An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA02-58


Filed: 21 January 2003


v .                         Mecklenburg County
                            No. 95-CVS-3906        

    Appeal by defendant from judgment entered 17 April 2001 by Judge James W. Morgan in Mecklenburg County Superior Court. Heard in the Court of Appeals on 19 September 2002.

    Casstevens, Hanner, Gunter & Riopel, P.A. by Robert P. Hanner, II, for plaintiff-appellee.

    Rosenman & Colin, LLP, by William L. Sitton, Jr. and Christopher A. Hicks, for defendant-appellant.


    This is the second appeal in this matter. The Court of Appeals, Lewis, J., reversed and remanded the matter for a new trial. Patterson v. Strickland, 133 N.C. App. 510, 515 S.E.2d 915 (1999) (“Patterson I”). In Patterson I, this Court held that Sylvia Ann Patterson (“plaintiff”) was not entitled to a one-half share of the disputed property on a contract theory because the contract violated the statute of frauds. The Court required a new trial on the equitable theories of constructive and resulting trusts, upon which the case was brought. A new trial was conducted in the Superior Court of Mecklenburg County.        The evidence at trial tended to show the following: Plaintiff and Dennis Strickland, Jr. (“defendant”) met in the mid-1960's. After their initial meeting, the relationship became romantic. On 12 December 1975, defendant purchased a house and real property located at 720 West Arrowood Road, Charlotte, North Carolina, (“Arrowood”). Defendant took title to Arrowood solely in his name and plaintiff was aware that her name did not appear on the deed. The overall purchase price for Arrowood was $39,528.00. Defendant secured the mortgage with a payment of $8,781.00. At closing, defendant executed a deed of trust for the remaining balance of $30,747.60 payable over a ten-year period. Monthly mortgage payments on Arrowood were $256.23.
    In 1976, defendant, plaintiff and her two sons moved to Arrowood. Upon moving to Arrowood, plaintiff paid defendant $160.00 monthly. Plaintiff contends that she and defendant agreed that she would share an ownership interest in Arrowood. Defendant contends that plaintiff was a tenant and he never agreed to share an ownership interest. In 1985, Jane Keever and Jean Keever (“Jean”), nieces of the plaintiff, moved to Arrowood. In 1986, the mortgage on Arrowood was paid in full. After 1986, plaintiff continued to give defendant monthly payments. According to plaintiff, the money was given to defendant to pay for insurance, taxes, and basic repairs to Arrowood. Defendant contends that the payments were made in satisfaction of a tenant-landlord relationship.     In 1985, defendant became romantically involved with Jean. Defendant moved from Arrowood to his parents' family farm in Maxton, North Carolina (“Maxton Farm”). Shortly after defendant left Arrowood, Jean also moved to Maxton Farm. In 1987, the word “rent” appeared in the memo portion of plaintiff's cancelled checks. The word “rent” was not in plaintiff's handwriting. In March 1995, defendant married Jean. Shortly after the marriage to Jean, defendant's son demanded that plaintiff leave Arrowood.
    Defendant now appeals from a jury verdict again in favor of plaintiff awarding her a forty-five percent ownership interest in Arrowood.


    Defendant presents six issues for review, contending the trial court erred in (1) finding that plaintiff's trust claims were not barred by the ten-year statute of limitations; (2) finding that plaintiff established the existence of a constructive trust; (3) finding that plaintiff proved the elements for a resulting trust; (4) finding that plaintiff was entitled to a forty-five percent interest in Arrowood; (5) admitting evidence that plaintiff and defendant lived as husband and wife; and (6) failing to include a definition of fraud in the jury instruction on constructive trust. For the reasons set forth herein, we conclude that the trial court committed no error.
    In his first assignment of error, defendant contends that the trial court erred in failing to grant his (1) motion for directed verdict; (2) motion for a judgment notwithstanding the verdict; (3)and motion for a new trial. Because plaintiff failed to bring a cause of action within the ten-year statute of limitations period required for constructive and resulting trusts, defendant argues that a directed verdict should have been granted. We disagree.
    In ruling on a motion for directed verdict, plaintiff's evidence must be taken as true and considered in the light most favorable to him. Shields v. Nationwide Mut. Fire Ins. Co., 61 N.C. App. 365, 374, 301 S.E.2d 439, 445, disc. review denied, 308 N.C. 678, 304 S.E.2d 759 (1983). “All conflicts must be resolved in plaintiff's favor, and he must be given the benefit of every reasonable inference.” Id. “The question presented by a motion for a directed verdict is whether the evidence is sufficient to entitle the non-movant to have a jury decide the issue in question.” United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 661, 370 S.E.2d 375, 387 (1988). “[I]f there is conflicting testimony that permits different inferences, one of which is favorable to the non-moving party, a directed verdict in favor of the party with the burden of proof is improper.” Id. at 662, 280 S.E.2d at 387. The same standard of review “is to be applied by the courts in ruling on a motion for [judgment notwithstanding the verdict] as is applied in ruling on a motion for a directed verdict.” Smith v. Price, 315 N.C. 523, 527, 340 S.E.2d 408, 411 (1986). North Carolina General Statutes § 1A-1, Rule 61, provides
        No error in either the admission or exclusion of evidence and no error or defect in any ruling or order or in anything done or omitted by any of the parties is ground for granting new trial or for setting aside a verdict or for vacating, modifying, or otherwisedisturbing a judgment or order unless refusal to take such action amounts to the denial of a substantial right.

N.C. Gen. Stat. § 1A-1, Rule 61 (2001).

    Resulting and constructive trusts are governed by the ten-year and not the three-year statute of limitations. N.C. Gen. Stat. § 1-56 (2001); Bowen v. Darden, 241 N.C. 11, 17, 84 S.E.2d 289, 294 (1954). The statute of limitations begins to run “from the time the trustee disavows the trust and knowledge of his disavowal is brought home to the [beneficiary], who will then be barred at the end of the statutory period.” Cline v. Cline, 297 N.C. 336, 348, 255 S.E.2d 399, 407 (1979).
    Here, defendant argues that the initial wrong alleged by plaintiff took place on 12 December 1975, when defendant took title to Arrowood. Taking plaintiff's evidence as true and considering the evidence in the light most favorable to her, the facts tend to show that in March 1995 defendant's son called and demanded that plaintiff vacate the property. Thus, there was sufficient evidence for the jury to properly infer that the formal disavowal took place in March 1995. Plaintiff filed her complaint in April 1995, which is within the ten-year period allowed by the statute of limitations for a resulting or constructive trust. This argument is without merit.
    By his second assignment of error, defendant argues that the trial court erred in not granting him judgment as a matter of law when plaintiff failed to present clear, strong, and convincing evidence of a resulting trust. Defendant specifically argues thatplaintiff failed to show an agreement to take title jointly or that her money was actually used to acquire Arrowood.
    A resulting trust arises
        “when a person becomes invested with the title to real property under circumstances which in equity obligate him to hold the title and to exercise his ownership for the benefit of another. . . . A trust of this sort does not arise from or depend on any agreement between the parties. It results from the fact that one man's money has been invested in land and the conveyance taken in the name of another.”

Patterson, 133 N.C. App. 510, 519, 515 S.E.2d 915, 920 (1999) (quoting Teachey v. Gurley, 214 N.C. 288, 292, 199 S.E. 83, 86-87 (1938)). A resulting trust is created by operation of law. Strange v. Sink, 27 N.C. App. 113, 116, 218 S.E.2d 196, 199, disc. review denied, 288 N.C. 733, 220 S.E.2d 353 (1975). “[T]he fact that the payor of the purchase money has previously obtained the consent of the other person to the placing of the title in his name does not prevent the creation of a resulting trust; he simply consents to an obligation imposed by the law.” Id.
    In the instant case, the issue of whether the parties created a resulting trust was presented to the jury. The jury was asked the following:
        ISSUE 1: Is the property located at [Arrowood] held under a purchase-money resulting trust by [defendant] for the benefit of [plaintiff]?

        Answer: No
        . . . .
While the jury's answer favors defendant, he assigns it as error. Defendant argues that a resulting trust was not established byclear, strong, and convincing evidence, and the jury agreed. Thus, even if the trial court erred by not directing judgment as a matter of law, any such error would not have been prejudicial since the jury's answer on the issue of a resulting trust is in defendant's favor. We overrule this assignment of error.
    In defendant's next assignment of error, he argues that the trial court erred in failing to grant judgment as a matter of law on the issue of a constructive trust. Defendant contends that plaintiff failed to show a fiduciary relationship or fraud. We disagree.
    In Patterson I, this Court concluded that it was “extremely reluctant to find a fiduciary relationship between unmarried roommates,” and “merely living together should not, generally, be enough to give rise to a fiduciary relationship.” Patterson, 133 N.C. App. 510, 516-17, 515 S.E.2d 915, 919 (1999). However, the Court indicated that if plaintiff could “provide evidence of a confidential relationship and fraud, a jury instruction on remand regarding constructive trusts might be appropriate.” Id. at 521, 515 S.E.2d at 921-22. Defendant now asserts that plaintiff's only basis for establishing a fiduciary relationship was her “common law wife” status. We disagree.
    A constructive trust exists,
        “where a party acquires property by conveyance or devise secured to himself under assurances that he will transfer the property to, or hold and appropriate it for, the use and benefit of another, a trust for the benefit of such other person is charged upon the property, not by reason merely of the oral promise, but because of the fact that by means of said promise hehad induced the transfer of the property to himself.”

Ferguson v. Ferguson, 55 N.C. App. 341, 345, 285 S.E.2d 288, 291, (quoting Glass v. Hulbert, 102 Mass. 24, 39, 3 Am. Rep. 418, 430 (1869)) (emphasis added) disc. review denied, 306 N.C. 383, 294 S.E.2d 207 (1982). Unlike a resulting trust, a constructive trust “arises when one obtains the legal title to property in violation of a duty he owes to another. Constructive trusts ordinarily arise from actual or presumptive fraud and usually involves the breach of a confidential relationship.” Fulp v. Fulp, 264 N.C. 20, 22, 140 S.E.2d 708, 711 (1965).
    Defendant argues that plaintiff must show clear, strong and convincing evidence that there was a confidential relationship and fraud. Citing Patterson I, defendant highlights for the Court the prior panel's language, which would seem to require both a confidential relationship and fraud. However, defendant misapprehends the law. It is not necessary to show fraud in order to establish a constructive trust. Roper v. Edwards, 323 N.C. 461, 465, 373 S.E.2d 423, 425 (1988). Such a trust will arise by operation of law “against one who in any way against equity and good conscience” holds legal title to property which he should not. Id.
    Here, the jury could properly infer that there was evidence to establish that (1) defendant acquired property by conveyance secured to himself; (2) at the time Arrowood was purchased, plaintiff believed that defendant acquired the real property solelyin his name for plaintiff's use and benefit; and (3) there was not a landlord-tenant relationship as asserted by defendant. We decline to reach a finding different from the jury. Thus, this assignment of error is overruled.
    In defendant's fourth assignment of error, he argues that the trial court's award of forty-five percent interest in Arrowood to plaintiff was not supported by the law or evidence. Defendant contends that plaintiff was able to prove by clear and convincing evidence that she paid $8,935 over the ten-year mortgage period which establishes approximately twenty-three percent interest in Arrowood. We disagree.
    When a court impresses a constructive trust upon property for the benefit of a claimant, it exercises its equitable powers to fashion remedies. Roper, 323 N.C. at 465, 373 S.E.2d at 425. Constructive trusts arise to prevent unjust enrichment by the legal titleholder. Patterson, 133 N.C. App. at 521, 515 S.E.2d at 921.
    In the case at bar, the total purchase price for Arrowood was $39,528.00. Plaintiff contended that she gave defendant monthly payments of $160.00 but could only produce records of cancelled checks and money orders totaling $8,935.46 from 1976 through 1986. However, at trial defendant had the following exchange with plaintiff's attorney:
        . . . .    
        Q: For the . . . period from 1975 to 1986, did [plaintiff] pay to you $160 a month, whether it was applied towards the mortgage or rent, or whatever you want to call it. . .
        A: She paid $160 a month timely each month.
        . . . .
By defendant's admission, plaintiff paid $160.00 each month for ten years, which is a total of $19,200.00 and approximately forty-five percent of the total mortgage. Defendant's testimony at trial does not support his argument, in which he contends that plaintiff only proved that she paid twenty-two percent of the total mortgage. From the evidence presented by plaintiff and the testimony from defendant, the jury could properly infer that plaintiff contributed forty-five percent of the total purchase price of Arrowood. We therefore overrule this assignment of error.
    In defendant's fifth assignment of error, he argues that the trial court erred in admitting evidence depicting plaintiff and defendant living together as husband and wife. Defendant contends that this evidence was irrelevant and prejudicial him. We disagree.
    This issue was raised and resolved in the prior appeal and thus it may not be resurrected in this appeal. In Patterson I, this Court held that “the descriptive evidence of the parties' behavior as husband and wife was relevant here to rebut defendant's claims of a mere landlord-tenant relationship.” Patterson, 133 N.C. App. at 517, 515 S.E.2d at 919.
    In his last assignment of error, defendant argues that the trial court erred by failing to instruct the jury on fraud as requested. We disagree.
    Defendant contends that the trial court committed prejudicial error in failing to specifically instruct the jury as follows:        Third, [plaintiff] must prove that [defendant] acquired [Arrowood] through fraudulent conduct or representations. This means that [p]laintiff . . . must show, by clear, strong and convincing evidence that (1) an oral agreement between the parties prior to the legal conveyance of [Arrowood] existed, and (2) a promise was made by . . . [d]efendant that misled . . . [p]laintiff and it was made without the intention to fulfill the promise. In this case, [p]laintiff contends that [d]efendant . . . promised to acquire [Arrowood] in both of their names, in consideration for [p]laintiff making payment on the note to Southern National Bank, representing funds borrowed by [defendant] to purchase the property.

    “When instructing the jury in a civil case, the trial court has the duty to explain the law and apply it to the evidence on the substantial issues of the action.” Wooten v. Warren, 117 N.C. App. 350, 358, 451 S.E.2d 342, 347 (1994). In determining whether the charge to the jury fairly and clearly presents the law to the jury, this Court must consider the instructions in their entirety. Murrow v. Daniels, 321 N.C. 494, 497, 364 S.E.2d 392, 395 (1988). A charge that is substantially correct in stating the law will be upheld. In re Will of Maynard, 64 N.C. App. 211, 237, 307 S.E.2d 416, 433 (1983), disc. review denied, 310 N.C. 477, 312 S.E.2d 885 (1984).
    In the case at bar, defendant sought to have the court insert defendant's requested jury instruction. However, charging the jury as requested by defendant would have resulted in a patently erroneous statement of the law. As previously noted in this opinion, it is not necessary to demonstrate fraud in order to establish a constructive trust. Having reviewed the instructionsin their entirety, we conclude that the charge clearly and fairly presented the law to the jury. Thus, the trial court did not err.     No error.
    Judge HUDSON concurs.
    Judge CAMPBELL concurred in the opinion prior to 31 December 2002.
    Report per Rule 30(e).




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