Wells Fargo Bank, N.A. v. Orsbon & Fenninger

• Court: Court of Appeals of North Carolina
• Decided: July 6, 2021
• Docket: 20-560
• Status: Published

Opinion

IN THE COURT OF APPEALS OF NORTH CAROLINA

2021-NCCOA-315 No. COA20-560

Filed 6 July 2021

Mecklenburg County, No. 18-CVS-23022

WELLS FARGO BANK, N.A., as Trustee of the JANE RICHARDSON MCELHANEY REVOCABLE TRUST, WELLS FARGO BANK, N.A., as Trustee of the SAMUEL CLINTON MCELHANEY REVOCABLE TRUST, and WELLS FARGO BANK, N.A., as Executor of the ESTATE OF JANE RICHARDSON MCELHANEY, Plaintiffs,

v.

ORSBON & FENNINGER, LLP, and R. ANTHONY ORSBON, Defendants.

Appeal by Defendants from order entered 3 March 2020 by Judge Donnie

Hoover in Mecklenburg County Superior Court. Heard in the Court of Appeals

24 March 2021.

McGuireWoods, L.L.P., by T. Richmond McPherson, III and Anne L. Doherty, for Plaintiffs-Appellees.

Brooks Pierce McClendon Humphrey & Leonard, L.L.P., by Gary S. Parsons and Kimberly M. Marston, for Defendants-Appellants.

COLLINS, Judge.

¶1 Anthony Orsbon and his law firm, Orsbon & Fenninger, LLP, (collectively,

“Defendants”) appeal from an order denying their motion for summary judgment on

certain defenses and granting Wells Fargo Plaintiffs’ motion for partial summary WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

2021-NCCOA-315

Opinion of the Court

judgment. Defendants argue that the trial court erred by denying their motion for

summary judgment as to the defenses of collateral estoppel and election of remedies

and granting Wells Fargo Plaintiffs summary judgment on those defenses. Because

Defendants have not shown sufficient grounds for immediate appellate review of the

trial court’s interlocutory order as to the election of remedies defense, we deny

Defendants’ petition for writ of certiorari and dismiss Defendants’ arguments

concerning that defense. Because Defendants cannot show that each element of

collateral estoppel is satisfied, we affirm the trial court’s order as to that defense.

I. Procedural History

¶2 The present action follows a declaratory judgment action (“Declaratory

Action”) brought by Wells Fargo Bank, N.A., as trustee of the Jane Richardson

McElhaney Revocable Trust (“Wells Fargo as Jane’s Trustee”), and a claim for

reformation of that trust (“Reformation Claim”) brought by Jacob and Julia

McElhaney. On 7 December 2018, the Mecklenburg County Superior Court

announced its ruling from the bench on a motion for summary judgment and

judgment on the pleadings in those actions.

¶3 The same day, Wells Fargo as Jane’s Trustee, along with Wells Fargo Bank,

N.A., as trustee of the Samuel Clinton McElhaney Revocable Trust, and Wells Fargo

Bank, N.A., as executor of the Jane Richardson McElhaney Estate (together, “Wells

Fargo Plaintiffs”) brought this action against Defendants alleging negligence and WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

legal malpractice. Simultaneously, Jacob and Julia McElhaney brought an action

against Defendants alleging negligence, legal malpractice, and breach of contract

arising from the same set of facts. Upon consent motions in both cases, the trial court

consolidated the actions for the purposes of discovery. With leave of the trial court,

Defendants filed amended answers in each action. Defendants asserted as defenses

that each of the plaintiffs lacked standing and that collateral estoppel and election of

remedies barred each of the plaintiffs’ claims. Defendants also contended that Wells

Fargo Plaintiffs’ claims were barred by contributory negligence and the equitable

doctrines of estoppel and laches.

¶4 Defendants moved for summary judgment in both actions on their defenses of

collateral estoppel and election of remedies, as well as an alleged lack of damages

from some or all of Defendants’ alleged negligent acts. Defendants also moved for

summary judgment against Wells Fargo Plaintiffs on the defense of lack of standing.

Wells Fargo Plaintiffs moved for partial summary judgment on standing, collateral

estoppel, equitable estoppel, laches, and election of remedies. Likewise, Jacob and

Julia McElhaney moved for partial summary judgment on standing, collateral

estoppel, and election of remedies.

¶5 In a consolidated order (“Order on Appeal”), the trial court granted the motions

for partial summary judgment by Wells Fargo Plaintiffs and Jacob and Julia

McElhaney and denied Defendants’ motions. Defendants timely appealed. WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

II. Factual Background

A. The Estate Planning Documents

¶6 In May 1996, both Samuel and Jane McElhaney established revocable trusts,

Samuel’s Trust and Jane’s Trust, respectively. In the fall of 2010, attorney Anthony

Orsbon (“Orsbon”) assisted Samuel and Jane in amending these trusts and preparing

other estate planning documents. On 12 October 2010, Samuel and Jane executed

separate trust agreements amending and restating their trusts. As amended, both

provided that the trust of the first spouse to die would be divided into a marital share

and a family share, each share to be administered as a trust. During the surviving

spouse’s lifetime, he or she would be entitled to certain distributions from both the

marital trust and the family trust.

¶7 Upon the surviving spouse’s death, the surviving spouse’s entire trust would

be allocated to the family share which, along with any remains of the marital share,

would be distributed to an identified set of beneficiaries (“Specific Beneficiaries”).

Following amendments in 2011, Samuel’s and Jane’s Trusts each provided for

identical bequests to identical lists of Specific Beneficiaries, comprised of relatives

and private organizations.

¶8 Each Specific Beneficiary would receive both the bequest provided in Samuel’s

Trust and the bequest provided in Jane’s Trust. The surviving spouse held a limited

power of appointment “at any time and from time to time by and through [his or her] WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

Last Will and Testament to reduce or decrease any or all bequest amounts

bequeathed to” the Specific Beneficiaries.

¶9 After disbursement to the Specific Beneficiaries, any remainder would be held

by the trustee “for the benefit of [Samuel and Jane’s] grandchildren who are living at

the Division Date.” Samuel and Jane’s one son, Scott McElhaney, had two children,

Jacob and Julia McElhaney. Following Scott McElhaney’s death in 2010, Jacob and

Julia (“Residuary Beneficiaries”) were the sole living descendants of Samuel and

Jane. After Samuel died in August 2015, Jane consulted Orsbon concerning her

estate planning documents. In October 2015, Orsbon provided drafts of updated

estate documents to Jane’s Wells Fargo financial advisor, Linda Montgomery. In

November, Montgomery had discussions with Orsbon concerning changes Jane

desired to make to the draft documents.

¶ 10 On 8 December 2015, Jane executed a new Last Will and Testament (“Jane’s

Will”) and an Amended and Restated Trust Agreement modifying her Trust. Jane’s

Will disposed of certain personal property and otherwise left the remainder of her

estate to her Trust via a pour-over clause. Jane’s Trust, as amended in 2015, stated

that “[t]he Family Share shall be administered as a Family Trust” with a changed

list of specific bequests. The amendment eliminated certain Specific Beneficiaries,

reduced bequests to others, and added one new Specific Beneficiary. The remainder

of Jane’s Trust after payment to the Specific Beneficiaries was to be divided in equal WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

shares and held in trust for Jane’s grandchildren or, if applicable, the issue of her

deceased grandchildren. Jane died on 21 April 2017.

B. The Declaratory Action and Reformation Claim

¶ 11 On 3 October 2017, Wells Fargo as Jane’s Trustee instituted the Declaratory

Action in Mecklenburg County Superior Court. Its petition for declaratory judgment

included the following allegations:

22. Specifically, as [Jane’s] Trust does not provide for the creation and disposition of a Family Share or Family Trust, the reference to the Family Trust contained in [Jane’s] Trust creates a latent ambiguity as to whether by making such reference Jane intended to exercise her testamentary limited power of appointment over the Family Trust created under Samuel’s Revocable Trust.

23. [Jane’s] Trust does not reference the testamentary limited power of appointment granted to Jane. Even if it did, the power of appointment granted to Jane was limited to the power to “reduce or decrease” the bequest of the specific beneficiaries named in Samuel’s Trust, and the provision in [Jane’s] Trust adds a beneficiary, Ellen McElhaney, which is not authorized by the testamentary limited power of appointment granted to Jane . . . .

24. [Jane’s] Will does not reference the testamentary limited power of appointment granted to Jane in the Family Trust or any attempt to exercise such power of appointment.

....

35. The Trustee is not aware of any evidence that would be admissible to clarify Jane’s intent in using the term “Family Share” and/or “Family Trust” in [Jane’s] WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

Trust.

¶ 12 Wells Fargo as Jane’s Trustee requested the trial court to:

1. Declare that [Jane’s] Will did not exercise Jane’s testamentary limited power of appointment over the Family Trust.

2. Absent the admissibility of evidence to clarify the latent ambiguity in [Jane’s] Trust sufficient to find that Jane exercised her testamentary limited power of appointment over the Family Trust, declare that [Jane’s] Trust does not exercise Jane’s testamentary limited power of appointment over the Family Trust[.]

3. Absent the admissibility of evidence to clarify the latent ambiguity in [Jane’s] Trust sufficient to find that Jane exercised her testamentary limited power of appointment over the Family Trust, declare that the Trustee shall distribute the property of the Family Trust as set forth in . . . Samuel’s Revocable Trust.

4. Absent the admissibility of evidence to clarify the latent ambiguity in [Jane’s] Trust sufficient to find that Jane exercised her testamentary limited power of appointment over the Family Trust, declare that the references to Family Share and Family Trust in [Jane’s] Trust refer to all of the property of [Jane’s] Trust and that the Trustee shall distribute the property of [Jane’s] Trust pursuant to the provisions of . . . the Trust.

¶ 13 On 19 March 2018, the Residuary Beneficiaries filed a response to the petition

for declaratory judgment and asserted the Reformation Claim against Wells Fargo as

Jane’s Trustee and the Specific Beneficiaries. The Residuary Beneficiaries alleged

that

[Jane’s] Trust’s express references to “The Family Share” WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

and “Family Trust” created under Samuel’s Revocable Trust, the substantial identity in beneficiaries between [Jane’s] Trust and Samuel’s Revocable trust, and [Jane’s] Trust’s reduction of the specific bequests set forth in Samuel’s Revocable Trust each are indicative of Jane’s desire and intent to exercise the testamentary limited power of appointment granted to her under Samuel’s Revocable Trust.

The Residuary Beneficiaries contended that additional extrinsic evidence “further

reveals that Jane intended, through execution of her Will and the Trust, to exercise

the testamentary limited power of appointment granted to her under Samuel’s

Revocable Trust.”

¶ 14 The Residuary Beneficiaries sought reformation of Jane’s Trust under N.C.

Gen. Stat. § 36C-4-415 on the ground that it “fail[ed] to include language clearly

expressing Jane’s intent to exercise the testamentary limited power of appointment

granted to her under Samuel’s Revocable Trust.” The Residuary Beneficiaries sought

to eliminate the bequests to Specific Beneficiaries in Jane’s Trust as contrary to

Jane’s intent.

¶ 15 Several of the Specific Beneficiaries moved for summary judgment and, in the

alternative, judgment on the pleadings, arguing that reformation was not available

as a matter of law. The Residuary Beneficiaries filed a brief and multiple affidavits

in opposition. On 7 December 2018, the trial court orally announced its ruling:

I did read everything because I wanted to make sure that in addition to the arguments that I went back and WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

reviewed everything in context of your arguments. . . . I read the depositions, read the affidavits, read the arguments and reformation and extrinsic evidence.

[I]n reviewing everything that was provided to me regarding Jane’s [T]rust and the issue of power of appointment and whether it was exercised. . . . I have to find that I don’t see any issues of material fact in this case as relates to what her intentions were at the time of the execution.

So as to the petition for declaratory judgment, I’m finding that Jane did not exercise her testamentary limited . . . power of appointment in either her will or her trust and that the claim for reformation will not be available based on the evidence of her intent at the time of execution. So again, as to the motion for summary judgment, I cannot find there are any genuine issues of material fact . . . .

I will also grant the motion for judgment on the pleadings after reviewing the pleadings in the file in this case, and that will be my order.

¶ 16 The trial court entered a written order (“Underlying Order”) on 20 December

2018 stating as follows:

After review of the matters of record including, without limitation, the pleadings, including the Petition, the Counterclaim, the Crossclaim, the Answers, and the exhibits referenced therein, the parties’ submissions to the Court and materials filed in support of and in opposition to [the Specific Beneficiary] Movants’ Motions, including sworn deposition testimony, and having the benefit of legal briefs and oral argument by counsel for the parties, the Court finds and determines that there exists no genuine issue as to any material fact and that Movants are entitled to Judgment as a matter of law on all claims and causes of WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

action asserted in this action, except the Movants’ Motion for attorneys’ fees and costs . . . .

The trial court granted the Specific Beneficiary Movants’ motion for summary

judgment and, in the alternative, granted their motion for judgment on the pleadings.

As to the petition for declaratory judgment, the trial court declared that Wells Fargo

Bank, N.A., shall distribute the property in Samuel’s Trust and Jane’s Trust as

written in the trust instruments. Finally, the trial court dismissed the Reformation

Claim with prejudice. The Residuary Beneficiaries timely appealed to this Court, but

withdrew their appeal after the parties entered into a confidential settlement

agreement.

C. The Negligence and Malpractice Actions

¶ 17 On 7 December 2018, shortly after the trial court orally announced its decision

in the Declaratory Action and Reformation Claim, Wells Fargo Plaintiffs and the

Residuary Beneficiaries filed their respective actions for negligence and legal

malpractice. The trial court granted summary judgment in favor of Wells Fargo

Plaintiffs and the Residuary Beneficiaries on the defenses of lack of standing,

collateral estoppel, equitable estoppel, laches, and election of remedies, and against

Defendants with respect to their defenses of collateral estoppel, election of remedies,

standing, and the alleged lack of damages due to some or all of Defendants’ alleged

negligent acts. Defendants appealed. WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

III. Appellate Jurisdiction

¶ 18 We first address whether Defendants’ appeal is properly before this Court. The

Order on Appeal is interlocutory because it does not “dispose[] of the cause as to all

the parties, leaving nothing to be judicially determined between them in the trial

court.” See Veazey v. City of Durham, 231 N.C. 357, 361-62, 57 S.E.2d 377, 381 (1950).

There is generally no right to immediate appeal of an interlocutory order. Goldston

v. Am. Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). The purpose of

this rule is to “prevent fragmentary, premature and unnecessary appeals by

permitting the trial court to bring the case to final judgment before it is presented to

the appellate courts.” Fraser v. Di Santi, 75 N.C. App. 654, 655, 331 S.E.2d 217, 218

(1985) (citation omitted). A party may immediately appeal an interlocutory order,

however, if the order “affects a substantial right claimed in any action or

proceeding[.]” N.C. Gen. Stat § 1-277(a) (2021).

¶ 19 Defendants contend that the Order on Appeal is immediately appealable to the

extent that its denial of their motion for summary judgment on the defense of

collateral estoppel affects a substantial right. “The doctrine [of collateral estoppel] is

designed to prevent repetitious lawsuits, and parties have a substantial right to avoid

litigating issues that have already been determined by a final judgment.” Turner v.

Hammocks Beach Corp., 363 N.C. 555, 558, 681 S.E.2d 770, 773 (2009). Thus, “[i]t is

well established that the denial of a motion for summary judgment ‘affects a WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

substantial right when the motion . . . makes a colorable assertion that [a] claim is

barred under the doctrine of collateral estoppel.’” Gray v. Fannie Mae, 264 N.C. App.

642, 645, 830 S.E.2d 652, 655-56 (2019) (quoting Turner, 363 N.C. at 558, 681 S.E.2d

at 773); see also Fox v. Johnson, 243 N.C. App. 274, 281, 777 S.E.2d 314, 321 (2015)

(holding that appellants made a colorable assertion of collateral estoppel by including

the defense in their answer and as a basis for their motion for judgment on the

pleadings); Hillsboro Partners, LLC v. City of Fayetteville, 226 N.C. App. 30, 35, 738

S.E.2d 819, 823 (2013) (concluding that appellant made a colorable assertion of

collateral estoppel because the prior and instant lawsuits both arose from the same

building demolition).

¶ 20 In this case, before the trial court, Defendants moved for summary judgment

based on collateral estoppel. Defendants thoroughly briefed and argued each element

of collateral estoppel and referenced numerous citations to caselaw and the

evidentiary record. We conclude that Defendants have made a colorable assertion of

collateral estoppel and the Order on Appeal may affect their “substantial right to

avoid litigating issues that have already been determined by a final judgment.” See

Turner, 363 N.C. at 558, 681 S.E.2d at 773. Accordingly, we will review the Order on

Appeal’s denial of the defense of collateral estoppel.

¶ 21 Defendants aptly concede that no precedent holds that the denial of summary

judgment on the defense of election of remedies affects a substantial right. Indeed, WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

“[t]he avoidance of one trial is not ordinarily a substantial right.” Green v. Duke

Power Co., 305 N.C. 603, 608, 290 S.E.2d 593, 596 (1982). As such, Defendants have

petitioned for a writ of certiorari requesting this Court to review the Order on Appeal

as to their defense of election of remedies.

¶ 22 This Court may issue the writ of certiorari “in appropriate circumstances . . .

to permit review of . . . orders of trial tribunals when . . . no right of appeal from an

interlocutory order exists . . . .” N.C. R. App. P. 21(a). We assess petitions seeking

review of interlocutory orders in light of our “general policy against the piecemeal

review of” such orders. See Harbor Point Homeowners’ Ass’n ex rel. Bd. of Directors

v. DJF Enterprises, Inc., 206 N.C. App. 152, 165, 697 S.E.2d 439, 448 (2010). We have

emphasized that “the routine allowance of interlocutory appeals would have a

tendency to delay, rather than advance, the ultimate resolution of matters in

litigation.” Newcomb v. Cnty. of Carteret, 207 N.C. App. 527, 554, 701 S.E.2d 325,

344 (2010).

¶ 23 Defendants argue that this Court should grant certiorari because (1) the issue

of election of remedies “arises from substantially the same facts as the collateral

estoppel issue; (2) the issue could be equally dispositive; (3) the issue is ripe; and (4) it

would promote judicial economy by eliminating the need for a later appeal on this

issue.” These arguments are unavailing because “similar considerations would

support the issuance of a writ of certiorari in virtually any case in which a trial court WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

refuses to grant summary judgment” on one out of several affirmative defenses. See

id. at 553, 701 S.E.2d at 344. Additionally, as Wells Fargo Plaintiffs argue, a decision

by this Court on the merits of the issue would not necessarily dispose of all claims as

to all parties. Accordingly, in our discretion, we deny Defendants’ petition for a writ

of certiorari and decline to review the merits of their arguments concerning the

defense of election of remedies.

IV. Discussion

¶ 24 Defendants argue that the trial court erred by denying their motion for

summary judgment on the defense of collateral estoppel and granting Wells Fargo

Plaintiffs’ motion as to that defense. Summary judgment is proper where “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) (2020). “The standard of review for summary judgment is de novo.”

Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007) (citation omitted).

¶ 25 “Under the collateral estoppel doctrine, parties and parties in privity with

them are precluded from retrying fully litigated issues that were decided in any prior

determination and were necessary to the prior determination.” Turner, 363 N.C. at

558, 681 S.E.2d at 773 (alteration, citation, and quotation marks omitted). “The

issues resolved in the prior action may be either factual issues or legal issues.” Doyle WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

v. Doyle, 176 N.C. App. 547, 549, 626 S.E.2d 845, 848 (2006). The party alleging

collateral estoppel must demonstrate

that the earlier suit resulted in a final judgment on the merits, that the issue in question was identical to an issue actually litigated and necessary to the judgment, and that both the party asserting collateral estoppel and the party against whom collateral estoppel is asserted were either parties to the earlier suit or were in privity with parties.

State ex rel. Tucker v. Frinzi, 344 N.C. 411, 414, 474 S.E.2d 127, 128-29 (1996)

(emphasis added) (brackets, quotation marks, and citation omitted). For issues to be

considered “identical” to ones “actually litigated and necessary” to a previous

judgment:

(1) the issues must be the same as those involved in the prior action, (2) the issues must have been raised and actually litigated in the prior action, (3) the issues must have been material and relevant to the disposition of the prior action, and (4) the determination of the issues in the prior action must have been necessary and essential to the resulting judgment.

State v. Summers, 351 N.C. 620, 623, 528 S.E.2d 17, 20 (2000) (citation omitted). “The

burden is on the party asserting [collateral estoppel] to show with clarity and

certainty what was determined by the prior judgment.” Miller Bldg. Corp. v. NBBJ

N.C., Inc., 129 N.C. App. 97, 100, 497 S.E.2d 433, 435 (1998) (internal quotation

marks and citation omitted); accord Powers v. Tatum, 196 N.C. App. 639, 642, 676

S.E.2d 89, 92 (2009). WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

¶ 26 Defendants argue that the instant malpractice and negligence suits present

the identical issue as the Declaratory Action and Reformation Claim: whether Jane

intended to exercise her limited power of appointment. Defendants contend that this

issue was actually litigated and that in the course of deciding the motions for

summary judgment and judgment on the pleadings in the Declaratory Action and

Reformation Claim, the trial court actually and necessarily determined that Jane did

not intend to exercise her limited power of appointment.

¶ 27 Wells Fargo Plaintiffs respond that (1) the trial court did not actually

determine whether Jane intended to exercise the power of appointment, but instead

only determined that the issue of Jane’s intent was immaterial; (2) even if the trial

court did determine the issue of Jane’s intent, that determination was unnecessary

to the Underlying Order; (3) Wells Fargo Plaintiffs were not all parties in the

Declaratory Action and Reformation Claim, so they did not all have a full and fair

opportunity to litigate the issue; (4) the heavier burden of proof applicable to the

Reformation Claim bars the application of collateral estoppel; and (5) the Declaratory

Action and Reformation Claim involved different facts than the present action.

¶ 28 The Residuary Beneficiaries did raise the issue of Jane’s intent in the

Declaratory Action. Specifically, they argued that a material issue of Jane’s intent

precluded summary judgment as to the petition for declaratory judgment. They

contended the issue was material to whether Jane had successfully exercised her WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

power of appointment by substantially complying with the terms set out in Samuel’s

Trust, as required by N.C. Gen. Stat. § 31D-3-304.

¶ 29 The Residuary Beneficiaries also raised the issue of Jane’s intent while

pursuing their Reformation Claim, which sought “to correct a mistake that occurred

as the result of a scrivener’s error which caused [Jane’s Trust] to fail to conform the

terms of trust to [Jane’s] intent.” Both the Residuary Beneficiaries and Specific

Beneficiaries extensively litigated the issue of Jane’s intent prior to entry of the

Underlying Order. Nonetheless, Defendants cannot meet their burden of showing

“with clarity and certainty” that the issue of Jane’s intent was actually and

necessarily determined by the Underlying Order. See Miller Bldg. Corp., 129 N.C.

App. at 100, 497 S.E.2d at 435.

¶ 30 When the trial court orally announced its ruling, it stated in pertinent part

in reviewing everything that was provided to me regarding Jane’s [T]rust and the issue of power of appointment and whether it was exercised . . . . I have to find that I don’t see any issues of material fact in this case as relates to what her intentions were at the time of the execution.

So as to the petition for declaratory judgment, I’m finding that Jane did not exercise her testamentary limited . . . power of appointment in either her will or her trust and that the claim for reformation will not be available based on the evidence of her intent at the time of execution. So again, as to the motion for summary judgment, I cannot find there are any genuine issues of material fact . . . . WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

(emphasis added).

The written Underlying Order stated in pertinent part that

there exists no genuine issue as to any material fact and that [the Specific Beneficiary] Movants are entitled to judgment as a matter of law on all claims and causes of action asserted in this action, except the Movants’ Motion for attorneys’ fees and costs . . . .

¶ 31 The Underlying Order granted the moving Specific Beneficiaries’ motion for

summary judgment and, in the alternative, the motion for judgment on the

pleadings.1 While the “slightest doubt” as to a material fact entitles a party opposing

summary judgment to trial, Adventure Travel World, Ltd. v. Gen. Motors Corp., 107

N.C. App. 573, 577, 421 S.E.2d 173, 176 (1992) (citation omitted), a dispute as to an

immaterial fact will not preclude summary judgment, Capps v. City of Raleigh, 35

N.C. App. 290, 293, 241 S.E.2d 527, 529 (1978). Likewise, “[j]udgment on the

pleadings is proper when ‘the movant clearly establishes that no material issue of

fact remains to be resolved and that he is entitled to judgment as a matter of law.’”

1 We note that where “matters outside the pleadings are presented to and not excluded

by the court,” a motion seeking judgment on the pleadings must be treated as a motion for summary judgment. See N.C. Gen. Stat. § 1A-1, Rule 12(c) (2018). Because the trial court explicitly stated that it considered matters outside the pleadings, it was improper to grant judgment on the pleadings in the alternative. See Battle v. Clanton, 27 N.C. App. 616, 618, 220 S.E.2d 97, 98 (1975) (holding that judgment on the pleadings was inappropriate where “matters outside the pleadings were presented to and considered by the court”). Even so, the Underlying Order’s grant of judgment on the pleadings in the alternative illuminates the possible bases of the trial court’s dismissal of the Reformation Claim. WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

Shearin v. Brown, 2021-NCCOA-4, ¶ 11 (quoting Samost v. Duke Univ., 226 N.C. App.

514, 518, 742 S.E.2d 257, 260 (2013)). The petition for declaratory judgment and the

counterclaim and crossclaim for reformation took inconsistent positions on the issue

of Jane’s intent. Prior to entry of the Underlying Order, the parties submitted plainly

conflicting evidence on this issue to the trial court.2

¶ 32 The trial court may have determined the issue of Jane’s intent by concluding

that it was required to disregard some of the conflicting evidence of Jane’s intent as

a matter of law. But it is also possible that the trial court merely determined that

the conflicting evidence of Jane’s intent was immaterial as a matter of law.

Specifically, the trial court could have resolved the Declaratory Action by determining

that Jane had not substantially complied with the requirements on her limited power

of appointment, regardless of her intent. See N.C. Gen. Stat. § 31D-3-304 (2015).

Section 31D-3-304 provides that

[a] power holder’s substantial compliance with a formal requirement of appointment imposed by the donor . . . is sufficient if both of the following apply:

(1) The power holder knows of and intends to exercise the power.

2 This evidence included, inter alia, Orsbon’s deposition testimony denying that Jane

intended to exercise the limited power of appointment or directed him to draft her estate documents to do so, Linda Montgomery’s deposition testimony that Jane did intend to exercise the limited power of appointment, and affidavits from various witnesses attesting that Orsbon had acknowledged Jane’s intent to exercise the limited power of appointment during a “family meeting” concerning trust administration. WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

(2) The power holder’s manner of attempted exercise of the power does not impair a material purpose of the donor in imposing the requirement.

Id. The Underlying Order could be based on a determination under section 31D-3-304

that Jane’s “manner of attempted exercise . . . impair[ed] a material purpose” of the

restrictions in Samuel’s Trust, and Defendants cannot show that Jane’s intent was

material to, and therefore actually and necessarily determined in, the Declaratory

Action.

¶ 33 Nor can Defendants show that the issue of Jane’s intent was material to the

Reformation Claim, and therefore actually and necessarily determined. The trial

court’s oral announcement could be understood as stating that reformation was

unavailable because there was no genuine issue that Jane did not intend to exercise

the power of appointment. But a closer examination of the Record and Underlying

Order demonstrates that, as Wells Fargo Plaintiffs argue, the trial court likely

determined that Jane’s intent was immaterial to the Reformation Claim. Residuary

Beneficiaries did not cite any precedent supporting the proposition that a court may

reform a trust under § 36C-4-415 based on the settlor’s intent to exercise a power of

appointment that by its terms could only be exercised in the power holder’s will. The

moving Specific Beneficiaries underscored this issue and argued that “the relief [the

Residuary Beneficiaries] seek far exceeds the scope of permissible reformations under

North Carolina Law.” WELLS FARGO BANK, N.A. V. ORSBON & FENNINGER, LLP

¶ 34 On these facts, Defendants cannot show with clarity and certainty that the

issue of Jane’s intent was actually and necessarily determined in the Declaratory

Action or Reformation Claim.3 Accordingly, collateral estoppel does not bar Wells

Fargo Plaintiffs’ claims. See Frinzi, 344 N.C. at 414, 474 S.E.2d at 128-29. The trial

court did not err in denying Defendants’ motion for summary judgment and granting

Wells Fargo Plaintiffs’ motion for partial summary judgment on the defense of

collateral estoppel.

V. Conclusion

¶ 35 We deny Defendants’ petition for a writ of certiorari to review the Order on

Appeal as to the defense of election of remedies. Because Defendants cannot show

that each element of the affirmative defense of collateral estoppel is satisfied, the

trial court did not err in denying their motion for summary judgment and granting

Wells Fargo Plaintiffs’ motion for partial summary judgment as to that defense.

AFFIRMED.

Judges ZACHARY and HAMPSON concur.

3 We therefore need not reach Wells Fargo Plaintiffs’ additional arguments that collateral estoppel cannot apply here.