Carter v. Parsons

301 S.E.2d 405 (1983)

David Coleman CARTER v. James F. PARSONS and Betty N. Parsons.

No. 8221SC410.

Court of Appeals of North Carolina.

April 5, 1983.

*408 Steven P. Pixley, Charlotte, for plaintiff-appellant.

Craige, Brawley, Liipfert & Ross, by William W. Walker, Winston-Salem, for defendant-appellee.

WELLS, Judge.

Plaintiff's only assignment of error is based on his exception taken to Judge Freeman's order partially granting defendant's motion for Judgment N.O.V. Thus, the only question properly before us is whether the trial judge erred in allowing defendant's motion.[1]

*409 To preserve the right to move for a Judgment N.O.V., the party must first have moved for a directed verdict at the close of all the evidence. Glen Forest Corp. v. Bensch, 9 N.C.App. 587, 176 S.E.2d 851 (1970). "The motion for judgment notwithstanding the verdict is technically only a renewal of the motion for a directed verdict made at the close of all the evidence, and thus the movant cannot assert grounds not included in the motion for directed verdict." Love v. Pressley, 34 N.C.App. 503, 239 S.E.2d 574 (1977), disc. rev. denied, 294 N.C. 441, 241 S.E.2d 843 (1978).

In her motion for directed verdict, defendant asserted that plaintiff's evidence failed to show a breach of contract; that loss of bargain damages were not recoverable on the evidence presented; that plaintiff's evidence was insufficient to allow recovery in fraud; that if there was fraud, it was only for the $3,340.00; that, as a matter of law, defendant was entitled by the power of attorney to use the $3,340.00 to pay off plaintiff and defendant's joint obligation; and that plaintiff was not entitled to punitive damages.[2] Defendant's asserted grounds pertaining to plaintiff's failure to show breach of contract and to plaintiff's right to loss of bargain damages were dealt with by the trial judge when he ruled that those issues could not go to the jury. Plaintiff has not taken exception to that ruling and, thus, those grounds are not before us. Defendant has not appealed from the denial of her motion as to the $3,340.00 that plaintiff gave to her. Thus, the grounds asserted pertaining to the power of attorney are not before us.

Defendant's motion, therefore, presents questions of whether the evidence, in the light most favorable to plaintiff, constituted any evidence more than a scintilla to support plaintiff's claim of fraud in all its constituent elements and the jury verdict awarding plaintiff punitive damages. See Shreve v. Combs, 54 N.C.App. 18, 282 S.E.2d 568 (1981). The constituent elements which must be established to make out a prima facie case of actual fraud were set out by our Supreme Court in Johnson v. Owens, 263 N.C. 754, 140 S.E.2d 311 (1965), as follows:

"`[T]he representation, its falsity, scienter, deception, and injury. The representation must be definite and specific; it must be materially false; ... it must be made with fraudulent intent; it must be reasonably relied on by the other party; and he must be deceived and caused to suffer loss.'" (Citations omitted).

See also Terry v. Terry, 302 N.C. 77, 273 S.E.2d 674 (1981); Ragsdale v. Kennedy, 286 N.C. 130, 209 S.E.2d 494 (1974); Shreve v. Combs, supra. Defendant contends that plaintiff's evidence fails to establish all the elements of fraud with respect to the money plaintiff paid Finger for Finger's interest in the Ashe County property. We disagree.

Plaintiff's evidence clearly is sufficient to establish that at the time plaintiff bought Finger's interest defendant had falsely represented to plaintiff that she was in possession of a deed to the property, executed by the owner; that such representation was made to induce plaintiff to pay defendant money for an interest in the property; and that plaintiff thereby was deceived and suffered *410 injury. The only real questions as to fraud are (1) whether, under all the circumstances, plaintiff reasonably relied on defendant's representations, and (2) whether defendant's fraudulent intent renders her answerable for plaintiff's loss incurred in buying Finger's interest. In response to the first of these questions, we can find no better statement than that made by Justice (later Chief Justice) Sharp in Johnson v. Owens, supra: "We are not inclined to encourage falsehood and dishonesty by protecting one who is guilty of such fraud on the ground that his victim had faith in his word, and for that reason did not pursue inquiries which would have disclosed the falsehood." See also Kleinfelter v. Developers, Inc., 44 N.C.App. 561, 261 S.E.2d 498 (1980), and cases discussed therein. As to the second question, we hold that defendant's liability to plaintiff is not limited to only those losses of plaintiff by which defendant directly benefited, but also includes such losses to plaintiff as "might foreseeably be expected to follow from the character of the misrepresentation itself." Prosser, Law of Torts § 110; see also Restatement of Torts 2d §§ 548A and 549; compare Restatement §§ 435B and 435B Comment. Plaintiff's evidence to the effect that the parties entered into the transaction with the expectation of reselling the property for a profit and to the effect that defendant herself had hoped to buy Felt's interest was sufficient to allow the jury to find that defendant should have reasonably foreseen that plaintiff might buy out Felts and Finger. Plaintiff's evidence was sufficient to entitle him to a verdict against defendant based on fraud.

Having decided that plaintiff's evidence was sufficient to support the jury's verdict as to compensatory damages for defendant's fraudulent conduct, the remaining question to be resolved is whether defendant's conduct was of a sufficiently aggravated nature to allow an award of punitive damages. Prior to the decisions of our Supreme Court in Newton v. Insurance Co., 291 N.C. 105, 229 S.E.2d 297 (1976), and Oestreicher v. Stores, 290 N.C. 118, 225 S.E.2d 797 (1976), it had been the rule in this State that actionable fraud alone was insufficient to support an award of punitive damages; that the fraudulent acts must be accompanied by "actual malice, oppression, gross and willful wrong, insult, indignity or a reckless disregard of plaintiff's rights." Sharp, Chief Justice, concurring in Newton, supra. See also Murray v. Insurance Co., 51 N.C.App. 10, 275 S.E.2d 195 (1981). In both Newton and Oestreicher, however, the Court weakened those previously adhered to requirements, indicating that the fraud itself might support an award of punitive damages. In Terry v. Terry, supra, the Court, in holding that the plaintiff's fraud claim was sufficient grounds to withstand a Rule 12(b)(6) challenge to the claim for punitive damages, put the question to rest by adopting language from Newton as follows: "`In North Carolina actionable fraud by its very nature involves intentional wrongdoing ... [and] is well within North Carolina's policy underlying its concept of punitive damages.'" Plaintiff's entitlement to punitive damages having been established by the evidence, the decision to award such damages and the amount awarded were matters for the sound discretion of the jury. Harris v. Queen City Coach Co., 220 N.C. 67, 16 S.E.2d 464 (1941). Thus, the trial court erred in granting defendant's motion for Judgment N.O.V. as to the $25,000.00 verdict of punitive damages.

For the reasons stated, the order of the trial court granting Judgment N.O.V. for defendant must be reversed and the case must be remanded for entering judgment on the jury's verdict.

Reversed and remanded for judgment on the verdict.

HILL and JOHNSON, JJ., concur.

NOTES

[1] We note that defendant argues as cross assignments of error that the trial judge erred in partially denying her motion for Judgment N.O.V. and in denying her motion for a new trial. Although these assignments are based on exceptions duly set out in the record, defendant has improperly designated them as cross assignments of error. See Rule 10(d) of the Rules of Appellate Procedure. Defendant should have raised these questions by a cross appeal. Cf. Rule 28(c). The record does not indicate that defendant gave notice of appeal in this case and defendant has not submitted an appellant's brief. Plaintiff has notand under the Rules he could not haveresponded to defendant's "cross assignments." See Rule 28(c). We do not address these questions because they have not been properly presented.

[2] Defendant's written motion for Judgment N.O.V. asserts a new ground not raised in the directed verdict motion in that it asserts that plaintiff may not recover the $12,500.00 that he paid to Finger because his complaint did not allege that as damages. That issue is not before us. Moreover, since the issue of whether plaintiff was induced by defendant's representations to give $12,500.00 to Finger was tried by the consent of the parties and since defendant made no timely objection to evidence admitted pertaining to that issue, the pleadings must be deemed amended to conform to the evidence and to entitle plaintiff to a recovery based on his proof. See G.S. 1A-1, Rule 15(b).