Unfair Trade Practices_sale of mobile home tie-downs_allegations sufficient
Plaintiff's allegations of actual injury were sufficient to state a claim for unfair and
deceptive acts in marketing soil anchor tie-downs for mobile homes.
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.
Adams Kleemeier Hagan Hannah & Fouts, P.L.L.C., by J.
Alexander S. Barrett and J. Scott Hale, for defendant-
appellee.
STEELMAN, Judge.
Plaintiffs appeal the order of the trial court dismissing
their claim against defendant, Champion Home Builders Co., for
failure to state a claim upon which relief can be granted pursuant
to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure.
This action was instituted by plaintiffs in the Superior Court
of Pender County against defendants Champion Home Builders Co.,
Champion Enterprises, and Redman Homes, Inc. on 3 May 2001. On 5
June 2001, this action was removed to the United States District
Court for the Eastern District of North Carolina. On 26 February
2002, the Honorable James C. Fox, Senior United States District
Judge entered an order dismissing plaintiffs' complaint as todefendant Champion Enterprises, Inc. for lack of personal
jurisdiction and allowing plaintiffs' motion to remand the case to
the state courts of North Carolina. On 14 August 2002, defendants
renewed their motion to dismiss before the Superior Court of Pender
County. Prior to the hearing on the motion, plaintiffs voluntarily
dismissed their claims against defendant Redman Homes, Inc. This
left Champion Home Builders, Inc. (Champion) as the only remaining
defendant. On 19 August 2002, the trial court dismissed
plaintiffs' complaint as to Champion.
Plaintiffs' complaint and amended complaint assert a single
cause of action against Champion 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 and amended complaint, plaintiffs make the
following allegations: Champion manufactures mobile homes which
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 that 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 in order to prevent personal injury andproperty damage caused by movement of the mobile home during high
winds.
Champion designates in its consumer manual that the “soil
anchor tie-down system” is recommended for use on its homes. In
addition, Champion manufactures its mobile homes with clips and
corner straps to be used with a soil anchor tie-down system. The
consumer manuals accompanying Champion's mobile homes direct
purchasers of their homes to use the anchors and straps. Champion
instructs retailers of its 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. Champion makes 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-known industry
publications, government publications and publications maintained
and indexed by the Manufactured Housing Institute.
Plaintiffs are each owners of mobile homes manufactured by
Champion, 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 property
damage during high winds. This risk is exacerbated by the fact
that Champion has led plaintiffs to believe that their homes aresafe and secure when the soil anchor tie-down system is in use.
Plaintiffs have been damaged by purchasing a system that does not
meet HUD standards, and they will incur expenses to procure a
replacement system to properly secure their homes.
The sole issue argued by the parties in this appeal is whether
plaintiffs have made a sufficient allegation of actual injury to
survive a motion to dismiss for failure to state a claim upon which
relief may be granted. A motion to dismiss for failure to state a
claim upon which relief may be granted challenges the legal
sufficiency of a pleading. Walker v. Sloan, 137 N.C. App. 387,
392, 529 S.E.2d 236, 241 (2000). In ruling on a motion to dismiss
under Rule 12(b)(6), a court must determine whether, taking all
allegations in the complaint as true, relief may be granted under
any recognized legal theory. Taylor v. Taylor, 143 N.C. App. 664,
668, 547 S.E.2d 161, 164 (2001).
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 defendant's unfair
and deceptive act. See Mayton v. Hiatt's Used Cars, Inc., 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)). Moreover, the treble
damages provision of Chapter 75 was created in part because the
remedies for fraud, breach of contract, and breach of warranty
often were ineffective. Canady, 107 N.C. App. at 260, 419 S.E.2d
at 602 (1992). Thus, “it would be illogical to hold that only
those methods of measuring damages could be used” to determine the
actual injury suffered by a Chapter 75 plaintiff. Id. (quoting
Bernard, 68 N.C. App. at 232, 314 S.E.2d at 585).
In their complaint, plaintiffs allege they should be awarded
“the costs that they have incurred to purchase and install the
defective soil anchor/tie down system or . . . the costs [to]
retro-fit their tie-down system to one that provides a safe and
reliable method to secure the homes in severe weather conditions
and meets the minimal governmental standards.” When viewed in the
light most favorable to plaintiffs, this is a sufficient allegation
of actual injury to state a claim for unfair and deceptive trade
practices. Because plaintiffs' complaint contains allegations that they
suffered actual injury proximately caused by Champion's unfair and
deceptive acts, the trial court erred in dismissing plaintiffs'
claim. “It will be plaintiffs' substantial burden, as this case
progresses, to provide sufficient evidence to support their claim
that they have suffered actual injury as a result of [Champion's]
actions. At this juncture, however, they are entitled to proceed
with their claims.” Boyce & Isley, PLLC v. Cooper, 153 N.C. App.
25, 37, 568 S.E.2d 893, 902-903 (2002), cert. denied, 157 L. Ed. 2d
310, __ U.S. __ (2003).
REVERSED.
Chief Judge EAGLES and Judge MCCULLOUGH concur.
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