Loving v. Webb ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA13-1082
NORTH CAROLINA COURT OF APPEALS
Filed: 5 August 2014
SYLVESTER LOVING,
Plaintiff,
v. Cumberland County
No. 12 CVS 7501
FRANCO WEBB and CORE COMPUTER
TECHNOLOGIES, LLC,
Defendants.
Appeal by defendants from judgment entered 17 May 2013 by
Judge Gale M. Adams in Cumberland County Superior Court. Heard
in the Court of Appeals 5 February 2014.
The Law Office of Bryce D. Neier, by Bryce D. Neier, for
defendant-appellant.
No brief was filed for plaintiff.
BRYANT, Judge.
Where defendant pursued a counterclaim seeking an equitable
remedy and argued before the trial court that the court had
authority to impose an equitable remedy, defendant’s argument to
the contrary will not be heard on appeal. Where the trial court
ordered defendants to refund plaintiff the amount he paid above
the cost of the goods received, the trial court acted within its
-2-
authority pursuant to principles of equity. Accordingly, we
affirm the trial court’s judgment.
Plaintiff Sylvester Loving ran an accounting business and
taught classes instructing clients on the use of accounting
software. Defendants Franco Webb and Core Computer
Technologies, LLC, were engaged in the business of selling,
installing, and servicing computer equipment. On 23 May 2012,
plaintiff agreed to purchase from defendants computer equipment,
including a “quad core” server (Agreement I). Plaintiff paid
$3,851.97 for the equipment. On 24 May 2012, plaintiff agreed
to purchase additional computer equipment, including fifteen
computer workstations, from defendants for a total price of
$9,277.34 (Agreement II). That same day plaintiff made a down
payment of $6,395.50.00. The agreements and down payments were
documented in invoices (Invoice I, dated 23 May 2012, and
Invoice II, dated 24 May 2012). The equipment was to be
installed before plaintiff began teaching classes in September
2012.
On 21 June 2012, pursuant to Agreement I, defendants
delivered to plaintiff’s business a server, but plaintiff
alleged that he received a “dual core CPU server rather than the
quad core server, contracted for.” In addition, plaintiff
-3-
alleged that he never received any of the equipment contracted
for pursuant to Agreement II.
On 22 August 2012 plaintiff filed a complaint against
defendants in Cumberland County Superior Court. Plaintiff
stated a claim for unfair and deceptive trade practices in
violation of section 75-1.1 alleging that defendants failed to
respond to plaintiff’s messages, failed to deliver the
contracted for goods, and failed to refund plaintiff’s payments.
Plaintiff sought compensatory damages in excess of $10,000.00,
requested that his damages be trebled, and “such other and
further relief the Court deems just, fit and proper.”
On 31 October 2012, defendants answered plaintiff’s
complaint and counterclaimed. Defendants alleged that in
accordance with Agreement I, they delivered to plaintiff a quad
core server but that the $3,851.97 plaintiff paid them was a
down payment on a total purchase price of $5,135.96, leaving an
outstanding balance of $1,283.99. Defendants further admitted
that pursuant to Agreement II, they agreed to sell plaintiff
additional computer equipment, including fifteen computer
workstations, for a price of $9,277.34. Plaintiff’s down
payment of $6,395.50 for Agreement II left an outstanding
balance of $2,881.84. Defendants admitted that they never
-4-
delivered any equipment in accordance with Agreement II as
“Plaintiff failed to pay the balance owed under [Agreement I]
and Defendants demanded payment in full on [Agreement I] before
any further equipment would be delivered . . . .” In their
counterclaims, defendants sought recovery on the theory of
unjust enrichment and quantum meruit. Defendants alleged that
they delivered the equipment and accessories ordered by
plaintiff under Agreement I but that plaintiff failed to pay the
total amount owed. Defendants further alleged that plaintiff
was unjustly enriched in excess of $2,283.99 “which represents
the balance owed on [payment under Agreement I] of $1,283.99 and
$1,000.00 in labor fees.”
This matter was heard in a bench trial before the
Cumberland County Superior Court on 6 May 2013, the Honorable
Gale M. Adams, Judge presiding. Following plaintiff’s
presentation of evidence in support of his sole claim for unfair
and deceptive trade practices, defendants moved for a directed
verdict. The trial court granted defendants’ motion at the
close of all the evidence “based on a finding that there was no
unfair and deceptive trade practice.”
In a judgment entered 17 May 2013, the trial court found
that there was an agreement between the parties for plaintiff to
-5-
purchase from defendant Webb computer equipment, including a
“quad core” server, for a total purchase price of $5,135.96
(Agreement I). Plaintiff had paid defendants $3,851.97, leaving
an outstanding balance of $1,283.99. The court also found there
was a second agreement between the parties for plaintiff to
purchase additional computer equipment, including fifteen
workstations, for a price of $9,277.34 (Agreement II), and that
plaintiff paid defendants $6,395.50, leaving an outstanding
balance of $2,881.84. However, defendant Webb never delivered
any product or service pursuant to Agreement II. The trial
court made the following findings of fact:
17. That based on [] Defendants’
counterclaims, [] Plaintiff has been
unjustly enriched in the amount of $1283.99
since he has enjoyed the benefit and
possession of the equipment delivered
pursuant to [Agreement I].
. . .
19. The amount of $1283.99 should be
deducted from the $6395.50 already paid to
[] Defendants pursuant to [Agreement II] and
the balance of $5111.51 should be returned
to plaintiff.
The trial court awarded plaintiff $5,112.51, with interest from
the date of judgment. Defendants appeal.
____________________________________
-6-
On appeal, defendants argue that the trial court abused its
discretion and committed reversible error by entering judgment
against defendants in the amount of $5,112.51. Defendants
contend the trial court properly dismissed plaintiff’s sole
claim for unfair and deceptive trade practices, but absent any
surviving claim on plaintiff’s behalf, the court lacked
authority to award plaintiff damages. More specifically,
defendants contend that because the evidence at trial proved the
parties entered into express contracts with remedies at law
available to them for disputes, the trial court was without
authority to impose an equitable remedy. We disagree.
The rule is, that an appeal ex
necessitate follows the theory of the trial.
Having tried the case upon one theory, the
law will not permit the defendant to change
its position, or to swap horses between
courts in order to get a better mount in the
[appellate courts]. The theory upon which a
case is tried must prevail in considering
the appeal, and in interpreting a record and
in determining the validity of exceptions.
Gorham v. Ins. Co., 214 N.C. 526, 531, 200 S.E. 5, 8 (1938)
(citation and quotations omitted); see also Dent v. Mica Co.,
212 N.C. 241, 242, 193 S.E. 165, 166 (1937) (holding the
defendant could not argue on appeal that the contract at issue
was not binding when the defendant argued at trial that no
contract existed).
-7-
First, we look to the theory defendants presented to the
trial court.
In their counterclaim, defendants sought recovery for the
outstanding balance due from plaintiff as to Agreement I.
Defendants raised one counterclaim, “unjust enrichment/quantum
meruit,” and made the following assertions:
14. Defendant’s [sic] delivered to
Plaintiff computer equipment and
accessories as specified in Business
Proposal 1.
15. That Plaintiff has failed to pay for
the equipment and services and labor
provided him in Business Proposal 1.
16. That Plaintiff has been unjustly
enriched at Defendants [sic] expense in
excess of $2,283.99, which represents
the balance owed on Business Proposal 2
of $1283.99 and $1000.00 in labor fees.
17. That the fees owed under Business
Proposal 2 represents the measure of
recovery for reasonable services
rendered by Defendants to Plaintiff.
At trial, defendants consistently argued that the exchanges
between plaintiff and defendants were business proposals and not
formalized contracts.
[Defense counsel:] And, Judge, again, as I
talked at the close of the plaintiff's
evidence, what we have here is a situation
wherein there were two receipts, business
proposals, one to deliver the server and
then the second one dealing with the
-8-
workstations.
. . .
So what this really comes down to is [as to
plaintiff’s claim] I don't think the
elements of unfair and deceptive trade
practice are met here, at most. Even
assuming arguendo if he had filed a claim
for unjust enrichment or quantum meruit,
again, as a trier of fact, you have to
determine whether those elements are met.
The problem here is that you don't have that
before you because, on the one hand, you
don't have a contract for which a claim
would be filed for breach of contract so you
don't have that present so that's off the
table. You don't have a claim from the
plaintiff for quantum meruit or unjust
enrichment, so that is not before the Court.
. . .
So again, assuming arguendo that it was an
issue of unjust enrichment or quantum meruit
on the plaintiff's side, that's not before
the Court. He hasn't pled that. My client
has pled the issue of, hey, he's still got
the equipment and there are still monies
that are offset. . . . That's what I would
contend to the Court.
(Emphasis added).
Defendants advocated for a finding that no actual contract
existed between the parties: “you don't have a contract for
which a claim would be filed for breach of contract.”
Furthermore, defendants presented the trial court with a
counterclaim for unjust enrichment / quantum meruit seeking to
-9-
recover the outstanding balance plaintiff owed as to the first
“business proposal.” And, in closing arguments, defendants
pointed out that plaintiff did not seek recovery on the theory
of unjust enrichment or quantum meruit: “He [, plaintiff,]
hasn't pled that. My client has pled the issue of, hey,
[plaintiff]’s still got the equipment and there are still monies
that are offset.”
In its 17 May 2013 judgment, the trial court found “[t]hat
based on the Defendants’ counterclaims, [] Plaintiff had been
unjustly enriched in the amount of $1283.99 since he has enjoyed
the benefit and possession of the equipment delivered pursuant
to the May 23, 2012 invoice.”
In their brief to this Court and contrary to the arguments
made before the trial court, defendants now state that “[t]he
evidence at trial proved express contracts in any scenario as
between the parties.” If taken as true, that the evidence
proves express contracts existed, the equitable remedy of unjust
enrichment would not be available to resolve this dispute. See
Pritchett & Burch, PLLC v. Boyd, 169 N.C. App. 118, 124, 609
S.E.2d 439, 443 (2005) (“Only in the absence of an express
agreement of the parties will courts impose a quasi contract or
a contract implied in law in order to prevent an unjust
-10-
enrichment.”). We find defendants’ stance on appeal to be
inconsistent with and even in direct contravention of the
argument defendants presented before the trial court.
Therefore, defendants will not be allowed to contend on appeal
what they directly advocated against before the trial court.
See Gorham, 214 N.C. at 531, 200 S.E. at 8 (“Having tried the
case upon one theory, the law will not permit the defendant to
change its position, or to swap horses between courts . . . .
The theory upon which a case is tried must prevail in
considering the appeal, and in interpreting a record and in
determining the validity of exceptions.”); see also Fabrikant v.
Currituck Cnty., 174 N.C. App. 30, 48, 621 S.E.2d 19, 31 (2005)
(holding the plaintiffs’ argument on appeal was precluded where
the plaintiffs induced the challenged outcome at trial by giving
the court the option to pursue it); Frugard v. Pritchard, 338
N.C. 508, 512, 450 S.E.2d 744, 746 (1994) (under the doctrine of
invited error, “a party may not complain of action which he
induced.”). Thus, defendants will not be heard to contend the
trial court lacked the authority to impose an equitable remedy.
We next consider defendants’ argument that the trial court
lacked authority to award plaintiff the amount he paid
-11-
defendants above the cost of the goods defendants provided where
plaintiff had no surviving claims.
“[W]hen equitable relief is sought, courts claim the power
to grant, deny, limit, or shape that relief” as necessary to
achieve equitable results. Sara Lee Corp. v. Carter, 351 N.C.
27, 36, 519 S.E.2d 308, 314 (1999) (citations and quotations
omitted). A well-known maxim is “[o]ne who seeks equity must do
equity.” Creech v. Melnik, 347 N.C. 520, 529, 495 S.E.2d 907,
913 (1998). “In fashioning an equitable remedy, the conduct of
both parties must be weighed by the trial court.” Kinlaw v.
Harris, 364 N.C. 528, 533, 702 S.E.2d 294, 297 (2010). In
Jefferson Standard Life Insurance Co. v. Guilford County, our
Supreme Court explained that a person who seeks equity cannot
“strike down only those transactions which are unfavorable to
him and preserve from a like fate those from which he would take
an advantage.” 226 N.C. 441, 448, 38 S.E.2d 519, 524 (1946).
“Because the fashioning of equitable remedies is a
discretionary matter for the trial court, we review such actions
under an abuse of discretion standard.” Kinlaw, 364 N.C. 532—
33, 702 S.E.2d 297. “Under the abuse-of-discretion standard, we
review to determine whether a decision is manifestly unsupported
by reason, or so arbitrary that it could not have been the
-12-
result of a reasoned decision.” Mark Grp. Int’l, Inc. v. Still,
151 N.C. App. 565, 566, 566 S.E.2d 160, 161 (2002) (citation
omitted).
In its judgment, the trial court made the following
conclusion of law:
3. That although [] Plaintiff was unjustly
enriched in the amount of $1283.99, he
has already paid an excess amount of
$6395.50 pursuant to the May 24, 2012
invoice, from which $1283.99 can be
deducted for [] Defendants, leaving a
balance of $5,111.51 owed to the
Plaintiff.
In accordance with this conclusion, the trial court awarded
plaintiff $5,111.51 to be recovered from defendants.
The trial court’s decision ordering defendants to refund
plaintiff the sum of $5,111.51 based on defendants’ unjust
enrichment claim is consistent with the principles of equity.
The trial court, when asked to fashion an equitable remedy,
considered the entire matter before it, including the conduct of
both parties and both transactions before the court, in order to
shape the relief as necessary to achieve equitable results. See
Creech, 347 N.C. at 529, 495 S.E.2d at 913. Therefore, we hold
that the trial court acted within its authority and discretion
to fashion this remedy pursuant to principles of equity. See
-13-
Guilford Cnty., 226 N.C. at 448, 38 S.E.2d at 524. Accordingly,
we affirm the trial court’s judgment.
Affirmed.
Judges STEPHENS and DILLON concur.
Report per Rule 30(e).