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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

Court of Appeals of North Carolina.

Douglas SINGLETARY, III, Plaintiff,

P & A INVESTMENTS, INC. d/b/a Andy’s Mobile Home and Land Sales, Defendant.

No. COA10–1089.

June 7, 2011.

Background: Mobile home buyer brought action against seller for breach of contract and deceptive trade practice

after home was destroyed by fire before it was moved to buyer’s lot and seller refused to refund buyer’s money. The

Superior Court, Anson County, W. Erwin Spainhour, J., entered judgment for buyer, and seller appealed.

Reversed.

West Headnotes

[1] Property 315 5

343 Sales

343I Requisites and Validity of Contract

343k9 Personal Property Which May Be Subject of Sale

343k10 k. Nature of property. Most Cited Cases

315 Property

315k3 Distinction Between Real and Personal Property

315k4 k. In general. Most Cited Cases

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

343k9 Personal Property Which May Be Subject of Sale

48A Automobiles

48AI Control, Regulation, and Use in General

48Ak19 k. Sale or transfer. Most Cited Cases

343k199 k. In general. Most Cited Cases

Motor Vehicle Act (MVA) did not supplant UCC in action regarding risk of fire loss of resold mobile home

which had been purchased but not yet moved from its former site, as case presented no issue as to tort liability or

automobile liability insurance coverage, and dealt with the rights and obligations of the parties directly involved in

the sales transaction. West‘s N.C.G.S.A. §§ 20–72(b), 25–2–105(2), 25–2–509.

Automobiles 48A 20

48A Automobiles

48AI Control, Regulation, and Use in General

[5] Sales 343 201(2)

343 Sales

343V Operation and Effect

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

343k198 Specific Articles or Goods

343k201 Delivery and Acceptance

343k201(2) k. Provisions of contract. Most Cited Cases

Mobile home buyer had risk of loss of mobile home on the date it was destroyed by fire; at the time the parties

343 Sales

343V Operation and Effect

343V(A) Transfer of Title as Between Parties

343k198 Specific Articles or Goods

343k199 k. In general. Most Cited Cases

Carpenter & Flake, PLLC, Wadesboro, by Jeffery K. Carpenter, for Plaintiff–Appellee.

Gordon, Hicks and Floyd, P.A., Laurinburg, by Charles L. Hicks, Jr., for Defendant–Appellant.

BEASLEY, Judge.

practice. A bench trial was held on 1 March 2010, where the matter was tried upon stipulated facts as set forth in a

pre-trial order filed in open court that same date. The trial court’s findings mirror the stipulations to which the parties

agreed and establish the factual background of the case, as follows.

This action arises out of an agreement between the parties for the purchase of a mobile home. At all times rele-

vant hereto, Defendant was engaged in the principal business of selling new and used “manufactured homes,” and

On or about 17 November 2007, Plaintiff entered into a written contract with Defendant for the sale of the same

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

mobile home and paid the purchase price in full. Although the certificate of title, together with appropriate docu-

mentation that would authorize the issuance of a certificate title in the name of any party to whom Defendant sold

the mobile home, had not yet been received by Defendant from Vanderbilt, Defendant represented to Plaintiff that it

contractual provision requiring it to relocate the mobile home from its existing location to Plaintiff’s property, but

Plaintiff ultimately declined the inclusion of such provision. Instead, Plaintiff elected to purchase and accept the

mobile home “As is where is,” as reflected in the sales contract, rather than bear additional costs for Defendant’s

assumption of the delivery responsibility. While Defendant failed to attach a separate “Notice of Cancellation” to the

contract in duplicate, as required for manufactured home purchase agreements by N.C. Gen.Stat. § 143–143.21A(c),

to any relocation thereof, the trial court found that it could be detached from the land without material harm to either

the mobile home or the real property. As of midnight on 21 November 2007, the third business day following the

execution of the agreement between Plaintiff and Defendant, neither party had expressed any intention to cancel the

sale. Moreover, Plaintiff had at no time advised Defendant of any inability to obtain insurance on the home, nor had

he requested Defendant’s assistance in that regard. In fact, the only communication between the parties from the date

possession of the certificate of title to the mobile home and the appropriate documentation for transfer to Plaintiff

shortly after 27 November 2007, Defendant diligently requested that Plaintiff cooperate in having the certificate of

title issued in Plaintiff‘s name. Plaintiff, however, refused to provide Defendant with either a driver’s license or iden-

tification card number, as required by N.C. Gen.Stat. § 20–52(a), and the trial court found that the failure to have a

certificate of title to the mobile home issued in Plaintiff’s name is the result of Plaintiff’s own refusal to cooperate

Our standard of review for a judgment following a bench trial, in which the trial court sits without a jury, “is

whether there is competent evidence to support the trial court’s findings of fact and whether the findings support the

conclusions of law and ensuing judgment.” Sessler v. Marsh, 144 N.C.App. 623, 628, 551 S.E.2d 160, 163 (2001)

(citation omitted). “Findings of fact by the trial court in a non-jury trial have the force and effect of a jury verdict

and are conclusive on appeal if there is evidence to support those findings. A trial court’s conclusions of law, how-

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

Plaintiff contended before the trial court, as he does on appeal, that the legal result obtained from application of

various UCC provisions is overridden by the North Carolina Motor Vehicle Act, specifically N.C. Gen.Stat. § 20–72

thereof, as set forth in Nationwide Mutual Insurance Co. v. Hayes, 276 N.C. 620, 174 S.E.2d 511 (1970). It is Plain-

tiff’s position that the MVA governs the sales transaction and that no ownership of, title to, or interest in the mobile

home passed to him before its destruction because the requirements of Hayes had not been met. His contention is

that under Hayes and the MVA’s title transfer provisions, ownership of the mobile home remained with the seller at

the time of its destruction, and thus, Defendant bore the loss thereof. Defendant, however, argues that our Supreme

Court’s decision in Hayes is inapposite to the facts of this case and that any conflict that may arise between the ap–

plicability of section 20–72 and the UCC, in which the MVA’s specific provision would govern, is not present in the

case at bar. Accordingly, the UCC’s risk of loss provisions, as applied to the parties’ agreement, shifted the risk of

loss from Defendant merchant-seller to Plaintiff upon the execution of the sales contract. For the following reasons,

and controlled by the UCC as something ‘movable at the time of identification to the contract for sale,’ ” Hensley v.

Ray’s Motor Co. of Forest City, Inc., 158 N.C.App. 261, 264, 580 S.E.2d 721, 723 (2003) (quoting N.C. Gen.Stat. §

25–2–105(1) (2001)); see also Reece v. Homette Corp., 110 N.C.App. 462, 466, 429 S.E.2d 768, 770 (1993) (“The

sale of a mobile home is a ‘transaction in goods.’ ”).

For example, this Court determined a mobile home was a good, the sale of which was controlled as a transaction

Hensley, 158 N.C.App. at 264, 580 S.E.2d at 723. Indeed, we have acknowledged that mobile homes can be

considered realty where a plaintiff shows: (1) that the home was annexed to land with the intent that it be permanent;

or (2) demonstrates that circumstances surrounding the association between the land and the mobile home or the

relationship between various parties claiming an interest in the item otherwise justifies treating the mobile home as

realty affixed to the land. Id. at 264, 580 S.E.2d at 723–24 (citing Hughes, 115 N.C.App. at 328, 444 S.E.2d at 250).

cmt. (“[I]tems affixed to real property which can be removed without injury to the realty are treated as goods by this

subsection of the UCC even though attached at the time the contract is made and without regard to which party

(buyer or seller) is to make the severance[,]” and “[w]hether an item is to be deemed ‘real’ or ‘personal’ property

(‘goods’) will be determined under the Code by its potential for severability without injury to the realty to which it is

attached and not upon the more difficult determination of whether the item is a ‘fixture.’ ”).

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

“the mobile home was located upon the real property in the State of North Carolina of a third party but could be re–

moved therefrom without material harm to either the mobile home or the real property.” While the trial court like-

masonry underpinning and arranged for the mobile home to be broken down and relocated further indicates that the

home was indeed movable at the time of the parties’ agreement. Thus, consistent with our general view that mobile

homes are goods, and in light of the trial court’s findings regarding the severability and relocation of the home in

question by Plaintiff, we conclude that it was not part of the real estate but, rather, personal property and a “good”

under the UCC.

(Bankr.M.D.N.C.1994) (“It is clear under North Carolina law that a mobile home is a ‘motor vehicle’ for purposes

of the statutes dealing with registration and ownership of motor vehicles.”). The MVA provides, in pertinent part:

In order to assign or transfer title or interest in any motor vehicle registered under the provisions of this Article,

the owner shall execute in the presence of a person authorized to administer oaths an assignment and warranty of

title on the reverse of the certificate of title in form approved by the Division, including in such assignment the

ty passage’ or ‘title’ approach as regards the question of who bears the risk of loss,” N.C. Gen.Stat. § 25–2–509

(Commentary) (2009), and states that, if the contract does not provide for the seller’s shipment of the goods by carri-

er or a bailee’s holding of the goods for delivery without being moved, and the seller is a merchant, “the risk of loss

passes to the buyer on his receipt of the goods if the seller is a merchant; otherwise the risk passes to the buyer on

tender of delivery.” N.C. Gen.Stat. § 25–2–509(3) (2009).

[4] The potential for conflict between the transfer of ownership provisions in the MVA and the overlapping sub-

ject matter covered by the UCC was first addressed in Hayes. See Hayes, 276 N.C. at 632, 174 S.E.2d at 519 (noting

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

issue of first impression in our Courts). Our Supreme Court in Hayes was called upon to resolve which of two insur-

ance companies-one providing a “non–owner’s” policy and the other, an “owner’s” policy-afforded liability coverage

the date upon which the purchaser of the vehicle acquired an ownership interest therein, which occurred at an earlier

point in time under the UCC than under the MVA. Id. at 626, 174 S.E.2d at 514. Where “ Hayes dealt with a situa-

tion in which the rights of parties not privy to the sales transaction itself, hinged on the time when legal title to the

vehicle passed,” American Clipper Corp. v. Howerton, 311 N.C. 151, 161, 316 S.E.2d 186, 192 (1984), the Court

applied the “public regulations” of the MVA over the conflicting title transfer provisions of the UCC, a “private

tion is involved, but that in case a court should decide to apply this private law definition and reasoning to its pub-

lic regulation, that there should be a clear and concise definitional basis for so doing. Such comment leads to the

conclusion that the sales act, a private law, is not necessarily applicable to public regulations unless the court

chooses to make it so.

Hayes, 276 N.C. at 638–39, 174 S.E.2d at 523. Where section 20–72(b) of the MVA contains “specific, defi-

for purposes of tort law and liability insurance coverage, no ownership passes to the purchaser of a motor vehicle

which requires registration under the [MVA] until (1) the owner executes, in the presence of a person authorized

to administer oaths, an assignment and warranty of title on the reverse of the certificate of title, including the

name and address of the transferee, (2) there is an actual or constructive delivery of the motor vehicle, and (3) the

duly assigned certificate of title is delivered to the transferee.

because the comprehensive terms provided in N.C. Gen.Stat. § 20–72(b) had not been met might be germane to our

analysis if tort law or liability insurance coverage were implicated. But see N.C. National Bank v. Robinson, 78

N.C.App. 1, 336 S.E.2d 666 (1985) (declining to apply the MVA even where the cause of action was the tort of

wrongful conversion because the dispute primarily involved, “not an automobile accident case,” but, rather, security

interest and entrustment issues arising out of “a business transaction in which the policies underlying the private

assigns legal title to the vendee, neither “ Hayes [n] or the general rule concerning liability insurance … controlling

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

on the [issue] of collision insurance coverage here”). While none of our cases distinguishing Hayes address the exact

risk of loss issue here—most deal with conflicting security interests and have applied Article 9 of the UCC over the

ownership requirements of the MVA-various principles articulated therein, often citing Hayes itself, support our

S.E.2d at 186 (applying the UCC to resolve conflicting security interests in a consignment transaction involving

manufacturer, dealer, lender, and buyer of a recreational vehicle, based, in part, on pre–Code reliance on “the general

law of sales, bailment and entrustment” in similar transactions).

Our Supreme Court in American Clipper revisited its earlier opinion in Hayes and explained that Hayes did

acknowledge the waning importance of title under the UCC, see American Clipper, 311 N.C. at 161, 316 S.E.2d at

interest and even though a document of title is to be delivered at a different time or place....”). The Court noted that

propriety of the Hayes decision lies in the relationship of the insurance companies involved to the nature of the ac–

tion, as the situation affected “the rights of parties not privy to the sales transaction itself.” American Clipper, 311

N.C. at 161, 316 S.E.2d at 192; see also Robinson, 78 N.C.App. at 9–11, 336 S.E.2d at 671–72 (distinguishing

Hayes‘s application of the MVA’s “public regulations,” where “the rights of the parties were directly dependent upon

involved in the sales transaction at issue, their obligations “revolve around their relationships as commercial actors.”

Robinson, 78 N.C.App. at 10, 336 S.E.2d at 672. As such, this case involves a business transaction which fully im-

plicates the policies underlying the private UCC law. See id. As our predecessor cases observed in the context of

motor vehicle security interests, “the title transfer provisions of the MVA were not designed to resolve the kind of

question here presented.” American Clipper, 311 N.C. at 163, 316 S.E.2d at 193. Thus, the UCC, which supplanted

where the risk of loss in a motor vehicle sales transaction is at issue. In that case, involving an insurance carrier hop-

ing to avoid its obligations to a purchaser of collision—not liability—insurance under Hayes’ proposition that title to

the vehicle had not been transferred. See Roseboro Ford, 77 N.C.App. 363, 335 S.E.2d 214. Because the “controver-

sy [t]here [did] not involve liability insurance coverage,” Hayes did not control to add further conditions to the

MVA’s general definition of “owner,” within N.C. Gen.Stat. § 20–4.01(26), on the date of the accident. Id. at 366,

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712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

(Cite as: 712 S.E.2d 681)

As owner of the vehicle as defined in G.S. 20–4.01(26), [the purchaser] had an insurable interest in the subject

matter to be insured. As a general rule, “anyone has an insurable interest in property who derives a benefit from its

existence or would suffer loss from its destruction.” 7 Am.Jur.2d, Automobile Insurance, Section 42 (1980). Pur-

suant to G.S. 25–2–509(3) risk of loss passes to the buyer upon receipt of the automobile. Bass had obligated him-

self by contract to comply with the terms of the agreement. Following the accident he could not have simply re-

turned the damaged car and walked away.

Roseboro Ford, 77 N.C.App. at 367, 335 S.E.2d at 216 (emphasis added).

[5] Similarly, Plaintiff in this case was the “owner” of the motor vehicle on the date the mobile home was de-

stroyed by fire, within the meaning of N.C. Gen.Stat. § 20–4.01(26). Pursuant to section 25–2–509(3) of the UCC,

the risk of loss passed to Plaintiff from the merchant-seller Defendant on Plaintiff’s receipt of the goods or other-

[6] We briefly address Plaintiff’s contention that at the time of the parties’ agreement on 17 November 2007,

Defendant did not have the right to sell him the mobile home in the first place because it did not pay consideration to

Vanderbilt until 19 November 2007 and had not been issued a certificate of title from Oakwood. However, Plain-

tiff’s reliance on the common law of contracts fails to consider the UCC’s effect on that sales agreement, which was

also characterized as an “as is/where is” contract. We reject Plaintiff’s argument that the date of payment between

401, occurs “at the time and place at which the seller completes his performance with reference to the physical de-

livery of the goods.”); N.C. Gen.Stat. § 20–75 (“When the transferee of a vehicle registered under [the MVA] is …

[a] dealer who is licensed under Article 12 of this Chapter and who holds the vehicle for resale [,]” such as Defend-

ant in this case, “the transferee shall not be required to register the vehicle nor forward the certificate of title to the

Division [of Motor Vehicles]….”).

Judges McGEE and BRYANT concur.

N.C.App.,2011.

Singletary, III v. P & A Investments, Inc.

712 S.E.2d 681, 74 UCC Rep.Serv.2d 830

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