Warfield v. Hicks
| Decision Date | 02 August 1988 |
| Docket Number | No. 8710SC970,8710SC970 |
| Citation | 91 N.C.App. 1,370 S.E.2d 689 |
| Court | North Carolina Court of Appeals |
| Parties | Louis R. WARFIELD and Elizabeth G. Warfield v. Clifton HICKS, Individually, and Clifton Hicks Builders, Incorporated. |
Barringer, Allen & Pinnix by William D. Harazin and C. Lynn Calder, Raleigh, for plaintiffs-appellees.
Kirk, Gay, Kirk, Gwynn & Howell by Philip G. Kirk and Joseph T. Howell, Wendell, for defendants-appellants.
This action arises from a contract for construction of a custom home. Plaintiffs, Louis R. and Elizabeth G. Warfield, filed suit against Clifton Hicks Builders, Incorporated (CHB) and Clifton Hicks individually, seeking compensatory and punitive damages based on claims of breach of contract, breach of express and implied warranties, misrepresentation, fraud, and negligence. The Warfields also alleged that certain conduct of defendants constituted unfair and deceptive trade practices or acts within the meaning of N.C.Gen.Stat. Sec. 75-1.1, entitling them to treble damages and attorneys fees. From a judgment awarding plaintiffs $27,200, defendants appeal. We reverse and remand for a new trial.
The evidence at trial showed that in January 1983, defendant Hicks, president of CHB, quoted to Mr. and Mrs. Warfield a price of $208,000 for the construction of a house, based on a set of preliminary blueprints, photographs, and a handwritten "spec" sheet provided by the Warfields. On 8 February 1983, the parties executed an Offer to Purchase and Contract which included the lot and construction of the house for $208,000. On 10 February, before the preparation of final plans by an architect was completed, the parties executed a standard form construction contract which included specifications for various materials to be used in construction and which provided that any changes would be accompanied by a change order signed by both parties.
During construction, disputes arose between the builder and the Warfields over numerous aspects of the building. Various changes instigated by either Mr. Hicks or the Warfields were evidenced by change orders which reflected either the increase or reduction in cost to the Warfields resulting from each change. On 8 September 1983, before construction was fully completed, a closing on the house was held at a final price of $214,837.54. At that time, CHB, through Mr. Hicks, executed a one-year express warranty on the construction of the house and an agreement to complete within thirty days a "punchlist" of items requiring completion or repairs.
The Warfields contested some of the change orders at trial, contending that certain items were included in the original plans and should not have been denominated "extras," and that Mr. Warfield felt coerced into signing the orders by financial pressures and fear of delays in construction. They also introduced evidence that some of the punchlist items were never completed and that various other defects or problems discovered during the warranty period were not remedied by the builder, despite his representations that they would be.
One major dispute between the parties concerned the installation of decorative beams in the kitchen and family room. The Warfields presented evidence that Mr. Hicks refused to install "heavy hand-hewn beams" as called for in the original specifications but offered to substitute old beams from a tobacco barn which were available from George Butts in Fuquay-Varina. At Hicks' suggestion, Mr. Warfield viewed the beams and was satisfied with their appearance but was told by Mr. Butts that they were full of worm holes and could not be used for structural purposes, and that there "might be a couple of beetles in the beams." When Mr. Warfield questioned Mr. Hicks about whether the beetles would be a problem, Mr. Hicks responded With Mr. Warfield's approval, Mr. Hicks personally installed the beams. Thereafter, the Warfields experienced problems with sawdust and a scratching noise, and learned, in the spring of 1984, that the problems were due to an active infestation of the beams by old house bores and powder post beetles. They also learned that the house could not pass a pest inspection and that, as a consequence, it potentially would be difficult for them or future buyers to obtain financing on the house.
Mr. Hicks testified that he told the Warfields early in their negotiations that he could not provide hand-hewn beams, that he was unaware until the spring of 1984 that the old beams used were infested with wood-boring insects, and that at that time he inquired of a college professor what problems might arise from the infestation. Based on what he was told, he informed Mr. Warfield in late spring or early summer that the beetles posed no threat to the house's structural integrity and that the only bother to him would be the possibility of some dust.
Evidence was also offered by the Warfields that an inspection of their home by an expert in July of 1986 revealed numerous items which were incomplete, below normal construction standards, or in violation of the building code. At least one witness testified concerning the costs of remedying the defective conditions, and a December 1986 appraisal showed a $35,000 lessened value of the house due to defects existing at that time.
At the conclusion of the plaintiffs' evidence, the trial court granted defendant Hicks' motion for a directed verdict on all issues except fraud, misrepresentation, and unfair and deceptive trade practices. The court denied motions for directed verdict by the corporation and by the plaintiffs made at the close of the plaintiffs' evidence and renewed at the conclusion of all the evidence.
Sixteen issues were submitted to the jury and were answered as follows:
1) Did the defendant Clifton Hicks Builders, Inc. breach the contract between it and the plaintiffs?
2) In what amount, if any, have the plaintiffs been damaged by the failure of the defendant Clifton Hicks Builders, Inc. to perform fully?
3) Did the defendant Clifton Hicks Builders, Inc. breach the express warranty given to the plaintiffs?
4) In what amount, if any, have the plaintiffs been damaged by the breach of the express warranty?
5) Did the defendant Clifton Hicks Builders Inc. construct the plaintiffs' dwelling in a negligent manner?
6) In what amount, if any, have the plaintiffs been damaged by the negligence of the defendant Clifton Hicks Builders, Inc.?
7) Did the defendant Clifton Hicks Builders, Inc. breach an implied warranty of workmanlike quality to the plaintiffs regarding the new dwelling?
8) In what amount, if any, have the plaintiffs been damaged by the breach of an implied warranty of workmanlike quality by the defendant Clifton Hicks Builders, Inc.?
9) Did the defendants Clifton Hicks and Clifton Hicks Builders, Inc. fraudulently misrepresent that the wood beams installed in the plaintiffs' dwelling would present no problem to the plaintiffs?
10) What amount, if any, have the plaintiffs been damaged by the fraudulent misrepresentation of the defendants Clifton Hicks and Clifton Hicks Builders, Inc.?
11) In your discretion, what amount of punitive damages, if any, should be awarded to the plaintiffs?
12) Did the defendants Clifton Hicks and Clifton Hicks Builders, Inc. represent to the plaintiffs that the wood beams would present no greater problem than a little saw dust, and the defendants knew or should have known that the beams were infested with beetles and would not pass a pest inspection thus causing great difficulty to the plaintiffs in selling or refinancing the dwelling?
13) Was the defendants Clifton Hicks and Clifton Hicks Builders, Inc. conduct in commerce or did it affect commerce?
14) Was the defendants Clifton Hicks and Clifton Hicks Builders, Inc. conduct a proximate cause of the plaintiffs' injury?
15) By what amount, if any, have the plaintiffs been injured?
16) What is the amount of damages, if any, due to the plaintiffs without being duplicative?
After the jury returned its verdict, the Warfields moved for judgment notwithstanding the verdict or in the alternative for a new trial, on the damages issue, and defendants moved for a judgment notwithstanding the verdict setting aside Issues Nos. 5, 12, and 15. The trial court denied the motions but set aside the jury's answer to Issue No. 16 as inconsistent with the instructions given. The Court entered judgment against defendants for $2,300 plus $8,300 pursuant to the jury verdict on Issues Nos. 4, 12, 13, 14, and 15; trebled the $8,300 pursuant to N.C.Gen.Stat. Sec. 75-16; and denied attorneys fees.
The issues on appeal relate to the admission of evidence, the jury instructions on damages, and various aspects of the trial court's rulings on motions by both parties for directed verdict and judgment notwithstanding the verdict.
Defendants' first contention--that the trial court erred by denying their motions for directed verdict and for judgment notwithstanding the verdict with respect to the issue of unfair or deceptive trade practices--presents the question whether the evidence, considered in the light most favorable to the plaintiffs, was sufficient to show that the individual and corporate defendants violated N.C.Gen.Stat. Sec. 75-1.1 in their business dealings with the Warfields. See Abernathy v. Ralph Squires Realty Co., 55 N.C.App. 354, 285 S.E.2d 325 (1982). The Warfields maintain that Mr. Hicks' representation to them that the beetle infestation of the ceiling beams would pose no problems other than a little sawdust amounts to an unfair and deceptive act because the statement had the capacity or tendency to deceive.
Although the parties have not raised the question, ...
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