Opinion
No. COA03-786
Filed May 18, 2004 This case not for publication
Appeal by plaintiffs from order entered 9 April 2003 by Judge Ernest B. Fullwood in Craven County Superior Court. Heard in the Court of Appeals 4 March 2004.
Henderson, Baxter, Taylor Gatchel, P.A., by David S. Henderson, for plaintiffs-appellants. Ward and Smith, P.A., by Eric J. Remington and Gary J. Rickner, for defendant-appellee.
Craven County No. 02 CVS 2117.
O. Wesley Hofstad and wife, Virginia C. Hofstad ("plaintiffs"), appeal the granting of a Rule 12(b)(6) motion by Fairfield Resorts, Inc., formerly known as Fairfield Communities, Inc. ("defendant"), to dismiss plaintiffs' complaint alleging defendant's actions constituted an unfair and deceptive trade practice in violation of Chapter 75 of the North Carolina General Statutes. We reverse and remand
In their complaint, plaintiffs allege the following. Defendant, a Delaware corporation with an office and place of business in Orlando, Florida, sought to sell lots located in Lake Elizabeth, a part of a planned development known as Fairfield Harbor, located in Craven County. Defendant's advertisements for the sale of lots within that development induced plaintiffs, residents of Pennsylvania, to visit the development and speak with defendant's representative. Defendant's representative showed plaintiffs certain property located on a waterfront in a heavily wooded area, which plaintiffs subsequently decided to purchase.
Since plaintiffs returned to their home in Pennsylvania, defendant mailed plaintiffs their sales contracts entitled "Real Estate Contract and Promissory Note" (the "contracts") and dated 20 May 1999. Plaintiffs were listed as the purchasers of Lots 1 and 3 in Lake Elizabeth as shown in the Craven County Registry. Despite the fact that defendant had recorded the final plat of the lots on 14 May 1999 after plaintiffs' viewing of Lake Elizabeth, defendant did not include a copy of the plat at the time they mailed plaintiffs the contracts. Moreover, prior to plaintiffs' execution of the contracts to purchase the lots on or about 24 May 1999, defendant never informed plaintiffs that Lots 1 and 3 as referenced in the contracts were neither waterfront nor heavily wooded and, in fact, were not the same lots defendant's representative had shown them and they desired to buy when they visited Lake Elizabeth.
After executing the sales contract, plaintiffs learned the lots they purchased differed from those for which they believed they had bargained. Plaintiffs filed suit against defendant for, in pertinent part, unfair and deceptive trade practices. The trialcourt dismissed plaintiffs' complaint under Rule 12(b)(6) holding that the complaint failed to state a claim upon which relief could be granted. Plaintiffs appeal.
Because plaintiffs appeal from a Rule 12(b)(6) dismissal, we treat all of the factual allegations contained in their complaint as true. Shell Island Homeowners Ass'n v. Tomlinson, 134 N.C. App. 217, 225, 517 S.E.2d 406, 413 (1999). A Rule 12(b)(6) dismissal is improper where, "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." Id. (citation omitted). Dismissal is only appropriate under Rule 12(b)(6) where no legal basis supports the claim, insufficient facts are included to support the claim, or facts provided necessarily defeat the claim. Id.
Plaintiffs' complaint accuses defendant of unfair and deceptive trade practices under N.C. Gen. Stat. § 75-1.1 and -16 (2003). North Carolina General Statutes § 75-1.1 "was not meant to encompass all business activities or all wrongdoings in a business setting but `was adopted to ensure that the original intent of the statute . . . was effectuated.'" Wilson v. Blue Ridge Elec. Membership Corp., 157 N.C. App. 355, 357, 578 S.E.2d 692, 694 (2003) (quoting Threatt v. Hiers, 76 N.C. App. 521, 523, 333 S.E.2d 772, 773 (1985)). The initial purpose of the statute was stated as follows:
To provide civil legal means to maintain ethical standards of dealings between persons engaged in business and between persons engaged in business and the consuming public within this State to the end that good faith and fair dealings between buyers and sellers at all level[s] of commerce be had in this State.
Bhatti v. Buckland, 328 N.C. 240, 245, 400 S.E.2d 440, 443 (1991) (citation omitted). To establish a claim for unfair and deceptive trade practices, plaintiffs must show "(1) that defendants committed an unfair or deceptive act or practice; (2) in or affecting commerce; and (3) plaintiffs were injured thereby." Edwards v. West, 128 N.C. App. 570, 574, 495 S.E.2d 920, 923 (1998). "[A] trade practice is unfair if it is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers." Id. (citation omitted). Further, a practice is deceptive "if it has the capacity or tendency to deceive." Id. (citation omitted). We also point out that this claim is one in tort and not on the contract; therefore, the rule that all prior negotiations and representations are merged into the writing does not apply, and we do not consider those provisions in the contracts to determine the issues on appeal. See Marshall v. Keaveny, 38 N.C. App. 644, 647, 248 S.E.2d 750, 753 (1978); Patrick K. Hetrick James B. McLaughlin, Jr., Webster's Real Estate Law in North Carolina § 9-15 (5th ed. 1999).
Taking all of plaintiffs' allegations as true, the allegations are sufficient to survive a Rule 12(b)(6) motion. Plaintiffs have alleged defendant engaged in actions tending to mislead them into thinking they were receiving two heavily wooded, waterfront lots. Plaintiffs alleged that defendant showed plaintiffs certain property located in Lake Elizabeth and, when plaintiffs desired to purchase that property, defendant prepared a sales contract conveying property other than that for which plaintiffs believed they had bargained. Additionally, defendant did not give plaintiffs a plat depicting the lots at the time of the contract signing despite the fact that the plat had been registered just days prior to the contract execution. Further, plaintiffs acted on these representations and incurred actual injury, including the "purchase price plus interest and closing costs . . . [and] loss of the use of specific and unique property[.]" Edwards, 128 N.C. App. at 575, 495 S.E.2d at 924. We hold that plaintiffs have alleged enough to survive defendant's motion to dismiss this claim.
Neither do we find defendant's reliance on the recordation of the final plat determinative. While not identical, the analysis set forth by this Court in Brotherton v. Point on Norman, LLC, 156 N.C. App. 577, 577 S.E.2d 361, disc. rev. denied, 357 N.C. 249, 582 S.E.2d 28 (2003) is sufficiently similar to this case to provide instruction. In Brotherton, this Court found a directed verdict on the issue of unfair and deceptive trade practices in favor of the defendant inappropriate where a plat of the property being purchased had been recorded prior to the entering of the contract and the lot conveyed pursuant to that plat differed from that for which the plaintiffs believed they had bargained. Id. Plaintiffs' expectations in Brotherton as to the lot they were receiving were based on the lot's boundaries as provided by the stakes designating the lot. We found such evidence indicated that the defendant "misled plaintiffs into thinking they were receiving" something different than what they actually purchased, and reversed the trial court's grant of a directed verdict for the defendant. Id., 156 N.C. App. at 582, 577 S.E.2d at 364.
Plaintiffs need not show a deliberate act of deceit or bad faith to prevail under Chapter 75. Edwards, 128 N.C. App. at 574, 495 S.E.2d at 924. However, plaintiffs must show that the act "possessed the tendency or capacity to mislead or created the likelihood of deception." Id., 128 N.C. App. at 575, 495 S.E.2d at 924 (citation omitted). In light of plaintiffs' allegations, we hold that they have presented sufficient evidence that defendant's conduct may have been deceptive; therefore, plaintiffs' Chapter 75 claim against defendant is not subject to dismissal at this stage.
Reversed and remanded.
Judges McGEE and STEELMAN concur.
Report per Rule 30(e).