Yesterday the Court of Appeals reversed a jury verdict as to two defendants in a breach of contract case and granted a new trial to the remaining defendant on the issue of damages.  The case is Scheerer v. Fisher.  Womble Carlyle attorneys Burley Mitchell and Bob Numbers represented Highland Forest Partners in this appeal.

David Scheerer and his company, Mountain Life Realty, sued defendants Jack Fisher, Renaissance Ventures, LLC, and Highland Forest Partners, LLC for breach of contract for the payment of a real estate brokerage commission. Scheerer, who had served as Fisheras agent in previous real estate transactions, alerted Fisher to an 800 acre development in Western North Carolina that was for sale.  Fisher's company, Renaissance Ventures, entered into agreements to purchase the property.

During the inspection period, Fisher discovered that the property wasn't large enough for all the residential lots he had anticipated developing.  As a result Renaissance Ventures exercised its right to terminate the purchase agreement. Plaintiffs claimed that Fisher asked Scheerer to continue his due diligence on the property to determine if the property could be acquired at a lower price.  Fisher later began negotiations to purchase the property through a different party who owned a minority interest in it.  This new party entered into contracts to purchase the property for $14,750,000 and assigned the contract to Highland Partners, another company owned by Fisher.

Scheerer filed suit to obtain the commission he believed he was entitled to as a result of this sale.  At trial, the jury found that there was a breach of contract by Fisher, Renaissance Ventures, and Highland Partners and awarded the plaintiffs $400,000.

After the trial, Highland Forest Partners retained Womble Carlyle to represent it in the appellate process.  The Court of Appeals found that the trial court erred in denying Renaissance Ventures' and Highland Partners' motion for a judgment in their favor notwithstanding the verdict because there was insufficient evidence of a breach of contract by those defendants - Renaissance properly terminated the initial purchase agreement, and the only claim alleged against Highland Partners in Plaintiffs' complaint was for a breach of a contract implied in law, an issue which the jury did not reach.  The opinion represents a complete victory for Renaissance Ventures and Highland Forest Partners.

The COA did find that there was sufficient evidence to uphold the jury verdict with respect to Fisher, even though he terminated the initial purchase agreement that provided Scheerer with a two percent commission, and the final purchase agreements did not contain such a provision.  Fisher testified that Scheerer introduced him to the properties and that he encouraged Scheerer to seek a commission from the seller. The COA held that the testimony "provided more than a scintilla of evidence that plaintiffs and Fisher had an express agreement that Fisher would procure Scheereras commission for the purchase of the properties and that he failed to do so."

We recently sat down with the Honorable Mark A. Davis with the North Carolina Court of Appeals for a conversation about his path to the bench, life at the Court, and his thoughts on appellate practice.  Read on for more details. . . .

Judge Davis received his undergraduate and law degrees from the University of North Carolina and then went on to serve as a law clerk for the Honorable Franklin T. Dupree at the United States District Court for the Eastern District of North Carolina.  Upon completion of his clerkship, Judge Davis spent 13 years as a litigator at Womble Carlyle Sandridge & Rice before moving to the Attorney Generalas office, where he spent five years in the Special Litigation section.  While he was at the AGas office, Judge Davis added to his significant civil experience by also working on criminal appeals.  Prior to his appointment to the bench on December 31, 2012, Judge Davis spent two years serving as General Counsel for Governor Beverly Perdue. 

            Judge Davis told us that serving as a judge on the Court of Appeals is his adream job,a as he has loved appellate law since his clerkship with Judge Dupree.  Before coming to the bench, Judge Davis had quite a busy appellate practice, handling between 60-70 appeals at both the state and federal levels.  During this time, he participated in approximately 20 oral arguments at the North Carolina Court of Appeals, five State Supreme Court arguments, and five Fourth Circuit arguments.

            For Judge Davis, the most rewarding aspect of his job is the purity of the appellate process.  Judge Davis loves that each time he is assigned a new case, he is handed a set of facts about which he knows almost nothing and within approximately 90 days his chambers has issued an opinion that represents the best efforts of the judges and staff on the Court, free of any bias or partisanship and uninfluenced by any outside interests. 

By contrast, Judge Davis told us that the hardest part about being a judge on the Court of Appeals is handling the cases that come to the court under Rule 3.1 of the North Carolina Rules of Appellate Procedure.  These are the cases that deal with the abuse, neglect, and dependency of children.  Judge Davis explained that he takes his role in these cases very seriously and that these cases keep him up at night, knowing that he is one of three votes that often determine whether a parent gets to keep custody of his or her child.

We asked Judge Davis to impart some sage advice for appellate lawyers practicing in North Carolina, and he gave us a great list:

-          Know your standard of review.  Donat just parrot the standard in your brief, but actually use it and write your brief with the standard in mind.

-          Appreciate that the Court has limited time.  Be concise.  At oral argument, you should assume the judges are familiar with the facts and want to jump right into the legal arguments.

-          Know the record.  If you werenat the lawyer that tried the case in the trial court, you still need to know your facts, and know where to find them in the record.

-          Always accurately cite cases.  If you misrepresent the holding or facts of a case cited in your brief, be aware that the Judge or his clerk will find it, and they will remember it.

-          Donat prepare for oral argument by memorizing a speech.  Be prepared to jump right into an issue when asked by the Judges even if itas not how you planned.  Chief Justice John Roberts once explained that he used to write his arguments on different index cards and then each time he practiced his argument, he would flip through them in different order each time. That way, when the time for oral argument came, he was prepared no matter which direction the questioning took.

-          Keep it professional, even when the other side doesnat do a great job.  The best lawyers are the ones who dismantle the other sideas arguments brick by brick but do so professionally and respectfully, without being shrill. 

Finally, when we asked Judge Davis to identify some his apet peevesa he hates to see on the bench, the number one thing he mentioned was something we can all avoid:  typos!  As Judge Davis eloquently put it, you canat control the facts or the law but you can control proofreading and you can always have an error free brief.  Wead say those are words to live by.

In Crossman v. Life Care Centers of America, Inc., the North Carolina Court of Appeals recently upheld the invalidation of a healthcare arbitration agreement as impossible to perform due to a failure of material terms.  In January 2011, while serving as the administrator of her husbandas estate, Lucille Crossman filed a wrongful death complaint against the Defendants, who own, operate, and manage the assisted living facility in Hendersonville in which Ms. Crossmanas husband resided before his death.  When Mr. Crossman entered the facility in 2004, he signed an agreement in which he stipulated that the parties agreed to submit all claims arising out of his care and treatment at the facility to binding arbitration.  The agreement also specified that such disputes would go before an arbitration hearing before a board of three arbitrators selected from the American Arbitration Association (aAAAa) and that the arbitrators would apply the rules of the AAA.  Ms. Crossman did not sign the agreement.

When Ms. Crossman filed the wrongful death complaint, the Defendants filed a motion to dismiss and compel arbitration based on the terms of the arbitration agreement.  The trial court denied the motion, holding that the agreement was unenforceable because it was impossible to perform due to a failure in its material terms and because arbitration agreements signed by decedents do not bind wrongful death beneficiaries.

On appeal, the Court agreed that the arbitration agreement was unenforceable.  The Court explained that effective January 1, 2003, the AAA had issued a Healthcare Policy Statement informing all potential parties to an arbitration agreement in the field of healthcare that the AAA would no longer accept the arbitration of cases involving individual patients without a post-dispute agreement to arbitrate.  Because the agreement had been signed before a dispute arose, and because the agreement stipulated that arbitration must occur under AAA rules and be presided over by persons approved by the AAA, the Court held that the agreement was unenforceable because it was impossible to perform due to a failure in material terms.

The Court distinguished the case from its earlier holding in Westmoreland v. High Point Healthcare Inc., ___ N.C. App. ___, 721 S.E.2d 712 (2012), in which the Court held that a pre-dispute arbitration agreement signed on admittance to a nursing facility was enforceable.  In that case, the agreement stipulated that any arbitration must follow the rules of the AAA and be conducted before one neutral arbitrator selected in accordance with the rules of the AAA.  The Court held that the agreement was not impossible to perform despite the existence of the AAA Policy Statement, because it did not preclude arbitration of the claims by a non-AAA arbitrator.  Here, in contrast, the agreement stated that the arbitration would be conducted by arbitrators selected from the AAA.  It specifically required the use of AAA arbitrators and was, therefore, unenforceable as impossible to perform. 

Interestingly, the Court declined to reach the second question posed by the appeal: whether Ms. Crossman, as a beneficiary of Mr. Crossmanas estate, would be bound by her husband's assent to the arbitration agreement.  That question remains for another day. . .