Heaton-Sides v. Snipes

NO. COA13-1083
NORTH CAROLINA COURT OF APPEALS
Filed: 18 March 2014
JANE HEATON-SIDES,
Plaintiff,
v. Granville County
No. 11 CVS 1065
(1) TORETTA SNIPES individually,
and in her capacity as Vice
President of STATE EMPLOYEES’
CREDIT UNION,
&
(2) STATE EMPLOYEES’ CREDIT UNION,
&
(3) JAYME CURRIN, individually,
and in her capacity as President
of AMERICAN DREAM PROPERTIES,
INC.,
&
(4) AMERICAN DREAM PROPERTIES,
INC.,
Defendants.
Appeal by plaintiff from an order entered 22 May 2013 by
Judge Henry W. Hight, Jr. in Granville County Superior Court.
Heard in the Court of Appeals 17 February 2014.
Michael A. Jones, for plaintiff-appellant.
Hopper, Hicks & Wrenn PLLC, by James C. Wrenn, Jr. and
Gerald T. Koinis, for defendants-appellees.
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MARTIN, Chief Judge.
Plaintiff Jane Heaton-Sides filed a complaint against
defendants alleging claims for conversion, negligent and
intentional infliction of emotional distress, punitive damages,
and unfair and deceptive trade practices. The claims against
defendants State Employees Credit Union (“SECU”) and Toretta
Snipes were dismissed by order dated 1 February 2013 as a result
of plaintiff’s failure to respond to discovery. Plaintiff
subsequently voluntarily dismissed with prejudice all of her
claims against defendants Jayme Currin and American Dream
Properties except her claim for conversion.
After a bench trial, the trial court made the following
relevant findings of fact, all of which are supported by the
evidence presented at the trial. SECU foreclosed on plaintiff’s
personal residence located at 1500 Cash Road in Creedmoor, North
Carolina and was later placed in lawful possession of the
residence on 1 April 2011 at 9:00 a.m. On that date, plaintiff
and her husband were in the process of moving out of the
residence. Plaintiff, her husband, and SECU agreed that
plaintiff and her husband could continue moving out until 3:00
p.m. that day. Around 3:00 p.m., Ms. Snipes, an employee of
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SECU, informed plaintiff and her husband that if they wanted to
take any additional personal property from the residence they
should inform her or Ms. Currin of American Dream, a property
manager for SECU, by the close of business on 4 April 2011.1
Furthermore, Ms. Currin testified that when she walked through
the residence on 1 April 2011 it did not appear that anything of
value was left behind. Plaintiff did not inform anyone that she
wanted to retrieve additional personal property from the
residence until 7 April 2011. By that time, any remaining
property in the residence had been disposed of and plaintiff was
not able to retrieve any additional personal property.
Plaintiff testified that, as a result, she was missing some
household items that would cost her $10,272 to replace as well
as notes and outlines for several children’s books (“the
papers”) that she thought had a value of $75,400 as reasonable
compensation to her for the amount of time she spent working on
them (20 hours per week x 52 weeks x 10 years x $7.25 per hour =
$75,400). Plaintiff, however, did not offer any testimony about
the fair market value of the household items or the papers.
1
We note that the trial court refers to both “Monday, April 3,
2011” and “Monday, April 4, 2011” in its order. The date is not
disputed in this action, but we take judicial notice, by
reference to a calendar, that the first Monday of April, 2011
was the 4th.
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Based on this evidence, the trial court concluded that
plaintiff did not show a wrongful conversion by defendants
because she had abandoned the personal property in the residence
when she failed to contact anyone about removing additional
personal property by 4 April 2011. Furthermore, the trial court
concluded that even if plaintiff had proven her conversion
claim, she had failed to prove actual damages. Plaintiff timely
filed notice of appeal from the trial court’s order dismissing
her conversion claim with prejudice.
_________________________
A conversion claim essentially requires two elements:
“ownership in the plaintiff and wrongful possession or
conversion by the defendant.” Variety Wholesalers, Inc. v.
Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523, 723
S.E.2d 744, 747 (2012). On appeal, plaintiff argues that the
trial court erred in dismissing her conversion claim for failure
to show a wrongful conversion by defendants because defendants
violated N.C.G.S. § 42-25.9(g) when they disposed of plaintiff’s
personal property before the expiration of the statutory ten-day
waiting period. We agree.
When we review an order issued after a bench trial we
determine “whether the trial judge’s underlying findings of fact
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are supported by competent evidence, in which event they are
conclusively binding on appeal, and whether those factual
findings in turn support the judge’s ultimate conclusion of
law.” Holloway v. Holloway, __ N.C. App. __, __, 726 S.E.2d
198, 204 (2012). However, we review the trial judge’s
conclusions of law de novo. Id.In this case, plaintiff’s residence was sold at a
foreclosure sale and SECU was later placed in possession of the
residence pursuant to N.C.G.S. § 45-21.29(l). This statute
provides that the purchaser of the foreclosed property “shall
have the same rights and remedies in connection with the
execution of an order for possession and the disposition of
personal property following the execution as are provided to a
landlord under North Carolina law, including Chapters 42 and 44A
of the General Statutes.” Id. Thus, section 45-21.29(l)
directs us to Chapter 42.
N.C.G.S. § 42-25.9(g) states:
Ten days after being placed in lawful
possession by execution of a writ of
possession, a landlord may throw away,
dispose of, or sell all items of personal
property remaining on the premises . . . .
During the 10-day period after being placed
in lawful possession by execution of a writ
of possession, a landlord may move for
storage purposes, but shall not throw away,
dispose of, or sell any items of personal
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property remaining on the premises unless
otherwise provided for in this Chapter.
Upon the tenant’s request prior to the
expiration of the 10-day period, the
landlord shall release possession of the
property to the tenant during regular
business hours or at a time agreed upon.
N.C. Gen. Stat. § 42-25.9(g) (2011) amended by 2012 N.C. Sess.
Laws 73, 74, ch. 17, §§ 2(a), 2(b), amended by 2013 N.C. Sess.
Laws 309, 311 ch. 334, § 4.
Based on the language of this statute, the landlord or
buyer in a foreclosure sale who is placed in lawful possession
of a residence may move personal property in the residence to
storage but cannot dispose of the property for ten days after
being placed in lawful possession. Furthermore, the landlord or
buyer must make the personal property available to the tenant or
former owner upon their request during the ten-day period.
Defendants assert that they met the statutory requirements
of N.C.G.S. § 42-25.9 by: (1) allowing plaintiff to continue
removing her personal property on 1 April 2011 when they were
placed in lawful possession, and (2) agreeing with plaintiff and
her husband that if they wanted additional personal property
from the residence they should notify defendants by the end of
business on Monday 4 April 2011. In essence, defendants appear
to argue that plaintiff waived the ten-day waiting period when
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she agreed to contact defendants by the end of business on 4
April 2011, and that plaintiff was guaranteed only one
opportunity to retrieve her personal property. These arguments
fail.
In contract law there are generally two types of rules:
default rules and immutable rules. Default rules are rules that
“parties can contract around by prior agreement.” Ian Ayres &
Robert Gertner, Filling Gaps in Incomplete Contracts: An
Economic Theory of Default Rules, 99 Yale L.J. 87, 87 (1989).
Immutable rules, by comparison, are those rules that “parties
cannot change by contractual agreement.” Id. While these terms
usually refer to the Uniform Commercial Code, they demonstrate
the principle that some rules may be avoided by contract while
others may not. The ten-day waiting period in N.C.G.S. § 42-
25.9(g) cannot be avoided by contract because N.C.G.S. § 42-25.8
provides: “Any lease or contract provision contrary to this
Article shall be void as against public policy.” Thus,
plaintiff and defendants could not satisfy the statutory ten-day
waiting period by agreeing to a modified timeline because such
an agreement violates public policy and is void.
Furthermore, nothing suggests that a tenant or former owner
has only one opportunity to obtain possession of their personal
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property during the ten-day period. While the statutory
language “[u]pon the tenant’s request” is singular, it seems
counterintuitive to reason that a former owner of property has
only one chance in the ten-day period to obtain physical
possession of their personal property before it is disposed of.
As a result, we believe that plaintiff could have obtained
possession of her personal property on 7 April 2011 even though
she had been allowed to remove personal property on 1 April
2011. Thus, we reverse the trial court’s conclusion of law that
plaintiff failed to prove her conversion claim.
Once a party has stated a claim for conversion, the party
must present evidence that will provide a basis for determining
damages. Marina Food Assocs., Inc. v. Marina Rest., Inc., 100
N.C. App. 82, 94, 394 S.E.2d 824, 831, disc. rev. denied, 327
N.C. 636, 399 S.E.2d 328 (1990). For a conversion claim,
damages are determined by the “fair market value of the
converted property at the time of the conversion, plus
interest.” Bartlett Milling Co., v. Walnut Grove Auction &
Realty Co., 192 N.C. App. 74, 81, 665 S.E.2d 478, 485, disc.
rev. denied, 362 N.C. 679, 669 S.E.2d 741 (2008). Fair market
value is the price that a willing buyer would pay a willing
seller when neither party is compelled to take part in the
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transaction. Esteel Co. v. Goodman, 82 N.C. App. 692, 698, 348
S.E.2d 153, 157 (1986), disc. rev. denied, 318 N.C. 693, 351
S.E.2d 745 (1987).
As discussed earlier, a trial court’s findings of fact are
conclusive on appeal if they are supported by competent
evidence. Holloway, __ N.C. App. at __, 726 S.E.2d at 204. In
this case, the trial judge found that plaintiff did not attempt
to determine the fair market value of the household goods and
offered no testimony as to the fair market value of the papers.
These findings are supported by the evidence. At trial,
plaintiff testified that the replacement cost of the household
items was $10,272. Replacement cost is not the fair market
value. The fair market value of the household goods would be
the value of the goods at the time of their conversion, not the
cost of buying replacement goods. Plaintiff did not testify as
to the value of the goods at the time of their conversion, and
as a result, failed to offer evidence of their fair market
value.
Furthermore, plaintiff offered no evidence as to the fair
market value of the papers. As stated earlier, fair market
value is the price a willing buyer would pay a willing seller
for goods. See Esteel, 82 N.C. App. at 698, 348 S.E.2d at 157.
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Plaintiff testified that she thought that the papers had a value
of $75,400 because that would be reasonable compensation for the
amount of time she worked on them. However, to prove the fair
market value of the papers plaintiff would have to demonstrate
how much a willing buyer would pay her for the papers.
During the bench trial, plaintiff’s counsel relied on
Pattern Jury Instruction 810.66 to argue that $75,400
represented the “intrinsic” value of the papers. This argument
was not made on appeal; however, if plaintiff had made this
argument on appeal it would have failed. The note to Pattern
Jury Instruction 810.66 states: “Use this instruction where
damages measured by market value would not adequately compensate
the plaintiff.” N.C.P.I.—Civ. 810.66 (gen. civ. vol. 2013).
Thus, intrinsic value was not the appropriate value to determine
plaintiff’s damages because there was no evidence of the fair
market value of the papers or that the fair market value of the
papers would not adequately compensate plaintiff. The trial
court correctly found that plaintiff had presented no evidence
of the fair market value of the household goods or the papers,
and correctly concluded that plaintiff had failed to prove
actual damages.
Actual damages, however, are not an essential element of a
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conversion claim. Hawkins v. Hawkins, 101 N.C. App. 529, 533,
400 S.E.2d 472, 475 (1991), aff'd, 331 N.C. 743, 417 S.E.2d 447(1992). Consequently, even if a plaintiff fails to prove actual
damages, she can still recover nominal damages. See Fagan v.
Hazzard, 34 N.C. App. 312, 313–14, 237 S.E.2d 916, 917 (1977)
(affirming a trial court’s award of one dollar as nominal
damages when the plaintiff proved conversion but not actual
damages). Accordingly, plaintiff is entitled to nominal damages
because she proved her conversion claim but not actual damages.
Therefore, we reverse the trial court’s holding that
plaintiff failed to prove conversion, affirm the determination
that plaintiff failed to prove actual damages, and remand this
case to the trial court for entry of a judgment awarding
plaintiff nominal damages.
Affirmed in part, reversed in part and remanded.
Judges ELMORE and HUNTER, JR. concur.