{ "id": 4221130, "name": "BOBBY E. MCKINNON, Plaintiff v. CV INDUSTRIES, INC., Defendant", "name_abbreviation": "McKinnon v. CV Industries, Inc.", "decision_date": "2013-07-02", "docket_number": "No. COA12-1165", "first_page": "190", "last_page": "202", "citations": [ { "type": "official", "cite": "228 N.C. App. 190" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "643 S.E.2d 586", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12638099 ], "year": 2007, "opinion_index": 0, "case_paths": [ "/se2d/643/0586-01" ] }, { "cite": "637 S.E.2d 230", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12637241 ], "weight": 2, "year": 2006, "pin_cites": [ { "page": "237" }, { "page": "237" } ], "opinion_index": 0, "case_paths": [ "/se2d/637/0230-01" ] }, { "cite": "658 S.E.2d 513", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12640648 ], "weight": 2, "year": 2008, "pin_cites": [ { "page": "519", "parenthetical": "\"The standard for awarding attorney's fees under N.C. Gen. 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App.", "case_ids": [ 8527893 ], "year": 1994, "pin_cites": [ { "page": "635" } ], "opinion_index": 0, "case_paths": [ "/nc-app/114/0632-01" ] }, { "cite": "698 S.E.2d 112", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2010, "pin_cites": [ { "page": "117" } ], "opinion_index": 0 }, { "cite": "206 N.C. App. 67", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4178052 ], "year": 2010, "pin_cites": [ { "page": "71" } ], "opinion_index": 0, "case_paths": [ "/nc-app/206/0067-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 6-21.5", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 9, "opinion_index": 0 }, { "cite": "718 S.E.2d 376", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2011, "opinion_index": 0 }, { "cite": "365 N.C. 353", "category": "reporters:state", "reporter": "N.C.", "year": 2011, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 75-1.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "parenthetical": "\"Chapter 75\"" } ], "opinion_index": 0 }, { "cite": "713 S.E.2d 495", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 11, "year": 2011, "pin_cites": [ { "parenthetical": "\"McKinnon I\"" }, { "page": "498" }, { "page": "499" }, { "page": "500" }, { "page": "501" }, { "page": "502" }, { "page": "502" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 1118, "char_count": 31307, "ocr_confidence": 0.714, "pagerank": { "raw": 1.1023943013083425e-07, "percentile": 0.5686887536686501 }, "sha256": "1e97ce6081b53bf0630388fd964a6ce3b75fee8c1ee780b647b3ebd1fe03f167", "simhash": "1:ae0bd624f6594d74", "word_count": 5085 }, "last_updated": "2023-07-14T22:18:27.138557+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUNTER and McCULLOUGH concur." ], "parties": [ "BOBBY E. MCKINNON, Plaintiff v. CV INDUSTRIES, INC., Defendant" ], "opinions": [ { "text": "DAVIS, Judge.\nPlaintiff Bobby E. McKinnon (\u201cplaintiff\u2019 or .\u201cMcKinnon\u201d) appeals from the trial court\u2019s order denying his motion for attorney\u2019s fees and awarding attorney\u2019s fees and costs to defendant CV Industries, Inc. (\u201cdefendant\u201d or \u201cCVI\u201d). Defendant cross-appeals. After careful review, we affirm in part and remand in part.\nFactual Background\nThis case is before this Court for the second time. The facts surrounding this action are set out more fully in McKinnon v. CV Indus., Inc., _N.C. App._, 713 S.E.2d 495 (2011) (\u201cMcKinnon I\u201d) but are summarized in pertinent part as follows:\nCVI is a holding company comprised of Century Furniture, LLC (\u201cCentury\u201d) and Valdese Weavers, LLC (\u201cValdese\u201d). Plaintiff is a former employee of CVI. He became president of Valdese in 1978 and continued in various managerial and executive capacities for CVI and its subsidiaries throughout his career. Plaintiff was serving as the president and CEO of CVI in 2000 when he announced his decision to resign in order to pursue a career opportunity at Joan Fabrics and Mastercraft.\nAfter plaintiff announced his resignation, plaintiff and CVI negotiated a severance agreement entitling plaintiff to benefits from certain incentive plans that he had obtained throughout the course of his employment with CVI. Plan A of the severance agreement provided plaintiff with a type of benefits known as shadow equity benefits \u201conce he disengaged from continuous competition with CVI, as long as CVTs ESOP [Employee Stock Ownership Program] stock price exceeded its 31 December 1999 price of $9.90 per share [on the date plaintiff stopped competing with CVI].\u201d McKinnon I,_N.C. App. at_, 713 S.E.2d at 498.\nThe severance agreement also required plaintiff to refrain from acquiring the patents or research of Frank Land (\u201cLand\u201d), who was developing a fire-resistant yam funded by Valdese. When Valdese discontinued funding for Land\u2019s research in October 2001, Land approached plaintiff about a potential joint business venture. Plaintiff requested \u2014 and obtained \u2014 a letter from CVI dated 20 November 2001 releasing him from his agreement to refrain from acquiring Land\u2019s patents or research. He then resigned from his position to begin a joint venture with Land in late 2001.\nOn 23 June 2008, plaintiff notified defendant that he intended to withdraw from continuous competition with CVI and acquire his Plan A benefits. Back in March 2002, CVI had hired outside auditors to examine its financial statements. The auditors determined at that time that defendant \u201cno longer needed to categorize Plaintiff\u2019s Plan A benefits as a liability, since, after leaving Joan Fabrics, Plaintiff was no longer in continuous competition with CVI and at that time CVI\u2019s ESOP price had not exceeded its 31 December 1999 value.\u201d Id. at_, 713 S.E.2d at 499. CVI, therefore, sent plaintiff a letter informing him that it did not owe him the Plan A benefits because plaintiff had previously ceased competition with CVI at a time when CVI\u2019s stock price was below its 31 December 1999 value.\nOn 11 March 2009, plaintiff filed a complaint in Catawba County Superior Court alleging that by failing to pay him the Plan A benefits under his severance agreement, defendant had (1) breached its contract with plaintiff; (2) engaged in fraud and misrepresentation; and (3) engaged in unfair and deceptive practices in violation of N.C. Gen. Stat. \u00a7 75-1.1 (\u201cChapter 75\u201d) based on fraud and misrepresentation. The matter was designated a complex business case and assigned to the Honorable Ben F. Tennille.\nDefendant filed an answer denying plaintiffs allegations along with a counterclaim alleging that plaintiff had breached the severance agreement by acquiring patents owned by Land. Plaintiff submitted a reply in response to the counterclaim in which he referenced the 20 November 2001 letter releasing him from his agreement to forego acquiring Land\u2019s patents. Defendant subsequently filed an amended answer omitting its counterclaim.\nAfter the parties engaged in discovery, defendant filed a motion for summary judgment with respect to all of plaintiff\u2019s claims, and the motion was granted in its entirety by Judge Tennille. Plaintiff appealed, and this Court affirmed Judge Tennille\u2019s order in McKinnon I. Plaintiff then filed a petition for discretionary review with the Supreme Court of North Carolina, which was denied. McKinnon v. CV Indus., Inc., 365 N.C. 353, 718 S.E.2d 376 (2011).\nBoth plaintiff and defendant subsequently filed motions in the trial court to recover attorney\u2019s fees and costs. After a hearing on the parties\u2019 cross-motions, the Honorable James L. Gale issued an order on 11 June 2012 (1) denying plaintiffs motion for attorney\u2019s fees; (2) awarding CVI $40,000 in attorney\u2019s fees for fees incurred after Judge Tennille\u2019s entry of summary judgment; and (3) awarding CVI costs totaling $16,798.36. Both parties appealed Judge Gale\u2019s order.\nAnalysis\nI. Denial of Attorney\u2019s Fees to Plaintiff\nPlaintiff contends that the trial court erred in determining that he was not entitled to attorney\u2019s fees pursuant to (1) Rule 11 of the North Carolina Rules of Civil Procedure; (2) N.C. Gen. Stat. \u00a7 ID-45; or (3) N.C. Gen. Stat. \u00a7 6-21.5.\nA. Rule 11\nRule 11 states, in pertinent part, as follows:\nEvery pleading, motion, and other paper of a party represented by an attorney shall be signed by at least one attorney of record in his individual name, whose address shall be stated. . . . The signature of an attorney or party constitutes a certificate by him that he has read the pleading, motion, or other paper; that to the best of his knowledge, information and belief formed after reasonable inquiry that it is well grounded in fact and warranted by existing law or a good faith argument for the extension, modification, or reversal of existing law, and that it is not interposed for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation.\nN.C. R. Civ. P. 11(a). If a pleading, motion, or paper is signed in violation of Rule 11, \u201cthe court, upon motion or upon its own initiative, shall impose ... an appropriate sanction, which may include an order to pay the other party... reasonable expenses... including a reasonable attorney\u2019s fee.\u201d Id.\nIt is well established that analysis under Rule 11 is three-pronged, requiring the trial court to determine whether the pleading, motion, or paper is (1) factually sufficient; (2) legally sufficient; and (3) not filed for an improper purpose. In re Will of Durham, 206 N.C. App. 67, 71, 698 S.E.2d 112, 117 (2010). \u201cA violation of any one of these requirements mandates the imposition of sanctions under Rule 11.\u201d Dodd v. Steele, 114 N.C. App. 632, 635, 442 S.E.2d 363, 365, disc. review denied, 337 N.C. 691, 448 S.E.2d 521 (1994).\nFactual sufficiency is determined by conducting a two-step inquiiy, whereby the court examines \u201c(1) whether the plaintiff undertook a reasonable inquiry into the facts and (2) whether the plaintiff; after reviewing the results of his inquiry, reasonably believed that his position was well grounded in fact.\u201d McClerin v. R-M Indus., Inc., 118 N.C. App. 640, 644, 456 S.E.2d 352, 355 (1995).\nLegal sufficiency also involves a two-step analysis. First, the court must ask if the pleading or motion is facially plausible. Mack v. Moore, 107 N.C. App. 87, 91, 418 S.E.2d 685, 688 (1992). If so, \u201cthe inquiry is complete, and sanctions are not proper.\u201d Id. If the document is not facially plausible, the trial court must then ask \u201c(1) whether the alleged offender undertook a reasonable inquiry into the law, and (2) whether, based upon the results of the inquiry, [he] formed a reasonable belief that the paper was warranted by existing law, judged as of the time the paper was signed.\u201d Id. \u201cRule 11 sanctions are appropriate where the offending party either failed to conduct a reasonable inquiry into the law or did not reasonably believe the paper was warranted by existing law.\u201d Ward v. Jett Props., LLC, 191 N.C. App. 605, 608, 663 S.E.2d 862, 864 (2008).\nFinally, the trial court must determine whether the pleading or motion was filed for an improper purpose. \u201cAn improper purpose is any purpose other than one to vindicate rights... or to put claims of right to a proper test.\u201d Mack, 107 N.C. App. at 93, 418 S.E.2d at 689 (citation and quotation marks omitted).\nOur Supreme Court has articulated the following standard of appellate review of a trial court\u2019s ruling on a Rule 11 motion:\nThe trial court\u2019s decision to impose or not to impose mandatory sanctions under N.C.G.S. \u00a7 1A-1, Rule 11(a) is reviewable de novo as a legal issue. In the de novo review, the appellate court will determine (1) whether the trial court\u2019s conclusions of law support its judgment or determination, (2) whether the trial court\u2019s conclusions of law are supported by its findings of fact, and (3) whether the findings of fact are supported by a sufficiency of the evidence. If the appellate court makes these three determinations in the affirmative, it must uphold the trial court\u2019s decision to impose or deny the imposition of mandatory sanctions under N.C.G.S. \u00a7 1A-1, Rule 11(a).\nTurner v. Duke Univ., 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989).\nPlaintiff contends that Rule 11 sanctions were appropriate in this case because CVI \u201cknew or by reasonable diligence should have known of the existence of the [20 November 2001] letter specifically authorizing the involvement of the Plaintiff with Land.\u201d Plaintiff argues that CVTs counterclaim against him was frivolous and caused him to incur substantial legal expenses in combating defendant\u2019s assertions. The trial court determined that Rule 11 sanctions against CVI were not mandated based on the following findings of fact:\n[49] CVI admits that the letter existed but was not found prior to the counterclaim being filed. CVTs Chief Financial Officer, Richard Reese, stated in his deposition that he reviewed the Agreement and searched his files relating to McKinnon prior to filing the counterclaim. [Alexander] Shuford, the author of the letter to McKinnon, also stated in his deposition that he did not recall the letter as it had been written several years prior. Not having found anything releasing McKinnon from the clause in the Agreement prohibiting him from working with the Land Patent after reviewing files, CVI filed the counterclaim believing it had a basis to do so. The court concludes that CVI made a reasonable inquiry into the facts supporting their breach of contract counterclaim.\n[50] The counterclaim does not fail the legal sufficiency standard. It is plausible on its face. But for the letter, McKinnon\u2019s involvement with the Land Patent would plainly support a claim for breach of contract.\n[51] There is no evidence to support a finding that CVI filed its counterclaim for any improper purpose. The prompt dismissal after notice of the letter suggests otherwise.\nThese findings of fact are supported by competent evidence in the record. In his deposition, Reese, the chief financial officer of CVI, testified that after reviewing his files and plaintiffs severance agreement, he based the counterclaim on the information contained therein \u2014 namely, the provision in the severance agreement forbidding plaintiff from acquiring Land\u2019s patents or research. Shuford, the current president and chief executive officer of CVI and the author of the 20 November 2001 letter, was also deposed. He testified that he had forgotten that the letter existed because it had been written eight or nine years earlier. He further testified that CVI \u201cwould not have filed the [counterclaim] if he \u2014 if we had known that letter was in existence.\u201d Furthermore, it is undisputed that upon plaintiff\u2019s filing of a reply to the counterclaim in which plaintiff referenced the 20 November 2001 letter from Shuford, defendant promptly filed an amended answer omitting the counterclaim.\nWe conclude that findings of fact 49-51 support the trial court\u2019s conclusions that defendant\u2019s counterclaim was (1) factually sufficient; (2) legally sufficient; and (3) not filed for an improper purpose. Moreover, these findings are based on competent evidence in the record. Accordingly, we affirm the trial court\u2019s denial of plaintiff\u2019s motion for attorney\u2019s fees under Rule 11.\nB. N.C. Gen. Stat. \u00a7 6-21.5 and N.C. Gen. Stat. \u00a7 ID-45\nWhile attorney\u2019s fees may, in appropriate circumstances, also be awarded pursuant to N.C. Gen. Stat. \u00a7 6-21.5 and N.C. Gen. Stat. \u00a7 ID-45, the trial court declined to award such fees to plaintiff under either of these statutory provisions. Although plaintiff makes a passing reference to these statutes in his brief, he makes no specific argument that the trial court erred in denying his motion for attorney\u2019s fees under them. We therefore deem these issues abandoned. See Piles v. Allstate Ins. Co., 187 N.C. App. 399, 402 n.2, 653 S.E.2d 181, 184 n.2 (2007) (treating issue referenced in brief but not argued as abandoned), disc. review denied, 362 N.C. 361, 663 S.E.2d 316 (2008); N.C.R. App. P. 28(b)(6) (\u201cIssues not presented in a party\u2019s brief, or in support of which no reason or argument is stated, will be taken as abandoned.\u201d)\nII. Award of Attorney\u2019s Fees and Costs to Defendant\nPlaintiff and defendant both raise arguments on appeal regarding the trial court\u2019s award to defendant of $40,000 in attorney\u2019s fees. Plaintiff argues that the trial court erred in awarding any attorney\u2019s fees at all to CVI. Defendant, conversely, claims that the trial court abused its discretion both in (1) limiting its recoverable attorney\u2019s fees solely to those incurred after the entry of summary judgment by Judge Tennille; and (2) awarding a sum substantially less than the total amount of attorney\u2019s fees incurred by CVI after summary judgment was entered.\nIn McKinnon I, we determined that the trial court properly granted defendant\u2019s motion for summary judgment as there were no genuine issues of material fact relating to any of plaintiff\u2019s claims against CVI. _N.C. App. at_, 713 S.E.2d at 500. Specifically, we held that plaintiff was no longer \u201ccompeting\u201d with CVI when he began his business venture with Land because competition \u201centail[s] more than mutual existence in a common industry or marketplace; rather, it requires an endeavor among business entities to seek out similar commercial transactions with similar clientele.\u201d Id. at_, 713 S.E.2d at 501.\nPlaintiff\u2019s and Land\u2019s companies produced flame-resistant yam for fabric manufacturing, and their clientele was made up of yam and fabric manufacturers. CVI, conversely, produced jacquard fabric and finished furniture, and their clients consisted of furniture manufacturers and consumers. Id. at_, 713 S.E.2d at 502. Thus, we concluded that \u201cPlaintiff and CVI were not in competition as they did not seek to sell similar goods or provide similar services to similar clientele.\u201d Id. at_, 713 S.E.2d at 502. As such, plaintiff was not entitled to the Plan A benefits because he had ceased continuous competition with defendant at a time when the stock price was below its 31 December 1999 value.\nIn its motion for attorney\u2019s fees and costs, defendant contended that an award of attorney\u2019s fees in its favor pursuant to Rule 11 was warranted because plaintiff\u2019s assertion that he was in continuous competition with CVI until 2008 was factually and legally baseless.\nAlthough it characterized its decision as \u201ca close call,\u201d the trial court ultimately declined to award sanctions under Rule 11. Defendant\u2019s briefs to this Court do not contain specific arguments challenging Judge Gale\u2019s determination under Rule 11, and we therefore deem that issue abandoned. N.C. R. App. P. 28(b)(6). The trial court determined, however, that an award of attorney\u2019s fees to defendant was appropriate under either N.C. Gen. Stat. \u00a7 6-21.5 or N.C. Gen. Stat. \u00a7 75-16.1 and explained its award using both statutory frameworks. Accordingly, we must analyze defendant\u2019s entitlement to attorney\u2019s fees under both of these statutes.\nA. N.C. Gen. Stat. \u00a7 6-21.5\nWhen reviewing an award of attorneys\u2019 fees under section 6-21.5, this Court must review all relevant pleadings and documents of a case in order to determine if either: (1) the pleadings contain a complete absence of a justiciable issue of either law or fact, or (2) whether the losing party persisted in litigating the case after a point where he should reasonably have become aware that the pleading he filed no longer contained a justiciable issue.\nCredigy Receivables, Inc. v. Whittington, 202 N.C. App. 646, 652, 689 S.E.2d 889, 893 (2010) (citation and quotation marks omitted).\nIn its order, the trial court determined that the award of attorney\u2019s fees to defendant became appropriate only after plaintiff continued to pursue this litigation after the entry of summary judgment against him. The trial court, therefore, purported to base its award on fees that were incurred by defendant (1) in connection with plaintiff\u2019s first appeal to this Court in McKinnon I; and (2) in opposing plaintiff\u2019s ensuing petition for discretionary review by the Supreme Court.\nWe have previously held, however, that the application of N.C. Gen. Stat. \u00a7 6-21.5 is \u201cconfined to the trial division\u201d and that, consequently, awards of attorney\u2019s fees pursuant to \u00a7 6-21.5 may only encompass fees incurred at the trial level. Hill v. Hill, 173 N.C. App. 309, 321, 622 S.E.2d 503, 511 (2005) (holding that trial court committed reversible error in awarding attorney\u2019s fees pursuant to \u00a7 6-21.5 that were incurred by prevailing party in connection with plaintiff\u2019s prior appeal), appeal dismissed and disc. review denied, 360 N.C. 363, 629 S.E.2d 851 (2006). For this reason, we conclude that \u00a7 6-21.5 cannot support the trial court\u2019s award of attorney\u2019s fees to defendant on these facts.\nB. N.C. Gen. Stat. \u00a7 75-16.1\nWe next determine whether the award of attorney\u2019s fees was appropriate under the trial court\u2019s alternate statutory basis \u2014 N.C. Gen. Stat. \u00a7 75-16.1. N.C. Gen. Stat. \u00a7 75-16.1 authorizes an award of attorney\u2019s fees to the prevailing party in a suit alleging a Chapter 75 violation if the trial court finds that either:\n(1) The party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such a party to fully resolve the matter which constitutes the basis of such suit; or\n(2) The party instituting the action knew, or should have known, the action was frivolous and malicious.\nN.C. Gen. Stat. \u00a7 75-16.1(1)-(2) (2011).\nIn the present case, the trial court\u2019s award was issued pursuant to \u00a7 75-16.1(2). As quoted above, this statutory provision allows a trial court to award attorney\u2019s fees to a prevailing defendant if the plaintiff knew, or should have known, the action was frivolous and malicious. N.C. Gen. Stat. \u00a7 75-16.1(2). \u201cA claim is frivolous if a proponent can present no rational argument based upon the evidence or law in support of [it]. A claim is malicious if it is wrongful and done intentionally without just cause or excuse or as a result of ill will.\u201d Blyth v. McCrary, 184 N.C. App. 654, 663 n.5, 646 S.E.2d 813, 819 n.5 (2007) (internal citations and quotation marks omitted):\nUnlike N.C. Gen. Stat. \u00a7 6-21.5, application of N.C. Gen. Stat. \u00a7 75-16.1 is not confined solely to the trial level, and a trial court may award attorney\u2019s fees under \u00a7 75-16.1 for \u201cservices rendered at all stages of the litigation^]\u201d including appeals. Shepard v. Bonita Vista Prop., L.P., 191 N.C. App. 614, 627, 664 S.E.2d 388, 396 (2008) (citation and quotation marks omitted), aff'd per curiam, 363 N.C. 252, 675 S.E.2d 332 (2009).\nThe decision whether or not to award attorney fees under section 75-16.1 rests within the sole discretion of the trial [court]. And if fees are awarded, the amount also rests within the discretion of the trial court.... However, when awarding fees pursuant to N.C. Gen. Stat. \u00a7 75-16.1, the court must make specific findings of fact....\nBlankenship v. Town & Country Ford, Inc., 174 N.C. App. 764, 771, 622 S.E.2d 638, 643 (2005) (emphasis added).\nIf, as here, the defendant is the prevailing party, the trial court must make findings that (1) the plaintiff \u201cknew, or should have known, the action was frivolous and malicious\u201d; and (2) the attorney\u2019s fee awarded is reasonable. N.C. Gen. Stat. \u00a7 75-16.1(2). See Birmingham v. H & H Home Consultants & Designs, Inc., 189 N.C. App. 435, 443, 658 S.E.2d 513, 519 (2008) (\u201cThe standard for awarding attorney\u2019s fees under N.C. Gen. Stat. \u00a7 75-16.1(2) is that the plaintiff \u2018knew or should have known, the action was frivolous and malicious.\u2019 \u201d); Barbee v. Atl. Marine Sales & Serv., Inc., 115 N.C. App. 641, 648, 446 S.E.2d. 117, 122 (holding that when awarding attorney\u2019s fees under \u00a7 75-16.1 \u201c[t]he court must make specific findings of fact... that the attorney\u2019s fee was reasonable\u201d), disc. review denied, 337 N.C. 689, 448 S.E.2d 516 (1994).\nBased on our review of the record, we agree that the facts presented here could be sufficient to support an award of attorney\u2019s fees under \u00a7 75-16.1(2). However, the trial court\u2019s order did not make specific findings \u2014 as it was required to do under \u00a7 75-16.1 \u2014 that plaintiff knew or should have known that the action was frivolous and malicious. Birmingham, 189 N.C. App. at 443, 658 S.E.2d at 519.\nJudge Gale\u2019s order noted that Judge Tennille had (1) \u201ccautioned McKinnon that he was exposed to potential attorneys\u2019 fees by continuing to pursue a Chapter 75 claim when the only nexus to \u2018commerce\u2019 was the Agreement formed between a company and its employee\u201d; and (2) determined that summary judgment was appropriate because Chapter 75 \u201cdoes not reach \u2018conduct solely related to the internal operation of a single business.\u2019 \u201d\nJudge Gale further noted in his findings that (1) \u201c[unquestionably ... McKinnon was seeking to sail on a slender reed\u201d and that \u201cthe claim for promissory fraud [upon which the Chapter 75 claim was based] was clearly a strained and weak one when it was first filed\u201d; and (2) despite \u201cbeing given every opportunity to do so through the summary judgment process, McKinnon could marshal no evidence that even colorably supported a promissory fraud or Chapter 75 claim.\u201d While these findings may be sufficient to support an ultimate finding that plaintiff knew or should have known that his Chapter 75 claim against defendant was frivolous and malicious, the trial court\u2019s order lacks such an ultimate finding.\nFurthermore, in addition to lacking a finding on the ultimate issue of whether plaintiff knew or should have known that his Chapter 75 claim was frivolous and malicious, the order also lacks the requisite findings of fact regarding the reasonableness of the award. In order for this Court to review whether a trial court\u2019s award of attorney\u2019s fees was reasonable, the trial court must make findings supporting its award, including \u201cfindings regarding the time and labor expended, the skill required to perform the services rendered, the customary fee for like work, and the experience and ability of the attorney.\u201d Shepard, 191 N.C. App. at 626, 664 S.E.2d at 396 (citation and quotation marks omitted). \u201cFailure to make findings of fact requires remand in order for the trial court to resolve any disputed factual issues [unless] the record reveals no evidence to support an award [under \u00a7 75-16.1].\u201d Blyth, 184 N.C. App. at 664, 646 S.E.2d at 820 (citation and quotation marks omitted).\nHere, the trial court\u2019s finding explaining its award of $40,000 in attorney\u2019s fees merely stated that\n[t]he court has carefully reviewed the time and extent of CVTs legal expenses. While the amount awarded is substantially less than the $322,151.07 CVI seeks ... the court in its discretion concludes that CVI should be awarded $40,000 in fees. This again appears to be less than the amount CVI actually expended in defending the case after the entry of summary judgment.\nThe order does not address at all (1) the skill required to perform the services rendered; (2) customary fees for similar work; and (3) the experience or ability of defendant\u2019s attorneys. Furthermore, it addresses only superficially the time and labor actually expended by defendant\u2019s attorneys in defending the appeal in McKinnon I. \u201cWithout these findings, we are unable to determine the reasonableness of the trial court\u2019s award.\u201d Printing Serv. of Greensboro, Inc. v. Am. Capital Grp., Inc., 180 N.C. App. 70, 82, 637 S.E.2d 230, 237 (2006), aff\u2019d per curiam, 361 N.C. 347, 643 S.E.2d 586 (2007).\nIn concluding that the trial court\u2019s findings regarding the reasonableness of the award are insufficient and require remand, we are guided by our decisions in Shepard and Printing Services of Greensboro. In Shepard, we held that the findings contained in the trial court\u2019s order listing the hours expended by the prevailing party\u2019s counsel and stating that the award of attorneys\u2019 fees was reasonable \u201cconsidering the time and labor expended, the skill required to perform the legal services that were rendered, and the experience and ability of [trial counsel]\u201d were inadequate. Shepard, 191 N.C. App. at 626-27, 664 S.E.2d at 396. We directed the trial court to make more detailed findings regarding the reasonableness of the amount of fees awarded on remand - including findings as to the skill required to perform the legal services and the experience and ability of trial counsel. Id.\nla Printing Services of Greensboro, we likewise remanded the trial court\u2019s order awarding attorney\u2019s fees for additional findings of fact as to the reasonableness of the award because the order\u2019s description of the prevailing party\u2019s attorney\u2019s hourly billing rates did not contain findings regarding the time actually expended, customary fees for like work, or the experience and ability of the party\u2019s attorney. Printing Serv. of Greensboro, 180 N.C. App. at 82, 637 S.E.2d at 237. As in Shepard and Printing Services of Greensboro, the trial court\u2019s order here must similarly be remanded in order for the trial court to make the requisite findings of fact regarding the reasonableness of the award of attorney\u2019s fees.\nIn sum, we conclude that (1) N.C. Gen. Stat. \u00a7 6-21.5 does not serve as a proper basis for the award of attorney\u2019s fees to defendant because that statute does not permit an award of fees incurred in connection with the appeal in McKinnon I; and (2) this case must be remanded for the trial court to (a) make an ultimate finding as to whether plaintiff knew or should have known that the assertion \u2014 or continued prosecution after summary judgment was entered \u2014 of his Chapter 75 claim was frivolous and malicious so as to support the award of attorney\u2019s fees under N.C. Gen. Stat. \u00a7 75-16.1, and, if so, (b) make additional findings of fact concerning the reasonableness of the award of attorney\u2019s fees based on the criteria set out above.\nIII. Award of Costs to Defendant\nIn addition to awarding attorney\u2019s fees to defendant, the trial court also awarded costs pursuant to N.C. Gen. Stat. \u00a7 6-20. Section 6-20 authorizes a trial court to award costs to a prevailing party \u2014 in the court\u2019s discretion \u2014 \u201csubject to the limitations on assessable or recoverable costs set forth in G.S. 7A-305(d).\u201d N.C. Gen. Stat. \u00a7 6-20 (2011). The expenses enumerated in \u00a7 7A-305(d) constitute a \u201ccomplete and exhaustive\u201d list. N.C. Gen. Stat. \u00a7 7A-305(d) (2011). Pursuant to these statutory provisions, the trial court awarded costs to defendant for expenses incurred in connection with deposition transcripts, transcripts of in-court proceedings, and mediator fees.\nWhile we believe these costs are authorized under the above-referenced statutes, we note that the trial court appears to have made a mathematical miscalculation in its award of costs. It calculated award-able costs of $8,399.18 - an amount equal to the sum of $7,321.80 in court reporter fees for deposition transcripts, $377.38 in court reporter fees for the transcription of oral arguments, and $700 in mediator fees. Later, however, in the decretal portion of the order, the trial court ordered an award of $16,798.36 \u2014 a sum that is the total of $8,399.18, $7,321.80, $377.38, and $700. Thus, it appears that in this portion of the order, the trial court inadvertently treated the total allowable costs ($8,399.18) as a separate allowable cost rather than as the sum' of each of the separately allowable costs. On remand, the trial court is directed to reexamine its calculation of costs accordingly.\nConclusion\nFor the reasons stated above, we affirm the trial court\u2019s order in part and remand in part.\nAFFIRMED IN PART; REMANDED IN PART.\nJudges HUNTER and McCULLOUGH concur.\n. Upon Judge Tennille\u2019s retirement, the case was reassigned to Judge Gale.\n. While plaintiff asserted claims against defendant on several different theories, an award of attorney\u2019s fees pursuant to \u00a7 75-16.1 would apply only to plaintiffs Chapter 75 claim.", "type": "majority", "author": "DAVIS, Judge." } ], "attorneys": [ "C. Gary Triggs, P.A., by C. Gary Triggs, for plaintiff-appellant.", "Parker Poe Adams & Bernstein LLP, by William L. Rikard, Jr. and James G. Lesnett, Jr., for defendant-appellee." ], "corrections": "", "head_matter": "BOBBY E. MCKINNON, Plaintiff v. CV INDUSTRIES, INC., Defendant\nNo. COA12-1165\nFiled 2 July 2013\n1. Pleadings \u2014 Rule 11 \u2014 motion for attorney fees \u2014 denied\nThe trial court correctly denied plaintiffs motion for attorney fees under N.C.G.S. \u00a7 1A-1, Rule 11 in an action arising from plaintiffs departure from defendant\u2019s business and plaintiffs new business activities. Plaintiffs motion concerned defendant\u2019s counterclaim for breach of the severance agreement, which was dropped after plaintiff\u2019s reply referred to a letter releasing plaintiff from his agreement concerning certain patents. There were findings that the counterclaim was based on the company files and the severance agreement, that the letter had been forgotten, and those findings supported the trial court\u2019s conclusion.\n2. Appeal and Error \u2014 preservation of issues \u2014 passing reference\nPlaintiff abandoned issues concerning attorney fees under N.C.G.S. \u00a7 6-21.5 and N.C.G.S. \u00a7 ID-45 by making only a passing reference to those statutes in this brief rather than a specific argument.\n3. Appeal and Error \u2014 preservation of issues \u2014 no specific argument\nDefendant abandoned a challenge to the trial court\u2019s refusal to award attorney fees under N.C.G.S. \u00a7 1A-1, Rule 11 where defendants\u2019 briefs did not contain specific arguments challenging that determination.\n4. Attorney Fees \u2014 incurred on appeal \u2014 not supported by statute\nN.C.G.S. \u00a7 6-21.5 may only encompass attorney fees incurred at the trial level and could not support an award of attorney fees incurred in an appeal.\n5. Attorney Fees \u2014 findings\u2014not sufficient\nAn award of attorney fees under N.C.G.S. \u00a7 76-16.1(2) was remanded where the facts could be sufficient to award attorney fees, but the trial court did not make specific findings that the action was specific and malicious or on the reasonableness of the award.\n6. Costs \u2014 miscalculated\u2014remanded\nAn award of costs under N.C.G.S. \u00a7 6-20 was remanded where the court miscalculated the costs in a portion of its order.\nAppeal by plaintiff and cross-appeal by defendant from order entered 11 June 2012 by Judge James L. Gale in Catawba County Superior Court. Heard in the Court of Appeals 26 February 2012.\nC. Gary Triggs, P.A., by C. Gary Triggs, for plaintiff-appellant.\nParker Poe Adams & Bernstein LLP, by William L. Rikard, Jr. and James G. Lesnett, Jr., for defendant-appellee." }, "file_name": "0190-01", "first_page_order": 200, "last_page_order": 212 }