Sullivan v. Pugh ( 2018 )


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  •              IN THE COURT OF APPEALS OF NORTH CAROLINA
    No. COA17-450
    Filed: 3 April 2018
    Pender County, No. 14-CVS-124
    DONALD SULLIVAN, Plaintiff,
    v.
    ROBERT WAYNE PUGH and KAREN LLOYD PUGH, his legal wife, Defendants.
    Pender County, No. 15-CVS-348
    TOG PROPERTIES, LLC, Plaintiff,
    v.
    KAREN PUGH, Defendant.
    Appeal by plaintiff TOG Properties, LLC from order entered 14 February 2017
    by Judge Phyllis M. Gorham in Pender County Superior Court. Heard in the Court
    of Appeals 5 October 2017.
    Donald Sullivan, pro se, plaintiff-appellant.
    The Law Offices of Oliver & Cheek, PLLC, by Ciara L. Rogers, for plaintiff-
    appellee TOG Properties, LLC.
    BERGER, Judge.
    Donald Sullivan (“Sullivan”) appeals a February 14, 2017 order granting
    summary judgment to TOG Properties, LLC (“TOG Properties”) on its cross-claim for
    SULLIVAN V. PUGH
    Opinion of the Court
    declaratory judgment.    This dispute arose over which party, Sullivan or TOG
    Properties, owned certain timbered property at the time it was damaged by a fire
    allegedly set by Karen Pugh (“Pugh”) on April 14, 2012. Whichever party owned the
    property at the time of the fire would hold any legal claims against Pugh resulting
    from the damages to the property as a result of the fire. Sullivan appeals, arguing
    that the trial court erred in granting TOG Properties’ summary judgment motion
    because this ruling denied him his right to a jury trial and because there was a
    genuine issue of material fact which should have precluded the trial court from
    granting the motion. We disagree.
    Factual and Procedural Background
    On June 1, 2006, TOG Properties purchased approximately 1500 acres of
    timbered real property in Pender County, North Carolina from B&N Properties of
    Pender, LLC (“B&N”). B&N financed the sale to TOG Properties, secured by a deed
    of trust.   At the time of the sale, Kenner Day (“Day”) was a manager of TOG
    Properties as well as the designated registered agent of TOG Properties in North
    Carolina. On May 9, 2010, Day was terminated as TOG Properties’ president and
    was removed from the company.         On July 16, 2010, TOG Properties filed for
    bankruptcy, and B&N subsequently filed a proof of claim as senior creditor with a
    claim to the real property and assigned its interest to Sullivan, its sole shareholder
    and manager.
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    SULLIVAN V. PUGH
    Opinion of the Court
    On April 14, 2012, Pugh set a fire near her home on property adjacent to the
    property at issue in this appeal damaging approximately 500 acres of timber. At the
    time of the fire, TOG Properties still maintained ownership of the property. Sullivan
    subsequently foreclosed on the property, and on October 20, 2012, Sullivan purchased
    the property in a foreclosure sale at the Pender County Courthouse. In the following
    months, Day, the former president and manager of TOG Properties, sent letters and
    executed documents purporting to transfer TOG Properties’ legal and equitable
    interests in any proceeds or claims related to the fire to Sullivan.
    Sullivan filed an amended complaint against Robert Wayne and Karen Pugh
    on February 3, 2015 alleging negligence and negligence per se seeking damages for
    the burning of the timber on the property now owned by Sullivan. On April 10, 2015,
    TOG Properties also filed a complaint against Pugh seeking to recover damages
    resulting from the fire.   TOG Properties additionally filed a cross-claim against
    Sullivan seeking a declaratory judgment that it was the owner of the property at the
    time of the fire and was, therefore, the sole owner of any claims against Pugh.
    On November 16, 2016, TOG Properties filed a motion for summary judgment
    on its cross-claim for declaratory judgment.        The trial court granted summary
    judgment in TOG Properties’ favor on February 14, 2017, and it is from this order
    that Sullivan timely appeals.
    Analysis
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    SULLIVAN V. PUGH
    Opinion of the Court
    Sullivan argues first that his constitutional right to a trial by jury was denied
    when the trial court granted TOG Properties’ motion for summary judgment
    pursuant to Rule 56 of the North Carolina Rules of Civil Procedure. He asserts that,
    although Rule 56 is “a commendable attempt by the judiciary to extend its power in
    order to reduce its docket and render the courts more efficient,” it is nevertheless
    “blatantly unconstitutional,” treasonous, and should not be tolerated. In support of
    his argument, Sullivan cites our North Carolina Constitution, Article I, Section 25,
    which states that “[i]n all controversies at law respecting property, the ancient mode
    of trial by jury is one of the best securities of the rights of the people, and shall remain
    sacred and inviolable.” N.C. Const. art. I, § 25.
    It is true that “[t]he right to a jury trial is a substantial right of great
    significance.” Mathias v. Brumsey, 
    27 N.C. App. 558
    , 560, 
    219 S.E.2d 646
    , 647 (1975),
    disc. review denied, 
    289 N.C. 140
    , 
    220 S.E.2d 798
     (1976).                 However, “[t]he
    constitutional right to trial by jury, N.C. Const. Art. I, § 25, is not absolute; rather, it
    is premised upon a preliminary determination by the trial judge that there indeed
    exist genuine issues of fact and credibility which require submission to the jury.”
    Bank v. Burnette, 
    297 N.C. 524
    , 537, 
    256 S.E.2d 388
    , 396 (1979). As both the United
    States Supreme Court stated in Ex parte Wall and this Court adopted in In re
    Bonding Co., “ ‘it is a mistaken idea that due process of law requires a plenary suit
    and a trial by jury[] in all cases where property or personal rights are involved.’ ” In
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    SULLIVAN V. PUGH
    Opinion of the Court
    re Bonding Co., 
    16 N.C. App. 272
    , 277, 
    192 S.E.2d 33
    , 36 (brackets omitted) (quoting
    Ex parte Wall, 
    107 U.S. 265
    , 289, 
    27 L. Ed. 552
     (1883)), cert. denied and appeal
    dismissed, 
    282 N.C. 426
    , 
    192 S.E.2d 837
     (1972).
    Therefore, because “[t]he right to a jury trial accrues only when there is a
    genuine issue of fact to be decided at trial,” State ex rel. Albright v. Arellano, 
    165 N.C. App. 609
    , 618, 
    599 S.E.2d 415
    , 421 (2004), we must resolve Sullivan’s other
    argument raised in his appeal, whether the trial court erred in granting TOG
    Properties’ motion for summary judgment. Specifically, Sullivan argues that there
    remains the genuine issue of material fact that requires determination by a jury:
    whether Day had the apparent authority as an agent of TOG Properties to transfer
    TOG Properties’ legal and equitable interests in any proceeds or claims related to the
    fire.
    “The doctrine of summary judgment requires cautious application, ensuring
    that no litigant is unjustly deprived of his right to try disputed factual issues.” Leiber
    v. Arboretum Joint Venture, LLC, 
    208 N.C. App. 336
    , 344, 
    702 S.E.2d 805
    , 811 (2010)
    (citation omitted), disc. review denied, 
    365 N.C. 195
    , 
    711 S.E.2d 433
     (2011). Citing
    Rule 56 of the North Carolina Rules of Civil Procedure, our Supreme Court explained
    summary judgment in Dalton v. Camp, stating that it
    is a device whereby judgment is rendered if the pleadings,
    depositions, interrogatories, and admissions on file,
    together with any affidavits, show that there is no genuine
    issue as to any material fact and that any party is entitled
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    SULLIVAN V. PUGH
    Opinion of the Court
    to judgment as a matter of law. The rule is designed to
    eliminate the necessity of a formal trial where only
    questions of law are involved and a fatal weakness in the
    claim of a party is exposed.
    Dalton v. Camp, 
    353 N.C. 647
    , 650, 
    548 S.E.2d 704
    , 707 (2001) (citations omitted).
    Therefore, if “the trial court determines that only questions of law, not fact, are at
    issue,” a trial is not necessary and is to be eliminated, along with the attendant
    opportunity for the nonmoving party to present its facts to a jury. Loy v. Lorm Corp.,
    
    52 N.C. App. 428
    , 437, 
    278 S.E.2d 897
    , 903-04 (1981).
    “When considering a motion for summary judgment, the trial judge must view
    the presented evidence in a light most favorable to the nonmoving party. Moreover,
    the party moving for summary judgment bears the burden of establishing the lack of
    any triable issue.” Dalton, 
    353 N.C. at 651
    , 
    548 S.E.2d at 707
     (citations omitted).
    Therefore, we must determine whether the trial court could correctly assert as a
    matter of law that “Day did not have authority, actual or apparent, to act on behalf
    of TOG Properties when the Day letters were executed,” namely, Day had no actual
    or apparent agency relationship with TOG Properties at the time he transferred TOG
    Properties’ substantive rights to Sullivan. If no agency relationship existed at that
    time, then the purported transfer of rights was void.       “Unless there is but one
    inference that can be drawn from the facts, whether an agency relationship exists is
    a question of fact for the jury. If only one inference can be drawn from the facts then
    it is a question of law for the trial court.” Hylton v. Koontz, 
    138 N.C. App. 629
    , 635-
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    SULLIVAN V. PUGH
    Opinion of the Court
    36, 
    532 S.E.2d 252
    , 257 (2000) (citing Hoffman v. Moore Regional Hospital, 
    114 N.C. App. 248
    , 250, 
    441 S.E.2d 567
    , 569, disc. review denied, 
    336 N.C. 605
    , 
    447 S.E.2d 391
    (1994)), disc. review denied and dismissed, 
    353 N.C. 373
    , 
    546 S.E.2d 603
    -04 (2001).
    “[A]n agent is one who acts for or in the place of another by authority from him.
    Two factors are essential in establishing an agency relationship: (1) the agent must
    be authorized to act for the principal; and (2) the principal must exercise control over
    the agent.” Leiber, 208 N.C. App. at 344, 
    702 S.E.2d at 811
     (citations, quotation
    marks, and brackets omitted). A principal will only be held liable to a third person
    for the actions of his agent “when the agent acts within the scope of his or her actual
    authority; when a contract, although unauthorized, has been ratified; or when the
    agent acts within the scope of his or her apparent authority, unless the third person
    has notice that the agent is exceeding actual authority.” First Union Nat'l Bank v.
    Brown, 
    166 N.C. App. 519
    , 527, 
    603 S.E.2d 808
    , 815 (2004) (citation omitted).
    Furthermore, the doctrine of apparent authority
    may not be invoked by one who knows, or has good reason
    for knowing, the limits and extent of the agent's authority.
    In such case the rule is: Any apparent authority that might
    otherwise exist vanishes in the presence of the third
    person's knowledge, actual or constructive, of what the
    agent is, or what he is not, empowered to do for his
    principal.
    Commercial Solvents v. Johnson, 
    235 N.C. 237
    , 242, 
    69 S.E.2d 716
    , 720 (1952)
    (citation and quotation marks omitted).
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    SULLIVAN V. PUGH
    Opinion of the Court
    Here, the uncontroverted evidence presented to the trial court in support of
    TOG Properties’ summary judgment motion “indicated that Day’s role as President
    of TOG Properties had been terminated on May 9, 2010”; thus, Day had no actual
    authority after that date.      Additionally, no allegations were made that the
    establishment of a contract, or ratification of a contract, between TOG Properties and
    Sullivan is an issue. Therefore, our final determination is whether, as a matter of
    law, Day had the apparent authority to bind TOG Properties to the transfer to
    Sullivan of its right to seek compensation for its damages caused by the April 2012
    fire.
    Sullivan presented no evidence beyond the assertions in his pleadings to
    oppose TOG Properties’ motion for summary judgment. The exhibits and affidavits
    presented to the trial court in support of TOG Properties’ motion showed that
    Sullivan knew, or had good reason for knowing, that Day had no authority to bind
    TOG Properties. First, the evidence tended to show that Sullivan had been served
    TOG Properties’ bankruptcy petition in 2010 as a creditor of the company. The
    Statement of Financial Affairs served on Sullivan with the bankruptcy petition listed
    Day under the section “Former partners, officers, directors and shareholders” as an
    officer or director of TOG Properties “whose relationship with the corporation
    terminated within one year immediately preceding the commencement of [the
    bankruptcy] case.” The date of Day’s termination was listed as May 9, 2010. Second,
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    SULLIVAN V. PUGH
    Opinion of the Court
    the agreement purporting to cede any rights to any insurance claims resulting from
    the 2012 fire was introduced to the trial court in support of TOG Properties’ motion.
    This agreement between Day and Sullivan, which they had sworn to, signed, and
    notarized in November and December of 2014, twice identified Day as a former
    member and registered agent of TOG Properties. Sullivan makes no attempt to
    explain what authority a former member or agent may reasonably possess that could
    bind his principal.
    Because only one inference can be drawn from the facts presented to the trial
    court for summary judgment, whether an agency relationship existed between Day
    and TOG Properties is a question of law for the court, and was correctly settled
    through summary judgment. No genuine issue of fact or credibility exists which
    would require submission of this question to the jury; therefore, Sullivan has no
    constitutional right to trial by jury.
    Conclusion
    The trial court did not err in ordering that, because no genuine issue of
    material fact existed, it could determine the rights, status, and legal relations of TOG
    Properties and Sullivan as a matter of law. Therefore, the order granting summary
    judgment to TOG Properties is affirmed.
    AFFIRMED.
    Judges DAVIS and ZACHARY concur.
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