GARY HENSLEY,
Plaintiff
v
.
RAY'S MOTOR COMPANY OF FOREST CITY, INC., d/b/a Applegate Mobile
Homes,
Defendant
Deaton & Biggers, P.L.L.C., by Brian D. Gulden, for plaintiff-
appellant.
Hamrick, Bowen, Mebane, Greenway & Lloyd, L.L.P., by Bradley
K. Greenway, for defendant-appellee.
CALABRIA, Judge.
On 8 January 1994, Gary Hensley (“plaintiff”) entered into a
contract to purchase a mobile home from Ray's Motor Company of
Forest City, Inc., d/b/a Applegate Mobile Homes (“Applegate”), a
North Carolina corporation engaged in the sale and distribution of
mobile homes. The mobile home was manufactured by Southern Energy
Homes of North Carolina, Inc., d/b/a Imperial Homes (“Imperial”).
On the back of the contract, under “Additional Terms and
Conditions,” a one-year period of limitation clause provided the
following: “I [the purchaser] understand and agree that if either
of us [the purchaser and seller] should breach this contract--the
other of us shall have only one year after the occurrence of thatbreach in which to commence an action for a breach of this
contract.”
The mobile home was delivered and set up in April 1994.
Plaintiff immediately noticed problems and notified the Department
of Insurance. Throughout the 1994 calendar year, plaintiff
continued to observe and report defects in the mobile home to
Imperial, and Imperial made certain repairs. On 2 December 1994,
Imperial and Applegate were notified by the Department of Insurance
to investigate and correct problems reported by plaintiff.
Thereafter, the Department of Insurance notified plaintiff they had
received further information, and it was their belief the problems
had been resolved. More importantly, the Department of Insurance
provided plaintiff a final opportunity to respond if the
information was unsatisfactory. When plaintiff failed to respond,
the Department of Insurance closed plaintiff's file.
On 23 and 27 March 1995, Imperial wrote to plaintiff in order
to set up a time when representatives from Imperial and Applegate
could inspect plaintiff's home to address his remaining items of
concern. Imperial attempted to contact plaintiff on at least five
occasions in order to either view the home and have a contractor
make the necessary repairs or settle the continuing problems with
a cash settlement. Correspondence with plaintiff's attorney
indicated plaintiff wanted a new mobile home or a full refund, both
of which Imperial was unwilling to provide.
On 27 October 1997, over three years after delivery of the
home and discovery of the defects, plaintiff filed suit inCleveland County District Court against Imperial and Applegate.
Imperial and Applegate answered the complaint and moved to dismiss
plaintiff's claims, asserting as an affirmative defense that the
claim was barred by the statute of limitations. On 15 September
2000, the trial court granted Applegate's motion to dismiss but
denied Imperial's motion to dismiss. Plaintiff filed a notice of
voluntary dismissal against Imperial, then appealed the trial
court's granting of Applegate's motion.
In light of evident confusion in the record as to the
procedural context of the trial court's action, we note that since
the trial court was presented with affidavits and exhibits and did
not exclude matters outside the pleadings, we treat the motion as
one for summary judgment pursuant to Rule 56 of the North Carolina
Rules of Civil Procedure. Baugh v. Woodard, 56 N.C. App. 180, 287
S.E.2d 412 (1982).
Summary judgment is appropriate where “the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c)
(2001). “The rule is designed to permit penetration of an
unfounded claim or defense in advance of trial and to allow summary
disposition for either party when a fatal weakness in the claim or
defense is exposed.” Caldwell v. Deese, 288 N.C. 375, 378, 218
S.E.2d 379, 381 (1975). The party moving for summary judgment has
the burden of showing that there is no genuine issue as to anymaterial fact. Dixie Chemical Corp. v. Edwards, 68 N.C. App. 714,
715, 315 S.E.2d 747, 749 (1984).
“Statutes of limitations are inflexible and unyielding. They
operate inexorably without reference to the merits of plaintiff's
cause of action.” Shearin v. Lloyd, 246 N.C. 363, 370, 98 S.E.2d
508, 514 (1957). “The purpose of a statute of limitations is to
afford security against stale demands, not to deprive anyone of his
just rights by lapse of time.” Id., 246 N.C. at 371, 98 S.E.2d at
514. In the instant case, the trial court concluded plaintiff had
filed his cause of action outside of the applicable statute of
limitations.
On appeal, plaintiff asserts three arguments: (I) the mobile
home was an improvement to property; therefore, the applicable
standard of limitations is six years; (II) the contract for the
mobile home was primarily a contract for services; and (III) even
if the contract is governed by North Carolina's Uniform Commercial
Code (“UCC”) as a transaction in goods, Applegate is estopped from
pleading the statute of limitations.
I. Nature of the Mobile Home
Plaintiff contends the purchase and setup of a mobile home is
an improvement to real property, requiring a six-year statute of
limitations as an action to “recover damages based upon or arising
out of the defective or unsafe condition of an improvement to real
property . . . .” N.C. Gen. Stat. § 1-50(a)(5) (2001).
Traditionally, the law treats a mobile home not as an improvement
to real property but as a good, defined and controlled by the UCCas something “movable at the time of identification to the contract
for sale . . . .” N.C. Gen. Stat. § 25-2-105(1) (2001). For
example, this Court determined a mobile home was a good, the sale
of which was controlled as a transaction under the UCC. Alberti v.
Manufactured Homes, Inc., 329 N.C. 727, 732, 407 S.E.2d 819, 822
(1991). Moreover, we have “note[d] that prior decisions of this
Court and our Supreme Court have classified a mobile home as a
'motor vehicle' for purposes of interpreting the application of our
motor vehicle laws to mobile homes.” Hughes v. Young, 115 N.C.
App. 325, 328, 444 S.E.2d 248, 250 (1994) (citing Peoples Sav. &
Loan Ass'n v. Citicorp Acceptance Co., 103 N.C. App. 762, 407
S.E.2d 251 (1991); King Homes, Inc. v. Bryson, 273 N.C. 84, 159
S.E.2d 329 (1968)).
We have stated that under some circumstances, mobile homes can
be considered realty and thereby could constitute an improvement to
real property. Hughes, 115 N.C. App. at 328, 444 S.E.2d at 250.
These circumstances include where a plaintiff shows either (1)
annexation of the mobile home to land with the intent that it be
permanent or (2) circumstances surrounding the association between
the land and the mobile home or the relationship between the
parties otherwise justifies treating the mobile home as realty
which is to become or is part of the land. Id. In the instant
case, plaintiff has made no allegations that the mobile home was
permanently affixed to the property.
(See footnote 1)
Additionally, plaintifffailed to show any relationship between the parties or between the
land and the mobile home which would otherwise justify treating the
mobile home as an improvement to the land on which it has been
placed. In light of our traditional treatment of mobile homes and
absent allegations justifying the characterization of the mobile
home as realty, we hold the plaintiff's mobile home does not
constitute an improvement to land.
II. Mixed Contract
Alternatively, plaintiff argues the sales contract for the
mobile home was primarily a contract for services because Applegate
delivered and set up the mobile home. The contract in the instant
case is a mixed contract in that it encompassed both the sale of a
good (i.e. the mobile home) and the provision of services (i.e. the
delivery and setup). Accordingly, this Court must determine
whether the contract is controlled by the UCC as a sale of goods or
is governed by the common law of contracts as a service contract.
The scope of the UCC is limited to “transactions in goods” and
does not apply to contracts for the provision of services. N.C.
Gen. Stat. § 25-2-102 (2001). The leading case on the UCC's
applicability to contracts which involve both goods and services is
Bonebrake v. Cox, 499 F.2d 951 (8th Cir. 1974). In Bonebrake, the
Court determined a contract for both goods and services should be
considered a “sale of goods” under the UCC because
[the] test for inclusion or exclusion is not
whether [the sale of goods and the provision
of services] are mixed, but, granting thatthey are mixed, whether their predominant
factor, their thrust, their purpose,
reasonably stated, is the rendition of
service, with goods incidentally involved . .
. or is a transaction of sale, with labor
incidentally involved . . . .
Bonebrake, 499 F.2d at 960. While North Carolina has yet to
expressly adopt the so-called “predominant factor” test set out in
Bonebrake, previous decisions by North Carolina courts accord with
the test. See, e.g., Batiste v. Home Products Corp., 32 N.C. App.
1, 6, 231 S.E.2d 269, 272 (1977) (examining the “essence of the
relationship” between a physician and a patient to determine
whether the prescription of medication by the physician was the
sale of goods or the provision of services); HPS, Inc. v. All Wood
Turning Corp., 21 N.C. App. 321, 324, 204 S.E.2d 188, 189 (1974)
(treating a contract to furnish and install a boiler conversion
system as a sale of goods). Surveying the jurisdictions which have
addressed mixed contracts reveals the Bonebrake test has been
overwhelmingly adopted. David J. Marchitelli, Annotation, Causes
of Action Governed by Limitations Period in UCC § 2-725, 49
A.L.R.5th 1, 102-06 (1997). We expressly adopt the test enunciated
in Bonebrake as the appropriate test to determine whether the UCC
controls the rights of the parties to a contract involving both the
sale of goods and the provision of services.
Accordingly, where the predominant factor of a contract is the
rendition of services with the sale of goods incidentally involved,
the UCC is not applicable. However, where the predominant factor
of the contract is the sale of goods with the provision of services
incidentally involved, the UCC controls. Factors which have been used in determining whether a mixed
contract should be governed by the UCC include the following: “(1)
the language of the contract, (2) the nature of the business of the
supplier, and (3) the intrinsic worth of the materials.” See,
e.g., Princess Cruises, Inc. v. General Elec. Co., 143 F.3d 828,
833 (4th Cir. 1998); Parks v. Alteon, Inc., 161 F. Supp. 2d 645,
649 (M.D.N.C. 2001). Applying these factors here, we note the
language of the contract deals primarily with the terms of sale,
including the price, warranties, description and model of the
mobile home, and options and accessories. The nature of
Applegate's business is the sale and distribution of mobile homes.
Finally, the intrinsic worth of the mobile home is approximately
its fair market value or the purchase price. Accordingly, we hold
the contract is predominantly a contract for the sale of goods, and
the provisions of the UCC control the rights of the parties.
Under the UCC, “[a]n action for breach of any contract for
sale must be commenced within four years after the cause of action
has accrued. By the original agreement the parties may reduce the
period of limitation to not less than one year but may not extend
it.” N.C. Gen. Stat. § 25-2-725(1) (2001). In the instant case,
the contract of sale limited the time to bring an action for breach
of contract to one year. Applegate delivered the mobile home in
April 1994. Plaintiff became aware of the breach no later than his
notification to the Department of Insurance in November 1994.
Plaintiff failed to file suit for breach of contract until 27
October 1997, over three years after Applegate tendered delivery. Accordingly, we conclude plaintiff's action is barred by the
applicable statute of limitations.
III. Estoppel
Plaintiff asserts Applegate should be estopped from pleading
the statute of limitations as a defense pursuant to Nowell v. Tea
Co., 250 N.C. 575, 579, 108 S.E.2d 889, 891 (1959) because the
delay in plaintiff bringing suit was induced by acts and
representations by Applegate, and the repudiation of such acts and
representations amounts to a breach of good faith. In Nowell, the
defendant assured the plaintiff he would perform any necessary
corrections to the building in the future due to re-occurring
problems in his construction work by stating he would “be entirely
responsible and . . . [would] remedy the situation,” if a previous
complaint re-occurred. Id., 250 N.C. at 578, 108 S.E.2d 891. In
reliance on such promises, the plaintiff in Nowell entered into
possession of the building, and after the statute of limitations
had run, the defendant refused to assume responsibility or correct
the re-occurring problem. Id. By contrast, in the case sub judice
plaintiff was contacted on numerous occasions in order to commence
repairs. Plaintiff repeatedly failed to respond or responded by
demanding a new mobile home or a refund. After numerous letters,
the one-year contractual limitation on plaintiff's claims was
specifically raised, and plaintiff was urged to make contact in
order to resolve the matter without further delay. The cause of
the delay was not representations made by Applegate, but rather, it
was plaintiff's unwillingness to accept repairs to the mobile homewhich caused the statute of limitations to run, and the theory of
estoppel, as espoused in Nowell, is inapposite.
We have carefully considered plaintiff's remaining claims and
found them to be without merit.
Affirmed.
Judges McCULLOUGH and TYSON concur.
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