Du Phan v. Clinard Oil Co., COA16-1083
| Decision Date | 02 May 2017 |
| Docket Number | No. COA16-1083,COA16-1083 |
| Citation | 798 S.E.2d 812 (Table) |
| Court | North Carolina Court of Appeals |
| Parties | DU PHAN, d/b/a Good Food Market, Plaintiff, v. CLINARD OIL COMPANY, INC., Defendant. |
Biesecker, Tripp, Sink, & Fritts, LLP, Lexington, by Christopher A. Raines for Plaintiff-Appellee.
Wyatt Early Harris Wheeler LLP, High Point, by William E. Wheeler for Defendant-Appellant.
Clinard Oil Company, Inc. ("Clinard") appeals the 12 July 2016 order by Judge Kevin M. Bridges in Davidson County Superior Court denying its motion for summary judgment. Clinard contends the instant case brought by the individual Du Phan, d/b/a Good Food Market ("Du Phan") is barred by res judicata due to the dismissal with prejudice of an earlier suit brought by the corporate entity Good Food Market, Inc. ("the Corporation"). After review, we agree and reverse the trial court's order.
On 20 April 2005, Michael and Marcus Tucker d/b/a Tucker's Good Food ("the Tuckers"), entered into a requirements contract to purchase gasoline and diesel fuel from Clinard ("the contract") for a term of eight years. Under the terms of the contract, the Tuckers agreed to pay Clinard $0.015 per gallon over Clinard's terminal cost for gasoline, and $0.17 per gallon over Clinard's terminal cost for diesel ("the contract price"). The contract provided Clinard would supply the signage for the pumps, maintain all hoses and nozzles, install credit card readers for Marathon Ashland credit cards, and provide the Tuckers with credit card invoices and other documentation necessary to access the credit card network.
In the fall of 2007, Du Phan and his wife, Hong Ha, purchased Tucker's Good Food from the Tuckers. On 27 November 2007, as part of the sale, the Tuckers assigned and Du Phan assumed the contract between the Tuckers and Clinard ("the assignment"). Clinard acknowledged and agreed to the assumption. Du Phan signed the assignment and assumption agreement in the name "Du Phan d/b/a Good Food Market."
On 24 October 2008, Du Phan and his wife incorporated the enterprise as "Good Food Market & Grill, Inc." Thereafter, the Corporation made payments to Clinard with checks signed by Du Phan as president.
Several months after assuming the contract, Du Phan began to suspect Clinard overcharged him for fuel. Du Phan visited Clinard's offices and noticed they sold fuel at their retail outlet at prices less than they charged him. Du Phan complained to Clinard, but received no satisfactory answer for this price discrepancy. The overcharges continued, however Du Phan lacked documentary proof Clinard was charging him more than the contract price. In 2012, Du Phan was approached by one of Clinard's competitors, who advised him to call Telvent DTN, a company which provides wholesale pricing data for fuel companies. After purchasing data from Telvent DTN, Du Phan confirmed Clinard was charging him more than the contract price for gasoline and diesel fuel.
On 4 March 2013, under the caption "Du Phan d/b/a Good Food Market & Grill, Inc. vs. Clinard Oil Company, Inc. and Does 1-50" the Corporation filed a verified complaint alleging Clinard and fifty "John Does" to be revealed in discovery overcharged for gasoline and diesel fuel ("the first complaint"). Furthermore, the plaintiff alleged Clinard and others failed to credit its account for credit card transactions made at the pumps and failed to provide regular invoices for those transactions. The Corporation sought monetary damages for breach of contract, misrepresentation, and unjust enrichment for violations of the assignment agreement. In addition, the Corporation sought monetary damages for unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1 and fraud and breach of the implied covenant of good faith and fair dealing for failure to properly account for, pay for, and credit sums due for credit card transactions. Du Phan verified the complaint as president of Good Food Market & Grill Inc.
Clinard, in response, moved to dismiss the claim under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure, arguing there was no contract between Clinard and Good Food Market & Grill Inc. In support thereof, Clinard noted Du Phan signed the assignment in his individual capacity, prior to the incorporation of Good Food Market & Grill, Inc. Thus, Clinard contended the contract existed only between itself and Du Phan, individually.
In response to Clinard's motion to dismiss, the Corporation filed a motion to amend the complaint under North Carolina Rule of Civil Procedure 17(a), seeking to substitute "Du Phan d/b/a Good Food Market & Grill," the name under which Du Phan signed the assignment, as plaintiff in the first complaint.
On 27 October 2015, the trial court granted Clinard's motion to dismiss and denied the Corporation's motion to amend. Commenting on its decision, the judge explicitly stated res judicata should not bar Du Phan from re-filing the suit in his own name and specified the order dismissing the case should be without prejudice. The judge asked Clinard's counsel to prepare the written order.
Drafts were exchanged, engendering a conflict over the wording of the order. When the final order was completed, the trial court stated in a written note to the parties that the order prepared by Clinard's counsel "reflects my decision." The trial court filed this written order on 16 November 2015, stating "it appearing to the Court, the Court so finds, from the Plaintiff's verified complaint, that Plaintiff's complaint has failed to state any claims upon which relief may be granted, as a result of which Plaintiff's action, and all claims and cause of actions therein, should be dismissed."
On 18 December 2015, "Du Phan, d/b/a Good Food Market" filed a complaint alleging Clinard charged him more than the contract price for gasoline and diesel ("the instant complaint"). Du Phan sought monetary damages for breach of contract, fraud, breach of implied covenant of good faith and fair dealing, and unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1. Du Phan dropped any mention of Clinard's mishandling of credit card invoices and omitted the claim for unjust enrichment.
On 28 January 2016, Clinard filed an answer and counterclaim, moving to dismiss under Rule 12(b)(6) and asserting the affirmative defenses of (1) real party in interest, (2) res judicata, (3) collateral estoppel, (4) judicial estoppel, (5) equitable estoppel, (6) statute of limitations, (7) waiver, and (8) modification of the contract. Clinard also counterclaimed, alleging Du Phan owed money to Clinard for repairs and maintenance of the fuel pumps, owed money to Clinard for use of the pumps after expiration of the contract, and converted the pumps by failing to allow Clinard to remove them from the front of Du Phan's store.1
The record does not indicate whether the trial court ruled on Clinard's motion to dismiss. However, on 11 May 2016, Clinard moved for summary judgment seeking dismissal of Du Phan's claims on the basis of the existence of the affirmative defenses named in the answer. Clinard attached over fifty exhibits to its motion, including the contract; the assignment agreement; the first complaint and summons; the Corporation's articles of incorporation; the Corporation's annual filings with the Secretary of State from 2009 to 2014; copies of checks from the Corporation's account made payable to Clinard; the deposition of the Corporation's accountant, Karen Odom, taken during discovery for the first complaint; Du Phan's motion to amend the first complaint; the transcript of the hearing on the motion to dismiss the first complaint; the deposition of Du Phan taken during discovery for the first complaint; the order dismissing the first complaint and motion to amend; and the deposition of Du Phan taken during discovery for the instant complaint.
In response to Clinard's motion for summary judgment, Du Phan filed an affidavit restating facts alleged in his verified complaint. On 24 June 2016, Du Phan filed a motion to amend to add a real party in interest under Rule 17 of the North Carolina Rules of Civil Procedure, seeking to "add or join individuals, including but not limited [to] Good Food Market & Grill, Inc., Hong Ha, Good Food Store and any other trade name under which Du Phan has conducted business from November 1, 2007 to the present[.]" The motion was filed "in the alternative to [Du Phan's] argument that the proper parties in interest are currently named and that the current Plaintiff has standing to bring all claims in this matter...."
On 12 July 2016, after giving "due consideration" to the motions, pleadings, court file, affidavits, testimony, transcripts, exhibits, briefs, and arguments of counsel, the trial court denied Clinard's motion for summary judgment as to all of Du Phan's claims, and denied Du Phan's motion to amend as unnecessary.
On 15 August 2016, Clinard filed a notice of appeal to this Court, seeking review of the trial court's 12 July 2016 order insofar as the denial of its assertion of res judicata as an affirmative defense affected a substantial right.
On 28 October 2016, Clinard filed a petition for writ of certiorari with this Court, seeking review...
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