Kogut v. Rosenfeld

579 S.E.2d 400, 157 N.C. App. 487, 2003 N.C. App. LEXIS 741
CourtCourt of Appeals of North Carolina
DecidedMay 6, 2003
DocketNo. COA02-264
StatusPublished
Cited by2 cases

This text of 579 S.E.2d 400 (Kogut v. Rosenfeld) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kogut v. Rosenfeld, 579 S.E.2d 400, 157 N.C. App. 487, 2003 N.C. App. LEXIS 741 (N.C. Ct. App. 2003).

Opinions

WYNN, Judge.

In this appeal, plaintiff, David G. Kogut, presents the following issue: Where plaintiff, through a bankruptcy settlement, releases one party from liability, are claims against another party barred by our decision in Chemimetals Processing Inc. v. Schrimsher, et al., 140 N.C. App. 135, 535 S.E.2d 594 (2000). We hold that a genuine issue of material fact exists as to the intended scope and effect of the bankruptcy order approving a release and settlement agreement; accordingly, we reverse the trial court’s grant of summary judgment in favor of defendant.

The underlying facts tend to show that plaintiff David G. Kogut and Aimee A. Toth were married until they divorced in 1996. During the marriage, Ms. Toth formed Capstar Corporation and served as president. Capstar borrowed money from NationsBank secured by collateral and personal guarantees from the couple.

Defendant, Joanne Rosenfeld, a certified public accountant, prepared personal tax returns for Dr. Kogut, Ms. Toth, and Dr. Kogut’s medical practice, Iredell Digestive Disease Clinic. Ms. Rosenfeld also provided professional services to Capstar and was involved in the financial affairs of Capstar, including but not limited to the preparation of reports to NationsBank regarding the financial status of Capstar. After his divorce from Ms. Toth, Dr. Kogut terminated his professional relationship with Ms. Rosenfeld.

On 29 May 1997, Capstar filed for bankruptcy protection in the Western District of North Carolina under Chapter 11 of the Bankruptcy Code. To recover a substantial secured debt owed by [489]*489Capstar, NationsBank sued Capstar, Dr. Kogut, and Ms. Toth on the Capstar guarantees. That action resulted in a judgment, dated 2 September 1997, of $1,725,534.76 against Dr. Kogut.

On 19 September 1997, Dr. Kogut, through a wholly owned corporation, Acme Liquidation Company, paid his obligation under the guaranty to NationsBank. In turn, NationsBank assigned its notes to Dr. Kogut as well as its collateral securing the notes, the judgment confirming the award against Dr. Kogut, and claim against Capstar. Subsequently, Dr. Kogut brought an action against Ms. Rosenfeld alleging that she led him to believe that Capstar was profitable, and unfairly induced him to sign the NationsBank guaranty.

In the meantime, while a domestic equitable distribution action was pending between Dr. Kogut and Ms. Toth, Ms. Toth filed for bankruptcy protection in the Western District of North Carolina. In June 1998, Dr. Kogut, individually and through Acme Liquidation Company, brought an action against Ms. Toth in bankruptcy court to recover for investments he made in Capstar and for reimbursement on NationsBank guaranty. In September 1998, Ms. Toth removed the domestic equitable distribution action pending between Dr. Kogut and Ms. Toth to the bankruptcy court. Ms. Rosenfeld was not a party to either action.

On 16 May 2000, Dr. Kogut and Ms. Toth resolved their differences under a “Bankruptcy Order” decreeing the following: (1) incorporation of the terms of a “Release and Settlement Agreement” distributing assets and legal rights among Ms. Toth, Dr. Kogut and Acme Liquidation Company; (2) dismissal with prejudice of Dr. Kogut and Ms. Toth claims against each other; (3) an award to Dr. Kogut of $400,000.00 on the claim for equitable distribution; (4) entitlement to Dr. Kogut of his claim in the amount of $89,000.00; (5) denial of Dr. Kogut and Acme Liquidation Company claims in the amount of $2,305,088.29; and (6) an order discharging Ms. Toth and enjoining her creditors. The release awarded real property in North Carolina and South Carolina to Dr. Kogut, estimated to be worth in excess of 1.2 million dollars and dismissed all alimony and support claims with prejudice. Acme Liquidation Company retained its liens on the property and the amount of debt owed to it. The Order also provided “that the claims of Dr. Kogut and his Related Entities,..., which have been or might be asserted in the bankruptcy case of Capstar Manufacturing Company... pending in this Court, are hereby denied, and Kogut and his Related Entities are directed to withdraw any such claims with prejudice.”

[490]*490As to Dr. Kogut’s action against Ms. Rosenfeld, in 1999, he voluntarily dismissed that action but re-filed it in October 2000 alleging again that Ms. Rosenfeld led him to believe that Capstar was profitable, and that she unfairly induced him to sign the NationsBank guaranty. On 14 September 2001, Ms. Rosenfeld filed a motion for summary judgment. Prior to a hearing on the motion, Dr. Kogut dismissed his claims for constructive fraud and extortion, leaving his claims for misrepresentation and professional negligence before the trial court. On 7 November 2001, the trial court granted summary judgment in favor of Ms. Rosenfeld which read in pertinent part:

After considering the materials of record, and the arguments and authorities urged upon by the parties, and after considering the decision in Chemimetals Processing Inc. v. Schrimsher, et al., 140 N.C. App. 135, 535 S.E.2d 594 (2000), the court is of the opinion that there is no genuine issue as to any material fact and that the defendant’s motion should be allowed.

From this order, Dr. Kogut appeals.

In light of the facts of this case, the issue on appeal is whether our decision in Chemimetals Processing Inc. v. Schrimsher, et al., 140 N.C. App. 135, 535 S.E.2d 594 (2000) bars, as a matter of law, Dr. Kogut from recovering damages against Ms. Rosenfeld because he recovered similar damages from Ms. Toth through a bankruptcy settlement and release? We answer, no.

Summary judgment is appropriate when 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(c) (2001). The party moving for summary judgment must “clearly demonstrate the lack of any triable issue of fact and entitlement to judgment as a matter of law.” Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 220, 513 S.E.2d 320, 324 (1999). In reviewing a motion for summary judgment, the evidence is viewed in the light most favorable to the party opposing the motion. Id.

In granting summary judgment, the trial court relied on Chemimetals Processing, Inc. v. Schrimsher, 140 N.C. App. 135, 535 [491]*491S.E.2d 594 (2000). In Chemimetals, the plaintiff sued its corporate president for breach of contract, breach of fiduciary duty and unfair and deceptive trade practices arising from the president’s scheme to divert money to himself. Before the case proceeded to trial, the parties entered into a “Settlement Agreement and Mutual Release.” In consideration for the settlement, plaintiff dismissed the complaint. Plaintiff then initiated a second lawsuit against the board of-directors and accountants alleging that they conspired to present financial statements which overstated the assets for three fiscal years. Id. at 137-38, 535 S.E.2d at 596.

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Bluebook (online)
579 S.E.2d 400, 157 N.C. App. 487, 2003 N.C. App. LEXIS 741, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kogut-v-rosenfeld-ncctapp-2003.