Wilson v. Pershing, LLC
253 N.C. App. 643
| N.C. Ct. App. | 2017Background
- Plaintiff Richard C. Wilson deposited $250,000 into an Ipswich Security Account (1996) as part of tax planning; funds were held for his benefit and managed by Centura/Centura Securities.
- A certified check for $250,000 dated October 23, 1998 (marked “void after 180 days”) was later found by Wilson in 2013 among stored Ipswich records; the account was closed in July 1999.
- Wilson alleged the funds were secretly transferred in 1999 and sued Pershing, BNY Mellon, JBS Liberty, Synergy, JBS Group, RBC Capital Markets, PNC, and a John Doe (May 2015) asserting breach of fiduciary duty, constructive fraud, fraud, unjust enrichment, breach of contract, UDTP, and civil conspiracy.
- Defendants moved to dismiss under Rules 12(b)(1), (4), and (6). At a November 2, 2015 hearing Wilson filed an amended complaint minutes before proceedings; the court heard defendants’ oral motions, permitted the amendment, and dismissed claims.
- The trial court dismissed all claims as time-barred; separate Rule 12(b)(1) dismissals for lack of standing were entered against Pershing, BNY Mellon, PNC, and RBCCMC; fraud claims against some defendants were also dismissed for lack of particularity.
- On appeal, Wilson preserved only challenges to dismissal of breach of fiduciary duty, constructive fraud, and fraud against Synergy and JBS Liberty; the Court of Appeals affirmed dismissal, holding the claims were barred by the applicable statutes of limitations and that Wilson failed to plead he exercised due diligence to discover the alleged wrongs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court abused discretion by refusing to continue Nov. 2, 2015 hearing | Wilson: amended complaint filed minutes before hearing rendered motions to dismiss moot and required continuance | Defendants: prepared to proceed; also moved to dismiss the amended complaint orally | Court: No review—issue abandoned on appeal (failure to brief standard of review) |
| Whether plaintiffs have standing to sue Pershing, BNY Mellon, PNC, RBCCMC | Wilson: challenges standing dismissal (argued in reply) | Defendants: moved under Rule 12(b)(1) that Wilson lacks standing | Court: Standing issue abandoned on appeal; dismissals under 12(b)(1) left undisturbed |
| Whether breach of fiduciary duty/constructive fraud/fraud claims against Synergy and JBS Liberty are time-barred | Wilson: limitations did not run until discovery in 2013; alleged reliance on "trusted advisors" deterred discovery | Defendants: acts occurred by 1999; plaintiff had capacity and opportunity to discover earlier; statute of limitations expired | Court: Claims barred. As a matter of law plaintiff failed to exercise due diligence; statute of limitations bars claims |
| Whether fraud and constructive fraud were pleaded with requisite particularity under Rule 9(b) | Wilson: alleged concealment and concealment delayed discovery; pleadings sufficient | Defendants: failed to plead specific acts, dates, or who made representations; conclusory allegations insufficient | Court: Fraud and constructive fraud claims dismissed for failure to plead with required particularity and as time-barred |
Key Cases Cited
- Morin v. Sharp, 144 N.C. App. 369 (N.C. Ct. App.) (standard of review for continuance is abuse of discretion)
- Watters v. Parrish, 252 N.C. 787 (N.C.) (trial courts have inherent power to control docket and proceedings)
- Houston v. Tillman, 234 N.C. App. 691 (N.C. Ct. App.) (amendment accepted by court can render prior motion to dismiss moot)
- Coley v. State, 360 N.C. 493 (N.C.) (Rule 12(b)(6) review: sufficiency of pleadings under some legal theory)
- Sutton v. Duke, 277 N.C. 94 (N.C.) (well-pleaded allegations taken as true on Rule 12(b)(6) review)
- Strickland v. Hedrick, 194 N.C. App. 1 (N.C. Ct. App.) (courts need not accept conclusory allegations)
- Birtha v. Stonemor, N. Carolina, LLC, 220 N.C. App. 286 (N.C. Ct. App.) (statute of limitations may be raised on Rule 12(b)(6) if apparent on face of complaint)
- Vail v. Vail, 233 N.C. 109 (N.C.) (trust/confidence may excuse duty to inquire until something excites suspicion)