Appeal by Defendants from order entered 27 April 2006 by Judge
Kimberly S. Taylor in Iredell County Superior Court. Heard in the
Court of Appeals 15 March 2007.
Eisele, Ashburn, Greene & Chapman, PA, by Douglas G. Eisele,
for Plaintiff-Appellee.
Mayer, Brown, Rowe & Maw LLP, by Robert B. Cordle and W.C.
Turner Herbert, and Pope McMillan Kutteh Simon & Privette,
P.A., by William P. Pope, for Defendants-Appellants.
STEPHENS, Judge.
On 13 September 2002, Plaintiff brought an action against
Defendants for alleged misappropriation of trade secrets under the
North Carolina Trade Secrets Protection Act (“TSPA”), N.C. Gen.
Stat. § 66-152 et seq., and for alleged unfair or deceptive trade
practices under the Unfair and Deceptive Trade Practices Act, N.C.
Gen. Stat. § 75-1.1 et seq. The trial court granted summary
judgment in favor of Defendants on 12 April 2004 . In addition to
stating “there [are] no genuine issue[s] as to any material
fact[,]” the order granting summary judgment stated that “Plaintiffis hereby [] taxed with all costs of this action pursuant to N.C.
Gen. Stat. § 6-21.” Plaintiff filed notice of appeal on 10 May
2004 challenging the order granting summary judgment . In Bruning
& Federle Mfg. Co. v. Mills, 173 N.C. App. 641, 619 S.E.2d 594
(unpublished) (No. COA04-999) (Oct. 4, 2005), disc. review denied,
360 N.C. 174, 625 S.E.2d 782 (2005), this Court affirmed the trial
court's grant of summary judgment in favor of Defendants .
On 29 December 2005, Defendant Ricky D. Mills filed a motion
with the trial court seeking “an [o]rder awarding and quantifying
the amount of attorneys' fees and costs to be taxed to the
Plaintiff” pursuant to the court's earlier summary judgment order .
Defendant Associated Metal Works, Inc. had filed a similar motion
on 15 December 2005 . In response, Plaintiff filed a request that
the trial court make findings of fact and conclusions of law under
N.C. Gen. Stat. § 1A-1, Rule 52(a)(2) . In its order following a
hearing on Defendants' motions, the trial court concluded as a
matter of law that
N.C. Gen. Stat. § 6-21 does not itself form
the legal basis for an award of attorney fees
in a TSPA case; rather, it only allows such
award (1) if the conditions provided in N.C.
Gen. Stat. § 66-154(d) exist, and (2) if the
Court then exercises its discretion to award
attorney fees based on evidence offered in
support of an appropriate Motion.
Concluding that “[n]either Defendant offered any evidence to
establish, or made any argument to support, a finding by the Court
that Plaintiff acted in 'bad faith' [one of the conditions provided
in N.C. Gen. Stat. § 66-154(d)] in prosecuting its TSPA claims,”
the trial court denied Defendants' motions for attorneys' fees, butallowed “the recovery of costs other than attorney fees[.]” From
the order denying their motions for attorneys' fees, Defendants
appeal. Defendants' sole issue on appeal is that the trial court
erred in interpreting N.C. Gen. Stat. § 6-21 as only allowing a
trial court to award attorneys' fees in a TSPA case if the
conditions provided in N.C. Gen. Stat. § 66-154(d) exist. For the
reasons stated herein, we affirm.
In this case, we must interpret two statutes that both address
the award of attorneys' fees in actions under the TSPA. Under
Section 66-154(d) of that Act, as enacted by the legislature in
1981 and since unamended,
[i]f a claim of misappropriation is made in
bad faith or if willful and malicious
misappropriation exists, the court may award
reasonable attorneys' fees to the prevailing
party.
N.C. Gen. Stat. § 66-154(d) (2005). In the same legislation by
which it enacted the TSPA, the General Assembly added subsection
twelve (12) to Section 6-21 of our General Statutes. Act of Jul.
9, 1981, ch. 890, sec. 2, 1981 N.C. Sess. Laws 1326. That statute,
after the 1981 addition, reads in pertinent part:
Costs in the following matters shall be taxed
against either party, or apportioned among the
parties, in the discretion of the court:
. . . .
(12) In actions brought for misappropriation
of a trade secret under [the TSPA].
The word “costs” as the same appears and is
used in this section shall be construed to
include reasonable attorneys' fees in suchamounts as the court shall in its discretion
determine and allow[.]
N.C. Gen. Stat. § 6-21 (2005). Defendants contend that these
statutes “may be harmonized and given separate effect,” that the
statutes “are in no way contradictory[,]” and that the trial court
erred in interpreting N.C. Gen. Stat. § 6-21 as only allowing a
trial court to award attorneys' fees in a TSPA case if the
conditions provided in N.C. Gen. Stat. § 66-154(d) exist. We
disagree.
“The case law in North Carolina is clear that to overturn the
trial judge's determination [on the issue of attorneys' fees], the
defendant must show an abuse of discretion.”
Hillman v. U.S. Liab.
Ins. Co., 59 N.C. App. 145, 155, 296 S.E.2d 302, 309 (1982)
(citations omitted),
disc. review denied, 307 N.C. 468, 299 S.E.2d
221 (1983). However, “'where an appeal presents [a] question[] of
statutory interpretation, full review is appropriate,'” and we
review a trial court's conclusions of law
de novo.
Coffman v.
Roberson, 153 N.C. App. 618, 623, 571 S.E.2d 255, 258 (2002)
(quoting
Edwards v. Wall, 142 N.C. App. 111, 115, 542 S.E.2d 258,
262 (2001)),
disc. review denied, 356 N.C. 668, 577 S.E.2d 111
(2003).
“As always, our primary task in statutory construction is to
ensure that the purpose of the Legislature in enacting the law, the
legislative intent, is accomplished.”
State ex rel. Hunt v. N.C.
Reinsurance Facil., 302 N.C. 274, 288, 275 S.E.2d 399, 405 (1981)
(citing
In re Dillingham, 257 N.C. 684, 127 S.E.2d 584 (1962)).
“The best indicia of that legislative purpose are 'the language ofthe statute, the spirit of the act, and what the act seeks to
accomplish.'”
Id. (quoting
Stevenson v. City of Durham, 281 N.C.
300, 303, 188 S.E.2d 281, 283 (1972)). “Moreover, we must be
guided by the rules of construction that statutes
in pari materia,
and all parts thereof, should be construed together and compared
with each other.”
Id. (citing
Redevelopment Comm'n of Greensboro
v. Sec. Nat'l Bank of Greensboro, 252 N.C. 595, 114 S.E.2d 688
(1960)). “Such statutes should be reconciled with each other when
possible and any irreconcilable ambiguity should be resolved in a
manner which most fully effectuates the true legislative intent.”
Id. (citing
Duncan v. Carpenter & Phillips, 233 N.C. 422, 64 S.E.2d
410 (1951),
overruled on other grounds,
Taylor v. J. P. Stevens &
Co., 300 N.C. 94, 265 S.E.2d 144 (1980)).
Section 66-154(d) is at odds with Section 6-21. A trial court
“may” award attorneys' fees under Section 66-154(d), while under
Section 6-21, a trial court “shall” award costs, which “shall be
construed to include” attorneys' fees. Under Section 66-154(d),
the trial court may only award attorneys' fees
to the prevailing
party if “a claim of misappropriation is made in bad faith or if
willful and malicious misappropriation exists[.]” Under Section 6-
21, a trial court has the discretion to tax costs
against either
party or apportion costs between the parties, and has the
discretion to determine the amount of a “reasonable” fee.
Importantly, neither party must show “bad faith” or “willful and
malicious misappropriation” under Section 6-21 to be awarded costs.
While we agree with Defendants that to superimpose the conditionsof Section 66-154(d) on Section 6-21 would “eviscerate[] [Section
6-21] for TSPA cases,”
we also note that to ignore the conditions
of Section 66-154(d) when awarding “costs” under Section 6-21 would
render Section 66-154(d) meaningless. We must resolve the
statutes' conflict in a manner which most fully effectuates the
legislative intent.
Based on our principles of statutory construction, we conclude
that in an action under the TSPA, a trial court may only award
attorneys' fees to the prevailing party “[i]f a claim of
misappropriation is made in bad faith or if willful and malicious
misappropriation exists,” pursuant to N.C. Gen. Stat. § 66-154(d).
While we agree with Defendants that “had the legislature intended
to limit the assessment of attorneys' fees in [Section 6-21] by
cross referencing the bad faith requirement of [Section 66-154(d)],
it could have easily done so[,]”
we are nevertheless persuaded that
our reading of the two statutes accomplishes the legislative
intent. As Defendants do not dispute the trial court's conclusion
“that the actions of Plaintiff [do not] merit the award of attorney
fees under . . . N.C. Gen. Stat. § 66-154(d)[,]” the order of the
trial court is affirmed.
AFFIRMED.
Judges McGEE and ELMORE concur.
*** Converted from WordPerfect ***