Opinion
No. COA10-881
Filed 19 April 2011 This case not for publication
Appeal by defendant from judgment entered 1 April 2010 by Judge Lori Christian in Wake County District Court. Heard in the Court of Appeals 15 December 2010.
Trachtman Law Firm, PLLC, by James B. Trachtman, for plaintiff. Law Office of Charles M. Putterman, by Charles M. Putterman, for defendant.
Wake County No. 09 CVD 007465.
Frank Csapo (defendant) appeals from a final judgment finding defendant in breach of contract and granting Trachtman Law Firm, PLLC (plaintiff), an award of $6,855.16 plus interest at the legal rate from the date of the judgment. After careful consideration, we affirm the judgment of the district court.
I. Background
On 16 April 2009, plaintiff filed a complaint against defendant for breach of contract, alleging that defendant had failed to pay plaintiff's attorney's fees. Pursuant to an agreement between plaintiff and defendant, plaintiff had filed a complaint on behalf of Profile Investments No. 25, LLC (Profile), against Ammons East Corporation (Ammons) for breach of contract whereby Profile had agreed to buy and Ammons had agreed to sell certain real property. Profile Investments No. 25, LLC v. Ammons East, ___ N.C. App. ___, ___, 700 S.E.2d 232, 233 (2010). The trial court granted Ammons's motion for summary judgment and dismissed Profile's breach of contract claim. Id. at ___, 700 S.E.2d at 234. Defendant's failure to pay attorney's fees in relation to the matter of Profile v. Ammons precipitated plaintiff's complaint against defendant on 16 April 2009. On 30 June 2009, defendant filed a motion to dismiss for failure to join Profile as a necessary party, which the trial court denied following a hearing. At the bench trial, defendant did not present any evidence. Plaintiff presented testimonial and documentary evidence.
The trial court found as fact that defendant and plaintiff "executed a contract in the form of an engagement letter, whereby Plaintiff was to provide litigation services to Defendant for monetary remuneration." The trial court found as fact that plaintiff had performed all of its obligations under the contract, but defendant did not pay plaintiff for its services, despite being invoiced five times over a period of four months. The trial court concluded, as a matter of law, that plaintiff and defendant entered into a valid contract, that defendant breached the contract by not paying plaintiff, and that plaintiff performed fully under the contract and was entitled to be paid in full. Furthermore, the court concluded that defendant was indebted to plaintiff under the contract and that plaintiff was entitled to recover $6,855.16 with interest at the legal rate from the date of the judgment. The trial court entered its judgment in plaintiff's favor on 1 April 2010.
II. Arguments
A. Denial of Defendant's Motion to Dismiss
Defendant first argues that the trial court committed reversible error by denying defendant's motion to dismiss for failure to join Profile as a necessary party. This argument is without legal basis. For the reasons stated below, we conclude that Profile was not a necessary party. Even assuming arguendo that Profile was a necessary party, "[t]he absence of a necessary party under Rule 19, N.C. Rules of Civil Procedure, does not merit dismissal of the action." City of Albemarle v. Security Bank and Trust Co., 106 N.C. App. 75, 77, 415 S.E.2d 96, 98 (1992). Accordingly, the trial court did not commit error by denying defendant's motion to dismiss.
B. The Trial Court's Findings of Fact and Conclusions of Law
Defendant next argues that several of the trial court's findings of fact are not supported by competent evidence. He also argues that the trial court erred by failing to order that Profile be joined as a necessary party because plaintiff contracted to represent Profile, not him, and thus he cannot be contractually liable for the disputed attorney's fees. He argues in the alternative that, even if he could be liable for the disputed attorney's fees, Profile had a material interest in the dispute such that a valid judgment could not have been rendered without joining Profile as a necessary party. As to all of defendant's arguments, we disagree.
We review a judgment following a bench trial to determine whether the trial court's findings of fact are supported by competent evidence and whether its conclusions of law are supported by the findings of fact. Lee v. Lee, 167 N.C. App. 250, 253, 605 S.E.2d 222, 224 (2004). "Findings of fact by the trial court in a non-jury trial have the force and effect of a jury verdict and are conclusive on appeal if there is evidence to support those findings." Shear v. Stevens Building Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992) (citation omitted). The trial court's conclusions of law are reviewable de novo. Id. Contract interpretation is a question of law to be reviewed de novo. Harris v. Ray Johnson Const. Co., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654 (2000).
Under the North Carolina Limited Liability Company Act (the Act), an LLC has the same powers as an individual, including, among other things, the power to make contracts and to sue in its own name. N.C. Gen. Stat. § 57C-2-02 (2011). Furthermore, the Act recognizes a separation between the legal rights and obligations of an LLC and those of an LLC's individual members, managers, executives, and directors. See N.C. Gen. Stat. § 57C-3-30(a) (2011) ("A person who is a member, manager, director, executive or any combination thereof of a limited liability company is not liable for the obligations of the limited liability company solely by reason of being a member, manager, director, or executive and does not become so by participating, in whatever capacity, in the management or control of the business.").
"It is the general law of contracts that the purport of a written instrument is to be gathered from its four corners, and the four corners are to be ascertained from the language used in the instrument." Lynn v. Lynn, ___ N.C. App. ___, ___, 689 S.E.2d 198, 205 (2010) (quotations and citation omitted). "When the language of the contract is clear and unambiguous, construction of the agreement is a matter of law for the court . . ., and the court cannot look beyond the terms of the contract to determine the intentions of the parties." Piedmont Bank and Trust Co. v. Stevenson, 79 N.C. App. 236, 240, 339 S.E.2d 49, 52, aff'd per curiam, 317 N.C. 330, 344 S.E.2d 788 (1986) (citations omitted).
1. The findings of fact are supported by competent evidence.
Defendant challenges findings of fact 3, 4, 5, 6, and 7 in his brief. In particular, defendant asserts that the trial court erred by finding that plaintiff provided legal representation to defendant and that defendant was sanctioned by the trial court in the underlying suit, Profile v. Ammons. According to defendant, plaintiff did not represent defendant, defendant was not a party to Profile v. Ammons, and the trial court "would not, and did not, sanction" defendant because defendant was a "non-party." Having reviewed the record on appeal, we conclude that competent evidence supports these challenged findings of fact.
The engagement letter demonstrates that a contract existed between plaintiff and defendant for legal representation of defendant by plaintiff. The contract, labeled "Engagement Letter and Fee Agreement" and addressed to "Mr. Frank Csapo," includes the following relevant provisions: (1) "TRACHTMAN LAW FIRM, PLLC is pleased to provide legal representation to you (the 'Client') with respect to the above referenced matter [ Profile Investments No. 25, LLC v. Ammons East Corporation]. This representation shall include full authority to render professional services on the Client's behalf." (2) "The Client agrees that the Client is responsible for such expenses relating to this case." (3) "This Agreement may be terminated by the Client at any time, on the Client's discretion, by written notice to TRACHTMAN LAW FIRM, PLLC." (4) "The terms of this letter are acceptable: [signed] Frank A. Csapo."
As a preliminary matter, we note that Profile is a legal entity separate from defendant, who is the sole owner of Profile. The contract clearly identifies Frank Csapo as "the Client" to whom legal services were to be provided as well as the party responsible for payment of fees. Furthermore, defendant signed the agreement in his individual capacity. The fact that the legal representation was in reference to a dispute involving defendant's company, Profile, does not obviate the fact that defendant as the client executed the contract and is bound by its terms. Therefore, we conclude that there is competent evidence to support the trial court's finding that the contract for legal services existed between plaintiff and defendant.
Defendant next argues that the trial court erred by finding that defendant was sanctioned by the trial court in the matter of Profile v. Ammons for his failure to provide sufficient discovery responses. Defendant, in violation of Rule 9(a)(1)(e) of the North Carolina Rules of Appellate Procedure, did not provide this Court with a transcript of the trial court proceedings. "In appeals from the trial division . . ., review is solely upon the record on appeal, the verbatim transcript of proceedings, if one is designated, and any other items filed pursuant to Rule 9." N.C.R. App. P. 9(a) (2011); see West v. Reddick, Inc., 48 N.C. App. 135, 137, 268 S.E.2d 235, 236 (1980) ("The Court of Appeals can judicially know only what appears of record. . . . Matters discussed in a brief but not found in the record will not be considered by this Court. It is incumbent upon the appellant to see that the record is properly made up and transmitted to the appellate court.") (citations omitted), rev'd on other grounds, 302 N.C. 201, 274 S.E.2d 221 (1981). The record must contain
so much of the litigation, set out in the form provided in Rule 9(c)(1), as is necessary for an understanding of all issues presented on appeal, or a statement specifying that verbatim transcript proceedings is being filed with the record pursuant to Rule 9(c)(2), or designating portions of the transcript to be so filed.
N.C.R App. P. 9(a)(1)(e) (2011).
Without the transcript or any other record from Profile v. Ammons, we are unable to properly analyze whether the trial court's findings on this issue are supported by competent evidence. See Hicks v. Alford, 156 N.C. App. 384, 389-90, 576 S.E.2d 410, 414 (2003) ("It is the duty of the appellant to ensure that the record is complete. . . . An appellate court is not required to, and should not, assume error by the trial judge when none appears on the record before the appellate court." (quotations and citations omitted)). Even assuming arguendo that the trial court's findings as to defendant's sanctions are not supported by competent evidence, we conclude that the trial court's other findings of fact support its conclusion that the parties entered into a valid contract, defendant breached the contract, and defendant is indebted to plaintiff in the amount of $6,673.06 plus interest and costs.
2. Profile was not a necessary party to the litigation.
Defendant argues in the alternative that, should we conclude that defendant may be held liable for the disputed attorney's fees, the trial court erred by failing to conclude that Profile was a necessary party without which the trial court's judgment could not have been validly entered. He further asserts that Profile was a necessary party because any defenses to the breach of contract claim, such as professional malpractice and performance under the contract, could only have been asserted by Profile, not defendant, because plaintiff owed a fiduciary duty to Profile "as the party plaintiff . . . was representing[.]"
"When a person is so vitally interested in the controversy that a valid judgment cannot be rendered in the action completely and finally determining the controversy without his presence, such a person is a necessary party to the action." Strickland v. Hughes, 273 N.C. 481, 485, 160 S.E.2d 313, 316 (1968) (citations omitted).
The term "necessary parties" embraces all persons who have or claim material interests in the subject matter of a controversy, which interests will be directly affected by an adjudication of the controversy. [Citation omitted.] A sound criterion for deciding whether particular persons must be joined in litigation between others appears in this definition: Necessary parties are those persons who have rights which must be ascertained and settled before the rights of the parties to the suit can be determined.
Wall v. Sneed, 13 N.C. App. 719, 724, 187 S.E.2d 454, 457 (1972) (quotations and citation omitted; alteration in original). A proper party is one whose interest may be affected by a judgment, but whose presence is not necessary for the court to adjudicate the rights of others. Strickland, 273 N.C. at 485, 160 S.E.2d at 316. "Necessary parties must be joined in an action[,]" whereas "[p]roper parties may be joined." Booker v. Everhart, 294 N.C. 146, 156, 240 S.E.2d 360, 365 (1978) (emphases added).
The subject matter of the controversy in the case sub judice was whether defendant was liable for breach of contract for his failure to pay attorney's fees according to the terms of the parties' agreement. The duties imposed by the contract were between plaintiff and defendant, not plaintiff and Profile. Profile's presence was not necessary for the trial court to determine that a contract for legal representation existed between plaintiff and defendant, that defendant failed to pay plaintiff's attorney's fees, and that plaintiff was entitled to be paid in full for defendant's breach. Additionally, Profile's absence did not preclude defendant from raising defenses that plaintiff failed to perform under the contract. "[A]ny defense which would relieve [a] defendant of liability under the contract may be asserted in any action brought for its breach[.]" Carding Developments v. Gunter Cooke, 12 N.C. App. 448, 452, 183 S.E.2d 834, 837 (1971). Defendant argues that Profile had a "material interest in the subject matter of the controversy" between plaintiff and defendant, however defendant has offered no authority to support this argument and none is apparent to us. We hold that Profile was not a necessary party to the breach of contract action between plaintiff and defendant.
III. Appellate Rules Violations
Before concluding our analysis of defendant's arguments on appeal, we note that defendant has committed several significant violations of the North Carolina Rules of Appellate Procedure. "It is well settled that the Rules of Appellate Procedure are mandatory and not directory. Thus, compliance with the Rules is required." State v. Hart, 361 N.C. 309, 311, 644 S.E.2d 201, 202 (2007) (citations omitted). Although an appellate court may, in its discretion, dismiss an appeal not in compliance with the mandatory rules, id., nonjurisdictional violations, such as those committed by defendant here, are merely "indicative of inartful appellate advocacy" and do not ordinarily require dismissal, Dogwood Dev. Mgmt. Co., LLC v. White Oak Transp. Co., 362 N.C. 191, 198, 657 S.E.2d 361, 365 (2008).
In his brief, defendant failed to include a statement of the standards of review applicable to the issues presented, as required by Rule 28(b)(6). N.C.R. App. P. 28(b)(6) (2011). Defendant failed to include a full, complete, and non-argumentative statement of the facts, in violation of Rule 28(b)(5); defendant's statement of the facts is both inaccurate and argumentative. See N.C.R. App. P. 28(b)(5) (2011) ("An appellant's brief shall contain . . . a non-argumentative summary of all material facts underlying the controversy which are necessary to understand all issues presented for review[.]") For example, defendant stated that he signed the engagement letter "on behalf of Barrister Commercial Group," yet the engagement letter nowhere indicates that defendant signed the agreement in anything other than his individual capacity. Defendant's fact section also includes an argumentative statement that the trial court "made multiple findings of fact in which [it] found that [plaintiff] represented Csapo despite the fact that no such representation ever occurred, and clear evidence that [plaintiff] represented Profile." Defendant further violated Rule 28(b)(5) by including in his fact statement an entire paragraph unsupported "by references to pages in the transcript of proceedings, the record on appeal, or exhibits, as the case may be." N.C.R. App. P. 28(b)(5) (2011).
As noted earlier, defendant violated Rule 9(a)(1)(e) by failing to provide this Court with a transcript of the trial court proceedings necessary to review defendant's argument that the trial court erred in finding that defendant was sanctioned in the underlying suit. See N.C.R. App. P. 9(a)(1)(e) (2011).
Finally, though defendant properly cited authority defining necessary parties generally, defendant cited no authority supporting his argument that Profile had a material interest in the dispute or that Profile's rights were prejudiced by a determination of defendant's liability for attorney's fees sufficient to qualify Profile as a necessary party, in violation of Rule 28(b)(6). See N.C.R. App. P. 28(b)(6) (2011) (requiring that the "body of the argument. . . . contain citations of the authorities upon which the appellant relies").
We admonish counsel to take greater care to comply with the appellate rules in any future appeals.
IV. Conclusion
The trial court did not err in denying defendant's motion to dismiss for failure to join a necessary party. Furthermore, the trial court did not err in failing to join Profile as a necessary party. Because Profile was not a necessary party, Profile's absence did not result in errors in the judgment. We conclude that there is competent evidence to support the trial courts findings of fact that defendant and plaintiff executed a contract for legal representation, that defendant breached the contract by not paying, and that plaintiff performed all of its obligations under the contract. These findings of fact support the trial court's conclusion that defendant's breach of the contract entitled plaintiff to the sum of $6,855.16 with interest at the legal rate from the date of the judgment. Accordingly, we affirm the judgment below.
Affirmed.
Judges HUNTER, Robert C, and CALABRIA concur.
Report per Rule 30(e).