State Ex Rel. Edmisten v. JC Penney Co., Inc.

227 S.E.2d 141 (1976) 30 N.C. App. 368

STATE of North Carolina ex rel. Rufus L. EDMISTEN, Attorney General, Plaintiff,
v.
J. C. PENNEY COMPANY, INC., Defendant.

No. 7610SC164.

Court of Appeals of North Carolina.

August 4, 1976.

Atty. Gen. Rufus L. Edmisten by Associate Atty. Gen. Alan S. Hirsch, Raleigh, for plaintiff-appellant.

Smith, Anderson, Blount & Mitchell by Henry A. Mitchell, Jr. and M. E. Weddington, Raleigh, for defendant-appellee.

ARNOLD, Judge.

G.S. 75-1.1 provides in pertinent part as follows:

"§ 75-1.1. Methods of competition, acts and practices regulated; legislative policy.—(a) Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.

(b) The purpose of this section is to declare, and to provide civil legal means to maintain, ethical standards of dealings between persons engaged in business, and between persons engaged in business and the consuming public within this State, to the end that good faith and fair dealings between buyers and sellers at all levels of commerce be had in this State."

G.S. 75-1.1 is a part of Chapter 833 of the 1969 Session Laws entitled An Act to Amend Chapter 75 of The General Statutes to Provide Civil Remedies Against Unfair Methods of Competition and Unfair or Deceptive Acts or Practices in Trade or Commerce. The only question presented by this appeal is whether G.S. 75-1.1 is applicable to the debt collection activities alleged in this action.

The intent of the General Assembly in enacting Chapter 833 was to enable a person damaged by deceptive acts or practices to recover treble damages from the wrongdoer, and to declare deceptive acts or practices in the conduct of any trade or commerce to be unlawful, and to provide civil legal means to maintain ethical standards of dealings between persons in business and the consuming public of North Carolina.

In determining the scope of G.S. 75-1.1 consideration must be given to the intent and purpose for which the legislation was enacted. G.S. 75-1.1 should be interpreted to grant broad relief against "unfair or deceptive acts or practices in the conduct of any trade or commerce." See 6 Wake Forest Intra.L.Rev. 1, 18-20 (1969).

To give effect to the intent and purpose for which G.S. 75-1.1 was enacted it should apply to all unfair and deceptive acts in the conduct of trade or business, including practices involved in the collection of debts. The argument presented by appellees that the phrase "trade or commerce" does not encompass debt collection activities is rejected. Black's Law Dictionary explains that the "words ``trade' and ``commerce', when used in juxtaposition impart to each other enlarged signification, so as to include practically every business occupation carried on for subsistence or profit, and into which the elements of bargain and sale, barter, exchange, or traffic, enter."

Further guidance can be obtained by reviewing federal decisions on appeals from the Federal Trade Commission, "since the language of G.S. § 75-1.1 closely parallels that of the Federal Trade Commission Act, 15 U.S.C. § 45(a)(1) (1973 Ed.), which prohibits ``unfair or deceptive acts or practices in commerce.'" Hardy v. Toler, 288 N.C. 303, 308, 218 S.E.2d 342, 345 (1975). The federal courts have consistently applied the Federal Trade Commission Act to unfair or deceptive acts in the collection of debts. Mohr v. FTC, 272 F.2d 401 (9 Cir. 1959); Dejay Stores v. Federal Trade Commission, 200 F.2d 865 (2 Cir. 1952); Bennett v. Federal Trade Commission, 91 U.S.App.D.C. 336, 200 F.2d 362 (1952); Silverman v. Federal Trade Commission, 145 F.2d 751 (9 Cir. 1944); In re Floersheim, 316 F.2d 423 (9 Cir. 1963); Floersheim v. FTC, 411 F.2d 874 (9 Cir. 1969).

In his amended order dissolving the temporary restraining order and denying the preliminary injunction the trial judge concluded that "assuming without deciding that all the allegations of the Complaint are true, the Court will not enter a Preliminary Injunction because it is of the opinion that such conduct does not fall within the purview of G.S. 75-1.1 . . .." His Honor found however that "there is ample evidence to support a finding that the conduct complained of did occur."

Appellant correctly contends that the court's finding of "ample evidence to support a finding that the conduct complained of did occur" is probable cause for supposing that plaintiff will be able to sustain its allegations at trial. See Automobile Dealer Resources, Inc. v. Insurance Co., 15 N.C.App. 634, 190 S.E.2d 729 (1972). Since there is ample evidence that the conduct alleged did occur, and the conduct complained of does fall within the scope prohibited by G.S. 75-1.1, it was error for the trial court to dissolve the restraining order and to deny the preliminary injunction. Judgment is vacated and the cause is remanded with directions to enter the preliminary injunction.

Reversed and remanded.

HEDRICK, J., concurs.

PARKER, J., dissents.