Clark v Penland, (02-1561) 05/18/2004

NO. COA02-1561

NORTH CAROLINA COURT OF APPEALS

Filed: 18 May 2004

TALMYR CLARK, COLIN A. HOLWAY
and MICHAEL D. BAKER, in their
respective individual capacities
and, alternatively, in their
capacities as officers, directors
and shareholders of FIBERCAP, INC.
Plaintiffs,

v .                                 Wake County
                                    No. 98 CVS 11926
KRISTOPHER PENLAND, RANDY PENLAND,
DAVID PENLAND, in their individual
capacities and in their respective
capacities as officers, directors,
and shareholders of Fibercap, Inc.,
and Fibercap Digital, Inc., and
FIBERCAP, INC., and FIBERCAP
DIGITAL, INC.
    Defendants.

Appeal by defendant from judgment entered 28 March 2002 by Judge David Q. LaBarre in Wake County Superior Court. Heard in the Court of Appeals 29 March 2004.

Jordan Price Wall Gray Jones & Carlton, PLLC, by Paul T. Flick and Karen Kelly Carlton for plaintiff-appellees.

Lutzel & Associates, PLLC, by Richard J. Lutzel, Esq. for defendant-appellant.

    LEVINSON, Judge.
    Defendant (Kristopher Penland) appeals from a judgment entered in favor of plaintiffs. We affirm.
    The record in this case establishes the following: In 1995 plaintiffs and defendants started a business together, in order toobtain and perform contracts for installation of fiber optic cables in Winston Salem, North Carolina. They formed a corporation, defendant Fibercap, Inc., which was awarded several contracts to install a fiber optic cable “loop” serving Wake Forest University. The contracts were performed and the university paid certain sums to defendants. In 1996 Fibercap, Inc. was dissolved and replaced by defendant Fibercap Digital, Inc. Controversy subsequently arose among the parties regarding these business enterprises. On 15 October 1998 plaintiffs filed suit against defendants for breach of contract, conversion, fraud, constructive fraud, breach of fiduciary duty, unjust enrichment, interference with contract, and unfair and deceptive trade practices. Plaintiffs sought injunctive relief, attorney's fees, and compensatory and punitive damages. Defendants answered and asserted various defenses and counterclaims.
    In January and February 2000 plaintiffs filed motions seeking sanctions against all defendants for failure to provide discovery and failure to comply with discovery orders. Orders were entered by Judge Henry W. Hight, Jr. on 29 February 2000, and by Judge Orlando Hudson on 30 March 2000, sanctioning defendants as follows: defendants' answers and defenses were stricken; defendants' counterclaims were dismissed with prejudice; default and default judgment were entered in favor of plaintiffs; defendants were barred from offering any evidence pertaining to liability; and plaintiffs were awarded attorney's fees. Both orders reserved the issue of plaintiffs' damages for a later hearing.     Defendants Randy and David Penland appealed the sanctions order, and on 18 September 2001, this Court upheld the order appealed from in Clark v. Penland, 146 N.C. App. 288, 252 S.E.2d 243 (2001). Thereafter the issue of plaintiffs' damages was set for trial. On 11 October 2001 plaintiffs filed a motion in limine seeking exclusion of any new defense evidence, not previously disclosed during discovery, concerning defendants' costs incurred in executing the contract with Wake Forest University. Judge LeBarre granted plaintiffs' motion in March 2002, at the start of trial. Following a jury trial on the issue of damages, plaintiffs were awarded treble damages in the amount of $1,175,334.51, as well as costs and attorney's fees. Plaintiff Talmyr Clark was also awarded additional treble damages in the amount of $354,800.00. From these judgments and orders the individual defendants appealed; the corporate defendants did not appeal. On 23 July 2003 defendants Randy and David Penland moved to dismiss their appeal, and on 29 July 2003 this Court granted their motion. Accordingly, the present appeal concerns only defendant Kristopher Penland.

    Defendant argues first that the trial court erred by granting plaintiffs' pretrial motion to exclude new defense evidence not provided during discovery on the subject of defendant's costs. Defendant argues that the trial court's ruling was erroneous and an abuse of discretion. We disagree.
    “A motion in limine seeks pretrial determination of the admissibility of evidence proposed to be introduced at trial; itsdetermination will not be reversed absent a showing of an abuse of the trial court's discretion.” Warren v. Gen. Motors Corp., 142 N.C. App. 316, 319, 542 S.E.2d 317, 319 (2001) (citing Nunnery v. Baucom, 135 N.C. App. 556, 521 S.E.2d 479 (1999)).
    Furthermore, to prevail on this issue, the defendant must also show prejudice. See N.C.G.S. § 1A-1, Rule 61 (2003) (“No error in either the admission or exclusion of evidence . . . is ground for granting a new trial . . . unless refusal to take such action amounts to the denial of a substantial right.”). Rule 61 has long been interpreted to require that the “party asserting error must show from the record not only that the trial court committed error, but that the aggrieved party was prejudiced as a result.” Lawing v. Lawing, 81 N.C. App. 159, 162, 344 S.E.2d 100, 104 (1986) (citing Rule 61).
    Preliminarily, we note that defendant mischaracterizes the trial court's ruling. In his brief, defendant contends the court ordered “that no evidence of costs or damages be introduced by defendants.” In fact, the court ordered that defendant could introduce evidence previously provided during discovery, and could cross-examine plaintiffs' witnesses regarding costs.
    Defendant argues that the trial court's ruling on plaintiffs' motion in limine was an abuse of discretion. However, even assuming arguendo that the trial court's ruling on the motion in limine constituted an abuse of discretion, defendant has failed to show any prejudice. At trial, defendant neither tendered the name of an expert witness, nor made any offer of proof regardingevidence that defendant would have presented. Under N.C.G.S. § 8C- 1, Rule 103 (2003):
        (a) . . . Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and . . . (2) Offer of proof. -- In case the ruling is one excluding evidence, the substance of the evidence was made known to the court by offer or was apparent from the context within which questions were asked. . . .

G.S. § 8C-1, Rule 103(a)(2).
    Without a record of the excluded testimony or evidence, we are unable to assess whether the trial court's ruling prejudiced defendant. Nelson v. Patrick, 73 N.C. App. 1, 6-7, 326 S.E.2d 45, 49 (1985) (failure to make offer of proof prevents determination of prejudice).
    Defendant also argues that the court's ruling violated his right to due process. However, review of the transcript reveals that defendant did not raise this constitutional issue at trial. “A constitutional issue not raised at trial will generally not be considered for the first time on appeal.” Anderson v. Assimos, 356 N.C. 415, 416, 572 S.E.2d 101, 102 (2002) (citing State v. Nobles, 350 N.C. 483, 495, 515 S.E.2d 885, 893 (1999))
    This assignment of error is overruled.

Defendant argues next that the trial court erred by allowing plaintiffs to submit a written brief in support of their motion in limine without having provided the brief to defendant at least two days prior to the hearing. We disagree. Defendant argues that the trial court's acceptance of plaintiff's written brief violated N.C.R. Civ. P. Rule 5(a1), which provides in relevant part that:
In actions in superior court, every brief or memorandum in support of or in opposition to a motion to dismiss, a motion for judgment on the pleadings, a motion for summary judgment, or any other motion seeking a final determination of the rights of the parties as to one or more of the claims or parties in the action shall be served upon each of the parties at least two days before the hearing on the motion.

In the instant case, plaintiffs submitted their brief at the beginning of a hearing on their motion in limine for exclusion of certain defense evidence. Plaintiffs' motion did not seek dismissal, judgment on the pleadings, summary judgment, or the final determination of the rights any party. Therefore, N.C. R. Civ. P. Rule 5(a1) is inapplicable. This assignment of error is overruled.

    Defendant next argues that the trial court erred by failing to submit to the jury the issue of plaintiffs' mitigation of damages. This argument is without merit.
    Mitigation of damages is an affirmative defense. See, e.g., Pinckney v. Baker, 130 N.C. App. 670, 672, 504 S.E.2d 99, 101 (1998) (defendant “pleaded as affirmative defenses the doctrines of sudden emergency, . . . and failure to mitigate damages”); Paschal v. Myers, 129 N.C. App. 23, 25, 497 S.E.2d 311, 313 (1998) (defendants answered “asserting affirmative defenses including . . . failure to mitigate damages.”). N.C.G.S. § 1A-1, Rule 8(c)(2003) requires that in its answer “a party shall set forth affirmatively [any] . . . matter constituting an avoidance or affirmative defense.”
    Defendant's answer did not raise the affirmative defense of failure to mitigate damages. “'Failure to raise an affirmative defense in the pleadings generally results in a waiver thereof.'” Purchase Nursery, Inc. v. Edgerton, 153 N.C. App. 156, 162, 568 S.E.2d 904, 908 (2002) (quoting Robinson v. Powell, 348 N.C. 562, 566, 500 S.E.2d 714, 717 (1998)). Moreover, even if defendant had raised mitigation of damages as an affirmative defense in his pleading, there is no evidence in the record that would have warranted an instruction. This assignment of error is overruled.

Defendant argues next that the trial court erred by not submitting to the jury the issue of whether defendants' unfair and deceptive trade practices proximately caused plaintiffs' injuries. Pursuant to the trial court's order sanctioning defendants, the allegations of plaintiffs' complaint were deemed admitted. Accordingly, defendant concedes that plaintiffs' allegations that certain actions constituted unfair and deceptive trade practices are deemed admitted. Defendant contends, however, that plaintiffs' complaint did not allege proximate cause and, thus, that this issue should have been submitted to the jury. This argument is without merit.
In paragraph numbers 111 through 114 of their complaint, plaintiffs state a claim for relief for unfair and deceptive tradeacts or practices. Paragraph 111 states that the “allegations contained in paragraphs 1 through 108 are hereby incorporated and realleged as if set forth in full herein.” In at least seven of the earlier paragraphs realleged in this manner plaintiffs assert that they were injured “as a direct and proximate result” of defendants' acts and omissions. We conclude that the trial court did not err by failing to submit the issue of proximate cause to the jury. This assignment of error is overruled.

    Finally, defendant argues that the trial court committed reversible error by allowing the jury to take into the jury room, without his consent, the verified pleadings and a chart used by plaintiffs in their opening statement and closing argument.
    While the pleadings and chart at issue were not admitted as trial exhibits, our common law principles applicable to exhibits are nonetheless instructive. In general, the jury may not have exhibits in the jury deliberation room absent the consent of all parties. Bass v. Johnson, 149 N.C. App. 152, 162, 560 S.E.2d 841, 848 (2002). Even when exhibits are sent to the jury room in the absence of consent, however, “such error requires reversal only when the objecting party demonstrates it has suffered resulting prejudice.” Reed v. Abrahamson, 108 N.C. App. 301, 309, 423 S.E.2d 491, 495 (1992) (citing Robinson v. Seaboard System Railroad, 87 N.C. App. 512, 361 S.E.2d 909 (1987)). After reviewing the record in the present appeal, we conclude it was error for the trial court to allow the verified pleadings and the chart in the jury roomwithout the consent of the parties. We turn next to examine whether defendant has demonstrated prejudice.
    Regarding the pleadings, defendant makes no argument that he was prejudiced by the jury's review of them, and thus fails to carry his burden to show prejudice. Regarding the chart, defendant makes a generalized assertion that “the fact that the chart was allowed into the deliberations constituted unfair prejudice to the defendants and gave greater weight to the plaintiffs' argument.” However, defendant does not articulate how the chart prejudiced him, or what “argument” assumed a “greater weight” by means of the chart. Defendant's conclusory statement that the jury's use of the chart “constituted unfair prejudice” is not persuasive.
    Even more problematic than defendant's failure to make a compelling argument, however, is the fact that the chart has not been made part of the record. The transcript indicates that plaintiffs' counsel first utilized this chart in his opening statement and later, having filled in certain blocks with figures obtained from trial evidence, in his closing argument. From the transcript it appears that the chart displayed various numbers representing relevant dollar amounts, accounting data, percentages, and other mathematical information. However, correlation of each number mentioned in counsel's opening statement and closing argument with corresponding trial testimony or evidence would be very difficult. Moreover, the transcript gives no insight into how the information in the chart was organized and displayed, orwhether the visual presentation was in some way unfairly suggestive. Under N.C.R. App. P. 9(d)(1):
        Maps, plats, diagrams and other documentary exhibits filed as portions of or attachments to items required to be included in the record on appeal shall be included as part of such items in the record on appeal. Where such exhibits are not necessary to an understanding of the errors assigned, they may by agreement of counsel or by order of the trial court upon motion be excluded from the record on appeal.

We conclude that the chart at issue herein is “necessary to an understanding of the errors assigned” and that defendant was therefore required to include it in the record. Without the chart, we are unable to determine if the jury's use of it was prejudicial. This assignment of error is overruled.
    For the foregoing reasons, the trial was free of reversible error.
    No error.
    Judges TIMMONS-GOODSON and THORNBURG concur.
    Report per Rule 30(e).

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