Houston v. Tillman ( 2014 )

NO. COA13-1094
NORTH CAROLINA COURT OF APPEALS
Filed: 1 July 2014
GERALDINE GRIER HOUSTON,
Plaintiff,
v. Mecklenburg County
No. 12 CVS 11029
JUANITA TILLMAN and THE ESTATE
OF CLIFFORD MEDLIN, JR.,
Defendants.
Appeal by defendants from judgment entered 14 May 2013 by
Judge Hugh B. Lewis in Mecklenburg County Superior Court. Heard
in the Court of Appeals 5 February 2014.
Paul Whitfield, P.A., by Paul L. Whitfield, for plaintiff-
appellee.
John F. Hanzel, P.A., by John F. Hanzel, for defendants-
appellants.
GEER, Judge.
The trial court entered judgment in favor of plaintiff
Geraldine Grier Houston and against defendants Juanita Tillman
and the Estate of Clifford Medlin, Jr. for the sum of
$120,000.00. On appeal, defendants primarily argue that the
trial court erred when it imposed a constructive trust on
certain property in the absence of defendants' engaging in any
wrongdoing. Because "wrongdoing" is not a requirement for
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imposing a constructive trust and because the record contains
sufficient evidence to support the trial court's imposition of a
constructive trust, we find no error.
Facts
In about 1989, plaintiff, who was married, met the
decedent, Clifford Medlin. Mr. Medlin lived on Miller Avenue in
Charlotte, North Carolina (the "Miller Avenue residence"). In
1997, plaintiff's husband moved out of their home on Coburg
Avenue in Charlotte (the "Coburg residence"), leaving plaintiff,
plaintiff's daughter, and plaintiff's two grandchildren to
support themselves. Plaintiff began working, but was forced to
stop sometime in 2000 due to a back injury she suffered on the
job. Although disabled, plaintiff was able to maintain the
mortgage on the Coburg residence for some time with rent paid by
her daughter who continued to live with her.
After her husband had left, plaintiff's relationship with
Mr. Medlin became romantic. Plaintiff and Mr. Medlin sometimes
stayed the night at the other's house, and starting in 2001,
when Mr. Medlin began a seven-year regimen of dialysis
treatments, plaintiff started providing caretaking and in-home
nursing services for Mr. Medlin.
In 2004, plaintiff fell behind on her mortgage payments for
the Coburg residence, and the bank foreclosed on her home.
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However, Mr. Medlin acquired title to the Coburg residence in
his own name and plaintiff and her family then resumed living at
the Coburg residence. Mr. Medlin paid the mortgage on the
Coburg residence while plaintiff paid for groceries. In
addition, in 2005, Mr. Medlin purchased a new Dodge Stratus and
gave it to plaintiff for Mother's Day. While title to the Dodge
remained in Mr. Medlin's name, plaintiff was responsible for the
car's maintenance.
Mr. Medlin underwent a kidney transplant in 2008.
Plaintiff stayed at the hospital for a month with Mr. Medlin
while he was recovering. After Mr. Medlin was discharged,
plaintiff continued to provide caretaking and in-home nursing
services for him. Over the course of their relationship,
plaintiff also helped Mr. Medlin when he suffered from gout, a
back condition, and problems associated with asbestos in his
lungs. Plaintiff also managed Mr. Medlin's finances. Plaintiff
estimated that she spent six to seven hours per day for 11 years
taking care of Mr. Medlin and providing in-home nursing
services.
Mr. Medlin died unexpectedly of a heart attack in early
2012. The day Mr. Medlin died, Mr. Medlin's sister -- defendant
Tillman -- whom plaintiff had never met, arrived at the Miller
Avenue residence and declared, "I am in charge here." Ms.
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Tillman demanded keys to the Miller Avenue residence and the
Coburg residence. Being one of Mr. Medlin's heirs, Ms. Tillman
applied for and was appointed as the personal representative of
Mr. Medlin's estate shortly after his death. Ms. Tillman
repossessed the Dodge from plaintiff with the assistance of a
uniformed police officer and evicted plaintiff from the Coburg
residence, letting the house go into foreclosure. Ms. Tillman
also sold the Dodge and placed the proceeds into the estate.
On 8 June 2012, plaintiff filed suit against Ms. Tillman
and Mr. Medlin's estate, asserting causes of action for (1) a
claim for personal services, (2) constructive trust, parole
trust, and (3) parole gift. The complaint sought the sum of
$582,400.00 for personal services rendered to Mr. Medlin and the
declaration of a constructive or resulting trust with respect to
the Coburg residence.
On 16 August 2012, defendants filed a combined motion to
dismiss pursuant to Rule 12(b)(6) of the Rules of Civil
Procedure, motion for summary judgment, and motion for sanctions
and attorneys' fees. Plaintiff responded with a motion to amend
and restate her complaint.1 On 2 October 2012, the trial court
entered an order deferring ruling on the Rule 12(b)(6) motion,
1
Although the record does not explicitly disclose whether or
when such a motion was made, we infer from the trial court's 2
October 2012 order that such a motion was made prior to that
date.
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allowing plaintiff leave to file an amended and restated
complaint, and declining to rule on defendants' remaining
motions. After plaintiff filed an amended and restated
complaint on 2 October 2012, defendants, on 30 October 2012,
again filed a combined Rule 12(b)(6) motion to dismiss, motion
for summary judgment, and motion for sanctions and attorneys'
fees. On 10 December 2012, the trial court entered an order
denying defendants' motions.
At trial, the trial court instructed the jury solely on
plaintiff's request for a constructive trust, submitting three
issues to the jury. The jury answered "[y]es" as to the issue
whether the Coburg Avenue residence and the Dodge were "subject
to a constructive trust in favor of the Plaintiff[.]" The jury
also found that "the conduct of the Defendants, Juanita Tillman
and The Estate Of Clifford Medlin, Jr., deprived the Plaintiff
of a beneficial interest in [the Coburg residence] and the 2005
Dodge Stratus to which the Plaintiff is entitled[.]" Finally,
with respect to "[w]hat amount is the Plaintiff . . . entitled
to recover from the Defendants . . .[,]" the jury answered:
$120,000.00. The trial court denied defendants' motion for
judgment notwithstanding the verdict and entered judgment on 14
May 2013 in accordance with the verdict. Defendants timely
appealed to this Court.
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I
Defendants first contend that the trial court erred when it
granted plaintiff leave to amend her complaint, when it denied
defendants' motions to dismiss pursuant to Rule 12(b)(6), and
when it denied defendants' motion for summary judgment.
However, with respect to the trial court's decision to grant
plaintiff's motion for leave to amend her complaint, defendants
merely asserted their contention in a heading and presented no
specific argument why that ruling was in error. We, therefore,
will not address that ruling. See N.C.R. App. P. 28(b)(6).
With respect to defendants' argument that the trial court
erred in denying their motion to dismiss the original complaint,
plaintiff's amendment and restatement of the complaint has
rendered any argument regarding the original complaint moot.
See Ass'n for Home & Hospice Care of N.C., Inc. v. Div. of Med.
Assistance, 214 N.C. App. 522, 525, 715 S.E.2d 285, 287-88
(2011) ("'A case is moot when a determination is sought on a
matter which, when rendered, cannot have any practical effect on
the existing controversy.'" (quoting Roberts v. Madison Cnty.
Realtors Ass'n, 344 N.C. 394, 398-99, 474 S.E.2d 783, 787
(1996))); Hyder v. Dergance, 76 N.C. App. 317, 319-20, 332
S.E.2d 713, 714 (1985) (noting that "an amended complaint has
the effect of superseding the original complaint"). See also
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Coastal Chem. Corp. v. Guardian Indus., Inc., 63 N.C. App. 176,
178, 303 S.E.2d 642, 644 (1983) (noting trial court found
defendant's motion to dismiss plaintiff's original complaint
presented "'moot question'" when trial court granted plaintiff's
motion to amend).
With respect to defendants' motion to dismiss the amended
complaint, defendants cannot show any prejudice from the denial
of their motion as to the first claim for relief based on
quantum meruit since the trial court did not submit the quantum
meruit claim to the jury. With respect to the constructive
trust claim, defendants argue that the trial court erred in
failing to dismiss the claim because the amended complaint
failed "to allege wrongdoing on the part of Defendants in the
acquisition of the property in question which would allow the
imposition of a constructive trust." As we explain below, in
discussing defendants' arguments regarding its motion for a
directed verdict and motion for JNOV, defendants have mistaken
the law. Because plaintiff was not required to allege
wrongdoing and defendants have made no other argument regarding
the sufficiency of the amended complaint, defendants have failed
to demonstrate that the trial court erred in denying their
motion to dismiss.
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Defendants also contend that the trial court erred in
denying their motion for summary judgment as to all of
plaintiff's claims in the amended complaint. However,
"[i]mproper 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 . . . ."
Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985).
Because this case was tried on the merits after denial of
defendants' motion for summary judgment, under Harris,
defendants' arguments regarding the summary judgment order
cannot amount to reversible error, and we, therefore, do not
address them.
II
Defendants next contend that the trial court erred in
denying their motion for a directed verdict and motion for JNOV
as to plaintiff's quantum meruit and constructive trust claims.
However, although defendants argue in their brief that
plaintiff's evidence in support of her claim based on quantum
meruit was insufficient, plaintiff's quantum meruit claim was
not submitted to the jury. The sole issue before the jury was
plaintiff's entitlement to a constructive trust. As a result,
defendants' arguments regarding the quantum meruit claim cannot
be a basis for reversal of the judgment below. This aspect of
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defendants' argument is beside the point. See Dodd v. Wilson,
46 N.C. App. 601, 602, 265 S.E.2d 449, 450 (1980) (holding
verdict on issues submitted to jury rendered moot court's
refusal to submit another issue to jury where refusal did not
result in harm to defendant-appellant).
The sole remaining question is whether the trial court
erred in denying defendants' motion for a directed verdict and
motion for JNOV as to plaintiff's request for a constructive
trust. "'The standard of review of the denial of a motion for a
directed verdict and of the denial of a motion for JNOV are
identical. We must determine whether, upon examination of all
the evidence in the light most favorable to the non-moving
party, and that party being given the benefit of every
reasonable inference drawn therefrom and resolving all conflicts
of any evidence in favor of the non-movant, the evidence is
sufficient to be submitted to the jury.'" Springs v. City of
Charlotte, 209 N.C. App. 271, 274-75, 704 S.E.2d 319, 322-23
(2011) (quoting Shelton v. Steelcase, Inc., 197 N.C. App. 404,
410, 677 S.E.2d 485, 491 (2009)).
Defendants' only contention with respect to the
constructive trust claim is that "for a constructive trust to be
imposed, the owner of title has to acquire the property through
some sort of wrongdoing" and that, here, "[s]uch wrongdoing was
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neither alleged nor proven." Defendants argue that since they
acquired title to the Coburg residence and the Dodge by
operation of intestacy law, they could not have committed
wrongdoing because they took no affirmative action to acquire
title.
Our Supreme Court's decision in Variety Wholesalers, Inc.
v. Salem Logistics Servs., LLC, 365 N.C. 520, 723 S.E.2d 744(2012), sets out the controlling law with respect to
constructive trusts. In rejecting this Court's conclusion that
the existence of a fiduciary relationship was a requirement for
imposition of a constructive trust, the Supreme Court explained:
"A constructive trust is a duty, or
relationship, imposed by courts of equity to
prevent the unjust enrichment of the holder
of title to, or of an interest in, property
which such holder acquired through fraud,
breach of duty or some other circumstance
making it inequitable for him to retain it
against the claim of the beneficiary of the
constructive trust."
Id. at 530, 723 S.E.2d at 751 (emphasis added) (quoting Wilson
v. Crab Orchard Dev. Co., 276 N.C. 198, 211, 171 S.E.2d 873, 882
(1970)). The Court noted further that it had "also used the
phrase, 'any other unconscientious manner,' in describing
situations in which a constructive trust may be imposed without
a fiduciary relationship." Id. at 531, 723 S.E.2d at 752
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(quoting Speight v. Branch Banking & Trust Co., 209 N.C. 563,
566, 183 S.E. 734, 736 (1936)).
Accordingly, Variety Wholesalers holds that a trial court
may impose a constructive trust, even in the absence of fraud or
a breach of fiduciary duty, upon the showing of either (1) some
other circumstance making it inequitable for the defendant to
retain the funds against the claim of the beneficiary of the
constructive trust, or (2) that the defendant acquired the funds
in an unconscientious manner. Id. at 530-31, 723 S.E.2d at 751-
52. See also id., 723 S.E.2d at 752 (noting that "[i]n the
absence of [a fiduciary] relationship, [plaintiff] faces the
difficult task of proving 'some other circumstance making it
inequitable' for [defendant] to possess the funds . . ."
(quoting Wilson, 276 N.C. at 211, 171 S.E.2d at 882)).
Although defendants cite Variety Wholesalers and Sara Lee
Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999), in support
of their claim that "some other circumstance" and
"unconscientious manner" are synonymous with "wrongdoing,"
defendants have not pointed to any language in either case to
support their contention.2 Indeed, the Supreme Court's
2
Sara Lee addressed the interaction of the constructive
trust doctrine with the Workers' Compensation Act, and it is,
therefore, irrelevant to our discussion here except insofar as
it recites the same general test for imposition of a
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application of the constructive trust doctrine in Variety
Wholesalers establishes that actual wrongdoing, such as fraud or
breach of fiduciary duty, is not necessary for imposition of a
constructive trust.
In Variety Wholesalers, the plaintiff had contracted with a
provider of bill-payment and auditing services. 365 N.C. at
522, 723 S.E.2d at 746. When notified by the bill-payment
provider of the amounts the plaintiff owed to freight carriers,
the plaintiff, at the provider's request, would forward the
amounts due to a lock-box bank account that, unbeknownst to the
plaintiff, was actually owned by the defendant, the provider's
lender. Id., 723 S.E.2d at 746-47. The plaintiff claimed that
the amounts deposited by the plaintiff were supposed to be paid
to the freight carriers. Id., 723 S.E.2d at 747. However, the
defendant applied the funds deposited in the lock-box account --
which, according to the defendant, were supposed to be funds
payable to the provider -- towards the principal and interest
due on the provider's line of credit. Id.In holding that issues of fact existed regarding the
availability of a constructive trust, the Supreme Court did not
require proof of actual wrongdoing, but instead held that if the
defendant had "constructive notice that [the provider] did not
constructive trust articulated in Variety Wholesalers. 351 N.C.
at 35, 519 S.E.2d at 313.
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have ownership of the funds deposited in the [lock-box] account,
[the defendant's] continued acceptance of those funds could be
considered unconscientious or inequitable and could thus permit
the imposition of a constructive trust." Id. at 531, 723 S.E.2d
at 752 (emphasis added). See also Weatherford v. Keenan, 128
N.C. App. 178, 179, 493 S.E.2d 812, 813 (1997) (upholding
constructive trust in equitable distribution action even absent
any mention of fraud, breach of fiduciary duty, or wrongdoing).
In this case, defendants have argued only that "the
standard for imposing a constructive trust is that [the] holder
of legal title acquired the property through some wrongdoing.
Such wrongdoing was neither alleged nor proven" in this case.
Since under Variety Wholesalers, proof of wrongdoing is not a
necessary prerequisite for a constructive trust and since
defendants have made no argument that plaintiff's evidence was
insufficient to prove, as allowed in Variety Wholesalers, some
other circumstance making it inequitable for defendants to have
retained the Coburg residence and the Dodge, defendants have
failed to demonstrate that the trial court erred in denying
their motion for a directed verdict and their motion for JNOV.
See also Rape v. Lyerly, 287 N.C. 601, 615, 215 S.E.2d 737, 746
(1975) (holding constructive trust may be imposed on property
received by beneficiaries of decedent's estate to enforce
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unfulfilled personal services agreement for decedent to devise
land to plaintiff); Rhue v. Rhue, 189 N.C. App. 299, 307-08, 658
S.E.2d 52, 59 (2008) (upholding constructive trust on certain
land parcels when parties had confidential and cohabiting
relationship; plaintiff assisted defendant with day-to-day
living, managed defendant's finances, cared for defendant's
grandson, helped operate defendant's business, and relied on
defendant's promise that parcels would be for their mutual
benefit; and defendant subsequently denied plaintiff's interest
in parcels).
Defendants have not challenged the trial court's jury
instructions or the issues submitted to the jury and have made
no other argument for reversal of the judgment below. We,
therefore, hold that defendants received a trial free of
prejudicial error.
No error.
Judges ROBERT C. HUNTER and McCULLOUGH concur.