v
.
Guilford County
No. 00 CVD 10371
PICKERING & COMPANY,
Defendant
Richard Green and Deborah Dabney Green, pro se, for plaintiff-
appellees.
Pinto, Coates, Kyre & Brown, P.L.L.C., by Brady A. Yntema, for
defendant-appellant.
CAMPBELL, Judge.
Defendant, Pickering & Company (“Pickering”) appeals a
judgment entered in plaintiffs' favor and an order denying its
motion for judgment notwithstanding the verdict (“JNOV”) and motion
for new trial. For the reasons stated herein, we affirm.
In response to a newspaper advertisement, Deborah Green (“Mrs.
Green”) met with Pickering representative Ken Baucom (“Mr. Baucom”)
in July 2000 regarding a house rental in Greensboro, North
Carolina. After viewing the house, Mr. Baucom gave Mrs. Green a
Rental Application (“Application”), which Mrs. Green took home with
her to discuss with her husband, Richard Green (“Mr. Green”). On20 July 2000, Mr. and Mrs. Green (“the Greens”) submitted the
completed, signed Application to Pickering along with a deposit of
$1,100.00 in order to secure the house for their tenancy. Upon
receipt of the Greens' deposit, Pickering ceased any further
advertising of the house.
When Mrs. Green arrived on 18 August 2000 to sign the lease
agreement and receive the keys to the house, a dispute arose over
the amount of rent owed to Pickering on that date. Mrs. Green did
not agree that she owed Pickering the prorated amount of rent for
the month of August as well as the September rent. Upon failing to
agree on any of the discussed options to remedy the rent dispute,
the Greens did not move into the house on 18 August or thereafter.
Pickering then retained the Greens' $1,100.00 deposit, re-
advertised the house in the newspaper and rented the house to
tenants who moved in on 15 September 2000. After deducting from
the deposit the prorated amount of lost rents that Pickering
incurred from 18 August 2000 through 14 September 2000, Pickering
then provided a refund check to the Greens for $146.68.
At a non-jury trial on plaintiffs' suit to recover their
deposit, the trial court entered an order in favor of plaintiffs
for defendant to pay plaintiffs $1,100.00 plus court costs,
including the cost of arbitration. Defendant's subsequent motion
for JNOV and alternative motion for new trial were both denied in
an order entered 27 June 2001. Defendant appeals the trial court's
judgment granted for plaintiffs. Defendant also appeals the denial
of his post-trial motions. Since we resolve defendant's appeal of the final judgment in plaintiffs' favor, we conclude that the
appeal of the denial of his post-trial motions would not withstand
the applicable higher standard of review. Therefore, we dismiss
defendant's assignments of error to the trial court's ruling on
defendant's post-trial motions.
On appeal of the judgment, defendant argues that the trial
court's findings of fact are not supported by the evidence
presented at trial and the conclusions of law are not in accordance
with law. Thus, the judgment for plaintiffs is erroneous. We
disagree.
Standard of Review
“The standard of review on appeal from a judgment entered
after a non-jury trial is 'whether there is competent evidence to
support the trial court's findings of fact and whether the findings
support the conclusions of law and ensuing judgment.'” Cartin v.
Harrison, ___ N.C. App. ___, 567 S.E.2d 174 (2002), review denied,
___ N.C. App. ___, ___ S.E.2d ___ (2002) (quoting Sessler v. Marsh,
144 N.C. App. 623, 628, 551 S.E.2d 160, 163, disc. review denied,
354 N.C. 365, 556 S.E.2d 577 (2001)). “If the court's factual
findings are supported by competent evidence, they are conclusive
on appeal, even though there is evidence to the contrary.”
Pineda-Lopez v. North Carolina Growers Ass'n, Inc., ___ N.C. App.
___, 566 S.E.2d 162 (2002) (citations omitted).
Findings of Fact
Defendant argues that the trial court based its judgment for
plaintiffs on erroneous findings of fact regarding the terms of arefund of the deposit and regarding the plaintiffs' belief of what
the $1,100.00 represented. The trial court found “that the
Plaintiff's filled out a rental application which did not state a
rental amount, the terms of the proration for a partial month,
[and] the terms for a refund of a deposit[.]”
Prospective tenants of Pickering signed a Rental Application
that states in relevant part:
I hereby deposit: Security Deposit $_____,
Application Fee (non refundable) $_____, Other
$_____, for a total deposit of $_____on_____,
19___. . . . If for any reason Management
decides to decline my application, then
Management will refund this good faith deposit
to me except for the non-refundable
application fee.
I understand I may cancel this application
within seventy-two (72) hours and receive a
full refund except for application fee of this
good faith deposit. If I cancel after
seventy-two (72) hours, or fail to execute the
attached rental agreement or refuse to occupy
the premises on the agreed upon date, I
understand this deposit will be held until
Management can determine if it has incurred
any expenses or rent loss due to my
cancellation. These costs will be deducted
from this deposit and the balance will be
refunded to me.
The Application, admitted as evidence at trial, does not make it
clear that the $1,100.00 submitted to Pickering by the Greens was
a non-refundable security deposit. The Application did not contain
any writing in the blank spaces indicating amounts paid by
applicants. At the top of the Application, “Dep 1100” is written
underneath a printed portion that says “Rental Rate: ____.”
Written on the line is “1100.” Thus, it is unclear whether Mrs.
Green submitted a deposit that would be credited as her firstmonth's rent or as a non-refundable security deposit if she did not
cancel within seventy-two hours of the Application. This evidence
supports the trial court's finding that the Application did not
state the terms for a refund of the deposit because it is unclear
how Pickering applied the $1,100.00 payment by the Greens.
Secondly, the trial court's finding that the plaintiffs
believed that their $1,100.00 payment represented their first
month's rent rather than a deposit is supported by the evidence.
Taking the Application alone as evidence of the Greens' belief with
respect to their $1,100.00 payment, it is not completely clear what
that payment represented. Mrs. Green's testimony at trial,
however, indicates her understanding that the $1,100.00 check that
she submitted with the completed, signed Rental Application to
Pickering on 20 July 2000 represented a deposit towards the first
month's rent. At trial, Mrs. Green testified on cross-examination
as follows:
Q. But to your knowledge, there was no
discussion as to how much rent would be due
when you first took over that . . .
A. A proration amount was never discussed.
Q. Was an initial rent amount discussed?
A. Just eleven hundred. That was the
only thing discussed.
Q. And so your testimony today and what your
memory is, is that you never had any discussion
as to a prorated amount--- A. Exactly.
The trial court found as a matter of fact that plaintiffs paid
eleven hundred dollars, “which the [p]laintiff believed to be the
first month's rent.” We conclude that the testimony during the
bench trial supports this finding.
Conclusions of Law
Defendant's second argument is that the court erred in
entering judgment for plaintiffs on the grounds that the
conclusions of law made by the court are not in accordance with
law. We disagree.
The trial court concluded “that the [d]efendant's refusal to
return the entire $1,100.00 deposit is unjustified” and entered
judgment in favor of the plaintiffs. In the order, the trial court
stated this conclusion of law as a finding of fact. This Court has
held that “'[i]f [a] finding of fact is essentially a conclusion of
law . . . it will be treated as a conclusion of law which is
reviewable on appeal.'” Smith v. Beaufort County Hosp. Ass'n, 141
N.C. App. 203, 214, 540 S.E.2d 775, 782 (2000), review denied, 353
N.C. 381, 547 S.E.2d 435 (2001), and aff'd, 354 N.C. 212, 552
S.E.2d 139 (2001) (quoting Bowles Distributing Co. v. Pabst Brewing
Co., 69 N.C. App. 341, 344, 317 S.E.2d 684, 686 (1984)). We
conclude that the trial court's decision that the defendant was
unjustified in retaining plaintiffs' security deposit is a
conclusion of law, which is supported by the findings of fact, and
based on the evidence presented at trial. First, we note that Pickering's Rental Application is in
accordance with the North Carolina Tenant Security Deposit Act.
N.C. Gen. Stat. § 42-51 limits the permitted landlord's uses of a
tenant's security deposit. In relevant part, § 42-51 states:
Security deposits for residential dwelling
units shall be permitted only for the tenant's
possible nonpayment of base rent, . . .
nonfulfillment of rental period, . . . [and]
costs of re-renting the premises after breach
by the tenant . . .
N.C. Gen. Stat. § 42-51 (2001). Pickering complied with this
statute insofar as it included terms for refund of a security
deposit in its Rental Application. Pickering, however, withheld
plaintiffs' $1,100.00 payment that was not specifically identified
to be a security deposit. Defendant was not justified in applying
plaintiffs' deposit to lost rent and the cost of re-renting the
premises when defendant did not specify as to what the Greens'
$1,100.00 check applied.
Upon deducting the amount due for costs, defendant returned
the balance to plaintiffs along with a detailed accounting of how
defendant calculated the remaining amount. Defendant argues that
it complied with § 42-52, which states:
Upon termination of the tenancy, money held by
the landlord as security may be applied as
permitted in G.S. 42-51 or, if not so applied,
shall be refunded to the tenant. In either
case the landlord in writing shall itemize any
damage and mail or deliver same to the tenant,
together with the balance of the security
deposit, no later than 30 days after
termination of the tenancy and delivery of
possession by the tenant.
Id. Defendant's Rental Application complied with the Tenant
Security Deposit Act regarding the authority to collect security
deposits and the limitation regarding how the deposits may be
applied. However, based on the evidence presented at trial
regarding the Greens' $1,100.00 payment, the trial court correctly
concluded that defendant was unjustified in failing to return the
full $1,100.00 deposit to the Greens.
Applying the standard of review stated above, we conclude that
the evidence supports the trial court's findings that the
Application does not state terms for a refund of the deposit and
that plaintiffs believed that their $1,100.00 payment was the first
month's rent. The findings of fact support the conclusion that
defendant was unjustified in withholding plaintiffs' security
deposit. Thus, the judgment entered in favor of plaintiffs was
correct.
Affirmed.
Judges WYNN and HUDSON concur.
Report per Rule 30(e).
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