DeMayo v. Stone By Lynch, LLC ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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
A p p e l l a t e P r o c e d u r e .
NO. COA14-119
NORTH CAROLINA COURT OF APPEALS
Filed: 15 July 2014
MICHAEL A. DEMAYO and KELLIE H.
DEMAYO,
Plaintiffs,
v. Mecklenburg County
No. 12 CVS 19847
STONE BY LYNCH, LLC, and L.C.
LYNCH, a/k/a L.C. Lynch, Jr.,
Defendants.
Appeal by defendants from order entered 17 September 2013
by Judge Richard D. Boner in Mecklenburg County Superior Court.
Heard in the Court of Appeals 19 May 2014.
Horack, Talley, Pharr & Lowndes, P.A., by Gregory L.
Shelton and John W. Bowers, for plaintiffs–appellees.
Kenneth T. Davies, for defendants–appellants.
MARTIN, Chief Judge.
Defendants Stone By Lynch, LLC and L.C. Lynch a/k/a L.C.
Lynch, Jr. appeal from an order denying their motion, made
pursuant to N.C.G.S. § 1A-1, Rules 60 and 68.1, to vacate a
1 November 2012 judgment entered against them and in favor of
plaintiffs Michael A. DeMayo and Kellie H. DeMayo by the
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Mecklenburg County Clerk of Court. We affirm.
Our recitation of the facts and procedural history is
limited to those events relevant to the issues presented on
appeal. Plaintiffs engaged JAS-AM, Inc., a North Carolina
general contractor, to build a new residential home for them in
Charlotte, North Carolina. In November 2009, JAS-AM entered
into a construction subcontract with defendant Stone By Lynch to
furnish and install all of the limestone and other stone masonry
work required for plaintiffs’ new residence. In January 2010,
defendant Stone By Lynch entered into a second-tier supply
agreement with Riverside Cut Stone, Inc. (“Riverside”) to supply
the limestone for plaintiffs’ construction project.
In December 2011, Riverside filed a subrogation claim of
lien with the Mecklenburg County Clerk of Court against
plaintiffs’ property, and filed a lien enforcement action in
Mecklenburg County against plaintiffs, JAS-AM, and defendant
Stone By Lynch. In turn, defendant Stone By Lynch filed a
subrogation claim of lien against plaintiffs’ property in the
amount of $91,881.00, and filed cross-claims against plaintiffs
and JAS-AM in Riverside’s lien enforcement action. Riverside’s
subrogation claim of lien was discharged after plaintiffs and
JAS-AM posted a cash bond with the Mecklenburg County Clerk of
Court in the amount of the lien totaling $255,626.00; no bond
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was posted with respect to defendant Stone By Lynch’s
subrogation claim of lien.
On 21 January 2012, defendant L.C. Lynch, Jr., the manager
of Stone By Lynch, met with plaintiff Michael A. DeMayo and
Sajjan Dhaliwal, the president of JAS-AM, at plaintiff DeMayo’s
request. At this meeting, plaintiff DeMayo presented defendant
Lynch with a Settlement Agreement and Confession of Judgment for
Lynch’s signature. The Settlement Agreement provided that the
parties——plaintiffs, JAS-AM, defendant Stone By Lynch, and
defendant Lynch, individually——agreed that, within two days of
the execution of the Settlement Agreement, defendant Stone By
Lynch would cause to be filed a notice of satisfaction of its
claim of lien and a notice of voluntary dismissal with
prejudice, and would execute and deliver a final lien waiver and
release, as well as a Confession of Judgment. In return,
plaintiffs agreed that they would pay defendant Stone By Lynch
$60,000.00 in fixed increments subject to the following schedule
and milestones: plaintiffs would pay the first $30,000.00 upon
the execution of the filings and deliverables requested in the
Settlement Agreement; plaintiffs would pay the next $20,000.00
upon the completion of defendant Stone By Lynch’s scope of work
for plaintiffs’ construction project; and plaintiffs would pay a
final payment of $10,000.00 “upon certification by [JAS-AM] and
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[plaintiffs] that [defendant Stone By Lynch] has satisfactorily
addressed punch list items.” The Settlement Agreement further
provided that the parties “have read and fully understood the
provisions of this Agreement prior to its execution and
delivery.” This Settlement Agreement was signed twice by
defendant Lynch two days later on 23 January 2012; once on
behalf of himself and once on behalf of defendant Stone By Lynch
as its managing member. The Confession of Judgment, signed by
defendant Lynch on 23 January 2012 on behalf of defendant Stone
By Lynch, further provided that defendants authorized the entry
of a judgment, without action, in plaintiffs’ favor, in the
amount of $170,626.00, in the event that defendants “fail[ed] to
hold harmless [p]laintiffs as required under that Settlement
Agreement entered by the [p]laintiffs, [d]efendants, and JAS-AM,
Inc., on or about January 23, 2012.”
Following the execution of the Confession of Judgment, the
Settlement Agreement, and the final lien waiver and release on
23 January 2012 by defendant Lynch, and the execution of the
notices of satisfaction of claim of lien and of voluntary
dismissal of cross-claims by defendant Stone By Lynch’s then-
counsel on 27 January 2012, plaintiffs paid defendant Stone By
Lynch the first two payments owed under the terms of the
Settlement Agreement. Plaintiffs tendered payment for the final
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$10,000.00 owed under the Settlement Agreement on 27 June 2012.
Accompanying that check was a letter from plaintiffs’ counsel
indicating that acceptance thereof constituted a waiver and
release of any claims by defendants against plaintiffs, and that
plaintiffs “reserve[d] any and all claims and causes of action”
against defendants “under the [Settlement Agreement] or
otherwise.” Defendants returned this check to plaintiffs two
days later, purportedly because plaintiffs “allowed [a] deadline
to pass without making a payment” and defendants “now
consider[ed] [plaintiffs] in breach of the settlement
agreement.” Two weeks later, on 13 July 2012, defendants’
counsel sent a letter to counsel for plaintiffs and JAS-AM
indicating that his clients were “intent on removing the burden
of the confessions of judgment and settlement agreement which
you [sic] clients have placed them under”; “a burden which was
imposed upon them by forcing them to sign the documents without
being given the opportunity to study the documents for
themselves, or seek the counsel of their attorney who was
representing them at the time.”
One month later, the Mecklenburg County Superior Court
entered an order arising from Riverside’s lien enforcement
action against defendant Stone By Lynch, JAS-AM, and plaintiffs,
in which it recognized that plaintiffs and Riverside had reached
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a settlement with respect to the $255,626.00 cash bond posted by
plaintiffs in the Riverside action. The order directed the
Clerk of Court to deliver a check for $70,000.00 made payable to
Riverside’s counsel, and to return the remaining balance plus
interest to plaintiffs, the proportional share of which would be
released to JAS-AM. Although the terms of the Settlement
Agreement provided that defendants would indemnify plaintiffs
and JAS-AM for all loss “arising from, relating to, or in any
manner connected with the [Riverside lien enforcement] Lawsuit,
the [plaintiffs’] Property, the Project funds, the [$255,626.00]
Cash Bond, or any combination thereof,” because of both the
return of the final $10,000.00 check and counsel’s letter
expressing that defendants no longer intended to be bound by the
“burdens of the confessions of judgment and settlement
agreement,” on 31 October 2012, plaintiffs filed the Confession
of Judgment that had been executed by defendant Lynch on
23 January 2012.
While the Confession of Judgment had authorized entry of a
judgment against defendants and in favor of plaintiffs in the
amount of $170,626.00, after applying credits to the balance
due, on 1 November 2012, the Clerk of Court entered a judgment
ordering defendants to pay plaintiffs $55,000.00. On
21 December 2012, defendants filed a “Motion in the Cause To
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Vacate Judgment Pursuant to Rule 60(b) and Rule 68.1,” on the
grounds that defendants “withdrew their consent to the
Confessions of Judgment via letter and draft of a complaint to
[plaintiffs] on July 13, 2012.” On 17 September 2013, after
hearing the matter, the trial court denied defendants’ Rule 60
motion. Defendants appealed.
_________________________
Defendants sole contention on appeal is that the trial
court erred in denying defendants’ Rule 60 motion to vacate the
1 November 2012 judgment entered by the Clerk of Court.
Defendants assert that they “withdrew their consent to the
Confession of Judgment before it was filed by [plaintiffs]” on
31 October 2012, so that the clerk’s judgment entered upon the
Confession of Judgment is void as a matter of law. After
reviewing the record before us, we affirm the order of the trial
court.
N.C.G.S. § 1A-1, Rule 68.1 provides that a confession of
judgment “may be entered without action at any time[,] . . . may
be for money due or for money that may become due,” N.C. Gen.
Stat. § 1A-1, Rule 68.1(a) (2013), and “remains as security for
the sums thereafter to become due.” N.C. Gen. Stat. § 1A-1,
Rule 68.1(e). “The purpose of such confession is to provide an
expeditious method for entering judgment against one who does
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not dispute a debt, without the necessity of filing a lawsuit.”
2 G. Gray Wilson, North Carolina Civil Procedure § 68.1-1, at
68A-3 (3d ed. 2007). “A confession of judgment is essentially a
consent judgment in that it depends on the agreement of the
parties which the court will enforce.” Id. at 68A-2 (citing
Yarborough v. Yarborough, 27 N.C. App. 100, 106, 218 S.E.2d 411,
415, cert. denied, 288 N.C. 734, 220 S.E.2d 353 (1975)); cf. id.(“Judgment by confession differs from an ordinary consent
judgment, however, to the extent that its form and manner of
entry and enforcement are supervised and regulated by statute,
in this instance [N.C.G.S. § 1A-1,] Rule 68.1.” (footnote
omitted) (citing Farmers Bank of Clayton v. McCullers, 201 N.C.
440, 443, 160 S.E. 494, 496 (1931))). “The judgment depends
upon the consent of the parties, and the court gives effect to
it as the agreement of the parties. It would not be valid
unless the parties consented . . . .” Ballard v. Hunter,
12 N.C. App. 613, 618, 184 S.E.2d 423, 426–27 (1971) (internal
quotation marks omitted), cert. denied, 280 N.C. 180, 185 S.E.2d
704 (1972).
Here, defendants assert that they “withdrew their consent
to the Confession of Judgment before it was filed by
[plaintiffs].” According to the record, defendant Lynch signed
the Settlement Agreement, the Confession of Judgment, and the
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final lien waiver and release on 23 January 2012, two days after
his meeting with plaintiff DeMayo and the president of JAS-AM,
and defendant Lynch’s wife notarized his signing of the
Confession of Judgment. On 27 January 2012, the notices of
satisfaction of claim of lien and of voluntary dismissal of
cross-claims, as well as the final lien waiver and release were
executed and sent by defendant Stone By Lynch’s then-counsel to
plaintiffs and to the president of JAS-AM. Defendants concede
that they accepted two payments totaling $50,000.00 from
plaintiffs in accordance with the terms of the Settlement
Agreement, and that plaintiffs tendered payment for the third
and final payment due under the terms of the Settlement
Agreement, which payment was refused by defendants. Although
defendants presented argument to the trial court that defendant
Lynch was incapable of understanding the documents at the time
he signed them because he was “medicated at the time he met with
DeMayo and Dhaliwal,” “suffers from dyslexia, causing him to
need assistance with reading comprehension,” and that plaintiff
DeMayo and Mr. Dhaliwal “refused to give Lynch a chance to read
the document which turned out to be a settlement agreement and
confession of judgment” and “demanded that Lynch sign it [sic]
on the spot,” the trial court rejected these assertions as
“ridiculous,” and defendants have brought forward no such
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challenges on appeal. Instead, in their brief, defendants
assert only, and without support, that a letter stating that
they were “intent on removing the burden of the confessions of
judgment and settlement agreement”——under which they had already
accepted two of three settlement payments——was sufficient to
revoke defendant Lynch’s consent to the terms of the Settlement
Agreement. Defendants fail to direct this Court to any relevant
legal authority in support of their assertion, and “[i]t is not
the duty of this Court to supplement an appellant’s brief with
legal authority or arguments not contained therein.” Goodson v.
P.H. Glatfelter Co., 171 N.C. App. 596, 606, 615 S.E.2d 350,
358, supersedeas and disc. review denied, 360 N.C. 63,
623 S.E.2d 582 (2005); see also Viar v. N.C. Dep’t of Transp.,
359 N.C. 400, 402, 610 S.E.2d 360, 361 (per curiam) (“It is not
the role of the appellate courts . . . to create an appeal for
an appellant.”), reh’g denied, 359 N.C. 643, 617 S.E.2d 662(2005). Thus, we reject defendants’ argument.
Affirmed.
Judges STEELMAN and DILLON concur.
Report per Rule 30(e).