Opinion
No. COA03-332
Filed 3 February 2004 This case not for publication
Appeal by defendant Charlotte Copy Data from judgment entered 7 October 2002 by Judge Timothy S. Kincaid in Catawba County Superior Court. Heard in the Court of Appeals 4 December 2003.
Tate, Young, Morphis, Bach, Taylor, LLP, by Paul E. Culpepper, for plaintiff-appellees. McElwee Firm, PLLC, by Robert P. Laney, for defendant-appellant.
Catawba County No. 01 CVS 400.
Defendant, Charlotte Copy Data, Inc. ("defendant"), appeals a jury verdict and judgment in favor of plaintiff, Robert Williams, on the issue of unfair and deceptive trade practices. For the reasons discussed herein, we find no error.
Plaintiff, Robert Williams ("plaintiff"), doing business as The Viewmont Magazine, commenced this action for unfair and deceptive trade practices, breach of contract and fraud on 2 February 2001. Defendant, Fidelity Leasing, Inc., counterclaimed for breach of contract. Prior to the trial of this matter, summaryjudgment was granted in favor of defendant, Fidelity, awarding it a judgment against plaintiff, LOST Enterprises, Inc., and dismissing plaintiffs' claims against Fidelity. This matter proceeded to trial on plaintiffs' claims against defendant, Charlotte Copy Data, Inc., on 23 September 2002. At the close of all the evidence, defendant moved for a directed verdict. The trial court granted the motion as to the corporate plaintiff, LOST Enterprises, but denied the motion as to the individual plaintiff. On 7 October 2002, the jury returned a verdict against defendant in the amount of $52,000 based upon fraud and unfair and deceptive trade practices. The trial court trebled the damages pursuant to N.C. Gen. Stat. § 75-16 and awarded attorney's fees pursuant to N.C. Gen. Stat. § 75-16.1. Defendant moved for judgment notwithstanding the verdict, which was denied by the trial court. Defendant appeals.
Plaintiff owned a small monthly trade magazine in Hickory, North Carolina called "The Viewmont." The first issue, printed in July 2000, consisted of twenty pages, and the second issue, August 2000, consisted of twenty-four pages. Two thousand copies of each issue were printed by an outside printing service. Plaintiff testified that following the publication of the August issue, Randy Street, a sales representative for defendant, contacted him about purchasing a color copier to print the magazine. During their initial meeting, Street stated that he could help plaintiff produce a full-color publication for less than he was currently paying for two-color printing. During their next meeting, Street examined the July and August issues of "The Viewmont." Plaintiff told Street that the next issue would be at least twenty-eight pages in length and that he would need 2,000 copies printed. They also discussed a maintenance contract for defendant's copiers, which would cost $4,000 per month, based on the number of copies plaintiff intended to print. Plaintiff indicated that this was more than he could afford. Street then told plaintiff that the maintenance on the copy machine would only be between $300 and $400 per month. However, Street never disclosed to plaintiff that the rollers, drums, and blades would need to be replaced every 40,000 copies at a cost of $1,372. Street represented that plaintiff should be able to print two full publications on each set of toner, which cost $320 per set.
At their next meeting, plaintiff told Street that his next publication would be at least twenty-eight pages but that it could be as many as thirty-two pages. Plaintiff also explained that all of the printing would be performed at the end of the month. He specifically asked Street if the copier could handle his requirements, and Street stated that it could.
Due to plaintiff's lack of net worth, the copier was leased to LOST Enterprises, Inc., which was owned by a friend of plaintiff. The lease was subsequently assigned to defendant Fidelity Leasing, Inc.
The copier failed to function as it was represented to plaintiff by defendant's sales representative and was not able to handle the volume of work which plaintiff's business required. Instead of being able to print two full publications on one set of toner, plaintiff was only able to print 200 copies over two months, which required seven sets of toner. Contrary to the representations made by Street, the manufacturer of the copier recommended that it be used for no more than 30,000 copies per month. The copier was undersized for plaintiff's operation, and was constantly breaking down, requiring service calls as often as twice a day. As a result of these problems, plaintiff was unable to continue the publication of "The Viewmont" and suffered financial losses.
In its first assignment of error, defendant argues the trial court erred in denying defendant's motion for a directed verdict at the end of all the evidence pursuant to Rule 50(a) of the North Carolina Rules of Civil Procedure. Defendant argues the evidence was insufficient to support plaintiff's unfair and deceptive trade practices claim. We disagree.
On a motion for directed verdict pursuant to Rule 50(a) of the North Carolina Rules of Civil Procedure, the trial court must consider the evidence in the light most favorable to the non-moving party. Newton v. New Hanover County Bd. of Education, 342 N.C. 554, 563, 467 S.E.2d 58, 65 (1996). Evidence supporting the non-movant's claims is to be taken as true, and the trial court must give the non-movant the benefit of every reasonable inference to be drawn from the evidence. Id. Conflicts and inconsistencies in the evidence must be resolved in the non-movant's favor. Id. Thus, defendant in this case was not entitled to a directed verdictunless plaintiff's evidence, viewed in its most favorable light, failed to establish the elements of an unfair or deceptive trade practice.
Unfair or deceptive acts or practices in or affecting commerce are unlawful in North Carolina. N.C. Gen. Stat. § 75-1.1 (2003). To prevail on a claim for unfair and deceptive trade practices, a plaintiff must show: (1) the defendant committed an unfair or deceptive act or practice; (2) in or affecting commerce; (3) which proximately caused actual injury to the plaintiff. Canady v. Mann, 107 N.C. App. 252, 260, 419 S.E.2d 597, 602 (1992).
Although the statute was enacted to protect consumers, it may extend to businesses in appropriate contexts. Hajmm Co. v. House of Raeford Farms, 328 N.C. 578, 592, 403 S.E.2d 483, 492 (1991). One business is permitted to assert a claim for unfair and deceptive trade practices against another business when the two businesses are "engaged in commercial dealings with each other." Food Lion, Inc. v. Capital Cities/ABC, Inc., 194 F.3d 505, 520 (4th Cir. 1999). Moreover, the inquiry is not whether a contractual relationship existed between the parties, but rather whether the defendant's allegedly deceptive acts affected commerce. J.M. Westall Co. v. Windswept View of Asheville, 97 N.C. App. 71, 75, 387 S.E.2d 67, 69, disc. rev. denied, 327 N.C. 139, 394 S.E.2d 175 (1990).
"A practice is unfair if it is unethical or unscrupulous, and it is deceptive if it has a tendency to deceive." Dalton v. Camp, 353 N.C. 647, 656, 548 S.E.2d 704, 711 (2001). The plaintiff neednot show fraud, bad faith, deliberate or knowing acts of deception, or actual deception. Chastain v. Wall, 78 N.C. App. 350, 356, 337 S.E.2d 150, 156 (1985), disc. rev. denied, 316 N.C. 375, 342 S.E.2d 891 (1986). Whether an act is unfair or deceptive depends upon the facts and circumstances of the case. See Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403(1981). A breach of contract is insufficient to declare an act unfair or deceptive; egregious or aggravating circumstances must be present. Dalton, 353 N.C. at 657, 548 S.E.2d at 711; see also United Roasters, Inc. v. Colgate-Palmolive Co., 649 F.2d 985, 992 (4th Cir. 1981), cert. denied, 454 U.S. 1054, 70 L.Ed.2d 590 (1981) (suggesting that deception either in the formation of the contract or in the circumstances of its breach is required).
First, defendant argues that the statute does not apply to its relationship with plaintiff because plaintiff is a customer, rather than a competitor, of defendant. However, the evidence shows that plaintiff and defendant were engaged in commercial dealings with each other. Randy Street approached plaintiff about purchasing a copier for his business, and they negotiated a lease agreement to be entered into between defendant and LOST Enterprises. This lease transaction was "in or affecting commerce," and plaintiff may proceed on an unfair or deceptive trade practice claim, even though "The Viewmont" and defendant are not competitors. See Food Lion, 194 F.3d at 520.
Defendant also claims that plaintiff did not present sufficient evidence that defendant's conduct was egregious oraggravating. However, when viewed in the light most favorable to plaintiff, the evidence supports a finding that defendant's representations concerning the copier were false and intended to be relied upon by plaintiff. On several occasions, plaintiff advised defendant of his copying needs. With full knowledge of plaintiff's requirements, Street sold plaintiff a copier which was only rated for 30,000 copies per month, well below the needs of plaintiff's business. Furthermore, Street represented that the monthly maintenance costs of the copier would be much lower than they actually were. This evidence of deliberate misrepresentations made by defendant during the formation of the contract supports a conclusion that defendant's conduct was aggravating and egregious. See United Roasters, 649 F.2d at 992.
Defendant further contends that plaintiff cannot maintain a successful cause of action because it was not reasonable for plaintiff to rely on any misrepresentations made by defendant's agents. However, the defense of contributory negligence is not applicable to actions under N.C. Gen. Stat. § 75-1.1. Winston Realty Co. v. G.H.G., Inc., 314 N.C. 90, 93-96, 331 S.E.2d 677, 679-81 (1985). Therefore, defendant's assertions that plaintiff had a duty to perform independent research about copiers and that plaintiff should not have relied solely on Street's representations are irrelevant. Viewing the evidence in the light most favorable to plaintiff, the trial court did not err in denying defendant's motion for a directed verdict. This assignment of error is without merit. In its second assignment of error, defendant argues the trial court erred in denying defendant's motion for judgment notwithstanding the verdict after the jury verdict pursuant to Rule 50(b) of the North Carolina Rules of Civil Procedure. Defendant argues that the facts and the law did not support the issue of unfair and deceptive trade practices and that the defendant was entitled to judgment as a matter of law. We disagree.
"A motion for judgment notwithstanding the verdict, pursuant to [Rule 50(b)], is essentially a renewal of the motion for directed verdict; if the motion for directed verdict could have been properly granted, the motion for judgment notwithstanding the verdict should be granted." Newton, 342 N.C. at 563, 467 S.E.2d at 65. As discussed above, when viewed in the light most favorable to plaintiff, the evidence supported plaintiff's unfair and deceptive trade practices claim. The jury could reasonably find from the evidence that defendant's misrepresentations regarding the copier it leased to plaintiff constituted an unfair and deceptive trade practice. Thus, the trial court did not err in denying defendant's motion for judgment notwithstanding the verdict. This assignment of error is without merit.
NO ERROR.
Judges HUDSON and TYSON concur.
Report per Rule 30(e).