Clements v. Clements

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA13-596
NORTH CAROLINA COURT OF APPEALS

Filed: 4 February 2014

DONNA G. CLEMENTS, by and through
her Guardian of the Estate,
Kimberly Batten,

Plaintiff

v. New Hanover County
No. 10-CVS-2451
ROBERT S. CLEMENTS, the ALEXANDRA
LEE CLEMENTS IRREVOCABLE TRUST and
the KYLE DAVIS CLEMENTS
IRREVOCABLE TRUST, by and through
their Trustee MICHAEL GREEN; ALC
TRADING COMPANY; KDC TRADING
COMPANY; JAMES SCOTT CONSTRUCTION,
INC.; and MARIANGELA BARBOSA
CLEMENTS,

Defendants.

Appeal by Defendants from orders entered 13 July 2010, 27

January 2011, and 13 November 2012 by Judge W. Allen Cobb, Jr.,

in New Hanover County Superior Court. Heard in the Court of

Appeals 8 October 2013.

Shipman & Wright, LLP, by W. Cory Reiss, for Plaintiff.

Pennington & Smith, PLLC, by Kristy J. Jackson, Esq., for
Defendants Robert S. Clements, ALC Trading Company, KDC
Trading Company, James Scott Construction, Inc., and
Mariangela Barbosa.
 -2-
Vaiden P. Kendrick, Attorney at Law, by Vaiden P. Kendrick,
for Defendants the Alexandra Lee Clements Irrevocable Trust
and the Kyle Davis Clements Irrevocable Trust by and
through their Trustee Michael Green.

J. Albert Clyburn, PLLC, by J. Albert Clyburn, for Charles
D. Meier, Guardian ad Litem for Kyle Davis Clements and
Alexandra Lee Clements.

DILLON, Judge.

The present appeal involves, in substantial part, a dispute

as to who is entitled to the proceeds from the sale of an

ownership interest in Pharmakon, LLC (“Pharmakon”), a privately

held company based in Illinois. Defendant Robert S. Clements

purchased an interest in Pharmakon (hereinafter, the “Pharmakon

shares”) in early 2000 using $400,000.00 that he had received

from his then-wife, Plaintiff Donna G. Clements. In 2004,

shortly after his divorce from Mrs. Clements, Mr. Clements sold

the Pharmakon shares for nearly $3 million and, thereafter,

transferred a significant portion of the sale proceeds

(hereinafter, the “Pharmakon proceeds”) to entities that have

also been named as Defendants in the present action.

Mrs. Clements was adjudicated incompetent in 2008, and

Kimberly Batten, one of Mrs. Clements’ daughters, brought the

claims in the present action as Guardian of her estate. In

substance, Plaintiff asserts that Mr. Clements purchased the
 -3-
Pharmakon shares on behalf of Mrs. Clements and that,

accordingly, Mrs. Clements is entitled to the Pharmakon

proceeds. Plaintiff also asserts a claim – unrelated to the

claim regarding the Pharmakon proceeds - to recover from Mr.

Clements monies owed in connection with a $145,000.00 loan (the

“$145,000.00 Loan”) that Mrs. Clements allegedly made to Mr.

Clements sometime prior to 2001.

In this appeal, Defendants seek review of the trial court’s

orders denying their motions to dismiss Plaintiff’s claims

entered 13 July 2010 and 27 January 2011. Further, Defendants

appeal from the trial court’s denial of their summary judgment

motion on Plaintiff’s claims; the trial court’s grant of partial

summary judgment for Plaintiff on her claims pertaining to the

Pharmakon proceeds (but not with respect to the $145,000.00

Loan, a matter which remains pending before the trial court);

and the trial court’s award of damages and other relief to

Plaintiff in conjunction with its grant of Plaintiff’s motion

for partial summary judgment. For the following reasons, we

dismiss in part, and reverse and remand in part for further

proceedings consistent with this opinion.

I. Factual & Procedural Background
 -4-
On 13 February 1997, two days prior to their marriage, Mr.

and Mrs. Clements executed a Premarital Agreement, which stated,

in pertinent part, that each party’s respective separate

property and any appreciation thereon would remain that party’s

separate property throughout the marriage. The parties agree

that the Premarital Agreement is valid and enforceable.

On 24 February 2000, Mrs. Clements issued a check to Mr.

Clements in the amount of $400,000.00 to be drawn from a bank

account that Mrs. Clements held as her separate property. Mr.

Clements used these funds to purchase the Pharmakon shares.

In late 2000, Mrs. Clements began having issues with

alcohol addiction and bouts with depression, and she and Mr.

Clements separated for a brief period of time. On 29 December

2000, apparently as part of his reconciliation with Mrs.

Clements, Mr. Clements executed two documents before a notary

public. The first document concerned the $400,000.00 that Mrs.

Clements had provided him to purchase the Pharmakon shares and

stated as follows:

Please let this letter serve as
documentation that Donna Clements has lent
to Robert S. Clements the sum of
[$400,000.00] for the purpose of investment
on her behalf in the Chicago based firm of
Pharmakon LLC. Let it further be known that
Robert S. Clements shall serve at the
pleasure of Donna G. Clements as her
 -5-
representative to Pharmakon, LLC.

[Signed by Robert S. Clements.]

The second document concerned the $145,000.00 Loan and stated as

follows:

Please let this letter serve as
documentation that Donna G. Clements has
lent [$145,000.00] to Robert S. Clements for
the purpose of investment in the
Construction business, James Scott
Construction Inc., of which Robert S.
Clements is the President of.

[Signed by Robert S. Clements.]

Mr. and Mrs. Clements reconciled immediately thereafter.

Mrs. Clements continued to have mental health issues

following the parties’ reconciliation, and she was admitted for

alcohol detoxification treatment several times in 2001.

In late 2001, Mrs. Clements purportedly executed two

additional documents concerning her interest in the Pharmakon

shares. In the first document, a letter to Pharmakon management

dated 26 November 2001, Mrs. Clements stated the following:

Please let this letter serve as an outline
of my involvement with Pharmakon. I loaned
Robert Clements funds that he was to invest
at his discretion. I understand that the
investment was in Pharmakon. . . . That
investment was made on his decision and at
his peril. I make no claims on Pharmakon;
only to the original loan with the
conditions that I made to him.
 -6-
The second document, captioned “ACKNOWLEDGEMENT AND QUITCLAIM

AGREEMENT” (the “Quitclaim Agreement”) and dated 31 December

2001, was purportedly executed by Mrs. Clements in response to a

redemption offer made by Pharmakon to some of its shareholders.

The Quitclaim Agreement was purportedly prepared by a Pharmakon

attorney and bears the apparent signatures of both Mrs. Clements

and a Pharmakon representative. In the Quitclaim Agreement,

Mrs. Clements describes Mr. Clements as “the record owner” of

the Pharmakon shares, “having previously made a capital

contribution of $400,000.00 to acquire the [shares].” She

states that she had “previously claimed an interest in the

[shares], but thereafter acknowledged in writing that she claims

no interest in the [shares]; and that she held “no claim to the

[Pharmakon shares,]” that “[Mr.] Clements [was] the sole and

legal owner, and possesse[d] all right, title, and interest in

and to, the [shares]”; that she otherwise “quitclaim[ed] to

[Mr.] Clements any and all right, title, and/or interest or

claim in [the Pharmakon shares]”; and that “in executing [the]

agreement, [she was] aware of and decline[d] to accept any right

she may have [had] to the redemption offer.”

In February 2002, Mrs. Clements informed her financial

advisor that she owned the Pharmakon shares. In February 2004,
 -7-
Mrs. Clements’ financial advisor listed the Pharmakon shares as

assets solely owned by Mrs. Clements. However, the income tax

returns jointly-filed by Mr. and Mrs. Clements reflect that only

Mr. Clements received distributions made by Pharmakon with

respect to the Pharmakon shares during that time period.

Mr. and Mrs. Clements separated in July 2004. On 26 August

2004, Pharmakon was sold to another company, and Mr. Clements

received the Pharmakon proceeds in the amount of $2,924,500.00.

Mr. Clements used the Pharmakon proceeds to, inter alia, make

payments on a James Scott Construction business line of credit,

create the KDC Trading and ALC Trading entities, establish the

Kyle Davis Clements Irrevocable Trust and the Alexandra Lee

Clements Irrevocable Trust for his son and daughter,

respectively, and pay a debt owed on real estate known as the

Camp Wright Property.

On 13 March 2007, Mr. Clements filed a complaint for

absolute divorce against Mrs. Clements in New Hanover County

District Court (the “District Court action”). Mrs. Clements

filed an answer and counterclaim seeking equitable distribution.

A judgment of absolute divorce was entered on 9 November 2007,

and the court subsequently dismissed Mrs. Clements’ equitable

distribution claim on grounds that, in light of the Premarital
 -8-
Agreement, the parties’ dispute concerned only separately-owned

property, and thus “there was no dispute for the family court to

decide in the context of an equitable distribution action under

Chapter 50 . . . .”

On 25 February 2008, Mrs. Clements was adjudicated

incompetent by the New Hanover County Clerk of Court. Mr.

Clements subsequently married Defendant Mariangela Barbosa

Clements and, on 24 September 2008, conveyed the Camp Wright

Property to himself and Ms. Barbosa as tenants by the

entireties.

On 24 May 2010, Plaintiff filed her complaint in the

present action in New Hanover County Superior Court. With

respect to the Pharmakon proceeds, Plaintiff asserted claims

against Mr. Clements for conversion, replevin, breach of

fiduciary duty, constructive fraud, and breach of contract.

Plaintiff’s complaint also requested a declaratory judgment as

to Plaintiff’s rights in the Pharmakon proceeds; imposition of a

constructive trust for the Pharmakon proceeds, much of which, as

previously stated, had been transferred by Mr. Clements to

several of the other named Defendants; and an injunction

prohibiting Mr. Clements “from transferring or otherwise

disposing of assets which had “been purchased, acquired, or
 -9-
funded with [Mrs. Clements’] separate property . . . .”

Further, the complaint sought repayment of the $145,000.00 Loan.1

On 8 June 2010, Defendants Clements, ALC Trading, KDC

Trading, and James Scott Construction filed motions to dismiss

Plaintiff’s claims. The trial court denied Defendants’ motions

by order entered 13 July 2010.

On 3 August 2010, Defendants again moved to dismiss

Plaintiff’s claims, asserting, inter alia, that the statute of

limitations barred Plaintiff’s claims; that Plaintiff’s claim

for breach of contract regarding the Pharmakon proceeds related

to the Premarital Agreement “over which the Superior Court ha[d]

no jurisdiction”; and that Plaintiff’s claims seeking equitable

relief were barred by the equitable defenses of laches and

estoppel. Following a hearing on the matter, the trial court

entered an order on 27 January 2011 denying Defendants’ motion

to dismiss.

On 24 July 2012, Plaintiff moved for partial summary

judgment against Defendants with respect to her claims regarding

the Pharmakon proceeds; however, her motion did not encompass

her claim for repayment of the $145,000.00 Loan. Defendants

1
The complaint was subsequently amended to add a claim for
fraudulent conveyance relating to Mr. Clements’ conveyance of
the Camp Wright Property into an estate by the entireties with
his current wife, Mariangela Clements.
 -10-
countered with their own motion for summary judgment with

respect to all of Plaintiff’s claims. Both sides introduced

competing expert testimony concerning Mrs. Clements’ mental

capacity in late 2001, when she purportedly executed the two

documents concerning her interest in the Pharmakon shares.

Defendants submitted the affidavit of their expert Dr. James E.

Bellard, which states his opinion, in part, that “[t]he claim or

suggestion that [Mrs. Clements] was similarly incompetent in

2001 is simply not supported by the medical record.” Plaintiff,

in turn, submitted the affidavit of her expert, Dr. George P.

Corvin, in which he criticizes Dr. Bellard’s methods as “not

sufficiently valid and reliable,” since Dr. Bellard had formed

his opinion as to Mrs. Clements’ competency “without conducting

a personal evaluation or examination of Ms. Clements or seeking

to interview those who knew her during the relevant period.”

Also in his affidavit, Dr. Corvin opined that Mrs. Clements “had

frontal lobe damage that permanently changed her from her

baseline ability [and that those] changes directly impaired her

ability in the latter half of 2001 and beyond to manage her own

affairs and to communicate important decisions concerning her

property[.]”
 -11-
The summary judgment motions came on for hearing on 7

August 2012. On 13 November 2012, the trial court entered a

declaratory judgment and order granting Plaintiff’s motion for

partial summary judgment and denying Defendants’ motion for

summary judgment. The order sets forth 132 findings of fact,

148 conclusions of law, and 102 footnotes, concluding, inter

alia, that Dr. Corvin’s opinion concerning Mrs. Clements’

competency in 2001 was admissible, but that Dr. Bellard’s

opinion was inadmissible on grounds that it was not formed based

on sufficiently reliable methods; that there was no genuine

issue that Mrs. Clements lacked the requisite mental capacity

beginning in 2000 (when the Pharmakon shares were first

acquired) to make a gift or enter into a contract that,

therefore, any agreement to convey the Pharmakon shares was

void; and that, consequently, Plaintiff was the owner of the

Pharmakon shares and thus entitled to the Pharmakon proceeds.

The trial court ordered that the trusts and accounts funded with

the Pharmakon proceeds be disgorged and that all property

obtained with the Pharmakon proceeds – for instance, the Camp

Wright property – be sold in order to satisfy Defendants’

obligation to Mrs. Clements’ estate.
 -12-
On 16 January 2013, the parties executed a memorandum of

consent judgment and order, in which they agreed to stay

execution of the trial court’s summary judgment order and order

on damages, as to all Defendants other than Mr. Clements, and to

liquidate the accounts held by Defendants ALC Trading, KLC

Trading, Kyle Davis Clements Irrevocable Trust, and Alexandra

Lee Clements Irrevocable Trust and transfer the proceeds to the

New Hanover County Clerk of Superior Court pending resolution of

this appeal.

From the trial court’s orders entered 13 July 2010, 27

January 2011, and 13 November 2012, Defendants now appeal.

II. Jurisdiction

Our review of the record reveals that Plaintiff’s claim

with respect to the $145,000.00 Loan remains pending before the

trial court. Accordingly, all of the orders from which

Defendants presently appeal are interlocutory in nature. Veazey

v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950).

“Generally, an interlocutory order is not immediately

appealable.” Builders Mut. Ins. Co. v. Meeting Street Builders,

LLC, __ N.C. App. __, __, 736 S.E.2d 197, 199 (2012) (citing

N.C. Gen. Stat. § 1A-1, Rule 54(b) (2011)). “An exception to

this general rule lies, however, where the order appealed from
 -13-
‘affects a substantial right.’” Id. (citing N.C. Gen. Stat. §

1-277(a) (2011); N.C. Gen. Stat. § 7A-27(d)(1) (2011)). “[T]his

Court has previously held that entry of summary judgment for a

monetary sum against one of multiple defendants affects a

substantial right” and is thus “immediately appealable under

N.C. Gen. Stat. §§ 1-277 and 7A-27.” Brown v. Cavit Sciences,

Inc., __ N.C. App. __, __, 749 S.E.2d 904, 907 (2013) (citing

Equitable Leasing Corp. v. Myers, 46 N.C. App. 162, 172, 265

S.E.2d 240, 247 (1980)).

Here, the trial court’s 13 November 2012 orders granted

Plaintiff’s motion for partial summary judgment and entered a

judgment for a monetary sum against Defendants. Execution of

the judgment has not been stayed with respect to Mr. Clements.

Moreover, the accounts of some of the other Defendants have been

liquidated and paid over to the court. We hold under these

circumstances that the trial court’s grant of partial summary

judgment in Plaintiff’s favor affects a substantial right and is

thus immediately appealable. Myers, 46 N.C. App. at 172, 265

S.E.2d at 247.

However, Defendants’ challenges to the trial court’s 13

July 2010 and 27 January 2011 orders denying their motions to

dismiss Plaintiff’s claims and the trial court’s order denying
 -14-
their motion for summary judgment are not properly before this

Court at the present time. The trial court did not certify

these interlocutory orders for immediate appellate review

pursuant to N.C. Gen. Stat. § 1A-1, Rule 54(b); and, upon review

of Defendants’ contentions, we conclude that Defendants have not

met their burden in demonstrating that these orders affect a

substantial right.

III. Analysis

Defendants contend that the trial court erred in granting

Plaintiff’s motion for partial summary judgment. We agree.

A motion for summary judgment is appropriately granted

where “the pleadings, depositions, answers to interrogatories,

and admissions on file, together with the affidavits, if any,

show that there is no genuine issue as to any material fact and

that any party is entitled to a judgment as a matter of law.”

N.C. Gen. Stat. § 1A–1, Rule 56(c) (2011). “The burden is on

the moving party to show the absence of any genuine issue of

fact and his entitlement to judgment as a matter of law.” In re

Will of Lamanski, 149 N.C. App. 647, 649, 561 S.E.2d 537, 539

(2002). “If the moving party has established the lack of a

genuine issue of material fact, then the burden shifts to the

non-moving party to present his own forecast of evidence to show
 -15-
that a genuine issue of material fact does exist.” Williams v.

Smith, 149 N.C. App. 855, 857, 561 S.E.2d 921, 923 (2002).

In its order granting Plaintiff’s motion for partial

summary judgment, the trial court determined that Mrs. Clements

was the owner of the Pharmakon shares when the shares were sold

in August 2004, reasoning that the evidence established as a

matter of law that Mrs. Clements lacked the mental capacity to

make a $400,000.00 gift to Mr. Clements at the time she issued

him the check for that amount, or, alternatively, lacked such

capacity at the time she signed the Quitclaim Agreement in late

2001.

We believe, however, that there remain genuine issues of

material fact such that Plaintiff was not entitled to judgment

as a matter of law, including a genuine issue concerning Mrs.

Clements’ mental capacity during the relevant time periods.

Regarding Mrs. Clements’ mental capacity, the trial court

concluded that Mrs. Clements “did not possess the required

mental capacity to gift, to execute contracts, or comprehend the

effect of a gift on her estate (in February 2000, November 2001,

or December 20012)[,]” and, therefore, she could not have

2
These dates represent when the Pharmakon shares were purchased
in Mr. Clements’ name; when Mrs. Clements wrote the letter to
Pharmakon management stating that she claimed no interest in the
 -16-
relinquished ownership of the $400,000.00 or the Pharmakon

shares purchased with those funds. The trial court based this

conclusion essentially upon its determination that testimony

offered by Plaintiff’s expert witness, Dr. Corvin, constituted

the only admissible expert opinion concerning Mrs. Clements’

competency – which was that Mrs. Clements lacked the requisite

mental capacity to make a gift as early as late 2001. Though

Defendants attempted to introduce Dr. Bellard’s countering

expert opinion, the trial court concluded that Dr. Bellard’s

methodology in forming his opinion was unreliable and thus

inadmissible since, unlike Dr. Corvin, Dr. Bellard had not

actually conducted a face-to-face interview with Mrs. Clements

or with anyone who had had contact with Mrs. Clements in the

early 2000’s.

Even assuming arguendo that the trial court did not err in

excluding Dr. Bellard’s opinion, we believe that the court erred

in concluding that the other evidence was insufficient to raise

a genuine issue concerning Mrs. Clements’ capacity. For

instance, in his affidavit, Dr. Corvin expressed no opinion on

Mrs. Clements’ capacity in 2000 – when Mrs. Clements signed the

Pharmakon shares, but that she had merely loaned $400,000.00 to
Mr. Clements; and when Mrs. Clements executed the Quitclaim
Agreement with Pharmakon.
 -17-
$400,000.00 check to Mr. Clements and the Pharmakon shares were

purchased in his name - but only stated his opinion that she

lacked sufficient capacity as of late 2001. Moreover, Dr.

Corvin’s opinion was not dispositive on the issue of Mrs.

Clements’ capacity during that time simply because it was the

only expert testimony admitted, as our Supreme Court has

specifically held that “[u]ncontradicted expert testimony

[concerning a person’s mental state] is not binding on the trier

of fact. Questions of credibility and the weight to be accorded

the evidence remains in the province of the finder of fact.”

Scott v. Scott, 336 N.C. 284, 291, 442 S.E.2d 493, 497 (1994).

As the trial court correctly states in its order, “the

measure of capacity is the ability to understand the nature of

the act in which he is engaged and its scope and effect, or its

nature and consequences, not that he should be able to act

wisely or discreetly, nor to drive a good bargain, but that he

should be in such possession of his faculties as to enable him

to know at least what he is doing,” Ridings v. Ridings, 55 N.C.

App. 630, 633, 286 S.E.2d 614, 617 (1982). In Ridings, this

Court stated that there is a presumption of mental capacity to

contract and that the testimony of an expert witness to the

contrary “would be sufficient to raise a genuine issue of [the
 -18-
party’s] ability to grasp the nature and consequences of his

actions.” Id. (emphasis added). Thus, while expert testimony

may be sufficient to raise a genuine issue with respect to an

individual’s lack of capacity, such testimony does not

necessarily establish this lack of capacity as a matter of law.

Id. In this present case, there is other evidence from which a

jury could infer that Mrs. Clements understood the nature of her

acts during the relevant time periods. For instance, Mrs.

Clements’ medical records from 2001, when she was in alcohol

rehabilitation treatment, describe her as “cognitively capable”

and having “cognition [which] appear[ed] intact.” Further, it

could be inferred from Mrs. Clements’ November 2001 letter to

Pharmakon – in which she stated that the risk (and reward)

regarding the success of Pharmakon was being borne entirely by

her husband and that she merely had merely made a loan to him –

that she understood the nature of her acts. Additionally, there

is deposition testimony from individuals who knew Mrs. Clements

and evidence regarding business transactions which she had

engaged in which a jury could infer that she understood the

nature of her business transactions during the relevant time

periods. Accordingly, we hold that the trial court erred in

concluding, as a matter of law, that Mrs. Clements lacked the
 -19-
requisite mental capacity to make a gift or a loan in late 2001

because there is a genuine issue as to whether she understood

the nature and consequences of her actions at that time. See,

e.g., McDevitt v. Chandler, 241 N.C. 677, 680, 86 S.E.2d 438,

440 (1955) (holding that the question of capacity to make a deed

is a question of law based on certain facts such as whether the

grantor understood the nature and consequences of his actions).3

Moreover, assuming that the issue of Mrs. Clements’

capacity is resolved in Defendants’ favor, there is evidence

from which a jury could find facts supporting the conclusion

that Mr. Clements was the owner of the Pharmakon shares. For

instance, there is evidence from which it could be inferred that

Mrs. Clements gifted $400,000.00 to Mr. Clements or subsequently

gifted the Pharmakon shares to him. Specifically, the evidence

indicates that Mrs. Clements issued the check to Mr. Clements in

early 2000 and that the proceeds therefrom were used to purchase

the Pharmakon shares in his name only. Our Supreme Court has

held that where the owner or purchaser of shares of stock has

3
Factual determinations concerning Mrs. Clements’ abilities
during various time periods in order to make conclusions on her
capacity and legal competency at these times may be important in
determining the owner of the Pharmakon shares as of 2004 and
also resolving certain issues raised in Defendants’ motions to
dismiss, e.g., the tolling of the applicable statutes of
limitations and the availability of the defenses of equitable
laches and estoppel.
 -20-
the certificate issued in the name of another, and so registered

on the books of the corporation, the transaction is regarded as

a gift completed by constructive delivery. Buffaloe v. Barnes,

226 N.C. 313, 318, 38 S.E.2d 222, 225 (1946). Regarding the

trial court’s conclusion that Mrs. Clements “did not intend to

relinquish all her control over the funds[,]” the court’s order

does not reflect any conduct on Mrs. Clements’ part at the time

that she gave her husband the $400,000.00 check indicating that

her intent was something other than to make a gift to her

husband. Rather, the trial court’s order points to statements

and actions made by Mrs. Clements and her attorney at later

times to conclude that there was no genuine issue with respect

to whether she intended to continue exercising control over the

$400,000.00 and the subsequently purchased Pharmakon shares at

the time she issued the check to Mr. Clements. Therefore, we

believe that there is evidence from which a jury could infer

that, at the time that she wrote the check to Mr. Clements and

the Pharmakon shares were purchased in his name alone, she

intended to confer a gift upon her husband, and that she may

have changed her mind regarding the gift only after the fact.

See Courts v. Annie Penn Mem’l Hosp., 111 N.C. App. 134, 141,

431 S.E.2d 864, 868 (1993) (holding that once a gift of shares
 -21-
of stock is completed, the law will not recognize any “after-

the-fact” conditions placed on the transaction by the donor).

Additionally, as the trial court found in its order, there

was evidence presented that Mr. Clements – and not Mrs. Clements

- reported the passive income derived from the Pharmakon shares

for tax purposes, evidence from which a jury could infer that

Mrs. Clements viewed Mr. Clements as the owner of the Pharmakon

shares. Further, her handwritten November 2001 letter to

Pharmakon is evidence from which a jury could infer that she

intended the $400,000.00 check to be a loan – rather than a gift

- to Mr. Clements, that she assumed no risk in the fortunes of

Pharmakon but that it was Mr. Clements who had made the

investment “at his own peril,” and, therefore, any claim that

Mrs. Clements might have against Mr. Clements would have been

for repayment of a $400,000.00 loan. We believe that this same

inference could be drawn from the December 2001 Quitclaim

Agreement, in which Mrs. Clements acknowledges that Mr. Clements

was the record owner of the Pharmakon shares, that it was Mr.

Clements who made the capital contribution of $400,000.00 to

acquire the shares, that she claimed no interest in the shares,

and that she quitclaimed any interest she might otherwise have

in the shares to Mr. Clements.
 -22-
In sum, we believe that there remain a number of factual

issues which must be resolved by a jury before any conclusion

can be drawn as to whether Mr. Clements or Mrs. Clements was the

owner of the Pharmakon shares. Many of these same factual

issues – such as Mrs. Clements’ competency - may also be

relevant to resolve other issues, such as Defendants’ defenses

based on the statute of limitations and equitable laches.

Although we have already held that the trial court erred in

granting Plaintiff’s motion for partial summary judgment, we

nevertheless choose to address the trial court’s exclusion of

Dr. Bellard’s testimony since this issue is likely to come up in

a trial of this matter. It is well established that a trial

court’s ruling on the admissibility of expert opinion testimony

is reviewable for abuse of discretion. State v. Ward, 364 N.C.

133, 139, 694 S.E.2d 738, 742 (2010) (citing Howerton v. Arai

Helmet, Ltd., 358 N.C. 440, 458, 597 S.E.2d 674, 686 (2004)).

“Abuse of discretion results where the court’s ruling is

manifestly unsupported by reason or is so arbitrary that it

could not have been the result of a reasoned decision.” State

v. Hennis, 323 N.C. 279, 285, 372 S.E.2d 523, 527 (1988).

Here, both Dr. Colvin and Dr. Bellard performed

“retrospective evaluations” of Mrs. Clements in order to form
 -23-
their respective opinions concerning her competency – or lack

thereof – during the early 2000’s. However, only Dr. Bellard’s

testimony was excluded as “not sufficiently reliable.” The

trial court made its decision to admit Dr. Corvin’s testimony

but exclude Dr. Bellard’s testimony, in essence, on grounds that

(1) Dr. Corvin had met face-to-face with Mrs. Clements, though

not until 2008, and interviewed others who knew her in the early

2000’s; and (2) Dr. Corvin believed that Dr. Bellard’s methods

were unreliable. Although these bases for distinction may bear

upon the weight accorded to the testimony by a jury, we find

them to be without merit to base a decision to exclude an

opinion from the consideration of a jury in this particular

case. Our Courts have explicitly rejected the notion that an

expert witness must personally interview an individual in order

to offer an opinion on that individual’s mental state, State v.

Daniels, 337 N.C. 243, 271, 446 S.E.2d 298, 315 (1994); Harvey

v. Raleigh Police Dep't, 85 N.C. App. 540, 547, 355 S.E.2d 147,

152 (1987); and we clearly cannot deem expert testimony properly

excludible solely because an expert tendered by the opposing

party denies its credibility.

Careful scrutiny of the testimony offered by Dr. Corvin and

Dr. Bellard further convinces us of the arbitrary nature of the
 -24-
court’s decision to exclude only that of the latter. In support

of his affidavit, Dr. Bellard submitted an extensively detailed

report, which documents Mrs. Clements’ medical history and

reflects the methodology that he used in arriving at his

conclusions concerning Mrs. Clements’ mental state. Dr. Corvin,

on the other hand, provided deposition testimony without an

accompanying report and without reviewing all of Plaintiff’s

available medical records. Further, as stated above, Dr.

Corvin’s personal interviews, which evidently served as the

trial court’s primary basis for elevating the reliability of Dr.

Corvin’s methods over those of Dr. Bellard, consisted of

interviewing Mrs. Clements, who was legally incompetent, and

Plaintiff’s two daughters, who have a stake in these proceedings

as Mrs. Clements’ heirs-at-law. Under these circumstances, we

believe that the trial court abused its discretion in excluding

Dr. Bellard’s opinion from consideration.

III. Conclusion

For the foregoing reasons, we dismiss Defendants’ appeals

from the trial court’s 13 July 2010 and 27 January 2011 orders

denying their motions to dismiss and Defendants’ appeal from the

trial court’s order denying their motion for summary judgment;
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and we reverse and remand the trial court’s order granting

Plaintiff’s motion for partial summary judgment.

DISMISSED IN PART; REVERSED AND REMANDED IN PART.

Judges McGEE and McCULLOUGH concur.

Report per Rule 30(e).