AZALEA GARDEN BOARD & CARE INC.
and DAVID H. WAGNER,
Plaintiffs,
v
.
Davidson County
No. 01 CVS 1631
BLACKWELL & ASSOCIATES
MANAGEMENT, INC., and
FAIGER M. BLACKWELL,
Defendants.
Biesecker, Tripp, Sink & Fritts, L.L.P., by Joe E. Biesecker
and Christopher Alan Raines, for plaintiff-appellant Azalea
Garden.
Forman Rossabi Black, P.A., by Emily J. Meister and Amiel J.
Rossabi, for defendant-appellees.
HUDSON, Judge.
On 31 May 2001, plaintiff Azalea Garden Board & Care, Inc.,
(“Azalea Garden”) and David H. Wagner commenced this action against
defendants Blackwell & Associates Management, Inc., and Faiger M.
Blackwell (“Blackwell”), alleging various claims. On 13 September
2001, Blackwell answered and counterclaimed. Plaintiffs moved for
summary judgment. On 18 October 2004, the court dismissed David
Wagner as a plaintiff and denied summary judgment on all remaining
claims. At the close of its evidence, Azalea Garden abandoned
certain claims and the court directed a verdict in favor ofdefendants on Azalea Garden's unfair and deceptive trade practices
(“UDTP”) and punitive damages claims and in favor of Azalea Garden
on defendants' counterclaims for fraud, UDTP and conversion. The
jury returned a verdict in favor of Azalea Garden on its economic
waste claim and on defendants' unjust enrichment claim, and in
favor of defendants on Azalea Garden's breach of contract claim.
On 1 November 2004, defendants moved for judgment notwithstanding
the verdict (“JNOV”) as to the economic waste claim, and Azalea
Garden moved for JNOV and, alternatively, for a new trial. On 22
November and 1 December 2004, the court granted defendants' motion
and denied plaintiff's motion. Azalea Garden appeals. As
discussed below, we affirm.
Azalea Garden owned the Brookside of Winston-Salem Rest Home
(“Brookside”). On 19 November 1997, Blackwell and Azalea Garden
entered into a lease with an option to purchase Brookside. The
lease and option period ran from 1 December 1997 through 28
February 1998, with a possible extension of one month. When
Blackwell assumed control of Brookside on 1 December 1997, the rest
home had 109 residents. Thereafter, Blackwell discharged several
Brookside residents and brought in residents from other rest homes.
Azalea Garden granted Blackwell an extension of the lease and
option through 31 March 1998. Blackwell did not exercise the
option to purchase Brookside, and David Wagner, Azalea Garden's
sole shareholder, demanded that Blackwell leave Brookside. On 1
April 1998, Azalea Garden filed for bankruptcy, and the bankruptcy
court ordered that Azalea Garden be held in default of obligationson its mortgage and that Blackwell continue operating Brookside.
Blackwell left Brookside and Azalea Garden regained possession on
18 September 1998. When Brookside returned to Azalea Garden's
control, it had a reduced staff and nineteen fewer residents than
when Blackwell took over operation of the home.
Plaintiff first argues that the court erred in granting JNOV
in favor of defendants on plaintiff's claim for economic waste and
that it is entitled to a new trial. We do not agree.
The trial court should deny a motion for JNOV “if there is
more than a scintilla of evidence supporting each element of the
non-movant's claim.” Couch v. Private Diagnostic Clinic, 133 N.C.
App. 93, 101, 515 S.E.2d 30, 36-7 (1999), affirmed, 351 N.C. 92,
520 S.E.2d 785 (1999) (internal quotation marks omitted). A trial
court's decision to deny a motion for JNOV “will not be disturbed
on appeal absent an abuse of discretion.” Crist v. Crist, 145 N.C.
App. 418, 422, 550 S.E.2d 260, 264 (2001). Here, plaintiff's claim
was for “economic waste.” “[T]he theory of economic waste applies
in suits against contractors for minor defects in construction.”
Pine Knoll Shores v. Evans, 331 N.C. 361, 366, 416 S.E.2d 4, 7
(1992). Plaintiff cites no North Carolina case in which the theory
of economic waste has been applied outside the construction
context, and we can find no instance in which courts in this state
have applied this theory to facts like these. Accordingly, we
conclude that plaintiff's assignment of error is without merit.
Plaintiff also argues that the court erred in denying JNOV on
the issue of breach of contract. We do not agree. “A trial court's decision to grant or deny a motion for [JNOV]
will not be disturbed on appeal absent an abuse of discretion.”
Crist, 145 N.C. App. at 422, 550 S.E.2d at 264. A motion for JNOV
is essentially a renewal of a motion for a directed verdict.
Couch, 133 N.C. App. at 100, 515 S.E.2d at 36. “A directed verdict
may be granted only if, as a matter of law, the evidence is
insufficient to justify a verdict for the nonmovant.” Watkins v.
Hellings, 321 N.C. 78, 81, 361 S.E.2d 568, 570 (1987). Here, the
evidence supports the jury's verdict that defendants did not breach
their contract with plaintiff. Plaintiff's own witness Evelyn
Wagner testified that Blackwell made all payments required under
the terms of the lease. After the lease period expired on 31 March
1998, Blackwell remained in possession of Brookside with the
express authorization of the United States Bankruptcy Court for the
Middle District of North Carolina, and fulfilled the requirements
set by the Bankruptcy Court's order. This evidence supports the
jury's verdict for defendants on the breach of contract claim, and
we conclude that the court did not abuse its discretion in denying
plaintiff's motion for JNOV.
Plaintiff next argues that it should be granted a new trial on
the breach of contract claim based on various errors in the
instructions to the jury, and in evidentiary rulings by the trial
court. We reject these arguments.
Pursuant to Rule 59 of the North Carolina
Rules of Civil Procedure, trial judges may
grant a motion for a new trial under certain
circumstances. In the instant case, the trial
court based awarding the new trial on two
grounds: (1) manifest disregard by the juryof the instructions of the court; and (2) the
verdict was contrary to law. See N.C. Gen.
Stat. § 1A-1, Rules 59(a)(5) and (7) (1999).
Granting a motion for a new trial under Rule
59 is directed to the discretion of the trial
court. Penley v. Penley, 314 N.C. 1, 332
S.E.2d 51 (1985). The trial court's ruling
will thus not be disturbed upon appeal without
a finding of abuse of discretion.
Roary v. Bolton, 150 N.C. App. 193, 194, 563 S.E.2d 21, 22 (2002).
Plaintiff contends that the verdict in favor of defendants was
contrary to law, the instructions of the trial court and the
evidence at trial. As discussed above, however, the evidence
showed that Blackwell complied with terms of the contract and
remained in possession of Brookside with the authorization of the
Bankruptcy Court. This and other evidence does not support a
conclusion that the trial court abused its discretion in denying
plaintiff a new trial on the breach of contract claim.
Plaintiff also contends that the trial court erred in a number
of evidentiary rulings, including: admitting evidence of
plaintiff's bankruptcy, admitting evidence of Brookside's condition
and regulatory violations, admitting evidence of alleged
misrepresentations and omissions by Azalea Garden, failing to admit
evidence regarding Blackwell's lawsuit against Brookside's mortgage
holder, and failing to instruct the jury on the duty of good faith
and fair dealing. The standard of review for this Court assessing
evidentiary rulings is abuse of discretion. State v. Boston, 165
N.C. App. 214, 218, 598 S.E.2d 163, 166 (2004). Plaintiff's
bankruptcy was relevant in that the Bankruptcy Court's ruling
explained why Blackwell remained in possession of Brookside afterthe lease period under the contract expired. Evidence of
Brookside's condition and regulatory violations pertained to
plaintiff's attempt to assert a claim for “economic waste” and to
any possible showing of harm to Brookside. Plaintiff's trial
counsel failed to state a ground for its objection to evidence of
plaintiff's omissions and misrepresentations, thereby failing to
preserve this issue for our review. N.C. R. App. P. 10(b)(1).
Evidence of the dismissal of Blackwell's lawsuit against
Brookside's mortgage company was not relevant to this case; that
lawsuit concerned only whether Blackwell had a right to purchase
Brookside; not whether Blackwell had breached the contract by
remaining in possession after the end of the lease period.
Finally, the court properly instructed the jury on the breach of
contract claim, using the North Carolina Pattern Jury Instructions,
which specifically make reference to the duty of good faith and
fair dealing. The court did not err or abuse its discretion in
denying plaintiff a new trial.
Plaintiff next argues that the court erred in directing
verdict for defendant on the unjust enrichment claim. We disagree.
Our review of a motion for a directed verdict is essentially
the same as one for JNOV. Watson v. Dixon, 130 N.C. App. 47, 51,
502 S.E.2d 15, 19 (1998), reaffirmed on reh'ing, 132 N.C. App. 329,
511 S.E.2d 37 (1999). A motion for directed verdict should “be
granted if the evidence so clearly establishes the fact in issue
that no reasonable inferences to the contrary can be drawn and if
the credibility of the movant's evidence is manifest as a matter oflaw.” Id. at 52, 502 S.E.2d at 19 (internal quotation marks
omitted). Further, “we must take the plaintiff's evidence as true,
and view all of the evidence in the light most favorable to
him/her, giving him/her the benefit of every reasonable inference
which may be legitimately drawn therefrom, with conflicts,
contradictions, and inconsistencies being resolved in the
plaintiff's favor.” Id. (internal quotation marks omitted).
“In order to properly set out a claim for unjust enrichment,
a plaintiff must allege that property or benefits were conferred on
a defendant under circumstances which give rise to a legal or
equitable obligation on the part of the defendant to account for
the benefits received, but that the defendant has failed to make
restitution for the property or benefits.” Norman v. Nash Johnson
& Sons' Farms, Inc., 140 N.C. App. 390, 417, 537 S.E.2d 248, 266
(2000). Plaintiff contends that Blackwell received benefits for
which he did not account to plaintiff. However, at oral argument,
plaintiff's counsel acknowledged that Blackwell made all required
payments under the contract and under the terms of the Bankruptcy
Court's order, and that Azalea Garden did not pursue any request
for an accounting from Blackwell. We overrule this assignment of
error.
Plaintiff also argues that the court erred in granting a
directed verdict for defendants as to plaintiff's Chapter 75 claim.
We disagree.
North Carolina General Statutes Chapter 75 declares unlawful
“unfair or deceptive acts or practices in or affecting commerce.”N.C. Gen. Stat. § 75-1.1 (2003). “[A]ctions for unfair or
deceptive trade practices are distinct from actions for breach of
contract, and . . . a mere breach of contract, even if intentional,
is not sufficiently unfair or deceptive to sustain an action under
N.C.G.S. § 75-1.1.” Branch Banking and Trust Co. v. Thompson, 107
N.C. App. 53, 62, 418 S.E.2d 694, 700, disc. review denied, 332
N.C. 482, 421 S.E.2d 350 (1992). Thus, even if defendants
intentionally breached their contract with plaintiff, which the
jury found they did not, a claim under Chapter 75 could not lie.
This assignment of error is without merit.
Plaintiff also argues that the court erred in directing
verdict for defendants on the issue of punitive damages. We do not
agree.
“Punitive damages may be awarded only if the claimant proves
that the defendant is liable for compensatory damages and that one
of the [statutory] aggravating factors was present . . . .” N.C.
Gen. Stat. § 1D-15(a) (2003). The existence of the aggravating
factor must be proved by clear and convincing evidence. N.C. Gen.
Stat. § 1D-15(b) (2003). Here, plaintiff failed to prove
defendants' liability for compensatory damages or the existence of
aggravating factors. We overrule this assignment of error.
Affirmed.
Judges TYSON and GEER concur.
Report per Rule 30(e).
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