Murphy v. Edwards and Warren

245 S.E.2d 212 (1978) 36 N.C. App. 653

Kenneth Moore MURPHY
v.
EDWARDS AND WARREN, a Professional Association, Mark Edwards and Jo Warren, III.

No. 7726SC551.

Court of Appeals of North Carolina.

June 20, 1978.

Andrew D. Taylor, Jr., Herbert & Taylor, Charlotte, Robert A. Melott, Raleigh, and Edwin Marger, Atlanta, Ga., for plaintiff-appellee.

William E. Underwood, Jr., Caudle, Underwood & Kinsey and J. J. Wade, Jr., Charlotte, for defendants-appellants.

MITCHELL, Judge.

By their exceptions and assignments of error relating to the trial court's denial of their motions to dismiss and for judgment notwithstanding the verdict, the defendants have presented for decision on appeal the question of whether the trial court erred in denying the defendants' motions for a directed verdict made at the close of the plaintiff's evidence and renewed at the close of all the evidence, in rendering a judgment on the verdict and in denying the defendants' motions for judgment notwithstanding the verdict. In determining whether the evidence was sufficient to withstand the defendants' motions for a directed verdict pursuant to G.S. 1A-1, Rule 50, all of the evidence which tends to support the plaintiff's claim must be taken as true and considered in the light most favorable to him, giving him the benefit of every reasonable inference which may be legitimately drawn therefrom, with contrasts, contradictions, conflicts and inconsistencies resolved in his favor. Jenkins v. Starrett Corp., 13 N.C.App. 437, 186 S.E.2d 198 (1972). See also Bowen v. Gardner, 275 N.C. 363, 168 S.E.2d 47 (1969). We find that, when subjected to these rules, the evidence introduced did not constitute a showing sufficient to withstand the defendants' motions for a directed verdict.

The general rule that negligence is actionable only when it is a proximate cause of the damages claimed applies in actions against attorneys for negligence in representing their clients. Annot., 45 A.L. R.2d 5 (1956). The fact that the plaintiff brought this action for attorney malpractice both on grounds of negligence and on grounds of improper conduct by the defendants in representing clients with conflicting interests, does not alter or remove this requirement that the actions of the attorneys be shown to have been a proximate cause of the alleged damages. Annot., 28 A.L.R.3d 389 (1969). It is not required in either situation, however, that the actions of the attorneys be the sole cause of the client's loss. Annot., 28 A.L.R.3d 389 (1969); see also Wise v. Vincent, 265 N.C. 647, 144 S.E.2d 877 (1965).

Assuming arguendo that an attorney-client relationship existed between the parties herein, as admitted in the defendants' answer, and that the defendants were negligent in performing their duties as the plaintiff's attorneys and improperly represented clients with conflicting interests, we find the evidence insufficient to support his claim for relief. The evidence, when construed in the light most favorable to the plaintiff, is devoid of any indication that the damages alleged were proximately caused by the negligence or conflict of interest of the defendants. There is no evidence from which it can be inferred that, on any of the occasions the plaintiff invested with the Company, it was unable to meet its obligations. Conversely, there is no evidence tending to show that at any of those times the Company was able to meet those obligations. There is a similar lack of evidence with regard to McKinney's ability to meet his obligations.

The plaintiff did offer evidence tending to show that the defendants had knowledge by 25 November 1974 that McKinney had engaged in certain illegal and improper conduct. This is not equivalent, however, to a showing as to the actual financial condition of McKinney or the Company at any of the times pertinent. The possible motivations of an individual for engaging in illegal or improper conduct with regard to financial dealings are literally limitless. Financial difficulty causing inability to meet one's obligations constitutes only one possible motivation among many. Others, including carelessness, basic dishonesty and incompetence, are equally likely. The evidence of illegal and improper conduct by McKinney in a highly speculative area of financial dealings, therefore, could only have led the jury to speculation and conjecture as to the actual financial status of either McKinney or the Company. As the jury was required to determine the actual financial status of McKinney and the Company at various points in order to find a causal connection between the acts or omissions of the defendants and the loss of the plaintiff, they were left to base such determinations of actual financial status and resulting loss solely upon speculation and conjecture which will not support a verdict. See Ingold v. Light Co., 11 N.C.App. 253, 181 S.E.2d 173 (1971).

The plaintiff also offered evidence tending to show that in late December, 1974, McKinney and the Company were unable to meet their financial obligations. This is not evidence, however, tending to show whether they were unable to meet their obligations at any of the times the plaintiff invested. There is, therefore, no evidence tending to show that a more complete initial investigation or later monitoring of the investment by the defendants would have indicated any inability or unwillingness to meet financial obligations on the part of McKinney or the Company which would or should have discouraged the plaintiff from investing. This lack of evidence also represents a failure to make any showing that, had the defendants been engaged in completely ethical and proper conduct, the plaintiff would have been spared loss. As the plaintiff offered no evidence tending to show that either the alleged negligence of the defendants or their alleged improper and unethical conduct was a proximate cause of his loss, his evidence does no more than raise conjecture as to these matters insufficient to withstand the defendants' motion for a directed verdict. Compare Tillis v. Cotton Mills, 251 N.C. 359, 111 S.E.2d 606 (1959) and Meares v. Construction Co., 7 N.C.App. 614, 173 S.E.2d 593 (1970) with Ingold v. Light Co., 11 N.C.App. 253, 181 S.E.2d 173 (1971).

The trial court having denied their motion for a directed verdict at the close of the plaintiff's evidence, the defendants elected to offer evidence. In passing upon a motion for directed verdict made at the close of all the evidence, a defendant's evidence that tends to contradict or refute the plaintiff's evidence is not considered, but other evidence presented by a defendant which is not in conflict with that of the plaintiff may be considered in ascertaining whether the evidence is sufficient to raise an issue for the jury. Blanton v. Frye, 272 N.C. 231, 158 S.E.2d 57 (1967); Jenkins v. Starrett Corp., 13 N.C.App. 437, 186 S.E.2d 198 (1972). Upon review of the evidence offered by the defendants in its entirety and drawing every legitimate inference therefrom in favor of the plaintiff, we find the defendants' evidence added nothing tending to show a causal relationship between the alleged conduct of the defendants and the plaintiff's damages. The trial court's denial of the defendants' motion for a directed verdict at the close of all the evidence was, therefore, erroneous. The judgment of the trial court must be reversed and the verdict set aside. As the defendants moved in apt time for judgment notwithstanding the verdict, the cause is remanded to the trial court with the direction that judgment be entered in accordance with the defendants' motion for a directed verdict in their favor. Nichols v. Real Estate, Inc., 10 N.C.App. 66, 177 S.E.2d 750 (1970).

For the reasons stated, the judgment of the trial court is

Reversed and the cause remanded.

BROCK, C. J., and HEDRICK, J., concur.