Appeal by plaintiff from order entered 28 March 2002 by Judge
W. Allen Cobb, Jr. in Carteret County Superior Court. Heard in the
Court of Appeals 14 May 2003.
Stone & Lumsden, by Treve B. Lumsden, for plaintiff-appellant.
Wheatly, Wheatly, Nobles, Weeks & Valentine, P.A., by C.R.
Wheatly, III, for defendant-appellee HMY Marine Sales, Inc.
HUDSON, Judge.
In 1997, plaintiff originally sued defendants Lloyd Johnson
(Johnson) and HMY Marine Sales, Inc. (“HMY”), alleging fraud,
negligent misrepresentation and unfair and deceptive trade
practices. Both defendants were served. Before trial, however,
plaintiff voluntarily dismissed the action pursuant to Rule 41 of
the North Carolina Rules of Civil Procedure. On 3 May 2000,
plaintiff filed this complaint, which is identical to the original.
Defendant Johnson could not be located and was not served with
process.
The parties conducted discovery and prior to trial both
parties moved for summary judgment. After receiving affidavits andhearing arguments of counsel, the trial court denied plaintiff's
motion for summary judgment on the sole issue of prior damage, and
granted defendant's motion, thereby dismissing plaintiff's claim.
Plaintiff appeals.
Factual Background
In late June or early July 1995, Lloyd Johnson, the owner of
a 1987 thirty-one foot Intrepid motor boat (“the boat”), contracted
with HMY to sell the boat for him. HMY acted as the agent for
Johnson in the sale of the boat.
In early August 1995, plaintiff went to HMY and looked at the
boat. Plaintiff visually inspected the boat and tested its
engines. Plaintiff then took the boat on a “sea trial.” The day
after the sea trial, plaintiff returned to HMY and continued
negotiations to purchase the boat. At HMY, plaintiff noticed a
stain on the port side at midship, indicating that water was
leaking from the hull. Plaintiff asked about the leak and was told
that it from was a stress crack.
HMY inspected the hull and at plaintiff's request took the
boat to Anthony Petrucci, a repairman, to fix the hull. Defendant
Johnson authorized and paid for the repairs to the hull. Plaintiff
also contacted Intrepid, the manufacturer of the boat and inquired
as to whether such a crack would cause structural problems, and
Intrepid informed him that it would not.
Anthony Petrucci repaired the crack on the hull. In so doing,
he found that the boat had been improperly repaired in that area
previously. The repair took approximately three days to complete. During the repairs, plaintiff visited the boatyard several times.
Plaintiff acknowledges speaking to Petrucci during the repairs but
denies being told that the hull had been improperly repaired in the
past.
On 5 August 1995, plaintiff made an offer to purchase the
boat. Plaintiff and defendant Johnson negotiated a sales price of
$18,500. The “Offer to Purchase and Contract” signed by both
plaintiff and a representative of HMY contained the following typed
language: “THIS VESSEL IS SOLD AS IS, WHERE IS, FREE AND CLEAR OF
ALL LIENS AND INDEBTEDNESS, WITH THE FOLLOWING EXCEPTIONS.” Below
this language, plaintiff inserted the following handwritten
language: “Hull indicated damage is not structural [and] is
repaired to buyer's satisfaction.”
Plaintiff purchased the boat. On 14 April 1996, approximately
seven months after the purchase, plaintiff returned from a ride in
the boat to discover a catastrophic failure of the underwater
section of the hull. Plaintiff transported the boat to the
Intrepid factory in Florida where repairs were made, costing
plaintiff in excess of $18,000.
Analysis
Summary judgment is appropriate if “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.” G.S. § 1A-1, Rule 56(c) (2001).
An issue is material if the facts alleged
would constitute a legal defense, or wouldaffect the result of the action, or if its
resolution would prevent the party against
whom it is resolved from prevailing in the
action. The party moving for summary judgment
has the burden of establishing the lack of any
triable issue of fact. Furthermore, the
evidence presented by the parties must be
viewed in the light most favorable to the
non-movant.
Adams v. Jefferson-Pilot Life Ins. Co., 148 N.C. App. 356, 358, 558
S.E.2d 504, 506,
disc. review denied, 356 N.C. 159, 568 S.E.2d 186
(2002) (internal citations and quotations omitted).
In general, a court interprets a contract according to the
intent of the parties to the contract.
Bueltel v. Lumber Mut. Ins.
Co., 134 N.C. App 626, 631, 518 S.E.2d 205, 209 (1999),
disc.
review denied, 351 N.C. 186, 541 S.E.2d 709 (1999). In addition,
“if the plain language of a contract is clear, the intention of the
parties is inferred from the words of the contract.”
Id. This
Court has previously noted that:
Intention or meaning in a contract may be
manifested or conveyed either expressly or
impliedly, and it is fundamental that that
which is plainly or necessarily implied in the
language of a contract is as much a part of it
as that which is expressed. If it can be
plainly seen from all the provisions of the
instrument taken together that the obligation
in question was within the contemplation of
the parties when making their contract or is
necessary to carry their intention into
effect, the law will imply the obligation and
enforce it. The policy of the law is to supply
in contracts what is presumed to have been
inadvertently omitted or to have been deemed
perfectly obvious by the parties.
Strader v. Sunstates Corp., 129 N.C. App. 562, 569, 500 S.E.2d 752,
756 (1998),
disc. review denied, 349 N.C. 240, 514 S.E.2d 274(1998).
“[W]hen a contract is in writing and free from any ambiguity
which would require resort to extrinsic evidence, or the
consideration of disputed fact, the intention of the parties is a
question of law.”
Bicycle Transit Authority v. Bell, 314 N.C. 219,
227, 333 S.E.2d 299, 304 (1985) (citations omitted). Moreover, “it
is a well-settled principle of legal construction that it must be
presumed the parties intended what the language used clearly
expresses, and the contract must be construed to mean what on its
face it purports to mean.”
Hagler v. Hagler, 319 N.C. 287, 294,
354 S.E.2d 228, 234 (1987). “Whether or not the language of a
contract is ambiguous or unambiguous is a question for the court to
determine.”
Piedmont Bank & Trust Co. v. Stevenson, 79 N.C. App.
236, 240, 339 S.E.2d 49, 52,
affirmed, 317 N.C. 330, 344 S.E.2d 788
(1986). In making this determination, “words are to be given their
usual and ordinary meaning and all the terms of the agreement are
to be reconciled if possible.”
Id.
A. Fraud
In
Ace, Inc. v. Maynard, 108 N.C. App. 241, 423 S.E.2d 504
(1992),
disc. review denied, 333 N.C. 574, 429 S.E.2d 567 (1993),
the purchaser of an airplane, prior to taking possession, signed a
“Purchase Agreement” which provided that the purchaser understood
that the airplane was “being sold 'AS IS' and 'WHERE IS' and that
there are 'NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED AS
TO ANY MATTER WHATSOEVER, INCLUDING, WHITHOUT [sic] LIMITATION, THE
CONDITION OF THE AIRCRAFT, PARTS OR ACCESSORIES, ITSMERCHANTABILITY OR ITS FITNESS FOR A PARTICULAR PURPOSE.”
Id. at
244, 423 S.E.2d at 506.
Upon taking possession of the airplane, the purchaser
discovered numerous defects, and the seller refused to make the
repairs. The purchaser argued, inter alia, that the seller
committed fraud by making false representations about the aircraft
prior to the sale. At trial, the jury returned a verdict in favor
of the purchaser on the fraud count. However, the court granted
defendants motion for JNOV. On appeal, this Court held that where
one of the essential elements of a fraud is a “[f]alse
representation or concealment of a material fact,” and where the
purchaser “effectively agreed when he signed the Purchase Agreement
that defendants made no representations whatsoever with regard to
the plane, [purchaser was] unable to establish the making of a
false representation.”
Id. at 249-50, 423 S.E.2d at 510. The
court further held that the purchaser failed to establish that the
seller concealed a material fact because purchaser presented no
evidence of seller's prior knowledge of the damage.
Id.
Here, the Offer to Purchase and Contract, signed by plaintiff,
provided the following language similar to that found in Ace: “The
terms and conditions on both sides of this contract contains the
entire understanding between you and me and that no other
representation or inducement, verbal or written, has been made
which is not included in this contract of sale.” Here, as in
Ace,
where plaintiff has not shown that defendant made any
representations, plaintiff is “unable to establish the making of afalse representation.”
Id. Additionally, the evidence forecast
here tends to show that plaintiff and defendant discovered the
crack in the hull at the same time, and that plaintiff personally
added the language to the contract that the “hull indicated damage
is not structural [and] is repaired to buyer's satisfaction.”
Thus, the trial court properly concluded that plaintiff's evidence
did not show the concealment of a material fact.
B. Negligent Misrepresentation
“[W]hether liability accrues [for negligent misrepresentation]
is highly fact-dependent, with the question of whether a duty is
owed a particular plaintiff being of paramount importance.”
Marcus
Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C. 214, 220,
513 S.E.2d 320, 325 (1999) (quoting Logan,
N.C. Torts § 25.30, at
551). As such, summary judgment is seldom appropriate in such a
case, “'unless the evidence is free of material conflict, and the
only reasonable inference that can be drawn therefrom is that there
was no negligence on the part of defendant, or that his negligence
was not the proximate cause of the injury.'”
Alva v. Cloninger, 51
N.C. App. 602, 609, 277 S.E.2d 535, 539-40 (1981) (quoting
Price v.
Miller, 271 N.C. 690, 693, 157 S.E.2d 347, 349-50 (1967)).
In
Powell v. Wold, 88 N.C. App. 61, 67, 362 S.E.2d 796, 799,
(1987), this Court stated that North Carolina has adopted the
Restatement of Torts definition and requirements for negligent
misrepresentation:
One who in the course of his business or profession
supplies information for the guidance of others in their
business transactions is subject to liability for harm
caused to them by their reliance upon information if
(a) he fails to exercise that care and competence in
obtaining and communicating the information which its
recipient is justified in expecting, and
(b) the harm is suffered
(i) by the person or one of the class of
persons for whose guidance the information was
supplied, and
(ii) because of his justifiable reliance upon
it in a transaction in which it was intended
to influence his conduct or in a transaction
substantially identical therewith.
Id. (quoting Restatement (Second) of Torts § 552 (1977)). Nothing
in the record shows defendants negligently misinformed plaintiffs
about the condition of the boat. As we have already noted, the
evidence indicates that both plaintiff and defendant discovered the
crack in the hull at the same time, after plaintiff returned from
a sea trial with the boat. Plaintiff requested the damage be
examined by an independent boat repairman, which was done. After
the repairs were completed, plaintiff inserted language on the
Offer to Purchase and Contract acknowledging that the damage was
not structural and that the repairs were made satisfactorily.
Additionally, in answers to interrogatories in the original suit,
the previous owner of the boat stated that the only repairs he had
done to the boat were “Normal boat maintenance, cosmetic repairs,
superficial stress cracks.”
Even assuming, arguendo, that HMY made negligent
misrepresentations to plaintiff regarding the condition of the
boat, the evidence did not indicate that any damage resulted from
plaintiff's reliance on this information. Thus, the trial courtcorrectly concluded that plaintiff's claim must fail. Because
plaintiff contacted the manufacturer of the boat and inquired about
the structural integrity of the hull, and because plaintiff's
evidence showed that HMY made no representations, plaintiff's claim
for negligent misrepresentation fails.
C. Unfair and Deceptive Trade Practices
In
Coble v. Richardson Corp., 71 N.C. App. 511, 322 S.E.2d 817
(1984), this court noted 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] party is guilty of an unfair
act or practice when it engages in conduct that amounts
to an inequitable assertion of its power or position.
Id. at 520, 322 S.E.2d at 823-24 (citations and quotation marks
omitted).
In
Coble, the plaintiff sued on a theory of unfair and
deceptive trade practices for damages to correct a drainage problem
on a tract of land she had purchased. This court noted that:
The case before us involves a breach of contract based on
written warranties and oral representations that were
essentially restatements of what defendant was already
bound to do under the warranty. There is nothing so
oppressive or overreaching about defendant's behavior in
breaching the contract that would transform the case into
one for an unfair trade practice.
Id.
Here, we find that there is nothing in the record to indicate
that any behavior by defendant HMY amounted to oppressive or
overreaching conduct. By admitting that the repairs to the boat
were done to his satisfaction, plaintiff fails in his claim that he
was unfairly induced into purchasing the boat. As such, his claimfor unfair and deceptive trade practices fails.
Affirmed.
Judges TIMMONS-GOODSON and STEELMAN concur.
Report per Rule 30(e).
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