                                 NO. COA14-670

                       NORTH CAROLINA COURT OF APPEALS

                            Filed:    3 February 2015


BENJAMIN SUPPLEE and MEBRITT
THOMAS,
     Plaintiffs

       v.                                   New Hanover County
                                            No. 12 CVS 3287
MILLER-MOTTE BUSINESS COLLEGE,
INC. and DELTA CAREER EDUCATION
CORPORATION,
     Defendants.


       Appeal by defendants from order entered 20 December 2013 by

Judge W. Allen Cobb, Jr., in New Hanover County Superior Court.

Cross-appeal by plaintiff Benjamin Supplee from order entered 31

July    2013   by   Judge   Phyllis   M.   Gorham   in   New   Hanover   County

Superior Court.       Cross-appeal by Kyle J. Nutt from order entered

27 January 2014 by Judge W. Allen Cobb, Jr., in New Hanover

County Superior Court.        Heard in the Court of Appeals 22 October

2014.


       Shipman & Wright, LLP, by Kyle           J. Nutt, for plaintiff-
       appellee and cross-appellants.

       Vandeventer Black LLP, by David P. Ferrell and Kevin A.
       Rust, for defendant-appellants and cross-appellee.


       McCULLOUGH, Judge.
                                            -2-
      Defendants Miller-Motte Business College, Inc. and Delta

Career Education appeal the order of the trial court denying

their motions for directed verdict and judgment notwithstanding

the verdict; Plaintiff Benjamin Supplee cross-appeals from the

order of the trial court granting defendants’ summary judgment

motion, in part; Plaintiff Benjamin Supplee’s attorney, Mr. Kyle

Nutt,    appeals        the    trial    court’s    order       granting   defendants’

motion for sanctions.             Based on the reasons stated herein, we

affirm in part and reverse in part.

                                   I.     Background

      On 21 August 2012, plaintiffs Benjamin Supplee (“Supplee”)

and     Mebritt     Thomas       (“Thomas”)       filed    a     complaint      against

defendants Miller-Motte Business College, Inc. (“MMC”) and Delta

Career Education Corporation (“DCEC”).                     Plaintiffs alleged the

following       claims:       fraud/fraud    in   the     inducement;     unfair   and

deceptive trade practices; negligent misrepresentation; breach

of contract by MMC; and negligence.

      On   29     May    2013,    defendants      filed    a    motion    for   summary

judgment pursuant to Rule 56 of the North Carolina Rules of

Civil Procedure.

      On 31 July 2013, the trial court entered an order, granting

defendants’ motion for summary judgment in part, and denying it
                                         -3-
in part.      The trial court found that there were no genuine

issues of material fact on plaintiffs’ claims for fraud, unfair

and   deceptive        trade     practices,     negligence,        and     negligent

misrepresentation.        Defendants’ motion for summary judgment on

plaintiffs’ breach of contract claim was denied.

      Plaintiffs’       trials    were    separated    with       Supplee’s       trial

occurring first, at the 28 October 2013 civil session of New

Hanover    County      Superior     Court,     Judge   W.     Allen       Cobb,     Jr.

presiding.1

      The evidence at Supplee’s trial indicated the following:

Sometime after      October 2009, Supplee met with MMC’s dean of

education, Mike Smith (“Smith”) and expressed interest in the

surgical technology (“surg tech”) program at MMC’s Wilmington,

North Carolina campus.           Supplee inquired about the requirements

of the surg tech program and job prospects in the field after

graduation.     The surg tech program was a two year program that

consisted of an eighteen month class component, followed by a

six month clinical component.             Smith gave Supplee MMC’s college

catalog.        Thereafter,         Supplee      met    with        Amy     Brothers

(“Brothers”),     an    admissions       representative     for    MMC.       Supplee



1
 Because plaintiff Benjamin Supplee is the only plaintiff who is
a party to the appeal before us, we will focus on the record
evidence relevant to Supplee’s appeal.
                                         -4-
testified that although Brothers was aware that he wanted to

apply to the surg tech program, Brothers encouraged him to apply

to the health information technology (“HIT”) program.                     Brothers

told Supplee that he could transfer to the surg tech program if

he did not like the HIT program.

    During their meeting, Brothers handed Supplee a document

entitled    “Career       Information    Profile.”          The    document   asked

whether Supplee had “ever been convicted of a crime.”                     Supplee

marked   “no”     after     asking    Brothers    whether     “a    DUI   count[s]

because I knew it was on my record, I knew I had some issues in

the past and she was like, no, you’re fine.”

    On 10 December 2009, Supplee received an acceptance letter

from the campus director of MMC and a congratulatory letter of

acceptance from the career services director at MMC.                          On 15

December    2009,        Supplee   and    Brothers     signed      an   enrollment

agreement   for     an    associate   degree     in   the   HIT    program.     The

agreement stated that Supplee’s enrollment was “subject to all

terms and conditions set forth in the Catalog” of MMC.                          The

student catalog, under the heading “PROGRAM REQUIREMENTS” and

“Background Checks,” provided as follows:

            Students applying for admission will be
            required to have a criminal history check.
            While a criminal conviction is not a per se
            bar to admission, [MMC] will review any
                                             -5-
              applicant who has been convicted of a crime
              in order to determine his or her fitness for
              admission, and will take into consideration
              the   following  factors:  the   nature  and
              gravity of the criminal conviction, the time
              that has passed since the conviction and/or
              completion of the criminal sentence, and the
              nature of the academic program for which the
              applicant has applied.

(emphasis added).

       In January 2010, Supplee began his courses at MMC.                            On 4

April       2010,    after    the     end    of     the   first    quarter,     Supplee

transferred         into    the     surg    tech    program.         To   complete    the

transfer, Supplee signed an enrollment agreement on 14 April

2010, almost identical to the HIT enrollment agreement, that

incorporated the terms and conditions of the catalog and stated

that    MMC    would       review    a     student’s      criminal    background      for

admission purposes.               Defendants backdated Supplee’s start date

in the surg tech program to 20 January 2010.

       On    12     October   2010,        during    Supplee’s       first   surg    tech

program specific class, he was given a document by defendants

entitled       “Background         Check     Statement      of    Disclosure”        which

provided as follows:

              Background checks will be provided as part
              of the curriculum, will be held in strictest
              confidence and specific information will not
              be released to the clinical site unless
              specifically requested by the clinical site
              administrator. . . .    As a student in the
                                  -6-
         Surgical Technology Program, I am aware that
         clinical sites in which I complete my
         clinical rotations may require proof of a
         criminal   background  check   prior  to  my
         acceptance at the clinical site.

Supplee and Cynthia Woolford (“Woolford”), the program director

of surgical technology at MMC, signed this document.          Woolford

testified that she reviewed the “Background Check Statement of

Disclosure” with the whole class, including Supplee.

    On or about 12 October 2010, Woolford provided Supplee with

the “Surgical Technology Program Student Policy Manual.”        Under

the subsection entitled “Admission,” the surg tech manual stated

that “[t]he college will perform a criminal background check

upon admission to the program.”     Further, it stated that

         An applicant may be denied admission to the
         [surg tech] program for any of the following
         reasons: . . . b. Conduct not in accordance
         with    the    standards    of    a    Surgical
         Technologist: . . . ii.     Has been convicted
         of or pleaded guilty or nolo contendere to
         any    crime   which    indicates    that    the
         individual   is   unfit   or   incompetent    to
         practice surgical technology or that the
         individual has deceived or defrauded the
         public. . . . e.         Due to JCAHO [Joint
         Commission   on    Accreditation    of    Health
         Organizations] requirements for Hospital &
         Operating Rooms, Students with a felony
         criminal record, larceny, or drug-related
         background found on the criminal background
         check will not be admitted to the clinical
         sites.
                                       -7-
Supplee testified that he had not been advised by defendants’

representatives that a criminal background check had not been

conducted, but believed they had already conducted one.

    At trial, Woolford testified that based on MMC’s written

policy, criminal background checks are “supposed to be conducted

of new applicants” during the admissions process.                Ned Snyder,

the campus director for MMC in Wilmington and the regional vice

president    for   MMC   in    North    Carolina,    South    Carolina,   and

Virginia testified that MMC had the same policy, regardless of

whether the applicant was applying to the HIT or the surg tech

program.     In    addition,    regardless    of    whether   the   applicant

answered “no” to the question of “have you ever been convicted

of crime?” on the career information profile, MMC was supposed

to run a criminal background check.               Woolford testified that,

“if a student during admission had a criminal charge that would

automatically disqualify them from clinical sites,” the purpose

of the criminal background check made during admission was to

screen out any applicants who would not be able to complete the

program.     Once a student was admitted, thirty days prior to

being placed at a clinical site, MMC was supposed to conduct

another    criminal   check    in   order    to   obtain   the   most   recent

results.    Woolford testified that MMC had a “responsibility to
                                          -8-
determine the type of criminal backgrounds that will prohibit

students     from     attending     [clinical]      externships.”      However,

Woolford admitted that defendants did not conduct a criminal

background    check        on   Supplee   during    his   admissions   process.

Woolford also testified that Supplee did not have a criminal

background check conducted prior to the time he started the surg

tech program.

      Around May of 2011, Supplee’s class was scheduled to go to

an   orientation      at    two   clinical      externship   sites.    Woolford

testified that thirty days prior to May 2011, Woolford ordered

the background check of Supplee.                 Prior to May 2011, Woolford

was not aware of any criminal background check being conducted

on Supplee.         A contact at a clinical externship site informed

MMC that four students, including Supplee, were not permitted to

attend the orientation based on the results of their criminal

background checks.          Supplee’s criminal background check revealed

the following: two felony charges of breaking and entering and

larceny which were dismissed in 2008; two convictions of driving

while intoxicated which occurred in 2004 and 2008, one of which

resulted in a probation violation.

      Supplee testified that around 15 May 2011, he was pulled

out of class by Woolford and told by Smith, that the criminal
                                        -9-
background      check     sent    to   the    clinical     site   was    rejected.

Defendants “pointed to two dismissed felony charges and said

that’s why I was not being allowed to attend the orientation

site    so    therefore     I    couldn’t     participate    in   the     clinical

portion.      I couldn’t -- I couldn’t finish.”              Supplee testified

that “[Woolford] looked at my background and everything else

that I had on there. DUIs, traffic misdemeanors she said was

okay, that that wasn’t why I was being denied.”                          Defendants

presented Supplee with two options: Supplee could transfer into

any other program at MMC at no charge or Supplee could get his

felony charges expunged and reapply to the surg tech program to

work   towards    completion.          At    Woolford’s    suggestion,     Supplee

elected to get the two felony charges of breaking and entering

and larceny expunged.             Supplee was successful in getting the

charges expunged and reapplied to MMC in December of 2011.                      When

Supplee      attempted    to     reenroll,    defendants    informed      him   that

their admissions policy regarding criminal background checks had

changed, requiring a “clean record.”

       On 10 January 2012, DCEC sent Supplee a “Notice of Pre-

Adverse Action” which stated the following:

              During the application process for                   the
              SURGICAL TECHNOLOGY program at [DCEC],               you
              authorized a review of your background               and
              qualifications   for   admission.                   This
                                    -10-
            background     check    revealed     criminal
            convictions that would almost certainly
            preclude participation in externship or
            clinical experience position placements that
            may be required to successfully complete the
            program you have applied.     Based on this
            background   check,  [DCEC]    rejects   your
            application.

       On 7 November 2013, a jury returned a verdict in favor of

Supplee.    The jury found that defendants entered into a contract

with   Supplee,    that   defendants   breached   the   contract   by   non-

performance, and that Supplee was entitled to recover from the

defendants in the amount of $53,481.00.           Costs in the amount of

$2,298.30 were also taxed against defendants.

       On 14 November 2013, defendants filed a motion for judgment

notwithstanding the verdict, or in the alternative, motion for a

new trial.       On 20 December 2013, the trial court denied both

motions.

       On   14   November   2013,   defendants    filed   a   motion    for

sanctions and/or appropriate relief.         Defendants’ motion stated

that upon the motion of plaintiffs, the trials of Supplee and

Thomas were separated; Supplee’s trial occurring during the 28

October 2013 civil session and Thomas’ trial scheduled for the

week of 18 November 2013.       Defendants provided that on or about

3 November 2013, a local news station called WECT, posted a

story on its website disclosing that Supplee had prevailed on
                               -11-
his breach of contract claim in the amount of $53,481.00 and

that the damages were based upon “wasted tuition and lost income

opportunities[.]”   Defendants claimed that the alleged basis for

the damages of “wasted tuition and lost income opportunities”

was not a matter of public record.    The news story stated that

plaintiffs’ attorney, Mr. Kyle Nutt (“Mr. Nutt”) of Shipman &

Wright, LLP, made the following statement:

          the school was contractually obligated to
          screen     their     applicants’    criminal
          backgrounds to make sure all potential
          students could eventually graduate from
          healthcare degree programs were certain
          offenses the school was aware of could
          potentially prevent students from completing
          required coursework at hospitals.

Mr. Nutt was also attributed to representing that “the school

offered Supplee $25,000 at the start of trial to end the matter,

but then removed the offer midway through trial.”        Defendants

argue that the statements attributed to Mr. Nutt were not found

in the jury’s verdict sheet and were not a matter of public

record.   Furthermore, Mr. Nutt was attributed to stating that

“his firm is representing another student going to trial over

similar claims this month” and defendants contended that this

statement was made with actual knowledge that Thomas’ claims

were scheduled to occur just two weeks after the article was

published.   Based on the foregoing, defendants moved the court
                                       -12-
to levy sanctions against plaintiff and/or Mr. Nutt and to grant

appropriate relief based on their violation of Rule 3.6 of the

North Carolina Rules of Professional Conduct and “their public

dissemination       of   information      that    would     not    be    admitted      as

evidence at Ms. Thomas’ trial and which creates a substantial

risk of prejudicing an impartial trial.”

    On 27 January 2014, the trial court entered an order on

defendants’ motion for sanctions and/or appropriate relief by

concluding that Mr. Nutt’s comments created a substantial risk

of prejudicing the Thomas jury and that Mr. Nutt’s extrajudicial

statements were in violation of Rule 3.6(a) and/or 3.3 of the

North Carolina Rules of Professional Conduct.                           Mr.   Nutt was

sanctioned     in    the   amount   of     $1,000.00        and    defendants         were

awarded $6,395.50 in attorneys’ fees and $20.00 in costs.

    Attorneys        for   plaintiffs,      including        Mr.    Nutt,      filed     a

motion   for      reconsideration,        arguing     that    defendants         waived

claims   referenced        in   their      motion      for        sanctions      and/or

appropriate relief, that vital First Amendment considerations

required a liberal construction of the “safe harbor” provisions

contained    in     Rule   3.6(b)    of     the     North    Carolina         Rules    of

Professional Conduct, and that under such a construction, Mr.

Nutt’s statements were protected disclosures as a matter of law.
                                        -13-
      On   11    February     2014,    the   trial    court   entered    an   order

denying plaintiffs’ motion for reconsideration.

      On 16 January 2014 defendants filed notice of appeal; on 21

January 2014, Supplee filed notice of appeal; and, on 3 February

2014, Mr. Nutt filed notice of appeal.

                                 II.    Discussion

                            A.    Defendants’ Appeal

      Defendants raise two issues on appeal. First, defendants

argue that the trial court erred by denying their motions for

directed     verdict    and      judgment      notwithstanding     the    verdict

(“JNOV”).       Next, defendants argue that the trial court erred by

permitting       the   jury      to    consider      speculative   evidence      of

Supplee’s lost profits and income.                   We address each of these

arguments in turn.

 i.      Directed Verdict and Judgment Notwithstanding the Verdict

      Defendants contend that the trial court erred by denying

their      motions for a directed verdict and JNOV where Supplee

failed to present sufficient evidence of a breach of contract

claim.     We reject defendants’ arguments and conclude there was

sufficient evidence of breach of contract by defendants in order

to submit the issue to the jury.

                 When  considering the  denial  of  a
            directed verdict or JNOV, the standard of
                                          -14-
              review is the same.   The standard of review
              of directed verdict is whether the evidence,
              taken in the light most favorable to the
              non-moving party, is sufficient as a matter
              of law to be submitted to the jury.       If
              there is evidence to support each element of
              the nonmoving party’s cause of action, then
              the motion for directed verdict and any
              subsequent motion for [JNOV] should be
              denied.

Green v. Freeman, 367 N.C. 136, 140-41, 749 S.E.2d 262, 267

(2013)      (citations      and     quotation      marks     omitted).       Whether

defendants were entitled to a directed verdict or JNOV is a

question of law and questions of law are reviewed de novo.                          Id.

at 141, 749 S.E.2d at 267.

       “The elements of a claim for breach of contract are (1)

existence of a valid contract and (2) breach of the terms of

that contract.”        Branch v. High Rock Lake Realty, Inc., 151 N.C.

App. 244, 250, 565 S.E.2d 248, 252 (2002) (citation omitted).

Here, the parties stipulated that Supplee and defendants entered

into    a   contract.         Therefore,     the    issue   before    the   jury   was

whether there was a breach of the terms of the contract.

       Defendants rely on the holdings of Ross v. Creighton Univ.,

957 F.2d 410 (7th Cir. 1992) and Ryan v. Univ. of N.C. Hospitals,

128    N.C.   App.   300,     494   S.E.2d    789    (1998),    and   contend      that

Supplee’s     breach     of    contract    claim     based    on   the   failure     of

defendants to conduct a criminal background check to determine
                                       -15-
if he was fit for admission into the surg tech program is not a

recognized cause of action.

      In    Ross,    a   student   accepted    an    athletic       scholarship     to

attend Creighton University and play on its varsity basketball

team.       Ross, 957 F.2d at 411.        Creighton was an “academically

superior       university”     while     the        student        came   from      an

“academically disadvantaged background” and was “at an academic

level far below that of the average Creighton student.”                            Id.

The student attended Creighton from 1978 until 1982, maintained

a D average, and obtained 96 out of the 128 credits needed to

graduate.      When he left Creighton, the student had the overall

language skills of a fourth grader and the reading skills of a

seventh grader.          Id. at 412.      The student filed a complaint

against     Creighton,     alleging    that   Creighton       was    aware   of    the

student’s academic limitations at admission and in order “to

induce him to attend and play basketball, Creighton assured [the

student] that he would receive sufficient tutoring so that he

‘would receive a meaningful education while at CREIGHTON.’”                        Id.

at 411.      The student further alleged that he took courses that

did   not    count   towards   a   university       degree    at    the   advice   of

Creighton’s Athletic Department, that the department employed a

secretary to read, prepare, and type his assignments, and failed
                                             -16-
to provide him with sufficient and competent tutoring that it

had promised.           Id. at 412.           The student asserted claims of

breach of contract and negligence.                      The student argued three

separate theories of how Creighton was negligent: “educational

malpractice”       for    failing       to    provide       him   with   a     meaningful

education        and   preparing       him     for    employment       after     college;

negligently inflicting emotional distress by enrolling him in a

stressful university environment when he was not prepared and by

failing     to     provide      remedial      programs       to    assist      him;    and,

“negligent        admission”       which      would     allow     recovery      when     an

institution       admits     and      then    does    not    adequately        assist    an

unprepared student.             Id.     The district court dismissed all of

the   student’s        claims    under     Federal     Rules      of   Civil    Procedure

12(b)(6) for failure to state a claim.

      The student appealed and the United States Court of Appeals

for the 7th Circuit held that the

            basic legal relation between a student and a
            private university or college is contractual
            in nature.      The catalogues, bulletins,
            circulars,    and    regulations    of   the
            institution    made    available    to   the
            matriculant become a part of the contract. .
            . .     It is quite clear, however, that
            Illinois would not recognize all aspects of
            a university-student relationship as subject
            to remedy through a contract action.
                                -17-
Id. at 416 (citations and quotation marks omitted).           The Ross

court explained that a breach of contract claim attacking the

general quality of an education would be precluded.     Id.

       In order to state a claim for breach of contract, the court

in Ross held that a plaintiff “must point to an identifiable

contractual promise that the defendant failed to honor.”        Id. at

417.

           In   these   cases,   the   essence    of  the
           plaintiff’s complaint would not be that the
           institution failed to perform adequately a
           promised educational service, but rather
           that it failed to perform that service at
           all. Ruling on this issue would not require
           an inquiry into the nuances of educational
           processes   and   theories,   but   rather  an
           objective    assessment    of    whether   the
           institution made a good faith effort to
           perform on its promise.

Id.    The Ross court read the student’s complaint to

           allege more than a failure of the University
           to provide him with an education of a
           certain quality.     Rather, he alleges that
           the   University   knew   that   he    was   not
           qualified academically to participate in its
           curriculum.      Nevertheless,     it   made   a
           specific promise that he would be able to
           participate in a meaningful way in that
           program because it would provide certain
           specific services to him.          Finally, he
           alleges that the University breached its
           promise by reneging on its commitment to
           provide those services and, consequently,
           effectively   cutting    him   off    from   any
           participation   in   and   benefit    from   the
           University’s academic program.
                                      -18-


Id.   Because the student’s breach of contract claim would be an

inquiry into whether Creighton “had provided any real access to

its academic curriculum at all”, the Ross court reversed the

decision of the trial court and stated that “we believe that the

district     court   can    adjudicate     [the   student’s]    specific    and

narrow claim that he was barred from any participation in and

benefit    from   [Creighton’s]       academic    program     without   second-

guessing the professional judgment of the University faculty on

academic matters.”         Id.

      In Ryan, the plaintiff was a resident who was “matched”

with the University of North Carolina Family Practice Program

(“University”) under the terms of the National Residency Program

based on their respective preferences.               The plaintiff and the

University “entered into a one-year written contract that was

renewable, upon the University’s approval, each of the three

years of the residency program.”             Ryan, 128 N.C. App. at 301,

494 S.E.2d at 790.          The plaintiff’s residency began on 1 July

1990 and sometime during the plaintiff’s second year, problems

arose and the University planned to terminate the residency.

Id.    The    plaintiff      used   the   internal   appeal    procedures   and

executed a contract with the University at the beginning of his

third year which stated “in part that plaintiff knew he might
                                     -19-
graduate as much as six months later than the normal program.”

Id.    The plaintiff graduated three months later than normal and

it    was    undisputed     that   the    plaintiff    graduated   from   an

accredited residency program.            The plaintiff then initiated an

action      against   the     University     for     breach   of   contract,

educational malpractice, intentional and negligent infliction of

emotional distress, civil conspiracy, tortious interference with

prospective     business    relationship,    and     self-defamation.     Id.

The trial court granted the University’s motion to dismiss all

claims and the plaintiff only appealed the dismissal of his

breach of contract claim against the University. Id.

      Relying on the holding in Ross that in order to state a

claim for breach of contract, the student “must point to an

identifiable contractual promise that the University failed to

honor,” our Court in Ryan held that although the plaintiff made

several allegations in support of his breach of contract claim

against the University, only one alleged a specific aspect of

the contract that would not involve an “inquiry into the nuances

of educational processes and theories.”             Id. at 302, 494 S.E.2d

at 791.     The plaintiff had alleged that the University breached

the “Essentials of Accredited Residencies” by failing to provide

a one month rotation in gynecology.                Our Court held that the
                                      -20-
plaintiff had alleged facts sufficient to support his claim for

breach of contract based on the University’s failure to provide

that one month rotation and reversed the trial court’s order.

Id. at 303, 494 S.E.2d at 791.

      Defendants argue that the present case is distinguishable

from Ross and Ryan because while Ross and Ryan permit a narrow

breach of contract claim where a university promises certain

educational services after enrollment, Supplee’s complaint does

not   allege    that     defendants    failed      to    provide     a    specific

educational service. Rather, defendants assert that Supplee’s

argument is a negligent admission case which has already been

rejected by Ross.        We disagree with this characterization.

      Based on Ross, Supplee’s relationship with defendants was

contractual in nature.         Supplee signed two separate enrollment

agreements     on   15    December     2009   and       14   April    2010      that

incorporated    the    terms   and    conditions    set      forth   in   the    MMC

student catalog.         The student catalog explicitly stated that

students applying for admission would be “required to have a

criminal history check” and that MMC “will review any applicant

who has been convicted of a crime in order to determine his or

her fitness for admission[.]”            Therefore, the student catalog
                                             -21-
and   the   aforementioned            term    became       a    part    of     the    contract

between defendants and Supplee.                 See Ross, 967 F.2d at 416.

      Supplee’s      claim      for    breach       of    contract       pointed      to     this

“identifiable contractual promise that the [defendants] failed

to honor.”         Ryan, 128 N.C. App. at 302, 494 S.E.2d at 791.

Supplee specifically alleged in his complaint that defendants

had “failed to order, failed to review, or ignored results from

the criminal background checks authorized by [Supplee] as part

of the admission process.”                   At trial, defendants conceded that

although        based     on     defendants’             written       policy,        criminal

background       checks     were       “supposed         to     be     conducted       of    new

applicants” during the admissions process, defendants failed to

conduct     a    criminal      background          check       of    Supplee     during      his

admissions process in late 2009.                    Defendants also admitted that

Supplee did not have a criminal background check conducted prior

to the time he started the surg tech program in early 2010.                                   Had

defendants       properly      conducted       a    criminal         background      check     of

Supplee at admission in 2009, the results would have revealed

his two felony charges of breaking and entering and larceny

which were dismissed in 2008 and his two convictions of driving

while intoxicated which occurred in 2004 and 2008.                               Defendants’

failure     to    conduct       a     criminal       background          check       prior    to
                                          -22-
admitting Supplee was a specific aspect of the contract between

defendant and Supplee that would not involve an “inquiry into

the nuances of educational processes and theories, but rather an

objective     assessment      of     whether     the    institution      made   a   good

faith effort to perform on its promise.”                   Ross, 957 F.2d at 417.

       Further, defendants argue that even if a contractual duty

existed, MMC could not be said to have committed a material

breach   of    contract.        Defendants        assert    that    because     Supplee

initially applied to the HIT program and an enrollee’s criminal

background     is    not   an       “issue,    concern     or     consideration”       to

complete      the    HIT   program,       even        assuming     arguendo     that    a

contractual duty existed, a material breach could not have been

committed.     We reject this argument.

       It is well established that “[i]n order for a breach of

contract to be actionable it must be a material breach, one that

substantially defeats the purpose of the agreement or goes to

the very heart of the agreement, or can be characterized as a

substantial failure to perform.”                  Long v. Long, 160 N.C. App.

664,   668,    588   S.E.2d     1,    4   (2003)      (citation     omitted).       “The

question      of    whether     a    breach      of    contract     is   material      is

ordinarily a question for a jury.”                     Charlotte Motor Speedway,
                                            -23-
Inc. v. Tindall Corp., 195 N.C. App. 296, 302, 672 S.E.2d 691,

695 (2009).

      In the case before us, evidence at trial demonstrated that

defendants were aware in October 2009 that Supplee intended to

pursue a degree in the surg tech program and were aware that

criminal background checks were necessary for the completion of

the     surg    tech     program.        Supplee       testified        that    based     on

Brother’s encouragement to enroll in the HIT program first and

her assurance that Supplee could transfer from the HIT program

into the surg tech program, Supplee initially enrolled in the

HIT program.           Supplee also testified that he would not have

enrolled in the HIT program were it not for Brother’s assurance

that he would be able to transfer into the surg tech program.

Once Supplee transferred into the surg tech program on 4 April

2010,    defendants       backdated     his     start    date     in    the     surg    tech

program to 20 January 2010.                  This evidence demonstrates that

defendants’          failure    to    conduct      a   criminal        check    prior    to

admission into either the HIT or surg tech program substantially

defeated       the    purpose    of   the    agreement     or   was      a     substantial

failure to perform.

      Viewing the foregoing evidence in the light most favorable

to Supplee, there was sufficient evidence of each element of
                                     -24-
breach of contract to submit the issue to the jury.                 As such, we

hold that the trial court did not err by denying defendants’

motions for directed verdict and JNOV.

                               ii.      Damages

    In their next argument, defendants contend that the trial

court   erred   by     admitting   evidence       of   Supplee’s      landscaping

business and the income he earned as a car salesman.                  Defendants

argue    that   this    evidence   of     lost    profits     and   income     was

speculative and request a new trial on the issue of damages.                    We

find defendants’ arguments unconvincing.

                Admission of evidence is addressed to
           the sound discretion of the trial court and
           may be disturbed on appeal only where an
           abuse of such discretion is clearly shown.
           Under an abuse of discretion standard, we
           defer to the trial court’s discretion and
           will reverse its decision only upon a
           showing that it was so arbitrary that it
           could not have been the result of a reasoned
           decision.

Cameron v. Merisel Props., 187 N.C. App. 40, 51, 652 S.E.2d 660,

668 (2007) (citations and quotation marks omitted).

    In    the   present    case,     Supplee      testified    that    prior   to

enrolling at MMC, he worked as a full-time car salesman from

August 2002 until October 2009 when he was laid off.                    After he

was laid off, Supplee received unemployment compensation until

the beginning of 2011.        When he started school at MMC in 2010,
                                             -25-
Supplee began working as a school janitor.                         In 2011, after he

was no longer enrolled at MMC, Supplee worked as an occasional

waiter and landscaper.                 Supplee submitted records reflecting his

taxed Social Security earnings and taxed Medicare earnings from

1994 until 2009.              Supplee also presented his 2010 tax return and

testified that he earned $727.00 in wages, salaries, tips, et

cetera       and    received       $16,231.00       in   unemployment       compensation

during the period of time he was enrolled at MMC.                           For the year

2011,        Supplee            received      $13,644.00          from      unemployment

compensation.            After leaving MMC, Supplee testified that in 2011

he   worked        for    a     landscaping      company    by    the    name    of   Flora

Landscape          and    earned       $631.35    and      also    worked       for   Eddie

Romanelli’s         and       earned   $2,048.00.        Supplee    further      testified

that    he    began       a    landscaping    business      in    2012    and    submitted

ledgers for the years 2012 through 2013 and testified as to his

income in 2012 and 2013.

       First, relying on McNamara v. Wilmington Mall Realty Corp.,

121 N.C. App. 400, 466 S.E.2d 324 (1996), defendants argue that

evidence about Supplee’s landscaping business was inadmissible

because Supplee did not have an established history of profits;

Supplee contended that the profits he earned after he left MMC

would have been duplicated in previous years; and, Supplee made
                                        -26-
no effort to obtain sales figures and other financial data from

similar      landscaping      businesses       in      the    Wilmington        area.

Specifically,      defendants       contend    that    this   evidence      was    too

speculative.

       In McNamara, the plaintiff leased a space to house a retail

custom jewelry store at a mall owned by the defendant.                         Id. at

402, 466 S.E.2d at 326.            The parties executed a five year lease

and the plaintiff commenced his operations in August 1991.                         Id.

at 403, 466 S.E.2d at 326-27.            In January or February 1992, the

defendant leased a space adjacent to the plaintiff’s store to an

aerobics     studio    and    a     dispute    arose    in    regards     to    noise

emanating from the aerobics studio.                 Id. at 403, 466 S.E.2d at

327.    The plaintiff stopped paying rent after April 1992 and

abandoned its leased space in December 1992.                  Id.    The plaintiff

sued   the      defendant    for    several    claims     including       breach   of

contract.       Id. at 403-404, 466 S.E.2d at 327.               The trial court

granted the defendant’s motion to dismiss all claims, excluding

the breach of contract claim and a jury returned a verdict in

favor of the plaintiff in the amount of $110,000.00.                           Id. at

404, 466 S.E.2d at 327.             On appeal, the defendant contested a

denial of a requested peremptory instruction on damages, argued

that      its     motions     for      directed        verdict      and     judgment
                                         -27-
notwithstanding the verdict should have been granted because the

plaintiff    did    not    meet   his    burden     of   proof     with   respect     to

damages, and, in the alternative, sought a new trial on the

issue of damages.         Id. at 407, 466 S.E.2d at 329.              At trial, the

plaintiff had confined his proof of damages solely to the issue

of lost future profits and our Court provided the following:

            Damages for breach of contract may include
            loss of prospective profits where the loss
            is the natural and proximate result of the
            breach.     To recover lost profits, the
            claimant   must   prove  such   losses  with
            “reasonable certainty.”    Although absolute
            certainty is not required, damages for lost
            profits will not be awarded based on
            hypothetical or speculative forecasts.

Id. at 407-408, 466 S.E.2d at 329 (citations and quotation marks

omitted).     Our Court found that the plaintiff did not have an

established history of profits and that his evidence of lost

profits     consisted      solely       on    the   testimony       of    Dr.      Craig

Galbraith, a professor of management at the University of North

Carolina    at     Wilmington.          Id.   at    408,    466    S.E.2d    at     330.

Agreeing     with    the     defendants,        our      Court     held     that     Dr.

Galbraith’s      “calculations      were      not   based   upon    standards       that

allowed the jury to determine the amount of plaintiff’s lost

profits with reasonable certainty.”                 Id. at 409, 466 S.E.2d at

330.   First, our Court found that Dr. Galbraith’s estimation of
                                        -28-
the    plaintiff’s    lost   profits      were      based    on     the    unsupported

assumption that from January 1992 until the remaining term of

the five year lease, the plaintiff’s sales would have risen in a

linear fashion to the point where they matched the average sales

of    independent    national      jewelers.         Id.      Rather,       he     relied

exclusively on data from independent national jewelers without

ascertaining       whether   these      jewelers     bore     any     similarity      to

plaintiff’s business.”          Id.     Based on the foregoing, our Court

held    that   Dr.    Galbraith’s       reliance      on    aforementioned           data

“rendered his calculations too conjectural to support an award

of lost profits” and remanded to the trial court for a new trial

on the issue of damages.           Id. at 409-12, 466 S.E.2d at 330-32.

       We   find    the   circumstances        in    McNamara       to    be      readily

distinguishable      from    the      facts    of   the     present       case.      The

McNamara    court    dealt   with      lost    future       profits,       which    “are

difficult for a new business to calculate and prove.”                             Id. at

408, 446 S.E.2d at 330 (citation omitted).                        In McNamara, the

evidence to support the lost future profits of the plaintiff

were held to be too conjectural for the aforementioned reasons.

In the case sub judice, evidence regarding Supplee’s landscaping

business was based on actual income earned by Supplee during the

years 2012 and 2013.         Most importantly, the evidence regarding
                                      -29-
Supplee’s landscaping business was not used to calculate future

lost profits, but was relevant to the jury’s determination of

whether Supplee was entitled to recover consequential damages

from the defendants for breach of contract.               As the trial court

instructed,    the   jury    could    find    that   Supplee     had   suffered

consequential damages which included Supplee’s investment of his

personal time as defined by his lost opportunity to earn income

during his time of enrollment.           Supplee testified that had he

not been accepted and enrolled in MMC, he would have continued

working.     Therefore, evidence of the history of income he earned

after his period of enrollment was relevant in the determination

of consequential damages.            Accordingly, we reject defendants’

arguments     that   the    trial    court    abused   its     discretion   in

admitting this evidence.

    Second, relying on Olivetti Corp. v. Ames Bus. Sys., Inc.,

319 N.C. 534, 356 S.E.2d 578 (1987), defendants argue that the

trial court erred by admitting speculative evidence of Supplee’s

past income as a car salesman when Supplee failed to produce any

evidence of any job offers he received while enrolled at MMC.

Defendants    also   assert    that    this    evidence    was    inadmissible

because Supplee admitted he was laid off from a dealership in

2009 and did not voluntarily leave his employment to enroll in
                                         -30-
MMC; Supplee admitted that his income was declining at the time

of his termination; Supplee testified that there was “no telling

what [he] would have done” had he not enrolled in MMC; and,

Supplee      testified   that     after     he    was       terminated      as        a   car

salesman, he was not returning to an automotive sales position.

       In    Olivetti,      the   plaintiff,           a    manufacturer         of       word

processors, appealed the trial court’s determination that the

defendant,      a    dealer,      was      damaged           by     the     plaintiff’s

misrepresentations.          Id. at 544, 356 S.E.2d at 584.                     The trial

court found that had it not been for the plaintiff’s fraud, the

defendant would have become a dealer for another manufacturer of

a word processor.           Id.   The North Carolina Supreme Court held

that the trial court correctly concluded that the plaintiff made

material      representations      to     the    defendant,          upon       which      the

defendant reasonably relied.              Id. at 549, 356 S.E.2d at 587.

However, the Supreme Court held that “proof of damages must be

made with reasonable certainty”                 and that          “in order for           [the

defendant] to show that it was deprived of an opportunity to

make profits, it must first show that there was in fact such an

opportunity.”       Id. at 546, 356 S.E.2d at 585-86.                     Because there

was no competent evidence in the record to support the finding

made    by    the   trial    court      that     the       defendant      had     such     an
                                        -31-
opportunity to make profits, the trial court’s award of damages

to the defendant was vacated.           Id. at 549, 356 S.E.2d at 587.

    After        careful    review,    we   find     defendants’          reliance      on

Olivetti    misplaced.        In    Olivetti,      the    issue      on     appeal     was

whether    there     was    competent    evidence        to     support      the    trial

court’s finding that the defendant dealer would have become a

dealer     for    another    manufacturer      had       it    not    been    for      the

plaintiff’s       misrepresentations.          Here,     the     issue      before     our

Court is whether evidence of Supplee’s income as a car salesman

is admissible.         While the defendant in                 Olivetti sought lost

future    profits,     Supplee’s      evidence     of    his     income      as    a   car

salesman, like the evidence of Supplee’s landscaping business,

was relevant to the jury’s determination of whether Supplee was

entitled to recover consequential damages from defendants for

breach of contract.         Evidence of the history of Supplee’s actual

income earned prior to enrolling at MMC was probative in the

determination of lost opportunity to earn income during his time

of enrollment.       As such, we reject defendants’ argument that the

challenged       evidence   was    speculative     and        hold   that    the    trial

court did not abuse its discretion in its admission.

                      B.     Plaintiff Supplee’s Appeal
                                              -32-
    Supplee        raises       two    issues        on    appeal.     Whether          the    trial

court   erred       by    (i)    striking           portions      of   his     4    June       2013

affidavit     and    (ii)       granting           defendants’       motion    for        summary

judgment, in part.

                     i.        Striking Supplee’s Affidavit

    Supplee        argues       that       the     trial    court      erred       by    striking

portions of his 4 June 2013 affidavit.                       We disagree.

    “Our      Court       reviews          the     trial     court’s      ruling          on     the

admissibility of affidavits for an abuse of discretion.”                                        Cape

Fear Pub. Util. Auth. v. Costa, 205 N.C. App. 589, 592, 697

S.E.2d 338, 340 (2010).

    It is well established that a party opposing a motion for

summary judgment cannot create an issue of fact by filing an

affidavit     contradicting            his    prior       sworn   testimony.             Wachovia

Mortgage     Co.    v.    Autry-Barker-Spurrier               Real     Estates,          Inc.,    39

N.C. App. 1, 9, 249 S.E.2d 727, 732 (1978).                            Our Court has held

that where an affidavit contains additions and changes that are

“conclusory statements or recharacterizations more favorable to

plaintiffs [that] materially alter the deposition testimony in

order   to   address          gaps    in     the    evidence      necessary         to    survive

summary    judgment[,]”          the       trial    court    should      properly         exclude

these   portions         of    the    affidavits.           Marion      Partners,         LLC     v.
                                          -33-
Weatherspoon & Voltz, LLP, 215 N.C. App. 357, 362, 716 S.E.2d

29, 33 (2011).       “[I]f a party who has been examined at length on

deposition could raise an issue of fact simply by submitting an

affidavit    contradicting        his     own    prior    testimony,      this   would

greatly diminish the utility of summary judgment as a procedure

for screening out sham issues of fact.”                       Id. at 362-63, 716

S.E.2d at 33.        Furthermore, “the appellant must show not only

that   the   trial    court    abused      its     discretion      in   striking    an

affidavit, but also that prejudice resulted from that error.”

Barringer v. Forsyth County, 197 N.C. App. 238, 246, 677 S.E.2d

465, 472 (2009) (citation and quotation marks omitted).

       In the case before us, Supplee was deposed on 14 May 2013.

On 29 May 2013, defendants filed a motion for summary judgment.

Thereafter, on 5 June 2013, Supplee filed an affidavit.                           On 6

June     2013,    defendants      filed    a     motion     to   strike    Supplee’s

affidavit    in    which   they    argued        that    paragraphs     four   through

seven,    thirteen,    and     fifteen     of     Supplee’s      affidavit     “either

materially       alter[ed]     his      deposition         testimony      or     flatly

contradict[ed] his prior sworn testimony.”                   On 31 July 2013, the

trial court entered an order striking paragraphs four through

seven,    thirteen,    and    fifteen      “because       they   materially      differ
                              -34-
from Plaintiff Supplee’s prior, sworn testimony and/or directly

conflict with Plaintiff Supplee’s prior, sworn testimony.”

    Paragraphs four through seven of Supplee’s affidavit stated

the following:

         4.   As part of the enrollment process, I was
              informed by representatives of [MMC] that
              a check of my criminal background would
              be performed.

         5.   As part of the enrollment process, [MMC]
              representatives also informed me that my
              acceptance into the school and any
              program of study I entered would be based
              upon   the   results   of   my   criminal
              background check.

         6.   I was informed by [MMC] representatives
              that, in the event a conviction was found
              on my record during the enrollment
              process, [MMC] would determine whether or
              not I was fit for admission.

         7.   I agreed to submit to the criminal
              background check process required by
              [MMC] as part of the enrollment process
              to determine my eligibility for the
              school and any program of study I applied
              for.

    During Supplee’s 14 May 2013 deposition, Supplee testified

that he revealed all the actions, conversations, and statements

made by MMC employees to the best of his recollection.       He

described his meetings with MMC’s dean of education, Brothers,

and Woolford and revealed the information that was discussed

during those meetings.   At no point during his deposition does
                                          -35-
Supplee testify that he was informed by MMC representatives that

a criminal background check would be performed, that acceptance

into a program would depend on the results of that criminal

background check, that MMC would determine whether he was fit

for admission based on the results of the criminal background

check,    or    that    he    agreed    to    submit     to    the     results     of   the

criminal       background       check    as    described       in     paragraphs        four

through seven of his affidavit.                We view paragraphs four through

seven of Supplee’s affidavit as additions that are comprised of

conclusory statements or recharacterizations that are favorable

to   Supplee      and    that    materially      alter        his    prior    deposition

testimony.        Based on the foregoing, we do not find that the

trial court abused its discretion in striking these portions of

Supplee’s      affidavit.         Nonetheless,       because         the    substance     of

paragraphs four through seven are independently corroborated by

MMC’s    “Background         Checks”    provision      included        in    the   student

catalog,       which    provided    that      students    would       be     required    to

submit to a criminal history check and that MMC would review any

applicant and determine their fitness for admission, we find

even     assuming       arguendo       that    the   trial          court    abused     its

discretion in striking paragraphs four through seven, Supplee

has failed to show any resulting prejudice.
                                          -36-
       Paragraphs    thirteen       and    fifteen        of    Supplee’s            affidavit

provided as follows:

             13. Prior to my dismissal from [MMC], I was
                 never made aware by [MMC] that if I was
                 denied access to one clinical externship
                 facility, I would not be permitted to
                 apply for admission to any other clinical
                 externship facility.

             . . . .

             15. Prior to my dismissal from [MMC], I was
                 not aware that being denied access to a
                 single clinical externship facility would
                 immediately prohibit me from graduating
                 from the Surgical Technology Program.

       A review of plaintiff’s deposition testimony demonstrates

that   he    was   aware    that   based       on   the   results         of    a     criminal

background     check,      there   “could      be   an    issue       .   .     .    with    the

clinical     sites   in    general[.]”           However,      Supplee’s            deposition

testimony fails to indicate that he was aware that being denied

to a single clinical externship facility would prohibit him from

applying for admission to another clinical externship facility

or   would    prohibit      him    from    graduating          from       the       surg    tech

program.      Thus, paragraphs thirteen and fifteen of Supplee’s

affidavit     do   not     contradict     or     materially       conflict           with    his

prior deposition testimony; nor do they contain additions and

changes that are conclusory statements or recharacterizations

more favorable to Supplee that materially alter his deposition
                                         -37-
testimony.     Yet, even if we were to find that the trial court

abused   its   discretion         in    striking    paragraphs      thirteen    and

fifteen of Supplee’s affidavit, we hold that this error was not

prejudicial as the substance of the paragraphs were contained

within paragraph seventeen, which was not struck by the trial

court:

           17. Had I known that the policies of a single
               third-party clinical site could render my
               investments, financial and otherwise, in
               a [surg tech program] degree to be of no
               value, I would not have enrolled in that
               program.

    Based on the foregoing, we reject Supplee’s arguments and

affirm   the   order   of    the       trial    court,   striking    portions   of

Supplee’s affidavit.

                            ii.    Summary Judgment

    In his next argument, Supplee contends that the trial court

erred by granting defendants’ motion for summary judgment as to

Supplee’s claims of fraud, unfair and deceptive trade practices

(UDTP), negligent misrepresentation, and negligence.

                [W]e review the trial court’s order de
           novo to ascertain whether summary judgment
           was properly entered.    Summary judgment is
           appropriate if the pleadings, depositions,
           answers to interrogatories, and admissions
           on file, together with the affidavits, if
           any, show that there is no genuine issue as
           to any material fact and that any party is
           entitled to a judgment as a matter of law.
                                      -38-


Bumpers v. Cmty. Bank of N. Va., 367 N.C. 81, 87, 747 S.E.2d

220, 226 (2013) (citation and quotation marks omitted).                   “When

considering a motion for summary judgment, the trial judge must

view the presented evidence in a light most favorable to the

nonmoving party.”    Hamby v. Profile Prods., LLC, 197 N.C. App.

99, 105, 676 S.E.2d 594, 599 (2009) (citation omitted).

           The party moving for summary judgment has
           the burden of establishing the lack of any
           triable issue.    The movant may meet this
           burden by proving that an essential element
           of    the   opposing    party’s    claim  is
           nonexistent, or by showing through discovery
           that the opposing party cannot produce
           evidence to support an essential element of
           his claim or cannot surmount an affirmative
           defense which would bar the claim.

Folmar v. Kesiah, __ N.C. App. __, __, 760 S.E.2d 365, 367

(2014) (citation omitted).

                                 a.     Fraud

    “[T]he essential elements of actionable fraud are:                        (1)

false   representation    or    concealment     of    a   material   fact,    (2)

reasonably   calculated    to    deceive,       (3)   made   with    intent   to

deceive, (4) which does in fact deceive, and (5) resulting in

damage to the injured party.”           Harrold v. Dowd, 149 N.C. App.

777, 782, 561 S.E.2d 914, 918 (2002) (citation omitted).                      “An

unfulfilled promise is not actionable fraud, however, unless the
                                            -39-
promisor had no intention of carrying it out at the time of the

promise, since this is misrepresentation of a material fact.”

McKinnon v. CV Indus., Inc., 213 N.C. App. 328, 338, 713 S.E.2d

495, 503 (2011) (citation omitted).

      In    the   present      case,     there        are    no     genuine     issues      of

material fact regarding Supplee’s fraud claim because Supplee

failed to present any evidence that defendants had the intent to

deceive.     Ned Snyder, the campus director of MMC at Wilmington,

testified in a deposition that it was MMC’s practice to run a

criminal    background        check    at    admissions           and    at   the   clinical

experience.       Woolford also testified that based on MMC’s written

policy,     criminal     background          checks         were        “supposed     to     be

conducted    of    new   applicants”         during         the    admissions       process.

Despite      defendants’        policy,            evidence         demonstrated           that

defendants    failed     to    conduct       a     criminal       background        check   on

Supplee prior to admissions.                However, Supplee failed to present

specific evidence that at the time of contract formation between

Supplee and defendants, defendants had no intention of carrying

out   its    unfulfilled        promise;         an    essential          element     for     a

successful fraud claim.               Consequently, we hold that the trial

court did not err by granting defendants’ motion for summary

judgment as to Supplee’s fraud claim.
                                   -40-
                              b.     UDTP

    “In order to prevail under [N.C. Gen. Stat. § 75-1.1(a)]

plaintiffs must prove:    (1) defendant committed an unfair or

deceptive act or practice, (2) that the action in question was

in or affecting commerce, (3) that said act proximately caused

actual injury to the plaintiff.”          Canady v. Mann, 107 N.C. App.

252, 260, 419 S.E.2d 597, 602 (1992).           “[W]hether an action is

unfair or deceptive is dependent upon the facts of each case and

its impact on the marketplace.”           Norman Owen Trucking, Inc. v.

Morkoski, 131 N.C. App. 168, 177, 506 S.E.2d 267, 273 (1998)

(citations and quotation marks omitted).

         If a practice has the capacity or tendency
         to deceive, it is deceptive for the purposes
         of the statute.    “Unfairness” is a broader
         concept than and includes the concept of
         “deception.”   A practice is unfair when it
         offends established public policy, as well
         as when the practice is immoral, unethical,
         oppressive, unscrupulous, or substantially
         injurious to consumers.

Mitchell v. Linville, 148 N.C. App. 71, 74, 557 S.E.2d 620, 623

(2001) (citations omitted).        Furthermore, “[a] party is guilty

of an unfair act or practice when it engages in conduct which

amounts to an inequitable assertion of its power or position.”

McInerney v. Pinehurst Area Realty, Inc., 162 N.C. App. 285,
                                        -41-
289, 590 S.E.2d 313, 316-17 (2004) (citation and quotation marks

omitted).

     Our case law establishes that “[s]imple breach of contract

. . . do[es] not qualify as unfair or deceptive acts, but rather

must be characterized by some type of egregious or aggravating

circumstances before the statute applies.”                  Norman, 131 N.C.

App. at 177, 507 S.E.2d at 273.            Breach of contract accompanied

by fraud or deception, on the other hand, constitutes an unfair

or   deceptive     trade    practice.          Unifour    Constr.   Servs.   v.

Bellsouth Telcoms., 163 N.C. App. 657, 666, 594 S.E.2d 802, 808

(2004).

     In    support   of    his   UDTP    claim,   Supplee   first   argues   on

appeal that defendants “knowingly made false representations of

material    fact   concerning     their    intent    to   perform   background

checks” and “knowingly omitted material information about the

discretion of a single clinical site to unilaterally reject a

student for any reason and prohibit the student from finishing

the program.”        As previously discussed, we held that Supplee

could not establish a valid claim for fraud based on Supplee’s

failure to produce evidence that defendants intended to deceive

Supplee at the time of contract formation.                  A review of the

record does not reveal any evidence that defendants knowingly
                                              -42-
made   the   alleged       false      representations         or   knowingly      omitted

material     about    a     clinical      sites’        discretion.           Necessarily,

Supplee’s UDTP claim under the theory of breach of contract

accompanied     by    fraud      or   deception        must   fail      as    Supplee    has

failed to demonstrate how defendants’ breach of contract was

characterized by egregious or aggravating circumstances.

       Second, Supplee argues that defendants engaged in an unfair

practice or act when it took intentional actions amounting to an

inequitable     assertion          of     power.          Supplee        contends       that

defendants accomplished this by immediately dismissing him from

the surg tech program once a single clinical internship site

rejected     him.      We     disagree.          In     Supplee’s       own    deposition,

Supplee testifies as to how                   defendants      suggested he get his

criminal     record    expunged         and    then    reapply     to    the    surg    tech

program.     Supplee further testified that defendants offered an

option of transferring into another MMC curriculum at no cost to

Supplee.     These facts do not display an inequitable assertion of

power and do not display a practice that is immoral, unethical,

oppressive,         unscrupulous,         or         substantially       injurious        to

consumers.      Rather, the case before us involves a breach of

contract     based    on    an     identifiable         contractual          promise    that

defendants failed to honor.               “There is nothing so oppressive or
                                       -43-
overreaching      about    defendant[s’]        behavior     in    breaching    the

contract that would transform the case into one for an unfair

trade practice.”          Coble v. Richardson Corp. of Greensboro, 71

N.C. App. 511, 520, 322 S.E.2d 817, 824 (1984).                   Accordingly, we

affirm the trial court’s granting of summary judgment in favor

of defendants on Supplee’s UDTP claim.

                               c.      Negligence

    Supplee     argues      that     the   trial   court    erred    by   granting

summary judgment in favor of defendants as to his negligence

claim   because    defendants        had   a   duty   to   conduct    a   criminal

background   check    in     order    to   determine       his    eligibility   for

admission into and completion of the surg tech program.

    In order to state a claim for negligence, a plaintiff must

show “(1) a legal duty; (2) a breach thereof; and (3) injury

proximately caused by the breach.”              Bridges v. Parrish, 366 N.C.

539, 541, 742 S.E.2d 794, 796 (2013) (citation omitted).                         In

North Carolina State Ports Authority v. Lloyd A. Fry Roofing

Co., 294 N.C. 73, 240 S.E.2d 345 (1978), the North Carolina

Supreme Court held that “[o]rdinarily, a breach of contract does

not give rise to a tort action by the promisee against the

promisor.”     Id. at 81, 240 S.E.2d at 350.                 However, the Ports

Authority Court recognized four general categories under which a
                              -44-
breach of contract may constitute a tort action:

         (1)   The injury, proximately caused by the
               promisor’s negligent act or omission in
               the performance of his contract, was an
               injury to the person or property of
               someone other than the promisee.
         (2)   The injury, proximately caused by the
               promisor’s negligent, or wilful, act or
               omission in the performance of his
               contract,   was    to  property  of the
               promisee other than the property which
               was the subject of the contract, or was
               a personal injury to the promisee.
         (3)   The injury, proximately caused by the
               promisor’s negligent, or willful, act
               or omission in the performance of his
               contract, was loss of or damage to the
               promisee’s property, which was the
               subject of the contract, the promisor
               being charged by law, as a matter of
               public policy, with the duty to use
               care   in   the    safeguarding  of the
               property from harm, as in the case of a
               common carrier, an innkeeper or other
               bailee.
         (4)   The injury so caused was a wilful
               injury to or a conversion of the
               property of the promisee, which was the
               subject   of    the   contract,  by the
               promisor.

Id. at 82, 240 S.E.2d at 350-51 (citations omitted).

    We hold that none of the four general exceptions set forth

in Ports Authority apply to the facts at hand.         Rather, this

negligence cause of action is analogous to the claim brought

forward by the plaintiff in Ross.    See Ross, 957 F.2d at 415

(the plaintiff alleged that a university owed him a duty “to
                                        -45-
recruit and enroll only those students reasonably qualified and

able to academically perform” at the university).                         As held in

Ross, we also hold that recognizing Supplee’s cause of action, a

“negligent admission” claim, would present difficult “problem[s]

to a court attempting to define a workable duty of care.”                           Id.

Addressing Supplee’s “negligent admission” claim would require

subjective assessments as to the requirements for admission into

the surg tech program, requirements for completion of the surg

tech    program,      requirements      of   the    clinical      sites,     and    the

results       of   Supplee’s    criminal         background      check.       Because

“[r]uling on this issue would . . . require an inquiry into the

nuances of educational processes and theories,” we reject his

claim and affirm summary judgment in favor of defendants on this

issue.    Id. at 417.

                      d.     Negligent Misrepresentation

       Lastly,     Supplee     argues     that     the   trial    court     erred    by

granting summary judgment in favor of defendants on the issue of

negligent misrepresentation.            We do not agree.

       “The    tort   of   negligent      misrepresentation        occurs     when   a

party     justifiably      relies    to      his    detriment      on     information

prepared without reasonable care by one who owed the relying
                                          -46-
party a duty of care.”            Howard v. County of Durham, __ N.C. App.

__, __, 748 S.E.2d 1, 7 (2013) (citation omitted).

             Under general principles of the law of
             torts, a breach of contract does not in and
             of itself provide the basis for liability in
             tort. Ordinarily, an action in tort must be
             grounded on a violation of a duty imposed by
             operation of law, and the right invaded must
             be one that the law provides without regard
             to the contractual relationship of the
             parties, rather than one based on an
             agreement between the parties. A failure to
             perform a contractual obligation is never a
             tort unless such nonperformance is also the
             omission of a legal duty.

Hardin v. York Memorial Park, __ N.C. App. __, __, 730 S.E.2d

768, 775-76 (2012) (citations and quotation marks omitted).

       The   allegations     in    Supplee’s      complaint       and    the    evidence

before the trial court demonstrate that Supplee’s claim is that

defendants failed to conduct a criminal background check prior

to    admissions     and     Supplee’s      damages        were       caused    by   the

aforementioned failure.           The duty that defendants had to conduct

a    criminal   background        check    arose    under       the     terms   of   the

contract     between   the    parties       and    not     by     operation     of   law

independent     of   the   contract.         As    such,    the       breach    of   that

contractual duty cannot provide the basis for an independent

claim of negligent misrepresentation.                 Therefore, we hold that

the trial court did not err by granting summary judgment in
                                           -47-
favor     of     defendants      on        Supplee’s     claim      for   negligent

misrepresentation.

                            C.    Mr. Nutt’s Appeal

     On appeal, Mr. Kyle Nutt argues that the trial court erred

by granting defendants’ motion for sanctions.                    We agree.

     “[A]      Superior    Court,     as    part    of   its   inherent      power   to

manage its affairs, to see that justice is done, and to see that

the administration of justice is accomplished as expeditiously

as   possible,       has   the   authority          to   impose    reasonable        and

appropriate sanctions upon errant lawyers practicing before it.”

In re Small, 201 N.C. App. 390, 394, 689 S.E.2d 482, 485 (2009)

(citation omitted).         We review our court’s inherent authority to

impose sanctions for an abuse of discretion.                      Couch v. Private

Diagnostic Clinic, 146 N.C. App. 658, 663, 554 S.E.2d 356, 361

(2001).        “In reviewing a trial court’s findings of fact, our

review is limited to whether there is competent evidence in the

record to support the findings.”                  In re Key, 182 N.C. App. 714,

717, 643 S.E.2d 452, 455 (2007) (citation omitted).

     Rule      3.6   of    the   North      Carolina     Rules    of   Professional

Conduct provides as follows:

               (a)   A lawyer who is participating or has
                     participated in the investigation or
                     litigation of a matter shall not make
                     an extrajudicial statement that the
                                        -48-
                     lawyer knows or reasonably should know
                     will be disseminated by means of public
                     communication   and    will   have    a
                     substantial likelihood of materially
                     prejudicing an adjudicative proceeding
                     in the matter.

               (b)   Notwithstanding paragraph (a), a lawyer
                     may state:
                     (1) the claim, offense or defense
                     involved and, except when prohibited by
                     law,   the   identity   of   the   persons
                     involved;
                     (2) the information contained in a
                     public record;
                     (3) that an investigation of a matter
                     is in progress;
                     (4) the scheduling or result of any
                     step in litigation;
                     (5) a     request   for    assistance   in
                     obtaining    evidence   and    information
                     necessary thereto[.]

N.C.   Revised       R.   Prof’l.    Conduct   Rule   3.6(a)   and   (b).    The

comment section to Rule 3.6 states that a “relevant factor in

determining prejudice is the nature of the proceeding involved.

Criminal jury trials will be most sensitive to extrajudicial

speech. Civil trials may be less sensitive.”                   N.C. Revised R.

Prof’l. Conduct Rule 3.6 cmt.

       North    Carolina     Rules    of   Professional   Conduct    Rule   3.3,

entitled “Candor Toward the Tribunal,” provides that “[a] lawyer

shall not knowingly . . . make a false statement of material

fact or law to a tribunal or fail to correct a false statement
                               -49-
of material fact or law previously made to the tribunal by the

lawyer[.]”   N.C. Revised R. Prof’l. Conduct Rule 3.3(a)(1).

    On 27 January 2014, the trial court entered an order on

defendants’ motion for sanctions and/or appropriate relief.    The

trial court made the following pertinent findings of fact:

         7.    . . .     Plaintiffs moved pursuant to
               Rule 42 for an order granting each
               Plaintiff a separate trial.

         8.    In that motion, [Mr. Nutt] represented,
               among other things, that:        (1) the
               respective    Plaintiffs    had   “vastly
               different” criminal records; (2) the
               charges that “led to each Plaintiffs’
               dismissal were entirely different”; (3)
               the Plaintiffs’ damages “were different
               in amount, time period, and nature”;
               (4) there were “significant factual
               differences” between the Plaintiffs’
               respective breach of contract claims;
               (5) Supplee “has decided to appeal the
               Court’s Summary Judgment Order”; (6)
               Thomas, “due to the greatly different
               factual difference in her case and
               desire to reach a final adjudication in
               a more timely manner, has expressed her
               intent to proceed directly to trial”;
               and (7) it would be “prejudicial and
               inconvenient for Plaintiff Thomas to be
               forced to wait for the outcome of the
               appeal     of     Plaintiff     Supplee’s
               distinctly separate case.” . . . .

         . . . .

         11.   Mr. Nutt [] moved to have Supplee’s
               claim tried first, despite representing
               to this Court that Thomas desired to
               have her claim adjudicated in a more
                      -50-
      timely manner.    The Honorable Phyllis
      M. Gorham . . . permitted Supplee’s
      trial to proceed before Thomas’ trial.

12.   Supplee’s breach of contract claim came
      on for trial on October 28, 2013,
      before the undersigned Superior Court
      Judge. Thomas’ trial was scheduled for
      November 18, 2013, which was also to be
      heard by the undersigned[.]

13.   The jury returned a verdict in favor of
      Supplee on November 1, 2013, in the
      amount of $53,481. . . .

14.   The   jury’s  verdict   sheet  did  not
      identify the basis for the award (i.e.,
      whether damages were awarded based on
      evidence of tuition paid, lost wages,
      or some combination thereof).

15.   On or about November 3, 2013, WECT
      posted    a    story   on   its    website
      disclosing     that   Mr.   Supplee    had
      prevailed on his breach of contract
      claim in the amount of $53,481, and
      that   the    damages  were   based   upon
      “wasted     tuition   and   lost    income
      opportunities[.]” . . . .

16.   The alleged basis for the damages,
      “wasted   tuition   and  lost  income
      opportunities[,]” is not a matter of
      public record.

17.   Mr. Nutt acknowledged     to this Court
      that he supplied the      information to
      WECT for the article.

18.   Mr. Nutt was reported in the article as
      stating    that    “the    school   was
      contractually obligated to screen their
      applicants’   criminal  backgrounds  to
      make sure all potential students could
                      -51-
      eventually   graduate   from   healthcare
      degree    programs     w[h]ere     certain
      offenses the school was aware of could
      potentially    prevent    students    from
      completing    required    coursework    at
      hospitals.”

19.   The specific statements attributed to
      Mr. Nutt by WECT were not found on the
      jury’s verdict sheet.

20.   Mr. Nutt also informed WECT that “the
      school offered Supplee $25,000 at the
      start of trial to end the matter, but
      then removed the offer midway through
      trial.”

21.   The settlement amount and withdrawal of
      the    offer   was    an    inadmissible
      settlement   communication,    and   was
      likewise not a matter of public record.

22.   In the WECT article, Mr. Nutt stated
      that “his firm is representing another
      student going to trial over similar
      claims this month.”

. . . .

24.   Mr. Nutt represented to WECT that
      Thomas’ case was “similar” to Mr.
      Supplee’s   claims,   while   Mr.   Nutt
      represented and has maintained before
      this Court that the two Plaintiffs
      present divergent and distinct fact
      patterns that necessitated two trials.

. . . .

29.   Mr.    Nutt’s   comments   created    a
      substantial risk of prejudicing the
      Thomas jury, and were in violation of
      Rule 3.6(a) of the North Carolina Rules
      of Professional Conduct.
                                           -52-


              30.    Partially as a result of Mr. Nutt’s
                     comments to the news media, Defendants
                     settled Thomas’ case and avoided a
                     trial,    did    not     pursue  their
                     counterclaim against Thomas[.]

       Based on the foregoing, the trial court concluded that Mr.

Nutt    had   violated        Rule   3.6    of    the   North   Carolina     Rules    of

Professional Conduct “by making extrajudicial statements to the

news media” and that Mr. Nutt “knew or reasonably should have

known     that      the    extrajudicial         statements     he   made    would   be

disseminated by means of public communication and would have a

substantial likelihood of materially prejudicing an adjudicative

proceeding in the matter.”              The trial court also concluded that

Mr. Nutt either violated Rule 3.6 or Rule 3.3, or both, when he

either misrepresented the difference in the plaintiffs’ claims

or     knew   or     should     have    known      that   their      cases   were    not

“similar.”

       First, Mr. Nutt          argues that his statements              made to the

media, excluding his statement concerning the settlement offer

made to Supplee, were protected by the “safe harbor” provisions

of Rule 3.6(b).           Here, the trial court found in findings of fact

numbers fifteen through nineteen that Mr. Nutt’s extrajudicial

comments included stating the basis of the damages awarded by

the    jury   and     stating    that      the    defendants    were    contractually
                                     -53-
obligated to screen their applicants’ criminal backgrounds to

ensure   all   potential    students        could     successfully      complete

healthcare degree programs.          The trial court found that these

statements were not a matter of public record.               After thoughtful

review, we find that the jury’s award of damages and the amount

of damages were clearly a matter of public record.                   Mr. Nutt’s

extrajudicial statement stating that the basis of damages was

“wasted tuition and lost income opportunities” qualifies under

Rule 3.6(b), as it pertained to Supplee’s claim.                      Supplee’s

claim against defendants were specifically for damages based on

expenses spent to enroll and participate in classes at MMC and

for   “forsaken    income-earning     opportunities.”           These    claims,

contained in Supplee’s 21 August 2012 complaint, were matters of

public   record.      Mr.   Nutt’s    statement       that   defendants     were

“contractually obligated to screen their applicants’ criminal

backgrounds” also involves the claim involved in the present

case, and therefore, are among the subjects a lawyer may state

extrajudicially.     Thus, we hold that the trial court abused its

discretion by finding that the aforementioned statements were

sanctionable under Rule 3.6.

      We now address the trial court’s finding of fact number

twenty   through   twenty-one   regarding       Mr.    Nutt’s    extrajudicial
                                         -54-
statement    that    defendants         made    Supplee       a    $25,000      settlement

offer at the start of the trial, which was later removed midway

through the trial.          The trial court found that this statement

was an inadmissible settlement communication and not a matter of

public   record.         Rule     3.6    requires          that    a    lawyer     “who    is

participating       or    has    participated         in     the       investigation       or

litigation of a matter” may not make an extrajudicial statement

that he knows “will have a substantial likelihood of materially

prejudicing an adjudicative proceeding in the matter.”                                    N.C.

Revised R. Prof’l Conduct Rule 3.6(a).                     (emphasis added).          Here,

the trial court found that Mr. Nutt’s statements were made on 3

November 2013, two days after a jury returned a verdict in favor

of   Supplee.            Therefore,        we    conclude          that      Mr.     Nutt’s

extrajudicial       statement      could       not    have    had       a   substantially

likelihood of materially prejudicing Supplee’s proceeding as it

had already concluded and find that the trial court abused its

discretion in finding that this statement violated Rule 3.6.

     Next,    Mr.    Nutt       argues    that       the    trial       court    erred     by

entering finding of fact number thirty and we agree.                            Finding of

fact number thirty provided that partially based on Mr. Nutt’s

extrajudicial statements, defendants settled in Thomas’ case and

avoided a trial.         We find nothing in the record to support this
                                     -55-
finding.     Mr. Nutt merely stated in his statements to the media

that “his firm was representing another student going to trial

over similar claims this month” and did not identify Thomas by

name.     Additional information about Thomas’ claims would have

been a matter of public record.

       Lastly, Mr. Nutt asserts that the trial court                  erred by

finding that his extrajudicial statements violated Rule 3.3 of

the North Carolina Rules of Professional Conduct.                    Here, the

trial court based its finding of a violation of Rule 3.3 on the

fact that while Mr. Nutt represented to the trial court that

Supplee’s and Thomas’ cases “present[ed] divergent and distinct

fact     patterns   that     necessitated       two   trials[,]”     Mr.    Nutt

represented to      the    media that    Thomas’ case was “similar” to

Supplee’s claims.          We conclude that these two representations

are not contradictory and do not constitute a “false statement”

under Rule 3.3.      It is clear from the record that Supplee and

Thomas’ 21 August 2012 joint complaint alleged the same legal

claims    against   defendants     and   that    after   the   31    July   2013

summary judgment order, the only claim at issue in both Supplee

and     Thomas’   trials     was   breach   of    contract.         Mr.    Nutt’s

representations to the media that Supplee and Thomas had similar

claims and Mr. Nutt’s representations to the trial court that
                                         -56-
Supplee    and   Thomas’s      cases    had       “divergent    and   distinct     fact

patterns” are not mutually exclusive.                     Stating that two cases

have similar claims as well as “divergent and distinct fact

patterns”      does   not     represent       a    lack   of    candor    toward   the

tribunal in violation of Rule 3.3.

       Based on the foregoing, we hold that the trial court abused

its discretion by holding that Mr. Nutt either violated Rule 3.6

or Rule 3.3, or both, and reverse the trial court’s 27 January

2014 order on defendants’ motion for sanctions.

                                 III. Conclusion

       We affirm the 20 December 2013 order of the trial court

denying defendants’ motions for directed verdict and judgment

notwithstanding the verdict and hold that the trial court did

not    abuse   its    discretion   by     admitting       evidence       of   Supplee’s

landscaping business and income earned as a car salesman.                           We

hold    that   the    trial    court    did       not   abuse   its   discretion    by

striking portions of Supplee’s affidavit and affirm the 31 July

2013 order of the trial court granting defendants’ motion for

summary judgment, in part.             We reverse the 27 January 2014 order

on defendants’ motion for sanctions.

       Affirmed in part; reversed in part.

       Judges CALABRIA and STEELMAN concur.
