DeMayo v. Stone By Lynch, LLC

• Court: Court of Appeals of North Carolina
• Decided: July 15, 2014
• Docket: 14-119
• Status: Unpublished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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA14-119 NORTH CAROLINA COURT OF APPEALS

Filed: 15 July 2014

MICHAEL A. DEMAYO and KELLIE H. DEMAYO, Plaintiffs,

v. Mecklenburg County No. 12 CVS 19847 STONE BY LYNCH, LLC, and L.C. LYNCH, a/k/a L.C. Lynch, Jr., Defendants.

Appeal by defendants from order entered 17 September 2013

by Judge Richard D. Boner in Mecklenburg County Superior Court.

Heard in the Court of Appeals 19 May 2014.

Horack, Talley, Pharr & Lowndes, P.A., by Gregory L. Shelton and John W. Bowers, for plaintiffs–appellees.

Kenneth T. Davies, for defendants–appellants.

MARTIN, Chief Judge.

Defendants Stone By Lynch, LLC and L.C. Lynch a/k/a L.C.

Lynch, Jr. appeal from an order denying their motion, made

pursuant to N.C.G.S. § 1A-1, Rules 60 and 68.1, to vacate a

1 November 2012 judgment entered against them and in favor of

plaintiffs Michael A. DeMayo and Kellie H. DeMayo by the -2- Mecklenburg County Clerk of Court. We affirm.

Our recitation of the facts and procedural history is

limited to those events relevant to the issues presented on

appeal. Plaintiffs engaged JAS-AM, Inc., a North Carolina

general contractor, to build a new residential home for them in

Charlotte, North Carolina. In November 2009, JAS-AM entered

into a construction subcontract with defendant Stone By Lynch to

furnish and install all of the limestone and other stone masonry

work required for plaintiffs’ new residence. In January 2010,

defendant Stone By Lynch entered into a second-tier supply

agreement with Riverside Cut Stone, Inc. (“Riverside”) to supply

the limestone for plaintiffs’ construction project.

In December 2011, Riverside filed a subrogation claim of

lien with the Mecklenburg County Clerk of Court against

plaintiffs’ property, and filed a lien enforcement action in

Mecklenburg County against plaintiffs, JAS-AM, and defendant

Stone By Lynch. In turn, defendant Stone By Lynch filed a

subrogation claim of lien against plaintiffs’ property in the

amount of $91,881.00, and filed cross-claims against plaintiffs

and JAS-AM in Riverside’s lien enforcement action. Riverside’s

subrogation claim of lien was discharged after plaintiffs and

JAS-AM posted a cash bond with the Mecklenburg County Clerk of

Court in the amount of the lien totaling $255,626.00; no bond -3- was posted with respect to defendant Stone By Lynch’s

subrogation claim of lien.

On 21 January 2012, defendant L.C. Lynch, Jr., the manager

of Stone By Lynch, met with plaintiff Michael A. DeMayo and

Sajjan Dhaliwal, the president of JAS-AM, at plaintiff DeMayo’s

request. At this meeting, plaintiff DeMayo presented defendant

Lynch with a Settlement Agreement and Confession of Judgment for

Lynch’s signature. The Settlement Agreement provided that the

parties——plaintiffs, JAS-AM, defendant Stone By Lynch, and

defendant Lynch, individually——agreed that, within two days of

the execution of the Settlement Agreement, defendant Stone By

Lynch would cause to be filed a notice of satisfaction of its

claim of lien and a notice of voluntary dismissal with

prejudice, and would execute and deliver a final lien waiver and

release, as well as a Confession of Judgment. In return,

plaintiffs agreed that they would pay defendant Stone By Lynch

$60,000.00 in fixed increments subject to the following schedule

and milestones: plaintiffs would pay the first $30,000.00 upon

the execution of the filings and deliverables requested in the

Settlement Agreement; plaintiffs would pay the next $20,000.00

upon the completion of defendant Stone By Lynch’s scope of work

for plaintiffs’ construction project; and plaintiffs would pay a

final payment of $10,000.00 “upon certification by [JAS-AM] and -4- [plaintiffs] that [defendant Stone By Lynch] has satisfactorily

addressed punch list items.” The Settlement Agreement further

provided that the parties “have read and fully understood the

provisions of this Agreement prior to its execution and

delivery.” This Settlement Agreement was signed twice by

defendant Lynch two days later on 23 January 2012; once on

behalf of himself and once on behalf of defendant Stone By Lynch

as its managing member. The Confession of Judgment, signed by

defendant Lynch on 23 January 2012 on behalf of defendant Stone

By Lynch, further provided that defendants authorized the entry

of a judgment, without action, in plaintiffs’ favor, in the

amount of $170,626.00, in the event that defendants “fail[ed] to

hold harmless [p]laintiffs as required under that Settlement

Agreement entered by the [p]laintiffs, [d]efendants, and JAS-AM,

Inc., on or about January 23, 2012.”

Following the execution of the Confession of Judgment, the

Settlement Agreement, and the final lien waiver and release on

23 January 2012 by defendant Lynch, and the execution of the

notices of satisfaction of claim of lien and of voluntary

dismissal of cross-claims by defendant Stone By Lynch’s then-

counsel on 27 January 2012, plaintiffs paid defendant Stone By

Lynch the first two payments owed under the terms of the

Settlement Agreement. Plaintiffs tendered payment for the final -5- $10,000.00 owed under the Settlement Agreement on 27 June 2012.

Accompanying that check was a letter from plaintiffs’ counsel

indicating that acceptance thereof constituted a waiver and

release of any claims by defendants against plaintiffs, and that

plaintiffs “reserve[d] any and all claims and causes of action”

against defendants “under the [Settlement Agreement] or

otherwise.” Defendants returned this check to plaintiffs two

days later, purportedly because plaintiffs “allowed [a] deadline

to pass without making a payment” and defendants “now

consider[ed] [plaintiffs] in breach of the settlement

agreement.” Two weeks later, on 13 July 2012, defendants’

counsel sent a letter to counsel for plaintiffs and JAS-AM

indicating that his clients were “intent on removing the burden

of the confessions of judgment and settlement agreement which

you [sic] clients have placed them under”; “a burden which was

imposed upon them by forcing them to sign the documents without

being given the opportunity to study the documents for

themselves, or seek the counsel of their attorney who was

representing them at the time.”

One month later, the Mecklenburg County Superior Court

entered an order arising from Riverside’s lien enforcement

action against defendant Stone By Lynch, JAS-AM, and plaintiffs,

in which it recognized that plaintiffs and Riverside had reached -6- a settlement with respect to the $255,626.00 cash bond posted by

plaintiffs in the Riverside action. The order directed the

Clerk of Court to deliver a check for $70,000.00 made payable to

Riverside’s counsel, and to return the remaining balance plus

interest to plaintiffs, the proportional share of which would be

released to JAS-AM. Although the terms of the Settlement

Agreement provided that defendants would indemnify plaintiffs

and JAS-AM for all loss “arising from, relating to, or in any

manner connected with the [Riverside lien enforcement] Lawsuit,

the [plaintiffs’] Property, the Project funds, the [$255,626.00]

Cash Bond, or any combination thereof,” because of both the

return of the final $10,000.00 check and counsel’s letter

expressing that defendants no longer intended to be bound by the

“burdens of the confessions of judgment and settlement

agreement,” on 31 October 2012, plaintiffs filed the Confession

of Judgment that had been executed by defendant Lynch on

23 January 2012.

While the Confession of Judgment had authorized entry of a

judgment against defendants and in favor of plaintiffs in the

amount of $170,626.00, after applying credits to the balance

due, on 1 November 2012, the Clerk of Court entered a judgment

ordering defendants to pay plaintiffs $55,000.00. On

21 December 2012, defendants filed a “Motion in the Cause To -7- Vacate Judgment Pursuant to Rule 60(b) and Rule 68.1,” on the

grounds that defendants “withdrew their consent to the

Confessions of Judgment via letter and draft of a complaint to

[plaintiffs] on July 13, 2012.” On 17 September 2013, after

hearing the matter, the trial court denied defendants’ Rule 60

motion. Defendants appealed.

_________________________

Defendants sole contention on appeal is that the trial

court erred in denying defendants’ Rule 60 motion to vacate the

1 November 2012 judgment entered by the Clerk of Court.

Defendants assert that they “withdrew their consent to the

Confession of Judgment before it was filed by [plaintiffs]” on

31 October 2012, so that the clerk’s judgment entered upon the

Confession of Judgment is void as a matter of law. After

reviewing the record before us, we affirm the order of the trial

court.

N.C.G.S. § 1A-1, Rule 68.1 provides that a confession of

judgment “may be entered without action at any time[,] . . . may

be for money due or for money that may become due,” N.C. Gen.

Stat. § 1A-1, Rule 68.1(a) (2013), and “remains as security for

the sums thereafter to become due.” N.C. Gen. Stat. § 1A-1,

Rule 68.1(e). “The purpose of such confession is to provide an

expeditious method for entering judgment against one who does -8- not dispute a debt, without the necessity of filing a lawsuit.”

2 G. Gray Wilson, North Carolina Civil Procedure § 68.1-1, at

68A-3 (3d ed. 2007). “A confession of judgment is essentially a

consent judgment in that it depends on the agreement of the

parties which the court will enforce.” Id. at 68A-2 (citing

Yarborough v. Yarborough, 27 N.C. App. 100, 106, 218 S.E.2d 411,

415, cert. denied, 288 N.C. 734, 220 S.E.2d 353 (1975)); cf. id.

(“Judgment by confession differs from an ordinary consent

judgment, however, to the extent that its form and manner of

entry and enforcement are supervised and regulated by statute,

in this instance [N.C.G.S. § 1A-1,] Rule 68.1.” (footnote

omitted) (citing Farmers Bank of Clayton v. McCullers, 201 N.C.

440, 443, 160 S.E. 494, 496 (1931))). “The judgment depends

upon the consent of the parties, and the court gives effect to

it as the agreement of the parties. It would not be valid

unless the parties consented . . . .” Ballard v. Hunter,

12 N.C. App. 613, 618, 184 S.E.2d 423, 426–27 (1971) (internal

quotation marks omitted), cert. denied, 280 N.C. 180, 185 S.E.2d

704 (1972).

Here, defendants assert that they “withdrew their consent

to the Confession of Judgment before it was filed by

[plaintiffs].” According to the record, defendant Lynch signed

the Settlement Agreement, the Confession of Judgment, and the -9- final lien waiver and release on 23 January 2012, two days after

his meeting with plaintiff DeMayo and the president of JAS-AM,

and defendant Lynch’s wife notarized his signing of the

Confession of Judgment. On 27 January 2012, the notices of

satisfaction of claim of lien and of voluntary dismissal of

cross-claims, as well as the final lien waiver and release were

executed and sent by defendant Stone By Lynch’s then-counsel to

plaintiffs and to the president of JAS-AM. Defendants concede

that they accepted two payments totaling $50,000.00 from

plaintiffs in accordance with the terms of the Settlement

Agreement, and that plaintiffs tendered payment for the third

and final payment due under the terms of the Settlement

Agreement, which payment was refused by defendants. Although

defendants presented argument to the trial court that defendant

Lynch was incapable of understanding the documents at the time

he signed them because he was “medicated at the time he met with

DeMayo and Dhaliwal,” “suffers from dyslexia, causing him to

need assistance with reading comprehension,” and that plaintiff

DeMayo and Mr. Dhaliwal “refused to give Lynch a chance to read

the document which turned out to be a settlement agreement and

confession of judgment” and “demanded that Lynch sign it [sic]

on the spot,” the trial court rejected these assertions as

“ridiculous,” and defendants have brought forward no such -10- challenges on appeal. Instead, in their brief, defendants

assert only, and without support, that a letter stating that

they were “intent on removing the burden of the confessions of

judgment and settlement agreement”——under which they had already

accepted two of three settlement payments——was sufficient to

revoke defendant Lynch’s consent to the terms of the Settlement

Agreement. Defendants fail to direct this Court to any relevant

legal authority in support of their assertion, and “[i]t is not

the duty of this Court to supplement an appellant’s brief with

legal authority or arguments not contained therein.” Goodson v.

P.H. Glatfelter Co., 171 N.C. App. 596, 606, 615 S.E.2d 350,

358, supersedeas and disc. review denied, 360 N.C. 63,

623 S.E.2d 582 (2005); see also Viar v. N.C. Dep’t of Transp.,

359 N.C. 400, 402, 610 S.E.2d 360, 361 (per curiam) (“It is not

the role of the appellate courts . . . to create an appeal for

an appellant.”), reh’g denied, 359 N.C. 643, 617 S.E.2d 662

(2005). Thus, we reject defendants’ argument.

Affirmed.

Judges STEELMAN and DILLON concur.

Report per Rule 30(e).