JIMMY LEWIS CONTRACTING, INC.,
Plaintiff,
v
.
Person County
No. 99 CVD 342
RICHARD M. PEARMAN, JR.,
Defendant.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Derek
J. Allen and Katherine A. Murphy, for defendant-appellant.
No brief filed by plaintiff-appellee.
HUDSON, Judge.
On 30 June 1999, plaintiff Jimmy Lewis Contracting, Inc.,
filed a complaint against defendant Richard M. Pearlman, Jr.,
alleging defendant owed plaintiff money for services rendered. On
10 January 2000, defendant moved for summary judgment. On 27 March
2000, plaintiff filed a motion for sanctions under Rule 11. On 27
March 2000, the Honorable Pattie S. Harrison denied both motions
and conducted a bench trial. By order filed 24 July 2000, the
court entered judgment for plaintiff. On 4 August 2000, defendant
moved for a new trial. Defendant obtained a continuance of the
hearing on his motion, but neither the court nor plaintiff notifieddefendant that the hearing had been set for 22 August 2001.
Defendant was not present at the hearing, and in an order entered
21 September 2001, the court dismissed his motion for new trial.
Defendant then filed a motion to set aside that order and hear his
motion on the merits.
On 22 May 2002, the Honorable Mike Gentry granted defendant's
motion, setting aside the dismissal, and then heard and denied his
motion for new trial. Judge Gentry asked plaintiff's counsel to
prepare the order, and defendant's counsel requested findings of
fact and conclusions of law. The order filed 26 February 2003
(nunc pro tunc 22 May 2002) lacked findings and conclusions
pertaining to the substance of the motion for new trial. Defendant
appeals. For the reasons discussed below, we affirm in part and
reverse in part.
Defendant is a corporate attorney, who also served as an
officer for Dependable Housing, Inc., which sold mobile homes under
the name Westwood Homes. Defendant had no ownership interest in
the corporation. Plaintiff, a septic tank installer, performed
work for defendant d/b/a Westwood Homes. Plaintiff sent invoices
to Westwood Homes, and Dependable Housing, Inc. paid them.
Plaintiff never sent an invoice to defendant and defendant never
paid an invoice. Plaintiff then filed this action against
defendant individually, seeking payment for money allegedly owed to
it by Dependable Housing, Inc.
Defendant first argues that the court erred in entering
judgment in favor of plaintiff. As discussed below, we agree. “In an appeal from a judgment entered in a non-jury trial, our
standard of review is whether competent evidence exists to support
the trial court's findings of fact, and whether the findings
support the conclusions of law. Resort Realty of the Outer Banks,
Inc. v. Brandt, 163 N.C. App. 114, 116, 593 S.E.2d 404, 407-408
(2004). Here, the trial court concluded that defendant was liable
to plaintiff based on its finding that defendant was the owner of
Westwood Homes.
Defendant contends that the only evidence that he had an
ownership interest in Westwood Homes came from the testimony of
Portia Lewis (“Mrs. Lewis”), the plaintiff's corporate secretary.
The pertinent portion of Mrs. Lewis' testimony is as follows:
Q: And tell us about this conversation,
please.
[Defendant's counsel]: Objection; hearsay.
THE COURT: The objection is overruled.
A. I was introduced to Mr. Pearman. I was
taken into his office after about a ten-minute
wait. By the way, I was called to come to his
office to pick up a check, so I went to the
office. I waited about ten minutes. I was
taken into Mr. Pearman's office by one of his
employees, and I was introduced to him as--Mr.
Pearman as being the owner of Westwood Homes.
Mr. Pearman never denied that he was not the
owner. Mr. Pearman-- the employee also said,
“This will be the man to write your check.”
[Defendant's counsel]: Your honor, I object
to the hearsay.
THE COURT: Okay. Now wait just one minute.
I'm going to sustain that as far as what the
employee said about the man to write your
check. Strike that portion from the record.
Except for the last sentence of Mrs. Lewis' testimony above, the
court admitted her testimony over the defendant's hearsay
objection. “[A] statement, other than one made by the declarant
while testifying at trial or hearing, offered in evidence to prove
the truth of the matter asserted” is inadmissable hearsay. N.C. R.
Evid. 801(c) (2003). However, the same information was also
received into evidence without any objection from defendant. For
example, shortly after the exchange above, plaintiff's attorney
asked Mrs. Lewis the following:
Q: Do you understand that he [Mr. Pearman]
is an owner of a -- is or was the owner of a
manufactured home dealership here in Roxboro
know as Westwood Homes? Is that also your
understanding?
A: That's what I was told, yes, sir.
Defendant did not object to this testimony. “It is well settled
that a defendant waives objection to the admission of testimony
when testimony of the same import is admitted without objection.”
State v. Tarlton, 146 N.C. App. 417, 421, 553 S.E.2d 50, 53 (2001).
Thus, defendant waived his objection to this evidence, which tended
to show that an unknown person led Mrs. Lewis to believe defendant
owned Westwood Homes.
However, defendant presented documentary evidence that he did
not have any beneficial interest in Westwood Homes, including two
letters from defendant to plaintiff's counsel stating that defendant
was only the attorney for, and had never been an owner of, Westwood
Homes. The only evidence relating to defendant's purported
ownership interest in Westwood Homes was Mrs. Lewis' testimony andaffidavit that she was introduced to him as such. Unlike the
documents submitted by defendant, this evidence did not go to the
issue of defendant's actual ownership of Westwood. “The trial
court's findings of fact are binding on appeal as long as competent
evidence supports them, despite the existence of evidence to the
contrary.” Resort Realty of the Outer Banks, Inc., 163 N.C. App. at
116, 593 S.E.2d at 408. While the evidence did support the finding
that defendant “was introduced to Portia Lewis as being the owner of
Westwood Homes,” it does not support the finding of fact that
defendant actually “own[ed] and operated . . . Westwood Homes,” or
the conclusion of law that defendant therefore “owes plaintiff”
certain sums. Thus, we reverse the trial court's judgment in favor
of plaintiff.
Next, defendant argues that the court erred in denying his
motion for sanctions under Rule 11. We affirm.
We review de novo the trial court's decision whether to impose
sanctions pursuant to Rule 11. Williams v. Liggett, 113 N.C. App.
812, 817, 440 S.E.2d 331, 334 (1994). “The reviewing court must
determine whether the trial court's conclusions support its
judgment, whether the conclusions of law are supported by the
findings of fact, and whether the findings of fact are supported by
sufficient evidence.” Id. at 817, 440 S.E.2d at 334. Under Rule
11:
the signature of . . . a party constitutes a
certificate by him that he has read the
pleading, motion, or other paper; that to the
best of his knowledge, information and belief
formed after reasonable inquiry it is well
grounded in fact and is warranted by existinglaw or a good faith argument for the extension,
modification, or reversal of existing law, and
that it is not interposed for any improper
purpose, such as to harass or to cause
unnecessary delay or needless increase in the
cost of litigation.
N.C. Gen. Stat. § 1A-1, Rule 11(a) (2003).
The complaint alleges that “Defendant . . . operated a business
in Person County.” Defendant argues that plaintiff's counsel knew
or should have known after reasonable inquiry that these allegations
were not well grounded in fact. Defendant contends that counsel for
plaintiff was in possession of letters from defendant explaining
that he did not own Westwood, and that counsel admitted that he
brought suit against defendant because he knew that suing Westwood
Homes would be futile. However, a careful examination of the record
reveals no such admission nor any other evidence that plaintiff's
counsel violated Rule 11.
Affirmed in part, reversed in part.
Judges TYSON and BRYANT concur.
Report per Rule 30(e).
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