Ward v. Jett Properties, LLC

663 S.E.2d 862, 191 N.C. App. 605, 2008 N.C. App. LEXIS 1490, 2008 WL 2966868
Court of Appeals of North Carolina·Decided August 5, 2008·No. COA08-104·Published·Cited by 17 cases

Opinion

*606 HUNTER, Judge.

Mark A. Ward (“plaintiff’) appeals from an order granting Jett Properties, LLC’s (“defendant”) motion for sanctions pursuant to Rule 11 of the North Carolina Rules of Civil Procedure. After careful review, we affirm.

Plaintiff is a tenant residing in unit 21 of Buckeye Townhouses in Rural Hall, North Carolina. Defendant owns Buckeye Townhouses. In a separate action, initiated on 20 June 2007, plaintiff filed a complaint seeking injunctive relief for the alleged violation of restrictive covenants by defendant’s other tenants. Plaintiff alleged “defendant’s tenants engaged in a football slinging and kicking session within striking distance of plaintiff’s vehicle” and abridged plaintiff’s right to ingress and egress 1 by “darting out between parked vehicles on metal skooters[.]”

On 29 June 2007, defendant filed a motion to dismiss pursuant to North Carolina Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief can be granted. The court granted defendant’s motion to dismiss on 30 July 2007 as plaintiff’s complaint “requested only injunctive relief and showed no actual damage and no substantial likelihood of irreparable harm[.]” Further, plaintiff “failed to show that he did not have an adequate remedy at law[.]” This Court affirmed the trial court’s order granting defendant’s motion to dismiss in an unpublished opinion. Ward v. Jett Props., LLC, 190 N.C. App. 208, S.E.2d — (2008).

On 6 September 2007, defendant filed a motion for sanctions pursuant to Rule 11 contending that plaintiff intended merely to harass defendant and filed the action knowing that it was insufficient as a matter of law. Finding that the “instant lawsuit was filed knowing that the claims were not warranted by existing law and further were filed for an improper purpose,” the trial court granted defendant’s motion for sanctions on 26 October 2007. The Court also noted that plaintiff has filed at least forty-two actions in the past six years including a previous action alleging conduct identical to the instant case. The court awarded defendant the sum of $2,000.00 for attorney’s fees and costs of the action; plaintiff timely filed an appeal on 20 November 2007.

Plaintiff contends that the trial court erred in granting defendant’s motion for sanctions pursuant to Rule 11. The trial court’s order *607 granting defendant’s motion for sanctions “is reviewable de novo as a legal issue.” Turner v. Duke University, 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989). On appeal, the Court must determine “(1) whether the trial court’s conclusions of law support its judgment or determination, (2) whether the trial court’s conclusions of law are supported by its findings of fact, and (3) whether the findings of fact are supported by a sufficiency of the evidence.” Id. The appropriateness of the sanction imposed, however, is reviewed under an abuse of discretion standard. Id.

In pertinent part, Rule 11 provides:

A party who is not represented by an attorney shall sign his pleading, motion, or other paper and state his address. . . . The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information, and belief formed after reasonable inquiry it is well grounded in fact and is warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.

N.C. Gen. Stat. § 1A-1, Rule 11(a) (2007). It is well established “ ‘[t]here are three parts to a Rule 11 analysis: (1) factual sufficiency, (2) legal sufficiency, and (3) improper purpose. ... A violation of any one of these requirements mandates the imposition of sanctions under Rule 11.’ ” Static Control Components, Inc. v. Vogler, 152 N.C. App. 599, 603, 568 S.E.2d 305, 308 (2002) (citation omitted).

In the instant case, the trial court granted defendant’s motion for sanctions finding that “the instant lawsuit was filed knowing that the claims were not warranted by existing law and further were filed for an improper purpose, that is harassment of the Defendant and it’s [sic] tenants[.]” As there is no issue as to the factual sufficiency of plaintiff’s complaint, we begin by discussing legal sufficiency.

I. Legal Sufficiency

Asserting that his complaint was based on extensive inquiry into the law and set forth a facially plausible legal theory, plaintiff contends that the trial court erred in granting defendant’s motion for sanctions. We disagree.

This court has held a two-step analysis is required when examining the legal sufficiency of a claim subject to Rule 11 inquiry. Initially, *608 the court must determine the facial plausibility of the paper. “If the paper is facially plausible, then the inquiry is complete, and sanctions are not proper.” Mack v. Moore, 107 N.C. App. 87, 91, 418 S.E.2d 685, 688 (1992). If the paper is not facially plausible, the second issue is whether, based on a reasonable inquiry into the law, the alleged offender “formed a reasonable belief that the paper was warranted by existing law, judged as of the time the paper was signed.” Id. Rule 11 sanctions are appropriate where the offending party either failed to conduct reasonable inquiry into the law or did not reasonably believe that the paper was warranted by existing law. Id.

In the instant case, plaintiffs claim was not facially plausible as it was dismissed pursuant to Rule 12(b)(6) at trial. The dismissal was subsequently affirmed by our court as plaintiff “alleged no claim of actual damage or substantial likelihood of irreparable harm” and, consequently, did not state a claim upon which relief could be granted. Ward, 190 N.C. App. at —■, —• S.E.2d at -— (slip op. 4). Though “the mere fact that a cause of action is dismissed upon a Rule 12(b)(6) motion does not automatically entitle the moving party to have sanctions imposed[,]” Harris v. Daimler Chrysler Corp., 180 N.C. App. 551, 561, 638 S.E.2d 260, 268 (2006), it is often indicative that sanctions are proper.

Plaintiff argues that he conducted a reasonable inquiry into existing law and, further, that the standard for a pro se litigant should be relaxed to account for the absence of a legal education. Supporting his claim of conducting reasonable inquiry, plaintiff asserts that he consulted a licensed attorney regarding the legal sufficiency of his complaint.

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Ward v. Jett Properties, LLC, 663 S.E.2d 862, 191 N.C. App. 605, 2008 N.C. App. LEXIS 1490, 2008 WL 2966868 (N.C. Ct. App. 2008).

663 S.E.2d 862 (Ward v. Jett Properties, LLC) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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