Prince v. Wright, No. COA99-1528.

• Citation: 541 S.E.2d 191,141 NC App. 262
• Decision Date: 29 December 2000
• Docket Number: No. COA99-1528.
• Parties: Bernice B. PRINCE, as Guardian Ad Litem for Brittany Hinson, a Minor Child and as Personal Representative for Joshua Hinson, Deceased, Plaintiff, v. O. Richard WRIGHT, Jr., Michael Kent Jones, Wall Street Investment Corporation, and United States Fidelity and Guaranty Company, Defendants.
• Court: Court of Appeal of North Carolina (US)

541 S.E.2d 191

141 NC App. 262

Bernice B. PRINCE, as Guardian Ad Litem for Brittany Hinson, a Minor Child and as Personal Representative for Joshua Hinson, Deceased, Plaintiff, v. O. Richard WRIGHT, Jr., Michael Kent Jones, Wall Street Investment Corporation, and United States Fidelity and Guaranty Company, Defendants.

No. COA99-1528.

Court of Appeals of North Carolina.

December 29, 2000.

Kathleen Shannon Glancy, and Patterson, Harkavy & Lawrence, L.L.P., by Martha A. Geer, Wilmington, for plaintiff-appellant.

Crossley, McIntosh, Prior & Collier, by Clay A. Collier and Samuel H. MacRae, Wilmington, for defendant-appellees O. Richard Wright, Jr., Michael Kent Jones, and Wall Street Investment Company.

Hedrick & Blackwell, L.L.P., by Jeffrey H. Blackwell, Wilmington, for defendant-appellee United States Fidelity and Guaranty Company.

MARTIN, Judge.

On 1 May 1996, Rodney Strickland (Mr. Strickland) entered into a residential lease agreement with Wall Street Investment Corporation, which was co-owned by O. Richard Wright and Michael Kent Jones, (defendant-landlords). Mr. Strickland moved into the house with Terri Strickland (Ms. Strickland) and her two children, Brittany and Joshua Hinson. On 5 September 1996, Hurricane Fran caused significant damage to the roof which resulted in water leaks. Three days later, a heavy rainstorm caused further water damage. Mr. Strickland notified defendant-landlords of the damage to the house on 13 September 1996. On 16 October 1996, defendant United States Fidelity and Guaranty Company (USF & G), which insured the property for defendant-landlords, undertook to inspect the house and, according to the complaint, claimed to conduct a thorough investigation. After the inspection, however, no repairs were made, nor were the tenants warned of any dangerous conditions on the premises. Four days following the inspection, on 20 October 1996, a fire broke out in the house, killing seventeen-month-old Joshua and injuring Brittany. At the time of the fire, no smoke detectors had been installed in the rental house. On 21 October 1996, USF & G caused to be prepared through NEMAX Claims Services an "Origin & Cause Investigation" report. Bernice Prince (plaintiff), the guardian ad litem for Brittany and the personal representative for the estate of Joshua, alleges that USF & G intentionally or negligently misrepresented or concealed facts and evidence regarding the fire in this report. Ms. Strickland was subsequently arrested and charged with the murder of her son, the attempted murder of her daughter, and first-degree arson; as a result of these charges, Brittany was taken from her mother and placed with the Department of Social Services. The charges were later dropped, and Brittany was returned to her mother. Finally, on 16 October 1998, Ms. Strickland filed an action on behalf of herself and her children against defendants; she subsequently filed a voluntary dismissal and resigned as guardian ad litem for Brittany and as personal representative for Joshua's estate. On 8 February 1999, plaintiff filed a First Amended Complaint representing Brittany Hinson and the estate of Joshua Hinson. In May 1999, the trial judge granted defendants' motions to dismiss. Plaintiff appeals.

We first note that plaintiff has appealed from an interlocutory order. The trial court's order dismisses all claims against defendant USF & G and some but not all claims against defendant-landlords. Further, there is no certification in the order that there is "no just reason for delay" which would facilitate an immediate appeal. N.C. Gen.Stat. § 1A-1, Rule 54(b). Generally, no immediate appeal lies from an interlocutory order. Godley Auction Co. v. Myers, 40 N.C.App. 570, 253 S.E.2d 362 (1979). However, when the order appealed from affects a substantial right, a party has a right to an immediate appeal. N.C. Gen.Stat. § 1-277(a); 7A-27(d)(1). An interlocutory order affects a substantial right when the order "deprive[s] the appealing party of a substantial right which will be lost if the order is not reviewed before a final judgment is entered." Cook v. Bankers Life & Cos. Co., 329 N.C. 488, 491, 406 S.E.2d 848, 850 (1991) (citation omitted). In Driver v. Burlington Aviation, Inc., this Court held that the trial court's dismissal of plaintiff's claims against one defendant affected "a substantial right to have determined in a single proceeding whether plaintiffs have been damaged by the actions of one, some or all defendants where their claims arise upon the same series of transactions." 110 N.C.App. 519, 524, 430 S.E.2d 476, 480 (1993) (citation omitted). Similarly, in this case, plaintiff seeks relief against multiple defendants based on negligence, violation of the statutory duty of a landlord to repair premises, unfair and deceptive trade practices, and wrongful death, all arising from the single occurrence of a fire in a rental home. Plaintiff has the right to have all her claims adjudicated in a single proceeding. We therefore consider plaintiff's appeal.

I.

Plaintiff first assigns error to the trial court's grant of USF & G's motion to dismiss plaintiff's negligence claim. Plaintiff alleges that USF & G assumed responsibility for inspecting the home for hazards and thus violated a duty of care owed to plaintiff by failing to warn the family that a dangerous condition existed on the premises.

In reviewing a trial court's dismissal pursuant to N.C.R. Civ.P. 12(b)(6), "[t]he question for the court is whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory, whether properly labeled or not." Miller v. Nationwide Mutual Ins. Co., 112 N.C.App. 295, 300, 435 S.E.2d 537, 541 (1993) (citation omitted), disc. review denied, 335 N.C. 770, 442 S.E.2d 519 (1994). Under this rule, a claim is properly dismissed "`if no law exists to support the claim made, if sufficient facts to make out a good claim are absent, or if facts are disclosed which will necessarily defeat the claim.'" Claggett v. Wake Forest University, 126 N.C.App. 602, 608, 486 S.E.2d 443, 446 (1997) (citation omitted). In actions for negligence, the plaintiff must allege that the defendant breached a duty owed the plaintiff, and that this breach caused actual injury to the plaintiff. Davis v. North Carolina Dept. of Human Resources, 121 N.C.App. 105, 465 S.E.2d 2 (1995). Negligence "`presupposes the existence of a legal relationship between the parties by which the injured party is owed a duty which either arises out of a contract or by operation of law.'" Sinning v. Clark, 119 N.C.App. 515, 518, 459 S.E.2d 71, 73, disc. review denied, 342 N.C. 194, 463 S.E.2d 242 (1995) (citation omitted). "If there is no duty, there can be no liability." Id. (citation omitted).

In Olympic Products Co. v. Roof Systems, Inc., 88 N.C.App. 315, 363 S.E.2d 367, disc. review denied, 321 N.C. 744, 366 S.E.2d 862 (1988), this Court held that privity of contract is not required to recover against a person "who negligently performs services for another and thus injures a third party." Id. at 322, 363 S.E.2d at 371-72. In Olympic Products, the plaintiff entered into a contract with Roof Systems to install a roof. Roof Systems then entered into a contract with manufacturer Carlisle to install a "Carlisle" roof. Carlisle, in its contract with Roof Systems, required that the installer comply with all Carlisle specifications; further, Carlisle committed itself to inspect the roof to ensure that the installer adhered to all necessary specifications and procedures. Shortly after the job was completed, the roof collapsed. Under these facts, this Court held that Carlisle owed a duty to the property owner to use reasonable care. Id. at 324-25, 363 S.E.2d at 373.

"[U]nder certain circumstances, one who undertakes to render services to another which he should recognize as necessary for the protection of a third person, or his property, is subject to liability to the third person for injuries resulting from his failure to exercise reasonable care in such undertaking."

Id. at 323, 363 S.E.2d at 372 (quoting Quail Hollow East Condominium Ass'n v. Donald J. Scholz Co., 47 N.C.App. 518, 522, 268 S.E.2d 12, 15, disc. review denied, 301 N.C. 527, 273 S.E.2d 454 (1980)).

This duty to protect third parties from harm arises under circumstances where the party is in a position so that "anyone of ordinary sense who thinks will at once recognize that if he does not use ordinary care and skill in his own conduct with regard to those circumstances, he will cause danger of injury to the person or property of the other."

Id. (quoting Davidson & Jones, Inc. v. County of New Hanover, 41 N.C.App. 661, 666, 255 S.E.2d 580, 584, disc. review denied, 298 N.C. 295, 259 S.E.2d 911 (1979)).

In the case sub judice, USF & G contracted to provide insurance coverage for defendant-landlords. In her complaint, plaintiff alleges that USF & G, on 16 October 1996, expressly undertook to conduct an inspection "for the purpose of detecting and detailing the suitability of the house for residential purposes, including but not limited to, damage or potential damage to the electrical system due to the presence of wind driven water or moisture." During this inspection, the complaint alleges that Ms. Strickland fully cooperated with USF & G and "requested notice of any dangerous conditions discovered as a result of said inspection." The complaint alleges that plaintiff "relied upon USF & G's express undertaking of the inspection to warn them of any dangerous conditions, including fire hazards, as a result of the presence of moisture and wind driven water and possible damage to the electrical system." Finally, plaintiff alleges that USF & G failed to warn the residents of the potential fire hazard created by the water damage to the electrical wiring. Taking these factual allegations in plaintiff's complaint as...