In Re Se. Eye Ctr. (Old Battleground v. Ccsea)

In re Se. Eye Ctr. (Old Battleground v. CCSEA), 2017 NCBC 3.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF WAKE 15 CVS 1648

IN RE SOUTHEASTERN EYE CENTER- ORDER AND OPINION
PENDING MATTERS ON MOTIONS TO DISMISS
(OLD BATTLEGROUND v. CCSEA)

1. THIS MATTER is before the Court upon (1) C. Richard Epes’s (“Epes”)

Motion to Dismiss the Thirteenth and Sixteenth Crossclaims filed by Historic Castle

McCulloch, LLC, Castle McCulloch, Inc., and Richard A. Harris (collectively, the

“Castle McCulloch Defendants”), (2) Epes’s Motion to Dismiss the Crossclaims filed

by Douglas S. Harris (“Harris”), and (3) Nivison Family Investments, LLC, Old

Battleground Properties, Inc. and Arthur Nivison’s (collectively, “Nivison”) Motion to

Dismiss Crossclaims Filed by James Mark McDaniel (“McDaniel”) (collectively, the

“Motions to Dismiss”) in Old Battleground Properties, Inc. v. Central Carolina

Surgical Eye Associates, P.A., (15 CVS 1648) (the “Action”).1

2. Having considered the Motions and the briefs in support and opposition to

the Motions,2 the Court hereby GRANTS the Motions to Dismiss.

Smith Debnam Narron Drake Saintsing & Myers, LLP, by Byron L. Saintsing,
for Plaintiffs Old Battleground Properties, Inc., Nivison Family Investments,
LLC, and Arthur Nivison.

1
The Action includes Nivison v. Harris (14 CVS 9564), which was consolidated with Old
Battleground Properties, Inc. v. Central Carolina Surgical Eye Associates, P.A. (15 CVS
1648) under the 15 CVS 1648 caption. The Action was then further consolidated with five
other lawsuits into In re Southeastern Eye Center—Pending Matters (15 CVS 9564)
(hereinafter, the “Consolidated Actions”).
2 Pursuant to BCR 15.4 (2006) and BCR 7.4 (2016), the Court elects to consider and decide

the Motions without oral argument and on the papers submitted.
McAllister, Aldridge & Kreinbrink, PLLC, by Kenneth W. McAllister and the
Law Offices of Richard M. Greene, by Richard M. Greene for Defendant
Charles Richard Epes, M.D.

Defendant J. Mark McDaniel, pro se.

Defendant Douglas S. Harris, pro se.

Wyatt Early Harris Wheeler, LLP, by Scott F. Wyatt and Donavan J.
Hylarides, for Defendants Richard A. Harris, Historic Castle McCulloch, LLC,
and Castle McCulloch, Inc.

Bledsoe, Judge.

I.

PROCEDURAL BACKGROUND

3. On July 21, 2014, Nivison Family Investments, LLC filed the Action against

Harris, individually and as Trustee of JDPW Trust U/T/A Dated June 8, 2007, JDPW

Trust U/T/A Dated June 8, 2007, and NewBridge Bank.

4. Harris filed counterclaims against Nivison Family Investments, LLC and,

on November 6, 2014, filed a Third-Party Complaint against Central Carolina

Surgical Eye Associates, P.A. (“CCSEA”), HUTA Leasing Company (“HUTA”),

Southeastern Eye Management, Inc. (“SEM”), EMS Partners, LLC (“EMS”), MEM of

High Point, LLC (“MEM”), Southeastern Cataract Laser Center, PLLC (“SCLC”),

McDaniel, Epes, Arthur Nivison, and Old Battleground Properties, Inc.

5. On June 19, 2015, the Court entered an Order consolidating the Action with

the other matters pending in, and directing all subsequent pleadings to be filed in the

Master File in, In re Southeastern Eye Center – Pending Matters (15 CVS 1648).
6. Subsequently, on June 22, 2015, the Court entered a Case Management

Order (“Master Case Management Order”) in the Consolidated Actions that

established a claims procedure to be used in lieu of filing additional lawsuits.

7. On July 3, 2015, Harris voluntarily dismissed without prejudice his third-

party claims against CCSEA, HUTA, SEM, EMS, MEM, SCLC, McDaniel, and Epes.

Harris did not dismiss his third-party claims against Arthur Nivison and Old

Battleground, Inc.

8. On July 14, 2015, the Court approved a Settlement between Epes and his

wife, on the one hand, and the Receiver, on the other hand; appointed the Receiver

as receiver for KEPES Newco, LLC (“KEPES”) and DRE Newco, LLC (“DRE”); and

entered a restraining order.

9. Plaintiffs Old Battleground Properties, Inc. and Nivison Family

Investments, LLC (collectively, “Plaintiffs”) filed their Amended Consolidated

Complaint in the Action on September 17, 2015 (“Amended Consolidated

Complaint”). The Amended Consolidated Complaint asserted claims against Epes,

McDaniel, Harris, individually and as trustee of JDPW Trust U/T/A Dated June 8,

2007, and the Castle McCulloch Defendants, among others.

10. On March 28, 2016, Plaintiffs dismissed all claims against McDaniel filed in

the Action.

11. On April 15, 2016, the Castle McCulloch Defendants moved for leave to

amend their Answer and to add crossclaims against Harris, McDaniel, Epes, CCSEA,

HUTA, SEM, SCLC, EMS, KEPES, and DRE (the “Castle McCulloch Defendants’
Motion to Amend”). The Castle McCulloch Defendants previously had not asserted

crossclaims against McDaniel or Epes.

12. On June 27, 2016, Plaintiffs voluntarily dismissed with prejudice the claims

filed in the Action against Epes, Charles Richard Epes, E. Richard Epes, and Bessie

K. Epes (the “Epes Defendants”), and the Epes Defendants voluntarily dismissed with

prejudice their claims against Plaintiffs in the Action.

13. On August 24, 2016, the Court granted the Castle McCulloch Defendants’

Motion to Amend, without prejudice to any party’s right to move to dismiss the newly-

added crossclaims.

14. The Castle McCulloch Defendants filed their Amended Answer and

Crossclaims on August 30, 2016.

15. On September 26, 2016, McDaniel filed his answer to the Castle McCulloch

Defendants’ crossclaims and asserted crossclaims against Nivison.

16. On September 29, 2016, Epes moved under N.C. R. Civ. P. Rules 12(b)(6)

and 13(g) to dismiss the crossclaims filed against him by the Castle McCulloch

Defendants because Epes was not a party to the Action when the crossclaims were

filed and served. Epes also requested an award of attorneys’ fees and costs from the

Castle McCulloch Defendants.

17. On October 12, 2016, the Castle McCulloch Defendants filed a response brief

in opposition to Epes’s motion to dismiss their crossclaims and indicated in their

response brief that, in the alternative, they moved to add Epes as a third-party
defendant. The Castle McCulloch Defendants did not file a separate motion to

support their request to add Epes as a third-party defendant.

18. On October 26, 2016, Nivison moved to dismiss McDaniel’s crossclaims

under Rules 12(b)(6) and 13(g) because McDaniel was not a coparty at the time his

crossclaims were filed or served and thus did not have standing to assert crossclaims

against Nivison.

19. On November 2, 2016, Harris filed his answer to the Castle McCulloch

Defendants’ crossclaims and asserted crossclaims against Epes.

20. On December 3, 2016, Epes moved to dismiss the crossclaims asserted by

Harris against Epes under Rules 12(b)(6) and 13(g) because Epes was not a coparty

at the time Harris’s crossclaims were filed or served. Epes also requested an award

of attorneys’ fees and costs from Harris.

II.

MOTIONS TO DISMISS

21. On a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina

Rules of Civil Procedure, the Court considers “whether the pleadings, when taken as

true, are legally sufficient to satisfy the elements of at least some legally cognizable

claim.” Arroyo v. Scottie’s Professional Window Cleaning, Inc., 120 N.C. App. 154,

158, 461 S.E.2d 13, 16 (1995) (quoting Harris v. NCNB Nat’l Bank of N.C., 85 N.C.

App. 669, 670, 355 S.E.2d 838, 840 (1987)). The Court construes a party’s pleading

liberally and generally accepts all allegations as true. Laster v. Francis, 199 N.C.

App. 572, 577, 681 S.E.2d 858, 862 (2009). Dismissal under Rule 12(b)(6) is proper
only “when one or more of the following three conditions is satisfied: (1) when the

[pleading] on its face reveals that no law supports plaintiff’s claim; (2) when the

[pleading] reveals on its face the absence of fact sufficient to make a good claim; [or]

(3) when some fact disclosed in the [pleading] necessarily defeats the plaintiff’s

claim.” Oates v. JAG, Inc., 314 N.C. 276, 278, 333 S.E.2d 222, 224 (1985) (citation

omitted).

22. Under Rule 13(g) of the North Carolina Rules of Civil Procedure, “[a]

pleading may state as a crossclaim any claim by one party against a coparty arising

out of the transaction or occurrence that is the subject matter either of the original

action or of a counterclaim therein or relating to any property that is the subject

matter of the original action.” Accordingly, “under Rule 13(g), in order for a person

or entity to assert a crossclaim in a pleading, that person or entity must be a party to

the action.” Outlaw v. Johnson, 190 N.C. App 233, 253, 660 S.E.2d 550, 564 (2008).

Similarly, a crossclaim can only be asserted against a party to the litigation. N.C. R.

Civ. P. 13(g).

23. The Court takes judicial notice from the Court’s docket in this case that, as

of the date of the filing of the Castle McCulloch Defendants’ Amended Answer and

Crossclaims, Epes and McDaniel were no longer parties to the Action. As a result,

the Castle McCulloch Defendants and Harris could not assert crossclaims against

Epes or McDaniel in the Action under Rule 13(g) as a matter of law, and those

crossclaims must therefore be dismissed. Outlaw, 190 N.C. App. at 254, 660 S.E.2d

at 564–65; N.C. R. Civ. P. 12(h)(3); see generally Artis v. Williford, No. COA11-1059,
2012 N.C. App. LEXIS 615, at *3–4 (N.C. App. May 15, 2012) (unpublished) (citing

Schnitzlein v. Hardee’s Food Sys., Inc., 134 N.C. App. 153, 156, 516 S.E.2d 891, 892

(1999)) (holding that trial court could not consider a motion to dismiss after plaintiffs’

voluntary dismissal).

24. Similarly, the Court’s docket shows that when McDaniel filed his answer to

the Castle McCulloch Defendants’ crossclaims and asserted crossclaims against

Nivison on September 26, 2016, McDaniel was not a party to the Action. As a result,

McDaniel’s crossclaims were improper under Rule 13(g) as a matter of law and should

therefore be dismissed.

25. The Castle McCulloch Defendants advance an alternative argument in their

opposition brief that in the event the Court grants Epes’s Motion to Dismiss, they

seek to assert their purported crossclaims against Epes as third-party claims against

Epes as a newly-added third-party defendant. Under the North Carolina Business

Court Rules, however, a request for relief such as that advanced by the Castle

McCulloch Defendants here must be in the form of a motion set out in a separate

paper. BCR 15.2 (2006); BCR 7.2 (2016) (effective January 1, 2017). Motions before

this Court must comply with the Business Court Rules or risk summary denial in the

Court’s discretion. See BCR 15.11 (2006); BCR 7.2 (2016); see also generally Helm v.

Appalachian State Univ., 194 N.C. App. 239, 248–49, 670 S.E.2d 571, 578–79 (2008)

(affirming trial court’s refusal to consider motion failing to comply with North

Carolina Rules of Civil Procedure), rev’d on other grounds, 363 N.C. 366, 677 S.E.2d
454 (2009); N.C. Alliance of Transp., Inc. v. N.C. Dep’t of Transp., 183 N.C. App. 466,

469–70, 645 S.E.2d 105, 108 (2007) (same).

26. Moreover, the Castle McCulloch Defendants’ failure to set out their request

in a separate motion was potentially of consequence here, given the size and

complexity of the Consolidated Actions and the failure of the Notice of Filing

generated by the Court’s electronic-filing system to inform parties to the Action that

a motion had been filed.

27. Therefore, the Court, in the exercise of its discretion, will not consider the

Castle McCulloch Defendants’ purported motion at this time because it was raised

only as an alternative argument in their opposition brief.

III.

CONCLUSION

28. Based on the foregoing, the Court hereby (i) GRANTS the Motions to

Dismiss, (ii) DISMISSES without prejudice the crossclaims filed by the Castle

McCulloch Defendants against Epes and McDaniel, the crossclaims filed by Harris

against Epes, and the crossclaims filed by McDaniel against Nivison, and (iii) in its

discretion and under the circumstances of this matter, DENIES Epes’s request for

attorneys’ fees and costs against Harris and the Castle McCulloch Defendants.

SO ORDERED, this the 11th day of January, 2017.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Special Superior Court Judge
for Complex Business Cases