An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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: 1 August 2006
PATRICIA B. LOCKE,
No. 04 CVS 1483
EDWARD NORRIS GLENN,
Appeal by defendant from judgment and order entered 15 July
2005 by Judge V. Bradford Long in Randolph County Superior Court.
Heard in the Court of Appeals 8 June 2006.
Gavin Cox Pugh and Wilhoit, LLP, by Alan V. Pugh, for
Bunch Robins & Stubblefield, LLP, by W. Edward Bunch, for
Defendant appeals from judgment and order entered in equity
imposing a constructive trust and ordering defendant to convey a
one-half undivided interest in certain property owned by defendant
located in North Carolina. We affirm.
Plaintiff, Patricia Locke (Ms. Locke) filed suit against
defendant, Edward Glenn (Mr. Glenn) on 22 July 2004, alleging an
oral promise to repay money borrowed for the benefit of Mr. Glenn,
failure to repay, and resulting unjust enrichment. Ms. Locke
further prayed the court to impose a constructive trust on the
property acquired by Mr. Glenn with the money borrowed and a liento be declared on such property. Mr. Glenn thereafter filed an
answer denying the existence of an oral promise to pay money used
for his benefit and further stating that the complaint filed by Ms.
Locke failed to state a claim upon which relief could be granted.
The trial court entered an order denying Mr. Glenn's motion to
dismiss on 2 May 2005.
Mr. Glenn then filed a motion for partial summary judgment on
the ground that there was no material issue of fact relating to
jurisdiction which was subsequently denied by the trial court. The
case proceeded to trial on 13 June 2005 before Judge V. Bradford
Long. Ms. Locke presented the following evidence at trial:
In 1991 Mr. Glenn and Rose Glenn, his wife at the time,
acquired a 10.58-acre tract of property in Randolph County, North
Carolina which was held jointly by the married couple. Mr. Glenn
and Rose Glenn were separated and eventually entered into a consent
order agreeing to a division of property as part of equitable
distribution. The consent order provided that the deed to the
10.58-acre tract of land was to be signed over to Mr. Glenn in
exchange for certain payments.
During the course of the separation, Ms. Locke and Mr. Glenn
began living together sometime around September or October of 1998
in New Jersey. In 2002, the payments required of Mr. Glenn became
due under the consent order, but he did not have the money to pay
off all the debts owed. Ms. Locke and Mr. Glenn thereafter entered
into an oral agreement that Ms. Locke would obtain a loan for
$50,000.00 which would enable Mr. Glenn to pay the money due underthe consent order and in turn, Mr. Glenn promised to repay the
money as it came due. Several checks were drawn on the line of
credit to pay the amount due under the consent order and the
remaining $15,363.00 was deposited into an account which was used
by Mr. Glenn to make improvements to the 10.58-acre tract of
property in North Carolina and the structure thereon. After payment
to Mr. Glenn's former wife was made, the deed to the 10.58-acre
property was signed over to Mr. Glenn, making him the sole owner of
the property. Mr. Glenn made all of the payments as they came due
on the equity line until April 2004, when he ceased all payments.
At the close of Ms. Locke's evidence, Mr. Glenn made a motion to
dismiss which was denied by the trial court.
Mr. Glenn contended at trial that Ms. Locke continued to have
possession of his tools and further that he was owed $150,000.00
for improvements he made to her house. However, Mr. Glenn did not
file a counterclaim or assert accord and satisfaction in his
pleadings. At the close of all the evidence, Mr. Glenn renewed his
motion to dismiss which was denied by the trial court.
The trial judge entered a judgment and order in equity on 15
June 2005 finding that there was an oral agreement between the
parties to repay the $50,000.00 loan which was disbursed for the
use and benefit of Mr. Glenn. The judge further found that the
entire $50,000.00 loan was used by Mr. Glenn to pay marital debts
required under the consent order, to obtain title to the 10.58-acre
tract of land by acquiring his former wife's 1/2 interest in the
property, to make improvements to the property, and to acquirefixtures and personalty located on the land. The court found that
Mr. Glenn failed to repay the money as promised and that there was
no evidence of any agreement that either party expected payment,
credit, or remuneration for the improvements made to Ms. Locke's
home by Mr. Glenn. The judge then concluded that Mr. Glenn had been
unjustly enriched, and therefore Ms. Locke was entitled to the
imposition of a constructive trust through the transfer of title as
to a 1/2 undivided interest in the 10.58-acre property which was
acquired pursuant to funds she provided to Mr. Glenn.
Defendant now appeals.
Mr. Glenn first contends on appeal that the suit was barred by
the statute of frauds and that the trial court further lacked
jurisdiction over him as a defendant. We find no merit to these
Mr. Glenn argues on appeal that the action should have been
dismissed based on the defenses of failure to comply with the
statute of frauds and lack of personal jurisdiction. However,
neither defense was pled in defendant's initial pleading to the
trial court. Where a litigant fails to plead the affirmative
defense of statute of frauds as required by N.C. Gen. Stat. § 1A-1,
Rule 8(c), the benefit of the defense is thereby waived and the
litigant is further precluded from asserting such defense on
appeal. N.C. Gen. Stat. § 1A-1, Rule 8(c) (2005); Danjee, Inc. v.Addressograph Multigraph Corp., 44 N.C. App. 626, 632, 262 S.E.2d
665, 669, cert. denied, 300 N.C. 196, 269 S.E.2d 623 (1980).
Likewise, to preserve the defenses of insufficiency of
service, service of process, and lack of personal jurisdiction, the
defendant must assert them in either a motion filed prior to any
responsive pleading or include them in his answer or other
responsive pleading permitted by the Rules of Civil Procedure. N.C.
Gen. Stat. § 1A-1, Rule 12(h)(1) (2005). Where defendant failed to
plead the statute of frauds as an affirmative defense and further
failed to raise the defense of lack of personal jurisdiction in his
answer as his first responsive pleading to the court, it is thereby
waived. Therefore, the corresponding assignments of error are
It appears from the arguments set forth in the brief that Mr.
Glenn further contends that the trial court lacked subject matter
jurisdiction in the instant action. We find no merit in the
contention that the court lacked subject matter jurisdiction.
Subject matter jurisdiction is conferred upon the courts by
either the North Carolina Constitution or by statute. Article I, §
18 of the North Carolina Constitution states: All courts shall be
open; every person for an injury done him in his lands, goods,
person, or reputation shall have remedy by due course of law; and
right and justice shall be administered without favor, denial, or
delay. Subject matter jurisdiction is statutorily conferred on thetrial divisions of the General Court of Justice in this state under
N.C. Gen. Stat. § 7A-240 which states:
Except for the original jurisdiction in
respect of claims against the State which is
vested in the Supreme Court, original general
jurisdiction of all justiciable matters of a
civil nature cognizable in the General Court
of Justice is vested in the aggregate in the
superior court division and the district court
division as the trial divisions of the General
Court of Justice. Except in respect of
proceedings in probate and the administration
of decedents' estates, the original civil
jurisdiction so vested in the trial divisions
is vested concurrently in each division.
N.C. Gen. Stat. § 7A-240 (2005). It is, therefore, evident that
except for areas specifically placing jurisdiction elsewhere (such
as claims under the Workers' Compensation Act) the trial courts of
North Carolina have subject matter jurisdiction over all
justiciable matters of a civil nature[.] Id. The dispute arising
in equity between the parties in this case is a justiciable matter
which is cognizable in our courts, and therefore the court properly
determined that it had subject matter jurisdiction.
Moreover, were this assignment of error to be construed as yet
another attempt to assert the defense of lack of personal
jurisdiction, as stated, supra, where Mr. Glenn failed to raise
this defense in his first responsive pleading or a motion prior to
the first responsive pleading, this defense is deemed waived. N.C.
Gen. Stat. § 1A-1, Rule 12(h)(1).
Therefore, this assignment of error is overruled.
It is further contended on appeal that the trial court erred
in denying Mr. Glenn's motions to dismiss raised at trial. We
The gravamen of Mr. Glenn's argument on appeal is that Ms.
Locke's claims for the imposition of a constructive trust should
have been dismissed where she failed to show any fraud or breach of
duty. However, a showing of actual fraud nor a distinct breach of
duty is required; rather, a constructive trust may be imposed when
equity requires due to actions contrary to conscientious manner.
See Electric Co. v. Construction Co., 267 N.C. 714, 719, 148 S.E.2d
856, 860 (1966); see also Speight v. Trust Co., 209 N.C. 563, 566,
183 S.E. 734, 736 (1936) (Equity impresses a constructive trust
where legal title is obtained by violation of fiduciary
relationship or in any other unconscientious manner[.]).
A constructive trust is an equitable remedy 'to prevent the
unjust enrichment of the holder of title to, or of an interest in,
property which such holder acquired through fraud, breach of duty
or some other circumstance making it inequitable for him to retain
it against the claim of the beneficiary of the constructive
trust.' Roper v. Edwards, 323 N.C. 461, 464, 373 S.E.2d 423,
424-25 (1988) (citation omitted). Where the retention of property
by the holder of the legal title would result in unjust enrichment,
such inequitable conduct, short of actual fraud, will give rise to
a constructive trust. Id. Where certain facts exist evincing that
one has obtained legal title to property against equity and goodconscience, the imposition of a constructive trust is wholly
appropriate, and actual fraud need not be established. Id.
The facts adduced at trial clearly showed that Ms. Locke
obtained a loan for $50,000.00, which was disbursed for the sole
use and benefit of Mr. Glenn; that Mr. Glenn used such money to pay
off marital debts, acquire title to the 10.58-acre tract of
property from his former wife, and purchase fixtures and personalty
for the 10.58-acre property. It was further adduced that there was
a distinct agreement between the two parties that Ms. Locke would
help Mr. Glenn by obtaining the financing but that he was expected
and agreed to repay the money borrowed; that Mr. Glenn paid each
installment of the money owed until ceasing all payments in April
2004, and that Ms. Locke was now required to make the payments on
the loan for money used for the sole benefit of Mr. Glenn.
Where the facts taken in the light most favorable to Ms. Locke
constituted substantial evidence that Mr. Glenn obtained title to
the 10.58-acre tract of property, contrary to good conscience and
equity, and that retention of such full title would result in
inequity, the trial court properly denied the motion to dismiss.
Therefore, this assignment of error is overruled.
Lastly, Mr. Glenn objects to the trial court's finding of fact
# 5 that he made substantial improvements to Ms. Locke's house but
failing to give him any credit or set-off for these improvements in
the judgment. We find no merit to this contention. Because the challenged finding is supported by competent
evidence in the record, it must be affirmed. Shamley v. Shamley
117 N.C. App. 175, 180, 455 S.E.2d 435, 438 (1994) (The trial
court's findings of fact are conclusive if supported by any
competent evidence and judgment supported by such findings will be
affirmed, even though there may be evidence to the contrary.).
The trial judge weighs the evidence, passes upon the credibility
of witnesses and the weight to be given their testimony, and draws
the reasonable inferences therefrom. Lyerly v. Malpass
, 82 N.C.
App. 224, 225-26, 346 S.E.2d 254, 256 (1986), disc. review denied
318 N.C. 695, 351 S.E.2d 748 (1987). If different inferences may
be drawn from the evidence, he determines which inferences shall be
drawn and which shall be rejected. Williams v. Insurance Co.
N.C. 338, 342, 218 S.E.2d 368, 371 (1975). The trial court
sometimes makes findings of fact which resolve conflicts in the
evidence; these findings are binding on appellate courts. Id.
Mr. Glenn specifically contends that the trial court erred in
failing to give him any credit in the judgment for improvements
made to Ms. Locke's home. However, there was no evidence adduced at
trial showing that there was ever any agreement between Mr. Glenn
and Ms. Locke that either party expected payment, credit, or
remuneration for the improvements made to Ms. Locke's home by Mr.
Glenn. Therefore, this assignment of error is overruled.
Accordingly, the trial court did not err in denying Mr.
Glenn's motion to dismiss and properly made findings of fact based
on the evidence presented at trial. Further, the record on appealcontains additional assignments of error which are not properly
addressed by defendant in his brief to this Court. Pursuant to
N.C.R. App. P. 28(b)(6), we deem them abandoned. Moreover, to the
extent that Mr. Glenn attempts to appeal the denial of the pretrial
motion to dismiss and denial of the motion for partial summary
judgment, where he failed to give any notice of appeal from the
denial of such orders pursuant to N.C.R. App. P. 3, any appeal
therefrom is improper.
Judges HUDSON and TYSON concur.
Report per Rule 30(e).
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