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Manufacturing evidence, pleading the Fifth in bad faith result in harsh sanctions

June 16, 2022-A Superior Court judge in Chatham County on Thursday handed down the harshest penalty available in a civil case for discovery violations that included withholding and manufacturing evidence.

Reiss & Nutt represents the longtime friend of an elderly man who was 88 when three people moved onto his property in 2017.  The friend, who also is acting on the victim's behalf, alleges the trio closed the curtains in the elderly veteran's home, set up video cameras, and discouraged family and friends from being alone with him.  Within weeks, the victim had signed deeds and other instruments meant to give the trio ownership of his substantial real estate and control over his business and other worldly possessions.

The elderly man’s friend sought legal help to stop what he believed was an influence campaign to take the property. 

“This order sends a message that committing discovery violations comes with severe consequences,” attorney W. Cory Reiss said.

The order strikes the defendants’ answers to the claims against them, resulting in default.  If it stands, the only remaining issues would be on damages owed to the elderly man and his friend for claims of undue influence, conversion, racketeering, and other civil violations.

The three defendants at first refused to testify, citing their Fifth Amendment right not to incriminate themselves.  But just before trial in 2021, one defendant, an active-duty military police officer in the U.S. Marine Corps, volunteered his own testimony and admitted that refusing to testify earlier was meant to let the defendants see the evidence in the case before deciding whether to answer questions in a deposition.  The judge held they pled the Fifth in bad faith, violating the rules of discovery.

The Marine also admitted he had taken photographs of the elderly victim’s residence after the lawsuit began and produced them in discovery as if they had been taken more than a year earlier.  He had used them in his testimony to support his defense that the trio had moved onto the property for the elderly man’s welfare, not to enrich themselves.  Reiss & Nutt found clues in the photographs that revealed they could not have been taken at the time the defendants asserted.  The defendants also were found to have withheld material evidence for years until the eve of trial. 

The judge decided that combined, the discovery violations warranted the most severe sanction available.  The judge had previously dismissed a claim by the Marine seeking title to the victim’s real estate, which is on appeal.

Thanks to his friend’s efforts, however, the elderly victim has been free of influence since a court ordered the defendants off his land in 2019, and he is mending relationships severed during their occupation of his home.

Judge kicks retaliatory discharge claims

June 7, 2022-A Superior Court judge dismissed claims for retaliatory discharge and wrongful termination by a former employee against his employer because the employee did not complain to anyone that he believed his legal rights had been violated.

The employer, represented by Reiss & Nutt, contended the employee’s mere complaint to a supervisor that he was owed commissions that had not been paid did not constitute a protected activity for which his termination could be considered retaliatory under the N.C. Retaliatory Employment Discrimination Act or, based on the same allegations, a violation of public policy against wrongful discharge.  REDA covers initiation of an investigation, or a specific threat to initiate an investigation, of a wage and hour violation to someone other than an immediate supervisor, such as a government agency or the employer’s human resources department.

The Court agreed that simply pointing out to a supervisor that money is owed does not suffice.  When the employee was later terminated, he alleged it might be connected to his request to be paid, but even if true that would not make it retaliatory and a violation of state law.

Delay cuts fish market loose from contract claims

February 8, 2022-A Superior Court judge ruled Monday that a commercial property owner waited too long to bring claims against a fish market that gave advance notice it would break its lease.

The Court dismissed the landlord’s case, highlighting the danger that statutes of limitations can pose for a party sitting on his rights.

In early June of 2018, the tenant, Wilmington’s Ronnie’s Crab Shack, Inc., and its landlord, The Other Company, LLC, agreed in writing that Ronnie’s would terminate its lease as of the first of July, which was more than a year before the lease term was to end.

Apparently, the landlord had a change of heart.  Three years and nearly one month after signing that notice of termination, the landlord sued Ronnie’s on the theory that the three-year statute of limitations didn’t begin to run until Ronnie’s vacated the premises.  Reiss & Nutt, representing Ronnie’s, moved to dismiss the case on the grounds that the statute began to run when the landlord received notice that Ronnie’s did not intend to honor the lease term.

“The Defendants clearly repudiated this contract,” W. Cory Reiss said.

"Anticipatory repudiation" of a contract occurs when one party unequivocally informs the other party that it cannot or will not abide by the contract.  Such advance notice of a breach may start the statute of limitations clock, which requires a breach of contract claim to be filed within three years. 

In this case, the landlord filed its action more than three years after receiving notice that the lease would terminate early, which was when the statute of limitations began to run rather than when the landlord contended it regained possession of the property.

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