1. Contracts--breach--real estate closing--readiness to perform
The trial court did not err by denying defendant's directed verdict and JNOV motions on
defendant-Mr. Hill's breach of contract claims arising from the failure of a real estate transaction
to close where the evidence, taken in the light most favorable to plaintiffs, indicates that plaintiffs
were ready and willing to perform at all times and the defendants breached the contracts.
2. Unfair Trade Practices--real estate sale--failure to close
The trial court did not err by denying defendants' JNOV motion on an unfair and
deceptive trade practice claim arising from the failure of a real estate transaction to close and the
resale of the property by defendants where it was undisputed that quitclaim deeds from another
party were not signed until December 1994, providing support for the jury's answer that
defendant-Mr. Hill knew he was not in a position to perform the contract with plaintiffs on 22
September, when defendants declared plaintiffs in default on their offer, having already resold the
property at a higher price.
3. Unfair Trade Practices--real estate sale--inability to close--resale
The trial court did not err by determining that defendants' acts surrounding a real estate
transaction which failed to close constituted an unfair or deceptive trade practice, given the
deceptive nature of the male defendant's letter to plaintiffs, his imposition of an increased price
upon the lots and entry into sales contracts with third parties, and his retention of plaintiffs'
earnest money deposits.
4. Contracts--breach--liability of spouse
The trial court erred by granting a directed verdict in favor of defendant-Mrs. Hill on a
breach of contract claim arising from the failure of a real estate transaction to close where Mr.
Hill testified that he and Mrs. Hill did business and sold lots in Sea Gate under the name Sea Gate
Enterprises; that the Sea Gate Enterprises operating account, into which plaintiffs' earnest money
payments had been deposited following withdrawal from defendants' trust accounts, was
maintained in the name of Mr. and Mrs. Hill; both Mr. and Mrs. Hill were required to obtain
quitclaim deeds from Weyerhaeuser; and Weyerhaeuser ultimately conveyed its interest in the
three lots to both Mr. and Mrs. Hill.
5. Unfair Trade Practices--real estate sale--failure to close--liability of spouse
The trial court erred by granting a directed verdict for defendant-Mrs. Hill on an unfair
and deceptive trade practices claim arising from the failure of a real estate sale to close where
defendants contended that the evidence focused upon the actions of Mr. Hill, but the evidence,
taken in the light most favorable to plaintiffs, tended to show that Mr. Hill was at all times acting
as agent for Mrs. Hill during the course of his dealings with plaintiffs regarding the lots at issue.
6. Unfair Trade Practices--breach of real estate sales contract--damages
The trial court erred in a claim for unfair and deceptive trade practices arising from a real
estate transaction which did not close by setting aside the jury's Chapter 75 damage award and
substituting the sum imposed for breach of contract upon a finding that a portion of the verdictwas against the greater weight of the evide
nce. The proper remedy for a verdict against the
greater weight of the evidence is a new trial on the issue of damages, and damages on a Chapter
75 claim are not necessarily limited to those that might be had for breach of contract; however,
upon a damage verdict favorable to plaintiffs and the trial court's determination that the same
course of conduct gave rise to the breach of contract as well as the Chapter 75 claims, plaintiffs
must elect their damages remedy.
7. Unfair Trade Practices--attorneys' fees--prevailing party--actual damages
The portion of a judgment awarding counsel fees on a claim for unfair and deceptive trade
practices was vacated where a new trial was ordered on the issue of damages. Attorneys' fees
may be allowed to a prevailing party under N.C.G.S. § 75-16.1 in a Chapter 75 claim, but one
must suffer actual damages to be a prevailing party.
Byrant & Stanley, P.A., by Richard L. Stanley for plaintiffs.
James W. Thompson for defendants.
JOHN, Judge.
At the outset, we observe that the appeals of both plaintiffs
and defendants are subject to dismissal, see Northwood Homeowners
Assn. v. Town of Chapel Hill, 112 N.C. App. 630, 632, 436 S.E.2d
282, 283 (1993), in that the parties' appellate briefs violate the
North Carolina Rules of Appellate Procedure (the Rules) by failing
to support their respective summary of the facts with sufficient
references to pages in the transcript of proceedings, the record
on appeal, or exhibits, N.C.R. App. P. 28(b)(4). Notwithstanding,
in view of the errors identified herein, we elect in our discretion
to address the instant appeals. See N.C.R. App. P. 2 (Court may
suspend operation of the Rules [t]o prevent manifest injustice). In this dispute concerning contracts fo
r the sale of real
property, plaintiffs and defendants appeal the trial court's
judgment (the judgment) awarding plaintiffs $15,000.00 in damages
for breach of contract and unfair and deceptive trade practices as
well as $7,500.00 in counsel fees. We affirm the judgment in part,
reverse in part, and vacate the award of counsel fees.
Pertinent facts and procedural history include the following:
In 1993, defendants Gary and Beverly Hill (Mr. and Mrs. Hill)
purchased approximately 150 lots in Sea Gate Subdivision, located
in Carteret County, North Carolina. Operating and doing business
under the trade name Sea Gate Enterprises, defendants later sought
to resell the lots for profit.
Plaintiffs Carl and Ruby Poor (Mr. and Mrs. Poor) and Carl and
Marie Rose (Mr. and Mrs. Rose) contacted defendants in the fall of
1993 concerning three Sea Gate lots located on the Intracoastal
Waterway. On 16 October 1993, defendants entered into three
contracts for sale (the contracts) with plaintiffs. Defendants
agreed to sell Lot 129 to Mr. and Mrs. Rose for the price of
$27,000.00, Lot 130 to Mr. and Mrs. Poor for $36,000.00, and Lot
128 to the four plaintiffs jointly for $27,000.00. Plaintiffs
advanced the sums of $810.00, $1,080.00, and $810.00, respectively,
as earnest money for each lot.
The contracts, each signed by both Mr. and Mrs. Hill on 16October 1993, were conditioned upon defendants' procureme
nt of a
septic permit for each lot, an unclouded deed from Weyerhaeuser
Timber Company for each lot, and Coastal Area Management Act(CAMA) permits allowing docks on lots 128 and 130. Defendants
disputed the claim of Weyerhaeuser, an adjoining property owner, to
ownership of nearly two-thirds of the acreage covered by the lots,
thereby prompting the quitclaim deed condition. The contracts
specified a closing date of 1 May 1994.
Between 16 October 1993 and October 1994, Mr. Rose exchanged
numerous telephone calls with Mr. Hill. Mr. Rose also contacted
defendants' attorney during the same period seeking information
regarding closing, but was told defendants had not obtained the
requisite quitclaim deeds from Weyerhaeuser. However, by mid-June
1994, septic tank permits for each lot and one CAMA dock permit had
been secured.
Mr. Hill and plaintiffs met in early June 1994 to discuss
closing, but the transaction did not take place. On 15 September
1994, Mr. Rose wrote Mr. Hill inquiring about closing and
referencing an earlier discussion of modifying financing
arrangements for the purchase of lot 130. Mr. Rose also requested
copies of the deeds from Weyerhaeuser to you to know for sure that
you have these lots in order to close with us.
In his 22 September 1994 written reply, Mr. Hill maintained he
had previously assured plaintiffs that Weyerhaeuser was prepared to
issue deeds, but that he had not heard from plaintiffs thereafter.
Accordingly, Mr. Hill continued,
[a]s far as we are concerned, any contracts we
have had with you and the Poor's are in
default. I have spoken with my attorney
concerning this matter . . . [and] he feels
that we had an enforceable contract and that
we are quite possibly entitled to damages dueto the fact that those three lots had been
taken off of the available real estate market
. . . .
Those lots have since been re-established
on the real estate market and are now for sale
with the asking price of $35,000 for lot
[128], $40,000.00 for lot [129] and $45,000.00
for lot [130]. If you would still like to
purchase them, it will require $2000.00 in
earnest money on each lot, up front . . . .
At about the same time, defendants transferred plaintiffs' earnest
money from Sea Gate's trust account into an operating account.
In a letter to Mr. Hill dated 17 October 1994, Mr. Rose
asserted plaintiffs were ready, willing, and able to close in
May, but were unable to do so because of defendants' failure to
secure quitclaim deeds from Weyerhaeuser. Mr. Rose reiterated that
plaintiffs remained ready to close on the contracts as written if
defendants had indeed obtained the deeds. Quitclaim deeds from
Weyerhaeuser on all three lots were recorded 12 December 1994.
In the meantime, however, Mr. Hill had executed sales
contracts with Richard and Joyce Cross (Mr. and Mrs. Cross) for lot
128 on 12 September 1994 and with Roy Davis (Davis) for lot 129 on
4 November 1994. Closing on these contracts was held 7 April 1995
and 3 February 1995, respectively, and lot 130 was sold 27
September 1995 to Edward and Jo Ann Chadwick (Mr. and Mrs.
Chadwick).
As late as 16 February 1995, plaintiffs, through their lawyer,
informed defendants they still wished to close on the contracts.
Plaintiffs thereafter filed the instant suit 18 July 1995 alleging
(1) breach of contract and (2) unfair or deceptive acts orpractices in violation of N.C.G.S. § 75-1 - 75-35 (1999) (Chapter
75).
Defendants filed answer 18 September 1995 asserting as an
affirmative defense that
[a]t all times, the Defendants were ready,
willing and able to close on the purchase of
the three lots pursuant to the contracts sued
upon. The Defendants would have closed at any
time the Plaintiffs were prepared to close,
but the Plaintiffs never came forward to
tender their performance . . . . By virtue of
[their] conduct, the Plaintiffs themselves
breached their own contract and therefore have
no rights in it . . . . In fact, the
Plaintiffs had a falling out between
themselves over the contract and gave every
indication to the Defendants that they had
lost interest in the contracts . . . .
At trial, following presentation of all the evidence,
defendants renewed an earlier motion for directed verdict as to
both claims against Mrs. Hill based upon the absolute lack of
evidence regarding [her] liability for default. Plaintiffs
objected, asserting that nothing in their evidence . . .
absolve[d] her from liability. The trial court, after questioning
why Mrs. Hill had not been called as a witness, allowed defendants'
motion. However, defendants' renewed directed verdict motion
addressed to plaintiffs' claims against Mr. Hill was denied.
By its verdict, the jury determined Mr. Hill, but not
plaintiffs, had breached and repudiated the contracts, and awarded
Mr. and Mrs. Rose $3,000.00 in damages and $2,000.00 to Mr. and
Mrs. Poor. The jury also answered special interrogatories
submitted by the trial court as follows:
11. Did the defendant, Gary A. Hill, Sr.commit any one or more of th
e following acts:
a. Did the defendant, knowing that he was
not in a position to perform his contract with
the plaintiffs, . . . intentionally terminate
his contracts with the plaintiffs on September
22, 1994, retain their down payment, and
increase the sales price?
ANSWER: Yes
b. At the time of the termination of the
contracts, had the defendant, . . . already
entered into a contract to sell any one or
more of the lots to third parties?
ANSWER: Yes
c. Did the defendant . . . retain
plaintiffs' . . . earnest money, not having
met the contract terms and resell the three
lots to third parties for an increased price?
ANSWER: Yes
d. Was the [defendant's] conduct in commerce
or did it affect commerce?
ANSWER: Yes
e. Were the plaintiffs . . . injured as a
proximate result of the [defendant's] conduct?
ANSWER: Yes
f. What amount, if any, have the plaintiffs
. . . been injured?
ANSWER: $30,000
In the judgment entered 22 May 1998, the trial court set aside
the jury's award of damages in issue 11f, and trebled the remaining
damage award, see G.S. § 75-16, thereby increasing to $9,000.00 the
damages of Mr. and Mrs. Rose and to $6,000.00 the damages of Mr.
and Mrs. Poor; the court also awarded counsel fees to plaintiffs in
the amount of $7,500.00, see G.S. § 75-16.1. Defendantssubsequently moved to set aside the jury's verdict, for judgment
notwithstanding the verdict (JNOV), and for new trial
(collectively, defendants' post-trial motions), which motions were
denied by the trial court 9 June 1998.
[1]We first note defendants have expressly abandoned two
assignments of error relating to the jury instructions given in the
instant case. We therefore turn to defendants' arguments
concerning denial of their directed verdict and post-trial motions,
in particular that for JNOV, as to Mr. Hill on both the breach of
contract and Chapter 75 claims. In challenging the trial court's
denial of said motions, defendants maintain the evidence was
insufficient to send either claim to the jury. We disagree.
A JNOV motion constitutes renewal of an earlier motion for
directed verdict, Bryant v. Nationwide Mut. Fire Ins. Co., 313 N.C.
362, 368-69, 329 S.E.2d 333, 337 (1985), and similarly tests the
legal sufficiency of the evidence to take the case to the jury.
Taylor v. Walker, 84 N.C. App. 507, 509, 353 S.E.2d 239, 240, rev'd
on other grounds, 320 N.C. 729, 360 S.E.2d 796 (1987). Such motion
"shall be granted if it appears that the motion for directed
verdict could properly have been granted." N.C.G.S. § 1A-1, Rule
50(b)(1) (1999).
Accordingly, the test for determining sufficiency of the
evidence is the same under both motions. Dickinson v. Pake, 284
N.C. 576, 584, 201 S.E.2d 897, 903 (1974). A court ruling on a
JNOV motion must consider the evidence in the light most favorable
to the non-movant, with all reasonable inferences drawn in itsfavor. Abels v. Renfro Corp., 335 N.C. 209, 215, 436 S.E.2d 822,
825 (1993). If there is more than a scintilla of evidence
supporting each element of the non-movant's claim, the motion
should be denied. Ace Chemical Corporation v. DSI Transports,
Inc., 115 N.C. App. 237, 242, 446 S.E.2d 100, 103 (1994).
The elements of a claim for breach of contract are (1)
existence of a valid contract and (2) breach of the terms of that
contract. Jackson v. California Hardwood Co., 120 N.C. App. 870,
871, 463 S.E.2d 571, 572 (1995). Defendants do not dispute that
valid contracts existed between plaintiffs and defendants; rather,
defendants argue Mr. Hill's performance under the contracts was
excused, such that no breach occurred, because plaintiffs were not
ready, willing, and able to perform their part of the contract.
To the contrary, the evidence taken in the light most
favorable to the plaintiffs, see Abels, 335 N.C. at 215, 436 S.E.2d
at 825, indicates plaintiffs at all times were ready and willing to
perform and that defendants, and specifically Mr. Hill, breached
the contracts. For example, the 17 October 1994 letter of Mr. Rose
to Mr. Hill stated plaintiffs had been ready, willing, and able to
close in May, but were prevented by defendants' failure to procure
quitclaim deeds from Weyerhaeuser. As to breach, undisputed
evidence in the record reflects that the required quitclaim deeds
were not obtained from Weyerhaeuser until seven months after the
closing date set in the contracts, see Sale v. State Highway
Commission, 242 N.C. 612, 619, 89 S.E.2d 290, 296 (1955) (failure
to comply with duty imposed by contract terms constitutes breach),that Mr. Hill entered into subsequent sales contracts with third
parties regarding the lots subject to the contracts with
plaintiffs, and that Mr. Hill terminated the contracts by means of
the 22 September 1994 letter.
Plaintiffs having presented more than a scintilla of evidence
on each element of their breach of contract claim as to Mr. Hill,
the trial court properly denied defendants' directed verdict and
post-trial motions, notably that for JNOV, see Ace Chemical
Corporation, 115 N.C. App. at 242, 446 S.E.2d at 103, on that
issue. We next consider the sufficiency of the evidence regarding
plaintiffs' Chapter 75 claim against Mr. Hill.
[2]To survive a JNOV motion on a claim of unfair and
deceptive trade practices, the non-moving party must have presented
more than a scintilla of evidence the movant engaged in
(1) an unfair or deceptive act or practice, or
an unfair method of competition, (2) in or
affecting commerce, (3) which proximately
caused actual injury to the [non-movant] or to
his business.
Spartan Leasing v. Pollard, 101 N.C. App. 450, 460-61, 400 S.E.2d
476, 482 (1991) (emphasis added). Defendants concede Mr. Hill was
engaged in commerce and present no argument in their appellate
brief disputing the presence of proximate cause. See N.C.R. App.
P. 28(b)(5) ([a]ssignments of error . . . in support of which no
reason or argument is stated or authority cited, will be taken as
abandoned). Denial of defendants' JNOV motion was therefore
proper if plaintiffs presented more than a scintilla of evidence
supporting the first element, i.e., whether Mr. Hill engaged in anunfair or deceptive act or practice, or an unf
air method of
competition. Spartan Leasing, 101 N.C. App. at 460, 400 S.E.2d at
482 (emphasis added).
Issue 11 of the verdict sheet, set out in full above, required
the jury to answer several special interrogatories directed at the
conduct of Mr. Hill. Defendants contend plaintiffs presented no
evidence to support interrogatory 11a, and that the conduct
described in interrogatories 11a, b, and c, to which the jury
responded in the affirmative, do[es] not rise to the level of an
unfair or deceptive trade practice. We are not persuaded by
either argument.
As to interrogatory 11a inquiring whether Mr. Hill knew he
was not in a position to perform his contract with the plaintiffs
. . . on September 22, 1994, we note it is undisputed in the
record that quitclaim deeds from Weyerhaeuser were not obtained
until December 1994. Such evidence alone, viewed in the light most
favorable to plaintiffs, see Abels, 335 N.C. at 215, 436 S.E.2d at
825, furnished an adequate basis upon which the jury could have
based its affirmative answer to the interrogatory.
[3]Regarding defendants' second argument, it is well
established that upon a jury's determination that certain specified
acts were committed, the trial court must then determine as a
matter of law whether the "proven facts constitute an unfair or
deceptive trade practice." United Laboratories, Inc. v.
Kuykendall, 322 N.C. 643, 664, 370 S.E.2d 375, 389 (1988). In the
case sub judice, the jury's special interrogatory responsesdetermined as fact that:
a. Mr. Hill, knowing that he was not in a
position to perform his contract . . .
intentionally terminate[d] his contracts with
the plaintiffs on September 22, 1994,
retain[ed] their down payment, and increase[d]
the sales price;
b. At the time of the termination of the
contracts, . . . [Mr. Hill had] already
entered into a contract to sell . . . one or
more of the lots to third parties; and,
c. Mr. Hill retaine[d the plaintiffs']
earnest money, not having met the contract
terms and res[old] the three lots to third
parties for an increased price.
Defendants assert the facts established by the jury
constituted at most breach of contract, not legally sufficient to
constitute a violation of Chapter 75. Defendants are correct that
a
[s]imple breach of contract . . . do[es] not
qualify as [a violation of Chapter 75], but
rather must be characterized by some type of
egregious or aggravating circumstances before
the statute applies.
Norman Owen Trucking v. Morkoski, 131 N.C. App. 168, 177, 506
S.E.2d 267, 273 (1998).
Applicable aggravating circumstances include conduct of the
breaching party that is deceptive. See Mosley & Mosley Builders v.
Landin Ltd., 97 N.C. App. 511, 518, 389 S.E.2d 576, 580 (breach
accompanied by fraud or deception constitutes unfair or deceptive
trade practice), disc. review denied, 326 N.C. 801, 393 S.E.2d 898
(1990). A practice is deceptive if it "possesse[s] the tendency or
capacity to mislead, or create[s] the likelihood of deception."
Overstreet v. Brookland, Inc., 52 N.C. App. 444, 453, 279 S.E.2d 1,7 (1981).
Mr. Hill's 22 September 1994 letter to plaintiffs had the
capacity to mislead and was therefore deceptive for Chapter 75
purposes. See id. Even though Mr. Hill indicated therein that
plaintiffs might purchase all three lots if they assented to an
increased purchase price, the jury's finding established that at
least one lot had become subject to an unrelated contract to
purchase by the date of the letter. See Mosley & Mosley, 97 N.C.
App. at 519, 389 S.E.2d at 580 (letter from lessor to lessee
expressing wishes for another profitable year deceptive when
lessor was simultaneously negotiating with another tenant for
lessee's retail space).
In addition, although not necessary to support a Chapter 75
claim, see Johnson v. Insurance Co., 300 N.C. 247, 265, 266 S.E.2d
610, 622 (1980) ([p]roof of actual deception is unnecessary),
evidence was also introduced that plaintiffs were in fact deceived,
believing the three lots would continue to be available. In a 16
February 1995 letter from their attorney, plaintiffs indicated a
continued willingness to close on the contracts; however, the
undisputed evidence was that closing on one lot in an unrelated
transaction had previously occurred on 3 February 1995.
Given the deceptive nature of Mr. Hill's 22 September 1994
letter, his imposition of an increased price upon the lots and
entry into sales contracts thereon with third parties, as well as
the retention of plaintiffs' earnest money deposits, we hold the
trial court properly concluded that aggravating circumstancesnecessary to sustain a Chapter 75 claim against Mr. Hill were
present, see Norman Owen Trucking, 131 N.C. App. at 177, 506 S.E.2d
at 273, and that the court did not err in denying defendants'
directed verdict and post-trial motions addressing that claim.
[4]We turn now to plaintiffs' assignments of error and
consider ad seriatim their challenge to the trial court's grant of
defendants' directed verdict motion on plaintiffs' claims of breach
of contract and unfair and deceptive trade practices against Mrs.
Hill.
To reiterate, the elements of a claim of breach of contract
are (1) existence of a valid contract and (2) breach of that
contract, specifically by Mrs. Hill in the present context.
Jackson, 120 N.C. App. at 871, 463 S.E.2d at 572. At trial,
defendants indicated they did not deny that [Mrs. Hill] signed the
contract[s] and in fact we don't deny that she was bound by the
contract[s]. Accordingly, to have survived defendants' directed
verdict motion, plaintiffs simply must have produced more than a
scintilla of evidence that Mrs. Hill breached the contracts. See
Ace Chemical Corporation, 115 N.C. App. at 242, 446 S.E.2d at 103.
Although Mrs. Hill was not called as a witness, Mr. Hill
testified he and Mrs. Hill did business and sold lots in Sea Gate
under the name Sea Gate Enterprises and that the Sea Gate
Enterprises operating account, into which plaintiffs' earnest money
payments had been deposited following withdrawal from defendants'
trust account, was maintained in the name of both Mr. and Mrs.
Hill. Additionally, under the terms of the contracts, both Mr. andMrs. Hill were required to obtain quitclaim deeds from
Weyerhaeuser, and Weyerhaeuser indeed conveyed its interest in the
three lots to both Mr. and Mrs. Hill, although not until 12
December 1994, seven months after the closing date specified in the
contracts.
Taken in the light most favorable to plaintiffs, see Abels,
335 N.C. at 215, 436 S.E.2d at 825, the foregoing provided more
than a scintilla of evidence that Mrs. Hill failed to perform a
term of the contracts, see Ace Chemical Corporation, 115 N.C. App.
at 242, 446 S.E.2d at 103, even absent consideration of the agency
implications raised by the evidence and discussed below. The trial
court's directed verdict in favor of Mrs. Hill on plaintiffs'
breach of contract claim therefore must be reversed.
[5]With reference to plaintiffs' claim of unfair and
deceptive trade practices against Mrs. Hill, defendants emphasize
that the evidence presented at trial focused upon the actions of
Mr. Hill, notably the 22 September 1994 letter in which he claimed
plaintiffs were in default on the contracts and purported to raise
the price of the lots. Mrs. Hill was neither a signatory to that
letter, nor to the later contracts for sale entered into for lots
128 and 129 in September and November 1994. Further, while
defendants vigorously reasserted at trial that there was no
evidence Mrs. Hill breached the contracts, they argued in the
alternative that her conduct in any event comprised no more than
breach of contract, which without more does not violate Chapter 75.
See Norman Owen Trucking, 131 N.C. App. at 177, 506 S.E.2d at 273.
However, although plaintiffs do not stress the point, the
record is replete with evidence tending to show Mr. Hill acted as
the agent of Mrs. Hill throughout his dealings with plaintiffs,
thereby implicating her in any violation of Chapter 75. See Lee v.
Keck, 68 N.C. App. 320, 324-25, 315 S.E.2d 323, 327 (wife who
committed no acts of misrepresentation or fraud in real estate
transaction held liable on plaintiffs' claims for unfair trade
practices and fraud for acts of husband determined to be her
agent), disc. review denied, 311 N.C. 401, 319 S.E.2d 271 (1984).
Although [n]o presumption arises from the mere fact of the marital
relationship that the husband is acting as agent for the wife,
Norburn v. Mackie, 262 N.C. 16, 22, 136 S.E.2d 279, 284 (1964),
only 'slight evidence' of agency suffices to charge a spouse as
a principal if that spouse receives, retains, and enjoys the
benefit of [a] contract entered into by the other spouse, id. at
23, 136 S.E.2d at 284 (citing 41 C.J.S. Husband and Wife § 70 (now
renumbered as 41 C.J.S. Husband and Wife § 58 (1991))).
In the case sub judice, for example, the record reflects that
Mrs. Hill retained the benefits of the contracts in that
plaintiffs' earnest money was deposited into a joint trust account
of Mr. and Mrs. Hill and was subsequently transferred to a joint
bank account following Mr. Hill's declaration that plaintiffs were
in default. In the 22 September 1994 letter, moreover, Mr. Hill
stated both he and Mrs. Hill owned the lots, and several times
employed the inclusive phrase we: we were still ready toclose, we would sell all 3 lots, and [a]
s far as we are
concerned, plaintiffs had defaulted on the contracts. The letter
was signed by Mr. Hill as President of Sea Gate Enterprises, which,
according to his testimony, was the name he and his wife utilized
in conducting the business of selling lots in Sea Gate subdivision.
In addition, the evidence tended to show Mrs. Hill retained
the benefits of the contracts conveying the lots to Mr. and Mrs.
Cross and Mr. and Mrs. Chadwick in that both Mr. and Mrs. Hill were
denominated as seller on the settlement statements, and Mrs. Hill
executed both the settlement statement for the Cross lot and the
deed for the Chadwick lot. Finally, Mrs. Hill was specifically
named on the quitclaim deeds from Weyerhaeuser.
The foregoing evidence, taken together in the light most
favorable to plaintiffs, see Abels, 335 N.C. at 215, 436 S.E.2d at
825, tended to show Mr. Hill was at all times acting as agent for
Mrs. Hill during the course of his dealings with plaintiffs
regarding the lots at issue. Where evidence of an agency
relationship has been presented, agency becomes a fact to be proved
and a question for the jury, Industries, Inc. v. Distributing,
Inc., 49 N.C. App. 172, 173, 270 S.E.2d 515, 516 (1980), and a
directed verdict would be proper only if "there [wa]s no evidence
presented tending to establish an agency relationship," Smith v.
VonCannon, 17 N.C. App. 438, 439, 194 S.E.2d 362, 363, aff'd, 283
N.C. 656, 197 S.E.2d 524 (1973).
In short, because the evidence tended to show Mr. Hill was
acting as Mrs. Hill's agent, see Industries, Inc., 49 N.C. App. at173, 270 S.E.2d at 516, the trial court's directed verdict
in favor
of Mrs. Hill on plaintiffs' Chapter 75 claim may be sustained only
if such motion were appropriate as to Mr. Hill. In that we have
determined defendants' renewed directed verdict motion regarding
Mr. Hill on plaintiffs' Chapter 75 claim was properly denied by the
trial court, it was error for the court to allow defendants'
directed verdict motion on this issue as to Mrs. Hill, see Lee, 68
N.C. App. at 324-25, 315 S.E.2d at 327 (even though wife committed
no acts of misrepresentation, court correctly denied her summary
judgment motion on unfair trade practices claim where evidence was
presented of husband acting as her agent).
At retrial, the jury must determine only whether Mr. Hill
indeed acted as the agent of Mrs. Hill in regard to the conduct
described in the instant jury's affirmative answers to the special
interrogatories. If so, in light of our opinion herein, it would
be unnecessary for the trial court to consider anew whether such
conduct of Mr. Hill was violative of Chapter 75.
[6]Plaintiffs next assign error to the action of the trial
court in setting aside the jury's damage award on plaintiffs'
Chapter 75 claim as to Mr. Hill. Prior to discussing this issue,
we interject that, no error having been assigned to the jury's
verdict assessing damages on plaintiffs' breach of contract claim,
resolution at trial in plaintiffs' favor of such claim against Mrs.
Hill, either under a theory of actual breach or of agency, would
result in the latter's joint liability for the previously
determined amount of damages. See, e.g., McLain v. Taco BellCorp., 137 N.C. App. 179, ___, 527 S.E.2d 712, ___ (2000) (damages
having been previously determined as to one of two jointly liable
parties, retrial limited to issue of liability), and Markham v.
Nationwide Mut. Fire Ins. Co., 125 N.C. App. 443, 455, 481 S.E.2d
349, 357 (although plaintiff is entitled to full recovery for its
damages, plaintiff is nevertheless not entitled to 'double
recovery' for the same loss or injury) (citation omitted), disc.
review denied, 346 N.C. 281, 487 S.E.2d 551 (1997).
The jury awarded plaintiffs $30,000.00 in damages for injuries
resulting from Mr. Hill's violation of Chapter 75, as outlined in
issue 11. In the judgment, the trial court stated that
issue 11f should not have been submitted to
the jury without first instructing them that
if they answered issues 9 and 10 [awarding
damages for breach of contract] that issue 11f
would have to be answered in the same amount.
Issue 11f as answered by the jury is against
the greater weight of the evidence and is not
in keeping with the instructions of the court
with regard to the issue of damages and,
therefore, issue 11f and the answer thereto is
hereby set aside.
However, the proper remedy in the instance of a verdict
against the greater weight of the evidence or contrary to the trial
court's instructions is a new trial on the issue of damages. See
N.C.G.S. § 1A-1, Rule 59(a)(5),(7) (1999); Insurance Co. v.
Chantos, 298 N.C. 246, 251, 258 S.E.2d 334, 338 (1979) (term
"insufficiency of the evidence" in Rule 59(a)(7) includes the
reason that the verdict "was against the greater weight of the
evidence"). Notwithstanding, the trial court herein instead
apparently replaced the jury's Chapter 75 damages in the amount of$30,000.00 with the sum imposed by the jury for breach of contract,
i.e., $5,000.00, and then trebled the latter amount, ostensibly
pursuant to G.S. § 75-16, thereby awarding plaintiffs a total of
$15,000.00.
It is a cardinal rule that the judgment must
follow the verdict, and if the jury have given
a specified sum as damages, the court cannot
increase or diminish the amount, except to add
interest, where [it] is allowed by law and has
not been included in the findings of the
jury. 2 McIntosh, North Carolina Practice
and Procedure § 1691 (2d ed. 1956); Durham v.
Davis, 171 N.C. 305, 88 S.E. 433 [(1916)]. In
this case, the judge should have set aside the
verdict in his discretion if he deemed it
against the weight of the evidence or
considered the damages excessive. Instead of
doing so, he attempted to change the verdict
as to the defendants . . ., and this he could
not do.
Bethea v. Kenly, 261 N.C. 730, 732, 136 S.E.2d 38, 40 (1964) (per
curiam). Accordingly, a new trial must be had on the issue of
damages, see G.S. § 1A-1, Rule 59(a), resulting from plaintiffs'
Chapter 75 claim against Mr. Hill.
As to the trial court's apparent theory that Chapter 75
damages on a claim arising out of a breach of contract must be
limited to the damages awarded by the jury on the related breach of
contract claim, we point out that G.S. § 75-16 provides:
If any person shall be injured . . . by reason
of any act or thing done by any other person,
firm or corporation in violation of the
provisions of [Chapter 75], such person . . .
so injured shall have a right of action on
account of such injury done, and if damages
are assessed in such case judgment shall be
rendered in favor of the plaintiff and against
the defendant for treble the amount fixed by
the verdict. This Court has previously observed that
[t]he statute merely refers to the person
being injured and does not state the method
of measuring damages. Consequently, there is
confusion as to the proper measure of damages
in an unfair or deceptive act or practice
case.
Bernard v. Central Carolina Truck Sales, 68 N.C. App. 228, 231, 314
S.E.2d 582, 585, disc. review denied, 311 N.C. 751, 321 S.E.2d 126
(1984).
Damages on a Chapter 75 claim are not necessarily limited to
those that might be had for breach of contract.
[A]n action for unfair or deceptive acts or
practices is a distinct action apart from
fraud, breach of contract, or breach of
warranty. Since the remedy was created partly
because those remedies often were ineffective,
it would be illogical to hold that only those
methods of measuring damages could be used.
Id. at 232, 314 S.E.2d at 585.
On retrial, therefore, plaintiffs must prove they suffered
actual injury as a proximate result of defendants' misconduct.
Ellis v. Smith-Broadhurst, Inc., 48 N.C. App. 180, 184, 268 S.E.2d
271, 273-74 (1980). Such injury may
include the (1) [earnest money deposits]; (2)
loss of the use of specific and unique
property; and (3) loss of the appreciated
value of the property,
Edwards v. West, 128 N.C. App. 570, 575, 495 S.E.2d 920, 924, cert.
denied, 348 N.C. 282, 501 S.E.2d 918 (1998) (citation omitted), and
such other elements of damages as may be shown by the evidence. In
short,
[t]he measure of damages used should further
the purpose of awarding damages, which is torestore the victim to his original condition,
to give back to him that which was lost as far
as it may be done by compensation in money."
Bernard, 68 N.C. App. at 233, 314 S.E.2d at 585 (quoting Phillips
v. Chesson, 231 N.C. 566, 571, 58 S.E.2d 343, 347 (1950)).
While considering the topic of Chapter 75 damages, we note
that upon submission to the jury and an answer favorable to
plaintiffs on the latter's Chapter 75 claim against Mrs. Hill under
an agency theory, Mr. and Mrs. Hill would thereupon be jointly
liable for the resultant amount of damages determined by the jury.
See McLain, 137 N.C. App. at ___, 527 S.E.2d at ___; Markham, 125
N.C. App. at 455, 481 S.E.2d at 357.
Finally, in the damages context, we note that should the same
course of conduct give[] rise to plaintiffs' breach of contract
and Chapter 75 claims, plaintiffs may recover damages either for
the breach of contract, or for violation of [Chapter 75], but not
for both. Marshall v. Miller, 47 N.C. App. 530, 542, 268 S.E.2d
97, 103 (1980), modified and aff'd, 302 N.C. 539, 276 S.E.2d 397
(1981). Upon a damage verdict favorable to plaintiffs at retrial
on their Chapter 75 claim and the trial court's determination that
the same course of conduct gave rise to plaintiffs' breach of
contract as well as then Chapter 75 claims, see id., plaintiffs
must elect their damages remedy, see Mapp v. Toyota World, Inc., 81
N.C. App. 421, 427, 344 S.E.2d 297, 301, disc. review denied, 318
N.C. 283, 347 S.E.2d 464 (1986) (requiring election of remedy prior
to jury resolution of all issues would be manifestly unfair).
[7]In their remaining assignment of error, defendants'
contend the trial court's grant of counsel fees to plaintiffs was
erroneous. We decline to address defendants' arguments in regards
thereto, however, as the trial court's award must be vacated.
In any suit instituted by a person who alleges
that the defendant violated G.S. [§] 75-1.1,
the presiding judge may, in his discretion,
allow a reasonable attorney fee to the duly
licensed attorney representing the prevailing
party, . . . upon a finding by the presiding
judge that:
(1) The party charged with the violation has
willfully engaged in the act or practice, and
there was an unwarranted refusal by such party
to fully resolve the matter which constitutes
the basis of such suit . . . .
G.S. § 75-16.1 (emphasis added). Plaintiffs,
in order to be the "prevailing party" within
the meaning of G.S. [§] 75-16.1, must prove
not only a violation of G.S. [§] 75-1.1 by the
defendant[s], but also that plaintiff[s]
ha[ve] suffered actual injury as a result of
that violation.
Mayton v. Hiatt's Used Cars, 45 N.C. App. 206, 212, 262 S.E.2d 860,
864, disc. review denied, 300 N.C. 198, 269 S.E.2d 624 (1980).
In the instant case, although plaintiffs have established Mr.
Hill's violation of G.S. § 75-1.1, a new trial as to the resultant
damages has been ordered herein. Absent an award of damages,
plaintiffs have not yet established the amount of actual injury.
See Mayton, 45 N.C. App. at 212, 262 S.E.2d at 864 (jury award of
zero damages for Chapter 75 violation was in essence a
determination that plaintiff suffered no injury). Consideration
of an award of counsel fees based upon G.S. § 75-16.1 would
therefore be premature at this stage, because plaintiffs' damages,if any, occasioned by defendants' violation of Chapter 75 will be
determined on remand. Accordingly, that portion of the judgment
awarding counsel fees to plaintiffs is vacated.
To summarize, the trial court's denial of defendants' directed
verdict and post-trial motions as to Mr. Hill is affirmed; the
court's grant of defendants' directed verdict motions as to Mrs.
Hill is reversed; the trial court's award of counsel fees is
vacated; and this case is remanded (1) for trial on all issues (as
to Mrs. Hill) save damages for breach of contract and (2) for trial
on the issue of damages as to Mr. Hill's (and potentially Mrs.
Hill's) violation of Chapter 75.
Affirmed in part, reversed in part, vacated in part, and
remanded.
Judges WYNN and EDMUNDS concur.
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