STEPHENS, Judge.
This appeal concerns a dispute over a parcel of real property in downtown Raleigh. On 23 May 2011, Plaintiff New Bar Partnership ("New Bar") filed a lis pendens in Wake County Superior Court providing notice of the existence of claims potentially affecting title to the property at issue. New Bar then filed a complaint against Defendants W.D. Martin, Jr. ("Martin"), W.D. Martin, III, as Trustee of the William D. Martin, Jr. Living Trust ("the Martin Trustee"), MMP, LLC ("MMP"), and FMW at Hillsborough & Morgan, LLC ("FMW") (collectively, "Defendants"). New Bar alleged that Defendants had conspired to deprive it of its right of first refusal to purchase real property ("the property") owned by Martin and his successors. The complaint included a request for declaratory judgment and an action to quiet title, as well as claims for specific performance, breach of lease, civil conspiracy, fraud, and unfair and deceptive trade practices.
On 22 July 2011, FMW moved to dismiss the complaint pursuant to Rule 12(b)(6), asserting that New Bar's right of first refusal was invalid under the Connor Act, N.C. Gen. Stat. § 47-18, and, in the alternative, had expired in 2009 under the common law rule against perpetuities ("the common law RAP"). On 27 July 2011, Martin, the Martin Trustee, and MMP (collectively, "the Martin Defendants") answered the complaint, asserting the common law RAP as a defense. On 15 September 2011, the Martin Defendants moved to dismiss pursuant to Rule 12(b)(6), and in the alternative, for judgment on the pleadings based on violation of the common law RAP, estoppel, lack of consideration, and other defenses. On 27 September 2011, New Bar filed a motion for a preliminary injunction preventing transfer of the property pending the outcome of the legal proceedings.
Following a hearing on the various motions, by order entered 25 October 2011, the trial court dismissed New Bar's claims against FMW pursuant to Rule 12(b)(6) ("the FMW order"). On 7 November 2011, the court (1) dismissed without prejudice New Bar's claims against the Martin Defendants (other than those related to the purported right of first refusal) pursuant to Rule 12(b)(6) and as premature, and (2) dismissed with prejudice New Bar's claims related to its alleged right of first refusal for failure to state a claim upon which relief could be granted and, in the alternative, granted summary judgment to the Martin Defendants on such claims ("the Martin order"). The court also dismissed as moot New Bar's motion for a preliminary injunction. New Bar appeals from the trial court's orders of dismissal. As discussed below, we affirm.
The origins of this legal dispute date to 15 October 1988, when Charlie Goodnight's, Inc. ("CGI") leased the property from Martin and
In 1989, CGI and the Martins executed an amendment to the initial lease, adding the following paragraph:
However, neither a memorandum, the initial lease, the first amendment, nor any of the subsequent amendments to the lease were recorded.
On 1 March 1990, with the Martins' consent, CGI assigned all of its rights and interests in the initial lease to New Bar. On 1 December 1999, the Martins and New Bar executed a second amendment to the initial lease, extending New Bar's option to renew by two additional five-year terms, which purported to give New Bar a right to renew the lease through 14 December 2018. The amendment made the renewal automatic at the conclusion of each term unless New Bar provided notice otherwise. Because the right of first refusal in the initial lease exists during any renewal period, the right of first refusal was likewise purportedly extended until 14 December 2018. On 1 November 2002, Martin (his wife having died, leaving Martin as the sole lessor) executed a third amendment to the initial lease, purporting to extend the right to renew by another two five-year terms, to run through 14 December 2028.
On 27 May 2004, Martin transferred the property to the Martin Trust, with his son serving as the trustee. No consideration was given for the property, and New Bar was not advised of the transfer. At some point before 29 June 2010, the Martin Trust began negotiating the sale of the property to FMW, again without advising New Bar. On 29 June 2010, MMP was formed with Martin's son (also the Martin Trustee) as managing member. One day later, the Martin Trust transferred the property by deed to MMP for $10.00. On 15 July 2010, Martin's son, acting as manager of MMP, entered into an agreement to sell the property to FMW, with a closing date on or before 31 December 2011.
On 13 September 2010, Martin's son sent a letter on his father's behalf to New Bar stating that the 1999 and 2002 amendments to the initial lease were made without any consideration, and therefore, were invalid and did not extend the lease. In addition, Martin's son asserted that FMW was a purchaser for valuable consideration which could "take title and possession of the [p]roperty free and clear of any property interest" of New Bar, FMW having recorded a memorandum of its contract to purchase the property from MMP and New Bar having failed to fulfill the recording obligation of the first amendment. Martin's son also asserted that New Bar had only a year-to-year tenancy based on an oral agreement which could be terminated by the property owner with one month's notice. New Bar then initiated this legal proceeding.
On appeal, New Bar argues that (1) its complaint stated claims against the Martin Defendants upon which relief could be granted and that were not premature; (2) its right of first refusal is not void under the common law or statutory RAP; and (3) FMW was not entitled to the protections of N.C. Gen.Stat. § 47-18 ("the Connor Act"). For the reasons discussed herein, we disagree.
We review a trial court's order allowing a Rule 12(b)(6) motion to dismiss de
Id. at 383-84, 626 S.E.2d at 714 (citations, quotation marks, and brackets omitted).
"[A] motion for judgment on the pleadings pursuant to Rule 12(c) should only be granted when the movant clearly establishes that no material issue of fact remains to be resolved and that the movant is entitled to judgment as a matter of law." Cash v. State Farm Mut. Auto. Ins. Co., 137 N.C. App. 192, 201-02, 528 S.E.2d 372, 378 (citations and quotation marks omitted), affirmed per curiam, 353 N.C. 257, 538 S.E.2d 569 (2000). We review such decisions de novo. Carpenter v. Carpenter, 189 N.C. App. 755, 757, 659 S.E.2d 762, 764 (2008).
All of New Bar's claims are ultimately based upon two purported property interests: a right to renew its lease for additional terms through 2028 and a right of first refusal for purchase of the property. In its complaint, New Bar alleged the following claims against the Martin Defendants: breach of lease (based on the purported right of first refusal), civil conspiracy (based on both the right of first refusal and the assertion by the Martin Defendants that the lease had expired leaving New Bar no right to renew it for future terms), fraud (same), and unfair and deceptive trade practices.
In addition to specifically dismissing all of New Bar's claims related to its purported right of first refusal pursuant to Rules 12(b)(6) and 12(c), the Martin order also dismisses "claims seeking enforcement of the lease covenant against the Martin Defendants, [for] failure to state a claim upon which relief can be granted and, [because] no material issue of fact exists that those claims have been asserted prematurely[.]"
New Bar argues that the trial court erred in dismissing pursuant to Rule 12(b)(6) and/or as premature its claims for declaratory
Nationwide Mut. Ins. Co. v. Roberts, 261 N.C. 285, 287, 134 S.E.2d 654, 656-57 (1964). However, the Declaratory Judgment Act explicitly grants trial courts the discretion to determine whether entry of a declaratory judgment is appropriate: "The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding[.]" N.C. Gen.Stat. § 1-257 (2011). "The trial court's decision to grant or deny such relief will be reversed only upon a showing of abuse of discretion." Farber v. N.C. Psychology Bd., 153 N.C. App. 1, 17, 569 S.E.2d 287, 299, cert. denied, 356 N.C. 612, 574 S.E.2d 679 (2002). A matter left to the trial court's discretion "will not be disturbed unless it is manifestly unsupported by reason, or so arbitrary that it could not have been the result of a reasoned decision. A trial judge's decision only amounts to an abuse of discretion if there is no rational basis for it." State v. Mutakbbic, 317 N.C. 264, 273-74, 345 S.E.2d 154, 158-59 (1986) (citations and quotation marks omitted).
Here, we see no abuse of discretion in the trial court's dismissal because the lack of an actual controversy between the parties deprived the trial court of subject matter jurisdiction.
Wendell v. Long, 107 N.C. App. 80, 82-83, 418 S.E.2d 825, 826 (1992). In Wendell, residential property owners brought a declaratory judgment action asking for a declaration that restrictive covenants in the deeds of their neighbors were valid and would prohibit a proposed construction project. Id. We held there was no actual controversy between the parties that would satisfy the jurisdictional requirement because the complaint alleged not "that [the] defendants ha[d] acted in violation of [] covenants, but [rather] that they anticipate[d] some future action to be taken by [the] defendants which would result in a violation." Id. at 83, 418 S.E.2d at 826.
Our review of the pleadings reveals a strikingly similar situation here. At the time New Bar's complaint was filed and the motions to dismiss were heard by the trial court, New Bar remained in possession of the property through the lease and no party had taken any action to interfere with its rights thereunder. Instead, New Bar only anticipated future actions that might damage it. As a result, the trial court lacked jurisdiction to render what would be an advisory opinion. "It is well-established that the issue of a court's jurisdiction over a matter may be raised at any time, even for the first time on appeal or by a court sua sponte." State v. Webber, 190 N.C. App. 649, 650, 660 S.E.2d 621, 622 (2008). Accordingly, New Bar's arguments regarding its declaratory judgment claims are overruled.
New Bar's claims for civil conspiracy and fraud are based in part on its purported right of first refusal (discussed in section IV below)
The essential elements of fraud are: "(1) [f]alse representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party." Ragsdale v. Kennedy, 286 N.C. 130, 138, 209 S.E.2d 494, 500 (1974). New Bar's complaint does not allege it was deceived by either the Martin Defendants' alleged misrepresentations that the lease had expired nor by the alleged shell transfers. As to the civil conspiracy claim, "[i]t is well established that there is not a separate civil action for civil conspiracy in North Carolina. Instead, civil conspiracy is premised on the underlying act." Piraino Bros., LLC v. Atl. Fin. Group, Inc., ___ N.C.App. ___, ___, 712 S.E.2d 328, 333 (2011) (citations and quotation marks omitted). Thus, where a plaintiff's underlying claims fail, its "claim for civil conspiracy must also fail." Id. at ___, 712 S.E.2d at 334. Accordingly, because New Bar plainly failed to state claims upon which relief could be granted, the court's dismissal was proper.
The elements of an unfair or deceptive trade practice are: "(1) an unfair or deceptive act or practice by [the] defendant, (2) in or affecting commerce, (3) which proximately caused actual injury to [the] plaintiff." Wilson v. Blue Ridge Elec. Membership Corp., 157 N.C. App. 355, 357, 578 S.E.2d 692, 694 (2003) (citations omitted). As noted in subsection A supra, at the date of the hearing on Defendant's motions to dismiss, New Bar remained in possession of the property under terms of the lease. Further, as discussed below, New Bar's purported right of first refusal was void under the common law RAP, and as a result, specific enforcement of the recordation requirement would have had no effect on New Bar's rights under the lease. Thus, New Bar had not yet suffered damages due to any actions or inactions by the Martin Defendants, and accordingly, its claims for unfair and deceptive trade practices claims were properly dismissed as premature.
New Bar also argues that the trial court erred to the extent it dismissed claims based upon the right of first refusal
Resolution of this aspect of the appeal requires consideration of two areas of our State's jurisprudence: (1) our case law on rights of first refusal, also known as preemptive rights; and (2) the effect of the 1995 enactment of the Uniform Statutory Rule Against Perpetuities, N.C. Gen.Stat. § 41-15 et seq. ("the USRAP"), on the common law RAP doctrine in our State.
Smith v. Mitchell, 301 N.C. 58, 61, 269 S.E.2d 608, 610-11 (1980). The Court in Smith established the rule that "preemptive provisions which are unreasonable are void as imposing impermissible restraints on alienation[,]" and noted that "two primary
At the time of the Smith opinion, our State relied solely upon the common law RAP. Id. For property interests established without reference to any measuring life (like the lease at issue here), the common law RAP voids any interest not certain to terminate or vest within 21 years. Mizell v. Greensboro Jaycees-Greensboro Junior Chamber of Commerce, Inc., 105 N.C. App. 284, 287, 412 S.E.2d 904, 906-07 (1992). However, effective 1 October 1995, the General Assembly enacted the USRAP which, among other actions, added a 90-year "wait and see" alternative to the common law RAP. N.C. Gen.Stat. § 41-15(a)(2) (2011). Under this section, certain nonvested property interests that violate the common law RAP can survive if the interest actually "vests or terminates within 90 years after its creation." Id.
As all parties acknowledge, section 41-18 makes clear that the USRAP does not apply to nonvested property rights arising from nondonative transfers
The plain language of section 41-18 excludes the right of first refusal at issue here from the statutory rule against perpetuities and section 41-22 states that the USRAP "supercedes" the common law RAP. "Supersede"
New Bar contends that, even if the common law RAP remains in effect for
Id. at 194, 558 S.E.2d at 80 (citation omitted). New Bar asserts that, relying on Rich, we should evaluate the policy behind the common law RAP as applied to its right of first refusal. We decline to do so in light of the Supreme Court's clear guidance in Smith (which, unlike Rich, specifically addressed a right of first refusal) that "the better rule is to limit the duration of the right to a period within the rule against perpetuities and thus avoid lengthy litigation over what is or is not a reasonable time within the facts of any given case." Smith, 301 N.C. at 66, 269 S.E.2d at 613. Our Supreme Court reaffirmed this holding in Pinehurst v. Regional Inv. of Moore, Inc., 330 N.C. 725, 728-29, 412 S.E.2d 645, 646-47 (1992):
Being bound by the decisions of our Supreme Court, we also hold that "a preemptive right or a right of first refusal to be valid must not extend beyond the period of the [common law RAP]." Id. at 728, 412 S.E.2d at 646.
Here, the initial lease (executed 15 December 1988) was for a five-year term with the option to renew for up to three additional five-year terms.
New Bar also argues that the court erred in dismissing its claims against FMW under the Connor Act. We disagree.
Our review of the pleadings reveals that New Bar's complaint adequately alleged its various claims against FMW. Thus, the trial court's dismissal of all claims against FMW pursuant to Rule 12(b)(6) for failure to state a claim upon which relief could be granted can only have been based upon FMW's assertion of various defenses thereto. As noted supra, all claims arising directly from New Bar's purported right of first refusal were properly dismissed based upon a common law RAP defense. See Locklear, 176 N.C.App. at 384, 626 S.E.2d at 714. However, New Bar also sought a declaration that its lease was valid and that, as a result, it retained the right to renew the lease through 2028. In the trial court and on appeal, FMW asserted that, because the lease was unrecorded, the Connor Act invalidated the lease as to FMW.
Under the Connor Act,
N.C. Gen.Stat. § 47-18(a) (2011).
Bourne v. Lay & Co., 264 N.C. 33, 35, 140 S.E.2d 769, 771 (1965) (emphasis added) (citations omitted). Thus, under the Connor Act, "until such [a] contract is registered, third parties may deal with the property to which it relates as if no contract existed." Eller v. Arnold, 230 N.C. 418, 421, 53 S.E.2d 266, 269 (1949). As a result, negotiations regarding such a property cannot constitute fraud or conspiracy simply because the parties negotiating are aware of an unrecorded lease. See id. ("If these acts are not wrongful or illegal, no agreement to commit them can properly be called an illegal and wrongful conspiracy.") (citation and quotation marks omitted).
Here, the initial lease was for more than three years and was never recorded, while FMW recorded its option to purchase the property on 20 July 2010. Thus, as New Bar concedes, "FMW `won the race to the courthouse.'" However, New Bar contends that it adequately pled fraud as a bar to FMW's invocation of the Connor Act.
Having carefully reviewed the factual allegations of New Bar's complaint, we are not persuaded. While the complaint does allege
The Martin and FMW orders are
AFFIRMED.
Judges MCGEE and HUNTER, JR., ROBERT N., concur.
