{
  "id": 12168352,
  "name": "VINCENT MADDEN, Custodian for Katherine Ann Madden UGTMA, on behalf of Himself and all others similarly situated v. DAVID T. CHASE, THOMAS N. ROBOZ, E. M. HICKS, J. JOHN FOX, JAMES E. GETTYS, HARRY M. NACEY, JR., J. BENJAMIN BOSTICK, FRANK GABOR, RONALD J. KRAUSE and STANWOOD CORPORATION",
  "name_abbreviation": "Madden v. Chase",
  "decision_date": "1987-02-03",
  "docket_number": "No. 8626SC785",
  "first_page": "289",
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  "analysis": {
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  "last_updated": "2023-07-14T23:00:23.119892+00:00",
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    "date_added": "2019-08-29",
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  "casebody": {
    "judges": [
      "Judges Phillips and ORR concur."
    ],
    "parties": [
      "VINCENT MADDEN, Custodian for Katherine Ann Madden UGTMA, on behalf of Himself and all others similarly situated v. DAVID T. CHASE, THOMAS N. ROBOZ, E. M. HICKS, J. JOHN FOX, JAMES E. GETTYS, HARRY M. NACEY, JR., J. BENJAMIN BOSTICK, FRANK GABOR, RONALD J. KRAUSE and STANWOOD CORPORATION"
    ],
    "opinions": [
      {
        "text": "ARNOLD, Judge.\nThe general rule in North Carolina is that in the absence of statutory authority, attorneys\u2019 fees are not recoverable. Hicks v. Albertson, 284 N.C. 236, 200 S.E. 2d 40 (1973). There is no statutory authority for an award of attorneys\u2019 fees in the present case. Despite this rule, plaintiff contends that \u201cthe trial court erred in denying plaintiffs request for an opportunity to make an application to recover costs, including reasonable attorneys\u2019 fees, where plaintiffs class action conferred a substantial benefit on all shareholders.\u201d\nIn support of his argument, plaintiff relies on Rider v. Lenoir County, 238 N.C. 632, 78 S.E. 2d 745 (1953), and Mills v. Electric Auto-Lite Co., 396 U.S. 375 (1970). Rider involved a suit by a taxpayer to enjoin the issuance of hospital bonds. The taxpayer prevailed and prevented the county from improperly expending tax revenues. However, the court denied the taxpayer\u2019s request for attorneys\u2019 fees because the action did not create or restore a common fund. There is dicta in Rider that the court may award attorneys\u2019 fees in certain equity cases which are successfully prosecuted on behalf of a class. However, the \u201ccertain equity cases\u201d cited in Rider consider the availability of attorneys\u2019 fees from decedent\u2019s estates. In other words, Rider represents the proposition that fees are at times available from court-supervised funds and municipal funds recovered in tax litigation.\nIn Mills, the U. S. Supreme Court awarded attorneys\u2019 fees to minority shareholders who had established a cause of action for a violation of the Securities Exchange Act of 1934. The Court held that the absence of express statutory authorization under section 14(a) of the Act did not preclude such an award. The Court further held that the award of attorneys\u2019 fees was not barred by the fact that no monetary fund was produced by the suit. The interpretation of the Securities Exchange Act of 1934 in Mills is irrelevant to the question of whether plaintiff can recover attorneys\u2019 fees for his action to enjoin a \u201cgoing private\u201d merger in North Carolina.\nNeither Rider nor Mills provide authority for the recovery of attorneys\u2019 fees in the case sub judice.\nIn Kiddie Korner Day Schools, Inc. v. Charlotte-Mecklenburg Board of Education, 55 N.C. App. 134, 147, 285 S.E. 2d 110, 118 (1981), disc. rev. denied, 305 N.C. 300, 291 S.E. 2d 150 (1982), this Court stated:\n\u201cNorth Carolina has applied a rule of equity exception in various classes of cases, i.e. where a litigant at his own expense has maintained a successful suit for the preservation, protection or increase of a common fund or of common property.\u201d Ingram, Commissioner of Insurance v. Assurance Co., 34 N.C. App. 517, 524-25, 239 S.E. 2d 474, 478 (1977) citing Horner v. Chamber of Commerce, 236 N.C. 96, 72 S.E. 2d 21 (1952). See also Rider v. Lenoir County, 238 N.C. 632, 78 S.E. 2d 745 (1953); Hopkins v. Barnhardt, 223 N.C. 617, 27 S.E. 2d 644 (1943).\nIn Kiddie Komer, plaintiffs argued that their action to stop defendant School Board from spending school funds fell within the equity exception above and entitled them to an award of attorneys\u2019 fees. This Court found no merit in their argument and stated that plaintiffs brought the action primarily to protect their business interests, not to protect or preserve public funds or property.\nPlaintiff argues in this case that his action to enjoin the \u201cgoing private\u201d merger falls within the equity exception. We do not agree. Plaintiff brought this action to maintain the value of his investment, not for the primary purpose of protecting or preserving public funds or property. We hold that the trial court did not err in denying plaintiffs request for an opportunity to make an application to recover costs and attorneys\u2019 fees.\nWe recognize the fact that \u201cgoing private\u201d mergers are novel transactions and are not expressly covered by the North Carolina Business Corporation Act. However, it is up to the legislature, and not the courts, to make any changes which would allow an award of fees in such situations. Accordingly, the judgment is\nAffirmed.\nJudges Phillips and ORR concur.",
        "type": "majority",
        "author": "ARNOLD, Judge."
      }
    ],
    "attorneys": [
      "Cansler & Lockhart, by Thomas Ashe Lockhart and Bruce M. Simpson; Garwin, Bronzaft & Gerstein, by Bertram Bronzaft and Scott W. Fisher; Gross & Sklar, by Eugene A. Spector, for plaintiff appellant.",
      "Kennedy, Covington, Lobdell & Hickman, by William C. Livingston and Joseph B. C. Kluttz, for defendant appellees Hicks, Fox, Gettys, Nacey, Bostick, Gabor and Krause.",
      "Robinson, Bradshaw & Hinson, by John R. Wester, Martin L. Brackett, Jr. and Samuel D. Walker, for defendant appellee Stan-wood Corporation.",
      "No brief for defendant appellees Chase and Roboz."
    ],
    "corrections": "",
    "head_matter": "VINCENT MADDEN, Custodian for Katherine Ann Madden UGTMA, on behalf of Himself and all others similarly situated v. DAVID T. CHASE, THOMAS N. ROBOZ, E. M. HICKS, J. JOHN FOX, JAMES E. GETTYS, HARRY M. NACEY, JR., J. BENJAMIN BOSTICK, FRANK GABOR, RONALD J. KRAUSE and STANWOOD CORPORATION\nNo. 8626SC785\n(Filed 3 February 1987)\nAttorneys at Law 8 7.5; Costs \u00a7 4.2\u2014 action to enjoin \u201cgoing private\u201d merger \u2014attorney fees not allowable\nPlaintiff shareholder\u2019s class action to enjoin a \u201cgoing private\u201d merger does not fall within the equity exception to the rule that attorney fees are not allowable as part of the costs in the absence of statutory authority since plaintiff brought the action to maintain the value of his investment rather than to protect or preserve public funds or property.\nAPPEAL by plaintiff from Saunders fChase BJ, Judge. Judgment entered 28 March 1986 in Superior Court, MECKLENBURG County. Heard in the Court of Appeals 17 December 1986.\nPlaintiff, a shareholder of defendant Stanwood Corporation, brought a class action against defendants. He sought to enjoin a proposed \u201cgoing private\u201d merger whereby defendants David T. Chase and Thomas N. Roboz proposed to purchase all of the outstanding Stanwood stock for $9.00 per share. Plaintiff contended that the price offered by Chase and Roboz was unfair and violated the fiduciary duty that they owed to the shareholders.\nAfter the case had been pending for approximately five months, Interstate Securities, an independent investment banking firm which had initially given an opinion to the directors of Stan-wood that the $9.00 per share price was fair, reevaluated its opinion and withdrew it. Thereafter, the offer of Chase and Roboz to acquire the stock was withdrawn, and the \u201cgoing private\u201d merger was abandoned.\nDefendants then moved to dismiss the action. Plaintiff acknowledged that dismissal was proper but sought an opportunity to file an application to recover costs including attorneys\u2019 fees. The trial court denied plaintiffs request. From the judgment of the trial court, plaintiff appeals.\nCansler & Lockhart, by Thomas Ashe Lockhart and Bruce M. Simpson; Garwin, Bronzaft & Gerstein, by Bertram Bronzaft and Scott W. Fisher; Gross & Sklar, by Eugene A. Spector, for plaintiff appellant.\nKennedy, Covington, Lobdell & Hickman, by William C. Livingston and Joseph B. C. Kluttz, for defendant appellees Hicks, Fox, Gettys, Nacey, Bostick, Gabor and Krause.\nRobinson, Bradshaw & Hinson, by John R. Wester, Martin L. Brackett, Jr. and Samuel D. Walker, for defendant appellee Stan-wood Corporation.\nNo brief for defendant appellees Chase and Roboz."
  },
  "file_name": "0289-01",
  "first_page_order": 317,
  "last_page_order": 320
}
