Appeal by plaintiff from judgments entered 23 July 2003 and
26 July 2002 by Judge Ronald L. Stephens in Durham County Superior
Court. Heard in the Court of Appeals 17 November 2003.
Keith A. Bishop, PLLC, by Daron D. Satterfield, for plaintiff-
appellant.
Forman, Rossabi, Black, P.A., by William F. Patterson, Jr.,
for defendant-appellee American Honda Finance Corporation.
Cranfill, Sumner & Hartzog, L.L.P., by H. Vance Barnette, III,
for defendant-appellee Chapel Hill Auto Investors, Inc.
EAGLES, Chief Judge.
This appeal arises from a civil action on an automobile lease
contract. Plaintiff appeals from summary judgment entered in favor
of defendants American Honda Finance Corporation and Chapel Hill
Auto Investors, Inc.
The record tends to establish the following: On 26 April 1996,
plaintiff entered into a closed end vehicle lease with PerformanceChevrolet, BMW, Subaru (“Performance”) in Chapel Hill, North
Carolina. The subject of the lease was a 1996 Acura 2.5TL
automobile. The terms of the lease required plaintiff to make
monthly lease payments of $537.39 for 30 months, ending on 1
November 1998. The lease also gave plaintiff the option to purchase
the car at the end of the lease period, providing in pertinent
part:
You have an option to purchase the vehicle at the
scheduled end of lease term from Lessor on an AS-IS,
WHERE-IS basis if you are not in default under the Lease.
To do so, you must notify Lessor in writing 30 days prior
to the end of lease term.
The purchase price of $18,870.35, which was the same as the
projected lease-end value of the car, was based upon a lease-end
mileage allowance of 37,500 miles. Plaintiff signed the lease
contract and took possession of the car.
Performance subsequently attempted to sell the lease contract
to American Honda Finance Corporation (“Honda”), pursuant to the
terms of a retail financing agreement between Performance and
Honda. When the lease was submitted to Honda, Honda rejected the
lease based on a miscalculation of the lease-end value and mileage
terms. According to Honda, in order to maintain a lease-end value
of $18,870.35, the lease-end mileage could not exceed 30,000 miles.
Consequently, Performance contacted plaintiff on or about 25 June
1996. Performance informed plaintiff of the error and asked
plaintiff to sign a new lease contract with a 30,000 mile mileage
allowance. Before signing the new contract, plaintiff had his
lawyer contact Performance. Plaintiff and his lawyer subsequentlynegotiated the terms of the new lease with Performance via a
telephone conference call. When, at plaintiff's request,
Performance agreed to the original lease-end mileage allowance of
37,500 miles, plaintiff returned to Performance and signed a new
lease contract. With the exception of the lease-end value/purchase
price of $17,942.30, the new lease was identical to the first
lease.
Plaintiff was consistently late in making the scheduled lease
payments. On three separate occasions, after plaintiff became more
than 60 days delinquent, Honda declared plaintiff to be in default
and initiated repossession proceedings. Plaintiff avoided
repossession twice by curing the default. However, in April 1998,
Honda terminated the lease and authorized repossession of the car.
In an effort to delay repossession, plaintiff painted the car
purple and took it to New Jersey. Meanwhile, plaintiff continued
trying to negotiate a repayment plan with Honda in order to avoid
repossession. Despite receiving numerous demands from Honda,
plaintiff refused to surrender the car or to disclose its location.
In August 1998, Honda contracted with a Bellmore, New York
company, Night Moves Recovery, Inc. (“Night Moves”), to locate and
repossess the car. Although Night Moves was successful in locating
the car, when its agents tried to repossess it, plaintiff resisted.
Plaintiff engaged in a physical altercation with the tow truck
operator, removed the car from the tow truck and drove it away.
Plaintiff refused to return the car to Honda after this incident. On 28 October 1998, plaintiff contacted Honda by phone and
inquired as to the payoff amount for exercising the lease-end
option to purchase. By letter dated 3 November 1998, Honda informed
plaintiff that the purchase price would be $19,068.72. This amount
was later reduced to $18,891.34, after plaintiff made an additional
monthly payment. Disputing the payoff amount, plaintiff made no
further payments and refused to return the car to Honda.
On 18 April 1999, Honda filed suit against plaintiff in the
Superior Court of Middlesex County, New Jersey, seeking possession
of the car. By order entered 4 October 1999, Honda was awarded the
right to immediate possession of the car. Plaintiff did not return
the car to Honda until 4 January 2000. At the time plaintiff
returned the car, there were 45,615 miles on the odometer. After
Honda sold the car and credited the net proceeds of $10,427.83 to
plaintiff's account, the balance due on plaintiff's account
remained $8,463.51.
On 4 November 1999, while still in possession of the car,
plaintiff filed this action in Durham County Superior Court
alleging fraud, breach of contract, unfair and deceptive trade
practices, assault, battery and abuse of process. Performance
answered asserting various affirmative defenses and cross-claiming
against Honda for contribution and indemnity. Honda answered
asserting affirmative defenses, cross-claiming against Performance
for contribution and indemnity and counterclaiming against
plaintiff for damages and possession. Night Moves filed no answer
and did not participate in the action. Discovery commenced on 20 June 2000. Over the next several
months, both sides served the other with interrogatories, requests
for the production of documents and requests for admissions.
Plaintiff was deposed in April 2001 and served a second set of
discovery requests on defendants in April 2002. On 9 July 2002,
alleging that defendants failed to adequately respond to his second
set of discovery requests, plaintiff moved to compel discovery and
impose sanctions against defendants pursuant to N.C. R. Civ. P. 37.
Honda and Performance moved for summary judgment. By orders entered
23 July 2002 and 26 July 2002, the trial court (1) granted summary
judgment on plaintiff's claims in favor of Performance and Honda,
and (2) granted summary judgment on Honda's counterclaim for
$8,463.51 in favor of Honda. The trial court granted default
judgment for plaintiff against Night Moves. Plaintiff appeals from
the 23 July 2002 and 26 July 2002 orders.
The sole issue on appeal is whether the trial court erred by
granting summary judgment on plaintiff's claims in favor of
Performance and Honda. After careful consideration of the record
and briefs, we affirm.
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. R. Civ. P. 56(c).
A defendant who moves for summary judgment assumes the
burden of positively and clearly showing that there is no
genuine issue as to any material fact and that he or she
is entitled to judgment as a matter of law. "A defendantmay meet this burden by: (1) proving that an essential
element of the plaintiff's case is nonexistent, or (2)
showing through discovery that the plaintiff cannot
produce evidence to support an essential element of his
or her claim, or (3) showing that the plaintiff cannot
surmount an affirmative defense which would bar the
claim."
James v. Clark, 118 N.C. App. 178, 180-81, 454 S.E.2d 826, 828
(1995)(citation omitted), disc. review denied, 340 N.C. 359, 458
S.E.2d 187 (1995).
I.
Plaintiff first contends that defendants failed to show that
they were entitled to summary judgment. We disagree. Plaintiff
asserted claims for fraud, breach of contract, unfair and deceptive
trade practices, assault, battery and abuse of process. We address
each claim below.
A. Fraud
Plaintiff's fraud claim is based on allegations that Honda and
Performance altered the lease-end value term of the second lease
contract without his knowledge, after he signed the contract.
Plaintiff further alleges that he was damaged when, due to the
discrepancy in the lease-end value, he was unable to secure
adequate financing to exercise the lease-end option to purchase. We
conclude plaintiff cannot produce evidence of an essential element
of this claim.
A claim of actionable fraud consists of the following
elements: “(1) False representation or concealment of a material
fact, (2) reasonably calculated to deceive, (3) made with intent to
deceive, (4) which does in fact deceive, (5) resulting in damage tothe injured party.”
Ragsdale v. Kennedy, 286 N.C. 130, 138, 209
S.E.2d 494, 500 (1974).
Here, the lease contract provided that plaintiff could only
exercise the lease-end option to purchase if he was “not in
default” under the terms of the lease. Further, the lease provides
that not making payments when due constitutes default and plaintiff
admitted, during deposition, that he failed to make several lease
payments when they became due. Consequently, it was plaintiff's
default under the terms of the lease, and not any conduct on the
part of defendants, that resulted in his loss of the lease-end
option to purchase. Since plaintiff cannot establish the fifth
essential element of fraud,
i.e., “resulting in damage to the
injured party[,]” defendants are entitled to judgment on this claim
as a matter of law.
B. Breach of Contract
Plaintiff's breach of contract claim is based on his
contention that once he exercised the lease-end option to purchase,
Honda was required to sell the car for the previously agreed upon
price of $17,942.30. Plaintiff asserts that Honda breached the
terms of their agreement by requiring plaintiff to pay a price of
$19,068.72. We conclude that an essential element of this claim is
nonexistent.
A claim for breach of contract presupposes the existence of a
valid and enforceable contract. “'An option is a contract by which
the owner of property agrees with another that he shall have the
right to purchase the same at a fixed price within a certaintime.'”
Kidd v. Early, 289 N.C. 343, 360, 222 S.E.2d 392, 404
(1976)(quoting
Ward v. Albertson, 165 N.C. 218, 221-22, 81 S.E.
168, 169 (1914)). “An option is not a contract to sell, but it is
transformed into one upon acceptance by the optionee in accordance
with its terms.”
Id. at 352, 222 S.E.2d at 399. “As master of the
offer, the optionor has the right to impose conditions upon the
optionee regarding the acceptance of the offer.” John N. Hutson,
Jr. & Scott A. Miskimon,
North Carolina Contract Law § 2-27-2(A),
at 112 (2001). Options are strictly construed in favor of the
optionor; therefore, effective acceptance by the optionee must be
in accord with all of the terms specified in the option.
Catawba
Athletics, Inc. v. Newton Car Wash, Inc., 53 N.C. App. 708, 712,
281 S.E.2d 676, 679 (1981).
Here, the terms of the lease-end option to purchase imposed
two conditions on plaintiff: (1) that plaintiff “not [be] in
default under the Lease;” and (2) that plaintiff “notify Lessor in
writing 30 days prior to the end of the lease term.” As we have
already noted, plaintiff was in default under the terms of the
lease at the time he attempted to exercise the option. Furthermore,
plaintiff first notified Honda of his intent to exercise the option
by phone on 28 October 1998, less than one week prior to the
expiration of the lease term on 1 November 1998. The consequence of
plaintiff's failed attempt to exercise the option is that no
enforceable contract to sell was ever formed. Because this was an
essential element of this claim, we conclude Honda was entitled to
judgment as a matter of law.
C. Unfair and Deceptive Trade Practices
Plaintiff's claim for unfair and deceptive trade practices is
wholly based on his claim that Performance and Honda committed
fraud. Although plaintiff correctly notes that “proof of fraud
necessarily constitutes a violation of the statutory prohibition
against unfair and deceptive acts,”
Mapp v. Toyota World, Inc., 81
N.C. App. 421, 425, 344 S.E.2d 297, 300,
disc. review denied, 318
N.C. 283, 347 S.E.2d 464 (1986), we have already concluded that
summary judgment was appropriately granted for defendant with
respect to plaintiff's fraud claim. Accordingly, we conclude this
claim fails as a matter of law.
D. Assault and Battery
Plaintiff's claims of assault and battery against Honda are
based upon the physical altercation that occurred between plaintiff
and Knight Moves' agents during their attempt to repossess the car.
Based on the material obtained through discovery, we conclude
plaintiff cannot produce evidence of an essential element of this
claim.
“As a general rule, 'an employer or contractee is not liable
for the torts of an independent contractor committed in the
performance of the contracted work.'”
Jiggetts v. Lancaster, 138
N.C. App. 546, 547-48, 531 S.E.2d 851, 852 (2000)(quoting
Page v.
Sloan, 12 N.C. App. 433, 439, 183 S.E.2d 813, 817 (1971)).
Whether one is an independent contractor or an employee
is a mixed question of law and fact. The factual issue
is: What were the terms of the parties' agreement?
Whether that agreement establishes a master-servant or
employer-independent contractor relationship is
ordinarily a question of law. As this Court has stated:
[W]here the facts are undisputed or the
evidence is susceptible of only a single
inference and a single conclusion, it is a
question of law for the court whether one is
an employee or an independent contractor, but
it is only where a single inference can
reasonably be drawn from the evidence that the
question of whether one is an employee or an
independent contractor becomes one of law for
the court.
Yelverton v. Lamm, 94 N.C. App. 536, 538-39, 380 S.E.2d 621, 623
(1989)(quoting
Little v. Poole, 11 N.C. App. 597, 600, 182 S.E. 2d
206, 208 (1971))(citation omitted).
Here, plaintiff's own documents indicate that Knight Moves was
an independently owned and operated New York corporation that Honda
engaged to repossess plaintiff's car. Although Honda provided Night
Moves with a copy of its policy requiring compliance with all
applicable laws relating to the repossession of collateral, there
is nothing in the record that indicates that Honda had any control
over the manner in which Night Moves was to effect repossession of
the car. On the contrary, the indemnity agreement between Honda and
Knight Moves expressly states that Knight Moves was acting “only as
an independent contractor and not as [Honda's] agent.” We conclude
the evidence of record is only susceptible to one conclusion:
Knight Moves was acting as an independent contractor. Accordingly,
Honda may not be held liable for the conduct of Knight Moves'
agents.
E. Abuse of Process
Plaintiff's claim for abuse of process arises from his
contention that Honda wrongfully instituted a civil action forpossession of the car when he was not in default. We conclude that
an essential element of this claim is nonexistent.
Abuse of process is the malicious misuse or misapplication of
legally issued process for a result not lawfully or properly
obtainable.
Melton v. Rickman, 225 N.C. 700, 703, 36 S.E.2d 276,
278 (1945). “One who uses legal process to compel a person to do
some collateral act not within the scope of the process or for the
purpose of oppression or annoyance is liable in damages in a common
law action for abuse of process.”
Id.
Apart from plaintiff's unsupported allegations to the
contrary, all of the evidence in the record tends to establish that
Honda's claim against plaintiff was reasonably grounded in fact and
brought for the specific purpose for which it was contemplated.
Accordingly, we conclude this claim was without merit.
II.
Plaintiff next contends that his pending Rule 37 motion to
compel discovery and impose sanctions precluded the entry of
summary judgment. We disagree.
“Ordinarily it is error for a court to hear and rule on a
motion for summary judgment when discovery procedures, which might
lead to the production of evidence relevant to the motion, are
still pending and the party seeking discovery has not been dilatory
in doing so.”
Conover v. Newton, 297 N.C. 506, 512, 256 S.E.2d 216,
220 (1979). However, “[t]he trial court is not barred in every
case from granting summary judgment before discovery is completed.”
Vaglio v. Town & Campus International, Inc., 71 N.C. App. 250, 255,322 S.E.2d 3, 6 (1984). “The rule that summary judgment should not
be granted while discovery is pending, presupposes that any
information gleaned will be useful.”
Id. Therefore, “[t]he
decision to grant or deny a continuance of discovery proceedings is
solely within the discretion of the trial judge, and his decision
will not be reviewed absent a manifest abuse of discretion.”
Id.
Here, careful review of the record reveals that discovery had
been ongoing for approximately two years. Moreover, in light of
plaintiff's own deposition testimony, nothing plaintiff asked for
in his second set of discovery requests would likely have negated
defendants' entitlement to judgment as a matter of law. Therefore,
we conclude the trial court did not abuse its discretion.
Accordingly, the decision of the trial court is affirmed.
Affirmed.
Judges MARTIN and LEVINSON concur.
Report per Rule 30(e).
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