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Case Summary — Blankenship v. Town and Country Ford, Inc., No. COA04-702 (N.C. Ct. App. filed Dec. 6, 2005)

Factual and Procedural Background

Plaintiffs Karen Ann Blankenship and Mike Thompson sued defendant Town and Country Ford after purchasing a used 1999 Chevrolet Cavalier that they allege had prior collision damage which defendant failed to disclose. The vehicle was purchased "as is" after the dealer had acquired it at auction. Plaintiffs experienced multiple mechanical and structural problems and a technician later documented physical damage to the vehicle.

Plaintiffs filed suit in April 2001 alleging violations of N.C. Gen. Stat. § 20-71.4 (damage disclosure), N.C. Gen. Stat. § 75-1.1 (unfair and deceptive trade practices), and N.C. Gen. Stat. § 20-348(a) (intent to defraud). Defendant failed to answer and the trial court entered default judgment on August 6, 2001, awarding trebled damages and attorney fees. This Court issued an opinion on December 31, 2002 (Blankenship I) and remanded. On remand the trial court limited proceedings largely to damages, found defendant violated the statutes, and again awarded trebled damages and attorney fees. Defendant appealed. The Court of Appeals affirmed in part and vacated and remanded in part (decision filed December 6, 2005).

Legal Issues Presented

  1. Whether the trial court erred by refusing to allow defendant a hearing on whether its conduct violated the statutes at issue after remand.
  2. Whether allegations in plaintiffs' complaint that were pleaded "upon information and belief" may be treated as admitted following entry of default.
  3. Whether the trial court abused its discretion by limiting discovery on remand to issues relating to damages and certain statutory elements.
  4. Whether plaintiffs may recover trebled damages under both N.C. Gen. Stat. § 20-348(a) and Chapter 75 for the same underlying conduct (i.e., whether multiple treble awards are permissible or whether election of remedies applies).
  5. Whether the trial court erred in refusing to offset plaintiffs' damages award by the value plaintiffs received from use of the vehicle.
  6. Whether the trial court abused its discretion in awarding attorney fees and whether the requisite findings to support such an award were made.

Arguments of the Parties

Defendant's Arguments

  • The trial court erred by refusing to permit a hearing on whether defendant's conduct violated the statutes; defendant sought discovery and to present evidence on liability but was restricted.
  • The court erred in treating plaintiffs' complaint allegations as admitted because several allegations were pleaded upon "information and belief" and, defendant contended, only "well-pled factual allegations" should be admitted by default.
  • The court abused its discretion in limiting discovery after remand and in refusing to allow certain evidence; this deprivation required a further hearing.
  • The court improperly awarded treble damages under both N.C. Gen. Stat. § 20-348(a) and Chapter 75, resulting in impermissible double recovery.
  • The court should have offset damages by the value plaintiffs received from use (plaintiffs had driven the car about 87,000 miles), citing Taylor v. Volvo.
  • The attorney fees awarded were unreasonable (contesting amount and proper exercise of discretion in awarding them).

Plaintiffs' Arguments

  • Plaintiffs relied on their complaint, sworn affidavits, and expert testimony on remand; the complaint's allegations (including those stated on information and belief) were properly treated as admitted following default.
  • Plaintiffs maintained that the remand should be limited to damages because liability had been established by default; they presented evidence on damages as permitted by the remand order.
  • Plaintiffs argued that prior authorities (cited in their brief, including Wilson v. Sutton and Washburn v. Vandiver) supported the recovery awarded, although the Court of Appeals evaluated the applicability of those cases.
  • Plaintiffs relied on Taylor v. Volvo to support the trial court's method of calculating damages and its refusal to offset for use in the specific context here.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Bell v. Martin, 299 N.C. 715, 264 S.E.2d 101 (1980) After default, substantive allegations of the complaint are deemed admitted for purposes of default judgment. The court relied on Bell to hold that defendant's failure to answer resulted in admission of plaintiffs' allegations, supporting the trial court's findings on remand.
Kirby v. Asheville Contracting Co., 11 N.C. App. 128, 180 S.E.2d 407 (1971) Findings of fact made on a motion to set aside a judgment by default are binding on appeal if supported by any competent evidence. Used to support that the trial court's findings on remand are binding if supported by competent evidence.
Norton v. Sawyer, 30 N.C. App. 420, 227 S.E.2d 148 (1976) Same principle: appellate binding effect of findings supported by competent evidence. Reinforced the proposition that the trial court's factual findings are conclusive if supported by competent evidence.
Spartan Leasing Inc. v. Pollard, 101 N.C. App. 450, 400 S.E.2d 476 (1991) After entry of default, defendant is deemed to have admitted allegations and is prohibited from defending on the merits. Supported the trial court's discretion to limit discovery and to treat liability as established by default.
Hudson v. Hudson, 34 N.C. App. 144, 237 S.E.2d 479 (1977) Orders regarding discovery are within trial court discretion and reversible only for abuse of discretion. Applied to conclude the trial court did not abuse discretion in limiting discovery on remand.
Rule 26(b)(1), N.C. Gen. Stat. § 1A-1 Discovery may be obtained regarding any matter not privileged that is relevant to the subject matter involved in the pending action. Cited to describe the general scope of discovery and to frame the court's discretion in limiting discovery after default.
Bowers v. Olf, 122 N.C. App. 421, 470 S.E.2d 346 (1996) An appellant must show prejudice from an erroneous evidentiary ruling to obtain a new trial. Used to hold defendant failed to show prejudice from exclusion of evidence and thus was not entitled to relief on that basis.
United Laboratories v. Kuykendall, 335 N.C. 183, 437 S.E.2d 374 (1993) Doctrine of election of remedies: a party may not recover twice based on the same conduct. Applied to conclude plaintiffs could not recover trebled damages under both statutory remedies for the same conduct; the Court vacated that portion of the award and remanded for an election.
Stanley v. Moore, 339 N.C. 717, 454 S.E.2d 225 (1995) Where statutory violation and unfair and deceptive trade practice claim arise from same conduct, plaintiff faces election of remedies. Supported the conclusion that plaintiffs must elect a single remedy when recovery arises from the same conduct.
Wilson v. Sutton, 124 N.C. App. 170, 476 S.E.2d 467 (1996) Addressed a denial of judgment notwithstanding the verdict (contextual precedent cited by plaintiffs). Court found Wilson did not control the multiple-treble-damages question presented here.
Washburn v. Vandiver, 93 N.C. App. 657, 379 S.E.2d 65 (1989) Upheld multiple awards where a statute (N.C. Gen. Stat. § 20-348) specifically authorized additional remedies. Distinguished because the statutes in the present case contain no language authorizing multiple recoveries.
Taylor v. Volvo North America Corp., 339 N.C. 238, 451 S.E.2d 618 (1994) In calculating damages, any benefit received must be deducted before trebling; in a lease context the benefit was use, whereas for ownership the benefit is the value of the car. Interpreted to support the trial court's damages calculation here (no offset for use was required in the same manner as in a lease); the court held trial court calculated damages correctly.
Barbee v. Atlantic Marine Sales Serv., 115 N.C. App. 641, 446 S.E.2d 117 (1994) Under § 75-16.1, findings must show willfulness, unwarranted refusal to resolve, and that the attorney fee is reasonable; decision to award fees rests within trial judge discretion. Applied to conclude the trial court made the requisite findings and did not abuse its discretion in awarding attorney fees.
Shumaker v. Shumaker, 137 N.C. App. 72, 527 S.E.2d 55 (2000) Amount of attorney fees awarded under § 75-16.1 is reviewed for abuse of discretion. Used to support the court's conclusion that the attorney fee award was within the trial court's discretion.
Blankenship v. Town and Country Ford (Blankenship I), 155 N.C. App. 161, 574 S.E.2d 132 (2002) Remand instruction: determine and find whether defendant's conduct amounts to violations of applicable statutes and allow evidence on damages on remand. The Court interpreted and applied the remand instruction in evaluating whether the trial court complied with the mandate and whether the remand hearing properly addressed damages.

Court's Reasoning and Analysis

The Court of Appeals proceeded through a sequence of legal determinations grounded in statutory rules and precedent from North Carolina authorities:

  1. Default admissions and admissibility of allegations: The court began with the well-established rule that when a defendant fails to answer and default is entered, the substantive allegations in the complaint are deemed admitted (citing Bell v. Martin). The trial court on remand incorporated plaintiffs' complaint into its findings "word for word." The court found these adopted allegations, together with plaintiffs' sworn affidavits and expert testimony heard at the remand hearing, provided competent evidence to support the trial court's factual findings. Defendant's argument that allegations pleaded on "information and belief" cannot support a default judgment failed because defendant cited no North Carolina authority establishing such a rule; thus the court rejected the argument.
  2. Scope of remand, discovery, and evidentiary limitations: The Court recited the remand instruction from Blankenship I, which allowed the parties to present evidence relating to damages. The trial court limited discovery and framed the hearing to focus on damages because liability had been established by default. The appellate court treated discovery orders as committed to the trial court's discretion (citing Hudson v. Hudson and Rule 26(b)(1)) and concluded the trial court did not abuse that discretion in limiting discovery to the issues the remand permitted. Regarding exclusion of evidence or denial of a further hearing on liability, the court emphasized that the defendant failed to show prejudice from these rulings, a necessary prerequisite to relief on evidentiary error (citing Bowers v. Olf).
  3. Multiple treble damages and election of remedies: Having accepted the trial court's finding that defendant's conduct violated both § 20-71.4 and Chapter 75, the court addressed whether plaintiffs could recover trebled damages under both § 20-348(a) and Chapter 75. Applying the election-of-remedies doctrine articulated in United Laboratories v. Kuykendall and extended in Stanley v. Moore to statutory and Chapter 75 claims, the court concluded the statutes here contain no language authorizing multiple recoveries for the same conduct. The court distinguished plaintiffs' reliance on Wilson and Washburn: Wilson did not address the issue of multiple trebled awards, and Washburn rested on statutory language unique to § 20-348 that authorized additional remedies. Consequently, the court held plaintiffs could not recover trebled damages twice for the same wrongdoing; it vacated that portion of the award and remanded for plaintiffs to elect a remedy.
  4. Damages calculation and offset for use: Addressing defendant's contention that the award should be offset to account for the benefit plaintiffs received from using the vehicle (they drove it approximately 87,000 miles), the court reviewed de novo and analyzed Taylor v. Volvo. Taylor requires that benefits received be deducted before trebling damages, and it recognized that in a lease the benefit is use while for ownership the benefit is the value of the car. The Court interpreted Taylor as supporting the trial court's calculation here and concluded the trial court correctly declined to offset based on use in the manner defendant urged.
  5. Attorney fees: The Court reviewed the award of fees under N.C. Gen. Stat. § 75-16.1 for abuse of discretion, noting the trial court must make specific findings that the defendant willfully engaged in the violation, refused to resolve the matter, and that the fee awarded was reasonable (citing Barbee). The Court found the trial court made the requisite findings and did not abuse its discretion in awarding attorney fees; it also referenced Shumaker for the standard of review on fee amount.

Holding and Implications

The Court of Appeals rendered a mixed disposition:

Holding: The judgment of the trial court is AFFIRMED IN PART and VACATED AND REMANDED IN PART.

Direct consequences and instructions to the trial court:

  • The trial court's factual findings on remand (adopting the complaint and relying on affidavits and expert testimony) stand as supported by competent evidence; the court did not err in treating allegations as admitted after default or in limiting discovery and the remand hearing to damages.
  • The award of trebled damages under both N.C. Gen. Stat. § 20-348(a) and Chapter 75 for the same conduct was vacated; plaintiffs must elect between the two remedies on remand (i.e., they cannot recover multiple trebled awards for the same wrongdoing).
  • The trial court's method of calculating damages without offsetting for plaintiffs' use (as opposed to offsetting the value of the vehicle in ownership contexts) was upheld as consistent with Taylor v. Volvo.
  • The award of attorney fees under N.C. Gen. Stat. § 75-16.1 and § 20-348(a)(2) was upheld because the trial court made the necessary findings and did not abuse its discretion regarding the fee award.

Broader implications: The opinion enforces existing North Carolina principles regarding default admissions, discretionary control over discovery, the election-of-remedies doctrine to prevent double recovery, and the necessary findings to support an award of attorney fees under § 75-16.1. The court did not articulate a new rule of law; rather, it applied established precedent to the facts of this remanded default-judgment case.

Disposition: Affirmed in part; vacated and remanded in part.

KAREN ANN BLANKENSHIP AND MIKE THOMPSON, PLAINTIFFS v. TOWN AND COUNTRY FORD, INC., DEFENDANT.

2. Discovery — limited by court — no abuse of discretion

1. Pleadings — information and belief — admitted by default judgment

There is no North Carolina law to preclude the entry of default judgment where the allegations are based on information and belief. Here, the trial court did not err by finding on remand that defendant had admitted the allegations in plaintiff's complaint; in addition to the complaint, plaintiff submitted sworn affidavits and the court heard evidence from experts on both sides.
After entry of default, the defendant is deemed to have admitted the allegations of the complaint. Here, the trial court did not abuse its discretion by limiting discovery after remand of a default judgment in an action involving a used car with prior damage alleged to be undisclosed.
The trial court did not err by limiting the evidence to damages on a hearing after remand of a default judgment. The court made the required findings that defendant had violated the relevant statutes (based on allegations deemed admitted by the default), and those findings were supported by plaintiffs' affidavits as well as evidence introduced at the hearing. Moreover, defendant did not show prejudice.
The trial court erred in an action involving a used car by awarding plaintiffs treble damages under both N.C.G.S. § 20-348(a) and Chapter 75. The applicable statutes do not contain language authorizing multiple recoveries; plaintiffs are required to elect their remedy.
The trial court did not err when calculating damages for a used car sold with an undisclosed collision by refusing to offset the value plaintiffs received from use of the vehicle. The court's decision is supported by Taylor v. Volvo North America Corp., 339 N.C. 238.
6. Costs attorney fees — findings — no abuse of discretion
The trial court made the requisite findings and did not abuse its discretion when awarding attorney fees pursuant to N.C.G.S. § 20-348(a)(2) and N.C.G.S. § 75-16.1.

HUDSON, Judge.

In April 2001, plaintiffs brought suit against defendant for claims arising from defendant's failure to disclose prior damage to a used car defendant sold to plaintiffs. Upon plaintiffs' motion, the trial court entered default judgment against defendant in August 2001 and awarded trebled compensatory damages and attorney fees to plaintiffs. This Court entered an opinion on 31 December 2002, which affirmed in part and reversed in part. Blankenship v. Town and Country Ford, 155 N.C. App. 161, 574 S.E.2d 132 (2002), disc. rev. denied, 357 N.C. 61, 579 S.E.2d 384 (2003) (Blankenship I). The trial court heard the remanded case on 2 September 2003 and entered judgment on 3 October 2003, finding that defendant's conduct did violate the statutes in question and again awarding trebled compensatory damages and attorney fees. Defendant appeals. For the reasons discussed below, we affirm in part, and vacate and remand in part.

The evidence tends to show that on 1 March 2000, defendant bought a used 1999 Chevrolet Cavalier (the vehicle) at an auto auction. Defendant then sold the vehicle to plaintiff Blankenship for $12,566 "as is." Defendant provided a "Damage Disclosure Statement" as required by North Carolina law and answered "no" to the question of whether the vehicle had "been damaged by collision or other occurrence to the extent that damages exceed 25% of its value at the time of the collision or other occurrence." After purchase, plaintiffs began to experience numerous problems with the vehicle, including a popping sound coming from the right front during left turns, a "right pull" during left turns, a radiator leak, water leaking into the trunk, and a door that was difficult to open. In February 2001, plaintiff Thompson took the vehicle to Spruill Chevrolet-General Motors, where the technician documented "physical damage to rear of car — bondo [a patching material] in side trunk," and "physical damage to front of car, fenders, bolts loose, etc."

Plaintiffs filed a complaint against defendant on 5 April 2001. Plaintiffs alleged that defendant violated the Motor Vehicle Act, N.C. Gen. Stat. § 20-71.4, by failing to disclose that the vehicle sustained damage in a collision in excess of 25% of its value; that such failure to disclose constituted an unfair and deceptive trade practice in violation of N.C. Gen. Stat. § 75-1.1; and that defendant's failure to disclose was committed with "intent to defraud," thus giving rise to a claim under N.C. Gen. Stat. § 20-348(a). Defendant failed to respond to plaintiffs' complaint and default judgment was entered on 6 August 2001, for $55,281, which consisted of damages trebled under §§ 75-16 and 20-348(a), plus attorney fees. As discussed, this Court then remanded the case after defendant's first appeal. On remand, the trial court limited the evidence on remand to the issue of damages, as it concluded that defendant had admitted liability with the entry of default judgment. It heard evidence from experts for both parties regarding the value of the car and the amount of damages. The trial court found that defendant's conduct violated both statutes and again awarded trebled damages and attorney fees, totaling $79,983.

In its brief, defendant first contends that the trial court erred by refusing to allow it a hearing regarding whether its conduct violated the various statutes. Defendant next contends that the trial court erred in finding that defendant admitted the allegations of plaintiffs' complaint as a result of the entry of default judgment. We disagree with both arguments and address defendant's second argument first.

When default is entered due to defendant's failure to answer, as here, "the substantive allegations raised by plaintiff's complaint are no longer in issue, and, for the purposes of entry of default and default judgment, are deemed admitted." Bell v. Martin, 299 N.C. 715, 721, 264 S.E.2d 101, 105 (1980) (internal citation omitted). Here, on remand, the trial court; adopted plaintiffs' complaint by reference and made it part of the findings of fact, "word for word." Findings of fact made by the trial court upon a motion to set aside a judgment by default are binding on appeal if supported by any competent evidence. Kirby v. Asheville Contracting Co., 11 N.C. App. 128, 132, 180 S.E.2d 407, 410, cert. denied, 278 N.C. 701, 181 S.E.2d 602 (1971); Norton v. Sawyer, 30 N.C. App. 420, 422, 227 S.E.2d 148, 151, disc. review denied, 291 N.C. 176, 229 S.E.2d 689 (1976).

Defendant contends that the trial court's adoption of plaintiffs' complaint was improper because the complaint was based upon information and belief and only "well-pled factual allegations" are admitted by default. However, defendant cites no North Carolina law in support of this argument. Although defendant cites cases from other jurisdictions, our research reveals no North Carolina statutes or caselaw which preclude a trial court from entering default where the allegations are based upon information and belief. Furthermore, in addition to the plaintiffs' complaint, the plaintiffs submitted sworn affidavits, and the trial court heard evidence on remand from experts on both sides regarding the damage to the vehicle. We conclude that the trial court's findings of fact are supported by competent evidence.

Defendant also asserts that the trial court "refused to permit a hearing" and did not comply with the mandate of this Court because it denied defendant's request for discovery and its attempts to introduce certain evidence. We disagree. This Court stated:

[W]e remand this case to the trial court for a determination and findings as to whether defendant's conduct amounts to an unfair and deceptive trade practice under N.C. Gen. Stat. § 75-1.1 and a violation of N.C. Gen. Stat. § 20-71.4, as well as an intent to defraud under N.C. Gen. Stat. § 20-348(a)(1). On remand, plaintiffs and defendant may present evidence on issues relating to damages under the applicable statutes.
Blankenship I, 155 N.C. App. at 168, 579 S.E.2d at 136. On remand, defendant requested discovery and plaintiffs filed a protective order in response. The trial court allowed discovery "solely on the issues of whether Defendant's conduct amounts to an unfair or deceptive trade practice under N.C. Gen. Stat. § 75-1.1 and a violation of N.C. Gen. Stat. § 20-71.4 with intent to defraud under N.C. Gen. Stat. § 20-348(a)(1)."

"It is a general rule that orders regarding matters of discovery are within the discretion of the trial court and will not be upset on appeal absent a showing of abuse of discretion." Hudson v. Hudson, 34 N.C. App. 144, 145, 237 S.E.2d 479, 480, disc, review denied, 293 N.C. 589, 239 S.E.2d 264-65 (1977) (internal citation omitted). Rule 26(b)(1) of the Rules of Civil Procedure provides that a party "may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party[.]" N.C. Gen. Stat. § 1A-1, Rule 26(b)(1) (2003). As discussed, after an entry of default against a defendant, he or she "is deemed to have admitted the allegations in plaintiffs complaint, and is prohibited from defending on the merits of the case." Spartan Leasing Inc. v. Pollard, 101 N.C. App. 450, 460, 400 S.E.2d 476, 482 (1991) (citing N.C. Gen. Stat. § 1A-1, Rule 8(d)) (internal citation omitted). We conclude that the trial court did not abuse its discretion in limiting discovery.

Defendant also contends that the trial court erred by refusing to allow it to present evidence regarding whether its conduct violated the statutes at issue, but was only allowed to introduce evidence regarding compensatory damages. The trial court stated that the hearing would be limited to evidence regarding damages, as the issue of liability had already been decided. We remanded for findings of fact regarding whether defendant's conduct violated the statutes. On remand, the trial court made such findings, based on the plaintiffs' allegations which were deemed admitted upon defendant's default, as discussed above. As discussed, the trial court's findings of fact here are binding on appeal if supported by any competent evidence. Our review of the record, specifically the affidavits of plaintiffs in support of their motion for judgment by default, as well as the evidence introduced at the hearing on remand, indicate competent evidence supports the trial court's findings of fact. Thus, these findings are conclusive on appeal.

We conclude that the trial court was not required to take further evidence on these matters. Indeed, this Court explicitly stated that on remand the parties could present evidence regarding damages, which is what the court did. Furthermore, in their argument regarding the exclusion of evidence, defendant fails to show prejudice. In a civil case such as this

not every erroneous ruling on the admissibility of evidence . . . will result in a new trial. The moving party has the burden to show not only that the trial court erred, but also to show that he or she was prejudiced and that a different result would have likely resulted had the error not have occurred.
Bowers v. Olf, 122 N.C. App. 421, 427, 470 S.E.2d 346, 350 (1996) (ellipses in original) (internal citations and quotation marks omitted). Defendant has shown no prejudice.

Defendant also contends that the trial court erred in awarding plaintiffs treble damages under both N.C. Gen. Stat. § 20-348(a) and again under Chapter 75. We agree. In Blankenship I, this Court remanded to the trial court for findings of fact so that this Court could determine whether damages were appropriate under the applicable statutes but did not decide whether multiple awards of treble damages were permissible. Now that the trial court has made findings of fact that defendant's conduct violated both statutes, we must address whether plaintiffs may recover damages under both statutes.

Defendant argues that the trial court awarded damages to plaintiffs twice for the same wrong and that plaintiffs are not entitled to "double recovery." In United Laboratories v. Kuykendall, the North Carolina Supreme Court held that pursuant to the doctrine of election of remedies, a party may not recover twice based on the same conduct. 335 N.C. 183, 191, 437, S.E.2d 374, 379 (1993).

Where the same source of conduct gives rise to a traditionally recognized cause of action, as, for example, an action for breach of contract, and as well gives rise to a cause of action for violation of G.S. 75-1.1, damages may be recovered either for the breach of contract, or for violation of G.S. 75-1.1, but not for both.
Id. (internal citation omitted). Although Kuykendall involved a common law and a Chapter 75 claim, our Supreme Court has also held that in a case involving a statutory violation and an unfair and deceptive trade practice claim plaintiff faces an election of remedies for recovery based upon the same conduct or transaction. Stanley v. Moore, 339 N.C. 717, 724, 454 S.E.2d 225, 229 (1995). Here, the Court's conclusions of law reveal that the Court awarded damages and treble damages for the same conduct:

[Defendant] failed to disclose in writing to the Plaintiffs before the time of transfer that the automobile had been involved in a collision or occurrence involving the vehicle resulting in twenty-five percent (25%) of its fair market value.

The court then concluded that this conduct violated N.C. Gen. Stat. § 20-71.4(a) and also N.C. Gen. Stat. § 75.1.1 and awarded treble damages pursuant to each statute.

Plaintiffs argue that Wilson v. Sutton, 124 N.C. App. 170, 476 S.E.2d 467 (1996), and Washburn v. Vandiver, 93 N.C. App. 657, 379 S.E.2d 65 (1989), control here. However, we conclude that neither case controls. In Wilson, the Court addressed whether the trial court erred in denying defendant's motion for judgment notwithstanding the verdict, not whether the trial court's awards of treble damages were permissible. Id. In Washburn, the Court upheld multiple awards based on N.C. Gen. Stat. § 20-348, which specifically authorized state statutory remedies in addition to federal odometer law remedies. 93 N.C. App. at 663, 379 S.E.2d at 69. Here, the applicable statutes contain no similar language authorizing multiple recoveries. We conclude that plaintiffs were required to elect between the two remedies and we therefore vacate this portion of the trial court's order and remand for the plaintiffs to elect between the two awards.

Defendant also contends that the trial court erred in refusing to offset the value plaintiffs received from use of the vehicle against the award of damages. As this is a matter of law, we review this contention de novo. At the time of the hearing, plaintiffs had driven the vehicle 87, 000 miles since their purchase. The trial court calculated damages by calculating the difference between the amount paid and the vehicle's actual value, but did not offset the amount by the plaintiffs' use. Defendant cites Taylor v. Volvo North America Corp. in support of its argument that the court was required to offset for use. 339 N.C. 238, 451 S.E.2d 618 (1994). However, we read Taylor as supporting the actions of the trial court here. We note that Taylor involved the Warranties Act, N.C. Gen. Stat. § 20-351, and a leased car, rather than Chapter 75 and an owned vehicle, as here. Id. But Taylor did address the calculation of damages, holding that any benefit received must be deducted before trebling damages. Id. at 261, 451 S.E.2d at 631. And, in Taylor, the Court held that the benefit received was usage, as the car was leased. Id. However, the Court noted that in a case where the car is owned, the benefit is the value of the car. Id. (citing Washburn). Thus, under Taylor, the trial court calculated damages correctly here.

Finally, defendant argues that the trial court erred in awarding unreasonable attorney fees. The trial court here awarded attorney fees to plaintiff pursuant to N.C. Gen. Stat. §§ 20-348(a)(2) and 75-16.1 Under N.C. Gen. Stat, § 75-16.1, a prevailing party may recover a reasonable attorney fee upon a finding by the trial court that "the party charged with the violation has willfully engaged in the act or practice, and there was an unwarranted refusal by such party to fully resolve the matter which constitutes the basis of such suit. . . ." N.C. Gen. Stat. § 75-16.1; Barbee v. Atlantic Marine Sales Serv., 115 N.C. App. 641, 648, 446 S.E.2d 117, 121, disc, review denied, 337 N.C. 689, 448 S.E.2d 516 (1994). The decision whether or not to award attorney fees under section 75-16.1 rests within the sole discretion of the trial judge. Barbee at 648, 446 S.E.2d at 121. And if fees are awarded, the amount also rests within the discretion of the trial court and we review such awards for abuse of discretion. Shumaker v. Shumaker, 137 N.C. App. 72, 78, 527 S.E.2d 55, 59 (2000). However, when awarding fees pursuant to N.C. Gen. Stat. § 75-16.1, the court must make specific findings of fact that the actions of the party charged with violating Chapter 75 were willful, that it refused to resolve the matter fully, and that the attorney fee was reasonable. Barbee at 648, 446 S.E.2d at 121-22. Here, the court made such findings. On appeal, the record must also contain findings regarding the attorney fees, such as: "findings regarding the time and labor expended, the skill required to perform the services rendered, the customary fee for like work, and the experience and ability of the attorney." Id. (internal citations omitted). Our review of the record reveals that the trial court made the requisite findings and we conclude that it did not abuse its discretion.

Affirmed in part.

Vacated and remanded in part.

Judges WYNN and STEELMAN concur.

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BLANKENSHIP v. TOWN
(Dec 1, 2005)