Childers v. Hayes

336 S.E.2d 146 (1985)

Melvin D. CHILDERS, Jr.
v.
John E. HAYES.

No. 8526SC448.

Court of Appeals of North Carolina.

November 19, 1985.

George C. Collie, and Charles M. Welling, Charolette, for plaintiff-appellant.

Roy H. Michaux, Jr., Charolette, for defendant-appellee.

HEDRICK, Chief Judge.

Plaintiff by his first assignment of error contends that there is no competent evidence to support the court's finding of fact that "[t]he defendant did engage in an offshore investment partnership in the way that he represented to the plaintiff in June and July of 1980." Plaintiff further contends that this finding of fact was necessary to support the trial court's dismissal of his fraud action pursuant to G.S. 1A-1, Rule 41(b).

When a Rule 41(b) motion is made in a non-jury trial, the judge becomes both the judge and the jury and he must consider and weigh all competent evidence before him. Dealers Specialties, Inc. v. Housing Services, 305 N.C. 633, 291 S.E.2d 137 (1982). The trial judge may weigh the evidence, find the facts and sustain defendant's Rule 41(b) motion at the conclusion of plaintiff's evidence even though plaintiff has made out a prima facie case which would have precluded a directed verdict for defendant in a jury trial. Helms v. Rea, 282 N.C. 610, 194 S.E.2d 1 (1973).

To make out a case of fraud, plaintiffs must show: 1) that defendant made a representation relating to some material past or existing fact; 2) that the representation was false; 3) that defendant knew the representation was false when it was made or made it recklessly; 4) that defendant made the false representation with the intention that it should be relied upon by plaintiffs; 5) that plaintiffs reasonably relied upon the representation and acted upon it; and 6) that plaintiff was injured. Johnson v. Insurance Co., 300 N.C. 247, 253, 266 S.E.2d 610, 615 (1980). In support of his contention that the trial court erred in dismissing his fraud claim, plaintiff emphasizes that defendant said he would transact business in a way which would give plaintiff tax advantages which plaintiff did not receive. The representations defendant made regarding future conduct did not relate to material past or existing facts. Furthermore, the federal court rulings which plaintiff contends gave notice to defendant of the falsity of his representations did not occur until after the representations were made. The trial court did not commit reversible error by granting defendant's Rule 41(b) motion dismissing plaintiff's fraud claim.

Plaintiff next contends that the trial court entered judgment for the defendant on the breach of fiduciary duty claim under a misapprehension of the applicable law. The heart of plaintiff's breach of fiduciary duty claim as stated in plaintiff's complaint is as follows:

19. As trustee, defendant was obligated to discharge his duties with respect to the trust with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of a similar enterprise.

20. Defendant as trustee breached his fiduciary duty with respect to the trust, in that:

a. Defendant failed to investigate and to properly supervise the transfer of plaintiff's funds in his possession to foreign third parties.

b. Defendant failed to secure confirmation or other substantiation of any trading activity.

c. Defendant failed to monitor, supervise or otherwise account for plaintiff's funds in the trust.

This claim is essentially a negligence or professional malpractice claim. Our standard of review here is quite narrow. Findings of fact made by the court in a non-jury trial have the force and effect of a jury verdict and are conclusive on appeal if supported by competent evidence, even though the evidence could support a contrary finding. Curl v. Key, 311 N.C. 259, 316 S.E.2d 272 (1984). We have studied the voluminous record on appeal extensively. The evidence supports the findings of fact. The findings of fact support the conclusions of law.

Plaintiff attempts to assign error to the trial court's failure to find that defendant breached his duty of loyalty and that defendant breached his duty to keep control of trust property. These two theories of recovery are advanced for the first time on appeal. Contentions not raised at trial may not be raised for the first time on appeal. Plemmer v. Matthewson, 281 N.C. 722, 190 S.E.2d 204 (1972); Ormond v. Crompton, 16 N.C.App. 88, 191 S.E.2d 405, cert. denied, 282 N.C. 304, 192 S.E.2d 194 (1972). Furthermore, there is no evidence that the conduct of defendant advanced by plaintiff in support of these two theories of recovery proximately caused the plaintiff's injury. Plaintiff also contends that the trial court erred in dismissing his unfair and deceptive trade practices claim. Plaintiff asserts that this claim derives from his fraud and negligence claim. Because the trial court's disposition of plaintiff's fraud and negligence claims was without error, the trial court did not err in dismissing plaintiff's unfair and deceptive trade practices act claim. We therefore affirm the trial court's dismissal of plaintiff's fraud and unfair trade practices claims and the judgment for defendant on plaintiff's negligence claim.

Affirmed.

EAGLES and MARTIN, JJ., concur.