Appeal by plaintiffs and defendants CSX Corporation and CSX
Transportation, Inc. from an order entered 22 November 2004 by
Judge Albert Diaz in Mecklenburg County Superior Court. Heard in
the Court of Appeals 16 November 2005.
The Fuller Law Firm, P.C., by Trevor M. Fuller, for plaintiff-
appellants.
Millberg, Gordon & Stewart, P.L.L.C., by Elizabeth H. Poremba,
John C. Millberg, and William W. Stewart, Jr., for defendant-
appellants CSX Corporation and CSX Transportation, Inc.
HUNTER, Judge.
Rachel M. King, Brianna King, and Aleaha King (“plaintiffs”)
appeal from an order entered 22 November 2004 granting a sanction
against their attorney, Trevor M. Fuller (“Fuller”), to CSX
Corporation and CSX Transportation, Inc. (collectively “CSX”). We
affirm the order of the trial court for the following reasons. On 9 May 2001, plaintiffs were traveling across a railroad
crossing on Nevada Boulevard in Charlotte, North Carolina.
Plaintiffs did not see any oncoming trains or warnings of
approaching trains at the crossing. Plaintiffs proceeded across
the tracks and were struck by a train traveling in reverse.
Plaintiffs subsequently filed an action on 6 May 2004 against
Norfolk Southern Corporation and Norfolk Southern Railway Company
(collectively “Norfolk Southern”), the owners of the train which
struck plaintiffs. Prior to filing the action, plaintiffs'
counsel, Trevor M. Fuller (“Fuller”) conducted a factual inquiry to
determine the responsible parties, as ownership of the tracks and
railroad crossing was unclear from the police report of the
incident. Fuller was unable to discover the owner of the tracks
and crossing, but determined that CSX Corporation was a major
railroad company that also held significant rail ownership in
Charlotte, North Carolina. Plaintiffs named CSX as defendants in
the action as well as Norfolk Southern.
CSX confirmed that they had no ownership interest in the
crossing at which the accident occurred with Doug Shoun (“Shoun”),
Claims Manager for Norfolk Southern, and contacted plaintiffs,
requesting an immediate dismissal. Plaintiffs asked CSX to seek
a thirty-day extension to file its answer so plaintiffs could
verify ownership of the crossing, and agreed to take no further
action against CSX until the matter was confirmed on 17 June 2004.
CSX agreed and filed for an extension of time. Plaintiffs
contacted Shoun and asked for written confirmation that NorfolkSouthern was the sole owner of the train and tracks, which Shoun
agreed to provide pending consultation with counsel. Shoun did not
provide the written confirmation to plaintiffs, and continued
communication between CSX and plaintiffs did not result in a
dismissal. CSX then filed an answer on 23 July 2004, and a motion
for summary judgment and sanctions on 1 September 2004. On 8
September 2004, plaintiffs voluntarily dismissed CSX from the case.
CSX proceeded on their motions for sanctions, however, and the
trial court granted the motion, ordering a sanction in the amount
of $487.50 to be paid by plaintiffs' attorney. Plaintiffs and CSX
appeal from this order.
I.
Plaintiffs first contend the trial court erred in imposing
sanctions because plaintiffs' factual inquiry was reasonable under
the circumstances. We disagree.
Our Supreme Court has established that sanctions ordered under
Rule 11 are reviewable
de novo by our appellate courts.
Turner v.
Duke University, 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989).
“There are three parts to a Rule 11 analysis: (1) factual
sufficiency, (2) legal sufficiency, and (3) improper purpose. A
violation of any one of these requirements mandates the imposition
of sanctions under Rule 11.”
Dodd v. Steele, 114 N.C. App. 632,
635, 442 S.E.2d 363, 365 (1994) (citations omitted). “If the
appellate court makes these three determinations in the
affirmative, it must uphold the trial court's decision to impose ordeny the imposition of mandatory sanctions under N.C.G.S. § 1A-1,
Rule 11(a).”
Turner, 325 N.C. at 165, 381 S.E.2d at 714.
Plaintiffs contend the trial court erred in finding the
complaint against CSX lacked a reasonable factual basis. “[W]hen
analyzing the factual sufficiency of a complaint, the court must
determine the following: '(1) whether the plaintiff undertook a
reasonable inquiry into the facts and (2) whether the plaintiff,
after reviewing the results of his inquiry, reasonably believed
that his position was well grounded in fact.'”
Page v. Roscoe,
LLC, 128 N.C. App. 678, 681-82, 497 S.E.2d 422, 425 (1998)
(citation omitted).
Prior to filing the complaint shortly before the statute of
limitations expired, Fuller undertook a search using the Internet
to determine the ownership of the railroad crossing. Fuller
discovered that CSX marketed itself as having the largest rail
network in the eastern United States and a significant presence in
Charlotte. Fuller also discovered that CSX owned 2,359 railroad
crossings in North Carolina. Fuller was not able to discover the
actual ownership of the crossing, but concluded as a result of his
research that CSX was a “likely responsible party for the
accident.”
The results of such inquiry fail to support a reasonable
belief that CSX was the owner of the crossing at which the accident
occurred, or was in any way responsible for plaintiffs' accident.
We therefore conclude the trial court did not err in finding
plaintiffs' complaint was factually insufficient under Rule 11.
II.
Both plaintiffs and CSX contest the appropriateness of the
amount of the sanction imposed by the trial court. We find no
abuse of discretion in the sanction ordered by the trial court.
N.C. Gen. Stat. § 1A-1, Rule 11(a) (2003) states in pertinent
part:
If a pleading, motion, or other paper is
signed in violation of this rule, the court,
upon motion or upon its own initiative, shall
impose upon the person who signed it, a
represented party, or both, an appropriate
sanction, which may include an order to pay to
the other party or parties the amount of the
reasonable expenses incurred because of the
filing of the pleading, motion, or other
paper, including a reasonable attorney's fee.
Id. “[I]n reviewing the appropriateness of the particular sanction
imposed, an 'abuse of discretion' standard is proper because '[t]he
rule's provision that the court “shall impose” sanctions for
motions abuses . . . concentrates [the court's] discretion on the
selection of an appropriate sanction rather than on the
decision to
impose sanctions.'”
Turner, 325 N.C. at 165, 381 S.E.2d at 714
(citations omitted).
Plaintiffs contend, without any citation of authority to
support their position, that the sanction imposed should have been
only nominal, as plaintiffs took steps to avoid defendant having to
expend attorney time in defending the case. Our appellate rules
require that “[t]he body of the argument . . . shall contain
citations of authorities upon which the appellant relies.” N.C.R.
App. P. 28(b)(6). Plaintiffs' assignment of error is therefore
deemed abandoned.
See Byrne v. Bordeaux, 85 N.C. App. 262, 265,354 S.E.2d 277, 279 (1987) (holding assignment of error abandoned
for failure to cite authority in support of argument).
CSX, citing
Central Carolina Nissan, Inc. v. Sturgis, 98 N.C.
App. 253, 390 S.E.2d 730 (1990), contends that the trial court
arbitrarily determined a cut-off date for reasonable expenses and
therefore abused its discretion in determining the amount of the
sanction. We disagree.
In
Central Carolina, this Court stated that “[the abuse of
discretion] standard is intended to give great leeway to the trial
court and a clear abuse of discretion must be shown.”
Id. at 264,
390 S.E.2d at 737. In that case, the Court found such a clear
abuse of discretion, determining that the trial court erred in
reducing the established amount of reasonable attorney's fees for
defense of the action based on a finding that the professional
damages were “'mitigated considerably by the extremely honest,
candid and competent representation'” of the respondent's
representation.
Id.
Central Carolina found such a factor
irrelevant in light of the established reasonable cost expended by
the petitioners in defending against the action, and held its use
as a justification for reduction of the sanction to be an abuse of
discretion.
Id.
Unlike in
Central Carolina, where a reasonable fee was found
and then reduced for an arbitrary reason, the trial court here
found that the reasonable cost of defending the action was $487.50,
the amount of attorney's fees expended until 17 June 2004, when
Fuller assured CSX “he would not proceed against them pendingfurther investigation.” The trial court found that no further
actions were taken by plaintiffs against CSX which required legal
action as plaintiffs continued to await written confirmation from
Norfolk Southern that CSX was not a proper party.
In this case, the trial court's findings and conclusions
provided a rational basis for the determination as to the
appropriate attorney's fees to award as sanction. We, therefore,
find no abuse of discretion on the part of the trial court.
As plaintiffs' complaint lacked a reasonable factual basis and
as the trial court did not abuse its discretion in the award of a
sanction, we affirm the order for the reasons stated herein.
Affirmed.
Judges McCULLOUGH and GEER concur.
Report as per Rule 30(e).
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