Weaver Investment Co. v. Pressly Development Associates

NO. COA13-624

NORTH CAROLINA COURT OF APPEALS

Filed: 1 July 2014

WEAVER INVESTMENT COMPANY and
TRAVEL CAMPS, INC., on their own
behalf and on behalf of FOURTH
CREEK LANDING HOUSING LIMITED
PARTNERSHIP and FOURTH CREEK
LANDING ASSOCIATES,

Plaintiffs,

v. Guilford County
No. 09 CVS 15378
PRESSLY DEVELOPMENT ASSOCIATES,
PRESSLY DEVELOPMENT COMPANY, INC.,
DAVID L. PRESSLY, and EDWIN A.
PRESSLY,

Defendants.

Appeal by defendants from judgment entered 18 May 2011 by

Judge John O. Craig, III in Guilford County Superior Court.

Heard in the Court of Appeals 21 October 2013.

Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by S.
Leigh Rodenbough IV and Charnanda T. Reid, for plaintiff-
appellees.

Eisele Ashburn Greene & Chapman, PA, by Douglas G. Eisele,
for defendant-appellants.

STEELMAN, Judge.

Where alleged misconduct of certain defendants occurred

within a partnership or joint enterprise, it was not “in or
 -2-
affecting commerce” for the purposes of an unfair and deceptive

trade practices action. The trial court erred in trebling

damages and awarding attorney’s fees as to those parties

pursuant to the unfair and deceptive trade practices statute.

The trial court had the authority to appoint an accountant to

perform a forensic accounting of the entities and to assess the

fees for the expert. Where defendants sought to introduce

evidence that was outside of the scope of the hearing, the trial

court did not abuse its discretion in excluding this evidence.

Where there was evidence that defendants were responsible for

depreciation in value of certain property, the trial court did

not err in holding defendants liable for the depreciation.

Where defendants offer no legal argument as to why the trial

court could not dissolve the partnership, defendants’ argument

is deemed abandoned. Where defendants do not challenge the

trial court’s findings regarding breach of fiduciary duty and

constructive fraud, the trial court did not err in its

conclusion based upon these findings. Where defendants

concealed their misconduct, and this misconduct was reasonably

discovered within the applicable statute of limitations periods,

the trial court did not err in holding that the statute of

limitations had not expired.
 -3-

I. Factual and Procedural Background

Weaver Investment Company (WIC) is one of three limited

partners of Fourth Creek Landing Housing Limited Partnership

(Fourth Creek Limited Partnership), with an 18.75% ownership

interest. The other two limited partners are Travel Camps,

Inc., (Travel) with a 37.5% interest, and Pressly Development

Associates, (PDA) with an 18.75% interest. The general partner

of the Partnership is Fourth Creek Landing Associates (FCLA), a

general partnership, which holds a 25% interest in Fourth Creek

Limited Partnership. WIC and PDA are the two general partners

of FCLA, each with a 50% interest. The business relationship

between WIC and PDA, as general partners of FCLA, is governed by

a partnership agreement dated 16 May 1985. The business

relationship between the general and limited partners of Fourth

Creek Limited Partnership is governed by a limited partnership

agreement, dated 16 May 1985, along with several amendments

thereto.

Fourth Creek Limited Partnership owns the first phase of an

apartment complex known as Fourth Creek Landing Apartments

(Fourth Creek Apartments I) located in Iredell County. Pressly

Development Company, Inc. (PDCI) is a corporation that manages
 -4-
and leases the entire Fourth Creek Landing Apartments, which

includes Fourth Creek Apartments I, and an additional 48 units

(Fourth Creek Apartments II) owned by a separate company, Fourth

Creek Landing Associates II, LLC (FCLA II). PDCI conducts the

day to day business of Fourth Creek Apartments I and Fourth

Creek Apartments II. PDCI charges fees to Fourth Creek Limited

Partnership for its services to Fourth Creek Apartments I.

David Pressly (David) and Edwin Pressly (Edwin) are brothers who

are the general partners of Free Nancy Partnership (Free Nancy),

which is the sole member of FCLA II. David and Edwin each hold

a 50% general partnership interest in PDA, and a 50% shareholder

interest in PDCI. David is also the President of PDCI and the

Manager of FCLA II. Edwin is a General Partner of PDA and the

Secretary of PDCI.

On 22 December 2009, WIC and Travel filed this action

against PDA and PDCI. They also brought this action on behalf

of Fourth Creek Limited Partnership and FCLA. FCLA II was not a

party to this action. The complaint alleged that PDA had acted

ultra vires to the partnership agreement of Fourth Creek Limited

Partnership, that PDCI or FCLA II had converted funds related to

cable television services in Fourth Creek Apartments I, and that

PDCI had engaged in inappropriate accounting practices with
 -5-
regard to its management services for Fourth Creek Limited

Partnership. Plaintiffs sought monetary damages from

defendants, termination of PDCI as property manager for Fourth

Creek Apartments I, dissolution of FCLA, dissolution of Fourth

Creek Limited Partnership, and monetary damages for breach of

fiduciary duty against PDA.

On 19 August 2010, plaintiffs moved to join David and Edwin

as defendants. This motion was granted 8 September 2010. On 10

September 2010, plaintiffs filed an amended complaint. The

amended complaint alleged additional causes of action for fraud

against all four defendants; constructive fraud by PDA, David

and Edwin; aiding and abetting fraud and breach of contract by

Edwin; unfair and deceptive trade practices as to all four

defendants; establishment of a constructive trust with regard to

the converted funds; punitive damages; and to pierce the

corporate veil of PDCI under an alter ego theory. Plaintiffs

further alleged that David, having volunteered to locate a real

estate broker in order to sell the property of Fourth Creek

Apartments I, delayed doing so in an attempt to maximize his

profits for FCLA II and PDCI; that David executed and recorded a

cross-easement between Fourth Creek Apartments I and Fourth

Creek Apartments II without authority, and failed to disclose
 -6-
that action; and that David executed a management agreement,

ostensibly on behalf of Fourth Creek Limited Partnership,

without authorization.

On 11 October 2010, defendants filed an answer and motion

to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules

of Civil Procedure. On 17 December 2010, plaintiffs voluntarily

dismissed their claim for dissolution of Fourth Creek Limited

Partnership pursuant to Rule 41 of the Rules of Civil Procedure.

All parties waived a jury trial pursuant to Rule 38(d) of the

Rules of Civil Procedure.

On 18 May 2011, following a hearing, the trial court

entered judgment. The trial court found that David, on his own

behalf and on behalf of PDA and PDCI, had misled plaintiffs;

engaged in unauthorized conduct; overcharged Fourth Creek

Limited Partnership; failed to make payments owed to Fourth

Creek Limited Partnership; purposefully delayed in obtaining a

broker to sell the property of Fourth Creek Apartments I in

order to increase revenues for PDCI and FCLA II; converted funds

from Fourth Creek Limited Partnership; used PDA and PDCI as his

alter ego; and engaged in unfair and deceptive trade practices.

The trial court concluded that PDCI, through David, had breached

its fiduciary duty to Fourth Creek Limited Partnership, and had
 -7-
engaged in constructive fraud; that PDA, through David, had

breached its fiduciary duty to FCLA and to Fourth Creek Limited

Partnership, and had engaged in constructive fraud; that David,

PDA and PDCI had engaged in fraud; that Edwin did not aid and

abet in the breaches of fiduciary duty of PDA and PDCI; that

David, PDA and PDCI had engaged in unfair and deceptive trade

practices; that David was individually liable for the torts of

PDCI; that David and Edwin, as owners of PDCI, were personally

liable for the liability attributable to PDCI under a piercing

the corporate veil theory; that David and Edwin, as general

partners in PDA, were personally liable for the liability

attributable to PDA; and that Edwin’s conduct was such as to not

merit treble damages, which were assessed against David, PDA and

PDCI. The trial court further concluded that plaintiffs did not

meet their burden of proving damages with regard to David’s

alleged delay in listing the property of Fourth Creek Apartments

I for sale, his recordation of a cross-easement without

authority, and his unauthorized execution of a management

agreement, and that only nominal damages were appropriate for

these claims. The trial court also concluded that David, Edwin,

and Free Nancy reasonably relied on the business judgment rule

with regard to unauthorized loans David had taken out as
 -8-
business necessities. The trial court ordered that an

accounting of PDCI’s books and records be conducted, the

dissolution of FCLA, and held that, because defendants’ actions

did not cease three years before the filing of the suit against

them, the continuing wrong doctrine barred defendants from

asserting a statute of limitations defense.

The trial court awarded Fourth Creek Limited Partnership

damages in the amount of $176,000.00 for defendants’ concealment

of revenue, $226,464.00 for defendants’ concealment of losses

resulting from the unauthorized housing of on-site employees at

Fourth Creek Apartments I, $46,872.00 for defendants’

overcharging services to Fourth Creek Limited Partnership, $1.00

nominal damages for defendants’ unauthorized execution and

recordation of the cross-easement, $1.00 nominal damages for

defendants’ unauthorized execution of a management agreement,

and $1.00 nominal damages for defendants’ purposeful delay in

retaining a broker for the purpose of selling the property of

Fourth Creek Apartments I. The trial court held that Edwin

would not be subject to treble damages. The trial court also

determined that Fourth Creek Limited Partnership was entitled to

an award of attorney’s fees from PDA, PDCI and David. The trial

court held that the damages awarded were subject to adjustment
 -9-
based upon an accounting of the books and records of PDCI. The

trial court appointed a receiver for Fourth Creek Limited

Partnership and FCLA, terminated PDCI as property manager for

Fourth Creek Apartments I, and ordered a forensic accounting of

PDCI’s books. The trial court also ordered an accounting of the

replacement cost of the amenities and facilities of Fourth Creek

Apartments I, which Fourth Creek Limited Partnership would be

entitled to collect as damages from defendants. The trial court

also ordered that PDA’s share of Fourth Creek Limited

Partnership be redeemed. The trial court ordered the

dissolution of FCLA, but not of Fourth Creek Limited

Partnership, and the termination of the cross-easement between

Fourth Creek Apartments I and Fourth Creek Apartments II.

Finally, the trial court held that the unauthorized satellite

television equipment installed by defendants was the property of

Fourth Creek Limited Partnership, as its value was less than the

unpaid rent that was owed by defendants to Fourth Creek Limited

Partnership. The judgment also provided that these damages

could be modified based upon the future accounting.

On 20 June 2012, the trial court entered its supplemental

judgment as to damages, based upon the accounting of the books

and records of PDCI. It held that the net fair market value of
 -10-
Fourth Creek Apartments I was $1,233,295.00; that PDA’s net

interest in Fourth Creek Limited Partnership was worth

$385,405.00; that the total cost for site improvements to FCLA

was $90,000.00; and that the total replacement damages for FCLA

were $160,000.00. The trial court held that Fourth Creek

Limited Partnership was entitled to recover from defendants

$131,599.00 for the conversion of satellite television revenue,

plus $45,249.00 interest. The court further held that the

principal portion of these damages was trebled with respect to

PDA, PDCI, and David, for a total amount of $394,797.00.1

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $13,851.00

for the assessment of management fees relating to the satellite

television revenue, plus $5,015.00 interest. The principal

portion of these damages was trebled with respect to PDA, PDCI,

and David, for a total amount of $41,553.00.

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $41,385.00

for unauthorized housing of employees, plus $13,881.00 interest.

The principal portion of these damages was trebled with respect

to PDA, PDCI, and David, for a total amount of $124,155.00.

1
All damages that were trebled were pursuant to Chapter 75 of
the North Carolina General Statutes.
 -11-
The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $162,369.00

for the unauthorized income to Fourth Creek Apartments II based

upon the unauthorized housing of employees, plus $62,926.00

interest. The principal portion of these damages was trebled

with respect to PDA, PDCI, and David, for a total amount of

$487,107.00.

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $32,880.00

based upon defendants’ overcharging of salaries and expenses,

plus $13,999.00 interest. The principal portion of these

damages was trebled with respect to PDA, PDCI, and David, for a

total amount of $98,640.00.

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $105,478.00

for the unauthorized collection of undisclosed bookkeeping fees

beyond those contractually agreed upon by the parties, plus

$53,998.00 interest. The principal portion of these damages was

trebled with respect to PDA, PDCI, and David, for a total amount

of $316,434.00.

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $48,000.00
 -12-
for failure to pay its share of the amenities of Fourth Creek

Apartments I, plus $35,531.00 interest. The principal portion

of these damages was trebled with respect to PDA, PDCI, and

David, for a total amount of $144,000.00.

The trial court also held that Fourth Creek Limited

Partnership was entitled to recover from defendants $1.00 in

nominal damages for the unauthorized execution and recordation

of the 2001 Cross-Easement, $1.00 in nominal damages for the

execution of the 1996 Management Agreement, and $1.00 in nominal

damages for purposeful delay in contracting with a real estate

broker.

In total, the trial court held that Fourth Creek Limited

Partnership was entitled to $535,562.00, plus interest of

$230,599.00, for a total of $766,161.00. The principal amounts

were trebled to $1,606,686.00 with respect to PDA, PDCI, and

David. All of the defendants were liable for the total of $3.00

in nominal damages. The trial court credited $385,405.00

against these damages based upon PDA’s redemption of its

interest in Fourth Creek Limited Partnership. The trial court

further held that plaintiffs were entitled to recover from

defendants $306,380.34 in reasonable attorney’s fees, $5,500.00

for the cost of an appraisal of the Fourth Creek Apartments I
 -13-
amenities, $68,854.48 for the forensic audit, and $787.50 in

expert witness fees for the testimony of the court-appointed

appraiser.

Defendants appeal.

II. Standard of Review

“The standard of review on appeal from a judgment entered

after a non-jury trial is ‘whether there is competent evidence

to support the trial court’s findings of fact and whether the

findings support the conclusions of law and ensuing judgment.’”

Cartin v. Harrison, 151 N.C. App. 697, 699, 567 S.E.2d 174, 176

(quoting Sessler v. Marsh, 144 N.C. App. 623, 628, 551 S.E.2d

160, 163 (2001)), disc. review denied, 356 N.C. 434, 572 S.E.2d

428 (2002).

Defendants have not challenged the trial court’s findings

of fact.2 These findings are therefore binding upon this court.

Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991).

Our review is therefore limited to whether the trial court’s

findings support its conclusions of law.

III. Unfair and Deceptive Trade Practices

2
Defendants mischaracterize the court’s conclusions of law that
defendants breached their fiduciary duty and engaged in
constructive fraud as findings of fact; they are not findings of
fact, but conclusions of law.
 -14-
In their first argument, defendants contend that the trial

court erred in concluding that defendants’ acts were “in or

affecting commerce” in North Carolina. We agree in part.

Pursuant to N.C. Gen. Stat. § 75-1.1, “[i]n order to

establish a prima facie claim for unfair trade practices, a

plaintiff must show: (1) defendant committed an unfair or

deceptive act or practice, (2) the action in question was in or

affecting commerce, and (3) the act proximately caused injury to

the plaintiff.” Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d

704, 711 (2001).

Our Supreme Court has held that N.C. Gen. Stat. § 75-1.1

does not apply within the confines of a partnership. See White

v. Thompson, 364 N.C. 47, 691 S.E.2d 676 (2010). In White, the

defendant, a partner in the Ace Fabrication and Welding entity,

diverted work from the partnership prior to his departure from

the business, and improperly maintained accounts. Plaintiffs

brought action against defendant, alleging breach of fiduciary

duty. The trial court ruled in favor of plaintiffs, and granted

plaintiffs treble damages. Id. at 47-51, 691 S.E.2d at 676-78.

On appeal, a majority of this Court reversed the treble damages,

holding that defendant’s usurpation of partnership opportunities

was not “in or affecting commerce” under our Unfair and
 -15-
Deceptive Trade Practices statute. The majority otherwise

affirmed the trial court’s decision. Id. at 51, 691 S.E.2d at

678-79. The Supreme Court held that “[o]ur prior decisions have

determined that the General Assembly did not intend for the

Act's protections to extend to a business's internal

operations.” Id. at 53, 691 S.E.2d at 680. It affirmed the

decision of the Court of Appeals, concluding that defendant’s

conduct within the partnership was not “in or affecting

commerce.”

The facts of the instant case show that PDA was a member of

Fourth Creek Limited Partnership; that David and Edwin were the

general partners of PDA; that defendants, through PDCI, were

engaged by Fourth Creek Limited Partnership to operate Fourth

Creek Apartments I; and that defendants engaged in various acts

inconsistent with their obligations to Fourth Creek Limited

Partnership.

We hold that, while the evidence in the record supports the

trial court’s findings that defendants committed fraud, delayed

in the sale of real property, and had a duty to provide an

accounting to plaintiffs, it also clearly shows the status of

David, Edwin, and PDA as partners within the Fourth Creek

Limited Partnership joint enterprise. Pursuant to the Supreme
 -16-
Court’s decision in White v. Thompson, defendants’ misconduct

within the confines of the partnership was not “in or affecting

commerce,” and therefore does not invoke N.C. Gen. Stat. § 75-

1.1 or its trebling provisions. We hold that, while the trial

court did not err in imposing damages against David, Edwin, and

PDA for their misconduct, it erred in trebling the damages

against David and PDA with regard to satellite revenue, employee

housing, bookkeeping, salaries and expenses, and failure to

maintain amenities, pursuant to North Carolina’s Unfair and

Deceptive Trade Practices statute, specifically N.C. Gen. Stat.

§ 75-16. Additionally, because the award of attorney’s fees was

made pursuant to N.C. Gen. Stat. § 75-16.1, based upon

defendants’ alleged violations of the Unfair and Deceptive Trade

Practices statute, we hold that the trial court erred in

awarding attorney’s fees to plaintiffs, with regard to David,

Edwin and PDA.

PDCI, however, was not a member of the Fourth Creek Limited

Partnership. The trial court found that PDCI “has served as the

property manager and leasing manager . . . for the entire Fourth

Creek Landing Apartments . . . [and] controls the day to day

affairs of the Fourth Creek Landing Apartments[.]” Although the

conduct of David, Edwin, and PDA was within the partnership
 -17-
context, and thus was not “in or affecting commerce,” PDCI was a

separate entity hired by Fourth Creek Limited Partnership.

Our Supreme Court has held that an employee’s fraudulent

self-dealing misconduct “[did] not preclude applicability of

N.C.G.S. § 75–1.1 to [his] case.” Sara Lee Corp. v. Carter, 351

N.C. 27, 34, 519 S.E.2d 308, 312 (1999). In Sara Lee, plaintiff

Sara Lee hired defendant to “develop[] and maintain[]

relationships with vendors to provide [Sara Lee Knit Products]

with the best possible pricing, availability, and support of

hardware and services.” Id. at 29, 519 S.E.2d at 309.

Defendant was “authorized and entrusted to order and purchase

computer parts at the lowest possible prices[,]” and was

“responsible for the maintenance and repair of personal

computers.” Id. During his employment with Sara Lee, defendant

“developed four separate businesses . . . through which he

engaged in self-dealing by supplying Sara Lee with computer

parts and services at allegedly excessive cost while concealing

his interest in these businesses. Sara Lee paid a total of

$495,431.54 to defendant's businesses for parts and services.”

Id.

When Sara Lee brought action against defendant for this

fraud, the trial court ruled in favor of Sara Lee, holding that
 -18-
“[t]he transactions between Sara Lee and the Carter Enterprises

were not open, fair and honest. In fact, the clear, cogent, and

convincing evidence is, to the contrary, that [defendant] used

his position of trust at Sara Lee to make profits on

transactions involving the Carter Enterprises without disclosing

his financial interest in the Carter Enterprises to his

superiors at Sara Lee.” Id. at 30, 519 S.E.2d at 310. This

Court agreed, holding that “[d]efendant breached his fiduciary

duty by selling computer parts to Sara Lee without disclosing

his interest in the companies supplying these parts.” Id.

(quoting Sara Lee Corp. v. Carter, 129 N.C. App. 464, 471, 500

S.E.2d 732, 737 (1998)). However, this Court then held that

the defendant did not violate § 75-1.1, because he was employed

by Sara Lee at the time of the fraud.

Our Supreme Court reversed, concluding that defendant’s

conduct was “in or affecting commerce,” and that,

having already characterized defendant's
conduct as buyer-seller transactions that
fall squarely within the Act's intended
reach, we conclude that defendant's
relationship to plaintiff as an employee,
under these facts, does not preclude
applicability of N.C.G.S. § 75–1.1 to this
case. Even though defendant was an employee,
he nevertheless engaged in self-dealing
conduct and “business activities.” N.C.G.S.
§ 75–1.1(b). On these facts, defendant's
mere employee status at the time he
 -19-
committed these acts does not safeguard him
from liability under the Act.

Id. at 34, 519 S.E.2d at 312.

If an employee can be held liable under § 75-1.1, it seems

clear that an independent contractor, such as PDCI, may also be

held liable. Accordingly, we hold that the trial court did not

err in trebling damages and awarding attorney’s fees with regard

to PDCI. Further, because the trial court concluded that David

was individually liable for the torts committed by PDCI under a

veil-piercing theory, David is subject to the same trebling of

damages and attorney’s fees to which PDCI is subject.

We vacate the portions of the trial court’s order trebling

damages and awarding attorney’s fees against David, Edwin and

PDA, as members of Fourth Creek Limited Partnership, pursuant to

the Unfair and Deceptive Trade Practices statute, and remand for

an order reducing damages accordingly. We affirm the judgment

of the trial court trebling damages and awarding attorney’s fees

with regard to PDCI, and David individually based upon a

piercing the corporate veil theory through PDCI.

IV. Awards of Fees, Costs and Damages

In their second, third, fourth, fifth, sixth, seventh,

eighth, ninth, and tenth arguments, defendants contend that the

trial court erred in awarding attorney’s fees and bookkeeping
 -20-
fees, in basing its damages upon the testimony of an expert

witness and denying defendants the opportunity to rebut that

testimony, in awarding as costs the fees of expert witnesses, in

awarding damages for the depreciation in value of Fourth Creek

Apartments I, in basing damages upon the fair market value of

Fourth Creek Apartments I, and in removing PDCI from the

Partnership.3

A. Attorney’s Fees

Defendants first contend that the trial court erred in

awarding attorney’s fees. We agree in part.

The trial court awarded attorney’s fees pursuant to N.C.

Gen. Stat. § 75-16.1. This statute provides:

In any suit instituted by a person who
alleges that the defendant violated G.S. 75-
1.1, the presiding judge may, in his
discretion, allow a reasonable attorney fee
to the duly licensed attorney representing
the prevailing party, such attorney fee to
be taxed as a part of the court costs and
payable by the losing party, upon a finding
by the presiding judge that:

(1) The party charged with the violation
has willfully engaged in the act or
practice, and there was an unwarranted

3
Defendants contend that the trial court erred in removing PDCI
as a member of the partnership. However, the trial court did
not remove PDCI; it removed FCLA, and its half-owner PDA, from
the partnership.
 -21-
refusal by such party to fully resolve the
matter which constitutes the basis of such
suit; or

(2) The party instituting the action knew,
or should have known, the action was
frivolous and malicious.

N.C. Gen. Stat. § 75-16.1 (2013). As we held above, the trial

court erred in concluding that certain defendants violated N.C.

Gen. Stat. § 75-1.1. Accordingly, the trial court erred in

awarding attorney’s fees pursuant to N.C. Gen. Stat. § 75-16.1

against David, Edwin, and PDA, as members of Fourth Creek

Limited Partnership; the trial court did not err in awarding

attorney’s fees against PDCI, or against David who was

individually liable for the actions of PDCI under a veil-

piercing theory. As described in Section III of this opinion,

we vacate the award of attorney’s fees with respect to David,

Edwin and PDA, and find no error with respect to PDCI, and David

through PDCI. As discussed in Section III of this opinion,

above, we remand with instructions for the trial court to award

fees only against PDCI, and David through PDCI.

B. Bookkeeping Fees

Defendants next contend that the trial court erred by

awarding bookkeeping fees, by relying on the testimony of Eric
 -22-
Lioy in setting those fees, and by denying defendants the

opportunity to rebut Lioy’s testimony. We disagree.

Eric Lioy is a Grant Thornton accountant who was charged by

the court to provide an accounting of PDCI’s expenses for

“things such as satellite television revenue, employee housing,

affects [sic] of the management fee and a couple other

matters[.]” The trial court’s judgment does not cite to his

testimony, because Lioy did not testify at trial, but testified

instead at a separate hearing, on 10 October 2011. Regarding

Lioy’s testimony, the trial court held that:

Now, this is really just designed -- I'm not
-- I'm not going to treat it as an
evidentiary hearing, but I'm going to treat
it as a way of this witness helping me and
Mr. Eisele go through the book[s] and -- or
the documents and sort of just take me
through it step by step as to what it -- how
it's comprised and how -- what findings were
made and just sort of take me through it as
kind of a guideline or road map.

At this hearing, Lioy testified under oath that he and his

team performed the services requested by the court, which also

included forensic accounting, searches of computer documents,

and double-checking of accounting calculations between “January

1, 2002 through March 31, 2011.” Lioy went on to testify to the

contents of his report, which had been previously submitted to

the trial court. At no point did defendants object to Lioy’s
 -23-
testimony. Defendants did object, however, to “this $159,000

item[,]” referring to a $159,176.00 item in the report, which

was bookkeeping fees paid by Fourth Creek Apartments I to PDCI

in 1999, plus interest. Defendants contended at the hearing

that this item

was not raised in the pleadings, it was
never suggested during the trial, there was
no mention of it made in oral argument at
any time, it was not the subject of any
amendment to the pleadings made at the
conclusion of the trial. I didn't know
anything about it until the Grant Thornton
report came down and I'm sure Mr. Rodenbough
didn't know about it until the Grant
Thornton report came down.

The trial court noted defendants’ objection, but held that

“that's something we're going to need to take up at a subsequent

hearing.”

The hearing was recessed, and subsequently reconvened on 2

December, 2011. At this hearing, defendants once again objected

to the bookkeeping fees, asserting that “[t]he word bookkeeping

fees never came up.” The trial court responded, however, that

“Mr. Eisele, my recollection of things and my concept of things

are different from yours.” The trial court overruled

defendants’ objection, and considered the evidence.

The trial court’s order did not refer to Lioy’s testimony.

Instead, as defendants concede,
 -24-
there is nothing in the record except the
Grant Thornton report (presented at a
hearing deemed not to be "evidentiary")
pertaining to bookkeeping fees, save and
except (1) par. 8.7(c) of the Limited
Partnership Agreement (Ps' Ex 3) allowing as
Expenses "(c) legal, audit, accounting,
brokerage and other fees", and (2)
Defendants' Exhibit H-2, which reveals
bookkeeping fees in addition to PDC's 6%
commission dating back to 1999.

Defendants acknowledge the existence of evidence to support

the trial court’s finding that PDCI charged bookkeeping fees;

the fact that the trial court may or may not have additionally

relied upon Mr. Lioy’s testimony is irrelevant. This evidence

supports a finding that PDCI charged fees for bookkeeping, which

as stated above supports an order awarding those fees as damages

to plaintiffs.

The trial court found that PDCI had charged plaintiffs for

bookkeeping, while PDCI used its own formulae on Fourth Creek

Limited Partnership’s books to conceal the treatment of

particular expenses. As a result of the commingling of assets

between defendants and Fourth Creek Limited Partnership, the

trial court ordered that forensic investigators “inquire into .

. . failures by [PDCI] to properly calculate, allocate and/or

charge to [Fourth Creek Limited Partnership] any management

fees, bookkeeping fees, employee reimbursements or other expense
 -25-
reimbursements,” which the Partnership would be entitled to

receive as damages. PDCI charged plaintiffs for bookkeeping

services, and then fraudulently concealed expenses from

plaintiffs on those books. We therefore hold that, where PDCI

used its authority as bookkeeper to fraudulently conceal

expenses, the trial court did not err in awarding damages to

plaintiffs based upon the bookkeeping fees charged by PDCI.

This argument is without merit.

C. Defendants’ Evidence on Bookkeeping Fees

At the hearings before the trial court to address the

amount of damages, attorney’s fees and costs to be awarded to

plaintiffs, defendants sought to introduce evidence that

defendants were entitled to charge fees for the bookkeeping

defendants performed. Defendants intended to use this evidence

to rebut plaintiffs’ claims that defendants’ fees were

fraudulent, and sought to make an offer of proof before the

trial court. The trial court excluded this evidence.

Defendants contend that this exclusion was error. We disagree.

We note first that the trial court’s decisions to admit or

exclude evidence are reviewed for abuse of discretion. State v.

Whaley, 362 N.C. 156, 160, 655 S.E.2d 388, 390 (2008).
 -26-
In its 18 May 2011 order, the trial court found that

defendants used accounting procedures to improperly allocate

expenses to Fourth Creek Landing Partnership. Preliminary

damages were awarded to plaintiffs, subject to being increased

or decreased based upon a forensic accounting ordered by the

court. At the hearings on the amount of damages, defendants

sought to introduce evidence as to “the propriety of charging

bookkeeping expenses as a project cost to the project and not to

be included in the six percent management fee . . .”

The trial court held that it had already ruled on the

liability issue in its 18 May 2011 order, and that the current

hearing was limited to damages. Since the evidence offered by

defendants went to liability rather than damages, the trial

court excluded the evidence. We discern no abuse of discretion

on the part of the trial court in the exclusion of this

evidence.

This argument is without merit.

D. Court-Ordered Accounting

In a supplemental order and judgment on damages dated 12

June 2012, the trial court ruled that the fees of the forensic

accountants ordered to examine the books of Fourth Creek Limited
 -27-
Partnership and PDCI were costs recoverable by plaintiffs.

Defendants contend that the trial court erred in awarding these

fees as costs against defendants. We disagree.

Pursuant to the North Carolina Rules of Evidence, an expert

appointed by the court is “entitled to reasonable compensation

in whatever sum the court may allow. . . . In other civil

actions and proceedings the compensation shall be paid by the

parties in such proportion and at such time as the court

directs, and thereafter charged in like manner as other costs.”

N.C. R. Evid. 706.

Defendants contend that the forensic accountants were not

court-appointed experts, but plaintiffs’ experts, and thus that

these fees should not have been taxed as costs. Defendants

argue that the accountants never provided defendants with a copy

of their findings. The testimony cited by defendants shows that

the accountant, Lioy, did not provide defendants with a copy of

his report. However, this same testimony indicates that

defendants never sought this report, and that Lioy had discussed

the contents of the report at length with defendants.

Defendants further contend that another court-appointed

accountant, Nancy Tritt, engaged in extensive ex parte

communications with plaintiffs. However, defendants merely
 -28-
assert that there were contacts between plaintiffs and the

expert; defendants present no evidence that such contacts were

improper. Defendants further concede that there are times when

ex parte contact with a court-appointed expert is not improper.

See Point Intrepid, LLC v. Farley, ___ N.C. App. ___, ___, 714

S.E.2d 797, 802-03 (2011). In the instant case, the record

demonstrates that the trial court ordered that forensic

accountants perform “a complete accounting of the books and

records maintained by [PDCI] for [Fourth Creek Limited

Partnership] and [Fourth Creek Apartments I][.]” There is no

evidence that these experts were deposed by either party. There

is no evidence that the accountants were not court-appointed

experts, nor that any improper contact occurred. There is

evidence to show that these were court-appointed experts, and we

therefore hold that the trial court did not err in awarding

their fees as costs.

This argument is without merit.

F. Damages

Defendants next contend that the trial court erred in

awarding damages for the depreciated value of the amenities on

Fourth Creek Apartments I as a result of PDCI’s management, and

awarding damages based upon the value of the property itself.
 -29-
Defendants contend that the only parties which caused the

depreciation were FCLA II and Free Nancy, neither of which was a

party to this lawsuit, and that this award was simply a means of

bypassing issues of joinder. However, the trial court held that

it was defendants, acting through FCLA II and Free Nancy, that

caused the actions which led to the depreciation of the

amenities. Accordingly, the trial court did not err in holding

defendants liable for the depreciation in value caused by their

actions.

This argument is without merit.

G. Dissolution

Defendants also contend that the trial court erred in

removing PDCI from Fourth Creek Limited Partnership. Defendants

contend that, absent total dissolution of Fourth Creek Limited

Partnership, there is no legal basis for the removal of PDCI.

We first note that PDCI was not removed from the partnership;

FCLA, and its half-owner PDA, were removed from the partnership.

Even assuming that defendants were contending that the

trial court erred in removing PDA, however, defendants do not

cite this Court to any authority indicating that the trial court

lacked the authority to remove FCLA and PDA. Accordingly,
 -30-
defendants’ argument on this point is deemed abandoned. See

N.C. R. App. P. 28(b)(6).

This argument is without merit.

V. Breach of Duty and Constructive Fraud

In their eleventh argument, defendants contend that the

trial court erred in finding that PDCI and PDA breached

fiduciary duty to Fourth Creek Limited Partnership and FCLA and

engaged in constructive fraud. We disagree.

The trial court found as fact that defendants had converted

funds, had engaged in unauthorized and ultra vires conduct, had

profited without informing Fourth Creek Limited Partnership, and

had delayed in taking actions beneficial to Fourth Creek Limited

Partnership in order to maximize their own profits. Defendants

do not challenge these findings; rather, they assert that their

conduct was entirely legal. The trial court’s findings support

the conclusion that defendants breached their fiduciary duty and

engaged in constructive fraud.

This argument is without merit.

VI. Statute of Limitations

In their twelfth argument, defendants contend that the

trial court erred in concluding that plaintiffs’ claims were not

barred by the statute of limitations. We disagree.
 -31-
The trial court examined defendants’ affirmative defense of

the statute of limitations extensively. It concluded that (1)

because defendants engaged in continuing conduct that had not

ceased prior to three years before the filing of the instant

lawsuit, the continuing wrong doctrine prevented the statute of

limitations from running; (2) because defendants actively

concealed their wrong from plaintiffs, the doctrine of equitable

estoppel prevented them from relying upon their concealment to

cause the statute of limitations to expire; (3) plaintiffs’

claims for dissolution are not subject to the statute of

limitations, since the statute would only begin to run from the

time of discovery of defendants’ wrongdoing; (4) plaintiffs’

claim for unfair and deceptive trade practices is governed by a

four-year statute of limitations, N.C. Gen. Stat. § 75-16.2,

which begins to run when the fraud is discovered or should have

been discovered, rather than when the act is committed, see Nash

v. Motorola Communications and Electronics. Inc., 96 N.C. App.

329, 331-32, 385 S.E.2d 537, 538 (1989); and (5) plaintiffs’

remaining claims were governed by a ten-year statute of

limitations, N.C. Gen. Stat. § 1-56, which had not expired at

the time the lawsuit was filed. The trial court based these

conclusions on its findings that this action was filed in 2009;
 -32-
that operation of the satellite television system was disclosed

to Fourth Creek Limited Partnership in a meeting in 2009; that

plaintiffs could not have reasonably discovered defendants’ on-

site housing of employees until this information was revealed in

2009; that defendants were assessing disproportionate costs to

Fourth Creek Limited Partnership as recently as October 2009;

and that these costs were not revealed until late 2009.

Defendants do not challenge these findings; instead, defendants

contend that plaintiffs’ negligence, not defendants’

concealment, was the cause of plaintiffs’ late discovery of

defendants’ conduct, and that the statute of limitations should

bar plaintiffs’ claims. As defendants do not challenge the

trial court’s findings, they are binding upon this Court on

appeal. Koufman 330 N.C. at 97, 408 S.E.2d at 731. These

findings support the trial court’s conclusion that the statute

of limitations did not bar plaintiffs’ claims.

This argument is without merit.

VII. Conclusion

The portions of the trial court’s judgment awarding trebled

damages and attorney’s fees pursuant to N.C. Gen. Stat. § 75-1.1

et seq. against David, Edwin, and PDA, are vacated. The trial

court, upon remand, shall award damages for these claims,
 -33-
without trebling. The portions trebling damages and awarding

attorney’s fees against PDCI, and David through PDCI, are

affirmed. All other aspects of the trial court’s order are

affirmed.

VACATED AND REMANDED IN PART, AFFIRMED IN PART.

Chief Judge MARTIN and Judge DILLON concur.