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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
THE BOB TIMBERLAKE COLLECTION, INC., Plaintiff v. MARSHALL
Filed: 21 February 2006
1. Appeal and Error--appealability_allowance of motion to dismiss_counterclaims_-
substantial right--identical issues of fact-- possibility of inconsistent verdicts
Although defendant's appeal from the grant of a motion to dismiss his counterclaims is
generally an appeal from an interlocutory order, defendant would be deprived of a substantial
right if an immediate appeal is not allowed. Defendant showed that plaintiff's claims of breach
of a stock purchase agreement, default on a promissory note, negligent misrepresentation, and
defendant's counterclaims of fraud, negligent misrepresentation, securities fraud, unfair and
deceptive trade practices, breach of a stock purchase agreement, and breach of a January 2002
agreement involve identical issues of fact with the possibility of inconsistent verdicts resulting
from the same factual issues.
2. Fraud_failure to allege elements with particularity
Defendant failed to state a counterclaim for fraud in plaintiff's action for breach of a
stock purchase agreement because he failed to plead with particularity the elements of fraud
where he alleged that representatives of plaintiff gave him false information concerning the
corporation, but defendant did not identify which representatives gave him false information or
specifically allege where or when he received the information.
3. Fraud_negligent misrepresentation_insufficient allegations
Defendant failed to state a counterclaim for negligent misrepresentation in plaintiff's
action for breach of a stock purchase agreement where defendant failed to allege that plaintiff or
its representatives owed any duty to defendant or breached any duty owed, and there was no
allegation that information provided to defendant was prepared without reasonable care or that
any supposed breach was a proximate cause of injury to defendant.
4. Securities_fraud_insufficient allegations
Defendant failed to state a counterclaim for fraud under the North Carolina Securities Act
in plaintiff's action for breach of a stock purchase agreement where defendant did not allege that
the shares he purchased were securities under the Act, did not allege that plaintiff sold such a
security by means of any untrue statement of a material fact or any omission to state a material
fact other than a conclusory allegation that representatives of plaintiff provided him with false
information, and did not allege that he did not know and in the exercise of reasonable care could
not have known of any untruth or omission. N.C.G. S. § 78A-8(2) and 78A-56(a)(2).
5. Unfair Trade Practices_insufficient allegations
Defendant failed to state a counterclaim for an unfair or deceptive trade practice in
plaintiff's action for breach of a stock purchase agreement where defendant did not allege what
conduct of plaintiff constituted an unfair and deceptive trade practice or that any specific conduct
by plaintiff caused injury to defendant. If this counterclaim relates to plaintiff's alleged breach of
the stock purchase agreement or alleged breach of a subsequent agreement that plaintiff would
defer payment of the final installment due under the stock purchase agreement, defendant made
no allegation of any substantial aggravating circumstances attending the breach of contract.
6. Contracts_representations and warranties_contractual limitations period
Defendant's counterclaim for breach of the representations and warranties section of a
stock purchase agreement based upon alleged inaccurate financial information was barred by a
two-year limitation in the agreement for representations and warranties where defendant did not
allege that he gave notice to plaintiff within the two-year limitation period of any breach or
nonconformity of any representation or warranty.
7. Contracts_unilateral offer_absence of acceptance and consideration
The purchaser of corporate shares did not have a contract with the seller to delay
indefinitely the third payment due pursuant to the stock purchase agreement where the seller
wrote a letter to the purchaser proposing to delay the third payment if the buyer made the second
payment due under the agreement, the purchaser never responded to the letter or made the second
payment, the purchaser thus never accepted the terms of the seller's unilateral offer, and there
was no consideration to support a valid agreement.
8. Pleadings_-counterclaims_-denial of motion for leave to amend
The trial court did not abuse its discretion by denying defendant's motion for leave to
amend his counterclaims, because: (1) the trial court specifically reviewed N.C.G.S. § 1A-1, Rule
15 in open court after hearing defense counsel's argument, and defendant would have been able
to amend his counterclaims without leave of court at any point prior to the responsive pleading
being filed; (2) it was only after having been served plaintiff's responsive pleading and having
notice of plaintiff's motion to dismiss that defendant moved orally to amend his pleadings at the
hearing; and (3) such an undue delay of time in making a motion to amend is a valid reason for
denying such motion.
Appeal by defendant from orders entered 24 May and 17 June
2004 by Judge Steve A. Balog in Davidson County Superior Court.
Heard in the Court of Appeals 15 June 2005. Allman, Spry, Leggett & Crumpler, P.A., by W. Rickert Hinnant,
Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Robert
J. King, III, and Katherine A. Murphy, for defendant-
Marshall Edwards (Edwards-defendant) appeals from orders
entered 24 May and 17 June 2004 by which the trial court (1)
granted The Bob Timberlake Collection, Inc.'s (BTI-plaintiff)
motion to dismiss defendant's counterclaims and (2) denied
defendant's motion for leave to amend his counterclaims.
The dispute between BTI and Edwards arose out of the sale of
Riverwood, Inc. (Riverwood) in 2001. Pursuant to a stock purchase
agreement, Edwards purchased 90% of the stock in Riverwood in
exchange for which he agreed to pay BTI $800,000.00 in three
payments. Edwards made the first payment of $250,000.00 at closing
on 30 April 2001, and the remaining payments of $250,000.00 and
$300,000.00 were to be secured by promissory notes.
After entering into the stock purchase agreement, Edwards
that prior to his purchase, BTI made inaccurate statements
to him regarding the following as to Riverwood's
sales force; general ledger trial balance; and general ledger
reflecting ownership of certain equipment that was actually ownedby third parties. Edwards raised his concerns with the chief
operating officer of BTI,
Daniel Timberlake (Timberlake). In
response to Edwards' concerns,
Timberlake wrote Edwards a letter
dated 18 January 2002
that stated if Edwards made the second
payment due under the terms of the stock purchase agreement, the
third payment of $300,000.00, originally due and payable on or
before 15 February 2002, would be delayed indefinitely. Edwards
did not respond to the 18 January 2002 letter. He did not make the
second $250,000.00 payment, or the third $300,000.00
sign a new promissory note.
As of October 2002, Edwards had paid a total of $5,250.00 in
interest payments under the terms of the promissory note. However
Edwards did not make further payments toward the principal balance
owed despite BTI's demand to do so. On 2 July 2003,
BTI filed a
complaint alleging breach of the stock purchase agreement, default
of promissory note, and misrepresentation. On 5 September 2003,
Edwards filed an answer and counterclaims which included claims for
fraud, negligent misrepresentation, securities fraud, unfair and
deceptive trade practices, breach of the stock purchase agreement
and breach of a January 2002 agreement. BTI answered Edwards'
counterclaims on 29 September 2003 and filed a motion to dismiss
Edward's counterclaims. On 10 May 2004, the trial court heard
BTI's motion to dismiss. Edwards'
s oral motion for leave to amendhis counterclaims was denied in open court. In an order signed 17
May 2004, the trial court granted BTI's motion to dismiss Edward's
counterclaims with prejudice for failure to state proper claims
for which relief can be granted pursuant to Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure.
filed a motion requesting the trial court to reconsider its denial
of his motion to amend, which was also denied. Edwards appeals.
On appeal defendant raises two substantive issues whether the
trial court erred by: (I) granting
motion to dismiss
counterclaims and (II) denying defendant'
leave to amend his counterclaims.
 As a preliminary matter we must determine whether the
appeal is from an interlocutory order and therefore is subject to
dismissal. An order or judgment is interlocutory if it is made
during the pendency of an action and does not dispose of the case
but requires further action by the trial court in order to finally
determine the entire controversy. Cagle v. Teachy, 111 N.C. App.
244, 247, 431 S.E.2d 801, 803 (1993) (citation omitted). There is
generally no right to appeal an interlocutory order. Jeffreys v.
Raleigh Oaks Joint Venture, 115 N.C. App. 377, 379, 444 S.E.2d 252,
253 (1994) (citation omitted). The purpose of this rule is 'to
prevent fragmentary, premature and unnecessary appeals bypermitting the trial court to bring the case to final judgment
before it is presented to the appellate courts.' Id. (quoting
Fraser v. Di Santi, 75 N.C. App. 654, 655, 331 S.E.2d 217, 218,
disc. rev. denied, 315 N.C. 183, 337 S.E.2d 856 (1985)).
However, a party may immediately appeal an interlocutory order
or judgment in two ways. First, if the order or judgment is final
as to some but not all of the claims or parties, and the trial
court certifies the case for appeal pursuant to N.C. Gen. Stat. §
1A-1, Rule 54(b), an immediate appeal will lie. Id. Second, an
appeal is permitted under N.C. Gen. Stat. §§ 1-277(a) and
7A-27(d)(1) if the trial court's decision deprives the appellant of
a substantial right which would be lost absent immediate review.
In Green v. Duke Power Co., 305 N.C. 603, 290 S.E.2d 593
(1982), the North Carolina Supreme Court held that the right to
avoid a trial is generally not a substantial right, but the right
to avoid two trials on the same issue may be a substantial right.
Id. at 608, 290 S.E.2d at 596. The Court stated that the
possibility of undergoing a second trial affects a substantial
right only when the same issues are present in both trials,
creating the possibility that a party will be prejudiced by
different juries in separate trials rendering inconsistent verdicts
on the same factual issue. Id. In Liggett Group, Inc. v. Sunas,113 N.C. App. 19, 437 S.E.2d 674 (1993), this Court stated:
A substantial right . . . is considered
affected if 'there are overlapping factual
issues between the claim determined and any
claims which have not yet been determined'
because such overlap creates the potential for
inconsistent verdicts resulting from two
trials on the same factual issues.
Id. at 24, 437 S.E.2d at 677 (citation omitted). There is a
two-part test requiring a party to show that (1) the same factual
issues would be present in both trials and (2) the possibility of
inconsistent verdicts on those issues exists. Moose v. Nissan of
Statesville, Inc., 115 N.C. App. 423, 426, 444 S.E.2d 694, 697
Defendant, while acknowledging the appeal is from an
interlocutory order, nevertheless asserts the appeal should be
heard because the trial court's ruling affects a substantial right.
Defendant contends the claims asserted by both parties involve
identical issues of fact and that defendant would be prejudiced if
these factual issues are not heard by the same jury.
argues he is entitled to an immediate appeal because the trial
court's order exposes him to the possibility of inconsistent
verdicts upon overlapping factual issues. After carefully
reviewing the pleadings and the procedural development of this
case, we agree.
Although BTI's claims remain viable and therefore not a finaldetermination of the rights of the parties, we hold defendant would
be deprived of a substantial right if an immediate appeal is not
allowed. Defendant shows that plaintiff's claims of breach of a
stock purchase agreement, default on a promissory note and
negligent misrepresentation and his counterclaims of fraud,
negligent misrepresentation, securities fraud, unfair and deceptive
trade practices, breach of a stock purchase agreement and breach of
a January 2002 agreement involve identical issues of fact.
Defendant's defense of fraud would be presented in plaintiff's
trial on the breach of contract claim and defendant's trial on
fraud in the inducement. Therefore, there exists the possibility
of inconsistent verdicts resulting from the same factual issues.
Accordingly, the trial court's dismissal of defendant's
counterclaims affects a substantial right which would prejudice
defendant if we did not hear this appeal. Therefore, we will reach
the merits of defendant's appeal.
Defendant first argues the trial court erred by granting
plaintiff's motion to dismiss defendant's counterclaims for failure
to state a claim upon which relief may be granted. We disagree.
The question for this Court on a motion to dismiss pursuant to
Rule 12(b)(6) is whether as a matter of law, the allegations of the
complaint, treated as true, are sufficient to state a claim uponwhich relief may be granted under some legal theory. Harris v.
NCNB Nat'l Bank, 85 N.C. App. 669, 670, 355 S.E.2d 838, 840 (1987).
Rule 9(b) of the North Carolina Rules of Civil Procedure
requires that in all averments of fraud . . . the circumstances
constituting fraud . . . shall be stated with particularity. N.C.
Gen. Stat. . 1A-1, Rule 9(b) (2005). The well-recognized elements
of fraud are 1) a false representation or concealment of a material
fact, 2) reasonably calculated to deceive, 3) made with intent to
deceive, 4) which does in fact deceive, and which 5) results in
damage to the injured party. A complaint charging fraud must
allege these elements with particularity. Hunter v. Spaulding, 97
N.C. App. 372, 377, 388 S.E.2d 630, 634 (1990) (internal citations
omitted). [I]n pleading actual fraud, the particularity
requirement is met by alleging time, place and content of the
fraudulent representation, identity of the person making the
representation and what was obtained as a result of the fraudulent
acts or representations.
Terry v. Terry, 302 N.C. 77, 85, 273
S.E.2d 674, 678 (1981). Dismissal of a claim for failure to plead
with particularity is proper where there are no facts whatsoever
setting forth the time, place, or specific individuals who
purportedly made the misrepresentations. Coley v. North Carolina
Nat'l Bank, 41 N.C. App. 121, 125, 254 S.E.2d 217, 220 (1979)
Here, defendant pleaded fraud in vague and general terms,
alleging that representatives of BTI gave him information
concerning Riverwood. However, defendant did not identify which
representatives gave him false information, nor did he specifically
allege where or when he received the information. Defendant failed
to sufficiently plead the substantive elements of fraud with the
required particularity. See Coley at 125-26, 254 S.E.2d at 219.
Accordingly, we affirm the trial court's dismissal of Edwards'
Our Supreme Court has held that the tort of negligent
misrepresentation occurs when a party justifiably relies to his
detriment on information prepared without reasonable care by one
who owed the relying party a duty of care. Raritan River Steel
Co. v. Cherry, Bekaert & Holland, 322 N.C. 200, 206, 367 S.E.2d
609, 612 (1988). Plaintiff's claim could properly be dismissed by
the trial court pursuant to Rule 12(b)(6) if no law exists to
support the claim, if the complaint fails to allege sufficient
facts to assert a viable claim, or if the complaint alleges facts
that will necessarily defeat the claim. Oberlin Capital, L.P. v.
Slavin, 147 N.C. App. 52, 61, 554 S.E.2d 840, 847 (2001) (citation
omitted). With respect to negligent misrepresentation, whether
liability accrues is highly fact-dependent, with the question ofwhether a duty is owed a particular plaintiff being of paramount
importance. Marcus Bros. Textiles, Inc. v. Price Waterhouse,
L.L.P., 350 N.C. 214, 220, 513 S.E.2d 320, 325 (1999).
Here, the trial court properly dismissed the negligent
misrepresentation claim for failure to allege all the required
facts and because the complaint includes facts that necessarily
defeat the claim.
In his counterclaim for negligent
misrepresentation, Edwards pleads a legal conclusion that such
misrepresentations were made negligently, that Timberlake, Inc.
had a financial interest in such misrepresentations, that Edwards
relied upon Timberlake, Inc.'s negligent misrepresentations, that
such reliance was reasonable, and that Edwards has been damaged
by Timberlake's negligent misrepresentations in an amount to be
established at trial.
However, Edwards failed to allege BTI or
its representatives owed any duty to Edwards
or breached any duty
owed. Further, there was no allegation that the information
provided was prepared without reasonable care, or that any supposed
breach was a proximate cause of the injury. Edwards has failed to
allege sufficient facts which, if taken as true would state a claim
for negligent misrepresentation. We affirm the trial court's
dismissal of Edwards' claim of misrepresentation.
 Edwards' counterclaim for securities fraud does not allegea specific violation of the North Carolina Securities Act (Act)
other than a conclusory statement that the above-described conduct
constitutes a violation of the North Carolina Securities Act,
N.C.G.S. § 78A-1, et seq. From the face of the counterclaim, it
Edwards intended to assign liability for a violation of
N.C.G.S. § 78A-8(2) and N.C.G.S. § 78A-56(a)(2) which imposes civil
liability upon any person who:
Offers or sells a security by means of any
untrue statement of a material fact or any
omission to state a material fact necessary in
order to make the statements made, in light of
the circumstances under which they were made,
not misleading (the purchaser not knowing of
the untruth or omission), and who
sustain the burden of proof that he did not
know, and in the exercise of reasonable care
could not have known of the untruth or
omission . . .
N.C. Gen. Stat. § 78A-56 (a)(2) (2005).
Defendant has not made any
of the allegations required to sustain a claim for relief under the
Act. Specifically, Edwards does not allege the stock he purchased
was a security by virtue of the terms of the Act, nor is it
specifically alleged that BTI sold such a security by means of any
untrue statement of a material fact or any omission to state a
material fact, other than Edwards conclusory allegation that
representatives of BTI provided him with false information.
Edwards further fails to allege he did not know, and in the
exercise of reasonable care, could not have known of the untruth oromission. Edwards merely offers conclusions of law and attempts to
allege the elements of a claim for securities fraud only in general
terms, but has not pled facts sufficient to state a claim for
securities fraud. Accordingly, we affirm the trial court's
dismissal of Edwards' securities fraud claim.
Unfair and Deceptive Trade Practices Act
 To establish a claim for unfair and deceptive trade
practices, Edwards must show: (1) that plaintiff committed an
unfair or deceptive act or practice, (2) the action in question was
in or affecting commerce, and (3) the act proximately caused injury
to defendant. See Pleasant Valley Promenade v. Lechmere, Inc., 120
N.C. App. 650, 664, 464 S.E.2d 47, 58 (1995). An act or practice
is unfair if it is immoral, unethical, oppressive, unscrupulous,
or substantially injurious to consumers. Marshall v. Miller, 302
N.C. 539, 548, 276 S.E.2d 397, 403 (1981). An act or practice is
deceptive if it has the capacity or tendency to deceive. Id.
Edwards makes no allegation BTI has done anything immoral,
oppressive, unscrupulous or substantially injurious to consumers.
Edwards alleges BTI's conduct constitutes unfair and deceptive
trade practices, that such conduct was in and effected [sic]
commerce, and that Edwards is therefore entitled to recover
damages as a result of BTI's alleged conduct. Edwards does not
state what alleged conduct of BTI constitutes unfair and deceptivetrade practices in violation of N.C. Gen. Stat. § 75-1.1 (Chapter
75). Edwards' claim may relate to either (1) the alleged breach of
the Stock Purchase Agreement, or (2) the alleged breach of the
agreement that plaintiff would defer payment of the final
installment payment under the Agreement.
A mere breach of contract, even if intentional, is not an
unfair or deceptive act under Chapter 75. Bartolomeo v. S.B.
Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989); see also Skinner
v. E. F. Hutton & Co., Inc., 314 N.C. 267, 275, 333 S.E.2d 236, 241
(1985) (securities transactions are beyond the scope of Chapter 75
in that such transactions are already subject to pervasive and
intricate regulation under the North Carolina Securities Act).
is well recognized . . . that actions for unfair or deceptive trade
practices are distinct from actions for breach of contract . . .
and that a mere breach of contract, even if intentional, is not
sufficiently unfair or deceptive to sustain an action under
N.C.G.S. § 75-1.1. Branch Banking & Trust Co. v. Thompson, 107
N.C. App. 53, 62, 418 S.E.2d 694, 700 (1992) (citations omitted).
To recover for unfair and deceptive trade practices, a party must
show substantial aggravating circumstances attending the breach of
contract. Id. It is unlikely that an independent tort could
arise in the course of contractual performance, since those sorts
of claims are most appropriately addressed by asking simply whethera party adequately fulfilled its contractual obligations.
Southeastern Shelter Corp. v. BTU, Inc., 154 N.C. App. 321, 330,
572 S.E.2d 200, 206 (2002) (citations and quotations omitted).
Edwards' counterclaim for Unfair and Deceptive Trade Practices
states Edwards is entitled to recover compensatory damages as a
result of Timberlake, Inc.'s conduct, but
fails to allege any
specific conduct by BTI that proximately caused injury to Edwards.
Edwards' failure to allege a necessary element defeats his claim
for unfair and deceptive trade practices. See Walker v. Sloan, 137
N.C. App. 387, 399, 529 S.E.2d 236, 246 (2000) (no recovery where
the complaint fails to demonstrate that the act of deception
proximately resulted in some adverse impact or actual injury to the
plaintiff). We affirm the trial court's dismissal of Edwards'
unfair and deceptive trade practices claim.
Breach of Contract
 In his counterclaim for breach of contract, Edwards states
by providing inaccurate financial information to Edwards,
Timberlake, Inc. breached Article 11, [Section] E of the Agreement.
Such breach has damaged Edwards in an amount to be established at
The elements of a claim for breach of contract are (1) the
existence of a valid contract and (2) breach of the terms of that
contract. Becker v. Graber Builders, Inc., 149 N.C. App. 787, 792,561 S.E.2d 905, 909 (2002). Edwards' claim for relief is based on
the alleged breach of Article 11, Section E of the Agreement, which
sets forth certain representations and warranties of BTI in
connection with Edwards' purchase of Riverwood stock. Article IX,
section A of the Agreement sets forth a limitation on the survival
of such representations and warranties as follows:
Section A. -- Survival of Representations and
Warranties. All representations and
warranties of the Seller and the Company shall
survive the execution, delivery and
performance of this Agreement for a period
extending two (2) years from the Closing Date.
As the Agreement was executed on April 30, 2001, and Edwards does
not allege that any notice whatsoever was provided to BTI within
the prescribed two-year limitation period of any breach or
nonconformity of any representation or warranty, Edwards' claim is
therefore barred by the express terms of the Agreement.
A legal insufficiency may be due to an absence of law to
support a claim of the sort made, absence of fact sufficient to
make a good claim, or the disclosure of some fact which will
necessarily defeat the claim. State of Tennessee v. Environmental
Management Comm., 78 N.C. App. 763, 765, 338 S.E.2d 781, 782
(1986). Furthermore, when a complaint states a valid claim but
also discloses an unconditional affirmative defense which defeats
the asserted claim, the motion to dismiss will be granted and theaction dismissed. Skinner at 270, 333 S.E.2d at 238. As Edwards'
claim for breach of the Agreement was filed in his counterclaim on
4 September 2003, it is more than 2 years after the parties
initially entered into the Agreement (30 April 2001) and therefore,
barred by an express limitation contained in the Agreement. Such
an insurmountable bar to recovery on the claim requires that the
claim be dismissed. A counterclaim is sufficient to withstand the
motion [12(b)(6)] where no insurmountable bar to recovery on the
claim appears on its face. Chrysler Credit Corp. v. Rebhan, 66
N.C. App. 255, 257, 311 S.E.2d 606, 608 (1984). At the hearing on
the motion to dismiss, counsel for BTI explicitly argued Edwards'
alleged claim for breach of the Agreement was barred by the express
terms of the Agreement.
The trial court properly dismissed the
Breach of the 18 January 2002 Agreement
 In his final counterclaim, Edwards claims the letter sent
by BTI to Edwards 18 January 2002 constitutes an agreement that
BTI has allegedly breached by filing the underlying action.
Edwards alleges that [he] and Timberlake, Inc. reached an
agreement in January 2002 pursuant to which Timberlake, Inc. agreed
to delay the payment on the $300,000 Note indefinitely. By filing
this suit, Timberlake, Inc. has breached such agreement.
letter states, in pertinent part: With respect to our final amount of $300,000
due in February, we are willing to extend the
payment thereof indefinitely to allow you
ample opportunity to grow the business.
Additionally, if you are able to effectively
merge all of your business interests into a
single corporate organization, we would be
willing to contribute our remaining 10%
interest in Riverwood if that helps you
up all of the structural and ownership issues
you currently face. Please let me know if
there is anything further you may need in this
regard. Please let me know if the above is
agreeable to you.
The 18 January 2002 correspondence was a unilateral offer made to
Edwards. Edwards does not allege he accepted the offer, but
characterizes the correspondence, standing alone, as an agreement
between the parties. We find this letter falls short of an
agreement because Edwards failed to accept the terms.
At the hearing on BTI's Motion, BTI's counsel explicitly
argued the letter was, at most, merely an offer, that Edwards never
alleged any consideration for the agreement. We agree. Here,
Edwards has not established the existence of a valid contract or a
meeting of the minds with respect to the January 2002 letter.
trial court properly granted plaintiff's motion to dismiss
 Defendant next argues the trial court erred by denying his
motion for leave to amend his counterclaims. Denial of a motion to amend by the trial court will not be
disturbed on appeal absent a showing of abuse of discretion.
Nationsbank of North Carolina, N.A. v. Baines
, 116 N.C. App. 263,
268, 447 S.E.2d 812, 815 (1994). An abuse of discretion occurs
when the trial court's ruling 'is so arbitrary that it could not
have been the result of a reasoned decision.' Chicora Country
Club, Inc., v. Town of Erwin
, 128 N.C. App. 101, 109, 493 S.E.2d
797, 802 (1997), disc. review denied
, 347 N.C. 670, 500 S.E.2d 84
(1998) (citation and quotations omitted). In the absence of any
declared reason for the denial of leave to amend, this Court may
examine any apparent reasons for such denial. United Leasing
Corp. v. Miller
, 60 N.C. App. 40, 42-43, 298 S.E.2d 409, 411
(1982), disc. rev. denied
, 308 N.C. 194, 302 S.E.2d 248 (1983).
Some reasons justifying denial of an amendment are (a) undue delay,
(b) bad faith, (c) undue prejudice, (d) futility of amendment, and
(e) repeated failure to cure defects by previous amendments. Id.
at 42-43, 298 S.E.2d at 411-12.
The trial court did not state a specific basis for its denial
of Edwards' motion for leave to amend his counterclaims. The trial
court entered its order denying the motion after having considered
the pleadings, legal briefs and arguments of counsel. The
transcript indicates that the trial court specifically reviewed
Rule 15 in open court
after hearing defense counsel's argument. Pursuant to Rule 15, Edwards would have been able to amend his
counterclaim, without leave of court, at any point prior to the
responsive pleading being filed. N.C. Gen. Stat. § 1A-1, Rule 15.
However, it was o
nly after having been served plaintiff's
responsive pleading and having notice of plaintiff's motion to
dismiss, that Edwards moved orally to amend his pleadings at the
hearing. Such an undue delay of time in making a motion to amend
is a valid reason for denying such motion. On this record, we find
no abuse of discretion by the trial court in denying Edwards'
request for leave to amend his pleadings.
This assignment of error
Because plaintiff's motion to dismiss defendant's
counterclaims was properly granted, and because defendant's motion
for leave to amend was properly denied, the judgment of the trial
court is affirmed.
Judges MCCULLOUGH and TYSON concur.
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