Ball v. Maynard, COA06-1545.

• Decision Date: 19 June 2007
• Docket Number: No. COA06-1545.,COA06-1545.
• Court: North Carolina Court of Appeals
• Parties: Eugene S. BALL, Peggy M. Ball, Patricia G. Miller and Kenneth C. Miller, Sr., Plaintiffs-Appellees, v. Robert E. MAYNARD, Jr., Defendant-Appellant.

645 S.E.2d 890

Eugene S. BALL, Peggy M. Ball, Patricia G. Miller and Kenneth C. Miller, Sr., Plaintiffs-Appellees, v. Robert E. MAYNARD, Jr., Defendant-Appellant.

No. COA06-1545.

Court of Appeals of North Carolina.

June 19, 2007.

Appeal by Defendant from judgment entered 11 August 2006 by Judge Benjamin G. Alford in Superior Court, Pender County. Heard in the Court of Appeals 9 May 2007.

H. Kenneth Stephens, II, Wilmington, for Plaintiffs-Appellees.

White & Allen, P.A., by Gregory E. Floyd and Richard J. Archie, Kinston, for Defendant-Appellant.

McGEE, Judge.

Eugene S. Ball, Peggy M. Ball, Patricia G. Miller, and Kenneth C. Miller, Sr. (Plaintiffs) filed a complaint on 23 December 2003 against Robert E. Maynard, Jr. (Defendant). Defendant sent a letter dated 24 February 2004 to the trial court and to Plaintiffs. In the letter, Defendant stated that the letter was in response to Plaintiffs' action. Defendant filed an amended answer dated 17 June 2005. The amended answer was accepted by the trial court in an order filed 18 July 2005, and the trial court entered judgment on 11 August 2006.

The trial court made the following unchallenged findings of fact: Plaintiffs, as buyers, and Defendant, as seller, entered into an Offer to Purchase and Contract (the contract) for real property located in Pender County (the property) on 11 December 2002. At the time the parties entered into the contract, Plaintiffs were provided a Septic Improvements Permit (the permit) for the property, and Defendant represented to Plaintiffs that the permit was valid. A section of the contract entitled "Sewer System" stated the following: "[Plaintiffs] [have] investigated the costs and expenses to install the sewer system approved by the Improvement Permit attached hereto as Exhibit A and hereby approve[ ] and accept[ ] said Improvement Permit." (R p. 36).

The trial court further found that prior to entering into the contract with Plaintiffs, Defendant had previously conveyed an approximately ten-foot strip of the property to a third party. Unbeknownst to Defendant, this conveyance invalidated the permit. Plaintiffs later learned that the permit was invalid and requested that Defendant provide them with a valid permit. However, Plaintiffs agreed to purchase the real property minus the ten foot-strip of land previously conveyed by Defendant. Defendant then agreed to apply for a valid permit for the property, and did so in April 2003.

Defendant attempted to terminate the contract and tendered Plaintiffs' earnest money on or about 4 September 2003, which Plaintiffs refused. Plaintiffs again requested that Defendant provide them with a valid permit, and that Defendant close on the purchase of the property pursuant to the terms of the parties' contract. Defendant refused. The Pender County Health Department subsequently issued a new Septic Improvements Permit for the property on 21 November 2003.

The trial court concluded the following:

2. That the parties had modified the [c]ontract to the extent that the time for performance on the part of . . . Plaintiffs was extended to allow . . . Defendant to obtain a valid Septic Improvements Permit.

3. That . . . Plaintiffs had a reasonable time in which to close the purchase of the . . . property which reasonable time had not run as of the date that . . . Defendant attempted to terminate the contract.

4. That the attempted termination of the contract by . . . Defendant and . . . Defendant's refusal to transfer the property to . . . Plaintiffs was a breach of the agreement between the parties.

5. That . . . Plaintiffs are entitled to the Court's Order ordering specific performance of the contract on the part of . . . Defendant.

The trial court ordered Defendant to convey the property to Plaintiffs pursuant to the terms and conditions of the parties' contract. Defendant appeals.

"In an appeal from a judgment entered in a non-jury trial, our standard of review is whether competent evidence exists to support the trial court's findings of fact, and whether the findings support the conclusions of law." Resort Realty of the Outer Banks, Inc. v. Brandt, 163 N.C.App. 114, 116, 593 S.E.2d 404, 407-08, disc. review denied, 358 N.C. 236, 595 S.E.2d 154 (2004). A trial court's conclusions of law are reviewable de novo. Humphries v. City of Jacksonville, 300 N.C. 186, 187, 265 S.E.2d 189, 190 (1980).

I.

Defendant argues the trial court erred by concluding that "the parties had modified the [c]ontract to the extent that the time for performance on the part of . . . Plaintiffs was extended to allow . . . Defendant to obtain a valid Septic Improvements Permit." Specifically, Defendant argues that any modification of the contract did not comply with the Statute of Frauds and lacked consideration.

Generally, the obligations of a buyer and a seller under a real estate purchase agreement "are deemed concurrent conditions-meaning, that neither party is in breach of the contract until the other party tenders his/her performance, even if the date designated for the closing is passed." Dishner Developers, Inc. v. Brown, 145 N.C.App. 375, 378, 549 S.E.2d 904, 906, aff'd per curiam, 354 N.C. 569, 557 S.E.2d 528 (2001). "It is well settled that absent a time-is-of-the-essence clause, North Carolina law `generally allows the parties [to a realty purchase agreement] a reasonable time after the date set for closing to complete performance.'" Id. (quoting Fletcher v. Jones, 314 N.C. 389, 393, 333 S.E.2d 731, 734 (1985)). "`[W]hen time is not of the essence, the date selected for closing can be viewed as "an approximation of what the parties regard as a reasonable time under the circumstance of the sale."'" Id. (quoting Fletcher, 314 N.C. at 393-94, 333 S.E.2d at 735 (quoting Drazin v. American Oil Company, 395 A.2d 32, 34 (D.C.Ct.App.1978))). "[T]he parties may waive or excuse non-occurrence of or delay in the performance of a contractual duty." Id. (citing Fletcher, 314 N.C. at 394-95, 333 S.E.2d at 735-36).

In Dishner Developers, the defendant's contract to purchase real property from the plaintiff contained a thirty-day cure provision after written notice of a title defect, and further provided that closing would take place on or before 1 August 1997. Id. at 375, 549 S.E.2d at 904. At closing on 28 July 1997, the defendant learned there were three outstanding deeds of trust encumbering the real property. Id. at 376, 549 S.E.2d at 904. The defendant was unwilling to close under the circumstances, but she left the documents and funds necessary for closing at a later date with her attorney. Id. The plaintiff's attorney subsequently informed the defendant's attorney that the deeds of trust would be canceled and that the plaintiff was prepared to close. Id. However, on or about 4 August 1997, the defendant's attorney communicated to the plaintiff's attorney that the defendant wanted to void the contract and have her earnest money refunded. Id. at 376, 549 S.E.2d at 905.

Our Court recognized that the parties' purchase agreement did not contain a time-is-of-the-essence clause. Id. at 378, 549 S.E.2d at 906. Therefore, the plaintiff had a reasonable time after the closing date to perform the contract. Id. However, the defendant "failed to give [the] plaintiff the thirty days provided under the contract, or `reasonable time' provided by existing case law, to cure the defect. Therefore, when [the] defendant declared the contract null and void on 4 August 1997-just a week after the failed closing-she breached the contract." Id.

In Fletcher, the "defendant and [the] defendant's attorney continued to orally reassure and represent to [the] plaintiff and her husband that [the] defendant intended to close and consummate the transaction beyond the 10 March 1981 closing date." Fletcher, 314 N.C. at 394, 333 S.E.2d at 735. On 4 August 1981, almost five months after the scheduled closing, the defendant's attorney informed the plaintiff's attorney that the defendant was prepared to close. Id. at 391, 333 S.E.2d at 733. However, on 24 September 1981, the defendant's attorney returned the plaintiff's earnest money and sent a letter to the plaintiff's attorney declaring that the contract was null and void. Id. at 392, 333 S.E.2d at 733. Two days later, the plaintiff tendered the full amount that was due at closing along with a properly executed promissory note for the balance, as was required by the contract. Id. The contract did not contain a time-is-of-the-essence clause. Id. at 393, 333 S.E.2d at 734.

The Court recognized that "[a] waiver can be defined as an `excuse of a non-occurrence or of a delay in the occurrence of a condition of a duty.'" Id. at 394, 333 S.E.2d at 735 (quoting E. Farnsworth, Contracts § 8.5, at 561 (1982)). "The basis for a waiver can be inferred from conduct or expressed in words. `[C]onduct such as continuing performance with knowledge that the condition has not occurred might be questionable as the manifestation needed for a modification but sufficient for waiver.'" Id. (quoting E. Farnsworth, Contracts § 8.5, at 562) (internal citation omitted). Our Supreme Court held that the defendant had waived the 10 March 1981 closing date. Id. at 395, 333 S.E.2d at 735.

Our Supreme Court further held that the trial court's findings of fact supported the trial court's conclusion that the plaintiff "`made full and sufficient tender'" within a reasonable time after receiving notice that the defendant was ready to close. Id. at 399, 333 S.E.2d at 738. The Court noted that "[a]lthough it would have been more desirable for the [trial court] to include within [its] conclusions of law that [the] plaintiff's tender of performance was within a `reasonable time,' we do not think that omission alone is fatal to the validity and correctness of the judgment." Id. at 399-400, 333 S.E.2d at 738.

In the present case, Defendant does not challenge the trial court's findings of fact that when Plaintiffs learned that the...