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  "name": "SEVEN SEVENTEEN HB CHARLOTTE CORPORATION, a North Carolina Corporation, d/b/a ADAM'S MARK HOTEL CHARLOTTE, Plaintiffs v. SHRINE BOWL OF THE CAROLINAS, INC., a North Carolina Corporation, JOHN DOES I-V, whose true names are unknown; DOE PARTNERSHIPS I-V, whose names are unknown; and DOE CORPORATIONS I-V, whose true names are unknown, Defendants",
  "name_abbreviation": "Seven Seventeen HB Charlotte Corp. v. Shrine Bowl of the Carolinas, Inc.",
  "decision_date": "2007-03-06",
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    "judges": [
      "Judges HUNTER and McCULLOUGH concur."
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    "parties": [
      "SEVEN SEVENTEEN HB CHARLOTTE CORPORATION, a North Carolina Corporation, d/b/a ADAM\u2019S MARK HOTEL CHARLOTTE, Plaintiffs v. SHRINE BOWL OF THE CAROLINAS, INC., a North Carolina Corporation, JOHN DOES I-V, whose true names are unknown; DOE PARTNERSHIPS I-V, whose names are unknown; and DOE CORPORATIONS I-V, whose true names are unknown, Defendants"
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    "opinions": [
      {
        "text": "ELMORE, Judge.\nShrine Bowl of the Carolinas, Inc. (defendant) appeals from judgment entered 21 December 2005 directing a verdict in favor of Seven Seventeen HB Charlotte Corporation (plaintiff) in the amount of $118,449.03, together with interest accrued since September 2001. After a thorough review of the record, we find no error.\nIn August, 2004, plaintiff served a summons and complaint, against defendant, alleging breach of contract. In the complaint, plaintiff alleged that the parties had formed a contract, and that the contract included a liquidated damages clause in the event of cancellation.\nOn 7 January 2005, plaintiff moved for summary judgment pursuant to Rule 56 of the North Carolina Rules of Civil Procedure. Arguments from both parties were presented in the Mecklenberg County Superior Court. On 3 February 2005, Judge Robert C. Ervin entered an order that stated:\n1. Plaintiff\u2019s Motion for Summary Judgment on all issues of liability is hereby GRANTED. Plaintiff has shown by admissible evidence and reasonable inferences therefrom, not contradicted by other evidence or inferences, that there is no triable issue of material fact regarding the liability of Defendant Shrine Bowl of the Carolinas, Inc. Therefore, Plaintiff is entitled to summary judgment on all issues of liability as a matter of law.\n2. Plaintiffs Motion for Summary Judgment on issues of damages is hereby DENIED. The Court finds that triable issues of material fact exist in regard to the enforceability of liquidated damages, and/or the amount of actual damages to which Plaintiff is entitled. This matter shall therefore proceed to trial on this sole remaining triable issue of fact.\nThe trial court thus focused exclusively on the issue of damages, deciding, first, whether the liquidated damages clause was enforceable, and, if not, what actual damages plaintiff suffered. As plaintiffs trial counsel correctly pointed out to the trial judge, if the trial court found the clause enforceable as a matter of law, there would be no need to present evidence on the issue of damages. The trial court therefore bifurcated the trial, addressing first the issue of the enforceability of the damages clause. Defendant presented no evidence and plaintiff moved for a directed verdict, which the trial court granted. Judgment was entered for plaintiff on 21 December 2005 in the amount of $118,499.03 with interest. Defendant now appeals.\nDefendant first contends that the trial court erred in entering judgment for plaintiff despite plaintiffs failure to offer evidence. This argument is without merit.\nPreliminarily, we note that despite defendant\u2019s repeated assertions and misrepresentations to the contrary, there was only one issue at trial: the enforceability of the liquidated damages clause. As defendant correctly notes in his brief, neither party appealed the summary judgment order. Accordingly, it became the law of the case, conclusively establishing the liability of defendant and leaving only the issue of damages for trial. However, defendant then makes the feckless argument that by allowing plaintiffs motion to bifurcate the trial, the trial court effectively attempted to modify, overrule, or change the scope of the prior order. This is simply incorrect. The bifurcation of the trial was appropriate, allowing the trial court to first consider whether the liquidated damages clause, the existence of which was not in dispute, was enforceable. The fact that summary judgment had previously been denied on the issue does not preclude a later directed verdict. See Headley v. Williams, 162 N.C. App. 300, 306, 590 S.E.2d 443, 447 (2004) (recognizing that \u201cdenial of a summary judgment motion, does not bar a subsequent directed verdict\u201d) (citing Edwards v. Northwestern Bank, 53 N.C. App. 492, 495, 281 S.E.2d 86, 88 (1981)).\nDefendant argues at length that plaintiff offered no evidence on the issue as to what amount of damages it was entitled, a claim that plaintiff happily concedes. It appears that the parties simply have different understandings of the concept of liquidated damages. \u201cUnder the fundamental principle of freedom of contract, the parties to a contract have a broad right to stipulate in their agreement the amount of damages recoverable in the event of a breach, and the courts will generally enforce such an agreement. 24 Richard A. Lord, Williston on Contracts \u00a7 65:1, 213 (4th ed. 2002). See also Eastern Carolina Internal Med., P.A. v. Faidas, 149 N.C. App. 940, 945, 564 S.E.2d 53, 56 (2002) (holding that \u201c[Liquidated damages clauses which are reasonable in amount are enforceable as part of a contract and are not seen as penalty clauses.\u201d).\nNeither party cites any binding authority as to which party bears the burden of proving whether a liquidated damages provision is enforceable. We have been unable to locate any such authority; it appears therefore that the issue is one of first impression.\nThough not uniform across jurisdictions, \u201c[t]he more widely held view . . . [is] that the burden [of establishing whether a clause is enforceable] is on the party seeking to invalidate a stipulated damages provision . . . .\u201d 24 Richard A. Lord, Williston on Contracts \u00a7 65:30, at 355-56 (4th ed. 2002). \u201c[P]lacing the burden on the party seeking to avoid a stipulated damages provision to prove that no damages were suffered or that there was no reasonable relationship between the actual or probable compensatory damages and those agreed upon,\u201d makes sense from a policy perspective. Id. at 357 (citing Bair v. Axiom Design, L.L.C., 2001 UT 20, 20 P.3d 388 (2001)). After all, \u201cthe purpose of a liquidated damages provision is to obviate the need for the nonbreaching party to prove actual damages.\u201d 24 Richard A. Lord, Williston on Contracts \u00a7 65:30, at 357 (4th ed. 2002) (quoting Bair, 2001 UT 20, 20 P.3d 388 (2001)) (emphasis added). Moreover, \u201cplacing the burden on the party seeking to invalidate a stipulated damages provision [is] appropriate because that party . . . initially agreed to it.\u201d 24 Richard A. Lord, Williston on Contracts \u00a7 65:30, at 357 (4th ed. 2002) (citing Bair, 2001 UT 20, 20 P.3d 388).\nThe courts which have placed the burden on the party seeking to enforce the liquidated damages clause argue that the enforcing party has \u201c \u2018the most immediate access to the evidence on the issue of both (a) the difficulty of advance estimation of damages and (b) the reasonableness of the forecast.\u2019 \u201d 24 Richard A. Lord, Williston on Contracts \u00a7 65:30, at 359 (4th ed. 2002) (quoting Pacheco v. Scoblionko, 532 A.2d 1036 (Me. 1987) (citing Restatement (Second) of Contracts \u00a7 356)). We find this argument unpersuasive. There is no reason to assume that one party has better access to this information than another; access to information would logically depend entirely upon the facts of each individual case. Accordingly, we adopt the majority position; the burden falls on the party seeking to invalidate a liquidated damages provision.\nHaving established that the burden was therefore on defendant in this case, it is clear that defendant failed to carry that burden. Indeed, defendant presented no evidence whatsoever. In the absence of any evidence showing good cause to find the clause unenforceable, the trial court correctly held for the plaintiff as a matter of law and directed a verdict for plaintiff. See N.C. Gen. Stat. \u00a7 1A-1, Rule 50 (2006).\nDefendant\u2019s lack of understanding of the fundamental principles of liquidated damages provisions is reflected in his argument that the trial court should have required evidence as to the amount of damages plaintiff was entitled to recover after the trial court directed the verdict in plaintiff\u2019s favor. \u201cThe general rule is that the amount stipulated in a contract as liquidated damages for a breach, if not a penalty, may be recovered in the event of a breach even though no actual damages are suffered.\u201d Faidas, 149 N.C. App. at 946, 564 S.E.2d at 56. Once the liquidated damages provision was declared enforceable, the proper damages were conclusively established by contract. Accordingly, defendant\u2019s contention is without merit.\nDefendant next contends that the trial court erred in failing to make specific findings of fact as requested by defendant pursuant to Rule 52 of our Rules of Civil Procedure. We address this issue despite careless reprinting of defense counsel\u2019s initial argument, in the heading of this section of its brief. Regardless, we find no merit in defendant\u2019s contention.\nIn this case, the trial judge was not sitting as a finder of fact. The trial was bifurcated to allow the trial judge to decide the issue of the enforceability of the liquidated damages provision (a question of law), prior to addressing the issue of actual damages (which, had it been reached, would have been a question of fact). Indeed, there were no facts at issue: The existence of the liquidated damages provision was undisputed, and no evidence was presented by either party.\nMoreover, the very nature of the directed verdict precludes the trial court from issuing findings of fact or conclusions of law. \u201c[Findings of fact and conclusions of law . . . are neither necessary nor appropriate in granting a motion for directed verdict.\u201d Chapel Hill Cinemas, Inc. v. Robbins, 143 N.C. App. 571, 576, 547 S.E.2d 462, 466-67 (2001), rev\u2019d, per curiam on other grounds, 354 N.C. 349, 554 S.E.2d 644 (2001) (citing Kelly v. Harvester Co., 278 N.C. 153, 159, 179 S.E.2d 396, 399 (1971) (\u201cIn the present case, the \u2018Findings of Fact\u2019 and \u2018Conclusions of Law\u2019 were not required or appropriate and have no legal significance.\u201d)). Accordingly, defendant\u2019s contention is without merit. '\nThe trial court properly placed on defendant the burden of establishing whether the liquidation clause was enforceable. Given that defendant presented no evidence tending to show that the clause was unenforceable, the trial court was correct in entering a verdict against defendant, even in the absence of any evidence from plaintiff. Moreover, because the trial court issued a directed verdict in this case, findings of fact and conclusions of law were \u201cneither necessary nor appropriate.\u201d Robbins, 143 N.C. App. at 576, 547 S.E.2d at 467. Accordingly, we find no error.\nNO ERROR.\nJudges HUNTER and McCULLOUGH concur.\n. Plaintiff\u2019s attempted reliance on Hamilton v. Memorex Telex Corp., 118 N.C. App. 1, 14, 454 S.E.2d 278, 284 (1995), is misplaced. In Hamilton, this Court did address the issue of which party bears the burden of proof in certain cases involving liquidated damages. However, Hamilton dealt specifically with the special case of recovery of unpaid wages. In such cases, the burden of proof is statutorily mandated. See N.C. Gen. Stat. \u00a7 95-25.22 (2006). In contrast, the present case deals only with general contract principles, and is therefore not governed by the Hamilton court\u2019s decision.",
        "type": "majority",
        "author": "ELMORE, Judge."
      }
    ],
    "attorneys": [
      "Roberti, Wittenberg, Lauffer & Wicker, by R. David Wicker, Jr., for the defendant-appellant.",
      "Rudner Law Offices, by David R. Teece, and Hamilton Fay Moon Stephens Steele & Martin, PLLC, by T. Jonathan Adams, for the plaintiff-appellee."
    ],
    "corrections": "",
    "head_matter": "SEVEN SEVENTEEN HB CHARLOTTE CORPORATION, a North Carolina Corporation, d/b/a ADAM\u2019S MARK HOTEL CHARLOTTE, Plaintiffs v. SHRINE BOWL OF THE CAROLINAS, INC., a North Carolina Corporation, JOHN DOES I-V, whose true names are unknown; DOE PARTNERSHIPS I-V, whose names are unknown; and DOE CORPORATIONS I-V, whose true names are unknown, Defendants\nNo. COA06-513\n(Filed 6 March 2007)\n1. Contracts\u2014 breach \u2014 enforceability of liquidated damages clause\nThe trial court did not err in a breach of contract case by entering judgment for plaintiff pursuant to a liquidated damages clause in the amount of $118,449.03, together with interest, despite plaintiffs failure to offer evidence, because: (1) the only issue at trial was the enforceability of the liquidated damages clause where neither party appealed a summary judgment order and it thus became the law of the case conclusively establishing the liability of defendant and leaving only the issue of damages for trial; (2) the bifurcation of the trial was appropriate, allowing the trial court to first consider whether the liquidated damages clause, the existence of which was not in dispute, was enforceable; (3) defendant failed to carry its burden of showing the liquidated damages provision was not enforceable, and in the absence of any evidence showing good cause to find the clause unenforceable, the trial court correctly held for plaintiff as a matter of law and directed a verdict for plaintiff; and (4) once the liquidated damages provision was declared enforceable, the proper damages were conclusively established by contract.\n2. Contracts\u2014 breach \u2014 failure to make specific findings of fact\nThe trial court did not err in a breach of contract case by failing to make specific findings of fact as requested by defendant under N.C.G.S. \u00a7 1A-1, Rule 52, because: (1) the trial judge was not sitting as a finder of fact; (2) there were no facts at issue when the existence of the liquidated damages provision was undisputed and no evidence was presented by either party; and (3) the very nature of the directed verdict precluded the trial court from issuing findings of fact or conclusions of law.\nAppeal by defendants from judgment entered 21 December 2005 by Judge J. Gentry Caudill in Mecklenberg County Superior Court. Heard in the Court of Appeals 15 November 2006.\nRoberti, Wittenberg, Lauffer & Wicker, by R. David Wicker, Jr., for the defendant-appellant.\nRudner Law Offices, by David R. Teece, and Hamilton Fay Moon Stephens Steele & Martin, PLLC, by T. Jonathan Adams, for the plaintiff-appellee."
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