Capps v. Blondeau

Capps v. Blondeau, 2014 NCBC 24.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
COUNTY OF WAKE 07 CVS 16486

ESTATE OF MARTHA B. CAPPS, by and )
through its Executor, Bruce L. Capps, )
and THE ANNE KYLE TRUST, by and )
through its Successor Trustee, Branch )
Banking and Trust Company, )
Plaintiffs ) OPINION AND
) ORDER ON MOTIONS FOR
v. ) SUMMARY JUDGMENT
)
HAROLD EARL BLONDEAU, R.J. )
BLONDEAU, NEAL WILLIAM KNIGHT, )
ANNE LOUISE KNIGHT, HELEN )
SOUTHWICK KNIGHT, MORGAN )
KEEGAN & COMPANY, INC., MARVIN L. )
BAKER FAMILY FOUNDATION, INC., and )
REGIONS BANK, d/b/a REGIONS )
MORGAN KEEGAN TRUST FSB, )
Defendants )

THIS CAUSE, designated a mandatory complex business case by Order of the

Chief Justice of the North Carolina Supreme Court, pursuant to N.C. Gen. Stat. § 7A-

45.4(b) (hereinafter, references to the North Carolina General Statutes will be to "G.S."),

and assigned to the undersigned Chief Special Superior Court Judge for Complex

Business Cases, comes before the court upon Defendant Morgan Keegan & Company,

Inc.'s Motion for Partial Summary Judgment ("Morgan Keegan Motion"), Defendant

Regions Bank's Motion for Partial Summary Judgment ("Regions Bank Motion"), Motion

of the Knight Defendants for Summary Judgment ("Knight Motion"), Defendant Marvin

L. Baker Family Foundation, Inc.'s Motion for Summary Judgment on All Cross Claims

("Baker Motion"), all pursuant to Rule 56 of the North Carolina Rules of Civil Procedure

("Rule(s)") (collectively, "Defendant Motion(s)"), and Plaintiffs' Motion to Summarily
Deny the Knight Defendants' Motion for Summary Judgment ("Plaintiffs' Motion"),

pursuant to Rules 6, 8 and 15 of the General Rules of Practice and Procedure for the

North Carolina Business Court ("BCR") (Defendant Motions and Plaintiffs’ Motion

collectively, "Motions").

THE COURT, after reviewing the Motions, briefs in support of and in opposition

to the Motions, arguments of counsel and other appropriate matters of record,

CONCLUDES that the Motions should be DENIED, for the reasons stated herein.

Brownlee Law Firm, PLLC, by Gilbert W. File, Esq. and Zaytoun Law Firm, PLLC,
by Robert E. Zaytoun, Esq., Matthew Ballew, Esq. and John R. Taylor, Esq., for
Plaintiffs.

Defendant Harold Earl Blondeau, pro se.

Defendant Neal William Knight, Jr., pro se.

Defendant Anne Louise Knight, pro se.

Defendant Helen Southwick Knight, pro se.

Brooks, Pierce, McLendon, Humphrey & Leonard, LLP, by Eric M. David, Esq.,
Charles F. Marshall, Esq., and James T. Williams, Esq., for Defendant Morgan Keegan
& Company, Inc.

Jordan Price Wall Gray Jones Carlton PLLC, by Paul T. Flick, Esq., for
Defendant Marvin L. Baker Family Foundation, Inc.

Howard Stallings From & Hutson, P.A., by James B. Angell, Esq., as Receiver for
Defendant Marvin L. Baker Family Foundation, Inc.

Robinson Bradshaw and Hinson, P.A. by Robert E. Harrington, Esq., Andrew W.
J. Tarr, Esq. and Matthew F. Tilley, Esq., for Defendant Regions Bank.
PROCEDURAL HISTORY

[1] On October 12, 2007, Plaintiffs filed this civil action suit against

Defendants Harold Blondeau ("Blondeau"), R.J. Blondeau, Neal William Knight, Jr.

("Neal Knight"), Anne Louise Knight ("Anne Knight"), Helen Southwick Knight ("Helen

Knight") (collectively, "Knight Defendants"), Morgan Keegan & Company, Inc. ("Morgan

Keegan"), Marvin L. Baker Family Foundation, Inc. ("Baker Foundation") and Regions

Bank.

[2] Plaintiffs filed a Verified Motion for Temporary Restraining Order and

Preliminary Injunction, N.C. Gen. Stat. § 1A-1, Rule 65, and a Verified Motion for

Appointment of Receiver for the Baker Foundation, N.C. Gen. Stat. § 1-501, et seq., on

October 30, 2007. Pursuant to these motions and a subsequent hearing, on November

15, 2007, the court entered an Order on Preliminary Injunction and Appointing Receiver,

by which it appointed James B. Angell, Esq. of Howard Stallings From & Hutson, P.A.

as Receiver to take possession and control of the Baker Foundation.

[3] Plaintiff Capps passed away on March 12, 2011. On July 8, 2011, the

court granted a Motion to Substitute Parties, allowing Bruce Capps, as executor of the

Estate of Martha B. Capps, and the Anne Kyle Trust, by and through its Successor

Trustee, BB&T, to be substituted as Plaintiffs in this action.1

[4] In the Complaint,2 Plaintiffs allege the following causes of action

1 Order on Mot. Substitute Parties (July 8, 2011).
2 Plaintiffs amended the original Complaint on May 5, 2008, by which they amended the Twentieth,

Twenty-First and Twenty-Second Causes of Action (Rescission of alleged Arbitration Agreement due to
fraudulent inducement, Rescission of alleged Arbitration Agreement due to unconscionability, and
Rescission of alleged Arbitration Agreement due to breach of fiduciary duty), and on July 15, 2011, by
which they amended the Twelfth Cause of Action (Breach of Fiduciary Duty as against Regions Bank)
and added a Twenty-Third Cause of Action against Defendant Regions Bank (Unfair and Deceptive Trade
("Claim(s)"): First Cause of Action [Breach of Fiduciary Duty as against Defendant Hal

Blondeau] ("Claim One"); Second Cause of Action [Constructive Fraud as against

Defendant Blondeau, pled in the alternative] ("Claim Two"); Third Cause of Action

[Fraud and Deceit as against Defendant Blondeau, pled in the alternative] ("Claim

Three"); Fourth Cause of Action [Breach of Fiduciary Duty as against Defendant Neal

Knight] ("Claim Four"); Fifth Cause of Action [Constructive Fraud as against Defendant

Neal Knight, pled in the alternative] ("Claim Five"); Sixth Cause of Action [Fraud and

Deceit as against Defendant Neal Knight, pled in the alternative] ("Claim Six"); Seventh

Cause of Action [Negligent Misrepresentation as against Defendants Hal Blondeau and

Morgan Keegan] ("Claim Seven"); Eighth Cause of Action [Respondeat

Superior/Vicarious Liability as against Defendant Morgan Keegan] ("Claim Eight"); Ninth

Cause of Action [Negligence and/or Negligence Per Se as against Defendant Morgan

Keegan] ("Claim Nine");Tenth Cause of Action [Violation of North Carolina Racketeer

Influenced and Corrupt Organizations Act, N.C.G.S. Ch. 75-D, as against Defendants

Hal Blondeau, Neal Knight, and Baker Foundation] ("Claim Ten"); Eleventh Cause of

Action [Civil Conspiracy as against Defendants Hal Blondeau, Neal Knight, and Baker

Foundation] ("Claim Eleven"); Twelfth Cause of Action [Breach of Fiduciary Duty as

against Defendant Regions Bank] ("Claim Twelve"); Thirteenth Cause of Action [Unfair

and Deceptive Trade Practices as against Defendant Morgan Keegan and Defendant

Blondeau] ("Claim Thirteen"); Fourteenth Cause of Action [Unjust Enrichment/Quantum

Meruit as against Defendants R.J. Blondeau, Anne Knight, and Helen Knight] ("Claim

Practices). The original Complaint and subsequent filings amending the original Complaint collectively will
be referred to as "Complaint."
Fourteen"); Fifteenth Cause of Action [Revocation of Gifts as against Defendants

Blondeau, R.J. Blondeau, Neal Knight, Helen Knight, Anne Knight, and Baker

Foundation] ("Claim Fifteen"); Sixteenth Cause of Action [Constructive Trust as against

Defendants Baker Foundation, Blondeau, R.J. Blondeau, Neal Knight, Anne Knight, and

Helen Knight] ("Claim Sixteen"); Seventeenth Cause of Action [Equitable Action for

Accounting] ("Claim Seventeen"); Eighteenth Cause of Action [Preliminary Injunction]

("Claim Eighteen"); Nineteenth Cause of Action [Order for Appointment of Receiver

pursuant to Chapter 1, Article 38 of the North Carolina General Statutes, pled in addition

and in the alternative] ("Claim Nineteen"); Twentieth Cause of Action [Rescission of

alleged Arbitration Agreement due to fraudulent inducement] ("Claim Twenty"); Twenty-

First Cause of Action [Rescission of alleged Arbitration Agreement due to

unconscionability] ("Claim Twenty-One"); Twenty-Second Cause of Action [Rescission

of alleged Arbitration Agreement due to breach of fiduciary duty] ("Claim Twenty-Two");

and Twenty-Third Cause of Action [Unfair and Deceptive Trade Practices as against

Regions Bank] ("Claim Twenty-Three").

[5] On June 10, 2009, based on his prior interactions with Capps, Defendant

Hal Blondeau pled guilty to charges of Investment Advisor Fraud and Making and

Subscribing a False Tax Return. United States v. Blondeau, 2011 U.S. Dist. LEXIS

139082 at *1.

[6] On January 7, 2008, Defendants Morgan Keegan and Blondeau filed

motions asking the court to stay this action and compel certain issues to be resolved by

arbitration. They contended that a valid and enforceable arbitration agreement between

Capps and Morgan Keegan prevented Plaintiffs from raising claims as to Morgan
Keegan and its agents or employees in this civil action.3 Because applicable law

requires a court to determine summarily the existence of an enforceable arbitration

agreement before ordering a dispute to arbitration, the court entered an order on May 2,

2008, requiring limited discovery as to the existence of an agreement to arbitrate

between Capps and Morgan Keegan and whether such agreement was

unconscionable.4 After considering the evidence produced by the parties in response to

the discovery order, the court entered an order denying the motions to compel

arbitration by Morgan Keegan and Blondeau on April 13, 2010.5 That order was

subsequently appealed, and the denial of arbitration was affirmed by the North Carolina

Court of Appeals on November 15, 2011.6

[7] On April 13, 2010, the court dismissed Claims Fourteen and Fifteen

against R.J. Blondeau, Helen Knight and Anne Knight.7

[8] In their Answers to the Complaint, Defendants Neal Knight and Anne

Knight alleged crossclaims against the Baker Foundation for indemnification.8 Neal

Knight also alleged a counterclaim against Capps for attorney's fees.9 Morgan Keegan

also filed a crossclaim against the Baker Foundation for indemnification.10

[9] On June 10, 2010, Defendant Baker Foundation filed Cross-Claims of the

Defendant Marvin L. Baker Family Foundation, Inc. ("Baker Foundation Crossclaims").

3 Morgan Keegan's Mot. Stay Jud. Proceedings & Compel Arb., Blondeau Mem. Law Supp. Mot. Compel

Arb.
4 Order (May 2, 2008) (citing Routh v. Snap-On Tools Corp., 108 N.C. App. 268, 271-72 (1992)).
5 Order on Mot. Stay Jud. Proceedings and Compel Arbitration, 2010 NCBC 7 (Apr. 13, 2010), aff'd, 2011

N.C. App. LEXIS 2373.
6 Capps v. Blondeau, 2011 N.C. App. LEXIS 2373.
7 Op. & Order on Mot. Dismiss ¶¶ 75-76, 2010 NCBC 8 (Apr. 13, 2010) ("Opinion").
8 Neal Knight Answer to Complaint 46-47; Anne Knight Answer to Complaint 45.
9 Neal Knight Answer to Complaint 45.
10 Morgan Keegan's Amendment to Answer Asserting Crossclaim Against Baker Fdtn.
The Baker Foundation CrossClaims allege the following against Defendants Hal

Blondeau, R.J. Blondeau, Neal Knight, and Anne Knight: 11 First Claim for Relief

(Breach of Fiduciary Duty) ("Crossclaim One"); Second Claim for Relief (Conversion)

("Crossclaim Two"); Third Claim for Relief: Constructive Trust and Accounting

("Crossclaim Three"); and Fourth Claim for Relief: Unjust Enrichment ("Crossclaim

Four").

[10] On September 14, 2012, Defendant Baker Foundation filed a Motion for

Entry of Default as to Harold Earl Blondeau on the Cross-Claims of the Defendant

Marvin L. Baker Family Foundation, Inc. ("Baker Blondeau Motion"), seeking an entry of

default against Blondeau as to the Baker Foundation Crossclaims.

[11] On September 19, 2012, Defendant Blondeau filed a Motion to Stay the

Proceeding or Dismiss Defendant Blondeau from this Action ("First Blondeau Motion"),

seeking a stay in the proceedings to allow him to build his case or, in the alternative,

dismissal of Blondeau from the action.

[12] On September 24, 2012, the Knight Defendants filed the Knight Motion,

seeking summary judgment on all claims asserted by Plaintiffs against the Knight

Defendants. Also on September 24, 2012, Defendant Morgan Keegan filed the Morgan

Keegan Motion, seeking summary judgment on all claims asserted by Plaintiffs against

Defendant Morgan Keegan, and Defendant Regions Bank filed the Regions Bank

Motion, requesting summary judgment on all claims asserted by Plaintiffs against

Defendant Regions Bank. Defendant Baker Foundation also filed the Baker Foundation

11 Although R.J. Blondeau was originally named as a Defendant in both the original Complaint and the

Baker Foundation Crossclaims, all claims against him subsequently were dismissed. Voluntary Dismissal
with Prejudice as to R.J. Blondeau (Jan. 25, 2012); Notice of Dismissal of Cross-Claim as to RJ
Blondeau, (Feb. 2, 2012).
Motion on September 24, 2012, seeking Summary Judgment on all of its own

crossclaims and all crossclaims asserted against it by the Knight Defendants and

Defendant Morgan Keegan.

[13] On September 29, 2012, Defendant Blondeau filed a Motion to Dismiss

Defendant Blondeau ("Second Blondeau Motion"), moving for his dismissal from the

action.

[14] On October 12, 2012, Plaintiffs filed the Plaintiffs' Motion, seeking denial

of the Knight Defendants' Motion for Summary Judgment on procedural grounds.

[15] On March 5, 2013, the court entered an Order on Motion for Entry of

Default and Motions to Dismiss, granting the Baker Blondeau Motion and denying the

First and Second Blondeau Motions.

[16] The Motions have been fully briefed and argued and are ripe for

determination.

FACTUAL BACKGROUND

Among other things, the Complaint alleges that:

[17] Martha B. Capps (“Capps”), now deceased, was a resident of Raleigh,

North Carolina.12 Capps learned in 1988 that she was to inherit a large sum of money

from her aunt Anne Kyle ("Kyle"), a Florida resident.13 Capps was in an abusive

marriage at the time, and undertook to seek legal advice from an estate planning

attorney on how to protect this anticipated inheritance from her husband.14

[18] Capps and Kyle were referred to Neal Knight, a Florida-based attorney.15

12 Compl. ¶ 1.
13 Id. ¶¶ 19-20.
14 Id. ¶¶ 22-23.
15 Id. ¶ 24.
Knight helped Kyle establish two trusts: the Anne Kyle GST and the Anne Kyle

Irrevocable Trust (collectively, "Trust").16 Capps was named beneficiary of the Trust.17

Knight continued to work with Capps as Kyle's estate administration attorney and

Capps' resident process agent for the state of Florida after Kyle's death.18

[19] Capps' financial advisor and stockbroker, Blondeau, was intimately

involved in the creation of the Trust, even attending Capps' meeting with legal counsel

and corresponding with Neal Knight about Kyle's estate planning.19 At the time of Kyle's

death, Blondeau was employed by A.G. Edwards, which subsequently became the

successor trustee for the Trust.20 The Trust contained at least four million dollars at the

time that A.G. Edwards became successor trustee.21

[20] A.G. Edwards served as successor trustee from 1989 to 1997, when

Blondeau left employment at A.G. Edwards to work for Morgan Keegan.22 At Blondeau's

advice, Capps then moved all of her accounts, including administration of the Trust, to

Morgan Keegan.23 Regions Bank, which owned Morgan Keegan, became successor

trustee.24

[21] Upon assuming successor trustee responsibilities, Regions Bank

discovered that A.G. Edwards had failed to pay Trust net income and related taxes in

the amount of at least one million dollars to Capps during its tenure as successor

16 Id. ¶¶ 28-29.
17 Id. ¶ 29.
18 Id. ¶ 30.
19 Id. ¶¶ 25-26.
20 Id. ¶ 34.
21 Id. ¶ 36.
22 Id. ¶ 39-40.
23 Id.
24 Id. ¶ 41.
trustee.25 Rather than identifying or explaining the problem to Capps, Regions Bank

opted to pay income taxes out of Trust property. This resulted in the imposition of a

higher tax rate than would have been required had Capps paid the taxes as

beneficiary.26 Blondeau and Knight were closely involved in the legal issues surrounding

the undistributed net income, and discussed these matters with estate attorney Gerald

Thornton ("Thornton") both in and out of Capps' presence.27

[22] In July 2001, Blondeau and Knight incorporated the Baker Foundation, a

Florida non-profit corporation named for Capps' father, without the knowledge of Capps

or Thornton.28 Blondeau and Knight named themselves President, Vice President,

Secretary, Treasurer and Directors of the Baker Foundation. They also named R.J.

Blondeau, Hal Blondeau's son, and Anne Knight, Neal Knight's daughter, as Directors.29

[23] Capps executed several estate planning documents on August 21, 2001.

One of these documents granted Blondeau financial Power of Attorney, giving him the

ability to make financial decisions for Martha Capps, with Knight named as first

successor.30 On the same day that Capps executed these documents, certain stocks

and securities held as Trust assets were transferred to Capps' personal account at

Morgan Keegan.31 These assets were improperly liquidated, resulting in a short-term

capital loss of $452,451.96.32

[24] The Baker Foundation was funded with $1,775,000 from Capps' personal

25 Id. ¶ 42.
26 Id. ¶ 43.
27 Id. ¶ 47-50.
28 Id. ¶ 56-58.
29 Id. ¶ 64.
30 Id. ¶ 54-55.
31 Id. ¶ 57.
32 Id. ¶ 58.
account at Morgan Keegan on August 28, 2001, one week after Capps executed her

estate planning documents and Trust securities were liquidated in Capps' account.33

This transfer comprised 80% of her then-existing personal estate.34

[25] Defendants Blondeau and Neal Knight withheld the Baker Foundation

transfer from Thornton, and Capps was not fully informed of the amount of the

transfer.35 Further, Capps was not informed of the fact that this transfer constituted an

irrevocable charitable gift.36

[26] Assets belonging to Capps were transferred from her personal account at

Morgan Keegan to the Baker Foundation in eight transactions occurring between

August 2001 and July 2005.37 These transfers were of no material benefit to Capps or

her family, and assets held by the Baker Foundation were completely under the control

of the Foundation's Directors.38

[27] From 2002 to 2006, the Baker Foundation made several charitable

donations to organizations with no connection to Capps or her family, resulting in

favorable community recognition for Blondeau and Neal Knight, and accrued several

thousand dollars in "directors' fees" despite the fact that the Baker Foundation Directors

had not contributed time to the Baker Foundation.39

[28] During the same time period, Defendant Regions Bank permitted several

distributions of Trust principal without having the required written authorization from

33 Id. ¶ 59.
34 Id. ¶ 61.
35 Id. ¶ 62.
36 Id. ¶¶ 61-62.
37 Id. ¶¶ 59, 66, 71, 79, 82, 86, 90, 115, 120.
38 Id. ¶¶ 61, 64.
39 Id. ¶¶138-139.
Capps, or for purposes not permitted by the Trust Agreement.40 Defendant Regions

Bank failed properly to perform its fiduciary duties as trustee by relying on Hal

Blondeau's position as stockbroker and partner at Morgan Keegan to conclude that Hal

Blondeau was acting in accordance with his fiduciary duties to Capps.41

[29] Additionally, several thousand dollars from the Trust and Capps' personal

accounts were paid to universities and law schools where R.J. Blondeau and Anne

Knight and Helen Knight were enrolled,42 to Wachovia Bank, which Plaintiff believes

was designed to obscure the fact that Hal Blondeau was the real recipient of the

transfers to Wachovia Bank, 43 and to Anne Knight and Helen Knight.44 Capps' Morgan

Keegan check card was also used to make several unauthorized purchases from

alcohol vendors.45

[30] In May 2004, Capps' doctor observed during a routine examination that

Capps appeared to be suffering memory loss. Her doctor gave her a sample of a drug

to help with Alzheimer's disease.46 The following day, Hal Blondeau submitted a

document requesting a wire transfer in the amount of $350,000 from the Trust to a real

estate agent, purportedly so that Capps could purchase a second beach home in

Morehead City, North Carolina.47 In actuality, the funds were used by Hal Blondeau to

purchase a beach home for himself.48 Hal Blondeau drafted a promissory note payable

to Capps for the amount of $350,000, purportedly to represent the fact that the money

40 Id. ¶¶ 70-72, 75, 80, 81, 85.
41 Id. ¶ 73.
42 Id. ¶¶ 67, 74, 77, 80,
43 Id. ¶ 83, 87.
44 Id. ¶¶ 93, 114.
45 Id. ¶¶ 88, 113.
46 Id. ¶ 100.
47 Id. ¶ 102.
48 Id. ¶ 104.
was a loan from Capps for the purchase, but never recorded a Deed of Trust.49 In his

role as stockbroker and employee of Morgan Keegan, Hal Blondeau was obligated to

provide financial and investment services to Capps, and was prevented from borrowing

money from a client except upon specific conditions that were not met in the present

case.50

[31] On August 8, 2005, Capps' physician wrote a letter in which he stated that

he believed that Capps was experiencing significant cognitive impairment and could not

make financial or personal decisions.51

[32] In February 2006, Hal Blondeau paid $1,072.19 to Neal Knight,

purportedly to reimburse him for a visit to North Carolina to meet with Capps. Neal

Knight did not meet with Capps during that visit.52

[33] Hal Blondeau and Neal Knight were aware of Capps' domestic situation

and her reliance upon them for financial and estate planning issues, and used her

reliance to their advantage.53

DISCUSSION

Plaintiffs' Motion

[34] Plaintiffs move for a summary denial of the Knight Motion on procedural

grounds. Specifically, Plaintiffs point to the fact that the required brief in support of the

Knight Motion was not filed until more than 24 hours after the filing deadline set by this

court's May 23, 2012 Order on Motion for Amended Case Management Order, that the

49 Id. ¶ 107.
50 Id. ¶ 110-111.
51 Id. ¶ 123.
52 Id. ¶ 128.
53 Id. ¶143.
Knight Defendants never submitted exhibits cited in the brief for consideration by the

court, and that the Knight Defendants did not file their Motion with the Wake County

Clerk of Superior Court or pay the associated filing fee.54 Plaintiffs speculate that the

Knight Defendants deliberately delayed filing their brief in order to relying upon evidence

and wording from Defendant Morgan Keegans' Brief in Support of its Motion for Partial

Summary Judgment.55

[35] BCR 15.2 requires all written summary judgment motions filed with the

North Carolina Business Court to be contemporaneously accompanied by a supporting

brief. Further, BCR 8 requires any filings submitted to the Business Court to be filed with

the Clerk of Superior Court in the county of venue within five business days, in

accordance with Rule 5(d).

[36] A party practicing before the North Carolina Business Court should take

the deadlines imposed by its orders and the rules of practice very seriously. "The failure

to file a brief or response within the time specified in [BCR 15] shall constitute a waiver

of the right thereafter to file such a brief or response . . . . A motion unaccompanied by a

required brief may, in the discretion of the Court, be summarily denied." BCR 15.11.

[37] Our court of appeals has set out an appropriate standard for determining

whether a filing should be stricken for failing to comply with the applicable rules of

practice. In deciding whether to dismiss a filing for procedural error, courts should weigh

the impact of the rule violations on the non-violating party and the importance of

upholding the integrity of the rules against the broader public policy favoring the

resolution of disputes on their merits. See, e.g., Hammonds v. Lumbee River Elec.

54 Br. Supp. Pls.' Mot. Summ. Deny Knight Defs.' Mot. Summ. J. at 2-3.
55 Id. at 4.
Membership Corp., 178 N.C. App. 1, 15 (2006). The court is troubled by the Knight

Defendants' reliance on Morgan Keegan's Memorandum of Law in Support of Motion for

Partial Summary Judgment. Nevertheless, in light of the relatively short delay between

the deadline and the time the Knight Defendants submitted their brief, the relatively

minor impact on Plaintiffs due to the delay and the Knight Defendants' failure to file with

the Wake County Clerk of Superior Court, the importance of consistency in applying the

BCRs and the complexity of the case before the court, the court elects, in its discretion,

to receive and review the Knight Defendants' Motion in spite of these filing improprieties.

[38] Accordingly, the Plaintiffs' Motion should be DENIED.

Summary Judgment

[39] Summary judgment is appropriate under Rule 56 if the pleadings,

depositions, interrogatories, admissions and affidavits show that there is no genuine

issue as to any material fact and that any party is entitled to judgment as a matter of

law. Forbis v. Neal, 361 N.C. 519, 523-524 (2007).

[40] A movant may utilize a motion for summary judgment to force the non-

movant to "forecast" evidence demonstrating that the non-movant will be able to make

out at least a prima facie case at trial. Collingwood v. Gen. Elec. Real Estate Equities,

Inc., 324 N.C. 63, 66 (1989). Any inference of fact should be drawn against the movant.

Forbis, 361 N.C. at 523-24 (citing Caldwell v. Deese, 288 N.C. 375, 378 (1975)). The

existence of a genuine issue of material fact will require the court to preserve the issue

for a finder of fact. Bumpers v. Cmty. Bank of N. Va, __ N.C. __, 747 S.E.2d 220 (2013).

[41] The Morgan Keegan Motion seeks summary judgment on all Claims

(direct and vicarious) for unfair and deceptive trade practices under G.S. § 75-1.1, all
Claims for negligence and/or negligent misrepresentation arising from any transaction

that occurred before August 1, 2005, all Claims for vicarious liability arising from any

transaction that occurred before August 1, 2005, and any request for punitive damages

against Morgan Keegan.

[42] The Regions Bank Motion seeks summary judgment in favor of Regions

Bank on "all claims asserted by Plaintiffs, with the exception of those claims relating to

Plaintiffs' alleged damages resulting from Regions' resignation as co-trustee"56 of the

Trust.

[43] The Knight Motion seeks summary judgment as to all of Plaintiff's Claims

against the Knight Defendants.

[44] The Baker Motion, through the Receiver for the Baker Foundation, seeks

summary judgment as to all Baker Foundation Crossclaims and all crossclaims against

the Baker Foundation, including the crossclaims for indemnification by Defendants Neal

and Anne Knight and the purported crossclaims of Defendant Morgan Keegan.

Conclusion

[45] The court has carefully examined each of the Defendant Motions, and the

evidence of record, under the standards of Rule 56. As a result, the court is unable to

conclude that there exist no genuine issues of material fact with regard to any of the

Claims that is a subject of one or more of the Defendant Motions. Consequently, the

court further concludes that the Defendant Motions should be DENIED.57

NOW THEREFORE, based upon the foregoing, it is hereby ORDERED that:

56 Def. Regions Bank's Mot. Partial Summ. J. ("Regions Bank Memo") at 2 (referring to Compl. ¶¶ 301-

02).
57 The court later may consider issues raised by the Defendant Motions upon appropriate request

pursuant to Rule 50.
[46] Plaintiffs' Motion to Summarily Deny the Knight Defendants' Motion for

Summary Judgment is DENIED.

[47] Defendant Morgan Keegan & Company, Inc.'s Motion for Partial Summary

Judgment is DENIED.

[48] Defendant Regions Bank's Motion for Partial Summary Judgment is

DENIED.

[49] The Motion of Knight Defendants for Summary Judgment is DENIED.

[50] Defendant Marvin L. Baker Family Foundation, Inc.'s Motion for Summary

Judgment on All Cross Claims is DENIED.

[51] This matter will come before the court for trial on Monday, August 25,

2014, beginning at 10:00 a.m. in courtroom 3B of the Wake County Courthouse, 316

Fayetteville Street, Raleigh.

[52] The court will hold a pre-trial conference concerning this matter on

Monday, August 11, 2014, beginning at 11:00 a.m. in courtroom 3B of the Wake

County Courthouse, 316 Fayetteville Street, Raleigh. At that time, the court will

consider and resolve any motions in limine or other pending pre-trial issues (“Pre-trial

Motions”).58 Any Pre-trial Motions shall be e-filed with supporting briefs by the close of

business on July 14, 2014. Any response to a Pre-trial Motion shall be e-filed by the

close of business on August 4, 2014. Any reply in further support of a Pre-trial Motion

shall be e-filed by the close of business on August 8, 2014.

This the 17th day of June, 2014.

58 The court will receive proposed jury instructions and issues at a later time.