Opinion
No. COA05-770
Filed 21 March 2006 This case not for publication
Appeal by plaintiff Azalea Garden from judgment entered 1 December 2004 by Judge Mark E. Klass in the Superior Court in Davidson County. Heard in the Court of Appeals 26 January 2006.
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.
Davidson County No. 01 CVS 1631.
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 counter claimed. 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 of defendants on Azalea Garden's unfair and deceptive trade practices ("UDTP") and punitive damages claims and in favor of Azalea Garden on defendants' counter claims 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 obligations on 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 non-movant." 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 jury of 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 after the 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 of law." 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).