Krause v. RK Motors , 252 N.C. App. 135 ( 2017 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-911
Filed: 7 March 2017
Mecklenburg County, No. 15 CVS 8568
TOM KRAUSE, Plaintiff,
v.
RK MOTORS, LLC and WESTERN SURETY COMPANY, Defendants.
Appeal by plaintiff from order entered 7 June 2016 by Judge Hugh B. Lewis in
Mecklenburg County Superior Court. Heard in the Court of Appeals 9 February
2017.
Blossom Law PLLC, by Rashad Blossom, and The Law Offices of Jason E.
Taylor, by Lawrence B. Serbin, for plaintiff-appellant.
Johnston, Allison & Hord, P.A., by Scott R. Miller and Martin L. White, for
defendants-appellees.
MURPHY, Judge.
Plaintiff Tom Krause (“Krause”) appeals from the trial court’s order granting
RK Motors, LLC (“RK Motors”) and Western Surety Company’s (collectively
“Defendants”) motion for summary judgment. Specifically, he contends the trial court
erred in granting Defendants’ motion as the motion failed to state with particularity
its bases, and in making findings of controverted fact and conclusions of law in its
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
order. Further, Krause argues that the trial court’s grant of summary judgment in
Defendants’ favor as to his claims for fraud, unfair and deceptive trade practices,
negligent misrepresentation, and breach of express warranty were unsupported by
law.
RK Motors’ counterclaim for unfair and deceptive trade practices remains
before the trial court. Additionally, the trial court’s order granting summary
judgment retained jurisdiction over the case “for such other and further orders as
may be necessary and appropriate including, but not limited, to orders for the award
of attorneys’ fees and recovery of costs.” On these bases, the present appeal is
interlocutory. Neither party has argued why this case is properly before us despite
its interlocutory nature, and it is not the role of this Court to create an appeal for an
appellant. Accordingly, we dismiss the appeal for lack of subject matter jurisdiction.
Factual Background
Krause, a citizen and resident of California, was in the market to purchase a
restored vintage performance automobile when he came across RK Motors’ online
listing for a 1967 Chevrolet Nova (the “Nova”). RK Motors is a North Carolina limited
liability company located in Charlotte that holds itself out as a dealer of antique,
collectible, and customized cars. Its website states that all cars in its showroom earn
“the RKM Performance Center Seal of Approval, a comprehensive 70+ point
-2-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
inspection performed by one of [the company’s] ASE certified technicians where any
major issues are found and addressed.”
The listing described the Nova and also displayed several pictures as well as a
video of the car. As alleged in Krause’s complaint, between its posting and
communications with him, RK Motors represented that the Nova: Had 137 miles on
it; contained a 383 cubic inch small block V8 supercharged engine with 540
horsepower designed “to go straight at a very high rate of speed”; was professionally
assembled and restored; would be an excellent car for someone looking for sheer
performance; could be driven and enjoyed; was a “pavement-scorcher” with a six-
figure build cost after months of skilled workmanship and hours of thorough detailing
in accordance with exacting specifications; had a no-compromises, impressive
drivetrain with momentum that perfectly complemented solid, undercoated floor
plans and a long roster of serious speed equipment; included a transmission that
executed “quick, efficient shifts on the heels of wheel stand-inducing launches”; was
“fully sorted and ready to pound the pavement”; and was “ready to hit the road for
Friday night cruises, Saturday morning poker runs or Sunday afternoon shows.” The
listing also reassured that RK Motors was a company of car enthusiasts who “know
the kind of dedication a high dollar project takes.”
Krause first contacted RK Motors regarding the Nova on 16 August 2013, and
he was informed that there was a pending sale of the car. Unbeknownst to Krause,
-3-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
when the other buyer arrived to pick up the Nova, it ran poorly, overheated, and was
spewing radiator fluid after being driven only one-eighth of a mile. That buyer
rescinded the contract to purchase the Nova on the spot.
Approximately one month later, Krause revisited the website and noticed the
listing was still posted and the “pending sale” note had been removed. On 15
September 2013, Krause emailed Frank Carroll (“Carroll”), RK Motors’ Vice
President of Sales, and was told the earlier buyer’s “wife had nixed the deal.” Later,
however, Carroll’s story changed, and he reported that the previous buyer had “a bad
record” with the bank, making it difficult for him to get insurance for a classic car.
This change likely resulted from Carroll’s tendency to, as he put it, “ma[k]e up
something” when asked why a deal fell through.
Krause asked Dave Kindig (“Kindig”), a professional car builder, to review the
listing and then contacted Carroll to ask a few questions about the Nova. Krause
explained that he and Kindig had noticed the Nova had a crack in its lower-left-rear
panel above the exhaust pipe, and he wanted to know what had caused the crack and
whether it had been repaired. Carroll replied “that the [Nova]’s horsepower caused
vibration that might have caused the crack,” but the crack “had been repaired.”
On 16 September 2013, RK Motors emailed Krause a number of documents
pertaining to the proposed sale of the Nova, including a Bill of Sale and Odometer
Disclosure Statement, both signed by the company’s president. That paperwork
-4-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
reiterated that there were 137 miles on the Nova. Based on RK Motors’
advertisement, photographs, video, emails, verbal representations, Bill of Sale, and
Odometer Disclosure Statement, Krause was induced to enter into the contract to
purchase the Nova. He paid $67,000.00 to RK Motors in the form of a $1,000.00 down
payment on 16 September, and wire transfers to RK Motors of $35,000.00 on 17
September and $31,000.00 on 1 October.
According to RK Motors’ records, the company knew no later than 30 August
2013 that the Nova was running poorly and that “above half throttle . . . it spits and
sputters and almost cuts off[,]” yet RK Motors concealed these facts from Krause and
made false representations to him via email as to the condition of the Nova. On 17
September 2013, RK Motors wrote that “[t]he shop is going through the car and
making sure it is running well. Giving it a tune up and checking things out.
Everything looks good.”
On 4 October 2013, Exotic Car Transport, Inc. picked up the Nova from RK
Motors and transported it to Krause. Krause’s first opportunity to inspect the Nova
was 10 October 2013 when he took actual possession of the vehicle. Immediately
upon taking possession of the Nova, Krause experienced problems with the car. The
Nova idled too low and overheated after driving about three miles. Krause took the
Nova to a mechanic who attributed the overheating to a broken cooling fan toggle
switch. The same mechanic repaired the switch and adjusted the Nova’s idle,
-5-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
returning it to Krause the same day. However, when Krause attempted to drive the
Nova, he experienced severe vibration and the belt for the supercharger and harmonic
balancer fell off. On 12 October 2013, Krause had the Nova towed back to the
mechanic.
This time, according to Krause, the mechanic discovered a bolt missing at the
end of the harmonic balancer, a damaged crankshaft and supercharger, cracked
cylinder heads, loose suspension bolts, a crushed front-right brake line, and a
damaged transmission. In addition, the crack in the Nova’s lower-left-rear panel,
that Carroll reported had been fixed, still existed, and there was a similar crack in
the lower-right-rear panel, as well. Upon further inspection by his mechanic, Krause
learned that the Nova did not contain a professionally built 383 cubic inch small block
engine, but rather a 350 Chevy stock engine with approximately 80,000 miles on it.
On 15 October 2013, RK Motors sent him a Dealer’s Reassignment of Title to a Motor
Vehicle in which the company disclosed for the first time that the odometer reading
of 137 miles did not reflect the actual mileage.
On 4 May 2015, Krause filed a complaint in Mecklenburg County Superior
Court against RK Motors and the company’s surety, Western Surety Company,
asserting causes of action against RK Motors for (1) actual fraud/constructive fraud;
(2) unfair and deceptive trade practices; (3) violation of the North Carolina Vehicle
Mileage Act; (4) gross negligent misrepresentation/negligent misrepresentation; and
-6-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
(5) breach of express warranty. Krause also asserted as the sixth count his right to
recover from either RK Motors or Western Surety Company pursuant to N.C.G.S. §
20-288(e). Put simply, Krause alleged that he relied on RK Motors’ false
representations in deciding to purchase the Nova and that he could not have
reasonably discovered the true condition of the Nova before purchasing it.
Defendants filed a motion to dismiss on 19 August 2015. After a hearing, the
trial court granted Defendants’ motion to dismiss Krause’s cause of action for
violation of the North Carolina Vehicle Mileage Act, but denied their motion to
dismiss the remaining claims. On 10 November 2015, Defendants filed an answer,
twenty-six affirmative defenses, and a counterclaim. Defendants contended that RK
Motors’ website specifically disclaims all warranties and noted that information
contained thereon might be out of date or erroneous. Defendants also relied upon the
fact that Krause executed a Buyer’s Guide and Disclaimer of Warranties and Liability
as part of the purchase. The Buyer’s Guide stated that Krause agreed to buy the
Nova “as is-no warranty,” and that “dealer assumes no responsibility for any repairs
regardless of any oral statements about the vehicle.” The Disclaimer of Warranties
and Liability also stated in pertinent part:
Customer acknowledges and agrees that once any third
party carrier secures the purchased Vehicle from RK
Motors, Customer and/or such carrier bear all risk of loss if
the Vehicle is lost, stolen, destroyed, or damaged in any
way while in possession of such carrier and RK Motors
has no risk of loss whatsoever under such circumstances.
-7-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
4. Customer has had an opportunity to inspect and
examine the Vehicle as fully as he/she desires, and, as such,
the Vehicle is being sold by RK Motors to Customer in “as-
is” condition, with all faults.
5. RK Motors makes no warranties whatsoever, whether
express or implied, of merchantability, fitness for purpose,
or otherwise, with respect to the Vehicle, and Customer
hereby disclaims and waives all such warranties.
Prior to purchasing the Vehicle, Customer acknowledges
that he/she has read and understands the above
limitations and disclaimers, that they are terms and
conditions of sale and that they constitute the entire
agreement between the parties regarding warranties and
any other liability.
Based on this language, Defendants alleged that Krause waived any right to recover
for any of the false statements made to him.
Krause replied to RK Motors’ counterclaim on 16 March 2016, and on 23 March
2016 Defendants filed a motion for summary judgment as to “all claims.” Defendants
amended their motion for summary judgment on 6 May 2016 to limit it to “all of
Plaintiff’s claims.” At no time did Krause file a cross-motion for summary judgment.
On 7 June 2016, the trial court granted Defendants’ motion for summary
judgment on Krause’s remaining claims. Notably, the order granting summary
judgment failed to acknowledge or resolve RK Motors’ counterclaim. It did explain,
however, “[t]his cause is retained for such other and further orders as may be
necessary and appropriate including, but not limited, to orders for the award of
-8-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
attorneys’ fees and recovery of costs.” Krause gave notice of appeal from the order
granting Defendants’ motion for summary judgment on 30 June 2016.
Analysis
At the outset, we note that the record establishes that the counterclaim has
not been resolved and that the trial court has not relinquished jurisdiction.
Accordingly, this appeal is interlocutory. See Veazey v. City of Durham, 231 N.C. 357,
362, 57 S.E.2d 377, 381 (1950) (“An interlocutory order is one made during the
pendency of an action, which does not dispose of the case, but leaves it for further
action by the trial court in order to settle and determine the entire controversy.”
(citation omitted)).
A party may immediately appeal an interlocutory order or judgment only if (1)
the trial court certifies the case for immediate appeal pursuant to Rule 54(b) of the
North Carolina Rules of Civil Procedure, or (2) if the trial court’s decision deprives
the appellant of a substantial right that would be lost absent immediate review.
Branch Banking & Tr. Co. v. Peacock Farm, Inc., ___ N.C. App. ___, ___, 772 S.E.2d
495, 498, aff’d per curiam, 368 N.C. 478, 780 S.E.2d 553 (2015). Rule 28(b)(4) of the
North Carolina Rules of Appellate Procedure requires appellants to include a
“statement of the grounds for appellate review.” If the appeal is interlocutory, that
statement must show that the trial court certified the case for immediate review, or
-9-
KRAUSE V. RK MOTORS, LLC
Opinion of the Court
“contain sufficient facts and argument to support appellate review on the ground that
the challenged order affects a substantial right.” N.C. R. App. P. 28(b)(4).
Here, Krause’s brief fails to contain the requisite statement of the grounds for
appellate review. Furthermore, he declines to address the interlocutory nature of the
appeal in the remainder of his brief. The order granting summary judgment in favor
of Defendants contains no Rule 54(b) certification, and the briefs to this Court fail to
make any argument as to why the order affects a substantial right.
“It is not the duty of this Court to construct arguments for or find support for
appellant’s right to appeal from an interlocutory order.” Jeffreys v. Raleigh Oaks
Joint Venture, 115 N.C. App. 377, 380, 444 S.E.2d 252, 254 (1994); see also Viar v.
N.C. Dep’t of Transp., 359 N.C. 400, 402, 610 S.E.2d 360, 361 (2005) (“It is not the
role of the appellate courts . . . to create an appeal for an appellant.”). That burden
rests solely with the appellant. Jeffreys, 115 N.C. App. at 380, 444 S.E.2d at 254.
Accordingly, we are required to dismiss this appeal.
DISMISSED.
Chief Judge McGEE and Judge DAVIS concur.
- 10 -