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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.
NORTH CAROLINA COURT OF APPEALS
Filed: 21 August 2007
GRAYWATER TRADERS, INC.,
No. 06 CVS 405
B & B ON THE BEACH, INC.,
Appeal by Plaintiff from judgment entered 17 October 2006 by
Judge Jerry R. Tillett in Superior Court, Dare County. Heard in
the Court of Appeals 5 June 2007.
Sharp, Michael, Outten & Graham, L.L.P., by David R. Tanis for
Aldridge, Seawell, Spence & Felthousen, L.L.P., by W. Mark
Spence for Defendant appellee.
Judgment on the pleadings is a summary procedure and the
movant is held to a strict standard and must show that no material
issue of fact exists.
(See footnote 1)
Because we hold that the pleadings, which
includes the alleged contract, are sufficient to allege the
existence of a contract, we reverse the trial court's dismissal of
this matter on the pleadings. However, we affirm the trial court's
dismissal of the unfair and deceptive trade practices claim because
the Plaintiff failed to allege any acts beyond the mere breach of
a contract. The relevant facts show that in September of 2001, Plaintiff
Graywater Traders Incorporated (Graywater) entered into an
agreement to provide linen and laundry services to Defendant B & B
on the Beach, Inc. (B & B). The contract was effective for a
term of five years, commencing on 1 April 2002 and expiring on 30
The parties complied with the terms of the agreement, until
Graywater contacted B & B concerning pricing and logistics for the
2006 season and was informed by B & B that its services would not
be required for the rental season. Thereafter, Graywater filed an
action against B & B alleging breach of contract and unfair and
deceptive trade practices.
Following an answer by B & B, the trial court granted B & B's
motion for judgment on the pleadings under Rule 12(c) on the breach
of contract claim, and dismissed the unfair and deceptive trade
practices claim under Rule 12(b)(6) for failure to state a claim
upon which relief can be granted. Graywater appeals from the
dismissal of its claims of (I) breach of contract and (II) unfair
and deceptive trade practices.
Graywater first argues that the trial court erred by granting
B & B's motion for judgment on the pleadings. We agree.
A motion for judgment on the pleadings, or a Rule 12(c)
motion, is proper when all the material allegations of fact are
admitted on the pleadings and only questions of law remain.
DeTorre v. Shell Oil Co., 84 N.C. App. 501, 504, 353 S.E.2d 269,271 (1987) (citation omitted). The moving party must show, even
when viewing the facts and permissible inferences in the light most
favorable to the nonmoving party, that he is clearly entitled to
judgment as a matter of law. Id. (citation omitted).
Furthermore, [b]ecause judgment on the pleadings is a summary
procedure and the judgment is final, the movant is held to a strict
standard and must show that no material issue of fact exists. Id.
A judgment on the pleadings is not favored by law and [t]he
mere fact that a party's case may be weak and the party unlikely to
prevail on the merits will not make judgment on the pleadings
appropriate. Pipkin v. Lassiter, 37 N.C. App. 36, 39, 245 S.E.2d
105, 106 (1978)(citation omitted). Our review of this motion is de
novo. See Toomer v. Branch Banking and Trust Co., 171 N.C. App.
58, 66, 614 S.E.2d 328, 355, disc. review denied, 360 N.C. 78, 623
S.E.2d 263 (2005).
Here, Graywater alleged that it entered into a contract for a
specific term of five years to provide linen and laundry services
to B & B. The agreement, attached to Graywater's complaint,
outlined the required services, the estimated amount of laundry to
be processed, the time period when B & B could use its own
facilities, the price for pick up, delivery, and processing, and
the criteria for price increases.
Nevertheless, B & B contends the agreement was illusory
because there is no definite quantity as to the amount of laundry,
and the price could be changed at the sole discretion of Graywater. Regarding quantity, B & B argues because the alleged contract
expressly provides that Defendant makes no guarantee as to any
particular amount of laundry it will supply, no valid contract
exists. The alleged contract provided that,
. . . the parties acknowledge that the
quantity of laundry will vary during the
calendar year. The quantity of 1aundry
discussed within this paragraph is understood
to be an estimate to be used for planning for
the capacity and availability of equipment and
does not constitute a guarantee on the part of
B & B on the Beach to require services for my
specific quantity of laundry[;]
B & B cites to Great Northern R. Co. v. Witham, L.R. 9 C.p. 16
(1873), for the proposition that a quantity is a material term of
a contract and without the quantity the contract is unenforceable.
However, that 134-year-old case from England is not binding on this
B & B also cites Williamson v. Miller, 231 N.C. 722, 58 S.E.2d
743 (1950), wherein our Supreme Court held that the missing
quantity terms rendered the contract unenforceable. However,
Williamson dealt with the sales of goods whereas the alleged
contract in this matter concerns the provision of services.
Here, while the alleged contract did not specify the quantity
of services to be rendered, B & B had a duty to act in good faith
in order to comply with the intent of the contract which was to
provide laundry services. See Calamari and Perillo on Contracts §
11.38(a) (5th ed. 2003) (In the area of indefiniteness where a
contract confers on one party a discretionary power affecting the
rights of the other, a duty is imposed to exercise the discretionin good faith and in accordance with fair dealing.) (internal
quotation omitted). Indeed, the heart of the contract was to
provide linen and laundry service which included the material terms
indicating the type of services to be provided and the price of
such services. The pleadings, which include the contract,
sufficiently alleged facts to show that these requirements were
Regarding price, B & B argues that the price was to be
determined by Graywater and without this material term, there was
no contract. We disagree.
The alleged contract specifically set out the pricing
guidelines for the linen and laundry services:
The price for pick up, delivery, and
processing of laundry will be $.56 per pound
for wrapped sheets and linen and $0.49 per
pound for towels. This price includes making
and wrapping bed sets as stated above. Any
loose or rewash [sic] linen not able to be
returned in a complete set will be processed
at a rate of $.55 per pound.
Additionally, the contract provided that the price could be
increased by Graywater if: (1) advance notice of the increase
specific to the operating expenses is provided to Defendant before
the start of the quarter and (2) Graywater incurs increased cost of
fuel, electricity, water, sewage, or other utility cost. However,
the price will be increased by 2.5% annually or increased in
conformity with the Consumer Price Index as published by the
United States Department of Labor, whichever is greater[.]
Furthermore, the increases were capped at no more than 5% annuallyand the increase must be provided to B & B no later than 15 August
of the previous year in consideration of B & B's budget.
Based on the alleged contract, the pricing term was not left
solely to the discretion of Graywater as contended by B & B.
Graywater was required to provide B & B with specific operating
expenses that would justify the increase. Moreover, the increases
were capped and there was a deadline for notification of price
increases. The price was definitive, therefore, the contract does
not fail on this basis.
In sum, we hold the trial court erred by granting the motion
for a judgment on the pleadings on Graywater's claim for breach of
Graywater further argues that the trial court erred by
granting B & B's motion to dismiss its unfair and deceptive trade
practices claim. We disagree.
On a Rule 12(b)(6) motion to dismiss, the question is
whether, as a matter of law, the allegations of the complaint,
treated as true, state a claim upon which relief can be granted.
Wood v. Guilford Cty., 355 N.C. 161, 166, 558 S.E.2d 490, 494
(2002). Dismissal pursuant to Rule 12(b)(6) is proper if (1) the
complaint on its face reveals that no law supports the . . . claim;
(2) the complaint on its face reveals the absence of facts
sufficient to make a good claim; or (3) the complaint discloses
some fact that necessarily defeats the . . . claim. Id. This
Court reviews dismissal of a complaint pursuant to N.C. Gen. Stat.§ 1A-1, Rule 12(b)(6), de novo. Acosta v. Byrum, ___ N.C. App.
___, 638 S.E.2d 246 (2006).
An unfair act or practice is one in which a party engages in
conduct which amounts to an inequitable assertion of its power or
position. Southeastern Shelter Corp. v. BTU, Inc., 154 N.C. App.
321, 330, 572 S.E.2d 200, 206 (2002). It is well recognized . .
. that actions for unfair and 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. Id.
(citing Branch Banking & 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)). In order
[t]o recover for unfair and deceptive trade
practices, a party must show substantial
aggravating circumstances attending the breach
of contract. It is 'unlikely that an
independent tort could arise in the course of
contractual performance, since those sorts of
claims are most appropriately addressed by
asking simply whether a party adequately
fulfilled its contractual obligations.'
Id. (quoting Broussard v. Meineke Discount Muffler Shops, Inc., 155
F.3d 331, 347 (4th Cir. 1998).
Here, Graywater maintains that it relied on the contract with
B & B in order to expand its facilities. Graywater argues that
this reliance establishes the aggravating circumstance which gives
rise to the unfair and deceptive trade practices claim. We
disagree. This Court has held that a breach of contract can give rise to
unfair and deceptive practices claim under circumstances that can
be characterized as extreme. See Garlock v. Henson
, 112 N.C. App.
243, 246, 435 S.E.2d 114, 115 (1993) (holding that the defendant's
conduct was sufficiently aggravating when he misled the plaintiff
about the sale of a bulldozer and deprived the plaintiff of his
money for three years.).
Here, Graywater does not contend beyond the mere breach of the
contract that B & B committed an unfair and deceptive trade
practice. Indeed, any damages caused by the loss of revenue and
reliance on the contract for the expansion of the business arose
from the breach of the contract itself, not from an aggravating
act. Accordingly, we affirm the trial court's dismissal of the
unfair and deceptive trade practices claim.
Reversed in part, affirmed in part.
Judges HUNTER and BRYANT concur.
Report per Rule 30(e).
DeTorre v. Shell Oil Co.
, 84 N.C. App. 501, 504, 353 S.E.2d
269, 271 (1987) (citation omitted).
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