James Michael Godfrey (“Godfrey”) and Sherry Jo Lusk (“Lusk”) (collectively, “plantiffs”) sued Res-Care, Inc. (“defendant”), alleging common law fraud and unfair and deceptive trade practices arising out of the sale of Access, Inc. (“Access”) to Communications Network Consultants (“CNC”), a subsidiary of defendant. On 16 July 2002, the jury found in favor of plaintiffs. In separate notices of appeal, defendant assigns error to the final judgment and post-judgment orders. Plaintiffs cross-assign error to the trial court order partially granting directed verdict in favor of defendant. Pursuant to N.C.R. App. P. 40 (2004), defendant’s separate appeals were consolidated at oral argument before this Court. After reviewing the merits of both appeals, we hold the trial court committed no error.
The facts presented at trial tend to show the following: In 1997, Access was in the business of providing employment, residential,
Throughout negotiations between the parties, plaintiffs expressed concern in selling their interests to defendant, a large corporation. Each shareholder of Access was a former employee of VOCA of North Carolina (“VOCA”), a large business also engaged in providing employment, residential, habilitation, and vocational training services to the mentally handicapped, mentally ill, and developmentally disabled. Plaintiffs informed defendant that the shareholders of Access left VOCA and formed Access because of philosophical differences they had with VOCA and its management. Plaintiffs further stated that in order for the shareholders of Access to sell their respective interests, the shareholders must be assured that they would never be affiliated with a company that acted or operated like VOCA. In initial meetings between the parties, Paul Dunn (“Dunn”), defendant’s Chief Development Officer, responded to plaintiffs’ concerns by stating that defendant was not like VOCA, and that it would never be like VOCA. Plaintiff Godfrey reiterated the shareholders’ concerns about selling to a large corporation when he and McKelvey traveled to Louisville in May 1998. At that time, Dunn reassured plaintiff Godfrey that defendant was not like VOCA, and that it was not interested in buying VOCA because VOCA did not make enough profit and was poorly managed. In the Fall of 1998, plaintiffs met with Todd Graybill (“Graybill”), defendant’s Vice President of the Central Region. During these meetings, plaintiffs informed Graybill that if there was a possibility that an association with VOCA might arise, the shareholders of Access would not sell their interests to defendant. Plaintiffs further stated that the shareholders of Access also would not sell their interests if an association with Ron Curran (“Curran”), the shareholders’ former supervisor at VOCA, might arise. Defendant’s representatives again assured plaintiffs that defendant was not going to purchase VOCA, and that defendant could not afford such a purchase.
Plaintiffs’ continued employment was also a critical factor in the sale of Access. Plaintiff Godfrey discussed his potential employment with defendant during initial meetings between the parties, and subsequent negotiations commenced under the assumption that plaintiff Godfrey would work for defendant for two or three years after the sale of Access. Plaintiff Lusk also planned to work for defendant for some time after the sale of Access. However, prior to the actual sale of Access, defendant informed plaintiffs that their employment contracts with defendant would be terminable at-will. When plaintiffs noted that the employment termination provisions were not what had been previously negotiated, Graybill assured plaintiffs that the employment term “wasn’t an issue.”
A week after plaintiffs signed the Agreement, defendant announced that it had signed a Letter of Intent to purchase VOCA. Defendant subsequently informed plaintiff Godfrey that he “had nothing to worry about [and that] things were not going to change.” Defendant also informed plaintiff Godfrey that Curran would be leaving North Carolina for a position outside the state. However, defendant subsequently named Curran Statewide Director, a position that required plaintiff Godfrey to work together with Curran and plaintiff Lusk to work directly beneath Curran. Defendant soon terminated plaintiff Godfrey, “truly without cause” according to Graybill. Plaintiff Lusk subsequently resigned after defendant refused to release her
On 1 December 1999, plaintiffs filed suit against defendant, alleging common law fraud and unfair and deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1. On 21 May 2002, defendant filed a motion for summary judgment. On 19 June 2002, the trial court denied the motion. Trial began on 25 June 2002, and defendant moved for directed verdict at the close of plaintiffs’ evidence. The trial court granted defendant’s motion “as to the [employment] claims, based on the terms of the [employment] agreement as three years as opposed to at will,” but denied defendant’s motion “as to the purported misrepresentation as to whether or not VOCA would be or wouldn’t be bought; in other words, the VOCA issue.” On 16 July 2002, the jury rendered a verdict in favor of plaintiffs on the issue of fraud, awarding $300,000 in damages to plaintiff Godfrey and $30,000 in damages to plaintiff Lusk. On 22 July 2002, defendant filed a motion for a new trial, a motion for judgment notwithstanding the verdict, and a motion for relief from final judgment. On 19 August 2002, the trial court denied each of defendant’s motions. On 30 September 2002, the trial court filed an order taxing attorneys’ fees and costs against defendant. Defendant appeals the judgment entered 29 July 2002, the order entered 19 August 2002, and the order entered 30 September 2002.
As an initial matter, we note that defendant’s briefs contain arguments supporting only ten of its original fifteen assignments of error. Pursuant to N.C.R. App. P. 28(b)(6) (2004), the five omitted assignments of error are thus deemed abandoned. Therefore, we limit our present review to those assignments of error properly preserved by defendant for appeal.
The issues on appeal are whether the trial court erred in (I) denying defendant’s motion for a directed verdict; (II) denying defendant’s request to instruct the jury regarding the directed verdict; (III) submitting the verdict sheet to the jury; (IV) granting plaintiffs’ motion for attorneys’ fees; (V) denying defendant’s motion for a new trial; (VI) denying defendant’s motion for judgment notwithstanding the verdict; (VII) denying defendant’s motion for relief from final judgment; and (VIII) granting defendant’s motion for directed verdict.
I.
Defendant first assigns error to the trial court order denying defendant’s motion for directed verdict. Defendant argues that plaintiffs failed to present sufficient evidence of an essential element of fraud. We disagree.
“On a defendant’s motion for directed verdict, the trial court must determine whether the evidence, when considered in the light most favorable to the plaintiff, is sufficient to take the case to the jury.”
Ward v.
Beaton,
While fraud has no all-embracing definition and is better left undefined lest crafty men find a way of committing fraud which avoids the definition, the following essential elements of actionable fraud are well established: (1) False 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) resulting in damage to the injured party.
Ragsdale v. Kennedy,
Defendant argues that plaintiffs failed to present sufficient evidence that defendant concealed a material fact. Defendant asserts that it had no duty to disclose to plaintiffs that it was negotiating to buy VOCA. and employ Curran. In support of this assertion, defendant cites
Computer Decisions, Inc. v. Rouse Office Mgmt. of N.C.,
“[E]ven if there is no duty to disclose information, if a seller does speak then he must make a full and fair disclosure of the matters he discloses.”
Freese v. Smith,
Although a duty to disclose generally arises out of a fiduciary relationship,
See, e.g., Link v. Link,
Defendant also argues that the evidence used by plaintiffs to prove the element of misrepresentation should not have been admitted as a matter of law. Defendant asserts that the parol evidence rule prohibited plaintiffs from introducing evidence regarding its oral discussions with defendant concerning VOCA and Curran. We find this argument unconvincing as well.
The parol evidence rule prohibits the admission of evidence of prior oral agreements “to vary, add to, or contradict [the terms
of]
a written instrument intended to be the final integration of the transaction.”
Hall v. Hotel L’Europe, Inc.,
Entire Agreement. This Agreement, its Exhibits, Schedules and Annexes, and the documents executed on the Closing Date in connection herewith, constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supercede all prior agreements and understandings, oral and written, between the parties hereto with respect to the subject matter hereof, including but not limited to the Letter of Intent.
(“merger clause”).
Defendant contends that because the merger clause states that the Agreement is the final expression of the parties’ agreement, plaintiffs were prohibited as a matter of law from introducing evidence concerning negotiations made prior to the execution of the Agreement. In support of this contention, defendant cites
Ace, Inc. v. Maynard,
In our analysis in
Ace,
we noted that “plaintiff failed to establish concealment of a material fact on the part of defendants because plaintiff presented no evidence that defendants knew of any defects in the plane.”
Id.
at 250,
In North Carolina, parol evidence may be admitted into evidence to prove that a written contract was procured by fraud because “the allegations of fraud challenge the validity of the contract itself, not the accuracy of its terms[.]”
Fox v. Southern Appliances,
II.
Defendant next assigns error to the trial court’s jury instructions. Defendant argues that because the trial court granted defendant directed verdict “as to the [employment] claims, based on the terms of the [employment] agreement as three years as opposed to at will,” the trial court was required to instruct the jury to disregard any evidence or inferences regarding plaintiff’s employment claims. We disagree.
At the jury charge conference, the trial court concluded that plaintiffs’ potential earnings at Res-Care were a proper measure for determining plaintiffs’ fraud damages. The trial court stated that plaintiffs’ damages in the case amounted to their potential earnings had they not sold Access. Thus, the trial court concluded, plaintiffs’ employment evidence was relevant to their damage claims. The trial court then provided the following pertinent instructions:
To determine the amount, if any, that you award to a respective plaintiff for actual damages, you will consider all the evidence that you have heard. Damages are compensation in money, in an amount so far as is possible, to restore a respective plaintiff to his or her original condition or position, which may include lost wages or lost benefits.
There is not any fixed mathematical formula for placing value on damages. [Plaintiffs’] damages are to be reasonably determined from the evidence presented in the case. . . . Your award must be fair and just.
You will determine the amount of damages by applying logic and common sense to the evidence; however, you may not reward any damages based upon speculation and conjecture.
The trial court did not instruct the jury to determine whether defendant’s representations concerning plaintiffs’ employment were fraudulent or whether defendant committed unfair and deceptive trade practices with regard to plaintiffs’ employment contract. Instead, the trial court allowed the jury to consider plaintiffs’ employment evidence to determine how to best restore plaintiffs to their original conditions and positions.
It is elementary that a plaintiff in a fraud suit has a right to recover an amount in damages “which will put him in the same position as if the fraud had not been practiced on him.”
Sykes v. Insurance Co.,
We conclude that the trial court’s instruction, considered in its entirety, encompassed the substance of the law of fraud damages. The instruction allowed the jury to consider proper factors in determining plaintiffs’ damages, and the instruction did not direct the jury to determine or consider improper issues. Therefore, we hold that the trial court did not err in denying defendant’s request to instruct the jury to disregard any evidence or inferences regarding plaintiffs’ employment claims.
III.
Defendant next assigns error to the trial court’s decision to submit the verdict sheet to the jury. Defendant argues that the verdict sheet was impermissibly confusing. We disagree.
The form.and the number of issues submitted to the jury is within the trial court’s discretion.
Wilson v. Pearce,
Because an action for unfair and deceptive trade practices is a distinct action separate from fraud,
United Virginia Bank v. Air-Lift Associates,
1. Was the plaintiff. . . damaged by fraud of the defendant. . . ?
Answer:_
2. Did the defendant, Res-Care, Inc. falsely represent to the plaintiff . . . that plaintiffs would not have to work with VOCA or Ron Curran, or falsely represent that Res-Care, Inc., was not acquiring and would not acquire Voca?
Answer:_
a. Was the conduct of the defendant... in commerce or did it affect commerce?
Answer:_
b. Was the conduct of the defendant... a proximate cause of injury to the plaintiff. . . ?
Answer:_
The verdict sheet instructed the jury to answer the second question regardless of the jury’s answer to the first question. The verdict sheet also instructed the jury to answer subsection (a) of the second question only if the jury’s answer to the second question was “yes.” The verdict sheet further instructed the jury to answer subsection (b) only if the jury’s answer to subsection (a) was “yes.” Finally, the verdict sheet instructed the jury to answer the questions contained in the damage section only if the jury’s answer to the first question was “yes” or if all of the jury’s answers to the second question and its subsections were “yes.”
Both the jury instructions and the verdict sheet utilized the North Carolina Pattern Jury Instructions on fraud, which allow a jury to find fraud in both affirmative misrepresentations and concealment of a material fact. N.C.P.I. 800.00. The parties agreed during the jury charge conference that the verdict sheet correctly questioned the jury regarding unfair and deceptive trade practices. By separating the fraud and unfair and deceptive trade practices issues and by allowing for separate answers, the verdict sheet offered three distinct alternatives to the jury. The jury could find (1) that defendant committed fraud, or (2) that defendant committed unfair and deceptive trade practices by making false representations, or (3) that defendant committed both fraud and unfair and deceptive trade practices. Thus, we conclude that the verdict sheet does not embody several issues into one jury determination, and is not impermissibly confusing or improper. Therefore, we hold that the trial court did not err in submitting the verdict sheet to the jury.
IV.
Defendant next assigns error to the trial court order awarding attorneys’ fees in favor of plaintiffs. Defendant argues that plaintiffs “lack any basis for recovering the fees and costs sought in their Petition for Attorneys’ Fees.” We disagree.
Plaintiffs’ complaint clearly alleges that during negotiations between the parties, defendant committed fraud as well as unfair and deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 (2003). As discussed
supra,
defendant was not entitled to a directed verdict on plaintiffs’ fraud claim, and the fraud claim was properly
submitted to the jury. After the jury found plaintiffs were damaged by fraud committed by defendant, plaintiffs moved the trial court to award attorneys’ fees pursuant to N.C. Gen. Stat. § 75-16.1 (2003). N.C. Gen. Stat. § 75-
V.
Defendant next assigns error to the trial court order denying its motion for a new trial. Defendant argues that a procedural irregularity denied defendant the right to a fair trial, and that because plaintiffs failed to produce sufficient evidence of fraud, the jury verdict was contrary to law. We disagree.
N.C.R. Civ. P. 59(a) permits a trial court to grant a new trial where the trial court finds “[a]ny irregularity by which any party was prevented from having a fair trial . . . [or] [insufficiency of the evidence to justify the verdict or that the verdict is contrary to law.” N.C. Gen. Stat. § 1A-1, Rule 59(a)(1), (7) (2003). Defendant asserts that a new trial is required in the instant case because defendant “was burdened by a procedural irregularity” — specifically, the trial court decision not to instruct the jury regarding defendant’s directed verdict “as to the [employment] claims, based on the terms of the [employment] agreement as three years as opposed to at will.” However, we concluded supra that the trial court’s jury instructions were proper because the instructions (1) encompassed the substance of the law of fraud damages, and (2) did not instruct the jury to determine whether defendant committed fraud or unfair and deceptive trade practices with regard to the employment agreement. Therefore, we are unconvinced that the trial court’s jury instructions amounted to a “procedural irregularity.”
Defendant asserts in the alternative that a new trial is required because the jury verdict was contrary to law. In support of this assertion, defendant submits that plaintiffs failed to present sufficient evidence to establish fraud. Specifically, defendant reasserts its arguments that (1) plaintiffs failed to demonstrate defendant concealed a material fact, and (2) the parol evidence rule prohibited plaintiffs from introducing the evidence used to prove the misrepresentation and concealment. However, we concluded supra that plaintiffs produced sufficient evidence to demonstrate that defendant took affirmative steps to conceal its on-going negotiations to buy VOCA and employ Curran. Furthermore, because plaintiffs challenged the validity of the contract rather than its terms, we also concluded supra that the trial court did not err in allowing plaintiffs to introduce parol evidence regarding their negotiations with defendant prior to signing the Agreement. Therefore, we are unconvinced that the jury verdict was contrary to law.
Our review of a discretionary ruling denying a motion for a new trial is limited to determining whether the record demonstrates that the trial court manifestly abused its discretion.
Pittman v. Nationwide Mutual Fire Ins. Co.,
VI.
Defendant next assigns error to the trial court’s denial of defendant’s motion for judgment notwithstanding the verdict. Defendant argues that “[t]his case should have never been submitted to the jury . . . [because
“The test for determining the sufficiency of the evidence when ruling on a motion for judgment notwithstanding the verdict is the same as that applied when ruling on a motion for directed verdict.”
DeHart v. R/S Financial Corp.,
VII.
Defendant next assigns error to the trial court’s denial of defendant’s motion for relief from the final judgment. Defendant argues that relief from judgment is proper in the instant case because the trial court erred in instructing the jury. We disagree.
N.C.R. Civ. P. 60(b)(6) (2003) allows a party to obtain relief from judgment for “[a]ny . . . reason justifying relief from the operation of the judgment.” Although Rule 60(b)(6) has been described as a “grand reservoir of equitable power to do justice in a particular place,” 7 Moore’s Federal Practice, para. 60.27[2] at 375 (2d ed 1979), a court may only set aside a judgment pursuant to Rule 60(b)(6) upon a showing that (1) extraordinary circumstances exist, and (2) justice demands relief.
Thacker v. Thacker,
Defendant argues that the extraordinary relief provided by Rule 60(b)(6) is necessary in the instant case because the jury returned a verdict in favor of plaintiff Godfrey in the amount of $300,000, “or precisely Mr. Godfrey’s compensation had he continued his employment for the three-year period he alleged he was promised.” Defendant asserts that the jury awarded plaintiff Godfrey this amount only because the trial court refused to instruct the jury regarding the directed verdict previously granted in favor of defendant. However, we concluded
supra
that the trial court properly instructed the jury regarding its determination of the amount of damages that would put plaintiffs “ ‘in the same position as if the fraud had not been practiced
on [them].’ ”
Sykes,
VIII.
Plaintiffs cross-assign error to the trial court order granting directed verdict in favor of defendant “as to the [employment] claims, based on the terms of the [employment] agreement as three years as opposed to at will.” Plaintiffs argue that they presented sufficient evidence regarding the employment claims to withstand defendant’s directed verdict motion. We disagree.
To survive a motion for directed verdict on a fraud claim, a plaintiff is required to provide sufficient evidence that the defendant concealed or made a false representation concerning a material fact.
In the instant case, plaintiffs testified at trial that negotiations with defendant commenced under the assumption that the shareholders of Access would work for defendant for two or three years. However, plaintiffs also admitted into evidence the Letter of Intent delivered to plaintiffs on 10 February 1999 as well as a facsimile of the Agreement delivered to plaintiffs on 4 March 1999. Both documents clearly state that the terms of plaintiffs’ continued employment would be mutually agreed on prior to the actual sale of Access on 29 March 1999. Furthermore, plaintiff Godfrey testified that two or three years of continued employment was only “the framework that [the parties] operated under,” and that the discussions he had with defendant concerning his employment produced “draft agreements” that were “a launching pad for negotiations.” Moreover, both plaintiffs admitted that prior to closing on 29 March 1999, they were aware that the Agreement contained at-will employment terms rather than the two or three-year employment terms they sought. When plaintiffs contacted Graybill about the at-will employment terms, Graybill informed plaintiffs that the terms were final and “pretty much it was take it or leave it.” Viewing this evidence in the light most favorable to plaintiffs, we nevertheless conclude that plaintiffs failed to offer sufficient evidence that defendant made a false representation to plaintiff or that plaintiff was deceived by such representation. Therefore, we hold that the trial court did not err in granting defendant directed verdict on plaintiffs’ employment claims.
IX.
In conclusion, we hold that the trial court did not err in (I) denying defendant’s motion for directed verdict; (II) denying defendant’s requested jury instructions; (III) submitting the verdict sheet to the jury; (IV) awarding attorneys’ fees in favor of plaintiffs; (V) denying defendant’s motion for new trial; (VI) denying defendant’s motion for judgment notwithstanding the verdict; (VII) denying defendant’s motion for relief from judgment; and (VIII) granting defendant directed verdict on plaintiffs’ employment claims.
No error.
Notes
. Defendant also cites
One-O-One Enterprises, Inc. v. Caruso,