Dykes v. Long

• Court: Court of Appeals of North Carolina
• Decided: July 1, 2014
• Docket: 14-148
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA14-148 NORTH CAROLINA COURT OF APPEALS

Filed: 1 July 2014

RANDALL DYKES and wife TAMARA DYKES, Plaintiffs,

v. Lee County No. 12 CVS 867 WILLIAM MORRIS LONG and wife VICKY LONG, Defendants.

Appeal by plaintiffs from order entered 28 October 2013 by

Judge C. Winston Gilchrist in Lee County Superior Court. Heard

in the Court of Appeals 20 May 2014.

Foyles Law Firm, PLLC, by Jody Stuart Foyles, for plaintiffs-appellants.

Anna S. Lucas for defendants-appellees.

HUNTER, Robert C., Judge.

Randall and Tamara Dykes (“plaintiffs”) appeal from order

entered 28 October 2013 granting summary judgment in favor of

Morris and Vicky Long (“defendants”) on plaintiffs’ fraud claim.

On appeal, plaintiffs argue that summary judgment was improperly

entered in defendants’ favor because genuine issues of material -2- fact existed as to whether defendants made a false

representation with intent to deceive.

After careful review, we affirm the trial court’s order.

Background

Plaintiffs entered into a contract on 10 January 2007 to

buy defendants’ home at 7603 Villanow Drive in Sanford, North

Carolina. Closing took place on 18 May 2007. In the

Residential Property Disclosure Statement (“the disclosure

statement”) signed by defendants in August 2006 and delivered to

plaintiffs before purchase, defendants indicated that they did

not know of any problems with the patio, deck, or other

structural components of the house. A licensed home inspector

hired by plaintiffs found no problems with the deck or front

porch when he examined the home in early 2007. In his report,

the inspector wrote “[t]he front porch appears to be in

acceptable condition.”

In the summer of 2011, plaintiffs discovered cracking in

the foundation of the front porch. They hired a structural

engineer to assess the damage. He determined that the front

porch had settled about two inches into the foundation and had

rotated away from the residence, causing cracks to the front and

right porch foundation wall. He also noticed that previous -3- mortar work and brick repair had been done to the porch. In his

opinion, the previous work done on the porch did not adequately

address the structural cause of the damage.

On 2 August 2012, plaintiffs brought suit against

defendants and sought punitive damages for fraud and unfair or

deceptive practices.1 They claimed that by representing no

knowledge of any structural problems to the porch or deck in the

disclosure statement, defendants knowingly and fraudulently

induced plaintiffs into buying their home.

Defendants filed an answer on 20 August 2012 denying the

allegations in the complaint. Both defendants provided

deposition testimony during discovery. Mr. Long testified that

after having the house built in 1994, he discovered cracks in

the porch in 1995. He hired contractors to address the problem;

they installed angle iron and sheet metal before pouring a new

slab of concrete. The contractors told defendants that the

structural issues with the porch were repaired and they would

not have any further problems. Later, in 1996 or 1997,

defendants paid for a brick mason to replace some cracked bricks

and mortar, which they characterized as a cosmetic rather than

structural issues caused by the previous foundation shift.

1 Plaintiffs took voluntary dismissal of the unfair or deceptive practices claim on 15 October 2012. -4- After the structural repairs done to the porch in 1995,

defendants never noticed any further problems with structure of

the porch or deck.

Defendants put their house on the market and signed the

disclosure statement in August 2006, roughly ten years after the

structural repairs were made. The exact wording of the

representation defendants made was that they did not “know of

any problem (malfunction or defect) with [the] . . . foundation,

slab . . . patio, deck, or other structural components including

any modifications to them.” When asked during his deposition

why defendants did not answer “yes” to this question, Mr. Long

testified that he thought the question was only asking about

current or ongoing problems.

Defendants’ motion for summary judgment came on for hearing

on 9 September 2013. Defendants argued that plaintiffs put

forth no evidence tending to show there was a problem with the

house when it was sold in 2007, or if there was a problem, that

defendants knew of it. The trial court granted defendants’

motion for summary judgment, and plaintiffs filed timely notice

of appeal from that order.

Discussion

I. Defendants’ Motion for Summary Judgment -5- Plaintiffs’ sole argument on appeal is that the trial court

erred by granting summary judgment for defendants where genuine

issues of material fact existed as to whether defendants knew of

a structural defect when they signed the disclosure statement.

We disagree.

Summary judgment is proper 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. Gen. Stat. §

1A-1, Rule 56(c) (2013). “In a motion for summary judgment, the

evidence presented to the trial court must be . . . viewed in

a light most favorable to the non-moving party.” Howerton v.

Arai Helmet, Ltd., 358 N.C. 440, 467, 597 S.E.2d 674, 692

(2004). This Court reviews an order granting summary judgment

de novo. In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d

572, 576 (2008).

The elements of fraud in North Carolina are: “(i) false

representation or concealment of a material fact, (ii)

reasonably calculated to deceive, (iii) made with intent to

deceive, (iv) which does in fact deceive, [and] (v) resulting in

damage to the injured party.” Deans v. Layton, 89 N.C. App. -6- 358, 366-67, 366 S.E.2d 560, 565-66 (1988). In order to survive

a motion for summary judgment on a fraud claim, the plaintiff

must forecast evidence that shows: (1) the defendant made a

definite and specific representation that was materially false;

(2) the defendant made the representation with knowledge of its

falsity; and (3) the plaintiff reasonably relied on the

representation to his detriment. Kent v. Humphries, 50 N.C.

App. 580, 588, 275 S.E.2d 176, 182, aff’d, 303 N.C. 675, 281

S.E.2d 43 (1981). “A defendant cannot be liable for concealing

[or falsely representing] a fact of which it was unaware.”

Forbes v. Par Ten Group, Inc., 99 N.C. App. 587, 594, 394 S.E.2d

643, 647 (1990) (internal quotation marks omitted). “If a

defendant presents evidence that it did not know of the fact in

issue, the burden shifts to plaintiff to prove that defendant

knew or had reason to know the fact.” Id. (internal quotation

marks omitted). “The required scienter for fraud is not present

without both knowledge [of a material fact] and an intent to

deceive, manipulate, or defraud.” RD&J Props. v. Lauralea-

Dilton Enters., LLC, 165 N.C. App. 737, 745, 600 S.E.2d 492, 498

(2004).

Plaintiffs argue that defendants made a false

representation or concealment of a material fact by filling out -7- the disclosure statement. Specifically, they argue that the

problems plaintiffs experienced in 2011 were substantially

similar to those experienced by defendants in 1995, and because

defendants knew of these issues and failed to either ensure that

they were adequately addressed or alert plaintiffs as to their

existence, there is a genuine issue of material fact as to

whether defendants made a false representation with the required

intent to deceive. Plaintiff’s argument is unfounded.

First, even taking the evidence in the light most favorable

to plaintiffs, Howerton, 358 N.C. at 467, 597 S.E.2d at 692,

they have put on no forecast of evidence that there was a

structural problem with the porch when defendants signed the

disclosure statement in 2006. Defendants testified that they

hired contractors to fix the porch when they experienced

structural problems in 1995. They also fixed cosmetic problems

such as cracked bricks and mortar caused by the settling of the

foundation. After the new concrete slab was poured, defendants

were advised to put in cement caulk between the porch and the

house to keep debris from collecting, which they did. Aside

from this work, defendants did nothing more to the porch or the

foundation, and they both testified that they had no further

problems with the porch in the roughly ten years between when -8- this work was performed and when they sold the house to

plaintiffs. Although plaintiffs point to the fact that there

was a loose column on the porch, Mr. Long testified that the

columns were “more visual aids than anything else” and were

obviously not structural in nature. He said that it “wasn’t

like there was a bunch of weight and there wasn’t no weight,”

but rather the column was always a little loose and didn’t

change over time. Mr. Long never felt like the column was a big

enough issue to warrant fixing. When defendants sold their

house to plaintiffs, a licensed inspector examined the porch and

noted that it appeared to be in acceptable condition.

Plaintiffs did not notice any issues with the porch until 2011,

roughly four years after buying the home from defendants. Thus,

the structural repairs that defendants made to the porch lasted

for approximately sixteen years before any further problems

became apparent. In sum, there is no evidence indicating that a

structural problem existed when defendants signed the disclosure

statement in 2006.

Second, even if there was a structural problem with the

house in 2006, plaintiffs have failed to carry their burden of

proving that defendants were aware of this defect when they

signed the disclosure statement. The disclosure statement only -9- asked whether defendants knew of any existing problems, not

whether they had ever made repairs to fix previous issues.

Defendants testified that they knew of no problems with the

porch or structural components of the house when they signed the

disclosure statement; this testimony was corroborated by

plaintiffs’ inspector’s report indicating that the porch

appeared to be in acceptable condition. Thus, the burden

shifted to plaintiffs to prove that defendants knew or had

reason to know of the structural defect, if one existed. Forbes,

99 N.C. App. 587, 594, 394 S.E.2d 643, 647. Again, taking the

evidence in the light most favorable to plaintiffs, they have

failed to meet this burden. The undisputed evidence shows that

defendants responded to the structural issues in 1995 and were

assured by their contractors that the problems were permanently

fixed. Defendants both testified that they experienced no more

problems with the porch during their ownership of the house, and

plaintiffs’ inspector observed no damage when he examined the

house in early 2007. Thus, there is no evidence indicating that

defendants knew or should have known about a structural defect

when they signed the disclosure statement in 2006, if such a

defect even existed. -10- Based on the foregoing, we conclude that plaintiffs failed

to forecast evidence that defendants either made a definite and

specific representation that was materially false or had

knowledge of its falsity. Accordingly, summary judgment for

defendants was proper. See Uzzell v. Integon Life Ins. Corp.,

78 N.C. App. 458, 337 S.E.2d 639 (1985); see also Taylor v.

Gore, 161 N.C. Ap. 300, 588 S.E.2d 51 (2003) (affirming summary

judgment for the defendants where they falsely represented that

the land they sold was not in a flood zone because the

plaintiffs could not forecast evidence that the defendants knew

or had reason to know the land was in the flood zone when they

made the misrepresentation).

Conclusion

After careful review, we affirm the trial court’s order

granting summary judgment in favor of defendants.

AFFIRMED.

Judges McGEE and ELMORE concur.

Report per Rule 30(e).