Wilson v. Pershing, LLC

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA16-803

Filed: 16 May 2017

Catawba County, No. 15 CVS 1286

RICHARD C. WILSON, Plaintiff,

v.

PERSHING, LLC; BANK OF NEW YORK MELLON CORPORATION; JBS
LIBERTY SECURITIES, INC.; THE PNC FINANCIAL SERVICES GROUP, INC.;
SYNERGY INVESTMENT GROUP, LLC; JBS GROUP, LLC; RBC CAPITAL
MARKETS CORPORATION; and JOHN DOE 1, Defendants.

Appeal by plaintiff from order entered 17 December 2015 by Judge Timothy S.

Kincaid in Catawba County Superior Court. Heard in the Court of Appeals 7 March

2017.

Law Offices of Matthew K. Rogers, PLLC, by Matthew K. Rogers, for plaintiff-
appellant.

McGuireWoods, LLP, Charlotte, by Brian P. Troutman, Wm. Grayson Lambert,
and Anita Foss, for defendants-appellees Pershing, LLC and Bank of New York
Mellon Corporation.

Jones Law Firm, by Jeffrey D. Jones, for defendants-appellees JBS Liberty
Securities, Inc. and Synergy Investment Group, LLC.

Poyner Spruill LLP, Charlotte, by Thomas L. Ogburn III and John M.
Durnovich, for defendant-appellee The PNC Financial Services Group, Inc.

Womble Carlyle Sandridge & Rice, LLP, by W. Clark Goodman, for defendant-
appellee RBC Capital Markets Corporation.

ZACHARY, Judge.
 WILSON V. PERSHING, LLC

Opinion of the Court

Plaintiff Richard C. Wilson appeals from an order dismissing his civil claims

against Pershing, LLC (Pershing), Bank of New York Mellon (BNY Mellon), JBS

Liberty Securities, Inc. (JBS Liberty), Synergy Investment Group, LLC (Synergy),

JBS Group, LLC (JBS Group), RBC Capital Markets Corporation (RBCCMC), and

John Doe I (collectively, defendants) pursuant to Rules 12(b)(1), (4), and (6) of the

North Carolina Rules of Civil Procedure. For the reasons that follow, we affirm the

trial court’s order in its entirety.

I. Background

Wilson is the founder of Ipswich Bay, LLC (Ipswich), a real estate development

company. In 1996, Wilson sought to purchase and develop 112 acres of real property

located on Lake Norman. This development project was entitled “Harbor Cove.”

After Wilson obtained a revolving line of credit from Centura Bank (the Centura

Loan) to finance the Harbor Cove project, he engaged a tax attorney to provide tax

treatment and planning advice related to the Centura Loan. Working with Centura,

Wilson’s legal team determined that Wilson could obtain certain tax advantages if

funds to be used as security for the Centura Loan were held in a trust account.

According to Wilson, on 28 February 1996, Centura Bank Vice President Greg

Grier stated that $250,000.00 could be deposited into a trust account at Centura

Bank, and that the funds would serve as collateral for the Centura Loan as well as

other potential loans. These funds were subsequently invested in mutual fund

-2-
 WILSON V. PERSHING, LLC

Opinion of the Court

investment accounts (the Ipswich Security Account) that were managed by either

Centura Bank or Centura Securities, Inc. (Centura Securities). As part of Wilson’s

tax strategy, the funds in the Ipswich Security Account were held for his benefit, but

not in his name. It appears that Chris Teague, a Centura employee, was responsible

for managing the Ipswich Security Account. Wilson understood that the $250,000.00

deposit would remain invested in mutual funds until he requested that the money be

returned to him, that he would benefit from mutual fund appreciation, and that no

taxes would be levied on funds in the Ipswich Security Account or on any gains

accruing while those monies were held in trust.

It is not clear how long the Harbor Cove project lasted, but Wilson alleges that

he “continued to sell property in Harbor Cove through and after 2006.” Wilson also

alleges that while he met with his accountant, attorneys, and bankers concerning the

Harbor Cove project “on a quarterly basis for many years[,]” none of Wilson’s “trusted

advisors” ever indicated that the funds from the Ipswich Security Account needed to

be transferred or liquidated. In 2013, Wilson met with his accountant to discuss

potential tax write-offs related to Ipswich’s developments at Lake Norman. While

gathering information concerning Ipswich’s depreciation schedules reaching back to

1985, Wilson “discovered Ipswich’s detailed documentary records that had been kept

in storage for [him].” Wilson found within the Ipswich files a certified check issued

by Centura Securities in the amount of $250,000.00. The check, dated 23 October

-3-
 WILSON V. PERSHING, LLC

Opinion of the Court

1998, was made payable to “Richard Gregg Wilson”1 and stated on its face that it was

“void after 180 days.” In addition, the check displayed references to defendant BNY

Mellon and defendant Pershing, a wholly owned subsidiary of BNY Mellon. Wilson

later learned that Pershing was a service provider on the Ipswich Security Account.

Wilson contacted PNC Bank, N.A. (PNC)—an entity that Wilson believed was

the successor in interest to Centura Securities—in late 2013 regarding the check, and

PNC indicated that it would research the matter. While his inquiry was pending with

PNC, Wilson presented the check to Wells Fargo, N.A., which refused to honor it and

referred Wilson to the check’s maker. By letter dated 15 January 2014, PNC informed

Wilson that “[a]lthough the assets in the account with Centura Securities, Inc. [(i.e.,

the Ipswich Securities Account)] secured a loan made by Centura Bank, Centura

Bank never had possession of the funds or the account other than its security

interest.” The letter further stated that PNC never acquired any portion of Centura

Securities; rather, Centura Securities became RBC Centura Securities, an entity that

sold some of its assets to RBC Dain Rausher, which was later acquired by defendants

Synergy and JBS Group in 2007. After Wilson filed a complaint with the U.S.

Consumer Financial Protection Bureau, PNC reiterated that it never acquired any

1 On appeal, Wilson maintains that his name is “Richard Craig Wilson.” However, a copy of
Wilson’s drivers’ license contained in the record appears to list Wilson’s middle name as “Gregg” or
“Cregg.”

-4-
 WILSON V. PERSHING, LLC

Opinion of the Court

part of Centura Securities, and that Wilson’s claim had to be directed to Synergy or

JBS.

Wilson eventually retained legal counsel, who presented the check to and

demanded payment from BNY Mellon in August 2014. Pershing’s general counsel,

Jane Myers, responded to this demand by letter dated 10 September 2014. Myers

explained that Pershing acted as a “clearing” firm for the investment account

managed by Centura Securities. In this capacity, Pershing was limited to providing

“custodial, execution[,] and clearance services” for the Ipswich Security Account.

Myers also rejected Wilson’s demand for payment on the check as follows:

[T]he check here was not a “certified casher’s” check as you
claim, but was drawn against the assets held in the
Account. On its face, the check stated that is was “void
after 180 days” when it was issued 15 years ago. . . .

Because the age of the check exceeds the record retention
period, [Pershing has] very limited information about the
check and the Account. However, [Pershing’s] records
reflect that the check was stopped on or about October 26,
1998. The Account was subsequently closed in July 1999.2
Accordingly, there are no funds on deposit with Pershing
and/or BNY Mellon purportedly owed to [Wilson] on the
check. [Pershing] must direct you to the drawer of the
check for any amounts allegedly owed.

Unable to negotiate the check or otherwise locate the Ipswich Security Account

2 Before Wilson’s demand for payment on the check was refused, Wilson’s attorney had spoken
with David Butler, an attorney in Pershing’s legal department. Wilson alleges that Butler “refused to
tell [Wilson’s counsel] who directed that the Ipswich Security Account be closed[,]” and that “Butler
represented he was not able to discern or disclose to whom the money in the Ipswich Security Account
was distributed.”

-5-
 WILSON V. PERSHING, LLC

Opinion of the Court

funds, Wilson filed a verified complaint (original complaint) in Catawba County

Superior Court against Pershing, BNY Mellon, Synergy, JBS Liberty, JBS Group,

RBCCMC, and John Doe I. The original complaint, filed 22 May 2015, alleged claims

for breach of fiduciary duty, constructive fraud, unjust enrichment, breach of

contract, fraud, and unfair and deceptive trade practices. Defendants all filed

motions to dismiss Wilson’s original complaint. On 2 November 2015, the Honorable

Timothy Kincaid conducted a hearing on defendants’ motions to dismiss.

Shortly before Judge Kincaid called the case for hearing, Wilson’s attorney

filed an amended complaint and served it on defendants’ attorneys. The amended

complaint contained some new allegations and added a claim for civil conspiracy,3 but

it generally mirrored the original complaint. Once the case came on for hearing,

Wilson’s attorney argued that the filing of the amended complaint rendered moot

defendants’ motions to dismiss, which were directed at the original complaint.

Wilson’s attorney then asserted that the trial court should not proceed with the

hearing, and that the parties should be granted time to brief issues raised by the

amended complaint. Defense counsel, however, advised the court that they were

prepared to proceed as scheduled. Judge Kincaid refused to continue the hearing,

reserved his ruling on Wilson’s motion to amend, and proclaimed as follows:

[I]f I’m able to determine that [Wilson’s] amended
complaint can be filed as a matter of right, and would make

3More specifically, the new claim alleged that “[o]ne or more of the [d]efendants conspired” to
commit a breach of fiduciary duty, constructive fraud, and fraud.

-6-
 WILSON V. PERSHING, LLC

Opinion of the Court

any ruling that I make moot, then that’s what I’ll do. But
I can’t make a ruling on whether or not to hear the thing
until I hear the thing. So . . . that’s what I’m going to do.

As the hearing went forward, both parties referenced the original complaint

and the amended complaint in their arguments to the court. Toward the end of the

hearing, Judge Kincaid announced that he would dismiss all claims against

defendants, and explained that his ruling applied to the original complaint.

Defendants then sought clarification as to whether Judge Kincaid’s ruling extended

to the amended complaint. Acknowledging that he “had not determined whether or

not it ha[d] been filed as a matter of right[,]” Judge Kincaid stated that because it

was “clear argument was referenced to the amended complaint[,] I’m going to consider

that as a waiver of any objection [by defendants] to amend, allow the amendment,

and then grant the motions [to dismiss] that I just granted on the original the same

as to the amended.” Judge Kincaid also concluded that Wilson had waived any

objection to the trial court’s decision to proceed with the hearing and to rule on the

defendants’ oral motions to dismiss the amended complaint.

On 17 December 2015, Judge Kincaid entered a written order that

memorialized his oral rulings at the 2 November 2015 hearing. Judge Kincaid

concluded that all of Wilson’s claims should be dismissed pursuant to Rule 12(b)(6)

because they were time-barred by the applicable statutes of limitations. The written

order also contained additional reasons as to why Wilson’s claims against individual

-7-
 WILSON V. PERSHING, LLC

Opinion of the Court

defendants were dismissed.

The claims against Pershing, BNY Mellon, PNC, and RBCCMC were dismissed

by the court pursuant to Rule 12(b)(1) of the North Carolina Rules of Civil Procedure

for lack of standing. Judge Kincaid further ruled that dismissal was proper under

Rule 12(b)(6) because Wilson failed to allege the existence of a contractual and a

fiduciary relationship between either BNY Mellon or RBCCMC4 and Wilson, and that

Wilson failed to plead any alleged fraudulent acts by BNY Mellon and RBCCMC with

particularity, as required by Rule 9(b) of the North Carolina Rules of Civil Procedure.

The fraud claims against Synergy and JBS Liberty were also dismissed because they

failed to satisfy Rule 9(b)’s particularity requirements. Wilson appeals from the order

dismissing his claims against defendants.

II. Discussion

A. Trial Court’s Refusal to Continue the 2 November 2015 Hearing

We first address Wilson’s assertion that Judge Kincaid improperly proceeded

with the hearing on defendants’ motions to dismiss. A trial court’s ruling on a motion

to continue is reviewed for abused of discretion. Morin v. Sharp, 144 N.C. App. 369,

373, 549 S.E.2d 871, 873 (2001) (citation omitted). “[T]here is power inherent in every

court to control the disposition of causes on its docket with economy of time and effort

4 The claims against RBCCMC were also dismissed pursuant to Rule 12(b)(4) of the North
Carolina Rules of Civil Procedure for insufficient service of process.

-8-
 WILSON V. PERSHING, LLC

Opinion of the Court

for itself, for counsel, and for litigants.” Watters v. Parrish, 252 N.C. 787, 791, 115

S.E.2d 1, 4 (1960).

Initially we note that defense counsel has brought to the Court’s attention the

fact that Wilson’s brief violates Rule 28(b)(6) of the Rules of Appellate Procedure

because it does not contain a concise statement of the applicable standard of review

for this issue. The Appellate Rules are mandatory, and failure to comply with them

subjects an appeal or issue to dismissal. State v. Hart, 361 N.C. 309, 311, 644 S.E.2d

201, 202 (2007). However, our Supreme Court has held that failure to comply with a

nonjurisdictional rule, such as Rule 28(b)(6), “normally should not lead to

dismissal[,]” Dogwood Dev. & Mgmt. Co., LLC v. White Oak Transp. Co., 362 N.C.

191, 198, 657 S.E.2d 361, 365 (2008), though some other sanction pursuant to Rules

25(b) or 34 may be appropriate. Hart, 361 N.C. at 311, 644 S.E.2d at 202. In this

instance, we elect not to take any action.

Wilson argues that his motion to continue the hearing should have been

granted because the filing of his amended complaint—which occurred minutes before

the hearing—rendered defendants’ motions to dismiss the original complaint moot.

However, Wilson’s argument ignores defendants’ oral motions to dismiss the

amended complaint, and Wilson does not challenge on appeal the trial court’s

consideration of those motions.

-9-
 WILSON V. PERSHING, LLC

Opinion of the Court

It is true that defendants’ motions to dismiss the original complaint eventually

became moot. However, this did not occur until the trial court allowed Wilson to

amend the original complaint at the end of the hearing. See Houston v. Tillman, 234

N.C. App. 691, 695, 760 S.E.2d 18, 20 (2014) (holding that the “plaintiff’s amendment

and restatement of the complaint[,]” which was accepted by the trial court, “rendered

any argument [by the defendants] regarding [their motions to dismiss] the original

complaint moot”). As the hearing unfolded, defendants and Wilson referenced the

amended complaint while making their arguments. Although Judge Kincaid initially

granted the defendants’ motions to dismiss the original complaint, shortly thereafter,

he granted Wilson’s motion to amend, concluding that defendants had waived any

objection to the amendment. Judge Kincaid then dismissed the amended complaint

upon the same grounds that warranted dismissal of the original complaint.

The gravamen of Wilson’s contention is that he was prejudiced by Judge

Kincaid’s decisions to hear arguments on the original complaint, dismiss the original

complaint in its entirety, and then extend that ruling to the amended complaint.

However, we need not decide this issue. Although Wilson’s counsel argued that the

court should not proceed with the hearing, Judge Kincaid’s conclusion that Wilson

waived “any objection to the [trial court’s] consideration of the Motion to Dismiss with

respect to the Amended Complaint” has not been challenged on appeal.

- 10 -
 WILSON V. PERSHING, LLC

Opinion of the Court

Consequently, we deem this issue abandoned pursuant to Rule 28(b)(6) of the Rules

of Appellate Procedure.

B. Scope of Appeal

Because the “Issues Presented” section of Wilson’s principal brief purports to

raise thirteen issues on appeal, we must first determine whether all of those issues

are properly before us. One point of considerable dispute is whether Wilson has

preserved for appellate review the trial court’s dismissal of his claims against

Pershing, BNY Mellon, PNC, and RBCCMC for lack of standing.

Standing, which is properly challenged by a Rule 12(b)(1) motion to dismiss,

Fuller v. Easley, 145 N.C. App. 391, 395, 553 S.E.2d 43, 46 (2001), “is a necessary

prerequisite to a court’s proper exercise of subject matter jurisdiction.” Aubin v. Susi,

149 N.C. App. 320, 324, 560 S.E.2d 875, 878 (2002). “If a party does not have standing

to bring a claim, a court has no subject matter jurisdiction to hear the claim.” Estate

of Apple v. Commercial Courier Express Inc., 168 N.C. App. 175, 177, 607 S.E.2d 14,

16 (2005).

Wilson argues in his reply brief that the “Issues Presented, Statement of the

Case, relevant parts of the Statement of Facts, and Argument Section F [(Wilson’s

challenge to the trial court’s decision to proceed with the 2 November 2015 hearing)]

clearly challenge (and defeat) [the] erroneous assertion that [the standing] arguments

were abandoned.” Wilson’s position is inherently flawed for the following reasons.

- 11 -
 WILSON V. PERSHING, LLC

Opinion of the Court

To begin, the issues presented, statement of the case, and statement of the facts

sections of an appellant’s brief cannot substitute for substantive arguments on an

issue. See N.C. R. App. P. 28(b)(6) (requiring that a principal brief “contain the

contentions of the appellant with respect to each issue presented” and providing that

“[i]ssues not presented in a party’s brief, or in support of which no reason or argument

is stated, will be taken as abandoned”) (emphasis added). As Wilson’s principal brief

does not contain any substantive arguments on standing, this issue has been

abandoned. Id. Wilson’s reply brief cannot be used to correct this deficiency in his

principal brief. Larsen v. Black Diamond French Truffles, Inc., __ N.C. App. __, __,

772 S.E.2d 93, 96 (2015) (a party’s reply brief could not correct the omission of a

statement of the grounds for appellate review in the party’s principal brief); Beckles-

Palomares v. Logan, 202 N.C. App. 235, 246, 688 S.E.2d 758, 765 (2010) (the

defendant’s contention that the plaintiff’s claim was barred by the applicable statute

of repose was abandoned and the issue could not be revived via reply brief). In

addition, no portion of Wilson’s argument concerning the 2 November 2015 hearing

challenges the trial court’s dismissal on the basis of lack of standing. Because any

argument on the standing issue has been abandoned, the trial court’s dismissal of all

of Wilson’s claims against Pershing, BNY Mellon, PNC, and RBCCMC under Rule

12(b)(1) remains undisturbed.

- 12 -
 WILSON V. PERSHING, LLC

Opinion of the Court

As a result, the only issues remaining on appeal are those related to the trial

court’s dismissal of Wilson’s claims against Synergy and JBS Liberty. Wilson does

not assert that his claims for unjust enrichment, breach of contract, unfair and

deceptive trade practices, and civil conspiracy against Synergy and JBS Liberty were

improperly dismissed. Any argument that those claims were erroneously dismissed

is abandoned, N.C. R. App. P. 28(b)(6), and the trial court’s unchallenged dismissal

of those claims remains undisturbed. A careful review of Wilson’s principal brief,

however, reveals that he does specifically challenge the trial court’s Rule 12(b)(6)

dismissal of his claims against Synergy and JBS Liberty for breach of fiduciary duty,

constructive fraud, and fraud. Consequently, our review is limited to whether the

trial court erred in dismissing any or all of these three claims, as alleged against

Synergy and JBS Liberty.

C. Standard of Review under Rule 12(b)(6)

Rule 12(b)(6) provides for the dismissal of an action when the complaint “fail[s]

to state a claim upon which relief can be granted.” N.C. Gen. Stat. § 1A-1, Rule

12(b)(6) (2015). Our review of an order granting a Rule 12(b)(6) motion has several

aspects. We consider “whether the allegations of the complaint . . . are sufficient to

state a claim upon which relief can be granted under some legal theory.” Coley v.

State, 360 N.C. 493, 494-95, 631 S.E.2d 121, 123 (2006) (citation and internal

quotation marks omitted). Under this mode of review, “the well-pleaded material

- 13 -
 WILSON V. PERSHING, LLC

Opinion of the Court

allegations of the complaint are taken as true[,]” Sutton v. Duke, 277 N.C. 94, 98, 176

S.E.2d 161, 163 (1970) (citation omitted), and “the complaint is liberally construed[.]”

Wells Fargo Bank, N.A. v. Corneal, 238 N.C. App. 192, 195, 767 S.E.2d 374, 377

(2014). Legal conclusions, however, are not entitled to a presumption of validity.” Id.

Similarly, this Court is “not required . . . to accept as true allegations that are merely

conclusory, unwarranted deductions of fact, or unreasonable inferences.” Strickland

v. Hedrick, 194 N.C. App. 1, 20, 669 S.E.2d 61, 73 (2008) (citations and internal

quotation marks omitted). In sum, this Court “must conduct a de novo review of the

pleadings to determine their legal sufficiency and to determine whether the trial

court’s ruling on the motion to dismiss was correct.” Craven v. Cope, 188 N.C. App.

814, 816, 656 S.E.2d 729, 732 (2008) (citation omitted).

D. Statutes of Limitations

Judge Kincaid dismissed all of Wilson’s claims on the basis that they were

time-barred by the applicable statutes of limitations. As explained above, however,

the dismissal of Wilson’s claims for breach of fiduciary duty, fraud, and constructive

fraud against Synergy and JBS Liberty are the only issues that remain subject to

appellate review.

A Rule 12(b)(6) motion to dismiss is the proper vehicle for asserting “ ‘[a]

statute of limitations defense . . . if it appears on the face of the complaint that such

a statute bars the claim. Once the defendant raises a statute of limitations defense,

- 14 -
 WILSON V. PERSHING, LLC

Opinion of the Court

the burden of showing that the action was instituted within the prescribed period is

on the plaintiff.’ ” Birtha v. Stonemor, N. Carolina, LLC, 220 N.C. App. 286, 292, 727

S.E.2d 1, 6-7 (2012) (quoting Horton v. Carolina Medicorp, 344 N.C. 133, 136, 472

S.E.2d 778, 780 (1996)).

Wilson makes a general argument that the relevant statutes of limitations did

not begin to run until he discovered the uncashed check and unsuccessfully attempted

to negotiate it. Wilson then makes the more specific argument that he has sufficiently

“alleged his efforts supporting his diligence (including periodic meetings with his

advisors), and that his trusted advisors’ representations prevented Wilson from

learning earlier in time that the Ipswich Security Account was closed.” We disagree.

“Allegations of breach of fiduciary duty that do not rise to the level of

constructive fraud are governed by the three-year statute of limitations applicable to

contract actions contained in N.C. Gen. Stat. § 1-52(1) ([2015]).” Toomer v. Branch

Banking & Trust Co., 171 N.C. App. 58, 66, 614 S.E.2d 328, 335, disc. review denied,

360 N.C. 78, 623 S.E.2d 263 (2005). In contrast, “[a] claim of constructive fraud based

upon a breach of a fiduciary duty falls under the ten-year statute of limitations

contained in N.C. Gen. Stat. § 1-56 ([2015]).” NationsBank of N. Carolina, N.A. v.

Parker, 140 N.C. App. 106, 113, 535 S.E.2d 597, 602 (2000). Claims for actual fraud

are subject to a three-year statute of limitations. N.C. Gen. Stat. § 1-52(9) (2015).

- 15 -
 WILSON V. PERSHING, LLC

Opinion of the Court

In general, “[s]tatutes of limitation are . . . seen as running from the time of

injury, or discovery of the injury in cases where that is difficult to detect. They serve

to limit the time within which an action may be commenced after the cause of action

has accrued.” Trustees of Rowan Tech. v. Hammond Assoc., 313 N.C. 230, 234 n.3,

328 S.E.2d 274, 276-77 n.3 (1985).

With respect to actual fraud claims, “the cause of action shall not be deemed to

have accrued until the discovery by the aggrieved party of the facts constituting the

fraud or mistake.” N.C. Gen. Stat. § 1-52(9) (2015). “ ‘[D]iscovery’ means either actual

discovery or when the fraud should have been discovered in the exercise of reasonable

diligence.” State Farm Fire & Cas. Co. v. Darsie, 161 N.C. App. 542, 547, 589 S.E.2d

391, 396 (2003). The circumstances at issue dictate whether this determination falls

within the province of the jury or the trial court. Whether a plaintiff exercised due

diligence in discovering the fraud is ordinarily an issue of fact for the jury “when the

evidence is not conclusive or is conflicting.” Huss v. Huss, 31 N.C. App. 463, 468, 230

S.E.2d 159, 163 (1976). “Failure to exercise due diligence may be determined as a

matter of law, however, where it is clear that there was both capacity and opportunity

to discover the [fraud].” Spears v. Moore, 145 N.C. App. 706, 708-09, 551 S.E.2d 483,

485 (2001) (emphasis added) (citing Huss, 31 N.C. App. at 468, 230 S.E.2d at 163).

Furthermore, “it is generally held that when it appears that by reason of the

confidence reposed the confiding party is actually deterred from sooner suspecting or

- 16 -
 WILSON V. PERSHING, LLC

Opinion of the Court

discovering the fraud, he is under no duty to make inquiry until something occurs to

excite his suspicions.” Vail v. Vail, 233 N.C. 109, 116-17, 63 S.E.2d 202, 208 (1951)

(emphasis added; citation and internal quotation marks omitted).

This Court has also applied the “due diligence” standard in determining when

the statute of limitations begins to run on a claim for breach of fiduciary duty. Dawn

v. Dawn, 122 N.C. App. 493, 495, 470 S.E.2d 341, 343 (1996) (“The statute begins to

run when the claimant ‘knew or, by due diligence, should have known of the facts

constituting the basis for the claim.’ ”) (internal quotation marks omitted) (citing

Pittman v. Barker, 117 N.C. App. 580, 591, 452 S.E.2d 326, 332, review denied, 340

N.C. 261, 456 S.E.2d 833 (1995)). We also find it appropriate to apply this standard

to Wilson’s constructive fraud claim. See Hunter v. Guardian Life Ins. Co. of Am.,

162 N.C. App. 477, 485, 593 S.E.2d 595, 601 (2004) (applying the “reasonable

diligence” standard applicable to actions grounded in fraud to determine whether the

pertinent statutes of limitations barred the plaintiffs’ claims for fraud, constructive

fraud, negligent misrepresentation, and unfair and deceptive trades practices).

Here, the relevant events concerning the timing of the alleged fraudulent acts

were as follows: Wilson deposited $250,000.00 in the Ipswich Security Account in

1996; the check was issued on 23 October 1998, and it became void in April 1999; and

the Ipswich Security Account was closed in July 1999. The gravamen of Wilson’s

amended complaint is that the relevant fraudulent act occurred when the Ipswich

- 17 -
 WILSON V. PERSHING, LLC

Opinion of the Court

Security Account funds were “secretly” transferred in July 1999. Wilson

inadvertently came across the check in 2013 after he “discovered [and searched]

Ipswich’s detailed documentary records that had been kept in storage for [him].” In

pleading his claims for breach of fiduciary duty and constructive fraud, Wilson alleges

that:

95. Despite meeting with his trusted advisors on regular
basis until through at least 2005, at no point was Wilson
notified or did Wilson receive a statement indicating that
funds in the Ipswich Security Account were transferred or
the Ipswich Security Account was closed.
...

98. Wilson placed his confidence and trust in the
Defendants and the Defendants acted in a manner that did
not cause Wilson to become suspicious. This relationship of
trust and confidence delayed Wilson’s discovery of the
fraud, and until Wilson’s recent discovery of the check and
refusal to honor the check or provide funds in the Ipswich
Security Accounts, the refusal to provide Wilson with
information regarding the Trust Account, and the “No
Action Letter,” the acts of one or more of the Defendants
were only recently discovered and could not have been
discovered with reasonable diligence, until recently.

Paragraph 127 of Wilson’s fraud claim contains the allegation that “one or more of

the Defendants intentionally failed to disclose [the transfer of the Ipswich Security

Account funds in July 1999] to Wilson intending to fraudulently conceal knowledge

of the transfer to Wilson.”

Critically, despite the conclusory allegation at the end of paragraph 98, Wilson

fails to allege how the exercise of due diligence would not have led Wilson to discover

- 18 -
 WILSON V. PERSHING, LLC

Opinion of the Court

that the funds had been transferred or withdrawn. Wilson had the capacity to

investigate the Ipswich Security Account’s status at any time, as the account was

opened with his funds for his benefit, and the check was found in the “detailed

documentary records” that had been kept for him. There is no allegation that Wilson

was denied access to his own files. Wilson also had the opportunity to discover that

the funds had been transferred simply by inquiring as to the account’s status or

balance. Significantly, Wilson alleges that his “trusted advisors” never notified him

or furnished him with a statement indicating that the Ipswich Security Account had

been closed. It is possible that Wilson’s advisors were tasked with handling certain

matters related to the Harbor Cove project, and that they made representations that

lulled Wilson into a sense of security. But those advisors have not been named in

this action. Nothing in the amended complaint suggests that any of the defendants

(or their predecessors in interest) took any action or made any representation that

prevented Wilson from learning about the issuance of the check or the subsequent

transfer of funds. Although Wilson alleges that his trusted advisors never furnished

him with a statement concerning the transfer of funds, Wilson does not allege that

any of the defendants failed to issue such a statement. Similarly, while paragraph

127 in the amended complaint contains the conclusory allegation that one or more

defendants fraudulently concealed the transfer, Wilson does not allege that he was

denied access in any manner to information concerning the Ipswich Security Account.

- 19 -
 WILSON V. PERSHING, LLC

Opinion of the Court

“Our courts have determined that a plaintiff cannot simply ignore facts which

should be obvious to him or would be readily discoverable upon reasonable inquiry.”

S.B. Simmons Landscaping & Excavating, Inc. v. Boggs, 192 N.C. App. 155, 161-62,

665 S.E.2d 147, 151 (2008) (emphasis added) (citing Peacock v. Barnes, 142 N.C. 215,

218, 55 S.E. 99, 100 (1906)). Moreover, even assuming that relationships of trust and

confidence existed between Wilson and Synergy, and Wilson and JBS Liberty,

Wilson’s failure to use due diligence in discovering the allegedly fraudulent acts could

be excused only if he were “actually deterred” from “suspecting or discovering the

fraud.” Vail, 233 N.C. at 116, 63 S.E.2d at 208. Based on the unique circumstances

of this case, we conclude that had Wilson made a reasonably diligent inquiry, he could

have discovered the acts of which he now complains, or the lack thereof. Our

conclusion rests upon the notion that Wilson was ultimately responsible for his own

affairs. If Wilson’s advisors negligently or fraudulently deterred him from inquiring

as to the status of the $250,000.00 principal (plus gains) contained in the Ipswich

Security Account, those advisors should have been named in this action. Wilson has

not alleged that any defendant denied him the opportunity to investigate,5 and

nothing in the amended complaint—apart from references to trusted advisors—

5 We note that while paragraph 129 of Wilson’s fraud claim contains a very general allegation
that one of more of defendants “are intentionally withholding information”—meaning, currently
withholding information—from him, Wilson fails to allege that he was denied the opportunity to
investigate the Ipswich Security Account’s status before or at the time when the allegedly fraudulent
transfer took place (July 1999), or at any point until he discovered the check in 2013. (Emphasis
added).

- 20 -
 WILSON V. PERSHING, LLC

Opinion of the Court

suggests that Wilson lacked the capacity to discover the alleged fraud when it

supposedly occurred in 1999. Accordingly, Wilson’s failure to use due diligence in

discovering the alleged fraud has been established as a matter of law. Wilson’s

arguments are without merit, and the trial court properly concluded that all of

Wilson’s claims—including the claims against Synergy and JBS Liberty—were

barred by the applicable statutes of limitations.

III. Conclusion

For the reasons stated above, we affirm the trial court’s order dismissing all of

Wilson’s claims against defendants.

AFFIRMED.

Judges BRYANT and INMAN concur.

- 21 -