Opinion
No. COA11–1027.
2012-08-7
Cleo Edward LAND, Sr. and Raymond Alan Land, on his own behalf and derivatively on behalf of Eddie Land Masonry Contractor, Inc., Plaintiffs–Appellees, v. Cleo Edward LAND, Jr., Nancy K. Land, and Eddie Land Masonry Contractor, Inc., Defendants–Appellants.
Brooks Pierce McLendon Humphrey & Leonard, LLP, by Reid L. Phillips, Jennifer T. Harrod, and Rebecca L. Cage, for Plaintiffs–Appellees. Smith Moore Leatherwood LLP, by James G. Exum, Jr., Jon Berkelhammer, L. Cooper Harrell, and Stephen M. Russell, Jr., for Defendants–Appellants.
Appeal by Defendants from judgment entered 4 March 2011 by Judge Ben F. Tennille in Special Superior Court for Complex Business Cases. Heard in the Court of Appeals 23 January 2012. Brooks Pierce McLendon Humphrey & Leonard, LLP, by Reid L. Phillips, Jennifer T. Harrod, and Rebecca L. Cage, for Plaintiffs–Appellees. Smith Moore Leatherwood LLP, by James G. Exum, Jr., Jon Berkelhammer, L. Cooper Harrell, and Stephen M. Russell, Jr., for Defendants–Appellants.
McGEE, Judge.
Cleo Edward Land, Sr. and Raymond Alan Land, on his own behalf and derivatively on behalf of Eddie Land Masonry Contractor, Inc. (ELMC), (collectively, Plaintiffs) filed a complaint against Cleo Edward Land, Jr., Nancy K. Land, and ELMC (collectively, Defendants). The evidence in this case shows that Cleo Edward Land, Sr. (Cleo Land) operated a masonry company named C.E. Land, Inc. (C.E. Land Masonry) from 1950 to 1982. Cleo Land had two sons, Cleo Edward Land, Jr. (Eddie Land) and Raymond Alan Land (Alan Land). Eddie Land worked for C.E. Land Masonry from 1968 until 1974, when he formed ELMC, a separate masonry company. Alan Land also worked for C.E. Land Masonry, and remained employed there after Eddie Land left the company.
The central dispute in this case involves an agreement alleged to have been reached between Cleo Land, Eddie Land, and Alan Land in 1982. Cleo Land was approaching retirement and did not feel that Alan Land was prepared to take over the operation of C.E. Land Masonry. Instead, Cleo Land approached Eddie Land with a proposal to merge C.E. Land Masonry and ELMC into a single company.
Plaintiffs contend Cleo Land proposed to Eddie Land that Eddie Land and Alan Land would be equal partners in the newly-merged company and that Cleo Land would give the assets and property of C.E. Land Masonry to the new company. Defendants contend no such agreement was reached and instead contend that Cleo Land gave the assets and property of C.E. Land Masonry to ELMC in consideration of ELMC's offering employment to Alan Land. Thereafter, Cleo Land did retire and Eddie Land moved the equipment belonging to ELMC into storage facilities alongside the equipment of C.E. Land Masonry on real property owned by Cleo Land.
Plaintiffs also offered evidence tending to show that, shortly after the two companies merged, Eddie Land presented to Alan Land a “piece of paper” on which the alleged agreement had been memorialized. Plaintiffs alleged that the piece of paper stated that the name of the new company would be ELMC and that Eddie Land would be the president and take fifty-one percent of the corporate profits while Alan Land would be the vice-president and share in forty-nine percent of the corporate profits. The piece of paper itself was not produced at trial.
The evidence showed that Eddie Land and his wife, Nancy Land, managed ELMC's corporate finances. Periodically, Alan Land asked Eddie Land about his financial interest in the business. Eddie Land is alleged to have assured Alan Land that Alan Land's financial interest was safe and was being managed fairly. Alan Land received periodic bonuses and payments from ELMC and did not investigate the finances himself. Alan Land presented evidence at trial tending to show that Nancy Land and Eddie Land never intended to make Alan Land a partner in ELMC or treat him as such. Rather, Eddie Land and Nancy Land named Eddie Land as the sole owner of ELMC and operated it as if Alan Land was merely an employee.
Alan Land alleged that, in 2005, he became concerned when he learned that Eddie Land and Nancy Land had used company assets to purchase real property. He made written requests for financial information on 29 July and 20 October 2005. On 3 November 2005, Eddie Land's attorney sent Alan Land a letter denying Alan Land's ownership interest in ELMC and stated that Cleo Land had given C.E. Land Masonry to Eddie Land outright in 1982.
Plaintiffs filed their complaint against Defendants on 18 November 2005, alleging sixteen causes of action, including inter alia, breach of contract, fraud, constructive fraud, breach of oral partnership agreement, conversion, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unfair and deceptive trade practices, unjust enrichment, and punitive damages. Plaintiffs filed a verified amended complaint 12 January 2006. Defendants filed their answer on 26 May 2006, denying the material allegations of Plaintiffs' complaint, and asserting certain counterclaims.
Defendants filed a motion on 7 June 2006, requesting a bifurcated trial on the issues of liability and damages. Both Plaintiffs and Defendants also filed motions for summary judgment. The trial court entered an order on 16 June 2008 in which it denied the motions for summary judgment and granted Defendants' motion for a bifurcated trial. The trial on the issues of liability (the liability trial) began on 16 September 2008. The jury found in favor of Plaintiffs on all issues submitted, finding Defendants liable for compensatory and punitive damages, and held against Defendants on their counterclaims. The trial court entered an “interlocutory judgment on liability” dated 14 October 2008 and filed on 20 October 2008.
Defendants filed a motion for judgment notwithstanding the verdict and for a new trial pursuant to N.C. Gen.Stat. § 1A–1, Rules 50 and 59. The trial court denied Defendants' motions by order entered 20 December 2008. Defendants appealed and this Court dismissed the appeal as interlocutory. Land v. Land, 201 N.C.App. 672, 687 S.E.2d 511,disc. review denied,364 N.C. 241, 698 S.E.2d 399 (2010). The trial on the issue of damages (the damages trial) was heard 24 January 2011 through 10 February 2011. Prior to the damages trial, Defendants filed, inter alia, a motion in limine to exclude evidence of an affair between Eddie Land and Alan Land's wife that occurred shortly after the merger. The trial court denied Defendants' motion in limine on the grounds that the evidence of the affair was relevant to the damages trial. Defendants now appeal from a final judgment entered 4 March 2011 following the damages trial. Further facts will be discussed below.
I. Damages Trial
At the damages trial, the jury awarded: (1) Cleo Land $1.00 from Eddie Land for breach of contract; (2) Alan Land $2,643,000.00 from Eddie Land for breach of contract, breach of fiduciary duty, and constructive fraud; (3) Alan Land $700,000.00 from both Eddie Land and Nancy Land for fraud; (4) Alan Land $2,643,000.00 from Nancy Land for aiding and abetting Eddie Land's breach of fiduciary duty and constructive fraud; and (5) Alan Land punitive damages against both Nancy Land and Eddie Land in the amount of $57,000.00 each.
Defendants filed a motion for judgment notwithstanding the verdict (JNOV) and a motion for a new trial on 18 February 2011. The trial court denied Defendants' motions by order dated 28 February 2011. The trial court then entered a final judgment on 4 March 2011, containing, inter alia, the following conclusions of law:
4. Plaintiff Alan Land is entitled to judgment against Defendants Cleo Edward Land, Jr. and Nancy K. Land, jointly and severally, in the total amount of Two Million Seven Hundred Fifty–Seven Thousand Dollars ($2,757,000), that being the amount awarded in answer to Issues 9 and 10, plus a single recovery of the amounts awarded in answer to issues 5,6,7, and 8;
5. Plaintiff Alan Land is entitled to judgment against Defendants Cleo Edward Land, Jr. and Nancy K. Land, jointly and severally, in the amount of Seven Hundred Thousand Dollars ($700,000) that being the amount awarded in answer to Issues 3 and 4, provided, however, that because the Court finds that this amount is subsumed by the amount referred to in the foregoing paragraph 4, the total recovery by Plaintiff Alan Land against Defendants Cleo Edward Land, Jr. and Nancy K. Land, jointly and severally, shall be Two Million Seven Hundred Fifty–Seven Thousand Dollars ($2,757,000) [.]
II. Issues on Appeal
Defendants raise on appeal the issues of whether: (1) the trial court erred by failing to grant Defendants' motion for JNOV on all claims; (2) the trial court erred by failing to grant Defendants' motion for JNOV as to the claims against Nancy Land; and (3) the trial court erred by failing to grant Defendants' motion for a new trial on all claims.
III. JNOV on All Claims
Defendants argue that the trial court erred by failing to grant their motion for JNOV because (1) “[t]here was no meeting of the minds as a matter of law” with respect to the formation of a contract; (2) “Plaintiffs' claims are barred as a matter of law by the applicable statutes of limitations[;]” (3) Alan Land was estopped from seeking damages and “breached his duty to mitigate damages [;]” and (4) Alan Land's tort claims should have been barred as being “inconsistent with his contract claim.” For the reasons set forth below, we disagree.
A. Standard of review
“On appeal the standard of review for a JNOV is the same as that for a directed verdict, that is whether the evidence was sufficient to go to the jury.” Tomika Invs., Inc. v. Macedonia True Vine Pent. Holiness Ch. of God, 136 N.C.App. 493, 498–99, 524 S.E.2d 591, 595 (2000).
We must determine “whether, upon examination of all the evidence in the light most favorable to the non-moving party, and that party being given the benefit of every reasonable inference drawn therefrom and resolving all conflicts of any evidence in favor of the non-movant, the evidence is sufficient to be submitted to the jury.”
Shelton v. Steelcase, Inc., 197 N.C.App. 404, 410, 677 S.E.2d 485, 491 (2009) (citation omitted). “A motion for either a directed verdict or JNOV ‘should be denied if there is more than a scintilla of evidence supporting each element of the nonmovant's claim.’ “ Id. (citation omitted).
B. Terms of the Contract
Defendants contend that the trial court erred by denying their motion for JNOV because the “very existence of a contract or contracts is at issue.” Defendants argue that no contract was formed because the parties never had a “meeting of the minds.” As evidence of the lack of a meeting of the minds, Defendants argue that
Plaintiffs presented conflicting evidence at the liability trial of alternative contracts—one oral, one written; a single contract, two contracts; that Eddie [Land] contracted with Cleo [Land], and that he contracted with Alan [Land]; that the contract(s) made Alan [Land] a shareholder, or that the contract(s) gave him a share in ELMC's profits.
....
Plaintiffs also offered contradictory testimony regarding whether the alleged contract(s) constituted a “merger” between C.E. Land and ELMC or whether Cleo [Land] merely transferred equipment to ELMC.
Defendants also argue that “[t]he jury issue itself establishes that Plaintiffs' evidence failed to show a meeting of the mind[s] necessary to sustain Plaintiffs' lawsuit.” Specifically, Defendants assert that, because the issue submitted to the jury used the language “agreement or agreements” and “and/or,” there was no showing of a clear understanding between the parties about the form or substance of their agreements. Defendants conclude that “[w]ithout proof of mutual assent to identical terms, there cannot be a contract as a matter of law.”
Plaintiffs argue that they presented sufficient evidence of an agreement and the terms of that agreement to submit the issue of contract formation to the jury. Plaintiffs cite Northington v. Michelotti, 121 N.C.App. 180, 184, 464 S.E.2d 711, 714 (1995), and argue that “ ‘[w]hether mutual assent has been established and whether a contract was intended between the parties are questions for the trier of fact.’ “ Plaintiffs contend that, in the light most favorable to them, they presented evidence at the liability trial that
there was an oral agreement made first between Cleo Land and Eddie Land, to which Alan Land orally assented.... This oral agreement was followed by a paper writing, which incorporated the original terms from the oral agreements but added the modification which gave Alan Land 49% and Eddie Land 51% ownership of ELMC.... Alan Land did not sign this paper, but verbally agreed to, ... thus amending the original agreement. The terms of the contract thus were for Eddie and Alan Land to share both ownership and profits in ELMC on a 51%–49% basis.
As stated above, our Court must determine
“whether, upon examination of all the evidence in the light most favorable to the non-moving party, and that party being given the benefit of every reasonable inference drawn therefrom and resolving all conflicts of any evidence in favor of the non-movant, the evidence is sufficient to be submitted to the jury.”
Shelton, 197 N.C.App. at 410, 677 S.E.2d at 491 (citation omitted). Reviewing the evidence presented at the liability trial, we agree with Plaintiffs and hold that there was “more than a scintilla of evidence supporting each element of” Plaintiffs' claims. Id. (citation omitted).
Plaintiffs presented evidence at the liability trial tending to show there was a written document prepared by Eddie Land and Nancy Land and that that document was shown to Alan Land. That document purported to contain the terms of the joint ownership of ELMC between Alan Land and Eddie Land. Plaintiffs also presented evidence that Alan Land behaved as an owner at times, making “free and open use of some ELMC assets, albeit not nearly to the same extent as Eddie [Land] and Nancy Land.” Cleo Land also testified that Eddie Land promised to make Alan Land a partner in ELMC and that this promise was the basis on which the agreement went forward. Thus, we hold that there was sufficient evidence of the existence and terms of the contract to support the trial court's denial of Defendants' motion for JNOV.
C. Statute of Limitations
Defendants next argue that the trial court erred by denying their motion for JNOV because all Plaintiffs' claims were barred by the statute of limitations. Defendants argue that the statute of limitations on causes of action arising from contract claims is three years from the date of breach of contract, regardless of the date the plaintiff learned of the breach. Defendants assert that “[t]he evidence was uncontroverted that, if the contract(s) existed, the breach occurred in the early 1980s when Alan [Land] did not receive stock or a share of profits.” Defendants argue that all other liability in the present case is premised on the contract claim.
Plaintiffs counter that the jury heard sufficient evidence from all parties concerning the statute of limitations issue, and that the jury determined the claims were not time-barred. Plaintiffs contend there was sufficient evidence to show that the breach of contract occurred in 2005 when Eddie Land first denied that Alan Land was an owner and refused to share profits and corporate records with Alan Land. Plaintiffs also contend that, though Alan Land knew Eddie Land and Nancy Land were personally using company assets, he did not know the extent to which that was occurring nor whether they had failed in their duties to account for such use.
We must determine “whether, upon examination of all the evidence in the light most favorable to the non-moving party, and that party being given the benefit of every reasonable inference drawn therefrom and resolving all conflicts of any evidence in favor of the non-movant, the evidence is sufficient to be submitted to the jury.”
Shelton, 197 N.C.App. at 410, 677 S.E.2d at 491 (citation omitted). We agree with Plaintiffs that there was “more than a scintilla of” evidence upon which the jury could find that the breach of contract did not occur until 2005. We therefore hold that the trial court did not err by denying Defendants' motion for JNOV based on the statute of limitations.
D. Mitigation
Defendants further contend that “Alan Land [was] estopped from seeking damages and breached his duty to mitigate damages.” Defendants assert that Alan Land testified that he had knowledge of the activities he complained about and had the authority to act to stop them, but that he never did so. Thus, Defendants contend Alan Land should be estopped from bringing any claim under a theory of quasi-equitable estoppel. Likewise, Defendants contend that Alan Land had a duty to mitigate his damages by taking steps to prevent Eddie Land and Nancy Land from abusing their ownership of ELMC.
Plaintiffs argue that while Alan Land was aware of the actions of Eddie Land and Nancy Land, he was under the impression that his share of the corporation was being managed by them fairly on his behalf. Plaintiffs argue that, until the breach of contract occurred, and Eddie Land and Nancy Land refused to honor Alan Land's rights in ELMC, Alan Land had no duty to mitigate his damages. Under Plaintiffs' theory of the case, the breach of contract did not occur until 2005. Having concluded above that there was sufficient evidence of Plaintiffs' theory of the case to survive Defendants' motion for JNOV, we also find Defendants' argument on this issue to be without merit.
E. Tort and Contract Theory
Defendants also assert that Alan Land's tort claims are barred because they are inconsistent with his contract claim. Plaintiffs contend this issue was not argued as a basis for Defendants' motion for a directed verdict and, therefore, was not preserved for Defendants' motion for JNOV. Plaintiffs argue that the “movant cannot assert grounds on a motion for JNOV that were not previously raised in the directed verdict motion.” Munie v. Tangle Oaks Corp., 109 N.C.App. 336, 342, 427 S.E.2d 149, 152 (1993).
“Appellate review of a motion for directed verdict is limited to those grounds asserted before the trial judge.” Id. at 341, 427 S.E.2d at 152. “A specific ground not stated in the motion, including a challenge to the sufficiency of the evidence, cannot be raised for the first time on appeal.” Id. “A motion for JNOV is treated as a renewal of the motion for directed verdict.” Id. at 342, 427 S.E.2d at 152. “A movant cannot assert grounds on a motion for JNOV that were not previously raised in the directed verdict motion.” Id.
Reviewing Defendants' motion for a directed verdict made at the close of the evidence in the liability trial, we find no mention of Defendants' argument concerning the tort claims being incompatible with the contract claims. Thus, this argument was not properly before the trial court on JNOV and it cannot be used on appeal to show error by the trial court. See Id. (“Although defendants argue both the statute of limitations and insufficiency of the evidence as grounds for JNOV, only the statute of limitations argument was previously raised on the directed verdict motion. Defendants' JNOV arguments are therefore limited to the statute of limitations.”). We therefore overrule this argument.
IV. Claims Against Nancy Land
Defendants next contend that the trial court erred by failing to grant their motion for JNOV with respect to Nancy Land because: (1) Nancy Land did not owe a fiduciary duty to Alan Land; (2) aiding and abetting breach of fiduciary duty is not a recognized cause of action in North Carolina; and (3) there was insufficient evidence of Nancy Land's participation in any fraud and the jury instructions on that issue were in error.
A. Fiduciary Duty
Defendants first argue that Nancy Land did not owe a fiduciary duty to Alan Land. Specifically, Defendants contend “the trial court identified two bases for Nancy's alleged fiduciary duty to Alan [Land]: her role as a corporate officer and a familial relationship. Neither is supported by the law [.]” Defendants contend that a non-shareholding corporate officer has no fiduciary duty to a shareholder. Likewise, Defendants contend that a family relationship creates no fiduciary duty. Defendants contend the trial court erred in its jury instructions on the issue of fiduciary duty.
Plaintiffs contend that Defendants' right to appeal based on the jury instruction on fiduciary duty was not preserved because Defendants did not object before the trial court submitted the issue to the jury. “[W]here a party fails to object to jury instructions, ‘it is conclusively presumed that the instructions conformed to the issues submitted and were without legal error.’ “ Madden v. Carolina Door Controls, 117 N.C.App. 56, 62, 449 S.E .2d 769, 773 (1994) (citation omitted). However, our case law allows a party to preserve jury instructions for appellate review by objecting during a pre-charge conference and obtaining a ruling thereon. See Wilson v. Burch Farms, Inc., 176 N.C.App. 629, 633, 627 S.E.2d 249, 254 (2006) (“Our Supreme Court has held, and we reiterate, that when a party has objected to proposed jury instructions during a charge conference, and the trial court has considered and denied the request, that the party need not repeat its objections after the jury charge is given.” Citing Wall v. Stout, 310 N.C. 184, 311 S.E.2d 571 (1984)).
In the present case, the following exchange occurred during the charge conference:
THE COURT: Okay. All right. Well, I think what I'll do is at the end of the paragraph, I'll just add a sentence similar to the other one that says, “If you found in Issue Number 1 that there was an agreement pursuant to which Alan Land was a 49 percent shareholder in ELMC, a fiduciary relationship existed between Alan and Nancy on the one hand and Alan on the other, it would exist as a matter of law. I will work on the language, but it would, essentially, be the same.
[DEFENDANTS' COUNSEL]: And I will take exception to that one. That's even more far a field of my understanding of the law.
[PLAINTIFFS' COUNSEL]: Two more things, Your Honor. I'm almost done.
THE COURT: All right.
Defendants noted their objection to the trial court's proposed instruction on Nancy Land's fiduciary duty, but they did not obtain a ruling on that objection. The trial court then gave the proposed instruction as follows:
The first issue reads: “Did Eddie Land, Cleo Land and Alan Land enter into an agreement or agreements that Alan Land would become an owner in and/or share in the profits of Eddie Land Masonry Contractors, Inc. on a 51 percent/49 percent basis?”
After the trial court gave the proposed instruction to the jury, the following exchange occurred:
[THE COURT]: All right. Is there anything from counsel with respect to the jury instructions?
[PLAINTIFFS' COUNSEL]: No, Your Honor.
THE COURT: Mr. Gatton [ (DEFENDANTS COUNSEL) ]?
MR. GATTON [ (DEFENDANTS COUNSEL) ]: No.
Thus, the record shows that Defendants objected to the proposed instruction but failed to obtain a ruling on their objection as required by Wilson and Wall. We therefore agree with Plaintiffs that Defendants did not preserve this issue for appellate review. This argument is therefore dismissed.
B. Aiding and Abetting Breach of Fiduciary Duty
Defendants also argue that the trial court erred in denying Nancy Land's JNOV motion as to Plaintiffs' claim for aiding and abetting breach of fiduciary duty. Defendants contend that our “Supreme Court has not recognized a cause of action for aiding and abetting breach of fiduciary duty.” In Ehrenhaus v. Baker, ––– N.C.App. ––––, ––––, 717 S.E.2d 9, 29 (2011), this Court has observed that, in North Carolina, there remains an unanswered question concerning the existence of a cause of action for aiding and abetting a breach of a fiduciary duty:
Ehrenhaus also claimed that Wells Fargo aided and abetted a breach of fiduciary duty by the Wachovia Board. First, it is unclear whether such a cause of action exists in North Carolina. In re Bostic Constr., Inc., 435 B.R. 46, 66 (Bankr.M.D.N.C.2010) (“It is not even clear that North Carolina recognizes a cause of action for aiding and abetting breach of fiduciary duty.”); Battleground Veterinary Hosp., P.C. v. McGeough, No. 05 CVS 18918, slip op. at 7, 2007 WL 3071618 (N.C.Super.Ct. Oct. 19, 2007) (“It remains an open question whether North Carolina law recognizes a claim for aiding and abetting breach of fiduciary duty.”). Compare Ahmed v. Porter, 1:09CV101, 2009 WL 2581615 (W.D.N.C. June 23, 2009) (unpublished) (concluding North Carolina recognizes such a claim), with Laws v. Priority Tr. Servs. of N.C., L.L.C., 610 F.Supp.2d 528, 532 (W.D.N.C.2009) (concluding North Carolina does not recognize such a claim). This Court recognized an aiding and abetting theory of liability for federal securities laws violations in Blow v. Shaughnessy, 88 N.C.App. 484, 490, 364 S.E.2d 444, 447 (1988). However, the underlying rationale of that decision was abrogated by Cent. Bank of Denver v. First Interstate Bank of Denver, 511 U.S. 164, 128 L.Ed.2d 119 (1994). Laws, 610 F.Supp.2d at 532. We elect not to delve into whether such a claim exists because it is highly unlikely Ehrenhaus or another Class member could establish a primary fiduciary duty violation by the Wachovia Board.
Ehrenhaus, ––– N.C.App. at ––––, 717 S.E.2d at 29.
Recognition of a cause of action for aiding and abetting breach of fiduciary duty in North Carolina is an “unclear” issue. In the present case, we find no reason to answer that question. In the damages trial, the jury found that Alan Land was entitled to recover $2,643,000.00 from Nancy Land for aiding and abetting breach of fiduciary duty, as well as for constructive fraud. The trial court's final judgment awarded Alan Land a single recovery from Nancy Land and Eddie Land, jointly and severally, that included the amount of $2,643,000.00. The trial court's order stated that this amount was being awarded as a single recovery based on the claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and constructive fraud.
Assuming arguendo, without determining, that the trial court erred by not granting Defendants' motion for JNOV on the grounds that North Carolina does not recognize a cause of action for aiding and abetting breach of fiduciary duty, such error was not prejudicial to Nancy Land. Based on the jury's verdict and the trial court's award in this case, striking the award for aiding and abetting breach of fiduciary duty would have no effect on the amount of the final award. “The burden is on the appellant not only to show error, but to show prejudicial error, i.e., that a different result would have likely ensued had the error not occurred .” Responsible Citizens v. City of Asheville, 308 N.C. 255, 271, 302 S.E.2d 204, 214 (1983). In light of the fact that the result of the trial court's judgment, an award of $2,643,000.00 in damages to Plaintiffs, would remain unchanged regardless of whether the claim for aiding and abetting breach of fiduciary duty was included, Defendants have failed to show that any alleged error was prejudicial. This argument is therefore without merit.
C. Evidence of Fraud
Defendants next argue that “[t]he fraud claim against Nancy Land fails for lack of evidence.” Defendants argue that the jury instruction was erroneous and that there was insufficient evidence that Nancy Land made a fraudulent statement. Plaintiffs contend that the evidence at the liability trial showed that Nancy Land was “directly and deeply involved in the fraud committed against Alan Land[,]” because she controlled the books and records of the company, made false entries, and used proceeds for personal expenses.
Defendants specifically make two arguments concerning the fraud claim: (1) erroneous jury instructions; and (2) insufficiency of the evidence. With respect to Defendants' argument concerning the jury instructions, we note that Defendants did not object to this instruction during the charge conference. We therefore will not address Defendants' argument concerning the jury instructions. Plaintiffs respond to Defendants' sufficiency of the evidence argument, stating that there was evidence of numerous false statements attributable to Nancy Land, including: that Eddie Land and Nancy Land prepared the “piece of paper” which showed Alan Land's purported ownership interest in ELMC; and Nancy Land manipulated the records of ELMC and allowed Alan Land to believe that his profits were being retained in ELMC. Reviewing the record “ ‘in the light most favorable to [Plaintiffs],” as required in considering a JNOV motion, and giving Plaintiffs “the benefit of every reasonable inference drawn therefrom and resolving all conflicts of any evidence in favor of” Plaintiffs, we conclude that “ ‘the evidence [was] sufficient to be submitted to the jury.’ “ Shelton, 197 N.C.App. at 410, 677 S.E.2d at 491 (citation omitted). We therefore hold that the trial court did not err in denying Defendants' motion for JNOV.
V. New Trial On All Claims
Defendants argue that the trial court erred by failing to grant a new trial on all claims because: (1) the [u]se of ‘or’ and ‘and/or’ in jury issues was improper[;]” (2) the “[i]ntroduction of alleged damages arising more than three years before the Complaint was filed was improper[;]” (3) the “[i]nstructions on estoppel and mitigation of damages were improper[;]” (4) the introduction into evidence during the damages trial of an affair between Eddie Land and Alan Land's wife at the time was prejudicial and irrelevant; (5) the trial court's jury instruction on constructive fraud was erroneous; and (6) the “cumulative effect of numerous legal errors warrants a new trial.”
A. Standard of Review
“[A]n appellate court's review of a trial judge's discretionary ruling either granting or denying a motion to set aside a verdict and order a new trial is strictly limited to the determination of whether the record affirmatively demonstrates a manifest abuse of discretion by the judge.” Worthington v. Bynum and Cogdell v. Bynum, 305 N.C. 478, 482, 290 S.E.2d 599, 602 (1982). “[A]n appellate court should not disturb a discretionary Rule 59 order unless it is reasonably convinced by the cold record that the trial judge's ruling probably amounted to a substantial miscarriage of justice.” Id. at 487, 290 S.E.2d at 605. However, “when the trial court grants or denies a new trial ‘due to some error of law,’ then its decision is fully reviewable.” Chiltoski v. Drum, 121 N.C.App. 161, 164, 464 S.E.2d 701, 703 (1995) (citation omitted). “Appellate courts thus must utilize the ‘abuse of discretion’ standard only in those instances where there is no question of ‘law or legal inference.’ “ Id. (citation omitted).
B. Jury Instructions and Verdict Sheet
Defendants contend the use of the terms “or” and “and/or” in the jury instructions and verdict sheet was improper. However, Defendants failed to object and thus have not preserved this argument for appellate review. We have reviewed the transcript of the charge conference and find that the trial court and trial counsel had thorough discussions of each claim and issue to be submitted to the jury and the argument Defendants now make was not presented to the trial court.
Defendants assert that they preserved the issue of the “and/or” instruction for appellate review because the proposed instructions that they submitted to the trial court did not include the language “and/or.” Defendants cite to Foy v. Spinks, 105 N.C.App. 534, 414 S.E.2d 87 (1992) and argue that the timely submission of proposed jury instructions to the trial court is sufficient to preserve this issue for appellate review, despite their failure to object to the issue. The Court in Foy held that, because the “plaintiffs timely submitted proposed jury instructions to the trial judge, it was not necessary for them to repeat their objections to the jury instructions.” Foy, 105 N.C.App. at 539, 414 S.E.2d at 89. We find the present case distinguishable from Foy, however, and we therefore disagree with Defendants' argument.
The Court in Foy did not quote or describe the proposed jury instructions submitted, and therefore we are unable to determine from Foy what would be required of proposed instructions to preserve an issue for appellate review. In the present case, the proposed instructions Defendants submitted with respect to contract formation were print-out copies of the pattern jury instructions that contained blank spaces for the trial court to supply the particular details or elements required by the facts.
It is therefore clear from the record and the transcript that Defendants did not intend for the trial court to give the proposed pattern instructions verbatim to the jury, with the bracketed blanks not completed. Rather, by submitting the pattern instructions, Defendants must have contemplated that the details of the instruction actually provided to the jury would be worked out during the charge conference. This is particularly evident because some other proposed instructions submitted by Defendants were actually drafted with specific wording by Defendants and were not merely copies of the pattern instructions.
In Wall v. Stout, 310 N.C. 184, 311 S.E.2d 571 (1984), our Supreme Court reviewed the appellate rules governing the preservation of appellate review of jury instruction error. The Court noted that “[t]hese rules were obviously designed to prevent unnecessary new trials caused by errors in instructions that the court could have corrected if brought to its attention at the proper time.” Id. at 188–89, 311 S.E.2d at 574. The Court stated “that this policy is met when a request to alter an instruction has been submitted and the trial judge has considered and refused the request.” Id. at 189, 311 S.E.2d at 574. The Court reasoned that “[i]n most instances, it is obvious that further objection at the close of the instructions would be unavailing.” Id.
In the present case, unlike in Foy, we do not find that Defendants' proposed instructions preserved this issue for review, largely because there is no evidence from the charge conference that the “and/or” issue was actually argued before the trial court. While it is correct that the pattern instruction does not contain the language “and/or,” it is equally clear from the context of the trial that the pattern instruction in this case was not submitted with the intention of requesting a verbatim instruction or obtaining a ruling thereon. As the Supreme Court noted in Wall, the purpose of the rules requiring preservation of issues by objection is to “prevent unnecessary new trials caused by errors in instructions that the court could have corrected if brought to its attention at the proper time.” Id. at 188–89, 311 S.E.2d at 574. In the present case, we hold that the submission of the incomplete pattern instruction to the trial court in a set of proposed jury instructions was insufficient to bring an alleged error to the trial court's attention. This fact, combined with Defendants' failure to bring the issue to the attention of the trial court during the charge conference or at any other time, leads us to conclude that Defendants in this case did not preserve this issue for appellate review. We therefore do not address Defendants' argument concerning the use of “and/or” in the jury instructions.
C. Evidence of Damages
Defendants next argue that “Plaintiffs' damages should have been substantially narrowed as a result of Plaintiffs' delay in bringing suit.” Defendants contend that the trial court “should have excluded evidence of damages allegedly occurring more than three years prior to the filing of the Complaint.” Plaintiffs respond that their theory of the case was that they suffered no damages until 2005 when Eddie Land “repudiated the agreement” and refused to pay Alan Land his share of the company profits. Under Plaintiffs' theory of the case, they did not present evidence of “damages allegedly occurring more than three years prior to the filing of the Complaint[,]” as Defendants state. Rather, Plaintiffs' evidence was limited to the damages which occurred when Alan Land demanded an accounting of his share of ELMC and his ownership was denied him. As this occurred in 2005, we find that Plaintiffs did not present evidence of damages occurring prior to 2005 and therefore we find Defendants' argument without merit.
D. Estoppel and Mitigation
Defendants also argue that the trial court's instructions on estoppel and mitigation of damages were improper. However, Defendants' arguments on this issue refer to their argument concerning estoppel and mitigation in the JNOV context. Having previously concluded that argument was without merit, we hold likewise with respect to the same argument in Defendants' motion for a new trial.
E. Evidence of Affair
Defendants next contend that evidence of an affair between Eddie Land and Alan Land's wife at the time was prejudicial and should not have been admitted at the damages trial. The particular evidence to which Defendants object involves testimony tending to show that Eddie Land had an affair with Alan Land's wife shortly after Cleo Land retired in 1985 from management of ELMC. Alan Land learned of the affair and Eddie Land asked him to keep the affair a secret from Nancy Land. Shortly after the affair, Alan Land received larger bonuses from Eddie Land.
Defendants argue that the trial court erred by denying their motion for a new trial on all claims with respect to the damages trial because the evidence of the affair was irrelevant and prejudicial. Defendants appear to be arguing that the trial court erred by denying their motion in limine. However, Defendants make their argument in terms of their motion for a new trial. Plaintiffs contend this evidence was important to the context of the working relationship between Alan Land and Eddie Land.
We note that determinations of relevance under N.C. Gen.Stat. § 8C–1, “Rule 104(a) are addressed to the sound discretion of the trial court.” State v. Shuford, 337 N.C. 641, 649, 447 S.E.2d 742, 747 (1994). However,
[a]lthough “the trial court's rulings on relevancy technically are not discretionary and therefore are not reviewed under the abuse of discretion standard applicable to Rule 403, such rulings are given great deference on appeal.”.... Because the trial court is better situated to evaluate whether a particular piece of evidence tends to make the existence of a fact of consequence more or less probable, the appropriate standard of review for a trial court's ruling on relevancy pursuant to Rule 401 is not as deferential as the “abuse of discretion” standard which applies to rulings made pursuant to Rule 403.
Dunn v. Custer, 162 N.C.App. 259, 266, 591 S.E.2d 11, 17 (2004) (citation omitted).
As to prejudice, “[w]e review a trial court's decision to exclude evidence under Rule 403 for abuse of discretion.” State v. Whaley, 362 N.C. 156, 160, 655 S.E.2d 388, 390 (2008). “A motion in limine seeks pretrial determination of the admissibility of evidence proposed to be introduced at trial; its determination will not be reversed absent a showing of an abuse of the trial court's discretion.” Warren v. Gen. Motors Corp., 142 N.C.App. 316, 319, 542 S.E.2d 317, 319 (2001) (citation omitted).
On appeal, Defendants contend that the trial court erred by failing to grant their motion for a new trial based on the admission of the evidence of the affair. In making their argument, Defendants also refer to alleged errors in the trial court's denial of their motion in limine regarding exclusion of the evidence of the affair. We note that, to the extent Defendants' arguments address the trial court's ruling on their motion in limine and the trial court's decision not to exclude evidence for prejudicial reasons, Defendants fail to argue abuse of discretion. Having reviewed the record, and without a supporting argument by Defendants, we are not persuaded that the trial court abused its discretion in this matter. Likewise, to the extent that Defendants' arguments address the trial court's determination on relevance, we note that our Courts give great deference to the trial court's relevancy ruling. The trial court concluded that the evidence was “relevant to circumstances of Eddie Land's promise to keep Alan Land's part of the business safe.” Reviewing the record and giving deference to the trial court's decision on this evidence, we find Defendants' argument without merit.
F. Constructive Fraud
Defendants also argue that they were entitled to a new trial because of the errors they contend occurred in the jury instructions based on Nancy Land's alleged fiduciary duties. As we have concluded Defendants' arguments concerning fiduciary duties were not preserved, this argument is without merit.
G. Cumulative Effect
Defendants lastly argue that, assuming our Court concludes that “none of the individual errors discussed above is sufficient standing alone to warrant a new trial, they can be considered cumulatively.” However, because we found no prejudicial error at trial, this argument is without merit.
No error. Chief Judge MARTIN and Judge CALABRIA concur.
Report per Rule 30(e).