Transcript Liability - University of North Carolina at Chapel Hill

Recent North Carolina
Decisions
J. Donald Cowan, Jr.
Smith Moore LLP
17 June 2004
1
LIABILITY
2
Motor Vehicles
3
Pintacuda v. Zuckeberg
(N.C. 2004) (1)
Issue:
Whether independent conduct of plaintiff
relieved defendant’s negligence of
stopping suddenly on interstate?
4
FACTS

Plaintiff, on motorcycle, following defendant on
I-240

Plaintiff traveling under speed limit and several
car lengths behind defendant

As plaintiff crested hill, saw defendant stopped
“instantaneously” in the plaintiff’s travel lane

Plaintiff applied brakes, swerved into adjoining
lane to avoid defendant’s vehicle
5
FACTS (Cont’d.)

Plaintiff testified that he “skidded on something or
hit reflector marker”

Trial court grants defendant’s motion for summary
judgment

Court of Appeals reverses because jury question
as to whether plaintiff’s skidding was foreseeable
when defendant stopped
6
HELD: Summary judgment for defendant
affirmed.
1. When plaintiff becomes aware of potential
danger created by negligence of another, then by
plaintiff’s independent act of negligence, causes
the accident, the defendant is relieved of liability
2. Responsibility for the accident was the plaintiff’s
“skidding on something or hitting the reflector
marker”
3. Plaintiff was aware of the defendant stopping
and had sufficient time to brake, see that the
adjoining lane was clear and began to move to
adjoining lane
7
Overton v. Purvis (N.C. 2003) (2)
Issue:
When plaintiff stood in the defendant’s
lane of travel attempting to get the
defendant to slow down because of
conditions on the road, whether the
defendant had the last clear chance to
avoid striking the plaintiff?
8
FACTS

As dogs involved in fox hunt crossed highway,
plaintiff stood in the road to get traffic to slow
down

Defendant approached the hunt crossing

When the defendant did not slow down, the
plaintiff ran to opposite lane of travel where he
was struck by the defendant who swerved to
avoid hitting the plaintiff

Jury found negligence and contributory
negligence, but concluded that the defendant had
the last clear chance to avoid the accident

Court of Appeals held it was error to instruct on
last clear chance
9
HELD: Trial court correctly instructed on last
clear chance.
1. Since lighting and visibility good, plaintiff acted
reasonably in remaining in the defendant’s travel
lane and attempting to get the defendant’s
attention
2. Because defendant was not keeping a proper
lookout, he did not notice the plaintiff until it was
too late
3. If defendant had stayed in his lane of travel, he
could have avoided the accident
4. By keeping a proper lookout, the defendant
would have seen the plaintiff sooner and had the
times and means to avoid hitting the plaintiff
10
Overton v. Purvis (N.C. App. 2004) (4)
Issue:
Whether the trial court properly refused to
instruct on sudden emergency?
11
HELD: Sudden emergency instruction
properly refused.
1. Defendant testified that he saw the hunters’
vehicles parked along the side of the road and
also saw the plaintiff in the road waving his arms
2. Defendant could have stopped, but did not
3. Defendant failed to establish element of sudden
emergency; that emergency was not created by
his own negligence
12
Headley v. Williams,
review denied (N.C.App. 2004) (6)
Issue:
1. Whether trial court correctly granted defendant’s
motion for directed verdict when decedent
collided with defendant’s vehicle and physical
evidence showed that accident occurred in
decedent’s lane of travel?
2. Whether findings of fact and conclusions of law
should be made when trial court bifurcates
liability and damages?
13
FACTS

Decedent, operating motorcycle, rounds curve in road and
collides with defendant’s vehicle

No witnesses to accident other than defendant

Witness had been following decedent’s motorcycle and
testified that decedent was operating within speed limit and
in normal manner

Investigating highway patrolman testified that gouge marks
in decedent’s lane of travel

Defendant’s driver’s license restricted operation of vehicle to
wearing corrective lenses – no contacts or glasses worn by
defendant when patrolman arrived on scene

Trial court grants defendant’s motion for a directed verdict
14
HELD: Directed verdict reversed.
1. Taking evidence in light most favorable to
plaintiff:
a) collision occurred in decedent’s lane of travel; and
b) no evidence that defendant wearing corrective
lenses
2. Although decision to bifurcate liability and
damages is in discretion of trial court, trial court
should consider making findings of fact and
conclusions of law “which clearly establish that
severance is appropriate”
15
Dunn v. Custer (N.C.App. 2004) (7)
Issue:
1. When plaintiff had just begun a second, parttime employment, whether plaintiff’s economist’s
opinions were too speculative and improperly
utilized “opportunity cost?”
2. Whether passenger in vehicle in which plaintiff
was injured was improperly permitted to testify
as to effect of impact on passenger’s injuries?
16
FACTS
 Plaintiff, a licensed dentist, had just begun working parttime for Dr. Teague at the time of the accident and had
received his first pay check of $1,200 the day before the
accident
 The plaintiff’s economic expert, Dr. Shirley Browning,
testified that the plaintiff would not have left his
employment with the County Health Department for a
lesser-paying job, thus using the Health Department salary
and “opportunity cost” to reach his opinion.
 The defendant admitted liability
 Dr. Teague was a passenger in the plaintiff’s car and was
permitted over objection to testify about the force of impact
and injuries he received in the accident. The jury awarded
the plaintiff $310,000.
17
HELD:
1. Testimony of economic expert properly admitted.
Defendant did not challenge Dr. Browning’s
methodology. Dr. Browning properly assumed
that the plaintiff would not leave the Health
Department for a lesser-paying job.
2. The admission of evidence of injuries by an
occupant in the vehicle is in the discretion of the
trial court. Although opposite result of excluding
evidence of occupant’s injuries was affirmed in
Griffis v. Lazaronich (N.C.App.2003), the
defendant in the present case did not show
abuse of discretion by the trial judge.
18
Sharp v. CSX Transportation
(N.C.App. 2003) (10)
Issue:
Whether decedent’s driving around railroad
crossing gates in violation of statute was grounds
for contributory negligence as a matter of law and
grant of defendant’s 12 (b) (6) motion?
19
HELD:
1. G.S. § 20-142.1 prohibits a person from driving
around a crossing gate, but also provides that
violation of statute shall not constitute
negligence per se
2. Since violation of statute would not establish
contributory negligence per se, error to grant
defendant’s 12 (b) (6) motion
20
Williams v. Davis (N.C.App. 2003) (11)
ISSUE:
Whether defendant’s motion for directed
verdict properly granted when plaintiff’s
evidence showed that defendant’s
headlights were not on at time of collision
at night?
21
FACTS

Plaintiff was entering University Parkway from
Holiday Inn in Winston-Salem at 9:30 p.m. when
struck by defendant’s vehicle.

Plaintiff testified that she looked right and left
before entering road.

Plaintiff’s evidence showed that defendant’s
headlights were not on at time of collision.

Plaintiff’s evidence also showed that defendant
traveling in excess of posted speed of 45 mph.
22
FACTS (Cont’d.)

Defendant’s vehicle entering University Parkway
from exit ramp.

Area in which collision occurred was heavily
commercialized with large car dealerships “lit up
like a Christmas tree.”

Trial Court grants defendant’s motion for directed
verdict based on plaintiff’s contributory
negligence.
23
HELD: Affirmed.
1. Even though plaintiff testified that she looked left
and right before entering the Parkway, she failed
to look at the exit ramp.
2. Although defendant’s headlights may not have
been on, there was sufficient light for the plaintiff
to see the defendant’s vehicle approaching.
3. Plaintiff pulled into the Parkway “when a
reasonable person should have seen it was
unsafe to enter the intersection.”
24
Horne v. Vassey (N.C.App. 2003) (12)
ISSUE:
Whether trial judge properly denied
plaintiff’s motion for a new trial when
plaintiff’s evidence showed that defendant
struck plaintiff’s vehicle from the rear and
plaintiff incurred $9,005 in medical bills as
a result of injuries received from the
accident and jury awarded no damages?
25
FACTS

Defendant struck plaintiff’s vehicle from the rear.

Plaintiff’s treating neurologist, Dr. Maier, testified
that plaintiff had a 10% permanent disability to
her entire body as a result of the accident.

Plaintiff introduced evidence of $9,005 in medical
bills incurred as a result of the accident.

Plaintiff had “numerous medical problems” before
the accident, including chronic pain syndrome.
26
FACTS

During defendant’s cross-examination of plaintiff,
plaintiff identified four photographs of her vehicle
that were taken the day after the accident.

Plaintiff disputed the photographs, contending
there was more damage to the rear of her vehicle
than shown on the photographs. She admitted
that the photographs were taken before her car
was repaired.

The jury awarded no damages. The trial judge
denied the plaintiff’s motion for a new trial.
27
HELD: Affirmed.
1. Photographs properly admitted by the trial court:
“Testimony that the exhibit is a fair and accurate
portrayal of the scene at the time of the
accident is ordinarily sufficient to authenticate
the exhibit.”
Although plaintiff disputed the accuracy of the
photographs as showing all of the damage to
her vehicle, this was an issue of the weight of
the photographs for the jury and did not
relate to the admissibility of the photographs.
28
HELD: Affirmed. (Cont’d.)
2. Motion for new trial properly denied.
Even though the defendant did not present expert medical
testimony, the defendant’s cross-examination of the
plaintiff’s medical expert, Dr. Maier, produced Dr. Maier’s
opinion that “it would be very hard to sustain a
significant injury” from an impact by the defendant’s
vehicle traveling at a speed of five miles per hour.
The defendant testified that his vehicle was traveling at no
more than one to two miles per hour when he “rolled
into” the plaintiff’s vehicle.
Additional cross-examination indicated that the plaintiff
had a “multitude of pre-existing medical problems.”
Credibility of the evidence is for the jury.
“It was well within the jury’s power to minimize or wholly
disregard the testimony given by Dr. Maier.”
29
Premises
30
Barringer v. Mid Pines Development Group
(N.C. 2003) (14-15)
ISSUES:
1.
Whether trial court properly denied plaintiff’s
requested jury instruction that plaintiff is not
contributorily negligent when plaintiff’s attention
is diverted from seeing an existing dangerous
condition?
2.
Whether the trial court properly admitted
testimony about the interpretation of the
plaintiff’s MMPI when the doctor interpreting the
MMPI did not testify?
31
FACTS





Plaintiff is attending employment-related
workshop at Mid Pines.
Buffet lunch provided at the Inn.
Plaintiff had been to the buffet table to make a
sandwich and salad.
Plaintiff returns to the buffet table, and, as
returning to his table, he trips over electrical cord
connecting warming pot to electrical outlet.
Trial court denies plaintiff’s request for jury
instruction that plaintiff is not contributorily
negligent when his attention is diverted from
discovering or seeing an existing dangerous
condition.
32
FACTS

Jury finds plaintiff contributorily negligent and
does not award damages.

Court of Appeals reverses on basis that requested
jury instruction should have been given.
33
HELD: Trial court affirmed.
1. Requested jury instruction by plaintiff properly
denied.
“Doctrine of diverted attention” has not been adopted in
North Carolina.
Pattern jury instruction on negligence includes the duty of
ordinary care in varying circumstances. Thus, when
jury instructed that a party must act as an ordinary
prudent person under the circumstances, this is
sufficient statement of duties.
The jury may not ignore or fail to apply contributory
negligence as requested by the plaintiff.
34
HELD: Trial court affirmed. (Cont’d.)
2.
MMPI properly admitted.
Dr. Edmundson, the plaintiff’s primary treating
physician, was cross-examined by the
defense about the plaintiff’s MMPI and the
interpretation of the MMPI by Dr. Crovitz, a
non-testifying witness.
The Court of Appeals held that it was error to
admit the testimony because there was no
evidence that the test was properly
administered and the MMPI was admitted for
the truth of the matters in the test.
35
HELD: Trial court affirmed. (Cont’d.)
2. MMPI properly admitted. (Cont’d.)
The Supreme Court held that the test was
properly admissible under Rule 803(6).
There was evidence at trial that the record was
made at or near the time of evaluation; that
the results were created by a person with
knowledge; and that the record was kept in
the ordinary course of business.
The plaintiff was given the opportunity to
depose Dr. Crovitz, but declined.
36
Nelson v. Novant Health Triad Region
(N.C.App. 2003) (17)
ISSUE:
Whether trial court properly denied
defendant’s motion for directed verdict
when plaintiff testified that she was
looking ahead of her and did not see that
the floor where she was walking was
slippery from water?
37
FACTS

Plaintiff was at Forsyth Memorial Hospital as part of her
employment.

She was walking down a hall past the hospital’s dishwashing
area.

Food trays and carts were across the hall as she walked
through the area.

She testified that the floor was “shiny and buffed” and had
a “glassy appearance.”

She slipped and fell and injured her right knee.

The trial court denied the defendant’s motion for directed
verdict. The jury awarded the plaintiff $14,500.
38
HELD: Affirmed.
1. Plaintiff testified that she was not aware of the
slippery condition of the floor and that the film of
water on the floor would have been impossible to
see because of the shiny linoleum floor.
2. Therefore, the dangerous condition was not open
and obvious as a matter of law.
3. The decision of the plaintiff to look ahead and
avoid the food trays and carts rather than look
down at the floor was a question of fact for the
jury.
39
Clontz v. St. Mark’s Evangelical Lutheran
(N.C.App. 2003) review denied (19)
ISSUE:
Whether operation of equipment on land
is sufficient basis for premises liability?
40
FACTS

The plaintiff was participating in the church’s annual
Halloween festival held on Allen Sloop’s farm.

As guests at the festival were being pulled through the
woods by a tractor-trailer, the plaintiff came out of the
woods to make “scary noises.”

The plaintiff noticed that one of the children on the trailer
appeared to be falling off. When the plaintiff attempted to
assist the child, the plaintiff was pulled under the trailer and
was injured.

The trial court granted the 12(b)(6) motions of the Church
and Allen Sloop, but denied similar motions by Harry Sloop,
the operator of the tractor-trailer.
41
HELD: Affirmed.
1. Even though appeals of the church and Allen
Sloop were interlocutory, because the claim
against Harry Sloop was still in the trial court, it
affected a substantial right.
A substantial right is affected because of the
right of the parties “to try all issues before the
same jury as well as the right to avoid
inconsistent verdicts in separate trials.”
42
HELD: Affirmed. (Cont’d.)
2. The premises liability claims against the church
and Allen Sloop were properly dismissed.
The claims related only to the operation of the
tractor-trailer.
“Hazards relating only to an activity . . . apart
from the condition or maintenance of the
property do not give rise to a claim for premises
liability.
Allegations involving the applicability of the
motor vehicle laws in the operation of the
tractor-trailer did not apply because the
operation was on the Sloop farm, therefore, they
were not governed by the motor vehicle statutes.
43
INSURANCE
44
Motor Vehicles
45
State Farm Fire and Casualty Co. v. Darsie,
review denied (N.C.App. 2003) (21)
Issues:
1. Whether allegation of fraud in amended
counterclaim related back to time original
counterclaim filed?
2. Whether the insured was on notice of the
alleged fraud more than three years before
the counterclaim was filed?
46
FACTS

Mr. and Mrs. Leinfelders had been insured by State Farm
since 1984

At suggestion of agent, Mr. High, for “check-up” of
coverage, automobile limits were reduced from
$500,000/person to $100,000/$300,000 and separate $1
million umbrella policy was purchased. Umbrella policy had
“intra-family” exclusion of claim against insured by spouse
or named insured.

Leinfelders involved in accident on 29 October 1996 in
which Mr. Leinfelder was killed and Mrs. Leinfelder received
serious injuries and medical bills over $500,000

The accident was caused by the negligence of Mr.
Leinfelder

Mrs. Leinfelders sued her husband’s estate on 5 October
1999
47
FACTS (Cont’d.)

State Farm filed declaratory judgment action on 4 March
2000 contending that no coverage under umbrella policy
and limits of $100,000 under automobile policy

On 8 March 2000, Mrs. Leinfelder counterclaimed in the
declaratory judgment action:
(1) denying that coverage under automobile policy was
limited; and
(2) alleging intra-family exclusion void as against public policy

Mrs. Leinfelder allowed to amend counterclaim on 10
May2001 to allege fraud and equitable estoppel

Trial court sitting without jury
(1) intra-family exclusion applied
(2) statue of limitations on claims alleging fraud had not run;
(3) Mrs. Leinfelder entitled to reformation of umbrella policy
48
HELD: Reversed.
1. Statute of limitations on fraud had run at the time Mrs.
Leinfelder was allowed to amend her counterclaim on 10
May 2001. Amended counterclaim allegations of fraud did
not relate back to original filing of counterclaim on 8 March
2000. The original counterclaim did not contain sufficient
factual allegations about the transactions to put State Farm
on notice of the later-alleged fraud. Fraud is required to
be alleged specifically.
2. Statute of limitations on fraud was not tolled during three
years before complaint was filed; no equitable estoppel.
Since statute of limitations was raised as a defense, the
burden was on Mrs. Leinfelder to “excuse the statutory
bar.” “We hold as a matter of law that an otherwise
reasonable time to discover fraud or misrepresentation in
the PLUP policy was when the policy itself required certain
claims, such as an accident, be brought to the attention of
the insurer for the purposes of determining coverage.”
49
HELD: Reversed. (Cont’d.)
2.
(Cont’d.) Mrs. Leinfelder was “charged” was discovery of
the fraud “at least sometime within a year of the
accident.” She should have discovered the fraud by 29
October 1997-one year after the accident – and more
than three years before the amended counterclaim on 10
May 2001.
50
UM/UIM
51
Purcell v. Downey (N.C.App. 2004) (25)
Issue:
Whether plaintiff/insured was entitled to
stack or aggregate two UIM policies?
52
FACTS

Accident on 29 June 1997 when plaintiffs injured
as a result of their motorcycle being struck by
vehicle operated by Downey

Downey’s liability carrier pays limits of $100,000
to each plaintiff

Plaintiffs have two automobile insurance policies
with State Farm with UIM limits of:
(1) $100,000/$300,000; and
(2) $25,000/$50,000

Trial court ruled that stacking available; thus,
plaintiffs entitled to coverage of $125,000/
$350,000 and additional payment of $25,000 each
53
HELD: Reversed. No stacking.
Policy #2 had the minimum limits, thus no
UIM coverage available and no stacking
54
Polk v. Andrews,
review denied (N.C. App. 2003) (26)
Issue:
Whether insured required to serve
uninsured carrier within statute of
limitations for underlying accident?
55
FACTS

Decedent was a passenger in Polk’s vehicle when
it was struck by truck operated by Andrews on 12
April 2000

Polk and his vehicle uninsured

The decedent died as a result of injuries received
in the accident

Suit filed on 8 December 2000 against Andrews
and Polk
56
FACTS (Cont’d.)

On 12 June 2002, plaintiff sent notice to Atlantic
Insurance Company, the uninsured carrier for the
decedent, giving notice of the suit and seeking
UM benefits

On 28 June 2002, Atlantic Insurance filed motion
to dismiss for lack of jurisdiction, insufficiency of
process and expiration of the statute of limitations

Atlantic was served with a copy of the summons
and complaint on 3 July 2002

The trial court dismissed the action as to Atlantic
57
HELD: Affirmed.
G.S. § 20-279.21 (b) (3) a requires that UM carriers
be served with a copy of the summons and
complaint within the statute of limitations for the
underlying tort
58
Register v. White,
review granted (N.C.App. 2003) (28)
Issue:
Whether the time to demand arbitration
pursuant to underinsurance policy ran
from the time of the underlying tort or
from the time the torfeasor’s liability
carrier paid its limit?
59
FACTS

Plaintiff was injured in accident on 30 June 1998
while riding as a passenger in vehicle operated by
White. Suit filed against White.

On 8 August 2001, White’s liability carrier
tendered its full limit of $50,000

On 24 September 2001, the plaintiff demanded
arbitration with her underinsured motorist carrier,
Farm Bureau

Trial court denied motion by plaintiff to compel
arbitration on grounds that motion untimely and
had been waived by plaintiff’s conduct during the
litigation
60
HELD: Reversed. Right to demand
arbitration did not arise until liability carrier
paid its limits.
1. Although Farm Bureau policy stated that demand
for arbitration must be made within limitation
period for underlying tort, G.S. § 20-279.21 (b)
(4) states that insured may seek UIM coverage
only after liability carrier has paid it limits.
2. Similarly, plaintiff’s conduct in the litigation did
not waive the right to arbitration. It was
necessary for the plaintiff to litigate against the
liability carrier to pursue her rights to payment.
Once the liability carrier paid its limits, the
plaintiff ceased litigation and demanded
arbitration.
61
Austin v. Midgett (N.C.App. 2003) (29)
ISSUE:
Whether UIM carriers were entitled to
credit for payment of workers’
compensation benefits which are not
subject to an employer’s lien?
62
FACTS

Automobile accident on 25 October 2000 in which Austin
was killed when his vehicle struck by vehicle operated by
Midgett.

At the time of the accident, Austin was in the course and
scope of his employment with NC DOT.

Midgett insured by Farm Bureau with limits of $50,000.

Austin covered by two UIM policies, one by Integon and the
other by State Farm. Both UIM policies had limits of
$100,000 per person.

Workers’ compensation benefits of $100,278.98 were paid
to Austin’s estate.
63
FACTS (Cont’d.)

Austin’s estate and NC DOT compromised compensation lien
with DOT agreeing to accept $33,426 in satisfaction of lien.

Midgett’s liability carrier paid limits of $50,000.

The parties stipulated that Midgett’s negligence was the sole
cause of Austin’s death and that damages sustained by
Austin estate were in excess of $200,000.
64
HELD: Reversed and Remanded.
1.
UIM policies did not exclude payment of prejudgment
interest from compensatory damages. But, since limit of
liability of UIM carriers was $75,000, UIM carriers could
not be required to pay prejudgment interest in excess of
$75,000.
2.
UIM policies stated that any amounts payable would be
reduced by sums payable under workers’ compensation
law.
3.
G.S. § 20-279.21(e) required UIM carrier to pay both
amount of workers’ compensation lien and any loss not
compensated by workers’ compensation.
65
HELD: Reversed and Remanded. (Cont’d.)
4.
UIM carriers were, therefore, responsible for $33,426 (the
amount of the compromised compensation lien) plus the
loss not compensated by workers’ compensation.
5.
The Court of Appeals held that:
--the amount of the uncompensated loss was $200,000
--LESS the amount of workers’ compensation benefits
paid of $100,278.98
--EQUALING $99,721.01
--PLUS the compensation lien of $33,426
--TOTALING $133,147.02
66
HELD: Reversed and Remanded. (Cont’d.)
6.
Since the Integon policy had an “other insurance” clause
and Integon’s limit of liability of $100,000 was one-half of
the $200,000 aggregate liability, Integon was responsible
for one-half of the loss.
7.
One half of the total of $133,147.02 is $66,573.51 for
each UIM carrier.
8.
Since both UIM carriers are entitled to credit of $25,000,
one-half of the payment by Midgett’s liability carrier, both
UIM carriers are required to pay:
--$66,573.52
--PLUS prejudgment interest up to the $75,000 limit
67
Erie Insurance Exchange v. Miller
(N.C.App. 2003) (33)
HELD:
Even though the Erie application for insurance
form contained the exact language required by
G.S. § 20-279.21 for rejection of UM/UIM
coverage, the insured did not effectively reject
UM/UIM coverage on the Erie application because
the Erie application form was not one that had
been promulgated by the Bureau and approved by
the Commissioner of Insurance.
68
Farm Bureau Insurance Company of N.C.,
Inc. v. Blong (N.C.App. 2003)
review denied (34)
ISSUE:
Whether UIM carrier making payments
under policy is subrogated to other
amounts payable to the UIM insured?
69
FACTS

Automobile accident on 6 April 1999 in which
vehicle operated by Ms. Marvin strikes vehicle in
which Ms. Blong and others are passengers.

Ms. Marvin had been drinking at two bars before
accident. Immediately after the accident, her
blood alcohol level is .21.

Ms. Marvin’s liability carrier pays its limits of
$50,000 to all occupants of the Blong vehicle.

One of passengers in Blong vehicle, Ms. Lawler,
had UIM insurance with Farm Bureau with limits
of $100,000/$300,000.
70
FACTS (Cont’d.)

Farm Bureau paid its limits of $250,00 to the
occupants of the Blong vehicle.

The occupants of the Blong vehicle filed two
separate dram shop suits against the bars
providing alcohol to Ms. Marvin. These suits were
settled through court-ordered mediation.

Farm Bureau filed the present action to be
subrogated to the amounts paid as a result of the
suits against the bars.
71
FACTS (Cont’d.)
Trial Court entered judgment for Farm Bureau:
1. Subrogating it to dram shop recoveries; and
2. Requiring Farm Bureau to pay percentage of
recovery to attorneys for occupants of Blong
vehicle.
72
HELD: Affirmed.
1.
UIM provisions of G.S. § 20-279.21(b)(4) make uninsured
section of G.S. § 20-279.21(b)(3) applicable to UIM
claims.
2.
(b)(3) provides that insurer making payments is entitled to
proceeds of any settlement relating to injury for which
payment was made.
3.
The UIM policy and the Financial Responsibility Act allow
subrogation of the dram shop recoveries.
4.
Trial court properly required Farm Bureau to pay
percentage of recovery to attorneys for occupants of
Blong vehicle.
73
Espino v. Allstate Indemnity Co.
(N.C.App. 2003) (36)
ISSUE:
Whether UIM carrier entitled to credit for
payments made under medical payments
coverage?
74
FACTS

Automobile accident on 19 October 1999 in which Allstate
insured, Espino, injured by vehicle driven by uninsured
motorist.

The UIM provisions of Allstate policy stated that Allstate
would pay reasonable medical expenses, but that this
coverage was “excess over and shall not duplicate any
amount payable” under the medical payments coverage.

Allstate paid $1,000 pursuant to medical payments
coverage.

UIM dispute was decided by arbitrator who awarded $9,000
in medical expenses.

Allstate paid $8,000, taking credit for $1,000 paid under
medical payments coverage.

Trial court ordered Allstate to pay full $9,000 awarded by
arbitrator on basis that Allstate policy violated collateral
source rule.
75
HELD: Reversed.
1. Medical payments coverage is not required by
statute and is not contained in Financial
Responsibility Act.
2. Relationship between the parties is, therefore,
governed by the policy. Policy allows credit for
medical payments on amount owed under UIM
provisions.
76
Monin v. Peerless Insurance Co.
(N.C.App. 2003)
review denied (38)
HELD:
Where issue for jury in claim for uninsured
benefits was whether plaintiff was a resident
of his father’s household at the time of the
accident, error for trial court to set aside jury
verdict in favor of Peerless when there was
“more than a scintilla of evidence that plaintiff
did not reside” at father’s residence.
77
Unfair and Deceptive Practices
78
Cullen v. Valley Forge Life Ins. Co.,
review denied (N.C.App. 2003) (39)
Issue:
When insurance company accepts premium
with knowledge of pre-existing health
condition, then sends letter to insured
revoking policy based on insured’s
concealment of pre-existing health
condition, whether such conduct constitutes
unfair and deceptive insurance practices?
79
FACTS






Cullen applied for $1 million policy and identified
on the application that he had skin disorders and
Crohn’s disease
The application was approved
The insurance agent solicited Cullen for additional
coverage and presented a plan for an additional
$500,000 policy
The application was completed on 2 April 1999
Because a premium was not required with the
application, the policy stated that the policy would
not become effective until the first premium was
paid
On 14 April 1999, Cullen completed a required
medical exam for the policy
80
FACTS (Cont’d.)

The policy was approved on 19 May 1999

On 26 May 1999, Cullen was seen by his regular
physician who told Cullen that he had a form of
skin cancer on his back

On 11 June 1999, the insurance company received
the first premium payment

Cullen submitted a second application for
insurance, and, as part of the application, he
received a medical examination and submitted a
medical history supplement on 14 June 1999 that
identified the melanoma
81
FACTS (Cont’d.)

The insurance company deposited the first
premium check on 17 June 1999

On 8 July 1999, the insurance company complied
with Cullen’s request for a change of beneficiary

On 21 September 1999, the insurance company
wrote Cullen and told him that his second
application for insurance had been denied because
of violation of the “good health” provision of the
policy, that the initial policy never went into effect
and refunded the premium payment

The trial court granted Cullen’s motion for
summary judgment and awarded $2.2 million for
breach of contract and unfair and deceptive
practices
82
HELD: Affirmed.
1. Valley Force had waived the right to enforce the
“good health” provisions of its policy.
Although Cullen did not disclose the melanoma
when applying for additional insurance, the
medical history supplement on 14 June 1999
fully disclosed the condition and treatment.
2. With knowledge of the information on the 14
June 1999 medical history supplement, Valley
Forge deposited the premium check and
processed the change of beneficiary request
83
HELD: Affirmed. (Cont’d.)
3. The internal memoranda of Valley Forge
established that it knew that coverage existed at
the time it wrote Cullen on 21 September 1999
telling him there was no coverage
4. “Purpose may be adjudicated by summary
judgment when the essential facts are made clear
of record”
5. The purpose of the letter revoking coverage and
returning the premium was “to induce plaintiff to
accept the returned premium check under the
false impression that Valley Force was correct in
claiming coverage never existed.”
84
Indemnity
85
Pennsylvania National Mutual Casualty v.
Associated Scaffolders and Equipment
(N.C.App. 2003) (43)
HELD:
Trial court correctly ruled that plaintiff did not have
duty to defend insured for liability assumed by
insured under contract that was determined to be
void as against public policy under G.S. § 22-B1.
86
TRIAL PRACTICE AND
PROCEDURE
87
Statutes and Periods of
Limitation and Repose
88
Bass v. Durham County Hospital Corp.
(N.C. 2004) (44)
Issue:
When plaintiff obtains 120-day extension
to file medical malpractice suit, then files
within extension but does not include Rule
9 (j) certification, whether amended
complaint with Rule 9 (j) certification
relates back so as to be filed within the
statute of limitations?
89
FACTS

Alleged malpractice occurred on 3 August 1996

Suit filed on 2 December 1999, the last day of a
120-day extension

The complaint did not contain the Rule 9 (j)
certification

On 13 December 1999, and before responsive
pleadings filed, the plaintiff filed an amended
complaint pursuant to Rule 15 (a) with the Rule
9 (j) certification
90
FACTS (Cont’d.)

The plaintiff took a voluntary dismissal without
prejudice on 29 May 2001 and refiled on 12 June
2001 with the Rule 9 (j) certification

The trial court granted the defendant’s motion to
dismiss

The Court Appeals reversed on the basis that Rule
41 allowed the plaintiff to refile within one year
and the refiled complaint contained the Rule 9 (j)
certification
91
HELD: Trial court affirmed.
1. Once the 120-day period expires without the
Rule 9 (j) certification, the complaint cannot be
amended.
2. Relation back is not available since the action
terminated at the end of the 120-day period
without the certification
3. The plaintiff was not entitled to the one year to
refile under Rule 41 because the initial
complaint was timely filed
92
Hatcher v. Flockhart Foods, Inc.,
review denied (N.C.App. 2003) (46)
Issue:
When defendant’s insurer responds to
demand letter by plaintiff without
identifying proper insured and party and
plaintiff files timely suit against improper
party, whether defendant and insurer may
be equitably estopped from pleading
statute of limitations?
93
FACTS

Plaintiff slipped and fell at Piggly Wiggly store in
Wallace on 10 July 1997

Plaintiff’s attorney wrote Piggly Wiggly and
notified them of claim

Great American as insurer of Piggly Wiggly
contacted plaintiff’s attorney and communicated
with him over the following 16 months

As the three-year statute of limitations
approached, the plaintiff’s attorney did a
corporate search at the Secretary of State’s office
and determined that the store was known as
Wallace Farm Mart, Inc.
94
FACTS (Cont’d.)

Suit was filed on 30 June 2000 against Wallace
Farm Mart, Inc., formerly know as Piggly Wiggly
of Wallace, Inc

Wallace Farm Mart, Inc., filed motion to dismiss
based on the statute of limitations on the grounds
that the store was leased to Flockhart Foods

The plaintiff filed a response pleading equitable
estoppel

The trial court dismissed the action
95
HELD: Reversed.
1. Flockhart Foods permitted Great American to act
on its behalf, therefore, the actions of Great
American were imputed to Flockhart Foods
2. The plaintiff’s attorney sought to deal directly
with the party responsible for the store. Great
American responded on behalf of Piggly Wiggly
and not on behalf of Flockhart, the party actually
responsible.
3. “. . . since plaintiff justifiably relied on the
insurer’s conduct to his detriment, these facts are
sufficient to create an agency by estoppel.”
96
Rule 41 Dismissal
97
Estate of Barber v. Guilford County
(N.C.App. 2003) (48)
Issue:
When case is settled by mediation and
case then dismissed, and one party fails to
comply with mediated settlement terms,
whether trial court may enter sanctions for
failure to comply with mediated settlement
agreement?
98
FACTS





Complaint filed alleging wrongful death
Counterclaim for defamation and emotional
distress
All claims resolved at mediation and parties sign
settlement agreement
As part of the settlement agreement, plaintiff’s
estate agrees not to use “murderer” thereafter in
connection with actions of deputy sheriff or to
accuse the deputy sheriff of a crime
In compliance with the mediated settlement
agreement, the deputy sheriff dismisses his
counterclaims with prejudice
99
FACTS (Cont’d)

On the day that the dismissal was filed, the
plaintiff calls a news conference, calls the deputy
a “murderer” and acknowledges that she does not
intend to comply with settlement terms

The deputy files a motion for sanctions for
violation of the mediated settlement, and, in the
alternative to set aside the dismissal of his
counterclaim

The trial court grants the motion for sanctions and
orders enforcement for the settlement agreement
100
HELD: Reversed.
1. Since the mediated settlement agreement was
not incorporated into a consent judgment, the
deputy sheriff was required to initiate a
separate action or file a motion in the original
action. Since the deputy had dismissed the
claims in the original action, he could not move
for sanctions in that action.
2. On remand, the trial court should first consider
the deputy’s motion to set aside the dismissal
of his counterclaims. Depending on the trial
court’s ruling, the deputy would then determine
where to file a motion for sanctions.
101
HELD: Reversed. (Cont’d.)
3. G.S. § 7A-38.1 (g) provides only for “appropriate
monetary sanction” if a party fails to attend a
mediated settlement conference without good
cause. No other sanctions are provided by
statute. The mediation rules do not provide for
sanctions if the settlement is not incorporated
into a consent judgment.
102
Centura Bank v. Winters
(N.C.App. 2003) (50)
ISSUE:
When plaintiff had taken two voluntary
dismissals without prejudice for
defendant’s breach of contract, whether
third suit for breach of contract was
barred by Rule 41?
103
FACTS

Parties entered into contract by which defendant leased
1995 Lexus.

Based on defendant’s default in payments, suit filed in
March 1997 to recover payments. Settlement discussions
resulted in plaintiff’s dismissal without prejudice of suit.

Defendant did not comply with payments required by
settlement. Second suit for default in payments filed in
November 1997. This suit was dismissed without prejudice.

Present suit brought for balance in payments due under
lease agreement. Trial court rejected defendant’s motion
that action was barred by Rule 41 and granted plaintiff’s
motion for summary judgment.
104
HELD: Affirmed.
1. Since different amounts were due each time
plaintiff filed suit, the third suit was not “based
on or including the same claim” as the first two
suits.
2. More than one claim may arise from single
contract.
105
Governmental Immunity
106
Batts v. North Carolina
Department of Transportation,
review denied (N.C.App. 2003) (52)
Issue:
When State is joined as third-party
defendant, whether plaintiff may then
amend to allege claim directly against the
State in the pending civil action?
107
FACTS

The plaintiff , Stacy Batts, was a passenger in a
car operated by Shawan Batts

The complaint alleged that the stop sign
controlling traffic for Shawan Batts was obstructed
by tree limbs.

Suit was filed against Mr. Batts and the Town of
Elm City

Mr. Batts filed a cross-claim against Elm City and a
third-party complaint against NCDOT
108
FACTS (Cont’d.)

The plaintiff then moved to amend her complaint
to allege a claim directly against NCDOT and to
dismiss her claims against Elm City

The trial court denied the State’s motion to
dismiss based on sovereign immunity asserting
lack of jurisdiction since the claim by the plaintiff
should have been filed in the Industrial
Commission
109
HELD: Affirmed.
1. Rule 14 (c) provides that the State may be
joined as a third-party defendant
2. Rule 14 (a) provides that the plaintiff may
alleged a claim against a third-party defendant
arising out of the same transaction or
occurrence that is the subject matter of the
plaintiff’s complaint
3. Since the Tort Claims Act waived sovereign
immunity and the legislature allowed the State
to be joined in a civil action as a third-party
defendant, Rule 14 (a) allows the plaintiff to
amend to allege a civil action against the State
110
Sanctions
111
Board of Drainage Commissioners of Pitt
County v. Dixon (N.C. 2004) (55)
Issue:
Whether a deponent who appears at his
properly noticed deposition may be
sanctioned under Rule 37 (c) for invoking
the Fifth Amendment in response to
questions?
112
FACTS






The complaint alleged that Dove and other
defendants embezzled money from the plaintiff
The plaintiffs noticed the deposition of Dove
Dove answered questions about his name and
address
Thereafter, Dove’s attorney asserted a “blanket
Fifth Amendment privilege”
Dove refused to answer any other questions
The trial court granted the plaintiffs’ motion for
sanctions pursuant to Rule 37 (c), imposed
sanctions of $2,800 and ordered that Dove be
deposed and assert any privilege on a questionby-question basis
113
HELD: Sanctions reversed.
1. Since Dove appeared at his deposition, he could
not be sanctioned under Rule 37 for failure to
appear
2. The better course would have been for Dove to
move for a protective order under Rule 26 (c)
114
Summey v. Barker (N.C. 2003) (56)
Issue:
Whether plaintiff’s failure to identify expert
witnesses as required by a scheduling
order in a medical malpractice case
subjected the plaintiff to dismissal?
115
FACTS

Prisoner in Forsyth County Jail alleged medical
malpractice as a result of improper medical
treatment while in the jail

The trial court entered a scheduling order
requiring the plaintiff to identify expert witnesses
within 30 days after final decision on the appeal
involving sovereign immunity

The plaintiff did not identify the experts within the
time required by the scheduling order

The trial court granted the defendant’s motion for
summary judgment
116
HELD: Affirmed.
1. Rule 26 (f1) requires a scheduling order in
cases alleging medical malpractice and allows
dismissal if a party fails to identify expert
witnesses
2. Review of the trial judge’s order is limited to
whether the plaintiff demonstrated excusable
neglect. Since the plaintiff did not allege that
failure to identify experts was a result of
excusable neglect, the motion was properly
allowed.
117
Essex Group v. Express Wire Services
(N.C.App. 2003) (57)
ISSUE:
When party responds to discovery after
expiration of the period required to
respond, whether that party may be
sanctioned under Rule 37?
118
FACTS

Plaintiff files suit alleging violations by defendants
of plaintiff’s trade secrets.

Plaintiff obtains order for expedited discovery.

Evidence indicates that after expedited discovery
order entered one defendant deleted emails from
his computer and the other defendant removed
documents from office. At deposition, defendant
admitted deleting emails. Other defendant denied
removal of documents.

All documents were eventually produced to the
plaintiff.
119
FACTS (Cont’d.)
On plaintiff’s motion for sanctions, trial court:

Granted sanctions pursuant to Rule 37;

Struck defendants’ answers and entered default
judgment; and.

Awarded costs and attorney fees of $7,000.
120
HELD: Affirmed.
1.
Appeal of sanctions was properly before the Court of
Appeals because striking answer and entering default
judgment affected a substantial right.
2.
“This Court has held that failure to answer interrogatories
or turn over requested documents in a timely manner
constitutes proper grounds for sanctions.”
3.
“Our Court has held that a litigant’s answering of
interrogatories after the trial court ordered the litigant to
answer did not prevent the trial court from imposing
sanctions upon the dilatory party.”
121
Evidence
122
Experts
123
Holley v. ACTS, Inc. (N.C. 2003) (59)
Issue:
Whether expert testimony as to the
possible cause of a medical condition is
sufficient to prove causation?
124
FACTS

Workers’ compensation injury on 13 July 1996
when plaintiff, nurses’ assistant, twisted leg and
felt sudden pain in her left calf.

Emergency room physician, Dr. Ratterree,
suspects deep vein thrombosis (DVT).

At hearing, Dr. Ratterree testifies
a. “Low possibility” that injury caused DVT
b. “90 percent or greater” of DVT patients have suffered
no injury
c. Cannot say to a reasonable degree of medical certainty
that injury was a significant contributing factor in
causing DVT
125
HELD:
1. No “competent evidence presented to establish a causal
connection between the original injury by accident to
plaintiff’s leg on 13 July 1996 and her diagnosis of DVT on
3 September 1996.”
2. “Although expert testimony as to the possible cause of a
medical condition is admissible if helpful to the jury,
Cherry v. Harrell, it is insufficient to prove causation,
particularly ‘when there is additional evidence or
testimony showing the expert’s opinion to be a guess or
mere speculation.’”
3. “The entirety of the expert testimony in the instant case
suggests that a causal connection between plaintiff’s
accident and her DVT, was possible, but unlikely.”
126
State v. Lassiter,
review denied (N.C.App. 2003) (61)
Issue:
Whether trial court properly allowed fire
expert to testify about experiment he ran
to disprove defendant’s contention of how
fire started?
127
FACTS

Defendant charged with involuntary manslaughter
and fraudulently setting fire to and burning a
dwelling house

The defendant contended that the fire started in a
pan of grease

The State’s fire and arson expert, Campbell,
testified that it was impossible for the fire to start
the way the defendant contended it started

Campbell ran an experiment in which he
attempted to ignite vegetable oil. The fire started
only after Campbell used a plumber’s torch
128
HELD: Affirmed.
1. Campbell was properly allowed to testify as an
expert. He had 40 years of experience with
firefighting, training from recognized institutions
and years of teaching fire investigation
2. Once qualified as an expert, it was proper for
him to testify “that it was impossible for ignited
vegetable oil to have been the source of the fire”
129
Red Hill Hosiery Mill v. Magnetek
(N.C.App. 2003) (62)
ISSUE:
Whether trial court properly admitted opinions of
Dr. McKnight on origin and cause of fire.
130
HELD: Affirmed.
1.
Dr. McKnight had Bachelor’s and Master’s Degrees in
Electrical Engineering and Doctorate of Physics from
Duke.
2.
He had over 23 years experience in origin and causes of
fire and had been recognized as expert in several courts.
3.
He had examined the product at issue in other cases.
4.
Based on his educational background and expertise, the
trial court did not abuse its discretion in admitting his
testimony. Trial court properly performed “gatekeeping”
function.
131
Attorney-Client Privilege
132
Hulse v. Arrow Trucking Co.
(N.C.App. 2003) (63)
Issue:
Whether testimony by defendant at his
deposition about answers to interrogatories
he wrote and submitted to his attorney
waived the attorney-client privilege?
133
FACTS

The plaintiff alleged that the defendant’s negligence caused an
automobile accident resulting in injuries to the plaintiff

The plaintiff submitted interrogatories to the defendant
requesting the defendant to describe how the accident occurred
and to give the speed and distances of the vehicles involved in
the accident

The defendant’s interrogatory answers referred to the speeds
and distances on the accident report and gave the plaintiff’s
speed as 55 miles per hour

The defendant was questioned about these answers at his
deposition
134
FACTS (Cont’d.)

The defendant testified that he received the plaintiff’s
interrogatories by mail from his lawyer, wrote the responses
on the interrogatories, returned the answers and his
notarized signature to his lawyer

The defendant testified at his deposition that he had not
seen the typed answers until the night before his deposition

The defendant also testified that several of the typed
answers were “not his answer”

It was also discovered during the deposition that some of
the interrogatory answers had been incorrectly typed

After the deposition, the plaintiff moved for production of
the defendant’s handwritten responses

Finding that the attorney-client privilege had been waived,
the trial court ordered production of the responses
135
HELD: Affirmed.
1. Testimony by the defendant at his deposition
about the answers he wrote and submitted to
his attorney alone waived the privilege
2. This deposition testimony put the contents of
the answers into evidence
3. Although issues involving the attorney-client
privilege are immediately appealable, waiver of
the privilege results in the appeal being
interlocutory. Appeal dismissed.
136
Hearsay Relied Upon by
Experts
137
State v. Thornton (N.C.App. 2003) (66)
ISSUE:
Whether social worker may testify about
out-of-court statements made to her by
victim?
HELD: Affirmed. Statements admissible.
Statements are admissible under Rule 803(4)
since made for purposes of diagnosis and
treatment.
138
Demonstrations
139
State v. Fowler (N.C.App. 2003)
review denied (67)
ISSUE:
Whether non-expert may use
demonstration before jury to disprove
defense theory of case?
140
FACTS

Defendant charged with first-degree murder.
Defense was that killing was result of sudden
impulse and anger.

State’s witness demonstrated manner in which
State contended murder occurred. The
demonstration showed facts supporting
premeditation and planning.
141
HELD: Affirmed. Demonstration admissible.
1. Demonstrator need not be expert, but proper
foundation must be laid as to the demonstrator’s
familiarity with the facts.
2. When evidence is conflicting, demonstration may
be used to “illustrate flaws in the prosecution or
defense theory or to rebut a witness’s
testimony.”
3. A demonstration is not inadmissible because it
goes to “the heart of the . . . issue.”
142
Costs
143
Department of Transportation v. Charlotte
Area Manufactured Housing, Inc.
(N.C.App. 2003) (68)
Following the “explicitly delineated”
approach and holding that only those costs
specified in G.S. § § 6-1, 6-20 and 7A-320
may be taxed.
144
Cosentino v. Weeks
(N.C.App. 2003) (69)
Affirming trial court’s denial in its discretion
of defendant’s motion in voluntarily
dismissed medical medical malpractice case
to tax as costs expert witness fees,
deposition transcripts, court reporter fees
and deposition-related attorney travel
expenses.
145
G.S. § 97-10.2
146
Ales v. T.A. Loving Co.
(N.C.App. 2004) (70)
Issue:
Whether superior court had jurisdiction
under G.S. § 97-10.2 to approve thirdparty settlement contingent upon waiver of
the workers’ compensation lien?
147
FACTS





Plaintiff injured in course and scope of
employment with Columbus Hospital
Present suit was against Loving, general
contractor for Hospital, and Shields, flooring
subcontractor
Plaintiff’s workers’ compensation claim against the
hospital settled by clincher agreement for lump
sum payment of $120,000
Plaintiff reached a mediated settlement with
Loving and Shield for $145,000 contingent upon
waiver of compensation lien
On plaintiff’s motion, the trial court ordered that
the lien be waived
148
HELD: Reversed. Trial court did not have
jurisdiction.
1. G.S. § 97-10.2 allows superior court to
adjust the workers’ compensation lien “if
the agreement between the parties has
been finalized so that only performance
of the agreement is necessary to bind the
parties.”
2. An agreement with a condition precedent
does not give the trial court jurisdiction.
149
Sherman v. Home Depot U.S.A.,
review denied (N.C.App. 2003) (71)
Issue:
After finding that third-party settlement and
workers’ compensation payments would not
compensate plaintiff adequately for the damage
suffered and would continue to suffer, whether
trial court properly reduced the workers’
compensation lien and ordered the workers’
compensation carrier to pay part of the costs
incurred by the plaintiffs’ attorney?
150
FACTS






Plaintiff injured in the course and scope of her
employment
Injuries included broken neck, degloving
laceration of the face and severe brain damage
Liability carrier for the adverse vehicle settled with
the plaintiff for $500,000 and the compensation
carrier waived its lien
The present action against Home Depot alleged
improper loading of the adverse vehicle
Home Depot settled for $1.3 million
At the time of the Home Depot settlement, the
compensation lien was $168,000
151
FACTS (Cont’d.)

The trial court reduced the compensation lien to
$55,667 and ordered the compensation carrier to
pay $56,602 as part of the plaintiff’s litigation costs

The trial court listed the specific amounts paid to
the plaintiff and found that these payments
received by the plaintiff “will not adequately
compensate plaintiff for all of the damage she has
suffered and will continue to suffer over the
remainder for her life.”
152
HELD: Affirmed.
1. The trial court considered the factors identified
by the legislature, and, in its discretion,
determined that even though the settlement
was inadequate to compensate the plaintiff,
the lien reduction was fair and equitable
2. The trial court properly required the workers’
compensation carrier to pay part of the
plaintiff’s litigation costs
153
G.S. § 97-90(c)
154
Palmer v. Jackson,
review denied (N.C.App. 2003) (72)
ISSUE:
Whether superior court judge has
discretion under G.S. § 97-90(c) to award
attorneys’ fees for recovery of medical
expenses?
155
FACTS

Plaintiff suffers disabling heatstroke while picking
tomatoes as part of federal program.

Employer and carrier deny claim. Industrial
Commission determines that claim is compensable
as occupational disease.

Commission awards lost wages of $24,000 and
medical expenses of $410,000. Commission
awards attorney’s fees of 25% of lost wages, but
refuses to award attorney’s fees as percentage of
medical expenses.

On appeal to superior court, superior court judge
exercises discretion and awards attorney fees of
25% of medical expenses recovered.
156
HELD: Reversed and remanded.
1. G.S. § 97-90(c) does not allow attorney’s fees
to be paid out of amounts paid to medical
providers.
2. G.S. § 97-90(c) does give trial court discretion
in special circumstances to order attorney’s
fees in addition to medical expenses.
157
Punitive Damages
158
Rhyne v. K-Mart Corp.
(N.C. 2004) (74)
Issue:
Whether statutory cap on punitive
damages is constitutional?
159
FACTS

With medical bills of $13,582 for Mrs. Rhyne and
$5,276 in medical bills and lost wages for Mr.
Rhyne, jury awards compensatory damages of
$8,255 to Mr. Rhyne and $10,730 to Mrs. Rhyne

Jury also awards $11.5 million in punitive
damages each to Mr. and Mrs. Rhyne

Applying G.S. § 1D-25, trial judge reduces
punitive damages award to $250,000 each
160
HELD: Affirmed.
1. Statutory cap of the greater of three times
compensatory damages or $250,000 on punitive
damages is constitutional
2. Cap applies on per-plaintiff basis, not a per-claim
or per-defendant basis
3. The cap is not an impermissible interference by
the legislature with the trial court’s inherent
power to reduce a jury’s award of punitive
damages
4. The legislature has the authority to declare the
policy of the State and to implement that policy
by practices and procedures to be utilized in the
trial courts
161
Eatmon v. Andrews (N.C.App. 2003) (76)
Issue:
Whether evidence of defendant’s
consumption of two beers and leaving the
scene of the accident so as to prevent
accurate determination of blood-alcohol
level is sufficient to submit issue of
punitive damages to the jury?
162
FACTS

Defendant at fault in causing collision

Defendant consumed two twelve-ounce beers
and admitted leaving the scene to avoid taking
the breath analyzer

Trial court bifurcates compensatory and punitive
damages

After jury awards $45,000 in compensatory
damages, trial court directs verdict for the
defendant on punitive damages
163
HELD: Reversed.
Defendant’s consumption of two beers and leaving
the scene of the accident to avoid taking bloodalcohol test is sufficient evidence to submit to the
jury on the issue of punitive damages
164
Reconsideration of Orders
of Superior Court Judge
165
State v. Woolridge
(N.C. 2004) (77)
Issue:
When first superior court judge grants
defendant’s motion to suppress fruits of
search by rejecting State’s theory of
exigent circumstances, whether second
superior court judge may deny defense
motion to suppress based on State’s
theory of inevitable discovery relying on
same facts?
166
FACTS

Defendant indicted for maintaining a dwelling for trafficking
in heroin

Defendant’s motion to suppress heard by Judge Jones

State argues that motion to suppress should be denied
based on exigent circumstances

Judge Jones grants motion to suppress finding no exigent
circumstances

State files motion that trial court reexamine evidence under
the inevitable discovery exception to the search warrant
requirement

State presents same facts before before Judge Hudson as
were presented before Judge Jones

Judge Hudson grants State’s motion and allows evidence
from the search to be introduced
167
HELD: Reversed.
1. Argument of different theories of admissibility of
evidence does not allow one superior court judge
to reconsider rulings made by previous superior
court judge
2. “An order of one superior court judge may be
reconsidered by another only if the party seeking
to alter the original order ‘makes a sufficient
showing of a substantial change in circumstances
during the interim which presently warrants a
different or new disposition of the matter.’ ”
3. When the State presented “the same or similar
evidence based upon a new legal theory,” the
ruling of the first superior court judge could not
be reconsidered
168
Fox v. Green (N.C.App. 2003) (78)
Issue:
When first superior court judge denies
motion for summary judgment, whether
subsequent superior court judge may allow
motion based upon different defense?
169
FACTS





Action alleging medical malpractice arising from
sponges left in plaintiff after surgery
Hospital’s motion for summary judgment on
grounds that res ipsa loquitur did not apply was
denied by Judge Spainhour, but order does not
state grounds for ruling
Surgeon moves for summary judgment and
argues that res ipsa loquitur does not apply
because of therapeutic justification
Hospital moves for summary judgment again and
incorporate arguments of surgeon
Judge Klass grants all motions for summary
judgment
170
HELD: Reversed.
1. “A motion for summary judgment denied by one
superior court judge may not be allowed by another
superior court judge on identical legal issues.”
2. “Subsequent motions for summary judgment are
allowed when they present legal issues different
than those raised in prior motions.”
3. “It is the rule in this State that an additional forecast
of evidence does not entitle a party to a second
chance at summary judgment on the same issues.”
4. In the present case, leaving sponges in the plaintiff
permits jury to infer negligence. This inference is
not removed by theory of therapeutic use.
171
Jurisdiction
172
Stetser v. TAP Pharmaceutical Products,
review pending (N.C.App. 2004) (80)
Issue:
Whether allegations that one party to a
civil conspiracy conducted acts in North
Carolina are sufficient to subject
constitutionally all parties to the conspiracy
to jurisdiction in North Carolina?
173
FACTS

Complaint alleged that Takeda, TAP
Pharmaceutical, Abbott Laboratories and other
defendants conspired to violate various laws in
connection with marketing and pricing of Lupron,
a drug for the treatment of prostate cancer

Takeda manufactured Lupron in Japan, but did not
sell or distribute Lupron in the United States

Lupron is sold in the United States by TAP

Takeda owned 50% of the stock of TAP

The trial court denied Takeda’s motion to dismiss
for lack of jurisdiction
174
HELD: Reversed.
1. General jurisdiction over a party may be
exercised where the party’s conduct in the State
is “continuous and systematic.” Takeda
conducted no activity in North Carolina; had no
bank accounts; had not been authorized to do
business in the State
2. Specific jurisdiction over a party may be
exercised when the basis of the litigation arises
out of that party’s contacts with North Carolina.
The plaintiffs’ allegations are not sufficient to
provide specific facts that Takeda agreed to
perform unlawful conduct. “Due process requires
more than a bare allegation of the existence of a
conspiracy.”
175
Judicial Estoppel
176
Whitacre Partnership v. Biosignia, Inc.
(N.C. 2004) (82)
Issue:
Whether testimony about ownership of
stock by individual in bankruptcy
proceeding may judicially estop
partnership in which individual is a
member from contesting ownership of
same stock in subsequent civil action
177
FACTS

Dr. Whitacre files for individual bankruptcy

During examination of Dr. Whitacre by bankruptcy
trustee, Dr. Whitacre testifies that his stock in
Biosignia, Inc. has no value. As a result of his
resignation, the stock never vested in him.

The present case is a declaratory judgment action
by Whitacre Partnership for a declaration that it is
the owner of 1 million shares of common stock in
Biosignia
178
FACTS (Cont’d)

Biosignia moves for summary judgment on the
grounds that Whitacre Partnership is estopped
from claiming ownership in stock as a result of
the testimony by Dr. Whitacre in the bankruptcy
proceeding

The trial court grants the defendants motion for
summary judgment

The Court of Appeals reverses on the grounds
that there was no evidence that Dr. Whitacre
intentionally misled the bankruptcy court by his
testimony
179
HELD: Court of Appeal reversed and case remanded
for additional findings by trial court.
1. Judicial estoppel applies only in civil actions
2. Judicial estoppel applies to bar “inconsistent
factual assertion,” but not “inconsistent legal
theories.”
3. Case remanded to the trial court for a factual
determination as to “whether the Whitacres and
Whitacre Partnership are in privity and, if so, to
exercise discretion in determining whether the
doctrine of judicial estoppel is applicable . . . .”
180
Woodson Claims
181
Cameron v. Merisel, Inc.
(N.C.App. 2004) (84)
Issue:
1. Whether allegations in complaint that coemployee engaged in “conduct that threatened
the safety of others and was so reckless or
manifestly indifferent to the consequences that a
finding of willfulness and wantonness equivalent
in spirit to actual intent is justified” are sufficient
to defeat a 12 (b) (6) motion by a co-employee?
2. Whether allegations that other employees had
contracted serious illnesses and exhibited
symptoms are sufficient to defeat a 12 (b) (6)
motion by the employer?
182
FACTS

Complaint by employee and wife alleges that
employer intentionally exposed employee to toxic
conditions knowing that the exposure was
substantially certain to cause severe bodily injury
or death

Claim also alleged against Goldsworthy, the
employer’s director of security

The trial court granted all 12 (b) (6) motions
183
HELD: Reversed as to co-employee. Affirmed as to
employer.
1. As to co-employee claims under Pleasant, allegations were
sufficient to withstand 12 (b) (6) that Goldsworthy
engaged in conduct that threatened the safety of others or
was so reckless and indifferent to equal actual intent
2. As to claims against employer under Woodson, the
allegations were deficient concerning the employer’s
knowledge that exposure was substantially certain to cause
serious injury.
Allegations about illnesses and symptoms of other
employees are “insufficient allegations that [the employer]
. . . had knowledge of a ‘substantial certainty’ of ‘serious
injury.’ ”
It is also insufficient to allege that some of the illnesses
were “serious.”
The Court refused to define specifically “serious injury,”
electing to continue to address each case individually
184
Attorney Fees, G.S. § 6-21.1
185
Moquin v. Hedrick. (N.C.App. 2004) (86)
HELD:
In minor’s action for personal injury, trial court
properly awarded attorneys’ fees of $5,000
separately for minor’s and parents’ claims under
G.S. § 6-21.1 for $6,700 awarded to minor for
personal injuries and $4,500 awarded to the
parents for medical expenses since there were two
causes of action.
186
Unfair and Deceptive
Trade Practices
187
Sterner v. Penn
(N.C.App. 2003) (86)
HELD:
G.S. § 75-1.1 does not apply to securities
transactions.
Wilson v. Blue Ridge
(N.C.App. 2003) (87)
HELD:
G.S. § 75-1.1 does not apply to “matters of
internal corporate management, such as the
manner of selection and qualifications for
directors.”
188
Opening Statements and
Closing Arguments
189
Smith v. Hamrick (N.C.App. 2003)
review denied (88)
ISSUES:
1.
When defendant’s attorney in his opening
statement and closing argument calls the
plaintiff’s case “nonsense” and the trial court
sustains the plaintiff’s objection but is not
requested and does not give a curative
instruction, whether these statements are so
prejudicial as to require a new trial?
2.
Whether the trial court erred in giving the
pattern jury instruction on nominal damages?
190
FACTS

Automobile accident in which rear wheel assembly on
defendant’s trailer dislodges and strikes and shatters
plaintiff’s windshield.

During his opening statement and closing argument, the
defense attorney says:
“this is nonsense; it’s absolute nonsense, and we’ll prove it to
you”
“this case is nonsense and we’ve showed you that the
plaintiff’s case was not about pain; it’s about profit, and it’s not
about injury; it’s about money.”

After each statement, the trial judge sustained the plaintiff’s
objection. No curative instruction was requested or given.

The jury awarded the plaintiff $1.00.
191
HELD: Affirmed.
1.
The statements by defense counsel were clearly
inappropriate.
2.
The Rules of Professional Conduct state that an attorney is
not to give a personal opinion as to the “justness” of a
case.
3.
When an objection is sustained as to an improper
argument, the trial court does not err in failing to give a
curative instruction when one is not requested.
4.
Pattern Jury Instructions 106.00 and 106.20 were properly
given. The jury was correctly instructed that it would be
their duty to award nominal damages of $1.00 if they
were not able to find the amount of damages by the
greater weight of the evidence.
192
Notice/Calendar of Hearing
193
Scruggs v. Chavis (N.C.App. 2003) (91)
ISSUE:
When a party notices a hearing for a
certain date and a trial calendar is
subsequently distributed with a different
date, which date governs the date of
hearing?
194
FACTS

Defendant files motion to dismiss, notice of
hearing and calendar request form that hearing
be held on 29 April 2002.

The trial court administrator then mails “Final
Calendar” for 6 May 2002 showing defendant’s
motion included in motions to be heard.

Defendant appears at the hearing on 29 April
2002. The trial judge finds that the plaintiff was
properly noticed for hearing on 29 April 2002 and
grants the defendant’s motion to dismiss the case.
195
HELD: Reversed.
1. Under the General Rules of Practice and the local
rules of the 18th Judicial District, the court, not
the lawyers, set the calendar.
2. The trial court administrator’s final calendar
“trumped” the defendant’s notice of hearing.
The plaintiff was entitled to rely upon the Final
Calendar.
196
Rule 60(b), Relief from Judgment
197
Hooks v. Eckman (N.C.App. 2003) (92)
ISSUE:
Whether perjured testimony of which
moving party had knowledge may be
grounds to reverse a final judgment?
198
FACTS

Mrs. Hooks sued Mrs. Boening for criminal conversation and
alienation of affections.

In response to discovery about her assets, Mrs. Boening
submitted the affidavit that had been filed in her equitable
distribution action.

The affidavit included the home Mrs. Boening owned with
her husband and was valued at $279,000. The home was
later sold with Mrs. Boening’s share of $143,000 being paid
directly to her parents. Her discovery responses were not
supplemented.

During the alienation of affections trial, Mrs. Boening was
questioned about the sale of her home. She testified that
the proceeds went to her parents to satisfy a promissory
note.

The trial court entered judgment for Mrs. Hooks of $42,500
in compensatory damages and $15,500 in punitive
damages. Mr. Boening paid the judgment in full and Ms.
Hooks marked the judgment satisfied.
199
FACTS (Cont’d.)
Trial Court :
1. Denied Mrs. Hooks’ Rule 60(b) motion on the
grounds that the judgment had been marked
satisfied and that plaintiff could not attack the
validity of that judgment; and
1. Granted the defendant’s motion for summary
judgment. When the plaintiff withdrew her
appeal to the Rule 60(b) ruling, the findings
of fact and conclusions of law became binding
on Mrs. Hooks.
200
HELD: Affirmed.
1. Only intrinsic fraud can be the basis of a Rule 60(b)(3)
motion. Intrinsic fraud occurs when a party has notice of
the fraudulent action and is not prevented from pursuing
appropriate action at the time.
2. Mrs. Hooks knew about the testimony of Mrs. Boening
concerning the transfer of sales proceeds to her parents
and had the opportunity to examine Mrs. Boening about
these facts at trial.
3. “A final judgment cannot be reversed merely upon a
showing of perjured testimony.”
4. The sole remedy of Mrs. Hooks was a motion in the cause
under rule 60. When the trial court denied her motion and
she withdrew her appeal, she was bound by the trial
court’s findings of fact and conclusions of law.
201