Myers & Chapman, Inc. v. Thomas G. Evans, Inc.

374 S.E.2d 385 (1988)

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Nature of the Case

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Facts

Myers & Chapman, Inc., (P), entered into a written subcontract with Thomas G. Evans, Inc. (D) to furnish and install the heating, ventilating and air conditioning system for a shopping center. D was to submit periodic 'Applications for Payment' to P as the work progressed. Each payment application was signed by D was in the following form and contained the following statement: The undersigned Contractor certifies that to the best of his knowledge, information and belief the Work covered by this Application for Payment has been completed in accordance with the Contract Documents, that all amounts have been paid by him for Work for which previous Certificates for Payment were issued and payments received from the Owner, and that current payment shown herein is now due. Payment No. 2, requested payment in the amount of $33,227 for equipment purportedly ordered and stored in a local bonded warehouse for eventual installation in the construction project. P paid D for all the materials claimed to have been purchased and stored and which were reflected in Application for Payment No. 2. In Application for Payment No. 3 D recertified that the specialty items had been purchased and stored. D decided to wind up his firm's business. D contracted with Custom Comfort, Inc., to finish the job. After Custom Comfort, Inc., began work, it was unable to locate the $11,247 in specialty items purportedly stored in the bonded warehouse and already paid for by P. P reordered the specialty items, paid for them a second time, and brought suit to recover its loss. P sued D for intentional fraud and gross negligence such as to permit a fraud to be committed on P. The jury and the court found for P. The trial court concluded that Ds' actions constituted an unfair and deceptive trade practice, it trebled the compensatory damages of $11,731 awarded by the jury to a total of $35,193 and awarded attorney fees to P. Ds appealed. The Court of Appeals reversed and P appealed.