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are subject to modification and technical correction prior to official
publication in the North Carolina Reports and North Carolina Court of Appeals
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authoritative.
NO. COA05-669
NORTH CAROLINA COURT OF APPEALS
Filed: 2 May 2006
MADELINE BECKER, JOHN YAHN,
DAVID BECKER, and JOHN BECKER,
Plaintiffs
v. North
Carolina Industrial Commission
I.C. File Nos. TA-17228, TA-17229,
& TA-17230
N.C. DEPARTMENT OF
MOTOR VEHICLES,
Defendant.
Appeal by defendant from Decision and Order entered 3
January 2005 by the North Carolina Industrial Commission. Heard in the Court of Appeals 6 March 2006.
The
Vincent Law Firm, P.C., by Branch W. Vincent, III.
Roy
A. Cooper, III, Attorney General, by Dahr Joseph Tanoury, Assistant Attorney
General, for the State.
MARTIN, Chief Judge.
On 25 October 2001, plaintiffs filed claims with the North
Carolina Industrial Commission for damages under the Tort Claims Act, alleging
negligence on the part of the Department of Motor Vehicles and its agents and
employees. The claim arose from the 27
October 1998 seizure and subsequent storage of numerous motor vehicles and
vehicle component parts. Acting on an
informant’s tip that plaintiffs were operating a junk yard and car dealership
without a license, DMV inspectors entered plaintiffs’ property, noticed a
forged window inspection sticker on a vehicle, and, upon further investigation,
discovered that the public vehicle identification numbers (PVINs) on other
vehicles either did not match the confidential vehicle identification numbers
(CVINs) or were missing, which can be an indication of theft. Plaintiffs John and David Becker were
arrested on misdemeanor and felony charges of violating the North Carolina
Motor Vehicle code, and their vehicles were taken to Grant’s Texaco for holding
while the criminal case was pending.
The Industrial Commission found as a fact that “[t]his seizure created a
bailment by implication, with the owners of the vehicles being the bailors.”
At the time of the seizure, the DMV inspector informed
plaintiffs that the vehicles were being seized due to the missing and altered
PVINs, calling the title and rightful ownership of the vehicles into
question. The vehicles could not be
returned until proper vehicle identification numbers were applied for and
assigned because it is illegal to possess a vehicle with a missing or altered
PVIN. David Becker was acquitted of the
criminal charges, and the charges against John Becker were dismissed by the
district attorney. Plaintiffs requested
special VIN numbers for the seized vehicles in 2001 and the vehicles were
returned to plaintiffs, except for a junked white Camero plaintiffs exchanged
with Grant’s Texaco for the $600.00 storage fee. Other property was lost or damaged and a carburetor was also
stolen from one of the vehicles while it was in storage, “but it is not known
who stole it, how such persons gained access to the vehicle, or what acts or
omissions, if any, on the part of Grant’s contributed to the theft.”
The Industrial Commission found that plaintiffs participated
in repairing automobiles as a family hobby, and that due to this “collective
experience in automobile and engine repair” they could “credibly assess the
value of automobile parts that were either lost or damaged while in storage.” The Commission found damages of $6,025.00
for David Becker, $2,050.00 for John Becker, $13,397.50 for John Yahn and
$3,575.00 for Madeline Becker. Based on
these facts, the Industrial Commission concluded as a matter of law that:
1. It is plaintiffs’ burden to prove that all the elements of negligence, including that defendant breached an owed duty of care, and that the breach was the proximate cause of plaintiff’s injury. The evidence must be sufficient to raise more than speculation, guess, or mere possibility.
2. Plaintiffs failed to
show by the greater weight of the evidence that defendant’s employees breached
a duty of care owed to plaintiffs by defendant with respect to the arrests and
criminal prosecutions. Plaintiffs are entitled to no damages for loss of wages,
claimed emotional distress, costs of bail, or costs of criminal trial
transcripts or costs of civil trial transcripts. In addition, defendant proved
that plaintiffs’ reputations were not harmed by the actions of the enforcement
officers in the carrying out of their lawful duties.
3. It is well‑settled
that once a bailment contract is created between a bailor and bailee, either
expressly or by implication, the bailee is charged with a duty of care to
protect the bailed property from damage or loss. When a bailee fails to return
or deliver the bailed property in an undamaged condition, the bailor may bring
an action to recover damages for breach of bailment contract and/or negligence
based on proof that the bailee failed to exercise due care to safeguard the bailed
property from damage, loss, or theft. See 46 Am. Jur. Proof of Facts 3d 361.
4. Plaintiffs proved
that employees of defendant seized their vehicles, creating a bailment by
implication. Plaintiffs also proved that defendant failed to return or deliver the
bailed property in an undamaged condition and that department [sic] failed to
exercise due care to safeguard the bailed property from damage, loss, or theft.
5. Under the
circumstances of this case, the damages set forth in paragraph 73 of the
findings of fact are proper damages with respect to the negligence of defendant
in failing to care for and return the bailed property.
The
Industrial Commission ordered defendant to pay damages to plaintiffs in
accordance with its findings. Defendant
appeals.
____________________
Defendant argues that the Industrial Commission erred as a
matter of law when it concluded that the lawful seizure created a bailment by
implication between plaintiffs and defendant.
For the reasons stated below, we agree.
Our standard of review under the Tort Claims Act is well
established:
The standard of
review for an appeal from the Full Commission’s decision under the Tort Claims
Act “shall be for errors of law only under the same terms and conditions as
govern appeals in ordinary civil actions, and the findings of fact of the
Commission shall be conclusive if there is any competent evidence to support
them.” N.C. Gen. Stat. §143‑293 (2003).
Simmons
v. Columbus County Bd. of Educ., ___ N.C. App. ___, ___, 615 S.E.2d 69, 72
(2005). Our Supreme Court has stated
that “to give the Industrial Commission jurisdiction of a tort claim, the claim
must be based on negligence.” Collins
v. North Carolina Parole Commission, 344 N.C. 179, 183, 473 S.E.2d 1, 3
(1996). To establish a claim for negligence
under the Tort Claims Act, “plaintiff must show that (1) [defendant] owed
plaintiff a duty of care; (2) the actions, or failure to act, by [defendant]’s
named employee breached that duty; (3) this breach was the actual and proximate
cause of plaintiff’s injury; and (4) plaintiff suffered damages as a result of
such breach.” Simmons v. N.C. Dept.
Of Transportation, 128 N.C. App. 402, 406, 496 S.E.2d 790, 793 (1998); N.C.
Gen. Stat. §143‑291 (2005).
Here, rather than make findings with respect to the issue of
defendant’s negligence, the Industrial Commission determined that a bailment
was created by the lawful seizure of plaintiffs’ vehicles, and, as a result,
defendant could be held liable for any damage to plaintiffs’ property. The Industrial Commission misconstrued the
concept of bailment.
“This Court has previously held that a bailment is created
upon the delivery of possession of goods and the acceptance of their delivery
by the bailee.” Atlantic Contr’g
& Material Co. v. Adcock, 161 N.C. App. 273, 277, 588 S.E.2d 36, 39
(2003) (internal citation omitted). “Liability for any damages to the [goods]
while in [bailee]’s possession turns upon the question of the presence or
absence of actionable or ordinary negligence on its part.” Mills, Inc. v. Terminal, Inc., 273 N.C.
519, 521, 160 S.E.2d 735, 738 (1968). A
bailor must offer evidence showing “that the property was delivered to the
bailee; that the bailee accepted it and thereafter had possession and control
of it; and that the bailee . . . returned it in a damaged
condition” to create a prima facie case of negligence, and, once a prima face
case has been made, the bailor retains the burden of proof. McKissick v. Jewelers, Inc., 41 N.C.
App. 152, 155‑56, 254 S.E.2d 211, 213 (1979) (internal citations
omitted).
Here there are no findings of fact regarding delivery and
acceptance between plaintiffs and defendant.
While the Commission concluded that defendant’s “seizure created a
bailment by implication,” it made no findings of fact regarding any delivery of
goods by plaintiffs or acceptance by defendant, which are necessary elements of
a prima facie case of negligence on a bailment contract. The Commission found only that the property
was seized, and after the criminal investigation was completed, the property
was returned in damaged condition. The
Industrial Commission failed to cite, and our own research does not reveal, any
basis in the law of this State for the proposition that a lawful seizure, pursuant
to the government’s police powers, creates a bailment of the property which is
seized. We decline to extend the duty
of care created by a bailment to lawful seizures. The seizure of property is a unilateral act which does not
suggest the mutual intent necessary to form even an implied bailment contract.
Even assuming arguendo that the Industrial
Commission’s findings of facts support the conclusion that an “implied
bailment” was created, its findings of fact remain inadequate to award
plaintiffs damages. The finding of a
bailment satisfies only the first element of a claim for negligence under the
Tort Claims Act, establishing a duty of care; however, there are no findings of
breach of this duty or proximate cause in this case. There are no findings of fact regarding the standard of care owed
by either the officers or defendant regarding the storage of plaintiffs’ goods
after they had been seized, nor are there findings regarding the proximate
cause of the damage, despite the implication that the vehicles were subject to
theft while in storage. See, e.g.
McKissick, 41 N.C. App. at 156, 254 S.E.2d at 213 (holding no recovery from
bailee jewelry store in bailment for mutual benefit situation where items left
for repair were stolen from bailee).
Instead, the findings by the Industrial Commission indicated
that defendant used commensurate care, noting that 1) the length of time the
property was stored was not unusual; 2) plaintiffs knew where their property
was and why it was seized; and 3) unknown individuals stole the carburetor from
the vehicle while it was at Grant’s.
The Commission left unresolved the question of Grant’s liability
regarding the carburetor. Moreover,
plaintiffs’ initial claim was for negligent investigation by defendant, and the
Industrial Commission explicitly found that “[t]here has been no finding that
the officers did not have probable cause for the arrests they made” and further
found that the seizures were due to the missing PVINs and pending criminal
charges.
Reversed.
Judges WYNN and STEPHENS concur.