Staton v. Brame

523 S.E.2d 424, 136 N.C. App. 170, 1999 N.C. App. LEXIS 1303
Court of Appeals of North Carolina·Decided December 21, 1999·No. No. COA98-1501·Published·Cited by 23 cases

Opinion

EDMUNDS, Judge.

This suit originated with an allegation that defendants mishandled and misappropriated funds belonging to plaintiffs. The issue before us is the propriety of the trial court’s order requiring defendant Samuel Thomas Brame (Brame) to provide testimony in the instant case. Although Brame previously had given relevant testimony at a deposition conducted as part of bankruptcy proceedings, he asserted his Fifth Amendment right not to respond to deposition questions in the case at bar. The trial court granted Centura Bank’s (Centura) motion to compel Brame’s testimony. Brame appeals on the ground that the trial court’s order violates his rights under the Fifth Amendment of the United States Constitution and Article I, Section 23 of the North Carolina Constitution. We reverse.

As a preliminary matter, we note that the caption of the 21 August 1998 order appealed from lists only one plaintiff and one defendant in each action and leaves all other parties under the rubric “et al.” Appendix B of the Rules of Appellate Procedure requires that all parties be named in the caption. See Buie v. Johnston, 69 N.C. App. 463, 463 n.1, 317 S.E.2d 91, 92 (1984). The instant case illustrates the importance of this rule; defendant Brame, whose actions constitute the subject of this appeal, is not named in the caption of the order from which the appeal was taken and is only identified as a party defendant on page six of that order. However, the record also contains a 29 July 1998 order that appears to contain the complete caption. We adopt the heading of this order as setting out the correct caption of the case.

The intricate backdrop of this case need not be set out in detail. Plaintiffs Philip A.R. Staton, Ingeborg E. Staton, and Mercedes Staton (the Statons), who lived abroad, inherited a block of stock in the Pan American Beverage Company. Trusts were set up for Ingeborg and Mercedes Staton. The Statons wired funds to an account called the PIM Group Clearing Account at Centura in Winston-Salem in 1993. Defendants Brame and his former wife, Jerri Russell (Russell), who [173] were living in the United States, were provided powers of attorney by the Statons. These defendants were to allocate funds from the PIM Group Clearing Account into investments for the Statons and to manage their assets pursuant to a written fee arrangement. The Statons maintained little control over Brame’s treatment of their money until early 1996. Brame allegedly used funds from the PIM Group Clearing Account for his own personal benefit and for speculative and unsuccessful business ventures and investments. In 1996, the Statons and others filed the first of several claims (the Staton cases) against Brame, Russell, and Centura for Brame’s alleged misuse of the money. Centura asserted claims against Brame for contribution and indemnification. The various suits against Brame were joined for discovery.

After the 1996 institution of the Staton cases, the United States Internal Revenue Service informed Brame that he was the target of an ongoing criminal investigation concerning many of the matters relevant to the Staton cases. Subsequently, on 21 December 1998, a federal indictment was returned against Brame in the Middle District of North Carolina.

Centura and other parties to the Staton cases attempted to depose Brame on 27 March 1997. At that point, Brame was aware that a criminal investigation had begun. The deposition did not take place because Brame asserted his privilege against self-incrimination, pursuant to the Fifth Amendment of the United States Constitution. Centura’s subsequent motion to compel Brame’s deposition testimony, filed on 23 April 1998, was denied. However, on 20 July 1998, Centura filed a Motion to Reconsider, citing Brame’s waiver of his Fifth Amendment privilege at a 1 August 1997 deposition conducted as part of a pending bankruptcy action.

Centura’s Motion to Reconsider and supporting exhibit revealed that on 27 December 1996, Brame filed a petition in bankruptcy in the United States Bankruptcy Court for the Middle District of North Carolina. Russell, Brame’s former wife, also filed for bankruptcy at the conclusion of the marriage. On 1 August 1997, Brame was deposed in an equitable distribution action, which had been removed to the Bankruptcy Court. He was questioned by an attorney for the Trustee in Bankruptcy and by an attorney for Russell. When questioning began, Brame responded, “I did not decide to talk until late yesterday. I spent several sleepless nights. But it’s time to clear the air. It was the toughest decision I think I’ve ever made in my [174] life not to plead the Fifth . . . .” He then answered questions posed to him.

The trial court found that by answering questions in the bankruptcy/equitable distribution proceeding, Brame waived his Fifth Amendment privilege against self-incrimination in the case at bar. “Having knowingly waived his right for his personal benefit, he should not be allowed [to] assert those same rights in this litigation where it might be beneficial to him not to testify.” The trial court then granted Centura’s Motion to Reconsider and ordered Brame to answer deposition questions. Brame appeals.

Whether Brame’s waiver of his Fifth Amendment rights in a hearing related to bankruptcy binds him for the purposes of this case is a question of law. We review questions of law de novo. See Al Smith Buick Co. v. Mazda Motor of America, 122 N.C. App. 429, 470 S.E.2d 552 (1996). Brame contends the trial court’s order requiring him to provide deposition testimony violates his rights under the United States and North Carolina Constitutions. We begin with a review of pertinent cases. An analogous issue arose in State v. Pearsall, 38 N.C. App. 600, 248 S.E.2d 436 (1978). Pearsall involved an armed robbery in which two defendants were charged, then tried separately. One defendant, Williams, after being convicted, entered notice of appeal. Williams then provided self-incriminating testimony at her co-defendant’s first trial. However, when Williams was called as a witness at the co-defendant’s second trial, she refused to testify, exercising her Fifth Amendment rights. Noting that Williams’ own appeal was still pending at the time she refused to testify when called as a witness in the second trial, we held that her testimony in the first trial did not operate as a waiver of her Fifth Amendment rights in the second trial. “It is the majority view that a witness who testifies to incriminating matters in one proceeding does not thereby waive the right to refuse to answer as to such matters on subsequent, separate, or independent trial or hearing.” Id. at 603, 248 S.E.2d at 438 (citations omitted).

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Staton v. Brame, 523 S.E.2d 424, 136 N.C. App. 170, 1999 N.C. App. LEXIS 1303 (N.C. Ct. App. 1999).

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Staton v. Brame
523 S.E.2d 424 (Court of Appeals of North Carolina, 1999)