Dykes v. Long ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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).