Court Opinion

ID: 9575078
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:11:21.999616+00
Date Added: 2024-06-11T12:47:55.240564
License: Public Domain

Chief Justice Sharp
concurring and dissenting.
I concur in the majority’s decision that the Court of Appeals has misconstrued G.S. 1A-1, Rule 54(b). The majority opinion correctly states, “Certainly the General Assembly did not intend to restrict the right of appeal provided by G.S. 1-277 and 7A-27(d) by engrafting Rule 54(b) requirements upon them.” Indeed, Rule 54(b) makes appealable judgments which were not appealable prior to its enactment.
Under G.S. 1-277 a partial summary judgment which determined fewer than all of the claims in a multiple-claim action would not be immediately appealable unless the order affected a substantial right. This is true because such an order would not finally determine the entire action — there would still be claims remaining in the case. Under G.S. 1-277 the general rule is that “ ‘an appeal will not lie until there is a final determination of the whole case. It lies from an interlocutory order only when it puts an end to the action or where it may destroy or impair or seriously imperil some substantial right of the appellant.’ ” State v. Childs, 265 N.C. 575, 578, 144 S.E. 2d 653, 655 (1965). See Veazey v. Durham, 231 N.C. 357, 57 S.E. 2d 377 (1950).
All Rule 54(b) did was to restrict the unit to which the finality concept would be applied. In other words, it allows the trial judge to authorize an appeal from a judgment that finally determines a claim for relief even though there are other claims remaining in the action. The only additional requirement that must be met is that there is no just cause for delay. The same order or judgment would not necessarily be appealable under G.S. 1-277 unless it also affected a substantial right. Thus Rule 54(b) has the effect of increasing the avenues of appellate review. Final judgments on fewer than all the claims are now immediately appealable if the trial judge determines that there is no just cause for delay, regardless of whether those judgments affect substantial rights as that term has been previously defined. This is what I believe the comment to Rule 54(b) means when it says:
“In considering this section, it should be remembered that § 1-277 was left intact except as modified by this section. In other words appeals will continue to lie only when a ‘party aggrieved’ has been deprived of a ‘substantial right,’ or from *145a final judgment. The modification here is that when there is no just reason for delay and when there is an express determination to that effect, the unit to which the finality concept shall be applied is by this rule made a smaller one. Thus, if two claims are presented to the trial court and one of them is the subject of a disputed ruling, an appeal will lie if the ruling would have been appealable in an action involving that claim alone and if the judge makes the requisite determination.” N. C. Gen. Stats., Vol. 1A at p. 700.
I also agree that in any claim for relief in which issues of compensatory and punitive damages are properly for the jury both issues should be tried at the same time by the same judge and jury, and that to require them to be tried separately at different times would violate a substantial right. In such a situation, however, multiple claims are not involved. “[W]hen plaintiff is suing to vindicate one legal right and alleges several elements of damage, only one claim is presented and subdivision (b) [of Rule 54] does not apply.” 10 C. Wright & A. Miller, Federal Practice and Procedure § 2657 (1973).
Further, in my view, this case involves no issue of punitive damages. The complaint in the present action purports to allege three (3) separate claims for relief, all relating to defendant’s alleged failure to perform its obligations as plaintiff’s lessee.
In the portion captioned “first claim for relief,” plaintiff alleges she was entitled to receive as rent in addition to a guaranteed minimum amount, a percentage of the net sales; that defendant, by understating the amount of its net sales had failed to comply with its obligation; and that, by reason of said failure, defendant is indebted to plaintiff in an amount in excess of $10,000.00 plus interest.
In the portion captioned, “second claim for relief,” plaintiff alleges, upon information and belief, that defendant “wilfully, fraudulently and inaccurately reported the net sales to the plaintiff over a continuing period of time,” thus depriving plaintiff of substantial revenues in excess of $10,000.00; and on account of defendant’s conduct plaintiff is entitled to recover punitive damages in the amount of $100,000.00.
In the portion captioned, “third claim for relief,” plaintiff alleged she was damaged in the amount of $30,000.00 plus interest, costs, and legal fees, because defendant closed its store *146in breach of the contract and vacated the leased premises prior to the expiration of the term. This third claim is referred to as one for an “anticipatory breach.”
It is noted that plaintiff does not allege that defendant has failed to pay any portion of the guaranteed minimum rental.
Recovery on plaintiff’s “first claim for relief,” that is, for defendant’s failure to meet its contractual obligations, is prerequisite to consideration of her “second claim for relief.” Both relate to whether defendant has paid in full the rental it was obligated to pay — in excess of the guaranteed minimum rental —based on its net sales during the period defendant conducted its business in the leased premises.
I agree with that portion of the Court’s opinion which holds that defendant was not obligated to remain in possession and carry on business in the leased premises until the expiration of the term of the lease. Hence, I agree that summary judgment for defendant on the “third claim for relief” was properly entered.
I dissent from that portion of the Court’s opinion which holds that in her “second claim for relief” plaintiff has stated “a proper cause of action for punitive damages.” In my opinion, these allegations concerning the recovery of punitive damages fail to state a claim upon which relief can be granted, and I agree with Judge Seay that from the affidavits and pleadings it affirmatively appears that plaintiff cannot prove entitlement to punitive damages. See Hardy v. Toler, 288 N.C. 303, 218 S.E. 2d 342 (1975); Nunn v. Smith, 270 N.C. 374, 154 S.E. 2d 497 (1967). I therefore dissent from the majority decision reversing summary judgment for defendant on the so-called “second cause of action.”
No decision has come to my attention which holds that a plaintiff is entitled to recover punitive damages on account of a defendant’s failure to pay what he is obligated by contract to pay. Moreover, the cases cited in the Court’s opinion are in full accord with my view.
In King v. Insurance Co., 273 N.C. 396, 159 S.E. 2d 891 (1968), the order from which the plaintiff appealed allowed the defendant’s motion to strike from the complaint the allegations concerning the recovery of punitive damages and the prayer therefor. The defendant’s motion to dismiss the appeal was overruled on the ground the order was in the nature of a judg*147ment sustaining a demurrer for failure to allege fácts sufficient to constitute a cause of action for punitive damages.
In King, the plaintiff sued his liability insurance company for compensatory and punitive damages. He alleged the defendant had wilfully breached its contractual obligations by refusing to defend a counterclaim which had been asserted against the plaintiff in an automobile collision case and by failing to pay the judgment obtained against the plaintiff on the counterclaim.
The allegations upon which the plaintiff based his right to recover punitive damages were as follows: He referred to the defendant’s conduct as “aggravated fraud.” He referred to the defendant’s breach of contract as “wilful,” “intentional,” in “wanton disregard of the rights of the plaintiff,” and as “calculated ... to hamper, prevent and/or impair the plaintiff’s legal position” in the automobile collision case.
The opinion of Justice Lake states: “With the exception of a breach of promise to marry, punitive damages are not given for breach of contract. Swinton v. Realty Co., 236 N.C. 723, 73 S.E. 2d 785; Richardson v. R. R., 126 N.C. 100, 35 S.E. 235; Restatement of the Law, Contracts, § 342. See also: Williston on Contracts, Rev. Ed., § 1340; Sutherland on Damages, 4th Ed., § 390; Sedgwick on Damages, 9th Ed., § 603; McCormick on Damages, § 81; Hale on Damages, p. 318; 22 Am. Jur. 2d, Damages, § 245; 25 C.J.S., Damages, § 120; Annot., 84 A.L.R. 1345.” Id. at 398, 159 S.E. 2d at 893. The Court concluded: “The complaint in the present action, including the allegations striken by the order of the superior court, alleges only a breach of contract by the defendant.” Id. See J. McCarthy, Punitive Damages in Bad Faith Cases, § 2.29 (1976).
We are not considering a factual situation in which it is alleged that a party was induced to enter into a contract by reason of false and fraudulent representation. Such a factual situation was involved in Saberton v. Greenwald, 146 Ohio St. 414, 66 N.E. 2d 224, 165 A.L.R. 599 (1946); Swinton v. Realty Co., 236 N.C. 723, 73 S.E. 2d 785 (1953), referred to in the Court’s opinion.
In Swinton, the plaintiff alleged, and the verdict established, that defendants induced the plaintiff to purchase a lot of land 80 by 150 feet at the price of $2,000.00 by falsely and fraudulently representing that the boundaries of the lot as *148designated and pointed out by the defendants embraced an area “268 feet wide and 160 yards deep.” Answering separate issues, the jury awarded the plaintiff actual damages of $1,500.00 and punitive damages at $1,500.00. The defendant appealed from a judgment that the plaintiff recover in accordance with the verdict. This Court modified the judgment by striking therefrom the allowance of punitive damages. The opinion of Chief Justice Devin states: “We are inclined to the view that the facts in evidence here are not sufficient to warrant the allowance of punitive damages. There was no evidence of insult, indignity, malice, oppression or bad motive other than the same false representations for which they have received the amount demanded. . . . We do not think the law requires that an additional amount for punishment should be meted out in this action.” Id. at 727, 73 S.E. 2d at 788.
As in King, the epithets used to describe the defendant’s conduct are insufficient to constitute a claim for punitive damages. We note that G.S. 1A-1, Rule 9 (b) provides: “In all aver-ments of fraud, duress or mistake, the circumstances constituting fraud or mistake shall be stated with particularity. Malice, intent, knowledge and other condition of mind of a person may be averred generally.” As we said in Mangum v. Surles, 281 N.C. 91, 96, 187 S.E. 2d 697, 700 (1972), “Rule 9(b) codifies the requirement previously existing in our State practice that the facts relied upon to establish fraud, duress or mistake must be alleged.”
In the present case plaintiff has alleged and shown only an intentional breach of contract. Her second claim for relief does not adequately allege an action for fraud or deceit but merely realleges the underlying basis of her contract action.
Justices Branch and Moore join in this opinion.