Colonial Trading, LLC v. Bassett Furniture Industries, Inc.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-2296
COLONIAL TRADING, LLC,
Plaintiff - Appellee,
v.
BASSETT FURNITURE INDUSTRIES, INC.,
Defendant - Appellant.
No. 12-2358
COLONIAL TRADING, LLC,
Plaintiff – Appellant,
v.
BASSETT FURNITURE INDUSTRIES, INCORPORATED,
Defendant – Appellee.
Appeal from the United States District Court for the Western
District of North Carolina, at Statesville. Richard L.
Voorhees, District Judge. (5:09-cv-00043-RLV-DCK)
Argued: May 15, 2013 Decided: June 21, 2013
Before TRAXLER, Chief Circuit Judge; GREGORY and DUNCAN, Circuit
Judges.

-- 1 of 23 --

2
Affirmed by unpublished per curiam opinion.
ARGUED: Robert Walker Fuller, III, ROBINSON BRADSHAW & HINSON,
PA, Charlotte, North Carolina, for Appellant/Cross-Appellee.
June K. Allison, WISHART, NORRIS, HENNINGER & PITTMAN,
Charlotte, North Carolina; Pamela Suzanne Duffy, WISHART,
NORRIS, HENNINGER & PITTMAN, Burlington, North Carolina, for
Appellee/Cross-Appellant. ON BRIEF: Nathan C. Chase, Jr.,
ROBINSON BRADSHAW & HINSON, PA, Charlotte, North Carolina, for
Appellant/Cross-Appellee. Robert John Wishart, WISHART, NORRIS,
HENNINGER & PITTMAN, PA, Charlotte, North Carolina, for
Appellee/Cross-Appellant.
Unpublished opinions are not binding precedent in this circuit.

-- 2 of 23 --

3
PER CURIAM:
A jury awarded $1,312,665.35 to Colonial Trading, LLC
(“Colonial”) on its breach of contract claim against Bassett
Furniture Industries, Inc. (“Bassett”) based on a dispute
involving recalled baby cribs. The jury also awarded Colonial
$41,472.08 on its North Carolina Unfair and Deceptive Trade
Practices Act (“UDTPA”) claim, N.C. Gen. Stat. § 75-1 et seq.,
which the district court trebled under N.C. Gen. Stat. § 75-16.
Bassett appeals, challenging the jury instructions, Colonial’s
UDTPA award, and the damages calculation. Colonial cross
appeals the district court’s denial of its request for trebled
contract damages. For the reasons that follow, we affirm.
I.
A.
Colonial is a North Carolina furniture sourcing agent that
imports furniture from Chinese companies for sale to American
furniture distributors. The distributors make specific product
orders through Colonial, who effectively advances the cost of
the goods on behalf of the distributor by paying the Chinese
company directly for the imported furniture. The Chinese
company then releases bills of lading when the goods reach
American ports, and Colonial invoices the distributor for the
cost of the products.

-- 3 of 23 --

4
The case before us involves orders for three crib models,
designed by Bassett, which Colonial sourced from Chinese
companies, and which Bassett had contracted to resell to
Babies’R’Us. In 2005, during the course of the Colonial-Bassett
relationship, Colonial signed Bassett’s “Import Sourcing
Policy”; the policy subjects each import order to Bassett’s
“standard quality control procedures.” J.A. 1249.
Additionally, the crib invoices Colonial submitted to Bassett
stated that Colonial’s product would “be 100% free of
manufacturing defects and raw material defects.” J.A. 1261.
Under the quality control procedures, Bassett supervised
the first production run and paid for third-party auditing of
each of the three crib models at issue. Beginning in 2007,
however, reports from consumers and internal testing results led
Bassett to issue voluntary recalls of each of the three crib
lines, damaging its relationship with Babies’R’Us.
Instead of paying Colonial’s mounting invoices for the
cribs and other furniture products, Bassett attempted to “charge
back” its recall costs by crediting those costs against invoices
from Colonial, including invoices for furniture other than the
cribs in question. Additionally, when Colonial refused to
advance more funds to Chinese manufacturers for Bassett’s
orders, effectively halting the release of the requisite bills
of lading, Bassett approached the Chinese manufacturers and paid

-- 4 of 23 --

5
at least one of them more than the contracted amount for the
furniture so the manufacturer would release bills of lading
directly to Bassett.1
B.
Colonial sued Bassett in North Carolina court, alleging
that Bassett (1) breached its contract with Colonial by failing
to pay its invoices, improperly cancelling orders, and applying
unauthorized chargebacks; (2) tortiously interfered with
Colonial’s third-party contracts; and (3) committed unfair and
deceptive trade practices in violation of the North Carolina
UDTPA, by, among other things, inducing Colonial’s suppliers to
deal with Bassett instead of Colonial by bribery or coercion.
Bassett removed the case to federal court and counterclaimed,
alleging that it had properly revoked its acceptance of the
cribs because Colonial (1) breached its contract with Bassett;
(2) tortiously interfered with Bassett’s contracts with
manufacturers;2 and (3) breached its express warranty and implied
warranty of merchantability by delivering defective cribs.
After an eight-day trial, the district court reviewed the
1 Specifically, Bassett paid YanRong Furniture (“YanRong”),
one of the Chinese crib manufacturers, $300,880 to release bills
of lading directly to Bassett; YanRong had billed Colonial
$170,000 for the same goods. J.A. 269, 468-69.
2 The district court later dismissed Bassett’s tortious
interference claim.

-- 5 of 23 --

6
parties’ proposed jury instructions at length before sending the
case to the jury. Although the court primarily used its own set
of prepared instructions, it did include Colonial’s proposed
Instruction 16, regarding warranties and manufacturing defects,
see infra Part II, despite Bassett’s objection that the
Instruction was “misleading or confusing,” J.A. 866.
After deliberations, the jury awarded Colonial
$1,312,665.35 on its breach of contract claim and $1 on its
tortious interference claim. With respect to the UDTPA, the
jury found that Bassett’s conduct was in or affected commerce,
that Bassett acted with the intent of interfering with
Colonial’s relationships with its suppliers, and that Bassett
committed seven alleged unfair trade practices--all the elements
of a UDTPA claim.3 The jury awarded UDTPA damages of $41,472.08
3 Specifically, the jury found, under Number 3(c) of the
verdict form, that Bassett: (A) “[o]rder[ed] and receive[d]
goods from Colonial for which [it] did not intend to pay”; (B)
“[u]nilaterally charge[d] back Colonial for non-defective goods
on the false justification that they were defective”; (C)
“[u]nilaterally charge[d] back Colonial for expenses which were
not permitted under any contractual obligation under the false
justification that they were proper charge back expenses”; (D)
“[w]ithout justification incur[red] unnecessary expenses
associated with the recall with the intent to improperly charge
back Colonial for such expenses”; (E) “[p]a[id] Colonial’s
suppliers and persuade[d] Colonial’s suppliers not to deal with
Colonial”; (F) “[i]nduce[d] Colonial’s suppliers to deal with
Bassett instead of Colonial by bribery or coercion”; and (G)
“misuse[d] its unequal financial power by creating a situation
which crippled Colonial financially and which caused the
factories to deal directly with [it].” J.A. 234-35.

-- 6 of 23 --

7
on the alleged unfair trade practice listed at 3(c)(F) of the
verdict form--that Bassett “[i]nduce[d] Colonial’s suppliers to
deal with Bassett instead of Colonial by bribery or coercion,”
J.A. 235; supra note 3. It awarded $1 in nominal damages on the
other six alleged unfair trade practices. The jury denied
Bassett’s counterclaims, except for its claim for breach of
express warranty, which it found Colonial had breached. It
awarded $1 in nominal damages to Bassett.
Following trial, Colonial moved for attorneys’ fees and
treble damages on its breach of contract and UDTPA awards. The
district court granted Colonial’s request for treble damages
with respect to its UDTPA recovery, explaining that, since
distinct conduct supported the breach of contract and UDTPA
awards, treble UDTPA damages were not duplicative of Colonial’s
recovery for breach of contract. Therefore, the district court
trebled the UDTPA damages to $124,416.24. This appeal followed.
II.
The primary thrust of Bassett’s appeal focuses on Number 16
of the jury instructions (“Instruction 16” or “the
Instruction”), which the district court adopted from Colonial’s
proposed instructions. Instruction 16 reads, in its entirety:
I further instruct you that warranting a shipment to
be without defects does not mean that each and every
part of each and every crib would have no

-- 7 of 23 --

8
manufacturing defects. Because any crib of a specific
model breaches a warranty does not mean that the
purchaser is entitled to any and all of its expenses
related to all cribs of that design. In order to
permit rejection of and expenses incident to an entire
shipment for nonconformity the purchase must show that
the defect rate was higher than agreed upon or lacking
specific agreement was higher than the standard in the
industry.
To the extent that Bassett has shown that
specific cribs have manufacturing defects [and] will
fail to meet the warranties made by Colonial[,]
Bassett is entitled to damages for breach of warranty
for such cribs.
J.A. 1041. Bassett contends that the Instruction (1) caused the
jury to ignore the express warranty signed by Colonial; (2)
misinstructed the jury about damages in breach of warranty
cases, generating confusion about the appropriate award; and (3)
misinformed the jury about the law governing Bassett’s breach of
contract, revocation of acceptance, and implied warranty claims,
so as to require a new trial. We address each argument in turn.
A. Standard of Review
While we review a district court’s decision to give or not
give a jury instruction for abuse of discretion, “we conduct a
de novo review of any claim that jury instructions incorrectly
stated the law.” United States v. Mouzone, 687 F.3d 207, 217
(4th Cir. 2012) (citation omitted). If a party failed to
properly object to a jury instruction under Federal Rule of
Civil Procedure 51(c), however, we review jury instructions for
plain error. Spell v. McDaniel, 824 F.2d 1380, 1398-99 (4th

-- 8 of 23 --

9
Cir. 1987). In either case, we reverse “only when we can
conclude that a particular jury instruction must necessarily
have caused the jury to act in complete ignorance of, or to have
misapplied, fundamentally controlling legal principles to the
inevitable prejudice of an aggrieved party.” Id. at 1399. The
jury instructions “must be construed in light of the whole
record,” and “will be reversed . . . ‘only if the error is
determined to have been prejudicial, based on a review of the
record as a whole.’” Abraham v. Cnty. of Greenville, S.C., 237
F.3d 386, 393 (4th Cir. 2001) (citing Wellington v. Daniels, 717
F.2d 932, 938 (4th Cir. 1983)).
B. Preservation of Error
As a threshold matter, we must decide whether Bassett
preserved its current objection to Instruction 16. Colonial
contends that Bassett’s objection to the Instruction below--that
it was “misleading or confusing”--was insufficient to preserve
the issue for appeal. See J.A. 866; Fed. R. Civ. Proc. 51(c)(1)
(“A party who objects to an instruction or the failure to give
an instruction must do so on the record, stating distinctly the
matter objected to and the grounds for the objection.”). In
support of its argument, Colonial cites Belk, Inc. v. Meyer
Corp., U.S., 679 F.3d 146, 153 n.6 (4th Cir. 2012), in which we
held that the appellant had waived its jury instruction
challenge by both failing to raise it in the opening brief and

-- 9 of 23 --

10
neglecting to object properly at trial. Counsel for Belk,
however, did not raise a specific objection to any jury
instruction; rather, he requested that the court administer his
proposed jury instructions. Id. We found the “general
invocation of proposed jury instructions” “insufficient to
preserve the issue for our review.” Id. The facts before us
present a closer question. Bassett’s terse, general objection
certainly did not aid the district court in fully considering
the nature of its challenge. But since Bassett’s arguments fail
on the merits, we prefer to rely for our affirmance on that
ground, and thus proceed to a de novo review of Instruction 16.
C. Instruction 16
1.
Bassett contends that the district court improperly
instructed the jury with respect to express warranties when it
adopted Colonial’s language and stated that “warranting a
shipment to be without defects does not mean that each and every
part of each and every crib would have no manufacturing
defects.” J.A. 1041. The parties proffer competing case law in
support of their respective views, none of which we ultimately
find convincing. Compare Knapp Shoes, Inc. v. Sylvania Shoe
Mfg. Corp., 72 F.3d 190, 199 (1st Cir. 1995) (concluding that an
express warranty guaranteeing a shipment of shoes to be “without
defect” “can at most be read to mean that [the seller] was

-- 10 of 23 --

11
capable of producing shoes that met industry standards as to the
percentage of defects”) with QVC, Inc. v. MJC America, Ltd., ---
F. Supp. 2d. ---, No. 08-3830, 2012 WL 5250266, at *22 (E.D. Pa.
Oct. 22, 2012) (finding that, where the seller provided a
defective product, it “broke its promise . . . that all of the
[products] would be free from all defects,” allowing the buyer
to recover recall-related costs).
As the district court’s subsequent instructions adequately
stated the controlling law, we conclude, without deciding
whether Instruction 16 was erroneous, that any misstatement was
harmless. See Volvo Trademark Holding Aktiebolaget v. Clark
Mach. Co., 510 F.3d 474, 485 (4th Cir. 2007) (“[P]roblems in
jury instructions will not warrant reversal of a jury verdict so
long as, taken as a whole, the instructions adequately state the
controlling legal principles.”). The court’s later instructions
on express warranties track the North Carolina statute regarding
the same. Compare N.C. Gen. Stat. § 25-2-313 (defining the
three methods for express warranty formation) with J.A. 1048-50
(instructing the jury as to the same three methods for forming
an express warranty). According to the court’s express warranty
instruction, if Bassett proved that Colonial promised “to
produce cribs that were 100 percent free of manufacturing
defects and of raw material defects,” it would be the jury’s
duty to find that an express warranty existed. J.A. 1050.

-- 11 of 23 --

12
Further, having explained what would constitute a breach in its
instructions on Colonial’s claims, id. at 1021 (“[A] breach of
contract is . . . any unjustified failure to perform any
promise, express or implied, that is part of the contract,” and
“occur[s] when a party without legal excuse fails to perform any
promise which is . . . part of the contract.”), the court made
clear that “Bassett’s counterclaim can best be understood by
relying on the terms . . . already explained,” id. at 1038.
Far from encouraging the jury to “ignore” the express
warranty, the instructions fully explained express warranty
formation and breach of contract. Indeed, it seems strange for
Bassett to argue that Instruction 16 caused the jury to “ignore”
the express warranty, when breach of express warranty was the
only claim on which it was successful. Since “a single
instruction to a jury may not be judged in artificial isolation,
but must be viewed in the context of the overall charge,” United
States v. Park, 421 U.S. 658, 674 (1975) (citation and internal
quotation marks omitted), the court’s accurate explanation of
how to evaluate whether Colonial made an express warranty and
the jury’s actual finding that Colonial breached the express
warranty indicate that any error did not cause the jury to
“misappl[y] fundamentally controlling legal principles,” Spell,
824 F.2d at 1399.

-- 12 of 23 --

13
2.
Bassett further contends that the Instruction improperly
limited the jury to awarding damages for specific, defective
cribs, instead of compensating Bassett for all costs associated
with recalling the crib models.
Insofar as Bassett alleges that it could recoup more than
costs associated with specific, defective cribs, we agree. The
North Carolina Supreme Court has held, in a case alleging breach
of the warranty of fitness, that “it need not be shown that any
given unit is totally unusable before a breach of warranty
occurs,” rejecting the argument that “every commercial unit in
an order of goods manufactured under the same specifications
must be shown to have become totally unusable before recovery
may be had for breach of warranty with respect to the entire
order.” Tenn. Carolina Transp., Inc. v. Strick Corp., 196
S.E.2d 711, 721 (N.C. 1973). The court explained that the fact
that nine trailers out of an order of 150 had malfunctioned,
“entitle[d] [the] plaintiff to go to the jury on the breach of
warranty issue with respect to all 150 trailers. It is for the
jury to determine . . . whether the fitness warranty was
breached as to all, part or none of the 150 trailers, and assess
the damages accordingly.” Id. at 722. Here, however, the jury
made just that determination, and did not explicitly find that
the cribs were defective or that the damages amounted to more

-- 13 of 23 --

14
than a nominal sum.
Furthermore, examining the instructions “as a whole,” the
court properly explained damages calculation to the jury, again
rendering any error in Instruction 16 harmless. See J.A. 1052-
55. The court instructed that “Bassett should not be denied
damages simply because they cannot be calculated with exactness
or high degree of mathematical certainty,” J.A. 1054, and
included provisions explaining incidental and consequential
damages. Additionally, the district court properly instructed
the jury on how to calculate damages based on the reduced value
of the cribs, in keeping with the tenets of North Carolina law
on damages for breach of warranty. J.A. 1053; see Alberti v.
Manufactured Homes, Inc., 407 S.E.2d 819, 826 (N.C. 1991) (“In
warranty actions, the measure of damages is generally the
difference between the value of the goods as accepted and the
value as warranted.”) (citation omitted). In further compliance
with North Carolina law, the court also cautioned that if the
jury found a breach, but Bassett failed to prove damages or the
jury did not find damages, “it would be [the jury’s] duty to
write a nominal amount of $1 in the blank space provided,” J.A.
1055, “in recognition of technical damage resulting from the
breach,” id. at 1052; see Hairston v. Atl. Greyhound Corp., 18
S.E.2d 166, 168 (N.C. 1942) (“What is meant by nominal damages
is a small trivial sum awarded in recognition of a technical

-- 14 of 23 --

15
injury which has caused no substantial damage.”) (internal
quotations and citation omitted).
If anything, the jury’s damages calculation indicates not
that it was confused about how to separate “defective” cribs
from nondefective cribs for its calculation, but rather that it
concluded that Bassett’s failure to prove damages on its breach
of express warranty claim required it to award the nominal sum
of $1, in line with the court’s instructions. Because the court
properly instructed the jury that it did not have to award
damages unless Bassett proved them, any misstatement with
respect to what Bassett could recover on its breach of warranty
claim in Instruction 16 was not prejudicial.4
3.
Finally, Bassett argues that because Instruction 16 implied
that the existence of some crib defects would be acceptable, the
Instruction clouded the jury’s analysis with respect to
Bassett’s breach of contract, revocation of acceptance, and
implied warranty of merchantability claims. Again, Bassett’s
argument hinges on the conclusion that the jury found the cribs
4 If the jury had awarded a larger sum for Colonial’s breach
of express warranty, indicating that it intended to compensate
Bassett for the cribs that did not conform to Colonial’s express
warranty, Bassett’s argument regarding jury confusion over
damage calculation might be more persuasive. The nominal damage
award of $1 indicates that, under the court’s instructions, the
jury did not find that Bassett proved damages at all.

-- 15 of 23 --

16
defective, a conclusion belied by the jury’s findings.
Under North Carolina law, Bassett needed to show that the
cribs were defective at the time of sale to succeed on its
claims involving the implied warranty of merchantability and
revocation of acceptance. See Dewitt v. Eveready Battery Co.,
565 S.E.2d 140, 147 (N.C. 2002) (“To establish a breach of
implied warranty of merchantability . . . a plaintiff must prove
. . . that the goods did not comply with the warranty in that
the goods were defective at the time of sale.”) (citation and
internal quotation marks omitted); Harrington Mfg. Co., Inc. v.
Logan Tontz Co., 253 S.E.2d 282, 286 (N.C. Ct. App. 1979)
(holding that to justify revocation, the plaintiff must prove,
in addition to other elements, “that the goods contained a
nonconformity that substantially impaired their value”). That
the jury found in favor of Colonial on both of these claims
indicates that it did not determine that the cribs were
defective at the time Bassett accepted them. Further, because
the court properly instructed the jury with respect to Bassett’s
implied warranty of merchantability, J.A. 1050-52, revocation of
acceptance, id. at 1042-48, and breach of contract claims, id.
at 1039, any error in Instruction 16 was harmless.
III.
Bassett next contends that we should vacate the district

-- 16 of 23 --

17
court’s UDTPA award because its dispute with Colonial was
contractual, the award duplicates Colonial’s recovery for breach
of contract, and Instruction 16 affected the jury’s assessment
of the alleged unfair trade practices.5
A. Standard of Review
We review the district court’s legal determinations with
respect to the UDTPA claim de novo. Belk, Inc., 679 F.3d at
164. “We review a jury’s factual findings on a UDTPA claim ‘in
the light most favorable to the prevailing party, and [i]f, with
that evidence, a reasonable jury could return a verdict in favor
of plaintiffs, [we] must defer to the judgment of the jury, even
if [our] judgment on the evidence differs.’” Id. (quoting ABT
Bldg. Prods. Corp. v. Nat’l Union Fire Ins. Co. Of Pittsburgh,
472 F.3d 99, 113 (4th Cir. 2006)).
B. Unfair Trade Practices
In order to recover under the UDTPA, a party is obliged to
show: “(1) that the defendant engaged in conduct that was in or
affecting commerce, (2) that the conduct was unfair or ‘had the
capacity or tendency to deceive,’ and (3) ‘that the plaintiff
suffered actual injury as a proximate result of defendant’s
deceptive statement or misrepresentation.’” ABT Bldg., 472 F.3d
5 Because Bassett’s argument with respect to Instruction 16
in the UDTPA context is largely duplicative of those just
discussed, we do not repeat that analysis here.

-- 17 of 23 --

18
at 122 (citation omitted). In making this showing, the
“occurrence of the alleged conduct, damages, and proximate cause
are fact questions for the jury.” Id. at 123 (citation and
internal quotation marks omitted). “[W]hether [such] conduct
was unfair or deceptive is a legal issue for the court.” Id.
Thus, when a jury finds a defendant committed infringing
conduct, “it is then the duty of the court to determine whether,
as a matter of law, such conduct constituted an unfair or
deceptive trade practice.” S. Atl. Ltd. P’ship of Tenn., LP v.
Riese, 284 F.3d 518, 534 (4th Cir. 2002).
In reviewing this determination, we have recognized that,
“under North Carolina law, the conduct sufficient to constitute
an unfair or deceptive trade practice ‘is a somewhat nebulous
concept,’ and depends on the circumstances of the particular
case.” ABT Bldg., 472 F.3d at 122-23 (citation omitted).
However, “only practices that involve ‘[s]ome type of egregious
or aggravating circumstances’ are sufficient to violate the
U[D]TPA.” Riese, 284 F.3d at 535 (citation omitted).
“Generally, a trade practice will only be deemed ‘unfair when it
offends established public policy as well as when the practice
is immoral, unethical, oppressive, unscrupulous, or
substantially injurious to consumers.’” ABT Bldg., 472 F.3d at
123 (quoting Marshall v. Miller, 276 S.E.2d 397, 403 (N.C.
1981)). North Carolina courts have repeatedly held that “a mere

-- 18 of 23 --

19
breach of contract, even if intentional, is not sufficiently
unfair or deceptive to sustain an action under [the UDTPA].”
Broussard v. Meineke Disc. Muffler Shops, Inc., 155 F.3d 331,
347 (4th Cir. 1998); see, e.g., Branch Banking & Trust Co. v.
Thompson, 418 S.E.2d 694, 700 (N.C. Ct. App. 1992) (finding
breach of contract, without substantial aggravating
circumstances, insufficient to support a UDTPA claim).
Bassett insists that Colonial’s UDTPA claim arises from the
same conduct underlying its contract claims, and thus cannot
support the court’s finding that Bassett’s conduct constituted
an unfair or deceptive practice justifying an UDTPA award. The
jury, however, found alleged unfair trade practices attenuated
from the basic contract dispute, such as paying Colonial’s
suppliers not to deal with Colonial, inducing Colonial’s
suppliers to deal with Bassett instead of Colonial through
bribery and coercion, and otherwise misusing its unequal
financial power against Colonial. See J.A. 235, supra note 3.
North Carolina courts have upheld UDTPA awards for tortious
interference with contract, commercial bribery, and coercive
conduct, practices akin to what the jury found here. See, e.g.,
United Labs., Inc. v. Kuykendall, 370 S.E.2d 375, 389 (N.C.
1988) (explaining that N.C. Gen. Stat. § 75-1.1 could apply “to
tortious interference with contract situations”); Media Network,
Inc. v. Long Haymes Carr, Inc., 678 S.E.2d 671, 684 (N.C. Ct.

-- 19 of 23 --

20
App. 2009) (“We also note that if a UDTP[A] claimant can
establish that the defendant committed commercial bribery, that
is sufficient to make the UDTP[A] claim.”); Wilder v. Squires,
315 S.E.2d 63, 67 (N.C. Ct. App. 1984) (threatening not to pay
plaintiff unless he agreed to a particular course of action was
coercive and qualified as an unfair and deceptive trade
practice). We therefore decline to disturb the award.
C. Collection of Contract and UDTPA Damages
Bassett contends that Colonial should have been required to
elect between contract or UDTPA damages, but should not have
recovered both. Bassett’s argument fails because it is premised
upon the assumption or mistaken belief that Colonial’s contract
and UDTPA claims arise from the same improper conduct.
Appellant’s Br. at 46-47. While Bassett is correct that, if the
“same course of conduct gives rise” to a plaintiff’s breach of
contract and UDTPA claims, the plaintiff may recover “either for
the breach of contract, or for violation of [the UDTPA], but not
for both,” Marshall v. Miller, 268 S.E.2d 97, 103 (N.C. Ct. App.
1980) modified and aff’d, 276 S.E.2d 397; see United Labs., Inc.
v. Kuykendall, 437 S.E.2d 374, 379 (N.C. 1993) (explaining that
the election of remedies “prevent[s] double redress for a single
wrong”), this accurate summary of North Carolina law is
inapplicable here. Far from resting on the same course of
conduct, the district court made clear that “[w]hile the UDTPA

-- 20 of 23 --

21
cause of action is partly derivative of Colonial’s [breach of
contract] claims,” J.A. 1232, “the jury rationally viewed the
conduct and the damages proximately caused by the specific UDTPA
conduct as distinct from the breach of contract,” id. at 1234.
While some of the same conduct--particularly the conduct
alleged as unfair trade practices at 3(c)(A)-(D) of the jury
verdict form--also formed the basis for Colonial’s breach of
contract claim, compare J.A. 232 with id. at 234, the conduct
underlying Colonial’s UDTPA recovery does not overlap.
Specifically, the jury awarded UDTPA damages to Colonial on
3(c)(F), id. at 235, based on Bassett’s bribery and coercion of
the Chinese manufacturer YanRong. This award obviates any
concerns of “duplicative” recovery.
IV.
Colonial cross-appeals the district court’s rejection of
its request for treble contract damages. In Gray v. North
Carolina Insurance Underwriting Ass’n, 529 S.E.2d 676, 684-85
(N.C. 2000), the North Carolina Supreme Court addressed a
similar argument that, in a case involving successful recovery
for breach of contract and UDTPA claims, the court should treble
the entire award. Rejecting this argument, the Supreme Court
concluded that only “damages proximately caused by a violation
of [the UDTPA] shall be trebled, not [] damages on every claim

-- 21 of 23 --

22
that happens to arise in a case involving a violation of [the
UDTPA].” Id. Because the damages for breach of contract did
not “aris[e] from a violation of [] § 75-1.1,” they could not be
trebled. Id. at 684. Since Gray, the North Carolina Court of
Appeals has allowed for trebling of breach of contract damages
when “the breach of contract accompanied by aggravating factors
is what gave rise to the [UDTPA] claim.” See, e.g., Johnson v.
Colonial Life & Accident Ins. Co., 618 S.E.2d 867, 871-72 (N.C.
Ct. App. 2005) (“[T]he court will not allow a defendant to
divide the breach of contract action and the conduct which
aggravated the breach when in substance there is but one
continuous transaction amounting to unfair and deceptive trade
practices.”).
Colonial urges us to conclude that its contract damages
“arise from” the unfair trade practices listed on the jury
verdict form at J.A. 234-35 3(c)(A)-(D), and should therefore be
trebled. Notwithstanding Colonial’s puzzling reversal from its
argument that distinct conduct supports their recovery of both
contract and UDTPA damages, see supra Part III.B, the verdict
does not support Colonial’s argument. While there is some
overlap between the acts underlying the breach of contract claim
and the alleged unfair trade practices, the jurors had the
opportunity to award specific damages for each unfair trade
practice. As discussed supra, the only practice on which they

-- 22 of 23 --

23
chose to award damages was the bribery and coercion claim, not
the contract-related acts.
A closer look at the verdict in Gray further supports our
decision to follow that case and reject Colonial’s argument. In
Gray, as here, the verdict form required the jury to first
determine whether the parties formed a contract, and then, if
the defendant breached the contract, to assess damages. See 529
S.E. 2d at 679. The form then asked the jury to determine
whether the defendant had committed any of several acts that
could constitute unfair trade practices, and to asses related
damages. The North Carolina Supreme Court allowed trebling of
only the latter, UDTPA damages. Colonial’s similarly structured
verdict form--which required the jury first to determine
contract damages, then to assess practices that could constitute
violations of the UDTPA and determine related damages--supports
our decision to affirm the district court’s decision to treble
only the UDTPA damages, rather than the entire jury award.
V.
For the foregoing reasons, the judgment of the district
court is
AFFIRMED.

-- 23 of 23 --