Jones v. Harrelson and Smith Contractors, COA05-1183-2.

• Decision Date: 16 December 2008
• Docket Number: No. COA05-1183-2.,COA05-1183-2.
• Court: North Carolina Court of Appeals
• Parties: Darvella JONES, Plaintiff, v. HARRELSON AND SMITH CONTRACTORS, LLC, a North Carolina Corporation, and Rodney S. Turner, d/b/a Rodney S. Turner Housemovers, Defendants.

670 S.E.2d 242

Darvella JONES, Plaintiff, v. HARRELSON AND SMITH CONTRACTORS, LLC, a North Carolina Corporation, and Rodney S. Turner, d/b/a Rodney S. Turner Housemovers, Defendants.

No. COA05-1183-2.

Court of Appeals of North Carolina.

December 16, 2008.

Appeal by plaintiff from judgment entered 10 May 2005 by Judge Jerry Braswell in Pamlico County Superior Court. This case was originally heard in the Court of Appeals 29 March 2006. Upon remand by order from the North Carolina Supreme Court, filed 7 March 2008.

William F. Ward, III, P.A., by William F. Ward, III, New Bern, for plaintiff-appellant.

Hopf & Higley, P.A., by Donald S. Higley, II, Greenville, for defendant-appellee Harrelson and Smith Contractors, LLC.

GEER, Judge.

This litigation arose out of efforts to remove houses from the 100-year flood plain in Pamlico County following widespread destruction from Hurricane Floyd. A jury below found that defendant Harrelson and Smith Contractors, LLC ("H & S"), who contracted with Pamlico County to remove such homes, committed fraud and conversion in its actions with respect to a house that H & S sold to plaintiff Darvella Jones. The trial court (1) left the conversion verdict intact, (2) granted a directed verdict in favor of H & S on Jones' unfair and deceptive trade practices ("UDTP") claim, and (3) granted judgment notwithstanding the verdict ("JNOV") to H & S on the fraud claim. Finally, the trial court granted judgment in favor of H & S with respect to Jones' claim for punitive damages. Jones appealed to this Court.

On 19 December 2006, a divided panel of this Court dismissed Jones' appeal for violations of the North Carolina Rules of Appellate Procedure. See Jones v. Harrelson & Smith Contractors, LLC, 180 N.C.App. 478, 638 S.E.2d 222 (2006). On 7 March 2008, the North Carolina Supreme Court reversed that decision and remanded for reconsideration in light of the Court's decisions in Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362 N.C. 191, 657 S.E.2d 361 (2008), and State v. Hart, 361 N.C. 309, 644 S.E.2d 201 (2007). See Jones v. Harrelson & Smith Contractors, LLC, 362 N.C. 226, 227, 657 S.E.2d 352, 353 (2008) (per curiam).

Upon reconsideration, we conclude that the appellate rules violations committed by Jones are nonjurisdictional violations for which dismissal of Jones' appeal is not appropriate. We further hold that these violations do not rise to the level of gross or substantial violations that warrant any other type of sanction.

On the merits, we reverse the trial court's entry of judgment in favor of H & S on Jones' fraud and UDTP claims. We, therefore, remand for entry of judgment in the amount of $31,815.00 on the fraud claim entry of an award of treble damages, and, in the trial court's discretion, an award of attorney's fees under N.C. Gen.Stat. § 75-16.1 (2007).

Facts and Procedural History

Hurricane Floyd struck North Carolina in September 1999, causing catastrophic flooding in the eastern portions of our State, including Pamlico County. Following the hurricane, Pamlico County, using funds provided by the state and federal governments, instituted a Flood Acquisition Program, which involved buying out landowners who had property located in the 100-year flood plain. One house purchased by the County belonged to Ray and Virginia Respers and was located at 439 Jones Road in the town of Vandemere. The County paid approximately $45,000.00 for the house, which was roughly equal to its appraised value.

The Flood Acquisition Program included a Demolition and Clearance Project designed to clear lots in the flood plain and thus reduce the possibility of property damage from future hurricanes and floods. As part of this project, the County solicited bids for the removal and/or demolition of homes that it had purchased in the flood plain. During the bidding process, H & S submitted a demolition bid in the amount of $60,797.00. Based on this bid, the County awarded H & S the demolition contract for a group of houses in the flood plain, including the Respers' former house.

The County signed a contract with H & S, which included, among other provisions, an option allowing H & S to salvage houses scheduled for demolition by severing them from their current lots and relocating them to lots outside the state-designated flood plain. H & S decided to exercise that option and salvage several of the houses that the County had designated for removal, including (1) the Respers' former house, (2) another house that belonged to Herman Garrison, and (3) a third house that belonged to the O'Neil family.

Plaintiff Darvella Jones gave John Harrelson of H & S $500.00 in cash for the Respers' former house. She showed Harrelson the piece of land nearby on Swan Point Road where she was currently living in a trailer and where she hoped to eventually place the house. Although it was apparent that the lot she showed Harrelson was inside the flood plain, Harrelson did not mention the contract restriction requiring that the house be relocated outside the flood plain. Instead, Harrelson asked Jones if she knew of anyone who moved houses. When Jones replied that she did not, Harrelson recommended his friend, defendant Rodney Turner.

H & S succeeded in selling the O'Neil house to Clyde Potter and the Garrison house to Herbert Kent. Kent testified at trial that he paid H & S $5,000.00 for his house and that H & S never told him the house would need to be relocated outside the flood plain. Following their purchases, Potter, Kent, and Jones all employed defendant Turner to relocate their houses elsewhere inside the flood plain.

Prior to the move, H & S had not entered into written contracts with any of the purchasers. On 10 September 2002, however, H & S sent a letter to RSM Harris Associates, the consulting firm hired by the County to oversee the buy-out program, in which H & S asserted: "We would like to assure you that the three owners that purchased the houses ... were informed with a written contract that the houses were to be relocated above the 100-year floodplain and they were to accept all expense & responsibility."

On 13 September 2002, after all three houses had been moved off their original lots and after sending the letter to RSM Harris Associates, H & S mailed a short form to Potter, Kent, and Jones, requesting that each owner sign and return it. The form read as follows:

I, ________, acknowledge all responsibility and expense for the moving and relocation for the house presently located at ________ in _________ County. I understand the house becomes my property and responsibility as of ________. I understand the house has to be relocated outside the 100 year flood plain.

Jones' form had the blanks completed with the information relating to her house. She signed it because H & S said it needed the form for its records.

On or about 20 September 2002, the County's inspectors learned that the Potter, Kent, and Jones houses had been relocated from their original lots to other lots inside the flood plain.¹ According to a County official, the North Carolina Division of Emergency Management gave the County three possible ways to resolve the issues with the three houses: (1) the houses could be removed to a location outside the flood plain, (2) the houses could be demolished, or (3) the houses could be removed from the buy-out program by reimbursement of the County for the full amount it had paid to the original owners. The County, in turn, informed H & S that the house relocations violated the terms of the Demolition and Clearance contract, explained the three choices, and gave H & S a deadline of 10 December 2002 to "complete corrective action." The County later threatened legal action against H & S if it did not bring the salvaged houses into compliance with the contract.

H & S ultimately dealt with each house in a different manner. With respect to Potter's house, H & S paid more than $22,000.00 to cover the cost of relocating the house to another lot that Potter owned outside the flood plain and putting it on a foundation. Kent, however, refused to move his house a second time, so H & S was forced to reimburse the County in the amount of $52,757.00 -the amount paid by the County to the original owner of the house in the buy-out program.

As for Jones' house, Harrelson met with Jones to inform her of the problem. He told her that he had found a lot outside the flood plain on Water Street in the town of Bayboro and offered to relocate her house there at H & S' expense. He told her that the owner of the lot was willing to sell the lot to Jones for $12,000.00, but that H & S would make the first two months' payments for her. Jones told Harrelson she did not want to live on Water Street. Instead, she contacted a realtor and began to make arrangements to purchase a lot in the town of Reelsboro with the intent of moving the house there. On 5 December 2002, she provided H & S with written certification that the Reelsboro lot was outside the flood plain.

The next day, 6 December 2002, four days before the County's deadline, H & S hired defendant Turner to move Jones' house from her Swan Point lot to the Water Street lot that H & S had rented at its own expense. Harrelson acknowledged at trial that Jones had never given him permission to move the house, but said that H & S was under pressure to bring the three houses into compliance by 10 December 2002. Jones was driving to work when she discovered that her house was missing.

On 9 December 2002, H & S sent a letter to the County, requesting payment on its contract with the County and stating: "Please consider this request and its urgency because [H & S] has incurred considerable expense in trying to resolve these issues." The County, however, was not satisfied because "the house was still in a potential movable position, still had steel underneath of it, and ... could still easily be moved back into the flood zone."

On 13 January 2003, H & S'...