Parks Bldg. Supply Co. v. Blackwell Homes, Inc.

Decision Date19 April 2016
Docket NumberNo. COA15-727,COA15-727
CourtNorth Carolina Court of Appeals
PartiesPARKS BUILDING SUPPLY COMPANY, Plaintiff, v. BLACKWELL HOMES, INC.; NEW CENTURY BANK; and CHARLES DUSTIN BLACKWELL individual as guarantor, Defendants.

PARKS BUILDING SUPPLY COMPANY, Plaintiff,
v.
BLACKWELL HOMES, INC.; NEW CENTURY BANK; and CHARLES DUSTIN
BLACKWELL individual as guarantor, Defendants.

No. COA15-727

COURT OF APPEALS OF NORTH CAROLINA

April 19, 2016


An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

Harnett County, No. 12 CVS 2059

Appeal by defendant New Century Bank from judgment entered 3 March 2015 by Judge James M. Webb in Harnett County Superior Court. Heard in the Court of Appeals 15 December 2015.

Vann Attorneys, PLLC, by James A. Beck II, for plaintiff-appellee.

Roberson Haworth & Reese, P.L.L.C., by Alan B. Powell, Christopher C. Finan and Matthew A.L. Anderson, for defendant-appellant New Century Bank.

GEER, Judge.

Defendant New Century Bank appeals from a judgment granting plaintiff Parks Building Supply Company's two materialman's liens priority over defendant's deeds of trust on the same real property, with the exception of defendant's first priority liens perfected pursuant to the doctrine of instantaneous seisin. Defendant primarily argues that the trial court erred in considering parol evidence to determine that Blackwell Homes, Inc. was the equitable owner of the subject real property at

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the time plaintiff furnished materials to it, even though the underlying contract for the sale of land referred to "Blackwell Homes" as the buyer and not "Blackwell Homes, Inc." We hold that the lack of a corporate identifier in the disputed contract created merely a latent ambiguity, resolvable by consideration of parol evidence. Therefore, the trial court could properly find, as it did, that the buyer of the land was in fact Blackwell Homes, Inc.

Facts

On 17 February 2012, two parties executed an agreement entitled "OFFER TO PURCHASE AND CONTRACT OF SALE" (the "Contract"). The Contract identified four tracts of land in Harnett County, North Carolina, including two tracts referred to as "Lot 14" and "Lot 17," as the subject of a sale between the seller, "Odell A. Smith Properties, LLC," and the buyer, identified as "Blackwell Homes." The signature block on the last page, however, identified the buyer as "By: Dustin Blackwell" and the notation "(SEAL)" appeared beside the signature.

Subsequently, on 27 February 2012, Blackwell Homes, Inc. executed and delivered two separate deeds of trust to defendant New Century Bank describing Lots 14 and 17. At this time, defendant advanced funds in the amount of $32,500.00 for each tract for the purchase of both tracts from Odell A. Smith Properties, LLC. Over the course of the loan, defendant advanced $143,286.00 and $149,141.00, respectively, to Blackwell Homes, Inc. pursuant to the loans secured by the Lot 14

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and Lot 17 deeds of trust. On 9 March 2012, Blackwell Homes, Inc. took title to Lots 14 and 17 by general warranty deed from Odell A. Smith Properties, LLC and recorded the deeds and deeds of trust on 13 March 2012.

Plaintiff first furnished materials to Blackwell Homes, Inc. for use on Lot 17 on 27 February 2012 and for use on Lot 14 on 5 March 2012. Plaintiff subsequently filed claims of lien under Chapter 44A of the North Carolina General Statutes against Lots 14 and 17, each identifying Blackwell Homes, Inc. as the party with which plaintiff contracted for the purchase of materials related to improvements to each lot. On 16 October 2012, plaintiff filed a complaint to collect amounts owed by Blackwell Homes, Inc. and successfully obtained a judgment against Blackwell Homes, Inc. on 11 February 2013.

On 27 December 2012, prior to plaintiff's obtaining a judgment against Blackwell Homes, Inc., defendant New Century Bank filed a counterclaim and crossclaim against plaintiff and Blackwell Homes, Inc., respectively, requesting that the trial court quiet title with respect to Lots 14 and 17, given plaintiff's materialman's liens, and, in the alternative, declare that defendant's deeds of trust have priority over plaintiff's liens. Prior to trial, the parties stipulated that the sole issue to be decided by the court was the identity of the parties to the Contract: specifically whether the Contract executed under seal by Dustin Blackwell on 17 February 2012 was actually executed by Blackwell Homes, Inc., thereby rendering

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Blackwell Homes, Inc. an "owner" of the subject real property on the date plaintiff furnished materials, as defined by N.C. Gen. Stat. § 44A-7(6) (2015).1

Defendant filed a motion in limine seeking the exclusion of all parol evidence offered for the purpose of identifying the buyer of the lots in the Contract. The trial court denied this motion and, after trial, entered judgment on 3 March 2015 concluding that Blackwell Homes, Inc. was a party to the Contract and, therefore, had an equitable interest in the lots at issue on the date that plaintiff furnished materials to Blackwell Homes, Inc. Accordingly, the trial court concluded that plaintiff held valid materialman's liens on Lots 14 and 17, thereby giving priority to plaintiff's liens with the exception of defendant's $32,500.00 first priority liens on each lot pursuant to the doctrine of instantaneous seisin. Defendant timely appealed to this Court.

Discussion

Defendant's overarching argument on appeal is that the trial court erred by relying upon parol evidence to conclude that Blackwell Homes, Inc. was the equitable

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owner of Lots 14 and 17 pursuant to a contract for the sale of land at the time plaintiff furnished materials to Blackwell Homes, Inc., thus giving plaintiff's materialman's lien priority over defendant's deeds of trust on the real property. In making this argument, defendant challenges both the trial court's denial of its motion in limine to exclude parol evidence and also the trial court's findings of fact and conclusions of law in the 3 March 2015 judgment.

When reviewing a decision to grant or deny a motion in limine, the "determination will not be reversed absent a showing of an abuse of the trial court's discretion." Warren v. Gen. Motors Corp, 142 N.C. App. 316, 319, 542 S.E.2d 317, 319 (2001). "It is an abuse of discretion for a trial court to base its decision on an error of law." Stark v. Ford Motor Co., 226 N.C. App. 80, 84, 739 S.E.2d 172, 176 (2013). However, when reviewing a judgment entered after a non-jury trial, " '[t]he standard of review on appeal . . . 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.' " Stikeleather Realty & Invs. Co. v. Broadway, ___ N.C. App. ___, ___, 772 S.E.2d 107, 113 (2015) (quoting Cartin v. Harrison, 151 N.C. App. 697, 699, 567 S.E.2d 174, 176 (2002)). "The trial court's conclusions of law are reviewed de novo[.]" Id. at ___, 772 S.E.2d at 113.

Plaintiff was entitled to file a valid materialman's lien upon real property if it "perform[ed] or furnish[ed] labor or . . . materials . . . pursuant to a contract, either

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express or implied, with the owner of real property for the making of an improvement thereon . . . ." N.C. Gen. Stat. § 44A-8 (2015) (emphasis added). The issue in this case is not whether plaintiff was entitled to a materialman's lien, but rather whether plaintiff's lien has priority over defendant's deeds of trust. That question depends upon when plaintiff became an "owner" within the meaning of N.C. Gen. Stat. § 44A-8.

An "[o]wner" for purposes of a materialman's lien is defined as one "who has an interest in the real property improved and for whom an improvement is made and who ordered the improvement to be made." N.C. Gen. Stat. § 44A-7(6). However, in Carolina Builders Corp. v. Howard-Veasey Homes, Inc., 72 N.C. App. 224, 231, 324 S.E.2d 626, 631 (1985), this Court held that the definition of "owner" also includes a party that has obtained an "equitable interest at the time materials were first furnished" pursuant to "an enforceable contract for the sale of land" and that obtains a "subsequent legal interest" in that land.

Thus, equitable ownership is established by an enforceable contract for the sale of land. An enforceable contract for the sale of land in North Carolina must, of course, satisfy the Statute of Frauds. See N.C. Gen. Stat. § 22-2 (2015). The Statute of Frauds requires that the contract be in writing and that the writing be " 'sufficiently definite to show the essential elements of a valid contract[,]' " including the " 'names of vendor and vendee, and a description of the lands to be conveyed, at least

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sufficiently definite to be aided by parol.' " Carr v. Good Shepherd Home, Inc., 269 N.C. 241, 243, 152 S.E.2d 85, 88 (1967) (quoting Smith v. Joyce, 214 N.C. 602, 604, 200 S.E. 431, 433 (1939)). In this case, the parties agree that if the Contract is enforceable as of its execution on 17 February 2012 and the buyer is Blackwell Homes, Inc., then Blackwell Homes, Inc. had equitable ownership of the real property at issue at the time plaintiff furnished materials for the improvement of the land, thereby giving plaintiff's liens priority over defendant's deeds of trust with the exception of defendant's $32,500.00 first priority liens on each lot pursuant to the doctrine of instantaneous seisin.

Defendant's argument on appeal rises and falls with its claim that the Contract's identification of the "buyer" of the property as "Blackwell Homes," without any corporate designation, means that Blackwell Homes, Inc. did not have an equitable interest in the property at the time plaintiff first furnished materials to Blackwell Homes, Inc. Specifically, defendant contends that the trial court erred in considering parol evidence when finding that the "buyer" for purposes of the Contract was "Blackwell Homes, Inc." We disagree.

The parol evidence rule " 'prohibits the consideration of evidence as to...

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