{
  "id": 8377985,
  "name": "DON SETLIFF & ASSOCIATES, INC., Plaintiff v. SUBWAY REAL ESTATE CORP., Defendant",
  "name_abbreviation": "Don Setliff & Associates, Inc. v. Subway Real Estate Corp.",
  "decision_date": "2006-07-05",
  "docket_number": "No. COA05-1423",
  "first_page": "385",
  "last_page": "388",
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  "last_updated": "2023-07-14T17:18:34.747306+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
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  "casebody": {
    "judges": [
      "Judges GEER and STEPHENS concur."
    ],
    "parties": [
      "DON SETLIFF & ASSOCIATES, INC., Plaintiff v. SUBWAY REAL ESTATE CORP., Defendant"
    ],
    "opinions": [
      {
        "text": "WYNN, Judge.\n\u201cThere are no required pleadings in assigned small claim actions other than the complaint.\u201d Here, Plaintiff contends that Defendant waived its affirmative defense of estoppel because it was not pled in accordance with North Carolina Rule of Civil Procedure 8(c) upon appeal from small claims court to the district court for a trial de novo. Because no affirmative defenses are required to be pled in small claims court, and a district court judge may try the case on the pleadings filed, we hold that Defendant did not waive its affirmative defense by failing to plead it.\nIn January 1996, Plaintiff Don Setliff & Associates, Inc., leased to Defendant Subway Real Estate Corporation the premises of 121 East Main Street, Jamestown, North Carolina, by terms of a written lease. On 14 February 2005, Setliff, Inc. filed a Complaint in Summary Ejectment in small claims court alleging that Subway Real Estate breached the lease by failing to pay any real estate taxes or special assessments. Following trial in small claims court, on 24 March 2005, the magistrate found that Subway Real Estate breached the lease by failing to pay taxes and ordered Subway Real Estate removed from the premises.\nOn 29 March 2005, Subway Real Estate gave notice of appeal to the district court. Following a trial de novo, District Court Judge Thomas G. Foster, Jr., found and concluded that Subway Real Estate breached the lease and was indebted to Setliff, Inc. for $13,789.98, the amount of past due taxes, and that Setliff,.Inc. was estopped to assert Subway\u2019s failure to pay taxes as a basis for termination of .the lease and ejectment. Setliff, Inc. appeals.\nOn appeal, Setliff, Inc. argues that the trial court erred in concluding that it was estopped from asserting Subway Real Estate\u2019s failure to pay taxes as a breach of the lease agreement, because Subway Real Estate never pled estoppel as a defense pursuant to North Carolina Rule of Civil Procedure 8(c). We disagree.\nRule 8(c) requires parties asserting an affirmative defense, i.e., estoppel, to plead the defense in order to assert it at trial. N.C. Gen. Stat. \u00a7 1A-1, Rule 8(c) (2005). However, section 7A-220 of the North Carolina General Statutes provides that: \u201cThere are no required pleadings in assigned small claim actions other than the complaint. Answers and counterclaims may be filed by the defendant in accordance with G.S. 7A-218 and G.S. 7A-219. Any new matter pleaded in avoidance in the answer is deemed denied or avoided.\u201d N.C. Gen. Stat. \u00a7 JA-220. Further, section 7A-218 provides in pertinent part: \u201cFailure of defendant to file a written answer after being subjected to the jurisdiction of the court over his person constitutes a general denial.\u201d N.C. Gen. Stat. \u00a7 7A-218 (2005). Accordingly, Subway Real Estate was not required to file an answer in small claims court in order to preserve its defense of estoppel for the de novo trial in district court. See Aldridge v. Mayfield, 2004 N.C. App. LEXIS 1109, *9-10 (COA03-1006) (filed 15 June 2004) (unpublished) (\u201c[Defendants were not required to file a pleading that asserted the defense of res judicata in small claims court to preserve the issue for the district court.\u201d).\nNonetheless, Setliff, Inc. argues that although Subway Real Estate was not required to file an answer in small claims court, in order to try the issue of estoppel in district court, Subway Real Estate had to plead the defense in accordance with Rule 8(c) of the North Carolina Rules of Civil Procedure. Upon appeal from small claims court to district court, \u201c[t]he district judge before whom the action is tried may order repleading or further pleading by some or all of the parties; may try the action on stipulation as to the issue; or may try it on the pleadings as filed.\u201d N.C. Gen. Stat. \u00a7 7A-229 (emphasis added). This statute gives discretion to the trial court as to whether further pleadings are needed or to try the case on the pleadings filed in small claims court, of which no answer is required, including a pleading of affirmative defenses. While Rule 8(c) does require affirmative defenses to be pled for cases arising in the superior or district courts, section 7A-218 allows for general denials for cases arising in small claims court. Section 7A-229 then gives discretion to the trial court whether, upon appeal to the district court for a trial de novo, to allow more pleadings beyond those filed in small claims court or to proceed in district court on the existing pleadings. However, a defendant has not waived an affirmative defense because the trial court, in its discretion, did not allow for further pleadings upon appeal to the district court. See N.C. Gen. Stat. \u00a7 7A-229.\nSetliff, Inc. cites to Jones v. Ratley, 168 N.C. App. 126, 607 S.E.2d 38 (Tyson, J., dissenting), rev\u2019d per curium, 360 N.C. 50, 619 S.E.2d 504 (2005), in support of its contention that upon appeal to the district court the North Carolina Rules of Civil Procedure \u201cfully apply.\u201d The dissent adopted by our Supreme Court without further opinion, held that upon appeal to the district-court from small claims court, the district court judge was required to make adequate findings of fact and state the basis for its conclusion of the law to support its judgment. Id. at 134, 607 S.E.2d at 43. Jones addressed the requirements of the district court\u2019s judgments, not pleadings in the district court. Therefore, Jones is inapplicable to this c\u00e1se.\nAccordingly, as Subway Real Estate was not required to plead its affirmative defense in small claims court and the district court tried the case on the pleadings as filed, Subway Real Estate did not waive its affirmative defense of estoppel. Therefore, the trial court did not err in considering the estoppel defense.\nAffirmed.\nJudges GEER and STEPHENS concur.\n. N.C. Gen. Stat. \u00a7 7A-220 (2005).\n. N.C. Gen. Stat. \u00a7 7A-229 (2005).\n. The amount listed in the facts and conclusions of law is $13,789.98, but the trial court then ordered payment in the amount of $13,798.98. This appears to be a scrivener\u2019s error on the part of the trial court and there is no dispute on appeal of the amount of payment.",
        "type": "majority",
        "author": "WYNN, Judge."
      }
    ],
    "attorneys": [
      "Wyatt Early Harris Wheeler, LLP, by Stanley F. Hammer, for plaintiff-appellant.",
      "Norman L. Sloan for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "DON SETLIFF & ASSOCIATES, INC., Plaintiff v. SUBWAY REAL ESTATE CORP., Defendant\nNo. COA05-1423\n(Filed 5 July 2006)\nSmall Claims\u2014 appeal to district court \u2014 estoppel defense\u2014 failure to plead \u2014 no waiver\nDefendant did not waive its affirmative defense of estoppel because it was not pled in accordance with N.C.G.S. \u00a7 1A-1, Rule 8(c) upon appeal from small claims court to the district court for a trial de novo because no affirmative defenses are required to be pled in small claims court, N.C.G.S. \u00a7 7A-220, and a district court judge may try the case on the pleadings filed, N.C.G.S. \u00a7 7A-229.\nAppeal by Plaintiff from judgment entered 15 July 2005 by Judge Thomas G. Foster, Jr. in District Court, Guilford County. Heard in the Court of Appeals 6 June 2006.\nWyatt Early Harris Wheeler, LLP, by Stanley F. Hammer, for plaintiff-appellant.\nNorman L. Sloan for defendant-appellee."
  },
  "file_name": "0385-01",
  "first_page_order": 417,
  "last_page_order": 420
}
