1. Civil Procedure--motion to dismiss converted to motion for summary judgment--
matters outside pleading
The trial court did not err in an unfair and deceptive trade practices case by converting
defendants' N.C.G.S. § 1A-1, Rule 12(b)(6) motion to dismiss into a Rule 56 motion for
summary judgment, because: (1) Rule 12(b) provides that if on a motion to dismiss made
pursuant to Rule 12(b)(6) matters outside of the pleadings are presented to and not excluded by
the court, the motion is to be treated as a summary judgment motion under Rule 56, and that is
what happened in this case; and (2) plaintiffs, through their counsel, fully participated in the
hearing and cannot now complain that they were denied a reasonable opportunity to present
materials to the court.
2. Unfair Trade Practices--damages--actual injury--summary judgment
The trial court did not err in an unfair and deceptive trade practices case by granting
summary judgment in favor of defendants, because: (1) plaintiffs must prove they suffered actual
injury as a result of defendants' unfair and deceptive act in order to recover damages; and (2)
plaintiff husband admitted in his deposition that he has not suffered actual injury proximately
caused by any alleged unfair and deceptive acts by defendants.
Shipman & Hodges, L.L.P., by Gary K. Shipman and William G.
Wright, and Ness Motley, P.A., by Edward B. Cottingham, Jr.,
for plaintiff-appellants.
Young Moore & Henderson, P.A., by Glenn C. Raynor, and Nelson
Mullins Riley & Scarborough, by S. Keith Hutto and William H.
Latham for defendant-appellees.
STEELMAN, Judge.
Plaintiffs, Thomas and Barbara Belcher, appeal the order of
the trial court dismissing their claim against defendants pursuant
to Rules 12(b)(1) and 12(b)(6) of the North Carolina Rules of CivilProcedure and granting summary judgment in favor of defendants.
For the reasons discussed herein, we affirm.
This action was instituted by plaintiffs against defendants on
6 July 2001. Plaintiffs' complaint and amended complaint assert a
single cause of action against defendants for unfair and deceptive
trade practices under Chapter 75 of the North Carolina General
Statutes. In addition to plaintiffs' individual claims, their
complaint asserts a class action pursuant to Rule 23 of the North
Carolina Rules of Civil Procedure on behalf of similarly situated
individuals. In their complaint, plaintiffs make the following
allegations: Plaintiffs own a mobile home, which is secured to the
ground by a “soil anchor tie-down system.” Plaintiffs purchased
their home from RC Manufactured Homes of Greenville, a retailer who
is not a party to this action. Defendants Fleetwood Homes of
Virginia, Inc. and Fleetwood Homes of North Carolina, Inc. are
engaged in the business of manufacturing mobile homes. They are
subsidiaries of defendant Fleetwood Enterprises, Inc., a non-
manufacturing holding company. Mobile homes manufactured by
defendants are marketed and sold in North Carolina and other
states.
The United States Department of Housing and Urban Development
(HUD) promulgates regulations pertaining to the manufactured
housing industry which require all mobile home manufacturers to
designate in their consumer manual at least one method to support
and anchor their mobile homes. The Commissioner of Insurance of
the State of North Carolina is authorized to adopt rules to carry
out the regulations adopted by HUD. N.C. Gen. Stat. § 143-146(e)(2003). The mobile home is anchored to prevent personal injury and
property damage caused by movement of the mobile home during high
winds.
Defendants designate in their consumer manual that the “soil
anchor tie-down system” is recommended for use on their homes.
Additionally, defendants equip their mobile homes with clips and
corner straps to be used with a soil anchor tie-down system. The
consumer manuals accompanying defendants' mobile homes direct
purchasers of their homes to use the anchors and straps.
Defendants instruct retailers of their mobile homes to inform
purchasers that the homes are safe and secure when installed with
the soil anchor tie-down system, thereby promoting the sale of soil
anchor tie-down systems. Consumers rely on these assertions when
purchasing their mobile homes. Defendants make these
recommendations despite knowledge of testing that indicates the
soil anchor tie-down system is defectively designed and does not
safely secure a mobile home in high winds. This testing was
reported in well-know industry publications, government
publications and publications maintained and indexed by the
Manufactured Housing Institute.
Plaintiffs are owners of mobile homes manufactured by
defendants, which are secured to the ground by a soil anchor tie-
down system. The soil anchor tie-down system specified for use
with their mobile homes is “defective and unreasonably dangerous in
that it does not meet the minimum resistance standards set forth by
federal and state regulations.” As a result of this defect,
plaintiffs are exposed to the risk of personal injury and propertydamage during high winds. This risk is exacerbated by the fact
that defendants have led plaintiffs to believe that their homes are
safe and secure when the soil anchor tie-down system is in use.
The deposition of plaintiff, Thomas Belcher, was taken on 15
November 2001. On 14 March 2002, defendants filed a motion to
dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the North
Carolina Rules of Civil Procedure. Plaintiffs filed the affidavit
of plaintiff, Thomas Belcher, on 9 July 2002 in opposition to
defendants' motions. On 12 July 2002, the trial court heard
defendants' motions to dismiss. On 23 August 2002, the trial court
entered an order granting defendants' motions to dismiss pursuant
to Rules 12(b)(1) and 12(b)(6). The trial court also converted
defendants' 12(b)(6) motion to a summary judgment motion and
granted summary judgment in favor of defendants. Plaintiffs
appeal, arguing that the trial court erred in granting defendants'
motions to dismiss, converting defendants' 12(b)(6) motion to a
motion for summary judgment, and granting summary judgment.
The basis for the dismissal of plaintiffs' claims by the trial
court under Rules 12(b)(1), 12(b)(6), and 56 was identical. Each
ruling was based upon the plaintiffs' failure to either properly
plead or present evidence that the plaintiffs had suffered an
“actual injury” as required under Chapter 75. We find that the
trial court properly dismissed plaintiffs' claims under Rule 56,
and limit our discussion to the plaintiffs' assignments of error
pertaining to this issue. [1] Plaintiffs first contend that the trial court erred in
converting defendants' Rule 12(b)(6) motion to dismiss into a Rule
56 motion for summary judgment. We disagree.
Rule 12(b) provides that if on a motion to dismiss made
pursuant to Rule 12(b)(6), matters outside of the pleadings are
presented to and not excluded by the court, the motion is to be
treated as a summary judgment motion under Rule 56. N.C. Gen.
Stat. § 1A-1, Rule 12(b) (2003). In this case, defendants
presented to the court the deposition of plaintiff, Thomas Belcher,
and plaintiffs presented the affidavit of the plaintiff, Thomas
Belcher, the affidavit of Tim Hushion, the affidavit of Jimmy Ward,
excerpts from the deposition of William Crawford Farish IV,
excerpts from the deposition of Jerome Moriarty, and excerpts from
the deposition of Robert Henry. None of these submissions were
excluded by the trial court.
Plaintiffs now contend that they were not afforded a
“reasonable opportunity to present all material made pertinent to
such a motion by Rule 56.” Id. At the hearing before Judge Duke,
plaintiffs did not request a continuance or additional time to
produce evidence under Rule 56(f). Plaintiffs, through their
counsel, fully participated in the hearing and cannot now complain
that they were denied a reasonable opportunity to present materials
to the court. Knotts v. City of Sanford, 142 N.C. App. 91, 97-98,
541 S.E.2d 517, 521 (2001).
Plaintiffs further contend that they objected to the trial
court's consideration of matters outside the pleadings, except for
the limited purpose of contesting the motion to dismiss for lack ofsubject matter jurisdiction under Rule 12(b)(1). As noted above,
the basis of defendants' motions was a lack of “actual injury.”
The submissions of both the plaintiffs and defendants dealt with
this issue. Further, the submissions of plaintiffs to the trial
court were not limited to the issue of subject matter jurisdiction.
The standard of review of a trial court's decision to convert
a Rule 12(b)(6) motion to a Rule 56 motion is abuse of discretion.
See Raintree Homeowners Assoc. v. Raintree Corp., 62 N.C. App. 668,
673-74, 303 S.E.2d 579, 582, disc. rev. denied, 309 N.C. 462, 307
S.E.2d 355 (1983). In this case, the trial court, upon
consideration of matters outside the pleadings submitted by both
plaintiffs and defendants, properly converted defendants' Rule
12(b)(6) motion into a Rule 56 motion. This was not an abuse of
discretion. This assignment of error is without merit.
[2] Plaintiffs next contend that the trial court erred by
granting summary judgment in favor of defendants. We disagree.
Summary judgment is proper when “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) (2003)
(emphasis added). A party moving for summary judgment satisfies
its burden of proof (1) by showing an essential element of the
opposing party's claim is nonexistent or cannot be proven, or (2)
by showing through discovery that the opposing party cannot produce
evidence to support an essential element of his or her claim. Lowe
v. Bradford, 305 N.C. 366, 369, 289 S.E.2d 363, 366 (1982). Oncethe movant satisfies its burden of proof, the burden then shifts to
the non-movant to set forth specific facts showing there is a
genuine issue of material fact as to that essential element. Id.
at 369-70, 289 S.E.2d at 366.
Unfair or deceptive acts or practices in or affecting commerce
are unlawful in North Carolina. N.C. Gen. Stat. § 75-1.1 (2003).
To prevail on a claim for unfair and deceptive trade practices,
plaintiffs must show: (1) an unfair or deceptive act or practice;
(2) in or affecting commerce; (3) which proximately caused actual
injury to plaintiffs. Canady v. Mann, 107 N.C. App. 252, 260, 419
S.E.2d 597, 602 (1992). Thus, to recover damages, plaintiffs must
prove they suffered actual injury as a result of defendants' unfair
and deceptive act. See Mayton v. Hiatt's Used Cars, 45 N.C. App.
206, 212, 262 S.E.2d 860, 864, disc. rev. denied, 300 N.C. 198, 269
S.E.2d 624 (1980).
Actual injury may include the loss of the use of specific and
unique property, the loss of any appreciated value of the property,
and such other elements of damages as may be shown by the evidence.
Poor v. Hill, 138 N.C. App. 19, 34, 530 S.E.2d 838, 848 (2000).
“The measure of damages used should further the purpose of awarding
damages, which is 'to restore the victim to his original condition,
to give back to him that which was lost as far as it may be done by
compensation in money.'” Bernard v. Central Carolina Truck Sales,
68 N.C. App. 228, 233, 314 S.E.2d 582, 585, disc. rev. denied, 311
N.C. 751 321 S.E.2d 126 (1984) (quoting Phillips v. Chesson, 231
N.C. 566, 571, 58 S.E.2d 343, 347 (1950)). In his deposition, plaintiff admitted that he did not rely on
defendants' recommendation of the soil anchor tie-down system when
he purchased his mobile home. In fact, he did not read the
consumer manual which specified the soil anchor tie-down system as
the recommended method to secure defendants' mobile homes. In
addition, defendants did not make any representations to plaintiff
regarding the soil anchor tie-down system prior to his purchase of
the mobile home. Furthermore, plaintiff stated that his mobile
home withstood two hurricanes without damage to the soil anchor
tie-down system. During the course of Mr. Belcher's deposition,
the following examination took place:
Q: Have you suffered any damages of any kind
that you're aware of that are related to the
anchor tie-downs themselves?
. . .
A: No.
Q: You have not suffered any damages?
A: No.
Q: Can you say no, I have not suffered any
damages.
A: No, I have not suffered any damages.
. . .
Q: Did you think that there was a problem to
address with the anchor system before you
received the letter from the attorney?
A: No, sir.
In his affidavit filed in response to defendants' motions to
dismiss, Mr. Belcher stated that defendants caused damage to him and
his wife “when they had us purchase the defective soil anchor tiedown system that they recommended.” However, considering
plaintiff's prior admissions in his deposition, this affidavit
alone is insufficient to create an issue of material fact to
overcome summary judgment. See Wachovia Mortg. Co. v. Autry-
Barker-Spurrier Real Estate, Inc., 39 N.C. App., 1, 9, 249 S.E.2d
727, 732 (1978) (stating that a non-moving party cannot create an
issue of fact to defeat summary judgment simply by filing an
affidavit contradicting his prior sworn testimony).
Plaintiff, Thomas Belcher, admitted in his deposition that he
has not suffered actual injury proximately caused by any alleged
unfair and deceptive acts by the defendants. This is a “fatal
weakness” in plaintiffs' claim, and the trial court correctly
granted summary judgment in favor of defendants. See Dalton v.
Camp, 353 N.C. 647, 650, 548 S.E.2d 704, 707 (2001). This
assignment of error is without merit.
We note that an opinion reversing the trial court's dismissal
of an unfair and deceptive trade practices claim in Coley v.
Champion Home Builders, __ N.C. App. __, __ S.E.2d __ (2004), was
filed contemporaneously with this opinion. The complaint in Coley
contained specific language pertaining to the actual injury
alleged, which is not found in plaintiffs' complaint in the instant
case. Further, in Coley there were no matters presented to the
trial court outside of the pleadings, whereas the instant case was
decided under Rule 56.
Because we hold that the granting of summary judgment in favor
of defendants was appropriate, we need not reach plaintiffs'
remaining assignments of error. AFFIRMED.
Chief Judge EAGLES and Judge MCCULLOUGH concur.
*** Converted from WordPerfect ***