219 N.C. App. 1
N.C. Ct. App.2012Background
- Plaintiffs, Greensboro Police officers, allege that Taylor and various related entities edited and marketed a DVD that falsely portrayed his arrest, damaging plaintiffs' reputations and careers.
- The DVD Stop Snitchin Stop Lyin, in which Bungalo Records participated, served as the core vehicle for defamation, appropriation, and unfair/deceptive practices claims.
- Bungalo was served in 2006; it defaulted in 2007 and the default was not set aside; discovery and related proceedings followed, with post-default liability alleged against Bungalo.
- A bench damages trial in 2010 awarded plaintiffs $1,000,000 each in compensatory damages and $2,000,000 each in punitive damages against Taylor and others; Bungalo later faced separate damages scrutiny.
- Taylor did not appear at trial or respond to certain admissions, leading to Rule 36 admissions being deemed conclusive for purposes of damages and liability.
- On appeal, the court affirmed in part, vacated in part, and remanded to address proper punitive-damages proof and to correct the Bungalo punitive-damages ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness and conduct at the summary judgment hearing | Taylor waived objections by nonappearance; timely service supported summary judgment. | Motion was untimely under scheduling order. | Waived; summary judgment proper against Taylor. |
| Sufficiency of evidence for summary judgment aided by Rule 36 admissions | Taylor admitted elements of defamation per se, appropriation, and unfair/deceptive practices. | Admissions were not properly used to support summary judgment. | Admissions conclusively supported summary judgment on all three claims. |
| Damages: sufficiency of compensatory damages and reliance on admissions | Damages supported by admitted facts and evidence of harm and profits. | Damages insufficient or improperly calculated. | Compensatory damages reasonable; admissions used to establish harm; no error found in the amount at issue. |
| Punitive damages against Taylor: sufficiency of aggravating factor and standard of proof | Admissions prove aggravating malice; ex ante evidence supports punitive award. | Need clear and convincing evidence; findings not explicit on standard. | Remand to confirm whether aggravating factor was proven by clear and convincing evidence. |
| Punitive damages against Bungalo: improper use of co-defendants' profits and need for new trial | Default admitted Bungalo's role; profits and ability to pay may be considered as to Bungalo. | Wrong to rely on co-defendants' profits; discovery failure. | Vacate Bungalo punitive damages and remand for new trial on that issue; use only Bungalo-specific evidence. |
| Entry of default and denial of set aside | Default established liability; damages trial valid. | Default should have been set aside for good cause. | No abuse of discretion; default upheld. |
Key Cases Cited
- Goins v. Puleo, 350 N.C.277 (1999) (Rule 36 admissions can support summary judgment)
- Roth v. News Co., 217 N.C.13 (1940) (damages for defamation include injury to reputation)
- Ausley v. Bishop, 150 N.C.App.56 (2002) (Rule 9(k) particularity satisfied by defamation per se pleading)
- Spartan Leasing v. Pollard, 101 N.C.App.450 (1991) (entry of default precludes merits defense; findings/amounts may be contested)
- Old Salem Foreign Car Serv., Inc. v. Webb, 159 N.C.App.93 (2003) (abuse of discretion standard for setting aside default)
- Hinnant v. Philips, 184 N.C.App.241 (2007) (bench-trial damages standard; review for competent evidence)
- Richardson v. Bank of Am., N.A., 182 N.C.App.531 (2007) (damages measure for unfair/deceptive practices)