Mann v. Huber Real Est. ( 2023 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA22-956
Filed 20 June 2023
Durham County, No. 21-CVS-1786
GALYA MANN, Plaintiff,
v.
HUBER REAL ESTATE, INC., PAUL HUBER, LEVEL CAROLINA HOMES, LLC,
d.b.a. LEVEL HOMES, 2-10 HOME BUYERS WARRANTY, Defendants.
Appeal by Plaintiff from order entered 4 August 2022 by Judge John M.
Dunlow in Durham County Superior Court. Heard in the Court of Appeals 22 March
2023.
Klein & Sheridan, LC PC, by Benjamin Sheridan and Jed Nolan, for
Plaintiff-Appellant.
Manning, Fulton & Skinner, P.A., by Lawrence D. Graham, Jr., and William
C. Smith, Jr., for Defendants-Appellees.
COLLINS, Judge.
Galya Mann (“Plaintiff”) appeals the trial court’s order granting summary
judgment in favor of Huber Real Estate, Inc., and Paul Huber (collectively, “Realtor”).
Plaintiff argues that the trial court erred by granting Realtor’s motion for summary
judgment on her claims for breach of fiduciary duty and unfair and deceptive trade
practices. We affirm the trial court’s order.
MANN V. HUBER REAL EST., INC.
Opinion of the Court
I. Background
Plaintiff moved from Bulgaria to the United States and attended East Carolina
University, where she obtained an undergraduate degree in supply chain
management and a Masters of Business Administration degree. Since her
graduation, she has owned her own business.
Plaintiff and her husband first owned a home together in Wilmington, North
Carolina.1 They sold that home and purchased a townhome in Clayton, North
Carolina. Plaintiff was not involved in these transactions because she “didn’t know
much about the United States or anything related to real estate.” When asked
whether she read, reviewed, or signed any of the documentation for the purchase of
the Clayton townhome, Plaintiff responded, “No. I am a spouse. I must have signed
all the documents but that’s all I did.”
Plaintiff and her husband began looking for a new home in Durham, North
Carolina, in 2018. Plaintiff and her daughter met Realtor in April of that year at an
open house for a property that Realtor was showing. Plaintiff hired Realtor as her
real estate agent for the sale of her Clayton townhome and in her search for a new
home in the Raleigh-Durham area. On or about 14 August 2018, Plaintiff received
an Exclusive Buyer Agency Agreement (“Agreement”) from Realtor. Plaintiff testified
at her deposition that she “most probably” read the document; could not remember if
1 Plaintiff and her husband are separated, and he is not a party to this appeal.
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she discussed the document with Realtor; “[m]ost probably” asked Realtor to explain
parts of the document to her, but could not remember; and did not ask a lawyer to
help her decipher anything in the document that she did not understand. When
asked whether she had enough time to review the document thoroughly before
signing, Plaintiff responded, “My answer is I do not remember at this time.”
Paragraph 10 of the Agreement states as follows:
10. OTHER PROFESSIONAL ADVICE. In addition to
the services rendered to Buyer by the Firm under the terms
of this Agreement, Buyer is advised to seek other
professional advice in matters of law, taxation, financing,
insurance, surveying, wood-destroying insect infestation,
structural soundness, engineering, and other matters
pertaining to any proposed transaction. Although Firm
may provide Buyer the names of providers who claim to
perform such services, Buyer understands that Firm
cannot guarantee the quality of service or level of expertise
of any such provider. Buyer agrees to pay the full amount
due for all services directly to the service provider whether
or not the transaction closes. Buyer also agrees to
indemnify and hold Firm harmless from and against any
and all liability, claim, loss, damage, suit, or expense that
Firm may incur either as a result of Buyer’s selection and
use of any such provider or Buyer’s election not to have one
or more of such services performed.
When asked whether she read and understood Paragraph 10 at the time of signing
the agreement, Plaintiff responded, “I cannot comment what happened three years
ago.”
After looking at a home in the Sterling community that did not meet Plaintiff’s
family’s needs, Plaintiff asked Realtor whether there were other options on the
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market. Realtor suggested the Brightleaf community in Durham, which was being
developed by Level Carolina Homes, LLC (“Level Homes”). That day or the day after,
Plaintiff drove around the Brightleaf community. Plaintiff, her husband, and Realtor
met with Level Homes’ sales representative a few days later. At that meeting, they
“[m]ost probably” viewed the house they ultimately bought, “viewed some
documents[,]” and “discuss[ed] interior selection.” Plaintiff and her husband were
“[m]ost probably” given a copy of the sales contract, but Plaintiff could not recall
whether they took the contract home with them.
The following exchange took place between Realtor’s attorney and Plaintiff at
her deposition regarding her review of the contract:
[Realtor’s Attorney]. Did you have sufficient time to review
the document before you signed it?
[Plaintiff]. I don’t believe so.
[Realtor’s Attorney]. You did not have sufficient time --
[Plaintiff]. This is a large document.
[Realtor’s Attorney]. Did you read the document before you
signed it?
[Plaintiff]. We were concerned about the changes in the
interior selection, that part we did go through.
[Realtor’s Attorney]. The question is: Did you read this
contract before you signed it?
[Plaintiff]. Not the full contract. We relied on our realtor
who said that this was a standard contract.
[Realtor’s Attorney]. So you did not read the full contract
but relied on your realtor who said it was a standard
contract?
[Plaintiff]. Yes.
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[Realtor’s Attorney]. Did the realtor, Mr. Huber, tell you
not to read the contract?
[Plaintiff]. The realtor, Mr. Huber, gets 6 percent of the
sale of this house to tell us this is the standard contract or
not.
[Realtor’s Attorney]. My question is: Did Mr. Huber tell
you not to read this contract?
[Plaintiff]. I do not remember.
....
[Realtor’s Attorney]. Did you discuss the content of the
contract with Mr. Huber?
[Plaintiff]. I asked Mr. Huber if this was a standard
contract and he said it was a standard contract.
[Realtor’s Attorney]. Did you understand that to mean it
was the standard contract for all transactions or the
standard contract for Level Homes transactions?
[Plaintiff]. I am not in the real estate so when I ask my
real estate agent if this is standard contract, I’m assuming
that he means this is standard contract period. For all
transactions.
[Realtor’s Attorney]. Even transactions that Level Homes
was not involved in?
[Plaintiff]. Yes. All transactions. I’m guessing there are
standard contracts and custom contracts.
Prior to signing the sales contract, Plaintiff asked Realtor to negotiate changes
to the contract pertaining to the interior design of the home, which he did. Plaintiff
only remembered discussing interior changes with Realtor and did not remember
discussing any warranty, arbitration, or limitation of damages provisions with
Realtor. Plaintiff and her husband e-signed the purchase contact on 19 August 2018
when they were “[m]ost probably at home.” Plaintiff’s initials appear at the bottom
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of each page and her signature appears on page 9.
The contract included provisions that disclaimed all warranties, including the
warranty of merchantability, fitness for a particular purpose, and habitability;
limited damages to the cost of repair or replacement; provided that the total damages
may not exceed the total purchase price; and required that any disputes be resolved
by arbitration. The contract also provided a limited warranty through 2-10 Home
Buyers Warranty, which included a one-year warranty on workmanship and
materials, a two-year warranty on systems, and a ten-year warranty on structural
defects.
After Plaintiff moved into the home, she discovered numerous latent defects,
including improper lot grading and drainage, improper shingle and gutter
installation, foundation cracks, no moisture barrier in the crawlspace, improper
mounting of the HVAC, electrical issues, water in the crawl space, plumbing
problems, and biological growth. The repairs to Plaintiff’s home were estimated to
cost between $83,894.72 and $90,594.73.
Plaintiff filed an unverified complaint against Realtor, Level Homes, and 2-10
Home Buyers Warranty. Against all defendants, Plaintiff brought claims for unfair
and deceptive trade practices and civil conspiracy. Against Realtor, Plaintiff also
brought claims for breach of fiduciary duty, negligence, and unjust enrichment.
Against Level Homes, Plaintiff also brought claims for negligence, fraudulent
inducement, unjust enrichment, and unconscionable contract. Against 2-10 Home
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Buyers Warranty, Plaintiff also brought claims for fraudulent inducement, unjust
enrichment, and unconscionable contract.
Level Homes moved to dismiss or, in the alternative, to stay the proceedings
and compel arbitration.2 Realtor answered and moved to dismiss for failure to state
a claim under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. By orders
entered 16 November 2021, the trial court denied Level Homes’ motion to dismiss and
deferred its decision on the motion to stay and compel arbitration, and denied
Realtor’s Rule 12(b)(6) motion to dismiss.
Realtor moved for summary judgment in April 2022. Realtor’s motion came on
for hearing on 11 July 2022 and by order entered 4 August 2022, the trial court
allowed Realtor’s motion for summary judgment on all claims. Plaintiff timely
appealed.
II. Discussion
Plaintiff contends that the trial court erred by granting Realtor’s motion for
summary judgment on her breach of fiduciary duty and unfair and deceptive trade
practices claims.3
Summary judgment is appropriate “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that
2 This motion is not in the record but is referenced in the trial court’s order deciding the
motion.
3
Plaintiff does not appeal the trial court’s order granting summary judgment on her claims
for negligence, unjust enrichment, and conspiracy.
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there is no genuine issue as to any material fact and that any party is entitled to a
judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2022). “The party
moving for summary judgment bears the burden of bringing forth a forecast of
evidence which tends to establish that there is no triable issue of material fact.”
Inland Constr. Co. v. Cameron Park II, Ltd., LLC, 181 N.C. App. 573, 576, 640 S.E.2d
415, 418 (2007) (quotation marks and citation omitted).
When a motion for summary judgment is made and
supported as provided in this rule, an adverse party may
not rest upon the mere allegations or denials of his
pleading, but his response, by affidavits or as otherwise
provided in this rule, must set forth specific facts showing
that there is a genuine issue for trial.
N.C. Gen. Stat. § 1A-1, Rule 56(e) (2022). In other words, “[o]nce the party seeking
summary judgment makes the required showing, the burden shifts to the nonmoving
party to produce a forecast of evidence demonstrating specific facts, as opposed to
allegations, showing that he can at least establish a prima facie case at trial.”
Draughon v. Harnett Cnty. Bd. of Educ., 158 N.C. App. 208, 212, 580 S.E.2d 732, 735
(2003) (quotation marks and citations omitted).
“In the course of a trial court’s ruling on a motion for summary judgment, [a]
verified complaint may be treated as an affidavit if it (1) is made on personal
knowledge, (2) sets forth such facts as would be admissible in evidence, and (3) shows
affirmatively that the affiant is competent to testify to the matters stated therein.”
Hampton v. Scales, 248 N.C. App. 144, 149, 789 S.E.2d 478, 483 (2016) (quotation
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marks and citations omitted). However, the trial court may not consider unverified
pleadings when ruling on a motion for summary judgment because they do not comply
with the requirements of Rule 56(e). Tew v. Brown, 135 N.C. App. 763, 767, 522
S.E.2d 127, 130 (1999), disc. review improvidently allowed, 352 N.C. 145, 531 S.E.2d
213 (2000); Weatherford v. Glassman, 129 N.C. App. 618, 623, 500 S.E.2d 466, 470
(1998). Here, Plaintiff’s complaint was not verified; thus, it could not be considered
in deciding Realtor’s summary judgment motion. See Hampton, 248 N.C. App. at 149,
789 S.E.2d at 483; see also Rankin v. Food Lion, 210 N.C. App. 213, 220, 706 S.E.2d
310, 315-16 (2011).
“We review a trial court’s order granting summary judgment de novo.” Archie
v. Durham Pub. Sch. Bd. of Educ., 283 N.C. App. 472, 474, 874 S.E.2d 616, 619 (2022)
(citation omitted). This de novo review requires a two-part analysis: (1) whether the
pleadings, depositions, answers to interrogatories, and admissions on file, together
with the affidavits, show that there is no genuine issue as to any material fact; and
(2) whether the moving party is entitled to judgment as a matter of law. Fayetteville
Publ’g Co. v. Advanced Internet Techs., Inc., 192 N.C. App. 419, 428, 665 S.E.2d 518,
524 (2008).
A. Breach of Fiduciary Duty
Plaintiff first contends that the trial court erred by granting Realtor summary
judgment on her breach of fiduciary duty claim because there were genuine issues of
material fact precluding summary judgment.
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“[T]he relationship between a real estate agent and his or her client is by,
definition, one of agency, with the agent owing a fiduciary duty to the buyer in all
matters relating to the relevant transaction.”4 Cummings v. Carroll, 379 N.C. 347,
374-75, 866 S.E.2d 675, 695 (2021) (citation omitted).
A real estate agent has the fiduciary duty to exercise
reasonable care, skill, and diligence in the transaction of
business entrusted to him, and he will be responsible to his
principal for any loss resulting from his negligence in
failing to do so. The care and skill required is that
generally possessed and exercised by persons engaged in
the same business. This duty requires the agent to make
a full and truthful disclosure to the principal of all facts
known to him, or discoverable with reasonable diligence
and likely to affect the principal. The principal has the
right to rely on his agent’s statements, and is not required
to make his own investigation.
Id. at 375, 866 S.E.2d at 695 (quoting Brown v. Roth, 133 N.C. App. 52, 54-55, 514
S.E.2d 294, 296 (1999)). A real estate agent also has a duty to “disclose any material
facts known to the agent and to discover and disclose to the principal all material
facts about which the agent should reasonably have known.” Id. (quotation marks,
italics, and citation omitted).
1. Standard Contract
Plaintiff first asserts that “[t]here is a factual dispute that should be sent to a
jury over whether [Realtor] breached the fiduciary duty by calling the sales contract
4 Realtor is a real estate broker. The fiduciary duties owed to a client by a real estate broker
are the same as those owed by a real estate agent. See, e.g., Sutton v. Driver, 211 N.C. App. 92, 100,
712 S.E.2d 318, 323 (2011).
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a ‘standard contract.’” However, as the parties agree that Realtor referred to the
contract as “standard,” the issue is not a question of fact, but is rather whether
Realtor was entitled to judgment as a matter of law on Plaintiff’s breach of fiduciary
claim.
At Plaintiff’s deposition, the following exchange took place between Plaintiff
and Realtor’s attorney:
[Realtor’s Attorney]. Did you discuss the content of the
contract with Mr. Huber?
[Plaintiff]. I asked Mr. Huber if this was a standard
contract and he said it was a standard contract.
[Realtor’s Attorney]. Did you understand that to mean it
was the standard contract for all transactions or the
standard contract for Level Homes transactions?
[Plaintiff]. I am not in the real estate so when I ask my
real estate agent if this is standard contract, I’m assuming
that he means this is standard contract period. For all
transactions.
[Realtor’s Attorney]. Even transactions that Level Homes
was not involved in?
[Plaintiff]. Yes. All transactions. I’m guessing there are
standard contracts and custom contracts.
In Realtor’s affidavit, he averred as follows:
I have sold a number of “spec” homes for large volume
builders in different neighborhoods, and I cannot recall a
situation in which I was involved that the particular
builder’s standard form contract was not used. If I told
Plaintiff her contract was “standard” it was to
communicate that it was Level Home’s standard contract,
which I believed because it was on Level Homes’
pre-printed form, and presented to Plaintiff on our first
visit to the Level Homes . . . sales office. I did not tell her
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this particular contract was “standard” among all builders
and all similar transactions.
(Emphasis omitted).
Furthermore, at Realtor’s deposition, the following exchange took place
between Realtor and Plaintiff’s attorney:
[Plaintiff’s Attorney]. Do you know whether or not you told
Ms. Mann this was a standard contract?
[Realtor]. To best of my recollection, I told her that all
builders use their own standard contracts.
[Plaintiff’s Attorney]. Why would you use the word
standard in that sentence?
[Realtor]. It’s just a generality.
[Plaintiff’s Attorney]. What does it mean to you in that
context?
[Realtor]. It means that they have their own standard. It
means that they use their own -- their own forms.
Plaintiff admits that when she and Realtor first met with a Level Homes’ sales
representative, she and her husband were “[m]ost probably” given a copy of the sales
contract. Realtor averred that the contract “was on Level Homes’ pre-printed form,
and presented to Plaintiff on our first visit to the Level Homes . . . sales office[.]”
Plaintiff testified that when she asked Realtor if “this was a standard contract[,]”
Realtor “said it was a standard contract.” Plaintiff further testified that she
“guess[ed] there are standard contracts and custom contracts.” However, Plaintiff
testified that she “assum[ed]” that Realtor meant “this is standard contract
period . . . for all transactions.” But there is no evidence that Realtor told Plaintiff it
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was the standard contract for all transactions or that Realtor’s remark could
reasonably be construed to mean as much.
Plaintiff asserts that she could rely solely on Realtor’s representation that the
sales contract was a “standard contract” and forego her own review of the contract.
Plaintiff is misguided.
According to well-established North Carolina law,
one who signs a paper writing is under a duty to ascertain
its contents, and in the absence of a showing that he was
wilfully misled or misinformed by the defendant as to these
contents, or that they were kept from him in fraudulent
opposition to his request, he is held to have signed with full
knowledge and assent as to what is therein contained. If
unable to read or write, he must ask that the paper be read
to him or its meaning explained.
Williams v. Williams, 220 N.C. 806, 809-10, 18 S.E.2d 364, 366 (1942) (citations
omitted). “It is well established in North Carolina that ‘[o]ne who signs a written
contract without reading it, when he can do so understandably[,] is bound thereby
unless the failure to read is justified by some special circumstances.’” Marion
Partners, LLC v. Weatherspoon & Voltz, LLP, 215 N.C. App. 357, 359, 716 S.E.2d 29,
31 (2011) (first alteration in original) (quoting Davis v. Davis, 256 N.C. 468, 472, 124
S.E.2d 130, 133 (1962)). As a result, a litigant’s “‘duty to read an instrument or to
have it read before signing it, is a positive one, and the failure to do so, in the absence
of any mistake, fraud or oppression, is a circumstance against which no relief may be
had, either at law or in equity.’” Mills v. Lynch, 259 N.C. 359, 362, 130 S.E.2d 541,
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543-44 (1963) (quoting Furst v. Merritt, 190 N.C. 397, 402, 130 S.E. 40, 43 (1925)).
Here, Plaintiff has failed to present evidence that special circumstances
absolved her of the duty to read the contract. Plaintiff thus had a positive duty to
read the sales contract and her failure to do so “is a circumstance against which no
relief may be had, either at law or in equity.” Mills, 259 N.C. at 362, 130 S.E.2d at
543 (quoting Furst, 190 N.C. at 402, 130 S.E. at 43).
In summary, Realtor’s reference to the sales contract as a “standard contract”
did not amount to a breach of fiduciary duty and Realtor was entitled to judgment as
a matter of law.
2. Legal Advice
Plaintiff also argues that a factual question arises over whether Realtor
advised Plaintiff to seek legal advice prior to signing the contract.
Realtor attached to his motion for summary judgment the Agreement, signed
by both Plaintiff and Realtor, which states in relevant part: “Buyer is advised to seek
other professional advice in matters of law, taxation, financing, insurance, surveying,
wood-destroying insect infestation, structural soundness, engineering, and other
matters pertaining to any proposed transaction” and that “Buyer also agrees to
indemnify and hold Firm harmless from and against any and all liability, claim, loss,
damage, suit, or expense that Firm may incur either as a result of Buyer’s selection
and use of any such provider or Buyer’s election not to have one or more of such services
performed.” (Emphasis added).
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Janet Thoren, Director of Regulatory Affairs and Legal Counsel for the North
Carolina Real Estate Commission, submitted an affidavit and testified consistent
with her affidavit by deposition. Thoren averred that her “division conducts
administrative prosecutions of licensed real estate brokers when probable cause is
found to believe they have violated Chapter 93A or the Commission’s codified rules”
and that she is “knowledgeable of and familiar with the various laws, regulations,
rules, and guidance that govern any person or entity in the state of North Carolina
licensed as a real estate broker and involved in the real estate brokerage business.”
She further averred that, because the Commission “has not investigated the facts
alleged in this particular case[,]” she “cannot give an opinion about what should or
should not have been done in this particular case by any licensed broker involved.”
Thoren’s affidavit further states as follows:
5. Notwithstanding the above, the standard of care
required of real estate licensees in the state of North
Carolina includes, but is not limited to, advising a client to
seek legal counsel for matters of law, including
interpretation of purchase contracts. That duty is
incorporated into and facilitated by paragraph 10 of the
Exclusive Buyer Agency Agreement, Standard Form 201
(“Form 201”). Because the advice does not have to be
verbal, in my opinion, if a buyer does not question the form
or content of legal documents such as the purchase
contract, the buyer agent’s duty to advise a client to seek
legal counsel regarding transactional documents may be
satisfied in writing. Form 201 may satisfy that
requirement.
6. In North Carolina, it is common and accepted for
builders selling new home construction to utilize their own
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contracts drafted by their own attorneys and to require the
use of such forms by any potential buyers of their product.
These types of contracts are sometimes referred to as the
builder’s “standard” contract. Real estate brokers are not
educated on such contracts and have no authority to
provide opinions or offer legal advice on their terms,
including but not limited to effects of different warranties,
and arbitration clauses or other dispute resolution
provisions. Real estate brokers are prohibited by law from
offering legal advice or interpreting contract language.
Here, the following exchange took place between Plaintiff and Realtor’s
attorney at Plaintiff’s deposition:
[Realtor’s Attorney]. Did you and Mr. Huber discuss the
warranty provisions in the contract?
[Plaintiff]. I don’t think we went into detail but the interior
changes.
[Realtor’s Attorney]. Did Mr. Huber make any
representations or warranties to you about what the
warranty provisions stated in the contract?
[Plaintiff]. As I told you, that is as much as I remember.
[Realtor’s Attorney]. So you don’t remember discussing the
warranty provision in the contract?
[Plaintiff]. I don’t believe we discussed the warranty
provisions.
[Realtor’s Attorney]. Did you and Mr. Huber discuss the
arbitration provision in the contract before you signed it?
[Plaintiff]. No.
[Realtor’s Attorney]. Did you and Mr. Huber discuss the
limitation of damages provision in the contract before you
signed it?
[Plaintiff]. I don’t believe so.
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Plaintiff’s inquiry about whether the contract was “standard” was not an
inquiry about the legal terms of the contract; it was, at most, a general inquiry about
whether the contract was “custom” in some way. Plaintiff admits that there was no
discussion about the various legal terms of the contract that she now complains of
and that her focus was on the interior changes to the home, which Realtor negotiated
for her. Because Plaintiff made no inquiry into the legal terms of the contract which,
according to Thoren, may have required Realtor to verbally advise Plaintiff to seek
legal advice, Realtor’s duty to advise Plaintiff to seek legal counsel regarding the
contract was satisfied in writing through the Agreement signed by Plaintiff.
Plaintiff relies on Cummings to support her assertion that the Agreement did
not insulate Realtor from liability; such assertion is inapposite here. In Cummings,
the exclusive buyer agency agreement attempted to limit the defendants-real estate
agents’ fiduciary duties by providing, inter alia, that they had only a duty to disclose
“material facts related to the property or concerning the transaction of which they
had actual knowledge[.]” 379 N.C. at 375, 866 S.E.2d at 695-96 (quotation marks and
brackets omitted). In holding that “[t]he fiduciary duty that a real estate agent owes
to his or her principal arises from the agency relationship itself . . . rather than upon
the nature of the contractual provisions governing any specific agent-principal
relationship[,]” the Court noted that “a real estate agent is obligated to ‘discover and
disclose’ those material facts that may affect [plaintiffs’] rights and interests or
influence [plaintiffs’] decision in the transaction rather than to simply disclose those
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of which the agent has ‘actual knowledge.’” Id. at 376, 866 S.E.2d at 696 (quotation
marks and citation omitted). Here, however, the Agreement did not limit Realtor’s
fiduciary duties, but rather, consistent with Realtor’s fiduciary duties, advised
Plaintiff to seek other professional advice in addition to the services rendered by
Realtor.
Accordingly, there is no genuine issue of material fact regarding whether
Realtor advised Plaintiff to seek legal advice prior to signing the sales contract.
B. Unfair and Deceptive Trade Practices
Plaintiff next contends that the trial court erred by granting Realtor summary
judgment on the unfair and deceptive trade practices claim because Realtor unfairly
and deceptively informed Plaintiff that Level Homes’ contract was “standard.”
Section 75-1.1 of our General Statutes provides that “unfair or deceptive acts
or practices in or affecting commerce” are unlawful. N.C. Gen. Stat. § 75-1.1(a)
(2022). To establish a prima facie claim for unfair and deceptive trade practices, “the
plaintiff must show: (1) defendant committed an unfair or deceptive act or practice,
(2) the action in question was in or affecting commerce, . . . and (3) the act proximately
caused injury to the plaintiff.” Pleasant Valley Promenade v. Lechmere, Inc., 120 N.C.
App. 650, 664, 464 S.E.2d 47, 58 (1995) (citation omitted). “A practice is unfair when
it offends established public policy as well as when the practice is immoral, unethical,
oppressive, unscrupulous, or substantially injurious to consumers.” Marshall v.
Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981) (citation omitted). “A practice
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is deceptive if it has the tendency to deceive . . . .” D C Custom Freight, LLC v. Tammy
A. Ross & Assocs., 273 N.C. App. 220, 228, 848 S.E.2d 552, 559 (2020) (citation
omitted). Whether an act or practice is unfair or deceptive is a question of law.
Carcano v. JBSS, LLC, 200 N.C. App. 162, 172, 684 S.E.2d 41, 50 (2009).
As discussed in more detail above, there is no factual dispute about whether
Realtor called the sales contract a “standard contract.” Plaintiff does not argue that
Realtor told her that the contract was a standard contract for all transactions, only
that she “assum[ed] that he mean[t] this is standard contract period. For all
transactions.” Furthermore, Plaintiff does not argue that Realtor’s reference to the
contract as “standard” to communicate that it was Level Homes’ standard contract,
rather than a standard contract for all transactions, was unfair or deceptive.
Accordingly, the trial court did not err by granting Realtor summary judgment
on Plaintiff’s unfair and deceptive trade practices claim.
III. Conclusion
The trial court did not err by granting Realtor summary judgment on Plaintiff’s
breach of fiduciary duty and unfair and deceptive trade practices claims because
there is no genuine issue of material fact and Realtor was entitled to judgment as a
matter of law. Accordingly, the trial court’s order is affirmed.
AFFIRMED.
Judge DILLON concurs.
Judge ARROWOOD concurs in part and dissents in part by separate opinion.
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MANN V. HUBER REAL EST., INC.
ARROWOOD, J., dissent
No. COA22-956 – Mann v. Huber Real Est., Inc.
ARROWOOD, Judge, concurring in part and dissenting in part.
I concur in that portion of the majority’s opinion affirming the trial court’s
grant of summary judgment with respect to Plaintiff’s claim for unfair and deceptive
trade practices. However, I respectfully dissent from the majority’s holding affirming
summary judgment in favor of Realtor for Plaintiff’s claim for breach of fiduciary
duty. Accordingly, I would hold that the trial court erred by granting summary
judgment on Plaintiff’s claim for breach of fiduciary duty because Realtor had a duty
to refer Plaintiff to an attorney when she questioned whether the contract was
standard.
There is no question that a realtor owes a fiduciary duty to their clients. Brown
v. Roth, 133 N.C. App. 52, 54, 514 S.E.2d 294, 296 (1999). Such duty “is not prescribed
by contract, but is instead imposed by operation of law.” Cummings v. Carroll, 379
N.C. 347, 376, 866 S.E.2d 675, 696 (2021) (citation and internal quotation marks
omitted). Based on this fiduciary duty, a realtor must “exercise reasonable care, skill,
and diligence in the transaction of business [e]ntrusted to him, and he will be
responsible to his principal for any loss resulting from his negligence in failing to do
so.” Brown, 133 N.C. App. at 54, 514 S.E.2d at 296 (citation and internal quotation
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MANN V. HUBER REAL EST., INC.
ARROWOOD, J., dissent
marks omitted). Generally, what is “reasonable” in the context of negligent behavior
depends on the circumstances and is therefore a question for the jury. Forbes v. Par
Ten Grp., Inc., 99 N.C. App. 587, 595-96, 394 S.E.2d 643, 648 (1990) (citation and
internal quotation marks omitted), disc. review denied, 328 N.C. 89, 402 S.E.2d 824(Mem) (1991).
“This duty requires the agent to ‘make a full and truthful disclosure [to the
principal] of all facts known to him, or discoverable with reasonable diligence’ and
likely to affect the principal.” Brown, 133 N.C. App. at 54-55, 514 S.E.2d at 296(citations omitted). “In sum, . . . a real estate broker has a duty to make full and
truthful disclosure of all known or discoverable facts likely to affect the client. And,
the client may rely upon the broker to comply with this duty and forego his or her
own investigation.” Sutton v. Driver, 211 N.C. App. 92, 100, 712 S.E.2d 318, 323
(2011). In cases concerning whether a realtor fulfilled their fiduciary duty to their
client, “the relevant issue . . . is whether the record discloses the existence of a
genuine issue concerning the extent to which [the realtor] exercised a level of
diligence consistent with applicable professional standards.” Cummings, 379 N.C. at
376-77, 866 S.E.2d at 696 (citation omitted).
Here, I would hold the trial court erred by granting summary judgment to
Realtor on Plaintiff’s breach of fiduciary duty claim, because there is a genuine issue
of fact as to whether Realtor breached their fiduciary duty to Plaintiff regarding the
contract between the builder and Plaintiff. The Director of Regulatory Affairs and
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MANN V. HUBER REAL EST., INC.
ARROWOOD, J., dissent
Legal Counsel for the North Carolina Real Estate Commission, Janet Thoren (“Ms.
Thoren”) testified as an expert. Ms. Thoren wrote in her affidavit that when a buyer
questions a contract, the “standard of care” requires agents to advise the client to
seek legal advice regarding the documents. However, “if a buyer does not question
the form or content of legal documents . . . the buyer agent’s duty to advise a client to
seek legal counsel regarding transactional documents may be satisfied in writing[,]”
by the agreement. Ms. Thoren, reiterated this sentiment in her deposition, stating
that “if the buyer has questions about [a] contract” the broker “should refer the buyer
to an attorney[.]” Still, Ms. Thoren confirmed that despite this general advice, she
could not opine on whether Realtor violated any rules, since she had not investigated
this incident.
During the summary judgment hearing, Plaintiff’s attorney argued that
Plaintiff asked Realtor whether the contract from the builder was “standard . . ., to
which he replied yes, this is a standard contract[,]” thus she “relied on [Realtor]” and
“forewent her own investigation.” Plaintiff’s attorney specifically argued that
Plaintiff’s inquiry about whether the builder’s contract was standard “warranted a
referral to an attorney[,]” which Realtor failed to provide. Realtor’s attorney
countered that although his “client [didn’t] recall that specific exchange, . . . he sa[id]
that if he was asked [whether the contract was standard], he would have said yeah,
this is [the builder’s] standard contract.”
Based on these arguments, the record, and there being no specific guidance
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MANN V. HUBER REAL EST., INC.
ARROWOOD, J., dissent
from the commission, I would hold there is a genuine issue of material fact as to
whether Realtor breached his fiduciary duty to Plaintiff by failing to advise her,
verbally, at the time she signed the agreement with the builder, to seek legal counsel
to answer her question about whether the contract was standard, since she was
questioning the form of the contract. I do not believe that boiler plate language in
the agreement relied upon by the majority is sufficient to satisfy the obligations under
the facts set forth in this case. Therefore, I would vacate the trial court’s order
granting summary judgment on Plaintiff’s claim for breach of fiduciary duty and
remand for a trial on this issue. Thus, I dissent.
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