Coker v. Daimlerchrysler Corp., COA04-523.

• Decision Date: 16 August 2005
• Docket Number: No. COA04-523.,COA04-523.
• Parties: James and Charlotte COKER, Robert and Rebecca Darconte, and Donald and Bonita Shoe, Plaintiffs, v. DAIMLERCHRYSLER CORPORATION, Defendant.
• Court: North Carolina Supreme Court

617 S.E.2d 306

James and Charlotte COKER, Robert and Rebecca Darconte, and Donald and Bonita Shoe, Plaintiffs, v. DAIMLERCHRYSLER CORPORATION, Defendant.

No. COA04-523.

Court of Appeals of North Carolina.

August 16, 2005.

COPYRIGHT MATERIAL OMITTED

Appeal by plaintiffs from order entered 5 January 2004 by Judge Ben F. Tennille in Rowan County Superior Court. Heard in the Court of Appeals 25 January 2005.

Mauriello Law Offices, by Christopher D. Mauriello; and Wallace and Graham, PA, by Marc P. Madonia, Salisbury, for plaintiffs-appellants.

Smith Moore LLP, by Sidney S. Eagles, Jr. and Allison O. Van Laningham; and Bush Seyferth Kethledge & Paige PLLC, by Raymond M. Kethledge, Troy, Michigan, pro hac vice, for defendant-appellee.

TYSON, Judge.

James and Charlotte Coker, Robert and Rebecca Darconte, and Donald and Bonita Shoe (collectively, "plaintiffs") appeal order granting judgment on the pleadings to DaimlerChrysler Corporation ("defendant"). We affirm.

I. Background

On 8 May 2001, plaintiffs filed an amended complaint against defendant as owners of model years 1995 through 2000 minivans manufactured by defendant. These minivans did not include a brake shift interlock device ("BSI"). Plaintiffs sought damages to install BSIs, to compel defendant to both notify its customers of the lack of BSIs and install them, treble damages, attorneys' fees, compensatory damages, punitive damages, interest, and costs of suit.

Plaintiffs' amended complaint defines a BSI as "a device that prevents a vehicle with an automatic transmission from being moved out of `park,' which keeps the transmission from being engaged, until the driver depresses the brake pedal." Plaintiffs assert the BSI ensures that "the vehicle is not inadvertently moved into reverse or drive, whether by a driver or a passenger, including a child who may attempt to move the transmission lever while playing in the vehicle."

Plaintiffs allege defendant promoted its minivans to be the "safest in the world" and emphasized their vehicles go "beyond government requirements to ensure that the best available safety devices are used to protect its customers." Plaintiffs argue defendant intentionally failed to disclose to its customers that its minivans for the years stated did not include BSIs. Plaintiffs assert defendant declined to include BSIs despite both its own safety leadership team recommending them and that BSIs were becoming an industry standard. Plaintiffs also allege defendant continued to market its minivans as "the safest in the world" even without installing BSIs.

Plaintiffs' amended complaint sought recovery for: (1) violations of the North Carolina Unfair and Deceptive Trade Practices Act ("NC UDTPA"); and (2) common law fraud and demanded: (1) compensation for their "ascertainable loss" which "includes the cost of installing the BSI in Chrysler minivans and/or the difference in value between minivans with the BSI and those without it;" and (2) defendant "to install the BSI in the minivans of Plaintiffs and Class members."

Plaintiffs expressly excluded from their amended complaint any allegation of personal injury or property damage. Plaintiffs also did not allege: (1) they had already installed the BSIs and were seeking reimbursement compensation; (2) they sold, or attempted to sell, their vehicles at a diminished price; (3) they have ever "inadvertently moved [their vehicles] into reverse or drive;" or (4) their vehicles have been damaged by any "inadvertent" shifting into reverse or drive.

On 15 April 2003, the Chief Justice of the North Carolina Supreme Court designated this case as a complex business matter under Rules 2.1 and 2.2 of the North Carolina General Rules of Practice, and referred it to the North Carolina Business Court ("Business Court"). On 20 April 2003, defendant filed a motion for judgment on the pleadings under Rule 12(c) of the North Carolina Rules of Civil Procedure. Plaintiffs filed a "motion" and memorandum in opposition. Following oral argument, the Business Court concluded: (1) plaintiffs lack standing to bring the action since they have suffered no injury in fact; (2) the economic loss rule bars plaintiffs' claims; and (3) plaintiffs' claims are preempted and barred by the doctrine of primary jurisdiction. It entered an "Opinion and Order" on 5 January 2004 granting defendant's motion and dismissing plaintiffs' claims. Plaintiffs appeal.

II. Issue

The issue before this Court is whether the trial court erred in granting defendant's motion for judgment on the pleadings under Rule 12(c) of the North Carolina Rules of Civil Procedure.

III. Abandoned Assignments of Error

Plaintiffs voluntarily abandoned assignment of error number three, regarding preemption by the National Traffic and Motor Vehicle and Safety Act of 1966, and number four, preemption under the doctrine of primary jurisdiction. See N.C.R.App. P. 28(b)(6) (2004). These assignments of error are dismissed.

IV. Standard of Review

Plaintiffs argue the Business Court erred in granting defendant's motion for judgment on the pleadings when it concluded: (1) plaintiffs lack standing; and (2) plaintiffs' claims are barred by the economic loss doctrine.

Under a motion for judgment on the pleadings:

[t]he trial court may consider, "only the pleadings and exhibits which are attached and incorporated into the pleadings" in ruling on the motion. Helms v. Holland, 124 N.C.App. 629, 633, 478 S.E.2d 513, 516 (1996) (citing Minor v. Minor, 70 N.C.App. 76, 78, 318 S.E.2d 865, 867, disc. rev. denied, 312 N.C. 495, 322 S.E.2d 558 (1984)). "`No evidence is to be heard, and the trial judge is not to consider statements of fact in the briefs of the parties or the testimony of allegations by the parties in different proceedings.'" Helms, 124 N.C.App. at 633, 478 S.E.2d at 516 (quoting Minor, 70 N.C.App. at 78, 318 S.E.2d at 867).

Davis v. Durham Mental Health/Development Disabilities/Substance Abuse Area Auth., 165 N.C.App. 100, 104, 598 S.E.2d 237, 240 (2004).

The purpose of Rule 12(c) is "to dispose of baseless claims or defenses when the formal pleadings reveal their lack of merit." Ragsdale v. Kennedy, 286 N.C. 130, 137, 209 S.E.2d 494, 499 (1974); see N.C. Gen.Stat. § 1A-1, Rule 12(c) (2003). Judgment on the pleadings is proper when all of the material issues of fact are admitted in the pleadings, and only questions of law remain. Ragsdale, 286 N.C. at 137, 209 S.E.2d at 499.

This Court reviews such a grant by determining "whether the moving party has shown that no material issue of fact exists upon the pleadings and that he is clearly entitled to judgment." Affordable Care, Inc. v. N.C. State Bd. of Dental Exam'rs, 153 N.C.App. 527, 532, 571 S.E.2d 52, 57 (2002) (citing Garrett v. Winfree, 120 N.C.App. 689, 463 S.E.2d 411 (1995)). "All factual allegations in the nonmovant's pleadings are deemed admitted except those that are legally impossible or not admissible in evidence." Governor's Club, Inc. v. Governors Club Ltd. P'ship, 152 N.C.App. 240, 247, 567 S.E.2d 781, 786 (2002) (citing Cheape v. Town of Chapel Hill, 320 N.C. 549, 359 S.E.2d 792 (1987)), aff'd per curiam, 357 N.C. 46, 577 S.E.2d 620 (2003).

Here, neither party asserts any issue of material fact exists based on the pleadings considered by the Business Court. Rather, defendant argues whether the Business Court properly concluded as a matter of law: (1) plaintiffs lack standing to assert claims under the NC UDTPA and common law fraud; and (2) the economic loss doctrine bars plaintiffs' claims. See Creek Pointe Homeowner's Ass'n v. Happ, 146 N.C.App. 159, 164, 552 S.E.2d 220, 224-25 (2001) (whether a complainant has standing is a question of law), disc. rev. denied, 356 N.C. 161, 568 S.E.2d 191 (2002).

Our review of the Business Court's order is de novo. Fuller v. Easley, 145 N.C.App. 391, 395, 553 S.E.2d 43, 46 (2001); Falk Integrated Tech., Inc. v. Stack, 132 N.C.App. 807, 809, 513 S.E.2d 572, 574 (1999). "Under a de novo review, the court considers the matter anew and freely substitutes its own judgment for that of the [court]." In re Appeal of the Greens of Pine Glen Ltd. P'ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003) (citing Mann Media, Inc. v. Randolph Cty. Planning Bd., 356 N.C. 1, 13, 565 S.E.2d 9, 17 (2002)).

V. Standing

"Standing is a necessary prerequisite to a court's proper exercise of subject matter jurisdiction." Street v. Smart Corp., 157 N.C.App. 303, 305, 578 S.E.2d 695, 698 (2003) (internal quotation omitted). "Standing refers to whether a party has a sufficient stake in an otherwise justiciable controversy such that he or she may properly seek adjudication of the matter." American Woodland Indus., Inc. v. Tolson, 155 N.C.App. 624, 626, 574 S.E.2d 55, 57 (2002) (citations omitted), disc. rev. denied, 357 N.C. 61, 579 S.E.2d 283 (2003). It requires "`that the plaintiff have been injured or threatened by injury or have a statutory right to institute an action.'" Bruggeman v. Meditrust Co., L.L.C., 165 N.C.App. 790, 795, 600 S.E.2d 507, 511 (2004) (quoting In re Baby Boy Scearce, 81 N.C.App. 531, 541, 345 S.E.2d 404, 410, disc. rev. denied, 318 N.C. 415, 349 S.E.2d 589 (1986)). "If a party does not have standing to bring a claim, a court has no subject matter jurisdiction to hear the claim." Estate of Apple v. Commer. Courier Express, Inc., 168 N.C.App. 175, 176, 607 S.E.2d 14, 16 (citations omitted), disc. rev. denied, 359 N.C. 632, 613 S.E.2d 688 (2005). "The `irreducible constitutional minimum' of standing contains three elements: (1) `injury in fact' . . .; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision." Neuse River Found., Inc. v. Smithfield Foods, Inc., 155 N.C.App. 110, 114, 574 S.E.2d 48, 52 (2002) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351, 364 (1992)), disc. rev....