Opinion
No. 06-444.
Filed January 2, 2007.
Appeal by plaintiff and third-party defendant from order entered 2 November 2005 by Judge Carl R. Fox in the Superior Court in Wake County Heard in the Court of Appeals 14 November 2006.
Webb Webb, by William D. Webb, for plaintiff and third-party defendant appellants. Allen Moore, L.L.P., by Arch T. Allen, III, for defendant and third-party plaintiff appellee.
Wake County No. 95 CVS 11730.
In November 2005, the trial court granted summary judgment to defendant, dismissing plaintiff's claims against defendant, and awarding attorney fees to defendant. Plaintiff appeals. For the reasons discussed below, we affirm.
This case arose from a real estate venture, has been litigated for over a decade, and has been the subject of two prior appeals to this Court. In 1986, plaintiff purchased a one-half undivided interest in a 3.88 acre tract known as the Windberry Subdivision, with defendant's son and daughter-in-law owning the remaining one-half undivided interest. Later in 1986, defendant's son and daughter-in-law conveyed their one-half undivided interest to defendant. By 1987, plaintiff and defendant had subdivided the land into 12 lots and sought to develop it into residential lots. In 1989, defendant paid off the balance of a $140,000 loan and the parties executed a promissory note and deed of trust to secure the loan of $70,000.00 from defendant. By the end of 1991, plaintiff and defendants had sold some lots, and in 1992 plaintiff began disputing the allocation of proceeds, asserting that he owned separately six specified lots in fee simple. In December 1992, defendant instituted a declaratory judgment action for declaration that the parties owned the tract as tenants in common, sharing costs and profits 50/50. In January 1993, defendant wrote plaintiff and informed him that he was in default under the note and deed of trust for failure to make agreed monthly payments. In August 1993, defendant acquired plaintiff's interest in the tract at a court-approved foreclosure sale. On 10 June 1994, the trial court granted summary judgment in favor of defendant on the declaratory judgment action.
Plaintiff sued defendant in November 1995 alleging: (1) unfair and deceptive trade practices ("UDTP"); (2) breach of fiduciary duty by preventing income to a partnership or joint venture; (3) breach of fiduciary duty by instigating foreclosure; and (4) quantum meruit. In May 1996, the trial court granted defendant's motion to dismiss plaintiff's second, third, and fourth claims for failure to state a claim upon which relief can be granted, but denied defendant's motion to dismiss the UDTP claim. On 1 August 1996, defendant amended his answer to assert a counterclaim seeking attorney fees. Thereafter, on 20 February 1997, the trial court granted defendant's motion for summary judgment as to the UDTP claim. Plaintiff appealed from the 20 February 1997 judgment and this Court affirmed the dismissal of his UDTP claim. Qubain v. Granberry, 129 N.C. App. 424, 502 S.E.2d 437 (1998).
On 30 November 1998, the trial court entered summary judgment in favor of defendant on his attorney fees counterclaim. Plaintiff appealed this judgment and also the court's May 1996 dismissal of his breach of fiduciary duty claims. This Court heard plaintiff's appeal of the May 1996 dismissal pursuant to its discretion under Rule 2 of the appellate rules of procedure and reversed, holding that plaintiff sufficiently alleged a claim of breach of fiduciary duty to withstand a 12(b)(6) motion to dismiss on his second, third, and fourth claims. Qubain v. Granberry, 139 N.C. App. 635, 537 S.E.2d 861 (2000). We also held that the award of attorney fees was premature and vacated the summary judgment on this issue.
In September 2005, defendant moved for summary judgment as to plaintiff's remaining claims (the second, third, and fourth claims from plaintiff's original complaint). Defendant asserted that there was no genuine issue of material fact and that he was entitled to judgment as a matter of law, that the claims were barred by prior adjudications between the parties, and that plaintiff had failed to prosecute his remaining claims. Defendant also moved for summary judgment reinstating the attorney fees previously awarded. On 2 November 2005, the trial court granted defendant's motion dismissing all of plaintiff's remaining claims on the grounds that there was no genuine issue of material fact concerning the parties' past ownership of the property as tenants in common, that plaintiff failed to forecast evidence creating an issue of fact about the existence of a partnership and therefore a fiduciary duty, and that defendant was entitled to judgment as a matter of law. The court also awarded defendant attorney fees with interest.
Plaintiff first argues that the trial court erred in dismissing his claim for breach of fiduciary duty. On appeal, we review the grant of summary judgment de novo. "Summary judgment is proper when the pleadings, together with depositions, interrogatories, admissions on file, and supporting affidavits show that there is no genuine issue as to any material fact and that a party is entitled to judgment as a matter of law." Stafford v. County of Bladen, 163 N.C. App. 149, 151, 592 S.E.2d 711, 713 (2004). N.C. Gen. Stat. § 1A-1, Rule 56 (2005). "The movant must meet the burden of proving an essential element of plaintiff's claim does not exist, cannot be proven at trial or would be barred by an affirmative defense." Goodman v. Wenco Foods, Inc., 333 N.C. 1, 21, 423 S.E.2d 444, 454 (1992). In his brief, plaintiff acknowledges that evidence of a partnership with defendant is an essential element of his claim for breach of fiduciary duty. Defendant asserts, and the trial court agreed, that plaintiff failed to forecast sufficient evidence of a partnership.
The North Carolina Uniform Partnership Act defines a partnership as "an association of two or more persons to carry on as co-owners a business for profit." N.C. Gen. Stat. § 59-36(a) (2004). "To prove existence of a partnership, an express agreement is not required; the intent of the parties can be inferred by their conduct and an examination of all of the circumstances. " Wike v. Wike, 115 N.C. App. 139, 141, 445 S.E.2d 406, 407 (1994). "A partnership may be inferred from all the circumstances, so long as the circumstances demonstrate a meeting of the minds with respect to the material terms of the partnership agreement." Compton v. Kirby, 157 N.C. App. 1, 11, 577 S.E.2d 905, 912 (2003). It is well-established that a tenancy in common does not, of itself, constitute a partnership. N.C. Gen. Stat. § 59-37(2) (2004); Moore v. Bryson, 11 N.C. App. 260, 265, 181 S.E.2d 113, 116 (1971). Furthermore, receipt of a share of profits is not prima facie evidence of a partnership where "such profits were received in payment . . . as the consideration for the sale of . . . property." N.C. Gen. Stat. § 59-37(4)(e) (2004). Here, it is undisputed that plaintiff and defendant owned land as tenants in common, that they shared expenses and profits from lot sales, and that they had a joint bank account for financing the land. While no one factor is dispositive in determining whether a partnership exists, our "examination of all of the circumstances, " Wike, 115 N.C. App. at 141, 445 S.E.2d at 407, reveals that there is no evidence of the following: a partnership bank account, see Dealers Supply Co. v. Cheil Industries, Co., 348 F. Supp. 2d 579, 588; a partnership tax return, see Eggleston v. Eggleston, 228 N.C. 668, 675, 47 S.E.2d 243, 247-48 (1948); the filing of a certificate of doing business under an assumed name, see N.C. Gen. Stat. § 66-68 (2004); or holding out to the public as a general partnership and complying with state licensing requirements for a business partnership, see Compton, 157 N.C. App. at 10-14, 577 S.E.2d at 912-14. As the Court in Wilder v. Hobson did, "[w]e reject plaintiff's contention that materials offered opposing defendant[']s motions for summary judgment create a genuine issue regarding the existence of a partnership." 101 N.C. App. 199, 202, 398 S.E.2d 625, 627-28 (1990). "A genuine issue is one which can be maintained by substantial evidence." Id. at 202, 398 S.E.2d at 628. We overrule this assignment of error.
In his second assignment of error, plaintiff asserts that the trial court erred in allowing summary judgment on defendant's claim for attorney fees because the note did not provide for such payment. N.C. Gen. Stat. § 6-21.2 (2004) indicates that obligations to pay attorney fees upon any note are enforceable if the note so provides and they do not exceed fifteen percent of the outstanding balance. Id. Here, the note clearly contains a provision that allows the holder to collect reasonable attorney fees and plaintiff does not contend that the amount awarded, $6,046.28 (less than 10 percent of the balance on the note), was unreasonable. Plaintiff argues, though, that the fees could only be pursued against the property, and that he cannot be held personally liable on a money judgment. However, the note states that the "rights and remedies of the holder . . . shall be cumulative and may be pursued . . . against the property . . . or any other funds." (Emphasis added). We overrule this assignment of error.
Affirmed.
Judges WYNN and STEPHENS concur.
Report per rule 30(e).
The judges participated and submitted this opinion for filing prior to 1 January 2007.