Quate v. Caudle
Decision Date | 15 August 1989 |
Docket Number | No. 8821SC981,8821SC981 |
Citation | 95 N.C.App. 80,381 S.E.2d 842 |
Parties | Charles QUATE and wife, Patsy Quate v. Bennie G. CAUDLE d/b/a Ben Caudle Construction Company. |
Court | North Carolina Court of Appeals |
Roy G. Hall, Jr., Winston-Salem, for plaintiffs-appellees, cross-appellants.
Finger, Parker & Avram by Raymond A. Parker, II, Jonesville, for defendant-appellant.
During the spring of 1982, defendant represented to plaintiffs that he would build a log home for them at a total cost of $66,300.00. The parties entered into an agreement out of which this action arises for the purchase and complete construction of a log home.
Construction began in June 1982. By early August 1982, the foundation had been poured and the logs had been stacked. The structure, however, lacked a roof, rafters, basement, flooring, insulation, plumbing, electrical and heating systems.
Defendant stopped construction of the log home by 14 August 1982. Plaintiffs had paid approximately $35,645.08 to defendant and his suppliers for the work completed to that point. Plaintiffs were forced to spend an additional $15,727.11 over and above the stipulated contract price of $66,300.00 to have another contractor complete construction.
Plaintiffs instituted this suit against defendant for breach of contract, fraud and unfair and deceptive trade practices. The matter was heard before a referee appointed in accordance with a consent order. The referee found the defendant breached the contract by failing to complete construction of the log home. The referee also found that defendant violated G.S. 75-1.1 when it intentionally underestimated the cost of the project and that "[t]he Plaintiffs were damaged by the Defendant in the amount of Twenty-One Thousand Eight Hundred Seventy-One Dollars and Twenty-Eight Cents ($21,871.28) [$15,727.11 in cost overruns and $6,144.17 in interest to finance the cost overruns] and are further entitled to have the said sum to be trebled pursuant to the provisions of N.C.G.S. Section 75-1.1 et seq."
Judge Rousseau, presiding over the Superior Court of Forsyth County, affirmed the referee's findings in part and modified the findings in part. Judge Rousseau ruled that "[t]he interest expense of $6,144.17 labelled 'cost of financing cost overruns' by the Referee, is not as a matter of law, recoverable and that portion of the Referee's Report is not approved...." Both parties appeal.
Defendant first contends the trial court erred in failing to review the findings of fact and conclusions of law in the report of the referee. We disagree.
Defendant argues G.S. 1A-1, Rule 53(g)(2) requires a review of findings upon objection to the referee's report. The rule states, in pertinent part: G.S. 1A-1, Rule 53(g)(2) (1983). Defendant's reliance upon Rule 53(g)(2) is misplaced.
The unambiguous wording of Rule 53(g)(2) reveals the options available to a judge with respect to a report filed after a hearing. There is nothing in the plain language of the statute from which defendant could infer a mandatory review of the referee's findings of fact and conclusions of law. However, the North Carolina Supreme Court has set forth the duties of a judge when exceptions are taken to a referee's report in Thompson v. Smith, 156 N.C. 345, 72 S.E. 379 (1911). In its decision, the Court held:
When exceptions are taken to a referee's findings of fact and law, it is the duty of the judge to consider the evidence and give his own opinion and conclusion, both upon the facts and the law. He is not permitted to do this in a perfunctory way, but he must deliberate and decide as in other cases--use his own faculties in ascertaining the truth and form his own judgment as to fact and law. This is required not only as a check upon the referee and a safeguard against any possible errors on his part, but because he cannot review the referee's findings in any other way.
Id. at 346, 72 S.E. at 379. (Emphasis original.)
Thompson clearly establishes the duties of a judge in reviewing the referee's findings. However, " '[u]nless the contrary is made to appear, it will be presumed that judicial acts and duties have been duly and regularly performed.' " State v. Johnson, 5 N.C.App. 469, 471, 168 S.E.2d 709, 711 (1969), quoting 1 Strong's N.C. Index 2d, Appeal and Error, sec. 46, p. 191.
Defendant has alleged no facts in support of its contention that the trial judge failed to review the evidence and the referee's findings of fact and law. On the contrary, the record discloses in the judgment and order that
The modification clearly establishes that the presiding judge made a review of the referee's findings. Defendant offers no evidence to support its conclusion that the court failed to review these findings. Rule 53(g)(2) allows the judge to adopt as well as modify or reject the referee's findings. The record reveals that the trial judge acted within the bounds of this rule. G.S. 1A-1, Rule 53(g)(2). Therefore, we find defendant's argument to be without merit.
Defendant next contends that the trial court erred in trebling the damages awarded to plaintiff under G.S. 75-16. G.S. 75-1.1(a) reads: "Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful." When acts are found to be within this section, the resulting damages are entitled to be trebled under G.S. 75-16.
G.S. 75-16 reads:
If any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict.
Defendant cites the case of Stone v. Homes, Inc., 37 N.C.App. 97, 245 S.E.2d 801, disc. rev. denied, 295 N.C. 653, 248 S.E.2d 257 (1978), for the proposition that contract damages cannot be trebled. In Stone, the parties entered into a contract for the purchase of a home under construction. The purchaser discovered defects in workmanship in the house and brought suit for breach of warranty, fraud and unfair trade practices. This Court held, Id. at 106, 245 S.E.2d at 807.
The case sub judice is clearly distinguishable from Stone. There, the breach of warranty claim was the sole factor in determining damages. The court found that there was insufficient evidence to support a claim for fraud. Id. Therefore, there was no foundation upon which to base a claim under Chapter 75. There must be some conduct which is found to be unfair or deceitful to violate Chapter 75-1.1.
In the case sub judice, the record clearly establishes the fraudulent acts performed by defendant in the Memorandum Report of the Referee:
[T]he Defendant made a practice of quoting unrealistically low prices for the cost of erecting a log home so as to entice his customers to purchase his log home packages. The consuming public, including the Plaintiffs, relied upon the Defendant's false or careless assertions and thereby became involved in a painful morass of cost overruns and unexpectedly high cash outlays.
. . . . .
By repeatedly misquoting the cost of constructing log homes to his customers and by failing to fully explain important details to his customers so as to gain sales, the Defendant misled the consuming public. The Defendant was thereby engaging in fraudulent misrepresentations which clearly had an adverse impact on business and commerce.
Defendant's breach of contract coupled with the fraudulent misrepresentation constitute a violation under G.S. 75-1.1.
Defendant also relies upon the case of Marshall v. Miller, 47 N.C.App. 530, 268 S.E.2d 97 (1980), modified, 302 N.C. 539, 276 S.E.2d 397 (1981). An erroneous jury instruction permitted the jury to assess damages against the defendant twice for the same default. Once trebled, the effect was a quadrupling of damages. To prevent this, the court held:
Where the same course of conduct gives rise to a traditionally recognized cause of action, as, for example, an action for breach of contract, and as well gives rise to a cause of action for violation of G.S. 75-1.1, damages may be recovered either for the breach of contract, or for violation of G.S. 75-1.1, but not for both.
Id. at 542, 268 S.E.2d at 103.
There is no possibility of such an excessive damage award in the case at bar. As plaintiff maintains, the fraudulent misrepresentation by defendant directly and proximately caused the expenditure of an additional $15,727.11. The damage award below reflects the amount of their injury as a result of the Chapter 75-1.1 violation. Thus, the damage verdict was properly trebled in accordance with G.S. 75-16.
On cross-appeal, plaintiff argues that the lower court erred in ruling, as a matter of law, that they could not recover, nor treble, the $6,144.17 cost of borrowing extra funds to complete their log home. We agree.
Plaintiff relies upon Bernard v. Central Carolina Truck Sales, 68 N.C.App. 228, 314 S.E.2d 582, disc. rev. denied, 311 N.C. 751, 321 S.E.2d 126 (1984), to...
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