                             NO. COA13-1083

                     NORTH CAROLINA COURT OF APPEALS

                         Filed:   18 March 2014


JANE HEATON-SIDES,
     Plaintiff,

    v.                                Granville County
                                      No. 11 CVS 1065
(1) TORETTA SNIPES individually,
and in her capacity as Vice
President of STATE EMPLOYEES’
CREDIT UNION,

                &

(2) STATE EMPLOYEES’ CREDIT UNION,

                &

(3) JAYME CURRIN, individually,
and in her capacity as President
of AMERICAN DREAM PROPERTIES,
INC.,

                &

(4) AMERICAN DREAM PROPERTIES,
INC.,
     Defendants.


    Appeal by plaintiff from an order entered 22 May 2013 by

Judge Henry W. Hight, Jr. in Granville County Superior Court.

Heard in the Court of Appeals 17 February 2014.


    Michael A. Jones, for plaintiff-appellant.

    Hopper, Hicks & Wrenn PLLC, by James C. Wrenn, Jr. and
    Gerald T. Koinis, for defendants-appellees.
                                              -2-


       MARTIN, Chief Judge.


       Plaintiff      Jane    Heaton-Sides                filed     a     complaint      against

defendants      alleging         claims        for        conversion,         negligent        and

intentional infliction of emotional distress, punitive damages,

and unfair and deceptive trade practices.                                The claims against

defendants     State      Employees       Credit          Union     (“SECU”)     and     Toretta

Snipes were dismissed by order dated 1 February 2013 as a result

of    plaintiff’s      failure     to        respond       to     discovery.          Plaintiff

subsequently       voluntarily         dismissed          with     prejudice     all     of    her

claims      against    defendants            Jayme        Currin        and   American     Dream

Properties except her claim for conversion.

       After a bench trial, the trial court made the following

relevant findings of fact, all of which are supported by the

evidence presented at the trial.                     SECU foreclosed on plaintiff’s

personal residence located at 1500 Cash Road in Creedmoor, North

Carolina     and    was    later       placed        in    lawful        possession      of    the

residence on 1 April 2011 at 9:00 a.m.                            On that date, plaintiff

and   her    husband      were    in    the     process           of    moving   out     of    the

residence.         Plaintiff,          her     husband,           and    SECU    agreed       that

plaintiff and her husband could continue moving out until 3:00

p.m. that day.            Around 3:00 p.m., Ms. Snipes, an employee of
                                          -3-
SECU, informed plaintiff and her husband that if they wanted to

take any additional personal property from the residence they

should inform her or Ms. Currin of American Dream, a property

manager for SECU, by the close of business on 4 April 2011.1

Furthermore, Ms. Currin testified that when she walked through

the residence on 1 April 2011 it did not appear that anything of

value was left behind.            Plaintiff did not inform anyone that she

wanted    to    retrieve      additional        personal      property     from     the

residence      until    7   April   2011.       By   that    time,   any   remaining

property in the residence had been disposed of and plaintiff was

not    able     to     retrieve     any     additional        personal     property.

Plaintiff testified that,            as a result,           she was missing some

household items that would cost her $10,272 to replace as well

as    notes    and     outlines     for   several     children’s      books       (“the

papers”) that she thought had a value of $75,400 as reasonable

compensation to her for the amount of time she spent working on

them (20 hours per week x 52 weeks x 10 years x $7.25 per hour =

$75,400).      Plaintiff, however, did not offer any testimony about

the fair market value of the household items or the papers.



1
  We note that the trial court refers to both “Monday, April 3,
2011” and “Monday, April 4, 2011” in its order. The date is not
disputed in this action, but we take judicial notice, by
reference to a calendar, that the first Monday of April, 2011
was the 4th.
                                              -4-
       Based    on    this     evidence,      the     trial       court     concluded    that

plaintiff      did    not     show    a    wrongful        conversion        by    defendants

because she had abandoned the personal property in the residence

when   she     failed    to    contact       anyone        about    removing       additional

personal property by 4 April 2011.                    Furthermore, the trial court

concluded      that     even    if    plaintiff           had    proven     her    conversion

claim, she had failed to prove actual damages.                             Plaintiff timely

filed notice of appeal from the trial court’s order dismissing

her conversion claim with prejudice.

                                _________________________

       A   conversion         claim       essentially           requires    two     elements:

“ownership       in     the     plaintiff           and     wrongful        possession      or

conversion      by    the     defendant.”           Variety       Wholesalers,       Inc.   v.

Salem Logistics Traffic Servs., LLC, 365 N.C. 520, 523, 723

S.E.2d 744, 747 (2012).                On appeal, plaintiff argues that the

trial court erred in dismissing her conversion claim for failure

to show a wrongful conversion by defendants because defendants

violated N.C.G.S. § 42-25.9(g) when they disposed of plaintiff’s

personal property before the expiration of the statutory ten-day

waiting period.         We agree.

       When    we    review    an     order    issued       after     a    bench    trial   we

determine “whether the trial judge’s underlying findings of fact
                                                 -5-
are supported by competent evidence, in which event they are

conclusively         binding       on   appeal,         and    whether      those     factual

findings      in     turn    support       the    judge’s      ultimate     conclusion       of

law.”       Holloway v. Holloway, __ N.C. App. __, __, 726 S.E.2d

198,    204     (2012).            However,        we   review      the   trial      judge’s

conclusions of law de novo.                 Id.

       In     this     case,       plaintiff’s          residence     was     sold     at    a

foreclosure sale and SECU was later placed in possession of the

residence      pursuant       to    N.C.G.S.       §    45-21.29(l).          This    statute

provides that the purchaser of the foreclosed property “shall

have    the    same     rights       and    remedies          in   connection       with    the

execution of an order for possession and the disposition of

personal property following the execution as are provided to a

landlord under North Carolina law, including Chapters 42 and 44A

of   the    General         Statutes.”           Id.     Thus,      section     45-21.29(l)

directs us to Chapter 42.

       N.C.G.S. § 42-25.9(g) states:

              Ten days after being placed in lawful
              possession by execution of a writ of
              possession, a landlord may throw away,
              dispose of, or sell all items of personal
              property remaining on the premises . . . .
              During the 10-day period after being placed
              in lawful possession by execution of a writ
              of possession, a landlord may move for
              storage purposes, but shall not throw away,
              dispose of, or sell any items of personal
                               -6-
         property remaining on the premises unless
         otherwise provided for in this Chapter.
         Upon the tenant’s request prior to the
         expiration    of   the    10-day   period,   the
         landlord shall release possession of the
         property   to    the   tenant   during   regular
         business hours or at a time agreed upon.

N.C. Gen. Stat. § 42-25.9(g) (2011) amended by 2012 N.C. Sess.

Laws 73, 74, ch. 17, §§ 2(a), 2(b), amended by 2013 N.C. Sess.

Laws 309, 311 ch. 334, § 4.

    Based on the language of this statute, the landlord or

buyer in a foreclosure sale who is placed in lawful possession

of a residence may move personal property in the residence to

storage but cannot dispose of the property for ten days after

being placed in lawful possession.    Furthermore, the landlord or

buyer must make the personal property available to the tenant or

former owner upon their request during the ten-day period.

    Defendants assert that they met the statutory requirements

of N.C.G.S. § 42-25.9 by:     (1) allowing plaintiff to continue

removing her personal property on 1 April 2011 when they were

placed in lawful possession, and (2) agreeing with plaintiff and

her husband that if they wanted additional personal property

from the residence they should notify defendants by the end of

business on Monday 4 April 2011.     In essence, defendants appear

to argue that plaintiff waived the ten-day waiting period when
                                         -7-
she agreed to contact defendants by the end of business on 4

April     2011,     and    that     plaintiff        was   guaranteed     only     one

opportunity to retrieve her personal property.                    These arguments

fail.

     In contract law there are generally two types of rules:

default rules and immutable rules.                  Default rules are rules that

“parties can contract around by prior agreement.”                       Ian Ayres &

Robert    Gertner,        Filling    Gaps      in    Incomplete    Contracts:      An

Economic Theory of Default Rules, 99 Yale L.J. 87, 87 (1989).

Immutable rules, by comparison, are those rules that “parties

cannot change by contractual agreement.”                   Id.   While these terms

usually refer to the Uniform Commercial Code, they demonstrate

the principle that some rules may be avoided by contract while

others may not.           The ten-day waiting period in N.C.G.S. § 42-

25.9(g) cannot be avoided by contract because N.C.G.S. § 42-25.8

provides:     “Any lease or contract provision contrary to this

Article     shall    be    void     as   against       public    policy.”        Thus,

plaintiff and defendants could not satisfy the statutory ten-day

waiting period by agreeing to a modified timeline because such

an agreement violates public policy and is void.

     Furthermore, nothing suggests that a tenant or former owner

has only one opportunity to obtain possession of their personal
                                                   -8-
property        during      the    ten-day          period.          While     the     statutory

language “[u]pon the tenant’s request” is singular, it seems

counterintuitive to reason that a former owner of property has

only     one    chance      in     the       ten-day       period     to     obtain     physical

possession of their personal property before it is disposed of.

As   a    result,      we   believe          that    plaintiff       could      have    obtained

possession of her personal property on 7 April 2011 even though

she had been allowed to remove personal property on 1 April

2011.      Thus, we reverse the trial court’s conclusion of law that

plaintiff failed to prove her conversion claim.

         Once a party has stated a claim for conversion, the party

must present evidence that will provide a basis for determining

damages.        Marina Food Assocs., Inc. v. Marina Rest., Inc., 100

N.C. App. 82, 94, 394 S.E.2d 824, 831, disc. rev. denied, 327

N.C.     636,    399     S.E.2d        328    (1990).         For    a     conversion     claim,

damages        are   determined          by    the        “fair     market    value     of     the

converted        property         at     the       time     of    the      conversion,        plus

interest.”           Bartlett Milling Co.,                 v. Walnut         Grove Auction &

Realty Co., 192 N.C. App. 74, 81, 665 S.E.2d 478, 485, disc.

rev. denied, 362 N.C. 679, 669 S.E.2d 741 (2008).                                 Fair market

value is the price that a willing buyer would pay a willing

seller     when      neither      party       is    compelled       to   take    part    in    the
                                         -9-
transaction.         Esteel Co. v. Goodman, 82 N.C. App. 692, 698, 348

S.E.2d 153, 157 (1986), disc. rev. denied, 318 N.C. 693, 351

S.E.2d 745 (1987).

         As discussed earlier, a trial court’s findings of fact are

conclusive      on     appeal    if    they        are    supported      by   competent

evidence.      Holloway, __ N.C. App. at __, 726 S.E.2d at 204.                       In

this case, the trial judge found that plaintiff did not attempt

to determine the fair market value of the household goods and

offered no testimony as to the fair market value of the papers.

These     findings     are    supported       by    the    evidence.          At   trial,

plaintiff testified that the replacement cost of the household

items was $10,272.            Replacement cost is not the fair market

value.      The fair market value of the household goods would be

the value of the goods at the time of their conversion, not the

cost of buying replacement goods.                  Plaintiff did not testify as

to the value of the goods at the time of their conversion, and

as   a    result,    failed     to   offer    evidence      of   their    fair     market

value.

         Furthermore, plaintiff offered no evidence as to the fair

market value of the papers.                  As stated earlier, fair market

value is the price a willing buyer would pay a willing seller

for goods.      See Esteel, 82 N.C. App. at 698, 348 S.E.2d at 157.
                                   -10-
Plaintiff testified that she thought that the papers had a value

of $75,400 because that would be reasonable compensation for the

amount of time she worked on them.          However, to prove the fair

market value of the papers plaintiff would have to demonstrate

how much a willing buyer would pay her for the papers.

      During   the    bench   trial,   plaintiff’s    counsel     relied   on

Pattern   Jury       Instruction   810.66    to    argue    that     $75,400

represented the “intrinsic” value of the papers.            This argument

was not made on appeal; however, if plaintiff had made this

argument on appeal it would have failed.             The note to Pattern

Jury Instruction 810.66 states:           “Use this instruction where

damages measured by market value would not adequately compensate

the plaintiff.”        N.C.P.I.—Civ. 810.66 (gen. civ. vol. 2013).

Thus, intrinsic value was not the appropriate value to determine

plaintiff’s damages because there was no evidence of the fair

market value of the papers or that the fair market value of the

papers would not adequately compensate plaintiff.                  The trial

court correctly found that plaintiff had presented no evidence

of the fair market value of the household goods or the papers,

and   correctly   concluded    that    plaintiff   had   failed    to   prove

actual damages.

      Actual damages, however, are not an essential element of a
                                        -11-
conversion claim.          Hawkins v. Hawkins, 101 N.C. App. 529, 533,

400 S.E.2d 472, 475 (1991), aff'd, 331 N.C. 743, 417 S.E.2d 447

(1992).     Consequently, even if a plaintiff fails to prove actual

damages, she can still recover nominal damages.                      See Fagan v.

Hazzard, 34 N.C. App. 312, 313–14, 237 S.E.2d 916, 917 (1977)

(affirming     a   trial    court’s     award    of     one     dollar   as    nominal

damages     when   the    plaintiff    proved     conversion       but   not   actual

damages).     Accordingly, plaintiff is entitled to nominal damages

because she proved her conversion claim but not actual damages.

       Therefore,    we     reverse    the      trial      court’s   holding     that

plaintiff failed to prove conversion, affirm the determination

that plaintiff failed to prove actual damages, and remand this

case   to    the   trial    court     for   entry     of    a   judgment      awarding

plaintiff nominal damages.

       Affirmed in part, reversed in part and remanded.

       Judges ELMORE and HUNTER, JR. concur.
