An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA04-1186


Filed: 3 January 2006


v .                         Mecklenburg County
                            No. 03 CVS 15618

    Appeal by defendant from an order filed 19 May 2004 by Judge Beverly T. Beal in Mecklenburg County Superior Court. Heard in the Court of Appeals 10 May 2005.

    Carruthers & Roth, P.A., by Jack B. Bayliss, Jr., for plaintiff-appellee.

    Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by H. Arthur Bolick, II and C. Scott Meyers, for defendant- appellant.

    BRYANT, Judge.

    Bruce R. Davis (defendant) appeals an order filed 19 May 2004, inter alia: (1) granting plaintiff's motion for summary judgment on its claim for conversion; (2) awarding plaintiff damages in the amount of $473,988.08 for conversion; and (3) denying defendant's motion for summary judgment based on the doctrine of collateral estoppel. For the reasons discussed herein, we affirm the trial court's ruling.


    Defendant is a citizen and resident of the State of Georgia. Defendant is the President of Armitec, a corporation formed andexisting under the laws of the State of Delaware, with its principal place of business being Smyrna, Georgia. On or about 27 November 2002, Armitec entered into a “Purchase and Sale Agreement” with plaintiff. Under the terms of the agreement, Armitec was to purchase certain inventory from plaintiff at a private foreclosure sale where plaintiff was the foreclosing creditor. At the time of the agreement, the inventory was located at two different locations in Georgia, referred to in the agreement as the leased location and the contractor's location. Armitec took delivery of some of the inventory in Georgia, and made payments to plaintiff totaling $50,000.00. However, Armitec thereafter was unable to fulfill its payment obligations under the agreement.
    On or about 1 April 2003, pursuant to the agreement's arbitration clause, plaintiff initiated arbitration proceedings against Armitec by filing a “Demand for Arbitration” form with the American Arbitration Association as well as a document entitled “Notice of Intention to Arbitrate and Demand for Arbitration.” In the arbitration demand, plaintiff listed the nature of the dispute as breach of the agreement and conversion and referenced the claims set forth in the arbitration notice.
    The arbitration notice listed three claims for relief: (1) breach of contract, (2) conversion, and (3) unfair and deceptive trade practices. The arbitration notice alleged Armitec and plaintiff were parties to the agreement; Armitec breached the agreement by failing to pay the full amount due; Armitec took a portion of the inventory from the leased and contractor's locationswithout authorization from plaintiff; and Armitec misrepresented the amount of goods that were taken and the reason they were taken. Plaintiff also submitted an “Arbitration Brief in Reply to Respondent's Arbitration Brief”, which further detailed the claims made by plaintiff in the arbitration.
    In the arbitration, Armitec did not dispute that it had breached the agreement, but merely contested the claims for conversion and unfair and deceptive trade practices as well as the proper measure of damages. After an evidentiary hearing and the submission of briefs by both parties, the arbitrator awarded plaintiff $197,460.50 plus interest and taxed the cost of the arbitration to Armitec. In addition, the arbitrator ordered the remainder of the inventory to be turned over to Armitec, or alternatively, Armitec was to be given credit for any of the inventory that had been sold by plaintiff. The arbitrator did not award plaintiff treble damages or attorney fees for unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1. By its terms, the arbitrator's award was “in full settlement of all claims
submitted to this arbitration.”
    After having the arbitration award confirmed by the Mecklenburg County Superior Court and reduced to a judgment, plaintiff took no action to execute on its judgment. Rather, plaintiff initiated this lawsuit, alleging conversion and unfair and deceptive trade practices by defendant, as well as a claim for punitive damages, all arising out of the exact same facts as the arbitration. Plaintiff's complaint in this case is nearly averbatim recitation of the arbitration notice submitted in the arbitration. There are no new allegations of fact in the complaint other than the identity and citizenship of defendant.
    Before filing an answer, defendant moved to dismiss the case for lack of personal jurisdiction. That motion was denied. Both parties then submitted cross motions for summary judgment. These matters came for hearing at the 17 May 2004 civil session of Mecklenburg County Superior Court with the Honorable Beverly T. Beal presiding. By order filed 19 May 2004, the trial court granted plaintiff's motion for summary judgment on its claim for conversion and awarded damages, but denied plaintiff's motion for summary judgment on its claims for unfair and deceptive trade practices and punitive damages. The trial court also denied defendant's motion for summary judgment. Defendant appeals.
Interlocutory Appeal

    “The denial of summary judgment is not a final judgment, but rather is interlocutory in nature. We do not review interlocutory orders as a matter of course.” McCallum v. N.C. Coop. Extension Serv., 142 N.C. App. 48, 50, 542 S.E.2d 227, 230 (2001) (citing Veazey v. City of Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950)). “If, however, 'the trial court's decision deprives the appellant of a substantial right which would be lost absent immediate review,' we may review the appeal under N.C. Gen. Stat. §§ 1-277(a) and 7A-27(d)(1).” McCallum, 142 N.C. App. at 50, 542 S.E.2d at 230-31 (citation omitted).
        The denial of summary judgment based on collateral estoppel, like res judicata, mayexpose a successful defendant to repetitious and unnecessary lawsuits. Accordingly, . . . the denial of a motion for summary judgment based on the defense of collateral estoppel may affect a substantial right . . . . [such that the appeal] is properly before us.

Id. at 51, 542 S.E.2d at 231. We hold defendant's appeal is immediately appealable and properly before this Court.

    On appeal, defendant presents the issues of whether the trial court erred in: (I) granting plaintiff's motion for summary judgment when genuine issues of material fact remain; and (II) denying defendant's motion for summary judgment based on the doctrine of collateral estoppel.
Summary Judgment

    “The standard of review on appeal from summary judgment is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law.” Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C. App. 729, 733, 504 S.E.2d 574, 577 (1998) (citing Wilmington Star News v. New Hanover Reg'l Med. Ctr., 125 N.C. App. 174, 178, 480 S.E.2d 53, 55 (1997)). Summary judgment is appropriate when, viewed in the light most favorable to the non-movant, “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2003). The party moving for summary judgment must establish that no triable issue of material fact exists “by proving that an essential elementof the opposing party's claim is nonexistent, or by showing through discovery that the opposing party cannot produce evidence to support an essential element of his claim or cannot surmount an affirmative defense which would bar the claim.” Collingwood v. Gen. Elec. Real Estate Equities, Inc., 324 N.C. 63, 66, 376 S.E.2d 425, 427 (1989) (citing Bernick v. Jurden, 306 N.C. 435, 293 S.E.2d 405 (1982)).
    Defendant argues plaintiff has not produced sufficient evidence to show either the amount or value of the inventory he is alleged to have converted. Both the amount and the value of the inventory are established in the Supplemental Affidavit of Jerry T. O'Neil, plaintiff's vice-president. However, defendant points to no evidence in the record contradicting O'Neil's statements. Instead defendant merely points to allegations made by plaintiff in its Complaint and arbitration brief. Therefore the only evidence as to the value of the inventory was that given by O'Neil.
    In its order granting Summary Judgment, the trial court awarded plaintiff $473,988.08, the value of the goods as established by O'Neil in his Supplemental Affidavit less $50,000.00 already paid by defendant. Defendant argues the difference between the price established in the original Purchase and Sale Agreement and the value given by O'Neil constitutes a genuine issue of material fact. However, it is not the contract price that determines damages under the tort of conversion. “The measure of damages for conversion is the fair market value of the chattel at the time and place of conversion, plus interest.” Marina FoodAssoc., Inc. v. Marina Rest., Inc., 100 N.C. App. 82, 94, 394 S.E.2d 824, 831 (1990) (emphasis added) (citing Esteel Co. v. Goodman, 82 N.C. App. 692, 348 S.E.2d 153 (1986)). As defendant produced no evidence contradicting plaintiff's evidence as to the amount and value of the inventory converted, the trial court properly held there was no issue of material fact with regards to plaintiff's claim of conversion. This assignment of error is overruled.
Collateral Estoppel
    “Under the doctrine of collateral estoppel, also known as issue preclusion, 'parties and parties in privity with them--even in unrelated causes of action--are precluded from retrying fully litigated issues that were decided in any prior determination and were necessary to the prior determination.'” Scarvey v. First Fed. Sav. & Loan Ass'n of Charlotte, 146 N.C. App. 33, 38, 552 S.E.2d 655, 658-59 (2001) (quoting King v. Grindstaff, 284 N.C. 348, 356, 200 S.E.2d 799, 805 (1973)). For collateral estoppel to apply, the party asserting it must show: (1) “the earlier suit resulted in a final judgment on the merits”; (2) “the issue in question was identical to an issue actually litigated and necessary to the judgment”; and (3) both parties “were either parties to the earlier suit or were in privity with parties.” Thomas M. McInnis & Assocs., Inc. v. Hall, 318 N.C. 421, 429, 349 S.E.2d 552, 557 (1986). In the case sub judice, the requirement that the issue in question in the instant case be identical to an issue previously litigated is not met. Our Supreme Court has set forth the following requirements for the identity of issues:
        (1) the issues must be the same as those involved in the prior action,
        (2) the issues must have been raised and actually litigated in the prior action,
        (3) the issues must have been material and relevant to the disposition of the prior action, and
        (4) the determination of the issues in the prior action must have been necessary and essential to the resulting judgment.

State v. Summers, 351 N.C. 620, 623, 528 S.E.2d 17, 20 (2000). In the instant case, the issue raised by the complaint is whether defendant is personally liable to plaintiff for conversion as a result of his actions taken in his capacity as a corporate officer of Armitec. In the arbitration proceedings, upon which defendant bases his collateral estoppel defense, the issue was Armitec's liability to plaintiff for conversion. The first requirement that the issues to which collateral estoppel applies be identical, therefore, is not satisfied.
    “A corporation, even one closely held, is recognized as a separate legal entity in this jurisdiction.” Quick v. Quick, 305 N.C. 446, 460, 290 S.E.2d 653, 662 (1982); see also, Sproles v. Greene, 329 N.C. 603, 609, 407 S.E.2d 497, 500 (1991) (a corporation is a separate legal entity distinct from its shareholders and employees). “The general rule is that 'a director, officer, or agent of a corporation is not, merely by virtue of his office, liable for the torts of the corporation . .. .'” Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 57, 554 S.E.2d 840, 845 (2001) (quoting United Artists Records, Inc. v. E. Tape Corp., 19 N.C. App. 207, 215, 198 S.E.2d 452, 457 (1973)). Consequently, determination of the liability of a corporation for tortious conduct does not automatically also result in a determination of the personal liability of its officers or shareholders. As defendant's personal liability was not actually litigated in the prior action, the requirement that the issues to which collateral estoppel may be applied must be identical is not met and collateral estoppel does not apply. This assignment of error is overruled.
    Judges WYNN and JACKSON concur.
    Report per Rule 30(e).

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