dissenting:
Terming as “indecent” the plaintiffs’ claim of trebled damages, the District Judge denied any recovery whatsoever of damages for violations of the North Carolina Unfair Trade Practices Act.1 So it is that we must inquire by whom and by what was the indecency caused.
I.
Review of the evidence immediately establishes that violations of the Act, which created the right to trebled damages, were committed by the defendants. The record at once confirms this conclusion by its recital of the jury’s answers to the interrogatories submitted by the court. They follow:
(1) Did the defendants expressly represent or warrant to plaintiffs that the Cessna airplane had recently undergone a 100-hour inspection and had had only the major repairs and only the amounts of hours on its engines and air frame that were recorded in the aircraft log books:
ANSWER: Yes
(2) If so, did the plaintiffs rely upon those representations or warranties or any of them, and did they become a part of the bargain between the plaintiffs and the defendants?
ANSWER: Yes
(3) Did the defendants breach or fail to make good on those express warranties?
ANSWER: Yes
(4) ••••
(5) [THIS ISSUE IS TO BE ANSWERED ONLY IF YOU HAVE ANSWERED *719THE FIRST ISSUE IN FAVOR OF THE PLAINTIFFS AND HAVE ALREADY AWARDED THE PLAINTIFFS SOME AMOUNT OF DAMAGES.] If so, were the representations of the defendants knowingly and wilfully made with knowledge of their falsity and with the intention that the plaintiffs would rely upon them to their detriment?
ANSWER: Yes
(6) ....
The force of these verdicts in revealing the unenviable — perhaps “indecent” — character of the defendant appellees is increased by the failure of the defendants to take the stand as witnesses or otherwise deny under oath the allegations of knowing and wilful misrepresentations. These accusations of fraud were pleaded with particularity by the plaintiffs in accordance with Federal Rule of Civil Procedure 9(b) and ample proof of their occurrence was admitted into evidence during the trial.
As stated by the Supreme Court of North Carolina, “[p]roof of fraud would necessarily constitute a violation of the provision against unfair and deceptive acts [N.C.G.S. § 75-1.1 supra n. 1].... ” Hardy v. Toler, 288 N.C. 303, 309, 218 S.E.2d 342, 346 (1975). A jury though, does not directly determine whether a litigant has contravened the statutes. Rather, the jury’s function is “to find the facts, and based on the jury’s findings the court must then determine as a matter of law whether the defendant’s conduct violated G.S. 7501.1.” Love v. Pressley, 34 N.C.App. 503, 516, 239 S.E.2d 574, 583 (1978) cert. denied, 294 N.C. 441, 241 S.E.2d 843 (1978); Hardy, 288 N.C. at 310, 218 S.E.2d at 346-47. Consequently, the jury’s finding that the defendants defrauded the plaintiffs ipso facto generates the conclusion that the prohibitions of the Act were transgressed.
Once the court ascertains that the Act has been violated, an award of treble damages under N.C.G.S. 75-16 is not a matter for further jury consideration; it is a post-verdict assessment to be made by the court after the jury has fixed liability. Marshall v. Miller, 302 N.C. 539, 540-41, 276 S.E.2d 397, 399 (1981). Moreover, the trebling of any damages assessed is not a matter within the trial court’s discretion, but “is automatic once a violation is shown.” Id. at 547, 276 S.E.2d at 402. Thus, treble damages are not awarded by the verdict; they are an effect of the verdict. This liability of the defrauding defendants was fixed by a statute intended to express a public policy of North Carolina. Its origin, purpose and application of the law were laid put by the Supreme Court in Marshall. Id.
Mistakenly, 'the defendants assert that the recovery of punitive damages by the plaintiffs precludes the allowance of treble damages.2 The Supreme Court of North Carolina, however, has never declared that the receipt of one bars the other.- In Hardy, a case concerning misrepresentations made during the sale of an automobile, the plaintiff prayed for actual, punitive and treble damages. 288 N.C. at 304, 218 S.E.2d at 343. The Court held that the defendant’s actions were fraudulent, but not sufficiently fraudulent to subject the defendants *720to punitive damages. [Incidentally, this deficiency is not the fact presently]. Id. at 307 218 S.E.2d at 345. Thus it demonstrated the distinction between the two classes of damages. The Court confirmed this view, also holding that the false representations constituted unfair and deceptive acts in violation of § 75-1.1 and trebled the actual damages in accordance with § 75-16. Id. at 311, 218 S.E.2d at 348. The Court predicated its conclusion on the ground that § 75-16 “is itself punitive in nature.”3
Again, it is worthy of note, that the State Supreme Court rejected the notion that the treble damages provision, § 75-16, was exclusively penal in nature. State ex rel. Edmisten v. J.C. Penney Co., 292 N.C. 311, 319, 233 S.E.2d 895, 900 (1977). As a result, the Court of Appeals held that actual damages, even if trebled via § 75-16, were not a penalty,4 In sum, these decisions delineate a clear distinction in both purpose and scope between treble and punitive damages.
II.
Notwithstanding their claims to the contrary, the defendants were fully aware of this potential liability. Repeated notice of their treble damage accountability was given before and after verdict. The statute itself carried word of this liability before trial. The law of North Carolina charged them with notice that conduct such as theirs was denounced by section 75-1.1. They were made civilly liable by the treble damage statute, section 75-16, as well as by the decision in Hardy, 288 N.C. at 309, 218 S.E.2d at 346. Indeed this was a claim within the prayer of the complaint “for such further relief as may be just and proper.”
Obviously then, further pleadings by the plaintiffs were unneeded. Simply to make their claims more formal, plaintiffs moved to amend the complaint to emphasize this claim. Although F.R.C.P. 15 liberally permitted the amendment and Rule 54(c) allowed this relief, even if the party had not demanded it in his pleadings, the District Judge overruled the motion. This was an abuse of discretion for the issue was not one of discretion in any event.
Nonetheless, the majority of this Court would uphold the decision of the District Judge arguing that the plaintiffs unduly had failed to plead a cause of action under the Act and so, prejudiced the defendants. Aside from the demerits of the defendants’ claims, it must also be recalled that where the jurisdiction of the Federal Court rests on diversity of citizenship, the doctrine of Erie R.R. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), broadly dictates that the court apply State substantive law *721when adjudicating rights created by that State. Hanna v. Plumer, 380 U.S. 460, 465, 85 S.Ct. 1136, 1140, 14 L.Ed.2d 8 (1964); Markham v. City of Newport News, 292 F.2d 711, 718 (4th Cir.1961). What constitutes a proper remedy for the harm suffered by a plaintiff is a question of substance governed by State law. McLeod v. Stevens, 617 F.2d 1038, 1041 (4th Cir.1980). As already noted, and as conceded by the majority, treble damages are a proper remedy for the plaintiffs in accordance with the court decisions and statutes of North Carolina.
The doctrine of Erie, however, does not generally extend to matters of Federal jurisdiction or procedure. Id. At all events, the availability of treble damages as a remedy is assumed by F.R.C.P. 54(c) and 15(b) even though plaintiffs’ complaint did not expressly request such an award. McLeod, 617 F.2d at 1040; see 6 C. Wright & A. Miller, Federal Practice and Procedure § 1491 (1971).
Rule 54(c) allows a party to receive the relief to which he “is entitled, even if the party has not demanded such relief in his pleadings.” This Court has liberally construed this provision “leaving no question that it is the court’s duty to grant whatever relief is appropriate in the case on the basis of the facts proved.” Robinson v. Lorillard Corp., 444 F.2d 791, 803 (4th Cir.1971). Additionally, Rule 15(b) permits amendment of the pleadings to conform to the evidence presented at trial when issues not covered by the pleadings are tried by the “express or implied consent of the parties.” McLeod, 617 F.2d at 1041. These rules further a theory of liberalized pleading and procedure under which “a party’s misconception of the theory of his case does not work a forfeiture of .his legal rights.” New Amsterdam Casualty Co. v. Waller, 323 F.2d 20, 25 (4th Cir.1963).
Although substantial prejudice to an opposing party may defeat relief under 54(c), Robinson, 444 F.2d at 803, the present defendant’s claim of prejudice is unpersuasive. An award of treble damages would stem directly from the facts proved at trial concerning the defendant’s fraud. Id. at 803; United States v. Marin, 651 F.2d 24, 31 (1st Cir.1981). More importantly, the issue of fraud was raised by the initial pleadings, was presented to the jury, and was central to a recovery of actual or treble damages. Rental Development Corp. v. Lavery, 304 F.2d 839, 843 (4th Cir.1962).
In respect to any purported surprise, the defendants continually were on notice that the plaintiffs sought a substantial recovery arising from the sale of sophisticated machinery. No fundamental unfairness would be worked upon the defendants by the trebling of damages particularly because these damages are sought simply as a supplement to general damages. See 5 C. Wright & A. Miller, Federal Practice & Procedure, § 1311 (1971).
Therefore, I would reverse the judgment of the District Court and remand with instructions to treble the actual damages awarded by the jury.
. N.C.G.S. § 75-1.1 Methods of competition, acts and practices regulated; legislative policy.
(a) Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
N.C.G.S.
§ 75-16: Civil action by person injured; treble damages.
If any person shall be injured or the business of any person, firm or corporation shall be broken up, destroyed or injured by reason of any act or thing done by any other person, firm or corporation in violation of the provisions of this Chapter, such person, firm or corporation so injured shall have a right of action on account of such injury done, and if damages are assessed in such case judgment shall be rendered in favor of the plaintiff and against the defendant for treble the amount fixed by the verdict, (accent added)
. In North Carolina, the law employs punitive damages both to punish intentional wrongdoing and to deter others from similar behavior. Newton v. Standard Fire Insurance Co., 291 N.C. 105, 113, 229 S.E.2d 297, 302 (1976). Punitive damages are awarded above and beyond actual damages and never are granted as compensation. Id. at 113, 229 S.E.2d at 302; Nunn v. Smith, 270 N.C. 374, 377, 154 S.E.2d 497, 498, 499 (1967); Overnite Transportation Co. v. International Brotherhood of Teamsters, 257 N.C. 18, 30, 125 S.E.2d 277, 286 (1962).
To recover punitive damages, a plaintiff must prove that the defendant acted “wilfully or under circumstances of rudeness, oppression or in a manner which evidences a reckless and wanton disregard of the plaintiffs rights.” Hardy v. Toler, 288 N.C. 303, 306-07, 218 S.E.2d 342, 345 (1975). Actionable fraud inherently involves intentional wrongdoing because “[f]raud is a malfeasance, a positive act resulting from a wilful intent to deceive ...” Newton 291 N.C. at 113, 229 S.E.2d at 302; Davis v. Highway Commission, 271 N.C. 405, 408, 156 S.E.2d 685, 688 (1967). Newton represents a revision of the law concerning punitive damages, from those principles set forth in Hardy. Consequently, a plaintiff who demonstrates actionable fraud by the defendant need no longer also show aggravating circumstances in order to receive punitive damages. Newton, 291 N.C. at 113-14, 229 S.E.2d at 302.
. Id. In contrast to a plaintiff seeking punitive damages, a plaintiff suing for violations of the North Carolina Unfair Trade Practices Act, N.C.G.S. §§ 75-1.1,-16, is not required to establish intentional wrongdoing on the part of the defendant. Marshall v. Miller, 302 N.C. 539, 547, 276 S.E.2d 397, 402 (1981); see also United Roasters, Inc. v. Colgate Palmolive Co., 649 F.2d 985, 991 (4th Cir.1981). Rather, the plaintiff need only demonstrate that the acts complained of possessed the tendency or capacity to mislead, or created the likelihood of deception. Marshall, 302 N.C. at 548, 276 S.E.2d at 403.
The Supreme Court of North Carolina further has held that the treble damages statute, N.C. G.S. § 75-16, is both remedial and punitive in nature, a “hybrid statute” that sanctions an entirely statutory cause of action. Id.; Edmisten v. J.C. Penney, Inc. 292 N.C. 311, 319, 233 S.E.2d 895, 900 (1977). Although proof of fraud “necessarily constitute[s] a violation of the provision against unfair and deceptive acts [75-1.1],” such proof is not integral to a recovery under § 75-16. Hardy, 288 N.C. at 309, 218 S.E.2d at 346.
. Holley v. Coggin Pontiac, Inc., 43 N.C.App. 229, 237, 259 S.E.2d 1, 6 (1979) petition for discretionary review denied 298 N.C. 806, 261 S.E.2d 919 (1979). In Holley, the North Carolina Court of Appeals confronted the issue again in considering the question of whether North Carolina’s one year statute of limitations for actions subjecting a defendant to a penalty applied to suits under § 75-1.1. The Court stated that § 75-1.1 served three major purposes, only one of which was punitive:
(1) to serve as an incentive for injured private individuals to ferret out fraudulent and deceptive trade practices, and by so doing, to assist the State in enforcing the act’s prohibitions; (2) to provide a remedy for those injured by way of unfair and deceptive trade practices; and (3) to serve as a deterrent against future violations of the statute.
Id.