QUB Studios, LLC v. Marsh

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA18-205

Filed: 6 November 2018

Guilford County, No. 16 CVS 614

QUB STUDIOS, LLC and ERIC ROBERT, Plaintiffs

v.

PHILLIP MARSH and ASHLEY JENKINS, Defendants

Appeal by defendant from order and judgment entered 18 August 2017 by

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

Appeals 3 October 2018.

Roberson Haworth & Reese, P.L.L.C., by Christopher C. Finan and Shane T.
Stutts, for plaintiff-appellees.

Teague, Rotenstreich, Stanaland, Fox & Holt, PLLC, by Kara V. Bordman and
Lyn K. Broom, for defendant-appellant Ashley Jenkins.

CALABRIA, Judge.

Where plaintiffs’ motion to reconsider was premised upon clerical error, and

not an error of law, the trial court had jurisdiction to consider it. Where defendant

does not challenge the trial court’s decision to grant a motion for relief pursuant to

Rule 60(b)(6) of the North Carolina Rules of Civil Procedure, such argument is

abandoned and we find no error. Where plaintiffs’ original complaint gave clear

notice of the subject matter to defendants, and their amended complaint served only

to properly reference a previously-attached exhibit, the trial court did not err in

permitting the amended complaint to relate back to the original. Where defendant’s
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Opinion of the Court

motions for relief constituted an impermissible collateral attack, the trial court did

not err in denying them. Where the trial court possessed subject matter jurisdiction,

it did not err in denying defendant’s motion to dismiss for lack of subject matter

jurisdiction. Where plaintiffs’ amended complaint related back to their original

complaint, the trial court did not err in denying defendant’s motion to dismiss for

failure to state a claim.

Where defendant failed to offer any evidence that the trial court lacked

personal jurisdiction over him, and in fact participated in the prior litigation in this

matter, the trial court did not err in denying his motion to dismiss for lack of personal

jurisdiction. Where no material issues of fact remained to be resolved, the trial court

did not err in granting plaintiffs’ motion for judgment on the pleadings. Where the

trial court entered judgment on the pleadings, the entry of findings of fact would have

been inappropriate, and the trial court did not err in denying defendant’s request for

written findings of fact. We affirm.

I. Factual and Procedural Background

On 20 June 2006, summary judgment was entered against Phillip Marsh

(“Marsh”) and Ashley Jenkins (“Jenkins”) (collectively, “defendants”), in favor of QUB

Studios, LLC (“QUB”) and Eric Robert (“Robert”) (collectively, “plaintiffs”). This

judgment ordered defendants to pay damages to plaintiffs. On 8 June 2016, plaintiffs

filed a complaint against defendants, alleging that defendants had failed to pay, and

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seeking treble damages plus attorney’s fees. On 15 August 2016, the Clerk of Court

entered default against Marsh for failure to plead.

On 19 September 2016, Jenkins filed his answer, denying the allegations in

the complaint, and moving to dismiss pursuant to Rules 12(b)(1), (2), (4), and (6) of

the North Carolina Rules of Civil Procedure, and pursuant to the statute of

limitations. Jenkins further moved for relief from the original summary judgment

pursuant to Rule 60(b) of the North Carolina Rules of Civil Procedure, and for a jury

trial.

On 17 November 2016, plaintiffs moved for summary judgment. On 10 March

2017, the trial court granted summary judgment in favor of plaintiffs against Marsh,

against whom default had been entered. That same day, in a separate order, the trial

court held that plaintiffs’ complaint failed to state a claim upon which relief could be

granted with respect to Jenkins. It therefore granted Jenkins’ motion to dismiss

pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure; denied

plaintiffs’ motion for summary judgment; and denied Jenkins’ remaining motions.

On 22 March 2017, plaintiffs filed a motion to reconsider, seeking relief from

judgment and to amend their complaint, alleging that Jenkins’ motion to dismiss was

successful due to “a mere technicality of pleading.” On 17 April 2017, the trial court

granted the motion, set aside its prior order, and allowed plaintiffs to amend their

complaint. On 16 June 2017, plaintiffs moved for judgment on the pleadings. On 17

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July 2017, Jenkins requested that the court make findings of fact and conclusions of

law on each of its rulings on his motions, pursuant to Rule 52(a) of the North Carolina

Rules of Civil Procedure.

On 18 August 2017, the trial court entered its order on plaintiffs’ motion for

judgment on the pleadings and Jenkins’ motions to dismiss and for relief from

judgment. The court denied Jenkins’ motions, with prejudice, granted plaintiffs’

motion for judgment on the pleadings, and awarded damages to plaintiffs. Jenkins

appeals.

II. Jurisdiction

In his first argument, Jenkins contends that the trial court lacked jurisdiction

to consider plaintiffs’ motion to reconsider and motion to amend. We disagree.

A. Standard of Review

“Whether a trial court has subject-matter jurisdiction is a question of law,

reviewed de novo on appeal.” McKoy v. McKoy, 202 N.C. App. 509, 511, 689 S.E.2d

590, 592 (2010).

B. Analysis

Plaintiffs’ motions for relief and reconsideration were filed pursuant to Rule

60(b) of the North Carolina Rules of Civil Procedure, and premised upon “mistake,

inadvertence, surprise, or excusable neglect.” On appeal, however, Jenkins contends

that the trial court lacked jurisdiction to consider these motions.

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Jenkins contends, and we recognize, that “Rule 60(b) provides no specific relief

for ‘errors of law’ and our courts have long held that even the broad general language

of Rule 60(b)(6) does not include relief for ‘errors of law.’ ” Hagwood v. Odom, 88 N.C.

App. 513, 519, 364 S.E.2d 190, 193 (1988). Jenkins argues that plaintiffs’ motion,

seeking “to correct an error of law[,]” was therefore not proper.

It is here that we must disagree with Jenkins. It is true that Rule 60(b) is not

designed to review errors of law, and does not provide relief therefrom. But plaintiffs’

motion was not premised upon an error of law. Plaintiffs’ motion was premised upon

the fact that their initial complaint included two exhibits, but only properly

referenced one of them. The error plaintiffs cited was therefore not an error of law,

but rather an error of the clerical variety.

Because plaintiffs’ motion sought relief based upon plaintiffs’ inadvertent

clerical error, and not an error of law, relief pursuant to Rule 60(b) was appropriate.

We therefore hold that the trial court possessed the jurisdiction to consider the

motion.

III. Motions for Relief

In his second and third arguments, Jenkins contends that the trial court erred

in granting plaintiffs’ motion for relief, and in denying Jenkins’ motions for relief. We

disagree.

A. Standard of Review

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“[A] motion for relief under Rule 60(b) is addressed to the sound discretion of

the trial court and appellate review is limited to determining whether the court

abused its discretion.” Sink v. Easter, 288 N.C. 183, 198, 217 S.E.2d 532, 541 (1975).

B. Plaintiffs’ Motion to Reconsider

Jenkins contends that plaintiffs “did not submit any evidence/facts to meet the

requirements of Rule 60(b)(1) or (6) in order for the trial court to have a basis to grant

[plaintiffs’] Rule 60 motion.” Accordingly, Jenkins contends that the trial court erred

in granting the motion.

Rule 60 of the North Carolina Rules of Civil Procedure governs motions for

relief from a judgment or order. Specifically, Rule 60(b) provides that:

On motion and upon such terms as are just, the court may
relieve a party or his legal representative from a final
judgment, order, or proceeding for the following reasons:

(1) Mistake, inadvertence, surprise, or excusable
neglect;

...

(6) Any other reason justifying relief from the operation
of the judgment.

N.C.R. Civ. P. 60(b). Jenkins contends, and we acknowledge, that although attorney

error may constitute grounds for relief pursuant to Rule 60(b)(1), ignorance,

carelessness, or similarly negligent mistakes evincing a lack of due care do not. See

Briley v. Farabow, 348 N.C. 537, 546, 501 S.E.2d 649, 655 (1998). However, what is

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required is some showing that counsel not only erred, but did so in a negligent manner

evincing a lack of due care. Jenkins offers nothing to support a contention that

plaintiffs’ counsel was negligent in its mistake.

If Jenkins made such a showing, however, that argument would apply only to

plaintiffs’ motion pursuant to Rule 60(b)(1). Jenkins makes no argument with respect

to the motion pursuant to Rule 60(b)(6), the catch-all “any other reason” provision of

the rule. Because Jenkins fails to argue this, we deem such argument abandoned.

See N.C.R. App. P. 28(b)(6) (“[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”). In the absence

of an argument that the trial court erred in granting plaintiffs’ motion pursuant to

the catch-all provision of Rule 60(b), we hold that the trial court did not err.

C. Plaintiffs’ Motion to Amend

Jenkins further contends that allowing the amendment of the complaint to

relate back was prejudicial and erroneous. However, Rule 15(c) of the North Carolina

Rules of Civil Procedure, which governs the relation back of amended pleadings,

provides that “[a] claim asserted in an amended pleading is deemed to have been

interposed at the time the claim in the original pleading was interposed, unless the

original pleading does not give notice of the transactions, occurrences, or series of

transactions or occurrences, to be proved pursuant to the amended pleading.” N.C.R.

Civ. P. 15(c).

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In the instant case, the original complaint named each of the parties, the

judgments, and the events central to plaintiffs’ claim. The only difference between

the original complaint and the complaint plaintiffs sought to introduce as amended

was the reference, in the complaint itself, to the attached exhibits. Clearly, the

complaint gave notice of the subject matter to both defendants, and Rule 15(c)

permitted the amended complaint to relate back to the original. Again, we hold that

the trial court did not err in permitting the complaint to relate back.

D. Jenkins’ Motions for Relief

In response to plaintiffs’ complaint and amended complaint, Jenkins sought

relief from the original summary judgment motion upon which the entire complaint

was predicated, pursuant to multiple subsections of Rule 60(b). On appeal, Jenkins

contends that the trial court erred in denying these motions for relief.

We note that, unlike plaintiffs’ standalone Rule 60(b) motion, which clearly

and in detail explained plaintiffs’ position and reason for seeking relief, the Rule 60(b)

motions found in Jenkins’ answers are summary and lack any explanation or support.

We further note that, on appeal, Jenkins addresses only his motions pursuant to Rule

60(b)(4) and (6). Since Jenkins raises no arguments with respect to his other Rule

60(b) motions, we deem such arguments abandoned. See N.C.R. App. P. 28(b)(6)

(“[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”).

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All this said, Jenkins’ unsuccessful Rule 60(b) motions differ from plaintiffs’ in

one key detail. Plaintiffs’ motion sought relief from a prior order in the instant case.

Jenkins’ motions, however, sought relief from an order in a separate case.

“ ‘A collateral attack is one in which a plaintiff is not entitled to the relief

demanded in the complaint unless the judgment in another action is adjudicated

invalid.’ ” Clayton v. N.C. State Bar, 168 N.C. App. 717, 719, 608 S.E.2d 821, 822

(2005) (quoting Thrasher v. Thrasher, 4 N.C. App. 534, 540, 167 S.E.2d 549, 553

(1969)). “North Carolina does not allow collateral attacks on judgments.” Id. (quoting

Regional Acceptance Corp. v. Old Republic Surety Co., 156 N.C. App. 680, 682, 577

S.E.2d 391, 392 (2003)). Jenkins’ motions for relief in the instant case could not have

been granted unless the judgment in the prior case was adjudicated invalid. Jenkins’

motions, had they been made in the prior case, may have been appropriate, but here

they constituted an impermissible collateral attack. Accordingly, we hold that the

trial court did not err in denying Jenkins’ Rule 60(b) motions.

IV. Motions to Dismiss

In his fourth argument, Jenkins contends that the trial court erred in denying

his motions to dismiss. We disagree.

A. Standard of Review

“We review Rule 12(b)(1) motions to dismiss for lack of subject matter

jurisdiction de novo and may consider matters outside the pleadings.” Harris v.

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Matthews, 361 N.C. 265, 271, 643 S.E.2d 566, 570 (2007). “The standard of review of

an order determining personal jurisdiction is whether the findings of fact by the trial

court are supported by competent evidence in the record; if so, this Court must affirm

the order of the trial court.” Replacements, Ltd. v. MidweSterling, 133 N.C. App. 139,

140-41, 515 S.E.2d 46, 48 (1999). With regard to Rule 12(b)(6), “[t]his 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.”

Leary v. N.C. Forest Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4, aff’d per

curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).

B. Analysis

Jenkins moved to dismiss the complaint pursuant to Rule 12(b)(1), governing

subject matter jurisdiction; Rule 12(b)(2), governing personal jurisdiction; and Rule

12(b)(6), governing failure to state a claim. On appeal, he contends that the trial

court erred in denying his motions to dismiss.

With respect to subject matter jurisdiction, we first note that the instant

complaint, seeking enforcement of the prior judgment, was proper. Jenkins does not

challenge it, and such challenge is therefore deemed abandoned. See N.C.R. App. P.

28(b)(6) (“[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”). Moreover, as we have already

discussed above, the trial court had jurisdiction to consider plaintiffs’ motion for

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relief, and plaintiffs’ amended complaint properly related back to the original.

Accordingly, we hold that the trial court had subject matter jurisdiction, and did not

err in denying Jenkins’ motion to dismiss pursuant to Rule 12(b)(1).

With respect to failure to state a claim, Jenkins contends that the amended

complaint would have been dated 2017, more than the ten-year statute of limitations

beyond the original 2006 order which plaintiffs sought enforced. Jenkins contends

that the amended complaint does not relate back to the original, and thus fails to

satisfy the statute of limitations on its face. Again, however, we have addressed this

argument above. The amended complaint properly related back to the original

complaint, and therefore complied with the necessary statute of limitations. We hold

that the trial court therefore did not err in denying Jenkins’ motion to dismiss

pursuant to Rule 12(b)(6).

Lastly, with respect to personal jurisdiction, Jenkins’ argument is oddly

conclusory. Jenkins cites North Carolina’s two-prong analysis to determine whether

a non-resident is subject to personal jurisdiction. Jenkins then cites the case of

Whitener v. Whitener, 56 N.C. App. 599, 289 S.E.2d 887 (1982), along with a brief

summary of its facts. Jenkins then concludes, simply, that “[o]n these facts, our Court

of Appeals concluded that there was no personal jurisdiction, . . . and there is none

here with regard to Jenkins.” Thus, although Jenkins offers case law concerning

personal jurisdiction generally, he offers no factual basis as to why the trial court

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lacked personal jurisdiction over him specifically. Nor does he indicate any evidence

in the record, nor can we find any, which may support this otherwise summary and

unsubstantiated defense. Moreover, it cannot be overstated that this matter is

premised upon a prior judgment which was entered in Guilford County, to which

Jenkins was a party and in which Jenkins participated. As such, we hold that the

trial court did not err in denying Jenkins’ motion to dismiss pursuant to Rule 12(b)(2).

For all these reasons, we hold that the trial court did not err in denying

Jenkins’ motions to dismiss.

V. Judgment on the Pleadings

In his fifth argument, Jenkins contends that the trial court erred in granting

plaintiffs’ motion for judgment on the pleadings. We disagree.

A. Standard of Review

“This Court reviews a trial court’s grant of a motion for judgment on the

pleadings de novo.” Carpenter v. Carpenter, 189 N.C. App. 755, 757, 659 S.E.2d 762,

764 (2008). “[A] motion for judgment on the pleadings should not be granted unless

the movant clearly establishes that no material issue of fact remains to be resolved

and that the movant is entitled to judgment as a matter of law.” Minor v. Minor, 70

N.C. App. 76, 78, 318 S.E.2d 865, 867 (1984).

B. Analysis

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Jenkins contends that he “asserted affirmative defenses including assertions

of fact which if taken as true, created fact issues to be decided by a jury.” If this were

true, it would have precluded the trial court from granting judgment on the pleadings.

However, the examples Jenkins gives are various collateral attacks on the original

summary judgment order. As we stated above, these collateral attacks are

impermissible. Notwithstanding Jenkins’ contentions to the contrary, it is

undisputed that summary judgment was entered against Jenkins and Marsh in the

prior proceeding.

Jenkins additionally contends that the trial court “took judicial notice of the

entire contents of the court file for the 2006 matter which converted the motion to one

for summary judgment.” Jenkins contends that the trial court erred in doing so.

Although there is not significant case law on point within our jurisdiction, we

note that the Supreme Court of the United States has addressed this issue

unambiguously, stating that “courts must consider the complaint in its entirety, as

well as other sources courts ordinarily examine when ruling on Rule 12(b)(6) motions

to dismiss, in particular, documents incorporated into the complaint by reference, and

matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues &

Rights, Ltd., 551 U.S. 308, 322, 168 L. Ed. 2d 179, 193 (2007). We find this reasoning

persuasive, and agree. The distinction between a Rule 12(c) motion for judgment on

the pleadings and a Rule 56 motion for summary judgment is that the latter may

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require an evidentiary hearing. In the situation where the trial court takes judicial

notice of an established fact – such as the record of the prior proceeding – no hearing

is required. As such, the trial court did not convert the proceeding into one for

summary judgment by taking judicial notice.

Jenkins presents no other purported issues of fact which might preclude a

judgment on the pleadings. Accordingly, we hold that the trial court did not err in

granting plaintiffs’ motion for judgment on the pleadings.

VI. Request for Findings

In his sixth argument, Jenkins contends that the trial court erred in denying

his request for findings of fact. We disagree.

A. Standard of Review

“Although it would be the better practice to do so when ruling on a Rule 60(b)

motion, the trial court is not required to make findings of fact unless requested to do

so by a party.” Nations v. Nations, 111 N.C. App. 211, 214, 431 S.E.2d 852, 855 (1993)

(citing N.C.R. Civ. P. 52(a)(2)).

B. Analysis

Prior to the entry of the trial court’s written order, Jenkins filed a motion

pursuant to Rule 52(a) of the North Carolina Rules of Civil Procedure, requesting

that the trial court enter findings of fact and conclusions of law when entering its

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written order. The trial court denied this motion. On appeal, Jenkins contends that

this was error.

Jenkins notes, and we agree, that it is appropriate for the trial court to enter

findings of fact and conclusions of law when ruling on motions for relief pursuant to

Rule 60(b). See Condellone v. Condellone, 137 N.C. App. 547, 550, 528 S.E.2d 639,

642 (2000). In such a circumstance, it would be appropriate for a party to actively

request such findings and conclusions pursuant to Rule 52(a).

However, this Court has noted that, where judgment is appropriate as a matter

of law, the entry of findings of fact is contraindicated. For example, this Court has

held that “Rule 52(a)(2) does not apply to the decision on a summary judgment motion

because, if findings of fact are necessary to resolve an issue, summary judgment is

improper.” Stone v. Conder, 46 N.C. App. 190, 195, 264 S.E.2d 760, 763 (1980). In

that same case, this Court held that “[i]n determining a motion for summary

judgment, the trial judge is not required to make finding [sic] of fact and conclusions

of law and when he does make same, they are disregarded on appeal.” Id. (emphasis

added, citation and quotation marks omitted).

In the instant case, the matter was decided on the pleadings pursuant to Rule

12(c) – that is, as a matter of law. Findings of fact were not necessary for the trial

court to reach its determination. Rather, if the trial court had to determine facts,

judgment on the pleadings would not have been appropriate. Id. Accordingly, we

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hold that the trial court did not abuse its discretion in denying Jenkins’ motion for

written findings of fact and conclusions of law.

VII. Conclusion

We hold that the trial court possessed subject matter jurisdiction to hear this

case. The trial court did not err in granting plaintiffs’ Rule 60 motion, nor in denying

Jenkins’. The trial court did not err in denying Jenkins’ motions to dismiss. The trial

court did not err in granting judgment on the pleadings in favor of plaintiffs. Because

judgment on the pleadings is a judgment as a matter of law, findings of fact would

have been inappropriate, and the trial court did not err in denying Jenkins’ motion

for written findings of fact.

AFFIRMED.

Judges TYSON and ZACHARY concur.

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