Opinion
No. 184A90
Filed 10 January 1992
Costs 37 (NCI4th) — action to require dividend — attorney fees — shareholder entitled to recover The trial court erred by denying plaintiff's motion to require defendant to pay its attorney fees where defendant had paid a dividend to all other preferred stockholders but contended that plaintiff had released any claim to a dividend in the settlement of a prior action, plaintiff sought to have defendant pay the dividend to it, the Court of Appeals ordered on appeal that summary judgment be entered for plaintiff, and plaintiff moved for attorney fees. Plaintiff is entitled to attorney fees under the plain language of N.C.G.S. 55-50(k), which was in effect when this action was filed. That subsection does not say it is limited to actions brought under section 50 and indeed refers to any action, which would include actions other than those brought under section 50. Although the new Business Corporation Act provides that shareholders may recover attorney fees only in actions brought under Chapter 55, a legislative change in a statute is not persuasive as to the meaning of a statute when the meaning is clear from reading the plain language of the statute.
Am Jur 2d, Costs 30.
APPEAL by the defendant pursuant to N.C.G.S. 7A-30(2) from the decision of a divided panel of the Court of Appeals, 98 N.C. App. 151, 389 S.E.2d 636 (1990), reversing the judgment of Martin (Lester P.), J., entered at the 7 August 1989 session of Superior Court, GUILFORD County. Heard in the Supreme Court 8 October 1990.
Brooks, Pierce, McLendon, Humphrey Leonard, by Reid L. Phillips and Jeffrey A. Batts, for plaintiff appellee.
Petree, Stockton Robinson, by Norwood Robinson, Robert J. Lawing and Jane C. Jackson, for defendant appellant.
Justice MARTIN dissenting.
Chief Justice EXUM and Justice MEYER join in this dissenting opinion.
This case brings to the Court a question as to whether a corporation may be required to pay an attorney's fee to a plaintiff who has brought an action which required the corporation to pay dividends to the plaintiff. The plaintiff had rendered services as an accountant to The Washington Group, Inc., a predecessor to the defendant. The Washington Group went into bankruptcy and the plaintiff filed a claim for its accounting services. The plaintiff received for its claim preferred stock in the defendant as part of a reorganization in the bankruptcy.
Two actions were filed in federal court against the plaintiff and the defendant in which the plaintiffs in that action alleged malfeasance on the part of the plaintiff in this action in matters leading to the bankruptcy of The Washington Group. Syntek cross-claimed against Pullen for failure to provide proper accounting services. The parties in those actions settled the two cases and releases were executed by all parties.
In this action, the plaintiff sought to have the defendant pay a dividend to the plaintiff on the preferred stock the plaintiff owned in the defendant. The defendant had paid a dividend to all other preferred stockholders but it contended the plaintiff had released any claim to a dividend by the release it had signed in the federal court actions. The superior court granted a motion for summary judgment for the defendant. The Court of Appeals reversed and ordered that summary judgment be entered for the plaintiff, requiring the defendant to pay the dividend. McGladrey, Hendrickson Pullen v. Syntek Finance Corp., 92 N.C. App. 708, 375 S.E.2d 689, rev. denied, 324 N.C. 433, 379 S.E.2d 243 (1989).
The plaintiff made a motion that the defendant be required to pay plaintiff's attorney fees, which motion was denied by the superior court. The Court of Appeals reversed and the defendant appealed to this Court.
The determination of this case depends on the application of N.C.G.S. 55-50(k), in effect when this action was filed, which provided in part:
Any action by a shareholder to compel the payment of dividends may be brought against the directors, or against the corporation with or without joining the directors as parties. The shareholder bringing such action shall be entitled, in the event that the court orders the payment of a dividend, to recover from the corporation all reasonable expenses, including attorney's fees, incurred in maintaining such action.
We affirm the Court of Appeals. The plaintiff is entitled to recover its attorney's fees under the plain language of this section of the statute. When the language of a statute is clear and unambiguous, judicial construction is unnecessary and its plain and definite meaning controls. Food House, Inc. v. Coble, Sec. of Revenue, 289 N.C. 123, 221 S.E.2d 297 (1976). The plaintiff is a shareholder who brought an action to compel the payment of dividends. The court ordered the payment of the dividends and under the plain language of this section the plaintiff is entitled to recover reasonable attorney's fees.
The defendant argues that this is not an action to "compel the payment of dividends" within the meaning of former section 50(k) and no attorney's fees should be allowed. The defendant says that the former N.C.G.S. 55-50 provided for the circumstances under which a corporation could be compelled to pay dividends and this action was not brought pursuant to such requirements of section 50. The defendant argues that subsection 50(k) applies only to actions brought pursuant to section 50 to compel the payment of dividends. We do not believe we should read this restriction into subsection 50(k). The subsection does not say it is limited to actions brought under section 50 and indeed it refers to "any action" which would include actions other than those brought under section 50.
The defendant contends that the new Business Corporation Act, which became effective 1 July 1990, offers compelling evidence that the former N.C.G.S. 55-50(k) authorizes the award of attorney's fees only in actions brought pursuant to N.C.G.S. 55-50. N.C.G.S. 55-6-40(h) is the reenactment of former subsection 50(k) and it provides that shareholders may recover attorney's fees only in actions brought under Chapter 55. We do not believe a legislative change in a statute is persuasive as to the meaning of a statute whose meaning is clear from reading the plain language of the statute.
The defendant argues that there was never any dispute about the propriety of its payment of dividends. Dividends were properly declared and paid to other stockholders. The question, says the defendant, involved the mutual releases in the federal court cases and whether the plaintiff had released its right to a dividend. Whatever defense was interposed in this case to the payment of a dividend, the action of the plaintiff was to compel the payment of a dividend.
The decision of the Court of Appeals is affirmed.
Affirmed.