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Home / Courts / Tort/Negligence – Unfair Trade Practices – Malicious Prosecution – Obstruction of Justice – Champerty & Maintenance – Punitive Damages

Tort/Negligence – Unfair Trade Practices – Malicious Prosecution – Obstruction of Justice – Champerty & Maintenance – Punitive Damages

Security Credit Corp. v. Mid/East Acceptance Corp. of N.C. (Lawyers Weekly No. 12-16-0443, 16 pp.) (Wanda G. Bryant, J.) Appealed from Johnston County Superior Court. (Ola M. Lewis, J.) On petition for rehearing. N.C. App. Unpub. Full-text opinion.

Holding: Plaintiffs allege that, in support of a lawsuit brought against plaintiffs by a competitor, defendants lent money and provided free services to the competitor. Plaintiffs have failed to show how defendants’ alleged conduct falls within defendants’ regular business activities. Plaintiffs failed to allege that defendants’ actions were “in or affecting commerce”; consequently, plaintiffs failed to state a claim for unfair trade practices.

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

Defendant Nethercutt filed a lawsuit against plaintiff Conway in Pitt County, seeking a restraining order based on an alleged “murder-for-hire” plot and bringing claims of intentional infliction of emotional distress and assault. Since Nethercutt’s lawsuit survived Conway’s motion for summary judgment, plaintiffs cannot establish that Nethercutt’s lawsuit was initiated without probable cause. Therefore, plaintiffs’ claim for malicious prosecution fails.

Plaintiffs allege that Nethercutt offered to pay an individual for untruthful testimony. Although subornation of perjury is a criminal offense, it is not a tort. The trial court did not err in dismissing plaintiffs’ obstruction of justice claim.

Taking plaintiffs’ champerty and maintenance allegations as true, defendants, although they had no financial interest in Smithfield Financial Services, Inc. (SFS), involved themselves by dedicating time and effort to support litigation between SFS and plaintiffs. The allegations also, if taken as true, support a finding that defendants’ involvement was activated by a long history of personal ill will. Finally, plaintiffs’ allegations, if taken as true, show that defendants acted purposely, knowing that their actions would result in not only emotional and mental distress, but also financial distress in having to defend the criminal and civil lawsuits filed against them.

Affirmed in part; reversed in part.


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