Appeal by plaintiffs from judgment entered 14 October 2005 and
orders entered 14 December 2005, 17 January 2006 and 20 January
2006 by Judge J. Marlene Hyatt in Haywood County Superior Court.
Heard in the Court of Appeals 24 January 2007.
Jeffrey W. Norris and Associates, PLLC, by Jeffrey W. Norris,
for plaintiff-appellants James D. Blyth and Elk Country
Realty, Inc.
Moody & Brigham, PLLC, by Fred H. Moody, Jr., for defendant-
appellees Samuel E. McCrary, Country Squire Real Estate,
Country Squire Enterprises, Inc., Country Squire Enterprises,
Inc. d/b/a Country Squire Real Estate.
Melrose, Seago & Lay, P.A., by Randal Seago, for defendant-
appellees Peter and Karen Hession.
Wenzel & Wenzel, PLLC, by Derek M. Wenzel, for defendant-
appellees Scott Greenhalge and Blue Sky Group, Inc.
STROUD, Judge.
Plaintiffs appeal from the 14 October 2005 judgment of the
trial court granting a directed verdict in favor of defendant KarenHession and, following a jury verdict, dismissing with prejudice
plaintiffs' claims as to all defendants except William Gunn.
Plaintiffs also appeal from the 14 December 2005 order of the trial
court denying plaintiffs' motion for judgment notwithstanding the
verdict, for amendment of judgment, or for a new trial. Finally,
plaintiffs appeal from the 17 January 2006 orders of the trial
court awarding costs and attorneys' fees to defendants Samuel
McCrary, Country Squire Real Estate, County Squire Enterprises,
Inc., County Squire Enterprises, Inc. d/b/a Country Squire Real
Estate (hereinafter collectively referred to as “defendants
McCrary”) and to defendants Scott Greenhalge and Blue Sky Group,
Inc. (hereinafter collectively referred to as “defendants
Greenhalge”), and from the 20 January 2006 order of the trial court
awarding attorneys' fees and costs to defendants Peter and Karen
Hession (hereinafter collectively referred to as “defendants
Hession”). For the reasons stated below, ten of plaintiffs'
assignments of error are dismissed because plaintiffs did not
follow the North Carolina Rules of Appellate Procedure. As to the
other assignments of error, we reverse the trial court judgment
dismissing with prejudice plaintiffs' claims for defamation against
defendant Peter Hession, defendants McCrary, and defendants
Greenhalge and the unfair and deceptive trade practices (UDTP)
claim against defendant Scott Greenhalge and remand for a new
trial; and we reverse the trial court order awarding attorneys'fees and costs to defendants Greenhalge and remand for findings of
fact and appropriate conclusions of law.
I. Background
Plaintiff Elk Country Realty conducts business in the Haywood
County real estate market. Plaintiff James D. “Jim” Blyth is the
owner of Elk Country Realty. Defendant Samuel E. McCrary owns
Country Squire Real Estate. Defendant Peter Hession is retired and
owns a bed and breakfast. Defendant Scott Greenhalge is also a
real estate developer and owns Blue Sky Group. In 2004, defendant
Scott Greenhalge worked, without compensation, as office manager of
Country Squire Real Estate. Defendants compete with plaintiffs in
the Haywood County real estate market. Sometime in early 2004, two
separate documents bearing the name of “Concerned Citizens of
Maggie Valley” began to circulate in the Haywood County business
community. These documents stated that Jim Blyth, owner of Elk
Country Realty, was a felon who defrauded the elderly with Ponzi
schemes.
(See footnote 1)
There is evidence in the record that defendants
circulated these documents and verbally communicated the
information in them, in an effort to harm plaintiff Blyth and his
business, plaintiff Elk Country Realty.
Plaintiffs filed a verified complaint against defendants
Samuel E. McCrary and Country Squire Real Estate on 30 March 2004,alleging defamation, tortious interference with contract, tortious
interference with prospective contracts, and wrongful interference
with a business relationship. Plaintiffs subsequently amended the
complaint, adding claims for UDTP and adding additional defendants,
filing the third and final amended complaint on or about 14 October
2004. Plaintiffs sought compensatory and punitive damages, and
equitable and injunctive relief.
Defendants filed separate answers, all denying the material
allegations of the complaint. In addition to denying the material
allegations of the complaint, the answers of defendants McCrary and
Hession pleaded the affirmative defense of truth. Defendants
Hession also pleaded the affirmative defense of privilege and
asserted a counterclaim for tortious interference with contract
against plaintiff Blyth. Plaintiff Blyth moved for summary
judgment on defendants Hession's counterclaim on or about 1 June
2005. The trial court granted summary judgment in favor of
plaintiff Blyth on defendants Hession's counterclaim on or about 17
August 2005.
On 15 July 2005, defendants Greenhalge, noting that plaintiffs
had voluntarily dismissed the claims against them for tortious
interference with contract and tortious interference with
prospective contract, moved for summary judgment as to plaintiffs'
claims for defamation, UDTP, and wrongful interference with a
business relationship. There is nothing in the record showing that
this motion was ever ruled on by the trial court. DefendantsMcCrary moved for summary judgment as to all of plaintiffs' claims
on or about 31 May 2005. The trial court entered summary judgment
in favor of defendants McCrary on 16 August 2005 as to the claims
of tortious interference with contract, tortious interference with
prospective contracts, equitable and injunctive relief, UDTP, and
wrongful interference with a business relationship.
Defendants Hession moved for summary judgment as to all of
plaintiffs' claims on 31 May 2005. The trial court entered summary
judgment on or about 17 August 2005 in favor of defendants Hession
as to the claims for tortious interference with contract, tortious
interference with prospective contracts, UDTP, and wrongful
interference with a business relationship. However, the trial
court denied the motions for summary judgment filed by defendants
Hession and McCrary as to plaintiffs' claims for defamation.
Plaintiffs' defamation claims were tried from 4 to 7 October
2005, in Superior Court, Haywood County. The trial court granted
a directed verdict in favor of Karen Hession. The jury then found
against plaintiffs on all remaining claims submitted to it. The
trial court entered judgment on 14 October 2005, dismissing
plaintiffs' complaints with prejudice as to all defendants except
William Gunn. On 20 October 2005, plaintiffs moved for Judgment
Notwithstanding The Verdict, And To Amend the Judgment, or
alternatively, For A New Trial. Those motions were denied by the
trial court on 14 December 2005. On or about 23 November 2005, defendants Hession moved the
trial court to tax costs and attorney fees to plaintiffs pursuant
to N.C. Gen. Stat. § 75-16.1, N.C. Gen. Stat. § 1A-1, Rule 11, and
N.C. Gen. Stat. § 1A-1, Rule 26. The trial court granted this
motion on 20 January 2006. On or about 1 December 2005, defendants
McCrary moved the trial court to tax costs and attorney fees to
plaintiffs pursuant to N.C. Gen. Stat. § 75-16.1 and N.C. Gen.
Stat. § 1D-45. The trial court granted this motion on 17 January
2006. On or about 30 November 2005, defendants Greenhalge moved
the trial court to tax costs and attorney fees to plaintiffs
pursuant to N.C. Gen. Stat. § 75-16.1 and N.C. Gen. Stat. § 1A-1,
Rule 11. The trial court granted this motion on 17 January 2006.
Plaintiffs appeal from the judgment entered 14 October 2005, from
the order denying their motions for post-trial relief entered on 14
December 2005, and from the orders awarding attorneys' fees and
costs entered on 17 and 20 January 2006.
II. Violations of Procedural Rules
Ten of plaintiffs' assignments of error are dismissed for
procedural reasons. Therefore, we will not review them.
[1] “[A] notice of appeal 'must designate the judgment or
order from which appeal is taken.' Without proper notice of
appeal, the appellate court acquires no jurisdiction.”
Bromhal v.
Stott, 116 N.C. App. 250, 253, 447 S.E.2d 481, 483 (1994) (quoting
N.C.R. App. P. 3(a)),
aff'd, 341 N.C. 702, 462 S.E.2d 219 (1995).
Plaintiffs assigned error to trial court orders granting summaryjudgment in favor of defendants Hession and defendants McCrary on
plaintiffs' claim of UDTP. However, the record contains no notice
of appeal which designates those orders. Consequently, this Court
lacks jurisdiction to review them.
[2] An assignment of error “shall state plainly, concisely and
without argumentation the legal basis upon which error is
assigned.” N.C.R. App. P. 10(c)(1). Plaintiffs assigned error to
the entry of judgment by the trial court and to the order denying
plaintiffs' post-trial motions simply on the basis that the
judgment and order, respectively, were error. To say, in essence,
that an order is error because it is error does not state a legal
basis upon which the error is assigned. Those two assignments of
error are therefore dismissed.
[3] “Assignments of error not set out in the appellant's
brief, or in support of which no reason or argument is stated or
authority cited, will be taken as abandoned.” N.C.R. App. P.
28(b)(6). Plaintiffs assigned error to the trial court judgment
granting defendant Karen Hession's motion for directed verdict
without citing any legal authority in their brief in support of the
assignment of error. This assignment of error is deemed abandoned.
[4] Plaintiffs assign as error the omission of a jury
instruction for plaintiffs' exhibit 3, the inclusion of a jury
instruction that defendants' statements related to a matter of
public concern, and the inclusion of a jury instruction that it
could find that privilege barred liability for some of defendantPeter Hession's statements. Plaintiffs did not object on the
record to any of these jury instructions or omissions at trial.
When a party alleges error in a jury instruction, the party
may not assign as error any portion of the
jury charge or omission therefrom unless he
objects thereto before the jury retires to
consider its verdict, stating distinctly that
to which he objects and the grounds of his
objection; provided, that opportunity was
given to the party to make the objection out
of the hearing of the jury, and, on request of
any party, out of the presence of the jury.
N.C.R. App. P. 10(b)(2).
Because plaintiffs did not object on the record to the
foregoing omission from and inclusions in the jury instructions
before the jury retired to consider its verdict, they may not
assign error to them on appeal. Accordingly, plaintiffs' three
assignments of error to those jury instructions and omissions are
dismissed.
[5] Plaintiffs next assign error to the failure of the trial
court to enter judgment against William Gunn. Parties who petition
this Court for review must notify, through service of process, the
other parties to the appeal. N.C.R. App. P. 26(b). There is no
indication in the record that William Gunn was served with the
notice of appeal, the briefs, or the record on appeal. At oral
argument plaintiffs acknowledged that Gunn had not been served with
any of these documents, and sought to excuse their failure to serve
Gunn by asserting that he had communicated a desire not to be
served with anything related to this lawsuit. We find no authorityfor the proposition that a party's expression of a desire not to be
served excuses another party's failure to serve all required
papers. This assignment of error is dismissed.
[6] Plaintiffs next assign error to the failure of the trial
court to order discovery of defendants' computers and the failure
of the trial court to release information concerning the income and
assets of the defendants. “In order to preserve a question for
appellate review . . .[,] the complaining party [must] obtain a
ruling [from the trial court] upon the party's request, objection
or motion.” N.C.R. App. P. 10(b)(1). Plaintiffs concede that the
trial court entered no order regarding discovery of defendants'
computers or release of information concerning the income and
assets of defendants. Absent a ruling from the trial court on
these two issues, plaintiffs may not assign error to them.
Accordingly, these two assignments of error are dismissed.
III. Admission of Evidence
[7] Plaintiffs contend that the trial court erred when it
admitted evidence of defendants' reputation for truthfulness. We
disagree. Plaintiffs rely on
Holiday v. Cutchin, 63 N.C. App.
369, 305 S.E.2d 45 (1983),
aff'd, 311 N.C. 277, 316 S.E.2d 55
(1984), a medical negligence case in which this Court held that the
admission of evidence to bolster the defendant doctor's character
was error, 63 N.C. App. at 370, 305 S.E.2d at 47.
Holiday stated
that character evidence of a party is “
generally inadmissible” in
a civil action. 63 N.C. App. at 371, 305 S.E.2d at 47 (emphasisadded). In their brief, plaintiffs argue that “as in
Holiday,
defendants' character was never at issue in the trial.”
“Evidence of truthful character is admissible only after the
character of the witness for truthfulness has been attacked.” N.C.
Gen. Stat. § 8C-1, Rule 608. An action for defamation necessarily
alleges that the defendant has made a false statement.
Hanton v.
Gilbert, 126 N.C. App. 561, 569, 486 S.E.2d 432, 437,
disc. review
denied, 347 N.C. 266, 493 S.E.2d 454 (1997). Thus, a defendant's
character for truthfulness is always at issue in a defamation suit.
Even in
Holiday, the case plaintiffs rely on, this Court noted an
exception to the general rule forbidding character evidence in
civil cases, stating “character evidence
is admissible when
character is directly in issue as in actions involving moral intent
[like]
defamation.” 63 N.C. App. at 371, 305 S.E.2d at 47
(emphasis added).
In the case
sub judice, each defendant for whom evidence of
truthful character was admitted had already been called as a
witness and questioned before the admission of the evidence of his
truthful character. Therefore, we conclude that the trial court
did not err when it admitted testimony concerning defendants'
reputations for truthfulness.
IV. Jury Instructions
[8] Plaintiffs assign error to the following jury instruction,
given in reference to each defendant: “Did [name of defendant(s)]
libel (or slander) the plaintiffs, James D. Blyth and Elk CountryRealty?” Plaintiffs argue that because two different plaintiffs
brought the suit, a separate jury instruction should have been
given for each plaintiff as to each defendant. We agree.
“The [trial] judge must submit to the jury such issues as when
answered by them will resolve all material controversies between
the parties, as raised by the pleadings.”
Harrison v. McLear, 49
N.C. App. 121, 123, 270 S.E.2d 577, 578 (1980). It is certainly
possible for a defamatory statement to injure either an individual
plaintiff or a business that the individual plaintiff owns, or
both.
See, e.g.,
Ellis v. Northern Star Co., 326 N.C. 219, 224-25,
388 S.E.2d 127, 130-31 (1990) (jury properly instructed in finding
that the business was defamed, but not its owner, when suit was
filed by both the owner and the business). Thus, when both an
individual and his business are plaintiffs in a defamation action,
the jury cannot resolve the material issues in the case unless it
is instructed that the owner and the business are distinct parties,
and that it could find that the defendant defamed one but not the
other.
Here the trial court combined the two plaintiffs in its
instructions to the jury, “Did [name of defendant(s)] libel (or
slander) the plaintiffs, James D. Blyth
and Elk Country Realty?”
(Emphasis added.) This instruction tended to mislead the jurors
into believing that they could find in plaintiffs' favor only if
they believed that the alleged defamatory statement defamed both
plaintiffs, and that if only one plaintiff was defamed, they shouldfind in favor of defendants. Although requested by plaintiffs'
counsel before the jury retired to consider its verdict, the trial
court did not give separate jury issues or instructions for the two
plaintiffs. Failure to submit separate issues or at least to
instruct the jury that it was to answer the issue separately for
each plaintiff was error.
(See footnote 2)
Accordingly, we reverse the judgment of
the trial court in favor of defendant Peter Hession, defendants
McCrary, and defendants Greenhalge on the claims for defamation and
remand for a new trial. Further, because the trial court
instructed the jury not to consider the UDTP claim against
defendant Scott Greenhalge if it found that defendant Scott
Greenhalge did not slander plaintiffs, the claim for UDTP against
defendant Scott Greenhalge must also be included in the new trial.
V. Attorneys' Fees
[9] Plaintiffs assigned error to the trial court orders
awarding attorneys' fees and costs to defendants Hession, McCrary,
and Greenhalge. The trial court ordered plaintiffs to pay
attorneys' fees and costs to: (1) defendants Hession pursuant to
N.C. Gen. Stat. § 75-16.1
(See footnote 3)
, because the trial court found thatplaintiffs knew or should have known that their claims that
defendants Hession violated N.C. Gen. Stat. § 75-1.1
(See footnote 4)
were
“frivolous and malicious”
(See footnote 5)
and pursuant to N.C. Gen. Stat. § 1D-45
(See footnote 6)
,because the trial court found that plaintiffs knew or should have
known that their claims for punitive damages arising from
defendants' alleged defamatory statements were “frivolous or
malicious;” (2) defendants McCrary, because the trial court found
that plaintiffs knew or should have known that their claims that
defendants McCrary violated N.C. Gen. Stat. § 75-1.1 were
“frivolous and malicious” and pursuant to N.C. Gen. Stat. § 1D-45,
because the trial court found that plaintiffs knew or should have
known that their claims for punitive damages arising from
defendants' alleged defamatory statements were “frivolous or
malicious;” and (3) defendants Greenhalge, but with no findings of
fact by the trial court. We agree in part and disagree in part.
“Assignments of error not set out in the appellant's brief, or
in support of which no reason or argument is stated or authority
cited, will be taken as abandoned.” N.C.R. App. P. 28(b)(6).
Although plaintiffs assigned error to all three orders of the trial
court which granted attorneys' fees and costs, in their brief
plaintiffs argue only (1) that the attorneys' fees and costs
awarded pursuant to N.C. Gen. Stat. § 75-16.1 are error, and (2)
that attorneys' fees and costs on the claims that survived summaryjudgment and directed verdict are error, reasoning that a claim
that is presented to the jury cannot be frivolous.
Plaintiffs' claims that defendants Hession and defendants
McCrary violated N.C. Gen. Stat. § 75-1.1 (the UDTP claims) did not
survive summary judgment, and as we noted before, plaintiffs did
not appeal from the trial court orders awarding summary judgment to
defendants Hession and defendants McCrary on the UDTP claims. We
therefore conclude that plaintiffs abandoned the assignment of
error to the order awarding attorneys' fees and costs to defendants
Hession and defendants McCrary.
(See footnote 7)
[10] All that remains from plaintiffs' assignment of error to
the trial court orders awarding attorneys' fees and costs is the
order awarding attorneys' fees and costs to defendants Greenhalge.
Defendants Greenhalge had moved for attorneys' fees and costs
pursuant to Rule 11, alleging that plaintiffs knew that the
allegations in the complaint were not truthful, and pursuant to
N.C. Gen. Stat. § 75-16.1, alleging that plaintiffs knew that their
UDTP claim was frivolous and malicious. “In awarding attorneys' fees under G.S. 75-16.1, the trial
court must make findings of fact to support the award.”
Lapierre
v. Samco Development Corp., 103 N.C. App. 551, 561, 406 S.E.2d 646,
651 (1991). Failure to make findings of fact “requires remand in
order for the trial court to resolve any disputed factual issues
[unless] the record reveals no evidence to support an award of
sanctions on any of the bases asserted by defendants.”
Taylor v.
Taylor Products Inc., 105 N.C. App. 620, 630, 414 S.E.2d 568, 576
(1992).
Although there is some evidence in the record which would
support an award of attorneys' fees in favor of defendants
Greenhalge, the trial court's order contains no findings of fact or
conclusions of law, even though it summarily granted all of the
attorneys' fees and costs requested by defendants Greenhalge. The
order also fails to indicate what portion of the fees granted was
based on Rule 11 and what portion was based on N.C. Gen. Stat. §
75-16.1. In addition, we are remanding for a new trial on the
defamation claims against defendants Greenhalge and the UDTP claim
against defendant Scott Greenhalge. Accordingly, we reverse and
remand the trial court order granting attorneys' fees and costs to
defendants Greenhalge for findings of fact and appropriate
conclusions of law. We note that the trial court will need to
consider the allocation of any fees awarded in light of the fact
that the defamation claims against defendants Greenhalge and theUDTP claim against defendant Scott Greenhalge have been remanded
for new trial.
VI. Conclusion
For the foregoing reasons, ten of plaintiffs' assignments of
error are dismissed because plaintiffs did not follow the North
Carolina Rules of Appellate Procedure. We reverse the judgment of
the trial court dismissing with prejudice plaintiffs' claims for
defamation against defendant Peter Hession, defendants McCrary, and
defendants Greenhalge and the UDTP claim against defendant Scott
Greenhalge, and remand for a new trial. Finally, we reverse and
remand the trial court order granting attorneys' fees and costs to
defendants Greenhalge.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED FOR NEW TRIAL
IN PART.
Judges TYSON and STEPHENS concur.
Footnote: 1