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  "name": "JAMES L. McINERNEY and ELIZABETH B. McINERNEY, Plaintiffs v. PINEHURST AREA REALTY, INC., a North Carolina Business Corporation, Defendant",
  "name_abbreviation": "McInerney v. Pinehurst Area Realty, Inc.",
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    "judges": [
      "Chief Judge EAGLES and Judge HUNTER concur."
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    "parties": [
      "JAMES L. McINERNEY and ELIZABETH B. McINERNEY, Plaintiffs v. PINEHURST AREA REALTY, INC., a North Carolina Business Corporation, Defendant"
    ],
    "opinions": [
      {
        "text": "GEER, Judge.\nPlaintiff homeowners James L. Mclnemey and Elizabeth B. Mclnemey brought suit pro se alleging that defendant Pinehurst Area Realty, Inc., the developer of the community where plaintiffs own a home, committed an unfair trade practice by amending the Declaration of Protective Covenants governing the properties in that community. After a bench trial, the trial court entered judgment in favor of defendant. Although we disagree with the basis for the trial court\u2019s decision, we affirm on the ground that the acts proven by plaintiffs do not constitute unfair trade practices within the meaning of N.C. Gen. Stat. \u00a7 75-1.1 (2003).\nSince this appeal involves a bench trial, the trial court\u2019s findings of fact are conclusive on appeal if there is substantial evidence to support them. Browning v. Helff 136 N.C. App. 420, 423, 524 S.E.2d 95, 98 (2000). Substantial evidence is \u201c \u2018such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.\u2019 \u201d McConnell v. McConnell, 151 N.C. App. 622, 626, 566 S.E.2d 801, 804 (2002) (quoting Union Transfer and Storage Co. Inc. v. Lefeber, 139 N.C. App. 280, 533 S.E.2d 550 (2000)). Appellate review of the trial court\u2019s conclusions of law is de novo. Id.\nIn 1980, defendant purchased the Midland Country Club (\u201cMCC\u201d), a private retirement community in Pinehurst, North Carolina. On 21 January 1985, defendant. recorded a \u201cDeclaration of Protective Covenants\u201d subjecting the MCC property to certain real covenants. The Declaration provided, in pertinent part:\nDeclarant... reserves the right to file in the Office of the Register of Deeds of Moore County, North Carolina supplementary \u201cDeclarations of Protective Covenants\u201d. The Declarant further reserves the right to file in the Office of the Register of Deeds of Moore County, North Carolina, supplementary or additional \u201cAmendments to Declarations of Protective Covenants\u201d, and these Protective Covenants may be modified, changed or stricken from the land by vote of the Owners of 75% of all units in said subdivision.\nPlaintiffs purchased a residence at MCC on 2 February 1985 expressly subject to the 21 January 1985 Declaration of Protective Covenants. Mr. Mclnerney, who is an attorney, testified: \u201cWe were represented by an attorney, by a local attorney, but I also personally reviewed those covenants, found some items that were objectionable, mildly objectionable, but not... a deal breaker, so to speak. And so I went ahead, executed the purchase agreement, and subsequently purchased the property, received a warranty deed which also stated that the property was subject to the restrictive covenants.\u201d\nTwelve years later, in 1997, Mr. Mclnerney unsuccessfully met with defendant in an attempt to seek modification of one of the covenants. In spring 1999, Mr. Mclnerney decided that the covenants were drawn too heavily in favor of defendant and that \u201cit was time to level the playing field.\u201d He initiated an effort to persuade 75% of the property owners to vote to amend the 1985 Protective Covenants to eliminate defendant\u2019s right to amend unless defendant had obtained agreement from 75% of the property owners.\nOn 2 June 1999, shortly after learning of Mr. Mclnerney\u2019s efforts, defendant recorded an \u201cAmendment to Declaration of Protective Covenants\u201d that deleted the provision in paragraph 9 allowing the MCC owners to modify the Protective Covenants by a vote of 75% of their membership. Defendant had not ever previously attempted to amend the 1985 Protective Covenants. The trial court found \u201c[t]hat the motive and intent of the Defendant in the recordation on June 2, 1999 of the document titled Amendment to Declaration of Protective Covenants was in direct response to the Plaintiffs\u2019 initiatives to seek amendment of the Protective Covenants by a vote of 75% of the property owners\u201d and \u201c[t]hat the intent of the Defendant . . . was to exercise exclusive control over any amendments to the Protective Covenants[.]\u201d\nSubsequently, Mr. Mclnerney met with representatives of defendant on multiple occasions in an attempt to resolve matters. He testified: \u201cIn each of those meetings we emphasized that reinstatement of owners\u2019 right to amend was an absolute show-stopper, that there was no other way we could settle our dispute. In all cases that reinstatement was declined; hence the need for this litigation.\u201d On 3 November 2000, however, defendant recorded a Supplementary Declaration of Protective Covenants that restored in some respects, but not all, the right of 75% of the owners to modify or change the Protective Covenants.\nOn 26 April 2001, Mr. Mclnerney filed a complaint alleging that defendant\u2019s 2 June 1999 recordation of the amendment was an unfair trade practice in violation of N.C. Gen. Stat. \u00a7\u00a7 75-1.1 et seq. Because the property was a tenancy by the entirety, the trial court allowed a motion to amend made at trial to add Mrs. Mclnerney as a plaintiff.\nFollowing a bench trial at the 15 July 2002 session of Moore County Superior Court, the trial court dismissed plaintiffs\u2019 action and entered judgment in favor of defendant on 19 July 2002. Although the trial court concluded that defendant\u2019s recordation of the 1999 amendment was an \u201cunfair act\u201d and that defendant had \u201cengaged in conduct which amounted to an inequitable assertion of its power[,]\u201d it also concluded that plaintiffs had \u201cfailed to demonstrate that the Defendant\u2019s conduct proximately caused actual injury to the Plaintiffs[.]\u201d Both plaintiffs and defendant appealed from the judgment.\nPlaintiffs assign error to the trial court\u2019s finding of fact that \u201cthe Plaintiffs have failed to present any evidence of actual injury[,]\u201d and to the court\u2019s conclusion of law that \u201cthe Plaintiffs have failed to demonstrate that the Defendant\u2019s conduct proximately caused actual injury to the Plaintiffs.\u201d Defendant, on the other hand, seeks to uphold the judgment, but challenges the trial court\u2019s conclusions that defendant\u2019s amendment was an \u201cunfair act\u201d and that defendant \u201cengaged in conduct which amounted to an inequitable assertion of its power.\u201d\nAs a preliminary matter, we note that because defendant prevailed at trial, it does not have standing to appeal. Only a \u201cparty aggrieved\u201d may appeal from a trial court\u2019s judgment. N.C. Gen. Stat. \u00a7 1-271 (2003); N.C.R. App. P. 3(a). When, as here, a defendant prevailed below and the judgment from which the defendant appeals \u201cis that the plaintiff recover nothing of them. . . . they are not parties aggrieved and may not appeal.\u201d Bethea v. Town of Kenly, 261 N.C. 730, 732, 136 S.E.2d 38, 40 (1964). We note that defendant\u2019s assignments of error are more properly considered cross-assignments of error under N.C.R. App. P. 10(d) (allowing a party to cross-assign as error \u201cany action or omission of the trial court which was properly preserved for appellate review and which deprived the appellee of an alternative basis in law for supporting the judgment, order, or other determination from which appeal has been taken.\u201d).\nUnder the Unfair and Deceptive Trade Practices Act (\u201cChapter 75\u201d), \u201c[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.\u201d N.C. Gen. Stat. \u00a7 75-1.1(a). To establish a claim under Chapter 75, a plaintiff must prove: (1) an unfair or deceptive act or practice or an unfair method of competition; (2) in or affecting commerce; (3) which proximately caused actual injury to the plaintiff or to his business. Furr v. Fonville Morisey Realty, Inc., 130 N.C. App. 541, 551, 503 S.E.2d 401, 408 (1998), disc. review improvidently granted, 351 N.C. 41, 519 S.E.2d 314 (1999).\nThe trier of fact decides whether the defendant committed the alleged acts, but the court decides as a matter of law whether those facts constitute an unfair or deceptive trade practice. United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 664, 370 S.E.2d 375, 389 (1988). We need not address plaintiffs\u2019 arguments regarding actual injury because we hold, as defendant has argued, that the acts proven by plaintiffs are not unfair practices within the meaning of N.C. Gen. Stat. \u00a7 75-1.1.\nOur Supreme Court has held that a practice is \u201cunfair\u201d under Chapter 75 \u201cwhen it offends established public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers.\u201d Marshall v. Miller, 302 N.C. 539, 548, 276 S.E.2d 397, 403 (1981). Alternatively, \u201c[a] party is guilty of an unfair act or practice when it engages in conduct which amounts to an inequitable assertion of its power or position.\u201d Johnson v. Phoenix Mut. Life Ins. Co., 300 N.C. 247, 264, 266 S.E.2d 610, 622 (1980), overruled on other grounds, Myers & Chapman, Inc. v. Thomas G. Evans, Inc., 323 N.C. 559, 374 S.E.2d 385 (1988).\nPlaintiffs\u2019 contention that defendant acted unfairly is not based on any argument by plaintiffs that defendant\u2019s 1999 amendment violated law or public policy apart from Chapter 75:\nThe Court: Well, what statute or State or federal constitutional provision do you suggest [defendant\u2019s amendment] violates?\nMr. McInerney: Chapter 75-1.1 of the North Carolina Statutes which proclaims that unfair or deceptive acts or practices in or affecting commerce are declared unlawful. . . .\nThe Court: .... Let me ask you this question, Mr. McInerney: Do you contend that the conduct of the defendants violates any other law or constitutional right other than what you contend in Chapter 75?\nMr. McInerney: No, Your Honor.... [Defense counsel] makes great use of the word \u201cunfettered\u201d in describing [defendant\u2019s] right to amend the covenants. That is not an unfettered right. By the terms and on the face of the covenants its [sic] unfettered, but any contract \u2014 I suppose it\u2019s actually considered in the nature of a contract \u2014 any contract does not permit illegal, unlawful actions. And so that right is not unfettered. As [defendant\u2019s expert witness] testified, it is \u2014 there are certain things that simply may not be done.\nThe Court: Well, that would involve constitutional violations.\nMr. McInerney: Well, those are constitutional violations, yes.... I don\u2019t contend it\u2019s a constitutional matter. What I contend is that this is a violation of Chapter 75 which precludes unfair acts in business or commerce.\nAt trial, Mr. McInerney agreed with defendant that the 1985 Declaration of Protective Covenants gave defendant a unilateral right to amend the Protective Covenants and that the Protective Covenants contained no exceptions to that right.\nOn appeal, plaintiffs likewise do not argue that defendant\u2019s actions constituted a breach of contract or violated any public policy apart from Chapter 75\u2019s prohibition against \u201cunfair\u201d acts. Plaintiffs appear to argue instead that even though they agree that the 1985 Declaration permitted defendant to amend the Protective Covenants, defendant\u2019s action in doing so was \u201cunfair\u201d because it was an inequitable exercise of defendant\u2019s power. Defendant was, however, exercising a right that plaintiffs agree was authorized under the 1985 Declaration.\nOur Supreme Court recently recognized that parties to a restrictive covenant \u201cmay structure the covenants, and any corresponding enforcement mechanism, in virtually any fashion they see fit.\u201d Wise v. Harrington Grove Cmty. Ass\u2019n, 357 N.C. 396, 401, 584 S.E.2d 731, 735 (2003). It is not for the courts to rewrite the parties\u2019 agreement should one of the parties, at a later date, desire a change, as this Court pointed out in Rosi v. McCoy, 79 N.C. App. 311, 314, 338 S.E.2d 792, 794 (1986), aff\u2019d in part and modified in part on other grounds, 319 N.C. 589, 356 S.E.2d 568 (1987):\n[Plaintiffs agreed to accept the deed, subject to the right of the developers to modify or amend any of the restrictions. This right appeared in the restrictions in unambiguous language. The developers have exercised that right and have amended the restrictions on defendants\u2019 property. The rights of the parties must be determined by the agreement they voluntarily made, and plaintiffs cannot now be judicially relieved of an improvident bargain which provided for such amendments.\nSince plaintiffs, when purchasing their property, agreed to defendant\u2019s right to amend, there can be nothing \u201cunfair\u201d in defendant\u2019s subsequent exercise of that right. See Tar Heel Indus., Inc. v. E. I. DuPont de Nemours & Co., 91 N.C. App. 51, 57, 370 S.E.2d 449, 452 (1988) (\u201cNo Chapter 75 claim exists against [defendant] for exercising its right to terminate the contract.\u201d).\nAlthough plaintiffs contend that defendant\u2019s contractual rights were \u201cnot unfettered,\u201d noting that defendant could not exercise its rights in a racially discriminatory manner or in breach of other restrictive covenants, plaintiffs have not pointed to any public policy or law that the amendment in this case implicates. Despite the expansive language of Chapter 75, North Carolina courts and federal courts applying North Carolina law \u201chave consistently recognized that \u00a7 75-1.1 does not cover every dispute between two parties.\u201d Hageman v. Twin City Chrysler-Plymouth, Inc., 681 F. Supp. 303, 306-07 (M.D.N.C. 1988). Without some showing by plaintiffs of a reason why they should not be held to the bargain they made when they purchased their property, the underlying dispute in this case does not come within the ambit of N.C. Gen. Stat. \u00a7 75-1.1.\nAlthough its decision rested on other grounds, the trial court properly dismissed plaintiffs\u2019 claim. Therefore, we affirm. See State ex rel. East Lenoir Sanitary Dist. v. City of Lenoir, 249 N.C. 96, 99, 105 S.E.2d 411, 413 (1958) (\u201cIf the correct result has been reached, the judgment should not be disturbed even though the court may not have assigned the correct reasons for the judgment entered.\u201d).\nAffirmed, as to plaintiffs\u2019 appeal.\nDismissed, as to defendant\u2019s cross-appeal.\nChief Judge EAGLES and Judge HUNTER concur.",
        "type": "majority",
        "author": "GEER, Judge."
      }
    ],
    "attorneys": [
      "James L. Mclnemey and Elizabeth B. Mclnemey, pro se, plaintiff s-appellants.",
      "Van Camp Meacham & Newman, P.L.L.C., by Michael J. Newman, for defendant-appellant."
    ],
    "corrections": "",
    "head_matter": "JAMES L. McINERNEY and ELIZABETH B. McINERNEY, Plaintiffs v. PINEHURST AREA REALTY, INC., a North Carolina Business Corporation, Defendant\nNo. COA03-149\n(Filed 20 January 2004)\n1. Appeal and Error\u2014 standing \u2014 appeal from favorable judgment \u2014 alternate grounds for judgment\nDefendant lacked standing and its appeal was dismissed where it attempted to appeal from a judgment holding that it had committed an unfair trade practice but that its conduct had not caused actual injury to plaintiffs. Defendant\u2019s assignments of error are more properly considered cross-assignments of error.\n2. Unfair Trade Practices\u2014 amending restrictive covenants\u2014 claim dismissed\nA trial court\u2019s dismissal of an unfair trade practices claim was upheld, even though its decision rested on other grounds, where plaintiffs were homeowners and defendant the subdivision developer, plaintiffs attempted to gather support for amending the restrictive covenants to reduce defendant\u2019s influence, and defendant preemptively amended the covenants to remove the voting provision which plaintiff wished to exercise. Plaintiffs agree that the covenants in effect when they purchased their property gave defendant a unilateral right to amend and have not pointed to a public policy or law implicated by defendant\u2019s amendment. Without some showing by plaintiffs of a reason they should not be held to the bargain they made when they purchased their property, the underlying dispute does not come within the ambit of N.C.G.S. \u00a7 76-1.1.\nAppeal by plaintiffs and cross-appeal by defendant from judgment entered 19 July 2002 by Judge James M. Webb in Moore County Superior Court. Heard in the Court of Appeals 27 October 2003.\nJames L. Mclnemey and Elizabeth B. Mclnemey, pro se, plaintiff s-appellants.\nVan Camp Meacham & Newman, P.L.L.C., by Michael J. Newman, for defendant-appellant."
  },
  "file_name": "0285-01",
  "first_page_order": 313,
  "last_page_order": 320
}
