Daniel Boone Complex, Inc. v. Furst

291 S.E.2d 296 (1982)

DANIEL BOONE COMPLEX, INC., A North Carolina Corporation, Camilco, Inc., a Virginia Corporation, Clarence A. McGillen, Jr., and Linda S. Broyhill McGillen v. Mitchell FURST, Individually, Mitchell Furst, Trustee and Matthew Mezzanotte. Mitchell FURST, Trustee, Plaintiff, v. CAMILCO, INC., and Clarence A. McGillen, Jr., Defendants. CAMILCO, INC., Plaintiff, v. Mitchell FURST, Trustee, Mitchell Furst, Individually, Matthew N. Mezzanotte and wife, Genevieve D. Mezzanotte.

No. 8115SC863.

Court of Appeals of North Carolina.

May 18, 1982.

*298 Charles Darsie, Durham and Robert E. Cooper, Chapel Hill, for plaintiffs-appellants.

Newsom, Graham, Hedrick, Murray, Bryson & Kennon by Josiah S. Murray, III, Durham, for defendants-appellees.

WELLS, Judge.

In their first assignment of error, plaintiffs contend the trial court erred in denying their motion to continue the case when it was called for the second trial. Defendant strongly resisted the motion when it was made to the trial court. G.S. 1A-1, Rule 40(b) of the Rules of Civil Procedure provides that continuances "may be granted only for good cause shown...". Upon a motion for continuance, which is addressed to the sound discretion of the trial judge, the burden is on the moving party to show the "good cause" required under the Rule. Shankle v. Shankle, 289 N.C. 473, 223 S.E.2d 380 (1976). The duty of the trial judge is to determine the motion as the rights of the parties require under the circumstances. Shankle, supra. The two grounds for continuance argued to the trial court were: (1) insufficient time for plaintiff's counsel, Mr. Darsie, to prepare for trial of the case; and (2) plaintiffs' difficulties in obtaining the presence of a witness, Gant Redmon. It is not clear from the transcript of plaintiffs' argument to the trial court as to how much time plaintiffs' counsel might require for further trial preparation, but Mr. Darsie's remarks could be construed as asking the court for only two or three additional days. The record does disclose that by the time the case was called for trial, Mr. Darsie had been involved in the case for several weeks, and Mr. Cooper, plaintiffs' other counsel, had been involved in the litigation since its inception 7 years before, and was present in court for the call of the case. Before ruling on the motion, Judge McKinnon reviewed these circumstances and reviewed with counsel their contentions as to the issues to be tried on remand. At this juncture, Mr. Darsie gave no indication of a lack of familiarity with or understanding of the issues in the case. Conversely, it was Mr. Darsie who argued as to the problems associated with the availability of the witness Redmon, which would permit the trial court to infer that Mr. Darsie was familiar with defendant's trial plans. Under these circumstances, we find that the trial court was clearly justified in finding no good cause in this aspect of defendant's motion.

The second ground for continuance argued to the trial court was that the requested delay was for only a day or two, so that Mr. Redmon might be rescheduled. In denying the motion, Judge McKinnon made it clear that if plaintiffs needed extra time in which to obtain Mr. Redmon's presence in court, he would accommodate them. The record does not show that Redmon was ever called at the second trial. This aspect of plaintiffs' argument on this assignment is clearly without merit. This assignment is overruled.[1]

In their next assignment of error, plaintiffs contend that the trial court erred in failing to find that the usurious loan to plaintiff Camilco was induced by Mitchell Furst's misrepresentations, which were directed, authorized, and ratified by the Mezzanottes. To establish the appropriate framework for our disposition of this question, it is necessary to refer to the previous opinion of this Court in these cases, where we reversed the original judgment of the trial court on the question of fraud. We quote in pertinent part from Judge Erwin's opinion in 43 N.C.App., supra, at 103, 104, and 105, 258 S.E.2d 379:

The trial court found in its findings of fact that Furst had intentionally misrepresented the identity of his undisclosed principals, the Mezzanottes. In doing so, *299 the trial court focused on the Mezzanottes' reasons for not having their identity revealed; however, the court's crucial inquiry, as trier of fact, should have focused on what significance Furst's misrepresentation of the identity had on Camilco's execution of the Furst-Camilco loan. [I]n the instant case, Camilco has presented evidence indicating that it would not have dealt with the Mezzanottes for various reasons. We hold that the trial court erred in not making any determination of fact on the existence of this requisite element of fraud. [S]hould the court determine that the identity of the undisclosed lenders, the Mezzanottes, was essential to Camilco's execution of the loan and mortgage agreements, Camilco would be able to meet the requisite damage element of fraud. The execution of the loan and mortgage agreement with a party with whom it did not wish to deal would be sufficient injury. [S]hould the trial court determine that Furst's fraudulent misrepresentation of the identity of his undisclosed principals induced Camilco to execute the loan and mortgage agreements, then Camilco would be entitled to recover any damages shown to result therefrom.

It is clear that on remand, Judge McKinnon's findings adverse to plaintiffs, properly focused on the factual issues outlined by our previous opinion. If supported by any competent evidence as to plaintiffs' reliance on the representation that the Mezzanottes were not the principals in the loan transaction, Judge McKinnon's findings have the force and effect of a jury verdict and are binding on appeal. See Henderson County v. Osteen, 297 N.C. 113, 254 S.E.2d 160 (1979); Williams v. Insurance Co., 288 N.C. 338, 218 S.E.2d 368 (1975), and cases cited therein. There was testimony from Matthew Mezzanotte, Genevieve Mezzanotte, Mitchell Furst, and Clarence McGillen that plaintiffs were having difficulty raising the required cash to close the Daniel Boone sale; that plaintiffs had approached Matthew Mezzanotte to inquire of him as to loan sources; that plaintiffs were so anxious to obtain a loan through Furst that they agreed to obligate themselves to pay an interest rate of 100 percent, agreed to put up additional collateral besides the Daniel Boone property, and agreed to execute the loan papers in Virginia so as to avoid the usury laws of North Carolina. We are persuaded that such evidence supports Judge McKinnon's findings on the issues of inducement and reliance. This assignment is overruled.

In plaintiffs' next assignment, they contend that the trial court erred in failing to hold the Mezzanottes responsible as constructive trustees. We disagree. That issue was effectively disposed of in our prior opinion, where we held that because plaintiffs had not elected to rescind the loan agreement, but instead, elected to affirm it and seek damages, the remedy of establishing a constructive trust was not available to them. This assignment is overruled.

Finally, plaintiffs contend that the trial court erred in dismissing plaintiffs' claim for relief based on contract in case 75CVS561, wherein plaintiffs asserted that they held an option to purchase the Daniel Boone complex and prayed for an order of the court declaring them to be entitled to such an option. Prior to trial on remand, defendants, apparently out of an abundance of caution, argued to the trial court that it should consider plaintiffs' contract claim. Plaintiffs objected. At this point, Judge McKinnon ruled that the matter was not before him. We agree with this ruling, but hasten to point out that plaintiffs are not helped by our conclusion. Plaintiffs' contract claim was fully litigated at the first trial. The findings, conclusions, and judgment on the first trial were adverse to plaintiffs on that claim. Our previous opinion in these cases did not disturb that portion of the judgment entered at the conclusion of the first trial, and it therefore constitutes the law of the case on this issue. See Hayes v. Wilmington, 243 N.C. 525, 91 S.E.2d 673 (1956); see also Transportation, Inc. v. Strick Corp., 286 N.C. 235, 210 S.E.2d *300 181 (1974); compare In re University of North Carolina, 300 N.C. 563, 268 S.E.2d 472 (1980). A careful reading of our previous opinion can lead to but one conclusion: that plaintiffs were entitled to a new trial on the issue of damages for fraud in the loan transaction. It would strain all logic to read our previous opinion as remanding for a new trial an issue of whether plaintiffs were entitled to specific performance of the alleged option or damages for its breach. The judgment on remand was "[t]hat the actions of Plaintiffs to the extent that same have not been adjudicated heretofore be... dismissed ...". We see no inconsistency in Judge McKinnon's initial ruling on plaintiffs' contract claim and his judgment, and find no error here. This assignment is overruled.

In the trial we find

No Error.

HILL and BECTON, JJ., concur.

NOTES

[1] In their brief, plaintiffs contend that the intervening death of Mr. Furst and the apparent absence of a personal representative for Furst's estate was a circumstance requiring a continuance. We note that the discussion as to Furst was merely incidental to the motion for continuance; there had been no motion by plaintiffs to substitute his personal representative; and there was no such motion presented at trial.