Court Opinion

ID: 2726923
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:10:00.488304+00
Date Added: 2024-06-11T13:26:27.650926
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA13-1082
                       NORTH CAROLINA COURT OF APPEALS

                              Filed: 5 August 2014

SYLVESTER LOVING,
     Plaintiff,

      v.                                      Cumberland County
                                              No. 12 CVS 7501
FRANCO WEBB and CORE COMPUTER
TECHNOLOGIES, LLC,
     Defendants.

      Appeal by defendants from judgment entered 17 May 2013 by

Judge Gale M. Adams in Cumberland County Superior Court.                      Heard

in the Court of Appeals 5 February 2014.

      The Law Office of Bryce D. Neier, by Bryce D. Neier, for
      defendant-appellant.

      No brief was filed for plaintiff.

      BRYANT, Judge.

      Where defendant pursued a counterclaim seeking an equitable

remedy and argued before the trial court that the court had

authority to impose an equitable remedy, defendant’s argument to

the contrary will not be heard on appeal.               Where the trial court

ordered defendants to refund plaintiff the amount he paid above

the cost of the goods received, the trial court acted within its
                                                -2-
authority pursuant to principles of equity.                                    Accordingly, we

affirm the trial court’s judgment.

       Plaintiff Sylvester Loving ran an accounting business and

taught      classes      instructing          clients       on    the     use    of    accounting

software.               Defendants           Franco        Webb        and      Core       Computer

Technologies,           LLC,    were    engaged       in    the        business       of   selling,

installing, and servicing computer equipment.                                 On 23 May 2012,

plaintiff agreed to purchase from defendants computer equipment,

including a “quad core” server (Agreement I).                                   Plaintiff paid

$3,851.97 for the equipment.                    On 24 May 2012, plaintiff agreed

to   purchase          additional       computer       equipment,            including       fifteen

computer      workstations,            from    defendants         for     a    total       price   of

$9,277.34 (Agreement II).                    That same day plaintiff made a down

payment of $6,395.50.00.                 The agreements and down payments were

documented         in    invoices       (Invoice       I,    dated       23     May    2012,       and

Invoice      II,       dated    24     May    2012).        The        equipment       was    to   be

installed before plaintiff began teaching classes in September

2012.

       On    21     June       2012,    pursuant       to       Agreement        I,    defendants

delivered         to    plaintiff’s          business       a     server,       but        plaintiff

alleged that he received a “dual core CPU server rather than the

quad    core      server,       contracted       for.”            In    addition,          plaintiff
                                                -3-
alleged that he never received any of the equipment contracted

for pursuant to Agreement II.

    On        22    August       2012    plaintiff      filed     a    complaint       against

defendants         in    Cumberland         County     Superior       Court.         Plaintiff

stated    a    claim       for      unfair    and     deceptive       trade       practices    in

violation of section 75-1.1 alleging that defendants failed to

respond       to        plaintiff’s         messages,     failed        to        deliver     the

contracted for goods, and failed to refund plaintiff’s payments.

Plaintiff sought compensatory damages in excess of $10,000.00,

requested      that       his       damages    be   trebled,    and      “such      other     and

further relief the Court deems just, fit and proper.”

    On        31     October          2012,    defendants       answered           plaintiff’s

complaint          and    counterclaimed.             Defendants        alleged       that     in

accordance with Agreement I, they delivered to plaintiff a quad

core server but that the $3,851.97 plaintiff paid them was a

down payment on a total purchase price of $5,135.96, leaving an

outstanding balance of $1,283.99.                       Defendants further admitted

that pursuant to Agreement II, they agreed to sell plaintiff

additional          computer         equipment,        including       fifteen        computer

workstations,            for    a    price    of    $9,277.34.          Plaintiff’s          down

payment       of    $6,395.50         for     Agreement    II     left       an    outstanding

balance       of    $2,881.84.           Defendants       admitted       that      they     never
                                       -4-
delivered     any   equipment    in    accordance     with      Agreement   II   as

“Plaintiff failed to pay the balance owed under [Agreement I]

and Defendants demanded payment in full on [Agreement I] before

any further equipment would be delivered . . . .”                        In their

counterclaims,      defendants    sought      recovery     on    the    theory   of

unjust enrichment and quantum meruit.               Defendants alleged that

they    delivered      the    equipment      and   accessories         ordered    by

plaintiff under Agreement I but that plaintiff failed to pay the

total amount owed.           Defendants further alleged that plaintiff

was unjustly enriched in excess of $2,283.99 “which represents

the balance owed on [payment under Agreement I] of $1,283.99 and

$1,000.00 in labor fees.”

       This   matter    was    heard    in    a    bench     trial     before    the

Cumberland County Superior Court on 6 May 2013, the Honorable

Gale    M.    Adams,    Judge     presiding.          Following        plaintiff’s

presentation of evidence in support of his sole claim for unfair

and deceptive trade practices, defendants moved for a directed

verdict.      The trial court granted defendants’ motion                    at the

close of all the evidence “based on a finding that there was no

unfair and deceptive trade practice.”

       In a judgment entered 17 May 2013, the trial court found

that there was an agreement between the parties for plaintiff to
                                        -5-
purchase    from    defendant    Webb   computer   equipment,     including   a

“quad core” server,       for a total purchase price of $5,135.96

(Agreement I).      Plaintiff had paid defendants $3,851.97, leaving

an outstanding balance of $1,283.99.          The court also found there

was a   second agreement between the parties for plaintiff to

purchase    additional     computer       equipment,    including     fifteen

workstations, for a price of $9,277.34 (Agreement II), and that

plaintiff    paid    defendants     $6,395.50,     leaving   an   outstanding

balance of $2,881.84.           However, defendant Webb never delivered

any product or service pursuant to Agreement II.                    The trial

court made the following findings of fact:

            17.    That    based   on    []   Defendants’
            counterclaims,    []   Plaintiff   has   been
            unjustly enriched in the amount of $1283.99
            since he has enjoyed the benefit and
            possession   of    the  equipment   delivered
            pursuant to [Agreement I].

            . . .

            19. The    amount  of  $1283.99   should  be
            deducted from the $6395.50 already paid to
            [] Defendants pursuant to [Agreement II] and
            the balance of $5111.51 should be returned
            to plaintiff.

The trial court awarded plaintiff $5,112.51, with interest from

the date of judgment.      Defendants appeal.

                   ____________________________________
                                             -6-
      On appeal, defendants argue that the trial court abused its

discretion and committed reversible error by entering judgment

against     defendants        in    the    amount    of     $5,112.51.        Defendants

contend     the    trial     court       properly    dismissed        plaintiff’s      sole

claim for unfair and deceptive trade practices, but absent any

surviving      claim       on      plaintiff’s      behalf,      the      court    lacked

authority     to     award      plaintiff        damages.        More      specifically,

defendants contend that because the evidence at trial proved the

parties     entered    into        express      contracts     with    remedies    at     law

available to them for disputes,                    the trial court was without

authority to impose an equitable remedy.                    We disagree.

                  The   rule  is,   that   an  appeal   ex
             necessitate follows the theory of the trial.
             Having tried the case upon one theory, the
             law will not permit the defendant to change
             its position, or to swap horses between
             courts in order to get a better mount in the
             [appellate courts]. The theory upon which a
             case is tried must prevail in considering
             the appeal, and in interpreting a record and
             in determining the validity of exceptions.

Gorham v. Ins. Co., 214 N.C. 526, 531, 200 S.E. 5, 8 (1938)

(citation and quotations omitted); see also Dent v. Mica Co.,

212   N.C.    241,     242,     193      S.E.    165,   166    (1937)      (holding      the

defendant could not argue on appeal that the contract at issue

was   not    binding    when       the    defendant     argued       at   trial   that   no

contract existed).
                                      -7-
    First, we look to the theory defendants presented to the

trial court.

    In their counterclaim, defendants sought recovery for the

outstanding    balance   due   from    plaintiff   as   to   Agreement   I.

Defendants raised one counterclaim, “unjust enrichment/quantum

meruit,” and made the following assertions:

         14.     Defendant’s    [sic]   delivered  to
                 Plaintiff   computer  equipment  and
                 accessories as specified in Business
                 Proposal 1.

         15.     That Plaintiff has failed to pay for
                 the equipment and services and labor
                 provided him in Business Proposal 1.

         16.     That   Plaintiff   has   been   unjustly
                 enriched at Defendants [sic] expense in
                 excess of $2,283.99, which represents
                 the balance owed on Business Proposal 2
                 of $1283.99 and $1000.00 in labor fees.

         17.     That the      fees owed under Business
                 Proposal 2     represents the measure of
                 recovery      for    reasonable   services
                 rendered by   Defendants to Plaintiff.

    At trial, defendants consistently argued that the exchanges

between plaintiff and defendants were business proposals and not

formalized contracts.

         [Defense counsel:] And, Judge, again, as I
         talked at the close of the plaintiff's
         evidence, what we have here is a situation
         wherein there were two receipts, business
         proposals, one to deliver the server and
         then the second one dealing with the
                                   -8-
            workstations.

            . . .

            So what this really comes down to is [as to
            plaintiff’s   claim]   I  don't   think   the
            elements of unfair and deceptive trade
            practice are met here, at most. Even
            assuming arguendo if he had filed a claim
            for unjust enrichment or quantum meruit,
            again, as a trier of fact, you have to
            determine whether those elements are met.
            The problem here is that you don't have that
            before you because, on the one hand, you
            don't have a contract for which a claim
            would be filed for breach of contract so you
            don't have that present so that's off the
            table. You don't have a claim from the
            plaintiff for quantum meruit or unjust
            enrichment, so that is not before the Court.

            . . .

            So again, assuming arguendo that it was an
            issue of unjust enrichment or quantum meruit
            on the plaintiff's side, that's not before
            the Court. He hasn't pled that. My client
            has pled the issue of, hey, he's still got
            the equipment and there are still monies
            that are offset. . . . That's what I would
            contend to the Court.

(Emphasis added).

    Defendants advocated for a finding that no actual contract

existed between the parties:        “you don't have a contract for

which   a   claim   would    be   filed   for   breach   of   contract.”

Furthermore,    defendants    presented   the   trial    court   with   a

counterclaim for unjust enrichment / quantum meruit seeking to
                                          -9-
recover the outstanding balance plaintiff owed as to the first

“business    proposal.”          And,   in      closing     arguments,        defendants

pointed out that plaintiff did not seek recovery on the theory

of unjust enrichment or quantum meruit:                          “He [,       plaintiff,]

hasn't    pled    that.    My    client       has    pled       the   issue    of,    hey,

[plaintiff]’s still got the equipment and there are still monies

that are offset.”

      In its 17 May 2013 judgment, the trial court found “[t]hat

based on the Defendants’ counterclaims, [] Plaintiff had been

unjustly enriched in the amount of $1283.99 since he has enjoyed

the benefit and possession of the equipment delivered pursuant

to the May 23, 2012 invoice.”

      In their brief to this Court and contrary to the arguments

made before the trial court, defendants now state that “[t]he

evidence at trial proved express contracts in any scenario as

between    the   parties.”        If    taken       as   true,    that   the       evidence

proves express contracts existed, the equitable remedy of unjust

enrichment would not be available to resolve this dispute.                              See

Pritchett & Burch, PLLC v. Boyd, 169 N.C. App. 118, 124, 609

S.E.2d    439,   443   (2005)     (“Only      in    the   absence      of     an   express

agreement of the parties will courts impose a quasi contract or

a   contract     implied    in    law    in     order      to     prevent     an     unjust
                                           -10-
enrichment.”).         We    find     defendants’       stance    on   appeal       to    be

inconsistent    with        and     even    in    direct    contravention       of       the

argument     defendants           presented        before     the      trial        court.

Therefore, defendants will not be allowed to contend on appeal

what they directly advocated against before the trial court.

See Gorham, 214 N.C. at 531, 200 S.E. at 8 (“Having tried the

case upon one theory, the law will not permit the defendant to

change its position, or to swap horses between courts . . . .

The   theory    upon        which    a     case    is   tried     must   prevail         in

considering the appeal, and in interpreting a record and in

determining the validity of exceptions.”); see also Fabrikant v.

Currituck Cnty., 174 N.C. App. 30, 48, 621 S.E.2d 19, 31 (2005)

(holding the plaintiffs’ argument on appeal was precluded where

the plaintiffs induced the challenged outcome at trial by giving

the court the option to pursue it); Frugard v. Pritchard, 338

N.C. 508, 512, 450 S.E.2d 744, 746 (1994) (under the doctrine of

invited error, “a party may not complain of action which he

induced.”).     Thus, defendants will not be heard to contend the

trial court lacked the authority to impose an equitable remedy.

      We next consider defendants’ argument that the trial court

lacked     authority        to    award     plaintiff       the     amount     he    paid
                                -11-
defendants above the cost of the goods defendants provided where

plaintiff had no surviving claims.

    “[W]hen equitable relief is sought, courts claim the power

to grant, deny, limit, or shape that relief” as necessary to

achieve equitable results.     Sara Lee Corp. v. Carter, 351 N.C.

27, 36, 519 S.E.2d 308, 314 (1999) (citations and quotations

omitted).   A well-known maxim is “[o]ne who seeks equity must do

equity.”    Creech v. Melnik, 347 N.C. 520, 529, 495 S.E.2d 907,

913 (1998).    “In fashioning an equitable remedy, the conduct of

both parties must be weighed by the trial court.” Kinlaw v.

Harris, 364 N.C. 528, 533, 702 S.E.2d 294, 297 (2010).               In

Jefferson Standard Life Insurance Co. v. Guilford County, our

Supreme Court explained that a person who seeks equity cannot

“strike down only those transactions which are unfavorable to

him and preserve from a like fate those from which he would take

an advantage.”   226 N.C. 441, 448, 38 S.E.2d 519, 524 (1946).

    “Because     the   fashioning   of   equitable   remedies   is   a

discretionary matter for the trial court, we review such actions

under an abuse of discretion standard.”       Kinlaw, 364 N.C. 532—

33, 702 S.E.2d 297.    “Under the abuse-of-discretion standard, we

review to determine whether a decision is manifestly unsupported

by reason, or so arbitrary that it could not have been the
                                        -12-
result of a reasoned decision.”             Mark Grp. Int’l, Inc. v. Still,

151 N.C. App. 565, 566, 566 S.E.2d 160, 161 (2002) (citation

omitted).

      In    its    judgment,      the   trial    court      made    the   following

conclusion of law:

            3.     That although [] Plaintiff was unjustly
                   enriched in the amount of $1283.99, he
                   has already paid an excess amount of
                   $6395.50 pursuant to the May 24, 2012
                   invoice, from which $1283.99 can be
                   deducted for [] Defendants, leaving a
                   balance   of  $5,111.51  owed  to   the
                   Plaintiff.

In   accordance     with   this    conclusion,     the      trial   court   awarded

plaintiff $5,111.51 to be recovered from defendants.

      The trial court’s decision ordering defendants to refund

plaintiff    the    sum    of   $5,111.51      based   on    defendants’    unjust

enrichment claim is consistent with the principles of equity.

The trial court, when asked to fashion an equitable remedy,

considered the entire matter before it, including the conduct of

both parties and both transactions before the court, in order to

shape the relief as necessary to achieve equitable results.                     See

Creech, 347 N.C. at 529, 495 S.E.2d at 913.                   Therefore, we hold

that the trial court acted within its authority and discretion

to fashion this remedy pursuant to principles of equity.                        See
                              -13-
Guilford Cnty., 226 N.C. at 448, 38 S.E.2d at 524.   Accordingly,

we affirm the trial court’s judgment.

    Affirmed.

    Judges STEPHENS and DILLON concur.

    Report per Rule 30(e).