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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA06-1143
NORTH CAROLINA COURT OF APPEALS
Filed: 03 July 2007
JEFFREY FRANZ and
KRISTIANE FRANZ,
Plaintiffs,
v
.
Mecklenburg County
No. 04 CvS 17501
TRIBECK, INC., d/b/a
LAKE NORMAN PAINT & BODY
SHOP; and HARLEY TRITT,
Defendants.
Appeal by plaintiffs from order entered 30 March 2006 by Judge
Jesse B. Caldwell, III in Mecklenburg County Superior Court. Heard
in the Court of Appeals 22 March 2007.
Law Office of J. Neal Rodgers, PLLC, by J. Neal Rodgers, for
plaintiffs-appellants.
Knox, Brotherton, Knox & Godfrey, by Lisa G. Godfrey and
Frances S. Knox, for defendants-appellees.
STEELMAN, Judge.
Plaintiffs' claims under N.C. Gen. Stat. § 20-354 et seq., and
for unfair and deceptive trade practices were not barred by the
affirmative defenses of res judicata and collateral estoppel where
the causes of action were not the same and there was not an
identity of issues.
Factual Background
On 29 April 2003, Jeffrey and Kristiane Franz (plaintiffs)
were the owners of a 2003 Volkswagen Jetta vehicle that was damaged
in a collision. The other vehicle involved in the collision wasoperated by Daryl Gary Queen (Queen). Plaintiffs had their
vehicle repaired by Tribek, Inc., d/b/a Lake Norman Paint & Body
Shop, which was managed by Harley Tritt (defendants).
Defendants' estimate to repair the vehicle was $8,396.03. Repairs
were made to plaintiffs' vehicle, and defendants were paid the
amount of the estimate by Queen's insurance carrier. Plaintiffs
picked up the vehicle from defendants on 28 July 2003. On 27
August 2003, plaintiffs submitted the vehicle to Collision
Consulting for an appraisal of the diminution of value of the
vehicle as a result of it being involved in the collision.
Collision Consulting determined that the value had been diminished
by $6,009.00, of which $4,986.00 was due to the collision and
$1,023.00 was due to faulty repairs. A dispute ensued between
plaintiffs and defendants as to the quality of the repairs made to
the vehicle.
On 21 November 2003, plaintiffs filed a small claim action
against Queen in Lincoln County, seeking $4,000.00 in damages due
to diminution of value of the vehicle. Mr. Patrick Yurek testified
on behalf of plaintiffs as to Collision Consulting's appraisal of
the $6,009.00 diminution of value. On 17 December 2003, the
magistrate entered judgment in favor of plaintiffs in the amount of
$2,900.00. This judgment was paid and satisfied by Queen's
insurance carrier.
On 25 January 2005, plaintiffs filed a complaint against
defendants in the Superior Court of Mecklenburg County seeking
monetary damages, punitive damages, and attorney's fees based uponbreach of contract, violation of N.C. Gen. Stat. § 20-354 et seq.,
negligence, gross negligence, and unfair and deceptive trade
practices. On 21 February 2006, defendants filed a motion to
dismiss pursuant to N.C. R. Civ. P. 12(b)(6), and in the
alternative, moved for summary judgment on the grounds of res
judicata and collateral estoppel. On 30 March 2006, Judge Caldwell
granted defendants' motion for summary judgment dismissing
plaintiffs' action, with prejudice. Plaintiffs appeal.
Scope of Appellate Review
Plaintiffs have made two assignments of error. First, they
assert that the trial court erred in granting summary judgment as
to their claim under N.C. Gen. Stat. § 20-354 et seq. Second, they
assert that the trial court erred in granting summary judgment as
to their unfair and deceptive trade practices claim. Plaintiffs
have failed to assign error to the trial court's dismissal of their
claims for breach of contract, negligence, and gross negligence.
Thus, as to these claims, we leave the decision of the trial court
undisturbed. N.C. R. App. P. 10(a) (2007).
While the order of the trial court does not state the legal
theory upon which plaintiffs' action was dismissed, all parties
have confined their arguments to res judicata and collateral
estoppel. We therefore limit our analysis to these two theories
which are properly before this Court.
Claim Under North Carolina Motor Vehicle Repair Act
In their first argument, plaintiffs contend that the trial
court erred in granting summary judgment in favor of defendants asto their claims pursuant to N.C. Gen. Stat. § 20-354 et seq. (North
Carolina Motor Vehicle Repair Act). We agree.
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) (2005). The
moving party bears the burden of demonstrating the lack of triable
issues of fact. Koontz v. City of Winston-Salem, 280 N.C. 513,
518, 186 S.E.2d 897, 901 (1972).
[U]nder res judicata as traditionally applied,
a final judgment on the merits in a prior
action will prevent a second suit based on the
same cause of action between the same parties
or those in privity with them. When the
plaintiff prevails, his cause of action is
said to have merged with the judgment; where
defendant prevails, the judgment bars the
plaintiff from further litigation. In either
situation, all matters, either fact or law,
that were or should have been adjudicated in
the prior action are deemed concluded. See
Restatement (Second) of Judgments § 18, 19
(1982); 1B Moore's Federal Practice § 405[1]
at 181-85 (2d ed. 1984). Under collateral
estoppel as traditionally applied, a final
judgment on the merits prevents relitigation
of issues actually litigated and necessary to
the outcome of the prior action in a later
suit involving a different cause of action
between the parties or their privies. See
Restatement (Second) of Judgments § 27
(1982); 1B Moore's Federal Practice § 0.441[1]
at 718 (2d ed. 1984).
Thomas M. McInnis & Assoc., Inc. v. Hall, 318 N.C. 421, 428-29, 349
S.E.2d 552, 556-57 (1986). Plaintiffs' complaint in the instant
case alleged that defendants: Made false representations to the plaintiffs
that the parts used to repair the plaintiffs'
vehicle conformed to the original vehicle
manufacturer's established repair procedures
or specifications and allowable tolerances for
that particular model and year, and performed
other acts as set forth herein in violation of
NCGS § 20-354.8...
These allegations state a claim under Article 15B of Chapter 20 of
the General Statutes, the North Carolina Motor Vehicle Repair Act.
This act provides remedies to consumers for certain practices of
repairing motor vehicles which the General Assembly found to be
misleading, deceptive, fraudulent, or unethical, and required a
separate statute to prohibit these practices and provide an
appropriate remedy to consumers.
The small claim action filed by plaintiffs in Lincoln County
against Queen sought $4,000.00 in damages arising out of a motor
vehicle collision. This was a tort action based upon the
negligence of Queen.
For the doctrine of res judicata to be applicable to bar
plaintiffs' action under N.C. Gen. Stat. § 20-354 et seq., in the
instant case, defendants would need to show that the previous suit
resulted in a final judgment on the merits, that the same cause of
action was involved, and that both plaintiffs and defendants were
either parties or in privity with the parties in the prior Lincoln
County small claim action. See McInnis, at 428, 349 S.E.2d at 557.
It is clear that the actions in the instant case and the
Lincoln County small claim action are not the same action. While
both involve alleged problems with plaintiffs' vehicle, one was an
action in tort based upon negligence, while the other was a claimbased upon a consumer protection statute. Res judicata is thus not
applicable to bar this claim against defendants.
We now turn to collateral estoppel, which is issue preclusion,
rather than claim preclusion. For collateral estoppel to bar
plaintiffs' action under N.C. Gen. Stat. § 20-354 et seq., in the
instant case, defendants would need to show that the earlier suit
resulted in a final judgment on the merits, that the issue in
question was identical to the issue actually litigated and
necessary to the judgment, and that both plaintiffs and defendants
were either parties or stand in privity with the parties in the
prior Lincoln County small claim action. See id. at 429, 349
S.E.2d at 557.
Defendants argue that since plaintiffs introduced the
appraisal from Collision Consulting into evidence at the Lincoln
County small claim hearing, and this included $1,023.00 for
diminution in value due to faulty repairs, that the judgment of the
magistrate for $2,900.00 must have included the $1,023.00. Since
this judgment has been paid, defendants argue that any further
claims for the diminution in value to plaintiffs' vehicle are
barred.
Only the diminution in value proximately caused by the
negligence of Queen was before the magistrate in Lincoln County.
Defendants were never parties to that action. Further, Queen's
insurance carrier had paid for the repairs to plaintiffs' vehicle.
Therefore, any issue pertaining to the quality of the repairs and
the resulting diminution of value of the vehicle was an issue to beresolved between plaintiffs and defendants and not between
plaintiffs and Queen. We hold that the issue of diminution of
value to plaintiffs' vehicle caused by any alleged faulty repairs
by defendants was not before the magistrate in Lincoln County, and
that the doctrine of collateral estoppel does not bar plaintiffs'
claim under N.C. Gen. Stat. § 20-354 et seq., in the instant
action.
The ruling of the trial court granting summary judgment and
dismissing plaintiffs' claims against defendants under N.C. Gen.
Stat. § 20-354 et seq., is reversed.
Unfair and Deceptive Trade Acts and Practices Claim
In their second argument, plaintiffs contend that the trial
court erred in granting summary judgment in favor of defendants and
dismissing plaintiffs' claim for unfair and deceptive trade
practices. We agree.
Defendants argue that since plaintiffs' underlying claims were
properly dismissed under the theories of
res judicata and
collateral estoppel, their claims for unfair and deceptive trade
practices must also fail. We have previously held that these
doctrines do not bar plaintiffs' claim under N.C. Gen. Stat. § 20-
354
et seq.
The conduct alleged under that claim would also be a violation
of N.C. Gen. Stat. § 75-1
et seq., which prohibits [u]nfair
methods of competition in or affecting commerce, and unfair or
deceptive acts or practices in or affecting commerce. N.C. Gen.
Stat. § 75-1.1 (2005). N.C. Gen. Stat. § 20-354.9 specificallystates that this Article does not limit the rights or remedies
which are otherwise available to a consumer under any other law.
The ruling of the trial court granting summary judgment and
dismissing plaintiffs' claim for unfair and deceptive trade
practices is reversed.
Reversed as to plaintiffs' claims under N.C. Gen. Stat. § 20-
354
et seq., and for unfair and deceptive trade practices. The
dismissal of the remainder of plaintiffs' claims by the trial court
is left undisturbed by this opinion.
REVERSED.
Judges BRYANT and LEVINSON concur.
Report per Rule 30(e).
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