Colonial Trading, LLC v. Bassett Furniture Industries, No. 12-2296 (4th Cir. 2013)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-2296 COLONIAL TRADING, LLC, Plaintiff - Appellee, v. BASSETT FURNITURE INDUSTRIES, INC., Defendant - Appellant. No. 12-2358 COLONIAL TRADING, LLC, Plaintiff Appellant, v. BASSETT FURNITURE INDUSTRIES, INCORPORATED, Defendant Appellee. Appeal from the United States District Court for the Western District of North Carolina, at Statesville. Richard L. Voorhees, District Judge. (5:09-cv-00043-RLV-DCK) Argued: May 15, 2013 Decided: June 21, 2013 Before TRAXLER, Chief Circuit Judge; GREGORY and DUNCAN, Circuit Judges. Affirmed by unpublished per curiam opinion. ARGUED: Robert Walker Fuller, III, ROBINSON BRADSHAW & HINSON, PA, Charlotte, North Carolina, for Appellant/Cross-Appellee. June K. Allison, WISHART, NORRIS, HENNINGER & PITTMAN, Charlotte, North Carolina; Pamela Suzanne Duffy, WISHART, NORRIS, HENNINGER & PITTMAN, Burlington, North Carolina, for Appellee/Cross-Appellant. ON BRIEF: Nathan C. Chase, Jr., ROBINSON BRADSHAW & HINSON, PA, Charlotte, North Carolina, for Appellant/Cross-Appellee. Robert John Wishart, WISHART, NORRIS, HENNINGER & PITTMAN, PA, Charlotte, North Carolina, for Appellee/Cross-Appellant. Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: A jury awarded $1,312,665.35 to Colonial Trading, LLC ( Colonial ) on its breach of contract claim against Bassett Furniture Industries, Inc. ( Bassett ) involving recalled baby cribs. $41,472.08 on its North based on a dispute The jury also awarded Colonial Carolina Unfair and Deceptive Trade Practices Act ( UDTPA ) claim, N.C. Gen. Stat. § 75-1 et seq., which the district court trebled under N.C. Gen. Stat. § 75-16. Bassett appeals, challenging the jury instructions, Colonial s UDTPA award, and the damages calculation. Colonial cross appeals the district court s denial of its request for trebled contract damages. For the reasons that follow, we affirm. I. A. Colonial is a North Carolina furniture sourcing agent that imports furniture from Chinese companies for sale to American furniture distributors. The distributors make specific product orders through Colonial, who effectively advances the cost of the goods on behalf of the distributor by paying the Chinese company directly company then for releases the imported bills of furniture. lading when the The Chinese goods reach American ports, and Colonial invoices the distributor for the cost of the products. 3 The case before us involves orders for three crib models, designed by companies, Bassett, and Babies R Us. the standard which Colonial Bassett had sourced from contracted to Chinese resell to In 2005, during the course of the Colonial-Bassett relationship, Policy ; which Colonial policy quality signed subjects Bassett s each control Import import order Sourcing to procedures. Bassett s J.A. 1249. Additionally, the crib invoices Colonial submitted to Bassett stated that Colonial s product would be manufacturing defects and raw material defects. Under the quality control procedures, 100% free of J.A. 1261. Bassett supervised the first production run and paid for third-party auditing of each of the three crib models at issue. Beginning in 2007, however, reports from consumers and internal testing results led Bassett to issue voluntary recalls of each of the three crib lines, damaging its relationship with Babies R Us. Instead of paying Colonial s mounting invoices for the cribs and other furniture products, Bassett attempted to charge back its recall costs by crediting those costs against invoices from Colonial, including invoices for furniture other than the cribs in advance question. more funds Additionally, to Chinese when Colonial manufacturers for refused to Bassett s orders, effectively halting the release of the requisite bills of lading, Bassett approached the Chinese manufacturers and paid 4 at least one of them more than the contracted amount for the furniture so the manufacturer would release bills of lading directly to Bassett. 1 B. Colonial sued Bassett in North Carolina court, alleging that Bassett (1) breached its contract with Colonial by failing to pay its invoices, improperly cancelling orders, and applying unauthorized chargebacks; (2) tortiously interfered with Colonial s third-party contracts; and (3) committed unfair and deceptive trade practices in violation of the North Carolina UDTPA, by, among other things, inducing Colonial s suppliers to deal with Bassett instead of Colonial by bribery or coercion. Bassett removed the case to federal court and counterclaimed, alleging that it had properly revoked its acceptance of the cribs because Colonial (1) breached its contract with Bassett; (2) tortiously interfered with Bassett s contracts with manufacturers; 2 and (3) breached its express warranty and implied warranty of merchantability by delivering defective cribs. After an eight-day trial, the district court reviewed the 1 Specifically, Bassett paid YanRong Furniture ( YanRong ), one of the Chinese crib manufacturers, $300,880 to release bills of lading directly to Bassett; YanRong had billed Colonial $170,000 for the same goods. J.A. 269, 468-69. 2 The district court later dismissed Bassett s tortious interference claim. 5 parties proposed jury instructions at length before sending the case to the jury. of prepared Although the court primarily used its own set instructions, it did include Colonial s proposed Instruction 16, regarding warranties and manufacturing defects, see infra Part II, despite Bassett s objection that the Instruction was misleading or confusing, J.A. 866. After deliberations, the jury awarded Colonial $1,312,665.35 on its breach of contract claim and $1 on its tortious interference claim. With respect to the UDTPA, the jury found that Bassett s conduct was in or affected commerce, that Bassett acted with the intent of interfering with Colonial s relationships with its suppliers, and that Bassett committed seven alleged unfair trade practices--all the elements of a UDTPA claim. 3 The jury awarded UDTPA damages of $41,472.08 3 Specifically, the jury found, under Number 3(c) of the verdict form, that Bassett: (A) [o]rder[ed] and receive[d] goods from Colonial for which [it] did not intend to pay ; (B) [u]nilaterally charge[d] back Colonial for non-defective goods on the false justification that they were defective ; (C) [u]nilaterally charge[d] back Colonial for expenses which were not permitted under any contractual obligation under the false justification that they were proper charge back expenses ; (D) [w]ithout justification incur[red] unnecessary expenses associated with the recall with the intent to improperly charge back Colonial for such expenses ; (E) [p]a[id] Colonial s suppliers and persuade[d] Colonial s suppliers not to deal with Colonial ; (F) [i]nduce[d] Colonial s suppliers to deal with Bassett instead of Colonial by bribery or coercion ; and (G) misuse[d] its unequal financial power by creating a situation which crippled Colonial financially and which caused the factories to deal directly with [it]. J.A. 234-35. 6 on the alleged unfair trade practice listed at 3(c)(F) of the verdict form--that Bassett [i]nduce[d] Colonial s suppliers to deal with Bassett instead of Colonial by bribery or coercion, J.A. 235; supra note 3. other six Bassett s express alleged It awarded $1 in nominal damages on the unfair counterclaims, warranty, which trade practices. except it for found its The claim Colonial had jury for denied breach breached. of It awarded $1 in nominal damages to Bassett. Following trial, Colonial moved for attorneys fees and treble damages on its breach of contract and UDTPA awards. district with court respect distinct granted to conduct its Colonial s UDTPA supported request recovery, the breach for treble explaining of The damages that, contract and since UDTPA awards, treble UDTPA damages were not duplicative of Colonial s recovery for breach of contract. Therefore, the district court trebled the UDTPA damages to $124,416.24. This appeal followed. II. The primary thrust of Bassett s appeal focuses on Number 16 of the jury instructions ( Instruction 16 or the Instruction ), which the district court adopted from Colonial s proposed instructions. Instruction 16 reads, in its entirety: I further instruct you that warranting a shipment to be without defects does not mean that each and every part of each and every crib would have no 7 manufacturing defects. Because any crib of a specific model breaches a warranty does not mean that the purchaser is entitled to any and all of its expenses related to all cribs of that design. In order to permit rejection of and expenses incident to an entire shipment for nonconformity the purchase must show that the defect rate was higher than agreed upon or lacking specific agreement was higher than the standard in the industry. To the extent that Bassett has shown that specific cribs have manufacturing defects [and] will fail to meet the warranties made by Colonial[,] Bassett is entitled to damages for breach of warranty for such cribs. J.A. 1041. jury to Bassett contends that the Instruction (1) caused the ignore misinstructed the the express jury warranty about signed damages in by breach Colonial; of (2) warranty cases, generating confusion about the appropriate award; and (3) misinformed the jury about the law governing Bassett s breach of contract, revocation of acceptance, and implied warranty claims, so as to require a new trial. A. We address each argument in turn. Standard of Review While we review a district court s decision to give or not give a jury instruction for abuse of discretion, we conduct a de novo review of any claim that jury instructions incorrectly stated the law. (4th Cir. 2012) properly object United States v. Mouzone, 687 F.3d 207, 217 (citation to a jury omitted). If a instruction under party failed Federal Rule to of Civil Procedure 51(c), however, we review jury instructions for plain error. Spell v. McDaniel, 824 F.2d 1380, 1398-99 (4th 8 Cir. 1987). conclude In that either a case, particular we jury reverse only instruction when must we can necessarily have caused the jury to act in complete ignorance of, or to have misapplied, fundamentally controlling legal principles inevitable prejudice of an aggrieved party. jury instructions must be construed in to Id. at 1399. light of the The the whole record, and will be reversed . . . only if the error is determined to have been prejudicial, based on a review of the record as a whole. Abraham v. Cnty. of Greenville, S.C., 237 F.3d 386, 393 (4th Cir. 2001) (citing Wellington v. Daniels, 717 F.2d 932, 938 (4th Cir. 1983)). B. As a threshold Preservation of Error matter, we must decide whether preserved its current objection to Instruction 16. Bassett Colonial contends that Bassett s objection to the Instruction below--that it was misleading or confusing --was insufficient to preserve the issue for appeal. See J.A. 866; Fed. R. Civ. Proc. 51(c)(1) ( A party who objects to an instruction or the failure to give an instruction must do so on the record, stating distinctly the matter objected to and the grounds for the objection. ). support of its argument, Colonial cites Belk, Inc. v. In Meyer Corp., U.S., 679 F.3d 146, 153 n.6 (4th Cir. 2012), in which we held that the appellant had waived its jury instruction challenge by both failing to raise it in the opening brief and 9 neglecting however, to did object not properly raise a at trial. specific Counsel objection to for Belk, any jury instruction; rather, he requested that the court administer his proposed jury invocation of instructions. proposed Id. jury We instructions preserve the issue for our review. present a closer question. found Id. the general insufficient to The facts before us Bassett s terse, general objection certainly did not aid the district court in fully considering the nature of its challenge. But since Bassett s arguments fail on the merits, we prefer to rely for our affirmance on that ground, and thus proceed to a de novo review of Instruction 16. C. Instruction 16 1. Bassett contends that the district court improperly instructed the jury with respect to express warranties when it adopted Colonial s language and stated that warranting a shipment to be without defects does not mean that each and every part of defects. each and every J.A. 1041. crib would have no manufacturing The parties proffer competing case law in support of their respective views, none of which we ultimately find convincing. Compare Knapp Shoes, Inc. v. Sylvania Shoe Mfg. Corp., 72 F.3d 190, 199 (1st Cir. 1995) (concluding that an express warranty guaranteeing a shipment of shoes to be without defect can at most be read to mean that [the seller] was 10 capable of producing shoes that met industry standards as to the percentage of defects ) with QVC, Inc. v. MJC America, Ltd., --F. Supp. 2d. ---, No. 08-3830, 2012 WL 5250266, at *22 (E.D. Pa. Oct. 22, 2012) (finding that, where the seller provided a defective product, it broke its promise . . . that all of the [products] would be free from all defects, allowing the buyer to recover recall-related costs). As the district court s subsequent instructions adequately stated the controlling law, we conclude, without deciding whether Instruction 16 was erroneous, that any misstatement was harmless. See Volvo Trademark Holding Aktiebolaget v. Clark Mach. Co., 510 F.3d 474, 485 (4th Cir. 2007) ( [P]roblems in jury instructions will not warrant reversal of a jury verdict so long as, taken as a whole, the instructions adequately state the controlling legal principles. ). The court s later instructions on express warranties track the North Carolina statute regarding the same. Compare N.C. Gen. Stat. § 25-2-313 (defining the three methods for express warranty formation) with J.A. 1048-50 (instructing the jury as to the same three methods for forming an express warranty). instruction, produce cribs if According to the court s express warranty Bassett that were proved 100 that percent Colonial promised free manufacturing of to defects and of raw material defects, it would be the jury s duty to find that an express warranty 11 existed. J.A. 1050. Further, having explained what would constitute a breach in its instructions on Colonial s claims, id. at 1021 ( [A] breach of contract is . . . any unjustified failure to perform any promise, express or implied, that is part of the contract, and occur[s] when a party without legal excuse fails to perform any promise which is . . . part of the contract. ), the court made clear that Bassett s counterclaim can best be understood by relying on the terms . . . already explained, id. at 1038. Far from warranty, the encouraging the instructions jury fully formation and breach of contract. to ignore explained the express express warranty Indeed, it seems strange for Bassett to argue that Instruction 16 caused the jury to ignore the express warranty, when breach of express warranty was the only claim on which it was successful. Since a single instruction to a jury may not be judged in artificial isolation, but must be viewed in the context of the overall charge, United States v. Park, 421 U.S. 658, 674 (1975) (citation and internal quotation marks omitted), the court s accurate explanation of how to evaluate whether Colonial made an express warranty and the jury s actual finding that Colonial breached the express warranty indicate that any error did not cause the jury to misappl[y] fundamentally controlling legal principles, Spell, 824 F.2d at 1399. 12 2. Bassett further contends that the Instruction improperly limited the jury to awarding damages for specific, defective cribs, instead of compensating Bassett for all costs associated with recalling the crib models. Insofar as Bassett alleges that it could recoup more than costs associated with specific, defective cribs, we agree. The North Carolina Supreme Court has held, in a case alleging breach of the warranty of fitness, that it need not be shown that any given unit is totally unusable before a breach of warranty occurs, rejecting the argument that every commercial unit in an order of goods manufactured under the same specifications must be shown to have become totally unusable before recovery may be had for breach of warranty with respect to the entire order. Tenn. Carolina Transp., S.E.2d 711, 721 (N.C. 1973). Inc. v. Strick Corp., 196 The court explained that the fact that nine trailers out of an order of 150 had malfunctioned, entitle[d] [the] plaintiff to go to the jury on the breach of warranty issue with respect to all 150 trailers. jury to determine . . . whether the fitness It is for the warranty was breached as to all, part or none of the 150 trailers, and assess the damages accordingly. Id. at 722. Here, however, the jury made just that determination, and did not explicitly find that the cribs were defective or that the damages amounted to more 13 than a nominal sum. Furthermore, examining the instructions as a whole, the court properly explained damages calculation to the jury, again rendering any error in Instruction 16 harmless. 55. See J.A. 1052- The court instructed that Bassett should not be denied damages simply because they cannot be calculated with exactness or high included damages. degree of mathematical provisions explaining certainty, incidental J.A. and 1054, and consequential Additionally, the district court properly instructed the jury on how to calculate damages based on the reduced value of the cribs, in keeping with the tenets of North Carolina law on damages for breach of warranty. J.A. 1053; see Alberti v. Manufactured Homes, Inc., 407 S.E.2d 819, 826 (N.C. 1991) ( In warranty actions, the measure of damages is generally the difference between the value of the goods as accepted and the value as warranted. ) (citation omitted). In further compliance with North Carolina law, the court also cautioned that if the jury found a breach, but Bassett failed to prove damages or the jury did not find damages, it would be [the jury s] duty to write a nominal amount of $1 in the blank space provided, J.A. 1055, in recognition of technical damage resulting from the breach, id. at 1052; see Hairston v. Atl. Greyhound Corp., 18 S.E.2d 166, 168 (N.C. 1942) ( What is meant by nominal damages is a small trivial sum awarded in recognition of a technical 14 injury which has caused no substantial damage. ) (internal quotations and citation omitted). If anything, the jury s damages calculation indicates not that it was confused about how to separate defective cribs from nondefective cribs for its calculation, but rather that it concluded that Bassett s failure to prove damages on its breach of express warranty claim required it to award the nominal sum of $1, in line with the court s instructions. properly instructed damages unless the Bassett jury that did them, proved it any Because the court not have to award misstatement with respect to what Bassett could recover on its breach of warranty claim in Instruction 16 was not prejudicial. 4 3. Finally, Bassett argues that because Instruction 16 implied that the existence of some crib defects would be acceptable, the Instruction Bassett s clouded breach of the jury s contract, analysis revocation with of implied warranty of merchantability claims. respect to acceptance, and Again, Bassett s argument hinges on the conclusion that the jury found the cribs 4 If the jury had awarded a larger sum for Colonial s breach of express warranty, indicating that it intended to compensate Bassett for the cribs that did not conform to Colonial s express warranty, Bassett s argument regarding jury confusion over damage calculation might be more persuasive. The nominal damage award of $1 indicates that, under the court s instructions, the jury did not find that Bassett proved damages at all. 15 defective, a conclusion belied by the jury s findings. Under North Carolina law, Bassett needed to show that the cribs were defective at the time of sale to succeed on its claims involving the implied revocation of acceptance. 565 S.E.2d 140, 147 warranty of merchantability and See Dewitt v. Eveready Battery Co., (N.C. 2002) ( To establish a breach of implied warranty of merchantability . . . a plaintiff must prove . . . that the goods did not comply with the warranty in that the goods were defective at the time of sale. ) (citation and internal quotation marks omitted); Harrington Mfg. Co., Inc. v. Logan Tontz Co., 253 S.E.2d 282, 286 (N.C. Ct. App. 1979) (holding that to justify revocation, the plaintiff must prove, in addition to other elements, that the goods contained nonconformity that substantially impaired their value ). a That the jury found in favor of Colonial on both of these claims indicates that it did not determine that defective at the time Bassett accepted them. the cribs were Further, because the court properly instructed the jury with respect to Bassett s implied warranty of merchantability, J.A. 1050-52, revocation of acceptance, id. at 1042-48, and breach of contract claims, id. at 1039, any error in Instruction 16 was harmless. III. Bassett next contends that we should vacate the district 16 court s UDTPA award because its dispute with Colonial was contractual, the award duplicates Colonial s recovery for breach of contract, and Instruction 16 affected the jury s assessment of the alleged unfair trade practices. 5 A. Standard of Review We review the district court s legal determinations with respect to the UDTPA claim de novo. 164. Belk, Inc., 679 F.3d at We review a jury s factual findings on a UDTPA claim in the light most favorable to the prevailing party, and [i]f, with that evidence, a reasonable jury could return a verdict in favor of plaintiffs, [we] must defer to the judgment of the jury, even if [our] judgment on the evidence differs. Id. (quoting ABT Bldg. Prods. Corp. v. Nat l Union Fire Ins. Co. Of Pittsburgh, 472 F.3d 99, 113 (4th Cir. 2006)). B. Unfair Trade Practices In order to recover under the UDTPA, a party is obliged to show: (1) that the defendant engaged in conduct that was in or affecting commerce, (2) that the conduct was unfair or had the capacity or tendency to deceive, and (3) that the plaintiff suffered actual injury as a proximate result deceptive statement or misrepresentation. 5 of defendant s ABT Bldg., 472 F.3d Because Bassett s argument with respect to Instruction 16 in the UDTPA context is largely duplicative of those just discussed, we do not repeat that analysis here. 17 at 122 (citation omitted). In making this showing, the occurrence of the alleged conduct, damages, and proximate cause are fact questions for the jury. Id. at 123 (citation and internal quotation marks omitted). [W]hether [such] conduct was unfair or deceptive is a legal issue for the court. Thus, when a jury finds a defendant committed Id. infringing conduct, it is then the duty of the court to determine whether, as a matter of law, such deceptive trade practice. conduct constituted an unfair or S. Atl. Ltd. P ship of Tenn., LP v. Riese, 284 F.3d 518, 534 (4th Cir. 2002). In reviewing this determination, we have recognized that, under North Carolina law, the conduct sufficient to constitute an unfair or deceptive trade practice is a somewhat nebulous concept, and depends on the circumstances of the particular case. ABT Bldg., 472 F.3d at 122-23 (citation omitted). However, only practices that involve [s]ome type of egregious or aggravating U[D]TPA. circumstances Riese, 284 are F.3d at sufficient 535 to violate (citation the omitted). Generally, a trade practice will only be deemed unfair when it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. ABT Bldg., 472 F.3d at 123 S.E.2d (quoting 1981)). Marshall v. Miller, 276 397, 403 (N.C. North Carolina courts have repeatedly held that a mere 18 breach of contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under [the UDTPA]. Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331, 347 (4th Cir. 1998); see, e.g., Branch Banking & Trust Co. v. Thompson, breach 418 S.E.2d of 694, contract, 700 (N.C. without Ct. App. 1992) substantial (finding aggravating circumstances, insufficient to support a UDTPA claim). Bassett insists that Colonial s UDTPA claim arises from the same conduct underlying its contract claims, and thus cannot support the court s finding that Bassett s conduct constituted an unfair or deceptive practice justifying an UDTPA award. The jury, however, found alleged unfair trade practices attenuated from the basic suppliers not suppliers to bribery and contract to deal deal with coercion, dispute, with as instead otherwise financial power against Colonial. paying Colonial s inducing Colonial, Bassett and such Colonial s of Colonial misusing its through unequal See J.A. 235, supra note 3. North Carolina courts have upheld UDTPA awards for tortious interference with contract, commercial bribery, and coercive conduct, practices akin to what the jury found here. See, e.g., United 389 Labs., Inc. v. Kuykendall, 370 S.E.2d 375, (N.C. 1988) (explaining that N.C. Gen. Stat. § 75-1.1 could apply to tortious interference with contract situations ); Media Network, Inc. v. Long Haymes Carr, Inc., 678 S.E.2d 671, 684 (N.C. Ct. 19 App. 2009) ( We also note that if a UDTP[A] claimant can establish that the defendant committed commercial bribery, that is sufficient to make the UDTP[A] claim. ); Wilder v. Squires, 315 S.E.2d 63, 67 (N.C. Ct. App. 1984) (threatening not to pay plaintiff unless he agreed to a particular course of action was coercive and practice). qualified as an unfair and deceptive trade We therefore decline to disturb the award. C. Collection of Contract and UDTPA Damages Bassett contends that Colonial should have been required to elect between contract or UDTPA damages, but should not have recovered both. Bassett s argument fails because it is premised upon the assumption or mistaken belief that Colonial s contract and UDTPA claims arise Appellant s Br. at 46-47. from the same improper conduct. While Bassett is correct that, if the same course of conduct gives rise to a plaintiff s breach of contract and UDTPA claims, the plaintiff may recover either for the breach of contract, or for violation of [the UDTPA], but not for both, Marshall v. Miller, 268 S.E.2d 97, 103 (N.C. Ct. App. 1980) modified and aff d, 276 S.E.2d 397; see United Labs., Inc. v. Kuykendall, 437 S.E.2d 374, 379 (N.C. 1993) (explaining that the election of remedies prevent[s] double redress for a single wrong ), this inapplicable accurate here. Far summary from of resting North Carolina on same the law is course of conduct, the district court made clear that [w]hile the UDTPA 20 cause of action is partly derivative of Colonial s [breach of contract] claims, J.A. 1232, the jury rationally viewed the conduct and the damages proximately caused by the specific UDTPA conduct as distinct from the breach of contract, id. at 1234. While some of the same conduct--particularly the conduct alleged as unfair trade practices at 3(c)(A)-(D) of the jury verdict form--also formed the basis for Colonial s breach of contract claim, compare J.A. 232 with id. at 234, the conduct underlying Colonial s Specifically, the jury UDTPA recovery awarded UDTPA does damages not to overlap. Colonial on 3(c)(F), id. at 235, based on Bassett s bribery and coercion of the Chinese manufacturer YanRong. This award obviates any concerns of duplicative recovery. IV. Colonial its request cross-appeals for treble the district contract court s damages. In rejection Gray v. of North Carolina Insurance Underwriting Ass n, 529 S.E.2d 676, 684-85 (N.C. 2000), the North Carolina Supreme Court addressed a similar argument that, in a case involving successful recovery for breach of contract and UDTPA claims, the court should treble the entire award. Rejecting this argument, the Supreme Court concluded that only damages proximately caused by a violation of [the UDTPA] shall be trebled, not [] damages on every claim 21 that happens to arise in a case involving a violation of [the UDTPA]. Id. Because the damages for breach of contract did not aris[e] from a violation of [] § 75-1.1, they could not be trebled. Id. at 684. Since Gray, the North Carolina Court of Appeals has allowed for trebling of breach of contract damages when the breach of contract accompanied by aggravating factors is what gave rise to the [UDTPA] claim. See, e.g., Johnson v. Colonial Life & Accident Ins. Co., 618 S.E.2d 867, 871-72 (N.C. Ct. App. divide 2005) the aggravated ( [T]he breach the of court will contract breach when not action in allow and a the substance defendant conduct there is to which but one continuous transaction amounting to unfair and deceptive trade practices. ). Colonial urges us to conclude that its contract damages arise from the unfair trade practices listed on the jury verdict form at J.A. 234-35 3(c)(A)-(D), and should therefore be trebled. Notwithstanding Colonial s puzzling reversal from its argument that distinct conduct supports their recovery of both contract and UDTPA damages, see supra Part III.B, the verdict does not support Colonial s argument. While there is some overlap between the acts underlying the breach of contract claim and the alleged opportunity practice. to unfair award trade specific practices, damages the for jurors each had unfair the trade As discussed supra, the only practice on which they 22 chose to award damages was the bribery and coercion claim, not the contract-related acts. A closer look at the verdict in Gray further supports our decision to follow that case and reject Colonial s argument. Gray, as here, the verdict form required the jury to In first determine whether the parties formed a contract, and then, if the defendant breached the contract, to assess damages. S.E. 2d at 679. See 529 The form then asked the jury to determine whether the defendant had committed any of several acts that could constitute unfair trade practices, and to asses related damages. The North Carolina Supreme Court allowed trebling of only the latter, UDTPA damages. verdict form--which required Colonial s similarly structured the jury first to determine contract damages, then to assess practices that could constitute violations of the UDTPA and determine related damages--supports our decision to affirm the district court s decision to treble only the UDTPA damages, rather than the entire jury award. V. For the foregoing reasons, the judgment of the district court is AFFIRMED. 23

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