Appeal by plaintiff from orders entered that ultimately
resulted in a judgment filed 19 September 2000 by Judge James E.
Lanning in Mecklenburg County Superior Court. Heard in the Court
of Appeals 27 November 2001.
Weaver, Bennett & Bland, P.A., by Michael D. Bland and Joseph
T. Copeland, for plaintiff-appellant.
Moore & Van Allen, PLLC, by Gregory J. Murphy and Scott M.
Tyler, for defendant-appellees.
CAMPBELL, Judge.
Plaintiff appeals from orders entered in Mecklenburg County
Superior Court by Judge James E. Lanning (Judge Lanning) granting
defendants' motions for directed verdict against plaintiff's
claims: (I) under the North Carolina Wage and Hour Act; (II) under
the North Carolina Unfair and Deceptive Trades Practices Act; (III)
for quantum meruit; and (IV) for fraud against defendant Louis L.
Rose, Jr. (Rose) and defendant Stephen M. Patterson (Patterson)
individually. We affirm. Plaintiff was employed by defendant Southern Real Estate
Company of Charlotte, Inc. (SRE) between 1973 and 1995 as a
commercial real estate broker. From 1986 to 1991, plaintiff acted
as sales manager of SRE. Patterson was also employed as a
commercial real estate broker with SRE from 1995 to 1999. Rose was
president of SRE during plaintiff's and Patterson's employment with
the company.
In 1985, SRE instituted a company policy manual (manual).
On 23 August 1990, a new page (Page 8B) was added to this manual.
Page 8B provided, in part, that:
[T]he broker when leaving [SRE] will register
with the Sales Manager the potential sales he
feels that are active and where he should be a
participant in the commission. This
registration will be in writing and signed by
both the leasing broker and Sales Manager.
After they have agreed on those potential
sales, this listing will be binding on both
for 90 days from the date of the listing by
both the leasing broker and the Sales Manager.
Plaintiff was aware of Page 8B and even referred to it in a
memorandum he wrote while acting as SRE's sales manager. However,
plaintiff did not believe Page 8B applied to him because he was
never given a copy of it as part of his policy manual. (At trial,
defendants presented a 13 February 1985 memorandum that stated each
employee is required to keep [his or her copy of the manual]
updated as corrections, additions or deletions are distributed.)
On 3 November 1994, SRE obtained a commercial real estate
listing from Dixie Yarn, Inc. (Dixie), which gave SRE the
exclusive right to list and market Dixie's 144 acre tract (the
Dixie property) in Mount Holly, North Carolina for nine months. Rose assigned plaintiff to be the listing agent for the Dixie
property. In June of 1995, Squires Enterprises, Inc. (Squires)
was brought forward as a potential buyer for the Dixie property by
Patterson, the buyer's agent for Squires. Plaintiff and Patterson
began working together to try to close the deal between Dixie and
Squires.
The nine-month listing agreement between Dixie and SRE expired
on 3 August 1995. Squires did not make an offer to purchase the
Dixie property prior to the expiration of the listing. Therefore,
plaintiff sought to obtain an extension of the listing from Dixie,
but Dixie chose not to re-list the property until it had determined
whether Squires was actually going to make the purchase.
On 30 August 1995, plaintiff submitted his letter of
resignation from SRE to Rose. As required by Page 8B, this letter
listed the Dixie/Squires transaction as one plaintiff expected to
participate in after he left SRE. On 6 September 1995, plaintiff
met with Rose and Patterson to discuss the pending deals he had
been working on for SRE, including the Dixie/Squires transaction.
There is a dispute as to what transpired at this meeting.
According to plaintiff, he made a separate agreement with SRE
whereby he would continue to represent Dixie in its negotiations
with Squires after his resignation, but Patterson would represent
Dixie as to any other potential buyers. Rose and Patterson denied
that a separate agreement was made. Nevertheless, all parties
agreed that during the meeting plaintiff was never told that Page
8B's ninety-day rule did not apply to him. After plaintiff resigned from SRE, Patterson obtained a
written renewal of the Dixie listing on 12 September 1995; thus,
making him both the listing agent and the buyer's agent in the
Dixie/Squires transaction. The Dixie listing was again renewed by
Patterson on 19 June 1996. Although plaintiff was no longer
labeled as Dixie's listing agent, he continued to be copied on
several documents about the transaction at least up until the
conclusion of the ninety-day period following his resignation.
When the contract of sale between Dixie and Squires was signed in
March of 1996 (more than six months after plaintiff's resignation),
Patterson honored plaintiff's request to send him a copy of the
contract. Plaintiff had no contact with Rose between the date of
his resignation and the signing of the contract of sale.
The Dixie/Squires transaction closed on 18 December 1996, more
than fifteen months after plaintiff resigned from SRE. SRE's
commission on the transaction was $160,606.98. Upon learning of
the closing, plaintiff informed SRE that he was entitled to the
twenty-five percent commission allocated to the listing agent. SRE
informed plaintiff that Patterson had already received the listing
agent's portion of the commission because his renewal of the Dixie
listing had made him both the listing agent and the buyer's agent.
SRE also stated that Page 8B's ninety-day rule barred plaintiff's
entitlement to a commission. However, as a good faith gesture,
Patterson offered plaintiff $10,000.00 from his share of the
commission. Plaintiff refused this amount. Thereafter, plaintiff filed a complaint against defendants
asserting claims against defendant SRE under the Wage and Hour Act
and for quantum meruit, and claims against all three defendants
under the Unfair and Deceptive Trades Practices Act and for fraud.
Plaintiff's complaint did not include a claim for breach of
contract. At the close of plaintiff's evidence on 29 August 2000,
the trial court granted directed verdict on plaintiff's Wage and
Hour Act claim against SRE, his fraud claims against both Rose and
Patterson, and plaintiff's Unfair and Deceptive Trade Practices Act
claim against all three defendants. At the close of all the
evidence, the court granted directed verdict on plaintiff's quantum
meruit claim against SRE. Plaintiff's fraud claim against SRE was
allowed to go to the jury. On 31 August 2000, the jury unanimously
found that SRE was not liable to plaintiff for fraud. The court's
judgment reflecting the jury verdict was filed on 19 September
2000. Plaintiff appeals the orders granting defendants' motions
for directed verdict.
Plaintiff argues the trial court erred in granting defendants'
motions for directed verdict. We disagree.
A motion for directed verdict tests the sufficiency of the
evidence to take [a] case to the jury. Abels v. Renfro Corp., 335
N.C. 209, 214, 436 S.E.2d 822, 825 (1993). It is appropriately
granted only when by looking at the evidence in the light most
favorable to the non-movant, and giving the non-movant the benefit
of every reasonable inference arising from the evidence, the
evidence is insufficient for submission to the jury. Streeter v.Cotton, 133 N.C. App. 80, 514 S.E.2d 539 (1999). A trial court's
decision to grant or deny a motion for directed verdict should not
be disturbed absent an abuse of discretion. G.P. Publications,
Inc. v. Quebecor Printing-St. Paul, Inc., 125 N.C. App. 424, 481
S.E.2d 674 (1997).
Plaintiff brings forth four assignments of error in the case
sub judice. For the following reasons, we affirm the trial court's
orders granting defendants' motions for directed verdict.
In plaintiff's first assignment of error, he argues the trial
court erred in granting defendant SRE's motion for directed verdict
on his Wage and Hour Act claim. We disagree.
The Wage and Hour Act was enacted to safeguard the hours
worked by and the wages paid to the people of the State without
jeopardizing the competitive position of North Carolina business
and industry. N.C. Gen. Stat. § 95-25.1(b) (2001). An employee
or the Commissioner of Labor may bring suit against an employer for
violations of this act. Laborers' Int'l Union of North America,
AFL-CIO v. Case Farms, Inc., 127 N.C. App. 312, 315, 488 S.E.2d
632, 634 (1997). Under the Wage and Hour Act, an employee is
defined as any individual employed by an employer. § 95-25.2(4).
Additionally, in determining whether an individual is an
employee, our state considers factors such as: (1) the degree of
control the alleged employer exerted over the person; and (2) the
permanency of the relationship between the person and the allegedemployer. See Laborers', 127 N.C. App. at 314, 488 S.E.2d at 634;
Thomas v. Brock, 617 F. Supp. 526, 534 (W.D.N.C. 1985), aff'd in
part, modified in part and remanded, 810 F.2d 448 (4th Cir. 1987).
When looking at the evidence in the light most favorable to
plaintiff, there is a reasonable inference that a separate
agreement between the parties was made as a result of their 6
September meeting. However, there is no evidence to support
plaintiff's contention that he was an employee of SRE after he
resigned from the company. The separate agreement between
plaintiff and SRE was entered into after plaintiff resigned.
Following his resignation, plaintiff was to participate only in the
Dixie/Squires transaction, providing services directly to Dixie and
not SRE. This is further evinced by plaintiff having no contact
with Rose during the fifteen-month negotiation period between Dixie
and Squires. Plaintiff's limited and virtually non-existent
relationship with Rose (and Dixie) during this period fails to
prove SRE exerted control over any aspect of plaintiff's employment
after 6 September 1995, especially considering plaintiff started
his own real estate company following his resignation. Thus, the
trial court properly granted defendant SRE's motion because
plaintiff was not an employee of SRE. At most, plaintiff's role
in the Dixie/Squires transaction was that of an independent
contractor.
In plaintiff's second assignment of error, he argues the trial
court erred in granting defendants' motions for directed verdict on
his Unfair and Deceptive Trades Practices Act claim. We disagree.
Chapter 75 of our statutes establishes an action for unfair or
deceptive practices or acts in or affecting commerce. See
Strickland v. A & C Mobile Homes, 70 N.C. App. 768, 321 S.E.2d 16
(1984); N.C. Gen. Stat. § 75-1.1 (2001). Our case law has held
that [a] practice is unfair when it offends established public
policy as well as when the practice is immoral, unethical,
oppressive, unscrupulous, or substantially injurious to consumers
. . . . [A] practice is deceptive if it has the capacity or
tendency to deceive; proof of actual deception is not required.
Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981)
(citations omitted).
It is also well recognized by our state that actions for
unfair or deceptive trade practices are distinct from actions for
breach of contract. Lapierre v. Samco Development Corp., 103 N.C.
App. 551, 559, 406 S.E.2d 646, 650 (1991). Thus, [a] mere breach
of contract does not constitute an unfair or deceptive trade
practice. Mosley v. Mosley Builders v. Landin Ltd., 97 N.C. App.
511, 518, 389 S.E.2d 576, 580 (1990) (citation omitted). [A]
plaintiff must show substantial aggravating circumstances attending
the breach to recover under the Act, which allows for treble
damages. Bartolomeo v. S.B. Thomas, Inc., 889 F.2d 530, 535 (4th Cir. 1989) (citation omitted). See also Branch Banking and Trust
Co. v. Thompson, 107 N.C. App. 53, 62, 418 S.E.2d 694, 700 (1992).
By inferring that there was a separate agreement between the
parties in the case sub judice, the actions of defendants, if found
to be true, amount to a breach of contract instead of an unfair or
deceptive trade practice. Essentially, plaintiff attempted to
establish an unfair or deceptive trade practice by offering
evidence of a note in Patterson's file stating: Also, per [Rose],
low profile with Dixie and [Dixie's counsel] regarding [plaintiff].
[SRE] is the agent, any obligation is through us. However, this
note and the other purported aggravating circumstances offered
into evidence, none of which were substantial, lack the sufficiency
needed to allow submission of an unfair or deceptive trade practice
claim to a jury. The trial court may have found there was
sufficient evidence to allow a claim for breach of contract to go
to the jury, assuming plaintiff had made a breach of contract
claim, but plaintiff failed to plead such a claim in his complaint.
Therefore, defendants' motion for directed verdict was properly
granted.
III: Quantum Meruit
In plaintiff's third assignment of error, he argues the trial
court erred in granting defendant SRE's motion for directed verdict
on his
quantum meruit claim. We disagree.
In order to prevent unjust enrichment, a plaintiff may recover
in
quantum meruit on an implied contract theory for the reasonablevalue of services rendered to and accepted by a defendant.
See
Ellis Jones, Inc. v. Western Waterproofing Co., 66 N.C. App. 641,
647, 312 S.E.2d 215, 218 (1984).
However, [i]t is a well
established principle that an express contract precludes an implied
contract with reference to the same matter.
Concrete Co. v.
Lumber Co., 256 N.C. 709, 713, 124 S.E.2d 905, 908 (1962).
Therefore,
quantum meruit is not an appropriate remedy when there
is an actual agreement between the parties.
Whitfield v.
Gilchrist, 348 N.C. 39, 42, 497 S.E.2d 412, 414 (1998).
In the instant case, plaintiff presented no evidence of
anything other than that he and defendants had entered into an
express contract with regard to the Dixie/Squires transaction.
Although he pled no claim specifically alleging breach of this
express contract, all of his claims alluded to this contract,
including his fraud claim which went to the jury based on alleged
fraudulent breach of the express contract. Having presented
evidence only of an express contract, plaintiff may not now
successfully contend that the trial court
erred in granting
defendant SRE's motion for a directed verdict on the
quantum meruit
claim.
Even if we were to find that there was sufficient evidence to
show that any express contract (assuming one in fact existed) was
abandoned or relinquished, plaintiff still did not produce evidence
which would enable him to go to the jury on
quantum meruit.
Plaintiff's work while employed at SRE is not to be confused with
his being the procuring cause of the sale of the property. A realestate broker is entitled to a commission as the procuring cause if
the sale of the property is the direct and proximate result of his
efforts or services[.]
Realty Agency, Inc. v. Duckworth &
Shelton, Inc., 274 N.C. 243, 251, 162 S.E.2d 486, 491 (1968).
Here, despite plaintiff's active role in the transaction during the
three months prior to his resignation, plaintiff's participation
did not amount to evidence that he was the procuring cause of the
sale. The evidence clearly showed that plaintiff did not (1)
obtain the Dixie listing, (2) bring Squires forward as a potential
buyer, or (3) participate in the Dixie/Squires negotiations that
took place throughout the entire year following his resignation
from SRE. Even making the above assumptions and taking the
evidence in a light most favorable to plaintiff, his efforts
nevertheless fall short of being the procuring cause of the sale.
Accordingly, defendant SRE's motion for directed verdict on
plaintiff's
quantum meruit claim was properly granted.
In plaintiff's fourth assignment of error, he argues the trial
court erred in granting defendants' motions for directed verdict on
his fraud claims against both Rose and Patterson. In particular,
plaintiff argues that since Rose and Patterson were acting as
agents of SRE, the trial court committed reversible error when it
dismissed the fraud claims against them, but allowed the fraud
claim against SRE to go to the jury. Defendants Rose and Patterson
agree that it is logically impossible to allow only the SRE fraudclaim to go to the jury.
See Baker v. Rushing, 104 N.C. App. 240,
247, 409 S.E.2d 108, 112 (1991) (holding [i]t is well settled in
North Carolina that a person is personally liable for all torts
committed by him, notwithstanding that he may have acted as an
agent for another or as an officer for a corporation.). However,
defendants argue the trial court's error was harmless because there
is no evidence to support fraud claims against Rose and Patterson.
We agree.
The essential elements of the tort of fraud are as follows:
(1) material misrepresentation of a past or
existing fact; (2) the representation must be
definite and specific; (3) made with knowledge
of its falsity or in culpable ignorance of its
truth; (4) that the misrepresentation was made
with intention that it should be acted upon;
(5) that the recipient of the
misrepresentation reasonably relied upon it
and acted upon it; and (6) that [thereby]
resulted in damage to the injured party.
Rosenthal v. Perkins, 42 N.C. App. 449, 451-52, 257 S.E.2d 63, 65
(1979)
. Concealment of a material fact may also constitute a
misrepresentation for the purposes of a fraud claim.
See Ragsdale
v. Kennedy, 286 N.C. 130, 209 S.E.2d 494 (1974).
In the present case, there were obviously no
misrepresentations made by Rose to plaintiff because plaintiff
testified he did not communicate with Rose following their 6
September meeting until a month after the Dixie/Squires transaction
closed. Additionally, if Patterson made any misrepresentations,
plaintiff, a former manager and twenty-two year employee of SRE,
could not have reasonably relied upon them because Patterson had no
authority to determine commission payments as a new broker withSRE. Having failed to support this first element of fraud,
plaintiff's fraud claims against Rose and Patterson were properly
dismissed.
However, even if there had been any misrepresentation or
concealment by Rose and Patterson, the evidence offered by
plaintiff failed to establish that it was definite and specific.
There was no evidence detailing the terms of plaintiff's commission
on the Dixie/Squires transaction under the alleged separate
agreement, especially those terms concerning the amount of that
commission. At best, defendants Rose and Patterson promised that
plaintiff would receive a commission; a promise that Patterson kept
by offering plaintiff $10,000.00. Thus, there was no abuse of
discretion by the trial court with respect to the fraud claims.
For the aforementioned reasons, we find that the trial court
properly granted defendants' motions to dismiss plaintiff's claims.
Affirmed.
Judge McCULLOUGH concurs.
Judge GREENE dissents.
NO. COA01-79
NORTH CAROLINA COURT OF APPEALS
Filed: 21 May 2002
BENJAMIN S. HORACK, JR.,
Plaintiff,
v
.
Mecklenburg County
No. 98 CVS 2478
SOUTHERN REAL ESTATE
COMPANY OF CHARLOTTE, INC.,
LOUIS L. ROSE, JR., and
STEPHEN M. PATTERSON,
Defendants.
GREENE, Judge, dissenting in part.
As I believe the evidence, viewed in the light most favorable
to plaintiff, establishes substantial evidence to support his
quantum meruit claim, I dissent. I otherwise fully concur in the
remainder of the majority opinion.
Standard of Review
On appeal from a directed verdict, this Court must determine
whether there is substantial evidence of each essential element of
a plaintiff's claim.
Cobb v.
Reitter, 105 N.C. App. 218, 220, 412
S.E.2d 110, 111 (1992). Substantial evidence is such relevant
evidence as a reasonable mind might accept as adequate to support
a conclusion.
State v.
Smith, 300 N.C. 71, 78-79, 265 S.E.2d 164,
169 (1980). In deciding a defendant's motion for a directed
verdict, the trial court must consider the evidence in the light
most favorable to the plaintiff, including evidence elicited from
the defendant favorable to the plaintiff,
Environmental Landscape
Design Specialist v.
Shields, 75 N.C. App. 304, 305, 330 S.E.2d627, 628 (1985), and resolve all inconsistences, contradictions
and conflicts for [the plaintiff], giving [the plaintiff] the
benefit of all reasonable inferences drawn from the evidence,
McFetters v.
McFetters, 98 N.C. App. 187, 191, 390 S.E.2d 348, 350,
disc.
review denied, 327 N.C. 140, 394 S.E.2d 177 (1990).
Elements
In order to prevent unjust enrichment,
[q]uantum meruit
operates as an equitable remedy based upon a quasi contract or a
contract implied in law, such that a party may recover for the
reasonable value of materials and services rendered.
Data Gen.
Corp.
v.
County of Durham, 143 N.C. App. 97, 103, 545 S.E.2d 243,
248 (2001). To recover in
quantum meruit, a plaintiff must show:
(1) services were rendered to [the] defendants; (2) the services
were knowingly and voluntarily accepted; and (3) the services were
not given gratuitously.
Shields, 75 N.C. App. at 306, 330 S.E.2d
at 628. In addition, there can be no recovery for
quantum meruit
if there is an express contract governing the same subject matter.
Barrett Kays & Assoc.,
P.
A.
v.
Colonial Bldg.
Co.,
Inc.
of Raleigh,
129 N.C. App. 525, 529, 500 S.E.2d 108, 111 (1998). When applying
quantum meruit to real estate transactions, a plaintiff is entitled
to
recover a commission if he procures a party who actually
contracts to purchase the property.
See Sessler v.
Marsh, 144 N.C.
App. 623, 629-30, 551 S.E.2d 160, 164,
disc.
review denied, 354
N.C. 365, 556 S.E.2d 577 (2001).
Express Contract
Defendants allege plaintiff's
quantum meruit claim is barred
by the existence of an express contract.
I agree with the majority that if an express contract exists,
quantum meruit is not appropriate. This proposition, however, is
conditioned on the existence of an express contract.
See Barrett
Kays, 129 N.C. App. at 529, 500 S.E.2d at 111.
Even assuming an
express contract exists, it may be abandoned or relinquished: (1)
by agreement between the parties; (2) by conduct clearly indicating
such purpose; [or] (3) by the substitution of a new contract
inconsistent with the existing contract.
Bixler v. Britton, 192
N.C. 199, 201, 134 S.E. 488, 489 (1926).
In this case, viewing all the evidence in the light most
favorable to plaintiff on his
quantum meruit claim, there is
substantial evidence
an express contract covering the Dixie/Squires
transaction did not exist. While there is a conflict in the
evidence as to the existence of an express contract, this conflict
must be resolved in favor of plaintiff. Even if there were no
substantial evidence that an express contract existed, there is
substantial evidence that any contract that did exist either was
abandoned or relinquished. The parties' conduct, including Rose
and Patterson having already decided prior to the closing of the
Dixie/Squires transaction that plaintiff would not be paid a 25%
listing commission, leads to an inference that the contract was
abandoned or relinquished by the parties' conduct.
See id.
Procuring Cause
Because I believe there is substantial evidence no express
contract exists covering the Dixie/Squires transaction, I address
whether there was substantial evidence plaintiff was the procuring
cause of the transaction.
The general rule is that a broker is entitled to a commission
'whenever he procures a party who actually contracts for the
purchase of the property at a price acceptable to the owner.'
Sessler, 144 N.C. App. at 629-30, 551 S.E.2d at 164 (quoting
Realty
Agency, Inc.
v.
Duckworth & Shelton,
Inc., 274 N.C. 243, 250-51,
162 S.E.2d 486, 491 (1968)). A broker is the procuring cause if
the sale is the direct and proximate result of his efforts or
services,
Duckworth, 274 N.C. at 251, 162 S.E.2d at 491, and he
sets 'in motion a series of events which,
without break in their
continuity' lead to the procurement of a purchaser who is ready,
willing and able to purchase the property,
Sessler, 144 N.C. App.
at 633, 551 S.E.2d at 166 (citation omitted).
Thus, it is the
broker's procurement of 'a party who actually contracts for the
purchase of the property,' which determines entitlement to a
realtor's commission.
Collins v.
Ogburn Realty Co.,
Inc., 49 N.C.
App. 316, 320, 271 S.E.2d 512, 515 (1980) (citation omitted).
In this case, viewing the evidence in the light most favorable
to plaintiff, there is substantial evidence plaintiff was the
procuring cause of the Dixie/Squires transaction. Initially,
plaintiff evaluated the property to determine if SRE's listing of
the Dixie property would be a profitable transaction. In addition,
plaintiff was primarily responsible for marketing the property andcooperating with potential buyers. In June 1995, plaintiff
provided a marketing packet, which included various information
about the property, to Patterson for him to forward to Squires.
Plaintiff worked with Patterson to promote the property, showed the
property to Squires, and even drove Squires' representatives and
Patterson on his boat to view the Dixie property. Prior to
plaintiff's resignation, he received a proposed contract on the
Dixie property from Squires and Patterson. Even after plaintiff
resigned from SRE, from September 1995-December 1995, he continued
to communicate with Dixie and worked with the lawyers of both
Squires and Dixie to obtain a formal contract on the Dixie
property, assisting in negotiation of those details. The evidence
shows the Dixie/Squires transaction was a direct result of
plaintiff's efforts and services; specifically, through plaintiff's
marketing and advertisement of the Dixie property, he set in motion
a series of events which led to the procurement of Squires, a
ready, willing, and able purchaser.
Conclusion
Accordingly, as there is substantial evidence of each
essential element of
quantum meruit, specifically that there was no
express contract and that plaintiff was the procuring cause of the
Dixie/Squires transaction, plaintiff's
quantum meruit claim should
have been submitted to the jury.
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