Ford v. All-dry Of The Carolinas Inc, COA10-931

CitationNO. COA10-931
Case DateApril 19, 2011
CourtCourt of Appeal of North Carolina (US)

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

Haywood County

No. 07 CVS 1547

Appeal by plaintiffs and defendant from order entered 15 January 2010 and judgment entered 11 February 2010 by Judge Dennis J. Winner in Haywood County Superior Court. Heard in the Court of Appeals 24 January 2011.

Smathers and Hyde, by Patrick U. Smathers, and Song & Song, PLLC, by Jonathan J. Song, for plaintiffs-appellants.

Young, Morphis, Bach & Taylor, L.L.P., by Paul E. Culpepper and Timothy D. Swanson, for defendant-appellant.

MARTIN, Chief Judge.

On 12 June 2006, plaintiff Sharon Ford purchased a home located at 171 Birch Road in Maggie Valley, North Carolina. Prior to her purchasing the home, three needed repairs were identified: 1) the retaining wall needed to be fixed orreplaced; 2) the foundation needed to be stabilized; and 3) the deck needed to be stabilized.

Defendant All-Dry of the Carolinas, Inc. ("All-Dry") submitted a proposal dated 1 May 2006 which quoted a price of $24,000.00 for the material and labor involved in the installation of a Grip-Tite Foundation Pier System in order to address these needed repairs. Ms. Ford was also given a copy of an unsigned warranty and literature advertising that All-Dry's Grip-Tite Foundation Pier System would cause a home to "solidly rest on bedrock or equal low-bearing strata instead of unstable soil" and to "eliminate shifting, settling problems." The literature also advertised that after installation, an " investment in a solid home or commercial building will be safe." Ms. Ford accepted All-Dry's proposal and, on or about 28 June 2006, All-Dry began the repair work on Ms. Ford's home.

The work was completed on 30 June 2006. That day, All-Dry gave Ms. Ford a document which she signed stating in part:

This amendment is made part of the contract submitted to _, dated _. In the piering and foundation business, there is one overriding goal by All-Dry of the Carolinas, and this is to "stabilize" the affected area against further vertical " settlement." Until this is accomplished, any repairs of a cosmetic nature performed on your home will be futile due to the fact that this type of structural damage is usually progressive.
As an added consideration, we will attempt to close cracks, render doors and windows operational, and move walls back to their original position. This is something we would sincerely like to see happen; however, we are painfully aware of the consequences of such efforts, and you, as our customer, must be also. There are several factors which affect any contractor's ability to cause the above mentioned items to occur.
Due to the above factors [skin friction, obstructions, brick or stone veneer, concrete piers], the possibility of further cosmetic or consequential damages occurring during a lifting operation is much greater than while only stabilizing the area in question. As a result, All-Dry of the Carolinas, Inc., does not accept any responsibility for these consequential damages if they should occur. We, of course, will proceed slowly and with extreme care to minimize the possibility of any damage during the lifting process.

Approximately two months after the installation was completed, Ms. Ford began to have difficulty opening her windows and doors. Interior plaster walls cracked, there were nail pops in her ceilings and walls, and spaces developed in her window and door trim. The slope in her floors changed and the cracks that were in the basement and outside foundation walls increased in size. By August 2006, Ms. Ford noticed that her refrigerator and stovetop had begun to tilt to one side. By September 2006, she noticed additional floor sloping in her dining room. ByOctober 2006, cracks began to appear in her walls. Since this time, Ms. Ford's home has experienced further deepening cracks, more nail pops, more tilting of floors, pooling and running of water when it rains, a bedroom wall on the main floor of the house separating from the back wall, and shifting of stairs.

Ms. Ford filed a complaint against All-Dry on 30 November 2007 alleging breach of contract, fraud, unfair and deceptive practices in commerce, and negligent infliction of emotional distress. By an amended complaint, Gwin Buffington was added as an additional party-plaintiff, and claims for breach of warranties and negligence were asserted.

By its answers to the complaint and amended complaint, All-Dry denied the allegations contained therein and moved to dismiss. The matter was tried by a jury. At trial, a number of different experts testified as to the manner in which the work was performed, the damages, and the cost of necessary repairs. Without any repairs, the director of building inspections for Haywood County testified that the structure would be condemned and, if not repaired, demolished.

At the close of all the evidence, All-Dry moved for directed verdict. The trial court granted the motion with respect to plaintiffs' claims for negligence and fraud, denied the motion with respect to plaintiffs' claims for breach ofcontract, and reserved ruling on the motion with respect to plaintiffs' claims for unfair and deceptive practices in commerce. The jury returned a verdict finding All-Dry breached the contract and awarded damages in the amount of $126,000.00. The jury also found that All-Dry failed to obtain a building permit, that its conduct was in commerce, and that such conduct had proximately caused plaintiffs to be damaged in the amount of $146,300.00.

All-Dry moved for a new trial and a judgment notwithstanding the verdict. The trial court granted judgment notwithstanding the verdict with respect to plaintiffs' claim for unfair practices, but denied the motions with respect to plaintiffs' claim for breach of contract. Judgment was entered awarding plaintiffs $126,000.00 plus interest and the plaintiffs' costs. Both plaintiffs and defendant appeal.


Plaintiffs contend the trial court erred in granting defendant's motion for directed verdict on their negligence claim. A motion for a directed verdict tests the sufficiency of the evidence to support a verdict for the non-moving party. Williams v. CSX Transp., Inc., 176 N.C. App. 330, 344, 626S.E.2d 716, 728 (citing Whaley v. White Consol. Indus., Inc., 144 N.C. App. 88, 92, 548 S.E.2d 177, 180, disc, review denied, 354 N.C. 229, 555 S.E.2d 277 (2001)), granting petition for disc. review withdrawn, 360 N.C. 491, 632 S.E.2d 775 (2006). The trial court takes the non-movant's evidence as true and considers it "in the light most favorable to him, giving to the non-movant the benefit of every reasonable inference that may legitimately be drawn from the evidence with contradictions, conflicts, and inconsistencies being resolved in the non-movant's favor." Whaley, 144 N.C. App. at 92, 548 S.E.2d at 180. The motion should be denied unless the evidence is insufficient to justify a verdict for the non-movant. E.g. Dickinson v. Pake, 284 N.C. 576, 583, 201 S.E.2d 897, 902 (1974).

"North Carolina has adopted the economic loss rule, which prohibits recovery for economic loss in tort. Instead, such claims are governed by contract law." Moore v. Coachmen Indus., Inc., 129 N.C. App. 389, 401, 499 S.E.2d 772, 780 (1998). The rule specifically provides that "[w]here a defective product causes damage to property other than the product itself, losses attributable to the defective product are recoverable in tort rather than contract." Id. at 402, 499 S.E.2d at 780 (citing Reece v. Homette Corp., 110 N.C. App. 462, 467, 429 S.E.2d 768, 770 (1993)).

The rationale for the economic loss rule is that the sale of goods is accomplished by contract and the parties are free to include, or exclude, provisions as to the parties' respective rights and remedies, should the product prove to be defective. To give a party a remedy in tort, where the defect in the product damages the actual product, would permit the party to ignore and avoid the rights and remedies granted or imposed by the parties' contract.

Id. at 401-02, 499 S.E. 2d at 780; see also Wilson v. Dryvit Sys., Inc., 206 F. Supp. 2d 749, 754 (E.D.N.C. 2002), aff'd, 71 F. App'x. 960 (4th Cir. 2003) (applying North Carolina law and noting that defendant's "cladding is an integral component of plaintiffs' house. The damage caused... therefore constitutes damage to the house itself. No 'other' property damage has resulted, and plaintiffs have suffered purely economic losses"); Land v. Tall House Bldg. Co., 165 N.C. App. 880, 884, 602 S.E.2d 1, 4 (2004); Gregory v. Atrium Door & Window Co., 106 N.C. App. 142, 143-44, 415 S.E.2d 574, 575 (1992) (water damage to flooring caused by malfunctioning and deteriorating doors constituted economic loss not recoverable in negligence); Warfield v. Hicks, 91 N.C. App. 1, 10, 370 S.E.2d 689, 694, disc. review denied, 323 N.C. 629, 374 S.E.2d 602 (1988).

In the present case, plaintiffs alleged that All-Dry'snegligent construction caused damage only to the house itself. As such, even taken in the light most favorable to plaintiffs, the economic loss rule prevents any recovery on a claim for negligence and therefore defendant's motion for a directed verdict as to that claim was properly granted.


Plaintiffs next allege that the trial court erred in granting All-Dry's motion for judgment notwithstanding the verdict on their claim that All-Dry committed unfair and deceptive practices in commerce. Specifically they allege that a finding by the jury that defendant failed to obtain a building permit as required by law constitutes an aggravating circumstance to support a verdict for plaintiffs on...

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