Noble v. HOOTERS OF GREENVILLE (NC), LLC

Citations: 681 S.E.2d 448; 199 N.C. App. 163; 2009 N.C. App. LEXIS 1387Docket: COA08-1144

Court: Court of Appeals of North Carolina; August 18, 2009; North Carolina; State Appellate Court

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On November 15, 2005, plaintiffs Justin Wayne Noble and Matthew Allen Noble filed complaints against Jonathan Lee Sugg for injuries sustained in a December 30, 2003 automobile accident, alleging Sugg's negligence. The complaints did not claim that Sugg was intoxicated during the incident. Amendments to the complaints added Hooters of Greenville (NC, LLC) and Hooters of America, Inc. as defendants, alleging negligence through employee actions and violations of the North Carolina Unfair and Deceptive Trade Practices Act (UDTPA). The cases were consolidated for discovery and trial, but defendants moved to dismiss the UDTPA claims for failure to state a claim, which the trial court granted on June 3, 2008. This dismissal was certified for immediate appeal. 

Factual allegations indicate that on December 30, 2003, the plaintiffs and Sugg, along with another patron, consumed a significant amount of alcohol at the Hooters restaurant in Greenville, where they were served by waitress Martha Barrera. She reported serving the patrons an equivalent of 35 beers before her shift ended, and after consulting with the manager, they were allowed to order more drinks. Waitress Liza Davis continued serving them an additional 23 beers after Barrera cashed out. The patrons left the restaurant around 5:00 p.m. in a vehicle driven by Sugg, with no Hooters staff intervening to prevent their departure.

At approximately 5:35 p.m., Sugg lost control of a vehicle on Rural Paved Road 1408 in Greene County, North Carolina, resulting in a crash that caused the vehicle to flip four times. Plaintiff Justin Wayne Noble was ejected and suffered serious injuries, including paraplegia and multiple fractures. Plaintiff Matthew Allen Noble also sustained severe injuries, including a closed head injury, brain injury, and respiratory failure.

The plaintiffs argued that the trial court incorrectly granted defendants' motions to dismiss their claims for unfair or deceptive trade practices (UDTPA) under N.C. Gen. Stat. 75-1.1. The court affirmed the trial court's decision, noting that a Rule 12(b)(6) motion tests the legal sufficiency of a complaint and generally prohibits dismissal unless the complaint shows an insurmountable bar to recovery. The court emphasized that complaints should be liberally construed and not dismissed unless it is certain that no relief can be granted under any facts that could be proven.

One potential bar to recovery is a lack of standing, which can be challenged by a Rule 12(b)(6) motion. Chapter 75 prohibits unfair acts undermining ethical business standards, with N.C. Gen. Stat. 75-16 granting standing to any person injured by violations of Chapter 75. To establish standing for their UDTPA claim, plaintiffs needed to demonstrate that their injuries were caused by a violation of Chapter 75, which defines unfair or deceptive trade practices and their elements: 1) an unfair or deceptive act in commerce, 2) affecting commerce, and 3) proximately causing actual injury to the plaintiff.

The Act lacks a specific definition for unfair or deceptive acts. The North Carolina Supreme Court describes an unfair act as conduct that reflects an inequitable assertion of power. A deceptive trade practice is defined as having the potential to mislead or create a likelihood of deception. The determination of whether an act is unfair or deceptive relies on the transaction's context and its marketplace impact, and this is a legal question for the court.

In their second amended complaint, Plaintiffs argue that their negligence claim also constitutes a violation of the Unfair and Deceptive Trade Practices Act (UDTPA). They allege that the Defendants engaged in unfair or deceptive acts by serving 58 beers over five hours and failing to prevent patrons from leaving the restaurant. They list several points to illustrate these alleged violations, including Hooters’ status as a licensed alcohol provider, employee training on responsible alcohol service, adherence to North Carolina regulations, public policy aimed at protecting citizens, and claims of Hooters' unethical actions.

However, the court finds that Plaintiffs’ allegations do not demonstrate that Defendants exerted an inequitable power over them or that their actions had the capacity to deceive. The court rejects Plaintiffs' reliance on previous case law to assert that violations of state laws regarding alcohol service inherently violate Chapter 75.

Cases cited by Plaintiffs are found to be distinguishable from the current case. In *Shepard*, the campground owner retaliated against a tenant, Tamitha Shepard, for contacting the health department about deteriorating conditions, leading to the disconnection of electricity to her and another tenant, Debra Rosseter, resulting in property damage. The court deemed the owner's actions unfair and upheld the trebling of damages under N.C. Gen. Stat. § 75-16. In contrast, *Sampson-Bladen Oil Co.* involved a plaintiff who fraudulently overcharged defendants for oil deliveries. The court recognized this as an unfair trade practice under N.C. Gen. Stat. § 75-1.1.

The current case differs significantly from both precedents. Unlike in *Shepard*, where the defendant exercised unjust power over the plaintiffs, the defendants in this case acted solely at the plaintiffs' requests, without any inequitable assertions of power. Furthermore, unlike in *Sampson-Bladen Oil Co.*, the defendants did not deceive the plaintiffs regarding alcohol sales or services. Plaintiffs' claims that the defendants violated Chapter 18B of the North Carolina General Statutes and related regulations, constituting unfair or deceptive trade practices, are not supported by the cited cases.

Plaintiffs argue that Defendants’ violations of Chapter 18B and Title 4 constitute violations of the Unfair and Deceptive Trade Practices Act (UDTPA). Specifically, N.C. Gen. Stat. 18B-305 prohibits selling alcohol to intoxicated individuals, and permittees are responsible for their employees' actions under N.C. Gen. Stat. 18B-1003(b). Furthermore, it is unlawful for permittees to allow violations of Chapter 18B on their premises (N.C. Gen. Stat. 18B-1005) and to permit intoxicated individuals to consume alcohol (4 N.C.A.C. 2S.0206). Despite these violations potentially being unfair or deceptive practices, the statutes cited do not explicitly establish such a violation as a per se violation of N.C. Gen. Stat. 75-1.1, unlike other regulatory statutes referenced in case law (e.g., Gray v. N.C. Ins. Underwriting Ass'n). The court declines to classify violations of Chapter 18B or 4 N.C.A.C. 2S as per se violations of the UDTPA, stating that to qualify, the violation must meet the three elements of a UDTPA claim, which Plaintiffs have not sufficiently alleged.

The allegations made by Plaintiffs do not constitute a violation of the Unfair and Deceptive Trade Practices Act (UDTPA). While the court acknowledges the public policy in North Carolina aimed at protecting individuals from harm caused by intoxicated persons, it disagrees with Plaintiffs' assertion that the case of Hutchens v. Hankins supports their UDTPA claim. The Hutchens case allows recovery from a tavern for negligence if an intoxicated patron causes injury, but it does not establish a UDTPA cause of action based on public policy. Although Plaintiffs have raised negligence claims against Defendants, which include defenses of contributory negligence, these claims are not the focus of this appeal. The court notes that, while it is understandable for Plaintiffs to seek a UDTPA claim—given the serious nature of their injuries—such a claim fails to meet the required legal standards as they have not demonstrated any unfair or deceptive acts under the UDTPA. Consequently, the Plaintiffs lack standing to bring a UDTPA claim, and the trial court's dismissal of this claim is affirmed. The court does not need to consider additional arguments from Plaintiffs. Judges Jackson and Stroud concur with this decision.

The order from the trial court lacks a stated basis or rationale for its decision. Plaintiffs acknowledge they received what they ordered and do not claim any adulteration of the beer served. North Carolina General Statute 58-63-15 defines various unfair and deceptive practices in the insurance business, including misrepresentations regarding policy terms, benefits, and the financial condition of insurers. Additionally, North Carolina General Statute 95-47.6 prohibits private personnel services from publishing false information or making misleading representations related to employment. Lastly, Session Laws 1981, chapter 412, repealed Chapter 18A and replaced it with Chapter 18B, effective January 1, 1982.