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Ke v. Zhou

Court of Appeals of North Carolina

November 21, 2017

SHENG YU KE a/k/a STEVEN KE and DUAN Z. ZHANG a/k/a SHIRLEY KE, Plaintiffs,
v.
HENG-QIAN ZHOU a/k/a RAY ZHOU, and SEVEN SEAS, CONTRACTORS, INC., Defendants.

          Heard in the Court of Appeals 10 August 2017.

         Appeal by Defendants from judgment entered 6 June 2016 and appeal by Plaintiffs from order entered 6 June 2016 by Judge Richard S. Gottlieb in Guilford County No. 15 CVS 3736 Superior Court.

          Sigmon Klein, PLLC, by Grant Sigmon, for the Plaintiffs-Appellees/Cross-Appellants.

          Bennett & Guthrie, P.L.L.C., by Joshua H. Bennett, for the Defendants-Appellants/Cross-Appellees.

          DILLON, JUDGE.

         This dispute arose from a contractual relationship between Plaintiffs and Defendants. Plaintiffs are the owners of a restaurant in Winston-Salem. Defendant Zhou is the owner and operator of Defendant Seven Seas Contractors, Inc. ("Seven Seas"). All parties have appealed from separate orders of the trial court. Defendants appeal from judgment entered upon a jury verdict finding that Plaintiffs were entitled to damages for fraudulent acts committed by Defendants. Plaintiffs appeal from the trial court's order denying Plaintiffs' request for attorney's fees.

         I. Background

         The evidence presented at trial tended to show as follows:

         In 2014, Plaintiffs entered into an agreement with Defendants to convert property owned by Plaintiffs into a restaurant. Defendant Zhou held himself and his company out to be a licensed general contractor, despite the fact that Defendants held no such license. Rather, Defendant Zhou intended to obtain the necessary permits under the name of an acquaintance who purportedly was licensed.

         At some point during the project's progress, the City became aware that Defendant Zhou was performing the project work without supervision of a licensed contractor. At a meeting with the City, Defendant Zhou indicated that he would have no problem finding another contractor under whom he could complete the project. Plaintiffs, however, decided to terminate the contract.

         In February 2015, Plaintiffs filed a complaint against Defendants, alleging that Defendants had failed to perform the work pursuant to the contract, despite Plaintiffs' payment of $60, 000; that Defendant Zhou was not, in fact, a licensed general contractor, despite his representation that he was; and that Defendants did not obtain the proper permits to start and complete the project.

         In April 2015, after the time to answer had expired, but before any default had been entered, Defendant Zhou filed and served a document pro se which responded to Plaintiffs' allegations. Shortly thereafter, Plaintiffs sought an entry of default against both Defendants. The clerk of court, however, entered default only against Defendant Seven Seas. The trial court later denied Defendant Seven Seas' motion to set aside the entry of default.

         After a jury trial, the trial court entered judgment in favor of Plaintiffs, finding both Defendants liable for fraud, unfair and deceptive trade practices, and punitive damages. The jury awarded Plaintiffs $76, 000 in compensatory damages and $5, 000 in punitive damages. The trial court determined that, as a matter of law, Defendants' misrepresentations violated the provisions of Chapter 75 of our General Statutes, and therefore that Plaintiffs were entitled to a trebling of the compensatory damages. See N.C. Gen. Stat. § 75-1.1 (2015). Accordingly, the trial court entered a treble damage award of $201, 000[1] in favor of Plaintiffs. Defendants appealed.

         After trial, Plaintiffs filed a motion for costs and a motion for attorney's fees. The trial court allowed the motion for costs but denied the ...


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