Opinion
No. COA02-1629
Filed 6 January 2004 This case not for publication
Appeal by plaintiff from judgments entered 23 July 2003 and 26 July 2002 by Judge Ronald L. Stephens in Durham County Superior Court. Heard in the Court of Appeals 17 November 2003.
Keith A. Bishop, PLLC, by Daron D. Satterfield, for plaintiff-appellant. Forman, Rossabi, Black, P.A., by William F. Patterson, Jr., for defendant-appellee American Honda Finance Corporation. Cranfill, Sumner Hartzog, L.L.P., by H. Vance Barnette, III, for defendant-appellee Chapel Hill Auto Investors, Inc.
Durham County, No. 99 CVS 4983.
This appeal arises from a civil action on an automobile lease contract. Plaintiff appeals from summary judgment entered in favor of defendants American Honda Finance Corporation and Chapel Hill Auto Investors, Inc.
The record tends to establish the following: On 26 April 1996, plaintiff entered into a closed end vehicle lease with PerformanceChevrolet, BMW, Subaru ("Performance") in Chapel Hill, North Carolina. The subject of the lease was a 1996 Acura 2.5TL automobile. The terms of the lease required plaintiff to make monthly lease payments of $537.39 for 30 months, ending on 1 November 1998. The lease also gave plaintiff the option to purchase the car at the end of the lease period, providing in pertinent part:
You have an option to purchase the vehicle at the scheduled end of lease term from Lessor on an AS-IS, WHERE-IS basis if you are not in default under the Lease. To do so, you must notify Lessor in writing 30 days prior to the end of lease term.
The purchase price of $18,870.35, which was the same as the projected lease-end value of the car, was based upon a lease-end mileage allowance of 37,500 miles. Plaintiff signed the lease contract and took possession of the car.
Performance subsequently attempted to sell the lease contract to American Honda Finance Corporation ("Honda"), pursuant to the terms of a retail financing agreement between Performance and Honda. When the lease was submitted to Honda, Honda rejected the lease based on a miscalculation of the lease-end value and mileage terms. According to Honda, in order to maintain a lease-end value of $18,870.35, the lease-end mileage could not exceed 30,000 miles. Consequently, Performance contacted plaintiff on or about 25 June 1996. Performance informed plaintiff of the error and asked plaintiff to sign a new lease contract with a 30,000 mile mileage allowance. Before signing the new contract, plaintiff had his lawyer contact Performance. Plaintiff and his lawyer subsequentlynegotiated the terms of the new lease with Performance via a telephone conference call. When, at plaintiff's request, Performance agreed to the original lease-end mileage allowance of 37,500 miles, plaintiff returned to Performance and signed a new lease contract. With the exception of the lease-end value/purchase price of $17,942.30, the new lease was identical to the first lease.
Plaintiff was consistently late in making the scheduled lease payments. On three separate occasions, after plaintiff became more than 60 days delinquent, Honda declared plaintiff to be in default and initiated repossession proceedings. Plaintiff avoided repossession twice by curing the default. However, in April 1998, Honda terminated the lease and authorized repossession of the car. In an effort to delay repossession, plaintiff painted the car purple and took it to New Jersey. Meanwhile, plaintiff continued trying to negotiate a repayment plan with Honda in order to avoid repossession. Despite receiving numerous demands from Honda, plaintiff refused to surrender the car or to disclose its location.
In August 1998, Honda contracted with a Bellmore, New York company, Night Moves Recovery, Inc. ("Night Moves"), to locate and repossess the car. Although Night Moves was successful in locating the car, when its agents tried to repossess it, plaintiff resisted. Plaintiff engaged in a physical altercation with the tow truck operator, removed the car from the tow truck and drove it away. Plaintiff refused to return the car to Honda after this incident. On 28 October 1998, plaintiff contacted Honda by phone and inquired as to the payoff amount for exercising the lease-end option to purchase. By letter dated 3 November 1998, Honda informed plaintiff that the purchase price would be $19,068.72. This amount was later reduced to $18,891.34, after plaintiff made an additional monthly payment. Disputing the payoff amount, plaintiff made no further payments and refused to return the car to Honda.
On 18 April 1999, Honda filed suit against plaintiff in the Superior Court of Middlesex County, New Jersey, seeking possession of the car. By order entered 4 October 1999, Honda was awarded the right to immediate possession of the car. Plaintiff did not return the car to Honda until 4 January 2000. At the time plaintiff returned the car, there were 45,615 miles on the odometer. After Honda sold the car and credited the net proceeds of $10,427.83 to plaintiff's account, the balance due on plaintiff's account remained $8,463.51.
On 4 November 1999, while still in possession of the car, plaintiff filed this action in Durham County Superior Court alleging fraud, breach of contract, unfair and deceptive trade practices, assault, battery and abuse of process. Performance answered asserting various affirmative defenses and cross-claiming against Honda for contribution and indemnity. Honda answered asserting affirmative defenses, cross-claiming against Performance for contribution and indemnity and counterclaiming against plaintiff for damages and possession. Night Moves filed no answer and did not participate in the action. Discovery commenced on 20 June 2000. Over the next several months, both sides served the other with interrogatories, requests for the production of documents and requests for admissions. Plaintiff was deposed in April 2001 and served a second set of discovery requests on defendants in April 2002. On 9 July 2002, alleging that defendants failed to adequately respond to his second set of discovery requests, plaintiff moved to compel discovery and impose sanctions against defendants pursuant to N.C.R. Civ. P. 37. Honda and Performance moved for summary judgment. By orders entered 23 July 2002 and 26 July 2002, the trial court (1) granted summary judgment on plaintiff's claims in favor of Performance and Honda, and (2) granted summary judgment on Honda's counterclaim for $8,463.51 in favor of Honda. The trial court granted default judgment for plaintiff against Night Moves. Plaintiff appeals from the 23 July 2002 and 26 July 2002 orders.
The sole issue on appeal is whether the trial court erred by granting summary judgment on plaintiff's claims in favor of Performance and Honda. After careful consideration of the record and briefs, we affirm.
Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C.R. Civ. P. 56(c).
A defendant who moves for summary judgment assumes the burden of positively and clearly showing that there is no genuine issue as to any material fact and that he or she is entitled to judgment as a matter of law. "A defendantmay meet this burden by: (1) proving that an essential element of the plaintiff's case is nonexistent, or (2) showing through discovery that the plaintiff cannot produce evidence to support an essential element of his or her claim, or (3) showing that the plaintiff cannot surmount an affirmative defense which would bar the claim."
James v. Clark, 118 N.C. App. 178, 180-81, 454 S.E.2d 826, 828 (1995) (citation omitted), disc. review denied, 340 N.C. 359, 458 S.E.2d 187 (1995).
I.
Plaintiff first contends that defendants failed to show that they were entitled to summary judgment. We disagree. Plaintiff asserted claims for fraud, breach of contract, unfair and deceptive trade practices, assault, battery and abuse of process. We address each claim below.
A. Fraud
Plaintiff's fraud claim is based on allegations that Honda and Performance altered the lease-end value term of the second lease contract without his knowledge, after he signed the contract. Plaintiff further alleges that he was damaged when, due to the discrepancy in the lease-end value, he was unable to secure adequate financing to exercise the lease-end option to purchase. We conclude plaintiff cannot produce evidence of an essential element of this claim.
A claim of actionable fraud consists of the following elements: "(1) False representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage tothe injured party." Ragsdale v. Kennedy, 286 N.C. 130, 138, 209 S.E.2d 494, 500 (1974).
Here, the lease contract provided that plaintiff could only exercise the lease-end option to purchase if he was "not in default" under the terms of the lease. Further, the lease provides that not making payments when due constitutes default and plaintiff admitted, during deposition, that he failed to make several lease payments when they became due. Consequently, it was plaintiff's default under the terms of the lease, and not any conduct on the part of defendants, that resulted in his loss of the lease-end option to purchase. Since plaintiff cannot establish the fifth essential element of fraud, i.e., "resulting in damage to the injured party[,]" defendants are entitled to judgment on this claim as a matter of law.
B. Breach of Contract
Plaintiff's breach of contract claim is based on his contention that once he exercised the lease-end option to purchase, Honda was required to sell the car for the previously agreed upon price of $17,942.30. Plaintiff asserts that Honda breached the terms of their agreement by requiring plaintiff to pay a price of $19,068.72. We conclude that an essential element of this claim is nonexistent.
A claim for breach of contract presupposes the existence of a valid and enforceable contract. "`An option is a contract by which the owner of property agrees with another that he shall have the right to purchase the same at a fixed price within a certaintime.'" Kidd v. Early, 289 N.C. 343, 360, 222 S.E.2d 392, 404 (1976) (quoting Ward v. Albertson, 165 N.C. 218, 221-22, 81 S.E. 168, 169 (1914)). "An option is not a contract to sell, but it is transformed into one upon acceptance by the optionee in accordance with its terms." Id. at 352, 222 S.E.2d at 399. "As master of the offer, the optionor has the right to impose conditions upon the optionee regarding the acceptance of the offer." John N. Hutson, Jr. Scott A. Miskimon, North Carolina Contract Law § 2-27-2(A), at 112 (2001). Options are strictly construed in favor of the optionor; therefore, effective acceptance by the optionee must be in accord with all of the terms specified in the option. Catawba Athletics, Inc. v. Newton Car Wash, Inc., 53 N.C. App. 708, 712, 281 S.E.2d 676, 679 (1981).
Here, the terms of the lease-end option to purchase imposed two conditions on plaintiff: (1) that plaintiff "not [be] in default under the Lease;" and (2) that plaintiff "notify Lessor in writing 30 days prior to the end of the lease term." As we have already noted, plaintiff was in default under the terms of the lease at the time he attempted to exercise the option. Furthermore, plaintiff first notified Honda of his intent to exercise the option by phone on 28 October 1998, less than one week prior to the expiration of the lease term on 1 November 1998. The consequence of plaintiff's failed attempt to exercise the option is that no enforceable contract to sell was ever formed. Because this was an essential element of this claim, we conclude Honda was entitled to judgment as a matter of law.
C. Unfair and Deceptive Trade Practices
Plaintiff's claim for unfair and deceptive trade practices is wholly based on his claim that Performance and Honda committed fraud. Although plaintiff correctly notes that "proof of fraud necessarily constitutes a violation of the statutory prohibition against unfair and deceptive acts," Mapp v. Toyota World, Inc., 81 N.C. App. 421, 425, 344 S.E.2d 297, 300, disc. review denied, 318 N.C. 283, 347 S.E.2d 464 (1986), we have already concluded that summary judgment was appropriately granted for defendant with respect to plaintiff's fraud claim. Accordingly, we conclude this claim fails as a matter of law.
D. Assault and Battery
Plaintiff's claims of assault and battery against Honda are based upon the physical altercation that occurred between plaintiff and Knight Moves' agents during their attempt to repossess the car. Based on the material obtained through discovery, we conclude plaintiff cannot produce evidence of an essential element of this claim.
"As a general rule, `an employer or contractee is not liable for the torts of an independent contractor committed in the performance of the contracted work.'" Jiggetts v. Lancaster, 138 N.C. App. 546, 547-48, 531 S.E.2d 851, 852 (2000) (quoting Page v. Sloan, 12 N.C. App. 433, 439, 183 S.E.2d 813, 817 (1971)).
Whether one is an independent contractor or an employee is a mixed question of law and fact. The factual issue is: What were the terms of the parties' agreement? Whether that agreement establishes a master-servant or employer-independent contractor relationship is ordinarily a question of law. As this Court has stated:
[W]here the facts are undisputed or the evidence is susceptible of only a single inference and a single conclusion, it is a question of law for the court whether one is an employee or an independent contractor, but it is only where a single inference can reasonably be drawn from the evidence that the question of whether one is an employee or an independent contractor becomes one of law for the court.
Yelverton v. Lamm, 94 N.C. App. 536, 538-39, 380 S.E.2d 621, 623 (1989) (quoting Little v. Poole, 11 N.C. App. 597, 600, 182 S.E.2d 206, 208 (1971)) (citation omitted).
Here, plaintiff's own documents indicate that Knight Moves was an independently owned and operated New York corporation that Honda engaged to repossess plaintiff's car. Although Honda provided Night Moves with a copy of its policy requiring compliance with all applicable laws relating to the repossession of collateral, there is nothing in the record that indicates that Honda had any control over the manner in which Night Moves was to effect repossession of the car. On the contrary, the indemnity agreement between Honda and Knight Moves expressly states that Knight Moves was acting "only as an independent contractor and not as [Honda's] agent." We conclude the evidence of record is only susceptible to one conclusion: Knight Moves was acting as an independent contractor. Accordingly, Honda may not be held liable for the conduct of Knight Moves' agents.
E. Abuse of Process
Plaintiff's claim for abuse of process arises from his contention that Honda wrongfully instituted a civil action forpossession of the car when he was not in default. We conclude that an essential element of this claim is nonexistent.
Abuse of process is the malicious misuse or misapplication of legally issued process for a result not lawfully or properly obtainable. Melton v. Rickman, 225 N.C. 700, 703, 36 S.E.2d 276, 278 (1945). "One who uses legal process to compel a person to do some collateral act not within the scope of the process or for the purpose of oppression or annoyance is liable in damages in a common law action for abuse of process." Id.
Apart from plaintiff's unsupported allegations to the contrary, all of the evidence in the record tends to establish that Honda's claim against plaintiff was reasonably grounded in fact and brought for the specific purpose for which it was contemplated. Accordingly, we conclude this claim was without merit.
II.
Plaintiff next contends that his pending Rule 37 motion to compel discovery and impose sanctions precluded the entry of summary judgment. We disagree.
"Ordinarily it is error for a court to hear and rule on a motion for summary judgment when discovery procedures, which might lead to the production of evidence relevant to the motion, are still pending and the party seeking discovery has not been dilatory in doing so." Conover v. Newton, 297 N.C. 506, 512, 256 S.E.2d 216, 220 (1979). However, "[t]he trial court is not barred in every case from granting summary judgment before discovery is completed." Vaglio v. Town Campus International, Inc., 71 N.C. App. 250, 255,322 S.E.2d 3, 6 (1984). "The rule that summary judgment should not be granted while discovery is pending, presupposes that any information gleaned will be useful." Id. Therefore, "[t]he decision to grant or deny a continuance of discovery proceedings is solely within the discretion of the trial judge, and his decision will not be reviewed absent a manifest abuse of discretion." Id.
Here, careful review of the record reveals that discovery had been ongoing for approximately two years. Moreover, in light of plaintiff's own deposition testimony, nothing plaintiff asked for in his second set of discovery requests would likely have negated defendants' entitlement to judgment as a matter of law. Therefore, we conclude the trial court did not abuse its discretion.
Accordingly, the decision of the trial court is affirmed.
Affirmed.
Judges MARTIN and LEVINSON concur.
Report per Rule 30(e).