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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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: 4 September 2007
JACQUELYN FAITH GARRISON
No. 05 SP 116
SHELBY HOLT, Individually
and as former Executor of
the Estate of Lois Garrison
and as Trustee for Jacquelyn
Faith Garrision; JIMMIE E.
JAMES, Individually and as
Executor of the Estate of
Appeal by Respondent Shelby Holt from orders entered 28 March
2006 and 24 May 2006 by Judge Thomas D. Haigwood in Pitt County
Superior Court. Heard in the Court of Appeals 15 March 2007.
David W. Silver for Petitioner-Appellee.
Poyner & Spruill LLP, by Gregory S. Camp and Jenny L.
Matthews, for Respondent-Appellant.
Respondent-Appellant Shelby Holt (Respondent) appeals from
a decision of the Pitt County Superior Court
(See footnote 1)
concluding that she
had breached her fiduciary duties to Petitioner and had failed to
act in an open, fair and honest manner. We affirm.
Evidence before the trial court tended to show that Petitioner
Jacquelyn Faith Garrison (Petitioner) was the only child of LoisJames Garrision (Lois). Before her death on 12 May 2000, Lois
executed a will which directed that the residue and remainder of
her estate be passed in fee simple to a trust (the trust) for the
benefit of Petitioner. The will appointed Respondent co-Trustee of
the trust and co-Executor of the estate. On 8 December 2000, the
Pitt County Clerk of Court removed Respondent as co-Executor of the
estate and appointed Respondent's brother and Petitioner's uncle,
Jimmie E. James (James), as the new Executor.
Over the course of Respondent's stewardship, the fund in the
trust dwindled considerably. Respondent received $102,644.46 from
Northwestern Mutual Life on 15 June 2000, and as of 31 December
2005, $30,399.77 remained.
(See footnote 2)
Evidence of similar diminution in the
value of several other accounts was also presented to the trial
court. The trial court found, inter alia, that Respondent had
repeatedly commingled funds on behalf of Petitioner with her
personal funds and had paid improper expenses with the trust funds.
For Respondent's failure to use the standard of judgment and care
which an ordinary prudent person of discretion and intelligence,
who is a fiduciary of the property of others, would observe as such
fiduciary[,] the court assessed actual total damages against
Respondent in the amount of $75,176.94. Based on the aggravating
factor of fraud and willful or wanton conduct . . . related to the
injury for which actual damages were assessed, the court awardedpunitive damages against Respondent in the amount of $225,000.00.
At the outset, we address Respondent's argument that the trial
court's findings of fact are not supported by the evidence
presented at trial. Respondent's assignment of error on this issue
states the following:
2. The trial court's award of punitive
damages to Petitioner [is erroneous] on
the ground that to the extent any finding
of fact does support the conclusion of
law that an aggravating factor of fraud
and willful or wanton conduct was
present, there was insufficient evidence
to support such a finding.
R. pp. 55-64; T. p. 1-235.
By this assignment of error, Respondent seeks to preserve for our
review every finding of fact made by the trial court. Furthermore,
through her broad assignment of error, Respondent places the burden
on this Court to sift through the Record and transcript to
determine which findings of fact are supported by the evidence.
Respondent's attempt is unsuccessful.
Where findings of fact are challenged on appeal, each
contested finding of fact must be separately assigned as error, and
the failure to do so results in a waiver of the right to challenge
the sufficiency of the evidence to support the finding. Okwara v.
Dillard Dep't Stores, Inc.
, 136 N.C. App. 587, 591, 525 S.E.2d 481,
484 (2000) (citations omitted). Where an appellant fails to
assign error to the trial court's findings of fact, the findings
are 'presumed to be correct.' Id.
(quoting Inspirational Network,Inc. v. Combs
, 131 N.C. App. 231, 235, 506 S.E.2d 754, 758 (1998)).
We are thus left to consider whether the trial court's findings of
fact support Judge Haigwood's conclusion that punitive damages were
warranted. See Taylor v. N. C. Dep't of Transp.
, 86 N.C. App. 299,
302, 357 S.E.2d 439, 441 (1987) (holding that where an appellant
did not properly preserve an argument regarding the sufficiency of
the evidence to support the trial court's findings of fact, [t]he
only question thus presented is whether the findings of fact
support the conclusions of law and the conclusions support the
judgment) (citation omitted)
(See footnote 3)
Pursuant to N.C. Gen. Stat. § 1D-1, punitive damages are
designed to punish a defendant for egregiously wrongful acts and
to deter the defendant and others from committing similar wrongful
acts. N.C. Gen. Stat. § 1D-1 (2005). Punitive damages may be
awarded against a defendant who is liable for compensatory damages
if the claimant also proves the presence of at least one of the
following factors: (1) fraud, (2) malice, or (3) willful or wanton
conduct. N.C. Gen. Stat. § 1D-15(a) (2005). Since it is
undisputed that Respondent is liable for compensatory damages, the
remaining issue is whether one of the aggravating factors is
supported by the trial court's findings of fact. In this case, the
trial court concluded that
[p]unitive damages against Respondent Holt is
[sic] appropriate as there is clear and
convincing evidence that Respondent Holt is
liable for compensatory damages to Petitionerand that the aggravating factor of fraud and
willful or wanton conduct is present and is
related to the injury for which compensatory
damages should be awarded in accordance with
NCGS § 1D-15.
After a thorough review of the trial court's order, it is clear
that Judge Haigwood made no findings of fact which would support
his conclusion regarding the existence of fraud. Therefore, we
examine whether the findings of fact support his determination
regarding the existence of willful or wanton conduct on the part of
'Willful or wanton conduct' is defined as 'the conscious and
intentional disregard of and indifference to the rights and safety
of others, which the defendant knows or should know is reasonably
likely to result in injury, damage, or other harm.' Richardson v.
Bank of Am., N.A.
, ___ N.C. App. ___, ___, 643 S.E.2d 410, 427
(2007) (quoting N.C. Gen. Stat. § 1D-5(7)). 'An act is wanton
when it is done of wicked purpose, or when done needlessly,
manifesting a reckless indifference to the rights of others.'
Yancey v. Lea
, 354 N.C. 48, 52, 550 S.E.2d 155, 157 (2001) (quoting
Foster v. Hyman
, 197 N.C. 189, 191, 148 S.E. 36, 37-38 (1929)).
In this case, the trial court's findings of fact establish
that the diminution of value of Lois's life insurance attributable
solely to Respondent's investment choices was approximately
$59,000.00. The trial court found that Respondent paid improper
expenses with some of these funds [life insurance policies] and
improperly transferred some of these funds to her personal
account. In addition, the trial court found that: 37. [Respondent] transferred funds intended by
Lois to be used for [Petitioner's] benefit
into [Respondent's] personal accounts in an
amount in excess of $128,000.00.
38. [Respondent] repeatedly commingled funds
held on behalf of [Petitioner] with her
These findings, in conjunction with Respondent's inability at trial
to give an accounting for her handling of the trust funds, despite
repeated efforts and admonitions of the trial judge, support the
trial court's conclusion that Respondent's conduct was sufficiently
egregious as to constitute willful or wanton misconduct. This
conclusion, in turn, supports the award of punitive damages.
Accordingly, Respondent's assignment of error is overruled.
Respondent next argues that the trial court awarded punitive
damages for an improper purpose. Specifically, Respondent contends
that [i]t is clear from the trial transcript that the trial court
in this case did not award punitive damages for the purpose of
punishment or deterrence as provided in the statute. Rather, the
trial court entered punitive damages for the improper compensatory
purpose of awarding Petitioner her attorney's fees. This argument
is not properly before this Court.
Rule 10 of the North Carolina Rules of Appellate Procedure
provides that [a] listing of the assignments of error upon which
an appeal is predicated shall be stated at the conclusion of the
record on appeal[.] N.C. R. App. P. 10(c)(1). The rule provides
further that the scope of review on appeal is confined to a
consideration of those assignments of error set out in the recordon appeal[.] N.C. R. App. P. 10(a).
One purpose of Rule 10 is
to 'identify for the appellee's benefit all the errors possibly to
be urged on appeal . . . so that the appellee may properly assess
the sufficiency of the proposed record on appeal to protect his
position. Rogers v. Colpitts
, 129 N.C. App. 421, 422, 499 S.E.2d
789, 790 (1998) (quoting Kimmel v. Brett
, 92 N.C. App. 331, 335,
374 S.E.2d 435, 437 (1988)). In State v. Hart
, 361 N.C. 309, 311,
644 S.E.2d 201, 202 (2007) (quotation marks and citations omitted),
our Supreme Court recognized that [i]t is well settled that the
Rules of Appellate Procedure are mandatory and not directory.
However, the Court concluded that not every violation of the
rules . . . require[s] dismissal of the appeal or the issue,
although some other sanction may be appropriate, pursuant to Rule
25(b) or Rule 34 of the Rules of Appellate Procedure. Id.
Here, the assignments of error set out in the Record on Appeal
are void of any reference to an improper purpose allegedly used
by the trial court as the basis for awarding punitive damages.
Rather, the assignments of error question the findings of fact and
conclusions of law made by the trial court and challenge the
court's denial of Respondent's motion for a new trial and for
relief from judgment.
(See footnote 4)
Therefore, Respondent's assignments oferror did not put Petitioner on notice that Respondent may assert
this improper purpose argument on appeal. This omission placed
Petitioner at a disadvantage when attempting to protect her
interests during the preparation of the Record on Appeal.
Accordingly, because Respondent argues outside the scope of her
assignments of error, we do not reach this argument in this
For the reasons stated, the order of the trial court is
Judges McGEE and ELMORE concur.
Report per Rule 30(e).
Judge Haigwood also entered this order against Respondent
Jimmie E. James. However, James did not appeal to this Court.
By his 28 March 2006 order, Judge Haigwood removed Respondent
as trustee of the trust containing the Northwestern Mutual Life
Respondent's first assignment of error sufficiently raises
this issue for our review.
Although Respondent assigns error to the trial court's denial
of her Motion for New Trial and for Relief from Judgment and
mentions Rule 59 and Rule 60 of the North Carolina Rules of Civil
Procedure in the Standard of Review and Conclusion sections of
her brief, she asserts no argument on these grounds in the body of
her brief. Therefore, the assignment of error addressing Rule 59
and Rule 60 is deemed abandoned. See
N.C. R. App. P. 28(b)(6)
(Assignments of error not set out in the appellant's brief, or in
support of which no reason or argument is stated or authoritycited, will be taken as abandoned.).
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