Di Frega v. Pugliese
| Decision Date | 01 June 2004 |
| Docket Number | No. COA03-950.,COA03-950. |
| Citation | 164 NC App. 499,596 S.E.2d 456 |
| Parties | Ciro Scotto DI FREGA, Plaintiff, v. Luigi PUGLIESE, Robert Wade Edwards, and Martha E. Edwards, Defendants. |
| Court | North Carolina Court of Appeals |
Daniel R. Johnston, Winston-Salem, for plaintiff-appellant.
Laurel O. Boyles, Winston-Salem, for defendants-appellees Robert Wade Edwards and Martha E. Edwards.
No brief filed for defendant-appellee Luigi Pugliese.
Ciro Scotto Di Frega ("plaintiff") appeals from a judgment entered after a jury returned a verdict in favor of plaintiff for conversion of his personal property by Robert Wade Edwards and Martha E. Edwards ("the Edwardses") and breach of contract by Luigi Pugliese ("Pugliese") (collectively, "defendants"). We hold there was no error at trial.
The Edwardses own improved commercial property ("the premises") in Mocksville, North Carolina. On or about 13 February 1993, the Edwardses entered into a lease ("1993 lease") with an option to purchase with three individuals who planned to operate a restaurant on the premises. On 1 September 1998, at the expiration of the 1993 lease, Ibrahim A. Elaasar ("Elaasar") acquired all of the interests of his two partners, renewed and extended the lease until 31 March 2002, and changed the lessees' names from the three individual names to "Mocksville Kitchens, Inc." The lease allowed the premises to be sublet to another individual or entity without landlord's approval and provided that the premises could be purchased for $189,000.00 at any time during the term of the lease.
Plaintiff is the operator of a restaurant in Forsyth County, North Carolina. Plaintiff became interested in purchasing Elaasar's restaurant. On 4 February 1999, Mocksville Kitchens, Inc., subleased the restaurant to plaintiff and his brother, sold all of the equipment and furnishings to them for $75,000.00, and assigned all its rights in the option to purchase to plaintiff and his brother. Plaintiff claims the Edwardses knew that he was not merely subleasing the premises but was acquiring all rights in the premises. Under the terms of the sublease, plaintiff paid rent directly to the Edwardses and was bound by all of the remaining terms of the 1993 lease.
Plaintiff and his brother opened an Italian restaurant on the premises. Plaintiff's brother managed the daily operations of the restaurant. Plaintiff's brother became seriously ill and was unable to continue operating the restaurant. On 1 September 1999, plaintiff sold the business to Pugliese for $135,000.00 and subleased the building under the terms of the 1993 lease. Pugliese paid rent directly to the Edwardses. The 1993 lease contained a rent escalation clause increasing the rent from $1,600.00 per month to $1,700.00, effective 1 March 2000. Pugliese paid only $1,600.00 for rental from April to June. The rent arrearage was never paid. Around this same time, the plumbing failed in the restaurant. The Edwardses fixed the plumbing and paid for all costs. The 1993 lease required the tenant to pay all costs of maintenance, upkeep, and repairs except for those made to the roof of the building. The Edwardses have not been paid for these repairs. Subsequently, the Edwardses, through counsel, notified the original lessee, Mocksville Kitchens, Inc., that the lease was breached. The letter listed four defaults: (1) failure to provide proof of general liability insurance; (2) failure to pay back rent in the amount of $300.00 for the months of April, May, and June of 2000; (3) failure to reimburse plumbing repairs made to the premises; and (4) failure to pay for the cost of a replacement heat pump. Elaasar was given ten days to cure, but did not respond. Plaintiff was also notified and promised to look into the matters. On 5 October 2000, the Edwardses terminated the lease with Elaasar and entered into a lease and option agreement with Pugliese.
Plaintiff brought suit against the Edwardses and Pugliese claiming fraud, civil conspiracy, conversion, unfair and deceptive trade practices, punitive damages, breach of contract, interference with contract, and unjust enrichment. Defendants moved for summary judgment on all of plaintiff's claims. The trial court denied all defendants' motions except plaintiff's claim for fraud, which it granted. At trial, defendants' motion for directed verdict on plaintiff's claims for civil conspiracy, unfair and deceptive trade practices, and punitive damages was granted by the trial court.
The jury returned a verdict in favor of plaintiff in the amount of $17,001.00 for conversion of his personal property and breach of contract by the Edwardses, and $4,000.00 for breach of contract by Pugliese. The jury also found that plaintiff had converted property belonging to the Edwardses and awarded $1.00 in damages. The jury found against plaintiff on all other claims or awarded only nominal damages. Plaintiff appeals.
The issues are whether the trial court erred in: (1) excluding evidence that the North Carolina Real Estate Commission revoked Martha Edwards's real estate license; (2) excluding evidence of the Edwardses' financial status; (3) granting defendants' motion for directed verdict regarding: (a) plaintiff's claim for civil conspiracy, (b) plaintiff's claim for unfair and deceptive trade practices, and (c) plaintiff's claim for punitive damages; (4) denying plaintiff's motion to dismiss the Edwardses' counterclaim for conversion; (5) denying plaintiff's motion to set aside the verdict; and (6) entering a judgment unsupported by the evidence.
Plaintiff contends that the trial court erred in excluding evidence that Martha Edwards's real estate license had been permanently revoked prior to trial. We disagree.
North Carolina Rules of Evidence, Rule 404(b) states:
Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that he acted in conformity therewith. It may, however, be admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake, entrapment or accident.
N.C. Gen.Stat. § 8C-1, Rule 404(b) (2003). The trial court must balance the probative value of the proffered evidence against any alleged unfair prejudice. State v. Mahaley, 332 N.C. 583, 598, 423 S.E.2d 58, 67 (1992), cert. denied, 513 U.S. 1089, 115 S.Ct. 749, 130 L.Ed.2d 649 (1995). Our Supreme Court has held, "[t]he dangerous tendency of this class of evidence to mislead and raise a legally spurious presumption of guilt requires that its admissibility should be subject to strict scrutiny by the courts." State v. Johnson, 317 N.C. 417, 430, 347 S.E.2d 7, 15 (1986).
Whether the requisite degree of relevancy exists is a judicial question to be resolved in the light of the consideration that the inevitable tendency of such evidence is to raise a legally spurious presumption of guilt in the minds of the jurors. Hence, if the court does not clearly perceive the connection between the extraneous criminal transaction and the crime charged, that is, its logical relevancy, the accused should be given the benefit of the doubt, and the evidence should be rejected.
State v. McClain, 240 N.C. 171, 177, 81 S.E.2d 364, 368 (1954). The trial court's sound discretion determines whether to exclude evidence on the grounds that such evidence would be unduly or unfairly prejudicial. State v. Mason, 315 N.C. 724, 731, 340 S.E.2d 430, 435 (1986). To reverse the trial court's ruling, plaintiff must show that the ruling was so arbitrary that it could not have been the result of a reasoned decision. State v. Jones, 89 N.C.App. 584, 594, 367 S.E.2d 139, 145 (1988),overruled in part by State v. Hinnant, 351 N.C. 277, 523 S.E.2d 663 (2000)
.
After hearing arguments and reviewing the conclusions of law from the North Carolina Real Estate Licensing Board in the prior order revoking the license, the trial court excluded evidence of the revocation of Martha Edwards's real estate license. The trial court held, "even if relevant ... the application of the 403 balancing test would indicate that the prejudice, its introduction would outweigh any probative value given its age, after review of the contents of that order." The record indicates Martha Edwards's real estate license was revoked twenty-one years earlier for acts similar to those alleged at bar. Rule 404(b) prohibits evidence of other crimes, wrongs, or acts to show that a defendant "acted in conformity therewith." N.C. Gen.Stat. § 8C-1, Rule 404(b) (2003). This evidence could have raised "a legally spurious presumption of guilt" against Martha Edwards in violation of Rule 404(b). McClain, 240 N.C. at 177, 81 S.E.2d at 368. Plaintiff has failed to show the trial court abused its discretion in excluding evidence of the revocation of Martha Edwards's real estate license. Plaintiff's assignment of error is overruled.
Plaintiff contends that the trial court erred in excluding evidence regarding the Edwardses' financial status. We disagree.
"Ordinarily, a party's financial ability to respond in damages ... is totally irrelevant to the issue of liability; and the admission of evidence tending to establish such ability is held to be prejudicial, except in cases warranting an award of punitive damages." Harvel's, Inc. v. Eggleston, 268 N.C. 388, 392, 150 S.E.2d 786, 790 (1966) (emphasis supplied). "[I]t is well established that evidence as to the financial worth of a defendant is competent for consideration by the jury when an issue as to punitive damages is warranted and submitted." Hinson v. Dawson, 244 N.C. 23, 29, 92 S.E.2d 393, 397 (1956) (emphasis supplied).
Plaintiff argues that evidence of a defendant's financial status is admissible by mere assertion of a punitive damages claim. We disagree. Evidence of this nature is admitted only in cases warranting...
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