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Home / Courts / Tort/Negligence – Unfair Trade Practices – Not in Commerce – Punitive Damages – Obstruction of Justice – Champerty & Maintenance

Tort/Negligence – Unfair Trade Practices – Not in Commerce – Punitive Damages – Obstruction of Justice – Champerty & Maintenance

Security Credit Corp. v. Mid/East Acceptance Corp. of N.C. (Lawyers Weekly No. 12-16-0189, 13 pp.) (Wanda G. Bryant, J.) Appealed from Johnston County Superior Court. (Ola M. Lewis, J.) N.C. App. Unpub. Click here for full-text opinion.

Holding: Plaintiffs’ unfair trade practices and punitive damages claims are based on defendants’ alleged champerty and maintenance. Since the champerty and maintenance were not part of defendants’ regular business, they were not “in commerce” within the meaning of G.S. § 75-1.1.

Because the conduct plaintiffs allege as willful and wanton is the same conduct plaintiffs rely on in support of their unfair trade practices claim, and because we hold that the trial court correctly dismissed the unfair trade practices claim, the punitive damages claim must also fail.

We affirm the trial court’s dismissal of plaintiffs’ unfair trade practices, malicious prosecution, obstruction of justice, and punitive damages claims.

Unfair Trade Practices

Plaintiffs contend that defendants officiously injected themselves into a looming lawsuit between plaintiffs and their competitor Security Auto Sales (SAS). Defendant Nethercutt allegedly evaluated SAS’s files and lent money to SAS to maintain lawsuits against plaintiffs.

Defendants’ alleged conduct is not a business activity “in or affecting commerce” within the meaning of G.S. Chapter 75. Taking all their allegations as true, plaintiffs have failed to show how defendants’ conduct relates to the manner in which defendants conduct their regular, day-to-day activities or affairs. The trial court did not err by dismissing plaintiffs’ unfair trade practices claim.

Malicious Prosecution

Plaintiffs alleged malicious prosecution based on allegations that a SAS partner, Eddie Snead, claimed to have a recording of plaintiff Conway trying to hire someone to kill defendant Nethercutt. Nethercutt paid $5,000 for the alleged recording, which was never produced and which Conway claims does not exist.

After prosecuting Snead for taking her $5,000 without giving her the promised recording, Nethercutt filed a lawsuit against Conway, seeking a restraining order based on the alleged murder-for-hire plot and alleging intentional infliction of emotional distress and assault. The trial court denied Conway’s summary judgment motion. The case was called for trial. After jury selection, Nethercutt voluntarily dismissed the lawsuit.

Where Nethercutt’s lawsuit survived a motion for summary judgment, plaintiffs cannot establish that it was initiated without probable cause. Accordingly, the trial court did not err by dismissing the malicious prosecution claim.

Obstruction of Justice

Plaintiffs based their obstruction of justice claim on an allegation that Nethercutt offered to pay a witness to give false testimony.

Although perjury and subornation of perjury are criminal offenses, neither is a tort supporting a civil action for damages. Generally, a civil action in tort cannot be maintained upon the ground that a defendant procured other persons to give false or perjured testimony.

Punitive Damages

Plaintiffs argue that they have alleged with specificity how defendants’ conduct was willful and wanton by referring to defendant’s alleged conduct of lending money and services to SAS to aid in its lawsuits against plaintiff Security Credit Corp. Because the conduct plaintiffs allege as willful and wanton is the same conduct plaintiffs rely on in support of their unfair trade practices claim, and because we have already held that the trial court did not err in dismissing the unfair trade practices claim, the claim for punitive damages must necessarily fail. Taking all its allegations as true, plaintiff’s complaint fails to state a claim for punitive damages.

Affirmed.


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