Town of Belhaven v. Pantego Creek, LLC , 250 N.C. App. 459 ( 2016 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-373
Filed: 15 November 2016
Beaufort County, No. 14 CVS 697
TOWN OF BELHAVEN, NC; and THE NORTH CAROLINA NAACP STATE
CONFERENCE OF BRANCHES, THE HYDE COUNTY NAACP BRANCH, and
THE BEAUFORT COUNTY NAACP BRANCH, Plaintiffs,1
v.
PANTEGO CREEK, LLC; and VIDANT HEALTH, INC., Defendants.
Appeal by Plaintiffs from order entered 13 October 2015 by Judge R. Stuart
Albright in Beaufort County Superior Court. Heard in the Court of Appeals 19
October 2016.
Alan McSurely for plaintiffs-appellants the North Carolina NAACP State
Conference of Branches, the Hyde County NAACP Branch, and the Beaufort
County NAACP Branch.
C. Scott Holmes for plaintiff-appellants Town of Belhaven, NC and Pungo
District Hospital Community Board, Inc.
K&L Gates LLP, by Gary S. Qualls, Kathryn F. Taylor, Susan K. Hackney, and
Steven G. Pine, for defendant-appellee University Health Systems of Eastern
Carolina, Inc. d/b/a Vidant Health, Inc.
Sumrell, Sugg, Carmichael, Hicks and Hart, P.A., by Scott C. Hart, Arey W.
Grady, and Frederick H. Bailey, III, for defendant-appellee Pantego Creek,
LLC.
ENOCHS, Judge.
1
Although not included in the caption of the trial court’s order, Pungo District Hospital
Community Board, Inc. is also a plaintiff in this case.
TOWN OF BELHAVEN, NC V. PANTEGO CREEK, LLC
Opinion of the Court
The Town of Belhaven, North Carolina, the Pungo District Hospital
Community Board, Inc., the NAACP State Conference of Branches, the Hyde County
NAACP Branch, and the Beaufort County NAACP Branch (collectively “Plaintiffs”)
appeal from the trial court’s order granting Pantego Creek, LLC’s and Vidant Health,
Inc.’s (collectively “Defendants”) motion to dismiss pursuant to Rule 12(b)(6) of the
North Carolina Rules of Civil Procedure. After careful review, we affirm the trial
court’s order.
Factual Background
On 21 January 1948, the Town of Belhaven (“Belhaven”), located in Beaufort
County, North Carolina, recorded a deed granting the Pungo District Hospital
Corporation (“PDHC”) a 100 foot strip of land (“the 1948 Deed”). The deed provided,
in pertinent part, as follows:
THIS DEED, MADE this the 20th day of January,
1948, by Town of Belhaven, a municipal corporation of the
State of North Carolina, hereinafter designated as party of
the first part, to Pungo District Hospital Corporation,
hereinafter designated as party of the second part,
WITNESSETH: That the party of the first part, in
consideration of the benefits to be derived by the citizens of
the Town of Belhaven from the construction and operation
of a hospital on the property hereinafter described and
pursuant to the authority granted by Chapter 659 of the
Session Laws of 1947, has given, granted, bargained, sold
and does hereby convey unto the party of the second part
that certain lot or parcel of land in the Town of Belhaven,
Beaufort County, North Carolina, particularly described as
follows:
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That portion of Allen Street in said Town of
Belhaven 100 feet in width extending from Front or [sic]
Water Street Southwardly to Pantego Creek, reference
being made to the map made by Norfolk Southern Railroad
Company for a more accurate description thereof.
TO HAVE AND TO HOLD the said piece or parcel of
land, together with all and singular, the rights, ways,
privileges and appurtenances thereto belonging or in
anywise appertaining unto the party of the second part, its
successors and assigns in fee simple, in as full and ample
manner as the party of the first part is authorized and
empowered to convey the same.
After recordation, PDHC constructed Pungo District Hospital (“the Hospital”)
on the land conveyed in the 1948 Deed. PDHC then managed and operated the
Hospital until 2011.
In 2011, PDHC entered into an agreement (“the 2011 Agreement”) with
University Health Systems of Eastern Carolina, Inc., d/b/a Vidant Health, Inc.
(“Vidant”) and Pantego Creek, LLC (“Pantego Creek”) — which was formed on 28
September 2011 by PDHC — transferring full control of PDHC to Vidant. Pursuant
to the 2011 Agreement, Pantego Creek was vested with the right to prosecute any
breach of the 2011 Agreement by Vidant. The 2011 Agreement also expressly stated
that “The Parties agree that this Agreement and all of the Transaction Agreements
are not intended to be third party beneficiary agreements.”
In September 2013, Vidant announced that it intended to close the Hospital.
In response, Belhaven and the NAACP State Conference of Branches, the Hyde
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County NAACP Branch, and the Beaufort County NAACP Branch (collectively “the
NAACP”), publicly denounced closure of the Hospital. Thereafter, the Mayor of
Belhaven, the NAACP, and Vidant met on several occasions to discuss concerns
surrounding the Hospital’s imminent closure.
As a result of these meetings, the NAACP, Belhaven, and Vidant entered into
a written agreement (“the Mediation Agreement”) charging Belhaven with creating
the Pungo District Hospital Community Board, Inc. (“Community Board”). The
Mediation Agreement also stated the following: “In the event that the [Community
Board] is unable to assume operational responsibility for the hospital for whatever
reason on July 1, 2014, the Hospital will be closed[.]”
Belhaven failed to comply with the Mediation Agreement’s terms when the
Community Board failed to meet the 1 July 2014 deadline. As a result, Vidant closed
the Hospital on 1 July 2014 and deeded the associated real property to Pantego Creek
(the “2014 Deed”).
Plaintiffs filed a complaint and motion for a temporary restraining order on 13
August 2014 in Beaufort County Superior Court. The following day, the Honorable
Milton F. Fitch granted Plaintiffs’ motion for a temporary restraining order. The case
was thereafter removed to the United States District Court for the Eastern District
of North Carolina. On 18 March 2015, the Honorable James C. Dever, III remanded
the case to Beaufort County Superior Court on the ground that Plaintiffs had not
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Opinion of the Court
actually brought a federal civil rights claim under Title VI of the Federal Civil Rights
Act of 1964, but rather had alleged civil rights violations under N.C. Gen. Stat. § 99D-
1 (2015).
On 6 April 2015, Plaintiffs filed their first amended complaint in Beaufort
County Superior Court. The complaint set forth the following six causes of action: (1)
breach of contract against Vidant as successor in interest to the 1948 Deed by
Belhaven; (2) declaratory judgment against Defendants for breaching the 1948 Deed’s
terms by Belhaven; (3) fraud against Vidant; (4) unfair and deceptive trade practices
against Vidant by Belhaven and the Community Board; (5) breach of fiduciary duty
against Pantego Creek by Belhaven; and (6) Section 99D-1 claim against Defendants
by the NAACP.
On 30 April 2015, Senior Resident Superior Court Judge Wayland J. Sermons,
Jr. sent a formal letter to Chief Justice Mark Martin of the North Carolina Supreme
Court, copied to counsel for all parties, recommending that the case be designated as
exceptional and that Chief Justice Martin assign a judge to the case in his absolute
discretion. On 7 May 2015, Chief Justice Martin entered an order designating the
case as exceptional pursuant to Rule 2.1 of the General Rules of Practice for the
Superior and District Courts and appointing the Honorable R. Stuart Albright to
adjudicate the matter.
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Opinion of the Court
On 10 July 2015, Defendants filed a motion to dismiss Plaintiffs’ first amended
complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief could
be granted. Defendants attached the following documents to their motion: (1) the
2011 Agreement and related documentation thereto; (2) the Mediation Agreement;
(3) an email from the president and CEO of Vidant to the Mayor of Belhaven
incorporated by reference in Plaintiffs’ complaint; and (4) the 1948 Deed.2
A hearing on Defendants’ motion was held before Judge Albright on 6 October
2015 in Beaufort County Superior Court. On 13 October 2015, Judge Albright
entered an order granting Defendants’ motion to dismiss. Plaintiffs entered notice of
appeal on 10 November 2015.
Analysis
I. Motion to Dismiss
On appeal, Plaintiffs contend that the trial court erred in granting Defendants’
motion to dismiss. Specifically, they assert that they pled sufficient factual
allegations to advance each of their claims. We disagree.
“The standard of review of an order granting a 12(b)(6)
motion is whether the complaint states a claim for which
relief can be granted under some legal theory when the
complaint is liberally construed and all the allegations
included therein are taken as true. On a motion to dismiss,
2 Plaintiffs briefly argue that the trial court erred by considering these documents without
converting Defendants’ motion to dismiss into a motion for summary judgment pursuant to Rule 56 of
the North Carolina Rules of Civil Procedure. However, it is well settled that “[d]ocuments attached as
exhibits to the complaint and incorporated therein by reference are properly considered when ruling
on a 12(b)(6) motion.” Woolard v. Davenport, 166 N.C. App. 129, 133-34, 601 S.E.2d 319, 322 (2004).
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the complaint’s material factual allegations are taken as
true. 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. On appeal of a
12(b)(6) motion to dismiss, this Court conducts a de novo
review of the pleadings to determine their legal sufficiency
and to determine whether the trial court’s ruling on the
motion to dismiss was correct.”
Podrebarac v. Horack, Talley, Pharr, & Lowndes, P.A., 231 N.C. App. 70, 74, 752
S.E.2d 661, 663-64 (2013) (quoting Burgin v. Owen, 181 N.C. App. 511, 512, 640
S.E.2d 427, 428-29 (2007)). We address each of Plaintiffs’ claims in turn.
A. Breach of Contract and Declaratory Judgment
Plaintiffs argue that because Defendants were successors in interest to the
1948 Deed they were subject to language included therein which amounted to a
reversionary interest held by Belhaven that the granted property be used for the
operation of a hospital for the benefit of the citizens of the town. They maintain that
the trial court erred in dismissing Belhaven’s breach of contract claim against Vidant
and by failing to enter declaratory judgment against Vidant and Pantego Creek.
Plaintiffs assert that Article V, Section 3 of the North Carolina Constitution
mandates that taxes shall only be levied for public purposes and contend that the
subject land conveyed in the 1948 Deed can therefore never be used for anything other
than for the operation of a hospital because it was conveyed by the Town of Belhaven
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— a governmental entity — to PDHC. Consequently, they argue that the closure of
the Hospital would extinguish the land’s use for a public purpose and, in turn, run
afoul of Article V, Section 3.
The fundamental flaw with Plaintiffs’ position is that Belhaven did not include
any language creating a reversionary interest in the 1948 Deed to the effect that the
land would revert to Belhaven in the event that the land ceased being used for the
operation of a hospital. Instead, the language in the 1948 Deed clearly states that
the land was conveyed in fee simple absolute to PDHC.
Significantly, our Supreme Court has long held that
[t]his Court has declined to recognize reversionary
interests in deeds that do not contain express and
unambiguous language of reversion or termination upon
condition broken.
We have stated repeatedly that a mere expression of
the purpose for which the property is to be used without
provision for forfeiture or reentry is insufficient to create
an estate on condition and that, in such a case, an
unqualified fee will pass.
Station Assocs. v. Dare Cnty., 350 N.C. 367, 370-71, 513 S.E.2d 789, 792-93 (1999)
(internal citations omitted).
Here, we are satisfied that the language of the 1948 Deed does nothing more
than express the purpose for which Belhaven wished the subject property to be used.
There does not exist any express and unambiguous reversionary interest in the deed,
and indeed, to the contrary, it plainly states that PDHC is entitled “TO HAVE AND
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TO HOLD the said piece or parcel of land, together with all and singular, the rights,
ways, privileges and appurtenances thereto belonging or in anywise appertaining
unto the party of the second part, its successors and assigns in fee simple, in as full
and ample manner as the party of the first part is authorized and empowered to
convey the same.” (Emphasis added).
It is well settled that
[a] grantor can impose conditions and can make the
title conveyed dependent upon a grantee’s performance.
But if the grantor does not make any condition, but simply
expresses the motive which induces him to execute the
deed, the legal effect of the granting words cannot be
controlled by the language indicating the grantor’s motive.
It is well established that the law does not favor a
construction of the language in a deed which will constitute
a condition subsequent unless the intention of the parties
to create such a restriction upon the title is clearly
manifested. For a reversionary interest to be recognized,
the deed must contain express and unambiguous language
of reversion or termination upon condition broken. A mere
expression of the purpose for which the property is to be
used without provision for forfeiture or re-entry is
insufficient to create an estate on condition.
Prelaz v. Town of Canton, 235 N.C. App. 147, 155, 760 S.E.2d 389, 394 (2014) (internal
citations, quotation marks, and brackets omitted).
Plaintiffs cite no authority for their proposition that an implicit reversionary
interest is created simply because the granting party is a governmental entity which
had a public purpose in mind at the time it conveyed certain property, nor are we
aware of any. Consequently, we are bound by Station Assocs., Inc. and analogous
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cases requiring that for a reversionary interest to exist it must be expressly and
unambiguously stated in a grant of real property. We therefore hold that no
reversionary interest was created in the 1948 Deed and PDHC and its successors in
interest acquired title to the subject property in fee simple absolute.
Furthermore, although unnecessary to our determination of this issue, we also
note that the General Assembly has affirmatively provided that
[i]t is the purpose of the General Assembly of the
State of North Carolina to provide that if a person claims
title to real property under a chain of record title for 30
years, and no other person has filed a notice of any claim of
interest in the real property during the 30-year period,
then all conflicting claims based upon any title transaction
prior to the 30-year period shall be extinguished.
N.C. Gen. Stat. § 47B-1 (2015). Towards this end, the General Assembly has
emphasized that “obsolete restrictions . . . which have been placed on the real
property records at remote times in the past often constitute unreasonable restraints
on the alienation and marketability of real property.” N.C. Gen. Stat. § 47B-1(2).
Consequently,
(a) Any person having the legal capacity to own real
property in this State, who, alone or together with his
predecessors in title, shall have been vested with any
estate in real property of record for 30 years or more, shall
have a marketable record title to such estate in real
property.
(b) A person has an estate in real property of record
for 30 years or more when the public records disclose a title
transaction affecting the title to the real property which
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has been of record for not less than 30 years purporting to
create such estate either in:
(1) The person claiming such estate; or
(2) Some other person from whom, by one
or more title transactions, such estate
has passed to the person claiming such
estate;
with nothing appearing of record, in either case, purporting
to divest such claimant of the estate claimed.
(c) Subject to the matters stated in G.S. 47B-3, such
marketable record title shall be free and clear of all rights,
estates, interests, claims or charges whatsoever, the
existence of which depends upon any act, title transaction,
event or omission that occurred prior to such 30-year
period. All such rights, estates, interests, claims or
charges, however denominated, whether such rights,
estates, interests, claims or charges are or appear to be
held or asserted by a person sui juris or under a disability,
whether such person is natural or corporate, or is private
or governmental, are hereby declared to be null and void.
N.C. Gen. Stat. § 47B-2(a)-(c) (2015) (emphasis added).
Because the 1948 Deed on its face states that it is fee simple, and since it had
been held as such for over 60 years at the time of the events giving rise to the present
appeal, we hold that the trial court did not err in dismissing Belhaven’s breach of
contract and declaratory judgment claims on this ground as well. Any argument that
Defendants somehow violated the North Carolina Constitution when title was
transferred to Vidant and then to Pantego Creek is foreclosed by the fact that they
acquired fee simple absolute title from their predecessor in interest, PDHC, who also
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enjoyed title in fee simple as a result of the 1948 Deed’s express provisions as
discussed above and the fact that they had held it for well over the 30 year time period
delineated in N.C. Gen. Stat. §§ 47B-1 and 47B-2. Consequently, Plaintiffs’
arguments on this issue are overruled.
B. Fraud
Plaintiffs next contend that the trial court erred in dismissing their claim
against Vidant for fraud. We disagree.
The well-recognized elements of fraud are 1) a false
representation or concealment of a material fact, 2)
reasonably calculated to deceive, 3) made with intent to
deceive, 4) which does in fact deceive, and which 5) results
in damage to the injured party. A complaint charging
fraud must allege these elements with particularity. In
pleading actual fraud, the particularity requirement is met
by alleging time, place and content of the fraudulent
representation, identity of the person making the
representation and what was obtained as a result of the
fraudulent acts or representations. Dismissal of a claim for
failure to plead with particularity is proper where there are
no facts whatsoever setting forth the time, place, or specific
individuals who purportedly made the misrepresentations.
Bob Timberlake Collection, Inc. v. Edwards, 176 N.C. App. 33, 39, 626 S.E.2d 315,
321 (2006) (internal citations, quotation marks, and brackets omitted).
Significantly, the Mediation Agreement expressly stated that “In the event
that the [Community Board] is unable to assume operational responsibility for the
hospital for whatever reason on July 1, 2014, the Hospital will be closed[.]” Belhaven
breached the Mediation Agreement when the Community Board was unable to legally
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assume control of the Hospital on 1 July 2014 and Plaintiffs do not contend otherwise.
Therefore, in complete accord with the agreement, Vidant closed the Hospital as it
was entitled to. The NAACP and Belhaven fully acquiesced to this portion of the
agreement to which they are signatories. “In North Carolina, parties to a contract
have an affirmative duty to read and understand a written contract before they sign
it.” Westmoreland v. High Point Healthcare Inc., 218 N.C. App. 76, 83, 721 S.E.2d
712, 718 (2012); see Raper v. Oliver House, LLC, 180 N.C. App. 414, 421, 637 S.E.2d
551, 555 (2006) (“ ‘Persons entering contracts . . . have a duty to read them and
ordinarily are charged with knowledge of their contents.’ ” (quoting Nationwide Mut.
Ins. Co. v. Edwards, 67 N.C. App. 1, 8, 312 S.E.2d 656, 661 (1984))).
Plaintiffs’ agreement that Vidant could close the Hospital on 1 July 2014 was
plain, clear, and unambiguous. Their attempt to allege fraud in their complaint does
not address the import of this provision, but rather simply states that “[a]t the time
Vidant made these representations, it was secretly implementing its plans to
permanently close the [Hospital], convey the property to a small group of people who
controlled the Pantego Creek, LLC, pay its agents to demolish the [Hospital], and to
build clinics nearby to compete with the re-opened hospital.”
Such a broad unparticularized allegation, despite ignoring the provision of the
Mediation Agreement that “[i]n the event that the [Community Board] is unable to
assume operational responsibility for the hospital for whatever reason on July 1,
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2014, the Hospital will be closed” additionally violates the pleading requirements of
Rule 9(b) of the North Carolina Rules of Civil Procedure which requires that “[i]n all
averments of fraud, duress or mistake, the circumstances constituting fraud or
mistake shall be stated with particularity.” See Terry v. Terry, 302 N.C. 77, 85, 273
S.E.2d 674, 678 (1981) (“[I]n pleading actual fraud the particularity requirement is
met by alleging time, place and content of the fraudulent representation, identity of
the person making the representation and what was obtained as a result of the
fraudulent acts or representations.”).
Moreover, Plaintiffs are incapable of suffering damages based on the 2011
Agreement or the 2014 Deed between Vidant, PDHC, and Pantego Creek because
they were not parties to those agreements and were not third-party beneficiaries
thereof.
North Carolina recognizes the right of a third-party
beneficiary . . . to sue for breach of a contract executed for
his benefit. In order to assert rights as a third-party
beneficiary under [a contract], plaintiffs must show they
were an intended beneficiary of the contract. We have
stated that plaintiffs must show:
(1) that a contract exists between two persons
or entities; (2) that the contract is valid and
enforceable; and (3) that the contract was
executed for the direct, and not incidental,
benefit of the [third party]. A person is a
direct beneficiary of the contract if the
contracting parties intended to confer a
legally enforceable benefit on that person. It
is not enough that the contract, in fact, benefits
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the [third party], if, when the contract was
made, the contracting parties did not intend it
to benefit the [third party] directly. In
determining the intent of the contracting
parties, the court should consider the
circumstances surrounding the transaction as
well as the actual language of the contract.
When a third person seeks enforcement of a
contract made between other parties, the
contract must be construed strictly against
the party seeking enforcement.
Babb v. Bynum & Murphrey, PLLC, 182 N.C. App. 750, 753-54, 643 S.E.2d 55, 57-58
(2007) (emphasis added) (internal citations and quotation marks omitted) (quoting
Country Boys Auction & Realty Co., Inc. v. Carolina Warehouse, Inc., 180 N.C. App.
141, 146, 636 S.E.2d 309, 313 (2006)).
Here, the 2011 Agreement and the 2014 Deed between Vidant, PDHC, and
Pantego Creek were for their exclusive benefit and Plaintiffs were not parties or
third-party beneficiaries thereto. Therefore, any benefit they derived from the
agreements would have properly been deemed incidental. Indeed, to wit, the 2011
Agreement expressly provides that “[t]he Parties agree that this Agreement and all
of the Transaction Agreements are not intended to be third party beneficiary
agreements.”
Without standing to challenge Vidant’s, PDHC’s, and Pantego Creek’s 2011
Agreement and 2014 Deed, Plaintiffs cannot maintain an action for fraud against
Vidant. Further, because they have failed to allege with any particularity how
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Vidant’s exercise of its express option to close the Hospital contained in the Mediation
Agreement and referenced in the letter from Vidant’s president and CEO to the
Mayor of Belhaven constituted fraud, we hold that the trial court did not err in
dismissing Plaintiffs’ fraud claim against Vidant.
C. Unfair and Deceptive Trade Practices
Plaintiffs next argue that the trial court erred by dismissing Belhaven’s and
the Community Board’s unfair and deceptive trade practices claim against Vidant.
We disagree.
Under N.C.G.S. § 75-1.1, a trade practice is unfair if
it is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to customers. A trade practice is
deceptive if it has the capacity or tendency to deceive. It is
well recognized, however, that actions for unfair or
deceptive trade practices are distinct from actions for
breach of contract, and that a mere breach of contract, even
if intentional, is not sufficiently unfair or deceptive to
sustain an action under N.C.G.S. § 75-1.1.
Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 61-62, 418 S.E.2d 694,
700 (1992) (internal citations and quotation marks omitted). “The elements of a claim
for unfair or deceptive trade practices are: ‘(1) an unfair or deceptive act or practice,
or an unfair method of competition, (2) in or affecting commerce, (3) which
proximately caused actual injury to the plaintiff or to his business.’ ” Noble v. Hooters
of Greenville (NC), LLC, 199 N.C. App. 163, 166, 681 S.E.2d 448, 452 (2009) (quoting
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Furr v. Fonville Morisey Realty, Inc., 130 N.C. App. 541, 551, 503 S.E.2d 401, 408
(1998)).
Here, for the reasons discussed above, Belhaven and the Community Board
have failed to allege any fraud or deception on the part of Vidant. Their claim for
unfair and deceptive trade practices fails for this reason alone as they cannot
establish the first element of the offense. Moreover, Plaintiffs do not have standing
to bring an unfair and deceptive trade practices claim as there was no business
relationship between Vidant and Plaintiffs, nor are they customers of Vidant, nor
have they pled any injury in fact beyond the mere abstract allegation that “Plaintiffs
suffered actual injury as a result of Vidant’s conduct alleged herein.” See Carcano v.
JBSS, LLC, 200 N.C. App. 162, 175, 684 S.E.2d 41, 52 (2009) (“To have standing to
bring a claim under the [Unfair and Deceptive Trade Practices] Act, the plaintiff must
prove the elements of standing, including injury in fact. An injury in fact must be
distinct and palpable, and must not be abstract or conjectural or hypothetical.”
(internal citation and quotation marks omitted)). Consequently, the trial court did
not err in dismissing Belhaven’s and the Community Board’s unfair and deceptive
trade practices claim against Vidant.
D. Breach of Fiduciary Duty
Belhaven next contends that Pantego Creek owed it a fiduciary duty pursuant
to the 2011 Agreement. However, as noted above, by that agreement’s plain terms it
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was not intended for the benefit of third-party beneficiaries and was exclusively
between Pantego Creek, PDHC, and Vidant. Thus, no fiduciary relationship ever
existed between Pantego Creek and Plaintiffs. See Dalton v. Camp, 353 N.C. 647,
651, 548 S.E.2d 704, 707 (2001) (“For a breach of fiduciary duty to exist, there must
first be a fiduciary relationship between the parties.”).
Therefore, Belhaven has failed to sufficiently plead a viable claim for breach of
fiduciary duty against Pantego Creek. Plaintiffs’ arguments on this issue are without
merit.
E. Section 99D-1 Claim
Plaintiffs next argue that the trial court erred in dismissing the NAACP’s N.C.
Gen. Stat. § 99D-1 claim against Defendants. We disagree.
It is well established that
[a]n organization generally lacks standing to sue for
money damages on behalf of its members if the damage
claims are not common to the entire membership, nor
shared equally, so that the fact and extent of injury would
require individualized proof. Where an association seeks
to recover damages on behalf of its members, the extent of
injury to individual members and the burden of
supervising the distribution of any recovery mitigates
against finding standing in the association.
Creek Pointe Homeowner’s Ass’n v. Happ, 146 N.C. App. 159, 167, 552 S.E.2d 220, 226
(2001) (internal citation, quotation marks, and brackets omitted); see generally
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Landfall Grp. Against Paid Transferability v. Landfall Club, Inc., 117 N.C. App. 270,
450 S.E.2d 513 (1994).
N.C. Gen. Stat. § 99D-1(a)-(b1) provides, in pertinent part, the following:
(a) It is a violation of this Chapter if:
(1) Two or more persons, motivated by
race, religion, ethnicity, or gender, but
whether or not acting under color of
law, conspire to interfere with the
exercise or enjoyment by any other
person or persons of a right secured by
the Constitutions of the United States
or North Carolina, or of a right secured
by a law of the United States or North
Carolina that enforces, interprets, or
impacts on a constitutional right; and
(2) One or more persons engaged in such a
conspiracy use force, repeated
harassment, violence, physical harm to
persons or property, or direct or
indirect threats of physical harm to
persons or property to commit an act in
furtherance of the object of the
conspiracy; and
(3) The commission of an act described in
subdivision (2) interferes, or is an
attempt to interfere, with the exercise
or enjoyment of a right, described in
subdivision (1), of another person.
(b) Any person whose exercise or enjoyment of a
right described in subdivision (a)(1) has been interfered
with, or against whom an attempt has been made to
interfere with the exercise or enjoyment of such a right, by
a violation of this Chapter may bring a civil action. . . .
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TOWN OF BELHAVEN, NC V. PANTEGO CREEK, LLC
Opinion of the Court
(b1) The North Carolina Human Relations
Commission may bring a civil action on behalf, and with
the consent, of any person subjected to a violation of this
Chapter. In any such action, the court may restrain and
enjoin such future acts, and may award compensatory
damages and punitive damages to the person on whose
behalf the action was brought. Court costs may be awarded
to the Commission or the defendant, whichever prevails.
Notwithstanding the provisions of G.S. 114-2, the
Commission shall be represented by the Commission’s staff
attorney.
(Emphasis added.)
Based upon the plain and unambiguous language of the statute, it is readily
apparent that the General Assembly only intended individually aggrieved persons or
the North Carolina Human Relations Commission to have standing to bring an action
under Section 99D-1. “Where the language of a statute is clear and unambiguous,
this Court is bound by the plain language of the statute.” Riviere v. Riviere, 134 N.C.
App. 302, 304, 517 S.E.2d 673, 675 (1999); see also Mangum v. Raleigh Bd. of
Adjustment, 196 N.C. App. 249, 255, 674 S.E.2d 742, 747 (2009) (“One of the long-
standing rules of interpretation and construction in this state is expressio unius est
exclusio alterius, the expression of one thing is the exclusion of another.”). Here, no
named individual person or persons are parties to this lawsuit. Thus, the NAACP is
without standing to assert a Section 99D-1 claim.
II. Designation of Case as Exceptional
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TOWN OF BELHAVEN, NC V. PANTEGO CREEK, LLC
Opinion of the Court
Plaintiffs’ final argument on appeal, in essence, is that the Senior Resident
Superior Court Judge for the Second Judicial District and the Chief Justice of the
Supreme Court of North Carolina deprived Plaintiffs of their right to a fair and
impartial hearing when the Chief Justice designated the present case as an
exceptional case under Rule 2.1 of the General Rules of Practice for the Superior and
District Courts upon the formal recommendation of the Senior Resident Superior
Court Judge for the Second Judicial District and appointed Judge Albright to
adjudicate the matter. For the first time on appeal, Plaintiffs now argue that they
were prejudiced by Judge Albright’s adjudication of the case and request that this
Court vacate Judge Albright’s order dismissing Plaintiffs’ claims and remand for a
new hearing with a judge that they would prefer over Judge Albright. On 25 July
2016, Defendants filed a motion to dismiss this portion of Plaintiffs’ appeal.
We are without jurisdiction to consider this matter on appeal as the superior
court had no jurisdiction to overrule a command of the Supreme Court and our
jurisdiction is derivative of the superior court’s jurisdiction. See State v. Earley, 24
N.C. App. 387, 389, 210 S.E.2d 541, 543 (1975) (“[T]he jurisdiction of the appellate
courts on an appeal is derivative. If the trial court has no jurisdiction, the appellate
courts cannot acquire jurisdiction by appeal.”). Consequently, we conclude that
Plaintiffs’ argument on this issue is wholly meritless and grant Defendants’ motion
to dismiss this portion of Plaintiffs’ appeal.
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TOWN OF BELHAVEN, NC V. PANTEGO CREEK, LLC
Opinion of the Court
Conclusion
For the reasons stated above, the trial court’s order is affirmed and Defendants’
motion to dismiss the portion of Plaintiffs’ appeal concerning the issues surrounding
the designation of the case as exceptional is granted.
AFFIRMED IN PART; DISMISSED IN PART.
Chief Judge McGEE and Judge INMAN concur.
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