The opinion
An unpublished opinion of the North Carolina Court of Appeals does not constitute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 Appellate Procedure.
NO. COA13-1189
NORTH CAROLINA COURT OF APPEALS
Filed: 15 April 2014
BRYANT/SUTPHIN PROPERTIES, LLC AND
DONALD H. SUTPHIN,
Plaintiffs,
vs. Guilford County
No. 13 CVS 5523
J. SCOTT HALE, ROBERT E. BOYDOH,
JR., AND BOYDOH & HALE, PLLC,
Defendants.
Appeal by Plaintiffs from order entered 8 August 2013 by
Judge Richard L. Doughton in Guilford County Superior Court.
Heard in the Court of Appeals 19 February 2014.
Benson, Brown & Faucher, PLLC, by Drew Brown, for
Plaintiff.
Yates, McLamb & Weyher, L.L.P., by Dan J. McLamb and Andrew
C. Buckner, for Defendants.
DILLON, Judge.
Bryant/Sutphin Properties, LLC, and Donald H. Sutphin
(together, “Plaintiffs”), were the defendants in a lawsuit filed
against them by SunTrust Bank (the “SunTrust suit”). Plaintiffs
were represented in the SunTrust suit by attorneys J. Scott Hale
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and Robert E. Boydoh, Jr., and their law firm Boydoh & Hale,
PLLC (together, “Defendants”). Plaintiffs filed the present
action against Defendants, alleging that Defendants committed
legal malpractice in the SunTrust suit. Plaintiffs’ complaint
against Defendants was dismissed by the trial court pursuant to
Rule 12(b)(6) by order entered 8 August 2013, from which
Plaintiffs appeal. We affirm the trial court’s order.
I. Background
On 3 February 2010, SunTrust Bank filed the SunTrust suit
against Plaintiffs alleging Plaintiffs’ default on a commercial
note in the original principal amount of $2,150,000.00.
Plaintiff Bryant/Sutphin Properties, LLC, was the borrower on
the note, and Plaintiff Mr. Sutphin was a guarantor on the note.
Defendants, who were retained to represent Plaintiffs, filed a
responsive pleading on behalf of Plaintiffs, which included
counterclaims against SunTrust for unfair/deceptive trade
practices pursuant to N.C. Gen. Stat. § 75-1.1 (“Chapter 75
counterclaim”) and for breach of contract. In the Chapter 75
counterclaim, Plaintiffs alleged that SunTrust had engaged in
wrongful conduct which adversely affected Plaintiffs’ day-to day
business operations by “placing a hold on [Plaintiffs’]
corporate accounts so that no funds could be withdrawn from such
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Accounts . . . .” Suntrust Bank v. Bryant/Sutphin Prop., LLC,
__ N.C. App. __, __, 732 S.E.2d 594, 597, disc. review denied,
366 N.C. 417, 735 S.E.2d 180 (2012).
At the end of the SunTrust suit trial, the jury found in
favor of Plaintiffs on their Chapter 75 counterclaim, awarding
$700,000.00, which was trebled to $2,100,000.00. However, the
jury found in favor of Suntrust on Plaintiffs’ breach of
contract counterclaim, determining that no breach of contract
had occurred. Id. at __, 732 S.E.2d at 597. All parties in the
SunTrust suit appealed.
On appeal in the SunTrust suit, we stated that Plaintiffs’
Chapter 75 counterclaim must be based on either a breach of
contract accompanied by “substantial aggravating circumstances”
or a claim separate and apart from a breach of contract; and,
accordingly, since the jury had ruled against Plaintiffs on
their breach of contract counterclaim, the only basis upon which
their Chapter 75 counterclaim could succeed would be conduct by
SunTrust separate and apart from a breach of contract.
Ultimately, we held that the trial court erred by entering an
award on Plaintiffs’ Chapter 75 counterclaim because Plaintiffs
had made “no allegations or claims for fraud, constructive
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fraud, misrepresentation or the like on the part of [SunTrust].”
Id. at __, 732 S.E.2d at 599.
On 2 May 2013, Plaintiffs filed the present action against
Defendants for breach of contract and professional negligence,
alleging that their Chapter 75 counterclaim against SunTrust in
the SunTrust suit ultimately failed on appeal because Defendants
had failed to amend the Chapter 75 counterclaim to allege a
distinct tort, separate from the breach of contract claim.
Essentially, Plaintiffs’ lawsuit against Defendants in the
present case hinges upon Plaintiffs’ belief that Defendants
committed malpractice by not alleging fraud, constructive fraud,
or misrepresentation in the SunTrust suit, such that Plaintiffs’
favorable judgment pertaining to the Chapter 75 counterclaim –
having a separate founding basis other than breach of contract -
would not have been reversed by this Court.
On 18 July 2013, Defendants filed a Rule 12(b)(6) motion in
the present action to dismiss Plaintiffs’ action for failure to
state a claim upon which relief can be granted. On 8 August
2013, the trial court entered an order granting Defendants’
motion and dismissing Plaintiffs’ complaint with prejudice.
From this order, Plaintiffs appeal.
II. Analysis
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In Plaintiffs’ sole argument on appeal, they contend the
trial court erred by granting Defendants’ Rule 12(b)(6) motion
to dismiss. We disagree.
“The motion to dismiss under N.C. R. Civ. P. 12(b)(6) tests
the legal sufficiency of the complaint.” Stanback v. Stanback,
297 N.C. 181, 185, 254 S.E.2d 611, 615 (1979). “In ruling on
the motion the allegations of the complaint must be viewed as
admitted, and on that basis the court must determine as a matter
of law whether the allegations state a claim for which relief
may be granted.” Id. (citations omitted). “This 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).
“In a professional malpractice case predicated upon a
theory of an attorney’s negligence, the plaintiff has the burden
of proving by the greater weight of the evidence: (1) that the
attorney breached the duties owed to his client . . ., and that
this negligence (2) proximately caused (3) damage to the
plaintiff.” Rorrer v. Cooke, 313 N.C. 338, 355, 329 S.E.2d 355,
365-66 (1985). A plaintiff in a legal malpractice action “must
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establish that the loss would not have occurred but for the
attorney’s conduct.” Id. at 361, 329 S.E.2d at 369. Said
plainly, a plaintiff in a legal malpractice suit must allege and
prove the following: “(1) The original claim was valid; (2) It
would have resulted in a judgment in his favor; and (3) The
judgment would have been collectible.” Id. “A plaintiff
alleging a legal malpractice action must prove a ‘case within a
case,’ meaning a showing of the viability and likelihood of
success of the underlying action.” Formyduval v. Britt, 177
N.C. App. 654, 658, 630 S.E.2d 192, 194 (2006).
In this case, except for Plaintiffs’ breach of contract
claim that Defendants charged “excessive fees,” all of
Plaintiffs’ claims appear to be based on Plaintiffs’ failure to
amend the counterclaim in the SunTrust suit. Plaintiffs allege
the original Chapter 75 claim against SunTrust was valid and
would have resulted in a judgment in their favor but for
Defendants’ negligent failure to amend the counterclaim with a
“distinct tort claim[] separate and apart from a breach of
contract[.]” Specifically, Plaintiffs state that Defendants
should have amended the counterclaim in the SunTrust suit to
allege “Negligent and/or Fraudulent Representation.” However,
it was also incumbent on Plaintiffs to allege in their complaint
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the circumstances that would have given rise to a valid claim
against SunTrust for negligent or fraudulent misrepresentation.
However, the only representation which Plaintiffs allege that
SunTrust made was that SunTrust had “falsely led [Plaintiff Mr.
Sutphin] to believe they would be fair to [Plaintiffs] in [their
banking] relationship.”
We believe that SunTrust’s alleged representation - that
Plaintiffs would be treated fairly in their future dealings - is
too vague to form the basis for fraud or misrepresentation based
on the facts of this case. See Timothy L. Hardin v. York Mem’l
Park, __ N.C. App. __, __, 730 S.E.2d 768, 778 (2012), disc.
review denied, 366 N.C. 571, 738 S.E.2d 376 (2013) (stating that
the “[p]laintiffs’ allegations regarding fraud are vague and
general — they essentially parrot the elements of a fraud claim
without providing any specifics” and holding that the trial
court did not err by dismissing the compliant). In other words,
we believe that Plaintiffs failed to support their “case within
a case” by failing to allege exactly what misrepresentation
SunTrust made that would have sustained Plaintiffs’ Chapter 75
counterclaim.
Assuming arguendo that SunTrust’s representation to treat
Plaintiffs fairly was a legitimate basis for fraud in this case,
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Plaintiffs have nonetheless failed to show how SunTrust’s
subsequent actions by placing a hold on Plaintiffs’ account –
which was the conduct Plaintiffs assert was unfair - constituted
a breach of the fairness representation. Rather, we held just
the opposite in Plaintiffs’ appeal in the SunTrust suit as
follows:
There is no doubt that [SunTrust’s] placing
a hold on [Plaintiffs’ corporate] accounts
without prior notice, failing to make
written demands for payment [on the loans
Plaintiffs allegedly defaulted on], and
acting in a different manner than [SunTrust]
had in the past would be surprising to
[Plaintiffs] and likely disruptive to
[Plaintiffs’] business(es) . . . .
[However,] this does not make [SunTrust’s]
actions “immoral, unethical, oppressive,
unscrupulous, or substantially injurious to
consumers” or accurately described as having
“the capacity or tendency to deceive.”
Bryant/Sutphin, __ N.C. App. at __, 732 S.E.2d at 600.
Accordingly, Plaintiffs have failed to allege facts to show that
they had a valid claim for misrepresentation against SunTrust
where Plaintiffs have merely alleged SunTrust’s representation
that it would treat them fairly and the subsequent hold placed
on Plaintiffs’ deposit accounts by SunTrust.
Regarding Plaintiffs’ claim that Defendants’ legal fees
were excessive, Plaintiffs make no allegations regarding what
the fee agreement was, how Defendants breached the agreement or
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the amount of damages, if any, resulting from the breach.
Rather, there is only a naked allegation that Defendants had
billed over $200,000.00 in their representation of Plaintiffs in
the SunTrust suit and that “[t]he fee charged in the matter
[was] excessive.” Accordingly, we believe the trial court
properly dismissed this claim as well.
AFFIRMED.
Judge BRYANT and Judge STEPHENS concur.
Report per Rule 30(e).