IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA19-58
Filed: 20 August 2019
Currituck County, No. 18-CVD-93
DOROTHY P. VOLIVA, Plaintiff,
v.
CHARLES DUDLEY and WENDY CHLOE GREWE, Defendants.
Appeal by Defendants from order entered 6 September 2018 by Judge Robert
P. Trivette in Currituck County District Court. Heard in the Court of Appeals 9 May
2019.
Trimpi & Nash, LLP, by John G. Trimpi, for Plaintiff-Appellee.
Sharp, Graham, Baker & Varnell, LLP, by Casey C. Varnell, for Defendants-
Appellants.
COLLINS, Judge.
Defendants Charles Dudley and Wendy Chloe Grewe appeal from an order
denying their motion to dismiss and motion for judgment on the pleadings made
pursuant to North Carolina Rules of Civil Procedure 12 and 56, and granting
Plaintiff’s motion for summary judgment made pursuant to Rule 56 on Plaintiff’s
cause of action alleging breach of contract. Defendants contend that the trial court
erred by granting Plaintiff’s motion for summary judgment because genuine issues of
material fact exist that preclude summary judgment in Plaintiff’s favor, and that the
VOLIVA V. DUDLEY
Opinion of the Court
trial court erred by denying Defendants’ motion for judgment on the pleadings
because the purported contract was illegally procured and unenforceable as a matter
of law. We reverse and remand in part and affirm in part.
I. Background
Amy Cassandra Dudley Payne died testate in April 2013, naming Plaintiff as
the desired executrix of her estate. On 7 May 2013, Plaintiff filed an application for
probate and letters testamentary with the Clerk of Superior Court. The Clerk
probated the Payne will and issued Plaintiff letters testamentary the same day.
The Payne will provided, in relevant part, that Plaintiff was to sell certain real
property owned by the decedent and to distribute the net proceeds of the sale equally
amongst the three beneficiaries: Tony Voliva, Defendant Dudley, and Defendant
Grewe (collectively, the “Beneficiaries”). On 11 March 2014, pursuant to the desires
of the Beneficiaries, Plaintiff and the Beneficiaries filed a verified petition in the
Superior Court seeking the court’s permission to allow Plaintiff to deviate from the
terms of the will by foregoing the contemplated sale and conveying the real property
to the Beneficiaries instead. The Superior Court entered an order on 12 March 2014
allowing the deviation and the conveyance. Plaintiff had the real property surveyed
and divided into three parcels, and conveyed one parcel to each of the Beneficiaries.
On 2 December 2014, Plaintiff filed an application in the Superior Court
seeking an executor’s commission of $4,504.38, which amounted to five percent of the
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Opinion of the Court
total receipts and disbursements of the Payne estate. The Clerk entered an order the
same day granting Plaintiff the commission she sought. On 7 February 2018,
Plaintiff filed a final account in the Superior Court, and the Clerk approved the final
account on 12 February 2018.
On 7 March 2018, Plaintiff filed a complaint in the District Court (the “trial
court”) seeking to enforce the terms of a promissory note executed by the Beneficiaries
on 24 January 2014 (the “Note”), which Plaintiff attached as an exhibit to her
complaint. Per the terms of the Note, the Beneficiaries became jointly and severally
liable to Plaintiff in the amount of $15,000 “FOR VALUE RECEIVED.” The Note
does not reference the Payne will or otherwise describe what value was provided in
exchange for the Beneficiaries’ promise to pay. In the complaint, Plaintiff alleges that
Tony Voliva, who is her son, is the only beneficiary who has paid her anything under
the Note. Plaintiff seeks to enforce the Note against Defendants only, and seeks the
balance of the principal due on the Note plus interest, attorney’s fees, and costs.
On 15 May 2018, Defendants filed a motion to dismiss pursuant to N.C. Gen.
Stat. § 1A-1, Rule 12(b)(6), and answered the complaint, raising the defenses of lack
of consideration; fraud, duress, and undue influence; and unclean hands. Defendants’
motion to dismiss and answer included a number of factual allegations, including that
“[t]he entire claim of the Plaintiff and alleged consideration for the subject promissory
note stems directly from” the probate of the Payne will, and that after Defendants
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Opinion of the Court
“suggested” to Plaintiff that they preferred the partition and conveyance of the real
property to the sale, “Plaintiff informed the Defendants that [Plaintiff] would not
agree to or allow an in-kind partition of the Property unless and until the Defendants
executed” the Note. On 13 July 2018, Defendants filed a motion for judgment on the
pleadings pursuant to N.C. Gen. Stat. § 1A-1, Rules 12(c) and 56, arguing that there
exist no genuine issues of material fact and that Defendants were entitled to
judgment as a matter of law.
On 31 July 2010, Plaintiff filed a motion for summary judgment under Rule
56, arguing that there exist no genuine issues of material fact and that Plaintiff was
entitled to judgment as a matter of law. Plaintiff attached to her motion for summary
judgment two affidavits: one of her own, and one executed by William Brumsey, III,
the attorney who both helped Plaintiff administer the Payne estate and drafted the
Note on behalf of the Beneficiaries. In her own affidavit, Plaintiff states that she
“never spoke to or had any conversation with either of the defendants pertaining to
the transaction in question or the [Note],” and that the Note was “the result of a
negotiated settlement arrangement between [Tony Voliva] and the two defendants in
this action.”
On 13 August 2018, Defendants filed verifications in which they stated that
the 15 May 2018 motion to dismiss and answer “is true of [their] own knowledge,
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Opinion of the Court
except as to those matters and things stated on information and belief,” which
Defendants stated they believed to be true.
On 6 September 2018, the trial court entered an order (1) granting Plaintiff’s
motion for summary judgment, (2) denying Defendants’ motions, and (3) ordering
Defendants to pay Plaintiff damages, attorney’s fees, and costs. Defendants timely
appealed.
II. Discussion
Defendants contend that the trial court erred by (1) granting Plaintiff’s motion
for summary judgment because genuine issues of material fact exist that preclude
summary judgment in Plaintiff’s favor and (2) denying Defendants’ motion for
summary judgment1 because the purported contract was illegally procured and
unenforceable as a matter of law.
a. Standard of review
Summary judgment is proper “if 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 (2018). “The party
1 As the parties each recognize in their briefs, the fact that the trial court was presented with
evidence outside of the pleadings (e.g., Defendants’ verified factual allegations in their 15 May 2018
motion to dismiss and answer) and did not exclude said evidence converted Defendants’ motion for
judgment on the pleadings into a motion for summary judgment. See N.C. Gen. Stat. § 1A-1, Rules
12(c) and 56.
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Opinion of the Court
moving for summary judgment ultimately has the burden of establishing the lack of
any triable issue of fact.” Pembee Mfg. Corp. v. Cape Fear Const. Co., 313 N.C. 488,
491, 329 S.E.2d 350, 353 (1985). We review a trial court’s order granting or denying
summary judgment de novo. Variety Wholesalers, Inc. v. Salem Logistics Traffic
Servs., LLC, 365 N.C. 520, 523, 723 S.E.2d 744, 747 (2012).
b. Analysis
This is an action alleging breach of contract.2 “The elements of a claim for
breach of contract are (1) existence of a valid contract and (2) breach of the terms of
that contract.” Supplee v. Miller-Motte Bus. Coll., Inc., 239 N.C. App. 208, 216, 768
S.E.2d 582, 590 (2015) (citation omitted). The questions for this Court are therefore
(1) whether the trial court properly concluded that Plaintiff succeeded in meeting her
burden of establishing that the pleadings, depositions, answers to interrogatories,
admissions on file, and affidavits show that there exist no genuine issues of material
fact regarding whether (a) the Note is a valid contract and (b) Defendants breached
the Note, and that Plaintiff was accordingly entitled to judgment as a matter of law,
and (2) whether the trial court properly concluded that Defendants failed in meeting
their burden of establishing that the same documents show there exist no genuine
2 Defendants do not contest Plaintiff’s standing to bring suit under the Note. While not herself
a party to the Note, since she was the intended beneficiary of the Note, Plaintiff may bring suit under
the Note pursuant to the third-party beneficiary doctrine. See Raritan River Steel Co. v. Cherry,
Bekaert & Holland, 329 N.C. 646, 651, 407 S.E.2d 178, 181 (1991) (discussing third-party beneficiary
doctrine).
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Opinion of the Court
issues of material fact regarding the same issues and that Defendants are entitled to
judgment as a matter of law.
Defendants admit that they signed the Note obligating them to pay Plaintiff,
and do not allege that they have paid Plaintiff anything pursuant thereto.
Defendants’ breach of the Note is therefore not in dispute.
Defendants argue, however, that the Note is unenforceable for lack of
consideration and because of fraud/duress/undue influence attributable to Plaintiff,3
and that the Note is therefore not a valid contract. The gravamen of Defendants’
argument is that Plaintiff, as executrix of the Payne estate, had a fiduciary duty to
Defendants, as beneficiaries of the Payne will, and that Plaintiff breached her duty
by demanding that Defendants execute the Note in her favor in exchange for her
agreement to support the in-kind conveyance of the real property.
An executrix is a fiduciary to the beneficiaries of the estate she administers.
See Fortune v. First Union Nat’l Bank, 323 N.C. 146, 149, 371 S.E.2d 483, 485 (1988);
N.C. Gen. Stat. § 32-2(a) (2018). “Fiduciaries must act in good faith. They can never
paramount their personal interest over the interest of those for whom they have
assumed to act.” Miller v. McLean, 252 N.C. 171, 174, 113 S.E.2d 359, 362 (1960).
3 Defendants make no arguments regarding unclean hands in their brief, and we accordingly
consider that issue abandoned for purposes of this appeal. N.C. R. App. P. 28(b)(6) (2018) (“Issues 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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“Both by law and the words of h[er] oath [an executrix] must faithfully execute the
trust imposed in [her]. [Sh]e must be impartial. [Sh]e cannot use [her] office for [her]
personal benefit.” In re Will of Covington, 252 N.C. 551, 553, 114 S.E.2d 261, 263
(1960).
If able to convince the factfinder that Plaintiff demanded the Note in exchange
for an agreement to perform her duties as executrix in violation of a fiduciary duty
owed to them, Defendants could have the Note set aside, e.g., under the doctrine of
constructive fraud. See Crumley & Assocs., P.C. v. Charles Peed & Assocs., P.A., 219
N.C. App. 615, 620, 730 S.E.2d 763, 767 (2012) (“To establish constructive fraud, a
plaintiff must show that defendant (1) owes plaintiff a fiduciary duty; (2) breached
this fiduciary duty; and (3) sought to benefit h[er]self in the transaction.”); Mehovic
v. Mehovic, 133 N.C. App. 131, 135, 514 S.E.2d 730, 733 (1999) (“a party alleging
fraud must elect either the remedy of rescission or that of damages”).
Defendants filed verifications of their motion to dismiss and answer, in which
they swore on personal knowledge that Plaintiff told Defendants she would not allow
the in-kind conveyance of the real property unless Defendants executed the Note in
her favor. Defendants’ verifications satisfy the requisite criteria to be treated as an
affidavit for purposes of summary judgment. See Daniel v. Daniel, 132 N.C. App. 217,
219, 510 S.E.2d 689, 690 (1999) (“A verified pleading may be treated as an affidavit
for summary judgment purposes if it: (1) is made on personal knowledge; (2) sets forth
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Opinion of the Court
such facts as would be admissible into evidence[4]; and (3) shows affirmatively that
the affiant is competent to testify to the matters stated therein.” (citing Rule 56(e)).
Plaintiff subsequently filed affidavits of her own, however, denying
Defendants’ allegations and asserting that she never spoke with Defendants
regarding the Note. The parties’ contradictory affidavits create genuine issues of fact
which, if material, preclude summary judgment. Hyde v. Taylor, 70 N.C. App. 523,
528, 320 S.E.2d 904, 907 (1984).
The question of whether Plaintiff demanded the Note in exchange for
supporting the in-kind conveyance of the real property is material to the question of
the Note’s validity and enforceability. By virtue of the material uncertainty
concerning the way the Note came into being5 created by the parties’ contradictory
4 While the parol evidence rule “prevents the introduction of extrinsic evidence of agreements
or understandings contemporaneous with or prior to execution of a written instrument when the
extrinsic evidence is used to contradict, vary, or explain the written instrument[,]” Carolina First Bank
v. Stark, Inc., 190 N.C. App. 561, 568, 660 S.E.2d 641, 646 (2008) (citation omitted), parol evidence is
admissible to establish contract defenses like those raised by Defendants. See Phelps-Dickson
Builders, L.L.C. v. Amerimann Partners, 172 N.C. App. 427, 437 n.3, 617 S.E.2d 664, 670 n.3 (2005)
(“[T]he parol evidence rule does not bar the admission of parol evidence to prove that a written contract
was procured by fraud because the allegations of fraud challenge the validity of the contract itself, not
the accuracy of its terms.” (internal quotation marks, brackets, and citation omitted)); Restatement
(Second) of Contracts § 214(d) (1981) (parol evidence admissible to prove “illegality, fraud, duress,
mistake, lack of consideration, or other invalidating cause.”).
5 Plaintiff asserts in her affidavit that it is her understanding that the Note was one aspect of
an agreement between the Beneficiaries to petition the trial court for the in-kind conveyance.
Plaintiff’s understanding of what the Beneficiaries agreed to is not based upon Plaintiff’s personal
knowledge, however, and therefore is not properly considered in adjudging the propriety of summary
judgment. N.C. Gen. Stat. § 1A-1, Rule 56(e). But if Plaintiff is able to prove at trial that Tony Voliva
demanded that Defendants execute the Note in exchange for his agreement to join the petition for the
in-kind conveyance, the Note could be enforced as a valid third-party beneficiary contract. See
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affidavits, there thus exist genuine issues of material fact regarding the validity of
the Note Plaintiff seeks to enforce, and we accordingly conclude that the trial court
(1) erred by granting Plaintiff’s motion for summary judgment and (2) did not err by
denying Defendants’ motion for summary judgment.
III. Conclusion
Because genuine issues of material fact exist regarding whether the Note is a
valid and enforceable contract, we reverse the trial court’s grant of Plaintiff’s motion
for summary judgment, affirm the trial court’s denial of Defendants’ motion for
summary judgment, and remand to the trial court for further proceedings consistent
with this opinion.
REVERSED AND REMANDED IN PART AND AFFIRMED IN PART.
Judges DIETZ and MURPHY concur.
Wachovia Bank & Trust Co. v. Allen, 232 N.C. 274, 279, 60 S.E.2d 117, 120-21 (1950) (“Where land is
directed to be converted into money . . . all the parties entitled beneficially thereto have the right to
take the property in its unconverted form, and thus prevent the actual conversion thereof, and this
right to take the realty instead of the proceeds is not limited to beneficiaries who also hold the legal
title. In the case of land, the election of one of the beneficiaries alone will not change the character of
the estate; all the persons so beneficially interested must join, and all must be bound.”) (emphasis added)
(quotation marks and citation omitted).
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