Brawley v. Elizabeth Townes Homeowners Ass'n, Inc.

• Court: Court of Appeals of North Carolina
• Decided: August 19, 2014
• Docket: 14-135
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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 A p p e l l a t e P r o c e d u r e .

NO. COA14-135

NORTH CAROLINA COURT OF APPEALS

Filed: 19 August 2014

BOBBY P. BRAWLEY and BETTY M. BRAWLEY, Plaintiffs,

v. Iredell County No. 13 CVS 01289 ELIZABETH TOWNES HOMEOWNERS ASSOCIATION, INC., LADONNA CONSTANCE WALDEN and PATRICIA HEDRICK, individually and as members of THE BOARD OF DIRECTORS OF ELIZABETH TOWNES HOMEOWNERS ASSOCIATION, INC., Defendants.

Appeal by plaintiffs from order entered 8 November 2013 by

Judge W. David Lee in Iredell County Superior Court. Heard in

the Court of Appeals 21 May 2014.

Kenneth T. Davies for plaintiff-appellants.

McAngus, Goudelock & Courie, PLLC, by Garry T. Davis and Jeffrey B. Kuykendal, for defendant-appellees.

PER CURIAM. -2- Where plaintiffs’ claims were barred by collateral

estoppel, defendants’ motions to dismiss were properly granted

by the trial court.

Plaintiffs Bobby P. Brawley and Betty M. Brawley own a

townhome in the Elizabeth Townes community in Charlotte.

Defendant Elizabeth Townes Homeowners Association (“Elizabeth

Townes HOA”) manages the Elizabeth Townes community, of which

plaintiffs are mandatory members. Individual defendants LaDonna

Constance Walden and Patricia Hedrick are members of the board

of directors of the Elizabeth Townes HOA.

Plaintiffs’ daughter, Jane Brawley Jordan, resides at the

Elizabeth Townes’ townhome. Plaintiffs granted Jordan a limited

power of attorney permitting Jordan to act on plaintiffs’ behalf

regarding all Elizabeth Townes HOA matters, including the

ability “to request financial records, to vote [plaintiffs’]

proxy in [Elizabeth Townes HOA] matters, and to attend

[Elizabeth Townes HOA] meetings on [plaintiffs’] behalf.”

Beginning in 2005, the relationship between Elizabeth

Townes HOA, Walden, and Hedrick (“defendants”), and Jordan began

to deteriorate. Jordan sent numerous emails, text messages, and

phone calls to defendants regarding alleged mismanagement of the

Elizabeth Townes community. Jordan also filed four pro se -3- lawsuits against Elizabeth Townes HOA, all of which were

subsequently dismissed either voluntarily by Jordan or with

prejudice by order of the trial court.

In 2010, Jordan filed claims with the North Carolina Real

Estate Commission and the State Bureau of Investigations against

Elizabeth Townes HOA, alleging that Elizabeth Townes HOA’s

former management company had committed fraud. The resulting

investigations found no evidence of fraud, and Elizabeth Townes

HOA invoiced Jordan and plaintiffs for the loss of business

caused by the investigations.

In March 2011, defendants filed a complaint and request for

permanent injunction against Jordan for “continuous and repeated

harassment.” Defendants also filed claims against plaintiffs,

alleging that by failing to revoke Jordan’s limited power of

attorney, plaintiffs had enabled Jordan’s continued harassment

of defendants.1 Plaintiffs transferred ownership of their

1 After a hearing on defendants’ motion for injunctive relief before the trial court in March 2011 during which Jordan and plaintiffs appeared “disoriented, distracted, and unresponsive to the Court’s inquiries,” Jordan was ordered to undergo a mental evaluation. Following Jordan’s refusal to submit to a forensic screening, in May 2012 the trial court entered an order finding Jordan to be in contempt of court. On appeal, this Court, by per curiam opinion, upheld the order of the trial court. See State v. Jordan, No. COA12-1264, 2013 N.C. App. LEXIS 736 (July 16, 2013). -4- Elizabeth Townes townhome to Jordan,2 and defendants subsequently

dismissed their claims against plaintiffs, leaving Jordan as the

sole opposing party to the litigation. On 4 February 2013, the

trial court entered an order for default judgment against Jordan

and awarded compensatory and punitive damages to Elizabeth

Townes HOA in the amount of “$34,929.59 for increased insurance

premiums, increased property management fees, [and] direct legal

costs,” finding that “Jordan engaged in malicious prosecution

and abuse of process as to [Elizabeth Townes HOA] and defamed

[Elizabeth Townes HOA].”

On 3 June 2013, plaintiffs filed a complaint against

defendants alleging claims for breach of fiduciary duty,

constructive fraud, abuse of process, and unfair and deceptive

trade practices. On 7 August, defendants filed motions to

dismiss and to change venue. The trial court, by order entered

2 We note that, based on the record, it is somewhat unclear as to whether plaintiffs have resumed ownership of their Elizabeth Townes townhome and, thus, have standing to bring this appeal. In an August 2012 motion to amend one of her four pro se lawsuits, Jordan described plaintiff Bobby Brawley as the “previous owner” of the townhome. However, in their instant complaint, plaintiffs indicate that they are currently the owners of the townhome, and in their answers, defendants treat plaintiffs as the current owners of the townhome as well, stating that “Plaintiffs herein subsequently transferred ownership of said property to Jane Jordan for a brief period of time.” As such, plaintiffs are viewed in the instant matter as being the current owners of the Elizabeth Townes townhome and, therefore, have standing. -5- 8 November, granted defendants’ motions to dismiss. Plaintiffs

appeal.

_________________________________

On appeal, plaintiffs contend the trial court erred in

granting defendants’ motions to dismiss. Specifically,

plaintiffs argue that the trial court erred in granting

defendants’ motions to dismiss pursuant to Rule 12(b)(6) and

based on collateral estoppel. We disagree. Assuming arguendo

that plaintiffs’ complaint is technically sufficient to survive

a Rule 12(b)(6) motion to dismiss, plaintiffs’ claims are

nonetheless barred by collateral estoppel.

Collateral Estoppel

defendants’ motions to dismiss because plaintiffs are not

collaterally estopped from asserting their claims.

Res judicata and collateral estoppel are companion

doctrines created “for the dual purposes of protecting litigants

from the burden of relitigating previously decided matters and

promoting judicial economy by preventing needless litigation.”

Bockweg v. Anderson, 333 N.C. 486, 491—92, 428 S.E.2d 157, 161

(1993) (citations omitted). Under the doctrine of res judicata,

or “claim preclusion,” “a final judgment on the merits in a -6- prior action will prevent a second suit based on the same cause

of action between the same parties or those in privity with

them.” Thomas M. McInnis & Assocs., Inc. v. Hall, 318 N.C. 421,

428, 349 S.E.2d 552, 556 (1986). Under the doctrine of

collateral estoppel, or “issue preclusion,” “parties and parties

in privity with them — even in unrelated causes of action — are

precluded from retrying fully litigated issues that were decided

in any prior determination and were necessary to the prior

determination.” King v. Grindstaff, 284 N.C. 348, 356, 200

S.E.2d 799, 805 (1973) (citations omitted).

“Like res judicata, collateral estoppel only applies if the

prior action involved the same parties or those in privity with

the parties and the same issues.” Goins v. Cone Mills Corp., 90

N.C. App. 90, 93, 367 S.E.2d 335, 337 (1988) (citing King, 284

N.C. at 356, 200 S.E.2d at 805) (emphasis added).

A judgment operates as an estoppel not only as to all matters actually determined or litigated in the proceeding, but also as to all relevant and material matters within the scope of the proceeding which the parties, in the exercise of reasonable diligence, could and should have brought forward for determination.

Moody v. Able Outdoor, Inc., 169 N.C. App. 80, 84, 609 S.E.2d

259, 261 (2005) (citation and quotation omitted). “In general,

privity involves a person so identified in interest with another -7- that he represents the same legal right previously represented

at trial.” State v. Summers, 351 N.C. 620, 623, 528 S.E.2d 17,

20 (2000) (citations and quotation omitted). In determining

whether a privity relationship exists, “courts will look beyond

the nominal party whose name appears on the record as plaintiff

and consider the legal questions raised as they may affect the

real party or parties in interest.” Whitacre P'ship v.

Biosignia, Inc., 358 N.C. 1, 36, 591 S.E.2d 870, 893 (2004)

(citations and quotation omitted).

Plaintiffs allowed their daughter, Jane Brawley Jordan, to

reside in their Elizabeth Townes townhome and granted Jordan a

limited power of attorney “to request financial records, to vote

[plaintiffs’] proxy in [Elizabeth Townes HOA] matters, and to

attend [Elizabeth Townes HOA] meetings on [plaintiffs’] behalf.”

Plaintiffs further acknowledge in their brief that Jordan “was

deemed to be an agent of [plaintiffs] through a limited power of

attorney, granting her the same right as [plaintiffs.]” Such

evidence indicates that a privity relationship exists between

Jordan and plaintiffs.

Further evidence of a privity relationship can be seen in

plaintiffs’ current complaint. After Jordan filed four pro se

complaints against Elizabeth Townes HOA, as well as filing -8- allegations of fraud against Elizabeth Townes HOA with the North

Carolina Real Estate Commission and the State Bureau of

Investigations, defendants filed claims against Jordan and

plaintiffs in 2011. Plaintiffs then temporarily transferred

their ownership of the Elizabeth Townes property to Jordan, and

defendants dismissed their claims against plaintiffs, leaving

Jordan as the sole opposing party in the litigation. The trial

court, in its order granting default judgment to defendants,

assessed compensatory and punitive damages against Jordan

because “Jordan engaged in malicious prosecution and abuse of

process as to [Elizabeth Townes HOA] and defamed [Elizabeth

Townes HOA].” Jordan did not appeal from this award of

compensatory and punitive damages. Rather, plaintiffs then

filed the instant complaint, alleging that defendants commenced

the 2011 litigation “to intimidate the Plaintiffs into silence

and acceptance of the authority of the Defendants” and that the

“asserted claims in the 2011 litigation against the Plaintiffs

were entirely frivolous and without merit.”

In its order granting defendants’ motions to dismiss, the

trial court noted that:

[I]t also appearing that the amended complaint filed in the [2011 litigation] was voluntarily dismissed as to [plaintiffs] on January 14, 2013, approximately thirteen -9- months after it was asserted against them (and twenty-two months after the commencement of the [2011 litigation] and that [plaintiffs] were in a position in that action to assert the claims now being asserted in this action. The claims asserted by [plaintiffs] herein are claims based upon matters that were relevant and material within the scope of the earlier [2011 litigation] and [plaintiffs], in the exercise of reasonable diligence, could and should have brought those claims forward for determination. [Plaintiffs] should not be permitted to reopen the subject of the prior [2011] litigation with respect to matters which might have been brought forward in that proceeding. . . . [Plaintiffs] are collaterally estopped from now asserting claims for breach of fiduciary duty, constructive fraud, abuse of process and unfair and deceptive trade practices in this action and these claims should be dismissed . . . .

We agree with the trial court’s determination that

plaintiffs are now estopped from bringing their claims, as the

“successive or mutual relationship in the same rights in [the

Elizabeth Townes townhome] establishes that the interests of

both [Jordan] and plaintiff[s] are so intertwined that privity

exists between them.” Cline v. McCullen, 148 N.C. App. 147,

150, 557 S.E.2d 588, 591 (2001). Moreover, “privity also exists

where one not actually a party to the previous action . . . had

a proprietary interest in the judgment or in the determination -10- of a question of law or facts on the same subject matter.” Id.

(citation omitted).

Jordan, in her four pro se complaints against defendants,

alleged a variety of claims including, but not limited to: abuse

of process, malicious prosecution, slander, retaliation,

defamation, extortion, wrongful prosecution, libel per se,

willful negligence, malfeasance, federal mail fraud, legal

malpractice, alienation of affection, breach of contract,

criminal intent, fraud, and contributory negligence. Although

Jordan did not make specific claims for breach of fiduciary

duty, constructive fraud, or unfair and deceptive trade

practices, a reading of her complaints indicates that such

claims were all-but asserted. In her first complaint, Jordan

alleged that defendants failed to act in good faith while

conducting Elizabeth Townes HOA business, and that defendants’

acts amounted to a “breech [sic] of monies;” such allegations

could support a claim for breach of fiduciary duty. Similar

statements in Jordan’s first complaint could also support claims

for constructive fraud and unfair and deceptive trade practices,

as Jordan made numerous allegations of fraud, embezzlement,

deception, mismanagement, and negligence by defendants regarding

defendants’ handling of Elizabeth Townes HOA business. -11- Moreover, similar allegations and statements can be found

throughout Jordan’s three other complaints. All of Jordan’s

allegations and claims in each complaint stemmed from her

ongoing disputes with defendants. Further, in addition to

Jordan’s claims which are intertwined with plaintiffs as a

matter of privity, plaintiffs were also directly involved in

litigation with defendants and had the opportunity to

counterclaim as to all claims that are now asserted in the

instant case.

Here, plaintiffs have brought claims against defendants for

breach of fiduciary duty, constructive fraud, abuse of process,

and unfair and deceptive trade practices. Although the only

claim directly asserted by both Jordan and plaintiffs was a

claim for abuse of process, all of plaintiffs’ instant

allegations and claims arise from Jordan’s ongoing disputes with

defendants. Indeed, plaintiffs’ complaint indicates plaintiffs

were aware of and involved in the ongoing disputes and

litigation between Jordan and defendants, as plaintiffs

reference these disputes and allege that defendants “began a

campaign of propaganda against [Jordan]” that caused plaintiffs

to “publically defend[] themselves” against defendants. As

such, although plaintiffs appear to bring three “new” claims not -12- previously asserted by Jordan, it is clear that these claims

were essentially alleged and brought by Jordan in her four

earlier pro se complaints. Moreover, plaintiffs had a

substantial interest in their townhome to create a proprietary

interest in the litigation between Jordan and defendants and,

therefore, this interest supports our earlier determination that

privity exists between plaintiffs and Jordan.

Accordingly, the trial court’s granting of defendants’

motions to dismiss is affirmed.

Affirmed.

Report per Rule 30(e).