An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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 Procedure.
NORTH CAROLINA COURT OF APPEALS
Filed: 16 May 2006
JERRY GIBBS, LARRY GIBBS, GARY
BARNETTE, ROLAND STOTESBERRY,
MATTIE BERRY, ANNA MAE GIBBS,
CHARLES GIBBS, REBECCA GIBBS,
REGINA GIBBS, ALISON ELLIS,
GARY ELLIS, BARBARA MEEKINS,
MACLYN GIBBS, ELLIS GIBBS,
JAMES GIBBS, MARK DODGE,
MARY GIBBS, BARBARA SPENCER,
SHERLIN SPENCER, JOHN HERINA,
PEGGY GRANT, GLENN JARVIS, ODESA
JARVIS, and CALVIN B. DAVIS,
individually and on behalf
of HYDE COUNTY,
No. 00 CVS 85
TROY LANE MAYO, D. SCOTT COBLE,
WAYNE TETTER, BARBARA DEESE, WILLIE
GIBBS, CALVIN GIBBS, JR. And NORTH
CAROLINA COUNTIES LIABILITY AND
PROPERTY INSURANCE POOL FUND,
Appeal by plaintiffs from judgment entered 13 January 2005 by
Judge William C. Griffin, Jr., in Hyde County Superior Court.
Heard in the Court of Appeals 7 February 2006.
Carter, Archie, Hassell & Singleton, LLP, by Sid Hassell, Jr.;
and Davis & Davis, by George Thomas Davis, Jr., for
The Twiford Law Firm, P.C., by Edward A. O'Neal, for
Wayland Sermons, Jr., for intervenor Hyde County.
Plaintiffs appeal from an order entered 13 January 2005,
denying their post-trial motion for attorneys' fees. We reverse
In November 2000, plaintiffs filed a complaint against
defendant and several others, alleging in pertinent part that the
defendant, an elected Commissioner for Hyde County, had entered
into illegal contracts to repair the county courthouse and health
center, for which he was paid more than $285,000. Plaintiffs
sought a judgment declaring the subject contracts to be void, and
requiring defendant to return to Hyde County all monies he received
under the contracts. Plaintiffs also asked for attorneys' fees.
Following trial, the jury on 19 August 2002 returned a verdict
against all defendants in the amount of $41,675.45. Plaintiffs
appealed the denial of their motion for Judgment Notwithstanding
the Verdict (JNOV) or for a new trial on the issue of damages;
defendant cross-appealed from the judgment.
This Court filed its opinion 17 February 2004, in Gibbs v.
Mayo, 162 N.C. App. 549, 591 S.E.2d 905, disc. review denied, 358
N.C. 543, 599 S.E.2d 45 (2004) (Gibbs I). In Gibbs I, the Court
reviewed North Carolina's conflict of interest law, N.C. Gen. Stat.
§ 14-234 (2005), which provides in pertinent part that [n]o public
officer or employee who is involved in making or administering a
contract on behalf of a public agency may derive a direct benefit
from the contract[.] G.S. § 14-234(a). The Court held that
because Mayo was an elected county commissioner when he entered
into these contracts, his actions fell within the purview of NorthCarolina's conflict of interest law. Gibbs I, 162 N.C. App. at
557, 591 S.E.2d at 911. Based on this conclusion, the Court
We hold Mayo 'must suffer the loss incident
upon his breach' and is required to return to
Hyde County the full amount of monies he
received from both contracts as he was an
elected commissioner and entered into these
contracts for his own benefit in direct
violation of the conflict of interest law of
North Carolina. The trial court erred in
failing to grant plaintiffs' motion for JNOV
on the issue of damages towards Mayo
Id. (quoting Insulation Co. v. Davidson County, 243 N.C. 252, 255,
90 S.E.2d 496, 498 (1955)). Accordingly, this Court remanded the
case to the trial court and instructed it to, inter alia, grant
plaintiffs' motion for a JNOV on the issue of damages against Mayo
only and enter judgment against him for the full amounts . . . that
he received on both contracts. Gibbs I, 162 N.C. App. at 568, 591
S.E.2d at 917. Following remand, the trial court on 12 July 2004
entered judgment against defendant in the amount of $281,245.25,
which defendant was ordered to pay to Hyde County. On 18 August
2004 this judgment was paid in full. On 30 August 2004 plaintiffs
filed a motion for attorneys' fees, which the trial court denied by
order dated 13 January 2005. From this order plaintiffs timely
Plaintiffs appeal the trial court's denial of their motion for
attorneys' fees. The general rule in this State is that, in the
absence of statutory authority therefor, a court may not include anallowance of attorneys' fees as part of the costs recoverable by
the successful party to an action or proceeding. In re King, 281
N.C. 533, 540, 189 S.E.2d 158, 162 (1972) (citations omitted).
Plaintiffs herein do not assert a statutory basis for attorneys'
fees on the facts of this case.
Under a long-standing exception to this rule, however, a
court in the exercise of equitable jurisdiction, may in its
discretion, and without statutory authorization, order an allowance
for attorney fees to a litigant who at his own expense has
maintained a successful suit for the preservation, protection, or
increase of a common fund or of common property[.] Horner v.
Chamber of Commerce, 236 N.C. 96, 97-98, 72 S.E.2d 21, 22 (1952)
At the time Horner was decided, the common fund doctrine had
been recognized and applied by this Court in various classes of
cases, most common among which are those involving . . . services
furnished by attorneys to (1) next friends of infants or others
under disability and (2) fiduciaries such as receivers, trustees,
and those administering estates of decedents, respecting litigation
involving either the creation or protection of the common fund or
common property. Horner, 236 N.C. at 98, 72 S.E.2d at 22. In
such cases, the common fund at issue generally exists for the
benefit of a small, determinate group of heirs or other
Horner, however, presented a new type of fact pattern, wherein
plaintiff filed suit on behalf of all the taxpayers of defendantCity of Burlington, in order to challenge certain expenditures by
the City. Plaintiffs successfully recovered the subject funds,
which were returned to the City. Thereafter, the plaintiff sought
attorneys' fees, which the trial court denied, on the grounds that
there was no legal basis for the award of attorneys' fees. The
Supreme Court of North Carolina set out the issue thus raised as
The question for decision is this: Can the
plaintiff in a taxpayers' action, who has
recovered for the benefit of a municipality
public moneys unlawfully disbursed and
otherwise lost, be awarded from the amount
recovered and restored to the municipality a
reasonable sum to be used in paying the fees
of his attorney, without a statute expressly
Horner, 236 N.C. at 97, 72 S.E.2d at 22. Following a review of the
relevant jurisprudence of other jurisdictions, the Court held:
[W]e conclude that where, as in the present
case,  on refusal of municipal authorities
to act,  a taxpayer successfully prosecutes
an action to recover, and  does actually
recover and  collect, funds of the
municipality  which had been expended
wrongfully or misapplied, the court has
implied power in the exercise of a sound
discretion to make a reasonable allowance,
from the funds actually recovered, to be used
as compensation for the plaintiff taxpayer's
Id. at 101, 72 S.E.2d at 24. We conclude that, under Horner and
related cases, the trial court has discretion to award attorneys'
fees when the criteria discussed above are met.
A trial court's discretionary ruling on a motion for
attorneys' fees is reviewed for abuse of discretion. See McDaniel
v. McBrayer, 164 N.C. App. 379, 381, 595 S.E.2d 784, 786 (2004)(under applicable statute, trial court's decision to award
attorneys' fees is discretionary; accordingly, court's ruling
will not be overturned absent a showing of abuse of discretion)
(citation omitted). However, the trial court's conclusion of law,
that it has no discretion to award attorneys' fees, is reviewed de
novo. See Friend-Novorska v. Novorska, 163 N.C. App. 776, 777-78,
594 S.E.2d 409, 410 (2004) (although requirements for awarding
attorney's fees are set out in statute, [w]hether the moving
party meets these requirements is a question of law fully
reviewable de novo on appeal) (citation omitted). And, [w]here
a trial court erroneously concludes that it lacks discretion to
award costs, the matter should be remanded to permit the trial
court to exercise its discretion. Cosentino v. Weeks, 160 N.C.
App. 511, 513, 586 S.E.2d 787, 788 (2003) (citing Dixon, Odom & Co.
v. Sledge, 59 N.C. App. 280, 286, 296 S.E.2d 512, 516 (1982)).
In the instant case, the trial court made the following
findings of fact in its order:
1. Although the complaint alleges it was brought
on behalf of Hyde County, there is nothing
before the undersigned to indicate that the
suit was brought by more than the named
2. Based on the decision of the Court of Appeals
in this case, the named plaintiffs are
entitled to no part of the money paid into
Hyde County by defendant Troy Lane Mayo.
3. The North Carolina Court of Appeals dismissed
the claims made by the plaintiffs.
4. The money paid into Hyde County as a
consequence of the appellate decision went tothe County's general fund and inured to the
benefit of all the taxpayers of Hyde County.
5. No finite benefits flowed to the named
6. The money paid in did not constitute a
7. The money paid in does not represent a
determinate fund in which the plaintiffs are
entitled to share.
8. No citizen of Hyde County has any claim to the
money paid in.
9. The plaintiffs have not created a fund at
their own expense or brought into court a fund
in which others may share with them.
10. This was not a class action lawsuit.
The trial court concluded the following:
1. There is no statutory basis for the award of
2. The money paid into the county resulted from
an appellate court decision based on a legal
theory that was not specifically pled.
3. This action was not equitable in nature, but
punitive, thereby limiting the Court's
discretion to award attorney fees.
4. The money paid into Hyde County by the
defendant Mayo does not represent a common
fund as defined by prior decisions of our
Here, the trial court erroneously concluded that, as a matter
of law, its discretion to award attorneys' fees was limited,
based on the court's belief that the case was not equitable in
nature. See, e.g., Horner,
236 N.C. at 100, 72 S.E.2d at 24 (in
this jurisdiction a taxpayers' action like this one is considered
equitable in nature) (citing Waddill v. Masten
, 172 N.C. 582, 586,90 S.E. 694 (1916)). In addition, the trial court erroneously
concluded that, as a matter of law, the funds recovered for Hyde
County could not be considered a 'common fund' as defined by prior
decisions of our appellate courts.
When a trial court fails to exercise its
discretion in the erroneous belief that it has
no discretion as to the question presented,
there is error. Where the error is
prejudicial to a party, that party is entitled
to have the question reconsidered and passed
upon as a discretionary matter. In such
cases, this Court may remand the case or take
such other actions as the rights of the
parties and applicable law may require.
State v. McAvoy
, 331 N.C. 583, 591, 417 S.E.2d 489, 494-95 (1992)
We conclude that the trial court's denial of plaintiffs'
motion for attorneys' fees was based on misapprehension of the law,
and that the trial court does have discretion to award attorneys'
fees. However, we express no opinion on whether the trial court
should, in the exercise of its discretion, award attorneys' fees to
plaintiffs, or on the dollar amount of any such fees. The trial
court's order is reversed and the case remanded for entry of a new
order on plaintiffs' motion for attorneys' fees. It is left to the
court's discretion whether to take additional evidence on this
Reversed and remanded.
Judges McCULLOUGH and ELMORE concur.
Report Per Rule 30(e).
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