 434, 206 S.E.2d 178
[1974]. Mere apprehension or the mere threat
of an action or a suit is not enough.
Newman
Machine Co. v. Newman, 2 N.C. App. 491, 163
S.E.2d 279 (1968),
rev'd on other grounds, 275
N.C. 189, 166 S.E.2d 63 (1969). Thus the
Declaratory Judgment Act does not “require the
court to give a purely advisory opinion which
the parties might, so to speak, put on ice to
be used if and when occasion might arise.”
Town of Tryon v. Power Co., 222 N.C. at 204,
22 S.E.2d at 453 (1942).
Gaston Bd. of Realtors, Inc. v. Harrison, 311 N.C. 230, 234, 316
S.E.2d 59, 61-62 (1984).
Plaintiffs, in their briefs and at oral argument, stress the
letter from the Attorney General's Office and argue that it shows
litigation is unavoidable, and thus an actual controversy exists.
This argument fails. Our courts have historically required more
than anticipation of future action.
See Wendell v. Long, 107 N.C.
App. 80, 418 S.E.2d 825 (1992);
Town of Pine Knoll Shores v.
Carolina Water Service, Inc., 128 N.C. App. 321, 494 S.E.2d 618
(1998). In an analogous case, a party sent a letter to theopposing side stating that he would “'take such actions as are
necessary to protect myself . . . from harm by the actions of
individuals involved in this matter.'”
Gaston Bd. of Realtors, 311
N.C. at 235, 316 S.E.2d at 62. The Supreme Court held that
“litigation between the parties does not appear unavoidable and
that the controversy between them is not therefore actual, genuine
and existing.”
Id. The
Gaston Court further noted that
[i]t is true that the defendant in seeking a
rehearing before the Board stated in a letter
that he would take whatever actions necessary
to protect himself. That statement does not
in and of itself point to unavoidable
litigation and the existence of an actual
controversy. Although the defendant did not
specify what action he intended to take to
protect his interests, he never mentioned
filing a lawsuit.
Even if the defendant had
directly threatened to sue the Board, a mere
threat to sue is not enough to establish an
actual controversy.
Id. at 235-36, 316 S.E.2d at 62 (emphasis added).
Plaintiffs' complaint is rife with words such as “could,”
“may,” and “would” in reference to the advertisement package it has
yet to send out and the legal action which the Attorney General's
Office has threatened but not yet brought to bear. Our case law
mandates the affirmance of the trial court's order of dismissal.
In addition, we note that granting jurisdiction and allowing
a declaratory judgment to be rendered in this case would arguably
not settle anything between the parties. We cite with approval the
Texas case of
California Products, Inc. v. Puretex Lemon Juice,
Inc., 160 Tex. 586, 334 S.W.2d 780 (1960). In that case, the
plaintiff sought a declaratory judgment as to whether or not abottle in which it planned to market lemon and lime juice would
violate the terms of a permanent injunction which defendant had
obtained in an earlier suit in which plaintiff had been enjoined
from marketing juice in a bottle resembling that used by the
defendant. The Texas court held that the adjudication sought was
but an advisory opinion and therefore not a proper subject for
declaratory judgment action, and noted that:
A declaratory judgment rendered herein
would not settle the controversy between the
parties. The permanent injunction . . . is
still outstanding. A violation of that
judgment is subject to be punished for
contempt in a proper proceeding. It cannot be
determined whether or not a proposed bottle
will be violative of the injunction . . .
until [plaintiff] seeks to market its product
in a bottle in the same market with
[defendant]. Only in this way can it be
determined whether the [plaintiff's] bottle is
of the size and appearance that it misleads
and deceives the buying public into believing
that it is securing [defendant's] products
rather than [plaintiff's] products.
We agree with the Court of Civil Appeals
that this proceeding is one in which an
advisory opinion is sought. Should we decide
that the bottle proposed to be used by
[plaintiff] did violate the injunction, we
would settle nothing. [Plaintiff] could
continue indefinitely to propose bottles of
different sizes, shapes and colors on which it
could seek an equally indefinite number of
advisory opinions as to whether such bottles
violate the injunction. Such procedure would
accomplish nothing. [Plaintiff] should
propose a bottle which it thinks does not
violate the injunction, use it and litigate
the material issue on a contempt hearing.
Id. at 591, 334 S.W.2d at 781.
“The courts of this state do not issue anticipatory judgmentsresolving controversies that have not arisen.”
Bland v. City of
Wilmington, 10 N.C. App. 163, 164, 178 S.E.2d 25, 26 (1970),
rev'd
on other grounds, 278 N.C. 657, 180 S.E.2d 813 (1971). While
plaintiffs are seemingly legitimately seeking to comply with the
consent judgment they are bound by, “[t]he Uniform Declaratory
Judgment Act does not license litigants to fish in judicial ponds
for legal advice.”
Lide v. Mears, 231 N.C. at 117, 56 S.E.2d at
409.
Affirmed.
Judges WALKER and BRYANT concur.
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