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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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: 20 February 2007
D.A.N. JOINT VENTURE, III, L.P.
JANICE P. FENNER
Appeal by plaintiff from judgment entered 13 October 2005 and
orders entered 31 August 2004 and 21 November 2005 by Judge J.
Richard Parker in Dare County Superior Court. Heard in the Court
of Appeals 15 November 2006.
Pritchett & Burch, PLLC, by Jonathan E. Huddleston, for
Vandeventer Black, LLP, by Robert P. Trivette, for defendant-
Upon plaintiff's suit for monies owed under a credit line
agreement, the jury returned a verdict of none. Since this
verdict was not supported by the evidence, we reverse and remand
for a new trial.
Plaintiff filed this action on 2 April 2002 against Janice P.
Fenner (defendant) to recover principal and interest due on a
credit agreement executed on 29 March 1995 by defendant and her
former husband, William Fenner, Jr., (husband). Defendant and
husband signed the agreement with NationsCredit as joint applicants
and received an advance for the full amount of the line of credit,$10,000.00, on 3 April 1995. Defendant and husband made their last
payment towards the loan in the amount of $200.00 on 1 June 1998.
At that time the balance on the loan was $9,654.34.
Defendant and husband separated on 1 October 1997, and in
November 1997, defendant and husband entered into a separation
agreement. This agreement provided that husband would be
responsible for the NationsCredit debt. The court entered a
judgment finalizing defendant's divorce from husband on 10 May
On 16 December 1998, NationsCredit sold its interest in the
loan to Cadle Company, and on 15 March 1999, Cadle Company sold its
interest in the loan to plaintiff. When plaintiff purchased the
loan, the balance owed on the loan was $10,490.23.
On 4 August 1999, husband filed for bankruptcy, and as a
result, husband's debt to Cadle Company was extinguished.
On 2 April 2002, plaintiff filed a complaint against defendant
to recover the balance due on the defaulted loan together with
attorneys' fees. On 8 July 2002, defendant filed an answer
asserting as affirmative defenses the applicable statute of
limitations and lack of consideration. Defendant also filed a
third party complaint against husband seeking indemnity and
contribution based upon the provisions of the separation agreement.
On 19 August 2002, default was entered against husband.
On 2 April 2003, plaintiff filed a motion for summary
judgment. This motion was denied on 31 August 2004. This case
went to trial before Judge Parker and a jury on 10 October 2005. The trial court denied defendant's motion for directed verdict at
the close of plaintiff's evidence. Defendant renewed her motion
for a directed verdict at the close of all of the evidence, and
plaintiff also moved for directed verdict. Both motions were
denied, and the trial court submitted a single issue to the jury:
What amount, if any, does the defendant . . . owe the plaintiff,
D.A.N. Joint Venture, III, L.P., on the account? The jury
answered this issue: None.
The court entered judgment on 13 October 2005, dismissing
plaintiff's action, with prejudice.
On 25 October 2005, plaintiff filed a motion for judgment
notwithstanding the verdict and a motion for a new trial. The
trial court denied both motions.
Plaintiff appeals from the judgment entered on 13 October 2005
and from orders denying its motions for summary judgment, judgment
notwithstanding the verdict and new trial.
I: Summary Judgment
In its first argument, plaintiff contends that the trial court
erred in denying plaintiff's motion for summary judgment. We
Our Supreme Court has previously held:
The purpose of summary judgment is to bring
litigation to an early decision on the merits
without the delay and expense of a trial when
no material facts are at issue. After there
has been a trial, this purpose cannot be
served. Improper denial of a motion for
summary judgment is not reversible error when
the case has proceeded to trial and has been
determined on the merits by the trier of the
facts, either judge or jury.
Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985)
(emphasis added) (internal citations omitted); see also In re Will
of Yelverton, __ N.C. App. __, 631 S.E.2d 180 (2006). This
assignment of error is without merit.
II: Directed Verdict and Judgment Notwithstanding the Verdict
In its second argument, plaintiff contends that the trial
court erred by denying its motion for directed verdict at the close
of all of the evidence and its motion for judgment notwithstanding
the verdict. We disagree.
A motion for judgment notwithstanding the verdict is
essentially a renewal of an earlier motion for a directed
verdict[,] and the standards of review are the same. Drain v.
United Services Life Ins. Co., 85 N.C. App. 174, 176, 354 S.E.2d
269, 272 (1987) (citing Dickinson v. Pake, 284 N.C. 576, 201 S.E.2d
897 (1974)). Accordingly, if the motion for directed verdict
could have been properly granted, then the subsequent motion for
judgment notwithstanding the verdict should also be granted.
Penley v. Penley, 314 N.C. 1, 10, 332 S.E.2d 51, 57 (1985) (quoting
Bryant v. Nationwide Fire Insurance Co., 313 N.C. 362, 329 S.E.2d
333 (1985)). A motion for a judgment notwithstanding the verdict
may not address issues on appeal not raised in the motion for a
directed verdict. See Drain at 176, 354 S.E.2d at 272 (1987);
Miller v. Motors, Inc., 40 N.C. App. 48, 51, 251 S.E.2d 925, 927
(1979). Therefore, we consider these two motions together.
Plaintiff did not state the grounds upon which it moved for
directed verdict at the close of all evidence. Plaintiff's failureto state grounds for its motion provides plaintiff no foundation
upon which to subsequently move for judgment notwithstanding the
verdict. See generally, Boone Lumber, Inc. v. Sigmon, 103 N.C.
App. 798, 800, 407 S.E.2d 291, 293 (1991) (stating that [a] motion
for directed verdict at the close of all evidence is an absolute
prerequisite to the post verdict motion for judgment
notwithstanding the verdict). Plaintiff may not create new
grounds on appeal to support a legal theory not anticipated before
the trial court. See generally, Anderson v. Assimos, 356 N.C. 415,
417, 572 S.E.2d 101, 103 (2002). This assignment of error is
III: New Trial
In its next argument, plaintiff contents that the trial court
erred by denying its motion for new trial . We agree.
Under N.C. Gen. Stat. § 1A-1, Rule 59, a party may obtain a
new trial either for errors of law committed during trial or for a
verdict not sufficiently supported by the evidence. Eason v.
Barber, 89 N.C. App. 294, 297, 365 S.E.2d 672, 674 (1988). The
trial court's ruling on a motion for new trial pursuant to N.C.
Gen. Stat. . 1A-1, Rule 59, is not reviewable on appeal absent
manifest abuse of discretion. Mumford v. Hutton & Bourbonnais Co.,
47 N.C. App. 440, 445, 267 S.E.2d 511, 514 (1980).
Rule 59(a)(7) authorizes the trial court to grant a new trial
based on the insufficiency of the evidence to justify the verdict
or that the verdict is contrary to law[.] N.C. Gen. Stat. § 1A-1,
Rule 59(a)(7). [I]n this context, the term 'insufficiency of theevidence' means that the verdict 'was against the greater weight of
the evidence.' In re Will of Buck, 350 N.C. 621, 624, 516 S.E.2d
858, 860 (1999). The trial court has discretionary authority to
appraise the evidence and to 'order a new trial whenever in his
opinion the verdict is contrary to the greater weight of the
credible testimony.' Id. (quoting Britt v. Allen, 291 N.C. 630,
634, 231 S.E.2d 607, 611 (1977)). When the evidence supports the
conclusion that the jury committed a palpable error, the trial
court has the duty to set aside the verdict on that issue to
prevent a miscarriage of justice. See Hussey v. Atlantic Coast
Line R.R., 183 N.C. 8, 9-10, 110 S.E. 599, 599-600 (1922).
Our review of the trial court's discretionary ruling to grant
or deny a motion to set aside a verdict and order a new trial is
strictly limited to the determination of whether the record
affirmatively demonstrates a manifest abuse of discretion by the
[trial] judge. Worthington v. Bynum and Cogdell v. Bynum, 305
N.C. 478, 482, 290 S.E.2d 599, 602 (1982). This Court 'should not
disturb a discretionary Rule 59 order unless it is reasonably
convinced . . . that the trial judge's ruling probably amounted to
a substantial miscarriage of justice.' Anderson v. Hollifield,
345 N.C. 480, 483, 480 S.E.2d 661, 663 (1997) (quoting Campbell v.
Pitt County Memorial Hosp., 321 N.C. 260, 265, 362 S.E.2d 273, 275
In the instant case, we are so convinced. All of the evidence
shows that on 29 March 1995, defendant and husband entered into,and subsequently breached, a credit agreement with NationsCredit.
The agreement stated:
I ask [NationsCredit] to give me a PeronaLine
Credit account with a credit line as shown
here: Credit Line $10,000.00. . . . I agree
to pay back all advances [NationsCredit]
make[s][.] . . . I will be in default if I
fail to make any minimum payment when due or
break any other promise made in this
agreement. If I default, [NationsCredit] may
demand immediate payment of my entire account
balance plus accrued finance charge subject to
any prior notice of default and right to cure
required by law. I agree to pay court costs
and reasonable attorney's fees if and to the
extent permitted by state law after default
and referral to an attorney who is not your
Husband and defendant received an advance for the full amount of
the line of credit, equaling $10,000.00, on 3 April 1995.
Defendant and husband separated, and the court entered a
judgment of absolute divorce. The divorce judgment incorporated
the parties' separation agreement as an order of this Court.
The separation agreement stated that husband shall assume all
liability arising from and indemnify and hold [defendant]
harmless of any and all loss [she] might suffer as a result of such
liabilities[,] stemming from the credit agreement in question.
On 19 July 2000, Cadle Company sent a letter to defendant
stating that defendant's account was in default and demanding
payment in full. Defendant made no payments but responded by
sending plaintiff copies of her separation agreement and divorce
judgment. After several phone conversations, plaintiff's legal
counsel sent defendant a letter again stating that defendant was
past due on the balance of her loan, that pursuant to theprovisions of the agreement plaintiff was accelerating the entire
amount due, and demanding a payment of $15,870.06.
At the time of the trial, 10 October 2005, the total amount
due, including accrued interest was $21,094.78.
Throughout the course of litigation, defendant argued that my
divorce decree and separation agreement released me from any claim
on the NationsCredit loan, because my ex-husband had assumed
responsibility for any debt owed. However, neither NationsCredit,
Cadle Company, nor plaintiff were parties to the separation
agreement, and therefore, they are not contractually bound by the
terms of the separation agreement. In fact, defendant and husband
entered into the separation agreement long after defendant signed
the credit line agreement. The separation agreement had no legal
effect on defendant's obligation to satisfy the jointly-held debt
in the event of husband's breach, even though husband contractually
agreed to assume the debt in question. See First Union Nat. Bank
v. Naylor, 102 N.C. App. 719, 721-22, 404 S.E.2d 161, 162 (stating,
in the event of husband's breach, husband's assumption of marital
debt in a separation agreement has no effect upon wife's obligation
to creditors of jointly-held debt or creditors' ability to collect
from wife); see also, Grimes v. Grimes, 47 N.C. App. 353, 355, 267
S.E.2d 372, 373 (1980) (stating that where the wife executes a
promissory note as a co-maker, she is primarily liable, and
furthermore, nothing else appearing, any person signing his or her
name at the bottom of the face of a promissory note is a maker, and
is primarily liable). Defendant's repeated assertions that theseparation agreement extinguished her obligation to plaintiff were
erroneous as a matter of law.
By executing the credit line agreement, defendant agreed to be
personally liable for this debt, obligating her to pay the debt,
regardless of the actions of her husband. See, e.g., Trust Co. v.
Creasy, 301 N.C. 44, 269 S.E.2d 117 (1980).
The issue submitted to the jury read: What amount, if any
does the defendant . . . owe the plaintiff, D.A.N. Joint Venture,
III, L.P., on the account? We note that the trial judge did not
submit to the jury issues of contract formation, the validity of
the contract, or whether the defendant had breached the contract.
Rather, the only issue was the amount owed. This was an
acknowledgment by the trial court that defendant had entered into
a valid contract and had breached the contract. This case is
similar to Housing, Inc. v. Weaver, 305 N.C. 428, 290 S.E.2d 642
(1982), in which the jury delivered a verdict determining that the
plaintiff was liable to the defendant, but thereafter found that
the defendant should recover no damages as a consequence of the
plaintiff's liability. Id. at 438, 290 S.E.2d at 648. The trial
court in Housing set aside the verdict and the judgment, and
entered judgment for the amount of the principal sum of the note,
plus interest and reimbursable expenses[.] Id. Thereafter, this
Court and the North Carolina Supreme Court affirmed the trial
court. This Court stated that the undisputed evidence in Housing
and the plaintiff's admissions establish the amount of defendant's
damages as a matter of law. Housing, Inc. v. Weaver, 52 N.C. App.662, 675, 280 S.E.2d 191, 199 (1981); see also United States v.
Simmons, 346 F.2d 213, 215 (5th Cir. 1965) (holding that [t]he
absence of any rational basis for the jury's verdict makes it a
mistake of law for the trial judge to deny the motion for a new
This is a contract case and is distinguishable from tort cases
where, on the issue of damages, [a]n appellate court . . . should
not disturb an able trial judge's ruling on a discretionary matter
merely because it believes some other award for damages would be
more appropriate. Worthington v. Bynum, 305 N.C. 478, 488, 290
S.E.2d 599, 608 (1982) (Carlton, J., concurring); see also Anderson
v. Hollifield, 345 N.C. 480, 481-83, 480 S.E.2d 661, 663-64 (1997)
(holding that this Court erred in reversing and remanding a trial
court's judgment denying a new trial on the issue of damages, which
was related solely to plaintiff's acute cervical sprain[,]
because the jury weigh[s] the evidence and determine[s] the
credibility of witnesses). Unlike the tort cases, the amount of
damages in this case did not rest upon credibility determinations,
nor did it encompass imprecise measures of damages such as
permanent injury or pain and suffering. The evidence presented to
the jury was uncontradicted that defendant owed plaintiff the
balance of principal plus interest under the note, together with
The evidence at trial was insufficient to support the jury's
verdict of none, and the trial court erred in denying plaintiff's
motion for a new trial.
IV: Cross-Assignment of Error
Defendant requests that we address issues regarding whether
the applicable statute of limitations bars plaintiff's claim and
whether the contract fails for lack of consideration. We decline to
The scope of this Court's review on appeal is limited to a
consideration of those assignments of error set out in the record
on appeal in accordance with Rule 10 of the Rules of Appellate
Procedure. Harllee v. Harllee
, 151 N.C. App. 40, 50, 565 S.E.2d
678, 684 (2002); N.C. R. App. P. 10(d) (2005).
N.C. R. App. P. 10 (d) (2005) provides, in pertinent part:
Without taking an appeal an appellee may
cross-assign as error any action or omission
of the trial court which was properly
preserved for appellate review and which
deprived the appellee of an alternative basis
in law for supporting the judgment, order, or
other determination from which appeal has been
In Carawan v. Tate
, 304 N.C. 696, 701, 286 S.E.2d 99, 102
(1982), the Supreme Court discussed the meaning of Rule 10(d):
Rule 10(d) provides protection for appellees
who have been deprived in the trial court of
an alternative basis in law on which their
favorable judgment could be supported, and who
face the possibility that on appeal
prejudicial error will be found in the ground
on which their judgment was actually based.
In the instant case, the only assignments of error set out in
the record on appeal are those brought forward and argued by
plaintiff-appellant. Defendant-appellee was permitted by the Rules
of Appellate Procedure to present issues for this Court's review. See N.C. R. App. P. 10(d) (2005). The statute of limitations and
lack of consideration arguments could certainly provide an
alternate basis for upholding the trial court's judgment. However,
defendant did not cross-assign error to the trial court's failure
to render judgment on these grounds. Defendant has not properly
preserved these grounds for appellate review. See Harllee at 50,
565 S.E.2d at 684; see also Howard v. Oakwood Homes Corp., 134 N.C.
App. 116, 122, 516 S.E.2d 879, 883 (1999). We decline to address
the additional arguments raised in defendant-appellee's brief.
For the foregoing reasons, we conclude that the trial court
erred in not granting plaintiff's motion for new trial. We reverse
and remand for a new trial on the merits.
REVERSED and REMANDED.
Judges MCGEE and BRYANT concur.
Report per Rule 30(e).
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