An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA02-1040


Filed: 17 June 2003


v .                         Forsyth County
                            No. 00 CVS 8137
TRIAD INC., a North
Carolina Corporation, and

    Appeal by plaintiff from judgment entered 4 March 2002 by Judge William Z. Wood, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 19 May 2003.

    Barron & Berry, L.L.P., by Vance Barron, Jr., for plaintiff- appellant.

    McCall Doughton Blancato & Hart, PLLC, by William A. Blancato, for defendant-appellees.

    EAGLES, Chief Judge.

    Kevin Crawford (“plaintiff”) appeals from the trial court's entry of a directed verdict in favor of Paul Davis Restoration- Triad Inc. and James Untz (“defendants”) in plaintiff's action for fraud, constructive fraud, breach of contract and breach of the North Carolina Wage and Hour Act. After careful consideration of the briefs and record, we affirm.
    Paul Davis Restoration-Triad Inc. (“PDR-T”) is a Georgia corporation with its principal place of business in Kernersville, North Carolina. James Untz was the President and sole shareholderin PDR-T. PDR-T consisted of two businesses. The Paul Davis Restoration division performed structural repairs to residential and commercial property damaged by fire or water while the Signature Professional Cleaning division performed cleaning and related services or mitigation to damaged properties.
    In approximately October 1993, plaintiff began working for PDR-T as a Production Manager for the Signature Professional Cleaning division. The main duty of the Production Manager was to complete work orders generated by Associates. On 2 November 1993, plaintiff and Untz, on behalf of PDR-T, executed an employment contract which provided that plaintiff would be paid a “20% commission on all allowable sales directly made by Production Manager” and that plaintiff would “receive, as a bonus on profitability, the balance in [the Production Manager Master] [A]ccount on the fifth day of each month after all costs of completing the work orders and all required payments to the Production Manager Security Account have been charged to the Production Manager Master Account.” In November 1994, PDR-T gave plaintiff an “Amended Payment Schedule” which “set up” plaintiff as an Associate. Plaintiff continued to work for PDR-T until he resigned on 17 September 1999.
    Plaintiff commenced this action on 16 August 2000 against defendants alleging fraud, constructive fraud, unjust enrichment, and breach of contract. Defendants answered and counterclaimed alleging breach of contract, breach of fiduciary duty, fraud, and unfair and deceptive trade practices.    The matter was heard at the 4 February 2002 Civil Session of Forsyth County Superior Court before Judge William Z. Wood, Jr. At the close of plaintiff's evidence, the trial court granted defendants' motion for directed verdict as well as their motion to dismiss their counterclaims. Plaintiff appeals.
    On appeal, plaintiff contends that the trial court erred in granting defendants' motion for a directed verdict on the grounds that the statute of limitations had expired and that plaintiff had not produced sufficient evidence of fraud, constructive fraud, breach of contract and breach of the North Carolina Wage and Hour Act. After careful consideration, we disagree.
    Plaintiff first contends that the trial court erred in granting defendants' motion for directed verdict because of the expiration of the statute of limitations. We do not agree.
    Plaintiff argues that his commission account was a “mutual, open and current account” subject to G.S. § 1-31 which provides that a “cause of action accrues from the time of the latest item proved in the account on either side.” G.S. § 1-31 (2001). Plaintiff argues that PDR-T maintained the account as active and open at least through plaintiff's last day of employment in September 1999 and that his cause of action did not accrue until 17 September 1999 at the earliest. We are not persuaded.
     G.S. § 1-31 is not applicable to this case. G.S. § 1-31 states that “[i]n an action brought to recover a balance due upon a mutual, open and current account, where there have been reciprocal demands between the parties, the cause of action accruesfrom the time of the latest item proved in the account on either side.” Plaintiff alleged fraud, breach of contract, and a violation of the North Carolina Wage and Hour Act. He brought this action alleging that PDR-T did not calculate his commissions properly and failed to establish accounts specified in his contract. Plaintiff did not sue to recover the balance due on the accounts.
    In the alternative, plaintiff contends that the issue of whether he should have discovered the facts constituting the alleged fraud is a question for the jury. In addition, plaintiff argues that he did not have access immediately to his commission reports and that when he did, he could not understand them and no one at PDR-T could explain them to him. Plaintiff further argues that defendants should be equitably estopped from asserting the statute of limitations defense.
    “A motion for directed verdict pursuant to G.S. § 1A-1, Rule 50(a) tests the sufficiency of the evidence to support a verdict for the non-moving party.” BNT Co. v. Baker Precythe Dev. Co., 151 N.C. App. 52, 56, 564 S.E.2d 891, 895, disc. review denied, 356 N.C. 159, 569 S.E.2d 283 (2002). “On a directed verdict motion, plaintiff's evidence must be taken as true and considered in the most favorable light, with every reasonable favorable inference.” Hall v. Mabe, 77 N.C. App. 758, 760, 336 S.E.2d 427, 428 (1985). However, “[w]here a defendant establishes an affirmative defense as a matter of law, there are no issues to submit to a jury and a plaintiff has no right to recover. Directing a verdict for thedefendant in such instance is appropriate.” Goodwin v. Investors Life Insurance Co. of North America, 332 N.C. 326, 329, 419 S.E.2d 766, 768 (1992).
    Here, defendants alleged in their answer as a defense that all of plaintiff's claims were barred by the applicable statutes of limitations. “The statute of limitations for fraud is three years from the date the fraud was, or reasonably should have been, discovered.” Walton v. Carolina Telephone, 93 N.C. App. 368, 378, 378 S.E.2d 427, 434, disc. review denied, 325 N.C. 230, 381 S.E.2d 792 (1989); G.S. § 1-52(9) (2001). “'Discovery' is defined as actual discovery or the time when the fraud should have been discovered in the exercise of due diligence.” Spears v. Moore, 145 N.C. App. 706, 708, 551 S.E.2d 483, 485 (2001). “Failure of plaintiff, however, to exercise due diligence in discovering fraud can be determined as a matter of law where it is clear that there was both capacity and opportunity to discover the fraud.” Hiatt v. Burlington Industries, 55 N.C. App. 523, 526, 286 S.E.2d 566, 568, disc. review denied, 305 N.C. 395, 290 S.E.2d 365 (1982).
        A man should not be allowed to close his eyes to facts readily observable by ordinary attention, and maintain for his own advantage the position of ignorance. Such a principle would enable a careless man, and by reason of his carelessness, to extend his right to recover for an indefinite length of time, and thus defeat the very purpose the statute was designed and framed to accomplish.

Peacock v. Barnes, 142 N.C. 215, 218, 55 S.E. 99, 100 (1906). “[W]hether a plaintiff should have discovered the facts constituting the fraud more than three years before the action wasfiled ordinarily is a question of fact for the jury. Only when 'it clearly appears that plaintiff's claim is barred by the running of the statute of limitations,' may that question be determined as a matter of law.” Walton, 93 N.C. App. at 379, 378 S.E.2d at 434 (citations omitted) (emphasis in original).
    Here, plaintiff's own evidence shows that through due diligence, he should have reasonably discovered the actions that constituted fraud by 1995 at the latest. Plaintiff alleges that he was promised a 20% commission on gross sales and that he never received that amount. This figure was stated in plaintiff's employment contract with defendants dated 2 November 1993. Plaintiff testified that he received an “Amended Payment Schedule” from defendants in November 1994. This “Amended Payment Schedule” states that plaintiff was “[s]et up as Associate with base draw of $850.00 + 5% of commissions.” It further stated:
        B.    Transfer commissions earned for October to Associate account.

            (1)    September balance        $ 613.84
            (2)    15% Signature Sales        $5,006.16
            (3)    10% Paul Davis Sales    $2,444.53    
                    Total Transfer        $8,064.53
(Emphasis added.) The “Amended Payment Schedule” clearly states that PDR-T was “[s]et[ting] up [plaintiff] as [an] Associate.” It further shows that PDR-T transferred his commissions of “15% Signature Sales” and “10% Paul Davis Sales” to an Associate account.
    Further, plaintiff testified that he “knew what the sales prices were and what sales [he] was making.” Plaintiff testifiedthat he did not keep records of his sales or the amounts of the sales. Plaintiff answered “[y]es, I could” to the question “[a]nd you could have, if you wanted to, calculate[d] twenty percent of the sales price.” With respect to commission reports, plaintiff testified:
        Q.    Now, you learned about these commission reports in early 1995, you said?

        A.    Approximately, yes.
        . . . .
        Q.    And were these commission reports run every week?

        A.    I believe they were, yes.
        Q.    And you could have looked at them whenever you wanted to?

        A.    Yes, I could.
        . . . .
        Q.    Did you ask to look at the book from 1994?

        A.    I don't believe I did.
        Q.    And whenever you wanted to look at these commission reports they were there for you to look at, weren't they?

        A.    Yes.
        Q.    No one ever stopped you from looking at them?

        A.    No.
Plaintiff also testified that he had access in 1995 to the Signature books and the “legal” or “job” folders. The “legal folders” contained a copy of the contract for the job, a copy ofthe estimates, a copy of the expenses, and a copy of the job closing report.
    Plaintiff had the “capacity and opportunity to discover the fraud,” Hiatt, 55 N.C. App. at 526, 286 S.E.2d at 568, by 1995. Plaintiff had received the “Amended Payment Schedule” in November 1994 and had access to commission reports and the “legal” or “job” folders. Plaintiff testified that he could have kept track manually of the commissions but did not do so. Plaintiff is not “allowed to close his eyes to facts readily observable by ordinary attention, and maintain for his own advantage the position of ignorance.” Peacock, 142 N.C. at 218, 55 S.E. at 100. Plaintiff commenced this action in August 2000, more than three years from the time he should reasonably have discovered the fraud with the exercise of due diligence.
    Plaintiff's other claims are similarly barred by the applicable statutes of limitations. Plaintiff's claim for constructive fraud, like his fraud claim, is based on the alleged breach of his 1993 employment contract. The applicable statute of limitations for the constructive fraud claim and the breach of contract claim is three years. See G.S. § 1-52(1), (9) (2001). A claim under the Wage and Hour Act “must be brought within two years pursuant to G.S. 1-53.” G.S. § 95-25.22(f) (2001). For the reasons already stated, plaintiff, through the exercise of due diligence, should have known about the facts and circumstances giving rise to these causes of action by 1995.     Plaintiff further argues that defendants should be equitably estopped from using the statute of limitations as a defense. We do not agree.
    The party seeking to use estoppel “must have (1) a lack of knowledge and the means of knowledge as to the real facts in question; and (2) relied upon the conduct of the party sought to be estopped to his prejudice.” Blizzard Building Supply v. Smith, 77 N.C. App. 594, 595, 335 S.E.2d 762, 763 (1985), cert. denied, 315 N.C. 389, 339 S.E.2d 410 (1986). Further, “a plaintiff must have been induced to delay filing of the action by the misrepresentations of the defendant.” Jordan v. Crew, 125 N.C. App. 712, 720, 482 S.E.2d 735, 739, disc. review denied, 346 N.C. 279, 487 S.E.2d 548 (1997). Here, plaintiff has not alleged any reliance on any statements made by defendants which caused him to delay filing his action. Plaintiff only alleges that he was not aware of the fraud or breach of contract. Because we have concluded that plaintiff should have been aware of the facts giving rise to his causes of action through the exercise of due diligence, equitable estoppel will not bar defendants' use of the statutes of limitations as a defense.
    Accordingly, the decision of the trial court is affirmed.
    Judges BRYANT and LEVINSON concur.     
    Report per Rule 30(e).

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