Opinion
No. 05-146.
Filed March 7, 2006.
Johnston County No. 03 CVS 00915.
Appeal by defendant from orders entered 31 August 2004 and 1 November 2004 by Judge Knox V. Jenkins, Jr. in Johnston County Superior Court. Heard in the Court of Appeals 14 November 2005.
Yates, McLamb Weyher, L.L.P., by Dan J. McLamb and Barbara B. Weyher, for plaintiff-appellee. Hayes Hofler, P.A., by R. Hayes Hofler, for defendant-appellant.
This appeal arises from an attorney's claim for fees and a client's counterclaim for legal malpractice. The trial court granted summary judgment in the attorney's favor allowing the collection of fees and precluding the legal malpractice action. We affirm the orders of the trial court.
In July of 1999, Coley Rhodes was separating from her husband and retained Marcia H. Armstrong of Armstrong Armstrong, P.A., to represent her in any equitable distribution matters concerning the couple's marital estate. Coming to the forefront of those matters was control of one asset in particular: Rhodes Chevrolet, a family car dealership. Early during the couple's separation, Ms. Rhodes entered into a consent judgment with her husband giving him possession of the dealership. That same order also entitled Ms. Rhodes to monthly reports on the business, and she became increasingly concerned that her husband was mismanaging the dealership and squandering its value. During this period, Ms. Rhodes began asking Ms. Armstrong's advice on obtaining ownership of the dealership for herself. Later in the representation, Mr. Rhodes issued Rhodes Chevrolet stock certificates to Ms. Rhodes and claimed he wanted her to have ownership of the dealership. Ms. Armstrong had some concern about the validity of the stock certificates and what impact the supposed transfer of ownership after the date of separation would have on the equitable distribution claims.
Ms. Armstrong was unable to settle the issue of ownership satisfactorily to Ms. Rhodes, and on 30 December 2001, Ms. Rhodes and her husband entered into a consent judgment regarding all issues of the separation — including equitable distribution and ownership of the dealership. Ms. Rhodes entered into the agreement on her own and without Ms. Armstrong's knowledge. At the point she entered into the voluntary agreement, the dealership's value had been substantially eroded.
Following the close of Ms. Armstrong's relationship with Ms. Rhodes, on 7 February 2002 Ms. Armstrong sent a letter and invoice to Ms. Rhodes for her services. Despite receiving periodic billing, Ms. Rhodes failed to pay the bill in full and the outstanding balance as of that date was just over $17,000.00. Ms. Armstrong's letter advised that after great deliberation she would not pursue litigation to collect the fee but would instead accept tender of any payment Ms. Rhodes felt she owed. Ms. Rhodes paid nothing pursuant to the letter.
Thereafter, Ms. Armstrong received word that Ms. Rhodes had retained counsel to file suit against her for malpractice if the two could not come to an agreement over the way the issues surrounding the representation resolved. This letter from Ms. Rhodes's counsel advised that he would file an action in Onslow County on 23 March 2003 if he did not hear back from Ms. Armstrong. Ms. Armstrong, through another attorney, filed an action to collect her fee in Johnston County on 20 March 2003. One day later, Ms. Rhodes's counsel filed an action for malpractice and other claims in Onslow County. Pursuant to Ms. Armstrong's motion, the Onslow County action was dismissed as a compulsory counterclaim to the previously filed action to collect fees. This order of dismissal was not appealed. Rather, Ms. Rhodes answered the complaint in the Johnston County action and counter claimed for malpractice as well as other claims previously asserted in the Onslow County action.
During the pending litigation in Johnston County, Ms. Rhodes made several motions: a motion in open court to have Judge Jenkins recused, and a motion to appoint a special judge and consolidate the two actions (the Johnston County and Onslow County actions). The trial court denied these motions. The trial court also entered orders awarding summary judgment to Ms. Armstrong on her action for the collection of fees and dismissing the malpractice counter claims of Ms. Rhodes. From all these orders, Ms. Rhodes appeals.
First, we will address Ms. Rhodes argument that Judge Jenkins erred by failing to grant her oral motion for recusal.
The burden is on the party moving for recusal `to demonstrate objectively that grounds for disqualification actually exist.' In re Nakell, 104 N.C. App. 638, 647, 411 S.E.2d 159, 164 (1991), appeal dismissed and disc. review denied and stay dissolved, 330 N.C. 851, 413 S.E.2d 556 (1992) (citation omitted). The moving party, supported by affidavits, may meet his burden by presenting `substantial evidence that there exists such a personal bias, prejudice or interest on the part of the judge that he would be unable to rule impartially.' Id. at 647, 411 S.E.2d at 164.
County of Johnston v. City of Wilson, 136 N.C. App. 775, 778, 525 S.E.2d 826, 828 (2000). Ms. Rhodes first argued that Judge Jenkins should recuse himself because Ms. Armstrong was a party in the case and practiced law in Johnston County. Ms. Rhodes later argued that Judge Jenkins lived in Ms. Armstrong's neighborhood and could not rule impartially on a matter involving Ms. Armstrong. We find these arguments without merit.
Foremost, Ms. Rhodes offered no evidence or affidavits that supported her motion for recusal, instead only argued the points above; thus, without some presentation of evidence, we cannot say that the trial court erred in failing to objectively find substantial evidence of bias or prejudice. See id. (Without affidavits or evidence of bias, the Court cannot adopt a general standard that bars judges from hearing cases involving the county where the judge resides); see also Lange v. Lange, 357 N.C. 645, 649, 588 S.E.2d 877, 880 (2003) (Noting error for a trial court judge to determine that recusal was appropriate based on "inferred perception and not the facts as they were found to exist."); Lange v. Lange, 167 N.C. App. 426, 605 S.E.2d 732 (2004) (Upon remand, this Court held that a judge's co-ownership of a vacation home and infrequent collection of money from all co-owners, one of which was an attorney on the case, did not rise to the standard of requiring recusal.). Also, Ms. Rhodes failed to file a copy of the hearing transcript in which her motion to recuse was made, heard, and denied despite noting in the record one would be filed pursuant to Rule 9(c) of our Appellate Rules. Without the ability to review this transcript, we cannot say that it was error for the trial court to deny the motion. Hicks v. Alford, 156 N.C. App. 384, 389-90, 576 S.E.2d 410, 414 (2003) ("It is the duty of the appellant to ensure that the record is complete. . . . `An appellate court is not required to, and should not, assume error by the trial judge when none appears on the record before the appellate court.'") (internal citations omitted)).
Next, Ms. Rhodes challenges the trial court's ruling that Ms. Armstrong was entitled to summary judgment on her claim for money owed under the parties' engagement contract. Ms. Rhodes argues that Ms. Armstrong's 7 February 2002 letter is an accord and satisfaction. We reject that notion.
`An "accord" is an agreement whereby one of the parties undertakes to give or perform, and the other to accept, in satisfaction of a claim, liquidated or in dispute, and arising either from contract or tort, something other than or different from what he is, or considered himself entitled to; and a "satisfaction" is the execution or performance, of such agreement.' Sharpe v. Nationwide Mut. Fire Ins. Co., 62 N.C. App. 564, 565, 302 S.E.2d 893, 894, cert. denied, 309 N.C. 823, 310 S.E.2d 353 (1983) (quoting Allgood v. Trust Co., 242 N.C. 506, 515, 88 S.E.2d 825, 830-831 (1955)).
Zanone v. RJR Nabisco, 120 N.C. App. 768, 772, 463 S.E.2d 584, 587 (1995). The letter from Ms. Armstrong stated that although she felt entitled to the invoiced amount, in an effort to "put this [dispute] behind me and move forward," she would accept any amount Ms. Rhodes felt was owed and as a result would not pursue litigation. Ms. Rhodes admitted in her deposition that Ms. Armstrong had appropriately billed her for the work completed and she owed the money pursuant to the agreement, yet at no point before or after receipt of the letter did Ms. Rhodes forward Ms. Armstrong any money.
Thus, on the facts before us, the question is not whether Ms. Rhodes's payment pursuant to the letter constitutes an accord and satisfaction of the underlying contractual obligation to pay, but instead whether an attorney's offer to forego litigation against a client for a full fee can be barred by an accord and satisfaction if the client pays nothing pursuant to the offer. The answer is no; we cannot find Ms. Rhodes's silence — nothing else appearing — as evidence of an accord, and also find Ms. Armstrong's receipt of no money a satisfaction of the underlying undisputed debt. Accordingly, the trial court did not err by rejecting Ms. Rhodes's argument that an affirmative defense existed and holding that Ms. Armstrong's forecast of evidence could prove the existence of a valid undisputed contractual debt.
Ms. Rhodes next challenges the trial court's decision to grant Ms. Armstrong's motion for summary judgment as to the legal malpractice claims. We find Ms. Armstrong's argument as to the doctrine of election of remedies controlling and thereby affirm the order of the trial court.
In Stewart v. Herring, 80 N.C. App. 529, 531, 342 S.E.2d 566, 567 (1986), this Court discussed election of remedies in the context of an attorney malpractice suit where the client had accepted an unfavorable settlement agreement in a divorce action, allegedly due to the negligence of that party's attorney. Interpreting previous cases on the subject, this Court held:
if a party contends that he or she was deprived of a legal claim because of the action of another and he pursues the claim against the original defendant he cannot then make a claim against the party he says caused him to lose all or part of the original claim. This is so even if the settlement the plaintiff is able to make on the original claim is not as good as it would have been if there had been no wrongful action by the third party. In this case the plaintiff contends she had a claim for permanent alimony which was lost by the negligence of the defendant. She then retained another attorney who filed a counterclaim for alimony. The alimony agreement negotiated by the defendant was rescinded and a second alimony agreement signed. By pursuing her claim for alimony against her husband the plaintiff lost her right to make a claim against the defendant for his negligence in representing the plaintiff in her original alimony claim.
Id. We see no significant difference between the facts here and those in Stewart. Here, Ms. Rhodes alleges that the inaction of her attorney allowed her husband to encumber the dealership with debt and drain it of its value at the time of separation. However, regardless of the validity of this claim, and without consultation, Ms. Rhodes entered into a voluntary settlement agreement of all aspects of her divorce, including the dealership. That agreement was later incorporated into a judgment and even modified at the consent of the parties. As Stewart instructs, this election by Ms. Rhodes is binding "even if the settlement the plaintiff is able to make on the original claim is not as good as it would have been if there had been no wrongful action by the third party." Id. Accordingly, we see no error in the trial court's decision to grant Ms. Armstrong's summary judgment motion against Ms. Rhodes's allegations of malpractice.
We have carefully reviewed defendant's remaining properly preserved assignments of error, including the provisional denial by the trial court of Ms. Rhodes's Rule 60 motion, and find them to be unpersuasive. Thus we affirm the orders of the trial court entitling Ms. Armstrong to her earned fee and dismissing Ms. Rhodes's action for malpractice.
Affirmed.
Judges McGEE and McCULLOUGH concur.
Report per Rule 30(e).