{ "id": 8526503, "name": "THE HAJMM COMPANY, Plaintiff v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON, Defendants", "name_abbreviation": "Hajmm Co. v. House of Raeford Farms, Inc.", "decision_date": "1989-06-06", "docket_number": "No. 8816SC574", "first_page": "1", "last_page": "20", "citations": [ { "type": "official", "cite": "94 N.C. App. 1" } ], "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": "N.C. Gen. Stat. \u00a7\u00a7 75-16", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "218 S.E. 2d 342", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1975, "pin_cites": [ { "page": "346-47" } ], "opinion_index": 0 }, { "cite": "288 N.C. 303", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568140 ], "year": 1975, "pin_cites": [ { "page": "310" } ], "opinion_index": 0, "case_paths": [ "/nc/288/0303-01" ] }, { "cite": "321 S.E. 2d 158", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "opinion_index": 0 }, { "cite": "311 N.C. 769", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4685827, 4683427, 4686693, 4682357, 4682613 ], "year": 1984, "opinion_index": 0, "case_paths": [ "/nc/311/0769-01", "/nc/311/0769-05", "/nc/311/0769-04", "/nc/311/0769-03", "/nc/311/0769-02" ] }, { "cite": "315 S.E. 2d 63", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "68" } ], "opinion_index": 0 }, { "cite": "68 N.C. App. 310", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527164 ], "year": 1984, "pin_cites": [ { "page": "319" } ], "opinion_index": 0, "case_paths": [ "/nc-app/68/0310-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 75-1.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1988, "opinion_index": 0 }, { "cite": "347 S.E. 2d 864", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "866" } ], "opinion_index": 0 }, { "cite": "82 N.C. App. 665", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8359592 ], "year": 1986, "pin_cites": [ { "page": "668" } ], "opinion_index": 0, "case_paths": [ "/nc-app/82/0665-01" ] }, { "cite": "252 S.E. 2d 698", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "702" } ], "opinion_index": 0 }, { "cite": "296 N.C. 661", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569934 ], "year": 1979, "pin_cites": [ { "page": "667" } ], "opinion_index": 0, "case_paths": [ "/nc/296/0661-01" ] }, { "cite": "171 S.E. 2d 901", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1970, "pin_cites": [ { "page": "904" } ], "opinion_index": 0 }, { "cite": "276 N.C. 273", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560974 ], "year": 1970, "pin_cites": [ { "page": "277" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0273-01" ] }, { "cite": "349 S.E. 2d 304", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "83 N.C. App. 116", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358122 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc-app/83/0116-01" ] }, { "cite": "296 S.E. 2d 814", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "59 N.C. App. 256", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526213 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc-app/59/0256-01" ] }, { "cite": "364 S.E. 2d 281", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 635133 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/ga-app/185/0125-01" ] }, { "cite": "321 N.C. 494", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2566545 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/321/0494-01" ] }, { "cite": "355 S.E. 2d 204", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "85 N.C. App. 401", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12169964 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc-app/85/0401-01" ] }, { "cite": "72 L.Ed. 2d 162", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1982, "opinion_index": 0 }, { "cite": "102 S.Ct. 1751", "category": "reporters:federal", "reporter": "S. Ct.", "year": 1982, "opinion_index": 0 }, { "cite": "456 U.S. 905", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6199776, 6200192, 6201027, 6199945, 6201484, 6201709, 6200404, 6200629, 6200828, 6201212, 6199583 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/us/456/0905-02", "/us/456/0905-04", "/us/456/0905-08", "/us/456/0905-03", "/us/456/0905-10", "/us/456/0905-11", "/us/456/0905-05", "/us/456/0905-06", "/us/456/0905-07", "/us/456/0905-09", "/us/456/0905-01" ] }, { "cite": "652 F. 2d 551", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1251640 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "556-67" }, { "page": "557", "parenthetical": "5th Cir. 1981" } ], "opinion_index": 0, "case_paths": [ "/f2d/652/0551-01" ] }, { "cite": "340 S.E. 2d 309", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "321", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "315 N.C. 599", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4715465 ], "year": 1986, "pin_cites": [ { "page": "617", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/315/0599-01" ] }, { "cite": "347 S.E. 2d 866", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1986, "pin_cites": [ { "page": "867" }, { "page": "868" } ], "opinion_index": 0 }, { "cite": "82 N.C. App. 680", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8359662 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "681" }, { "page": "681" } ], "opinion_index": 0, "case_paths": [ "/nc-app/82/0680-01" ] }, { "cite": "35 S.E. 2d 489", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1945, "pin_cites": [ { "page": "492", "parenthetical": "\"The fiduciary character of the debt does not depend upon its form but the manner of its origin and the acts by which it is incurred . . . .\"" } ], "opinion_index": 0 }, { "cite": "225 N.C. 480", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8611578 ], "year": 1945, "pin_cites": [ { "page": "485", "parenthetical": "\"The fiduciary character of the debt does not depend upon its form but the manner of its origin and the acts by which it is incurred . . . .\"" } ], "opinion_index": 0, "case_paths": [ "/nc/225/0480-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 55-35", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1982, "opinion_index": 0 }, { "cite": "181 S.E. 2d 113", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1971, "pin_cites": [ { "page": "116" } ], "opinion_index": 0 }, { "cite": "11 N.C. App. 260", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554369 ], "year": 1971, "pin_cites": [ { "page": "265" } ], "opinion_index": 0, "case_paths": [ "/nc-app/11/0260-01" ] }, { "cite": "261 S.E. 2d 128", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "298 N.C. 572", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573665, 8573740, 8573712, 8573650, 8573687 ], "year": 1979, "pin_cites": [ { "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/298/0572-02", "/nc/298/0572-05", "/nc/298/0572-04", "/nc/298/0572-01", "/nc/298/0572-03" ] }, { "cite": "257 S.E. 2d 78", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1979, "pin_cites": [ { "page": "83", "parenthetical": "citation omitted" }, { "page": "83" } ], "opinion_index": 0 }, { "cite": "42 N.C. App. 393", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554570 ], "weight": 2, "year": 1979, "pin_cites": [ { "page": "401", "parenthetical": "citation omitted" }, { "page": "401" } ], "opinion_index": 0, "case_paths": [ "/nc-app/42/0393-01" ] }, { "cite": "201 S.E. 2d 689", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "opinion_index": 0 }, { "cite": "284 N.C. 616", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563559, 8563592, 8563658, 8563628, 8563710 ], "year": 1974, "opinion_index": 0, "case_paths": [ "/nc/284/0616-01", "/nc/284/0616-02", "/nc/284/0616-04", "/nc/284/0616-03", "/nc/284/0616-05" ] }, { "cite": "200 S.E. 2d 410", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1973, "pin_cites": [ { "page": "414" } ], "opinion_index": 0 }, { "cite": "20 N.C. App. 11", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549000 ], "year": 1973, "pin_cites": [ { "page": "17" } ], "opinion_index": 0, "case_paths": [ "/nc-app/20/0011-01" ] }, { "cite": "364 S.E. 2d 921", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1988, "opinion_index": 0 }, { "cite": "321 N.C. 473", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2570563, 2567951, 2571154, 2571737, 2569151 ], "weight": 2, "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/321/0473-05", "/nc/321/0473-04", "/nc/321/0473-01", "/nc/321/0473-03", "/nc/321/0473-02" ] }, { "cite": "362 S.E. 2d 578", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1987, "pin_cites": [ { "page": "582" }, { "page": "584" } ], "opinion_index": 0 }, { "cite": "88 N.C. App. 44", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8357753 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "50" }, { "page": "53" } ], "opinion_index": 0, "case_paths": [ "/nc-app/88/0044-01" ] }, { "cite": "208 Kan. 129", "category": "reporters:state", "reporter": "Kan.", "case_ids": [ 61173 ], "weight": 2, "year": 1971, "opinion_index": 0, "case_paths": [ "/kan/208/0129-01" ] }, { "cite": "329 S.E. 2d 333", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "337" } ], "opinion_index": 0 }, { "cite": "313 N.C. 362", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4726773 ], "year": 1985, "pin_cites": [ { "page": "369" } ], "opinion_index": 0, "case_paths": [ "/nc/313/0362-01" ] }, { "cite": "326 S.E. 2d 601", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "pin_cites": [ { "page": "606" } ], "opinion_index": 0 }, { "cite": "313 N.C. 33", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4719700 ], "year": 1985, "pin_cites": [ { "page": "40" } ], "opinion_index": 0, "case_paths": [ "/nc/313/0033-01" ] }, { "cite": "124 S.E. 2d 537", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1962, "pin_cites": [ { "parenthetical": "where defendant charged with selling unregistered securities, expert could state that debentures must be registered under state securities law" } ], "opinion_index": 1 }, { "cite": "262 N.C. 94", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565824 ], "year": 1962, "pin_cites": [ { "parenthetical": "where defendant charged with selling unregistered securities, expert could state that debentures must be registered under state securities law" } ], "opinion_index": 1, "case_paths": [ "/nc/262/0094-01" ] }, { "cite": "364 S.E. 2d 392", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "pin_cites": [ { "parenthetical": "expert's opinion that defendant's lack of security was \"gross negligence\" was improper legal conclusion" } ], "opinion_index": 1 }, { "cite": "337 S.E. 2d 833", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "parenthetical": "dictum" } ], "opinion_index": 1 }, { "cite": "315 N.C. 76", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4715827 ], "year": 1985, "pin_cites": [ { "parenthetical": "dictum" } ], "opinion_index": 1, "case_paths": [ "/nc/315/0076-01" ] }, { "cite": "367 S.E. 2d 895", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "903", "parenthetical": "psychiatric testimony that defendant did not act in \"cool state of mind\" and was unable to conform behavior to legal requirements improperly stated legal standard had not been met" } ], "opinion_index": 1 }, { "cite": "322 N.C. 152", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2517737 ], "year": 1988, "pin_cites": [ { "page": "167", "parenthetical": "psychiatric testimony that defendant did not act in \"cool state of mind\" and was unable to conform behavior to legal requirements improperly stated legal standard had not been met" } ], "opinion_index": 1, "case_paths": [ "/nc/322/0152-01" ] }, { "cite": "832 F. 2d 1516", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10551976 ], "year": 1987, "pin_cites": [ { "page": "1527", "parenthetical": "en banc" } ], "opinion_index": 1, "case_paths": [ "/f2d/832/1516-01" ] }, { "cite": "349 S.E. 2d 304", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "parenthetical": "error to allow attorney to give expert opinion that plaintiff was legally entitled to easement by implication" } ], "opinion_index": 1 }, { "cite": "83 N.C. App. 116", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358122 ], "year": 1986, "pin_cites": [ { "parenthetical": "error to allow attorney to give expert opinion that plaintiff was legally entitled to easement by implication" } ], "opinion_index": 1, "case_paths": [ "/nc-app/83/0116-01" ] }, { "cite": "321 N.C. 494", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2566545 ], "year": 1988, "pin_cites": [ { "parenthetical": "expert's opinion that defendant's lack of security was \"gross negligence\" was improper legal conclusion" } ], "opinion_index": 1, "case_paths": [ "/nc/321/0494-01" ] }, { "cite": "355 S.E. 2d 204", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "parenthetical": "expert's opinion that defendant's lack of security was \"gross negligence\" was improper legal conclusion" } ], "opinion_index": 1 }, { "cite": "85 N.C. App. 401", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12169964 ], "year": 1988, "pin_cites": [ { "parenthetical": "expert's opinion that defendant's lack of security was \"gross negligence\" was improper legal conclusion" } ], "opinion_index": 1, "case_paths": [ "/nc-app/85/0401-01" ] }, { "cite": "340 S.E. 2d 309", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "parenthetical": "expert precluded from stating that injuries were \"proximate cause\" of death" } ], "opinion_index": 1 }, { "cite": "315 N.C. 599", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4715465 ], "year": 1986, "pin_cites": [ { "parenthetical": "expert precluded from stating that injuries were \"proximate cause\" of death" } ], "opinion_index": 1, "case_paths": [ "/nc/315/0599-01" ] } ], "analysis": { "cardinality": 1354, "char_count": 43788, "ocr_confidence": 0.751, "pagerank": { "raw": 3.259622254206491e-07, "percentile": 0.8694404577255276 }, "sha256": "a2cc72555b9633d2b378843b52dd6bd672fdb16f5fa057f266bda028080ab95a", "simhash": "1:3fa4700a7b7f0c50", "word_count": 6984 }, "last_updated": "2023-07-14T20:07:12.068465+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge Phillips concurs.", "Judge GREENE dissents." ], "parties": [ "THE HAJMM COMPANY, Plaintiff v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON, Defendants" ], "opinions": [ { "text": "COZORT, Judge.\nPlaintiff sued defendants House of Raeford Farms, Inc. (Raeford), and E. Marvin Johnson for their refusal to retire a revolving fund certificate issued to plaintiff by Raeford in exchange for stock plaintiff sold to Raeford. Plaintiff asserted claims of relief alleging that defendants: (1) violated Raeford\u2019s by-laws by refusing to retire plaintiff\u2019s certificate after retiring other certificates in the same series as plaintiffs; (2) breached a fiduciary duty owed plaintiff; and (3) committed an unfair or deceptive trade practice. The trial court granted defendants\u2019 motion to dismiss the unfair or deceptive trade practice claim for failure to state a claim upon which relief can be granted. The other issues went to the jury, which found for plaintiff. The judge awarded plaintiff $387,500 in actual damages, and the jury awarded plaintiff $100,000 in punitive damages. Plaintiff and defendants appeal. The primary issues submitted on appeal by defendants are: (1) whether defendants\u2019 motions for directed verdict and judgment notwithstanding the verdict were properly denied and the issues properly submitted to the jury; (2) whether there was sufficient evidence to create a jury issue on partial redemption; (3) whether defendants owed plaintiff a fiduciary duty; (4) whether plaintiff\u2019s expert testimony on breach of fiduciary duty was properly admitted; and (5) whether there was sufficient evidence to submit to the jury on the issue of punitive damages. The plaintiff contends that the trial court erred in granting defendants\u2019 motion to dismiss plaintiff\u2019s unfair or deceptive trade practice claim. In defendants\u2019 appeal, we find no error. In plaintiff\u2019s appeal, we find the trial court erred in dismissing the unfair or deceptive trade practice claim, and we remand for a new trial on that issue.\nThe HAJMM Company, plaintiff herein, is a limited partnership engaged in the business of agricultural marketing. Defendant Raeford is an agricultural cooperative engaged in processing turkeys and other poultry. Defendant Johnson is President and Chairman of the Board of Raeford. Raeford was formed in 1975 when plaintiff and two other turkey producers, Stone Brothers and Nash Johnsons and Sons, Inc. (NJS), sold their stock in Raeford Turkey Farms, Inc. (RTF), to defendant Raeford. Plaintiff held a 25\u00b0/o share, Stone Bros, held a 25% share, and NJS held a 50% share in RTF. For its stock plaintiff was issued a \u201cClass B \u2014 Series 1975 Revolving Fund Certificate\u201d in the amount of $387,500. Raeford issued a Class B \u2014Series 1975 certificate to Stone Bros, in the amount of $387,500 for its 25% share of RTF and issued a Class B \u2014Series 1975 certificate to NJS in the amount of $750,000 in exchange for its 50% share in RTF. In the same year, Raeford also issued Class A \u2014 Series 1975 certificates to other turkey producers at the same time the three Class B certificates were issued.\nIn 1978 Raeford redeemed and cancelled the Class A \u2014Series 1975 certificates. The same year, Raeford retired the Class B \u2014 Series 1975 certificate originally issued to Stone Bros., who negotiated its certificate to FCX, Inc. In its 1984 financial statement Raeford discounted to zero value the Stone Bros./FCX certificate and the certificate to NJS. Raeford subtracted the value of the Stone Bros./FCX and NJS Class B \u2014 Series 1975 certificates from the total amount owed on other certificates, thereby reducing stockholder\u2019s equity. Plaintiff\u2019s Class B \u2014Series 1975 certificate was not redeemed at that time and continues to be shown as part of stockholder\u2019s equity in Raeford\u2019s financial statements. On or about 4 February 1986 plaintiff made a formal demand to defendants to redeem plaintiff\u2019s certificate for $387,500. Citing provisions in Raeford\u2019s by-laws giving them the sole discretion to decide whether to retire plaintiff\u2019s certificate, defendants refused plaintiff\u2019s request. Plaintiff filed suit in March of 1986.\nThe trial court submitted seven issues to the jury, which were answered as follows:\n1. Did the defendant, House of Raeford Farms, Inc., breach its bylaws by refusing to retire the revolving fund certificate of the plaintiff, HAJMM, in the reasonable exercise of its discretion?\nYes.\n2. Did the defendant, House of Raeford Farms, Inc., breach its bylaws by retiring any of the revolving fund certificates in the same annual series as that of the plaintiff, HAJMM, and refusing to retire that of the plaintiff, HAJMM?\nYes.\n3. Do the defendants, E. Marvin Johnson and Raeford Farms, Inc., owe a fiduciary duty to the plaintiff, HAJMM?\nYes.\n4. If so, was their refusal to retire HAJMM\u2019s revolving fund certificate an open, fair and honest transaction?\nNo.\n5. In what month and year did the breach or violation occur?\nMarch, 1986.\n6. In your discretion, what amount of punitive damages, if any, should be awarded to the plaintiff, HAJMM from the defendant E. Marvin Johnson.\nNone.\n7. In your discretion what amount of punitive damages, if any, should be awarded to the plaintiff, HAJMM from the defendant, House of Raeford Farms, Inc.?\n$100,000.\nThe trial court determined that plaintiff should recover the full amount of the certificate, $387,500, from both defendants. The court entered judgment for $387,500 actual damages against both defendants and $100,000 punitive damages against Raeford. Defendants and plaintiff entered timely notices of appeal. We consider defendants\u2019 appeal first.\nWe initially consider defendants\u2019 argument that the trial court erred in denying defendants\u2019 motion for directed verdict and defendants\u2019 motion for judgment notwithstanding the verdict. Defendants\u2019 motion for directed verdict should be granted only if the trial judge concludes that no reasonable juror could find for plaintiff. West v. Slick, 313 N.C. 33, 40, 326 S.E. 2d 601, 606 (1985). In considering the defendants\u2019 motion all conflicts in the evidence must be resolved in favor of plaintiff and the evidence must be viewed in a light most favorable to plaintiff. Id. The standard of review is the same for a motion for judgment notwithstanding the verdict. Bryant v. Nationwide Mut. Fire Ins. Co., 313 N.C. 362, 369, 329 S.E. 2d 333, 337 (1985).\nDefendants contend that plaintiff offered insufficient evidence to prove that Raeford breached its by-laws by retiring certificates in the same series as plaintiff\u2019s while refusing to retire plaintiffs certificate. In the alternative, defendants argue that even if the certificates were of the same series, the trial court should have submitted to the jury an issue on whether Raeford retired other certificates for full or partial value. We reject both arguments.\nPlaintiff\u2019s evidence tended to show that defendant Raeford issued identical \u201cClass B \u2014Series 1975\u201d Revolving Fund Certificates to plaintiff and to Stone Brothers when it was formed in 1975. Both certificates were in the amount of $387,500. The remaining 50% of RTF was owned by NJS. Defendant Johnson owned 80% of NJS and served as its president. Defendant Johnson is also Chief Executive Officer of defendant Raeford, a post he has held since 1978. NJS is one of defendant\u2019s largest turkey suppliers. In exchange for NJS\u2019s 50% share of RTF, defendant Raeford issued the same \u201cClass B \u2014Series 1975\u201d certificate to NJS that had been issued to plaintiff and Stone Brothers, except NJS\u2019s certificate was in the amount of $750,000. Defendant Raeford also issued \u201cClass A \u2014Series 1975\u201d certificates to other turkey producers in 1975.\nPlaintiff\u2019s evidence also tended to show that Raeford refused plaintiff\u2019s demand to pay its certificate even though Raeford paid an identical Stone Brothers\u2019 certificate in 1978. Raeford was less solvent in 1978 than in 1986 when plaintiff made its demand. Moreover, Raeford discounted NJS\u2019s $750,000 certificate on its books to zero value in 1984, even though that certificate was nearly twice the amount of plaintiff\u2019s. The Class A \u2014Series 1975 certificates were also paid off in 1978. Defendants argue that the Class A certificates were of a different series than the Class B certificates because the Class A certificates were issued at a different time and to a different class of people, patron members of Raeford, not former owners of RTF which held the Class B certificates.\nRaeford\u2019s by-laws support plaintiffs argument that the Class A and Class B certificates are of the same series. The by-laws provide as follows:\nSuch certificates shall be issued in annual series, each certificate in each series upon its face being identified by the year in which it is issued; and each series shall be retired fully or on a prorata [sic] basis, only at the discretion of the board of directors of the association, in the order of issuance by years as funds are available for that purpose. (Emphasis supplied.)\nThe by-laws require designation of certificates by \u201cannual series.\u201d Both Class A and Class B certificates are identified with the caption \u201cSeries 1975.\u201d Class A and B certificates were, therefore, the same series. We find the evidence sufficient to support plaintiff\u2019s claim that defendants breached Raeford\u2019s by-laws.\nDefendants contend alternatively that the trial court erred in failing to instruct the jury that they should determine whether Stone Bros., NJS, and the Class A certificates were retired at full value or on a pro rata basis. Defendants maintain that the trial court\u2019s decision to enter judgment for the full amount of the certificate, rather than permitting the jury to consider the amount, amounted to an improper directed verdict on damages.\nDefendant Raeford\u2019s by-laws require that the retirement of each series must be either in full or on a pro rata basis. Thus, if the Class A and B holders received full value, then plaintiff was entitled to receive full value. The evidence is clear that Class A holders received $100 each, plus cancellation of their promissory notes to Raeford, in exchange for Raeford taking back the certificates. Moreover, Raeford discounted the entire value of all Series 1975 certificates, except plaintiff\u2019s, in its 1987 Financial Statement. For the purposes of Raeford\u2019s books, the entire 1975 Series was considered paid in full, except plaintiff\u2019s certificate. Finally, concerning the certificates of Stone Bros./FCX and NJS, Raeford paid FCX $950,000 in 1978 for the certificate and other obligations and passed a corporate resolution providing that the actions would \u201cthus retire, all interests of FCX in the association . . . FCX then transferred \u201call its right, title and interest\u201d in the Class B instrument to Raeford. As for the NJS certificate, Raeford discounted the certificate\u2019s full value on its books. In short, there is simply no evidence that Class A and B holders, except plaintiff, received anything but full value. The jury was therefore properly instructed to find that plaintiff should receive full value if it found defendants violated Raeford\u2019s by-laws or defendants unreasonably denied plaintiff\u2019s demand.\nNext defendants challenge the sufficiency of plaintiff\u2019s evidence on whether Raeford acted unreasonably in exercising its discretion not to redeem plaintiff\u2019s certificate. The certificates were redeemable, if at all, defendants contend, in the sole discretion of Raeford\u2019s board as the by-laws provided. Defendants note the cyclical nature of the poultry business and the Board\u2019s desire to become more competitive by purchasing new plant and equipment as factors they considered in declining plaintiff\u2019s demand for payment. Similarly, defendants point out that the certificates by their terms were junior and subordinate to all other corporate debts. Defendants argue that Raeford had to consider the effect on other creditors of paying a junior creditor\u2019s debts, as well as a balance sheet showing current liabilities and long-term debts exceeding $5,000,000.\nOn the issue of the subordinate nature of the debt, plaintiff offered expert testimony from Dr. James Baarda that the \u201cjunior and subordinate\u201d language meant that when the cooperative dissolves, all other debts are paid before the certificates. Defendants\u2019 expert agreed with Dr. Baarda that the \u201csubordinate\u201d language did not mean payment of the certificate was to be withheld if the corporation had other debts. Defendants\u2019 argument seems disingenuous in light of the payment to the Class A holders, the redemption of the Stone Brothers certificate, as well as the bookkeeping cancellation of the NJS certificate. The total value of these certificates far exceeded plaintiff\u2019s certificate.\nPlaintiff\u2019s evidence of Raeford\u2019s strong financial position, together with testimony of defendant Johnson that Raeford may never pay the certificate, supported plaintiff\u2019s claim that the Board unreasonably exercised its discretion in refusing to pay plaintiff\u2019s certificate. Plaintiff\u2019s evidence showed that Raeford\u2019s net worth nearly quadrupled in five years from $6.8 million in 1983 to $27 million in 1987. In 1986, the year plaintiff demanded payment, plaintiff\u2019s net earnings were $6.1 million. While Raeford spent $6.5 million in 1987 on a new plant and equipment, Raeford was able to loan defendant Johnson $394,000 and invest $3.4 million of excess cash in a securities portfolio in 1987. Nevertheless, defendant Johnson testified that he told Mr. Hervey Evans, one of plaintiff\u2019s principals, \u201cI might not never pay it [the certificate].\u201d An attorney for the Federal Land Bank testified that Mr. Johnson told him, \u201cIt\u2019s not bearing any interest, so there\u2019s really no reason to pay it. It\u2019s sort of like owing money to yourself.\u201d Likewise, at the director\u2019s meeting discussing plaintiff\u2019s request to pay the certificate, Mr. Johnson stated that the Board \u201cdecided that we didn\u2019t need to bother with it; it shouldn\u2019t be paid, it wasn\u2019t good business . . . .\u201d As to Raeford\u2019s by-laws governing the certificates, Mr. Johnson stated: \u201c[T]he by-laws wasn\u2019t [sic] that important to me. I, I\u2019ve never read them all the way through. I just glanced at them, that\u2019s about it.\u201d\nWe agree with defendants that the mere financial ability of a corporation to pay is insufficient to prove an abuse of discretion. See, e.g., Claassen v. Farmers Grain Co-op., 208 Kan. 129, 490 P. 2d 376 (1971). We are also mindful that the business judgment rule protects corporate directors from being judicially second-guessed when they exercise reasonable care and business judgment. The directors \u201care not guarantors that they will make no mistakes in the management of corporate business.\u201d R. Robinson, North Carolina Corporation Law and Practice \u00a7 12-6 at 178 (3d ed. 1983). Nevertheless, on the facts of this case, we find that plaintiff\u2019s evidence was sufficient to go to the jury on the question of whether Raeford unreasonably exercised its discretion in refusing to pay plaintiff\u2019s certificate.\nNext defendants maintain that the trial judge erred in submitting the issue of breach of Raeford\u2019s by-laws because by-laws are intracorporate rules of governance which cannot serve as a basis for plaintiff\u2019s cause of action. We note initially that defendants requested that the jury be instructed to address whether defendants abused their discretion in refusing to retire plaintiff\u2019s certificate. The trial court instructed the jury as defendants requested. Defendants cannot now complain because the trial court granted their request. Jennings Glass Co. v. Brummer, 88 N.C. App. 44, 50, 362 S.E. 2d 578, 582 (1987), disc. review denied, 321 N.C. 473, 364 S.E. 2d 921 (1988). Second, plaintiff\u2019s certificate ' constituted a contract between plaintiff and Raeford upon which Raeford conditionally promised to pay plaintiff $387,500 in consideration for the stock plaintiff held in Raeford\u2019s predecessor corporation, RTF. See, e.g., Mezzanotte v. Freeland, 20 N.C. App. 11, 17, 200 S.E. 2d 410, 414 (1973), cert. denied, 284 N.C. 616, 201 S.E. 2d 689 (1974). Raeford\u2019s by-laws were incorporated into plaintiff\u2019s certificate. Those by-laws constituted additional terms of the parties\u2019 contract and therefore more than internal rules for defendant Raeford. Defendants\u2019 argument is without merit.\nDefendants also contend the trial court erred in submitting to the jury the issue of whether defendants owed plaintiff a fiduciary duty. According to defendants the certificate held by plaintiff was an instrument of debt. They maintain that no fiduciary duty exists in a debtor-creditor relationship.\nA fiduciary duty \u201c \u2018exists in all cases where there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence.\u2019 \u201d Stone v. McClam, 42 N.C. App. 393, 401, 257 S.E. 2d 78, 83, cert. denied, 298 N.C. 572, 261 S.E. 2d 128 (1979) (citation omitted). We find the facts of this case sufficient to show that plaintiff placed a special confidence and trust in Raeford and its directors. Plaintiff accepted the certificate as partial consideration for the 25\u00b0/o share plaintiff held in RTF. Plaintiff\u2019s interest was in turn transferred to Raeford as successor in interest to RTF, and Raeford recognized the certificate as a capital contribution on its balance sheet. Furthermore, since the certificate was redeemable at Raeford\u2019s discretion and since Raeford refused to reveal financial information about itself to plaintiff, plaintiff had the right to expect Raeford to exercise its discretion in good faith.\nAlso, we are unpersuaded that the certificate was a pure debt instrument. The existence of a fiduciary relationship is not contingent upon a technical or legal relationship. Moore v. Bryson, 11 N.C. App. 260, 265, 181 S.E. 2d 113, 116 (1971). Shareholders of a corporation are owed a fiduciary duty by that corporation\u2019s officers and directors. N.C. Gen. Stat. \u00a7 55-35 (1982). The issuance of the revolving fund certificate has some characteristics of a corporation/shareholder relationship. First, the certificate was originally issued in exchange for stock held in Raeford\u2019s predecessor, RTF, as partial consideration for plaintiff\u2019s capital contribution to Raeford. Plaintiff\u2019s certificate, along with similar certificates to Stone Bros. and NJS, was part of Raeford\u2019s original capitalization. See First Citizens Bank and Trust Co. v. Parker, 225 N.C. 480, 485, 35 S.E. 2d 489, 492 (1945) (\u201cThe fiduciary character of the debt does not depend upon its form but the manner of its origin and the acts by which it is incurred . . . .\u201d). Second, Raeford listed the certificates under stockholder\u2019s equity on its balance sheet as it did for common stock. Finally, like common stock, the certificate was junior and subordinate to all other debts of Raeford, secured or unsecured. It is fundamental to corporate law that if the corporation dissolves, the common stockholders receive a distribution, if at all, after all the debts have been paid. 19 Am. Jur. 2d Corporations \u00a7 2866 at 648 (1986).\nDefendants next challenge the instruction given to the jury on the fiduciary duty issue on the grounds that the trial court erred in shifting the burden of proof to defendants to prove that a breach of that duty did not occur. We find no error. Once plaintiff established a prima facie case that defendants owed plaintiff a fiduciary duty and that duty was breached, which amounted to constructive fraud, the burden of proof shifted to defendants to prove that they acted in an open, fair and honest manner, and the court so instructed the jury. See Sanders v. Spaulding & Perkins, Inc., 82 N.C. App. 680, 681, 347 S.E. 2d 866, 867 (1986).\nWe turn now to defendants\u2019 contention that the trial court erred in admitting plaintiff\u2019s expert testimony from Dr. James Baarda. Defendants contend Dr. Baarda\u2019s testimony embraced ultimate legal conclusions and thus amounted to an impermissible instruction to the jury and usurpation of the jury\u2019s duty.\nN.C. Gen. Stat. \u00a7 8C-1, Rule 704 (1986) provides that \u201c[testimony in the form of an opinion or inference is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.\u201d Our Supreme Court has stated that \u201can expert may not testify that a particular legal conclusion or standard has or has not been met, at least where the standard is a legal term of art which carries a specific legal meaning not readily apparent to the witness.\u201d State v. Ledford, 315 N.C. 599, 617, 340 S.E. 2d 309, 321 (1986) (emphasis added).\nDefendants first argue that the trial court should have excluded Dr. Baarda\u2019s testimony that the directors abused their discretion in failing to redeem plaintiff\u2019s certificate. We do not believe the testimony at issue constituted testimony on a legal conclusion or standard for which there is a specific legal meaning such that exclusion was required. The existence or nonexistence of a fiduciary duty was a question of fact for the jury. The jury had to determine whether plaintiff had placed special confidence and faith in defendants to act in plaintiff\u2019s interests. See Stone, 42 N.C. App. at 401, 257 S.E. 2d at 83. We further find that the trial judge instructed the jury, in part, as follows: \u201c[Y]ou should consider the opinion of an expert witness, but you are not bound by it.\u201d He also instructed, \u201cYou must . . . apply the facts as you find them to be to the law as I am about to give it to you.\u201d Accord, 3 Weinstein\u2019s Evidence (J 704 [02] at 704-16 (1988) and United States v. Fogg, 652 F. 2d 551, 556-67 (5th Cir. 1981), cert. denied, 456 U.S. 905, 102 S.Ct. 1751, 72 L.Ed. 2d 162 (1982). (Applying Federal Rule 704 \u2014 which is identical to North Carolina\u2019s Rule 704 \u2014 the court held that no error occurred where an IRS agent stated a legal conclusion on defendant\u2019s culpability because of the court\u2019s precautionary instructions to the jury on the weight to be afforded expert testimony.) We also believe that the complexity of this case and the specialized knowledge necessary to understand the use of revolving fund certificates in agricultural cooperatives distinguishes this case from those relied on by defendants. See Fogg, 652 F. 2d at 557 (5th Cir. 1981) (the court considered the complexity of the case in affirming the use of expert testimony even though it embraced a legal conclusion). The cases relied on by defendants involve less complex issues such as gross negligence (Murrow v. Daniels, 85 N.C. App. 401, 355 S.E. 2d 204, rev\u2019d on other grounds, 321 N.C. 494, 364 S.E. 2d 281 (1988)); the construction and interpretation of a right-of-way agreement (Board of Transportation v. Bryant, 59 N.C. App. 256, 296 S.E. 2d 814 (1982)); and whether an easement by implication existed (Williams v. Sapp, 83 N.C. App. 116, 349 S.E. 2d 304 (1986)). We find no error in the admission of Dr. Baarda\u2019s testimony.\nDefendants next contend that the trial court erred in submitting a punitive damages issue to the jury because plaintiff failed to show aggravated or tortious conduct other than defendants\u2019 mere refusal to pay. We disagree. In answering the third and fourth issues \u201cYes,\u201d the jury found that defendants had a fiduciary duty to plaintiff and their refusal to retire plaintiff\u2019s certificate was not an open, fair or honest transaction. Defendants\u2019 breach of their fiduciary duty to plaintiff, which also amounted to evidence sufficient to prove constructive fraud, justified punitive damages. See Sanders, 82 N.C. App. at 681, 347 S.E. 2d at 868 (1986). Defendants\u2019 assignment of error is overruled.\nDefendants have raised several other issues on appeal. We have carefully reviewed those arguments, and we find they entitle defendants to no relief and do not merit further discussion. See State v. Tomblin, 276 N.C. 273, 277, 171 S.E. 2d 901, 904 (1970).\nWe now turn to plaintiff\u2019s cross appeal. Plaintiff\u2019s sole assignment of error alleges the trial court erred in the dismissal of its unfair or deceptive trade practices claim for failure to state a claim upon which relief can be granted. Moreover, plaintiff contends that the jury\u2019s factual determination that defendants\u2019 refusal to redeem was not an open, fair or honest transaction established an unfair or deceptive trade practice as a matter of law. We agree that the trial judge erred in dismissing plaintiff\u2019s unfair or deceptive trade practice claim. We do not agree, however, that plaintiff has established that claim as a matter of law.\nThe standard of review for the granting of defendants\u2019 N.C. Gen. Stat. \u00a7 1A-1, Rule 12(b)(6) motion requires us to test the legal sufficiency of plaintiff\u2019s claim. The allegations in plaintiff\u2019s complaint are treated as true. White v. White, 296 N.C. 661, 667, 252 S.E. 2d 698, 702 (1979). In its complaint plaintiff alleged that defendants owed plaintiff a fiduciary duty and that defendants breached that duty when they refused to redeem plaintiff\u2019s certificate. Plaintiff alleged that the refusal was unreasonable. Plaintiff alleged that defendants manipulated Raeford\u2019s income to the benefit of defendant Johnson\u2019s family and to the detriment of plaintiff\u2019s interest. Plaintiff alleged that defendants\u2019 actions were inequitable, arbitrary, in bad faith, were an abuse of discretion, and a violation of Raeford\u2019s by-laws. Plaintiff further alleged that defendants\u2019 acts were in or affecting commerce. These allegations, though not denominated as such, are sufficient to allege constructive fraud. Therefore, the allegations were sufficient to allege a claim of unfair or deceptive trade practice. Spence v. Spaulding and Perkins, Ltd., 82 N.C. App. 665, 668, 347 S.E. 2d 864, 866 (1986).\nWe do not agree, however, with plaintiff\u2019s argument that we should find that, in the case below, the unfair or deceptive trade practice has been established as a matter of law. Plaintiff urges this Court to treble the damages and remand the cause only for consideration of attorney fees. In rejecting this argument, we note initially that the case was not tried below with any consideration given to an unfair or deceptive trade practice claim. Had the claim been present during trial, it could have profoundly affected defendants\u2019 preparation for trial and the tactics pursued during trial. It would be manifestly unfair to declare, at this stage of the proceedings, that the claim was proven as a matter of law with no contrary result possible, even though the claim was not prosecuted or defended as such below.\nWe also reject plaintiff\u2019s argument because the jury made no findings concerning whether defendants\u2019 practices were in or affecting commerce and whether the acts had an impact on plaintiff. N.C. Gen. Stat. \u00a7 75-1.1 (1988); Wilder v. Squires, 68 N.C. App. 310, 319, 315 S.E. 2d 63, 68, disc. rev. denied, 311 N.C. 769, 321 S.E. 2d 158 (1984).\nOrdinarily, it would be for the jury to determine the facts, and based on the jury\u2019s finding, the court would then determine as a matter of law whether the defendant engaged in unfair or deceptive acts or practices in the conduct of trade or commerce.\nHardy v. Toler, 288 N.C. 303, 310, 218 S.E. 2d 342, 346-47 (1975). Since the jury has not made the requisite findings, we will not speculate, based on the findings made on plaintiff\u2019s other claims, whether plaintiff has established its claim as a matter of law.\nOn remand the trial court must consider the factual findings already made by the jury together with additional factual findings the jury will make under proper instructions in accordance with the statutes and case law relative to unfair or deceptive trade practice claims. Then the trial court must determine whether defendants engaged in unfair or deceptive trade practices. If the trial court finds that defendants engaged in an unfair or deceptive trade practice, plaintiff is entitled to have its actual damages trebled and may be entitled to attorney fees in the trial court\u2019s discretion, if the court finds that defendants\u2019 act or practice was willful and their refusal to resolve the matter was unwarranted. N.C. Gen. Stat. \u00a7\u00a7 75-16 and 75-16.1 (1988). Plaintiff would then elect to recover either punitive damages or treble damages. Plaintiff is not entitled to recover both treble and punitive damages under \u00a7 75-16. Jennings Glass Co. v. Brummer, 88 N.C. App. 44, 53, 362 S.E. 2d 578, 584 (1987), disc. rev. denied, 321 N.C. 473, 364 S.E. 2d 921 (1988).\nIn summary, in defendants\u2019 appeal we find no error. In plaintiff\u2019s appeal we vacate the order granting defendants\u2019 Rule 12(b)(6) motion as to unfair or deceptive trade practices, and we remand for a new trial on that claim.\nNo error in part; vacated and-remanded in part.\nJudge Phillips concurs.\nJudge GREENE dissents.", "type": "majority", "author": "COZORT, Judge." }, { "text": "Judge Greene\ndissenting.\nI dissent from the majority\u2019s ruling on the admissibility of Dr. Baarda\u2019s testimony that the defendants \u201cabused their discretion\u201d and \u201cbreached\u201d certain \u201cfiduciary duties.\u201d Despite the adoption of Rule 704, Dean Brandis has stated the continuing validity of state precedent that an expert may not opine on whether a legal standard has or has not been fulfilled in a specific case:\nIn attempting to relate the facts it often happens that a witness will use words which, though familiar to the layman\u2019s vocabulary, also have a legal meaning. Whether such usage will violate the opinion rule depends upon the sense in which the words are used and the nature of the issues in the case. Thus a witness may state that he was in \u2018possession\u2019 of land or chattel ... or that the prosecutrix was \u2018raped\u2019 ... if the words are employed in a popular sense to describe the facts rather than their legal consequences. Where the legal relations growing out of the facts are in dispute, and the witness\u2019s words appear to describe the relations themselves, the same words may be objectionable. Under these circumstances it is improper for a witness to testify whether a transaction was \u2018bona fide\u2019 or induced by \u2018fraud\u2019 ... or whether he was an \u2018agent\u2019 . . . and a witness may not testify to the legal effect of a contract or to its meaning when that is a question for the court to decide from the writing itself; but he may testify to his own intention and understanding where they are relevant.\n1 H. Brandis, Brandis on North Carolina Evidence Sec. 130 at 579-82 (3rd ed. 1988) (emphasis added).\nIt is true that the federal courts have been generally reluctant to overrule a trial judge who allows expert opinion that arguably states relevant legal standards have been met. E.g., Specht v. Jensen, 832 F. 2d 1516, 1527 (10th Cir. 1987) (en banc) (permitting constitutional expert to state opinion on dispositive issue whether \u201csearch\u201d occurred under Fourth Amendment). However, even after this state\u2019s adoption of Rule 704, our own Supreme Court and this court have followed a more conservative course which confirms Dean Brandis\u2019s observation. See, e.g., State v. Weeks, 322 N.C. 152, 167, 367 S.E. 2d 895, 903 (1988) (psychiatric testimony that defendant did not act in \u201ccool state of mind\u201d and was unable to conform behavior to legal requirements improperly stated legal standard had not been met); State v. Ledford, 315 N.C. 599, 340 S.E. 2d 309 (1986) (expert precluded from stating that injuries were \u201cproximate cause\u201d of death); State v. Smith, 315 N.C. 76, 337 S.E. 2d 833 (1985) (dictum) (court noted it would bar expert testimony that defendant \u201craped\u201d victim in rape trial); Murrow v. Daniels, 85 N.C. App. 401, 355 S.E. 2d 204, rev\u2019d on other grounds, 321 N.C. 494, 364 S.E. 2d 392 (1987) (expert\u2019s opinion that defendant\u2019s lack of security was \u201cgross negligence\u201d was improper legal conclusion) (cited with approval by Supreme Court in Weeks)-, Williams v. Sapp, 83 N.C. App. 116, 349 S.E. 2d 304 (1986) (error to allow attorney to give expert opinion that plaintiff was legally entitled to easement by implication); but see State v. Franks, 262 N.C. 94, 124 S.E. 2d 537 (1962) (where defendant charged with selling unregistered securities, expert could state that debentures must be registered under state securities law).\nDr. Baarda testified as an expert with degrees in law and agricultural economics. He testified extensively concerning the nature of agricultural cooperatives and the use of revolving certificates for their financing. The majority summarizes Dr. Baarda\u2019s testimony as \u201ctestimony that the directors abused their discretion in failing to redeem plaintiff\u2019s certificate.\u201d That simple paraphrase does not do justice to the breadth of Dr. Baarda\u2019s extensive testimony concerning the legal effect of key provisions of the certificates, as well as Dr. Baarda\u2019s opinion that defendants abused their discretion and breached their fiduciary duties to plaintiff in failing to redeem the certificates:\nQ. All right. I am trying to deal with the subject of discretion, Dr. Baarda. What discretion is available to the Board under this Section [of the certificate] that you are reading from?\nA. That this cooperative gives the discretion to the Board of Directors to redeem.\nQ. I\u2019d like to ask whether you have an opinion as to whether there is an additional type of discretion permissible to the Board of Directors?\nA. (Reading over paragraph.) Yes, there is an additional discretion.\nQ. What is that discretion?\nA. [The] discretion ... to revolve [the certificates] out of order . . . under some extraordinary circumstances . . . spelled out in the by-laws [such as] to compromise or settle the dispute between the owner thereof and the association, and then for other purposes such as settling an estate or when an owner moves from the territory.\nQ. Based upon your experience, and your review of materials which you have previously testified to, do you have an opinion satisfactory to yourself as to whether the Board of Directors of Raeford abused its discretion in failing to redeem HAJMM\u2019s Class B revolving fund certificate?\nA. [M]y opinion is that the Board of Directors did abuse its discretion in failing to redeem this equity.\nQ. Do you have an opinion satisfactory to yourself as to when the abuse of discretion occurred?\nA. In my opinion the abuse occurred when demand was made on the cooperative to pay it back and the cooperative refused to do so.\nQ. Do you have an opinion satisfactory to yourself as to whether the abuse of discretion is a continuing matter?\nA. Yes, this decision can be made at any time, so it is a continuing problem.\nQ. Do you have an opinion satisfactory to yourself as to whether there was a fiduciary duty both by Raeford and the defendant, Marvin Johnson, to the HAJMM Company?\nA. In my opinion . . . there was such a relationship.\nQ. Do you have an opinion satisfactory to yourself as to whether the fiduciary duty was breached?\nA. I believe that the fiduciary duty was breached.\nQ. Do you have an opinion satisfactory to yourself as to when the fiduciary duty was breached?\nA. I believe it was breached when the Evans family made demand on the cooperative to pay it back, and the cooperative refused to do so.\nQ. Do you have an opinion satisfactory to yourself as to whether this breach is continuous?\nA. Yes, this, this is a continuing duty.\nThe court submitted issues to the jury concerning whether defendant breached its by-laws by refusing to retire the certificates in the reasonable exercise of its discretion, and whether defendants breached a fiduciary duty by refusing to retire the certificates. Contrary to the majority\u2019s assertion, this case may not be distinguished from the state precedents cited earlier: irrespective of how complex the factual issues were in those cases, they did not involve legal standards which were necessarily less complex than those relevant to this case. Once Dr. Baarda clarified the admittedly complex facts concerning the operation and financing of this agricultural cooperative and stated criteria pertinent to judging its financial transactions, the jury was in as good a position as Dr. Baarda to apply the relevant legal standards given by the trial judge to the facts of this case. I question the helpful \u201cexpert\u201d nature of the conclusion that defendants breached their \u201cfiduciary\u201d duties to plaintiff since the legal meaning of the term \u201cfiduciary\u201d is nearly identical to its meaning to laymen. Compare Webster\u2019s Third New Int\u2019l Dictionary at 845 (1968) with Black\u2019s Law Dictionary at 753-54 (1968). Thus, given the minimal helpfulness of the specific legal conclusions stated above, the unfair prejudice to defendants of Dr. Baarda\u2019s weighty legal conclusions warrants their exclusion under Rule 403.\nAlthough the federal courts would arguably apply the rules of evidence to permit these opinions under these facts, we are bound by the unqualified state precedents cited earlier. Given those authorities, the erroneous admission of Dr. Baarda\u2019s opinions were not cured by the trial judge\u2019s pattern instructions on credibility and expert testimony. As I believe there is a reasonable likelihood a different result might have been reached had Dr. Baarda\u2019s legal conclusions been excluded, I would grant defendants a new trial of the issues embraced by his testimony.\nFurthermore, by establishing defendants\u2019 breach of fiduciary duty (and therefore their constructive fraud), Dr. Baarda\u2019s testimony also significantly affected plaintiff\u2019s deceptive trade claims. Thus, while I agree with the majority that the trial court erroneously dismissed plaintiff\u2019s deceptive trade claims, I would remand for a new trial of all claims, including the deceptive trade claims.", "type": "dissent", "author": "Judge Greene" } ], "attorneys": [ "Petree Stockton & Robinson, by G. Gray Wilson and R. Rand Tucker, for defendant appellants, cross-appellees.", "Adams, McCullough & Beard, by William H. McCullough, Charles C. Meeker and John J. Butler, for plaintiff appellee, cross-appellant." ], "corrections": "", "head_matter": "THE HAJMM COMPANY, Plaintiff v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON, Defendants\nNo. 8816SC574\n(Filed 6 June 1989)\n1. Corporations \u00a7 13\u2014 revolving fund certificate \u2014 refusal to redeem \u2014 breach of bylaws\nThe evidence was sufficient to support plaintiff\u2019s claim' that defendants violated the bylaws of the corporate defendant, an agricultural cooperative, by refusing to retire a revolving fund certificate issued to plaintiff by defendant corporation in exchange for stock in a predecessor corporation after defendant corporation had retired other certificates in the same series.\n2. Corporations \u00a7 13\u2014 revolving fund certificate \u2014 judgment for full amount\nThe trial court did not err in entering judgment for plaintiff for the full amount of a revolving fund certificate rather than permitting the jury to consider whether other certificates were retired by the corporate defendant at full or only partial value where the corporate defendant\u2019s bylaws required the retirement of each series of certificates to be either in full or on a pro rata basis, the evidence showed that the holders of other certificates in the same series received full value, and plaintiff was thus entitled to full value.\n3. Corporations \u00a7 13\u2014 revolving fund certificate \u2014refusal by directors to redeem \u2014unreasonable exercise of discretion \u2014 jury question\nA jury question on the issue of whether the corporate defendant\u2019s board of directors unreasonably exercised its discretion in refusing to redeem plaintiffs revolving fund certificate was presented by plaintiff\u2019s evidence of the corporate defendant\u2019s strong financial position and testimony by the corporation\u2019s president that the corporation may never pay the certificate.\n4. Corporations \u00a7 25\u2014 revolving fund certificate \u2014 refusal to redeem \u2014 bylaws as basis of action\nDefendant corporation\u2019s bylaws could serve as a basis for plaintiff\u2019s action based on the corporation\u2019s refusal to retire a revolving fund certificate issued to plaintiff where the certificate constituted a contract between plaintiff and the corporation upon which the corporation conditionally promised to pay plaintiff $387,500 in consideration for stock plaintiff held in a predecessor corporation, and the bylaws were incorporated into and constituted additional terms of the parties\u2019 contract and thus were more than internal rules for the corporation.\n5. Corporations \u00a7 13\u2014 revolving fund certificate \u2014 fiduciary duty of directors and president\nThe trial court properly submitted to the jury an issue as to whether the directors and president of defendant corporation owed a fiduciary duty to plaintiff holder of a revolving fund certificate where the certificate was issued to plaintiff in consideration for the stock plaintiff held in a predecessor corporation; since the certificate was redeemable at the corporation\u2019s discretion and the corporation refused to reveal financial information about itself to plaintiff, plaintiff had the right to expect the corporation to exercise its discretion in good faith; and plaintiff was not a pure creditor of defendant corporation but had some characteristics of a shareholder in that the certificate was part of defendant corporation\u2019s original capitalization, was listed under stockholders\u2019 equity on the corporation\u2019s balance sheet, and was junior and subordinate to all other debts of the corporation upon dissolution of the corporation.\n6. Fiduciaries \u00a7 1; Fraud \u00a77\u2014 breach of fiduciary duty \u2014 prima facie case \u2014 shift of burden of proof\nThe trial court properly instructed the jury that once plaintiff established a prima facie case that defendants owed plaintiff a fiduciary duty and breached that duty, which amounted to constructive fraud, the burden of proof shifted to defendants to prove that they acted in an open, fair and honest manner.\n7. Evidence \u00a7 47\u2014 expert testimony \u2014 opinion on ultimate issue \u2014 admissibility\nThe trial court did not err in the admission of testimony by an expert witness that directors of defendant corporation abused their discretion in failing to redeem plaintiff\u2019s revolving fund certificate since the testimony did not constitute an opinion on a legal conclusion or standard for which there is a specific legal meaning not readily apparent to the witness; the court gave a precautionary instruction on the weight to be accorded expert testimony; and the complexity of this case required specialized knowledge for an understanding of the use of revolving fund certificates by agricultural cooperatives. N.C.G.S. \u00a7 8C-1, Rule 704.\n8. Damages \u00a7 11.1\u2014 breach of fiduciary duty \u2014 constructive fraud \u2014 punitive damages\nThe refusal of defendant corporation and its president to redeem plaintiffs revolving fund certificate in violation of their fiduciary duty to plaintiff, which amounted to constructive fraud, was a sufficient basis for the imposition of punitive damages.\n9. Unfair Competition \u00a7 1\u2014 revolving fund certificate \u2014 refusal to redeem \u2014 unfair trade practice \u2014 sufficiency of complaint\nPlaintiff\u2019s complaint was sufficient to state a claim against a corporation and its president for an unfair trade practice where it alleged: defendants breached a fiduciary duty to plaintiff by refusing to redeem a revolving fund certificate issued to plaintiff in exchange for stock in a predecessor corporation; defendants manipulated the corporation\u2019s income to the benefit of the individual defendant\u2019s family and to the detriment of plaintiff\u2019s interest; defendants\u2019 actions were an abuse of discretion and a violation of the corporation\u2019s bylaws; and defendants\u2019 acts were in or affecting commerce.\n10. Unfair Competition \u00a7 1; Election of Remedies \u00a7 1.1\u2014 unfair trade practice \u2014punitive or treble damages \u2014 election after verdict\nPlaintiff is not entitled to recover both treble and punitive damages for an unfair trade practice but may elect its remedy after the court has determined whether to treble the compensatory damages.\nJudge Greene dissenting.\nAPPEAL by defendants and cross appeal by plaintiff from Judgment of Judge Herbert 0. Phillips, III, entered 29 December 1987, nunc pro tunc 17 December 1987, in the SCOTLAND County Superior Court. Heard in the Court of Appeals 9 December 1988.\nPetree Stockton & Robinson, by G. Gray Wilson and R. Rand Tucker, for defendant appellants, cross-appellees.\nAdams, McCullough & Beard, by William H. McCullough, Charles C. Meeker and John J. Butler, for plaintiff appellee, cross-appellant." }, "file_name": "0001-01", "first_page_order": 31, "last_page_order": 50 }