Brawley v. Elizabeth Townes Homeowners Ass'n, Inc.

An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-135
NORTH CAROLINA COURT OF APPEALS
Filed: 19 August 2014
BOBBY P. BRAWLEY and BETTY M.
BRAWLEY,
Plaintiffs,
v. Iredell County
No. 13 CVS 01289
ELIZABETH TOWNES HOMEOWNERS
ASSOCIATION, INC., LADONNA
CONSTANCE WALDEN and PATRICIA
HEDRICK, individually and as
members of THE BOARD OF DIRECTORS
OF ELIZABETH TOWNES HOMEOWNERS
ASSOCIATION, INC.,
Defendants.
Appeal by plaintiffs from order entered 8 November 2013 by
Judge W. David Lee in Iredell County Superior Court. Heard in
the Court of Appeals 21 May 2014.
Kenneth T. Davies for plaintiff-appellants.
McAngus, Goudelock & Courie, PLLC, by Garry T. Davis and
Jeffrey B. Kuykendal, for defendant-appellees.
PER CURIAM.
-2-
Where plaintiffs’ claims were barred by collateral
estoppel, defendants’ motions to dismiss were properly granted
by the trial court.
Plaintiffs Bobby P. Brawley and Betty M. Brawley own a
townhome in the Elizabeth Townes community in Charlotte.
Defendant Elizabeth Townes Homeowners Association (“Elizabeth
Townes HOA”) manages the Elizabeth Townes community, of which
plaintiffs are mandatory members. Individual defendants LaDonna
Constance Walden and Patricia Hedrick are members of the board
of directors of the Elizabeth Townes HOA.
Plaintiffs’ daughter, Jane Brawley Jordan, resides at the
Elizabeth Townes’ townhome. Plaintiffs granted Jordan a limited
power of attorney permitting Jordan to act on plaintiffs’ behalf
regarding all Elizabeth Townes HOA matters, including the
ability “to request financial records, to vote [plaintiffs’]
proxy in [Elizabeth Townes HOA] matters, and to attend
[Elizabeth Townes HOA] meetings on [plaintiffs’] behalf.”
Beginning in 2005, the relationship between Elizabeth
Townes HOA, Walden, and Hedrick (“defendants”), and Jordan began
to deteriorate. Jordan sent numerous emails, text messages, and
phone calls to defendants regarding alleged mismanagement of the
Elizabeth Townes community. Jordan also filed four pro se
-3-
lawsuits against Elizabeth Townes HOA, all of which were
subsequently dismissed either voluntarily by Jordan or with
prejudice by order of the trial court.
In 2010, Jordan filed claims with the North Carolina Real
Estate Commission and the State Bureau of Investigations against
Elizabeth Townes HOA, alleging that Elizabeth Townes HOA’s
former management company had committed fraud. The resulting
investigations found no evidence of fraud, and Elizabeth Townes
HOA invoiced Jordan and plaintiffs for the loss of business
caused by the investigations.
In March 2011, defendants filed a complaint and request for
permanent injunction against Jordan for “continuous and repeated
harassment.” Defendants also filed claims against plaintiffs,
alleging that by failing to revoke Jordan’s limited power of
attorney, plaintiffs had enabled Jordan’s continued harassment
of defendants.1 Plaintiffs transferred ownership of their
1
After a hearing on defendants’ motion for injunctive relief
before the trial court in March 2011 during which Jordan and
plaintiffs appeared “disoriented, distracted, and unresponsive
to the Court’s inquiries,” Jordan was ordered to undergo a
mental evaluation. Following Jordan’s refusal to submit to a
forensic screening, in May 2012 the trial court entered an order
finding Jordan to be in contempt of court. On appeal, this
Court, by per curiam opinion, upheld the order of the trial
court. See State v. Jordan, No. COA12-1264, 2013 N.C. App.
LEXIS 736 (July 16, 2013).
-4-
Elizabeth Townes townhome to Jordan,2 and defendants subsequently
dismissed their claims against plaintiffs, leaving Jordan as the
sole opposing party to the litigation. On 4 February 2013, the
trial court entered an order for default judgment against Jordan
and awarded compensatory and punitive damages to Elizabeth
Townes HOA in the amount of “$34,929.59 for increased insurance
premiums, increased property management fees, [and] direct legal
costs,” finding that “Jordan engaged in malicious prosecution
and abuse of process as to [Elizabeth Townes HOA] and defamed
[Elizabeth Townes HOA].”
On 3 June 2013, plaintiffs filed a complaint against
defendants alleging claims for breach of fiduciary duty,
constructive fraud, abuse of process, and unfair and deceptive
trade practices. On 7 August, defendants filed motions to
dismiss and to change venue. The trial court, by order entered
2
We note that, based on the record, it is somewhat unclear as to
whether plaintiffs have resumed ownership of their Elizabeth
Townes townhome and, thus, have standing to bring this appeal.
In an August 2012 motion to amend one of her four pro se
lawsuits, Jordan described plaintiff Bobby Brawley as the
“previous owner” of the townhome. However, in their instant
complaint, plaintiffs indicate that they are currently the
owners of the townhome, and in their answers, defendants treat
plaintiffs as the current owners of the townhome as well,
stating that “Plaintiffs herein subsequently transferred
ownership of said property to Jane Jordan for a brief period of
time.” As such, plaintiffs are viewed in the instant matter as
being the current owners of the Elizabeth Townes townhome and,
therefore, have standing.
-5-
8 November, granted defendants’ motions to dismiss. Plaintiffs
appeal.
_________________________________
On appeal, plaintiffs contend the trial court erred in
granting defendants’ motions to dismiss. Specifically,
plaintiffs argue that the trial court erred in granting
defendants’ motions to dismiss pursuant to Rule 12(b)(6) and
based on collateral estoppel. We disagree. Assuming arguendo
that plaintiffs’ complaint is technically sufficient to survive
a Rule 12(b)(6) motion to dismiss, plaintiffs’ claims are
nonetheless barred by collateral estoppel.
Collateral Estoppel
Plaintiffs argue that the trial court erred in granting
defendants’ motions to dismiss because plaintiffs are not
collaterally estopped from asserting their claims.
Res judicata and collateral estoppel are companion
doctrines created “for the dual purposes of protecting litigants
from the burden of relitigating previously decided matters and
promoting judicial economy by preventing needless litigation.”
Bockweg v. Anderson, 333 N.C. 486, 491—92, 428 S.E.2d 157, 161
(1993) (citations omitted). Under the doctrine of res judicata,
or “claim preclusion,” “a final judgment on the merits in a
-6-
prior action will prevent a second suit based on the same cause
of action between the same parties or those in privity with
them.” Thomas M. McInnis & Assocs., Inc. v. Hall, 318 N.C. 421,
428, 349 S.E.2d 552, 556 (1986). Under the doctrine of
collateral estoppel, or “issue preclusion,” “parties and parties
in privity with them — even in unrelated causes of action — are
precluded from retrying fully litigated issues that were decided
in any prior determination and were necessary to the prior
determination.” King v. Grindstaff, 284 N.C. 348, 356, 200
S.E.2d 799, 805 (1973) (citations omitted).
“Like res judicata, collateral estoppel only applies if the
prior action involved the same parties or those in privity with
the parties and the same issues.” Goins v. Cone Mills Corp., 90
N.C. App. 90, 93, 367 S.E.2d 335, 337 (1988) (citing King, 284
N.C. at 356, 200 S.E.2d at 805) (emphasis added).
A judgment operates as an estoppel not only
as to all matters actually determined or
litigated in the proceeding, but also as to
all relevant and material matters within the
scope of the proceeding which the parties,
in the exercise of reasonable diligence,
could and should have brought forward for
determination.
Moody v. Able Outdoor, Inc., 169 N.C. App. 80, 84, 609 S.E.2d
259, 261 (2005) (citation and quotation omitted). “In general,
privity involves a person so identified in interest with another
-7-
that he represents the same legal right previously represented
at trial.” State v. Summers, 351 N.C. 620, 623, 528 S.E.2d 17,
20 (2000) (citations and quotation omitted). In determining
whether a privity relationship exists, “courts will look beyond
the nominal party whose name appears on the record as plaintiff
and consider the legal questions raised as they may affect the
real party or parties in interest.” Whitacre P'ship v.
Biosignia, Inc., 358 N.C. 1, 36, 591 S.E.2d 870, 893 (2004)
(citations and quotation omitted).
Plaintiffs allowed their daughter, Jane Brawley Jordan, to
reside in their Elizabeth Townes townhome and granted Jordan a
limited power of attorney “to request financial records, to vote
[plaintiffs’] proxy in [Elizabeth Townes HOA] matters, and to
attend [Elizabeth Townes HOA] meetings on [plaintiffs’] behalf.”
Plaintiffs further acknowledge in their brief that Jordan “was
deemed to be an agent of [plaintiffs] through a limited power of
attorney, granting her the same right as [plaintiffs.]” Such
evidence indicates that a privity relationship exists between
Jordan and plaintiffs.
Further evidence of a privity relationship can be seen in
plaintiffs’ current complaint. After Jordan filed four pro se
complaints against Elizabeth Townes HOA, as well as filing
-8-
allegations of fraud against Elizabeth Townes HOA with the North
Carolina Real Estate Commission and the State Bureau of
Investigations, defendants filed claims against Jordan and
plaintiffs in 2011. Plaintiffs then temporarily transferred
their ownership of the Elizabeth Townes property to Jordan, and
defendants dismissed their claims against plaintiffs, leaving
Jordan as the sole opposing party in the litigation. The trial
court, in its order granting default judgment to defendants,
assessed compensatory and punitive damages against Jordan
because “Jordan engaged in malicious prosecution and abuse of
process as to [Elizabeth Townes HOA] and defamed [Elizabeth
Townes HOA].” Jordan did not appeal from this award of
compensatory and punitive damages. Rather, plaintiffs then
filed the instant complaint, alleging that defendants commenced
the 2011 litigation “to intimidate the Plaintiffs into silence
and acceptance of the authority of the Defendants” and that the
“asserted claims in the 2011 litigation against the Plaintiffs
were entirely frivolous and without merit.”
In its order granting defendants’ motions to dismiss, the
trial court noted that:
[I]t also appearing that the amended
complaint filed in the [2011 litigation] was
voluntarily dismissed as to [plaintiffs] on
January 14, 2013, approximately thirteen
-9-
months after it was asserted against them
(and twenty-two months after the
commencement of the [2011 litigation] and
that [plaintiffs] were in a position in that
action to assert the claims now being
asserted in this action. The claims asserted
by [plaintiffs] herein are claims based upon
matters that were relevant and material
within the scope of the earlier [2011
litigation] and [plaintiffs], in the
exercise of reasonable diligence, could and
should have brought those claims forward for
determination. [Plaintiffs] should not be
permitted to reopen the subject of the prior
[2011] litigation with respect to matters
which might have been brought forward in
that proceeding. . . . [Plaintiffs] are
collaterally estopped from now asserting
claims for breach of fiduciary duty,
constructive fraud, abuse of process and
unfair and deceptive trade practices in this
action and these claims should be dismissed
. . . .
We agree with the trial court’s determination that
plaintiffs are now estopped from bringing their claims, as the
“successive or mutual relationship in the same rights in [the
Elizabeth Townes townhome] establishes that the interests of
both [Jordan] and plaintiff[s] are so intertwined that privity
exists between them.” Cline v. McCullen, 148 N.C. App. 147,
150, 557 S.E.2d 588, 591 (2001). Moreover, “privity also exists
where one not actually a party to the previous action . . . had
a proprietary interest in the judgment or in the determination
-10-
of a question of law or facts on the same subject matter.” Id.(citation omitted).
Jordan, in her four pro se complaints against defendants,
alleged a variety of claims including, but not limited to: abuse
of process, malicious prosecution, slander, retaliation,
defamation, extortion, wrongful prosecution, libel per se,
willful negligence, malfeasance, federal mail fraud, legal
malpractice, alienation of affection, breach of contract,
criminal intent, fraud, and contributory negligence. Although
Jordan did not make specific claims for breach of fiduciary
duty, constructive fraud, or unfair and deceptive trade
practices, a reading of her complaints indicates that such
claims were all-but asserted. In her first complaint, Jordan
alleged that defendants failed to act in good faith while
conducting Elizabeth Townes HOA business, and that defendants’
acts amounted to a “breech [sic] of monies;” such allegations
could support a claim for breach of fiduciary duty. Similar
statements in Jordan’s first complaint could also support claims
for constructive fraud and unfair and deceptive trade practices,
as Jordan made numerous allegations of fraud, embezzlement,
deception, mismanagement, and negligence by defendants regarding
defendants’ handling of Elizabeth Townes HOA business.
-11-
Moreover, similar allegations and statements can be found
throughout Jordan’s three other complaints. All of Jordan’s
allegations and claims in each complaint stemmed from her
ongoing disputes with defendants. Further, in addition to
Jordan’s claims which are intertwined with plaintiffs as a
matter of privity, plaintiffs were also directly involved in
litigation with defendants and had the opportunity to
counterclaim as to all claims that are now asserted in the
instant case.
Here, plaintiffs have brought claims against defendants for
breach of fiduciary duty, constructive fraud, abuse of process,
and unfair and deceptive trade practices. Although the only
claim directly asserted by both Jordan and plaintiffs was a
claim for abuse of process, all of plaintiffs’ instant
allegations and claims arise from Jordan’s ongoing disputes with
defendants. Indeed, plaintiffs’ complaint indicates plaintiffs
were aware of and involved in the ongoing disputes and
litigation between Jordan and defendants, as plaintiffs
reference these disputes and allege that defendants “began a
campaign of propaganda against [Jordan]” that caused plaintiffs
to “publically defend[] themselves” against defendants. As
such, although plaintiffs appear to bring three “new” claims not
-12-
previously asserted by Jordan, it is clear that these claims
were essentially alleged and brought by Jordan in her four
earlier pro se complaints. Moreover, plaintiffs had a
substantial interest in their townhome to create a proprietary
interest in the litigation between Jordan and defendants and,
therefore, this interest supports our earlier determination that
privity exists between plaintiffs and Jordan.
Accordingly, the trial court’s granting of defendants’
motions to dismiss is affirmed.
Affirmed.
Report per Rule 30(e).