Collier v Bryant

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NO. COA10-1579 NORTH CAROLINA COURT OF APPEALS Filed: 1 November 2011 JAMES MICHAEL COLLIER, KIMBERLY COLLIER and CHERYL DETTE, Plaintiffs v. Guilford County No. 09 CVS 13513 ANGELA COLLIER BRYANT, DANIEL CHRISTOPHER BRYANT, SOUTHERN HOMES, LLC and CATHE HENDERSON, Defendants Appeal by plaintiffs from order entered 29 September 2010 by Judge John O. Craig III in Guilford County Superior Court. Heard in the Court of Appeals 18 August 2011. Higgins, Benjamin, Eagles & Adams, Andia, Jr., for plaintiff-appellants. PLLC, by Gilbert J. Forman Rossabi Black, P.A., by Amiel J. Rossabi and Gavin J. Reardon, for defendant-appellees, Angela Collier Bryant, Daniel Christopher Bryant and Southern Homes, LLC. No brief filed for defendant-appellee Cathe Henderson. CALABRIA, Judge. James Michael ( Kimberly ), and Collier Cheryl ( Michael ), Dette Kimberly ( Dette ) Collier (collectively plaintiffs ) appeal from an order granting summary judgment in favor of Angela -2Bryant Collier Christopher Bryant ( Mr. ( Southern ) (collectively ( Ms. Bryant ), Bryant ), Southern defendants ) and Daniel Homes, Cathe LLC Henderson ( Henderson ) and denying plaintiffs motion for partial summary judgment. We affirm in part and reverse and remand in part. I. Background James O. Collier ( Mr. Collier ) died testate on or about 9 January 2005. beneficiaries. His will listed his four children as his The three plaintiffs are his children and the fourth child, Ms. Bryant, is one of the defendants as well as the Executrix of the Collier Estate. The will directed the Executrix to sell any owned real estate and divide the proceeds equally among the four children, unless there is unanimous division of the real estate. consent of [the] children to a Ms. Bryant, as Executrix, had the power to sell the estate property, which included a tract of land, approximately 22.41 acres, located at 1809 Alamance Church Road, Guilford County, North Carolina ( the Farm ). The sale of the Farm is the only estate property that is the subject of the present appeal. On 3 February 2005, estate appraiser, Overly appraisal ) Faye performed and an M. Overly, a residential real appraisal estimated the on value the of Farm the ( the property between $88,000 and $95,000. -3Since all four children agreed to sell the property and divide the proceeds, early in 2005, Ms. Bryant listed the property with Alicia Hausler ( Hausler ), a real estate agent. Ms. Bryant initially listed the price for the Farm at $1,154,900 even though Greensboro Water Resources estimated the cost to supply water and sewer was $2,664,768. On 2 September 2005, Hausler notified Ms. Bryant that there was some interest but when no offers were submitted after three months, Ms. Bryant reduced the listing price to $800,000. On 3 January 2006, Articles of Organization were filed in Alabama for Southern, a limited liability company. Mr. and Ms. Bryant were initial members and organizers. Only a month later, on 3 February 2006, the listing agreement for the Farm was terminated. After the termination of the listing Hausler, Ms. Bryant contacted plaintiffs. make an offer but Dette offered to agreement with Michael declined to purchase the Farm for $100,000. Ms. Bryant was unable to reach Kimberly. According to the settlement statement, dated 17 March 2006, Ms. Bryant, as Executrix of the estate, sold the Farm to Southern for $102,000, yet Ms. Bryant failed to Southern to her siblings. disclose her personal interest in Ms. Bryant signed both the settlement statement and the general warranty deed recorded on 23 March -42006 as the Executrix of the estate. After the sale of the Farm, checks in the amount of $25,347.13 were distributed to each of the plaintiffs. On 8 August 2006, plaintiffs filed a petition to remove Ms. Bryant as Executrix of the estate. Three days later, unaware of the pending petition and believing the estate was closed, Ms. Bryant sent plaintiffs final disbursement checks in the amount of $12,063.22. Plaintiffs held these checks rather than cashing them, per their lawyers instructions. discovered plaintiffs had filed a Executrix, she Subsequently, requested Ms. Bryant a After petition stop closed Bryant to remove her as payment the Ms. on Collier the checks. Estate s bank account with Wachovia Bank and transferred $31,414.87 to another bank account. On 7 September 2006, Dalrypmle Associates, Inc. performed a commercial appraisal ( Dalrypmle appraisal ) of the Farm, at plaintiffs request. According to the Dalrypmle appraisal, the total value of the Farm was $615,000. On 30 October Superior Court petition to 2006, ( Clerk remove Ms. Anne Ring ), Bryant P. Ring, conducted as Assistant a hearing Executrix. Clerk of on the Clerk Ring concluded Ms. Bryant had violated her fiduciary duty and issued an order on 28 December 2006, revoking the Letters Testamentary that established Ms. Bryant as Executrix. Ms. Bryant appealed Clerk Ring s affirmed Ms. -5appeal, order. On Bryant s removal Judge as Thomas Executrix of D. Haigwood the Collier Estate. Following Ms. Bryant s removal, Henderson, the public administrator for Guilford County, was appointed the personal representative of the Collier Estate. On 12 September 2006, Southern executed and subsequently recorded a deed transferring ownership of the Farm to Ms. Bryant in her individual capacity. Plaintiffs filed a complaint on 16 October 2009 requesting a Declaratory Judgment or in the alternative a Claim to Set Aside the Transfer of the Property and alleged Fraud, Fraud in Fiduciary Capacity, Breach of Fiduciary Duty, Civil Conspiracy, and Wrongful Conversion. an Answer and Conversion, Trust, Abuse Counterclaims Unjust of On 4 February 2010, defendants filed Enrichment Process, alleging or alternatively Malicious Partition, and Civil Conspiracy. Breach Filing of of Contract, Constructive Lis Pendens, Between 11 March 2010 and 20 July 2010, Ms. Bryant offered to re-sell the Farm to plaintiffs, or the Estate, for essentially the price she had paid in March 2006. Plaintiffs did not accept any of Ms. Bryant s offers. On 7 May 2010, defendants previously filed Motion to Dismiss was denied. In July 2010, plaintiffs moved for a partial summary judgment on the claims of breach of fiduciary duty and wrongful -6Plaintiffs also moved to set aside the transfer of conversion. property. Defendants moved for Summary Judgment alleging plaintiffs had suffered no compensable damages as a result of defendants acts. On 29 September 2010, the trial court granted summary judgment in favor of defendants and Henderson, denied plaintiffs partial plaintiffs claims summary as judgment, well as and dismissed defendants all of counterclaims. Plaintiffs appeal. II. Standard of Review Summary judgment is proper when there is no genuine issue of material fact and a party is entitled to judgment as a matter of law. Finova Capital Corp. v. Beach Pharm. II, Ltd., 175 N.C. App. 184, 187, 623 S.E.2d 289, 291 (2005). Review of summary judgment evidence on appeal is de novo. Id. The must be evaluated in the light most favorable to the non-moving party. Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003). III. Collateral Estoppel Plaintiffs argue the trial court erred in denying their motion for summary judgment on the issue of collateral estoppel. Specifically, plaintiffs claim that the issue of breach of fiduciary duty cannot be relitigated because it was previously determined at the time Ms. Bryant was removed as Executrix of the Collier Estate. We disagree. Collateral already estoppel decided by bars -7relitigation administrative or of the judicial same issue proceedings provided the party against whom the prior decision was asserted enjoyed a full and fair opportunity to litigate that issue in an earlier proceeding. Rymer v. Estate of Sorrells, 127 N.C. App. 266, 268, 488 S.E.2d 838, 840 (1997) (citing In re McNallen, 62 F.3d 619, 624 (4th Cir. 1995)). Offensive collateral estoppel occurs when a plaintiff seeks to foreclose a defendant from relitigating an issue that the defendant litigated unsuccessfully in another action.... has previously Id. at 269, 488 S.E.2d at 840. North Carolina recognizes a policy exception to collateral estoppel for civil actions that follow the statutory removal of an executor. Shelton v. Fairley, 72 N.C. App. 1, 5, 323 S.E.2d 410, 414 (1984). In Jones v. Palmer, the Court limited the clerk of court s findings and conclusions to the action that removed the executor. (1939). The Court 215 N.C. 696, 699, 2 S.E.2d 850, 853 stated it did not intend to make the findings of fact and conclusions of the [c]lerk...or the judge reviewing them on appeal effective for any other purpose. Id. (emphasis added). In Shelton, the plaintiff-beneficiaries attempted to remove the executor but were unsuccessful. Shelton, 72 N.C. App. at 2, 323 S.E.2d at 412. -8Later, the plaintiffs filed a civil action for damages and the defendants contended the action was barred by res judicata and collateral estoppel. Id. at 2-3, 323 S.E.2d at 413. This Court held that orders entered in a proceeding...in which an executor must show cause why he should not be removed, do not constitute res judicata as to a later civil action for damages between the parties or collaterally estop the bringing of such an action. 414. Id. at 5, 323 S.E.2d at In its reasoning, the Court noted that the removal was purely statutory, with probate jurisdiction vested in the clerk...[a] civil suit for damages involves a full trial with the right to have factual issues resolved by a jury. Id. at 8, 323 S.E.2d at 416. In the instant case, the order revoking letters testamentary included findings of fact and conclusions of law. The court concluded that Ms. Bryant violated her fiduciary duty. Plaintiffs sought to collaterally estop Ms. relitigating the breach of fiduciary duty issue. Bryant from Just as the Court held in Shelton and Jones, the order entered by Clerk Ring, and affirmed by the Judge, does not bind the trial court on the breach of fiduciary duty issue in a later civil action. In addition, it also does not automatically determine the breach of fiduciary duty issue in plaintiffs subsequent civil action. -9Plaintiffs contend that the policy reasons recognized in Shelton are inapplicable here. In Shelton, the Court indicated applying collateral estoppel or res judicata in this situation would either chill exercise of the right to seek statutory removal of an executor or force beneficiaries prematurely to bring civil actions for damages. Shelton, 72 N.C. App. at 7, 323 S.E.2d at 415. find none, plaintiff Yet plaintiffs cite no cases, and we can indicating that is the party the result is different when seeking the protection proceeding that removed the executor. plaintiffs would be in direct is not collaterally estopped breach of fiduciary duty. from the prior The result proposed by conflict Jones. 215 N.C. at 699, 2 S.E.2d at 853. of the with the holding in Therefore, Ms. Bryant relitigating the issue of We affirm the trial court s denial of plaintiffs motion for partial summary judgment on that issue. IV. Ability of Ms. Bryant to Sell Property Plaintiffs next contend the trial court erred in denying partial summary judgment on the claim to set aside the transfer of the property alleging the transfer was void. plaintiffs allege that title to the Farm Specifically, vested in all beneficiaries upon Mr. Collier s death and Ms. Bryant did not have the power to sell the Farm without including plaintiffs as grantors of the fee simple title. We disagree. -10When reading a will, the testator s intent guides the trial court s interpretation of the will. N.C. App. 558, 559, 366 S.E.2d Slater v. Lineberry, 89 608, 609-10 (1988). The testator s intent must be given effect unless it is contrary to public policy or some rule of law and the will must be construed according to the four corners of the will. Buchanan v. Buchanan, __ N.C. App. ___, 698 S.E.2d 485, 488 (2010)(citations omitted). In Slater, this Court held that a will provision clearly intending to devise land in fee simple would not be limited by further precatory language. S.E.2d at 609. Slater, 89 N.C. App. at 559, 366 In that case, the will provision stated: ITEM FOUR: I will, devise and bequeath to my three children, to wit: Ola Mae Taylor Lineberry, Gladys Taylor Miller, and Velma Taylor Slater, subject to the life estate of my said wife, all of the lands that I may own at the time of my death, absolutely and in fee simple, and it is my will that my executor sell at public auction for cash the said lands after the death of my said wife, and divide the proceeds among my three children, or in the event that any of them should predecease me, then I want her share to go to her children. Id. The Court noted that in construing a will every word and clause must, if possible, be given effect and apparent conflicts reconciled. ultimately Id. at 559, 366 S.E.2d at 610. determined that the first However, the Court provision, granting the estate in fee -11equally among simple the daughters, was the testator s general, dominant purpose and the later clause was only precatory language prevailing purpose. which must yield to the general, Id. at 560, 366 S.E.2d at 610; see also Montgomery v. Hinton, 45 N.C. App. 271, 275, 262 S.E.2d 697, 700 (1980) (where the Court gave effect to the first provision in the will, holding that the property had vested in the son upon execution of the will and since the fiduciary had no power of sale granted by the will, he was unable to dispose of the property without court approval.). In the instant case, ITEM I of the will states: I further direct my Executrix to sell any Real Estate I may own and the proceeds divided as indicated in ITEM II below, unless there is unanimous consent of my children to a division of the real estate. In ITEM II of the will, Mr. Collier devised to the beneficiaries description, all of of my whatever property nature, of and every wherever sort, kind situated, and both real and personal, to be theirs absolutely and in fee simple, share and share alike. ITEM V of the will named Ms. Bryant as Executrix of the Collier estate and gave her the power of sale, which allowed her to sell the property, publicly or privately, according to terms which she deemed necessary and desirable in the Settlement of the estate. Mr. Collier s will clauses in the will. must -12be read to give effect to all Just as the Court determined in Slater that the first provision was the testator s general dominant purpose, the fact that Mr. Collier placed one provision first is indicative of the priority the provisions should be given. Furthermore, Mr. Collier referenced ITEM II in the provision of ITEM I, indicating if the events in ITEM I occurred, then ITEM II should be used to divide the proceeds. It is clear from the four corners of the will that if the beneficiaries could not unanimously agree, then the real property should be sold and the proceeds distributed to the beneficiaries. Plaintiffs interpretation only gives effect to ITEM II, but there is no indication that the property immediately vested in the beneficiaries as tenants in common, and we must give effect to all provisions in the will. the real property agreed to do so. as The beneficiaries were only to hold tenants in common if they unanimously Since plaintiffs and Ms. Bryant agreed to sell the real property and divide the proceeds, the power of sale provision contained in ITEM V gave the Executrix the power to sell the Farm. By reading the will in this way, all provisions of the will are given effect. Plaintiffs rely on Slater and Montgomery because in both cases ownership in fee simple was granted and the Court found -13this provision of the will to be controlling. However, in both cases the provision granting ownership in fee simple came first in the will. testator s In addition, it was clear in those cases that the intent beneficiaries in was first fee to simple devise and, the at property that to time, the the beneficiaries rights vested in the property. In the instant case, the primary provision directed the Executrix unless an plaintiffs to sell any agreement and Ms. real estate could be Bryant to and divide reached. share in Mr. the the proceeds, Collier property wanted equally either by a unanimous agreement or by a distribution of the sales proceeds. There is no indication that Mr. Collier intended their rights to vest in fee simple upon his death. In fact, he directed exactly what should occur if his children could not unanimously agree regarding a division of the real property. Plaintiffs contend that North Carolina statutes indicate the title to the Farm vested in all four children immediately upon Mr. Collier s death. See N.C. Gen. Stat. § 28A-15-2(b) (2009) ( the title to real property of a decedent devised under a valid probated will becomes vested in the devisees and shall relate back to the decedent s death... ). However, as we have previously stated, there was a condition in the will. The title would vest only if the -14beneficiaries division of the real property. all agreed upon the Since there was no unanimous agreement to divide the property, Ms. Bryant had the authority to sell pursuant to N.C. Gen. Stat. § 28A-17-8 (2009)( sales of real property be...on such made pursuant terms as in to authority the given by of the opinion will may personal representative are most advantageous to those interested in the decedent s estate ). Furthermore, there is nothing in the record that indicates plaintiffs contested Ms. Bryant s ability to sell the Farm. Plaintiffs only contested the sale once they realized the circumstances of the transfer. In the instant case, Ms. Bryant, as Executrix, was given the authority to sell the real property. We therefore hold, that based on the will, Ms. Bryant had the power to sell the Farm and equally divide the proceeds. Consequently, the sale of the Farm was not void. However, because Ms. Bryant, as Executrix, sold the Farm to her limited liability company then later transferred voidable. it to herself individually, the sale is The act of an executrix purchasing property from the estate, either directly or indirectly, makes a sale voidable. See Thompson v. Watkins, 285 N.C. 616, 626, 207 S.E.2d 740, 747 (1974); Morehead v. Harris, 262 N.C. 330, 335, 137 S.E.2d 174, 180 (1964). Nevertheless, the executrix does have a remedy. Equitable -15including defenses, accord and satisfaction, ratification, and unclean hands may be available to her and may bar plaintiffs tort claims for fraud and breach of fiduciary duty. See Peedin v. Oliver, 222 N.C. 665, 670, 24 S.E.2d 519, 522 (1943); Construction Co. v. Coan, 30 N.C. App. 731, 736, 228 S.E.2d 497, 501 (1976). V. Equitable Defenses The trial court denied summary judgment to plaintiffs on their claim to set aside the transfer of property, finding an accord and satisfaction occurred. Plaintiffs contend the trial court erred in satisfaction. An to defendants defense of accord and We agree. accord undertakes accepting is an agreement give or perform, whereby and the one of other to the parties accept, in satisfaction of a claim, liquidated or in dispute...something other than or different from what he is, or considered himself entitled to. N.C. State Bar v. Gilbert, 189 N.C. App. 320, 327, 663 S.E.2d 1, 6 (2008) (citations omitted). agreement common implies the understanding of parties the are rights of and one The word mind all obligations others there has been a meeting of the minds. have of a the Prentzas v. Prentzas, 260 N.C. 101, 103-04, 131 S.E.2d 678, 680-81 (1963). A satisfaction is the execution or performance[,] of such agreement.... at 6. -16N.C. State Bar, 189 N.C. App. at 327, 663 S.E.2d Although generally a question of fact, where the only reasonable inference is existence or non-existence, accord and satisfaction is a question of law and may be adjudicated by summary judgment when the essential facts are made clear of record. Construction Co., 30 N.C. App. at 737, 228 S.E.2d at 501. In Cullen v. Valley Forge Life Ins. Co., this Court recognized that an accord is voidable by the plaintiff if, when the accord was purportedly made, it was premised upon misrepresentation not known to plaintiff at that time. N.C. App. 570, 577, 589 S.E.2d 423, 429 (2003). a 161 In Cullen, this Court held no accord and satisfaction occurred where defendant insurance company intentionally misrepresented that the plaintiff did not have insurance coverage when he did, and the plaintiff cashed the misrepresentation. return of premiums in reliance on Id. at 576-78, 589 S.E.2d at 429-30. the The defense of accord and satisfaction was precluded as a matter of law. Id. at 577, 589 S.E.2d at 430. In the instant case, as to plaintiffs Michael and Dette, the facts fail satisfaction. to meet the parameters of an accord and There is nothing in the record to show there was a disputed claim regarding the Farm at the time Michael and -17Dette received and cashed the checks from the sale of the Farm. While they believed the Farm was worth more, and requested that Ms. Bryant hold the property until a future time when they could receive a higher price, they did not dispute her authority as Executrix to sell the property. Ms. Bryant insisted that the Farm was only worth $88,000-$95,000, the value stated in the Overly appraisal. Ms. Bryant used her power as Executrix to override her siblings wishes to hold the Farm, and instead sold it from the estate to her own company in March 2006. Michael and Dette were unaware of the circumstances surrounding the transfer as well as Ms. Bryant s involvement in the purchase of the Farm. Michael and Dette were also unaware that Ms. Bryant had a real estate license. Since Michael and Dette had no reason to distrust Ms. Bryant s motives or actions, nor did they have a claim against Ms. Bryant, the action of cashing their checks was not the satisfaction of a dispute. Ms. Bryant s relationship with Kimberly was another matter. There is evidence adversarial stance Specifically, Bryant as that Ms. at the Kimberly had Executrix of Bryant time and of the Kimberly were sale of to a pending petition the estate. On 17 the in Farm. remove May an 2006, Ms. a Withdrawal, Dismissal and Settlement Agreement was filed whereby Ms. Bryant agreed to keep Kimberly informed of the sale of -18estate property and Kimberly agreed to cooperate with the sale of the property. petition, there supported it. While Michael and Dette were aware of the is nothing in the record to show that they In fact, Michael executed an affidavit supporting Ms. Bryant in the action. Therefore, in light of the dispute between Kimberly and Ms. Bryant, Kimberly s acceptance of the check may qualify as an accord and satisfaction. Nevertheless, all plaintiffs cashed their checks based on Ms. Bryant s misrepresentation of the terms of the sale, and therefore any accord and satisfaction is voidable. Ms. Bryant concealed the details of the sale and the true identity of the buyer from her siblings. for $100,000 prior to Dette had offered to buy the property the date of settlement. explanation was that she simply outbid Dette. Ms. Bryant s However, there is nothing in the record that Dette had an opportunity to make a counteroffer. Plaintiffs cashed the checks from the sale of the Farm prior to discovering Ms. Bryant s misrepresentation. It was not until July 2006 that plaintiffs discovered Mr. and Ms. Bryant were co-owners of Southern Homes. Defendants base their argument on the unpublished case of Greene v. Hicks, satisfaction was which held that the available to an defense of executrix accord and when the beneficiaries of an estate cashed a check for a property they -19thought was of greater value than the sales price received and the executrix concealed her involvement in the sale. 169 N.C. App. 455, 612 S.E.2d 448, 2005 LEXIS N.C. App. 788, 2005 WL 757191, (2005) (unpublished). While some of the facts of Greene may be similar to the instant case, the opinion was unpublished and its holding is not binding on this Court. Defendants contend that plaintiffs failure to return the money after discovering Ms. Bryant s alleged fraud is evidence of ratification or unclean hands. Ratification occurs when a plaintiff takes and unauthorized act. retains the benefit of an allegedly See Snyder v. Freeman, 300 N.C. 204, 213, 266 S.E.2d 593, 599-600 (1980). The doctrine of clean hands is an equitable defense which prevents recovery where the party seeking relief comes into court with unclean hands. Ray v. Norris, (1985). 78 N.C. App. 379, 384, 337 S.E.2d 137, 141 Generally, a plaintiff who seeks to set aside and cancel a deed based on fraud must refund the consideration paid. Smith v. Smith, 261 N.C. 278, 280, 134 S.E.2d 331, 333 (1964). However, in Smith, the Court held that the deed could be set aside and defendant could consideration later paid to bring the an action plaintiff, voluntarily returned the consideration. at 334. seeking a unless the refund for plaintiff Id. at 281, 134 S.E.2d -20Plaintiffs cashed the checks for the sale of the before they discovered Ms. Bryant s fraud. Farm After discovering the fraud, they filed a petition with the clerk to revoke her letters testamentary. Although Ms. Bryant sent final disbursement checks to plaintiffs in the amount of $12,063.22, plaintiffs held rather than cash the final disbursement checks. On 24 August 2006, when Ms. Bryant discovered a petition was filed to remove her as Executrix, she requested a stop payment on the checks. the estate Executrix. Ms. Bryant then used the funds that remained in account for legal fees regarding her removal as She also used the funds for estate administration fees that she paid to herself and other estate fees. While plaintiffs could have returned the proceeds from the sale of the Farm in August 2006, the fact that they did not only proves plaintiffs wanted to protect the proceeds. In light of Ms. Bryant s actions, it was reasonable for plaintiffs to protect the proceeds from the sale of the Farm and the retention of the funds does not conclusively prove ratification or unclean hands. Defendants may still seek reimbursement of the consideration paid for the sale of the Farm, if the court rescinds the deed. VI. Damages Plaintiffs next argue that the trial court erred in granting summary judgment for defendants on plaintiffs actual -21and constructive fraud claims as there were genuine issues of material fact on the issue of damages. There are two types of fraud, We agree. actual and constructive. Watts v. Cumberland County Hosp. System, 317 N.C. 110, 115, 343 S.E.2d 879, 883 (1986). fraud are: (1) The well-established elements of actual [f]alse representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party. Forbis v. Neal, 361 N.C. 519, 526-27, 649 S.E.2d 382, 387 (2007) (citation omitted). Fraudulent misrepresentation requires, as an essential element to a cause of action[,] that plaintiff incur actual damage. Hawkins v. Hawkins, 101 N.C. App. 529, 532-33, 400 S.E.2d 472, 474-75 (1991). Damage in a fraud case is the amount of loss caused by the difference between what was received and what was promised through a false representation. First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 256, 507 S.E.2d 56, 65 (1998). In the instant case, plaintiffs contend that due to Ms. Bryant s false representations, the proceeds from the sale of the Farm was an amount less than its actual value, and therefore plaintiffs incurred damages. Ms. Bryant, as Executrix, sold the property to Southern for $102,000. According to the record, the -22value of the Farm varied depending on the type of appraisal. In February 2005, the Overly appraisal, a residential appraisal, valued the Farm at $88,000-$95,000. In August 2006, the Guilford County Tax Department indicated the value of the Farm had decreased appraisal, $615,000. a to $111,500. commercial In October appraisal, 2006, valued the the Dalrymple property at Ms. Bryant sold the Farm for only $102,000, and two independent sources valued the property higher than the price she paid. Therefore, there is a genuine issue of material fact as to the value of the Farm, and the extent of plaintiffs damages. We hold that summary judgment was improper as to the actual fraud claim on the issue of damages. Defendants contend that the Dalrymple appraisal was either incompetent hearsay or incompetent evidence of the Farm s value and was therefore never properly before the trial court. Plaintiffs argue that any inadequacies in the appraisal go to the weight, not the admissibility, of the appraisal. indicates that the trial court considered the The record Dalrymple appraisal, which was attached to Ms. Bryant s affidavit, while ruling on summary judgment, but determined it was incompetent evidence of value. It is unnecessary for us to determine the propriety of the Dalrymple appraisal because even assuming, arguendo, the -23Dalrymple appraisal was hearsay, other evidence in the record shows that Ms. Bryant sold the Farm for less than its value. Specifically, the tax appraisal listed the value of the Farm as $111,500. Viewed in the light most favorable to plaintiffs, there is enough information in the record to create a genuine issue of material fact on the issue of damages for actual fraud. Proof of constructive fraud is less exacting than what is required for actual S.E.2d at 884. showing (1) fraud. Watts, 317 N.C. at 115-16, 343 A plaintiff can establish constructive fraud by facts and circumstances creating a relation of trust and confidence; (2) which surrounded the consummation of the transaction in which the defendant is alleged to have taken advantage of the relationship; and (3) the defendant sought to benefit himself in the transaction. Sullivan v. Mebane Packaging Grp., Inc., 158 N.C. App. 19, 32, 581 S.E.2d 452, 462 (2003). When the parties are engaged in a fiduciary relationship, constructive fraud is presumed when the superior party obtains a possible benefit. Id. (citation omitted). "This presumption arises not so much because [the fiduciary] has committed a fraud, but [because] he may have done so." Watts, 317 N.C at 116, 343 S.E.2d at 884 (citing Atkins v. Withers, 94 N.C. 581, 590 (1886)). After the plaintiff has established a prima facie -24case of the existence of a fiduciary duty, and its breach, the burden shifts to the defendant to prove he acted in an open, fair and honest manner, so that no breach of fiduciary duty occurred. Estate of Smith v. Underwood, 127 N.C. App. 1, 9, 487 S.E.2d 807, 812 (1997) (citation omitted). For example, the superior party can rebut the presumption by showing that the confidence reposed in him was not abused, but that the other party acted on independent advice. S.E.2d at 884 (citation omitted). executor acts in a fiduciary Watts, 317 N.C at 116, 343 It is unquestionable that an capacity. Allen v. Currie, Commiss r of Revenue, 254 N.C. 636, 639, 119 S.E.2d 917, 920 (1961). As Executrix of the Collier estate, Ms. Bryant acted in a fiduciary capacity. Ms. Bryant used that relationship of trust and confidence to arrange the transaction between Southern and the Collier Estate. By selling the Farm to her limited liability company and concealing the buyer s true identity from plaintiffs, Ms. Bryant failed to act in an open, fair and honest manner as Executrix. As the Court established in Watts, there is a presumption of constructive fraud if Ms. Bryant received a possible benefit from the sale of the Farm. 116, 343 S.E.2d at 884. Watts, 317 N.C. at -25There is sufficient evidence in the record to show that Ms. Bryant received a possible benefit from the sale. her actions surrounding the listing and sale of Initially, the Farm indicate that she believed the Farm was worth more than the sale price of $102,000. A February 2005 residential appraisal of the Farm indicated the property was worth $88,000 to $95,000. In March 2005, Ms. Bryant learned that the cost for sewer and water would be $2,664,768. expenses, the $1,154,900. $800,000. Despite initial the listing appraisal price in and April possible 2005 was In December 2005, Ms. Bryant reduced the price to After Mr. and Ms. Bryant created Southern in January 2006, the listing was terminated and Southern bought the Farm for $102,000 in March 2006. In addition, Ms. Bryant s actions indicate she obtained a possible benefit. Farm and motives. close Ms. Bryant claimed she intended to sell the the estate, yet the record suggests Michael s affidavit states: The period between January 30, 2006 and March 5, 2006, [Ms. Bryant] approached [Dette] and me numerous times via telephone to discuss how we could buy the land through a third party that we trust. She tried to convince [Dette] and me that we could sell the property to a third party that we trust. She could close the probate and divide the proceeds. Then, we could buy back the property, delay filing the deed and HUD-1 statement for up to a year, then sit on the other -26property or divide it amongst the three of us, essentially forcing Kimberly out of the Estate. [Dette] and I were adamantly opposed. We told [Ms. Bryant] that those transactions were not above board or ethical, nor was her idea. She got frustrated because during that time, Kimberly had filed the petition to remove her as Executrix and stopped talking to [Dette] and myself. It appears that Ms. Bryant, as the superior party, was determined to be the owner of the Farm and abused the confidence plaintiffs placed in her to make sure this happened. Finally, it was unnecessary for Ms. Bryant to sell the Farm in order to pay any of the estate s debts. By transferring the Farm from Southern to herself, she indicated that her true goal was to own the Farm. Therefore, Ms. Bryant s claims of buying the property for the benefit of the estate present an issue of fact. Constructive fraud is presumed since there is sufficient evidence that Ms. Bryant received a possible benefit from the sale of the Farm. showing that Furthermore, there is nothing in the record plaintiffs sought independent counsel cashing the checks from the sale of the Farm. prior to Plaintiffs did not obtain counsel until July 2006 when they discovered Ms. Bryant s 1 fraudulent actions.1 Moreover, we have already While Kimberly had counsel prior to July 2006, individually, there is nothing in the record to show that Kimberly consulted counsel prior to cashing her check from the sale of the Farm. -27determined that Ms. Bryant s sales tactics were not open and honest whether and Ms. present Bryant a genuine paid issue a fair of material price. fact as to Therefore, the presumption of constructive fraud has not been rebutted. We hold that the trial court improperly granted summary judgment on the issue of constructive fraud. VII. Punitive Damages Defendants contend that plaintiffs are not entitled to punitive damages as they cannot prove the elements of actual or constructive fraud and that plaintiffs cannot seek inconsistent remedies of both rescission of the deed and punitive damages. We disagree. Punitive damages are available, not as an individual cause of action, but as incidental damages to a cause of action. Hawkins, 101 N.C. App. at 532, 400 S.E.2d at 474. In North Carolina, punitive damages have been awarded on the basis of the public policy reason to punish intentional wrongdoing, not on the basis of compensating a plaintiff. Mehovic v. Mehovic, 133 N.C. App. 131, 136, 514 S.E.2d 730, 733-34 (1999). Therefore, punitive damages can be awarded if either actual or constructive fraud is shown. See id.; Melvin v. Home Federal Savings & Loan Assn., 125 N.C. App. 660, 665, 482 S.E.2d 6, 8 (1997). To justify an award of punitive damages, nominal damages must be -28recoverable, but there is no requirement that nominal damages actually be recovered. Hawkins v. Hawkins, 331 N.C. 743, 745, 417 S.E.2d 447, 449 (1992). When a party has been fraudulently induced to enter a sale, the remedies are either to repudiate the contract or affirm the contract and recover damages caused by the fraud. White, 235 N.C. 680, 688, 71 S.E.2d 122, 128 Parker v. (1952). The plaintiff may elect one or the other but may not seek rescission and maintain an action for fraud. Id. However, the purpose of the doctrine of election of remedies is not to prevent recourse to any remedy, wrong. place suffered to prevent double redress for a single Smith v. Oil Corp., 239 N.C. 360, 368, 79 S.E.2d 880, 885 (1954). not but The rule is, if rescission of the contract does the injured damages which party in statu cancellation of quo, the as where contract he has cannot repair, there is no principle of law which prevents him from maintaining his action for damages caused by the other party's fraud." Kee v. Dillingham, 229 N.C. 262, 265, 49 S.E.2d 510, 512 (1948). In Mehovic, the husband convinced his wife to transfer full title to their property to his brother to protect their home from creditors. 732. Mehovic, 133 N.C. App. at 133, 514 S.E.2d at At trial, the jury verdict allowed a rescission of the -29fraudulent deed and granted the plaintiff wife $1.00 in nominal damages for assault and $24,500 in punitive damages. 134, 512 S.E.2d at 732. Id. at This Court affirmed the trial court and held that North Carolina public policy supports an award of punitive damages upon a jury verdict establishing fraud and consequent entitlement, at the plaintiff s election, either to rescission or compensatory damages. Id. at 137, 514 S.E.2d at 734. Just as the plaintiffs in Mehovic sought rescission of the deed and received an award of punitive damages, plaintiffs in the instant case can seek both rescission of the transfer to Southern and punitive damages for the fraud as a result of Ms. Bryant s fraudulent actions. the record, plaintiffs Based on the facts available in could have maintained either actual or constructive fraud. an action for Therefore, plaintiffs may be able to recover punitive damages for Ms. Bryant s actions, even if they also seek rescission of the deed in the alternative. VIII. Reliance The trial court granted summary judgment on the issue of fraud solely on actual damages. the basis that plaintiffs failed to allege However, on appeal, defendants also contend -30that plaintiffs failed to meet the reliance element of actual fraud. We disagree. Reliance must be reasonable. S.E.2d at 387. Forbis, 361 N.C. at 527, 649 The reasonableness of a party s reliance is a question for the jury, unless the facts are so clear that they support only one conclusion. Id. When it appears a plaintiff seeking relief from alleged [fraud] must have known the truth, the doctrine of reasonable reliance will prevent him from recovering for a misrepresentation which, if in point of fact made, did not deceive him. Johnson v. Owens, 263 N.C. 754, 758, 140 S.E.2d 311, 314 (1965). Here, plaintiffs relied on Ms. Bryant s the misrepresentation that buyer of the Farm was disinterested and that $102,000 was the highest price they could receive. The reasonableness of plaintiffs reliance is a jury question. IX. Conclusion Based on the specific policy rule allowing relitigation of issues in both a clerk s revocation of letters testamentary and a civil trial, Ms. Bryant is not collaterally estopped from raising the issue of breach of fiduciary duty in a trial on that issue. In addition, since Mr. Collier granted Ms. Bryant the right to sell the property, she had the discretion to sell and the sale of the Farm was not void. However, because Ms. Bryant -31was a fiduciary and essentially sold the property to herself, the sale is voidable. plaintiffs cashed satisfaction Therefore, the because presented issue material checks, there of Ms. may plaintiffs Plaintiffs of Despite defendants contentions, although still sufficient fact as was Bryant s have the accord sale to create issue and misrepresentation. the evidence to no of nullified. a genuine damages for constructive and actual fraud and may therefore seek punitive damages, even if they also seek rescission of the deed. Finally, plaintiffs relied on Ms. Bryant s misrepresentation; the reasonableness of this reliance is a question for the jury. Affirmed in part, Reversed and Remanded in part. Judges ELMORE and STEELMAN concur.

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