{ "id": 2538399, "name": "THE HAJMM COMPANY v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON", "name_abbreviation": "HAJMM Co. v. House of Raeford Farms, Inc.", "decision_date": "1991-05-02", "docket_number": "No. 271A89", "first_page": "578", "last_page": "597", "citations": [ { "type": "official", "cite": "328 N.C. 578" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "379 S.E.2d 868", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": -1 }, { "cite": "94 N.C. App. 1", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526503 ], "year": 1989, "opinion_index": -1, "case_paths": [ "/nc-app/94/0001-01" ] }, { "cite": "254 S.E.2d 32", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "parenthetical": "holding for similar, though not identical, reasons that commodities transactions are not covered by the Act" } ], "opinion_index": 0 }, { "cite": "296 N.C. 583", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568544, 8568580, 8568454, 8568502, 8568631 ], "year": 1979, "pin_cites": [ { "parenthetical": "holding for similar, though not identical, reasons that commodities transactions are not covered by the Act" } ], "opinion_index": 0, "case_paths": [ "/nc/296/0583-03", "/nc/296/0583-04", "/nc/296/0583-01", "/nc/296/0583-02", "/nc/296/0583-05" ] }, { "cite": "248 S.E.2d 567", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "opinion_index": 0 }, { "cite": "38 N.C. App. 414", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554394 ], "year": 1978, "opinion_index": 0, "case_paths": [ "/nc-app/38/0414-01" ] }, { "cite": "849 F.2d 288", "category": "reporters:federal", "reporter": "F.2d", "year": 1988, "pin_cites": [ { "parenthetical": "same result in construing similar provisions in Hawaii's statute" } ], "opinion_index": 0 }, { "cite": "839 F.2d 1095", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 10547407 ], "year": 1988, "pin_cites": [ { "parenthetical": "construing similar provisions in Louisiana's statute as not providing coverage to securities transactions" } ], "opinion_index": 0, "case_paths": [ "/f2d/839/1095-01" ] }, { "cite": "15 U.S.C.A. \u00a7 45", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)(1)" } ], "opinion_index": 0 }, { "cite": "761 F.2d 162", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 29505 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/f2d/761/0162-01" ] }, { "cite": "333 S.E.2d 236", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1985, "pin_cites": [ { "page": "275" }, { "page": "241" } ], "opinion_index": 0 }, { "cite": "314 N.C. 267", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4690671 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/314/0267-01" ] }, { "cite": "292 S.E.2d 574", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "305 N.C. 759", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573251, 8573289, 8573226, 8573201, 8573274 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/305/0759-03", "/nc/305/0759-05", "/nc/305/0759-02", "/nc/305/0759-01", "/nc/305/0759-04" ] }, { "cite": "289 S.E.2d 118", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "56 N.C. App. 445", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8521757 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc-app/56/0445-01" ] }, { "cite": "266 S.E.2d 610", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "300 N.C. 247", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561020 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/300/0247-01" ] }, { "cite": "370 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "322 N.C. 643", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2518481 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0643-01" ] }, { "cite": "343 S.E.2d 174", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "opinion_index": 0 }, { "cite": "316 N.C. 461", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4694338 ], "year": 1986, "opinion_index": 0, "case_paths": [ "/nc/316/0461-01" ] }, { "cite": "131 S.E.2d 671", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1963, "opinion_index": 0 }, { "cite": "260 N.C. 126", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573244 ], "year": 1963, "opinion_index": 0, "case_paths": [ "/nc/260/0126-01" ] }, { "cite": "155 S.E.2d 488", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1967, "opinion_index": 0 }, { "cite": "271 N.C. 198", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563104 ], "year": 1967, "opinion_index": 0, "case_paths": [ "/nc/271/0198-01" ] }, { "cite": "173 S.E.2d 281", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1970, "pin_cites": [ { "page": "285" } ], "opinion_index": 0 }, { "cite": "276 N.C. 487", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561836 ], "weight": 2, "year": 1970, "pin_cites": [ { "page": "492" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0487-01" ] }, { "cite": "79 S.E.2d 735", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1954, "opinion_index": 0 }, { "cite": "239 N.C. 121", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626052 ], "year": 1954, "opinion_index": 0, "case_paths": [ "/nc/239/0121-01" ] }, { "cite": "160 S.E. 896", "category": "reporters:state_regional", "reporter": "S.E.", "weight": 3, "year": 1931, "pin_cites": [ { "page": "906" } ], "opinion_index": 0 }, { "cite": "201 N.C. 577", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8626992 ], "weight": 2, "year": 1931, "pin_cites": [ { "page": "598" } ], "opinion_index": 0, "case_paths": [ "/nc/201/0577-01" ] }, { "cite": "261 S.E.2d 128", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "parenthetical": "quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)" } ], "opinion_index": 0 }, { "cite": "298 N.C. 572", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8573665, 8573740, 8573712, 8573650, 8573687 ], "year": 1979, "pin_cites": [ { "parenthetical": "quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)" } ], "opinion_index": 0, "case_paths": [ "/nc/298/0572-02", "/nc/298/0572-05", "/nc/298/0572-04", "/nc/298/0572-01", "/nc/298/0572-03" ] }, { "cite": "257 S.E.2d 78", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "page": "83", "parenthetical": "quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)" } ], "opinion_index": 0 }, { "cite": "42 N.C. App. 393", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554570 ], "year": 1979, "pin_cites": [ { "page": "401", "parenthetical": "quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/42/0393-01" ] }, { "cite": "78 L. Ed. 2d 232", "category": "reporters:federal", "reporter": "L. Ed. 2d", "year": 1983, "opinion_index": 0 }, { "cite": "464 U.S. 894", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6413056, 6413218, 6413124, 6414405, 6414023, 6414151, 6413675, 6414251, 6413907, 6413461, 6413559, 6414526, 6413791 ], "year": 1983, "opinion_index": 0, "case_paths": [ "/us/464/0894-01", "/us/464/0894-03", "/us/464/0894-02", "/us/464/0894-12", "/us/464/0894-09", "/us/464/0894-10", "/us/464/0894-06", "/us/464/0894-11", "/us/464/0894-08", "/us/464/0894-04", "/us/464/0894-05", "/us/464/0894-13", "/us/464/0894-07" ] }, { "cite": "705 F.2d 624", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 1858586 ], "year": 1983, "pin_cites": [ { "page": "632" } ], "opinion_index": 0, "case_paths": [ "/f2d/705/0624-01" ] }, { "cite": "67 N.C.L. Rev. 1293", "category": "journals:journal", "reporter": "N.C. L. Rev.", "year": 1989, "opinion_index": 0 }, { "cite": "367 S.E.2d 895", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "322 N.C. 152", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2517737 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0152-01" ] }, { "cite": "373 S.E.2d 426", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 0 }, { "cite": "323 N.C. 455", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2560540 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/323/0455-01" ] }, { "cite": "367 S.E.2d 639", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1988, "pin_cites": [ { "page": "643" } ], "opinion_index": 0 }, { "cite": "322 N.C. 243", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2518702 ], "year": 1988, "opinion_index": 0, "case_paths": [ "/nc/322/0243-01" ] }, { "cite": "31 S.E.2d 369", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1944, "pin_cites": [ { "page": "370" } ], "opinion_index": 0 }, { "cite": "224 N.C. 459", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8606104 ], "year": 1944, "pin_cites": [ { "page": "462" } ], "opinion_index": 0, "case_paths": [ "/nc/224/0459-01" ] }, { "cite": "65 S.E.2d 351", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1951, "pin_cites": [ { "page": "354", "parenthetical": "quoting In re Will of Lomax, 224 N.C. 459, 462, 31 S.E.2d 369, 370 (1944)" } ], "opinion_index": 0 }, { "cite": "233 N.C. 723", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8616381 ], "year": 1951, "pin_cites": [ { "page": "728", "parenthetical": "quoting In re Will of Lomax, 224 N.C. 459, 462, 31 S.E.2d 369, 370 (1944)" } ], "opinion_index": 0, "case_paths": [ "/nc/233/0723-01" ] }, { "cite": "340 S.E.2d 309", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "321", "parenthetical": "error, but not prejudicial, to admit expert opinion that certain injuries were the \"proximate cause\" of death" } ], "opinion_index": 0 }, { "cite": "315 N.C. 599", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4715465 ], "year": 1986, "pin_cites": [ { "page": "617", "parenthetical": "error, but not prejudicial, to admit expert opinion that certain injuries were the \"proximate cause\" of death" } ], "opinion_index": 0, "case_paths": [ "/nc/315/0599-01" ] }, { "cite": "247 S.E.2d 905", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "911" } ], "opinion_index": 0 }, { "cite": "295 N.C. 559", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566309 ], "year": 1978, "pin_cites": [ { "page": "568-69" } ], "opinion_index": 0, "case_paths": [ "/nc/295/0559-01" ] }, { "cite": "307 S.E.2d 164", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "opinion_index": 1 }, { "cite": "309 N.C. 321", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4762957, 4765550, 4763995, 4764923, 4761023 ], "year": 1983, "opinion_index": 1, "case_paths": [ "/nc/309/0321-05", "/nc/309/0321-01", "/nc/309/0321-02", "/nc/309/0321-04", "/nc/309/0321-03" ] }, { "cite": "303 S.E.2d 565", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1983, "opinion_index": 1 }, { "cite": "62 N.C. App. 695", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524677 ], "year": 1983, "opinion_index": 1, "case_paths": [ "/nc-app/62/0695-01" ] }, { "cite": "276 S.E.2d 397", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": 1 }, { "cite": "302 N.C. 539", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567785 ], "year": 1981, "opinion_index": 1, "case_paths": [ "/nc/302/0539-01" ] }, { "cite": "364 S.E.2d 921", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "opinion_index": 1 }, { "cite": "321 N.C. 473", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2570563, 2567951, 2571154, 2571737, 2569151 ], "year": 1988, "opinion_index": 1, "case_paths": [ "/nc/321/0473-05", "/nc/321/0473-04", "/nc/321/0473-01", "/nc/321/0473-03", "/nc/321/0473-02" ] }, { "cite": "362 S.E.2d 578", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1987, "opinion_index": 1 }, { "cite": "88 N.C. App. 44", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8357753 ], "year": 1987, "opinion_index": 1, "case_paths": [ "/nc-app/88/0044-01" ] }, { "cite": "251 S.E.2d 469", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1979, "pin_cites": [ { "parenthetical": "\"G.S. 75-1.1(b) speaks in terms of declaring and providing civil means of maintaining ethical standards of dealings 'between persons engaged in business,' as well as between such persons and the consuming public\"" } ], "opinion_index": 1 }, { "cite": "296 N.C. 411", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566666, 8566731, 8566699, 8566765, 8566803 ], "year": 1979, "pin_cites": [ { "parenthetical": "\"G.S. 75-1.1(b) speaks in terms of declaring and providing civil means of maintaining ethical standards of dealings 'between persons engaged in business,' as well as between such persons and the consuming public\"" } ], "opinion_index": 1, "case_paths": [ "/nc/296/0411-01", "/nc/296/0411-03", "/nc/296/0411-02", "/nc/296/0411-04", "/nc/296/0411-05" ] }, { "cite": "248 S.E.2d 739", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "742" } ], "opinion_index": 1 }, { "cite": "38 N.C. App. 393", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554328 ], "year": 1978, "pin_cites": [ { "page": "396" } ], "opinion_index": 1, "case_paths": [ "/nc-app/38/0393-01" ] }, { "cite": "761 F.2d 162", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 29505 ], "weight": 2, "year": 1985, "opinion_index": 1, "case_paths": [ "/f2d/761/0162-01" ] }, { "cite": "333 S.E.2d 236", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "parenthetical": "citing Lindner v. Durham Hosiery Mills, Inc., 761 F.2d 162 (4th Cir. 1985)" } ], "opinion_index": 1 }, { "cite": "314 N.C. 267", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4690671 ], "year": 1985, "pin_cites": [ { "parenthetical": "citing Lindner v. Durham Hosiery Mills, Inc., 761 F.2d 162 (4th Cir. 1985)" } ], "opinion_index": 1, "case_paths": [ "/nc/314/0267-01" ] }, { "cite": "370 S.E.2d 375", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "389" } ], "opinion_index": 1 }, { "cite": "322 N.C. 643", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2518481 ], "year": 1988, "pin_cites": [ { "page": "665" } ], "opinion_index": 1, "case_paths": [ "/nc/322/0643-01" ] } ], "analysis": { "cardinality": 1516, "char_count": 45238, "ocr_confidence": 0.759, "pagerank": { "raw": 7.270474190954708e-07, "percentile": 0.9681552862734468 }, "sha256": "d651a7de93a9603c4b5ff9eb3c014b08134cdea1b54da74047f711d8a7a957c5", "simhash": "1:9b8d3c32b6ca26da", "word_count": 7155 }, "last_updated": "2023-07-14T22:58:40.693084+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "THE HAJMM COMPANY v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON" ], "opinions": [ { "text": "EXUM, Chief Justice.\nThis is an action seeking compensatory, punitive and treble damages for breach of fiduciary duty, breach of corporate bylaws, and unfair or deceptive acts or practices in or affecting commerce (unfair practices) based on defendants\u2019 allegedly improper refusal to redeem a certain \u201crevolving fund certificate\u201d issued by the corporate defendant (Raeford) to plaintiff. The trial court dismissed the claim for unfair practices under Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. The other claims were tried before a jury, which returned a verdict granting compensatory damages against both defendants and punitive damages against Raeford. From judgment entered on the verdict defendants appealed. Plaintiff appealed from the dismissal of its unfair practices claim.\nThe Court of Appeals found no error in the trial, but reversed the dismissal of plaintiff\u2019s unfair practices claim and remanded it for trial. Judge Greene dissented, believing that during the jury trial the court improperly admitted certain expert testimony to the prejudice of defendants. Defendants\u2019 appeal to us is based on this dissent and raises the question of the admissibility of the expert testimony. We allowed in part defendants\u2019 petition for discretionary review to consider only the question whether the Court of Appeals correctly concluded that plaintiff stated a claim for unfair practices under N.C.G.S. \u00a7 75-1.1.\nWe conclude that the challenged expert testimony should not have been admitted but the error in admitting it was harmless. We also conclude that N.C.G.S. \u00a7 75-1.1 was not intended to apply to the transaction in question and plaintiff has not, therefore, stated a claim for unfair practices. We consequently modify and affirm in part and reverse in part the Court of Appeals\u2019 decision.\nI.\nEvidence at trial tends to show the following:\nPlaintiff is a North Carolina limited partnership engaged in agricultural marketing. The partnership is composed of members of the Evans family from Laurinburg. HAJMM is an acronym formed from the first names of five Evans siblings \u2014 Hervey, Ann, John, McNair and Murphy.\nDefendant Raeford is an incorporated North Carolina agricultural cooperative engaged in the business of processing turkeys and other poultry. Defendant Johnson is president and chairman of its board of directors. He runs the company. According to his testimony, \u201c[t]he final decision is mine\u201d with regard to Raeford\u2019s business.\nRaeford was formed in 1975. It was capitalized in part when plaintiff and two other turkey producers sold to Raeford all their stock in Raeford Turkey Farms, Inc. (RTF). The other two selling turkey producers were Stone Brothers, Inc. (Stone Brothers), and Nash Johnson and Sons, Inc. (NJS). Defendant Johnson and his sisters own NJS, which provides over ninety percent of Raeford\u2019s turkeys.\nAs part of the consideration for selling their interests in RTF to Raeford, plaintiff and the other turkey producers received \u201cClass B \u2014 Series 1975\u201d revolving fund certificates issued by Raeford. The certificates became part of Raeford\u2019s capital structure and are shown as stockholder\u2019s equity on Raeford\u2019s balance sheet.\nPlaintiff\u2019s certificate recites that plaintiff \u201chas furnished $387,500 . . . in value to [Raeford].\u201d The certificate also recites that it \u201cshall bear no interest,\u201d is \u201cjunior and subordinate to all debts\u201d of the company, is subject to the company\u2019s bylaws, which are incorporated by reference, and is \u201cretirable in the sole discretion of the board of directors, either fully or on a pro rata basis.\u201d The certificate bears no maturity date.\nAn identical certificate was issued to Stone Brothers for its RTF stock. NJS received a certificate with like terms but with a face value of $750,000.\nWith regard to the revolving fund certificates, Raeford\u2019s bylaws provide in part: \u201cFunds arising from the issue of such certificates shall be used for creating a revolving fund for the purpose of building up such an amount of capital as may be deemed necessary by the board of directors from time to time and for revolving such capital.\u201d The bylaws also provide that \u201c[s]uch certificates shall be issued in annual series . . . and each series shall be retired fully or on a prorata basis, only at the discretion of the board . . . in the order of issuance by years as funds are available for that purpose.\u201d\nDuring 1978 Raeford retired the revolving fund certificate originally issued to Stone Brothers but which Stone Brothers had by then transferred to FCX, Inc. No value was placed on the certificate when it was retired. This retirement was a component of Raeford\u2019s purchase of all interest FCX then held in Raeford and was shown on Raeford\u2019s books by discounting the certificate to zero value.\nSome time later Raeford retired the NJS certificate. Retirement of this certificate was also shown on Raeford\u2019s books by discounting the certificate to zero value.\nPlaintiff\u2019s certificate was not retired and continued to be carried on Raeford\u2019s books as part of Raeford\u2019s capital structure. In March 1986 plaintiff demanded payment on the certificate and Raeford refused.\nAccording to plaintiff\u2019s evidence defendant Johnson told Hervey Evans that Raeford would never pay the certificate. Johnson told an attorney representing the Federal Land Bank, \u201c[i]t\u2019s not bearing interest, so there\u2019s really no reason to pay it. It\u2019s sort of like owing money to yourself.\u201d According to defendant Johnson, Raeford had refused to pay off the certificate because it \u201cwasn\u2019t good business.\u201d He conceded he had 'said he might never pay the certificate.\nPlaintiff\u2019s evidence also showed that Raeford had been profitable throughout the mid-1980\u2019s. For example, the fiscal year ending 31 May 1986 yielded Raeford $6.1 million in net income and brought its net worth to over $18 million. Raeford\u2019s net worth had been only $6.8 million in 1983.\nAs of 1986 Raeford had loaned $375,000 to Johnson and over $1.1 million to other businesses owned by the Johnson family. In fiscal year 1987 Raeford purchased a jet airplane for over $800,000. By the end of the year, Raeford held $3.4 million in outside securities and had $922,000 cash on hand. Despite these loans, purchases, and liquidity, defendant Raeford refused to retire plaintiffs $387,500 revolving fund certificate.\nDefendants\u2019 evidence sought primarily to justify the refusal to pay plaintiff\u2019s revolving fund certificate.\nAt the close of the evidence, the trial court submitted issues to the jury and received the following answers:\n1. Did the defendant, House of Raeford Farms, Inc., breach its bylaws by refusing to retire the revolving fund certificate of the plaintiff, HAJMM, in the reasonable exercise of its discretion?\nYes.\n2. Did the defendant, House of Raeford Farms, Inc., breach its bylaws by retiring any of the revolving fund certificates in the same annual series as that of plaintiff, HAJMM, and refusing to retire that of the plaintiff, HAJMM?\nYes.\n3. Do the defendants, E. Marvin Johnson and Raeford Farms, Inc., owe a fiduciary duty to the plaintiff, HAJMM?\nYes.\n4. If so, was their refusal to retire HAJMM\u2019s revolving fund certificate an open, fair and honest transaction?\nNo.\n5. In what month and year did the breach or violation occur?\nMarch, 1986.\n6. In your discretion what amount of punitive damages, if any, should be awarded to the plaintiff, HAJMM from the defendant E. Marvin Johnson?\nNone.\n7. In your discretion, what amount of punitive damages, if any, should be awarded to the plaintiff, HAJMM from the defendant, House of Raeford Farms, Inc.?\n$100,000.\nUpon this verdict the trial court entered judgment ordering defendants, jointly and severally, to pay plaintiff $387,500 as compensatory damages and ordering defendant Raeford to pay plaintiff $100,000 in punitive damages.\nOn defendants\u2019 appeal a majority of the Court of Appeals panel found no error in the trial. Judge Greene dissented, believing that the trial court erred by allowing an expert witness to testify that Raeford\u2019s Board of Directors \u201cabused its discretion\u201d and that defendants owed plaintiff a \u201cfiduciary duty,\u201d which they breached. Defendants appeal to us as of right on the basis of the dissent.\nOn plaintiff\u2019s appeal, the Court of Appeals reversed and vacated the trial court\u2019s order granting defendants\u2019 Rule 12(b)(6) motion to dismiss the unfair practices claim and remanded for trial on that issue.\nWe granted defendants\u2019 petition for discretionary review to consider only the unfair practices claim issue.\nII.\nThe first question we address is whether there was reversible error in the admission of certain expert testimony. The Court of Appeals concluded there was no error. We conclude there was error but that it was not so prejudicial as to warrant a new trial.\nDr. James Baarda was qualified as an expert witness on equity redemption by agricultural cooperatives. Defendants made timely objections to the following portions of his direct testimony:\nQ: [By plaintiff\u2019s counsel] Based upon your experience and your review of the materials as to what you have previously testified and identified, do you have an opinion satisfactory to yourself, as to whether the Board of Directors of Raeford, abused their [sic] discretion in failing to redeem HAJMM\u2019s Class B Revolving Fund Certificate?\nA: [By Dr. Baarda] Yes, I do have an opinion.\nQ: What is that opinion?\nA: [M]y opinion is that the Board of Directors did abuse its discretion in failing to redeem this equity.\nQ: Do you have an opinion satisfactory to yourself, as to whether there was a fiduciary duty [owed] both by Raeford and the defendant, Marvin Johnson, to the HAJMM Company?\nA: Yes, I do.\nQ: What is that opinion?\nA: In my opinion . . . there was such a relationship.\nQ: Do you have an opinion satisfactory to yourself as to whether the fiduciary duty was breached?\nA: Yes.\nQ: What is that?\nA: I believe that the fiduciary duty was breached.\nQ: Do you have an opinion satisfactory to yourself, as to when the fiduciary duty was breached?\nA: I believe it was breached when the Evans family made demand on the cooperative to pay it back, and the cooperative refused to do so.\nQ: Do you have an opinion satisfactory to yourself as to whether this breach is continuous?\nA: Yes, this, this is a continuing duty.\n(Objections and objections to the line of questioning omitted.)\nDefendants contend that Dr. Baarda should not have been permitted to give his opinion that they were plaintiff\u2019s fiduciaries, that they breached their fiduciary duties to plaintiff, or that Raeford\u2019s board abused its discretion by failing to redeem plaintiff\u2019s certificate. We agree with defendants.\nTo decide this issue, we first examine the Rules of Evidence and pertinent case law. We also discuss the policies underlying the admission or exclusion of certain types of opinion testimony.\nExpert testimony is admissible under North Carolina Evidence Rule 702, which provides:\nIf scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion.\nN.C.G.S. \u00a7 8C-1, Rule 702.\nUnder Rule 704 \u201c[t]estimony in the form of an opinion or inference is not objectionable because it embraces an ultimate issue to be decided by the trier of fact.\u201d N.C.G.S. \u00a7 8C-1, Rule 704. Rule 704 comports with and codifies North Carolina\u2019s common law:\n[ I]n determining whether expert . . . opinion is to be admitted into evidence the inquiry should be not whether it invades the province of the jury, but whether the opinion expressed is really one based on the special expertise of the expert, that is, whether the witness because of his expertise is in a better position to have an opinion on the subject than is the trier of fact.\nState v. Wilkerson, 295 N.C. 559, 568-69, 247 S.E.2d 905, 911 (1978).\nThere are, nevertheless, limits on the admissibility of expert opinion testimony. The advisory committee note to Rule 704 states:\nThe abolition of the ultimate issue rule does not lower the bars so as to admit all opinions. Under Rules 701 and 702, opinions must be helpful to the trier of fact, and Rule 403 provides for exclusion of evidence which wastes time. These provisions afford ample assurance against the admission of opinions which would merely tell the jury what result to reach, somewhat in the manner of the oath-helpers of an earlier day. They also stand ready to exclude opinions phrased in terms of inadequately explored legal criteria.\nN.C.G.S. \u00a7 8C-1, Rule 704 advisory committee\u2019s note.\nOur cases interpreting Rule 704 are to the same effect. \u201c[U]nder the ... rules of evidence, an expert may not testify that a particular legal conclusion or standard has or has not been met, at least where the standard is a legal term of art which carries a specific meaning not readily apparent to the witness.\u201d State v. Ledford, 315 N.C. 599, 617, 340 S.E.2d 309, 321 (1986) (error, but not prejudicial, to admit expert opinion that certain injuries were the \u201cproximate cause\u201d of death).\nThe distinction between legal standards and conclusions about which testimony may not be admitted, and ultimate facts about which testimony is admissible, is often difficult to draw. The advisory committee\u2019s note to Rule 704 gives a helpful example of the difference:\n[ T]he question, \u201cDid [the testator] have capacity to make a will?\u201d would be excluded, while the question, \u201cDid [the testator] have sufficient mental capacity to know the nature and extent of his property and the natural objects of his bounty and to formulate a rational scheme of distribution?\u201d would be allowed.\nN.C;G.S. \u00a7 8C-1, Rule 704 advisory committee\u2019s notes. This example illustrates the kind of opinion testimony, expert or not, that should be excluded by the rules as well as the kind of testimony that should be admitted under them. The term \u201c \u2018 \u201c[testamentary capacity]\u201d is a conclusion which the law draws from certain facts as premises.\u2019 \u201d In re Will of Tatum, 233 N.C. 723, 728, 65 S.E.2d 351, 354 (1951) (quoting In re Will of Lomax, 224 N.C. 459, 462, 31 S.E.2d 369, 370 (1944)). In the example given, opinion testimony would be allowed regarding the underlying factual premises the jury must consider in determining whether testamentary capacity exists, facts including the testator\u2019s ability to know the nature and extent of his property, to know the natural objects of his bounty, and to formulate a rational distribution scheme. Opinion testimony could not be offered on whether the legal conclusion that testamentary capacity existed should be drawn.\nWe have applied this distinction between a legal standard, or conclusion, and its factual premises in other contexts. In State v. Shank, 322 N.C. 243, 367 S.E.2d 639 (1988), we held that it was reversible error for the trial court to exclude evidence offered by the defendant\u2019s expert that the \u201cdefendant\u2019s diminished mental capacity affected his ability to make and carry out plans.\u201d Id. at 246, 367 S.E.2d at 643. This testimony was directed to facts, even if regarded as ultimate facts, which were relevant to whether the legal conclusion that defendant premeditated and deliberated should be drawn. In State v. Rose, 323 N.C. 455, 373 S.E.2d 426 (1988), we held that the trial court correctly excluded a psychiatrist\u2019s testimony that the defendant was incapable of \u201cpremeditation and deliberation\u201d because the proffered evidence went to whether a legal conclusion should be drawn. See also State v. Weeks, 322 N.C. 152, 367 S.E.2d 895 (1988). See generally Note, Mental Impairment and Mens Rea: North Carolina Recognizes the Diminished Capacity Defense in State v. Shank and State v. Rose, 67 N.C.L. Rev. 1293 (1989).\nFrom the Rules of Evidence, the advisory committee\u2019s notes, case law, and commentaries, we discern two overriding reasons for excluding testimony which suggests whether legal conclusions should be drawn or whether legal standards are satisfied. The first is that such testimony invades not the province of the jury but \u201cthe province of the court to determine the applicable law and to instruct the jury as to that law.\u201d F.A.A. v. Landy, 705 F.2d 624, 632 (2d Cir. 1983), cert. denied, 464 U.S. 894, 78 L. Ed. 2d 232 (1983). It is for the court to explain to the jury the given legal standard or conclusion at issue and how it should be determined. To permit the expert to make this determination usurps the function of the judge. The second reason is that an expert is in no better position to conclude whether a legal standard has been satisfied or a legal conclusion should be drawn than is a jury which has been properly instructed on the standard or conclusion.\nUltimate jural relationships at issue are like legal standards and conclusions. It is improper to admit expert opinion testimony as to whether these relationships exist. \u201c[W]here the legal relations growing out of the facts are in dispute, and the witness\u2019s words appear to describe the relations themselves, the same words may be objectionable.\u201d 1 H. Brandis, Brandis on North Carolina Evidence \u00a7 130 (3d ed. 1988). The expert may, however, give testimony regarding the existence of the underlying factual component of the relationship. The jury, after hearing the opinion testimony and upon proper instructions from the court, is in as good a position as the expert to say whether the relationship exists.\nWe now turn to the legal standards and jural relationships in this case. A fiduciary relationship \u201cmay exist under a variety of circumstances; it exists in all cases where there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence.\u201d Stone v. McClam, 42 N.C. App. 393, 401, 257 S.E.2d 78, 83, disc. rev. denied, 298 N.C. 572, 261 S.E.2d 128 (1979) (quoting Abbitt v. Gregory, 201 N.C. 577, 598, 160 S.E. 896, 906 (1931)). Business partners, for example, are each other\u2019s fiduciaries as a matter of law. Casey v. Grantham, 239 N.C. 121, 79 S.E.2d 735 (1954). In less clearly defined situations the question whether a fiduciary relationship exists is more open and depends ultimately on the circumstances. Courts have historically declined to offer a-rigid definition of a fiduciary relationship in order to allow imposition of fiduciary duties where justified. Abbitt v. Gregory, 201 N.C. 577, 160 S.E. 896. Thus, the relationship can arise in a variety of circumstances, id., and may stem from varied and unpredictable factors.\nA qualified expert such as Dr. Baarda should be permitted under Evidence Rule 704 to give an expert opinion regarding the existence of these factors. For example, the expert witness may give an opinion that under the circumstances one party has reposed special confidence in another party, or that one party should act in good faith toward another party, or that one party must act with due regard to the interests of another party. However, the witness may not opine that a fiduciary relationship exists or has been breached. The trial judge should instruct the jury with regard to factors which give rise to the relationship. The jury so instructed is then in as good a position as the expert to consider the factors and determine whether the fiduciary relationship exists.\nLikewise, the discretion vested in a board of directors arises from a variety of sources and circumstances, including statutes, corporate charters, bylaws, resolutions and agreements. Whether such discretion has been abused depends on numerous factors. One such factor prominent in the case before us was the availability of funds with which to retire plaintiff\u2019s certificate. Experts may give opinions regarding the existence of these underlying factors, such as, for example, the availability of funds, but they may not opine whether a board abused its discretion. Again the trial court should instruct on the legal significance of the underlying factors to which testimony has been offered. The jury so instructed is then in as good a position as the expert to consider the factors before it and determine whether the abuse of discretion standard has been satisfied.\nApplying the foregoing principles to Dr. Baarda\u2019s challenged testimony, we conclude that he should not have been permitted to give his opinion that there was a fiduciary relationship between plaintiff and defendants, that the defendants breached their fiduciary duty, and that the Raeford board abused its discretion. Whether there was a fiduciary relationship was the ultimate jural relationship at issue. Whether the fiduciary duty was breached was the ultimate legal conclusion, and whether the board abused its discretion involved the satisfaction or not of the ultimate legal standard. The jural relationship, the legal conclusion and the legal standard each have various underlying factual components, the existence of which were the proper subject of expert opinion testimony. The jury heard this fact-oriented testimony and, having been properly instructed on the legal significance of the underlying factual components, was in as good a position as the expert to determine whether the jural relationship existed, whether the legal conclusion should be drawn, and whether the legal standard was satisfied.\nThough the Court of Appeals incorrectly determined that Dr. Baarda\u2019s challenged testimony was admissible, we conclude that its admission was harmless error. In civil cases, \u201c[t]he burden is on the appellant not only to show error but to enable the court \\to see that he was prejudiced or the verdict of the jury probably influenced thereby.\u201d Board of Education v. Lamm, 276 N.C. 487, 492, 173 S.E.2d 281, 285 (1970). Erroneous admission of evidence is xlot prejudicial when its import is established by other, admissible testimony, or where the erroneously admitted testimony is merely cumulative or corroborative. Lamm, 276 N.C. 487, 173 S.E.2d 281. To establish prejudice and be entitled to a new trial, the appellant must show there is a reasonable probability that he would have received a favorable verdict had the error not occurred. Gregory v. Lynch, 271 N.C. 198, 155 S.E.2d 488 (1967); Mayberry v. Coach Lines, 260 N.C. 126, 131 S.E.2d 671 (1963).\nApplying these principles, we conclude defendants have failed to establish that Dr. Baarda\u2019s inadmissible testimony was prejudicial. The substantial admissible testimony of Dr. Baarda, Hervey Evans, and others, together with the documentary evidence, is compelling in favor of plaintiff on the existence of a fiduciary relationship, breach of fiduciary duty and abuse of discretion. It also provides a solid basis for the award of punitive damages.\nThe jury\u2019s determination on the fiduciary relationship issue rested on substantial and compelling competent evidence that plaintiff placed special confidence and trust in defendants when it agreed to accept the revolving fund certificate in return for its interest in RTF and that, with regard to the certificate, plaintiff justifiably expected defendants to deal fairly. It rested also on the factual characteristics of the certificate itself, about which there is little or no dispute. The dispute regarding the certificate has revolved around the legal effect to be given its characteristics. Plaintiff has contended the certificate evidences enough of an equity interest in Raeford to lead as a matter of law to the creation of a fiduciary relation between the parties. Defendant has contended the certificate evidences merely a creditor-debtor relation out of which no fiduciary relation can arise. The Court of Appeals resolved these conflicting legal contentions favorably to plaintiff. We elected not to review this aspect of the Court of Appeals\u2019 opinion; it thus becomes the law of the case.\nThe upshot is that Dr. Baarda\u2019s conclusion that there was a fiduciary relation between the parties, standing alone, had little or nothing to do with the ultimate determination of this issue for plaintiff. This determination rested more directly on other competent and compelling evidence favorable to plaintiff and the legal effect of the revolving fund certificate\u2019s characteristics.\nWith regard to breach of fiduciary duty and abuse of discretion issues, there was also substantial and compelling evidence that defendant Raeford abused its discretion and that both defendants breached their fiduciary duties by not retiring the certificate. Dr. Baarda was properly determined by the trial court to be an expert in cooperative financing. He gave five guiding reasons for a cooperative to retire its revolving fund certificates at a given time and five reasons not to retire them. He testified that all five reasons favoring retirement were present in this case, and that none of the reasons against retirement were present.\nDr. Baarda testified, largely without contradiction, that of great importance to determinations about retirement of revolving fund certificates is the financial status of the cooperative. During the time plaintiff demanded that defendants retire plaintiff\u2019s certificate, Raeford was enjoying financial success. Raeford had enough financial wherewithal to loan over $1 million to defendant Johnson and his family\u2019s other businesses. It had the ability to make large purchases, such as a corporate jet. Raeford\u2019s net worth had increased from $6.8 million in 1983 to over $18 million by 31 May 1986. By the end of fiscal year 1987, Raeford had $3.4 million invested in outside securities and $922,000 cash on hand. Raeford\u2019s liquidity was extremely high. The evidence regarding Raeford\u2019s financial circumstances during the period in question was largely uncontradicted.\nDefendants\u2019 evidence did not challenge plaintiff\u2019s version of Raeford\u2019s objective financial condition. It tended in more conclusory fashion to justify defendants\u2019 refusal to retire plaintiff\u2019s certificate. Even defendants\u2019 own expert, improperly as we have shown, gave his opinion that defendants\u2019 refusal to retire the certificate was not an \u201cabuse of discretion.\u201d\nGiven this state of the evidence, we are confident the jury did not base its verdict on conflicting, conclusory and improperly admitted expert opinions regarding whether a legal standard had been satisfied, but rather based its verdict on the largely uncontradicted facts regarding Raeford\u2019s objective financial condition and its financial ability to retire plaintiff\u2019s certificate.\nThe state of the evidence is such that we are confident the challenged expert testimony had little bearing not only on the liability issues but also on the award of punitive damages. To make the award, the jury under the trial court\u2019s instruction must have considered Raeford\u2019s conduct to be \u201coutrageous.\u201d The jury was undoubtedly moved in plaintiff\u2019s favor by Johnson\u2019s testimony that after plaintiff made demand, Johnson and other Raeford directors, including Johnson family members, \u201chad us a little meeting and decided that we didn\u2019t need to bother with it; it shouldn\u2019t be paid, it wasn\u2019t good business and we didn\u2019t do it.\u201d Johnson even acknowledged that he said he might never pay the certificate.\nDefendants, therefore, have failed to establish a reasonable probability that the verdict would have been favorable to them had the error in admitting Dr. Baarda\u2019s challenged testimony not been committed. Because the error was harmless, we modify accordingly and affirm the decision of the Court of Appeals on this issue.\nIII.\nWe now consider whether the trial court properly dismissed plaintiff\u2019s unfair practices claim under Civil Procedure Rule 12(b)(6). Plaintiff contends defendants\u2019 refusal to retire plaintiff\u2019s revolving fund certificate constitutes unfair practices under N.C.G.S. \u00a7 75-1.1 (the Act), entitling it to treble damages, N.C.G.S. \u00a7 75-16, and attorneys\u2019 fees, N.C.G.S. \u00a7 75-16.1. We disagree and conclude this claim was properly dismissed.\nThe Act provides: \u201cUnfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.\u201d N.C.G.S. \u00a7 75-l.Ha). The Act was clearly intended to benefit consumers, Pearce v. American Defender Life Ins. Co., 316 N.C. 461, 343 S.E.2d 174 (1986), but its protections extend to businesses in appropriate contexts. See United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 370 S.E.2d 375 (1988). Thus, plaintiff\u2019s status as a business partnership does not remove it from the Act\u2019s protection.\nFor plaintiff to be entitled to the Act\u2019s remedies, it must show that defendants\u2019 conduct falls within the statutory framework allowing recovery. Plaintiff must first establish that defendants\u2019 conduct was \u201cin or affecting commerce\u201d before the question of unfairness or deception arises. Johnson v. Insurance Co., 300 N.C. 247, 266 S.E.2d 610 (1980).\nThis rule requires the Court to interpret the word \u201ccommerce.\u201d The Act provides that \u201c[f]or purposes of this section, \u2018commerce\u2019 includes all business activities, however denominated, but does not include professional services rendered by a member of a learned profession.\u201d N.C.G.S. \u00a7 75-l.l(b). Although this statutory definition of commerce is expansive, the Act is not intended to apply to all wrongs in a business setting. For instance, it does not cover employer-employee relations, Buie v. Daniel International, 56 N.C. App. 445, 289 S.E.2d 118, disc. rev. denied, 305 N.C. 759, 292 S.E.2d 574 (1982), or securities transactions, Skinner v. E. F. Hutton & Co., 314 N.C. 267, 333 S.E.2d 236 (1985).\nIn Skinner we held that \u201csecurities transactions are beyond the scope of N.C.G.S. \u00a7 75-1.1.\u201d Id. at 275, 333 S.E.2d at 241. Skinner relies on Lindner v. Durham Hosiery Mills, Inc., 761 F.2d 162 (4th Cir. 1985). In Lindner the Fourth Circuit Court of Appeals concluded that the Act did not apply to securities transactions, in part because no court had interpreted the Federal Trade Commission Act, 15 U.S.C.A. \u00a7 45(a)(1), upon which N.C.G.S. \u00a7 75-1.1 was modeled, to apply to securities transactions. Cf. Stephenson v. Paine Webber Jackson & Curtis, Inc., 839 F.2d 1095 (5th Cir. 1988) (construing similar provisions in Louisiana\u2019s statute as not providing coverage to securities transactions); Spinner Corp. v. Princeville Development Corp., 849 F.2d 288 (9th Cir. 1988) (same result in construing similar provisions in Hawaii\u2019s statute).\nSkinner and Lindner gave another reason for not applying the Act to securities transactions. This was that to extend the Act to securities transactions would create overlapping supervision, enforcement, and liability in this area, which is already pervasively regulated by state and federal statutes and agencies. The courts concluded there is enough legislative apparatus already in place to govern securities transactions without also applying the Act. Cf. Bache Halsey Stuart, Inc. v. Hunsucker, 38 N.C. App. 414, 248 S.E.2d 567 (1978), disc. rev. denied, 296 N.C. 583, 254 S.E.2d 32 (1979) (holding for similar, though not identical, reasons that commodities transactions are not covered by the Act).\nThese cases are pertinent because we believe revolving fund certificates are, in essence, corporate securities. Their purpose is to provide and maintain adequate capital for enterprises that issue them. Raeford\u2019s bylaws provide that the purpose of issuing the certificates was to \u201cbuild up . . . capital.\u201d This is the same function served by issuing more conventional corporate securities. Our conclusion in Skinner that the Act does not apply to corporate securities should also extend to revolving fund certificates unless there is good reason to treat the certificates differently.\nThere is one important difference that bears consideration between this revolving fund certificate and more conventional corporate securities. According to the evidence, revolving fund certificates are not subject to the same extensive statutory provisions and administrative regulation that govern more conventional corporate securities. Federal involvement with a cooperative\u2019s issuance of revolving fund certificates is only incidental to the United States Department of Agriculture\u2019s other work. The USDA involvement is largely advisory rather than mandatory.\nBut pervasive regulation by other sources is not the only basis for refusing to apply the Act to securities transactions. Another reason is that the legislature simply did not intend for the trade, issuance and redemption of corporate securities or similar financial instruments to be transactions \u201cin or affecting commerce\u201d as those terms are used in N.C.G.S. \u00a7 75-l.l(a). Subsection (b) of this section of the Act defines the term \u201ccommerce\u201d to mean \u201cbusiness activities.\u201d \u201cBusiness activities\u201d is a term which connotes the manner in which businesses conduct their regular, day-to-day activities, or affairs, such as the purchase and sale of goods, or whatever other activities the business regularly engages in and for which it is organized.\nIssuance and redemption of securities are not in this sense business activities. The issuance of securities is an extraordinary event done for the purpose of raising capital in order that the enterprise can either be organized for the purpose of conducting its business activities or, if already a going concern, to enable it to continue its business activities. Subsequent transfer of securities merely works a change in ownership of the security itself. Again, this is not a business activity of the issuing enterprise. Similarly, retirement of the security by the issuing enterprise simply removes the security from the capital structure. Like issuance and transfer of the security, retirement is not a business activity which the issuing enterprise was organized to conduct.\nSecurities transactions are related to the creation, transfer, or retirement of capital. Unlike regular purchase and sale of goods, or whatever else the enterprise was organized to do, they are not \u201cbusiness activities\u201d as that term is used in the Act. They are not, therefore, \u201cin or affecting commerce,\u201d even under a reasonably broad interpretation of the legislative intent underlying these terms.\nRevolving fund certificates are a cooperative\u2019s functional equivalent of traditional corporate securities. They are capital-raising devices. We conclude, therefore, that, like more conventional securities, issuance or redemption of revolving fund certificates are not \u201cin or affecting commerce\u201d and are not subject to the Act.\nWe reverse the Court of Appeals decision on this issue and reinstate the order of dismissal entered by the trial court.\nIV.\nIn sum, we affirm, for different reasons, the result reached by the Court of Appeals in concluding there was no error in the trial. We reverse the Court of Appeals\u2019 reversal and vacation of the trial court\u2019s dismissal of plaintiff\u2019s unfair practices claim.\nModified and affirmed in part; reversed in part.\n. This claim was dismissed at the 4 August 1986 session of Superior Court, Scotland County, Hairston, J., presiding.\n. The trial was conducted at the 14 December 1987 session of Superior Court, Scotland County, Phillips, J., presiding. '\n. We note the jury\u2019s answer to issue number 2 provides a sufficient, independent basis for sustaining the award of compensatory damages. Dr. Baarda\u2019s challenged testimony did not bear on this issue. We discuss its prejudicial effect nevertheless on the other issues because they are all intertwined with and may have affected the punitive damages award.\n. No issue specifically using the term \u201cbreach of fiduciary duties\u201d was submitted to the jury. However, the jury was asked to determine whether defendants owed plaintiff a fiduciary duty. If the jury so found, it was then required to determine whether defendants had engaged in an \u201copen, fair and honest\u201d transaction. Given the context of the issues, the latter question is the equivalent of asking the jury whether defendants had breached their fiduciary duties.", "type": "majority", "author": "EXUM, Chief Justice." }, { "text": "Justice Martin\ndissenting in part.\nI respectfully dissent from the majority opinion on the issue of unfair commercial practices. I conclude that plaintiff has made out a claim sufficient to survive defendants\u2019 motion under Rule 12(b)(6).\nAs the majority points out, N.C.G.S. \u00a7 75-1.1 protects businesses as well as consumers. This Court has recognized that \u201cunfair trade practices involving only businesses affect the consumer as well.\u201d United Laboratories, Inc. v. Kuykendall, 322 N.C. 643, 665, 370 S.E.2d 375, 389 (1988); see also Manufacturing Co. v. Manufacturing Co., 38 N.C. App. 393, 396, 248 S.E.2d 739, 742 (1978), disc. rev. denied and cert. denied, 296 N.C. 411, 251 S.E.2d 469 (1979) (\u201cG.S. 75-1.1(b) speaks in terms of declaring and providing civil means of maintaining ethical standards of dealings \u2018between persons engaged in business,\u2019 as well as between such persons and the consuming public\u201d).\nAs stated by the majority, it is the law of the ease on this appeal that the certificate at issue represented an equity interest in Raeford and created a fiduciary relationship between the parties. It has been further established that defendants breached that fiduciary relationship when they did not act in an \u201copen, fair and honest\u201d manner when they refused to redeem plaintiff\u2019s certificate. There is no dispute that Raeford had the financial resources to easily redeem the certificate. The company \u201cloaned\u201d more than a million dollars to Johnson, acquired an $800,000 airplane, and had a net income of $6.1 million in fiscal year 1986. Defendants do not attempt to refute the evidence of Raeford\u2019s ability to redeem the certificate.\nThe majority relies heavily upon cases involving securities transactions. However, these cases are inapposite, because they were decided upon the theory that securities transactions were already subject to extensive regulation under state and federal law, and the application of N.C.G.S. \u00a7 75-1.1 would subject such transactions to overlapping- supervision and enforcement. See, e.g., Skinner v. E.F. Hutton & Co., 314 N.C. 267, 333 S.E.2d 236 (1985) (citing Lindner v. Durham Hosiery Mills, Inc., 761 F.2d 162 (4th Cir. 1985)). The certificate at issue is only subject to \u201cincidental\u201d federal involvement of an advisory nature. Therefore, I am unable to conclude that the revolving fund securities in the instant case are essentially corporate securities.\nThe majority cites no authority, and our statute and cases provide none, to support its argument that \u201ccommerce\u201d means only the \u201cregular, day-to-day activities or affairs\u201d of a business. The plain words of the statute state otherwise. The majority makes the startling argument that issuance of the certificates (which the majority now calls \u201csecurities\u201d) is for the purpose of raising capital to conduct its business activities and that this is not a \u201cbusiness activity\u201d within the meaning of the statute. How can raising funds to operate a business not be a business activity?\nFurther, the majority argues that the repayment of debt incurred to operate Raeford was not a business activity. Certainly defendants did not treat their obligation arising on the certificates in a fair and honest businesslike manner. Finally, the majority returns to its argument that the certificates are really corporate securities after all. This entire analysis rings hollow.\nThe acquisition of capital in one form or another is the lifeblood today for business. By holding that the issuance and redemption of certificates, as in this case, are not within the protection of Chapter 75-1.1, the majority loses touch with the reality of the business world. Limiting the meaning of \u201cbusiness activities\u201d to the day-to-day affairs of the business eliminates most of the raising of business capital from the protection of the statute. The most important area of business life is no longer subject to the Act, but the sales of a baker, for example, remain. Surely this could not have been the intent of the legislature.\nI disagree with the majority\u2019s conclusion that the legislature intended to include only day-to-day activities in its definition of \u201ccommerce\u201d as \u201cbusiness activities.\u201d N.C.G.S. \u00a7 75-l.Hb) (1988). The statute in plain words says that \u201ccommerce\u201d includes \u201call business activities.\u201d Id. No matter how one twists it, the issuance of the certificate and defendant\u2019s refusal to redeem it were business activities within the meaning of the Act.\nPlaintiff has alleged that Nash Johnson, a principal of defendant, stated several times that defendant would never redeem plaintiff\u2019s revolving fund certificate; that defendant had failed to redeem plaintiff\u2019s certificate after demand; that defendant has sufficient unencumbered funds to redeem the certificate; and that defendant has redeemed the certificate of Nash Johnson in a greater amount than plaintiff\u2019s certificate. These allegations, together with the other allegations in plaintiff\u2019s complaint, are sufficient to state a cause of action under the statute based upon unfair and deceptive acts.\n\u201cUnfair\u201d is a broader term than \u201cdeceptive.\u201d Jennings Glass Co. v. Brummer, 88 N.C. App. 44, 362 S.E.2d 578 (1987), disc. rev. denied, 321 N.C. 473, 364 S.E.2d 921 (1988). A practice is unfair when it offends public policy as well as when the practice is immoral, unethical, oppressive, unscrupulous, or substantially injurious. Marshall v. Miller, 302 N.C. 539, 276 S.E.2d 397 (1981). An inequitable assertion of power or position may be an unfair act. Libby Hill Seafood Restaurants, Inc. v. Owens, 62 N.C. App. 695, 303 S.E.2d 565, disc. rev. denied, 309 N.C. 321, 307 S.E.2d 164 (1983).\nSurely, it is unfair to redeem a principal\u2019s certificate and to refuse to redeem plaintiff\u2019s when defendant has ample cash resources to do so. This is especially true when the principal whose certificate was redeemed has publicly vowed never to redeem plaintiff\u2019s certificate unless he is forced to do so. Defendant\u2019s conduct toward plaintiff by refusing to refund plaintiff\u2019s certificate was immoral, unethical, oppressive, unscrupulous, substantially injurious, and arose out of a position of power defendant had over plaintiff with respect to the certificate.\nPlaintiff\u2019s pleadings on the claim pursuant to N.C.G.S. \u00a7 75-1.1 are sufficient to withstand defendant\u2019s motion to dismiss. Except as above stated, I concur in the remainder of the majority opinion.", "type": "dissent", "author": "Justice Martin" } ], "attorneys": [ "Adams, McCullough & Beard, by William H. McCullough, Charles C. Meeker, and John J. Butler, for plaintiff-appellee.", "Petree Stockton & Robinson, by G. Gray Wilson and R. Rand Tucker, for defendant-appellants." ], "corrections": "", "head_matter": "THE HAJMM COMPANY v. HOUSE OF RAEFORD FARMS, INC.; E. MARVIN JOHNSON\nNo. 271A89\n(Filed 2 May 1991)\n1. Evidence \u00a7 47 (NCI3d) \u2014 expert testimony on ultimate issues\u2014 erroneously admitted \u2014 not prejudicial\nThere was no prejudicial error in an action arising from defendants\u2019 refusal to redeem a revolving fund certificate in the admission of expert testimony that there was a fiduciary relationship, that defendants breached their duty, and that the Raeford board abused its discretion. Whether there was a fiduciary relationship was the ultimate jural relationship at issue, whether the fiduciary duty was breached was the ultimate legal conclusion, and whether the board abused its discretion involved the satisfaction of the ultimate legal standard. The underlying factual components were the proper subject of expert opinion testimony, but the witness should not have been permitted to give his opinion on the existence of a fiduciary relationship, the breach of the relationship, and the abuse of discretion. However, admission of the testimony was harmless because other substantial admissible testimony, together with documentary evidence, was compelling in favor of plaintiff. N.C.G.S. \u00a7 8C-1, Rules 702 and 704.\nAm Jur 2d, Securities Regulation \u2014 Federal \u00a7\u00a7 35 et seq.; Securities Regulation \u2014 State \u00a7\u00a7 11 et seq.\n2. Unfair Competition \u00a7 1 (NCI3d(\u2014 revolving fund certificate \u2014 failure to redeem \u2014unfair practices not applicable\nThe trial court properly granted a dismissal under N.C.G.S. \u00a7 1A-1, Rule 12(b)(6) of an unfair practices claim arising from the failure to redeem a revolving fund certificate. Revolving fund certificates are, in essence, corporate securities and N.C.G.S. \u00a7 75-1.1 does not apply to securities transactions. Securities transactions are pervasively regulated by other state statutes, federal statutes, and agencies, and securities transactions are related to the creation, transfer, or retirement of capital and are not business activities as that term is used in the Act.\nAm Jur 2d, Securities Regulation \u2014 Federal \u00a7\u00a7 35 et seq.; Securities Regulation \u2014 State \u00a7\u00a7 11 et seq.\nJustice MARTIN dissenting in part.\nAPPEAL by defendants pursuant to N.C.G.S. \u00a7 7A-30(2) from a decision by a divided panel of the Court of Appeals, 94 N.C. App. 1, 379 S.E.2d 868 (1989), finding no error in a verdict and judgment rendered at the 14 December 1987 session of Superior Court, SCOTLAND County, Phillips, J., presiding. Defendants\u2019 petition for discretionary review was allowed as to an additional issue. Heard in the Supreme Court 13 December 1989.\nAdams, McCullough & Beard, by William H. McCullough, Charles C. Meeker, and John J. Butler, for plaintiff-appellee.\nPetree Stockton & Robinson, by G. Gray Wilson and R. Rand Tucker, for defendant-appellants." }, "file_name": "0578-01", "first_page_order": 612, "last_page_order": 631 }