Stanford v. Owens
| Decision Date | 06 May 1980 |
| Docket Number | No. 7921SC915,7921SC915 |
| Citation | 46 N.C.App. 388,265 S.E.2d 617 |
| Court | North Carolina Court of Appeals |
| Parties | T. C. STANFORD and wife, Phyllis A. Stanford and Silas Creek Station, Inc. v. Edward P. OWENS and wife, Nancy P. Owens, J. R. Yarbrough, Suzanna R. Gwyn, Coleman Engineering Laboratories, Inc., and Allen G. Mills. |
White & Crumpler by Harrell Powell, Jr., G. Edgar, Parker and Edward L. Powell, Winston-Salem, for plaintiffs-appellants.
Hatfield & Allman by Weston P. Hatfield, Michael D. West, and C. Edwin Allman III, Winston-Salem, for defendants-appellees Edward P. Owens, Nancy P. Owens, J. R. Yarbrough and Suzanna R. Gwyn.
Hutchins, Tyndall, Bell, Davis & Pitt by Richard Tyndall, Winston-Salem, for defendant-appellee Coleman Engineering Laboratories, Inc.
We are asked on this appeal to determine whether the trial court correctly decided A complaint may be dismissed on a Rule 12(b)(6) motion if it is clearly without merit. This lack of merit may consist of either an absence of law to support a claim of the type asserted, an absence of facts to make a good claim, or the disclosure of a fact which will necessarily defeat the claim. Hodges v. Wellons, 9 N.C.App. 152, 175 S.E.2d 690, cert. denied, 277 N.C. 251 (1970). The allegations of the complaint are to be taken as true on the motion to dismiss. Smith v. Ford Motor Co., 289 N.C. 71, 221 S.E.2d 282 (1976). With these familiar principles in mind, we review the seven claims of relief seriatim.
the Rule 12(b)(6) motions in defendants' [46 N.C.App. 391] favor and correctly denied plaintiffs' motion to amend. The court dismissed seven of the claims of plaintiffs' complaint for failure to state a claim upon which relief can be granted. For the following reasons we conclude that the court was without error in dismissing the first, third and seventh claims and in denying plaintiffs' motion to amend. We think, however, the court erred in dismissing the second, fourth, fifth and sixth claims.
Plaintiffs Stanford bring this claim against the individual defendants from whom they purchased the property. Pertinent allegations of the claim follow:
V. . . . During the winter of 1975 defendants Yarborough and Gwyn informed plaintiffs Stanford that they had a tract on Silas Creek Parkway that was suitable for a restaurant building of the type located on the first tract purchased from defendants, Yarborough and Gwyn. Defendants, Yarborough and Gwyn then showed the plaintiffs the tract described in Exhibit B, that tract being located with the boundaries of Exhibit A. The defendants, Yarborough, Gwyn and Owens represented that a portion of the lot described in Exhibit B had been filled, but the fill was of proper composition and compaction to support a restaurant building and that they would furnish proof of these facts. They further represented the fill was far enough back on the lot that none of the restaurant should be located on the filled portion.
VI. At all times prior to the purchase, defendants, Yarborough, Gwyn and Owens knew that plaintiffs, Stanford were purchasing this tract for purpose of constructing a restaurant of the type constructed on the site previously purchased from defendants Yarborough and Gwyn. Defendants Yarborough, Gwyn and Owens made numerous representations that the land was fit for plaintiffs, Stanford's intended use and purpose. In reliance on these warranties and representations, plaintiffs Stanford purchased that tract described in Exhibit B from defendants by deed from defendants, Owens.
VII. That shortly after purchasing the tract described in Exhibit B, but before construction commenced, defendants, Yarborough, Gwyn and Owens furnished to plaintiffs Stanford as further evidence that the soil would be adequate support for the purposed building, a report from Coleman Engineering Laboratories, Inc. (Exhibit C). Said report disclosed that the soil located on the tract was of sufficient soil bearing qualities to support a building of the type that plaintiffs Stanford proposed to construct. That at the time of the furnishing of the said report, the defendants, Yarborough, Gwyn and Owens knew that the plaintiffs were going to construct a restaurant upon the said premises and knew that the plaintiffs would act in reliance upon the said report in constructing a restaurant upon the said premises and in fact, the plaintiffs did act in reliance upon the furnishing of the said report and did commence the construction of the restaurant as hereinabove set out.
Plaintiffs argue in their brief that this portion of their complaint states a valid claim for breach of express warranty. They recognized that the warranty provisions of the Uniform Commercial Code do not apply because the sale involved real property, not goods. They seek, however Plaintiffs contend that they "clearly allege the making of an express warranty," pointing to the following excerpts from the complaint:
to utilize the provisions of N.C.G.S. 25-1-103, that, as they state, "supplemental principles of law are not displaced by the enactment of the Code," and maintain that application of general warranty principles is authorized by this statute. The cases they cite, however, involve sales of goods.
Defendants . . . informed plaintiffs Stanford that they had a tract on Silas Creek Parkway that was suitable for a restaurant building of the type located on the first tract purchased from defendants.
Defendants . . . represented that a portion of the lot . . . had been filled, but the fill was of proper composition and compaction to support a restaurant building.
Defendants represented the fill was far enough back on the lot that none of the restaurant should be located on the filled portion.
Defendants . . . made numerous representations that the land was fit for plaintiffs' Stanford intended use and purpose.
We, however, have concluded that these alleged representations amount to nothing more than the expression of an opinion on the part of defendants. They do not rise to the level of "affirmation of fact or promise" required for the creation of an express warranty.
Assertions concerning the value of property which is the subject of a contract of sale, or in regard to its qualities and characteristics, are the usual and ordinary means adopted by sellers to obtain a high price, and are always understood as affording to buyers no ground for omitting to make inquiries for the purpose of ascertaining the real condition of the property. Affirmations concerning the value of land or its adaptation to a particular mode of culture or the capacity of the soil to produce crops or support cattle are, after all, only expressions of opinion or estimates founded on judgment, about which honest men might well differ materially.
Williamson v. Holt, 147 N.C. 515, 522, 61 S.E. 384, 387 (1908).
We also take note that neither could a claim for breach of an implied warranty succeed under this fact situation, because to date this right of action exists only in the sale of a new residential dwelling to a consumer-vendee. See Hartley v. Ballou, 286 N.C. 51, 209 S.E.2d 776 (1974).
Defendants, according to their brief, initially believed this first claim was premised on fraud. Even though plaintiffs do not presently argue fraud, if the complaint sufficiently alleges fraud it should not be dismissed. The necessary elements of fraud are well recognized. "To constitute fraud, there must be false representation, known to be false, or made with reckless indifference as to its truth, and it must be made with intent to deceive." Myrtle Apartments v. Casualty Co., 258 N.C. 49, 52, 127 S.E.2d 759, 761 (1962). The test for sufficiency of pleading fraud is the following: "A pleading setting up fraud must allege the facts relied upon to constitute fraud, and that the alleged false representation was made with intent to deceive plaintiff, or must allege facts from which such intent can be legitimately inferred." Calloway v. Wyatt, 246 N.C. 129, 133, 97 S.E.2d 881, 884 (1957). We think plaintiffs' complaint does not meet this standard. It lacks the requisite allegation or inference that defendants made the false representation knowing it to be false or with reckless indifference as to its truth. To the contrary, plaintiffs alleged that defendants represented they would furnish proof of the fact that the "fill was of proper composition and compaction to support a restaurant building."
The trial court's decision to dismiss the first claim is affirmed.
Plaintiffs Stanford bring this claim against the same individual defendants X. That defendants Yarborough, Gwyn and Owens by their acts of filling the land knew or should have known of its ability to support a building of the type plaintiffs Stanford would place upon it. That because of this knowledge and their knowledge of the type of building the plaintiffs Stanford would construct, defendants Yarborough, Gwyn and Owens are guilty of negligently misrepresenting to plaintiffs Stanford that the land was fit for the purpose intended. That as a consequence of this negligent misrepresentation plaintiffs Stanford have suffered the following damages:
they argue that a valid claim is stated based upon negligent misrepresentation. The pertinent allegations are as follows:
(a) The sum of $53,775.00, representing funds already expended to halt the cracking.
(b) The sum of $340,000.00 representing the difference in the fair market value of the plaintiffs' land and building as it had been represented and warranted by the defendants, Owens, Yarborough and Gwyn, and its present fair market value.
We hold the trial court erred in dismissing this claim. North Carolina now expressly recognizes a cause of action in negligence based on negligent misrepresentation. See Davidson and Jones, Inc. v. County of New Hanover, 41 N.C.App. 661, 255 S.E.2d 580, disc. rev. denied, 298 N.C. 295 (1979), which found...
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