QUB Studios, LLC v. Marsh

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-205
Filed: 6 November 2018
Guilford County, No. 16 CVS 614
QUB STUDIOS, LLC and ERIC ROBERT, Plaintiffs
v.
PHILLIP MARSH and ASHLEY JENKINS, Defendants
Appeal by defendant from order and judgment entered 18 August 2017 by
Judge John O. Craig, III in Guilford County Superior Court. Heard in the Court of
Appeals 3 October 2018.
Roberson Haworth & Reese, P.L.L.C., by Christopher C. Finan and Shane T.
Stutts, for plaintiff-appellees.
Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, by Kara V. Bordman and
Lyn K. Broom, for defendant-appellant Ashley Jenkins.
CALABRIA, Judge.
Where plaintiffs’ motion to reconsider was premised upon clerical error, and
not an error of law, the trial court had jurisdiction to consider it. Where defendant
does not challenge the trial court’s decision to grant a motion for relief pursuant to
Rule 60(b)(6) of the North Carolina Rules of Civil Procedure, such argument is
abandoned and we find no error. Where plaintiffs’ original complaint gave clear
notice of the subject matter to defendants, and their amended complaint served only
to properly reference a previously-attached exhibit, the trial court did not err in
permitting the amended complaint to relate back to the original. Where defendant’s
QUB STUDIOS, LLC V. MARSH
Opinion of the Court
motions for relief constituted an impermissible collateral attack, the trial court did
not err in denying them. Where the trial court possessed subject matter jurisdiction,
it did not err in denying defendant’s motion to dismiss for lack of subject matter
jurisdiction. Where plaintiffs’ amended complaint related back to their original
complaint, the trial court did not err in denying defendant’s motion to dismiss for
failure to state a claim.
Where defendant failed to offer any evidence that the trial court lacked
personal jurisdiction over him, and in fact participated in the prior litigation in this
matter, the trial court did not err in denying his motion to dismiss for lack of personal
jurisdiction. Where no material issues of fact remained to be resolved, the trial court
did not err in granting plaintiffs’ motion for judgment on the pleadings. Where the
trial court entered judgment on the pleadings, the entry of findings of fact would have
been inappropriate, and the trial court did not err in denying defendant’s request for
written findings of fact. We affirm.
I. Factual and Procedural Background
On 20 June 2006, summary judgment was entered against Phillip Marsh
(“Marsh”) and Ashley Jenkins (“Jenkins”) (collectively, “defendants”), in favor of QUB
Studios, LLC (“QUB”) and Eric Robert (“Robert”) (collectively, “plaintiffs”). This
judgment ordered defendants to pay damages to plaintiffs. On 8 June 2016, plaintiffs
filed a complaint against defendants, alleging that defendants had failed to pay, and
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seeking treble damages plus attorney’s fees. On 15 August 2016, the Clerk of Court
entered default against Marsh for failure to plead.
On 19 September 2016, Jenkins filed his answer, denying the allegations in
the complaint, and moving to dismiss pursuant to Rules 12(b)(1), (2), (4), and (6) of
the North Carolina Rules of Civil Procedure, and pursuant to the statute of
limitations. Jenkins further moved for relief from the original summary judgment
pursuant to Rule 60(b) of the North Carolina Rules of Civil Procedure, and for a jury
trial.
On 17 November 2016, plaintiffs moved for summary judgment. On 10 March
2017, the trial court granted summary judgment in favor of plaintiffs against Marsh,
against whom default had been entered. That same day, in a separate order, the trial
court held that plaintiffs’ complaint failed to state a claim upon which relief could be
granted with respect to Jenkins. It therefore granted Jenkins’ motion to dismiss
pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure; denied
plaintiffs’ motion for summary judgment; and denied Jenkins’ remaining motions.
On 22 March 2017, plaintiffs filed a motion to reconsider, seeking relief from
judgment and to amend their complaint, alleging that Jenkins’ motion to dismiss was
successful due to “a mere technicality of pleading.” On 17 April 2017, the trial court
granted the motion, set aside its prior order, and allowed plaintiffs to amend their
complaint. On 16 June 2017, plaintiffs moved for judgment on the pleadings. On 17
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July 2017, Jenkins requested that the court make findings of fact and conclusions of
law on each of its rulings on his motions, pursuant to Rule 52(a) of the North Carolina
Rules of Civil Procedure.
On 18 August 2017, the trial court entered its order on plaintiffs’ motion for
judgment on the pleadings and Jenkins’ motions to dismiss and for relief from
judgment. The court denied Jenkins’ motions, with prejudice, granted plaintiffs’
motion for judgment on the pleadings, and awarded damages to plaintiffs. Jenkins
appeals.
II. Jurisdiction
In his first argument, Jenkins contends that the trial court lacked jurisdiction
to consider plaintiffs’ motion to reconsider and motion to amend. We disagree.
A. Standard of Review
“Whether a trial court has subject-matter jurisdiction is a question of law,
reviewed de novo on appeal.” McKoy v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d
590, 592 (2010).
B. Analysis
Plaintiffs’ motions for relief and reconsideration were filed pursuant to Rule
60(b) of the North Carolina Rules of Civil Procedure, and premised upon “mistake,
inadvertence, surprise, or excusable neglect.” On appeal, however, Jenkins contends
that the trial court lacked jurisdiction to consider these motions.
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Jenkins contends, and we recognize, that “Rule 60(b) provides no specific relief
for ‘errors of law’ and our courts have long held that even the broad general language
of Rule 60(b)(6) does not include relief for ‘errors of law.’ ” Hagwood v. Odom, 88 N.C.
App. 513, 519, 364 S.E.2d 190, 193 (1988). Jenkins argues that plaintiffs’ motion,
seeking “to correct an error of law[,]” was therefore not proper.
It is here that we must disagree with Jenkins. It is true that Rule 60(b) is not
designed to review errors of law, and does not provide relief therefrom. But plaintiffs’
motion was not premised upon an error of law. Plaintiffs’ motion was premised upon
the fact that their initial complaint included two exhibits, but only properly
referenced one of them. The error plaintiffs cited was therefore not an error of law,
but rather an error of the clerical variety.
Because plaintiffs’ motion sought relief based upon plaintiffs’ inadvertent
clerical error, and not an error of law, relief pursuant to Rule 60(b) was appropriate.
We therefore hold that the trial court possessed the jurisdiction to consider the
motion.
III. Motions for Relief
In his second and third arguments, Jenkins contends that the trial court erred
in granting plaintiffs’ motion for relief, and in denying Jenkins’ motions for relief. We
disagree.
A. Standard of Review
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“[A] motion for relief under Rule 60(b) is addressed to the sound discretion of
the trial court and appellate review is limited to determining whether the court
abused its discretion.” Sink v. Easter, 288 N.C. 183, 198, 217 S.E.2d 532, 541 (1975).
B. Plaintiffs’ Motion to Reconsider
Jenkins contends that plaintiffs “did not submit any evidence/facts to meet the
requirements of Rule 60(b)(1) or (6) in order for the trial court to have a basis to grant
[plaintiffs’] Rule 60 motion.” Accordingly, Jenkins contends that the trial court erred
in granting the motion.
Rule 60 of the North Carolina Rules of Civil Procedure governs motions for
relief from a judgment or order. Specifically, Rule 60(b) provides that:
On motion and upon such terms as are just, the court may
relieve a party or his legal representative from a final
judgment, order, or proceeding for the following reasons:
(1) Mistake, inadvertence, surprise, or excusable
neglect;
...
(6) Any other reason justifying relief from the operation
of the judgment.
N.C.R. Civ. P. 60(b). Jenkins contends, and we acknowledge, that although attorney
error may constitute grounds for relief pursuant to Rule 60(b)(1), ignorance,
carelessness, or similarly negligent mistakes evincing a lack of due care do not. See
Briley v. Farabow, 348 N.C. 537, 546, 501 S.E.2d 649, 655 (1998). However, what is
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required is some showing that counsel not only erred, but did so in a negligent manner
evincing a lack of due care. Jenkins offers nothing to support a contention that
plaintiffs’ counsel was negligent in its mistake.
If Jenkins made such a showing, however, that argument would apply only to
plaintiffs’ motion pursuant to Rule 60(b)(1). Jenkins makes no argument with respect
to the motion pursuant to Rule 60(b)(6), the catch-all “any other reason” provision of
the rule. Because Jenkins fails to argue this, we deem such argument abandoned.
See N.C.R. App. P. 28(b)(6) (“[i]ssues not presented in a party’s brief, or in support of
which no reason or argument is stated, will be taken as abandoned”). In the absence
of an argument that the trial court erred in granting plaintiffs’ motion pursuant to
the catch-all provision of Rule 60(b), we hold that the trial court did not err.
C. Plaintiffs’ Motion to Amend
Jenkins further contends that allowing the amendment of the complaint to
relate back was prejudicial and erroneous. However, Rule 15(c) of the North Carolina
Rules of Civil Procedure, which governs the relation back of amended pleadings,
provides that “[a] claim asserted in an amended pleading is deemed to have been
interposed at the time the claim in the original pleading was interposed, unless the
original pleading does not give notice of the transactions, occurrences, or series of
transactions or occurrences, to be proved pursuant to the amended pleading.” N.C.R.
Civ. P. 15(c).
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In the instant case, the original complaint named each of the parties, the
judgments, and the events central to plaintiffs’ claim. The only difference between
the original complaint and the complaint plaintiffs sought to introduce as amended
was the reference, in the complaint itself, to the attached exhibits. Clearly, the
complaint gave notice of the subject matter to both defendants, and Rule 15(c)
permitted the amended complaint to relate back to the original. Again, we hold that
the trial court did not err in permitting the complaint to relate back.
D. Jenkins’ Motions for Relief
In response to plaintiffs’ complaint and amended complaint, Jenkins sought
relief from the original summary judgment motion upon which the entire complaint
was predicated, pursuant to multiple subsections of Rule 60(b). On appeal, Jenkins
contends that the trial court erred in denying these motions for relief.
We note that, unlike plaintiffs’ standalone Rule 60(b) motion, which clearly
and in detail explained plaintiffs’ position and reason for seeking relief, the Rule 60(b)
motions found in Jenkins’ answers are summary and lack any explanation or support.
We further note that, on appeal, Jenkins addresses only his motions pursuant to Rule
60(b)(4) and (6). Since Jenkins raises no arguments with respect to his other Rule
60(b) motions, we deem such arguments abandoned. See N.C.R. App. P. 28(b)(6)
(“[i]ssues not presented in a party’s brief, or in support of which no reason or
argument is stated, will be taken as abandoned”).
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All this said, Jenkins’ unsuccessful Rule 60(b) motions differ from plaintiffs’ in
one key detail. Plaintiffs’ motion sought relief from a prior order in the instant case.
Jenkins’ motions, however, sought relief from an order in a separate case.
“ ‘A collateral attack is one in which a plaintiff is not entitled to the relief
demanded in the complaint unless the judgment in another action is adjudicated
invalid.’ ” Clayton v. N.C. State Bar, 168 N.C. App. 717, 719, 608 S.E.2d 821, 822
(2005) (quoting Thrasher v. Thrasher, 4 N.C. App. 534, 540, 167 S.E.2d 549, 553
(1969)). “North Carolina does not allow collateral attacks on judgments.” Id. (quoting
Regional Acceptance Corp. v. Old Republic Surety Co., 156 N.C. App. 680, 682, 577
S.E.2d 391, 392 (2003)). Jenkins’ motions for relief in the instant case could not have
been granted unless the judgment in the prior case was adjudicated invalid. Jenkins’
motions, had they been made in the prior case, may have been appropriate, but here
they constituted an impermissible collateral attack. Accordingly, we hold that the
trial court did not err in denying Jenkins’ Rule 60(b) motions.
IV. Motions to Dismiss
In his fourth argument, Jenkins contends that the trial court erred in denying
his motions to dismiss. We disagree.
A. Standard of Review
“We review Rule 12(b)(1) motions to dismiss for lack of subject matter
jurisdiction de novo and may consider matters outside the pleadings.” Harris v.
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Matthews, 361 N.C. 265, 271, 643 S.E.2d 566, 570 (2007). “The standard of review of
an order determining personal jurisdiction is whether the findings of fact by the trial
court are supported by competent evidence in the record; if so, this Court must affirm
the order of the trial court.” Replacements, Ltd. v. MidweSterling, 133 N.C. App. 139,
140-41, 515 S.E.2d 46, 48 (1999). With regard to Rule 12(b)(6), “[t]his Court must
conduct a de novo review of the pleadings to determine their legal sufficiency and to
determine whether the trial court’s ruling on the motion to dismiss was correct.”
Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4, aff’d per
curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).
B. Analysis
Jenkins moved to dismiss the complaint pursuant to Rule 12(b)(1), governing
subject matter jurisdiction; Rule 12(b)(2), governing personal jurisdiction; and Rule
12(b)(6), governing failure to state a claim. On appeal, he contends that the trial
court erred in denying his motions to dismiss.
With respect to subject matter jurisdiction, we first note that the instant
complaint, seeking enforcement of the prior judgment, was proper. Jenkins does not
challenge it, and such challenge is therefore deemed abandoned. See N.C.R. App. P.
28(b)(6) (“[i]ssues not presented in a party’s brief, or in support of which no reason or
argument is stated, will be taken as abandoned”). Moreover, as we have already
discussed above, the trial court had jurisdiction to consider plaintiffs’ motion for
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relief, and plaintiffs’ amended complaint properly related back to the original.
Accordingly, we hold that the trial court had subject matter jurisdiction, and did not
err in denying Jenkins’ motion to dismiss pursuant to Rule 12(b)(1).
With respect to failure to state a claim, Jenkins contends that the amended
complaint would have been dated 2017, more than the ten-year statute of limitations
beyond the original 2006 order which plaintiffs sought enforced. Jenkins contends
that the amended complaint does not relate back to the original, and thus fails to
satisfy the statute of limitations on its face. Again, however, we have addressed this
argument above. The amended complaint properly related back to the original
complaint, and therefore complied with the necessary statute of limitations. We hold
that the trial court therefore did not err in denying Jenkins’ motion to dismiss
pursuant to Rule 12(b)(6).
Lastly, with respect to personal jurisdiction, Jenkins’ argument is oddly
conclusory. Jenkins cites North Carolina’s two-prong analysis to determine whether
a non-resident is subject to personal jurisdiction. Jenkins then cites the case of
Whitener v. Whitener, 56 N.C. App. 599, 289 S.E.2d 887 (1982), along with a brief
summary of its facts. Jenkins then concludes, simply, that “[o]n these facts, our Court
of Appeals concluded that there was no personal jurisdiction, . . . and there is none
here with regard to Jenkins.” Thus, although Jenkins offers case law concerning
personal jurisdiction generally, he offers no factual basis as to why the trial court
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lacked personal jurisdiction over him specifically. Nor does he indicate any evidence
in the record, nor can we find any, which may support this otherwise summary and
unsubstantiated defense. Moreover, it cannot be overstated that this matter is
premised upon a prior judgment which was entered in Guilford County, to which
Jenkins was a party and in which Jenkins participated. As such, we hold that the
trial court did not err in denying Jenkins’ motion to dismiss pursuant to Rule 12(b)(2).
For all these reasons, we hold that the trial court did not err in denying
Jenkins’ motions to dismiss.
V. Judgment on the Pleadings
In his fifth argument, Jenkins contends that the trial court erred in granting
plaintiffs’ motion for judgment on the pleadings. We disagree.
A. Standard of Review
“This Court reviews a trial court’s grant of a motion for judgment on the
pleadings de novo.” Carpenter v. Carpenter, 189 N.C. App. 755, 757, 659 S.E.2d 762,
764 (2008). “[A] motion for judgment on the pleadings should not be granted unless
the movant clearly establishes that no material issue of fact remains to be resolved
and that the movant is entitled to judgment as a matter of law.” Minor v. Minor, 70
N.C. App. 76, 78, 318 S.E.2d 865, 867 (1984).
B. Analysis
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Jenkins contends that he “asserted affirmative defenses including assertions
of fact which if taken as true, created fact issues to be decided by a jury.” If this were
true, it would have precluded the trial court from granting judgment on the pleadings.
However, the examples Jenkins gives are various collateral attacks on the original
summary judgment order. As we stated above, these collateral attacks are
impermissible. Notwithstanding Jenkins’ contentions to the contrary, it is
undisputed that summary judgment was entered against Jenkins and Marsh in the
prior proceeding.
Jenkins additionally contends that the trial court “took judicial notice of the
entire contents of the court file for the 2006 matter which converted the motion to one
for summary judgment.” Jenkins contends that the trial court erred in doing so.
Although there is not significant case law on point within our jurisdiction, we
note that the Supreme Court of the United States has addressed this issue
unambiguously, stating that “courts must consider the complaint in its entirety, as
well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions
to dismiss, in particular, documents incorporated into the complaint by reference, and
matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues &
Rights, Ltd., 551 U.S. 308, 322, 168 L. Ed. 2d 179, 193 (2007). We find this reasoning
persuasive, and agree. The distinction between a Rule 12(c) motion for judgment on
the pleadings and a Rule 56 motion for summary judgment is that the latter may
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require an evidentiary hearing. In the situation where the trial court takes judicial
notice of an established fact – such as the record of the prior proceeding – no hearing
is required. As such, the trial court did not convert the proceeding into one for
summary judgment by taking judicial notice.
Jenkins presents no other purported issues of fact which might preclude a
judgment on the pleadings. Accordingly, we hold that the trial court did not err in
granting plaintiffs’ motion for judgment on the pleadings.
VI. Request for Findings
In his sixth argument, Jenkins contends that the trial court erred in denying
his request for findings of fact. We disagree.
A. Standard of Review
“Although it would be the better practice to do so when ruling on a Rule 60(b)
motion, the trial court is not required to make findings of fact unless requested to do
so by a party.” Nations v. Nations, 111 N.C. App. 211, 214, 431 S.E.2d 852, 855 (1993)
(citing N.C.R. Civ. P. 52(a)(2)).
B. Analysis
Prior to the entry of the trial court’s written order, Jenkins filed a motion
pursuant to Rule 52(a) of the North Carolina Rules of Civil Procedure, requesting
that the trial court enter findings of fact and conclusions of law when entering its
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written order. The trial court denied this motion. On appeal, Jenkins contends that
this was error.
Jenkins notes, and we agree, that it is appropriate for the trial court to enter
findings of fact and conclusions of law when ruling on motions for relief pursuant to
Rule 60(b). See Condellone v. Condellone, 137 N.C. App. 547, 550, 528 S.E.2d 639,
642 (2000). In such a circumstance, it would be appropriate for a party to actively
request such findings and conclusions pursuant to Rule 52(a).
However, this Court has noted that, where judgment is appropriate as a matter
of law, the entry of findings of fact is contraindicated. For example, this Court has
held that “Rule 52(a)(2) does not apply to the decision on a summary judgment motion
because, if findings of fact are necessary to resolve an issue, summary judgment is
improper.” Stone v. Conder, 46 N.C. App. 190, 195, 264 S.E.2d 760, 763 (1980). In
that same case, this Court held that “[i]n determining a motion for summary
judgment, the trial judge is not required to make finding [sic] of fact and conclusions
of law and when he does make same, they are disregarded on appeal.” Id. (emphasis
added, citation and quotation marks omitted).
In the instant case, the matter was decided on the pleadings pursuant to Rule
12(c) – that is, as a matter of law. Findings of fact were not necessary for the trial
court to reach its determination. Rather, if the trial court had to determine facts,
judgment on the pleadings would not have been appropriate. Id. Accordingly, we
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hold that the trial court did not abuse its discretion in denying Jenkins’ motion for
written findings of fact and conclusions of law.
VII. Conclusion
We hold that the trial court possessed subject matter jurisdiction to hear this
case. The trial court did not err in granting plaintiffs’ Rule 60 motion, nor in denying
Jenkins’. The trial court did not err in denying Jenkins’ motions to dismiss. The trial
court did not err in granting judgment on the pleadings in favor of plaintiffs. Because
judgment on the pleadings is a judgment as a matter of law, findings of fact would
have been inappropriate, and the trial court did not err in denying Jenkins’ motion
for written findings of fact.
AFFIRMED.
Judges TYSON and ZACHARY concur.
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