Opinion
No. 04-1393.
Filed 20 September 2005.
Jackson County No. 03 CVD 115.
Appeal by plaintiff from judgment entered 7 June 2004 by Judge Steven J. Bryant in Jackson County District Court. Heard in the Court of Appeals 14 June 2005.
Mark L. Jenkins for plaintiff-appellant. Bridgers Ridenour, P.L.L.C., by Eric Ridenour, for defendant-appellees.
By this appeal, Alan N. Berkow ("plaintiff") contends the trial court erroneously dismissed his claims for fraud and tortious interference with business relations and erroneously entered summary judgment in favor of Norman and Carol West ("defendants") on defendants' counter claim for unpaid rent. We affirm after careful review.
On 1 November 1997, plaintiff and defendants entered into a lease agreement pursuant to which plaintiff agreed to lease the first floor of a two-story brick building owned by defendants. By its terms, the lease would run for one year, commencing on 1 November 1997 and terminating on 31 October 1998, with an option to renew the lease for two years. Plaintiff agreed to pay $350.00 per month in rent plus $12.00 per month for utilities. The lease further specified that in the event a connection was made to the Jackson County sewer system, the lessee would be required to pay a share of the monthly sewer bill.
According to plaintiff, at the time of the lease negotiations, he informed defendants that the space was not large enough for his restaurant. Plaintiff alleges defendants agreed to expand the seating capacity by enclosing an area. Specifically, plaintiff testified:
I . . . told Mr. West that I couldn't rent the place because I'm afraid it was too small. He was showing me the place for rent. He had a for-rent sign. I was looking at it. I thanked him, and I was moving on. And he stopped, and said, "If I enclose this area, would you rent this place so you could facilitate 36 seats?"
And I said, "If you would enclose that, I would do that."
The parties' alleged verbal agreement was not included in the lease.
Although the area was enclosed, plaintiff alleges defendants failed to properly secure the necessary utilities, including sewage connections, to permit seating in the enclosed area. As a result, plaintiff alleges he was unable to fully utilize his restaurant and gain the necessary income from the leased premises. Specifically, plaintiff testified that Charles Stephens ("Stephens") of the Jackson County Health Department prohibited him from operating his restaurant due to defendants' failure to secure the necessary sewage connections. However, Stephens stated in a sworn affidavit that the Jackson County Health Department never revoked or pulled plaintiff's license to operate a restaurant, and that the restaurant was never closed by the Jackson County Health Department.
On 6 March 2003, plaintiff filed a complaint against defendants alleging fraud, tortious interference with business relations, and breach of the lease agreement. Defendants filed a counter claim for breach of the lease agreement based upon plaintiff's failure to pay rent and utilities in the amount of $6,933.99. Specifically, defendants alleged plaintiff failed to pay rent from September 2000 until he was evicted in February 2002. Plaintiff did not dispute he failed to pay rent.
On 7 June 2004, the trial court dismissed plaintiff's fraud and tortious interference claims pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6) (2003). The trial court granted summary judgment for defendants on plaintiff's claim for breach of lease, and granted partial summary judgment for defendants on their counter claim for unpaid rent. A judgment was entered against plaintiff in favor of defendants in the amount of $4,900.00. Plaintiff appeals.
I.
Plaintiff first contends the trial court erroneously dismissed his fraud complaint pursuant to Rule 12(b)(6), arguing he alleged sufficient allegations of fraud. Specifically, he contends his complaint alleged defendants knew at the time of the lease that they would not act according to the terms of the agreement, thereby committing fraud. We disagree.
"`On a motion to dismiss pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, the standard of review is "whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory."'" Hunter v. Guardian Life Ins. Co. of Am., 162 N.C. App. 477, 480, 593 S.E.2d 595, 598 (2004) (citations omitted). "`The complaint must be liberally construed, and the court should not dismiss the complaint unless it appears beyond a doubt that the plaintiff could not prove any set of facts to support his claim which would entitle him to relief.'" Id. (citation omitted).
The "essential elements of actual fraud are: `(1) False representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party.'" Terry v. Terry, 302 N.C. 77, 83, 273 S.E.2d 674, 677 (1981) (citations omitted). "In all averments of fraud . . . the circumstances constituting fraud . . . shall be stated with particularity." N.C. Gen. Stat. § 1A-1, Rule 9(b) (2003).
In this case, plaintiff made the following pertinent allegations in his amended complaint:
3.
Further the Defendants were aware that expanded seating would be needed and a contract was reached between the parties to expand the seating to allow seating for the restaurant.
4.
That expanded seating was constructed; however, the Defendants failed to properly secure the necessary utilities including but not limited to sewage connections.
5.
That as a result the Plaintiff was unable to fully utilize his restaurant and gain the necessary income he would have from the leased premises.
. . . 7.
That at the time of the lease the Defendant knew that he would not obtain the necessary utility work to allow the Plaintiff to operate his restaurant.
COUNT ONE 1.
Plaintiff reavers the foregoing paragraphs as if set forth fully herein.
2.
That the actions of the Plaintiff were fraudulent and the Plaintiff has been damaged in an amount in excess of $5,000.00.
3.
That at the time the agreement was made with the Plaintiff the Defendants knew that he would not connect the necessary sewer to the premises and thus his actions were fraudulent.
Plaintiff alleges in his complaint that defendants agreed to expand the seating capacity of the restaurant and that the expanded seating was constructed. Plaintiff does not allege the parties agreed to an expanded sewer connection in his complaint, that such an expansion was contemplated as part of the agreed upon enclosure for additional seating, or that an expanded sewer connection was required by law to permit additional seating. Moreover, the terms of the lease indicate that a county sewer connection did not exist at the time the lease was signed, and that the lease contained no agreement to provide such a connection. Specifically, the lease stated:
(3) UTILITIES. The Lessee shall pay to the Lessor the sum of $12.00 per month due and payable on the first day of each calendar month for water. In the event the Lessor hooks onto the Jackson County sewer system the Lessee shall pay his share of the monthly sewer bill and this shall also be due and payable on the first day of each calendar month.
(Emphasis added.) Finally, plaintiff does not allege with any particularity the circumstances indicating why he was not able to fully utilize his restaurant and gain the necessary income due to the lack of a sewer connection. As plaintiff failed to allege any agreement to establish a sewer connection, and as plaintiff did not state with any particularity how he was harmed by the lack of the sewer connection, we find the trial court properly dismissed the fraud claim pursuant to Rule 12(b)(6).
II.
Plaintiff also challenges the trial court's dismissal of his claim for tortious interference with business relations pursuant to Rule 12(b)(6). Plaintiff contends that malice should be imputed to defendants for their failure to provide expanded seating, which plaintiff contends interfered with business relationships between plaintiff and plaintiff's customers. We disagree.
As discuss supra, the appropriate standard of review for a motion to dismiss pursuant to Rule 12(b)(6) "`is "whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory."'" Hunter, 162 N.C. App. at 480, 593 S.E.2d at 598 (citations omitted).
"`[T]o maintain an action for interference with business relations in North Carolina, [the complainant] must show that [the defending party] "acted with malice and for a reason not reasonably related to the protection of a legitimate business interest of [the defending party]."'" Market America, Inc. v. Christman-Orth, 135 N.C. App. 143, 158, 520 S.E.2d 570, 581 (1999) (citations omitted). "`Malice' is defined as `[t]he intentional doing of a wrongful act without just cause or excuse, with an intent to inflict an injury or under circumstances that the law will imply an evil intent.'" Hawkins v. State of North Carolina, 117 N.C. App. 615, 630, 453 S.E.2d 233, 242 (1995) (citation omitted).
In this case, plaintiff has not alleged any facts tending to indicate defendants acted with malice. As previously stated, plaintiff did not allege the parties agreed to expansion of a sewer connection and, therefore, alleges no factual basis for the failure to do so being actual malice. Rather, plaintiff alleged defendants agreed to construct an enclosure to allow additional seating for the restaurant and that the expanded seating was constructed. Thus, plaintiff failed to allege actual malice in defendants' fulfillment of the agreement to construct enclosed seating. As plaintiff's complaint tends to indicate defendants provided what they agreed to provide, plaintiff's complaint for tortious interference with business relations was properly dismissed.
III.
Finally, plaintiff contends the trial court erroneously granted summary judgment on defendants' counter claim for unpaid rent and utilities. We disagree.
"`Summary judgment is appropriate when all the evidentiary materials before the court "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."'" Harris v. Tri-Arc Food Sys., Inc., 165 N.C. App. 495, 498, 598 S.E.2d 644, 646 (2004) (citations omitted).
Here, plaintiff admitted in his deposition testimony that he did not dispute any of the figures regarding the months in which he did not pay any rent. Plaintiff also stated in his deposition testimony that "I couldn't pay it, and I would have paid it if I could, but I didn't have it." As there are no material issues of fact, the trial court did not erroneously grant defendants summary judgment on their claim for unpaid rents and utilities.
For the reasons stated herein, we affirm the trial court's dismissal of plaintiff's claims and grant of summary judgment to defendants.
Affirmed.
Judges McGEE and LEVINSON concur.
Report per Rule 30(e).