An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-684
NORTH CAROLINA COURT OF APPEALS
Filed: 31 December 2014
JACOB L. WITCHER,
Plaintiff,
v. Guilford County
No. 13-CVS-1470
ALISHA PARSONS,
WR STARKEY MORTGAGE, L.L.P.,
CITY OF HIGH POINT, NORTH
CAROLINA,
Defendants/Third-Party
Plaintiffs,
v.
MICHAEL LEE GOODSON and wife,
TERESA GOODSON,
Third-Party Defendants.
Appeal by plaintiff from order entered 28 February 2014 by
Judge Vance Bradford Long in Guilford County Superior Court.
Heard in the Court of Appeals 23 October 2014.
Craige Brawley Liipfert & Walker LLP, by William W. Walker,
for plaintiff-appellant.
Jones, Childers, McLurkin & Donaldson, PLLC, by Dennis W.
Dorsey, Mark L. Childers and Elise B. McLurkin Horton, for
defendants/third party plaintiffs-appellees.
Roberson Haworth & Reese, P.L.L.C., by Alan B. Powell,
Christopher C. Finan and Andrew D. Irby, for third-party
defendants-appellees.
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BELL, Judge.
Jacob L. Witcher (“Plaintiff”) appeals from the trial
court’s order dismissing his complaint to quiet title against
Alisha Parsons, WR Starkey Mortgage, LLP, and the City of High
Point, North Carolina (collectively, “Defendants”) pursuant to
Rule 12(b)(6) of the North Carolina Rules of Civil Procedure.
After careful review, we vacate the trial court’s order and
remand for entry of an order consistent with this opinion.
Factual Background
Plaintiff’s grandfather, S.L. Witcher (“S.L.”), died on 15
May 1999. S.L.’s will devised his real property in three equal
shares to his children: Joel L. Witcher (“Joel”), David R.
Witcher (“David”), and Alyson W. Frazier (“Alyson”).
Accordingly, Joel, David, and Alyson each became the owner of an
undivided one-third interest in S.L.’s former house located at
2715 Triangle Lake Road in High Point, North Carolina (“the
house”).
On 14 May 2000, Joel passed away. Joel was not married at
the time of his death and Plaintiff, who was six years old at
the time, was his only child. Prior to his death, Joel executed
a will that devised all of his real and personal property to
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Plaintiff, including his one-third interest in the house. The
will also appointed Alyson as executrix of Joel’s estate. The
will further provided that if Plaintiff had not reached the age
of 18 at the time of Joel’s death, his share of Joel’s estate
was to be transferred to and held in a trust created for
Plaintiff’s benefit. Alyson was named as trustee and was
directed to hold the property in trust until Plaintiff reached
18 years of age and use funds from the trust for Plaintiff’s
“support, maintenance, education and general welfare” in her
discretion. Joel’s will also granted Alyson, as trustee, “the
right, with respect to all property . . . to sell . . . without
court order.” Although Alyson filed Joel’s will with the Clerk
of Superior Court of Guilford County, North Carolina, the will
was never formally admitted to probate.
On 29 March 2001, Alyson and David executed a general
warranty deed conveying the house to Bennie and Dinah Williams
(“the Williamses”). Alyson and David signed the deed as
grantors, individually, and Alyson signed the deed as executor
of Joel’s estate.
On 25 November 2008, Wells Fargo Financial (“Wells Fargo”)
purchased the house at a foreclosure sale after the Williamses
defaulted on their mortgage. On 16 January 2009, Wells Fargo
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sold the house to Michael Goodson. On 31 July 2009, Michael
Goodson and his wife, Teresa Goodson, (“Third-Party Defendants”)
sold the house to Alisha Parsons (“Defendant”). Alisha Parsons
gave deeds of trust to WR Starkey Mortgage, LLP and the City of
High Point, North Carolina (“Defendants1”) as part of this
conveyance.
On 13 November 2012, Plaintiff filed a complaint against
Alyson in Forsyth County Superior Court (“the Forsyth County
action”), asserting claims for: (1) an accounting of all
transactions conducted as Plaintiff’s fiduciary; (2) breach of
fiduciary duty; (3) constructive fraud; (4) fraud; (5)
conversion; and (6) imposition of a constructive trust.
Plaintiff’s complaint alleged that after the house was
originally sold on 29 March 2001, Alyson “received a share of
the proceeds from the sale of the House which belonged to
Plaintiff” and that she “failed to distribute any assets from
[Plaintiff’s] Trust for Plaintiff’s use or benefit prior to
Plaintiff reaching eighteen years of age on 17 June 2011.”
On 29 August 2013, Plaintiff filed a Complaint to Quiet
Title in Guilford County Superior Court. Plaintiff also sought
1
Throughout the remainder of the opinion, “Defendants” refers
collectively to Alisha Parsons, WR Starkey Mortgage, LLP, and
the City of High Point, North Carolina.
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a declaratory judgment that Defendants “have no right, title, or
interest adverse to Plaintiff’s one-third interest in the
House.” In his Complaint to Quiet Title, Plaintiff alleged that
Alyson was not executor of Joel’s estate because his will was
never admitted to probate. Plaintiff further alleged that he
retained a one-third interest in the house because, pursuant to
N.C. Gen. Stat. § 28A-15-2(b), Joel’s one-third interest in the
house had passed to Plaintiff upon Joel’s death and was
therefore no longer an asset of Joel’s estate when the house was
conveyed on 29 March 2001. As a result, according to Plaintiff,
the attempted conveyance of Joel’s one-third interest in the
house was ineffective.
On 12 November 2013, Plaintiff moved for summary judgment
in the Forsyth County action, alleging that there was no genuine
issue as to any material fact because the documents of record
showed that: (1) Joel left all of his estate to Plaintiff in
trust, with Alyson as trustee; (2) Alyson received funds as
trustee, including $20,000 from the sale of Joel’s one-third
interest in the house; (3) Alyson deposited the funds into her
personal bank account; and (4) Alyson never used any of the
funds for Plaintiff’s benefit.
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On 16 January 2014 and 24 January 2014, respectively,
Defendants and Third-Party Defendants each filed a motion to
dismiss Plaintiff’s Complaint to Quiet Title pursuant to Rule
12(b)(6) of the North Carolina Rules of Civil Procedure for
failure to state a claim upon which relief may be granted. In
their motions to dismiss, Defendants and Third-Party Defendants
alleged that Plaintiff was judicially estopped from denying the
validity of the conveyance of the house in his Complaint to
Quiet Title because he had already acknowledged the validity of
the conveyance in the Forsyth County action against Alyson.
Defendants’ and Third-Party Defendants’ motions to dismiss
came on for hearing on 3 February 2014, and the trial court
entered an order dismissing Plaintiff’s complaint on 28 February
2014. Plaintiff filed a timely notice of appeal to this Court.
On 16 April 2014, while this appeal was pending, the trial
court granted partial summary judgment for Plaintiff in the
Forsyth County action. In particular, the trial court granted
summary judgment against Alyson on the following claims: (1)
breach of fiduciary duty; (2) constructive fraud; (3)
conversion; and (4) imposition of a constructive trust. The
trial court subsequently entered a consent judgment on 28 April
2014 that awarded Plaintiff a $20,000 judgment against Alyson
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and deemed Plaintiff’s claims in the Forsyth County action fully
adjudicated.
On 23 September 2014, Third-Party Defendants filed a motion
to dismiss Plaintiff’s appeal. On 24 September 2014, Defendants
joined with Third-Party Defendants in their motion to dismiss
Plaintiff’s appeal.
Analysis
As an initial matter, we must address Third-Party
Defendants’ and Defendants’ motion to dismiss the present
appeal. These parties move to dismiss Plaintiff’s appeal on the
basis that the trial court entered a final judgment in the
Forsyth County action on 16 April 2014, rendering the present
action moot. The parties also request that we take judicial
notice of the final judgment entered in the Forsyth County
action as a predicate to the relief sought in their motion to
dismiss the present appeal.
Although the final judgment in the Forsyth County action
was not part of the record on appeal, it was included in the
appendix of Plaintiff’s brief. We have held that “this Court
can take judicial notice of certain documents even though they
were not included in the record on appeal.” In re Hackley, 212
N.C. App. 596, 601, 713 S.E.2d 119, 123 (2011).
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Rule 201 of the North Carolina Rules of Evidence provides
that “[a] court shall take judicial notice if requested by a
party and supplied with the necessary information.” N.C.R.
Evid. 201(d). Rule 201(b) further provides that “[a] judicially
noticed fact must be one not subject to reasonable dispute in
that it is either (1) generally known within the territorial
jurisdiction of the trial court or (2) capable of accurate and
ready determination by resort to sources whose accuracy cannot
reasonably be questioned.” N.C.R. Evid. 201(b). The final
judgment in the Forsyth County action falls under this second
category of facts not subject to reasonable dispute. Thus, we
elect to take judicial notice of the final judgment in the
Forsyth County action.
While we elect to take judicial notice of the final
judgment entered in the Forsyth County action, we disagree that
it renders Plaintiff’s appeal moot and, therefore, address
Plaintiff’s arguments on the merits. In their motions to
dismiss, Defendants and Third-Party Defendants asserted that
Plaintiff’s claim to quiet title was barred by the doctrine of
judicial estoppel. In support of their motions, Defendants and
Third-Party Defendants asked the trial court to take judicial
notice of the pleadings in the Forsyth County action. In its
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order dismissing Plaintiff’s quiet title action, the trial court
concluded that it was permitted to take judicial notice of the
contents of the pending Forsyth County action and “that such
consideration [did] not convert either the Defendants’ Motion to
Dismiss or the Third-Party Defendants’ Motion to Dismiss to a
Summary Judgment Motion.”
Plaintiff argues that the trial court acted prematurely or,
in the alternative, was required to make findings of fact to
support its application of the doctrine of judicial estoppel
when it dismissed Plaintiff’s complaint. A careful review of
the record and those documents of which we have taken judicial
notice leads us to agree with Plaintiff’s assertion that,
assuming without deciding that the trial court was permitted to
take judicial notice of the pleadings in the Forsyth County
action without converting the motions to dismiss to motions for
summary judgment, based on the pleadings before it, the trial
court acted prematurely in granting Defendants’ and Third-Party
Defendants’ motions to dismiss pursuant to Rule 12(b)(6).
When a party files a motion to dismiss
pursuant to Rule 12(b)(6), the question for
the court is whether the allegations of the
complaint, treated as true, are sufficient
to state a claim upon which relief may be
granted under some legal theory, whether
properly labeled or not. A complaint may be
dismissed pursuant to Rule 12(b)(6) where
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(1) the complaint on its face reveals that
no law supports a plaintiff’s claim, (2) the
complaint on its face reveals the absence of
facts sufficient to make a good claim, or
(3) the complaint discloses some fact that
necessarily defeats a plaintiff’s claim. An
appellate court reviews de novo a trial
court’s dismissal of an action under Rule
12(b)(6).
Horne v. Cumberland Cty. Hosp. Sys. Inc., __ N.C. App. __,
__, 746 S.E.2d 13, 16 (2013) (internal citations and quotation
marks omitted). In ruling on a motion to dismiss, “the
allegations of the complaint must be viewed as admitted, and on
that basis the court must determine as a matter of law whether
the allegations state a claim for which relief may be granted.”
Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615
(1979) (citation omitted).
Although Plaintiff makes inconsistent factual assertions in
his two complaints, at the time the trial court entered its
order dismissing Plaintiff’s quiet title action, none of the
assertions in either of Plaintiff’s complaints had been
established as true. “[E]stoppel is a bar which precludes a
person from denying or asserting anything to the contrary of
that which has, in contemplation of law, been established as the
truth.” 28 Am.Jur.2d Estoppel and Waiver § 1(2000)(emphasis
added). Given that none of Plaintiff’s inconsistent assertions
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had been established as the truth at the time the trial court
ruled on Defendants’ motions to dismiss, his quiet title action
was not barred by judicial estoppel at that time. “[J]udicial
estoppel . . . should not be applied to prevent the assertion of
inconsistent legal theories.” Whitacre P’ship v. Biosignia,
Inc., 358 N.C. 1, 32 591 S.E.2d 870, 890 (2004). “[S]uch a
limitation is necessary to avoid interference with our liberal
pleading rules, which permit a litigant to assert inconsistent,
even contradictory, legal positions within a lawsuit.” Id.
(citations omitted). Therefore, we conclude that the trial
court erred by dismissing Plaintiff’s quiet title action
pursuant to Rule 12(b)(6).
However, in light of the final disposition entered in the
Forsyth County action during the pendency of this appeal, we
conclude that Plaintiff is now estopped from pursuing the case
before us in the trial court. Where a party assumes a certain
position in a legal proceeding, and succeeds in maintaining that
position, he may not thereafter, simply because his interests
have changed, assume a contrary position . . . .” Whitacre, 358
N.C at 22, 591 S.E.2d at 884 (emphasis added)(citations and
quotation marks omitted). Judicial estoppel, which prevents a
party from making inconsistent factual assertions, seeks to
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protect the integrity of judicial proceedings by “prevent[ing] a
party from acting in a way that is inconsistent with its earlier
position before the court.” Powell v. City of Newton, 364 N.C.
562, 569, 703 S.E.2d 723, 728 (2010) (citation omitted).
Although “the circumstances under which judicial estoppel
may appropriately be invoked are probably not reducible to any
general formulation of principle,” our Supreme Court has
enumerated three factors that may serve as guideposts for
applying the doctrine. Whitacre, 358 N.C. at 28, 591 S.E.2d at
888 (citation and quotation marks omitted).
First, a party’s subsequent position must be
clearly inconsistent with its earlier
position. Second, courts regularly inquire
whether the party has succeeded in
persuading a court to accept that party’s
earlier position, so that judicial
acceptance of an inconsistent position in a
later proceeding might pose a threat to
judicial integrity by leading to
inconsistent court determinations or the
perception that either the first or the
second court was misled. Third, courts
consider whether the party seeking to assert
an inconsistent position would derive an
unfair advantage . . . if not estopped.
Id. at 29, 591 S.E.2d at 888-89 (citations and internal
quotation marks omitted).
In his motion for summary judgment in the Forsyth County
action, Plaintiff assumed the position that the sale of the
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house was valid. Plaintiff alleged, in pertinent part, as
follows:
3. Defendant received funds as trustee for
Plaintiff
a. $20,000 from the sale of Joel’s
interest in real property in Guilford
County, North Carolina[.]
. . . .
8. Defendant was a fiduciary to Plaintiff,
as she acted as trustee of funds for
Plaintiff.
9. Defendant’s transfer to herself of the
trust funds raises a presumption that
Defendant breached her fiduciary duty to
Plaintiff, and Defendant has presented no
evidence to rebut the presumption and raise
a disputed issue of material fact.
In the final judgment entered in the Forsyth County action,
which was entered during the pendency of Plaintiff’s appeal in
the subject action, the trial court concluded that Plaintiff was
entitled to partial summary judgment and monetary damages for,
among other things, Alyson’s breach of fiduciary duty. As such,
Plaintiff succeeded before the trial court on his position that
the sale of the house was valid, as the trial court’s order of
summary judgment necessarily required a determination by the
trial court that a valid sale of the house had occurred. In the
present action, Plaintiff seeks a declaration that the sale of
the house was invalid — a position that is inconsistent with the
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factual allegations Plaintiff relied on in the Forsyth County
action, in which he ultimately succeeded.
Having established before the trial court that a valid sale
occurred, Plaintiff cannot now seek to have this Court determine
that he maintains a one-third interest in the house because the
sale was invalid. Not only would this pose a threat to judicial
integrity, but it would also permit Plaintiff to derive an
unfair advantage, as he has already recovered his interest in
the house from the final judgment in the Forsyth County action
against Alyson.
Plaintiff argues that because he has been unable to recover
anything on this judgment, he should be entitled to use another
legal theory to be made whole. However, a party’s current
inability to pay a judgment does not justify permitting the
other party to obtain judgments on two legally contradictory
claims. It is still possible that Alyson may be able to pay the
judgment in the future, and even if she cannot, judicial
integrity prevents us from upholding two judgments based on
contradictory facts and legal claims. If Plaintiff were
concerned about Alyson’s ability to pay a judgment, he had the
option to pursue his quiet title action before seeking a
judgment against Alyson. Thus, we conclude that Plaintiff is
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now judicially estopped from alleging that the sale of the house
was invalid.
Conclusion
For the reasons stated above, we vacate trial court’s order
dismissing Plaintiff’s appeal and remand for entry of order
consistent with this opinion.
VACATED AND REMANDED.
Judges GEER and STROUD concur.
Report per Rule 30(e).
Witcher v. Parsons
Combined Opinion