Pinewood Homes, Inc. v. Harris

HUNTER, Judge.

WYNN, Judge, concurring in part and dissenting in part.

I concur with that portion of the majority opinion that affirms the trial court's denial of Plaintiff's motion to amend their complaint. However, because I find that the timing of Plaintiffs' complaint for tortious interference makes it a collateral attack on the preliminary injunction sought by Defendants, I would affirm the trial court's dismissal of that cause of action. Additionally, after reviewing Plaintiffs' original complaint for abuse of process, I conclude they failed to allege any facts that would support a claim of abuse of process. Therefore, I respectfully dissent.Page 609 As noted by the majority and previously held by this Court, "[a] collateral attack on a judicial proceeding is an attempt to avoid, defeat, or evade it, or deny its force and effect, in some incidental proceeding not provided by law for the express purpose of attacking it."Reg'l Acceptance Corp. v. Old Republic Sur Co.,156 N.C. App. 680,682,577 S.E.2d 391,392(2003) (internal quotation and citation omitted). Significantly, as quoted by the majority, a collateral attack is one "in which a plaintiff is not entitled to the relief demanded in the complaintunless the judgment in another action is adjudicated invalid." Thrasherv. Thrasher,4 N.C. App. 534,540,167 S.E.2d 549,553(1969) (internal quotation and citation omitted) (emphasis added).

Here, Plaintiffs contend that Defendants sought to use the injunction in question to coerce them into paving the judgment against Mr. Ritchie, a judgment for which they were not legally responsible. They further assert that their claim of tortious interference was based on Defendants' "intentional and malicious refusal . . . to recognize the validity of the trusts and Pinewood's status as trustee," and was not an attempt to have the injunction vacated or modified. Nevertheless, in the words of their own complaint, they asked the trial court to have the injunction "modified to exclude plaintiffs as well as real estate held in trust by plaintiffs so that plaintiffs may conduct business." In my opinion, this falls squarely within the prohibition against using an ancillary legal proceeding to "avoid, defeat, or evade . . ., or deny [the] force and effect" of a judgment in another proceeding.

Plaintiffs also state, however, that "now it is certainly true that granting [their] prayer for relief does not amount to a collateral attack on the injunction because the injunction has been vacated." This position — and that of the majority — begs the question of what our conclusion would be as to the collateral nature of Plaintiffs' claims had our Courtupheldthe preliminary injunction.

The majority maintains that, because the injunction was vacated, it was "nullified and made void," meaning that "no part of it could thereafter be the law of the case."See Alford v. Shaw,327 N.C. 526,543n. 6,398 S.E.2d 445,455n. 6 (1990). While I agree that the injunction no longer has any legal force, I observe that the majority's approach, that its existence is no longer part of the case between Plaintiffs and Defendants, would lead to this cause of action being mooted, as Plaintiffs would no longer be able to show the requisitePage 610damages necessary to sustain a claim for tortious interference. That is clearly an absurd outcome; the injunction did exist and was in force for six months, barring Plaintiffs from selling and transferring assets and real estate titles and having a "real life" impact.

Thus, if the injunction existed to the extent necessary not to moot Plaintiffs' claim, then it should also be considered for the purpose of determining whether the claim of tortious interference was a collateral attack. Indeed, this very situation reinforces the need for a prohibition against such attacks, in order to avoid circumstances in which we would have to create legal fictions such as a supposedly non-existent injunction that did cause actual harm in the real world.

Moreover, Defendants would be guilty of tortious interference only if they acted without justification in seeking the injunction.Beck v. Cityof Durham,154 N.C. App. 221,232,573 S.E.2d 183,191(2002). This Court has held that in order to establish this element, a plaintiff's complaint must admit of no motive for interference other than malice.Id.(internal quotation and citation omitted). Here, Plaintiffs stated in their complaint that "defendants Harris requested issuance of a preliminary injunction to prohibit Ray Ritchie and various companies from selling or transferring title to real estate" until "the post-judgment collection proceedings are completed by satisfaction of [the Harrises'] judgment." Thus, Plaintiffs essentially admitted to another motive in their complaint, i.e., to maintain assets and titles until Defendants had been paid. Even if no other motive was shown, a conclusion of malice would necessarily rely on the injunction being vacated, as surely it would have been sustained only if it was sought with justification. Accordingly, Plaintiffs would be entitled to relief for their claim of tortious interference only if the injunction were vacated, another definitive factor of a collateral attack.See Thrasher,4 N.C. App. at 540,167 S.E.2d at 553.

When Plaintiffs filed their complaint for tortious interference against Defendants, the preliminary injunction against Plaintiffs was still in force.²While true that the injunction was ultimately vacated, essentially on procedural grounds,see Harris v. Pinewood Dev. Corp.,176 N.C. App. 704,707-08,627 S.E.2d 639,642(2006), that outcomePage 611was not certain at the time Pinewood filed its complaint, and the prohibition against collateral attacks is not retroactive in application. Plaintiffs should either have filed a counter-complaint for tortious interference at the time the injunction was sought, or should have waited until after the injunction had been vacated to file their claim. As such, I conclude that, when the trial court dismissed Pinewood's claims in January 2006, he did so properly, as he essentially had no subject matter jurisdiction at that time. I would therefore affirm.³ On a Rule 12(b)(6) motion to dismiss, a trial court must determine whether, as a matter of law, the allegations of the complaint, treated as true, state a claim upon which relief can be granted.Isenhour v. Hutto,350 N.C. 601,604,517 S.E.2d 121,124(1999). Dismissal under Rule 12(b)(6) is proper when one of the following three conditions is satisfied: (1) the complaint on its face reveals that no law supports the plaintiffs' claim, (2) the complaint on its face reveals the absence of facts sufficient to make a good claim, or (3) the complaint discloses some fact that necessarily defeats the plaintiffs' claim.Oates v. JAG,Inc.,314 N.C. 276,278,333 S.E.2d 222,224(1985). A claim should not be dismissed unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle him to relief.Garvin v. City of Fayetteville,102 N.C. App. 121,123,401 S.E.2d 133,134-35(1991).

In order to prove abuse of process, a plaintiff must show (1) an ulterior motive in the use of process and (2) a wilful act in the misuse of process after issuance to accomplish some purpose not warranted by the writ.Stanback v. Stanback,297 N.C. 181,200,254 S.E.2d 611,624(1979). The majority concludes that Plaintiffs in the instant case alleged facts in their complaint sufficient, if proven, to make a good claim for abuse of process. In particular, the majority finds that Plaintiffs' allegations of Defendants' "ulterior purpose of coercing plaintiffs to pay," "malicious[] refus[al] to recognize the validity of the trusts," and attempt to "gain an advantage over the assets" heldPage 612by Plaintiffs, are enough to withstand a Rule 12(b)(6) motion to dismiss. I disagree.

Unlike inHewes v. Wolfe and Hewes v. Johnston,74 N.C. App. 610,330 S.E.2d 16(1985), Defendants in the instant case did not file notices of liens orlis pendensagainst the real estate held by Plaintiffs. Defendants' sole action against Plaintiffs here was to seek the preliminary injunction; no facts were alleged in Plaintiffs' complaint that Defendants then committed some wilful act and used the injunction for anything other than the purpose for which it was intended — namely, to prevent the sale or transfer of assets to which Defendants believed they were entitled, even if mistakenly.

InHewes, the liens andlis pendenswere filed while an action was still pending alleging the misuse of, and failure to account for, partnership assets; the complaint alleged that the notices of liens andlis pendenswere filed "for the purpose of injuring and destroying the credit business of the plaintiffs and in general to oppress the plaintiffs," purposes for which such processes were never intended.74 N.C. App. at 614,330 S.E.2d at 19. The mere filing of those notices would have clouded the title to the real estate in question, whereas here, Defendants would have had to take some further affirmative action, in addition to obtaining the injunction, in order to "gain an advantage over the assets held in trust by plaintiffs." Plaintiffs' complaint alleges no such further wilful act by Defendants to "coerce" Plaintiffs to pay Mr. Ritchie's judgment.

The facts of this case are analogous to those inLyon v. May,108 N.C. App. 633,424 S.E.2d 655,disc, review denied,333 N.C. 791,431 S.E.2d 25(1993), in which this Court concluded the defendant did not establish the elements of a claim for abuse of process, and the plaintiff was therefore entitled to judgment notwithstanding the verdict on that issue. InLyon, we found that there was "no evidence that plaintiff tried to use the attachment [to proceeds] for anything other than its real purpose — to prevent the transfer of money which plaintiff believed he was entitled, albeit mistakenly."Id.at 640,424 S.E.2d at 659. Even though the plaintiff "was not entitled to attachment of the proceeds," "that does not change the fact that plaintiff used the attachment for its true purpose."Id.

Likewise, here, no facts are alleged in Plaintiffs' complaint that would support their assertions that Defendants used the injunction to coerce them into paying Mr. Ritchie's judgment. Plaintiffs' language as to Defendants'"ulterior purpose," "coerc[ion]," "maliciousPage 613refus[al]," and attempt to "gain an advantage" are not factual allegations, but legal conclusions and are accordingly "not entitled to a presumption of truth" in considering a Rule 12(b)(6) motion to dismiss.Miller v. Rose,138 N.C. App. 582,592,532 S.E.2d 228,235(2000);see also Sutton v. Duke,277 N.C. 94,98,176 S.E.2d 161,163(1970) (internal citation omitted) (in discussing the newly adopted North Carolina Rules of Civil Procedure, quoting with approval the statement that, "For the purpose of [a Rule 12(b)(6)] motion, the well-pleaded material allegations of the complaint are taken as admitted; but conclusions of law or unwarranted deductions of fact are not admitted.").

Because Plaintiffs merely recite the legal terms used in the definition of a claim of abuse of process without alleging facts that would serve to support those legal conclusions, I would affirm the trial court's granting of Defendants' Rule 12(b)(6) motion to dismiss.