Plaintiff and defendants Bryant/Sutphin Properties, LLC and Donald H. Sutphin appeal. For the following reasons, we reverse the trial court’s entry of an award for unfair or deceptive practice to Bryant/Sutphin Properties, LLC and affirm the trial court on all other issues raised by the parties.
I. Background
Plaintiff and defendant Bryant/Sutphin Properties, LLC (“BSP”) entered into a Commercial Note (“Note”) whereby plaintiff would provide defendant BSP funds to finance a real estate development project; defendant Sutphin was a guarantor on the Note. Plaintiff sued defendants BSP and Sutphin
After the filing of the initial pleadings, the parties engaged in various legal filings which resulted in a 472 page record and a box of exhibits which includes, inter alia, a reply to defendants’ counterclaims, a motion for summary judgment, a motion to dismiss and objections to the motion for summary judgment, a jury verdict, two motions for judgment notwithstanding the verdict, a motion for a new trial, a motion to tax costs, two notices of appeal, an undertaking to stay execution on appeal, a special motion to docket entry of the stay, an exception to undertaking to stay execution on appeal, and the various orders and judgment of the trial court ruling on the parties’ aforementioned motions.
Ultimately the jury found in favor of defendants as to the factual basis for their claims under Section 75-1.1(a) although it also found no breach of contract by either plaintiff or defendants. The trial court set aside the Section 75-1.1(a) verdict for defendant Sutphin, leaving only the Section 75-1.1(a) verdict for defendant BSP. Defendant BSP was awarded $700,000.00 from plaintiff on its Section 75-1.1(a) claim, and these damages were trebled to $2,100,000.00; plaintiff was also ordered to pay costs of $5,612.90. All of the parties appealed.
II. Plaintiff’s Appeal
Plaintiff argues that the trial court erred in entering an award on defendant BSP’s Section 75-1.1(a) claim and in failing to enter a directed verdict on its claim for breach of contract.
A. Defendant BSP’s Claim for Section 75-1.1(a)
The verdict sheet presented 22 issues to the jury, addressing the various claims raised by all of the parties. There is no issue raised on appeal as to the propriety of the verdict sheet or jury instructions. The issues and verdicts as to the relevant questions for purposes of defendant BSP’s Section 75-1.1(a) claim read, in pertinent part:
7. Did [plaintiff] breach the Central Carolina Bank Deposit Agreement related to [defendant] Donald H. Sutphin’s money market account?
Answer: NO
' 12. Did [plaintiff] breach the contract with [defendant] Bryant/Sutphin Properties, LLC for the making and repayment of the loan for the acquisition and development of the property known as Ashley Terrace?
Answer: NO
17. Did [plaintiff] do at least one of the following?
a) Did [plaintiff] place the hold on [defendant] Donald H. Sutphin’s money market account without any prior notice?
Answer: yes
b) Did [plaintiff] fail to make written demand for payment in full of the two D.H. Sutphin Builders’ demand notes before placing the hold on [defendant] Mr. Sutphin’s account?
Answer: yes
c) Did [plaintiff] fail to make written demand for payment in full of the Bryant/Sutphin Properties, LLC loan before placing the hold on [defendant] Mr. Sutphin’s account?
Answer: yes
d) Did [plaintiff] change the prior manner in which it had been dealing with Defendants by placing the hold on [defendant] Mr. Sutphin’s account?
Answer: yes
18. Was [plaintiff’s conduct as found in Issue 17 in commerce or did it affect commerce?
Answer: yes
20. Was [plaintiff’s conduct as found in Issue 17 a proximate cause of economic injury to [defendant] Bryant/Sutphin Properties, LLC?
Answer: yes
22. In what amount has [defendant] Bryant/Sutphin Properties, LLC been injured by [plaintiff’s conduct as found in Issue 17?
Answer: $700,000
On 25 July 2011, the trial court entered an order determining that “[t]he conduct found by the jury is determined to constitute an unfair trade practice in violation of N.C.G.S. § 75-1.1, and the damages in the amount of $700,000.00 shall be trebled pursuant to N.C.G.S. § 75-16.” On 25 August 2011, the trial court entered a judgment concluding “that the conduct found by the jury constitutes an unfair trade practice in violation of N.C. Gen. Stat. § 75-1.1. Pursuant to N.C. Gen. Stat. § 75-16, the damages that the jury found Bryant/Sutphin Properties, LLC incurred in the amount of $700,000.00 will be trebled.” Plaintiff contends that the trial court “erred in concluding that [plaintiff] committed [a Section 75-1.1(a) violation] after the jury found that [plaintiff did not breach its contracts with Defendants. Without a breach, the [Section 75-1.1(a)] counterclaim should have necessarily failed.”
1. Standard of Review
“Although it is a question of fact whether the defendant performed the alleged acts, it is a question of law whether those facts constitute an unfair or deceptive trade practice.” RD&J Props. v. Lauralea-Dilton Enters., LLC,
2. Law on Section 75-1.1(a)
N.C. Gen. Stat. § 75-1.1(a) provides that “[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.” N.C. Gen. Stat. § 75-1.1(a).
The elements of a claim for unfair or deceptive trade practices in violation of N.C. Gen. Stat. § 75-1.1 . . . are: (1) an unfair or deceptive act or practice or an unfair method of competition; (2) in or affecting commerce; (3) that proximately causes actual injury to the plaintiff or to his business.
RD&J Props.,
actions for unfair or deceptive trade practices are distinct from actions for breach of contract, and a mere breach of contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under N.C.G.S. § 75-1.1. Substantial aggravating circumstances must attend the breach in order to recover under the Act. A violation of Chapter 75 is unlikely to occur during the course of contractual performance, as these types of claims are best resolved by simply determining whether the parties.properly fulfilled their contractual duties.
Mitchell v. Linville,
3. Analysis
In this case, there are two ways in which defendants could have proven and prevailed on a Section 75-l.l(a) claim: (1) a Section 75-1.1(a) claim standing separate and apart from a breach of contract claim or (2) a Section 75-1.1(a) claim based upon a breach of contract accompanied by “[s]ubstantial aggravating circumstances[.]” Id.
a. Section 75-1.1(a) Claim Standing Alone
The first way in which defendants could have prevailed on a Section 75-1.1(a) claim is by showing a Section 75-1.1(a) violation separate and apart from a breach of contract; indeed, this is the route defendants have chosen as they contend that “freezing of the Sutphin Account was outside the scope of both the CCB Deposit Agreement and the loan documents.” Defendants argue that “regardless of whether [plaintiff’s conduct violated or complied with any contractual provision, [plaintiff’s conduct was immoral, unethical, oppressive, unscrupulous, and destroyed Defendants’ business in violation of Chapter 75.” However, despite the numerous adjectives used by defendants to describe plaintiff’s alleged conduct, none of the allegations in defendants’ counterclaims support defendants’ claim that plaintiff has committed a Section 75-1.1(a) violation. Defendants make no allegations or claims for fraud, constructive fraud, misrepresentation or the like on the part of plaintiff. While we recognize that “[t]o prevail on a Chapter 75 claim, a [party] need not show fraud, bad faith, or actual deception[,]” [the party] must show “that a defendant’s acts possessed the tendency or capacity to mislead or created the likelihood of deception.” RD&J Properties,
Issue 17 addressed the possible bases for defendants’ Section 75-1.1(a) claim. The jury’s answers to issue 17 indicate that the jury found that plaintiff (1) placed “the hold on [defendant] Donald H. Sutphin’s money market account without any prior notice[;]” (2) failed “to make written demand for payment in full of the two D.H. Sutphin Builders’ demand notes before placing the hold on [defendant] Mr. Sutphin’s account[;]” (3) failed “to make written demand for payment in full of the Bryant/Sutphin Properties, LLC loan before placing the hold on [defendant] Mr. Sutphin’s account[;]” and (4) changed “the prior manner in which it had been dealing with Defendants by placing the hold on [defendant] Mr. Sutphin’s accountf.]” Yet the fact that plaintiff committed any of these four acts will not support a Section 75-1.1(a) claim if plaintiff had the right to do these 'acts under the contracts between plaintiff and defendants. Defendants argue that these actions are outside of the scope of the contracts, including the CCB Deposit Agreement and loan documents, but in actuality, defendants are claiming that plaintiff acted outside of its authority under these contracts: this is a breach of contract.
For example, even if we were to assume that the contracts required plaintiff “to make a written demand for payment in full of the two D.H. Sutphin Builders’ demand notes before placing the hold on [defendant] Mr. Supthin’s account[,]” the failure to make written demand for payment in full would simply be a breach of the contracts; yet the jury found that plaintiff had not breached any contract with defendants, implicitly finding that plaintiff had the contractual right to place the hold on the account without giving
b. Section 75-1.1(a) Based Upon Breach of Contract
The second way in which defendants could have demonstrated a valid claim for Section 75-1.1(a) is by showing a breach of contract accompanied by “[substantial aggravating circumstances[.] Mitchell,
c. Jury Verdict Regarding Section 75-1.1(a)
Because defendants failed to plead in their counterclaims or demonstrate during trial any facts which would allow for a Section 75-1.1(a) claim outside of the context of a breach of contract claim, the trial court was left with three possible determinations as to BSP’s counterclaims for breach of contract and Section 75-1.1(a): (1) The jury could have found that plaintiff neither breached a contract nor committed any acts which would constitute a Section 75-1.1(a) violation against BSP. In this situation, the trial court would not award any damages to BSP. (2) The jury could have found that although plaintiff had breached a contract there were not facts constituting a Section 75-1.1(a) violation against BSP. In this situation, the trial court would award damages based upon breach of contract but not upon a Section 75-1.1(a) violation against BSP. (3) The jury could have found that plaintiff breached a contract and there were facts constituting a Section 75-1.1(a) violation against BSP. In this situation, the trial court would award damages based upon breach of contract and would then have “determine[d] as a matter of law whether” the jury’s positive responses to issue 17 regarding the “[substantial aggravating circumstances” supported an award for a Section 75-1.1(a) violation. Id.; McDonald v. Scarboro,
Here, the jury found that plaintiff had not breached a contract but there were facts sufficient to constitute a Section 75-1.1(a) violation; hence, the jury’s negative responses to issues 7 and 12 regarding breach of contract and its positive responses to issue 17 regarding other conduct on the part of plaintiff. In other words, the jury found that although there was not a breach of contract there were “[substantial aggravating circumstances” that took place. Mitchell,
4. Conclusion
In summary, defendants have not shown any conduct upon which a Section 75-1.1(a) claim could stand except for a breach of contract claim. As the jury found that plaintiff had not breached the applicable contracts, defendants have no viable claim under Section 75-1.1(a). Accordingly, the trial court erred in entering an award on defendant BSP’s claim for Section 75-1.1(a). As we have concluded that the trial court erred in entering an award for Section 75-1.1(a) to defendant BSP, we need not address plaintiff’s other issues regarding defendant BSP’s Section 75-1.1(a) claim.
B. Plaintiff’s Claim for Breach of Contract
During trial, pursuant to Rule 50, plaintiff requested a directed verdict as to its claim for breach of contract against defendants. After the jury verdict finding no breach of contract on the part of defendants, pursuant to Rule 59, plaintiff moved for a new trial. The trial court denied both of plaintiff’s requests.
1. Directed Verdict
Plaintiff contends that “[t]he [tjrial [c]ourt [e]rred in [djenying [its] Rule 50 [m]otions on its [b]reach of [c]ontract [c]laims” arguing that “[i]t is undisputed that Defendants haven’t made the payments under the BSP Note and Sutphin/BSP Guaranty.”
The standard of review of directed verdict is whether the evidence, taken in the light most favorable to the non-moving party, is sufficient as a matter of law to be submitted to the jury. In determining the sufficiency of the evidence to withstand a motion for a directed verdict, all of the evidence which supports the nonmovant’s claim must be taken as true and considered in the light most favorable to the non-movant, giving the non-movant the benefit of every reasonable inference which may legitimately be drawn therefrom and resolving contradictions, conflicts, and inconsistencies in the non-movant’s favor.
Rink & Robinson v. Catawba Valley Ent., _ N.C. App. _, _,
“A party to an executory contract is under a duty not to do anything to prevent the other party to the contract from performing. When he does something that prevents the other party from performing, he is liable in damages.” Pedwell v. First Union Natl. Bank,
Plaintiff claims it had a right to place the hold, so its actions in placing the hold were not wrongful. However, our standard of review requires us to take “all of the evidence which supports the nonmovant’s claim ... as true” and to consider it “in the light most favorable to the non-movant, giving the non-movant the benefit of every reasonable inference which may legitimately be drawn therefrom and resolving contradictions, conflicts, and inconsistencies in the nonmovant’s favor.” Id. Therefore, though this case is rife with “contradictions, conflicts, and inconsistencies!,]” we must resolve these in defendants’ favor. Id.
In addition, in the criminal context our Supreme Court has stated,
In North Carolina jurisprudence, a distinction is drawn between verdicts that are merely inconsistent and those which are legally inconsistent and contradictory. It is firmly established that when there is sufficient evidence to support a verdict, mere inconsistency will not invalidate the verdict.
However, when a verdict is inconsistent and contradictory, a defendant is entitled to relief.
State v. Mumford,
While the jury’s verdicts on plaintiff’s claim and defendants’ counterclaims may be factually inconsistent, they are not “legally inconsistent and contradictory[,]” id., as a finding that one party did not breach a contract does not legally require a finding that the other party breached the same contract; nor does a finding that a party breached a contract legally require a finding that the other party did not breach said contract. Legally, both parties could breach the same contract, neither could breach the contract, or either party alone could breach the contract. Accordingly, plaintiff was not entitled to a directed verdict. See Pedwell,
2. New Trial
Plaintiff argues that “the trial court erred in denying [its] motion for a new trial” as to its breach of contract claim. (Original in all caps.) Plaintiff contends that “[a]ll of the evidence showed that the BSP Note was due and unpaid],]” and therefore it is entitled to a new trial because “[t]he jury’s verdict on [its] breach of contract claims ignored the evidence].]”
Generally . . . the trial court’s decision on a motion for a new trial under Rule 59 will not be disturbed on appeal, absent an abuse of discretion.... However, where the Rule 59 motion involves a question of law or legal inference, our standard of review is de novo.
Bodie Island Beach Club Ass’n, Inc. v. Wray,_N.C. App._, _,
III. Defendants’ Appeal
A. Judgment Notwithstanding the Verdict
Plaintiff and defendants made motions for judgment notwithstanding the verdict (“JNOV”); the trial court granted plaintiff’s motion as to the jury’s award to defendant Sutphin on his claim for Section 75-1.1(a) and denied defendants’ motion as to its claim for breach of covenant of good faith and fair dealing.
1. Defendant Sutphin’s Claim for Section 75-1.1(a)
Defendants first contend that “the trial court erred by granting JNOV for [plaintiff] and setting aside the jury’s verdict in favor of Mr. Sutphin.” (Original in all caps.) As we have already concluded, the trial court
2. Defendants’ Claim for Breach of Covenant of Good Faith and Fair Dealing
Defendants next contend that “the trial court erred by denying defendants’ motion for JNOV on their good faith claims.” (Original in all caps.) As the jury determined that plaintiff did not breach any of its contracts with defendants, it would be illogical for this Court to conclude that plaintiff somehow breached implied terms of the same contracts. See generally Bicycle Transit Authority v. Bell,
B. Attorneys’ Fees
Lastly, defendants moved for attorneys’ fees; the trial court denied the request. Defendants contend that “the trial court erred by refusing to award defendants their attorneys fees pursuant to N.C.G.S. § 75-16.1.” (Original in all caps.) Defendants’ entire argument is contingent upon the fact that defendant BSP prevailed in its claim for Section 75-1.1(a). However, as we have concluded that the trial court erred in entering an award for Section 75-1.1(a), this argument must necessarily fail. Therefore, we conclude that the trial court did not err in “refusing to award defendants their attorneys fees[.]”
IV. Conclusion
For the foregoing reasons, we reverse the trial court’s entry of an award for defendant BSP’s claim for Section 75-1.1(a). As to all of the parties other issues, we affirm.
REVERSED in part; AFFIRMED in part.
Notes
. Defendant Calvert R. Bryant, Jr. is not a party to this appeal, and therefore will not be discussed.
. We note that though defendants entitle their counterclaim “Unfair/Deceptive Trade Practices” the word “trade” does not actually appear in N.C. Gen. Stat. § 75-1.1. See N.C. Gen. Stat. § 75-1.1 (2009). We will therefore refer to defendants’ counterclaim as a “Section 75-l.l(a)” claim.