GLENN C. McDOWELL,
No. 03 CVD 739
FORSYTH MOTOSPORTS, LLC,
No brief filed for Plaintiff-Appellee.
Martin & Van Hoy, LLP, by Henry P. Van Hoy, II, for Defendant- Appellant.
Glenn C. McDowell (Plaintiff) filed a complaint against Forsyth Motosports, LLC (Defendant) alleging breach of contract, fraud, and unfair and deceptive trade practices arising out of Defendant's repair of Plaintiff's 2001 Yamaha YZX6R motorcycle (the motorcycle). In a judgment entered 7 July 2006, the trial court concluded that Defendant had willfully committed unfair and deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1. The trial court trebled Plaintiff's damages and assessed costs against Defendant. Defendant appeals.
The trial court heard this case without a jury on 6 December 2005. Plaintiff testified that the motorcycle was involved in acrash prior to 1 December 2001. Plaintiff further testified that Defendant represented that it was a certified Yamaha dealer and service center, and that Plaintiff took the motorcycle to Defendant for repairs in December 2001. Plaintiff obtained a written estimate (the original estimate) for the repairs, which totaled $4,836.92. Plaintiff's insurance company authorized the repairs and Defendant received a check for $4,836.92 on 5 February 2002. In mid-February 2002, Plaintiff was deployed overseas.
Plaintiff's parents acted as Plaintiff's attorneys-in-fact during Plaintiff's deployment. Plaintiff's parents were contacted by Defendant on 3 April 2002 regarding additional repairs the motorcycle needed, but that had not been included in the original estimate. These additional repairs totaled $213.22 and were authorized by Plaintiff's insurance company. A check from Plaintiff's insurance company was delivered to Defendant on 7 August 2002. Plaintiff's mother testified that Defendant never contacted her concerning the status of the motorcycle repairs, except with regard to insurance. When she called Defendant, she was given numerous reasons as to why the repair work had not been completed.
Plaintiff's deployment ended on or about 14 August 2002, and Plaintiff returned to Defendant's premises to pick up the motorcycle. Plaintiff's inspection of the motorcycle revealed that (1) parts were missing, (2) parts were in the wrong place, (3) parts that were supposed to be new were damaged, and (4) the motorcycle was scratched. Plaintiff also noticed that themotorcycle's grill was no longer attached. Plaintiff started the motorcycle to check the mileage and noticed that 826 miles had been put on the motorcycle since the time Plaintiff had left the motorcycle with Defendant for repair. Plaintiff complained that the repairs were not completed in an acceptable manner and that he was dissatisfied with Defendant's service. Robert Bucknall (Bucknall), Defendant's service manager, gave Plaintiff a signed statement that noted the difference between the mileage when the motorcycle was left with Defendant and the mileage when Plaintiff came to pick up the motorcycle. Plaintiff expressed concern as to whether the motorcycle had sustained damage to its major components, and Bucknall provided Plaintiff with another statement that indicated no damage had occurred to the motorcycle's frame, swing arm, or front forks. Both statements were admitted into evidence. Bucknall also told Plaintiff he would discuss the matter with Defendant's general manager.
Plaintiff testified that he heard nothing from Defendant and that he returned to Defendant's premises the following day. Bucknall then told Plaintiff that Defendant would repair the cosmetic damages that Plaintiff had identified. Bucknall also offered Plaintiff a one hundred dollar gift certificate to compensate Plaintiff for the excess mileage on the motorcycle.
Andrew Phillips (Phillips) testified that he was employed by Defendant as a technician until February 2003, when he was fired. Phillips testified that he was familiar with the motorcycle, but that he was not the technician responsible for repairing themotorcycle. Phillips stated that the period of time from February 2002 until August 2002 was "a pretty long period of time" to fix a motorcycle, even considering delays from back-ordered parts. He testified that approximately four weeks would have been a reasonable amount of time in which to make the repairs. Phillips also stated that Bucknall told him Defendant would "probably . . . purchas[e] the [motorcycle]."
Phillips testified that Bucknall gave him permission to ride the motorcycle from Defendant's shop to Phillips' home, and that Phillips did so several times with Bucknall's knowledge and permission. Phillips said the technician responsible for repairing the motorcycle also used it for transportation between Defendant's shop and the technician's home. Phillips stated that "[i]t seemed like everybody in [Defendant's] service department [rode the motorcycle] one time or another." Phillips testified that Bucknall said that since Defendant was going to purchase the motorcycle, Defendant's shop personnel could ride it for personal use. Phillips testified that he was fired in February 2003 after Plaintiff had filed this action. Phillips stated he was not aware of any other motorcycles that Defendant's employees were permitted to ride for personal transportation.
Tim Brown (Brown), operator of Alumachrome Motorsports, a builder of custom sport motorcycles, testified that as part of his job, he was familiar with Yamaha YZX6R motorcycles and their repair specifications. Brown testified he inspected the motorcycle sometime after August 2002. Brown issued a report in October 2002,along with an estimate of how much it would cost to repair the motorcycle to Yamaha's specifications. Brown further testified that he found a problem with the swing arm, a major component of the motorcycle. Although Brown stated that he felt the motorcycle was safe to operate when he received it, he found wiring problems, significant cosmetic damage, and other problems. Brown testified that the original estimate of needed repairs was missing "a lot" of items. Further, Brown testified that certain parts listed as "new" on the original estimate showed signs of significant use. He opined that for the motorcycle to show such signs, it must have been used excessively. Brown further opined that Defendant did not comport with the industry standard for repair when Defendant repaired the motorcycle. Brown's report listed $3,813.84 in needed repairs: (1) $2,188.92 for items which should have been, but were not, included in Defendant's original estimate and (2) $1,624.92 for items not repaired in accordance with the standards and practices of the industry.
Chris Calhoughn (Calhoughn), Defendant's general manager, testified for Defendant. Calhoughn testified that Bucknall was Defendant's service manager during the time the motorcycle was being repaired. Calhoughn stated that Bucknall did not have the authority to permit any of Defendant's employees to drive a motorcycle outside the course of repairs. Calhoughn testified that he had no knowledge of Bucknall's authorization of that type of use until approximately February 2003. Calhoughn testified that he fired Bucknall after he learned of Bucknall's actions. Calhoughnalso testified that when Plaintiff complained about the damages which remained on the motorcycle, Calhoughn arranged for replacement parts to be sent by overnight mail. Calhoughn remembered that someone picked up the motorcycle a few days later, and he assumed the repairs Plaintiff had complained about had been completed.
In its judgment, the trial court made the following findings of fact which are now challenged by Defendant:
20. That it will cost $3,813.84 to repair the . . . [m]otorcycle to correct the work performed by . . . Defendant and to bring the [motorcycle] to the state of repair which . . . Defendant originally agreed to perform.
. . .
22. That . . . Defendant has breached the contractual agreement entered into by the parties by failing to repair the . . . motorcycle according to the terms of the agreement entered into by the parties and in accordance with the prevailing standards in the industry, and by fraudulently misrepresenting that the repairs had been completed in accordance with the terms of the agreement entered into by the parties and in accordance with the prevailing standards in the industry for repair by a certified Yamaha dealer.
23. That . . . Defendant's breach of the contractual agreement entered into by the parties has resulted in . . . Plaintiff sustaining actual compensatory damages in the amount of $3,813.84, the actual cost to repair the . . . [m]otorcycle to correct the work performed by . . . Defendant and to bring the [motorcycle] to the state of repair which . . . Defendant originally agreed to perform.
24. That . . . Defendant's fraudulent misrepresentation, including, but not limited to, the representation that the repairs would be completed in accordance withthe prevailing standard of repair for Yamaha dealers, and the representation upon tender of the [motorcycle] on August 14, 2002 that the repairs had been completed in accordance with the prevailing standard of repair for Yamaha dealers, constitutes the willful commission of an unfair and deceptive trade practice in and [affecting] commerce in violation of [N.C. Gen. Stat. § § 75-1.1], subjects . . . Defendant to the assessment of treble damages of the compensatory damages of $3,813,84, totaling $11,441.52, plus interest at the legal rate from the date of the filing of the Complaint herein on January 31, 2003.
. . .
26. That . . . Defendant's unreasonable delay in completing the repairs to the . . . motorcycle constituted an unfair act because it was an inequitable assertion of . . . Defendant's power and/or position, and constitutes the willful commission of an unfair trade practice in violation of [N.C.G.S. § 75-1.1].
27. That . . . Plaintiff did sustain damages as the result of . . . Defendant's unreasonable delay in completing the repairs to the . . . motorcycle, including, but not limited to, damages for loss of use of the . . . motorcycle. Further, the Court finds that the damages incurred as the result of loss of use of the . . . motorcycle, as the result of . . . Defendant's unreasonable delay in completing the repairs to the . . . motorcycle, measured by the standard of the cost to rent a similar vehicle during the reasonable period for repairs, to be $448.00.
28. That . . . Defendant's unreasonable delay in completing the repairs to the . . . motorcycle constitutes the willful commission of unfair trade practice in and [affecting] commerce in violation of [N.C.G.S. § 75-1.1] subjects . . . Defendant to an assessment of treble damages, totaling $1,344.00, plus interest at the legal rate from the date of the filing of the Complaint herein on January 31, 2003.
. . .
30. That . . . Plaintiff is the prevailing party in this litigation and the Court will hold this matter open for the submission of motion and fee affidavit by Plaintiff's counsel for a ruling of whether said counsel is entitled to an award of attorney fees pursuant to [N.C.G.S. § 75-16.1].
The trial court also made the following conclusions of law, which are now challenged by Defendant:
b. . . . Defendant willfully committed an unfair and deceptive trade practice in violation of [N.C.G.S. § 75-1.1] by its representation that the repairs to the . . . motorcycle would be completed in accordance with the prevailing standard of repair for Yamaha dealers, and the representation upon tender of the . . . motorcycle on August 14, 2002 that the repairs had been completed in accordance with the prevailing standard of repair for Yamaha dealers.
c. . . . Defendant willfully committed an unfair trade practice in violation of [N.C.G.S. § 75-1.1] by the unreasonable delay in completing repairs to the . . . motorcycle.
. . .
e. . . . Defendant's commission of unfair and deceptive trade practices has resulted in . . . Plaintiff sustaining damages which were [causally] related to the commission of said unfair and deceptive trade practices.
f. . . . Defendant unwarrantedly refused to fully resolve the matters involved in this suit prior to the commencement of the litigation.
g. . . . Defendant's violation of [N.C.G.S. § 75-1.1] entitled . . . Plaintiff to an assessment of treble damages from . . . Defendant.
h. . . . Defendant owes . . . Plaintiff the sum of $12,785.52, plus interest at the legal rate from January 31, 2003, representing treble damages for the violations of [N.C.G.S.§ 75-1.1].
We hold the trial court erred in concluding that Defendant committed unfair and deceptive trade practices and in trebling Plaintiff's damages. Further, we note that several of the trial court's findings of fact contain conclusions of law and, therefore, we review them as conclusions of law.
When a judgment has been rendered in a non-jury trial, our standard of review
is whether there is competent evidence to support the trial court's findings of fact and whether the findings support the conclusions of law and ensuing judgment. Findings of fact are binding on appeal if there is competent evidence to support them, even if there is evidence to the contrary.
Sessler v. Marsh, 144 N.C. App. 623, 628, 551 S.E.2d 160, 163 (citation omitted), disc. review denied, 354 N.C. 365, 556 S.E.2d 577 (2001).
A plaintiff alleging a violation of N.C.G.S. § 75-1.1 must show
(1) an unfair or deceptive act or practice, or an unfair method of competition, (2) in or affecting commerce, (3) which proximately caused actual injury to the plaintiff or to his business. A practice is deceptive if it has the capacity or tendency to deceive the average consumer, but proof of actual deception is not required. Whether the practice is unfair or deceptive usually depends upon the facts of each case and the impact the practice has in the marketplace. The plaintiff need not show fraud, bad faith, deliberate acts of deception or actual deception, but must show that the acts had a tendency or capacity to mislead or created the likelihood of deception.
Spartan Leasing v. Pollard, 101 N.C. App. 450, 460-61, 400 S.E.2d476, 482 (1991) (internal citations omitted). Further, "[a] practice is unfair when it offends established public policy and when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers." Miller v. Nationwide Mutual Ins. Co., 112 N.C. App. 295, 301, 435 S.E.2d 537, 542 (1993), disc. review denied, 335 N.C. 770, 442 S.E.2d 519 (1994). "The determination as to whether an act is unfair or deceptive is a question of law for the court." Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001).
"It is well recognized . . . that actions for unfair or deceptive trade practices are distinct from actions for breach of contract, and that 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). Substantial aggravating circumstances must attend a breach of contract to permit recovery as an unfair or deceptive trade practice. Id.
Defendant concedes in its brief that Plaintiff's evidence was sufficient to establish that Defendant breached it contract with Plaintiff to repair the motorcycle. However, Defendant argues that the trial court's conclusions that Defendant committed unfair and deceptive trade practices were erroneous. We agree.
We first note that we do not reach the question of whether Defendant's practice of allowing its employees to use the motorcycle for personal use constituted a violation of N.C.G.S. §75-1.1 because the trial court found as fact that it could not determine with specificity the damages resulting from this action by Defendant. The trial court's finding on this point was not challenged on appeal and therefore is binding on this Court. Okwara v. Dillard Dep't Stores, Inc., 136 N.C. App. 587, 591, 525 S.E.2d 481, 484 (2000) ("Where findings of fact are challenged on appeal, each contested finding of fact must be separately assigned as error, and the failure to do so results in a waiver of the right to challenge the sufficiency of the evidence to support the finding."). Therefore, even if this conduct could qualify as a violation of N.C.G.S. § 75-1.1, because the trial court could not find damages with specificity, Defendant's practice of allowing its employees to use the motorcycle for personal use cannot sustain the trial court's judgment.
Further, none of the remaining grounds relied upon by the trial court amounted to the substantial aggravating circumstances needed to elevate Plaintiff's cause of action from mere breach of contract to a violation of N.C.G.S. § 75-1.1. Although the trial court found, as part of several findings, that Defendant had made fraudulent misrepresentations to Plaintiff, Plaintiff's evidence did not make out a claim of fraud. To be actionable, a "claim for fraud must include the following elements: (1) a false representation or a concealment of a material fact which is (2) reasonably calculated to deceive, (3) made with the intent to deceive, (4) which does in fact deceive, and (5) results in damage to the injured party." Willen v. Hewson, 174 N.C. App. 714, 718, 622 S.E.2d 187, 190-91 (2005), disc. review denied, 360 N.C. 491, 631 S.E.2d 520 (2006). Plaintiff's evidence does not establish a fraud claim. We find the trial court's findings of fact and conclusions of law referencing fraud by Defendant to be unsupported and unjustified. Therefore, we cannot sustain the trial court's judgment on this basis.
As to the delay associated with the repair of the motorcycle, even if we assume arguendo that Plaintiff was injured, the delay does not amount to substantial aggravating circumstances attending the breach of contract. The trial court also found that the delay constituted an unfair and deceptive trade practice in that it was an inequitable assertion of Defendant's power and position. Although labeled a finding of fact, this was actually a conclusion of law. We find this conclusion to be unjustified by any of the proven facts. Therefore, we conclude that, although recovery for breach of contract was supported by the evidence, recovery under N.C.G.S. § 75-1.1 was error.
Defendant also argues that the trial court's calculation of Plaintiff's damages was erroneous. Specifically, Defendant contends that the trial court's calculation of compensatory damages of $3,813.84 erroneously included the items in Brown's report representing repairs not listed in the original estimate. Defendant contends that these items could not properly be included in an award for a breach of the contract at issue in this case. Defendant also argues that the trial court's determination that Plaintiff incurred $448.00 in damages as a result of theunreasonable delay in completing the repairs was erroneous.
We first note that Defendant's brief incorrectly recounts Brown's testimony. Our review of the transcript reveals that Brown testified that his report included items "one through ten [that] would . . . cost $2,188.92 to repair" and that these were items not listed in the original estimate. Brown further testified that his report included items 1A through 14A, totaling $1,624.92, for items which were not repaired in accordance with the standards and practices of the industry. Defendant argues Plaintiff suffered no damages from Defendant's failure to include items one through ten in the original estimate and therefore Plaintiff could not recover for them. We disagree.
The general rule for the measure of damages for a breach of contract "is the amount which will compensate the injured party for the loss which fulfillment of the promise could have prevented or the breach of it entailed, so that the parties may be placed as nearly as may be in the same monetary condition that they would have occupied had the contract not been breached."
Starling v. Sproles, 69 N.C. App. 598, 602, 318 S.E.2d 94, 96 (1984) (quoting 3 Strong's N.C. Index 3rd, Contracts, § 29.2), disc. review denied, 312 N.C. 85, 321 S.E.2d 900 (1984)). "[T]he amount of damages is ordinarily a question of fact[.]" Olivetti Corp. v. Ames Business Systems, Inc., 319 N.C. 534, 548, 356 S.E.2d 578, 586 reh'g denied, 320 N.C. 639, 360 S.E.2d 92 (1987).
Brown testified that the repairs completed on the motorcycle did not meet the prevailing industry standards and that to repair the motorcycle to meet those standards would require an additionalexpenditure of $3,813.84. This evidence supports the trial court's calculation of Plaintiff's compensatory damages and we therefore affirm the finding of fact.
As to the trial court's finding that Plaintiff sustained $448.00 in damages as a result of the delay in completing the repairs, we find no evidence to support this calculation. We note that in its oral ruling, the trial court stated that it "heard no evidence as to how often [the motorcycle] was used, or whether it was a primary or secondary [vehicle]." Plaintiff's testimony shows that he was out of the country during the majority of the time the motorcycle was in Defendant's possession. We find no evidence in the record to suggest any injury to Plaintiff as a result of the delay. Therefore, we find this finding of fact to be unsupported by the evidence.
In sum, we affirm the trial court's finding that Plaintiff sustained $3,814.84 in compensatory damages as a result of Defendant's breach of contract. We reverse the trial court's finding of $448.00 in damages as a result of the delay in completing the repairs, and we also reverse the trial court's award of treble damages.
Affirmed in part; reversed in part.
Judges LEVINSON and JACKSON concur.
Report per Rule 30(e).
*** Converted from WordPerfect ***