CFR Foods, Inc. v. Randolph Development Co.

Annotate this Case

421 S.E.2d 386 (1992)

107 N.C. App. 584


No. 9119SC757.

Court of Appeals of North Carolina.

October 6, 1992.

*388 Greeson, Grace and Gatto, P.A. by Michael R. Greeson, Jr. and Lisa S. Costner, Winston-Salem, for plaintiff-appellant.

Smith, Casper, Smith & Alexander by Archie L. Smith, Jr., Asheboro, for defendant-appellee.

EAGLES, Judge.

Plaintiff contends that the trial court did not base its findings on competent evidence and erred by granting defendant's motion for involuntary dismissal with prejudice. After a careful examination of the record, we disagree and affirm.

The standard regarding involuntary dismissal is as follows:

"When a motion to dismiss pursuant to [N.C.G.S. § 1A-1, Rule] 41(b) is made, the judge becomes both the judge and the jury and he must consider and weigh all competent evidence before him." Dealers Specialties, Inc. v. Neighborhood Housing Services, Inc., 305 N.C. 633, 640, 291 S.E.2d 137, 141 (1982). The trial judge in a non-jury case does not weigh the evidence in the light most favorable to the plaintiff as he does on a motion for directed verdict in a jury trial. Id. at 638, 291 S.E.2d at 140. Dismissal with prejudice pursuant to a Rule 41(b) motion is a judgment on the merits, subject to the usual rules of res judicata. Barnes v. McGee, 21 N.C.App. 287, 289, 204 S.E.2d 203, 205 (1974).

Progressive Sales, Inc. v. Williams, Willeford, Boger, Grady & Davis, 86 N.C.App. 51, 55, 356 S.E.2d 372, 375 (1987).

Plaintiff argues that its claims of actionable fraud and negligent misrepresentation should have survived the motion for involuntary dismissal because it met its burden of proof on all essential elements. We disagree.

First, plaintiff alleges that defendant's nondisclosure was fraudulent because defendant "had at least constructive knowledge" of the presence of the organic materials from the 13 February 1980 report by ATEC. In Rowan County Board of Education v. U.S. Gypsum Co., 332 N.C. 1, 17, 418 S.E.2d 648, 658-59 (1992), our Supreme Court stated:

The essential elements of fraud are: "(1) [F]alse representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) *389 resulting in damage to the injured party." Terry v. Terry, 302 N.C. 77, 83, 273 S.E.2d 674, 677 (1981) (quoting Ragsdale v. Kennedy, 286 N.C. 130, 138, 209 S.E.2d 494, 500 (1974)); accord Cofield v. Griffin, 238 N.C. 377, 379, 78 S.E.2d 131, 133 (1953).

Additionally, plaintiff's reliance must be reasonable. Forbes v. Par Ten Group, Inc., 99 N.C.App. 587, 594, 394 S.E.2d 643, 647 (1990), rev. denied, 328 N.C. 89, 402 S.E.2d 824 (1991); Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 323 N.C. 559, 568, 374 S.E.2d 385, 391 (1988), reh'g denied, 324 N.C. 117, 377 S.E.2d 235 (1989). Here, plaintiff showed neither defendant's intent to deceive nor plaintiff's own reasonable reliance. We note that this was a transaction involving commercial real estate between two commercial parties. Accordingly, defendant owed no duty of disclosure to plaintiff. Libby Hill Seafood Restaurants, Inc. v. Owens, 62 N.C.App. 695, 699, 303 S.E.2d 565, 568, rev. denied, 309 N.C. 321, 307 S.E.2d 164 (1983).

"An action in fraud for misrepresentations regarding realty will lie only where the purchaser has been fraudulently induced to forego inquiries which he otherwise would have made. Thus, the representation generally must be definite and specific." Id. 62 N.C.App. at 698, 303 S.E.2d at 568 (citations omitted). The evidence before the trial court showed that prior to its purchase, plaintiff requested and received from defendant a topographical map. This map contained both the original and current soil grades, including a specific indication that fill had been placed upon certain portions of the parcel.

This map served to put plaintiff on notice that a further investigation of the soil would be prudent before beginning construction. Instead, plaintiff chose to rely upon the mere appearance of the land, which it alleges appeared "ready-to-build." The trial court correctly found that plaintiff's reliance was not reasonable and that plaintiff was contributorily negligent in not performing further investigation. The agreement for purchase and sale gave plaintiff access to the property to perform tests. Furthermore, plaintiff's president, Cecil Hash, testified that such pre-construction soil tests had not been performed in the purchase of other properties by plaintiff, because "I never saw a need to do it."

Where "the purchaser has full opportunity to make pertinent inquiries but fails to do so through no artifice or inducement of the seller, an action in fraud will not lie." Id. at 698, 303 S.E.2d at 568. Here, plaintiff had a full opportunity to make pertinent inquiries and failed to do so through no inducement of the seller. By the exercise of reasonable diligence prior to its purchase, plaintiff could have discovered the problem and protected its interests accordingly. Similarly, the negligent misrepresentation claim fails because plaintiff has not established that defendant has breached any duty of care it owed as a seller of commercial real estate. Id. at 699, 303 S.E.2d at 568-69.

Finally, plaintiff's claim for unfair and deceptive trade practices pursuant to N.C.G.S. § 75-1.1 was appropriately dismissed. "In essence, a party is guilty of an unfair act or practice when it engages in conduct that amounts to an inequitable assertion of its power or position." Libby Hill, 62 N.C.App. at 700, 303 S.E.2d at 569. We find no such conduct here and hold that the trial court properly dismissed the unfair and deceptive trade practices claim.


JOHNSON and PARKER, JJ., concur.