Kassel v. Rienth
| Docket Number | COA22-825 |
| Decision Date | 06 June 2023 |
| Parties | RICHARD KASSEL, and wife, SUSAN KASSEL, Plaintiffs, v. KENNETH RIENTH, and wife, CATHERINE RIENTH, Defendants. |
| Court | North Carolina Court of Appeals |
Heard in the Court of Appeals 26 April 2023.
Appeal by defendants-appellants from order entered 14 March 2022 by Judge J. Stanley Carmical in Brunswick County No. 21CVS671 Superior Court.
Law Offices of G. Grady Richardson, Jr., P.C., by Susan Groves Renton and G. Grady Richardson, Jr., for defendants-appellants.
The Del Re Law Firm, by Benedict J. Del Re, Jr., for plaintiffs-appellees.
Kenneth and Catherine Rienth ("Defendants") appeal from the 14 March 2022 Order for Specific Performance (the "March Order"). On appeal, Defendants argue the trial court erred by: (1) interpreting the consent order as a standard real estate purchase contract and not an order of the court (2) inserting words into the unambiguous consent order; (3) making findings of fact that are unsupported by the evidence and (4) denying their motion for sanctions. After careful review, we find no error.
On 13 February 2020, Richard and Susan Kassel ("Plaintiffs") entered into a Lease Agreement and Option to Purchase (the "Lease Agreement") Defendants' home (the "Home") located at 3227 St. Andrews Circle SE, Southport, North Carolina. Per the Lease Agreement, Plaintiffs would lease the Home for a term of one year, beginning on 15 February 2020, with the right to purchase the Home at any time prior to the expiration of the Lease Agreement.
On 3 August 2020, a hurricane substantially damaged the Home, resulting in the need to replace the roof. Defendants did not name Plaintiffs as an additional insured party on the Home and had difficulty obtaining insurance proceeds on repairs made by Plaintiffs. Plaintiffs alleged Defendants refused to pay those funds in an attempt to profit from the storm repairs.
On 22 January 2021, Plaintiffs sent Defendants written notice of their intent to close with a cash sale on the Home. Plaintiffs hired Sandra Darby ("Ms. Darby") as their closing attorney, and Defendants hired Zach Clouser ("Mr. Clouser") as their closing attorney. The closing date was scheduled for 14 February 2021, but the parties were unable to close on the sale.
On 16 February 2021, after it became clear to Plaintiffs that Defendants were not going to close on the Home, Plaintiffs filed a Claim of Lien with the Brunswick County Clerk of Court for $13,512.87. This "mechanic's lien" was filed against the Home to secure the costs they expended to repair the roof damaged by the hurricane.
Subsequently, Excel Roofing filed their own mechanic's lien for the roofing work they completed on the Home.
On 8 April 2021, Plaintiffs filed a Complaint in Brunswick County Superior Court for breach of the Lease Agreement, breach of offer to purchase, specific performance, breach of duty of good faith, and damages. In their Complaint, Plaintiffs alleged Clay Collier ("Mr. Collier") contacted Ms. Darby and represented himself as the attorney for Defendants. Plaintiffs alleged the sale of the Home did not take place because Defendants did not procure and provide the documents necessary to close on the Home and continued to demand more money related to the costs of repairing the roof.
In June 2021, after ongoing negotiations, Plaintiffs' current counsel, Benedict Del Re ("Mr. Del Re") drafted a consent order (the "Consent Order") memorializing Plaintiffs' and Defendants' resolution of issues and agreement to close. After drafting the Consent Order, Mr. Del Re sent the Consent Order to Defendants for their approval and signature. Defendants signed the Consent Order on 21 June 2021 and sent it to Plaintiffs for their signature. The Consent Order, which was "the result of arm's length negotiation" between parties, was intended to resolve all claims between the parties and grant Plaintiffs' claim for specific performance. Per the Consent Order, Defendants were responsible for satisfying Excel Roofing's mechanic's lien, and Plaintiffs were responsible for "satisfy[ing] the [mechanic's] lien for $13,512.87." Defendants were also responsible for providing proper execution and delivery of all documents necessary to complete the closing transaction. The parties further agreed rent would be abated from the time the Consent Order was filed until the closing was complete.
On 22 June 2021, Mr. Del Re emailed then-attorney for Defendants, Mr. Collier, summarizing what Defendants needed to complete in order to close. It is unclear from the Record whether Mr. Collier responded to this email, but Mr. Del Re sent a follow up email on 24 June 2021, stating:
This is just not working. The mortgage company is going to back out of the financing which will cause further delay . . . . I have no order, nor lien cancellation, no response on [Plaintiffs'] lien payment.
On 28 June 2021, Mr. Clouser sent the seller documents and the receipt for Excel Roofing's mechanic's lien payoff to Mack Hewett ("Mr. Hewett"), who took over closing responsibilities from Ms. Darby on behalf of Plaintiffs. Later that afternoon, the lender emailed Mr. Clouser requesting a list of items the lender needed "ASAP" to secure financing. Mr. Clouser responded that he was not doing the closing, and that last he heard, Mr. Hewett was responsible for the closing.
On 7 July 2021, Judge Disbrow signed the Consent Order, and it was filed with the clerk the same day. The Consent Order did not specify the date for closing, but it stipulated closing was to occur sixty days after the Consent Order was filed, which would have been 7 September 2021.[1] Defendants sent a request for a closing date but were told Plaintiffs were waiting on lender confirmation. Plaintiffs did not communicate a closing date to Defendants, but Plaintiffs worked with the lender through the month of August to complete the transaction. On 9 August 2021, Plaintiffs emailed Mr. Hewett that they had "scheduled a closing for [12 August 2021,]" but due to final documents being "held-up," closing on this date would not be feasible. It is unclear from the Record who was responsible for holding up these documents.
On 8 September 2021, Mr. Del Re emailed Mr. Collier to schedule the closing date for 10 September 2021. Mr. Collier responded,
On 9 September 2021, Mr. Clouser emailed Mr. Del Re and Mr. Hewett the following: On 10 September 2021, Mr. Clouser sent another email that stated: The parties attempted to resolve issues related to the closing but were unable to reach a resolution.
On 1 November 2021, Plaintiffs filed a Motion for Clarification and a Motion for Relief from Final Entry of Judgment/Order under Rule 60 of the North Carolina Rules of Civil Procedure (the "Rule 60 Motion"), requesting the trial court extend the closing date. In their Motion, Plaintiffs alleged the delay in closing was due to Defendants' delay in "consenting to inspections and providing verification of rents paid by Plaintiffs, delays in loan commitment due to title issues surrounding the cancellation of a mechanic's lien in the Clerk's office (official record), unexpected delays, and other delays not the fault of the Plaintiffs[.]"
On 20 December 2021, Defendants filed a Motion to Enforce the Consent Order, which included a motion to eject Plaintiffs from the Home and restore possession to Defendants. Defendants further requested an award of Rule 11 sanctions (the "Rule 11 Motion") against Plaintiffs and Mr. Del Re for the Rule 60 Motion. In response, Plaintiffs filed an Objection to Defendants' Motion and a Countermotion for Specific Performance.
On 14 March 2022, Judge Carmical entered the March Order granting Plaintiffs' Motion for Specific Performance and denying Defendants' Rule 11 Motion. The March Order concluded as a matter of law that the Consent Order "was intended to be a recital of the parties' agreement . . . [and] should be considered a court-approved contract and be subject to the normal rules of contract interpretation." The trial court further concluded:
Where a contract for the sale of real property does not include an explicit provision that time is of the essence for execution of the contract terms, the 'the dates stated in an offer to purchase and contract agreement serve on as guidelines, and such dates are not binding on the parties.'
The trial court did not rule on the Rule 60 Motion filed by Plaintiffs.
On 12 April 2022, Defendants filed timely notice of appeal.
This Court has jurisdiction to hear this appeal as a final order from a superior court pursuant to N.C. Gen. Stat. § 7A-27(b) (2021).
Defendants' first two issues on appeal are whether the trial court erred in (1) interpreting the Consent Order as a standard real estate contract and not a court order and (2) rewriting the Consent Order's explicit deadline for Plaintiffs to close on the purchase of the Home by allowing Plaintiffs "a reasonable time to perform." To address these issues, we are required to determine whether the Consent Order is a court-approved contract subject to regular principles of contract...
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