Camp v. Leonard

• Decision Date: 15 June 1999
• Docket Number: No. COA98-588.,COA98-588.
• Citation: 515 S.E.2d 909,133 NC App. 554
• Court: North Carolina Court of Appeals
• Parties: Earl Ray CAMP, and wife Joyce Dianne Camp, Plaintiffs, v. Mitchell H. LEONARD, and wife, Kimberly B. Leonard, d/b/a Mitch Leonard Construction, and Industrial Federal Savings Bank, Defendants.

515 S.E.2d 909

133 NC App. 554

Earl Ray CAMP, and wife Joyce Dianne Camp, Plaintiffs, v. Mitchell H. LEONARD, and wife, Kimberly B. Leonard, d/b/a Mitch Leonard Construction, and Industrial Federal Savings Bank, Defendants.

No. COA98-588.

Court of Appeals of North Carolina.

June 15, 1999.

W.L. Stafford, Jr., Salisbury, for plaintiff-appellants.

Richard R. Reamer, Salisbury, for defendant-appellee Kimberly B. Leonard; Stoner, Bowers & Gray, P.A., by Bob W. Bowers, Lexington, and Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Reid L. Phillips and Erin L. Roberts, Greensboro, for defendant-appellee Industrial Federal Savings Bank.

HUNTER, Judge.

Plaintiffs appeal summary judgment in favor of defendant Kimberly B. Leonard by order of 28 January 1998, and defendant Industrial Federal Savings Bank by order of 2 February 1998.

The purpose of summary judgment is to eliminate formal trials where only questions of law are involved. Gardner v. Gardner, 334 N.C. 662, 435 S.E.2d 324 (1993). It may be sustained only if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, 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." N.C. Gen.Stat. § 1A-1, Rule 56(c) (1990). In passing upon a motion for summary judgment, the court must view the evidence presented by both parties in the light most favorable to the nonmoving party. Davis v. Town of Southern Pines, 116 N.C.App. 663, 449 S.E.2d 240 (1994), disc. review denied, 339 N.C. 737, 454 S.E.2d 648 (1995).

Viewing the evidence in the light most favorable to the plaintiffs, it shows that Earl Ray Camp ("Mr. Camp") and wife Joyce Dianne Camp ("Mrs. Camp") entered into a written contract on or about 15 May 1995 to purchase lot thirty-seven ("lot 37") at Pebble Point Subdivision in Rowan County from defendants Mitchell H. Leonard ("Mr. Leonard") and Kimberly B. Leonard ("Mrs. Leonard") for the sum of $55,000.00. Plaintiffs entered into a written contract on 13 October 1995 with defendant Mitch Leonard Construction for the construction of a house on lot 37, along with a pier and dredging necessary to obtain a permit for a pier, for the sum of $126,000.00. The construction contract provided, among other things, that the plaintiffs agreed "to make payments on account hereof upon presentation of proper lien waivers, as the work progresses and as follows: 1 draw on the [tenth] of each month after construction begins." Prior to 22 November 1995, plaintiffs applied to defendant Industrial Federal Savings Bank ("Industrial") for a construction loan on lot 37 and the house to be built thereon by defendant Mitch Leonard Construction.

On 22 November 1995, plaintiffs met at Industrial's office for the purposes of closing the purchase of lot 37 from defendants Leonard and closing the purchase/construction loan of $135,000.00 from Industrial. At the same closing, plaintiffs and defendant Mitchell H. Leonard, as contractor, executed a construction loan agreement making certain covenants with defendant Industrial, which provided in part, that Industrial is authorized to disburse funds in the construction loan account "only in proportion to its inspector's report of progress, or by Architect's or Superintendent's Certificate accompanied by a proper affidavit from the contractor." Using $9,000.00 advanced from the construction loan towards the purchase price of lot 37 from defendants Leonard, plaintiffs had $126,000.00 left in the construction loan account with Industrial.

Within one or two days after the closing at Industrial, construction began on plaintiffs' house on lot 37. Plaintiffs presented evidence that when Mr. Camp went to Industrial's office for the first advance, the amount was left blank because, according to Industrial employee William C. Rains, Jr., they "did not know how much money [Mr.] Leonard would need," but that Mr. Camp should not worry about it because "[Mr.] Leonard was good for it." Plaintiffs also presented evidence that defendant Industrial informed them that defendant Mr. Leonard was a "good contractor," and that plaintiffs need not worry about the money aspects of the construction.

On 13 December 1995, Mr. Leonard obtained an advance from plaintiffs' construction loan account with Industrial in the amount of $43,000.00. On 12 January 1996, he obtained a second advance in the amount of $40,000.00. Mr. Leonard received a third advance for $17,800.00 on 14 February 1996, and a fourth advance for $14,000.00 on 13 March 1996. All of the advances made to Mr. Leonard were made with the authorization and signature of Mr. Camp. Plaintiffs presented evidence that as to the second and third advances, Industrial told Mr. Camp that it was not necessary for him to come to the office, because Industrial would make the disbursements and mail him the documentation for advances. While this procedure was employed for the second advance, Mr. Camp went to Industrial's offices for the third advance, expressing concern about the large amount of the advances to Mr. Leonard. Industrial employee Rains informed Mr. Camp that $17,800.00 was probably more than Mr. Leonard was entitled to at the time, and that Mr. Leonard was probably only entitled to eleven or twelve thousand dollars, but "I went ahead and let him have some extra, but he's good for it."

Sometime in late April 1996, Mr. Camp had a disagreement with Mr. Leonard over the specifications concerning a heat pump for the house, and Mr. Leonard quit construction on the house due to the disagreement. At the time, various items were left unfinished in the construction of the house, and the pier was never built. Plaintiffs contend the costs for the unfinished items is $32,101.48; however, only $9,713.76 remained in their construction loan account with defendant Industrial after the aforementioned advances to Mr. Leonard.

Plaintiffs instituted suit on 17 April 1997 against defendants Leonard for breach of contract to sell land and breach of contract to build a dwelling house; against defendant Industrial for breach of contract, breach of duty of good faith, and negligence; and against all defendants for conspiracy, unfair trade practices, and willful and wanton conduct. Plaintiffs first argue that their appeal is not interlocutory, and is immediately appealable since failure to allow such an appeal would impair their substantial rights. Entry of judgment for fewer than all the defendants is not a final judgment and may not be appealed in the absence of certification pursuant to Rule 54(b) unless the entry of summary judgment affects a substantial right. See N.C. Gen.Stat. § 1-277 (1996); N.C. Gen. Stat. § 1A-1, Rule 54(b) (1990); N.C. Gen. Stat. § 7A-27(d) (1995). Our Supreme Court has held that a grant of summary judgment as to fewer than all of the defendants affects a substantial right when there is the possibility of inconsistent verdicts, stating that it is "the plaintiff's right to have one jury decide whether the conduct of one, some, all or none of the defendants caused his injuries...." Bernick v. Jurden, 306 N.C. 435, 439, 293 S.E.2d 405, 409 (1982). This Court has created a two-part test to show that a substantial right is affected, requiring a party to show "(1) the same factual issues would be present in both trials and (2) the possibility of inconsistent verdicts on those issues exist." N.C. Dept. of Transportation v. Page, 119 N.C.App. 730, 736, 460 S.E.2d 332, 335 (1995).

In the present case, the same factual issues apply to all claims against the various defendants, and many of the elements and amount of damages alleged are identical in all counts against all parties. Because several different proceedings may bring about inconsistent verdicts relating to the cause of plaintiffs' injuries, we find that plaintiffs have a substantial right to have the liability of all defendants determined in one proceeding, and therefore we address their appeal.

The trial court granted summary judgment for defendant Mrs. Leonard on causes of action for breach of contract to sell land, unfair trade practices as to sales contract, breach of contract to build dwelling house, unfair trade practices as to construction, conspiracy, and willful and wanton conduct. The causes of action relating to the sales contract are based on the assertion that defendants Leonard falsely informed plaintiffs during negotiation that a pier could be built on lot 37, which is a waterfront lot. All other causes of action concern the construction of plaintiffs' home on lot 37.

Viewing the evidence in the light most favorable to plaintiffs, it indicates that Mrs. Leonard did sign the warranty deed conveying lot 37 to the plaintiffs; however, she only met the plaintiffs briefly at the real estate closing. The evidence indicates that Mrs. Leonard did not sign the sales contract or construction contract. No evidence indicated that she was actively involved in her husband's construction business and all of the evidence shows that she was not a partner or joint venturer. The fact that Mrs. Leonard signed the deed conveying the subject property to the plaintiffs does not indicate that she was party to or received benefits from the sales contract or construction contract. A wife's retention of benefits from a contract negotiated by the husband is a factual circumstance giving rise to an inference that the husband was authorized to act for her under the contract. Passmore v. Woodard, 37 N.C.App. 535, 246 S.E.2d 795 (1978); Douglas v. Doub, 95 N.C.App. 505, 383 S.E.2d 423 (1989). In Douglas, this Court held that while defendant wife did not receive money from the sale of the condominium, she nevertheless did receive a benefit from the sales contract when plaintiff assumed the note and deed of trust, relieving her from a $39,950.00 obligation. Id. at 513-14, 383 S.E.2d at 427-28. In the case sub judice, all the evidence...