Lindley Law represented the Plaintiff, DavFam, LLC (“DavFam”), in a matter initially before the court in 2016. After an unsuccessful appeal by the Defendant, and petition for discretionary review to the North Carolina Supreme Court, the trial court’s decision in favor of DavFam is affirmed and upheld. Congratulations to DavFam and Lindley Law for the victory!
DavFam is a closely-held family entity, whose members are siblings, and which owns real estate across North Carolina. The Defendant is a sibling of the DavFam members, but he is not a member or manager in the LLC. Among the assets held by DavFam is real estate located in Alleghany County, North Carolina (the “Alleghany Property”). The Alleghany Property was previously owned by a separate entity, Davis Groups Farms, LLC (“Davis Group”). The Defendant was a manager of Davis Group at the time it held title to the Alleghany Property; however, the Defendant executed a deed purportedly conveying title to the Alleghany Property from Davis Group to himself, individually, without notifying the other Davis Group managers or his other siblings. A sibling, and fellow Davis Group manager, discovered the deed, and the Defendant agreed to assign his interest in Davis Group to the other manager. After this assignment, the other Davis Group manager transferred the Alleghany Property, and all other real property owned by Davis Group, to DavFam, subsequently dissolving Davis Group. Three years later, the Defendant executed another deed as manager of Davis Group, despite its dissolution, purportedly: (a) replacing the deed which conveyed the Alleghany Property from Davis Group to DavFam, and (b) conveying that property from Davis Group to himself, individually. Shortly thereafter, DavFam initiated the lawsuit to quiet title and to have the second deed set aside.
In answering the Complaint filed by DavFam, the Defendant failed to raise any affirmative defenses; however, he later attempted to argue the assignment of his interest in Davis Group was void for lack of consideration – the lack of an exchange of things of value required to support a binding contract between two or more parties. The trial court disagreed, granting DavFam’s motion for summary judgment. The Defendant appealed this decision, but later voluntarily dismissed his appeal. He renewed his dispute by filing motions for relief of the judgment, or for the trial court to reconsider its ruling on the summary judgment. The trial court denied both motions, and the Defendant appealed this decision.
Upon review, the North Carolina Court of Appeals determined that the trial court did not err in granting DavFam’s motion for summary judgment for two reasons. First, the Defendant, by not raising his argument of lack of consideration in his Answer, waived this defense. Second, the Defendant never argued that the other Davis Group manager lacked the authority to execute the deed conveying the Alleghany Property from Davis Group to DavFam. The Defendant also argued on appeal that Rule 60 of the North Carolina Rules of Civil Procedure provides another basis to grant his motion for relief of the judgment. The Court of Appeals again concluded that this argument had no merit: the Defendant had ample notice of the hearing for DavFam’s motion for summary judgment; DavFam’s attorneys did not engage in any misconduct during trial, and; the trial court did not err in making certain findings of fact that supported its ruling in favor of DavFam’s motion.
The North Carolina Supreme Court declined the Defendant’s request to review the decision by the Court of Appeals, leaving the Court of Appeals ruling as the final decision on the merits of the dispute.
This blog post may be considered an advertisement under the North Carolina Rules of Professional Conduct or under the state bar rules in other jurisdictions. Prior results do not guaranteed a similar outcome. The outcome of any case on which Lindley Law works cannot be predicated on previous results.
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