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Docket Number

No. COA02-191

Attorney(S)

David Q. Burgess for plaintiffs-appellees. Parker Poe Adams Bernstein, L.L.P., by Harvey L. Cosper, Jr., Michael S. Malloy and William L. Esser IV, for defendant-appellant Town and Country Ford, Inc.

Judges

WALKER, Judge.

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Smart Summary

Summary of Opinion: Blankenship and Thompson v. Town and Country Ford, Inc.

Factual and Procedural Background

Plaintiffs Karen Ann Blankenship and Mike Thompson purchased a used vehicle from defendant Town and Country Ford, Inc. (defendant) after defendant bought the vehicle at auction on March 1, 2000. Defendant sold the vehicle to Blankenship on April 30, 2000 for $14,848.50 and provided a North Carolina Damage Disclosure Statement indicating it did not know, nor reasonably should have known, of collision damage exceeding 25% of the vehicle's value. The sales paperwork included an arbitration agreement signed by Blankenship covering certain issues, including alleged unfair trade practices and punitive damages.

Plaintiffs later experienced problems they described as relating to the vehicle's "structural integrity." Assessments by another dealership indicated the vehicle had been in at least one collision causing damage in excess of 25% of its value. Plaintiffs allege attempts to contact defendant by phone in December 2000 and an on-site visit on December 21, 2000, neither of which resolved their concerns.

Plaintiffs filed suit alleging failure to disclose damage under N.C. Gen. Stat. § 20-71.4, fraud, and unfair and deceptive trade practices (N.C. Gen. Stat. § 75-1.1), and sought punitive damages. The clerk entered an entry of default for defendant's failure to appear, answer, or otherwise respond. Plaintiffs moved for default judgment and submitted affidavits establishing the vehicle's purchase price and a lower value at purchase and later appraisal; the trial court entered default judgment on August 6, 2001, awarding compensatory and trebled damages under the cited statutes and attorney fees.

On September 5, 2001, defendant moved to set aside the entry of default and the default judgment. After a hearing the trial court denied defendant's motions, finding proper service of process, that defendant waived arbitration by failing to assert it before default was entered, and that defendant had not shown grounds under Rule 60(b) or Rule 55 to set aside the judgment or default. Defendant appealed. The Court of Appeals affirmed in part, reversed in part, and remanded for further findings on damages.

Legal Issues Presented

Whether the trial court abused its discretion in denying defendant's N.C. Gen. Stat. § 1A-1, Rule 60(b)(4) motion to set aside the default judgment as void for lack of service of process.
Whether the trial court erred in refusing to set aside the entry of default under N.C. Gen. Stat. § 1A-1, Rule 55 (i.e., whether defendant showed "good cause" to set aside entry of default).
Whether the trial court lacked jurisdiction because the parties were subject to mandatory arbitration pursuant to an arbitration agreement signed by plaintiff.
Whether the default judgment was void or irregular because plaintiffs failed to state a claim or failed to comply with N.C. Gen. Stat. § 1-75.11(1) before entry of default judgment (i.e., whether plaintiffs provided adequate proof to establish personal jurisdiction).
Whether the trial court's awards of compensatory and trebled damages under N.C. Gen. Stat. § 75-1.1, § 75-16, § 20-71.4, and § 20-348(a)(1) were duplicative or otherwise unauthorized without requisite findings.

Arguments of the Parties

Defendant's Arguments

The default judgment is void for lack of service of process and should be set aside under Rule 60(b)(4).
The entry of default should be set aside for good cause under Rule 55 because defendant did not willfully default.
The trial court lacked jurisdiction because the parties were subject to a mandatory arbitration agreement concerning the issues raised; defendant contends it should not have been litigated in court.
The default judgment was void and irregular because plaintiffs failed to state a claim and failed to comply with N.C. Gen. Stat. § 1-75.11(1) (requiring proof by affidavit or other evidence of facts needed to establish grounds for personal jurisdiction before entering default judgment).
The damages awarded (compensatory plus trebling under both applicable statutes) are duplicative and not authorized by law without appropriate findings as to statutory violations and intent to defraud.

Plaintiffs' Positions (as reflected in the opinion)

Plaintiffs sought and obtained an entry of default and subsequently default judgment based on defendant's failure to appear, answer, or otherwise respond within the time prescribed by Rule 12(a)(1).
Plaintiffs supported their motion for default judgment with affidavits asserting the vehicle's purchase price ($14,848.50), its actual value at the time of purchase ($6,200), and a later appraisal ($4,900), demonstrating compensable loss in a sum certain ($8,648.50).
Plaintiffs relied on the return of service filed with the clerk to show proper service and on their affidavits to establish grounds for personal jurisdiction under N.C. Gen. Stat. § 1-75.11(1).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court in This Opinion
Gentry v. Hill, 57 N.C. App. 151, 290 S.E.2d 777 (1982)	Standard that the granting of a Rule 60(b) motion is within the trial court's sound discretion and is reviewed only for abuse of discretion.	The court cited Gentry to frame the standard of review for the trial court's denial of defendant's Rule 60(b)(4) motion and upheld the trial court's factual findings when supported by competent evidence.
Clark v. Clark, 301 N.C. 123, 271 S.E.2d 58 (1980)	Definition of "abuse of discretion" — that actions are manifestly unsupported by reason.	The court relied on Clark to explain the narrow scope of appellate review of discretionary trial court rulings (i.e., review for abuse of discretion).
Sawyer v. Goodman, 63 N.C. App. 191, 303 S.E.2d 632 (1983)	If there is competent evidence on both sides of a Rule 60(b) motion, the trial court must evaluate that evidence and its findings supported by competent evidence are conclusive on appeal.	The court applied Sawyer to confirm that because there was competing evidence about service, the trial court's finding of proper service (based on the return of service) is conclusive if supported by competent evidence.
Silverman v. Tate, 61 N.C. App. 670, 301 S.E.2d 732 (1983)	To set aside an entry of default, a defendant must show "good cause"; trial court's decision reviewed for abuse of discretion.	The court cited Silverman to affirm that denial of defendant's motion to set aside the entry of default was a discretionary ruling and that the record did not show an abuse of discretion.
Adams v. Nelsen, 313 N.C. 442, 329 S.E.2d 322 (1985)	Arbitration pursuant to a valid agreement may be compelled only upon application by a party to the agreement; refusal to compel where party failed to apply.	The court cited Adams to support the proposition that defendant, not plaintiffs, was required to apply to compel arbitration and that failure to do so meant the court was not compelled to enforce arbitration.
Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 321 S.E.2d 872 (1984)	Illustrates that arbitration may be compelled upon motion by a party to the arbitration agreement.	The opinion referenced Cyclone Roofing to contrast situations in which courts have compelled arbitration when a party timely seeks it — emphasizing defendant's failure to seek arbitration here.
Wilson v. Sutton, 124 N.C. App. 170, 476 S.E.2d 467 (1996)	Support for the proposition that trebling damages under N.C. Gen. Stat. § 75-16 and § 20-348(a)(1) has been upheld and may not be duplicative in some circumstances.	The court cited Wilson as authority plaintiffs relied upon in support of the trial court's trebling of damages, but found remand necessary because the trial court made no findings on statutory violations or intent to defraud required to support trebling here.
Hunter v. Spaulding, 97 N.C. App. 372, 388 S.E.2d 630 (1990)	Compensatory damages must be demonstrable and capable of being alleged in a sum certain; procedural guidance regarding presentation of evidence for damages and punitive damages issues.	The court cited Hunter to (1) confirm that plaintiffs' affidavits stating a sum certain for compensatory damages are sufficient in principle, and (2) to instruct that on remand parties may present evidence on damages and that trial procedure must allow defendant to present evidence on punitive/remove damages issues as appropriate.

Court's Reasoning and Analysis

The Court of Appeals reviewed several discrete challenges raised by defendant and analyzed each under the applicable standards:

Service of Process (Rule 60(b)(4)): The court observed that the return of service indicated a Mecklenburg County deputy sheriff delivered the summons and complaint to defendant at its place of business and left a copy with the general manager, David Smith. Although defendant submitted affidavits denying receipt, the trial court found proper service based on the return of service. Applying the Rule 60(b) abuse-of-discretion standard (as framed by Gentry and Clark) and the principle that the trial court's findings supported by competent evidence are conclusive on appeal (Sawyer), the appellate court concluded there was competent evidence supporting the trial court's finding of proper service and therefore no abuse of discretion in denying the Rule 60(b)(4) motion to vacate as void for lack of service.
Entry of Default (Rule 55 and Rule 12(a)(1)): Plaintiffs filed for entry of default asserting defendant failed to answer or otherwise respond within thirty days after service as required by Rule 12(a)(1). The court applied Rule 55's requirement that the clerk enter default when a party has failed to plead and Silverman’s "good cause" standard to set aside an entry of default. Reviewing the record under the abuse-of-discretion standard, the appellate court concluded the trial court did not abuse its discretion in denying defendant's motion to set aside the clerk's entry of default.
Arbitration Agreement: The court noted that the record contained an arbitration agreement signed by plaintiff. However, arbitration must be compelled by application of a party to the agreement (citing N.C. Gen. Stat. § 1-567.3 and Adams v. Nelsen). Plaintiffs elected to file suit rather than seek arbitration, and defendant did not timely assert its right to arbitrate before default was entered. The appellate court held that because defendant failed to assert its right to arbitrate, the trial court was not required to enforce arbitration and did not err in denying relief based on the existence of the arbitration agreement.
Default Judgment and Personal Jurisdiction (N.C. Gen. Stat. § 1-75.11(1)): Before entering a default judgment against a defendant who failed to appear, the court is required to have proof by affidavit or other evidence of facts needed to establish grounds for personal jurisdiction. The appellate court found that Blankenship's affidavit, supported by Thompson's affidavit, established the sale of the vehicle by defendant and that defendant was engaged in the business of selling vehicles in the State, thereby satisfying § 1-75.11(1). Consequently, the trial court did not err in refusing to vacate the default judgment on these grounds.
Damages (Compensatory and Treble Awards): The appellate court set out the damages awarded by the trial court: compensatory damages of $8,648.50 for each statutory violation (based on plaintiffs' affidavits stating purchase price and actual value) and trebling under both N.C. Gen. Stat. § 75-16 and § 20-348(a)(1), resulting in a combined monetary judgment plus attorney fees. However, the court noted there were no findings by the trial court regarding (a) whether defendant's conduct constituted an unfair and deceptive trade practice under § 75-1.1, (b) whether defendant failed to disclose damage in violation of § 20-71.4, or (c) whether defendant had an intent to defraud under § 20-348(a)(1). Because such findings are necessary to determine entitlement to trebled damages, the Court of Appeals remanded for the trial court to determine and make findings on those statutory-violation and intent issues and to permit the parties to present evidence on damages consistent with Hunter v. Spaulding.

Holding and Implications

The Court of Appeals issued a mixed disposition:

Core Ruling: Affirmed in part; reversed in part and remanded.

Practical consequences flowing from the court's decision:

The appellate court affirmed the trial court's determinations that (1) service of process was proper such that the trial court had jurisdiction, (2) the entry of default need not be set aside for lack of good cause, and (3) defendant waived any right to compel arbitration by failing to timely assert it.
The court reversed as to the award of trebled damages and remanded the case to the trial court for specific findings on whether defendant's conduct constituted (a) an unfair and deceptive trade practice under N.C. Gen. Stat. § 75-1.1, (b) a failure to disclose damage under N.C. Gen. Stat. § 20-71.4, and (c) an intent to defraud under N.C. Gen. Stat. § 20-348(a)(1). On remand, the trial court must make determinations and permit the parties to present evidence relevant to damages under the applicable statutes.
The opinion does not purport to create a new rule of law; it applies existing statutory and case-law standards to the facts and remands for the trial court to make the factual and legal findings necessary to support (or deny) trebled damages.

Additional note from the opinion: Although the court found the entry of default and default judgment procedurally proper under existing law, the opinion urged the legislature to review the statutes to consider whether notice to a defendant should be required in the circumstances that lead to default and default judgment. This is a policy recommendation rather than a legal holding.

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KAREN ANN BLANKENSHIP and MIKE THOMPSON, Plaintiffs v. TOWN COUNTRY FORD, INC. and FORD CREDIT LEASING COMPANY, INC., Defendants.

2. Judgments — default — motion to set aside entry of default

1. Process and Service — place of business — return of service — default judgment

The trial court did not abuse its discretion in an action for failure to disclose damage to a vehicle under N.C.G.S. § 20-71.4, fraud, and unfair and deceptive trade practices by denying defendant company's N.C.G.S. § 1A-1, Rule 60(b)(4) motion to set aside a default judgment as void for lack of service of process, because: (1) the return of service on the summons and complaint show that it was delivered by a deputy sheriff to defendant at its place of business and that a copy was left with defendant's general manager; and (2) although defendant submitted affidavits from the company's general manager, the receptionist, and the controller denying the receipt of the summons and complaint, the return of service filed with the clerk of court indicated proper service of process.

The trial court did not abuse its discretion in an action for failure to disclose damage to a vehicle under N.C.G.S. § 20-71.4, fraud, and unfair and deceptive trade practices by failing to set aside an entry of default, because defendant failed to answer or otherwise respond to the complaint within thirty days after service of summons and complaint as required by N.C.G.S. § 1A-1, Rule 12(a)(1).

The trial court did not abuse its discretion in an action for failure to disclose damage to a vehicle under N.C.G.S. § 20-71.4, fraud, and unfair and deceptive trade practices by denying defendant's motion to set aside a default judgment even though defendant contends the trial court lacked jurisdiction based on the fact that the parties were subject to mandatory arbitration with respect to issues raised in plaintiffs' complaint, because defendant failed to assert its right to arbitrate.

The trial court did not err in an action for failure to disclose damage to a vehicle under N.C.G.S. § 20-71.4, fraud, and unfair and deceptive trade practices by entering and refusing to vacate a default judgment even though defendant contends that it was void and irregular based on plaintiffs' alleged failure to state a claim and alleged failure to comply with N.C.G.S. § 1-75.11(1), because: (1) plaintiff wife's affidavit, supported by plaintiff husband's affidavit, established the sale of the pertinent vehicle by defendant company who engaged in the business of selling vehicles in North Carolina; and (2) plaintiffs' affidavits demonstrated grounds for personal jurisdiction over defendant and meet the requirements of N.C.G.S. § 1-75.11(1).

The trial court's award of compensatory damages for each of the alleged violations of N.C.G.S. § 75-1.1 and N.C.G.S. § 20-71.4 as well as treble damages awards under both N.C.G.S. § 75-16 and N.C.G.S. § 20-348(a)(1) are remanded for a determination and findings as to whether defendant company's conduct amounts to unfair and deceptive trade practices under N.C.G.S. § 75-1.1 and a violation of N.C.G.S. § 20-71.4 regarding failure to disclose damage to a vehicle, as well as an intent to defraud under N.C.G.S. § 20-348(a)(1).

WALKER, Judge.

Plaintiffs voluntarily dismissed their claims against Ford Credit Leasing Company, Inc. pursuant to N.C. Gen. Stat. § 1A-1, Rule 41(a) prior to entry of the default judgment, leaving Town and Country Ford, Inc. as the sole defendant on appeal.

On 1 March 2000, Town and Country Ford, Inc. (defendant) purchased the subject used vehicle at auction. Defendant sold the vehicle to plaintiff Karen Ann Blankenship (Blankenship) for $14,848.50 on 30 April 2000. As part of the sale, defendant issued Blankenship a North Carolina Damage Disclosure Statement indicating that it neither knew nor reasonably should have known of a collision or other occurrence involving the vehicle resulting in damages in excess of 25 percent of its value at the time of any such collision or occurrence. The record also contains an agreement signed by Blankenship to arbitrate certain issues, including alleged unfair trade practices and punitive damages.

Blankenship and her husband, plaintiff Mike Thompson (Thompson) claimed to experience several problems relating to the "structural integrity" of the vehicle and took it to two other dealerships for an assessment of needed repairs. Employees of one dealership were of the opinion that the vehicle had been involved in at least one collision that had caused extensive damage to the front and rear of the vehicle in excess of 25 percent of the vehicle's value.

In his affidavit, Thompson alleged that he contacted defendant by telephone on 17 December 2000 regarding the problems with the vehicle and whether it had been involved in a collision. Further, he alleges that, in response to his telephone calls, defendant's employees referred him to other employees or failed to return his telephone messages. Thompson also alleges that on 21 December 2000, he and Blankenship went to defendant's dealership to inquire about problems with the vehicle; however, their concerns were not addressed at that time.

Plaintiffs filed suit against defendant, alleging failure to disclose damage to the vehicle pursuant to N.C. Gen. Stat. § 20-71.4 (2001), fraud and unfair and deceptive trade practices and claiming punitive damages. Upon plaintiffs' motion, the clerk of superior court ordered an entry of default against defendant for failure to appear, answer or otherwise respond to the complaint within the time allowed by law. Plaintiffs then filed a motion and notice of hearing for default judgment. In support of the motion for default judgment, Blankenship and Thompson submitted affidavits stating that the vehicle was appraised at $4,900 when they attempted to sell it in August 2001 and that the vehicle was worth only $6,200 at the time of purchase, $8,648.50 below the original purchase price.

The trial court entered default judgment against defendant on 6 August 2001, finding it had violated N.C. Gen. Stat. § 75-1.1 (2001) and N.C. Gen. Stat. § 20-71.4. The judgment also ordered defendant to pay $8,648.50 in compensatory damages for each of the statutory violations and then trebled these damages under both N.C. Gen. Stat. § 75-16 (2001) and N.C. Gen. Stat. § 20-348(a)(1) (2001). The total amount of the judgment was $51,891, plus $3,930 in attorney fees.

On 5 September 2001, after receiving a copy of the default judgment, defendant moved to set aside the entry of default and default judgment. After a hearing, the trial court denied defendant's motion, concluding that defendant was properly served with process giving the trial court jurisdiction, that defendant waived its right to arbitrate by failing to demand it prior to the entry of default and default judgment and that defendant had not shown mistake, inadvertence, surprise, excusable neglect or other extraordinary circumstances to justify setting aside the default judgment under N.C. Gen. Stat. § 1A-1, Rule 60 (2001). Further, defendant had not shown good cause to set aside entry of default under N.C. Gen. Stat. § 1A-1, Rule 55 (2001).

1. Service of Process

Defendant first contends that the trial court erred in denying its motion pursuant to N.C. Gen. Stat. § 1A-1, Rule 60(b)(4) (2001) to set aside the default judgment because it was void for lack of service of process. The granting of a Rule 60(b) motion is within the trial court's sound discretion and is reviewable only for abuse of discretion. Gentry v. Hill, 57 N.C. App. 151, 154, 290 S.E.2d 777, 779 (1982). Abuse of discretion is shown only when "the challenged actions are manifestly unsupported by reason." Clark v. Clark, 301 N.C. 123, 129, 271 S.E.2d 58, 63 (1980) (citation omitted). If there is "competent evidence of record on both sides" of the Rule 60(b) motion, it is the duty of the trial court to evaluate such evidence, Sawyer v. Goodman, 63 N.C. App. 191, 193, 303 S.E.2d 632, 634, disc. review denied, 309 N.C. 823, 310 S.E.2d 352 (1983), and the trial court's findings supported by competent evidence are conclusive on appeal. Gentry, 57 N.C. App. at 154, 290 S.E.2d at 779.

Here, the return of service on the summons and complaint shows that it was delivered by a Mecklenburg County deputy sheriff to defendant at its place of business in Charlotte and that a copy was left with its General Manager, David Smith (Smith). Although defendant submitted affidavits from Smith, its receptionist and its controller denying the receipt of the summons and complaint, the trial court found proper service of process on defendant as indicated by the return of service filed with the clerk of court. Because there is competent evidence in the record to support this finding, we hold the trial court did not abuse its discretion in concluding proper service of process was made on defendant. Therefore, the trial court properly denied defendant's Rule 60(b)(4) motion to set aside the default judgment as void for lack of service of process.

2. Entry of Default

Defendant argues that the trial court erred in failing to set aside the entry of default. On 4 June 2001, plaintiffs' attorney filed a motion for entry of default asserting that defendant had failed to answer or otherwise respond to the complaint within thirty days after service of summons and complaint as required by N.C. Gen. Stat. § 1A-1, Rule 12(a)(1) (2001).

N.C. Gen. Stat. § 1A-1, Rule 55(a) (2001) provides:

When a party against whom a judgment for affirmative relief is sought has failed to plead or is otherwise subject to default judgment as provided by these rules or by statute and that fact is made to appear by affidavit, motion of attorney for the plaintiff, or otherwise, the clerk shall enter his default.

"To set aside an entry of default, good cause must be shown." Silverman v. Tate, 61 N.C. App. 670, 673, 301 S.E.2d 732, 734 (1983). The trial court's decision whether good cause has been shown is reviewable by this Court only for abuse of discretion. Id. Upon careful examination of the record, we conclude the trial court did not abuse its discretion in denying the motion to set aside entry of default.

3. Arbitration Agreement

Defendant next argues that the trial court erred in denying its motion to set aside the default judgment because the trial court lacked jurisdiction since the parties were subject to mandatory arbitration with respect to issues raised in plaintiffs' complaint. Here, the record contains an agreement signed by Blankenship to arbitrate certain issues, including unfair and deceptive trade practices and punitive damages.

Arbitration pursuant to a valid agreement may be compelled by a court only upon application by a party to the agreement. N.C. Gen. Stat. § 1-567.3 (2001); see also Adams v. Nelsen, 313 N.C. 442, 329 S.E.2d 322 (1985) (refusing to compel arbitration where defendants failed to apply to the court to exercise their contractual remedy to arbitrate), Cyclone Roofing Co. v. LaFave Co., 312 N.C. 224, 321 S.E.2d 872 (1984) (compelling arbitration upon motion of a party to agreement).

Plaintiffs chose to file suit against defendant rather than seek arbitration pursuant to the agreement. It was incumbent upon defendant to assert its right to arbitrate. Because defendant failed to assert its right to arbitrate, this Court is not compelled to enforce the arbitration agreement. Moreover, we hold that the trial court did not err in denying the motion to set aside the default judgment based on the existence of an arbitration agreement.

4. Default Judgment

Defendant further contends the trial court erred in entering and refusing to vacate the default judgment because it was void and irregular. Specifically, defendant contends that plaintiffs failed to state a claim and also failed to comply with N.C. Gen. Stat. § 1-75.11(1) (2001).

In cases where a defendant fails to appear within the time allowed by law and personal jurisdiction is claimed over defendant, the court shall, before entering default judgment, require "proof by affidavit or other evidence, to be made and filed, of the existence of any fact not shown by verified complaint which is needed to establish grounds for personal jurisdiction over the defendant." N.C. Gen. Stat. § 1-75.11(1).

Here, Blankenship's affidavit, supported by Thompson's affidavit, establishes the sale of this vehicle by defendant, who is engaged in the business of selling vehicles in this State. Thus, plaintiffs' affidavits demonstrate grounds for personal jurisdiction over defendant and meet the requirements of N.C. Gen. Stat. § 1-75.11(1).

5. Damages

Defendant further contends the trial court's award of compensatory damages for each of the alleged violations of N.C. Gen. Stat. § 75-1.1 and N.C. Gen. Stat. § 20-71.4, as well as treble damages awards under both N.C. Gen. Stat. § 75-16 and N.C. Gen. Stat. § 20-348(a)(1) are duplicative and not authorized by law.

In its default judgment, the trial court awarded damages as follows: "1. $25,945.50 for violation of N.C. Gen. Stat. § 75-1.1, consisting of compensatory damages of $8,648.50, which are hereby trebled pursuant to N.C. Gen. Stat. § 75-16; 2. $25,945.50 for violation of N.C. Gen. Stat. § 20-71.4, consisting of compensatory damages of $8,648.50, which are hereby trebled pursuant to N.C. Gen. Stat. § 20-348(a)(1);. . . ."

A plaintiff is entitled to compensatory damages which "are demonstrable and capable of being alleged in a sum certain by a plaintiff." Hunter v. Spaulding, 97 N.C. App. 372, 380, 388 S.E.2d 630, 635 (1990). Here, Blankenship's affidavit stated the purchase price of the vehicle as $14,848.50 and established the actual value of the vehicle at the time of the purchase as $6,200, amounting to a difference of $8,648.50.

To support the trial court's award of treble damages under both statutes, plaintiff cites Wilson v. Sutton, 124 N.C. App. 170, 476 S.E.2d 467 (1996), disc. review denied, 345 N.C. 354, 483 S.E.2d 192 (1997), for the proposition that trebling damages under N.C. Gen. Stat. § 75-16 and N.C. Gen. Stat. § 20-348(a)(1) has been upheld by this Court as not being duplicative. In Wilson, the jury found that:

(1) the van had been damaged in excess of twenty-five percent of its fair market retail value; (2) the Sutton defendants failed to disclose this fact to plaintiffs in writing, and intended to defraud plaintiffs; and (3) plaintiffs were injured as a proximate result of the Sutton defendants' conduct in the amount of $3,300.00.

Wilson, supra, at 173, 476 S.E.2d at 469.

Here, there are no findings by the trial court regarding whether defendant's conduct amounts to an unfair and deceptive trade practice under N.C. Gen. Stat. § 75-1.1, a failure to disclose damage to the vehicle in violation of N.C. Gen. Stat. § 20-71.4 or an intent to defraud under N.C. Gen. Stat. § 20-348(a)(1). Without these findings, we are unable to determine whether defendant's conduct entitles plaintiff to damages under the applicable statutes.

Therefore, we 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. See Hunter, supra (holding that, in a case alleging unfair and deceptive trade practices and fraud and resulting in default judgment on the fraud claim, the trial court erred by submitting the punitive damages question to the jury without permitting defendant to put on evidence).

Although the record here shows that defendant was properly served and plaintiff followed existing law in obtaining both the entry of default and default judgment without notice to defendant, we urge the legislature to review the applicable statutes to again determine whether in each instance, before obtaining entry of default and before obtaining a default judgment, notice to defendant should be required.

Affirmed in part; reversed in part and remanded.

Judges McCULLOUGH and CAMPBELL concur.

BLANKENSHIP v. TOWN COUNTRY FORD