Aldridge v. Kiger, 2016 NCBC 83.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION UNION COUNTY 16 CVS 1680
DONNY CLEAMON ALDRIDGE, ) ) Plaintiff, ) ) v. ) ORDER AND OPINION ON ) DEFENDANTS’ MOTION TO DISMISS JOHN KIPPLAND KIGER, DALON ) OR REMOVE AND PLAINTIFF’S G. BASS, WILLIAM S. BLACKMON, ) MOTION TO SEVER BLACKMON SERVICE, INC., and ) WSL PROPERTY COMPANY, LLC, ) ) Defendants. ) )
1. THIS MATTER is before the Court on the following motions: (1)
Defendants’ Motion to Dismiss or Remove (the “Motion to Remove”) pursuant to Rule
12(b)(3) of the North Carolina Rules of Civil Procedure (“Rule(s)”) and N.C. Gen. Stat.
§§ 1-83(1) and 55-14-31(a); and (2) Plaintiff’s Motion to Sever (the “Motion to Sever”)
pursuant to Rule 42(b)(1) (collectively, the “Motions”). For the reasons set forth
below, the Court hereby DENIES IN PART Defendants’ Motion to Remove to the
extent it seeks dismissal of Plaintiff’s action, GRANTS IN PART Defendants’ Motion
to Remove to the extent it seeks to transfer Plaintiff’s action to Mecklenburg County,
and DENIES Plaintiff’s Motion to Sever.
Erwin, Bishop, Capitano & Moss, P.A., by Scott A. Hefner and J. Daniel Bishop, for Plaintiff.
Essex Richards, P.A., by John T. Daniel, for Defendants.
Robinson, Judge. I. PROCEDURAL HISTORY
2. The Court sets forth here only that portion of the procedural history
relevant to its determination of the Motions.
3. Plaintiff Donny Cleamon Aldridge (“Plaintiff”) resides in Union County.
(Compl. ¶ 1.)
4. Individual defendants John Kippland Kiger, Dalon G. Bass, and William S.
Blackmon reside in Mecklenburg County. (Compl. ¶¶ 2−4.) Company defendants
Blackmon Service, Inc., (“Blackmon Service”) and WSL Property Company, LLC, are
North Carolina companies with their principal place of business in Mecklenburg
County. (Compl. ¶¶ 5−6.) The individual defendants and company defendants are
collectively referred to herein as “Defendants.”
5. On June 28, 2016, Plaintiff commenced this action in Union County by
filing his Complaint. The Complaint brings the following claims: (1) breach of
majority’s fiduciary duty; (2) majority’s constructive fraud; (3) equitable compulsion
of dividends; (4) breach of directors’ fiduciary duty; (5) corporate waste; (6) directors’
constructive fraud; (7) punitive damages; and (8) judicial dissolution of Blackmon
Service.
6. On August 19, 2016, the parties filed their Case Management Report
pursuant to Rule 17.2 of the General Rules of Practice and Procedure for the North
Carolina Business Court (“BCR”).
7. On August 29, 2016, the Court issued a Notice of Conference, scheduling a
case management conference for September 7, 2016. 8. On September 6, 2016, Defendants filed their Answer, Motion and
Counterclaims, and their brief in support of the Motion to Remove. The Motion to
Remove seeks dismissal or transfer of the action from Union County to Mecklenburg
County on the ground that Union County is an improper venue for Plaintiff’s judicial
dissolution claim. (Defs.’ Answer, Mot. and Countercls. 16−17.)
9. On September 7, 2016, the Court held a case management conference. At
the conference, Defendants consented to the Court entering a case management order
pending full briefing and consideration of the Motion to Remove filed the day before.
The Court entered a Case Management Order on September 19, 2016.
10. On September 29, 2016, Plaintiff filed the Motion to Sever and brief in
support of such motion and in opposition to the Motion to Remove. The Motion to
Sever seeks—to the extent the Motion to Remove is allowed—to sever the judicial
dissolution claim from Plaintiff’s remaining claims so that only the judicial
dissolution claim is transferred to Mecklenburg County, and Plaintiff’s other claims
remain in Union County. (Pl.’s Mot. to Sever ¶ 6.)
11. On October 10, 2016, Defendants filed their brief in opposition to the Motion
to Sever and replying to Plaintiff’s brief in opposition to the Motion to Remove.
12. On October 24, 2016, Plaintiff filed his brief replying to Defendants’ brief
in opposition to the Motion to Sever.
13. The Motions are now ripe for resolution and, pursuant to BCR 15.4(a), the
Court decides the Motions without hearing or oral argument. II. ANALYSIS
14. The Court notes at the outset that North Carolina case law is clear that a
motion to dismiss based on improper venue made pursuant to Rule 12(b)(3) shall be
treated as a motion to transfer, rather than a motion to dismiss. Coats v. Sampson
Cty. Mem’l Hosp., Inc., 264 N.C. 332, 334, 141 S.E.2d 490, 492 (1965) (holding that
the lower court correctly treated defendant’s motion to dismiss based on improper
venue as a motion for change of venue); Roberts v. Adventure Holdings, LLC, 208
N.C. App. 705, 711, 703 S.E.2d 784, 788 (2010) (stating that even though the
defendant’s motion to dismiss based on improper venue did not request a change of
venue, “our precedent requires that the motion be treated as such”). Here, the Motion
to Remove expressly requests that the action be dismissed or removed based on
improper venue; however, the Motion to Remove will be treated solely as a motion to
change venue in accordance with North Carolina case law.
15. Defendants argue that this action must be transferred to Mecklenburg
County because Union County is an improper venue. Plaintiff argues that if the
Court grants the Motion to Remove, the Court must grant the Motion to Sever the
judicial dissolution claim from Plaintiff’s other claims and transfer only the judicial
dissolution claim to Mecklenburg County. Plaintiff’s argument, however, assumes
that the Court considers the Motions simultaneously.
16. Addressing first the sequence in which the Court must consider the two
Motions, the case law in North Carolina is clear that when a defendant makes a
proper motion to remove as a matter of right, “the question of removal then becomes a matter of substantial right, and the court of original venue is without power to
proceed further in essential matters until the right of removal is considered and
passed upon.” Atl. Coast Line R.R. Co. v. Thrower, 213 N.C. 637, 639, 197 S.E. 197,
198−99 (1938) (holding that the trial court erred when it denied defendant’s motion
to transfer the action to the proper venue and granted plaintiff’s subsequently filed
motion to retain the action for the convenience of the witnesses); see also Casstevens
v. Wilkes Tel. Membership Corp., 254 N.C. 746, 751, 120 S.E.2d 94, 97 (1961) (stating
that the trial court erred in simultaneously considering defendant’s motion to
transfer as a matter of right and plaintiff’s subsequently filed motion to amend); Nello
L. Teer Co. v. Hitchcock Corp., 235 N.C. 741, 745, 71 S.E.2d 54, 57 (1952); Little v.
Little, 12 N.C. App. 353, 356, 183 S.E.2d 278, 280 (1971).
17. Here, Defendants filed the Motion to Remove based on improper
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Aldridge v. Kiger, 2016 NCBC 83.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION UNION COUNTY 16 CVS 1680
DONNY CLEAMON ALDRIDGE, ) ) Plaintiff, ) ) v. ) ORDER AND OPINION ON ) DEFENDANTS’ MOTION TO DISMISS JOHN KIPPLAND KIGER, DALON ) OR REMOVE AND PLAINTIFF’S G. BASS, WILLIAM S. BLACKMON, ) MOTION TO SEVER BLACKMON SERVICE, INC., and ) WSL PROPERTY COMPANY, LLC, ) ) Defendants. ) )
1. THIS MATTER is before the Court on the following motions: (1)
Defendants’ Motion to Dismiss or Remove (the “Motion to Remove”) pursuant to Rule
12(b)(3) of the North Carolina Rules of Civil Procedure (“Rule(s)”) and N.C. Gen. Stat.
§§ 1-83(1) and 55-14-31(a); and (2) Plaintiff’s Motion to Sever (the “Motion to Sever”)
pursuant to Rule 42(b)(1) (collectively, the “Motions”). For the reasons set forth
below, the Court hereby DENIES IN PART Defendants’ Motion to Remove to the
extent it seeks dismissal of Plaintiff’s action, GRANTS IN PART Defendants’ Motion
to Remove to the extent it seeks to transfer Plaintiff’s action to Mecklenburg County,
and DENIES Plaintiff’s Motion to Sever.
Erwin, Bishop, Capitano & Moss, P.A., by Scott A. Hefner and J. Daniel Bishop, for Plaintiff.
Essex Richards, P.A., by John T. Daniel, for Defendants.
Robinson, Judge. I. PROCEDURAL HISTORY
2. The Court sets forth here only that portion of the procedural history
relevant to its determination of the Motions.
3. Plaintiff Donny Cleamon Aldridge (“Plaintiff”) resides in Union County.
(Compl. ¶ 1.)
4. Individual defendants John Kippland Kiger, Dalon G. Bass, and William S.
Blackmon reside in Mecklenburg County. (Compl. ¶¶ 2−4.) Company defendants
Blackmon Service, Inc., (“Blackmon Service”) and WSL Property Company, LLC, are
North Carolina companies with their principal place of business in Mecklenburg
County. (Compl. ¶¶ 5−6.) The individual defendants and company defendants are
collectively referred to herein as “Defendants.”
5. On June 28, 2016, Plaintiff commenced this action in Union County by
filing his Complaint. The Complaint brings the following claims: (1) breach of
majority’s fiduciary duty; (2) majority’s constructive fraud; (3) equitable compulsion
of dividends; (4) breach of directors’ fiduciary duty; (5) corporate waste; (6) directors’
constructive fraud; (7) punitive damages; and (8) judicial dissolution of Blackmon
Service.
6. On August 19, 2016, the parties filed their Case Management Report
pursuant to Rule 17.2 of the General Rules of Practice and Procedure for the North
Carolina Business Court (“BCR”).
7. On August 29, 2016, the Court issued a Notice of Conference, scheduling a
case management conference for September 7, 2016. 8. On September 6, 2016, Defendants filed their Answer, Motion and
Counterclaims, and their brief in support of the Motion to Remove. The Motion to
Remove seeks dismissal or transfer of the action from Union County to Mecklenburg
County on the ground that Union County is an improper venue for Plaintiff’s judicial
dissolution claim. (Defs.’ Answer, Mot. and Countercls. 16−17.)
9. On September 7, 2016, the Court held a case management conference. At
the conference, Defendants consented to the Court entering a case management order
pending full briefing and consideration of the Motion to Remove filed the day before.
The Court entered a Case Management Order on September 19, 2016.
10. On September 29, 2016, Plaintiff filed the Motion to Sever and brief in
support of such motion and in opposition to the Motion to Remove. The Motion to
Sever seeks—to the extent the Motion to Remove is allowed—to sever the judicial
dissolution claim from Plaintiff’s remaining claims so that only the judicial
dissolution claim is transferred to Mecklenburg County, and Plaintiff’s other claims
remain in Union County. (Pl.’s Mot. to Sever ¶ 6.)
11. On October 10, 2016, Defendants filed their brief in opposition to the Motion
to Sever and replying to Plaintiff’s brief in opposition to the Motion to Remove.
12. On October 24, 2016, Plaintiff filed his brief replying to Defendants’ brief
in opposition to the Motion to Sever.
13. The Motions are now ripe for resolution and, pursuant to BCR 15.4(a), the
Court decides the Motions without hearing or oral argument. II. ANALYSIS
14. The Court notes at the outset that North Carolina case law is clear that a
motion to dismiss based on improper venue made pursuant to Rule 12(b)(3) shall be
treated as a motion to transfer, rather than a motion to dismiss. Coats v. Sampson
Cty. Mem’l Hosp., Inc., 264 N.C. 332, 334, 141 S.E.2d 490, 492 (1965) (holding that
the lower court correctly treated defendant’s motion to dismiss based on improper
venue as a motion for change of venue); Roberts v. Adventure Holdings, LLC, 208
N.C. App. 705, 711, 703 S.E.2d 784, 788 (2010) (stating that even though the
defendant’s motion to dismiss based on improper venue did not request a change of
venue, “our precedent requires that the motion be treated as such”). Here, the Motion
to Remove expressly requests that the action be dismissed or removed based on
improper venue; however, the Motion to Remove will be treated solely as a motion to
change venue in accordance with North Carolina case law.
15. Defendants argue that this action must be transferred to Mecklenburg
County because Union County is an improper venue. Plaintiff argues that if the
Court grants the Motion to Remove, the Court must grant the Motion to Sever the
judicial dissolution claim from Plaintiff’s other claims and transfer only the judicial
dissolution claim to Mecklenburg County. Plaintiff’s argument, however, assumes
that the Court considers the Motions simultaneously.
16. Addressing first the sequence in which the Court must consider the two
Motions, the case law in North Carolina is clear that when a defendant makes a
proper motion to remove as a matter of right, “the question of removal then becomes a matter of substantial right, and the court of original venue is without power to
proceed further in essential matters until the right of removal is considered and
passed upon.” Atl. Coast Line R.R. Co. v. Thrower, 213 N.C. 637, 639, 197 S.E. 197,
198−99 (1938) (holding that the trial court erred when it denied defendant’s motion
to transfer the action to the proper venue and granted plaintiff’s subsequently filed
motion to retain the action for the convenience of the witnesses); see also Casstevens
v. Wilkes Tel. Membership Corp., 254 N.C. 746, 751, 120 S.E.2d 94, 97 (1961) (stating
that the trial court erred in simultaneously considering defendant’s motion to
transfer as a matter of right and plaintiff’s subsequently filed motion to amend); Nello
L. Teer Co. v. Hitchcock Corp., 235 N.C. 741, 745, 71 S.E.2d 54, 57 (1952); Little v.
Little, 12 N.C. App. 353, 356, 183 S.E.2d 278, 280 (1971).
17. Here, Defendants filed the Motion to Remove based on improper
venue as a matter of right, and thereafter Plaintiff filed the Motion to Sever.
As a result, the Court is required to consider and rule on the Motion to Remove
before it may consider the Motion to Sever.
A. Motion to Remove
18. Change of venue is governed by N.C. Gen. Stat § 1-83. Although
section 1-83(1) states that a court “may” change venue when the county
designated is not the proper one, North Carolina case law is clear that “may”
is construed in this specific context as “must.” Nello L. Teer Co., 235 N.C. at
743, 71 S.E.2d at 56; Thompson v. Norfolk S. Ry. Co., 140 N.C. App. 115, 122,
535 S.E.2d 397, 401−02 (2000). More specifically, “[i]f the demand for removal is properly made, and it appears that the action has been brought in the wrong
county, the court has no discretion as to removal.” Nello L. Teer Co., 235 N.C.
at 743, 71 S.E.2d at 55−56; Thompson, 140 N.C. App. at 122, 535 S.E.2d at
401−02.
19. Pursuant to N.C. Gen. Stat. § 55-14-31(a), “[v]enue for a proceeding
to dissolve a corporation lies in the county where a corporation’s principal
office . . . is or was last located.” N.C. Gen. Stat. § 55-14-31(a).
20. Here, Plaintiff brought this action in Union County and asserts a
claim for judicial dissolution of Blackmon Service pursuant to N.C. Gen. Stat.
§ 55-14-30. It is undisputed that Blackmon Service’s principal place of
business is located in Mecklenburg County. Thus, it is clear that Union County
is an improper county, and upon Defendants’ Motion to Remove, the action
must be transferred to Mecklenburg County. Therefore, the Motion to Remove
must be granted to the extent it seeks to transfer the action.
B. Motion to Sever
21. Plaintiff argues that if Defendants’ Motion to Remove is granted, the
Court is required under Rule 42(b)(1) to sever the judicial dissolution claim
from Plaintiff’s remaining claims, and that only the judicial dissolution claim
may be transferred to Mecklenburg County for improper venue. Rule 42(b)(1)
provides that “[t]he court may in furtherance of convenience or to avoid
prejudice and shall for considerations of venue upon timely motion order a
separate trial of any claim[.]” N.C. Gen. Stat. § 1A-1, Rule 42(b)(1) (emphasis added). Plaintiff argues that the Motion to Sever the judicial dissolution claim,
in the circumstances here, is based on considerations of venue, and thus Rule
42(b)(1) requires that claim—but only that claim—to be severed and litigated
in Mecklenburg County.
22. “When a cause is directed to be removed, . . . all other proceedings
shall be had in the county to which the place of trial is changed . . . .” N.C.
Gen. Stat. § 1-87(a) (emphasis added). Because all claims were brought in a
single action in Union County, and Union County is an improper venue for the
judicial dissolution claim, the entire action must be transferred to
Mecklenburg County. Therefore, Plaintiff’s Motion to Sever the judicial
dissolution claim, so that only the judicial dissolution claim is transferred to
Mecklenburg County, must be denied.
III. CONCLUSION
23. THEREFORE, for the foregoing reasons, Defendants’ Motion to
Remove this action to Mecklenburg County is DENIED IN PART to the extent
it seeks to dismiss Plaintiff’s action, and GRANTED IN PART to the extent it
seeks to transfer Plaintiff’s action to Mecklenburg County. Plaintiff’s Motion
to Sever is DENIED. The Union County Clerk of Superior Court is hereby
ordered to transfer the case file in this matter to the Mecklenburg County
Clerk of Superior Court and to file a certification attesting to such transfer
within thirty days of this Order and Opinion. The case caption shall hereafter reflect the case number assigned to this case by the Mecklenburg County Clerk
of Superior Court.
SO ORDERED, this the 3rd day of November, 2016.
/s/ Michael L. Robinson Michael L. Robinson Special Superior Court Judge for Complex Business Cases