Miller v. Ruth's of North Carolina, Inc.
Miller v. Ruth's of North Carolina, Inc.
Opinion of the Court
Plaintiff contends that the court erred in denying his request for attorneys’ fees under G.S. 55-55(d), which provides that a court “may award” a successful plaintiff in a shareholders’ derivative action “the reasonable expenses of maintaining the action, including reasonable attorneys’ fees. . . .”
Four years later, after extensive discovery litigation, plaintiff moved to amend his complaint. He sought in essence to reallege his case in two claims, one derivatively as a shareholder and one in his individual capacity. He requested extensive relief on behalf of Ruth’s, as well as again asking for individual relief. The court denied the motion,
Plaintiff also alleges error in the court’s refusal to award him attorneys’ fees as a discovery sanction pursuant to G.S. § 1A-1, Rule 37. His motions were, however, granted in part and denied in part; he has not shown that the court abused its discretion in apportioning costs. This assignment is also without merit.
Affirmed.
. Plaintiff does not assign error to this ruling on this appeal. Even if he had, we do not believe that it amounted to an abuse of discretion. See Flores v. Caldwell, 14 N.C. App. 144, 187 S.E. 2d 377 (1972). Nor is there any indication that plaintiff was unjustly deprived of any right to relief by the court’s order.
. See note 1, supra.
. The corporation must be joined as a party; this condition was met here as to both Ruth’s corporations.
Concurring Opinion
concurring.
I concur in the majority’s decision to affirm the order of the trial court denying plaintiffs request for attorneys’ fees. How
A stockholder may maintain an action in behalf of a corporation against the corporate officers for acting against the interest of the corporation only where he alleges that he has exhausted reasonable efforts to obtain relief within the corporate management or where it appears that efforts to obtain such relief would be to no avail. Hill v. Erwin Mills, Inc., 239 N.C. 437, 80 S.E. 2d 358 (1954). See 3 Strong’s N.C. Index 3d, Corporations § 6 (1976).
In the case at bar, plaintiff alleged in his complaint that he was unable to obtain relief from defendants, despite his persistent efforts. Moreover, he specifically asked for relief for the Ruth’s corporations. It is clear that the corporations were injured by the acts of defendants. Therefore, although the judgment awarding damages does appear to resemble an individual recovery in some respects, the totality of the evidence indicates that this action is in fact a derivative action, brought on behalf of the corporation. G.S. 55-55(d) is, therefore, applicable.
The provision in G.S. 55-55(d) that “the court may award” reasonable attorneys’ fees clearly leaves that decision to the discretion of the trial judge. A finding that the judge erred in denying a request for attorneys’ fees would, therefore, require the complaining party to show an abuse of that discretion. After a careful examination of the record on appeal, it cannot be found that the trial court abused its discretion in denying plaintiffs motion.
In its order directing defendants to purchase plaintiffs interest in the Ruth’s corporations, the court found the following instances of bad faith on the part of defendants: 1) payment of
Although there is no hard and fast rule as to what constitutes an abuse of discretion, the view is generally taken that any party seeking such a finding has a substantial hurdle to overcome. The general rule in this state is that “the action of the trial court as to matters within its judicial discretion will not be disturbed unless there is a clear abuse thereof; or, as it is frequently stated, the appellate court will not review the discretion of the trial court.” Meiselman v. Meiselman, 58 N.C. App. 758, 768-69, 295 S.E. 2d 249, 256 (1982). In the case at bar, the order of the court denying attorneys’ fees states “[t]hat the Motion by the plaintiffs for the allowance of attorney’s fees to the plaintiff is in the discretion of the court denied.” Although the trial judge did not detail his reasons for denying plaintiff s request for attorneys’ fees, the record suggests several possibilities.
Plaintiff contends that defendants were uncooperative during discovery, causing delay and added expense. The record shows, however, that plaintiff himself may have contributed to any delay which occurred, particularly by filing a petition for cancellation of the Ruth’s trademark with the Trademark Office Trial and Appeals Board. The action remained with that board for some three years before it was ultimately decided that plaintiff lacked standing for such an appeal.
Reference
- Full Case Name
- Thomas E. Miller v. Ruth’s of North Carolina, Inc., Ruth’s of South Carolina, Inc., B & H Foods, Inc., B & H, Inc. of Chester, Frances June Griffin, and Robert Griffin
- Cited By
- 7 cases
- Status
- Published