Opinion
No. 8121DC553
Filed 6 April 1982
1. Landlord and Tenant 8.1 — plaintiff's claim not covered by Residential Rental Agreements act Plaintiffs claim for relief based upon an alleged breach of the Residential Rental Agreements act by defendant was invalid since the act did not become effective until 1 October 1977 and the written agreement between plaintiff and defendant was signed one year prior to that date.
2. Consumer Credit 1 — Retail Installment Sales Act — lease with option to purchase trailer — consumer credit sale An agreement between the parties, entitled "Lease with Option to Purchase Trailer," constituted a consumer credit sale under North Carolina's Retail Installment Sales Act. G.S. 25A-2(b).
3. Uniform Commercial Code 26 — damages for breach of warranty Under G.S. 25-2-714(2), damages for defendant's violation of its express warranty to repair a trailer leased to plaintiff is the total payments made by plaintiff over the total value of the trailer as warranted since plaintiff had not made the total payments required to exercise her option to buy the trailer. If the jury returned a verdict in favor of plaintiff, she would be entitled to treble damages. G.S. 25A-44(4).
4. Evidence 45 — plaintiff's opinion as to value of property — erroneously excluded In an action concerning violation of express warranty to repair a trailer sold by defendant to plaintiff, the trial court erred in excluding plaintiff's opinion as to the value of the trailer while she inhabited it, the value of the trailer in the condition it was purchased, and the amount plaintiff paid in excess of the trailer's worth since the evidence was sufficient to show that plaintiff possessed the familiarity, knowledge and experience to testify about the trailer's value.
APPEAL by plaintiff from Alexander, Judge. Judgment entered 10 February 1981 in District Court, FORSYTH County. Heard in the Court of Appeals 1 February 1982.
Legal Aid Society of Northwest North Carolina, Inc., by Kate Mewhinney, for plaintiff appellant.
Badgett, Calaway, Phillips, Davis, Stephens, Peed Brown, by Richard G. Badgett and Herman L. Stephens, for defendant appellee.
Judge VAUGHN concurring in part and dissenting in part.
On 18 September 1976, plaintiff signed a lease with option to purchase a 1969 Fleetwood house trailer from defendant. On that date the cash value of the trailer was approximately $5,500 to $6,000. Pursuant to this agreement, plaintiff agreed to pay rent in the amount of $85 per month for ninety-six months. Upon completion of these payments, plaintiff was to become owner of the trailer. Plaintiff lived in the trailer until 14 July 1979 when it was destroyed by fire. She had paid defendant a total of $2,370.
In her complaint, filed on 4 December 1979, plaintiff alleged that prior to the execution of the written agreement signed by the parties, defendant's agent, C. W. Myers, agreed to repair defects in the trailer; that Myers failed to remedy the majority of these defects and that his failure to do so reduced the fair market rental value of the trailer from $85 to $50 per month. In her first claim for relief, she alleged that defendant had violated the Residential Rental Agreements act by failing to maintain the trailer in fit and habitable condition. N.C. Gen. Stat. 42-38 to -44 (Cum. Supp. 1981). In her second claim for relief, plaintiff sought recovery under the Retail Installment Sales Act. N.C. Gen. Stat. 25A-1 to -45 (Cum. Supp. 1981). In her final claim, plaintiff alleged that a portion of her payment to defendant represented her equity in the trailer. She further alleged that defendant had received insurance proceeds due to the destruction of the trailer; and that she was "entitled to receive from defendant a sum representing her share of the insurance proceeds, in an amount to be proven at trial."
In its answer defendant denied plaintiff's claim for relief and alleged that plaintiff, by failing to comply with the terms and conditions of the written agreement, did not exercise her option to buy the trailer. Defendant further alleged that plaintiff had an option to insure her interest in the trailer but failed to do so.
The case proceeded to trial against defendant on the following three issues:
Issue No. 1 — Did the defendant give plaintiff an express warranty to repair the trailer?
Issue No. 2 — Did the defendant knowingly and wilfully include in the contract a provision limiting, excluding, modifying or in any manner altering the terms of an express warranty given by the defendant to the plaintiff?
Issue No. 3 — In what amount, if any, has plaintiff been damaged as a result of her relying on defendant's promises to make repairs?
After plaintiff presented evidence at the jury trial, defendant moved for a directed verdict. Plaintiff appeals from the judgment directing a verdict in defendant's favor and dismissing plaintiff's action with prejudice.
Plaintiff's first three assignments of error concern the trial court's exclusion of her testimony regarding the value of the trailer in question. She argues that this testimony was competent in determining the issue of damages. She further contends that its exclusion constituted prejudicial error, because the trial court granted defendant's motion for a directed verdict on the basis of plaintiff's failure to present evidence of damages.
In evaluating the merits of plaintiff's argument, this Court must first determine the merits of plaintiff's three claims for relief. Plaintiff's first claim for relief, based upon the alleged breach of the Residential Rental Agreements act by defendant, is invalid. This act did not become effective until 1 October 1977. The written agreement between plaintiff and defendant was signed almost one year prior to this date. In plaintiff's third claim for relief, she sought to recover a share of the insurance proceeds recovered by defendant after the trailer burned. Plaintiff failed to present any authority or evidence supporting this claim. Moreover, upon considering the three issues presented to the jury, it appears that plaintiff relied solely upon her second claim for relief at trial.
Plaintiff's second claim for relief relies upon a breach of the Retail Installment Sales Act. In her complaint plaintiff alleged that the agreement between the parties, entitled "Lease with Option to Purchase Trailer," constituted a consumer credit sale under North Carolina's Retail Installment Sales Act. Under this act such a sale
includes but is not limited to any contract in the form of a bailment or lease if the bailee or lessee contracts to pay as compensation for use a sum substantially equivalent to or in excess of the aggregate value of the goods and services involved, and it is agreed that the bailee or lessee will become, or for no other or for a nominal consideration, has the option to become, the owner of the goods and services upon full compliance with his obligations under such contract.
N.C. Gen. Stat. 25A-2(b) (Cum. Supp. 1981). The parties' written agreement comes within this definition. The parties stipulated that plaintiff had missed some of her monthly payments. This delinquency, though, did not terminate the agreement since defendant never exercised its option in the agreement to terminate the contract upon plaintiff's failure to make a payment. Plaintiff further alleged in her complaint that defendant violated N.C.G.S. 25A-20 of the Retail Installment Sales Act by including in the agreement the words, "Leased as is." These words excluded defendant's express warranty to repair the trailer. She alleged that a willful violation of N.C.G.S. 25A-20 constituted an unfair trade practice entitling her to treble damages. See N.C. Gen. Stat. 25A-44(4) (Cum. Supp. 1981).
At trial plaintiff presented testimony that Myers informed her he would fix specified defects in the trailer before it was delivered; that the trailer was delivered in its defective condition; that plaintiff repeatedly requested Myers to repair the trailer after it was delivered; that Myers continued to promise that the repairs would be made, and that the defects were never repaired. Plaintiff also offered into evidence the written agreement signed by the parties. This agreement contained a list of defects to be repaired. Plaintiff, therefore, was entitled to present evidence of damages caused by the alleged breach of defendant's express warranty to repair.
Under the Uniform Commercial Code, the general measure of damages for breach of warranty "is the difference at the time and place of acceptance between the value of the goods accepted and the value they would have had if they had been as warranted, unless special circumstances show proximate damages of a different amount." N.C. Gen. Stat. 25-2-714(2) (1965). Special circumstances in the case sub judice would seem to require that plaintiff recover only a fraction of the difference between the fair market value of the trailer as delivered and the value of the trailer as warranted. Specifically, at the time the trailer burned, plaintiff had not made the total payments required to exercise her option to buy the trailer. The fraction to which she is entitled is therefore the total payments made by plaintiff over the total value of the trailer as warranted. In the event of a jury verdict in favor of plaintiff upon retrial, she would be entitled to treble damages. N.C. Gen. Stat. 25A-44(4) (Cum. Supp. 1981).
During the trial the court sustained defendant's objections to questions pertinent to the issue of damages. These questions concerned plaintiff's opinion as to the value of the trailer while she inhabited it, the value of the trailer in the condition it was purchased, and the amount plaintiff paid in excess of the trailer's worth. In response to a question concerning the fair market value of the trailer at the time it burned, plaintiff indicated that the value was "[a]bout half of what I was supposed to pay for it." The court instructed the jury to disregard this answer. We disagree with defendant's argument that plaintiff was not a competent witness regarding the value of her trailer.
A witness may give his opinion as to the value of specific personal property if he has obtained his knowledge of value from experience, information, and observation. The witness need not be an expert; it is sufficient that he is familiar with the thing upon which he places a value and has the knowledge and experience necessary to enable him to intelligently value it. 1 Stansbury, North Carolina Evidence 128 (Brandis rev. 1973).
State v. Revelle, 301 N.C. 153, 160, 270 S.E.2d 476, 480 (1980). In the case sub judice, plaintiff's testimony reveals that she lived in the trailer at issue for three years and that she had previously purchased another trailer from defendant. This evidence is sufficient to show that plaintiff possessed the familiarity, knowledge and experience to testify about the trailer's value. The trial court denied plaintiff's testimony on the erroneous basis that such evidence of value would have to be given by "a realtor specialist or somebody in that field."
Defendant argues in its brief that regardless of plaintiff's qualifications to answer questions concerning the value of the trailer, she failed to place her answers in the record for purposes of review. Defendant emphasizes that no prejudice has been shown by the court's action. In Currence v. Hardin, 296 N.C. 95 249 S.E.2d 387 (1978), the Court was confronted with this issue and came to the following conclusion:
[W]e . . . hold that, whether an objection be to the admissibility of testimony or to the competency of a witness to give that, or any, testimony, the significance of the excluded evidence must be made to appear in the record if the matter is to be heard on review. Unless the significance of the evidence is obvious from the record, counsel offering the evidence must make a specific offer of what he expects to prove by the answer of the witness.
Id. at 99-100, 249 S.E.2d at 390. The second sentence quoted from Currence is dispositive of the question before us. At trial plaintiff attempted to show how much the value of the trailer as promised had been diminished by the defects in the trailer. The significance of this testimony, in determining damages caused by the breach of defendant's express warranty, clearly did not depend upon the exact numerical answers plaintiff would have given. It is obvious from her complaint that she would have testified that the trailer's value as delivered was less than the value of the trailer as promised.
In light of the trial court's erroneous exclusion of this testimony regarding the value of the trailer, the order allowing defendant's motion for directed verdict upon failure of plaintiff to show damages must be reversed. When a defendant moves for a directed verdict at the close of plaintiff's evidence, the trial judge must determine whether the evidence when considered in the light most favorable to the plaintiff and when given the benefit of every reasonable inference to be drawn therefrom, is significant to withstand defendant's motion. Beal v. Supply Co., 36 N.C. App. 505, 244 S.E.2d 463 (1978). Plaintiff's testimony, including that pertaining to the trailer's value, constitutes sufficient evidence of an action for breach of an express warranty under the Retail Installment Sales Act and of damages caused by the breach.
As to plaintiff's first and third claims for relief, the trial court's directed verdict and dismissal against plaintiff is affirmed. The directed verdict and dismissal in regards to plaintiffs second claim for relief is reversed. In light of this holding, we deem it unnecessary to discuss plaintiff's fourth assignment of error. The cause is remanded to the District Court of Forsyth County for a new trial on plaintiffs second claim for relief.
Reversed in part; affirmed in part.
Chief Judge MORRIS concurs.
Judge VAUGHN concurs in part and dissents in part. (Judge VAUGHN'S concurring and dissenting opinion is reported at page 816.)