IN THE COURT OF APPEALS OF NORTH CAROLINA. No. COA Filed: 7 April Appeal by defendant from judgment entered 31 October 2013 by Judge A.

Size: px

Start display at page:

Download "IN THE COURT OF APPEALS OF NORTH CAROLINA. No. COA Filed: 7 April Appeal by defendant from judgment entered 31 October 2013 by Judge A."

Hector Gordon
5 years ago
Views:

1 An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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 Appellate Procedure. IN THE COURT OF APPEALS OF NORTH CAROLINA No. COA Filed: 7 April 2015 Iredell County, No. 11 CVS 175 KECIA LAMM, Plaintiff, v. DAVID ALLEN TILL, Defendant. Appeal by defendant from judgment entered 31 October 2013 by Judge A. Robinson Hassell in Iredell County Superior Court. Heard in the Court of Appeals 21 January Homesley & Wingo Law Group, PLLC, by Ronnie D. Crisco, Jr., for plaintiffappellee. Weaver, Bennett & Bland, P.A., by Trent M. Grissom, for defendant-appellant. STEELMAN, Judge. The trial court did not err by denying defendant s motion for directed verdict where there was evidence from which reasonable jurors could find the existence of all of the elements of plaintiff s claim of fraud. I. Factual and Procedural History Plaintiff began working in retail sales and management after high school, securing positions in management for the Target corporation. After working for

2 Target for 12 years, plaintiff obtained a B.S. degree in business management and began working for the Home Depot corporation. In 2008 plaintiff and her husband divorced and as part of the divorce settlement plaintiff received their former marital residence in Atlanta. In 2009 she began working for Family Dollar corporation and moved to Charlotte, North Carolina. In the fall of 2009 plaintiff was living at an apartment complex in Charlotte called The Residence. She met defendant through an online dating website and they began a dating relationship. Defendant moved into plaintiff s apartment and became acquainted with some of her friends at The Residence. Between November 2009 and June 2010 plaintiff provided defendant with approximately $448,000 to invest on her behalf. In July 2010 plaintiff and her son moved from The Residence to defendant s home in Mooresville. By 30 September 2010 defendant had lost all of the money that plaintiff had invested with him. The parties relationship ended in January On 26 January 2011 plaintiff filed a complaint asserting claims of conversion, fraud, and unfair or deceptive acts or practices. Plaintiff also sought the ancillary remedy of attachment to attach assets of defendant located in North Carolina. The complaint alleged that defendant had falsely represented to plaintiff that he was a corporate bond trader and licensed personal investment specialist who could guarantee plaintiff a 6% return on investments; that in reliance on defendant s representations she had given him over $400,000 to invest on her behalf; that during - 2 -

3 the course of their relationship defendant falsely represented that her investments were earning money; and that defendant lost all of the money she invested with him. On 26 May 2011 defendant filed an answer and motion to dismiss, and asserted counterclaims for wrongful attachment, wrongful claim and delivery, slander, fraud, abuse of process, conversion, assault and battery, and punitive damages. Plaintiff filed a reply and motion to dismiss defendant s counterclaims on 26 July On 25 October 2011 plaintiff filed an amended complaint, with leave of court, that contained additional factual allegations. On 2 November 2011 Judge Theodore S. Royster, Jr., entered an order dismissing defendant s counterclaims for wrongful attachment, wrongful claim and delivery, fraud, abuse of process, and the punitive damages claims. This matter was tried before the trial court and a jury at the 30 September 2013 civil session of Superior Court for Iredell County. Plaintiff testified that at her first meeting with defendant, he told her that he was a corporate bond trader and a personal money manager who guaranteed his investors a six percent return, and that he made his living from the investment return above six percent. Plaintiff s savings were in stock from Home Depot and Family Dollar and defendant told her that allowing him to invest her savings would be a good investment. [Defendant] talked a lot to me about my investments... what his plan was. And to me the six percent return being re-invested, I wasn't going to get rich quick overnight, but it would protect my nest egg[.]... So it made a lot of sense - 3 -

4 to me to put it somewhere where I would get a predicted, guaranteed return, and that's it.... He had told me that he was Lloyd's of London insured. And that -- so he had an insurance backing on it if something ever happened in the market. He also told me that he was licensed and registered. And I guess that gave me the confidence that he was above board in what he was doing. Plaintiff sold her stock from Home Depot and invested proceeds of approximately $274,000 with defendant, who assured plaintiff that the money she invested with him would be in her investment account, that it would be under his guidance and he would be investing [it,] and that she would be insured on any potential losses and could recover her funds at any time by giving him 30 days notice. Plaintiff also invested her severance pay from Home Depot and an inheritance from her father s estate with defendant. Between November 2009 and June 2010, plaintiff invested approximately $448,000 with defendant. During this time defendant assured her that her investments were earning a profit and even outperforming. During the period when she invested money with defendant, plaintiff was trying to sell her former marital home in Atlanta. The outstanding mortgage was more than the value of the house, so plaintiff applied to the bank holding her mortgage for authorization to conduct a hardship sale of the property for less than the outstanding mortgage. The application required plaintiff to disclose assets, but defendant advised her that as long as she disclosed the funds she invested with him - 4 -

5 on her annual tax returns, she would not need to include those funds among the assets listed in the hardship application. Plaintiff considered defendant to be her personal investment advisor and believed that he would tell her what [she] could or could not do or should or should not do. When plaintiff later learned that she should have disclosed the investment funds in the sale application, she contacted the bank and informed them about the investment funds. Defendant also asked her to introduce him to friends and neighbors who might be interested in investing with him, and several witnesses corroborated plaintiff s testimony regarding defendant s representations. Jim Snyder, a former tenant at The Residence, knew plaintiff from their employment at Home Depot and Family Dollar. Defendant told Mr. Snyder that he earned a living investing money for others and that he offered a personal guarantee of a six percent rate of return. Sheila Hoover, a friend of plaintiff s and former tenant of The Residence, met defendant through plaintiff. Defendant told her that he was a full time investor for a select group of clients, that he was investing funds for plaintiff, and that he would provide a written personal guarantee of a six percent return. Ms. Hoover arranged a meeting between defendant and another apartment resident who was interested in investing with defendant, at which defendant held himself out to be a private investor for high net worth individuals[.] Meade Dadkhah, who also lived at The Residence, was at the meeting at Ms. Hoover s house, and heard defendant say that plaintiff had invested - 5 -

6 with him. Another resident of The Residence, Ms. Shana Seabold, testified that defendant told her his profession was fixed rate personal investments for others with a guaranteed six percent return, that he had invested millions of dollars for others, including plaintiff, and that he was a registered investor with over sixteen years experience. William Roth was friends with plaintiff and met defendant through plaintiff. Defendant told him he was an investment manager who could guarantee a six percent investment return, and plaintiff told him that she had invested with defendant. Ultimately, none of these witnesses invested with defendant. Plaintiff testified that after she and her son moved into defendant s house, their relationship deteriorated. In December 2010 plaintiff asked defendant to return $15,000 of the funds she had invested with him. When she received the money, plaintiff put it into their joint checking account, but defendant removed $14,000 of this from the joint account. In January 2011, plaintiff moved her son into her daughter s Charlotte apartment and stayed in Charlotte for two nights. When she returned to defendant s house, the locks had been changed and she could not get inside to retrieve her property. Paul Saltzman testified as a court-appointed expert in forensic accounting. Mr. Saltzman had been asked by the trial court to determine what funds had been transferred from plaintiff to defendant, and to trace the funds after they were deposited. He testified that the funds that plaintiff gave to defendant were deposited - 6 -

7 into an investment account in defendant s name only, and were lost in defendant s stock trading. Defendant also used plaintiff s funds to pay expenses such as his mortgage and credit card bills. At the close of plaintiff s evidence, the trial court granted defendant s motion to dismiss plaintiff s claim for unfair or deceptive acts or practices. Plaintiff called defendant as an adverse witness. After plaintiff rested her case, defendant testified on his own behalf that he had never received any licensure or certification that would allow him to engage in professional securities trading. He acknowledged that during the mid to late 2000 s he engaged in personal stock trading for his own benefit all day, every day except holidays and weekends and that after 2008 his only source of income was from his stock investments and trading activities. He also testified that between March and September 2009 the value of his stock portfolio dropped from $1,200,000 to just over $100,000, despite receiving $200,000 from his mother. Defendant met plaintiff in the fall of 2009 and in November 2009 plaintiff provided defendant with $274,000, bringing the total value of his portfolio to $308,000 by 31 December However, the value of defendant s stock portfolio continued to fall: by 31 March 2010 it was down to $62,500 and by 30 September 2010 it had dropped to less than $2000. Defendant testified that he never offered to invest money on behalf of plaintiff or anyone else, and never represented that he had a license or certification to engage - 7 -

8 in securities transactions or promised any particular rate of return. However, he admitted that the brochures which he provided to several friends of plaintiff s described him as David A. Till, fixed income investments, corporate bond specialist, NASD registered, and that he had never been licensed or registered to trade in the stock market on behalf of others. He acknowledged that plaintiff provided him with over $448,000 between November 2009 and June However, he testified that plaintiff gave him the money as a gift, and not for investment, because she believed she would lose it anyway if she reported it in the application for the hardship sale of her home. Defendant also denied giving plaintiff advice about the documentation for the hardship sale of her home. At the close of all the evidence, defendant took a voluntary dismissal of his counterclaims for slander and assault, and the trial court dismissed his counterclaim for conversion. On 3 October 2013 the jury returned verdicts finding that defendant had converted plaintiff s property with a reasonable value of $25,000; that defendant had committed fraud upon plaintiff, for which plaintiff was entitled to recover $435,000; and that plaintiff was entitled to recover punitive damages in the amount of $250,000. On 31 October 2013 the trial court entered judgment in accordance with the jury s verdict. Defendant appeals. II. Directed Verdict - 8 -

9 In his only argument on appeal, defendant contends that the trial court erred in denying his motion to dismiss plaintiff s claim for fraud. We disagree. We further note that defendant does not challenge the jury s verdict on the conversion claim or offer any appellate arguments regarding the jury s award of punitive damages, or the amount of its award on plaintiff s fraud claim. A. Standard of Review The standard of review of directed verdict is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury. Prelaz v. Town of Canton, N.C. App.,, 760 S.E.2d 389, 391 (2014) (quoting Davis v. Dennis Lilly Co., 330 N.C. 314, , 411 S.E.2d 133, 138 (1991)). Thus, upon review of a trial court s denial of a motion for a directed verdict, this Court must determine: whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury. In determining the sufficiency of the evidence to withstand a motion for a directed verdict, all of the evidence which supports the non-movant's claim must be taken as true and considered in the light most favorable to the non-movant. The non-movant is given the benefit of every reasonable inference which may legitimately be drawn from the evidence, resolving contradictions, conflicts, and inconsistencies in the non-movant's favor. A motion for directed verdict should be denied if more than a scintilla of evidence supports each element of the nonmoving party's claim

10 Trantham v. Michael L. Martin,. Inc., N.C. App.,, 745 S.E.2d 327, 331 (2013) (internal citations, quotation marks, and brackets omitted)). When a motion is made for directed verdict at the close of the plaintiff s evidence, the trial court may either rule on the motion or reserve its ruling on the motion. By offering evidence, however, a defendant waives its motion for directed verdict made at the close of plaintiff's evidence. Accordingly, if a defendant offers evidence after making a motion for directed verdict, any subsequent ruling by the trial judge upon defendant s motion for directed verdict must be upon a renewal of the motion by the defendant at the close of all the evidence, and the judge s ruling must be based upon the evidence of both plaintiff and defendant. Ligon v. Strickland, 176 N.C. App. 132, 135, 625 S.E.2d 824, 827 (2006) (quoting Stallings v. Food Lion, Inc., 141 N.C. App. 135, , 539 S.E.2d 331, 332 (2000) (internal citations omitted). B. Sufficiency of the Evidence of Intent to Deceive While actual fraud has no all-embracing definition, the following essential elements of actual fraud are well established: (1) False 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. Additionally, any reliance on the allegedly false representations must be reasonable. 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

11 Forbis v. Neal, 361 N.C. 519, , 649 S.E.2d 382, 387, (2007) (quoting Ragsdale v. Kennedy, 286 N.C. 130, 138, 209 S.E.2d 494, 500 (1974) (additional citations omitted). Defendant argues that the trial court erred by denying his motion for directed verdict. Specifically, he contends that there was insufficient evidence of defendant s fraudulent intent at the time that he made false representations to plaintiff or of plaintiff s reasonable reliance on defendant s misrepresentations. Plaintiff testified extensively that defendant had told her that he was an experienced investor who was licensed and insured ; that he had a long and successful history of investing on behalf of others; that he guaranteed his clients a six percent return on their investments and supported himself by keeping the returns above six percent, and; that she would be insured against any losses. It is well established that the jurors are the sole judges of the credibility of a witness, and the weight to be given [a witness s] testimony was a matter for them.... In passing upon a motion for a directed verdict and the subsequent motion for a judgment notwithstanding the verdict based upon it, we must accept the testimony of plaintiff's witnesses at face value. Rayfield v. Clark, 283 N.C. 362, 367, 196 S.E.2d 197, (1973) (citing Cockman v. Powers, 248 N.C. 403, 407, 103 S.E. 2d 710, 713 (1958)). Therefore, we take as true, for purposes of reviewing defendant s motion for directed verdict, plaintiff s testimony that defendant had represented himself to her as a

12 licensed and insured stock broker, with a successful history of investing for high income clients. Defendant, who denied making these statements, testified that he was not licensed as a stock broker and had never invested on behalf of another person. Based upon our standard of review, we must accept plaintiff s testimony concerning defendant s representations as true; we note that their falsity was confirmed by defendant s own testimony. Defendant further asserts that there was insufficient evidence of his fraudulent intent at the time he made the statements to plaintiff, challenging the evidence that his representations as to his qualifications and experience as an investor were reasonably calculated to deceive and were made with intent to deceive. Juries often have little access to direct evidence of a person s intent and therefore may infer intent from the totality of the properly admitted evidence. Hudgins v. Wagoner, 204 N.C. App. 480, 491, 694 S.E.2d 436, 445 (2010) (citing Jones v. Harrelson & Smith Contr'rs, LLC, 194 N.C. App. 203, 214, 670 S.E.2d 242, 250 (2008), aff'd, 363 N.C. 371, 677 S.E.2d 453 (2009) (per curiam)), disc. rev. denied, 365 N.C. 88, 706 S.E.2d 250 (2011). In the instant case, there was evidence that (1) after 2008 defendant s sole source of support was from his trading activities in the stock market; (2) during 2009 the value of defendant s stock portfolio fell precipitously; (3) in the fall of 2009 defendant urged plaintiff to allow him to invest her savings, and represented himself as experienced, licensed, and insured, and; (4) in reliance upon

13 defendant s representations, plaintiff provided defendant with over $400,000 in funds to invest. Moreover, plaintiff presented the testimony of five other witnesses from whom defendant had solicited investments. We hold that there was more than ample evidence that defendant s false statements to plaintiff were calculated and intended to deceive. In arguing for a contrary result, defendant argues that plaintiff cannot establish the elements of fraud merely based upon the fact that defendant did not achieve the promised rate of return of six percent, or upon the premise that defendant never intended to invest her funds[.] However, our holding that there was more than sufficient evidence that defendant s false representations were intended to deceive is not based upon either of these conclusions, but upon the evidence that defendant s false statements were intended to induce her to allow him to invest her savings. Defendant also argues that the evidence could possibly have supported the conclusion that plaintiff gave him her life savings as part of committing fraud in her application for a hardship sale. However: Upon a motion for a directed verdict, pursuant to N.C.G.S. 1A-1, Rule 50 [(2014)], the evidence must be considered in the light most favorable to the non-moving party, resolving all conflicts in his favor, and giving him the benefit of all reasonable inferences flowing from the evidence in his favor.... Moreover, if there is conflicting testimony that permits different inferences, one of which is favorable to the non-moving party, a directed verdict in favor of the party with the burden of proof is improper

14 United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, , 370 S.E.2d 375, 387 (1988) (citations omitted). This argument is without merit. C. Reasonable Reliance upon False Representations Defendant next argues that the trial court erred by denying his motion for a directed verdict as to plaintiff s fraud claim because there was insufficient evidence that plaintiff s reliance upon his representations was reasonable. We disagree. As discussed above, defendant represented himself as a skilled and experienced investor, with a long and successful record of investing on behalf of wealthy investors and achieving good results for his clients. He represented that he was licensed as a broker and insured by Lloyds of London. The undisputed evidence establishes that these representations were false. There was no evidence suggesting plaintiff relied upon false representations by defendant concerning the general nature of the stock market, investments, or some other factual matter unrelated to defendant s personal background. Instead, as plaintiff testified, she relied upon defendant s personal background and qualifications as an investor when she delivered monies to defendant. In addition, it was undisputed that defendant s representations were made in the course of a personal relationship, rather than during an arms length business transaction. 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. State Properties, LLC v. Ray, 155 N.C. App. 65, 73, 574 S.E.2d 180,

15 186 (2002) (citation omitted), disc. review denied, 356 N.C. 694, 577 S.E.2d 889 (2003). We hold that the trial court did not err by denying defendant s motion for directed verdict on plaintiff s claim for fraud and allowing the jury to determine the reasonableness of plaintiff s reliance upon defendant s false representations. At trial, defendant testified under oath that he never made any of the false representations to which plaintiff testified. On appeal, he essentially argues that if he did make these false representations, then it was unreasonable for plaintiff to trust his honesty concerning his personal background and qualifications. In effect he attacks his own credibility. However, it is axiomatic that the trier of fact, in this case the jury, must resolve issues of credibility and determine the relative strength of competing evidence. Delta Env. Consultants of N.C. v. Wysong & Miles Co., 132 N.C. App. 160, 171, 510 S.E.2d 690, 697 (1999). This argument lacks merit. III. Conclusion We hold that there was sufficient evidence presented for the trial court to submit plaintiff s claim of fraud to the jury. The trial court did not err by denying defendant s motion for a directed verdict as to plaintiff s fraud claim. NO ERROR. Judges DIETZ and INMAN concur. Report per Rule 30(e)

NO. COA NORTH CAROLINA COURT OF APPEALS. Filed: 18 September 2012

NO. COA NORTH CAROLINA COURT OF APPEALS. Filed: 18 September 2012 NO. COA12-131 NORTH CAROLINA COURT OF APPEALS Filed: 18 September 2012 SUNTRUST BANK, Plaintiff, v. Forsyth County No. 10 CVS 983 BRYANT/SUTPHIN PROPERTIES, LLC, CALVERT R. BRYANT, JR. AND DONALD H. SUTPHIN,