Appeal by plaintiff from order filed 25 October 2001 by Judge
Marvin K. Gray in Mecklenburg County Superior Court. Heard in the
Court of Appeals 12 November 2002.
Paul L. Whitfield & Associates, PA, by Paul L. Whitfield, for
plaintiff appellant.
Haynesworth Baldwin Johnson & Greaves LLC, by Stephen D.
Dellinger, for defendant appellees.
GREENE, Judge.
Blair Gaynor (Plaintiff) appeals from an order filed 25
October 2001 granting judgment for Gordon and Mary Melvin,
individually, and doing business as Mill Direct Sales and Mill
Direct Sales, Inc. (collectively, Defendants).
Plaintiff filed a complaint claiming breach of contract,
fraud, and defamation and also demanding a jury trial. The
complaint alleged the parties entered into an oral agreement (the
agreement) on or about April 1997, whereby Plaintiff would open and
manage an office in Charlotte, North Carolina (the office) to sell
lumber on behalf of Defendants. Under the agreement, Plaintiff was
to receive a salary and a commission based on the sales and profitsof the office. When Plaintiff resigned in September 1999,
Plaintiff claimed, he was still owed salary, sales commissions, and
a commission for the office's net profits. Plaintiff also alleged
Defendants fraudulently induced him to maximize profits and
doctored records to reduce Plaintiff's commissions.
On 1 December 1999, Plaintiff filed a motion for the
appointment of a referee on the breach of contract and fraud
claims, and Defendants later filed their objection to the
appointment of a referee. By order dated 26 January 2000, Judge
Jesse Caldwell (Judge Caldwell) granted Plaintiff's motion and
appointed a referee to determine if: (1) any salary, sales
commission, or commission on the net profits was owed to Plaintiff
and (2) net profits had been calculated correctly, including any
changes in net profits caused by reselling inferior quality lumber
rejected by other customers. Judge Caldwell included in his order
the following:
[T]his compulsory reference does not deprive
any of the parties of their rights to a trial
by jury, which may be preserved by objecting
to the order of compulsory reference at the
time it is made or by filing specific
exceptions to particular findings of fact made
by the referee within thirty (30) days after
the referee files his report . . . .
Plaintiff did not object to the order of reference. Defendants
subsequently filed answers to Plaintiff's complaint and made
various counterclaims against Plaintiff.
The referee filed a report dated 22 December 2000 (the
original report) finding Plaintiff was owed some form ofcommissions in the amount of $126,819.33.
(See footnote 1)
The referee also
apparently determined the amount of loss from the resale of
rejected lumber. Both parties entered a timely exception to the
referee's determination on commissions. Judge Marcus L. Johnson
(Judge Johnson), after considering the exceptions and arguments
asserted by both parties, remanded the case to the referee for
reconsideration of the calculation of the commissions and the loss
attributed to the costs of the resale of rejected lumber.
The referee filed a supplemental report dated 5 September 2001
(the supplemental report) increasing the sales commissions owed to
Plaintiff to $126,926.14. The supplemental report reserved for the
jury the issue of the amount of loss from the resale of some
rejected lumber. Plaintiff and Defendants filed exceptions to this
supplemental report. Plaintiff did not, however, except to the
determination by the referee that the rejected timber issue be
resolved by a jury. Defendant did except to this determination.
After a 25 October 2001 hearing, Judge Marvin K. Gray (Judge Gray)
entered judgment for Plaintiff on the amount of commissions owed
as calculated in the supplemental report but rejected the
supplemental report on the issue of the rejected lumber and adopted
the original report on this issue. In making his ruling, Judge
Gray indicated “it appeared to [him] from the argument . . . [he]
could simply . . . take [the Defendants'] proposed order . . . andincorporate the referee's report by reference.” Judge Gray then
entered judgment for Defendants on Plaintiff's remaining breach of
contract and fraud claims, denied Defendants' summary judgment
motion on Plaintiff's defamation claim, and did not rule on
Defendants' counterclaims.
_______________________________
The issues are whether: (I) Plaintiff preserved his right to
a jury trial on the breach of contract and fraud claims; and (II)
Judge Gray erred in modifying the supplemental report without
considering the evidence.
(See footnote 2)
I
Plaintiff argues Judge Gray erred in granting judgment to
Defendants on the breach of contract and fraud claims because these
claims should have been submitted to a jury. We disagree.
In order to preserve the right to a jury trial where a
compulsory reference has been ordered, a party must, among other
things, object to the order of reference at the time it is made.
See Porter Bros., Inc. v. Jones, 11 N.C. App. 215, 224, 181 S.E.2d
177, 182-83 (1971) (Rule 53(b)(2) sets out steps to be followed to
preserve right to jury trial);
N.C.G.S. § 1A-1, Rule 53(b)(2)
(2001). Failure to so object results in the waiver of a party's
right to a jury trial.
Id.;
see also Bartlett v. Hopkins, 235 N.C.
165, 167-68, 69 S.E.2d 236, 237-38 (1952) (under prior law, rightto jury trial waived by a compulsory reference where party does not
take the proper steps to save it).
In this compulsory reference case, Plaintiff did not enter an
objection to the appointment of a referee for the purpose of
preserving his right to a jury trial. Plaintiff therefore waived
his right to a jury trial on the breach of contract and fraud
claims and cannot now claim error on this basis.
We also reject Plaintiff's alternative argument that he is
entitled to a jury trial on these claims because Judge Caldwell's
order of reference stated a jury trial could be preserved if
Plaintiff either objected to the compulsory reference or filed
exceptions to the referee's report. It follows, Plaintiff
contends, that because he filed timely exceptions to the referee's
reports, he has complied with the order of the trial court and is
thus entitled to a jury trial. We disagree.
A trial court may not enter orders in conflict with the
statutes and to the extent they are in conflict, those orders are
void.
See Prentiss v. Allstate Ins. Co., 144 N.C. App. 404, 407,
548 S.E.2d 557, 559 (2001) (courts do not have power to interpolate
or superimpose provisions and limitations into a clear and
unambiguous statute),
appeal dismissed, 354 N.C. 220, 554 S.E.2d
343 (2001);
cf. Hunt v. Reinsurance Facility, 302 N.C. 274, 290,
275 S.E.2d 399, 407 (1981) (under the maxim
expressio unius est
exclusio alterius, statute supplying one procedure for
accomplishing an objective necessarily excludes any other
procedure). In this case, the order of Judge Caldwell relating tohow a party would preserve a jury trial is in direct conflict with
Rule 53 and thus of no consequence.
II
Plaintiff next contends Judge Gray erred in modifying the
supplemental report by adopting the original report's calculation
of the net loss from the costs of reselling the rejected lumber.
If a party files exceptions to a referee's report it is the
duty of the trial court to consider the evidence and give its own
opinion and conclusion, both as to the facts and the law.
Quate v.
Caudle, 95 N.C. App. 80, 83, 381 S.E.2d 842, 844 (1989). The trial
court is not permitted to conduct a perfunctory review, but “must
deliberate and decide as in other cases -- us[ing its] own
faculties in ascertaining the truth and form[ing its] own judgment
as to fact and law.”
Id. After conducting this review, the trial
court may adopt, modify, or reject the referee's report in whole or
in part, remand the proceedings to the referee, or enter judgment.
Id.; N.C.G.S. § 1A-1, Rule 53(g)(2) (2001).
In this case, Defendants excepted to the determination of the
referee that the issue relating to rejected timber be decided by a
jury.
(See footnote 3)
Once this exception was entered, Judge Gray was required to
consider the evidence on this issue and enter his own opinion on
the merits.
(See footnote 4)
The record reveals Judge Gray did not consider theevidence presented to the referee on this issue and instead simply
relied on the arguments asserted by the parties. This was not
sufficient and constitutes error.
See Quate, 95 N.C. App. at 83,
381 S.E.2d at 844 (the only way a trial court can review a
referee's findings is through the trial court's own review of the
evidence).
Thus, the trial court's adoption of the original report on the
issue of net loss from the resale of the rejected lumber was
improper. Accordingly, this case must be remanded to the trial
court for (1) the trial court's determination of any profit or loss
attributable to the resale of the rejected lumber and (2) a jury
trial on Plaintiff's defamation claim, and Defendants'
counterclaims, including whether any loss from the resale of the
rejected lumber was caused by Plaintiff's fraudulent conduct.
Affirmed in part, reversed in part, and remanded.
Chief Judge EAGLES and Judge MARTIN concur.
Footnote: 1