An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA13-585
NORTH CAROLINA COURT OF APPEALS
Filed: 4 March 2014
LORIE ANN PATTERSON,
Plaintiff
Durham County
v.
No. 11 CVS 2376
UNIVERSITY FORD, INC.,
Defendant
Appeal by plaintiff from judgment entered 19 October 2012
and orders entered 1 November 2012 and 25 March 2013 by Judge
Michael J. O’Foghludha in Durham County Superior Court. Heard
in the Court of Appeals 10 October 2013.
Mario M. White, for Plaintiff.
Poe Law Firm, PLLC, by G. Jona Poe, Jr., for Defendant.
ERVIN, Judge.
Plaintiff Lorie Ann Patterson appeals from a judgment
entered based upon a jury verdict finding that Plaintiff and
Defendant did not enter into a contract and that Defendant did
not convert a 2010 Mustang that belonged to Plaintiff and from
orders denying Plaintiff’s motions for judgment notwithstanding
the verdict and for a new trial. On appeal, Plaintiff argues
that the trial court erred by failing to instruct the jury that
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the Uniform Commercial Code controlled the transaction between
the parties and by denying Plaintiff’s motions for directed
verdict, judgment notwithstanding the verdict, and a new trial.
After careful consideration of Plaintiff’s challenges to the
trial court’s judgment and orders in light of the record and the
applicable law, we conclude that the trial court’s judgment and
orders should be affirmed.
I. Factual Background
A. Substantive Facts
On 20 November 2010, Plaintiff drove to Defendant
University Ford’s place of business in Durham for the purpose of
purchasing a 2010 Ford Mustang. Prior to that date, Plaintiff
had applied for automobile financing through a third-party
website which had, in turn, forwarded that request to several
entities, including Defendant. As a result, one of Defendant’s
employees contacted Plaintiff and requested that she fax a copy
of her pay stub to Defendant prior to her arrival at the
dealership. Plaintiff had been under the impression that she
would be able to get the vehicle that she wanted when she
arrived at the dealership, and she became upset upon learning
during discussions with Defendant’s employees that certain
potential issues relating to her credit application could
prevent her from making the purchase that she had in mind.
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According to Plaintiff, she was eventually informed by
Defendant’s general manager that she had been approved to
purchase a Mustang, picked out the vehicle she wanted, and took
it for a test drive. After driving the vehicle, Plaintiff
signed several documents, including a retail installment sales
contract, or RISC, which specified the terms and conditions,
including the amount financed and the interest rate, under which
the vehicle sale would be made. Although the RISC listed
Plaintiff as the buyer and Defendant as the seller/creditor, the
contract also stated that Defendant had “assign[ed] its interest
in this contract to C&F Finance Company (Assignee) under the
terms of Seller’s agreement(s) with Assignee.”1 In addition, the
RISC stated that “[t]his contract contains the entire agreement
between you and us relating to this contract,” that “[a]ny
change to this contract must be in writing and we must sign it,”
and that “[n]o oral changes are binding.”
Simultaneously with the execution of the RISC, Plaintiff
signed a conditional delivery agreement, or CDA, which provided
that:
University Ford is delivering this
automobile based on the credit information
received from the customer. Final approval
1
Although Plaintiff originally testified that Defendant had
never informed her that C&F Finance Company would be financing
the sale, she later admitted on cross-examination that the RISC
provided that the purchase would be financed by C&F.
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of the terms of a retail installment sales
contract rests solely with a lender. The
terms of the retail installment sales
contract are not binding until accepted by a
designated lender. This contract is
cancelled if the terms are rejected by a
lender. If the contract is cancelled, the
dealer will return the customer’s deposit
and trade-in vehicle. The customer agrees
to pay for any damages done to the
automobile during the time they had
possession, and also agrees to indemnify
University Ford for any damages caused to a
third party. If the contract is cancelled,
the customer will return the vehicle to
University Ford within 24 hours of being
notified by the dealer.2
According to Defendant’s controller, Don Colclough, the
execution of a CDA along with an RISC is standard industry
practice as specifically authorized by North Carolina law. In
addition, Mr. Colclough testified that the CDA was part of the
RISC, that Defendant did not finance vehicle purchases, that an
agreement for the purchase of a vehicle was not finalized until
the necessary financing arrangements had been made, and that
Defendant never intended to accept payments directly from
Plaintiff.
After executing the RISC and CDA and trading in her 2007
Mustang, Plaintiff left Defendant’s facility driving a 2010
2
Plaintiff originally testified that she did not remember
signing the CDA and that Defendant did not explain the
conditional nature of the transaction to her. However,
Plaintiff admitted on cross-examination that she read and went
over the CDA before signing it on 20 November 2010.
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Mustang. Defendant maintained insurance on the 2010 vehicle
throughout the entire time that the 2010 Mustang remained in
Plaintiff’s possession and never made any effort to transfer the
vehicle’s title to Plaintiff.
A few days after Plaintiff obtained possession of the 2010
Mustang, Defendant contacted Plaintiff and asked her to provide
proof of additional income given that the information that she
had provided did not suffice to support approval of the
financing necessary to support the vehicle purchase. At that
point, Plaintiff told Defendant that she was receiving an extra
$1,000 a month “under the table” from her ex-husband and
workers’ compensation benefits. Although Defendant made a
number of attempts to contact Plaintiff’s ex-husband for the
purpose of obtaining proof of the payments that Plaintiff
claimed to be receiving, it never received the requested
documentation. As a result, Defendant eventually informed
Plaintiff that her request for credit had been denied and that
Defendant was going to come pick up the vehicle. Subsequently,
one of Defendant’s employees went to Plaintiff’s place of
employment, took possession of the 2010 Mustang, and returned
the 2007 Mustang that Plaintiff had traded in.
B. Procedural History
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On 10 December 2010, Plaintiff filed a complaint in which
she sought to recover damages from Defendant based upon unfair
and deceptive trade practices, conversion, and breach of
contract claims. On 11 February 2011, Defendant filed an answer
in which it sought to have Plaintiff’s complaint dismissed,
denied the material allegations of Plaintiff’s complaint, and
asserted a number of affirmative defenses. The issues raised by
Plaintiff’s complaint came on for trial at the 17 September 2012
civil session of the Durham County Superior Court. After the
presentation of the evidence, the arguments of counsel, and the
trial court’s instructions, the jury returned a verdict finding
that Plaintiff and Defendant had not entered into a contract and
that Defendant had not converted the 2010 Mustang.
On 28 September 2012, Plaintiff filed a motion for
judgment notwithstanding the verdict or, in the alternative, for
a new trial. On 19 October 2012, the trial court entered a
judgment based upon the jury’s verdict which provided that
“Plaintiff take nothing by this action and that it be dismissed
with prejudice.” On 1 November 2012, the trial court entered an
order denying Plaintiff’s motion for judgment notwithstanding
the verdict. On 25 March 2013, the trial court entered an order
denying Plaintiff’s motion for a new trial. Plaintiff noted an
appeal to this Court from the trial court’s judgment and from
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the orders denying Plaintiff’s motion for judgment
notwithstanding the verdict and for a new trial.
II. Substantive Legal Analysis
A. Jury Instructions
In her initial challenge to the trial court’s judgment,
Plaintiff contends that the trial court erred by failing to
instruct the jury that the Uniform Commercial Code controlled
the transaction between the parties. We do not find Plaintiff’s
argument persuasive.
On appeal, arguments “challenging the trial court’s
decisions regarding jury instructions are reviewed de novo by
this Court.” State v. Osorio, 196 N.C. App. 458, 466, 675
S.E.2d 144, 149 (2009). “A specific jury instruction should be
given when ‘(1) the requested instruction was a correct
statement of law and (2) was supported by the evidence, and that
(3) the instruction given, considered in its entirety, failed to
encompass the substance of the law requested and (4) such
failure likely misled the jury.’” Outlaw v. Johnson, 190 N.C.
App. 233, 243, 660 S.E.2d 550, 559 (2008) (quoting Liborio v.
King, 150 N.C. App. 531, 534, 564 S.E.2d 272, 274, disc. review
denied, 356 N.C. 304, 570 S.E.2d 726 (2002)). “When reviewing
the refusal of a trial court to give certain instructions
requested by a party to the jury, this Court must decide whether
the evidence presented at trial was sufficient to support a
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reasonable inference by the jury of the elements of the claim.
If the instruction is supported by such evidence, the trial
court’s failure to give the instruction is reversible error.”
Ellison v. Gambill Oil Co., 186 N.C. App. 167, 169, 650 S.E.2d
819, 821 (2007) (citations omitted), aff’d per curiam and disc.
review improvidently allowed, 363 N.C. 364, 677 S.E.2d 452
(2009). However, the party seeking relief on appeal based upon
an allegedly erroneous jury instruction must establish that the
jury was misled or that the verdict was affected by an
improperly omitted instruction. Robinson v. Seaboard System
Railroad, 87 N.C. App. 512, 524, 361 S.E.2d 909, 917, disc.
review denied, 321 N.C. 474, 364 S.E.2d 924 (1988). As a
result, “it is not enough for the appealing party to show that
error occurred in the jury instructions; rather, it must be
demonstrated that such error was likely, in light of the entire
charge, to mislead the jury.” Id. “[W]here a party fails to
object to jury instructions, ‘it is conclusively presumed that
the instructions conformed to the issues submitted and were
without legal error.’” Madden v. Carolina Door Controls, Inc.,
117 N.C. App. 56, 62, 449 S.E.2d 769, 773 (1994) (quoting Dailey
v. Integon Gen. Ins. Corp., 75 N.C. App. 387, 399, 331 S.E.2d
148, 156, disc. review denied, 314 N.C. 664, 336 S.E.2d 399
(1985)).
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In this case, the trial court instructed the jury in
accordance with N.C. Gen. Stat. § 20-72(b) that, “[i]n the
context of automobile sales, no title to any motor vehicle shall
pass or vest until an assignment and warranty of title is
executed by the owner on the reverse certificate of title.”
Although Plaintiff has argued in her brief that the trial
court’s instruction to this effect was erroneous, we note that
Plaintiff did not object to the challenged instruction at trial.
In fact, when the trial court indicated its intention to deliver
the challenged instruction during the jury instruction
conference, Plaintiff admitted that the instruction was “a
statement of the law, I can’t argue about the law,” and stated,
“that’s fine[,] I’m not going to fight much of that.” As a
result, since Plaintiff failed to object to this instruction at
trial, “it is conclusively presumed that the instructions
conformed to the issues submitted and were without legal error.”
Madden, 117 N.C. App. at 62, 449 S.E.2d at 773.
At trial, Plaintiff did object to the trial court’s refusal
to include additional UCC-based language in its instructions
concerning the conversion issue. Although the trial court
instructed the jury with respect to the issue of whether
Defendant converted Plaintiff’s 2010 Mustang in accordance with
NCPJI 806.00, Plaintiff also contended that the jury should be
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instructed that “[t]itle, and therefore ownership, passes to the
buyer at the time and place at which the seller completes his
performance with reference to the physical delivery of the
goods, despite any reservation of a security interest and even
though a document of title is to be delivered at a different
time or place” in reliance upon N.C. Gen. Stat. § 25-2-401(2).
However, we note that Plaintiff’s requested instruction was not
a correct statement of the applicable law given that it omitted
any reference to the fact that the language from N.C. Gen. Stat.
§ 25-2-401(2) upon which Plaintiff relies begins “[u]nless
otherwise explicitly agreed . . . .” As a result, particularly
given Defendant’s contention that the parties had, in fact,
agreed that title did not pass to Plaintiff at the time of
delivery, the omission of this caveat from Plaintiff’s requested
instruction rendered that instruction legally erroneous and
obviated the necessity for the delivery of the instruction
requested by Plaintiff. See State v. Munoz, 141 N.C. App. 675,
688, 541 S.E.2d 218, 226 (stating that, “if the requested
instruction is not a correct statement of the law, the trial
court can properly refuse to give it”), cert. denied, 353 N.C.
454, 548 S.E.2d 534 (2001).
Finally, Plaintiff simply did not argue at trial that the
trial court should have instructed the jury to the effect that
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the UCC, instead of the statutory provisions governing motor
vehicle transactions, governed the relationship between the
parties as she does on appeal. In fact, Plaintiff never
objected to the trial court’s instructions concerning the
contract formation issue, all of which rested on the statutory
provisions governing motor vehicle transactions. Instead,
Plaintiff acknowledged that the trial court’s proposed
instructions based on N.C. Gen. Stat. §§ 20-75.1 and 20-3-3(a)
were correct statements of the law and stated, instead, that she
could “make that work in [the] closing argument.” As result,
given that the only UCC-based argument that Plaintiff advanced
in the court below related to her conversion claim, given that
the trial court instructed the jury in accordance with the
relevant sections of the NCPJI, given that Plaintiff merely
argued at trial that the UCC applied to the conversion issue,
and since the trial court instructed the jury concerning the
conversion issue in accordance with the relevant pattern jury
instruction, Henry v. Knudsen, 203 N.C. App. 510, 519, 692
S.E.2d 878, 884 (stating that the applicable pattern jury
instructions “provide[d] the jury with an understandable
explanation of the law”), disc. review denied, 364 N.C. 602, 703
S.E.2d 446 (2010), we hold that none of Plaintiff’s challenges
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to the trial court’s instructions provide any basis for
overturning the trial court’s judgment.
B. Denial of Motions for Directed Verdict, Judgment
Notwithstanding the Verdict, and a New Trial
Secondly, Plaintiff argues that the trial court erred by
denying her motion for directed verdict at the close of all
evidence and her motions for judgment notwithstanding the
verdict and a new trial. In essence, Plaintiff contends that
the undisputed evidence in the record, when considered in light
of what she believes to be the relevant legal principles,
required the trial court to grant the motions in question.
Although Defendant contends that Plaintiff’s challenge to the
denial of her motion for a directed verdict was not properly
preserved for review by this Court, we need not address this
issue in light of our determination that none of the arguments
that Plaintiff has advanced in the course of challenging the
denial of these motions have merit.
1. Standard of Review
a. Motions for Directed Verdict and
Judgment Notwithstanding the Verdict
A party is entitled to seek a directed verdict in his or
her favor at the conclusion of an opponent’s evidence and at the
conclusion of all of the evidence. N.C. Gen. Stat. § 1A-1, Rule
50(b). Overman v. Gibson Prods. Co., 30 N.C. App. 516, 519, 227
S.E.2d 159, 161 (1976). In addition, a party who made an
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unsuccessful motion for a directed verdict at the conclusion of
all of the evidence “may move to have the verdict and any
judgment entered thereon set aside and to have judgment entered
in accordance with his motion for a directed verdict[.]” N.C.
Gen. Stat. § 1A–1, Rule 50(b)(1). “A motion for [judgment
notwithstanding the verdict] provides the trial court with an
opportunity to reconsider the question of the sufficiency of the
evidence after the jury has returned a verdict and permits the
court to enter judgment ‘in accordance with the movant’s earlier
motion for a directed verdict and notwithstanding the contrary
verdict actually returned by the jury.’” Primerica Life v.
James Massengill & Sons, 211 N.C. App. 252, 256-57, 712 S.E.2d
670, 675 (2011) (quoting Ace, Inc. v. Maynard, 108 N.C. App.
241, 245, 423 S.E.2d 504, 507 (1992) (internal quotation marks
and citation omitted), disc. review denied, 333 N.C. 574, 429
S.E.2d 567 (1993)).
“A motion for judgment notwithstanding the verdict is
essentially a renewal of the motion for directed verdict, and
the same standard of review applies to both motions.” Zubaidi
v. Earl L. Pickett Enterprises, Inc., 164 N.C. App. 107, 119,
595 S.E.2d 190, 197, disc. rev. denied, 359 N.C. 76, 605 S.E.2d
151 (2004). As a result, the standard of review utilized in
reviewing an appellate challenge to a trial court’s ruling with
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respect to a motion for directed verdict or a motion for
judgment notwithstanding the verdict is “‘whether upon
examination of all the evidence in the light most favorable to
the nonmoving party, and that party being given the benefit of
every reasonable inference drawn therefrom, the evidence is
sufficient to be submitted to the jury.’” Branch v. High Rock
Realty, Inc., 151 N.C. App. 244, 250, 565 S.E.2d 248, 252 (2002)
(quoting Fulk v. Piedmont Music Ctr., 138 N.C. App. 425, 429,
531 S.E.2d 476, 479 (2000)), disc. review denied, 356 N.C. 667,
576 S.E.2d 330 (2003). “In determining the sufficiency of the
evidence to withstand a motion for a directed verdict [or
judgment notwithstanding the verdict], all of the evidence which
supports the non-movant’s claim must be taken as true and
considered in the light most favorable to the non-movant, giving
the non-movant the benefit of every reasonable inference which
may legitimately be drawn therefrom and resolving
contradictions, conflicts, and inconsistencies in the non-
movant’s favor.” Turner v. Duke Univ., 325 N.C. 152, 158, 381
S.E.2d 706, 710 (1989). A motion for directed verdict or
judgment notwithstanding the verdict “should be denied if more
than a scintilla of evidence supports each element of the non-
moving party’s claim.” Weeks v. Select Homes, Inc., 193 N.C.
App. 725, 730, 668 S.E.2d 638, 641 (2008) (citation omitted).
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We review orders ruling on a motion for directed verdict or
judgment notwithstanding the verdict de novo. Austin v. Bald
II, L.L.C., 189 N.C. App. 338, 342, 658 S.E.2d 1, 4, disc.
review denied, 362 N.C. 469, 665 S.E.2d 737 (2008). “‘Under a
de novo [standard of] review, the court considers the matter
anew and freely substitutes its own judgment’ for that of the
lower tribunal.” State v. Williams, 362 N.C. 628, 632-33, 669
S.E.2d 290, 294 (2008) (quoting In re Greens of Pine Glen, Ltd.
P’ship, 356 N.C. 642, 647, 576 S.E.2d 316, 319 (2003)).
b. New Trial Motion
A challenge to the denial of a motion for a new trial is
reviewed for an abuse of discretion. Worthington v. Bynum, 305
N.C. 478, 482, 290 S.E.2d 599, 602 (1982). An “[a]buse of
discretion results where the court’s ruling is manifestly
unsupported by reason or is so arbitrary that it could not have
been the result of a reasoned decision.” State v. Hennis, 323
N.C. 279, 285, 372 S.E.2d 523, 527 (1988).
2. Substantive Legal Issues
a. Breach of Contract Claim
In her brief, Plaintiff contends that the trial court erred
by denying her motions for directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to her
breach of contract claim. More specifically, Plaintiff asserts
that the undisputed evidence establishes that the parties had a
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contract which Defendant breached by refusing to accept
Plaintiff’s monthly payments and repossessing the vehicle prior
to the date upon which Plaintiff’s first payment was even due.
Plaintiff’s argument lacks merit.
“‘The elements of a claim for breach of contract are (1)
existence of a valid contract and (2) breach of the terms of
that contract.’” Ahmadi v. Triangle Rent A Car, Inc., 203 N.C.
App. 360, 362, 691 S.E.2d 101, 103 (2010) (quoting Poor v. Hill,
138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000)). The
existence of an agreement to which at least two parties manifest
an intent to be bound is an essential prerequisite to the making
of a valid contract. Croom v. Goldsboro Lumber Co., 182 N.C.
217, 220, 108 S.E. 735, 737 (1921) (stating that mutual assent
between the parties is an “essential element” of every
contract); see also Kirby v. Stokes Cty. Bd. of Educ., 230 N.C.
619, 626, 55 S.E.2d 322, 327 (1949) (stating that “[a] contract
is an agreement between two or more persons or parties [based]
on sufficient consideration to do or refrain from doing a
particular act”). “There is no meeting of the minds, and,
therefore, no contract, when ‘in the contemplation of both
parties . . . something remains to be done to establish
contract[ual] relations.’” Parker v. Glosson, 182 N.C. App.
229, 232, 641 S.E.2d 735, 737 (2007) (quoting Fed. Reserve Bank
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v. Neuse Mfg. Co., Inc., 213 N.C. 489, 493, 196 S.E. 848, 850
(1938)). As a result, if the agreement between the parties is
subject to the occurrence of some other event, no contract is
formed until this condition precedent has been satisfied.
Parker, 182 N.C. App. at 232, 641 S.E.2d at 737. “Whether
mutual assent is established and whether a contract was intended
between parties are questions for the trier of fact.”
Nationwide Mut. Fire Ins. Co. v. Mnatsakanov, 191 N.C. App. 802,
805, 664 S.E.2d 13, 15 (2008) (quoting Creech v. Melnik, 347
N.C. 520, 527, 495 S.E.2d 907, 911 (1998)).
In this case, Plaintiff and Defendant signed an RISC which
detailed the terms and conditions contained in the agreement
between the parties and included provisions to the effect that
Plaintiff was the buyer and Defendant was the seller/creditor,
that the sale would be made subject to a specific price and
payment terms, and that Defendant had assigned its interest in
the contract to C&F Finance Company. In addition, both parties
executed a CDA which, as we have already noted, provided that:
University Ford is delivering this
automobile based on the credit information
received from the customer. Final approval
of the terms of a retail installment sales
contract rests solely with a lender. The
terms of the retail installment sales
contract are not binding until accepted by a
designated lender. This contract is
cancelled if the terms are rejected by a
lender. If the contract is cancelled, the
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dealer will return the customer’s deposit
and trade-in vehicle. The customer agrees
to pay for any damages done to the
automobile during the time they had
possession, and also agrees to indemnify
University Ford for any damages caused to a
third party. If the contract is cancelled,
the customer will return the vehicle to
University Ford within 24 hours of being
notified by the dealer.
As a result of the fact that “separate contracts relating to the
same subject matter and executed simultaneously by the same
parties may be construed as one agreement,” with this being
“true even where one contract states that there are no other
agreements between the parties,” Zinn v. Walker, 87 N.C. App.
325, 334, 361 S.E.2d 314, 319 (1987) (citing 3 Corbin on
Contracts §578 (1960 and 1984 supplement)), the trial court had
ample justification for allowing the jury to treat the CDA as
part of the contract between the parties.
According to the undisputed record evidence, the lender
rejected Plaintiff’s request for the extension of the credit
needed to support the purchase of the 2010 Mustang. As a
result, acting pursuant to the CDA, Defendant repossessed the
2010 Mustang that Plaintiff had intended to purchase and
returned both the deposit that Plaintiff had paid and the
vehicle that she had traded in as part of the sale transaction.
Although Plaintiff vigorously asserts that the execution of the
RISC created a binding contract and that the trial court erred
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by allowing the jury to make a contrary determination, the
record clearly contained ample evidence permitting a
determination that the CDA constituted a part of the agreement
between the parties, that the CDA was a conditional delivery
agreement rather than a conditional sales contract, and that
there was no binding agreement between the parties in the event
that the proposed lender declined to extend credit to Plaintiff.
As a result, given that “[w]hether mutual assent is established
and whether a contract was intended between parties are
questions for the trier of fact,” Nationwide Mut. Fire Ins. Co.,
191 N.C. App. at 805, 664 S.E.2d at 15, and given that there
was, at a minimum, a genuine issue of material fact concerning
the extent, if any, to which the agreement embodied in the RISC
ever became effective, we see no error in the trial court’s
decision to allow the jury to determine whether a binding
contract between the parties existed.
In an attempt to persuade us to reach a different result,
Plaintiff argues that the trial court should have refrained from
allowing the jury to give effect to the CDA on the theory that
the RISC contained a merger clause and that a decision to allow
the jury to consider the CDA in determining whether a contract
between the parties existed resulted in a violation of the parol
evidence rule. However, as we have already noted, the record
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would have supported a determination that the RISC and the CDA
were both components of an overall agreement between the parties
despite the fact that the RISC contained a merger provision.
Zinn, 87 N.C. App. at 334, 361 S.E.2d at 319 (1987). In
addition, according to well-established North Carolina law,
“parol evidence is admissible to show conditions precedent,
which relate to the delivery or taking effect of the instrument,
as that it shall only become effective on certain conditions or
contingencies[.]” Bailey v. Westmoreland, 251 N.C. 843, 845,
112 S.E.2d 517, 520 (1960). Thus, since the record contained
ample evidence supporting a conclusion that the RISC and the CDA
were part of a single overall contract despite the presence of a
merger provision in the RISC and since parol evidence is
admissible for the purpose of showing that a condition precedent
has not been satisfied, we do not find Plaintiff’s argument
persuasive. As a result, the trial court did not err by denying
Plaintiff’s motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial.
b. Conversion Claim
In addition, Plaintiff argues that the trial court erred by
denying her motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to her
conversion claim. More specifically, Plaintiff contends that
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all of the evidence tends to show that an unlawful conversion
occurred. Once again, we conclude that Plaintiff’s argument
lacks merit.
A conversion occurs when there has been “an unauthorized
assumption and exercise of the right of ownership over goods or
personal chattels belonging to another, to the alteration of
their condition or the exclusion of an owner’s rights.” Mace v.
Pyatt, 203 N.C. App. 245, 256, 691 S.E.2d 81, 90 (quoting Myers
v. Catoe Construction Co., 80 N.C. App. 692, 695, 343 S.E.2d
281, 283 (1986)), disc. review denied, 364 N.C. 614, 705 S.E.2d
354 (2010). “There are, in effect, two essential elements of a
conversion claim: ownership in the plaintiff and wrongful
possession or conversion by the defendant.” Variety
Wholesalers, Inc. v. Salem Logistics Traffic Servs., LLC, 365
N.C. 520, 523, 723 S.E.2d 744, 747 (2012). As a result,
Plaintiff was required to show that she possessed an ownership
interest in the 2010 Mustang that is the subject of this
litigation in order to successfully maintain a conversion claim.
In attempting to persuade us that the trial court erred by
denying her motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial, Plaintiff contends
that ownership of the 2010 Mustang passed to her at the time of
delivery. However, the undisputed evidence contained in the
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present record tends to show that no certification of title
evidencing Defendant’s ownership was ever issued. In addition,
Defendant presented testimony, based upon the language of the
CDA, to the effect that the parties did not intend for a
transfer of ownership to occur until financing had been
obtained, an event which never occurred. As a result, in light
of the evidentiary dispute with respect to this issue, we have
no trouble agreeing with the statement made by Plaintiff’s
counsel at trial to the effect that “ownership is the issue for
the jury” and hold that the trial court did not err by denying
Plaintiff’s motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to
Plaintiff’s conversion claim.
c. Unfair and Deceptive Trade Practices Claim
Next, Plaintiff contends that the trial court erred by
denying her motion for a directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to her
unfair and deceptive trade practices claim. In support of this
contention, Plaintiff argues that CDAs like the one at issue
here are inherently unfair and deceptive. Once again, we
conclude that Plaintiff’s argument lacks merit.
“To prevail on a claim of unfair and deceptive trade
practices, a plaintiff must show: (1) defendant[] committed an
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unfair or deceptive act or practice; (2) in or affecting
commerce; and (3) that plaintiff was injured thereby.” Carcano
v. JBSS, LLC, 200 N.C. App. 162, 171, 684 S.E.2d 41, 49 (2009)
(quoting First Atl. Mgmt. Corp. v. Dunlea Realty Co., 131 N.C.
App. 242, 252, 507 S.E.2d 56, 63 (1998)). “A practice is unfair
when it offends established public policy as well as when the
practice is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers.” Marshall v. Miller, 302
N.C. 539, 548, 276 S.E.2d 397, 403 (1981). “A practice is
deceptive if it ‘possesse[s] the tendency or capacity to
mislead, or create[s] the likelihood of deception.’” Poor, 138
N.C. App. at 28-29, 530 S.E.2d at 845 (quoting Overstreet v.
Brookland, Inc., 52 N.C. App. 444, 453, 279 S.E.2d 1, 7 (1981)).
According to Plaintiff, the use of a CDA results in a “spot
delivery” or “Yo-Yo” sale, transactions that are inherently
unfair and deceptive and that have been held to be unlawful in
other jurisdictions. Acceptance of Plaintiff’s argument would,
however, require us to overlook the fact that the General
Assembly has explicitly authorized the use of CDAs in N.C. Gen.
Stat. § 20-75.1, which states that:
Notwithstanding [N.C. Gen. Stat. §§] 20-
52.1, 20-72, and 20-75, nothing contained in
those sections prohibits a dealer from
entering into a contract with any purchaser
for the sale of a vehicle and delivering the
vehicle to the purchaser under terms by
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which the dealer’s obligation to execute the
manufacturer’s certificate of origin or the
certificate of title is conditioned on the
purchaser obtaining financing for the
purchase of the vehicle.
N.C. Gen. Stat. § 20-75.1. In view of the fact that the use of
CDAs is expressly authorized in this jurisdiction, we hold that
there was ample justification for the trial court’s decision to
deny Plaintiff’s motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to the
unfair and deceptive trade practices issue.
d. Punitive Damages Claim
Finally, Plaintiff contends that the trial court erred by
denying her motions for a directed verdict, judgment
notwithstanding the verdict, and a new trial with respect to her
claim for punitive damages. According to Plaintiff, the record
shows that Defendant never intended to abide by the terms of the
contract between the parties, that Defendant had engaged in
similar conduct for more than two decades, and that Defendant’s
conduct constituted fraud sufficient to support an award of
punitive damages. We do not find Plaintiff’s argument
persuasive.
Punitive damages “are awarded as punishment due to the
outrageous nature of the wrongdoer’s conduct.” Juarez–Martinez
v. Deans, 108 N.C. App. 486, 495, 424 S.E.2d 154, 159-60, disc.
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review denied, 333 N.C. 539, 429 S.E.2d 558 (1993). For that
reason, punitive damages are “not allowed as a matter of
course;” instead, “they may be awarded only when there are some
features of aggravation, as when the act is done wilfully and
evidences a reckless and wanton disregard of plaintiff’s
rights.” Scott v. Kiker, 59 N.C. App. 458, 462, 297 S.E.2d 142,
146 (1982). As a general proposition, a punitive damages
recovery is not available as the result of a breach of contract,
with the exception of a breach of contract to marry. Newton v.
Standard Fire Insurance Co., 291 N.C. 105, 111, 229 S.E.2d 297,
301 (1976). “Nevertheless, where there is an identifiable tort
even though the tort also constitutes, or accompanies, a breach
of contract, the tort itself may give rise to a claim for
punitive damages.” Id. As a result of the fact that actionable
fraud inherently involves intentional wrongdoing, punitive
damages are available in the event that a litigant is harmed by
fraudulent conduct on the part of the opposing party. Newton,
291 N.C. at 113, 229 S.E.2d at 302.
Actual fraud consists of a “(1) [f]alse 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 to the injured party.” Mancuso
v. Burton Farm Dev. Co. LLC, __ N.C. App. __, __, 748 S.E.2d
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738, 749, disc. review denied, __ N.C. __, 752 S.E.2d 149
(2013). The evidence contained in the present record simply
does not establish any fraudulent conduct on the part of
Defendant. On the contrary, the undisputed record evidence
tends to show that Defendant believed that the CDA rendered the
RISC ineffective in the event that Plaintiff’s application for
credit was not approved and that Defendant would not have
repossessed the 2010 Mustang had the relevant lender made a
different determination. Thus, Plaintiff’s contention that
Defendant never intended to honor the RISC notwithstanding, the
record contains no indication that any “(1) [f]alse
representation or concealment of a material fact, [that was] (2)
reasonably calculated to deceive, [and] (3) made with intent to
deceive,” Mancuso, __ N.C. App. at __, 748 S.E.2d at 749, was
ever made or that Defendant acted in such a manner as to exhibit
“a reckless and wanton disregard of plaintiff’s rights.” Scott,
59 N.C. App. at 462, 297 S.E.2d at 146. As a result, the trial
court did not err by denying Plaintiff’s motions for a directed
verdict, judgment notwithstanding the verdict, or a new trial
with respect to the punitive damages issue.
III. Conclusion
Thus, for the reasons set forth above, we conclude that
none of Plaintiff’s challenges to the trial court’s judgment and
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orders have merit. As a result, the trial court’s judgment and
orders should, and hereby do, remain undisturbed.
NO ERROR.
Judges ROBERT N. HUNTER, JR., and DAVIS concur.
Report per Rule 30(e).
Patterson v. Univ. Ford, Inc.
Combined Opinion