PINEWOOD HOMES, INC. and PINEWOOD HOMES, INC., ACTING AS TRUSTEE of
the following trusts: Trust No. 802, Trust No. 1527, Trust No.
224, Trust No. 307, Trust No. 403, Trust No. 404, Trust No. 450,
Trust No. 810, Trust No. 375, Trust No. 2629, Trust No. 310, Trust
No. 730, Plaintiffs v. JULIE HARRIS and DUANE HARRIS; BANK OF
AMERICA CORPORATION as beneficiary by Assignment recorded in Book
901, Page 484 and SOUTHLAND ASSOCIATES, INC. as Trustee under the
Deed of Trust in Book 901, Page 482, Rowan County Registry,
(reference to 802 Overhill Rd., Salisbury, North Carolina); C.M.
PRINCE and wife, MARLENE B. PRINCE as beneficiaries and CLINTON S.
FORBIS, JR. as Trustee under the Deed of Trust in Book 1605, Page
899, Lincoln County Registry, (reference 1527 Westdale Lane,
Lincolnton, North Carolina); FIRST NATIONAL BANK, as beneficiary as
successor in interest to Rowan Savings Bank SSB, Inc. and BRUCE B.
JONES, CLAUDE M. COLVARD, and CARL E. SLOOP, JR., as Trustees under
Deeds of Trust in Book 984, Page 936, Rowan County Registry
(reference 224 Lafayette Street, Salisbury, North Carolina), Book
876, Page 352, Rowan County Registry (reference 307 Edgewood
Circle, China Grove, North Carolina), Book 3009, Page 278, Cabarrus
County Registry (reference 403, Helen Street, Kannapolis, North
Carolina), Book 949, Page 879, Rowan County Registry (reference 404
Chapel Street, Landis, North Carolina), Book 890, Page 204, Rowan
County Registry (reference 450 Neel Road, Salisbury, North
Carolina), Book 914, Page 679, Rowan County Registry (reference 810
Ryan Street, Salisbury, North Carolina); CONSECO FINANCE SERVICING
CORP. as beneficiary as successor in interest to Green Tree
Financial Servicing Corporation and DON E. FUQUAY, as Trustee under
Deed of Trust in Book 832, Page 361, Rowan County Registry
(reference 375 Virginia Avenue, China Grove, North Carolina);
NATIONAL CITY MORTGAGE CO. d/b/a Commonwealth United Mortgage
Company as beneficiary and LINDA K. HARTSELL, as Trustee under Deed
of Trust in Book 2923, Page 291, Cabarrus County Registry
(reference 2629 South Ridge Ave., Kannapolis, North Carolina);
WACHOVIA MORTGAGE COMPANY as beneficiary and NEW SALEM INC. as
Trustee under Deed of Trust in Book 878, Page 947, Rowan County
Registry (reference 310 Fry St., China Grove, North Carolina); and
FIRST NATIONAL BANK, as beneficiary as successor in interest to
Rowan Savings Bank SSB, Inc. and BRUCE D. JONES, CLAUDE M. COLVARD,
and CARL E. SLOOP, JR., as Trustees under Deed of Trust in Book
878, Page 612, Rowan County Registry (reference 730 Saw Rd., China
Grove, North Carolina), Defendants
NO. COA06-690
Filed: 17 July 2007
1. Judgments--preliminary injunction_action not collateral attack
An action by plaintiff corporation, of which a judgment debtor was a shareholder, and a
corporate trustee of certain assets against the judgment creditors for interference with contracts and
business relationships and abuse of process was not an improper collateral attack on a preliminary
injunction in the prior action where the order granting the preliminary injunction had been vacated
and rendered void.
2. Abuse of Process_complaint_statements of claim
The complaint of plaintiff corporation, of which a judgment debtor was a shareholder, and
plaintiff corporate trustee of certain assets stated on abuse of process claim against defendant
judgment creditors where it alleged: (1) defendants had an ulterior motive in seeking an injunction
of coercing plaintiff to pay a judgment it was not obligated to pay and of oppressing its business
activities until the judgment was paid; and (2) defendants maliciously refused to recognize the
validity of the trusts and thus gained an advantage over assets held by the corporation.
3. Wrongful Interference_tortious interference with contract_lack of
justification_sufficiency of allegations
The complaint of plaintiff corporation, of which a judgment debtor was a stockholder, and
plaintiff corporate trustee of certain assets sufficiently alleged the fourth element of lack of
justification to support a claim for tortious interference with contract against defendant judgment
creditors where it alleged: (1) defendant judgment creditors obtained a preliminary injunction against
plaintiffs in relation to a prior judgment not between the present parties; (2) trusts involved in the
case were not owned by the judgment debtor; and (3) defendant judgment creditors did not respond
to a request by plaintiffs to modify the injunction so it would not impact the trusts.
4. Pleadings--motion to amend complaint--answers already filed by parties in the case
The trial court did not abuse its discretion in an interference with contracts and business
relationships and abuse of process case by denying plaintiffs' motion to amend their complaint under
N.C.G.S. § 1A-1, Rule 15(a) in light of the substance of plaintiffs' motion to amend their complaint,
it being filed at the same time as the hearing on defendants' N.C.G.S. § 1A-1, Rule 12(b)(6) motion,
the fact that answers had been filed by parties to the case, and the Court of Appeals' applicable
standard of review.
Judge WYNN concurring in part and dissenting in part.
Appeal by plaintiffs from an order entered 27 January 2006 by
Judge John W. Smith in Rowan County Superior Court. Heard in the
Court of Appeals 23 January 2007.
Ferguson, Scarbrough & Hayes, P.A., by James E. Scarbrough,
for plaintiff-appellants.
Homesley, Jones, Gaines, Dudley, Childress, McLurkin,
Donaldson & Johnson, P.L.L.C., by Mitchell P. Johnson, for
defendant-appellees Julie Harris & Duane Harris.
Robinson, Bradshaw & Hinson, P.A., by Thomas Holderness, for
defendant-appellees New Salem, Inc. and Wachovia Mortgage
Company.
Law Firm of Hutchens, Senter & Britton, by H. Terry Hutchens,
for defendant-appellees National City Mortgage Co. and Linda
K. Hartsell.
Clinton S. Forbis, Jr. for defendant-appellees C.M. Prince,
Marlene B. Prince, and Clinton S. Forbis, Jr.
HUNTER, Judge.
Pinewood Homes, Inc., and Pinewood Homes, Inc., as trustee
(plaintiffs or Pinewood) have asserted claims against Julie and
Duane Harris (defendants) for interference with contracts and
business relationships as well as abuse of process. The purported
cause of action arose after defendants received a judgment in the
amount of $326,901.00 against Pinewood Development Corp., Willow
Creek, LLP, and Ray Ritchie (Ritchie) for allegedly engaging in
fraudulent conduct in the course of a land sale. See Harris et al.
v. Pinewood Development Corp. et al., file 00 CVS 3117, Rowan
County Superior Court. That judgment was not against plaintiffs in
the instant case. Ritchie, however, was a shareholder and the
president of Pinewood on the date of the judgment between Ritchie
and defendants.
After the judgment, defendants were granted a preliminary
injunction against Ritchie and all companies in which he maintains
an ownership interest from selling, disposing of, secreting,
transferring or encumbering any assets until the post-judgment
collection proceedings are completed[.] Among those entities
enjoined by the lower court was Pinewood, and, by extension, the
assets Pinewood holds as trustee. Pinewood was not a named
defendant in the injunction. According to the complaint, neither
Ritchie nor Pinewood maintain an ownership interest in those trust
assets. The preliminary injunction was later vacated by this
Court. Harris v. Pinewood Dev. Corp., 176 N.C. App. 704, 707-08,
627 S.E.2d 639, 642 (2006) (holding that N.C. Gen. Stat. § 1-355does not allow a preliminary injunction to be entered until either
a judgment has been returned wholly or partially unsatisfied or
the terms of N.C. Gen. Stat. § 1-355 are met).
Plaintiffs allege that while that appeal was pending
defendants used the preliminary injunction to try to coerce
Pinewood to pay the judgment that had been entered against Ritchie.
Thus, plaintiffs brought two claims: (1) interference with
contracts and business relationships; and (2) abuse of process,
essentially arguing that Pinewood's business ventures had been shut
down because of the injunction.
Defendants moved to dismiss plaintiffs' complaint for failure
to state a claim under N.C.R. Civ. P. (12)(b)(6). Defendants also
argued that Pinewood's suit was a collateral attack on the
injunction. At the Rule 12 hearing, plaintiffs made a motion to
amend their complaint under N.C.R. Civ. P. 15(a).
The trial court granted the motions to dismiss on the grounds
that granting Pinewood's relief would necessarily require this
court to interpret and either affirm or limit and redefine the
preliminary injunction[.] The complaint was also dismissed
because after taking all allegations as true, there had been no
legitimate claim stated in the complaint. Finally, the trial court
rejected plaintiffs' motion to amend because they could not correct
a fatal defect, and dismissed the complaint with prejudice.
Plaintiffs present the following issues for review: (1)
whether plaintiffs' cause of action is barred by the rule against
collateral attacks and whether the trial court erred in dismissing
plaintiffs' complaint for failure to state a claim; and (2) whetherthe trial court erred in denying plaintiffs' motion to amend the
complaint. After careful consideration we affirm in part, reverse
in part, and remand.
I.
The standard of review on a motion to dismiss pursuant to Rule
12(b)(6) of the North Carolina Rules of Civil Procedure 'is
whether, as a matter of law, the allegations of the complaint,
treated as true, are sufficient to state a claim upon which relief
may be granted under some legal theory.'
Cabaniss v. Deutsche
Bank Secs., Inc., 170 N.C. App. 180, 182, 611 S.E.2d 878, 880
(2005) (quoting
Block v. County of Person, 141 N.C. App. 273,
277-78, 540 S.E.2d 415, 419 (2000)). The complaint must be
liberally construed and should not be dismissed unless it appears
beyond a doubt that plaintiffs could not prove any set of facts to
support the claim which would entitle them to relief.
Id.
Dismissal is proper 'when one of the following three
conditions is satisfied: (1) the complaint on its face reveals
that no law supports the plaintiff's claim; (2) the complaint on
its face reveals the absence of facts sufficient to make a good
claim; or (3) the complaint discloses some fact that necessarily
defeats the plaintiff's claim.'
Newberne v. Department of Crime
Control & Pub. Safety, 359 N.C. 782, 784, 618 S.E.2d 201, 204
(2005) (citation omitted). Before addressing whether plaintiffs'
complaint adequately states a cause of action, we must first
address whether the complaint is barred by the rule against
collateral attacks. [1] Defendants argue that plaintiffs' cause of action is a
collateral attack on the preliminary injunction that had been
previously granted between the parties. We disagree. A collateral
attack is one 'in which a plaintiff is not entitled to the relief
demanded in the complaint unless the judgment in another action is
adjudicated invalid.'
Thrasher v. Thrasher, 4 N.C. App. 534, 540,
167 S.E.2d 549, 553 (1969) (citation omitted). A collateral
attack on a judicial proceeding is 'an attempt to avoid, defeat, or
evade it, or deny its force and effect, in some incidental
proceeding not provided by law for the express purpose of attacking
it.'
Regional Acceptance Corp. v. Old Republic Surety Co., 156
N.C. App. 680, 682, 577 S.E.2d 391, 392 (2003) (citation omitted).
North Carolina does not allow collateral attacks on judgments.
Id.
In this case, a monetary judgment in favor of defendants was
entered against Ritchie and several companies in which he has an
ownership interest on 27 August 2004. None of those companies,
however, were plaintiffs in the current action. After the
judgment, the trial court entered an order on 12 January 2005
granting a preliminary injunction against Ritchie and all companies
in which he has an ownership interest to prevent him from selling,
disposing of, secreting, transferring or encumbering any assets
until the judgment was satisfied. While the injunction was still
in place, plaintiffs filed the current cause of action and the
trial court ruled plaintiffs' action to be a collateral attack and
dismissed the case. After the dismissal of plaintiffs' complaint
by the trial court, and while the present case was pending, wevacated the injunction.
Harris, 176 N.C. App. at 708, 627 S.E.2d
at 642. The issue raised by the parties to this Court is whether
Pinewood, a non-party to the first judgment, may attack the
preliminary injunction arising out of that judgment in a collateral
proceeding. Because we vacated this injunction in
Harris, we need
not fully reach this issue.
Id.
When something is vacated, it is nullified and made void.
Alford v. Shaw, 327 N.C. 526, 543 n.6, 398 S.E.2d 445, 455 n.6
(1990);
see also Black's Law Dictionary
1584 (8th ed. 2004);
Stewert v. Oneal, 237 F. 897, 906 (6th Cir. 1916) (Vacate means to
annul, set aside, or render void; suspend, to stay. When a thing
is vacated it is devitalized). Accordingly, [o]nce [a] judgment
[is] vacated, no part of it could thereafter be the law of the
case.
Alford, 327 N.C. at 543 n.6, 398 S.E.2d at 455 n.6. Thus,
it cannot be said that plaintiffs are attempting to set aside a
judgment, as required by the rule against collateral attacks,
because the prior order granting the preliminary injunction has
been voided and is no longer part of the case between plaintiffs
and defendants.
The dissent contends that [p]laintiffs should either have
filed a counter-complaint for tortious interference at the time the
injunction was sought, or should have waited until after the
injunction had been vacated to file their claim. The dissent,
however, fails to recognize that plaintiffs were neither a party to
the original dispute between Ritchie and defendants nor were they
a party before this Court when we vacated the injunction.
See
Harris, 176 N.C. App. 704, 627 S.E.2d 639. Accordingly, we cannotsay that plaintiffs engaged in a collateral attack when they filed
this current cause of action. Having determined that there was no
collateral attack, we next address whether plaintiffs' complaint
has stated a claim upon which relief may be granted.
A.
[2] Plaintiffs argue that the trial court erred in dismissing
their cause of action for abuse of process. We agree. Abuse of
process is the misapplication of civil or criminal process to
accomplish some purpose not warranted or commanded by the process.
David A. Logan & Wayne A. Logan,
North Carolina Torts § 19.40 at
432 (1996) (citing
Ellis v. Wellons, 224 N.C. 269, 29 S.E.2d 884
(1944)). Two elements must be proved to find abuse of process:
(1) that the defendant had an ulterior motive to achieve a
collateral purpose not within the normal scope of the process used,
and (2) that the defendant committed some act that is a 'malicious
misuse or misapplication of that process
after issuance to
accomplish some purpose not warranted or commanded by the writ.'
Stanback v. Stanback, 297 N.C. 181, 200, 254 S.E.2d 611, 624 (1979)
(citation omitted).
The ulterior motive requirement is satisfied
when the plaintiff alleges that the prior
action was initiated by the defendant or used
by him to achieve a collateral purpose not
within the intended scope of the process used.
The act requirement is satisfied when the
plaintiff alleges that during the course of
the prior proceeding, the defendant committed
some wilful act whereby he sought to use the
proceeding as a vehicle to gain advantage of
the plaintiff in respect to some collateral
matter.
Hewes v. Wolfe and Hewes v. Johnston, 74 N.C. App. 610, 614, 330
S.E.3d 16, 19 (1985) (citations omitted);
see also Stanback, 297
N.C. at 201, 254 S.E.2d at 624.
In
Hewes, this Court held that a complaint alleging that
defendants maliciously filed notices of
lis pendens and notices of
lien on property owned by plaintiffs 'for the purpose of injuring
and destroying the credit business of the plaintiffs and in general
to oppress the plaintiffs[]' satisfied the ulterior motive and act
requirements.
Hewes, 74 N.C. App. at 614, 330 S.E.2d at 19. These
allegations were sufficient because plaintiffs had alleged that the
prior action was filed: (1) to coerce plaintiffs and (2) to
achieve a collateral purpose -- oppression.
Id.
Here, plaintiffs argue that our holding in
Hewes requires us
to hold that plaintiffs have stated a claim upon which relief may
be granted. We agree. Plaintiffs' complaint alleged that: (1)
[d]efendants . . . had an ulterior purpose of
coercing plaintiffs
to pay a judgment they were
not obligated to pay; (2) defendants
maliciously refused to recognize the validity of the trusts; and
(3) have therefore gained an
advantage over the assets held by
plaintiffs. (Emphasis added.) As in
Hewes, these allegations, if
proven, show that the injunction was sought to coerce plaintiffs to
pay a judgment for which they were not responsible and to oppress
their business activities until such judgment was paid. Thus,
defendants' motion to dismiss for failure to state a claim should
have been denied, and we therefore reverse as to this issue. To
hold otherwise would allow a party who has a judgment against a
debtor to seek an injunction against any company in which thedebtor holds stock without serving the company and making them a
party in the proceeding.
The dissent attempts to distinguish
Hewes on the ground that
the plaintiffs in this case have, according to the dissent, not
alleged an act beyond the filing of the injunction. In
Hewes,
however, the act requirement was satisfied by the filing of the
notices of lien and
lis pendens.
Id. The dissent correctly points
out that the mere filing of a lien or
lis pendens would cloud title
to property. We disagree, however, with the implication that an
injunction which plaintiffs alleged to have shut down its business
activities could not have the same impact on their trust assets.
Indeed, the plaintiffs alleged that the injunction caused
plaintiffs to refrain from conducting all lawful activities
relating to the trust assets. If proven, this is more severe than
a
lis pendens which merely puts potential buyers of property on
notice that the property is subject to litigation and that if they
buy it they will take the property subject only to the result of
that pending judgment.
Hill v. Memorial Park, 304 N.C. 159, 164,
282 S.E.2d 779, 782 (1981).
The dissent's reliance on
Lyon v. May, 108 N.C. App. 633, 424
S.E.2d 655,
disc. review denied, 333 N.C. 791, 431 S.E.2d 25
(1993), is misplaced. In that case, we held that defendant
(See footnote 1)
was
entitled to a judgment notwithstanding the verdict because there
was no evidence that [defendant] tried to use the attachment foranything other than its real purpose -- to prevent the transfer of
money which [defendant] believed he was entitled, albeit
mistakenly.
Id. at 640, 424 S.E.2d at 659. It could very well be
that at a later stage in this case plaintiffs will not have
established sufficient evidence to prevail on the abuse of process
claim, but we are reviewing this case at the motion to dismiss
phase. As stated, in reviewing a motion to dismiss plaintiffs are
entitled to have all allegations treated as true and to have the
complaint liberally construed.
Cabaniss, 170 N.C. App. at 182, 611
S.E.2d at 880. Accordingly, we do not find
Lyon persuasive on this
issue.
B.
[3] Plaintiffs next argue that the trial court erred in
dismissing their cause of action for tortious interference with a
contract. The elements of a tortious interference with a contract
claim are: (1) a valid contract existed between the plaintiff and
a third person, conferring upon the plaintiff some contractual
right against the third person; (2) the defendant knows of the
contract; (3) the defendant intentionally induces the third person
not to perform the contract; (4) the defendant acts without
justification; and (5) the defendant's conduct causes actual
pecuniary harm to the plaintiffs.
Childress v. Abeles, 240 N.C.
667, 674, 84 S.E.2d 176, 181-82 (1954). Defendants attack only the
fourth element (lack of justification) in plaintiffs' complaint;
consequently, we address only that issue and express no opinion as
to whether plaintiffs have established the other elements of
tortious interference with a contract. A motion to dismiss a claim of tortious interference is
properly granted where the complaint shows the interference was
justified or privileged.
Peoples Security Life Ins. Co. v. Hooks,
322 N.C. 216, 220, 367 S.E.2d 647, 650 (1988). 'In general, a
wrong purpose exists where the act is done other than as a
reasonable and
bona fide attempt to protect the interest of the
defendant which is involved.'
Id. (citation omitted).
Interference of the contract must be without justification.
The interference is 'without justification' if the defendants'
motives . . . were 'not reasonably related to the protection of a
legitimate business interest' of the defendant.
Privette v.
University of North Carolina, 96 N.C. App. 124, 134, 385 S.E.2d
185, 190 (1989) (quoting
Smith v. Ford Motor Co., 289 N.C. 71, 94,
221 S.E.2d 282, 292 (1976)). Accordingly, we have held that the
complaint must admit of no motive for interference other than
malice.
Privette, 96 N.C. App. at 134-35, 385 S.E.2d at 191;
Sides
v. Duke University, 74 N.C. App. 331, 346, 328 S.E.2d 818, 829
(1985),
rev'd on other grounds, Kurtzman v. Applied Analytical
Industries, Inc., 347 N.C. 329, 493 S.E.2d 420 (1997).
At the outset, we note that plaintiffs' complaint has alleged
that the actions of defendants in seeking the injunction were taken
maliciously and without justification. Defendants correctly point
out, however, that general allegations of malice are insufficient
as a matter of pleading.
See Equipment Co. v. Equipment Co., 263
N.C. 549, 559, 140 S.E.2d 3, 11 (1965). Thus, we must determine
whether plaintiffs' have alleged a factual basis to support the
claim of malice. We conclude that they have. Here, plaintiffs have alleged that the seeking of the
injunction was the malicious act. This is a factual basis
supporting plaintiffs' assertion of malice. Specifically, the
complaint makes the following allegations:
38. Plaintiffs were not parties to
Harris v. Ritchie, file 00 CVS 3117, Rowan
County.
39. The real estate title held in trust
by plaintiffs is not subject to the money
judgment entered in Harris v. Ritchie, file 00
CVS 3117, Rowan County.
40. In an effort to coerce payment of
the judgment in 00 CVS 3117, defendants Harris
have unlawfully pursued a course of action
culminating in an injunction against
plaintiffs. . . . Said injunction was
obtained without notice to plaintiffs or the
holders of deed of trust liens described
herein.
41. Pursuant to a court order obtained
by defendants Harris in Harris v. Ritchie
. . . , plaintiffs produced trust documents
and corporate records for inspection by
defendants Harris. Despite reviewing the
documents, defendants Harris have continued to
pursue a course of action to make the assets
held in trust subject to the judgment in 00
CVS 3117.
42. For the further purpose of coercing
plaintiffs to pay the judgment in 00 CVS 3117,
defendants Harris have intentionally and
maliciously refused to recognize the validity
of plaintiff's corporate status and the status
of the trusts.
43. The actions of defendants Harris
have been without just cause or excuse with
the intent to injure plaintiffs and reach the
assets held in trusts.
44. Defendants Harris knew or should
have known that the trust assets are subject
to deed of trust liens. Said deed of trust
liens are a matter of public record.
45. The actions of defendants Harris
have threatened and continue to threaten the
viability of the trusts and the trust assets
and will cause a default under the terms of
the security instruments executed by
plaintiffs to secure payment of the deed of
trust notes.
46. As a result of the wrongful acts of
defendants Harris, plaintiffs have been
prevented from conducting business and the
value of the trust assets have been adversely
affected. Plaintiffs have been damaged in an
amount in excess of $10,000.00.
In summation, the complaint alleges the following factual
allegations: (1) that a preliminary injunction against plaintiffs
was obtained in relation to a prior judgment not between the
parties; (2) that the trusts involved in this case are not owned by
Ritchie; and (3) that defendants did not respond to plaintiffs'
request to modify the injunction so that it would not impact the
trusts. If proved, these factual allegations tend to support
plaintiffs' accusation of malice. Thus, assuming without deciding
that plaintiffs' complaint establishes the other elements of
interference with a contract, defendants' motion to dismiss for
failure to state a claim should have been denied and we therefore
reverse as to this issue.
II.
[4] Lastly, plaintiffs argue that the trial court erred in
denying their motion to amend their complaint. We disagree.
We review a denial of a motion to amend under Rule 15(a) for
abuse of discretion.
Smith v. McRary, 306 N.C. 664, 671, 295
S.E.2d 444, 448 (1982). An abuse of discretion will be found where
a trial court's ruling 'is manifestly unsupported by reason or is
so arbitrary that it could not have been the result of a reasoneddecision.'
State v. Campbell, 359 N.C. 644, 673, 617 S.E.2d 1, 19
(2005),
cert. denied, ___ U.S. ___, 164 L. Ed. 2d 523 (2006)
(citation omitted).
In the instant case, plaintiffs moved to amend their complaint
as a matter of course under N.C.R. Civ. P. 15(a). In substance,
plaintiffs sought to amend the complaint to make it clear that
plaintiffs seek a judgment declaring that (a) the trusts are valid
and (b) the assets of the trusts are not subject to the judgment.
All of the proposed language was related to their first claim for
relief for a declaratory judgment that the money judgment against
Ritchie was not a lien against the assets or trusts held by
plaintiffs. That claim for relief, however, was subsequently
dismissed on 27 June 2006. It would follow then, that plaintiffs'
motion to amend would be rendered moot. Plaintiffs' complaint,
however, contained a sentence in each section that [t]he
allegations of the preceding paragraphs are adopted, re-alleged and
incorporated herein by reference. Accordingly, the language in
the proposed amendments would apply to all of plaintiffs' remaining
claims for relief. That said, we are unable to say that the trial
court abused its discretion in denying plaintiffs' request to amend
their complaint.
Plaintiffs argue in their brief to this Court that no
responsive pleadings had been filed prior to their motion to amend
their complaint because the three parties who had filed answers at
that point were only joined in the action to afford complete
relief and to make them bound by the outcome, not for any
affirmative relief. Rule 15(a), however, refers only to a party'sright to amend once as a matter of course at any time before a
responsive pleading is served, and makes no distinction among how
named parties should be treated under the rule. N.C.R. Civ. P.
15(a). Plaintiff cites no authority to the contrary. Thus,
plaintiffs' right to amend as a matter of course terminated when
one of the parties filed a responsive pleading.
In light of the substance of plaintiffs' motion to amend their
complaint, it being filed at the same time as the hearing on
defendants' Rule 12(b)(6) motion, the fact that answers had been
filed by parties to the case, and this Court's applicable standard
of review, we cannot say that the trial court abused its discretion
in ruling on plaintiffs' motion to dismiss. Thus, we affirm the
ruling of the trial court as to this issue.
III.
In summary, we hold that plaintiffs' cause of action is not
barred by the rule against collateral attacks. We also hold that
plaintiffs have stated a valid claim for abuse of process and that
they have sufficiently alleged that defendants acted without
justification in seeking the injunction. Finally, we hold that the
trial court did not err when it denied plaintiffs' motion to amend
their complaint. Therefore, we reverse the judgment of the trial
court and remand for further proceedings consistent with this
opinion.
Affirmed in part; reversed in part and remanded.
Judge STEELMAN concurs.
Judge WYNN concurs in part and dissents in part in a separate
opinion.
WYNN, Judge, concurring in part and dissenting in part.
I concur with that portion of the majority opinion that
affirms the trial court's denial of Plaintiff's motion to amend
their complaint. However, because I find that the timing of
Plaintiffs' complaint for tortious interference makes it a
collateral attack on the preliminary injunction sought by
Defendants, I would affirm the trial court's dismissal of that
cause of action. Additionally, after reviewing Plaintiffs'
original complaint for abuse of process, I conclude they failed to
allege any facts that would support a claim of abuse of process.
Therefore, I respectfully dissent.
I.
II.
On a Rule 12(b)(6) motion to dismiss, a trial court must
determine whether, as a matter of law, the allegations of the
complaint, treated as true, state a claim upon which relief can be
granted.
Isenhour v. Hutto, 350 N.C. 601, 604, 517 S.E.2d 121, 124
(1999). Dismissal under Rule 12(b)(6) is proper when one of the
following three conditions is satisfied: (1) the complaint on its
face reveals that no law supports the plaintiffs' claim, (2) the
complaint on its face reveals the absence of facts sufficient to
make a good claim, or (3) the complaint discloses some fact that
necessarily defeats the plaintiffs' claim.
Oates v. JAG, Inc., 314
N.C. 276, 278, 333 S.E.2d 222, 224 (1985). A claim should not be
dismissed unless it appears beyond doubt that the plaintiff can
prove no set of facts in support of his claim that would entitle
him to relief.
Garvin v. City of Fayetteville, 102 N.C. App. 121,
123, 401 S.E.2d 133, 134-35 (1991).
In order to prove abuse of process, a plaintiff must show (1)
an ulterior motive in the use of process and (2) a wilful act in
the misuse of process after issuance to accomplish some purpose not
warranted by the writ.
Stanback v. Stanback, 297 N.C. 181, 200,254 S.E.2d 611, 624 (1979). The majority concludes that Plaintiffs
in the instant case alleged facts in their complaint sufficient, if
proven, to make a good claim for abuse of process. In particular,
the majority finds that Plaintiffs' allegations of Defendants'
ulterior purpose of coercing plaintiffs to pay, malicious[]
refus[al] to recognize the validity of the trusts, and attempt to
gain an advantage over the assets held by Plaintiffs, are enough
to withstand a Rule 12(b)(6) motion to dismiss. I disagree.
Unlike in
Hewes v. Wolfe and Hewes v. Johnston, 74 N.C. App.
610, 330 S.E.2d 16 (1985), Defendants in the instant case did not
file notices of liens or
lis pendens against the real estate held
by Plaintiffs. Defendants' sole action against Plaintiffs here was
to seek the preliminary injunction; no facts were alleged in
Plaintiffs' complaint that Defendants then committed some wilful
act and used the injunction for anything other than the purpose for
which it was intended - namely, to prevent the sale or transfer of
assets to which Defendants believed they were entitled, even if
mistakenly.
In
Hewes, the liens and
lis pendens were filed while an action
was still pending alleging the misuse of, and failure to account
for, partnership assets; the complaint alleged that the notices of
liens and
lis pendens were filed for the purpose of injuring and
destroying the credit business of the plaintiffs and in general to
oppress the plaintiffs, purposes for which such processes were
never intended. 74 N.C. App. at 614, 330 S.E.2d at 19. The mere
filing of those notices would have clouded the title to the real
estate in question, whereas here, Defendants would have had to takesome further affirmative action, in addition to obtaining the
injunction, in order to gain an advantage over the assets held in
trust by plaintiffs. Plaintiffs' complaint alleges no such
further wilful act by Defendants to coerce Plaintiffs to pay Mr.
Ritchie's judgment.
The facts of this case are analogous to those in
Lyon v. May,
108 N.C. App. 633, 424 S.E.2d 655,
disc. review denied, 333 N.C.
791, 431 S.E.2d 25 (1993), in which this Court concluded the
defendant did not establish the elements of a claim for abuse of
process, and the plaintiff was therefore entitled to judgment
notwithstanding the verdict on that issue. In
Lyon, we found that
there was no evidence that plaintiff tried to use the attachment
[to proceeds] for anything other than its real purpose _ to prevent
the transfer of money which plaintiff believed he was entitled,
albeit mistakenly.
Id. at 640, 424 S.E.2d at 659. Even though
the plaintiff was not entitled to attachment of the proceeds,
that does not change the fact that plaintiff used the attachment
for its true purpose.
Id.
Likewise, here, no facts are alleged in Plaintiffs' complaint
that would support their assertions that Defendants used the
injunction to coerce them into paying Mr. Ritchie's judgment.
Plaintiffs' language as to Defendants' ulterior purpose,
coerc[ion], malicious refus[al], and attempt to gain an
advantage are not factual allegations, but legal conclusions and
are accordingly not entitled to a presumption of truth in
considering a Rule 12(b)(6) motion to dismiss.
Miller v. Rose, 138
N.C. App. 582, 592, 532 S.E.2d 228, 235 (2000);
see also Sutton v.Duke, 277 N.C. 94, 98, 176 S.E.2d 161, 163 (1970) (internal
citation omitted) (in discussing the newly adopted North Carolina
Rules of Civil Procedure, quoting with approval the statement that,
For the purpose of [a Rule 12(b)(6)] motion, the well-pleaded
material allegations of the complaint are taken as admitted; but
conclusions of law or unwarranted deductions of fact are not
admitted.).
Because Plaintiffs merely recite the legal terms used in the
definition of a claim of abuse of process without alleging facts
that would serve to support those legal conclusions, I would affirm
the trial court's granting of Defendants' Rule 12(b)(6) motion to
dismiss.
Footnote: 1