Eastern Roofing & Aluminum Co. v. Brock , 70 N.C. App. 431 ( 1984 )

320 S.E.2d 22 (1984)

EASTERN ROOFING AND ALUMINUM COMPANY, a North Carolina Corporation
v.
D.C. BROCK and wife, Eunice Brock.

No. 8310DC1120.

Court of Appeals of North Carolina.

September 18, 1984.

Robert A. Hassell, Raleigh, for plaintiff-appellant.

Samuel J. Morris, III, Hilton Head, for defendants-appellees.

HILL, Judge.

Plaintiff contends that defendants failed to notify plaintiff in writing of their intention to cancel the contract as required by G.S. 25A-39 and G.S. 25A-40, and therefore, defendants did not validly cancel their contract with the plaintiff.

Because the language of G.S. 75-1.1 closely resembles that employed by Section 5(a)(1) of the Federal Trade Commission Act, codified at 15 U.S.C. § 45(a)(1) (1976), the North Carolina Supreme Court has established by earlier decisions that federal decisions interpreting the FTC Act may be used as guidance in construing the scope and meaning of G.S. 75-1.1. Marshall v. Miller, 302 N.C. 539, 276 S.E.2d 397 (1981); Johnson v. Insurance Co., 300 N.C. 247, 266 S.E.2d 610 (1980); Hardy v. Toler, 288 N.C. 303, 218 S.E.2d 342 (1975). Federal law is specifically cited in G.S. 25A-39(a) by referring to the "Federal Trade Commission Trade Regulation Rule Concerning a Cooling-Off Period for Door-to-Door Sales." The pertinent provisions of this trade regulation rule to the case under review recite that

[i]n connection with any door-to-door sale, it constitutes an unfair and deceptive act or practice for any seller to:

. . . . .

(b) Fail to furnish each buyer, at the time he signs the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned "NOTICE OF CANCELLATION", which shall be attached to the contract or receipt and easily detachable....

. . . . .

(e) Fail to inform each buyer orally, at the time he signs the contract or purchases the goods or services, of his right to cancel.

16 C.F.R. § 429.1 (1984).

Defendants contend that plaintiff's failure to comply with 16 C.F.R. § 429.1(e), by in fact failing to orally explain to defendants their rights to cancel at the time the agreement was signed, coupled with the defective notice of cancellation which was incomplete and unattached to the contract in violation of G.S. 25A-40(b) and 16 C.F.R. § 429.1(b), constitute an unfair and deceptive act in violation of G.S. 75-1.1. We agree. Plaintiff's noncompliance with 16 C.F.R. § 429.1(b) and (e) and G.S. 25A-40(b) was directly responsible for defendants' failure to give written notice of cancellation which requirement was not contained in the contract except in the notice of cancellation. Without knowledge of the requirement for written notice, defendants in good faith complied with what they understood to be the required notice of cancellation contained in the contract, i.e., cancellation within three business days from the date of the transaction. It is significant that the language contained in the unsigned acknowledgement in the notice of cancellation specifically indicates that the buyers received oral representations of their right to cancel, clearly an effort designed to comply with 16 C.F.R. § 429(e).

The jury found as fact that plaintiff, at the time the contract was entered, failed to inform defendants orally of defendants' right to cancel, and that plaintiff's conduct was the proximate cause of defendants' injury for which defendants suffered a loss in the amount of $500.00. Based on these findings of fact the trial court concluded as a matter of law that plaintiff violated G.S. 75-1.1. In addressing defendants' claim of plaintiff's violation of G.S. 75-1.1, the trial court properly instructed the jury to find the facts, and based on the jury's finding, the court determined as a matter of law whether the defendant engaged in "unfair or deceptive acts or practices in the conduct of trade or commerce." Hardy v. Toler, 288 N.C. 303, 310, 218 S.E.2d 342, 347 (1975).

The trial court was correct in finding that plaintiff did violate G.S. 75-1.1 based on the jury verdict and therefore trebled the damages. However, the award by the jury in the sum of $500.00 should have been trebled to $1,500.00, and this sum, not $2,000.00, should have been the total amount awarded defendants. For this reason the judgment of the trial court is stricken, and the case remanded to the trial court for entry of judgment in conformity herewith.

Remanded.

BRASWELL and PHILLIPS, JJ., concur.