Hardin v. Kcs Intern., Inc.

Decision Date15 September 2009
Docket NumberNo. COA08-996.,COA08-996.
Citation682 S.E.2d 726
PartiesRobert H. HARDIN, Jr., Plaintiff, v. KCS INTERNATIONAL, INC. d/b/a Cruisers Yachts, and Cape Fear Yacht Sales of North Carolina, Inc., Defendants.
CourtNorth Carolina Court of Appeals

Hodges & Coxe, P.C., by C. Wes Hodges, II, Wilmington, for plaintiff-appellant.

McGuireWoods LLP, by Henry L. Kitchin, Jr. and John H. Anderson, Jr., Wilmington, for defendant-appellee KCS International, Inc.

Hedrick, Gardner, Kincheloe & Garofalo, L.L.P., by Scott Lewis, for defendant-appellee Cape Fear Yacht Sales of North Carolina, Inc.

GEER, Judge.

Plaintiff Robert H. Hardin, Jr. appeals from the trial court's order dismissing his complaint with prejudice and enforcing the settlement agreement between Hardin and defendants KCS International, Inc. doing business as Cruisers Yachts ("Cruisers") and Cape Fear Yacht Sales of North Carolina, Inc. ("Cape Fear"). Hardin primarily argues on appeal that the trial court erred in enforcing the settlement agreement because it was induced by defendants' fraud. Hardin's evidence fails, however, to establish the necessary elements of a claim for fraud, and we therefore affirm the trial court's order.


On 15 December 2005, Hardin purchased a 2006 Cruisers 415 Yacht from Cape Fear for $452,705.00. Cruisers manufactured the boat. Almost immediately after the purchase, Hardin began experiencing problems with the boat. Specifically, Hardin was concerned that the boat did not perform to the manufacturer's specifications; it had repeated engine, fuel system, and generator failures; the boat's keypads and air conditioning malfunctioned; water leaked into the boat's interior; there were numerous defective fixtures and mechanisms; and the fiberglass hull had cracks in it. In March 2006, Hardin demanded either return of the purchase price or a new boat. Defendants refused to return Hardin's money or provide a new boat, maintaining that any defects or non-conforming conditions would be repaired in a timely fashion under the boat's warranties.

Hardin filed suit on 26 January 2007, asserting claims against defendants for breach of contract and breach of express and implied warranties. Hardin subsequently served his first request for production of documents on 15 February 2007. Defendants obtained an extension of their time to respond to the document request until 19 April 2007. The parties then engaged in settlement negotiations before any response was served.

On 26 March 2007, Hardin, defendants, and Volvo Penta of the Americas, Inc. (the manufacturer of the boat's engines) entered into a "Settlement Agreement and Release."1 The settlement agreement provided that in consideration for defendants' replacing the engines and making specified repairs, Hardin would dismiss his cause of action with prejudice. Hardin was not, however, required to dismiss his action until "completion of the engine replacement and other repairs called for [in the settlement agreement], the independent survey of the Boat . . ., and any further repairs identified by the survey. . . ." The settlement agreement also included a general release:

In consideration of the foregoing payments, and other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, HARDIN and his administrators, personal representatives, successors, heirs, and assigns, hereby release and forever discharge CRUISERS, CAPE FEAR, and VOLVO and their officers, directors, shareholders, employees, agents, servants, successors and assigns, from any and all claims in any way related to the dispute between them regarding the Boat to date. The effect of this Paragraph is intended to be a general release of all claims that HARDIN may have against CRUISERS, CAPE FEAR, and VOLVO as a result of their dealings to date, and specifically including but not limited to the subject matter of this Agreement and the Civil Action, although this release is not intended to release or bar any future claims based upon any new warranty issues arising under any preexisting warranty that has not yet expired, failure of the repairs required herein, breach of the new engine warranty or extended protection plan provided hereunder, or an action to otherwise enforce the terms of this Agreement.

Cruisers took possession of the boat on 30 March 2007 in order to replace the engines and make the required repairs. Cruisers returned the boat to Hardin on 4 May 2007 and notified him that the repairs had been completed, that an inspection by Wayne Canning had been performed (as provided in the settlement agreement), and that everything was fine with the boat.

Upon return of the boat, Hardin identified various repairs that had not been done, including fixing a substantial leak around the forward salon windshield and the electronic keypad. In addition, Hardin was concerned about "rigged" repairs to the trim tabs, added propeller well extenders, and spliced wiring in the cockpit roof. Although Cruisers claimed that it had fixed the windshield, a representative of Cape Fear determined that the windshield, in fact, had not been repaired. According to Hardin, that leak resulted in additional damage to the boat, including damage to the boat's coring material.

On 26 June 2007, at Hardin's invitation, Canning performed a second inspection with Hardin and representatives of both defendants present. As a result of that inspection, Canning identified 14 additional repairs that needed to be made, including removing, rebedding, and recaulking the forward salon windows, as well as testing and repairing the boat's coring material in the areas of the leaks.

Following Canning's inspection, Hardin agreed to Cruisers' request to have its own technician inspect the boat. The technician recommended doing repairs that were not as extensive as those indicated as necessary by Canning. In response, Hardin informed defendants that he "considered the Settlement Agreement to be null and void and that [he] intended to proceed with litigation."

After Hardin refused to dismiss his action, the case was referred to mediation. Roughly three weeks prior to the mediation conference, Cruisers produced documents in response to Hardin's earlier request for production of documents. These documents revealed that Hardin's boat, while being shipped from Cruisers' manufacturing facility in Wisconsin to North Carolina, had been involved in a collision with a tree.

Hardin subsequently moved to amend his complaint to include claims for fraud and negligent misrepresentation against Cape Fear for failing to disclose the facts surrounding the collision prior to Hardin's purchase of the boat. Cruisers filed an answer on 6 August 2007, generally denying Hardin's allegations and moving to dismiss for failure to state a claim for relief based on the settlement agreement. Cruisers later filed a motion on 16 November 2007 seeking enforcement of the settlement agreement and an order directing Hardin to voluntarily dismiss his complaint with prejudice. Cape Fear filed a similar motion on 26 November 2007.

In an order entered 27 March 2008, the trial court dismissed Hardin's complaint with prejudice. The court ruled: "[A]fter reviewing all matter of record, including the affidavits filed with the court, and after hearing from counsel for defendants in support of Defendants' Motions and from counsel for the plaintiff in opposition to Defendants' Motions as set out in Plaintiff's Response, and after considering the applicable law, . . . the Settlement Agreement is valid and enforceable, and the Defendants' Motions should be GRANTED[.]"

On 23 April 2008, Hardin filed a notice of appeal from the trial court's order enforcing the settlement agreement. On 28 May 2008, he served defendants with a proposed record on appeal. On 27 June 2008, defendants jointly filed their objections and amendments to Hardin's proposed record. Hardin served defendants with a second proposed record on 1 August 2008, but defendants refused to stipulate to the settling of the record as requested. Hardin filed the record on appeal with this Court on 19 August 2008. Cruisers filed a motion to dismiss Hardin's appeal on 26 September 2008.

Motion to Dismiss Appeal

Cruisers moves to dismiss Hardin's appeal on the ground that "Plaintiff's failure to timely file the Record on Appeal within the period set forth in Rule 12(a) . . . mandates dismissal of Plaintiff's appeal because such a default is a jurisdictional default." Hardin acknowledges that there was a "minimal" delay in filing the record on appeal, but counters that under the Supreme Court's analysis in Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362 N.C. 191, 657 S.E.2d 361 (2008), "the requirements of the current Rule 12(a) are not jurisdictional."

This Court, in Copper v. Denlinger, ___ N.C.App. ___, ___, 667 S.E.2d 470, 479-80 (2008), appeal dismissed in part and disc. review allowed in part, 363 N.C. 124, 672 S.E.2d 686 (2009), held that a violation of Rule 12 of the Rules of Appellate Procedure is nonjurisdictional. Our Supreme Court has stressed that "a party's failure to comply with nonjurisdictional rule requirements normally should not lead to dismissal of the appeal." Dogwood, 362 N.C. at 198, 657 S.E.2d at 365. The Supreme Court, in Dogwood, id. at 199, 657 S.E.2d at 366, also explained that an appellate court should impose a sanction of any type only when a party's nonjurisdictional rules violations rise to the level of a "substantial failure" under N.C.R.App. P. 25 or a "gross violation" under N.C.R.App. P. 34. In the absence of a substantial or gross violation, the Court should not impose any sanction at all, but rather "the appellate court should simply perform its core function of reviewing the merits of the appeal to the extent possible." Dogwood, ...

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