Trantham v. Michael L. Martin, Inc.

745 S.E.2d 327, 228 N.C. App. 118, 2013 WL 2990771, 2013 N.C. App. LEXIS 665
CourtCourt of Appeals of North Carolina
DecidedJune 18, 2013
DocketNo. COA12-1160
StatusPublished
Cited by19 cases

This text of 745 S.E.2d 327 (Trantham v. Michael L. Martin, Inc.) 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
Trantham v. Michael L. Martin, Inc., 745 S.E.2d 327, 228 N.C. App. 118, 2013 WL 2990771, 2013 N.C. App. LEXIS 665 (N.C. Ct. App. 2013).

Opinion

MARTIN, Chief Judge.

Michael L. Martin in his individual capacity, Michael L. Martin, Inc. n/k/a Equity Management, Inc., and Roanoke Land Company, Inc. (“defendants”) appeal from a judgment entered upon a jury’s verdict finding all defendants liable for breach of contract and defendant Michael L. [120]*120Martin, individually, liable for constructive fraud, unfair and deceptive trade practices, and negligent misrepresentation.

The evidence at trial tended to show that Margaret and Grady Trantham owned approximately one hundred acres of farmland in Pickens County, South Carolina. The Tranthams purchased the farmland in 1972 following Grady Trantham’s retirement after thirty-one years as a machine operator at the Champion Paper Mill in Canton, North Carolina. The Tranthams farmed the land, raising crops and livestock, until 1997 or 1998 when they decided they were too old to continue. The Tranthams placed the farm for sale and met defendant Michael Martin when he came to view the property.

Martin was a real estate broker with some considerable experience, having held a North Carolina real estate broker’s license for over thirty years and having been “involved with approximately 100 seller-financing transactions during that time.” In contrast, Grady Trantham attended school through the seventh grade, while Margaret Trantham completed the ninth grade and never worked outside the home. Martin and the Tranthams agreed to an owner-financed sale of the Pickens County property for $388,000.00. Martin structured the transaction through a series of notes and purchase money mortgages taken by multiple entities that Martin solely owned and controlled. As a licensed real estate broker, Martin also received a commission on the sale of the property.

Martin subdivided and developed the property, selling tracts to individuals. Defendants, however, soon fell behind on the monthly payments on the various notes. Martin made assurances to the Tranthams that he would eventually make the payments and bring current the arrearages. Throughout their dealings, Martin fostered a personal relationship with the Tranthams, visiting with them at their home. Martin summarized his relationship with the Tranthams in a 2008 letter he wrote to them, saying, “I continue to appreciate very much the confidence that you have always placed in me.” Martin also handled all the accounting on the loans, providing periodic reconciliation statements to the Tranthams and documentation to their income tax preparer. Margaret Trantham testified that she and her husband Grady “trusted Mike [Martin]. We got to know him real well, and he was more like a friend. And we liked him. And we just trusted him.”

In 2004, while still behind on payments to the Tranthams in excess of $60,000, Martin proposed in writing that the Tranthams release their remaining liens on the property, enabling him to sell the remaining lots. In exchange, Martin was to use the proceeds of the sale to “bring all [121]*121arrearages and current sums due to [the Tranthams] current” and the Tranthams were to receive substitute collateral in the form of a second lien position on a warehouse in Hendersonville, North Carolina. Martin represented that the value of the warehouse was “in the range of $450,000” and the first lien was in the amount of $175,000, leaving $275,000 in equity. The Tranthams accepted the substitution of collateral agreement. Martin did not explain to the Tranthams the significance of the second lien position.

Martin also failed to disclose that he was in arrears on the warehouse’s first mortgage at the time of the collateral substitution. In a 2007 email to an attorney for the first lien holder, Martin acknowledged the history of financial troubles with the property: “I have been in a catch 22 from the beginning with this property. It has been in rough shape, which impacts the rentability.”

Following the substitution of collateral agreement, Martin made gross sales of all the remaining property totaling $362,297.00. However, Martin did not make payment to the Tranthams to bring the arrearages current, as contemplated in the agreement.

In February 2007, the holder of the first note on the warehouse property in Hendersonville called the note because of the continued arrearages on that property. Martin, acting through Roanoke Land Company, Inc., then took an assignment of the six original notes due to the Tranthams, purportedly to “defend them” and collect against the warehouse. The warehouse was ultimately foreclosed upon by the first lien holder and no additional monies were ever remitted to the Tranthams.

Grady Trantham died on 18 March 2011 and his estate was represented in this action through Margaret Trantham, who was ninety-one years old at the time of trial.

The jury’s verdict awarded identical sums of $426,927.41 to plaintiffs for: 1) breach of the substitution of collateral agreement by Martin, individually; 2) breach of the promissory notes by Michael L. Martin, Inc.; 3) breach of the promissory notes by Roanoke Land Company, Inc.; 4) constructive fraud by Martin, individually; 5) unfair and deceptive trade practices by Martin, individually; and 6) negligent misrepresentation by Martin, individually. Defendants made a post-trial motion to, inter alia, alter or amend the judgment and attached a proposed judgment reducing the amounts owed by Michael L. Martin, Inc. and Roanoke Land Company, Inc. to $92,963.34 and $333,964.07, respectively, and assessing no liability to Martin, individually. In a 10 May 2012 amended judgment, the trial court entered judgment against Michael L. Martin, Inc. in the [122]*122amount of $92,963.34, and Roanoke Land Company, Inc. in the amount of $333,964.07. The.trial court also entered judgment against Martin, individually, in the amount of $426,927.41, which was trebled pursuant to N.C.G.S. § 75-1.1. Defendants appeal.

Defendants first argue that the trial court erred by denying defendants’ motion for a directed verdict with respect to each of plaintiffs’ causes of action. “The standard of review of directed verdict is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury. ” Davis v. Dennis Lilly Co., 330 N.C. 314, 322, 411 S.E.2d 133, 138 (1991) (citing Kelly v. Int’l Harvester Co., 278 N.C. 153, 158, 179 S.E.2d 396, 398 (1971)). “In determining the sufficiency of the evidence to withstand a motion for a directed verdict, all of the evidence which supports the non-movant’s claim must be taken as true and considered in the light most favorable to the non-movant.” Turner v. Duke Univ., 325 NC. 152, 158, 381 S.E.2d 706, 710 (1989). The non-movant is given “the benefit of every reasonable inference which may legitimately be drawn [from the evidence,] resolving contradictions, conflicts, and inconsistencies in the non-movant’s favor.” Id. “ ‘A motion for directed verdict should be denied if more than a scintilla of evidence supports each element of the non-moving party’s claim.’ ” J.T. Russell & Sons, Inc. v. Silver Birch Pond L.L.C.,_N.C. App._,_, 721 S.E.2d 699, 703 (2011) (quoting Weeks v. Select Homes, Inc., 193 N.C. App. 725, 730, 668 S.E.2d 638, 641 (2008)).

Defendants argue the trial court erred by denying a directed verdict of plaintiffs’ claim of breach of contract against Michael L.

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Bluebook (online)
745 S.E.2d 327, 228 N.C. App. 118, 2013 WL 2990771, 2013 N.C. App. LEXIS 665, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trantham-v-michael-l-martin-inc-ncctapp-2013.