LOUISE W. FLANAGAN, District Judge.
This matter is before the court on defendant's motion for judgment notwithstanding the verdict and for new trial (DE 164). Plaintiff responded and defendant replied. Also before the court are the parties' post-trial briefs on the issue of setoff and interest, as directed by the court in oral order entered March 29, 2018. In this posture, the issues raised are ripe for ruling. For the following reasons, the court denies defendant's motion, denies defendant's request for relief in the form of a setoff, and directs entry of amended judgment awarding interest as set forth herein.
Jury trial in this matter commenced March 27, 2018, on plaintiff's claims for breach of contract and misrepresentation. The jury returned a verdict in favor of plaintiff on plaintiff's breach of contract claim on March 29, 2018, awarding damages in the amount of $193,000.00. For case background purposes, the court incorporates herein by reference the statement of the case and statement of facts from its August 11, 2016, order on plaintiffs motion for summary judgment. (See Sum. J. Order (DE 43) at 1-7;
The parties filed post-trial briefs on April 6, 2018, on the issue of prejudgment and post-judgment interest, as well as issues associated with defendant's asserted setoff defense. In support of his setoff defense, defendant also filed an affidavit. Defendant filed the instant motion on April 26, 2018, seeking judgment notwithstanding the verdict and a new trial.
In addressing a motion for judgment notwithstanding the verdict, the court "must determine whether there is no substantial evidence to support the verdict asked of the jury."
A new trial may be granted if "(1) the verdict is against the clear weight of the evidence, or (2) is based upon evidence which is false, or (3) will result in a miscarriage of justice, even though there may be substantial evidence which would prevent the direction of a verdict."
Defendant argues that plaintiff failed to present sufficient evidence to establish a prima facie case of breach of contract. Under North Carolina law, "[t]he elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract."
The jury, in its verdict, answered "YES" to the following question on plaintiff's breach of contract claim:
(Verdict Form (DE 152) at 1). The jury also answered "YES" to the question: "Did defendant breach the agreement?" (
Substantial evidence supported the jury's findings on these verdict questions. On July 23, 2013, Ralph L. Falls, Jr., sent an email to defendant offering to send defendant $200,000, in exchange for defendant agreeing to "put a second mortgage on the house for $200,000 after the closing" in favor of Ralph L. Falls, Jr. (Trial Tr. Vol I (DE 161) at 40). Defendant responded "Thank you. I appreciate your advice and support." (
Confirming the character of the transaction as a loan, defendant testified in his deposition, which was played as a video deposition at trial, as follows:
(Def's Dep. at 12, 28;
Viewing this evidence in the light most favorable to plaintiff, there is sufficient evidence supporting the jury's determination on the verdict form that Ralph L. Falls, Jr. and defendant reached an agreement that Ralph L. Falls, Jr. would loan defendant $200,000.00 upon defendant's promise either to place a second mortgage on the home that defendant purchased in Summit, New Jersey or to provide a promissory note in favor of Ralph L. Falls, Jr.
There is also sufficient evidence supporting the jury's determination on the verdict form that defendant breached the agreement by failing to repay the loan and failing either to place a second mortgage on the home or to provide a promissory note in favor of Ralph L. Falls, Jr. Defendant asserted at trial that the $200,000 transferred from his father was "a gift instead of a loan." (Trial Tr. Vol. II (DE 162) at 123). He testified as follows:
(
Defendant argues that plaintiff failed to establish a prima facie case of breach of contract because plaintiff offered no evidence of the terms of the second mortgage or time for repayment of the loan. The verdict form, however, did not require the jury to make findings of the terms of the second mortgage or time for repayment of the loan. This argument thus is not a basis for judgment notwithstanding the verdict.
In any event, the law does not require plaintiff to present evidence as to terms of the second mortgage or time for repayment of the loan. As noted, "[t]he elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract."
"A loan of money has been defined as a contract by which one delivers a sum of money to another and the latter agrees to return at a future time a sum equivalent to that which he borrows."
The alleged agreement in this case did not require specific time for repayment or specific terms for a second mortgage. Indeed it did not require a second mortgage at all but rather a second mortgage or a promissory note. Where defendant plainly testified at his deposition that he did not obtain a second mortgage or a promissory note, and where he denied the existence of a loan at trial, the evidence was sufficient to show that defendant breached the agreement alleged by nonperformance and repudiation.
Defendant argues that the concept of breach by repudiation does not apply in this case because the agreement here was akin to an "installment contract which contains no acceleration clause." (Def's Reply (DE 170) at 4 (citing
Defendant suggests that evidence of a $7000 check paid by defendant to his father in December 2013 demonstrates that the agreement was an installment contract. Defendant notes that the payment must have been treated by the jury as a regular payment of principal due on the loan applicable for the time period from August 2013 to July 2014, because the jury found damages in the amount of $193,000. Neither assumption is required by the evidence in the case. The fact that defendant decided to send his father a check for $7000 in December 2013, in reference to repayment of money owed, (
In sum, substantial evidence supports the jury's determination of the existence of a valid contract as set forth in question 1 of the verdict form and breach of that contract as set forth in question 2 of the verdict form. Therefore defendant's argument that plaintiff failed to establish a prima facie case of breach of contract is without merit.
Defendant argues that the evidence at trial established, as a matter of law, that the $200,000 payment from Ralph Falls, Jr., to defendant was an unconditional, completed gift, and therefore defendant cannot be liable to plaintiff. This argument, however, ignores evidence and inferences construed in the light most favorable to plaintiff. For example, defendant cites his testimony that he and his father agreed that the transfer of funds "would be a gift instead of a loan," after discussing the gift letter requirement imposed by Wells Fargo. (Trial Tr. Vol. II (DE 162) at 123). Other evidence, by contrast, tends to show that defendant and his father agreed that the transfer of funds would be a loan, and their agreement was not altered by the gift letters, including defendant's own unequivocal deposition testimony. (
While the jury was permitted to weigh the testimony in the manner suggested by defendant in his brief, substantial evidence supports a verdict in favor of plaintiff. Accordingly, defendant's motion for judgment notwithstanding the verdict must be denied.
Defendant argues that a new trial is warranted because plaintiff's Exhibit 16, a November 2013 letter from Ralph Falls, Jr., to defendant, was improperly admitted hearsay evidence.
As an initial matter, introduction of the November 2013 letter was not improper because the court provided a limiting instruction that it "did not allow it in for the truth of the matter asserted that there was a loan, but rather to show there was a demand made by the father to the son in November of 2013." (Trial Tr. Vol. I (DE 161) at 52). Accordingly, the November 2013 letter was not admitted as hearsay evidence.
In any event, even if improper, admission of the November 2013 letter is not a basis for a new trial because it did not result in a miscarriage of justice. Indeed, statements made in the November 2013 letter provided grounds for the court's determination that the Dead Man's Statute, N.C. R. Evid. 601(c)(3), had been waived in this case, thus opening the door to a substantial amount of testimony supporting central aspects of defendant's case. (
Defendant suggests that admission of the November 2013 letter was improper because it was not identified in discovery and not properly referenced in plaintiff's pretrial disclosures. Defendant, however, has not demonstrated prejudice resulting from the lack of identification in discovery in this case or improper reference in plaintiff's pretrial disclosures. Although misidentified, the document was filed on March 7, 2018, by plaintiff in response to court order. (
Accordingly, new trial on this basis is not warranted.
Defendant argues the court erred in failing to allow further testimony by lay witnesses as to the health and mental status of Ralph Falls, Jr., particularly during the time the November 2013 letter was signed. The extent of lay witness testimony as to health and mental status, however, was subject of court's deliberate consideration at trial, and the court allowed substantial testimony by lay witnesses as to their observations and perception of health and mental status of Ralph Falls, Jr. Balancing competing considerations of relevance and prejudice, the court excluded testimony that strayed too far towards opinions on medical issues that would be unduly prejudicial if not explained as part of a comprehensive medical history of Ralph Falls, Jr., which was beyond the scope of the instant trial where plaintiff did not introduce any medical records as part of its own case.
For example, at a motion hearing on this issue before trial commenced, the court previewed its reasoning as follows:
(Trial Tr. Vol. I (DE 161) at 6-7). At trial, the court allowed defendant to testify that during a fishing trip, in August 2013, his father was "very cranked up and agitated," "[j]ust all over the place," and "had a hernia surgery scheduled." (Trial Tr. Vol. II (DE 162) at 126). When he received an email from his father demanding payment in September 2013, according to defendant: "It did make me have concerns with regard to when I had seen him and been fishing with him earlier . . . that he had been agitated and anxious, but excited to [sic], like: How is my father now messing these numbers up?" (
(
While defendant argues he should have been allowed to introduce further testimony on health and mental status of Ralph Falls, Jr., he did not proffer what such testimony would be, nor is it apparent what such testimony could be, given the limitations due to the fact that no medical or expert evidence was introduced at trial. In light of the substantial testimony allowed by the court on health and mental status, limited according to balancing considerations of relevance and prejudice to plaintiff, defendant has not demonstrated a miscarriage of justice in the court's limiting of lay testimony on this subject.
Accordingly, new trial on this basis is not warranted, considered both separately and in conjunction with defendant's prior basis for new trial.
Defendant argues that the court improperly admitted plaintiff's Exhibit 4, a check register, in violation of Federal Rule of Evidence 802. The court determined the admissibility of the check register under the business records exception to the hearsay rule, after considering arguments of defendant. (
Defendant argues that the court improperly admitted testimony by Nancy Ledford ("Ledford") and John Bode ("Bode") regarding Robark LLC and GST Trusts, where the subject of such testimony was not disclosed in pretrial order and where the testimony was inadmissible character evidence. The court addresses admission of testimony by Ledford and Bode in turn.
In pretrial order, plaintiff previewed the scope of Ledford's testimony as follows:
(Pretrial Order (DE 140) at 14-15). In the course of questioning about plaintiff's Exhibit 7, described as a $7,000 check for "interest" paid by defendant, plaintiff's counsel asked Ledford: "[W]as it unusual for money to be deposited into Mr. Falls' account without your knowledge like this $7,000?" (Trial Tr. Vol. II (DE 162) at 13). Then, counsel asked the question: "How about the GST Trust[s]?" whereupon defendant's counsel objected and a description of anticipated testimony was heard at sidebar. (
Contrary to defendant's argument, this testimony by Ledford was not outside the scope of identified testimony nor inadmissible character evidence. Rather, supporting reasonable inferences in favor of plaintiff, the testimony was relevant to the issues of loan formation, breach, and the $7,000 payment on the loan in December 2013. Ledford's testimony provided important context for the loan, in that it showed defendant's varied roles with respect to accounts and finances of Ralph Falls, Jr., and that the loan was not just an isolated transfer between father and son. Defendant's unilateral transfers involving the GST Trust accounts were similar in time and manner to his unilateral deposit of the $7,000 check. Moreover, evidence that defendant "totally wiped out" the GST Trust accounts, even for a day, without being "the least bit concerned," serves to rebut defendant's contention at trial that he gave the $7,000 check to placate his father and ensure no stress to a fragile health condition. (
Where Ledford's testimony was relevant for purposes other than solely showing character for truthfulness, it was not improperly admitted character evidence. In this respect, defendant's reliance on Rules of Evidence 404(a) and 608(b) is misplaced. Under Rule 404(a), "[e]vidence of a person's character or character trait is not admissible to prove that on a particular occasion the person acted in accordance with the character or trait." Under Rule 608(b) "extrinsic evidence is not admissible to prove specific instances of a witness's conduct in order to attack . . . the witness's character for truthfulness." Neither rule, however, limits introduction of evidence of specific instances of prior conduct for other purposes, including those noted in Rule 404(b).
In particular, evidence of prior conduct may be admitted if the evidence is also proof of "motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident." Fed. R. Evid. 404(b);
In addition, prior conduct of a witness also may be admissible, under Rule 404(b), as probative of an "essential claim or element," such as bearing on knowledge or intent of a defendant or claimant.
In this case, Ledford's testimony did not concern merely a random prior instance by defendant that might tend to attack defendant's character for truthfulness. Rather, the testimony regarding the GST Trust account activity in December 2013 was probative because it was linked in multiple respects to the transaction at issue, both in terms of the relationship of defendant to his father, the context of financial dealings between them, and the specific actions in December 2013, at the time of demands for payment by Ralph Falls, Jr. Accordingly, admission of Ledford's testimony about the GST Trusts is not a proper basis for new trial.
Testimony by Bode is subject to a similar analysis. In pretrial order, plaintiff previewed that his testimony would cover "[f]acts regarding the loan and Falls III refusal to provide promissory note or second mortgage." (Pretrial Order (DE 140) at 15). At trial, Bode testified about the history of his relationship with Ralph Falls, Jr., the establishment of Robark LLC and related trust (hereinafter the "Robark trust") to benefit the children of Ralph Falls, Jr., and installation of Bode in place of defendant as trustee of Robark trust in 2014. He testified about the reason for this change as follows:
(Trial Tr. Vol. II (DE 162) at 68). Bode then testified about the following activity of the Robark trust with defendant as trustee, which Bode discovered upon becoming trustee and reviewing books and records of the trust:
(
The first part of the cited testimony, regarding reasons for removal of defendant as trustee, is probative to the loan because it shows conduct by Ralph Falls, Jr., that is consistent with his demands for repayment and intention to hold his son to their agreement despite the gift letters. The second part of the cited testimony, regarding defendant's $60,000 payment from the Robark trust, is probative to the loan for reasons similar to Ledford testimony about the GST Trusts. In particular, it provides context for the loan, showing defendant's varied formal roles with respect to accounts and finances of Ralph Falls, Jr., and that the loan was not just an isolated transfer between father and son. At the same time, in light of the recently recognized $60,000 repayment obligation, it tends to show a motive on the part of defendant for later insisting that the $200,000 transfer from Ralph Falls, Jr., was a gift instead of a loan, in a unilateral effort to balance various financial obligations with his father's estate. Finally, taking together defendant's activities in the GST Trusts, the Robark trust, and the loan, the jury reasonably could infer a pattern with respect to financial arrangements between defendant and his father, where the private nature of the arrangements limited documentation and outside scrutiny.
In sum, Bode's testimony was admissible as probative to issues raised at trial and was not merely improper character evidence. Defendant argues, nonetheless, that it was improper for plaintiff to urge the jury at closing argument to "disbelieve" defendant because of his activities with the GST Trusts and the Robark trust. (Mem. (DE 165) at 16). Defendant, however, did not object to plaintiff's suggestions to the jury in closing argument, and defendant did not request a limiting instruction. Moreover, the referenced testimony was probative to more than just defendant's "character for truthfulness," Fed. R. Evid. 608(b), as explained herein above, and plaintiff did not impermissibly invite the jury to judge defendant only in that limited respect.
In any event, even if improperly admitted and subject to argument at closing, introduction of objected-to testimony of Ledford and Bode did not result in a miscarriage of justice, where plaintiff presented substantial additional testimony of the loan agreement and breach, including defendant's unequivocal deposition testimony. Accordingly, defendant has not demonstrated entitlement to a new trial on this basis, considered both separately and in conjunction with defendant's other asserted grounds for new trial.
Defendant argues that the court erred in instructing the jury that defendant had the burden of proof on modification or cancellation. In support of this argument, defendant contends that he "did not assert the defense of modification or cancellation of the agreement; rather Defendant claimed that the $200,000 transfer was a gift at the time the ultimate agreement was reached between the parties." (Mem. (DE 165) at 18). The court's jury instructions, however, permitted the jury to find that the $200,000 transfer was a gift
In particular, in instructing the jury as to the first element of plaintiff's breach of contract claim, the court noted, with respect to this element on which plaintiff had the burden of proof, that:
(Trial Tr., Vol. III (DE 163) at 118-119) (emphasis added). Defendant's counsel, at closing argument, raised contentions in line with this instruction on the first element of plaintiff's breach of contract claim, stating: "this is really a very simple case. It's about whether or not in July 2013, Mr. Falls and his sone Ralph agreed, finally agreed, that this was going to be a loan or a gift." (
(
The fact that the court then gave the jury a second opportunity to find that the parties cancelled or modified the original agreement, such that it became later a gift, does not amount to a miscarriage of justice depriving defendant a substantial right. Indeed, defendant's own deposition testimony suggested such a theory of defense, where he admitted his father provided him a "loan," (Def's Dep. at 12, 28;
In sum, defendant has not demonstrated entitlement to a new trial on this basis, considered both separately and in conjunction with defendant's other asserted grounds for new trial.
Defendant argues that the court erred in failing to instruct the jury that love and affection is sufficient consideration to modify or cancel a loan agreement. The court previously addressed this issue in order entered March 30, 2018, and the court adheres to its prior analysis.
Defendant cites
Exum, 125 S.E. at 17 (emphasis added).
At bottom, neither
In any event, failure to provide the requested instruction does not constitute a miscarriage of justice in this case because, as defendant asserts in his brief, he never contended before the jury that a completed loan agreement was cancelled or modified, but rather that a gift instead of a loan was formed in the first place. Defendant urged this theory upon closing argument, and the court's instructions allowed the jury to reach a verdict on the basis of such a theory. Thus, the court's instructions on a defense of cancellation or modification of a loan, even if incorrectly reflecting the law regarding consideration for such a defense, did not affect defendant's substantial rights.
In sum, defendant has not demonstrated entitlement to a new trial on this basis, considered both separately and in conjunction with defendant's other asserted grounds for new trial. Defendant's motion for new trial thus is denied.
In accordance with the court's oral order dated March 29, 2018, the parties submitted briefing on the issue of prejudgment and postjudgment interest. Plaintiff contends that interest on plaintiff's damages award of $193,000 should run from December 9, 2013, or, in the alternative, from November 7, 2014, the date the lawsuit was filed. Defendant contends plaintiff is entitled to no interest.
North Carolina law provides for interest in an action for breach of contract as follows:
N.C. Gen. Stat. § 24-5(a). In addition, North Carolina law provides, in pertinent part, that "the legal rate of interest shall be eight percent (8%) per annum for such time as interest may accrue, and no more." N.C. Gen. Stat. § 24-1.
The first issue presented by section 24-5(a) is the "date of breach." In this case, the jury did not make any findings as to the date of breach. Nevertheless, in such circumstances, the date of breach and amount of interest is "a question of law properly within the province of the trial judge."
The next issue presented by section 24-5(a) is the rate of interest. Where the issue of rate of interest is not submitted to the jury, interest is determined as a matter of law.
Defendant argues that the "contract rate" in this instance is 0% because the jury determined the loan did not bear any interest. Defendant suggests the jury must have found a 0% interest rate applied to the loan, because the jury credited the $7,000 check paid by defendant to Ralph Falls, Jr., in December 2013, towards a reduction in the amount of the loan, rather than treating it as an interest payment. (
This argument is flawed because it assumes the jury made findings about the rate of interest, where it did not make any such findings. The jury was not asked to make any findings about the rate of interest, and the parties did not advance any contentions about the rate of interest at trial. In this context, the fact that the jury credited the $7,000 check against the principal amount of the loan does not translate to a finding that defendant and Ralph Falls, Jr., agreed that the loan would carry a 0% interest rate. Where the loan agreement found by the jury in question one of the verdict form did not specify payment terms of interest or principal, the $7,000 check reasonably could be considered a payment or principal or interest or some combination of both. In this instance, the evidence permitted a finding that it was a payment towards the principal balance of the loan. Defendant's mere unilateral act of payment does not alter the jury's finding of the terms of the loan agreement in response to question one of the verdict form.
In sum, the court will enter an amended judgment in accordance herewith specifying that the judgment accrues interest at a rate of 8% per annum starting on January 23, 2015, until such date as the judgment is paid.
As discussed at pretrial conference, the court held in abeyance consideration of a setoff defense asserted by defendant until after conclusion of the trial, upon such further order of the court as may be warranted.
In considering what defendant now asserts to be a "setoff defense" for "[r]ent payable" and "[c]osts of maintenance and repair," (Defendant's post-trial brief (DE 157) at 5-6), the court notes as a preliminary matter that such a defense was not well pleaded. Indeed, the answer filed January 23, 2015, did not mention rent payable or costs of maintenance and repair. It included a "Ninth Further Defense" for "Setoff" stating that, to the extent defendant is liable: "Defendant is entitled to a setoff for any amounts owed by Plaintiff to Defendant including but not limited to amounts alleged in Defendant's Counterclaim." (Answer (DE 9) at 6). Defendant's counterclaim included, first, a claim for breach of fiduciary duty, asserting that Ralph Falls, Jr., had failed "to distribute the trust property of the Falls QPRT to Falls III, including, without limitation, failing to execute and deliver a deed conveying a title to the [Morehead City] Property to Falls III." (Answer (DE 9) at 9). Second, defendant asserted a counterclaim for specific performance, seeking to have Falls Jr. execute a deed conveying title to the Morehead City house. The specific performance counterclaim was mooted after Falls Jr. died and defendant conveyed the title to himself. (
Nevertheless, on March 24, 2016, defendant raised in response to plaintiff's motion for summary judgment a counterclaim for which "rent and other amounts due" was payable as damages, under a theory of "breach of fiduciary duty," as distinct from a "Creditor's Claim for rent and other amounts due" then pending in the "Estate Action," Case No. 15-E-1997, in Wake County Superior Court, which became Case No. 5:16-CV-98-FL, upon removal to this court by defendant on March 3, 2016. (Response (DE 39) at 24-25). Defendant also asserted a "setoff defense that cannot be resolved absent interpretation of trust documents at issue in a separate action currently being litigated between these same parties," referencing again the Estate Action. (
In its order denying summary judgment, the court suggested that defendant had constructively amended his answer to preserve a setoff defense for which "rent and other amounts due" was payable as damages, through his "references to the lease and his creditor's claim in state court for rent due under the lease, as well as his deposition statements substantiating the basis for the setoff." (Order (DE 43) at 17-18). The court has cause to reconsider now, however, whether defendant's assertions and conduct, post-answer, amounted to a constructive amendment of the answer. While a pleading may in some circumstances be constructively amended through litigation conduct, upon "express or implied consent of the parties," Fed. R. Civ. P. 15(c), plaintiff in this case did not give consent to try a setoff defense, but rather asserted in reply to summary judgment that plaintiff had "improperly asserted a setoff" in the instant action. (Reply (DE 42) at 7). In sum, a "setoff defense" for "[r]ent payable" and "[c]osts of maintenance and repair." (Defendant's post-trial brief (DE 157) at 5-6), was not pleaded properly. Therefore defendant's instant request for relief in the instant action based thereon must be denied.
In the alternative, even if such a setoff defense was pleaded properly, subsequent procedural history confirms that such a setoff defense no longer presents a viable issue or claim for resolution in the instant case. In its summary judgment order, the court described defendant's "setoff theory" in conjunction with defendant's counterclaim for breach of fiduciary duty and "creditor's claim in state court for rent due under the lease," and the court directed defendant to show cause why his counterclaim for breach of fiduciary duty should not be dismissed or held in abeyance pending resolution of the Estate Action. (Order (DE 43) at 18).
In response to the show cause order, defendant asserted that his "breach of lease" claim would be dismissed from the Estate Action and that he had asserted the same "breach of lease" claim in a new action then filed in Case No. 5:16-CV-740 (hereinafter also referenced as the "Trust Action"). (Response (DE 44) at 2). Defendant asserted that the "counterclaim for breach of fiduciary duty in the instant action is a separate claim from Falls III's claim for breach of the lease," and that such claim should be "consolidated with Case No. 5:16-CV-740 to be heard in conjunction with the breach of lease claim in that action in order to promote judicial economy and avoid the potential for inconsistent results." (
The referenced Trust Action was commenced by Ralph Falls III and his children on August 12, 2016, against Goldman Sachs Trust Company, N.A., among other defendants, asserting claims including the following pertinent here:
Having asserted claims for which rents due were payable as damages, defendant did not then suggest any basis by which a setoff defense seeking the same rents due should remain in the instant case. Indeed, such an approach would run counter to defendant's own reasoning in seeking consolidation "to promote judicial economy and avoid potential for inconsistent results." (
(Def's Mem. (DE 49) at 9) (emphasis added). By seeking consolidation of "all of the interrelated issues" pertaining to the lease, defendant left no room for maintenance of a setoff defense on the same basis in the instant action.
On December 20, 2016, the court granted defendant's motion to sever and consolidate related claims. In that order, the court described the severance and consolidation as follows:
(Order (DE 55) at 2). Such order was without qualification or reservation, and was well-supported by defendant's own stated desire to try "all of the interrelated issues" pertaining to the lease in the Trust Action, and with the "sole claim proceeding . . . to trial" in the instant case being one for breach of contract. (Order (DE 55) at 2).
At that time, in the Trust Action (5:16-CV-740-FL),Goldman Sachs Trust Company, N.A., as a defendant therein, had filed a motion to dismiss as untimely the claim in that action for "Breach of Lease" brought by Ralph Falls III, as a plaintiff therein. Regarding that motion, the court noted in the instant case: "The court expresses in this ruling no opinion on the still-pending motion to dismiss Ralph L. Falls III's claim for breach of lease." (Order (DE 55) at 2).
At first pretrial conference in the instant case, in January 2017, the court asked defendant about the defense of setoff, as follows:
(
The end result of this procedural history is that what defendant now asserts to be a "setoff defense" for "[r]ent payable" and "[c]osts of maintenance and repair," (Def's post-trial brief (DE 157) at 5-6), is not a defense, issue, or claim, that remains for adjudication in the instant action. The relief sought through this "setoff defense" rather is the same as, or overlaps with, the relief sought through one or more claims asserted in the Trust Action. The precise nature of the issues and claims remaining for adjudication in the Trust Action is beyond the scope of this order. The court notes for purposes here only that one or more claims remain in the Trust Action for which "rent due" and other costs may provide a measure of damages. Accordingly, the court must deny defendant's request in post-trial briefing for relief in the instant action in the form of "[r]ent payable" and "[c]osts of maintenance and repair." (
Defendant argues, nonetheless, that his "entitlement to offset amounts due him from Plaintiff is a well-established right." (
Defendant also cites North Carolina case law for the proposition that "[i]t is settled under North Carolina law that a defendant when sued may set up any
In sum, the court denies defendant's request for relief in the form of a "setoff defense" in the instant action for "[r]ent payable" and "[c]osts of maintenance and repair." (Def's post-trial brief (DE 157) at 5-6). All issues properly presented in this case now having been decided, the court directs entry of an amended judgment including an award of interest as specified herein.
Based on the foregoing, defendant's motion for judgment notwithstanding the verdict and for new trial (DE 164) is DENIED. Defendant's request for relief in the form of a setoff defense is denied, and the court DIRECTS the clerk to enter an amended judgment including an award of interest as follows:
IT IS ORDERED, ADJUDGED AND DECREED that Ralph L. Falls, Jr. and defendant DID reach an agreement that Ralph L. Falls, Jr. would loan defendant $200,000.00 upon defendant's promise either to place a second mortgage on the home that defendant purchased in Summit, New Jersey or to provide a promissory note in favor of Ralph L. Falls, Jr.
IT IS ORDERED, ADJUDGED AND DECREED that defendant DID breach the agreement.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that after entering into the agreement, Ralph L. Falls, Jr. and defendant DID NOT cancel or modify the terms of the agreement.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that plaintiff is entitled to recover $193,000.00 from defendant and plaintiff is entitled to recover interest on that amount accruing at a rate of 8% per annum, calculated starting on January 23, 2015, until such date as the judgment is paid.
IT IS FURTHER ORDERED, ADJUDGED AND DECREED that plaintiff WAS NOT damaged by defendant's misrepresentation that he would place a second mortgage in favor of Ralph L. Falls, Jr. on the home that defendant purchased in Summit, New Jersey.
SO ORDERED.
