Court Opinion

ID: 9585867
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:04:33.839015+00
Date Added: 2024-06-11T17:24:15.861685
License: Public Domain

Judge GREENE
concurring in part and dissenting in part.
While I agree with the majority in affirming the trial court on most of the issues presented, I believe the trial court erred in granting summary judgment for Beverly-Hanks & Associates, Inc., Wynelle M. Thompson, and Donald 0. Thompson on both the fraud and unfair trade practices claims, and for Dorothy E. Kefgen on the fraud claim.
*348I
Beverly-Hanks & Associates, Inc. and Wynelle M. Thompson
The majority conclude that “plaintiffs have not produced any evidence that defendant Wynelle Thompson or any representative of defendant Beverly-Hanks, made any false representation as to a material past or existing fact.” The plaintiffs, in their verified complaint, allege factual bases for an action of fraud arguing that Wynelle M. Thompson and, derivatively, Beverly-Hanks fraudulently misled the plaintiffs into purchasing the property in issue.
A broker who makes fraudulent misrepresentations or who conceals a material fact when there is a duty to speak to a prospective purchaser in connection with the sale of the principal’s property is personally liable to the purchaser notwithstanding that the broker was acting in the capacity of agent for the seller.
J. Webster, Real Estate Law in North Carolina § 132, at 165 (3d ed. 1988) (footnote omitted).
Plaintiffs’ evidence showed that Ms. Thompson hired Jim Gordon to conduct an inspection to satisfy the plaintiffs’ demand for an independent investigation of the house’s structural integrity. Ms. Thompson failed to mention that Mr. Gordon had earlier inspected the house for the Kefgens at the behest of Thomas Sumner, with whom Ms. Thompson now acted in concert in marketing the house on behalf of the Kefgens. By the evidence presented, Jim Gordon arguably does not qualify as a neutral, independent inspector, yet the plaintiffs relied on Ms. Thompson’s choosing him as an independent inspector. The plaintiffs provided evidence that they would not have gone through with closing had they known they had not received an independent investigation. The evidence elicited during discovery and presented for the trial court’s review upon the motion of summary judgment is thus conflicting as to material facts. Wynelle Thompson produced evidence to the effect that she did not know Jim Gordon had previously inspected the house for the Kefgens, and the plaintiffs produced evidence tending to show that not only was she aware of it, but that she sought Jim Gordon’s services because of it. As these defendants have not shown that they otherwise were entitled to judgment as a matter of law, summary judgment was improperly granted.
*349Similarly I find in the record conflicting evidence as to the unfair trade practices claim against Wynelle Thompson and Beverly-Hanks. The evidence outlined above relating to the fraud claim could also tend to prove that Ms. Thompson engaged in a deceptive act or practice in or affecting commerce. Powell v. Wold, 88 N.C. App. 61, 68, 362 S.E.2d 796, 800 (1987) (proof of fraud necessarily constitutes a violation of the prohibition against unfair and deceptive trade practices). Thus, summary judgment was improvidently granted as to defendants Wynelle Thompson and Beverly-Hanks on this issue. See Powell, 88 N.C. App. 61, 362 S.E.2d 796 (motion to dismiss denied as to both realtor and real estate company where realtor made deceptive statements).
II
Dorothy E. Kefgen
Regarding defendant Dorothy E. Kefgen, I find that the plaintiffs presented sufficient evidence to withstand defendants’ summary judgment motion since this defendant can be liable for the alleged fraud of her agent, Wynelle Thompson.
A seller of property, as principal, is responsible to a purchaser for injuries caused by the fraud of the seller’s broker committed during the existence of the agency and within the scope of the agent’s actual or apparent authority from the seller. This is true even though the seller did not have knowledge of or authorize the actions of the broker. A seller will be precluded from enforcing a contract to convey against purchaser who has entered into the contract in justifiable reliance on the fraudulent, negligent or innocent material misrepresentations of the seller’s agent.
J. Webster, Real Estate Law in North Carolina § 133, at 166. Also, the plaintiffs produced some evidence of misrepresentations by Ms. Kefgen and her husband directly to them about the soundness of the house. The plaintiffs provided evidence that tended to prove that when the plaintiffs inquired as to the cause of certain observed defects, the Kefgens provided incomplete and misleading answers. The plaintiffs testified this induced them to forego inquiries they would otherwise have made, thus presenting an additional ground for fraud. See Blackwell v. Dorosko, 93 N.C. App. 310, 377 S.E.2d 814, opinion withdrawn in part on rehearing, 95 N.C. App. 637, 383 S.E.2d 670 (1989).
*350Ms. Kefgen also argues that the plaintiffs had no unfair trade practices action under N.C.G.S. § 75-1.1 since she was only an individual selling her home. The same evidence which gave rise to her liability for fraud may also support an action under the Unfair Trade Practices Act. Powell, 88 N.C. App. at 68, 362 S.E.2d at 800. I fail to see the logic of excusing a homeowner-seller from the application of § 75-1.1 simply because the owner-seller does not earn a living by selling homes. N.C.G.S. § 75-1.1 declares unlawful “unfair or deceptive acts or practices in or affecting commerce . . . .” Commerce “includes all business activities, however denominated. .. .” N.C.G.S. § 75-l.Hb). Some of the many definitions of “business” include:
an activity engaged in as normal, logical, or inevitable and usually extending over a considerable period of time; ... an activity engaged in toward an immediate specific end and usually extending over a limited period of time; ... a usually commercial or mercantile activity customarily engaged in as a means of livelihood . . . ; [or] transactions, dealings, or intercourse of any nature but now especially economic (as buying and selling) . . .
Webster’s Third New International Dictionary (1968).
The statutory definition of commerce does not indicate with certainty whether the Legislature had an expansive or restrictive definition of business in mind, but the phrase “however denominated” connotes an expansive approach. However, as the majority opinion points out, our courts have interpreted the statute restrictively, holding that homeowners “engaged in the sale of [their] residence [are] not involved in trade or commerce . . . .” Robertson v. Boyd, 88 N.C. App. 437, 443, 363 S.E.2d 672, 676 (1988). Robertson depended on Rosenthal v. Perkins, 42 N.C. App. 449, 257 S.E.2d 63 (1979), which also held that a homeowner-seller was not subject to liability under N.C.G.S. § 75-1.1. To come to this conclusion the Rosenthal court looked to the purpose of the original version of the Unfair Trade Practices Act there enunciated as follows:
(b) The purpose of this section is to declare, and to provide civil legal means to maintain, ethical standards of dealing between persons engaged in business and between persons engaged in business and the consuming public within this State, *351to the end that good faith and fair dealings between buyers and sellers at all levels of commerce be had in this State.
N.C.G.S. § 75-l.Kb) (1975).
The Legislature has eliminated this language from the statute, but at the time it was in force, no doubt a restrictive definition of commerce was the legislative intent. Now, however, Rosenthal is no longer binding precedent given the substantial change in the statutory language, which currently states that: “ ‘commerce’ includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.” N.C.G.S. § 75-1.Kb) (1988). Unlike the earlier version, only professional services are excluded from the definition of commerce. When some subjects or things are specifically excluded from statutory coverage, all others are assumed included. See generally 82 C.J.S. Statutes § 333 (1953). Furthermore, the elimination of the restrictive language from the statute indicates the Legislature intended the Act to facilitate wider imposition of liability. This view is bolstered by the addition of the “in or affecting commerce” language to N.C.G.S. § 75-1.Ka) (emphasis added) which significantly expanded the scope of liability from the old language which contemplated liability only for acts and practices in commerce. In addition, the Legislature’s elimination of the restrictive term “trade” from the original version “clearly ‘constituted a substantive revision intended to expand the potential liability for certain proscribed acts.’ ” Talbert v. Mauney, 80 N.C. App. 477, 480, 343 S.E.2d 5, 8 (1986) (quoting United Roasters, Inc. v. Colgate-Palmolive Co., 485 F.Supp. 1049 (E.D.N.C. 1980), aff’d, 649 F.2d 985 (4th Cir.), cert. denied, 454 U.S. 1054, 102 S.Ct. 599, 70 L.Ed.2d 590 (1981)). Here a deceptive act by Ms. Kefgen or her husband arguably is in commerce since it involved a commercial transaction, the sale of a house. It could arguably also affect commerce since the alleged deception could affect this particular transaction. More significantly, deception affecting this transaction would affect commerce as a whole since each individual house sale affects commerce of house sales generally.
However, the court in Robertson has already interpreted the Act, as it now stands, and I am bound by that decision. See In the Matter of Appeal from Civil Penalty, 324 N.C. 373, 379 S.E.2d 30 (1989). Thus, I must concur with the majority that summary judgment was correctly granted to Ms. Kefgen on the Unfair Trade *352Practices Act claim on the grounds that the sale was not in or affected commerce.
Ill
Donald 0. Thompson
Regarding the plaintiffs’ claim of fraud against Donald 0. Thompson, the housebuilder, the record shows that Mr. Thompson submitted a letter to the plaintiffs attesting to the general soundness of the house. Whether this assertion will form the basis for a fraud claim is an issue properly left for the jury since the complaint and record contain conflicting evidence of the elements of fraud. The trial court improvidently granted summary judgment for Donald 0. Thompson on this issue.
Similarly, the trial court improvidently granted summary judgment for Mr. Thompson on the unfair trade practices claim. His affirmation of the general soundness of the house could be considered a deceptive act affecting commerce. Mr. Thompson did not carry the burden of showing that the plaintiffs could not prove the acts in support of an element of this action. The fact that Mr. Thompson had no contractual relationship with the plaintiffs does not preclude the imposition of liability under N.C.G.S. § 75-1.1. See J. M. Westall & Co. v. Windswept View of Asheville, Inc., 97 N.C. App. 71, 387 S.E.2d 67 (1990).
On these claims, I would vacate the summary judgment as to defendants Beverly-Hanks & Associates, Dorothy E. Kefgen, Donald 0. Thompson and Wynelle Thompson and remand for trial.