La Casa Homes of NC, Inc.

Filing 167

ORDER signed by JUDGE THOMAS D. SCHROEDER on 06/10/2013, adopting the Magistrate Judge's Recommendation as set out herein. (Israel, Lisa)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

BOBBY G. SLATE, et al.,

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)
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)
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)
)
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Plaintiffs,
v.
RHONDA L. BYRD, et al.,
Defendants.

1:09cv852

ORDER
On

March

15,

2013,

the

United

States

Magistrate

Judge=s

Recommendation (“Recommendation”) was filed and notice was served
on the parties pursuant to 28 U.S.C. ' 636.

(Docs. 143, 144.)

Defendant Quincy Washington timely filed objections (Doc. 151), to
which Plaintiffs filed a response (Doc. 157).

Defendant Southern

Community Bank and Trust (“SCB”) also timely filed objections (Doc.
152), to which Plaintiffs filed a response (Doc. 159).

And

Plaintiffs timely filed objections (Doc. 153), to which Defendants
Quincy Washington (Doc. 156) and SCB (Doc. 158) filed responses.
Pursuant to section 636, the court is obliged to conduct a de
novo determination as to “those portions of the report or specified
proposed findings or recommendations to which objection is made.”
28 U.S.C. § 636(b)(1); accord Fed. R. Civ. P. 72(b)(2)-(3).

An

objecting party is required to identify specifically those findings
objected to and to support such objection with the basis for it.
Suntrust Mortg., Inc. v. Busby, 651 F. Supp. 2d 472, 476 (W.D.N.C.

2009).

“A general objection, or one that merely restates the

arguments previously presented[,] is not sufficient to alert the
court to alleged errors on the part of the magistrate judge.

An

‘objection’ that does nothing more than state a disagreement with
a magistrate’s suggested resolution, or simply summarizes what has
been presented before, is not an ‘objection’ as that term is used
in this context.”

Id. (quoting Aldrich v. Bock, 327 F. Supp. 2d 743,

747 (E.D. Mich. 2004)); see United States v. O’Neill, 27 F. Supp.
2d 1121, 1126 (E.D. Wis. 1998) (noting that “[w]ithout specific
reference to portions of the magistrate’s decision and legal
discussion on the objected portion, the district court’s duty to make
a de novo determination does not arise”).
Similarly, general or conclusory objections that do not point
to specific error do not require this court’s de novo review and will
result in the waiver of appellate review.

E.g., Smith v. Wash. Mut.

Bank FA, 308 F. App’x 707, 708 (4th Cir. 2009) (per curiam) (quoting
Orpiano v. Johnson, 687 F.2d 44, 47 (4th Cir. 1982)).

In the absence

of a valid and timely objection, the court must “only satisfy itself
that there is no clear error on the face of the record in order to
accept the recommendation.”

Diamond v. Colonial Life & Accident

Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005) (quoting Fed. R. Civ.
P. 72 advisory committee note).

“A finding is clearly erroneous

when, although there is evidence to support it, on the entire evidence
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the reviewing court is left with the definite and firm conviction
that a mistake has been committed.”

Faulconer v. C.I.R., 748 F.2d

890, 895 (4th Cir. 1984) (citing United States v. United States Gypsum
Co., 333 U.S. 364, 395 (1948)).

If new evidence is raised in the

objections, the court has the authority to receive it, reject it,
or recommit the matter to the Magistrate Judge.

See 28 U.S.C.

§ 636(b)(1).
The court has applied these standards to the myriad objections
filed by the parties.

To the extent new evidence has been offered

which was not put before the Magistrate Judge, the court in its
discretion declines to consider it at this stage.

Doe v. Chao, 306

F.3d 170, 183 & n.9 (4th Cir. 2002).
After

careful

consideration,

the

court

finds

that

its

conclusions are largely in accord with the thorough Recommendation
of the Magistrate Judge.

Except as otherwise noted below, the

objections

overruled

are

therefore

and

the

Recommendation

is

ADOPTED, except as modified by the rulings that follow.
IT IS ORDERED that Plaintiffs’ Motion to Strike and for
Sanctions (Doc. 94) is granted in part and denied in part.

Whether

treating the motion as one to strike or as objections under Federal
Rule of Civil Procedure 56(c)(2), the court declines to consider the
affidavits of Defendants Rhonda Byrd (Doc. 77) and Charles Washington
(Doc. 88) in deciding the relevant summary judgment motions.
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The

request to strike or disregard SCB’s Motion for Summary Judgment
(Doc. 72) is denied.
IT IS FURTHER ORDERED that Defendant John Washington’s Motion
for Summary Judgment (Doc. 70) is granted in part and denied in part.
Judgment shall be entered as a matter of law against Plaintiffs on
their fraud and RICO claims against John Washington.

The court

refrains from taking action on any other bases of liability not
specifically addressed by John Washington in his briefing.
IT IS FURTHER ORDERED that Defendant Quincy Washington’s Motion
for Summary Judgment (Doc. 74) is granted in part and denied in part.
Judgment shall be entered as a matter of law against Plaintiffs on
their breach of fiduciary duty and fraud claims against Quincy
Washington, on their RICO claims against all Defendants, and on all
claims by all Plaintiffs other than La Casa Real Estate and
Investment, LLC (“La Casa”) and Bobby G. Slate against Quincy
Washington.

Quincy Washington’s Motion for Summary Judgment as to

the negligence claims of Plaintiff Bobby G. Slate is granted 1 and as

1

Quincy Washington argues that summary judgment should be entered in his
favor as to all of Plaintiff Bobby G. Slate’s claims against him. (Doc.
151 at 2.) As to the negligence claim, the court agrees and, as noted,
grants summary judgment on that claim. The Magistrate Judge found that
“the record contains no evidence that SCB acted negligently on accounts
owned by Slate or any other Plaintiff entities.” (Doc. 143 at 47.) For
this same reason, there is no evidence that SCB’s employee, Quincy
Washington, owed any duty to Bobby G. Slate. However, Quincy Washington
has not addressed in his objections Plaintiffs’ argument that he may be
liable to Bobby G. Slate on other asserted bases. Therefore, the court
will not address this argument at this stage, leaving Quincy Washington

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to Plaintiff La Casa is denied, provided that such damages shall be
subject to the limitations of N.C. Gen. Stat. § 25-4-406(f) and shall
be limited to those damages for which La Casa gave timely notice as
to statements SCB made available to La Casa but in no case may include
any damages incurred prior to May 2007.

Quincy Washington’s Motion

for Summary Judgment as to claims by Plaintiffs La Casa and Bobby
G. Slate for conversion (on a civil conspiracy theory) and fraudulent
concealment is denied, and the provisions of N.C. Gen. Stat.
§ 25-4-406(f) shall not apply to those claims. 2
IT IS FURTHER ORDERED that Defendant SCB’s Motion for Summary
Judgment (Doc. 72) is granted in part and denied in part.

Judgment

shall be entered as a matter of law against Plaintiffs on their claims
against SCB based on RICO, fraud, and breach of fiduciary duty, as

to raise any further arguments as to Bobby G. Slate’s claims before the
trial court at the appropriate time.
2

SCB argues that claims by Plaintiffs La Casa and Bobby G. Slate for
conversion (based on a civil conspiracy theory) and fraudulent concealment
should also be subject to the limitations of N.C. Gen. Stat. § 25-4-406,
citing multiple cases. (Doc. 152 at 1-5.) The authority SCB cites does
not involve the scenario alleged here, where an employee of the financial
institution is alleged to have been a part of the scheme to defraud the
customer. Therefore, insofar as Plaintiffs allege that Quincy Washington
was at all relevant times part of the scheme to defraud La Casa, the bank
customer, and further was aware that the bank’s statements were being sent
to his co-conspirator at the customer under circumstances such that any
notice contemplated by the statute would be ineffective, the court
concludes that the bank should not be able to avail itself of the statutory
provision for purposes of summary judgment. Cf. APCOA, Inc. v. Fidelity
Nat’l Bank, 703 F. Supp. 1553, 1562 (N.D. Ga. 1988) (holding that bank could
not avail itself of the statute’s protection where it did not give notice
to the bank customer). To this extent, therefore, SCB’s objection is
overruled.

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well as on all claims against SCB by Plaintiffs other than La Casa.
Judgment shall be entered as a matter of law against Plaintiffs as
to any request for damages occurring from unauthorized payments made
more than one year before La Casa brought unauthorized account
activity to the attention of SCB pursuant to N.C. Gen. Stat.
§ 25-4-406 and in no event before May 2007 (except that any damages
arising from any respondeat superior liability in connection with
Plaintiffs’

claims

against

Quincy

Washington

for

fraudulent

concealment and/or conspiracy to commit conversion shall not be
limited by N.C. Gen. Stat. § 25-4-406), for punitive damages against
SCB, for damages occurring before SCB began doing business with La
Casa, and for lost profit damages as to all Defendants.

Thus, La

Casa may maintain claims against SCB for fraudulent concealment and
conspiracy to commit conversion on a respondeat superior theory,
negligence on a respondeat superior theory and as to the handling
the La Casa account.
IT IS FURTHER ORDERED that Plaintiffs’ Motion for Summary
Judgment

(Doc.

81)

is

granted

in

part

and

denied

in

part.

Plaintiffs’ motion for summary judgment on their fraudulent transfer
(or previously addressed RICO) claims against Rhonda Byrd, Charles
Washington, and the corporate Defendants is denied.

Judgment shall

be entered as a matter of law as to liability against Charles
Washington

on

Plaintiffs’

claims
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for

conversion,

fraud,

and

fraudulent concealment, in addition to liability as a co-conspirator
on all of those same claims (excepting the claims relating to the
jewelry and payroll conversion) against Rhonda Byrd.

Plaintiffs’

Motion for Summary Judgment against Rhonda Byrd on Plaintiffs’ claims
of

conversion,

fraud,

fraudulent

concealment,

and

breach

of

fiduciary duty is denied, and those claims shall proceed to trial
for resolution, subject to proof of statute of limitations issues.
Judgment shall be entered as a matter of law in favor of Plaintiffs
on Rhonda Byrd and Charles Washington’s counterclaim for intentional
infliction of emotional distress.
Because no party has contended that a separate judgment should
issue as to any claim or party at this time, the court refrains from
entering a separate partial judgment.

/s/
Thomas D. Schroeder
United States District Judge

June 10, 2013

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