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State of North Carolina v. Stockton5/19/1998
ation received during his representation of ILA to assist in the defense of Peterson and Shugart.
To state a claim against an attorney representing a client adversely against a former client, "the past client must show more than the potential for misconduct." 2 Mallen & Smith, § 16.23 at 484.
A cause of action is not established merely by showing that the attorney had access to confidential information or that the representation was adverse. The former client must establish not only that the attorney possessed and misused the client's confidences, but also that the fiduciary breach was a proximate cause of the injury .
Id.; see also Watts v. Cumberland County Hosp. System, 75 N.C. App. 1, 9-10, 330 S.E.2d 242, 247-50 (1985), rev'd on other grounds, 317 N.C. 321, 345 S.E.2d 201 (1986)(discussing malpractice action for breach of confidentiality by health care providers).
Plaintiff's complaint herein merely alleged Iseman, in undertaking to represent Peterson and Shugart, was "presumably" drawing upon information gained from his past representation of ILA. As such, plaintiff alleged only the "potential for misconduct," and failed to state a cause of action. The trial court therefore did not err in granting defendants' motion as to plaintiff's breach of the duty of loyalty claim against Iseman.
In sum, plaintiff's claims set out in Counts I and III are barred by the applicable statute of limitations and/or statute of repose. Further, plaintiff's assertions of fraud in Count II and "breach of duty of loyalty" on the part of Iseman in Count IV fail to state a claim. Accordingly, the trial court's grant of defendants' Rule 12(b)(6) motion is affirmed.
Affirmed.
Judge GREENE concurs with separate opinion.
Judge WALKER concurs. =======================
GREENE, Judge, Concurring with separate opinion.
I concur with the majority, but write separately to explain why I believe that Count III of the plaintiff's complaint, which the plaintiff denominates as a claim for facilitating fraud, merely states a claim for negligence.
A claim for relief should "state enough to give the substantive elements of claim." Sutton v. Duke, 277 N.C. 94, 105, 176 S.E.2d 161, 167 (1970); W. Brian Howell, Shuford on North Carolina Civil Procedure § 9-3 (4th ed. 1992) (noting that Rule 9(b) requires the essential elements of fraud to be set forth affirmatively in the complaint); see also N.C.G.S. § 1A-1, Rule 9(b) (Supp. 1997) (requiring all fraud claims to be stated with particularity). An essential element of facilitating fraud is that the defendant and a third party agreed to defraud the plaintiff. Nye v. Oates, 96 N.C. App. 343, 346-47, 385 S.E.2d 529, 531 (1989) (" ur law . . . permits one defrauded to recover from anyone who facilitated the fraud by agreeing for it to be accomplished." (emphasis added)).
In this case, the plaintiff's complaint alleges that the defendants "assisted, . . . facilitated, aided and abetted" Peterson and others in actions which the defendants "knew" would harm ILA, an entity which the defendants also represented, and that the defendants "intentionally did not advise ILA" of these actions. These allegations do not, however, state that the defendants agreed to defraud ILA, or that they had a "meeting of the minds" with Peterson or others to defraud ILA. See Black's Law Dictionary 67 (6th ed. 1990) (defining "agreement" as a "meeting of two or more minds; a coming together in opinion or determination; . . . concord of understanding and intention between . . . parties with respect to . . . future facts or performances"). As the plaintiff's complaint does n
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