A recent case that went all the way to the NC Court of Appeals confirms that if you deviate from the plain terms of a contract out of pure spite, you may get hit with a jury award for unfair and deceptive trade practices. And if you still don’t take responsibility and you appeal, you are probably going to have to pay even more. Dr. Faucette, a dentist in Charlotte, recently experienced property damage from a pipe that burst in the condo next door to his office. He had insurance that paid for the damage, but he did have to pay a $5,000 deductible out of his own pocket. The LLC that owned the condo where the pipe burst also collected money from their own insurance company, and its payout included $5,000 that was owed to Dr. Faucette.
However, the LLC refused to pay the $5,000 to Dr. Faucette, even after collecting the money from its insurance carrier. Dr. Faucette was forced to sue his neighbor to collect the money. When it came time for his deposition, the neighbor LLC owner admitted that he knew the money belonged to Dr. Faucette but would not pay him because he was “basically pissed off at Dr. Faucette,” because of an entirely different dispute over condominium association dues.
Failure to pay the money out of anger turned out to be the wrong call. The initial jury verdict was for the $5,000 which was then trebled because of violation of the unfair and deceptive trade practices act — plus, the LLC was ordered to pay all of Faucette’s attorneys’ fees of $27,000. On appeal, the Court of Appeals seemed astounded that the LLC appealed. Now the LLC has to pay all the costs of the appeal plus more of Dr. Faucette’s attorneys’ fees.
The lesson for individuals and companies that enter into contracts: Play by the rules and leave your emotions at home.