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Wednesday, March 30, 2011

It Is Not Necessary To Show Damages To Make A Prima Facie Claim For Breach Of Contract

by Gary Beaver

On March 1, 2011, in Hodges v. Young, the N.C. Court of Appeals reversed a trial court's order granting defendants' summary judgment motion asserting plaintiff failed to prove any damages based on an alleged breach of contract.  The court pointed out that there are only two elements of a breach of contract:  the existence of a valid contract and a breach of the contract's terms.  No damages are required to be shown.  The Court of Appeals also affirmed the trial court's grant of summary judgment on plaintiff's Chapter 75 claims which tried to assert fraudulent acts based on "should have known" allegations.  We all see these efforts by creative pleaders to manufacture a Chapter 75 claim out of a breach of contract claim so this case may be one to keep in the drawer as an example of Chapter 75 allegations that are too thin.

Monday, March 28, 2011

In Most Cases, You Have To Be A Party To Seek Sanctions Or To Have To Pay Them

by Gary Beaver

A trial court order sanctioned a plaintiff company and its owner with dismissal of claims, striking of pleadings, and default on counterclaims due to multiple failures to make proper discovery responses.  On January 4, 2011, in Honeycutt Contractors, Inc. v. Otto, the N.C. Court of Appeals reversed the sanctions against the individual owner because, though the pleadings alleged piercing the corporate veil, the owner was never made a party to the case and, therefore, the court lacked jurisdiction over him.  The sanctions against the company stood.  On the other side of the coin, in Lucas v. R.K. Lock & Associates, filed on March 1, 2011, the same court held that a company lacked standing to move for and the court lacked jurisdiction to grant Rule 11 sanctions where the company was listed only as a "dba" in the plaintiff's Complaint, the trial court had ruled that insufficient to make it a party, and the named defendant did not appeal that ruling.

Monday, March 21, 2011

Update: Crossman Communities of North Carolina v. Harleysville Mutual Insurance Company

By Stephen P. Groves, Sr.

Crossmann Communities of North Carolina, Inc. v. Harleysville Mutual Insurance Company,

___ S.C. ___, ___ S.E.2d ___ (2011) (2011 WL 93716, filed January 7, 2011)

On January 11, 2011, I posted an entry to this blog addressing the South Carolina Supreme Court’s decision in the above-referenced case. As it turned out, my entry was only the tip of the iceberg. This case has created a firestorm of controversy in South Carolina and has been the subject of discussion around this country. Furthermore, the decision spurred action in the South Carolina Legislature with the introduction of various bills seeking, in essence to overturn Crossmann Communities and make sure that insurance companies doing business in South Carolina provide liability insurance coverage to contractors and subcontractors for unintentional defective construction and/or faulty workmanship.

The opinion, of course, elicited a Petition for Rehearing, as well as, numerous amicus briefs in opposition to and in support of the petition. The amici included the (a) Ledgestone Court Residents of York County; (2) Coastal Carolina University Student Housing Association, (3) American Subcontractors Association of the Carolinas, (5) Mechanical Contractors Association of South Carolina, (6) Riverwalk at Arrowhead Country Club Property Owners Association, (7) Medical University of South Carolina, (8) Home Builders Association of South Carolina, (9) National Association of Nome Builders, (10) Community Associations Institute, (11) South Carolina Chapter of the Community Associations Institute, (12) Associated General Contractors of America, Inc., (13) Carolinas AGC, Inc., (14) Cincinnati Insurance Company, (15) Charleston County School District, (16) School District of Greenville County, (17) Associated Builders and Contractors of the Carolinas, Inc., and (18) Leading Builders of America. In the spirit of full disclosure, I filed an amicus brief on behalf of the Property Casualty Insurers Association of America.

Apparently, based at least in part on the uproar, including the legislative action, on March 9, 2011, the Supreme Court granted the Petition for Rehearing and scheduled re-argument of the case for Monday, May 23, 2011. In addition to the unusual Monday scheduling, the Supreme Court has specifically granted all of the amici oral argument time. This should prove to be an interesting day.

Friday, March 18, 2011

No Magic In Internet Evidence

By Gary Beaver

The N.C. appellate courts have been slow to issue opinions on the subjects of e-discovery and the internet.  Practitioners in the N.C. trial courts have had to rely upon the existing rules and make arguments for those rules to be applied similarly to leading federal court decisions (such as the five Zubulake opinions) and or as suggested by authoritative sources like the guidelines issued by the Sedona Conference and the Conference of Chief Justices (for the state appellate courts).  The development of those areas of law in the N.C. courts will likely be incremental as the N.C. appellate courts typically do not engage in the comprehensive opinions providing treatise-type treatment of internet and e-discovery issues that some federal district court judges have entered.  The closest to such opinions in the N.C. state courts came from Judge Tennille, in the
N.C. Business Court,
when he provided two non-precedential but influential decisions on e-discovery issues back on November 1, 2006.  We have seen little guidance since then.  In Rankin v. Food Lion, decided March 1, 2011, the N.C. Court of Appeals had the opportunity to address the use of evidence found on the internet but limited its opinion to addressing the narrow issue before it without providing a lot of discussion about the methods for admitting such evidence.  The Rankin court affirmed the trial court's grant of summary judgment for the defendant.  In doing so, the court also affirmed the trial court's rejection of the plaintiff's evidence printed out from the internet due to the failure of the plaintiff to properly authenticate it.  The plaintiff had submitted printouts from internet websites -- a page from the N.C. Secretary of State and an internet posting about the ownership of Food Lion.  The plaintiff failed to provide any sworn testimony by affidavit or live witness or to use a means of self-authentication to identify and authenticate those internet printouts.  While this decision did not tell us anything new, it did remind trial lawyers that the internet does not magically make authentic or reliable information found on the internet; one must always comply with the rules for authenticating documents and establishing hearsay exceptions.  If you want extensive advice on admitting internet evidence, look at Lorraine v. Markel American Insurance Company, 242 F.R.D. 534 (2007) -- a 100-page opinion by Magistrate Judge Paul Grimm.

Gary Beaver is a member of Nexsen Pruet's Technology Law team. Visit to learn more about how ever-changing technology is impacting your business and how our attorney can help you solve problems that might arise.

Tuesday, March 15, 2011

Those 14 pages at the beginning of your brief? Yeah, they count.

By Kirsten E. Small

I do a CLE program called "The Ten Commandments of Appellate Brief Writing," in which I tell my audience that a key goal of an appellate brief (other than persuading the court, of course) is not to hack off the judges. (Depending on the crowd and the proximity of my presentation to cocktail hour, "hack off" may be replaced by a more colorful term, but you get the point.)

A case out of the Seventh Circuit gives us a sterling example of how not to achieve that key goal: exceed the word limit and then offer a flimsy excuse when you get caught.

Friday, March 11, 2011

Women's (Legal) History, Part 2: Where are we now?

By Kirsten E. Small

I had planned to do a timeline of female attorneys today--I'd done all my Googling and was all set to go. But I decided to go a diffferent direction after I got my morning feed from Law360. The feed included an article titled "Not So Sweet 16," by Patricia Gillette.

Why is 16 not so sweet? Because, as Pat points out, roughly 50 percent of law school graduates are women, but only about 16 percent of law firm partners are women. (Actually, the studies I've seen show that the number is more like 14.5 percent.) The percentage is about the same for female general counsels.

The numbers raise two questions: (1) Why? (2) What can/should we (meaning the legal communty writ large) do about it? Pat's article touches briefly on both subjects. As to the "why," Pat doesn't shy away from the reality that it's not all about the "old boys network." Female lawyers do, as she points out, engage in self-limiting behaviors: we tend not to claim credit where it is due, we don't like to make our demands known, we are, on the whole, a risk-averse bunch.

But none of us--men or women--can take comfort in the platitude that the lack of women partners and GCs is due to our own choices (having children, working part-time, not being interested in power). Bias, conscious and unconscious, is real and must be addressed.

Tuesday, March 1, 2011

Women's (Legal) History Month, Part One: Chief Justice Toal makes history (again!)

By Kirsten E. Small

Just as I was casting about for my first post about the history of female lawyers in this country, the South Carolina Bar's weekly e-newsletter arrived in my box with the news that South Carolina Supreme Court Chief Justice Jean Hoefer Toal has been named the first recipient of the Sandra Day O'Connor Award for the Advancement of Civics Education. The award, given by the National Center for State Courts recognizes Chief Justice Toal for her leadership in the SC Supreme Court's "long history of supporting civics education." The press release is here.

The civics programs sponsored by the Court are described here.

Of course, this is not the first time Chief Justice Toal has made history. She was the South Carolina Supreme Court's first female justice and currently serves as the first female Chief Justice. As her official bio notes, when she was admitted to the bar in 1968, fewer than one percent of the state's lawyers were women.