First Bank v. S&R Grandview, L.L.C

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of A p p e l l a t e P r o c e d u r e . NO. COA13-343 NORTH CAROLINA COURT OF APPEALS Filed: 15 October 2013 FIRST BANK, Plaintiff, v. Montgomery County No. 11 CVS 74 S&R GRANDVIEW, L.L.C.; DONALD J. RHINE; JOEL R. RHINE; GORDON P. FRIEZE, JR.; MAXINE GANER; SHARON R. SILVERMAN, EXECUTRIX OF THE ESTATE OF STEVEN S. SILVERMAN; AND MARTIN J. SILVERMAN, Defendants. Appeal by Defendant Donald J. Rhine1 from orders entered 25 June and 7 September 2012 by Judge Montgomery County Superior Court. Vance Bradford Long in Heard in the Court of Appeals 25 September 2013. Nexen Pruet, PLLC, by M. Jay DeVaney and Brian T. Pearce, for Plaintiff. Wilson & Ratledge, PLLC, Defendant Donald J. Rhine. 1 by Michael A. Ostrander, for As discussed herein, the remaining defendants settled the case and, accordingly, they are not parties to this appeal. -2STEPHENS, Judge. Factual Background and Procedural History This action arises from the development by Defendant S&R Grandview, L.L.C. ( S&R ), of a Pender County property known as Eagles Watch. Cooperative In Bank 2006, ( the Eagles Watch project. S&R first borrowed loan ) in $11 million connection from with the Cooperative Bank required several members of S&R, including Defendant Donald J. Rhine and some of the other named defendants ( the original guarantors ), personally guarantee portions of the first loan. to In March 2008, S&R executed a promissory note in favor of Cooperative Bank in the amount of $500,000. Portions of this loan were also secured by the original guarantors. In 2009, after First Bank ( the Bank ) Bank, acquired Cooperative it required S&R and the original guarantors to execute a series of modifications to the first loan. Rhine signed each of the loan modifications. Ultimately, guarantors 2011. attended in On a the Bank default 5 December mediated and declared S&R commenced this 2011, the settlement and the action parties, conference in including and original February Rhine, reached a -3settlement agreement ( the settlement agreement ). The settlement agreement was handwritten, informal, and contingent on ratification by S&R s members. The settlement agreement also provided for the drafting and execution of several additional documents, including a formal version of the agreement, a deed in lieu of foreclosure, a release, confessions of judgment, and assignments. The parties signed the settlement agreement during the settlement conference. formalized, typewritten Later, the Bank s counsel drafted a version ( the final agreement ). of the While all of settlement agreement the other defendants signed the final agreement, ending the Bank s action as to them, Rhine refused to do so. Rhine objected, inter alia, to provisions relating to declarant rights.2 On 15 February 2012, the Bank moved to enforce the final agreement. Rhine did not appear at a hearing on the motion which was held later that month. The hearing was continued, and the court ordered Rhine to appear with his counsel at the next hearing on 15 March 2012. When Rhine did not appear at the 15 March hearing, the court ordered Rhine to show cause why he had 2 The declarant rights here involved an option to annex a fortyacre parcel into the Eagles Watch development. If Rhine and the other defendants were to retain these rights, it would in effect continue their involvement in the Eagles Watch development, a consequence to which the Bank was strenuously opposed. -4failed to do so. By order filed 5 April 2012, Rhine was held in contempt and fined after being found to have willfully ignored the court s order. On 28 March 2012, enforce the settlement. the Bank filed an amended motion to At the motion hearing in May 2012, the mediator for the matter testified that the issue of declarant rights had been conference. discussed Rhine contended during the that the mediated issue had settlement not been resolved and noted that the settlement agreement he had signed at the conclusion of the settlement conference did not make any direct reference to declarant rights. On 25 June 2012, the trial court entered an order ( the settlement order ) finding, inter alia, that there had been no meeting of the minds between the Bank and Rhine on the issue of declarant rights, that the matter was material to the settlement agreement, that the settlement agreement was void as between the Bank and Rhine, and that the Bank could continue its pursuit of relief against Rhine. On 15 August 2012, the Bank moved for summary judgment against Rhine.3 3 The motion and notice of hearing to be held 27 The motion and certificate of service are dated 15 August 2012, but the motion is filed-stamped 16 August 2012. -5August 2012 were served facsimile on the same day. on Rhine by first-class mail and On 22 August 2012, counsel for Rhine moved for a continuance, noting that he had been hired only two days earlier. The court denied Rhine s motion for continuance. At the summary judgment hearing, Rhine again moved to continue. The court denied the renewed motion, observing that Rhine s new counsel was at proceedings. least the fourth he had retained during the The court entered its written order denying the motion for continuance on 7 September 2012 ( the continuance order ). ( the On the same date, the court entered a money judgment summary judgment order ) for the Bank against Rhine. Rhine appeals. Discussion Rhine presents four arguments on appeal: that the trial court (1) erred in declaring the settlement agreement void, (2) abused its discretion in denying his motion for a continuance, (3) erred in granting summary judgment in favor of the Bank, and (4) erred in failing opposition to the motion was under to Bank s consider summary advisement. We additional submissions judgment motion dismiss Rhine s while first in that two arguments as not properly before this Court and affirm summary judgment for the Bank. -6The Bank s Motion to Dismiss Rhine s Appeal In its brief, the Bank asks this Court to dismiss Rhine s appeal in its entirety, noting violations of Appellate Rules 3(d), 28(b)(5), and 28(b)(6). We agree in part. Although compliance with our Rules of Appellate Procedure is mandatory, not every violation dismissal of an appeal or issue. of the rules requires Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362 N.C. 191, 194, 657 S.E.2d 361, 363 (2008). However, [a] jurisdictional default . . . precludes the appellate court from acting in any manner other than to dismiss the appeal. Id. at 197, 657 S.E.2d at 365. in jurisdiction, the absence of the appellate Moreover, courts lack authority to consider whether the circumstances of a purported appeal justify application of Rule 2. Id. at 198, 657 S.E.2d at 365 (referring to N.C.R. App. P. 2 which permits appellate courts to excuse a party s noncompliance with certain appellate rules and procedures when necessary to expedite decision in the public interest or prevent manifest injustice to a party ). Specifically, Appellate Rule 3(d) provides that an appellant s notice of appeal shall designate the judgment or order from which appeal is taken. An appellant s failure to designate a particular judgment or order in the notice of appeal generally -7divests this Court of jurisdiction to consider that order. Yorke v. Novant Health, Inc., 192 N.C. App. 340, 347, 666 S.E.2d 127, 133 (2008) (citation and quotation marks omitted), cert. denied, 363 N.C. 260, 677 S.E.2d 461 (2009). However, [n]otwithstanding the jurisdictional requirements in Rule 3(d), our Court has recognized that even if an appellant omits a certain order from the notice of appeal, our Court may still obtain jurisdiction to review the order pursuant to N.C. Gen. Stat. § 1-278. Review under [section] 1-278 is permissible if three conditions are met: (1) the appellant must have timely objected to the order; (2) the order must be interlocutory and not immediately appealable; and (3) the order must have involved the merits and necessarily affected the judgment. Id. at 348, 666 S.E.2d 127, 133 (citations, quotation marks, and brackets omitted). With regard to the first requirement, the Court in Yorke observed that, [w]ith respect to orders of the court not directed to the admissibility of evidence, formal objections and exceptions are unnecessary. In order to preserve an exception to any such ruling or order, it shall be sufficient if a party, at the time the ruling or order is made or sought, makes known to the court the party s objection to the action of the court or makes known the action that the party desires the court to take and the party s grounds for its position. -8Id. at 349, 666 S.E.2d at 134 (citation, quotation marks, and ellipses omitted). As to the third requirement, our Courts have found an interlocutory order to involve the merits and necessarily affect the judgment where the order deprived an appellant of one of her substantive legal claims. Id. at 349-50, 666 S.E.2d at 134. In Yorke, the interlocutory order in question, a protective order[,] did not deny Mr. Yorke any of his substantive legal claims. While the protective order did deny Mr. Yorke access to certain evidence, it did not resolve any substantive legal issues related to Mr. Yorke s negligence claim, nor did it deny Mr. Yorke his right to pursue his negligence claim, or to prove his negligence claim through introduction of other evidence and examination of witnesses. Id. at 350, lack[ed] 666 S.E.2d jurisdiction at Accordingly, this either under 134. N.C.R. P. App. Court 3(d) or [section] 1-278 to consider the appellant s claims regarding the protective order, and those arguments were dismissed. Id. On 2 October 2012, Rhine filed a notice of appeal from the summary reference judgment to the order. That settlement or notice of continuance appeal orders makes no despite Rhine s purported arguments on appeal that the trial court erred in declaring the settlement agreement void as between himself and the Bank and abused its discretion in failing to grant his -9motion for Rhine s a continuance. arguments on The these Bank urges two issues, that we contending dismiss that the settlement and continuance orders do not fall into the category of intermediate orders covered by section 1-278. Our review of Rhine s orders appeal interlocutory order does reveals and not not that, immediately satisfy the first while both appealable, the prong Yorke under were settlement and the continuance order fails under the third prong. As noted supra, in the settlement order the trial court held that the settlement agreement was void as between Rhine and the Bank because there had been no meeting of the minds between those parties with regard to the issue of declarant rights, a substantive provision of vital importance to both parties. record contains no evidence that Rhine timely objection to the settlement The made an explicit and order. Thus, we must consider whether Rhine made known to the court [his] objection to the action of the court or [made] known the action that [he] desire[d] position. the court to take and [his] grounds for [that] Id. at 348, 666 S.E.2d at 134. As Rhine s counsel stated during the hearing, the main point of contention is whether or not the transfer of declarant rights to the [B]ank or anyone else was bargained for in the -10agreement and . . . whether S&R Grandview should be ordered to do that, whether that was a part of the contract. The Bank contended that extinction of the defendants declarant rights was part of the agreement, and Rhine contended it was not. mediator from the settlement conference testified The repeatedly that, although the words declarant rights do not appear in the handwritten settlement agreement, the parties had discussed that issue as described by the Bank and as provided for in the final agreement. The attorney who represented Rhine during the settlement conference, in contrast, testified that the issue of declarant rights was not discussed or agreed to. and Rhine extremely agreed that important the matter ( imperative of in Both the Bank declarant the words rights of was Rhine s counsel at the summary judgment hearing). In concluding his argument, court counsel for the Bank asked the to either require . . . Rhine to execute the [final] agreement everybody else has signed or release the [B]ank and let it foreclose on this property[.] At the hearing, Rhine made clear his preference that the court enforce the settlement agreement per Rhine s understanding that it did not extinguish declarant rights (and thus to deny the Bank s motion to enforce the final agreement). However, in -11the alternative, Rhine s counsel also agreed that the court could simply refuse to enforce either agreement and let the Bank foreclose, which would result in Rhine retaining his declarant rights: THE COURT: It sort of whip [saws] [the Bank], doesn t it? Got an agreement but it doesn t include declarant[] rights but the agreement prevents you from foreclosing on the property, just in case your legal position is right and it does distinguish declarant rights. [RHINE S COUNSEL]: They don t but, Judge, they don t need to foreclose. They re not going to get the declarant rights if they foreclose. They never negotiated to get declarant rights. They didn t negotiate for us to transfer the declarant rights anywhere. If they foreclose, they re where they ought to be. If you enforce the agreement, where they where they agree they d be [according to Rhine s understanding of the agreement] and right where foreclosure would put them. Rhine s trial counsel made repeated references during the lengthy hearing (the transcript of which runs to more than 75 pages) that, agreement alternate while according remedy of he to preferred Rhine s allowing that the court understanding foreclosure would enforce of be it, the the acceptable because his client would thereby retain his declarant rights. Ultimately, that is exactly what happened: the settlement order entered by the trial court did not permit the Bank to -12enforce the final agreement against Rhine and thus did not extinguish Rhine s declarant rights, but rather allowed the Bank to move forward with foreclosure. Thus, while Rhine s arguments at the hearing did make[] known the action that [he] desire[d] the court to take and [his] grounds for [that] position[,] id. at 349, 666 S.E.2d at 134, those arguments cannot serve as an objection to the court s ruling for the simple reason that Rhine prevailed, at least on his alternate request for relief. Accordingly, Rhine s purported appeal from the settlement order is dismissed. As for the continuance order, Rhine makes no argument in his brief that it falls under the provisions of Yorke. Even had he did done so, we conclude involve the judgment [order] substantive merits legal and because claim. that the continuance necessarily it did Id. at order affect not deprive 349-50, (citation and quotation marks omitted). the 666 not [summary] Rhine S.E.2d of at a 134 Accordingly, Rhine s argument that the trial court abused its discretion in denying his motion for a continuance is also dismissed. However, as to 28(b)(5) and 28(b)(6), Rhine s violations we conclude of Appellate that they do not dismissal of his final two arguments on appeal. Rule require [A] party s -13failure to comply with nonjurisdictional rule requirements normally should not lead to dismissal of the appeal. Dogwood Dev. & Mgmt. Co., 362 N.C. at 198, 657 S.E.2d at 365. Instead, when consider nonjurisdictional whether and to rules what are extent violated, the we must noncompliance impairs the court s task of review and whether and to what extent review on the merits would frustrate the adversarial process. Id. at 200, 657 S.E.2d at 366-67. Appellate Rule 28(b), which delineates the required contents of an appellant s brief, is nonjurisdictional. Id. at 200, 657 S.E.2d at 367. Specifically, Rule 28(b)(5) requires an appellant to full facts. N.C.R. argumentative matter in include a and complete App. P. 28(b)(5). summary of all controversy which This material are statement should facts necessary to be of the a non- underlying the understand all issues presented for review, supported by references to pages in the transcript of proceedings, exhibits, as the case may be. appellant s argument to the Id. contain a record on appeal, or Rule 28(b)(6) requires an concise statement of the applicable standard(s) of review for each issue, which shall appear either at the beginning of the discussion of each issue -14or under a separate heading placed before the beginning of the discussion of all the issues. The Bank observes that N.C.R. App. P. 28(b)(6). Rhine s appellate brief includes argumentative allegations which are unsupported by citations to the record, transcripts, or exhibits, and that it also fails to provide the applicable standards of review as to his first, third, and fourth issues on appeal. However, while these violations are certainly an irritation, they do not in this instance impair our ability to appeal. review the merits of Rhine s See Dogwood Dev. & Mgmt. Co., 362 N.C. at 200, 657 S.E.2d at 366-67. Accordingly, we deny the Bank s motion to dismiss Rhine s third and fourth arguments on appeal and address their merits. Summary Judgment Rhine argues that the trial court erred in granting summary judgment in additional favor of affidavits the in Bank and in failing opposition to the to Bank s consider summary judgment motion while that motion was under advisement. We disagree. [A]ffidavits in opposition to a motion for summary judgment should be served prior to the day of the hearing. Rockingham Square Shopping Center, Inc. v. Integon Life Ins. -15Co., 52 N.C. App. 633, 641, 279 S.E.2d 918, 924 (citing N.C. Gen. Stat. § 1A-1, Rule 56(c)), cert. denied, 304 N.C. 196, 285 S.E.2d 101 (1981). Further, while the trial court has discretion to allow the late filing of affidavits[,]. . . . absent a showing of excusable neglect, the trial court does not abuse its discretion when it refuses to accept late affidavits. Id. However, Rule 56(f) provides that, [s]hould it appear from the affidavits of a party opposing the motion that he cannot for reasons stated present by affidavit facts essential to justify his opposition, the court may refuse the application for judgment or may order a continuance to permit affidavits to be obtained or depositions to be taken or discovery to be had or may make such other order as is just. N.C. Gen. Stat. § 1A-1, Rule 56(f) (2011). A ruling under Rule 56(f) is also left to the trial court s discretion. Gillis v. Whitley s Disct. Auto Sales, Inc., 70 N.C. App. 270, 274-75, 319 S.E.2d 661, 664 (1984). A matter left to the trial court s discretion disturbed will not be unless it is manifestly unsupported by reason, or so arbitrary that it could not have been the result of a reasoned decision. A trial judge s decision only amounts to an abuse of discretion if there is no rational basis for it. State v. Mutakbbic, 317 N.C. 264, 273- -1674, 345 S.E.2d 154, 158-59 (1986) (citations and quotation marks omitted). Here, at the summary judgment hearing on 27 August 2012, Rhine s counsel renewed his motion for a continuance, noting that he had only been on the case since 20 August and stating that Rhine wanted counsel to prepare a supplemental affidavit in opposition to the Bank s summary judgment motion. Rhine s counsel handed up an affidavit 4 from Rhine which purported to explain why Rhine needed substantive affidavit. additional time to produce a The court expressed puzzlement about the request, asking, if [Rhine has] had time to file an affidavit to say that he hasn t had time to file an affidavit, why haven t you guys had time to file an affidavit that addresses the substantive issues . . . ? After arguments from the parties, the under 4 court took the matter advisement briefly before The affidavit discussed at the hearing is labeled as such and appears in the usual form and language of an affidavit, but crucially, this document lacks any evidence of being confirmed by the oath or affirmation of the party making it, taken before an officer having authority to administer such oath. See Schoolfield v. Collins, 281 N.C. 604, 612, 189 S.E.2d 208, 213 (1972) ( An affidavit is a written or printed declaration or statement of facts, made voluntarily, and confirmed by the oath or affirmation of the party making it, taken before an officer having authority to administer such oath. ) (citation, quotation marks, and brackets omitted). Accordingly, this unsworn document is not an affidavit. -17returning to announce his denial of the motion to continue in open court. In so doing, the court found that Mr. Rhine consented to prior counsel withdrawing after [prior] counsel was informed of the court date for the summary judgment motion. The court also found that Rhine had repeatedly switched counsel and had a prior history of not dealing with [the c]ourt in a forthright manner. The court heard brief arguments on the substance of the summary judgment motion and then took that matter under advisement. In his excusable present neglect his judgment argument in to Court, connection affidavit motion. this See in with opposition N.C. Gen. Rhine his to Stat. not failure the § does argue to timely Bank s 1A-1, summary Rule 56(c). Rather, he asserts that the trial court s refusal to accept his late affidavits constituted a deviation from Rule 56(f). noted supra, discretion. such rulings are left to the trial As court s Gillis, 70 N.C. App. at 474-75, 319 S.E.2d at 664. Because the record reflects a rational basis for the court s decision not to accept Rhine s late affidavit, to wit, its concern that Rhine was engaging in delay tactics, Rhine cannot show an argument. abuse of discretion. Accordingly, we overrule this -18Rhine also argues that the trial court erred in granting the Bank s summary judgment motion. Again, we disagree. The principles applicable to summary judgment are well established. The moving party has the burden of clearly establishing the lack of any triable issue of fact. The papers supporting the movant s position are to be closely scrutinized while those of the opposing party are to be regarded indulgently. The motion may only be granted where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Rockingham Square Shopping Center, Inc., 52 N.C. App. at 642, 279 S.E.2d at 924. A party moving for summary judgment may prevail the if it meets burden (1) of proving an essential element of the opposing party s claim is nonexistent, or (2) of showing through discovery that the opposing party cannot produce evidence to support an essential element of his or her claim. Lowe v. Bradford, 305 N.C. 366, 369, 289 S.E.2d 363, 366 (1982). If the moving party meets this burden, the non-moving party must in turn either show that a genuine issue of material fact exists for trial or must provide an excuse for not doing so. Id. As Rhine acknowledges, the party opposing summary judgment may not rest on the allegations of his pleadings, but must, by affidavits or otherwise, set forth specific facts demonstrating that there is an issue for trial. Cockerham v. Ward, 44 N.C. -19App. 615, 618, marks omitted), 262 S.E.2d 651, 654 (citations and quotation cert. denied, 300 N.C. 195, 269 S.E.2d 622 affidavit or (1980). Here, Rhine concedes that he submitted no other evidence beyond his pleadings to set forth specific facts demonstrating that there [wa]s an issue for trial. Id. However, he urges that this failure was excusable because the summary judgment hearing was conducted based on an untimely filed and inadequately noticed motion and after the trial court denied Rhine s Rule 56(f) motion. As discussed supra, the court acted within its discretion in denying Rhine s Rule 56(f) motion and thus he cannot establish that his affidavits is excusable on that basis. the summary judgment motion was failure to produce As to the assertion that untimely or inadequately noticed, Rhine did not raise this issue in his motion for a continuance or during the Accordingly, we do address not hearing it on here. 27 August See 2012. Plemmer Matthewson, 281 N.C. 722, 725, 190 S.E.2d 204, 206 (1972). v. This argument is overruled, and the trial court s summary judgment order is affirmed. DISMISSED IN PART; AFFIRMED IN PART. Judges CALABRIA and ELMORE concur. -20Report per Rule 30(e).

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