GLENN C. McDOWELL,
Plaintiff-Appellee,
v
.
Forsyth County
No. 03 CVD 739
FORSYTH MOTOSPORTS, LLC,
Defendant-Appellant.
No brief filed for Plaintiff-Appellee.
Martin & Van Hoy, LLP, by Henry P. Van Hoy, II, for Defendant-
Appellant.
McGEE, Judge.
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).
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