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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the
print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
CASTLE MCCULLOCH, INC., Plaintiff, v. DONALD LEE FREEDMAN, d/b/a
FREEDMAN ASSOCIATES, and FREEDMAN ASSOCIATES, INC. Defendants
Filed: 5 April 2005
1. Unfair Trade Practices_competitor's survey_damages not shown
The trial court did not err by granting defendant's motion for a directed verdict in an
action for unfair and deceptive trade practices arising from a bridal show survey and tip sheet by
a competitor where plaintiff failed to present evidence that it suffered actual injury as a
proximate result of defendant's conduct. There was no evidence from which a jury could
calculate lost profits from vendors or payroll damages with a reasonable certainty.
2. Evidence _door not opened on cross-examination_witness interjecting answer
The trial court did not err by refusing to allow plaintiff's expert to testify in an unfair and
deceptive trade practices action arising from a bridal show survey and tip sheet where the court
ruled that plaintiff had not properly disclosed the expert's opinion in discovery. Although
plaintiff argued that defendant opened the door on cross-examination, the witness interjected the
information and defendant was not the first to raise the issue.
3. Unfair Trade Practices_costs and attorney fees_frivolous action_discretionary
The trial court did not abuse its discretion by awarding costs and attorney fees to
defendant in an unfair and deceptive trade practices action arising from a bridal show survey and
tip sheet where it found the action to be frivolous. The court's decision was not manifestly
unsupported by reason; moreover, where the court has taxed costs in its discretion, that decision
is not reviewable.
Judge TYSON concurring in part and dissenting in part.
Appeal by Plaintiff from judgment entered 17 March 2003 by
Judge William Z. Wood, Jr. in Superior Court, Guilford County.
Heard in the Court of Appeals 25 January 2005.
Douglas S. Harris for plaintiff-appellant.
Elliot Pishko Gelbin & Morgan, P.A., by David C. Pishko for
To prevail on a claim of unfair and deceptive trade practices,
under Chapter 75 of the North Carolina General Statutes, a
plaintiff must show the defendant committed an unfair or deceptive
act or practice, in or affecting commerce, and that the plaintiff
was injured thereby. In this case, the record shows that Plaintiff
failed to present evidence from which a jury could reasonably
calculate damages. Accordingly, we hold that the trial court did
not err in granting Defendant's Motion for a Directed Verdict.
Plaintiff, Castle McCulloch, Inc., owns and operates a
facility in Jamestown, North Carolina used primarily for weddings
and wedding receptions. In 1999, Castle McCulloch also began
holding bridal shows at its facility. At a bridal show various
vendors - caterers, photographers, florists, musicians, etc. -
display their products and services to brides. In January 1999,
Castle McCulloch's first bridal show had twenty-six vendors and 150
brides. By June 2001, the bridal show consisted of seventy vendors
and 506 brides. The January 2003 bridal show included 753 brides
and fifty-five vendors.
Castle McCulloch charges each vendor $650 per booth, unless
they are a preferred vendor in which case the charge is only
$325-350. A preferred vendor at Castle McCulloch has its
literature included in a bridal notebook given to all brides that
use Castle McCulloch, and the brides are encouraged to book
services with the preferred vendors. In addition, Castle
McCulloch markets the preferred vendors at various wedding shows
its employees attend around North Carolina. In exchange for thismarketing service, all preferred vendors must pay Castle
McCulloch fifteen percent (ten percent for caterers) of all sales
they make to brides holding their events at Castle McCulloch.
There is no charge for brides to attend the bridal show if they
Defendant, Donald Lee Freedman, operates three large wedding
shows a year in Greensboro, North Carolina and two in Winston-
Salem, North Carolina. Annually, Freedman rents booths to about
400 vendors at his bridal shows collectively at a rate of $640 per
booth. Most brides are charged a ten dollar entrance fee to
In March 2001, Freedman conducted a survey questionnaire
asking fifteen local caterers and four local wedding planners to
grade various reception sites that allow outside caterers.
Thirteen of the caterers were chosen from a list of the top fifteen
caterers in the Triad area (two were removed because they did not
caterer weddings) and Freedman added two more caterers that were
frequently used for weddings. Along with five other sites, Castle
McCulloch was one of the facilities graded. Each facility was
given a letter grade in six categories - professionalism,
integrity, personal service, convenience, preparation/amenities,
and hidden costs. Freedman received responses from fifteen vendors
and averaged the letter grades into a final list. Castle McCulloch
received the worst grades with four Cs and two Ds. Some of the
vendors who were sent the questionnaire were Castle McCulloch's
preferred vendors, while one vendor had been banned fromperforming services there. The survey results were sent to the
nineteen vendors that the questionnaire was originally sent to,
along with a few other vendors. It was not given to any brides.
In August 2001, Freedman sent Dave Card of After Five Framing
a sheet entitled How can I tell a Good bridal show from a not-so-
good one? in response to Card inquiring into joining either
Freedman's or Castle McCulloch's bridal show. Card eventually
joined Castle McCulloch's bridal show. The sheet contained the
following pertinent sections:
KICKBACK FEES. Believe it or not, some shows
hit you for a percentage of your hard-won
sales. If you feel like you are not currently
paying enough taxes, you'll love this type of
REAL BRIDES. Do most brides get into the show
for free? Such brides are not your best
prospects: heck, access to free caterers' food
is enough to draw a crowd. Look for a show
where 90+% pay for tickets: now those are
brides who are planning weddings!
On 16 November 2001, Castle McCulloch filed a complaint
against Freedman alleging unfair and deceptive actions constituting
an unfair trade practice in violation of Chapter 75 on the North
Carolina General Statutes. The case went to trial on 24 February
2004, and at the close of Castle McCulloch's evidence the trial
court granted Freedman's motion for a directed verdict. Castle
____________________________________________ On appeal, Castle McCulloch argues that the trial court erred
in (A) granting Freedman's Motion for a Directed Verdict, (B) not
allowing its economic expert to testify as to damages, and (C)
granting Freedman's Motion for Costs and Attorneys Fees. We
A. Directed Verdict
Castle McCulloch first contends that the trial court erred in
granting Freedman's Motion for a Directed Verdict at the close of
its evidence when it had properly stated its case within the
meaning of section 75-1.1 of the North Carolina General Statutes.
A motion for a directed verdict under Rule 50(a) of the North
Carolina Rules of Civil Procedure presents the same question for
both trial and appellate courts: whether the evidence, taken in a
light most favorable to plaintiff, was sufficient for submission to
the jury. Helvy v. Sweat, 58 N.C. App. 197, 199, 292 S.E.2d 733,
734, disc. review denied, 306 N.C. 741, 295 S.E.2d 477 (1982). The
question of the evidence's sufficiency is a matter of law, and the
motion should be reversed if there is more than a scintilla of
evidence to support all the elements of plaintiff's prima facie
case. S. Ry. Co. v. O'Boyle Tank Lines, Inc., 70 N.C. App. 1, 4,
318 S.E.2d 872, 875 (1984). Therefore, this Court reviews the
record and transcript de novo, reversing upon a finding of more
than a scintilla of evidence supporting each element of plaintiff's
prima facie case. Whitt v. Harris Teeter, Inc., 165 N.C. App. 32,
46, 598 S.E.2d 151, 160 (2004). To prevail on a claim of unfair and deceptive trade practices,
a plaintiff must show: (1) defendants committed an unfair or
deceptive act or practice; (2) in or affecting commerce; and (3)
that plaintiff was injured thereby. See Canady v. Mann, 107 N.C.
App. 252, 260, 419 S.E.2d 597, 602 (1992); N.C. Gen. Stat. § 75-1.1
(2004). The plaintiff must also establish it suffered actual
injury as a proximate result of defendants' misrepresentations or
unfair conduct. First Atl. Mgmt., Corp. v. Dunlea Realty, Co.,
131 N.C. App. 242, 252, 507 S.E.2d 56, 63 (1998) (citation
Here, the trial court concluded that the plaintiff's evidence
is insufficient as a matter of law to establish each of the
elements of the plaintiff's claim and that the defendants' Motion
should be granted. The trial court found that Castle McCulloch
failed to establish with certainty the existence of any actual
damages caused by Freedman.
The burden of proving damages is on the party seeking them.
Olivetti Corp. v. Ames Bus. Sys., Inc., 319 N.C. 534, 547, 356
S.E.2d 578, 586 (1987). As part of its burden, the party seeking
damages must show that the amount of damages is based upon a
standard that will allow the finder of fact to calculate the amount
of damages with reasonable certainty. Id. at 547-48, 356 S.E.2d
At trial, Castle McCulloch argued the damages it sustained
from Freedman's survey and bridal show tip sheet amounted to the
payroll time employees spent talking about the survey and therevenue from the decline in vendor booths at the wedding shows.
Denisa Harvey, general manager of Castle McCulloch, testified at
trial that although they had no meeting logs, based on her personal
notes from staff meetings, she estimated that Castle McCulloch
employees spent fifty to seventy hours working on the reaction to
the Freedman survey and the average employee made ten dollars per
hour. All employees were on the payroll and there was no overtime
or additional employees hired in response to Freedman's survey.
Richard Harris, president of Castle McCulloch, testified at trial
that he calculated Castle McCulloch lost revenue in the amount of
$33,000 to $67,000 due to Freedman's survey. Harris reached these
numbers by calculating the amount of vendors lost since the highest
point (seventy) to the current number (fifty-five) and multiplied
this by $650 (the charge for a booth to a non-preferred vendor) to
reach $33,000. He calculated the $67,000 by looking at the amount
of vendors his show would have had if the number of vendors
continued to grow as it previously had before the drop off.
The damages argued by Castle McCulloch regarding the lost
vendor revenue are essentially damages for lost profits. North
Carolina courts have long held that damages for lost profits will
not be awarded based upon hypothetical or speculative forecasts of
losses. Iron Steamer, Ltd. v. Trinity Rest., Inc., 110 N.C. App.
843, 847, 431 S.E.2d 767, 770 (1993). This Court has chosen to
evaluate the quality of evidence of lost profits on an individual
case-by-case basis in light of certain criteria to determinewhether damages have been proven with reasonable certainty. Id.
at 847-48, 431 S.E.2d at 770.
In Iron Steamer, the defendant leasee operated a restaurant
and his gross revenues for August, September, October, and November
of 1989 were lower than the revenues from May, June, or July of
that year. Id. at 848, 431 S.E.2d at 771. The trial court found
that, but for the plaintiff's breach of contract, the gross sales
figures for a restaurant of that type and location, for the month
of August, should have been similar to the gross sales figures for
the month of July. Id. The defendant estimated his lost profits
for the months of August through November, by estimating the gross
sales figures would have been the same as in July and subtracting
what he thought would have been the additional expenses for those
months. Id. at 848-49, 431 S.E.2d at 771. This court found no
factual basis upon which a jury could calculate lost profits with
a 'reasonable certainty.' [The defendant's] estimation of lost
profits is based on assumptions that are purely speculative in
nature. Id. at 849, 431 S.E.2d at 771. See also Meares v. Nixon
Constr. Co., 7 N.C. App. 614, 623, 173 S.E.2d 593, 599 (1970) (an
estimate of anticipated profits does not provide an adequate
factual basis for a jury to ascertain the measure of damages).
Here, as in Iron Steamer, Castle McCulloch merely speculated
as to the number of vendors that would have attended the bridal
show but for Freedman's survey. Castle McCulloch speculated that
the number of vendors would not have decreased or the rate of
growth would not have slowed. No evidence was presented to showthat any vendor left Castle McCulloch's bridal show as a result of
Freedman's survey. Castle McCulloch presented no evidence as to
why those fifteen vendors left the bridal show. Also, Castle
McCulloch assumed that all the missing vendors paid the full booth
price without presenting evidence that the vendors who left were
not preferred vendors who paid half that price. Additionally,
Castle McCulloch subtracted nothing for the additional setup or
labor costs needed for those additional vendors.
Similarly, the only evidence Castle McCulloch presented
regarding damages from payroll expenses was the general manager's
testimony that she looked over her personal notes from some
meetings and she estimated the time and then took an average hourly
wage figure. This is far from a reasonably certain calculation.
There were no meeting minutes or attendance logs of who was at
these meetings. Nor was there any breakdown of how much time each
individual employee spent and their individual wage.
After reviewing the entire record, we find no evidence from
which a jury could calculate lost profits from vendors or payroll
damages with a reasonable certainty. Iron Steamer, Ltd., 110
N.C. App. at 847, 431 S.E.2d at 770. As Castle McCulloch failed to
present evidence that it suffered actual injury as a proximate
result of Freedman's misrepresentations or unfair conduct, the
trial court did not err in granting Freedman's motion for a
directed verdict. First Atl. Mgmt., Corp., 131 N.C. App. at 252,
507 S.E.2d at 63.
B. Expert Testimony
Castle McCulloch next argues that the trial court erred in not
allowing its expert to testify regarding damages because Freedman
opened the door to the testimony by his cross-examination of
Harris. We disagree.
Before trial, the trial court ruled that Castle McCulloch's
expert witness, Erskine Walther, would not be permitted to testify
concerning any economic impact Freedman's survey may have had on
Castle McCulloch's business because his opinion had not been
properly disclosed to Freedman in discovery.
On direct examination Harris testified concerning the number
of vendors. Well, well, we get a peak in June of 2001. We had 70
vendors. We currently have 55, moved around in 50s, 60s.
Generally falling since June of 2001. On cross-examination,
Freedman questioned Harris on his testimony regarding vendor
numbers as it conflicted with his earlier deposition testimony. At
his deposition, Harris stated he had more vendors, more brides,
more money. Harris then asked if he could explain the differing
testimonies and stated that Walther's economic data showed him he
had been hurt.
We hold that Freedman did not open the door to Walther's
testimony regarding damages. Defense counsel only questioned
Harris as to the differing vendor numbers he testified to at his
deposition and at trial. Harris interjected in his answer that he
received information from Walther, the defense did not introduce
this. [W]hen a party first raises an issue, it opens the door to
questions in response to that issue and cannot later object totestimony regarding the subject raised. Middleton v. Russell
Group, Ltd., 126 N.C. App. 1, 23-24, 483 S.E.2d 727, 740 (1997).
However, since Freedman did not first raise the issue regarding
Walther's testimony regarding damages or the issue of the decline
in vendors, the door was not opened for Walther's testimony.
Therefore, the trial court did not err in refusing to allow
Walther's testimony regarding damages.
C. Costs and Attorney's Fees
Castle McCulloch argues the trial court erred in awarding
costs and attorney's fees to Freedman. We disagree.
Section 75-16.1 of the North Carolina General Statutes
[i]n any suit instituted by a person who
alleges that the defendant violated G.S.
75-1.1, the presiding judge may, in his
discretion, allow a reasonable attorney fee .
. . to be taxed as a part of the court costs
and payable by the losing party, upon a
finding by the presiding judge that: . . . (2)
The party instituting the action knew, or
should have known, the action was frivolous
N.C. Gen. Stat. § 75-16.1 (2004). The award of attorneys' fees
under section 75-16.1 of the North Carolina General Statutes is
within the sound discretion of the trial judge. Borders v. Newton,
68 N.C. App. 768, 770, 315 S.E.2d 731, 732 (1984). A trial court
may be reversed for abuse of discretion only upon a showing that
its actions are manifestly unsupported by reason. Smith v.
Beaufort County Hosp. Ass'n, Inc., 141 N.C. App. 203, 210, 540
S.E.2d 775, 780 (2000). Castle McCulloch argues that the trial court made no finding
that the action was frivolous and malicious and there was no
evidence to support such a finding. In its 10 July 2003 order, the
trial court found that the plaintiff knew, or should have known,
that it would be unable to establish any damages arising from the
alleged conduct of the defendants and that this action was
frivolous and malicious. To support this finding, the trial court
went on to state that [t]he plaintiff failed to present evidence
sufficient to prove that it's [sic] business had suffered any
economic injury caused by any of the alleged actions by the
defendants. Here, the record shows that Castle McCulloch did not
offer the testimony of any vendor that left its wedding show
because of Freedman's tip sheet or questionnaire.
Moreover, the trial court made a finding of fact that the
action was frivolous and malicious and supported its finding.
Although, the dissent does not agree that this is competent
evidence to support the trial court's finding of frivolous and
malicious, we conclude that the trial court's decision was not
manifestly unsupported by reason. Smith, 141 N.C. App. at 210, 540
S.E.2d at 780.
Finally, we point out that section 6-20 of the North Carolina
General Statutes provides that costs may be allowed or not, in the
discretion of the court[.] N.C. Gen. Stat. § 6-20 (2004). Where
the court has taxed costs in a discretionary manner its decision is
not reviewable. Dixon, Odom & Co. v. Sledge, 59 N.C. App. 280,286, 296 S.E.2d 512, 516 (1982). As the trial court awarded costs
in its discretion, we do not review that decision on appeal.
Judge McGEE concurs.
Judge TYSON concurs in part and dissents in part.
TYSON, Judge concurring in part, dissenting in part.
I concur in the majority's decision to affirm the trial
court's grant for a directed verdict and that Freedman's cross-
examination of Castle McCulloch's expert witness was insufficient
to open the door to testimony regarding the decline in vendors.
I disagree with the majority's decision to affirm the trial court's
award of attorney's fees. I also vote to dismiss Castle
McCulloch's assignment of error to the trial court's award of costs
to Freedman. I respectfully dissent.
I. Attorney's Fees
The majority's opinion concludes, but does not set forth any
evidence in the record to support the trial court's finding that
[Castle McCulloch] failed to present evidence sufficient to prove
that its business has suffered any economic injury caused by any of
the alleged actions by [Freedman]. The majority's opinion
concludes this finding supports a conclusion of law of frivolous
and malicious conduct by Castle McCulloch. I disagree. No
evidence supports the trial court's finding that Castle McCulloch's
claims were frivolous and malicious, and its prior rulings show
otherwise. The award of attorney's fees pursuant to N.C. Gen. Stat. § 75-
16.1 rests within the sound discretion of the trial court and
cannot be reversed absent a showing that its determinations are
manifestly unsupported by reason. Buford v. General Motors
Corp., 339 N.C. 396, 406, 451 S.E.2d 293, 298 (1994) (citations
Here, the trial court found, Following the denial of the
defendants' Motion of Summary Judgment on February 18, 2003, the
plaintiff knew, or should have known, that it would be unable to
establish any damages arising from the alleged conduct of the
defendants and that this action was frivolous and malicious.
(Emphasis supplied). A denial of defendants' motion to dismiss
under Rule 12(b)(6) and their motion for summary judgment under
Rule 56 cannot support the trial court's conclusion that Castle
McCulloch, as plaintiff, knew, or should have known, its
complaint was frivolous and malicious.
A. Rule 12(b)(6)
In his answer, Freedman asserted that Castle McCulloch failed
to state a claim upon which relief can be granted and should
therefore be dismissed pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure. See N.C. Gen. Stat. § 1A-1,
Rule 12(b)(6) (2003). The trial court did not grant Freedman's
motion to dismiss accompanying their answer. The assertion of this
defense followed by the trial court's failure to dismiss Castle
McCulloch's complaint indicates that Castle McCulloch's complaint
stated a claim upon which relief can be granted and was notfrivolous and malicious. N.C. Gen. Stat. § 1A-1, Rule 12(b)(6);
N.C. Gen. Stat. § 75-16.1.
B. Summary Judgment
The standard of review for summary judgment is well
established by the court.
'The party moving for summary judgment
ultimately has the burden of establishing the
lack of any triable issue of fact.' Pacheco
v. Rogers and Breece, Inc., 157 N.C. App. 445,
477, 579 S.E.2d 505, 507 (2003) (quoting
Pembee Mfg. Corp. v. Cape Fear Constr. Co.,
313 N.C. 488, 491, 329 S.E.2d 350, 353
A defendant may show entitlement to summary
judgment by (1) proving that an essential
element of the plaintiff's case is
non-existent, 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, 181, 454 S.E.2d 826, 828, disc.
review denied, 340 N.C. 359, 458 S.E.2d 187
(1995). Summary judgment is not appropriate
where matters of credibility and determining
the weight of the evidence exist. Moore v.
Fieldcrest Mills, Inc., 296 N.C. 467, 470, 251
S.E.2d 419, 422 (1979).
Draughon v. Harnett County Bd. of Educ., 158 N.C. App. 208, 580
Following hearing, the trial court denied Freedman's motion
for summary judgment. The trial court's denial of Freedman's
motion establishes that Castle McCulloch's complaint, affidavits,
and forecast of evidence sufficiently presented genuine issues of
material fact to support its causes of action, and that Freedman
had failed to show or establish a defense to defeat CastleMcCulloch's claims. See id.; see also N.C. Gen. Stat. § 1A-1, Rule
Because Castle McCulloch prevailed over Freedman's assertion
of a Rule 12(b)(6) defense and a Rule 56 motion for summary
judgment, no evidence supports the trial court's conclusion that
Castle McCulloch's complaint is wholly frivolous or malicious.
Otherwise, the trial court would have either dismissed Castle
McCulloch's complaint under Rule 12(b)(6) or granted Freedman's
motion for summary judgment pursuant to Rule 56. See First Atl.
Mgmt. Corp. v. Dunlea Realty Co., 131 N.C. App. 242, 252, 507
S.E.2d 56, 63 (1998) (requiring evidence of actual injury as an
element to a cause of action for unfair and deceptive trade
As Castle McCulloch prevailed in both instances, the trial
court abused its discretion when it concluded that Castle
McCulloch's action was frivolous and malicious. The lack of a
dismissal for Castle McCulloch's failure to state a claim and the
denial of Freedman's motion for summary judgment cannot support a
finding that Castle McCulloch's knew or should have known that its
action was frivolous and malicious, as required by N.C. Gen. Stat.
§ 75-16.1(2). The trial court's order awarding attorney's fees to
Freedman is manifestly unsupported by reason. Buford, 339 N.C.
at 406, 451 S.E.2d at 298. The trial court's finding of fact does
not support its conclusion of law and award of attorney's fees to
Freedman is error. That portion of the judgment appealed from
should be reversed.
Castle McCulloch's assignment of error to the trial court's
award of costs is not properly before this Court and should be
Freedman moved for costs pursuant to N.C. Gen. Stat. §§ 6-20
and 7A-305. N.C. Gen. Stat. § 7A-305(d) lists expenses that are
recoverable. The trial court . . . is prohibited from assessing
costs in civil cases which are neither enumerated in section 7A-305
nor provided by law. Crist v. Crist, 145 N.C. App. 418, 424, 550
S.E.2d 260, 265 (2001) (citation omitted). N.C. Gen. Stat. § 6-20
(2003) provides that costs may be allowed or not, in the
discretion of the court. The trial court's discretion to tax
costs pursuant to N.C. Gen. Stat. § 6-20 is not reviewable on
appeal absent an abuse of discretion. Cosentino v. Weeks, 160
N.C. App. 511, 516, 586 S.E.2d 787, 789-90 (2003).
Castle McCulloch's brief fails to assert any argument or cite
to any authority to support a reversal of the trial court's award
of costs to Freedman. This assignment of error is not properly
before this Court. I would dismiss this portion of Castle
McCulloch's assignment of error. N.C.R. App. P. 28(b)(6) (2004).
I concur with the majority's opinion to affirm the trial
court's award of a directed verdict for Freedman and its discussion
of Freedman's cross-examination of Castle McCulloch's expert
witness. I disagree with the holding in the majority's opinion to
affirm the trial court's award of attorney's fees to Freedman onthe grounds that Castle McCulloch's action was frivolous and
malicious. I would dismiss Castle McCulloch's assignment of error
regarding costs. See
N.C.R. App. P. 28(b)(6) (2004). I
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