Powell v. City of Newton

• Decision Date: 20 October 2009
• Docket Number: No. COA08-1262.,COA08-1262.
• Citation: 684 S.E.2d 55
• Parties: James W. POWELL, Jr., Plaintiff, v. CITY OF NEWTON, A Municipal Corporation, Defendant and Third-Party Plaintiff, v. Shaver Wood Products, Inc., a North Carolina Corporation and Dickson Engineering, Inc., a North Carolina Corporation, Third-Party Defendants.
• Court: North Carolina Court of Appeals

684 S.E.2d 55

James W. POWELL, Jr., Plaintiff, v. CITY OF NEWTON, A Municipal Corporation, Defendant and Third-Party Plaintiff, v. Shaver Wood Products, Inc., a North Carolina Corporation and Dickson Engineering, Inc., a North Carolina Corporation, Third-Party Defendants.

No. COA08-1262.

Court of Appeals of North Carolina.

October 20, 2009.

Appeal by plaintiff from an order entered 27 May 2008 by Judge Yvonne Mims Evans and cross-appeal by defendant and third-party defendants from an order entered 19 August 2008 by Judge W. Robert Bell in Catawba County Superior Court. Heard in the Court of Appeals 5 May 2009.

Crowe & Davis, P.A., by H. Kent Crowe, Conover, for plaintiff-appellant/cross-appellee.

Hamilton Moon Stephens Steele & Martin, PLLC, by Rebecca K. Cheney for third-party defendant-appellee/cross-appellant W.K. Dickson & Co., Inc.

Baucom Claytor Benton Morgan & Wood, PA, by M. Heath Gilbert, Jr., Charlotte, for defendant/third-party plaintiff-appellee/cross-appellant City of Newton.

Pope, McMillan, Kutteh, Privette, Edwards & Schieck, PA, by William P. Pope, Statesville, for third-party defendant-appellee/cross-appellant Shaver Wood Products, Inc.

JACKSON, Judge.

James W. Powell, Jr. ("plaintiff") appeals the 27 May 2008 order requiring him to execute a settlement agreement and quitclaim deed. Defendant City of Newton ("the city"), third-party defendant Shaver Wood Products, Inc. ("Shaver"), and third-party defendant W.K. Dickson Engineering, Inc. ("Dickson") (collectively "defendants") appeal the 19 August 2008 order denying their motion to dismiss plaintiff's appeal. For the reasons stated below, we affirm.

Plaintiff owns land located on Jacobs Fork River in Catawba County. Plaintiff's land abuts land owned by the city. In 2004, the city decided to build a public park on its land, retaining Dickson to oversee the project. The city retained Shaver to harvest timber from an area which needed to be cleared for the construction project. On 2 December 2005, plaintiff filed a complaint against the city alleging, inter alia, that the city had improperly cut and removed hardwood trees from his land. On 2 November 2006, the city filed a third-party complaint against Dickson and Shaver seeking indemnification.

On 14 November 2007, during a trial on the matter, the parties informed the court that they had reached an agreement in settlement of their dispute. In exchange for plaintiff's execution of a quitclaim deed to the disputed land, the city agreed to pay plaintiff $30,000.00, while Dickson and Shaver agreed to pay plaintiff $5,000.00 each, for a total sum of $40,000.00. Attorneys for defendants and for plaintiff agreed to those terms. When asked if that was the agreement, plaintiff responded, "I don't have any choice." Plaintiff's attorney informed him that he did have a choice. The court again asked plaintiff if that was his agreement, to which plaintiff responded, "Yes, that's my agreement." Counsel for the city noted that the agreement was subject to approval by the city council but that it was a mere technicality.

Thereafter, on 21 November 2007, a proposed written agreement was exchanged between attorneys. The proposed agreement was modified and forwarded to the parties on 27 November 2007. Additional correspondence was exchanged on 12 December 2007, regarding the draft quitclaim deed. Plaintiff refused to execute the agreement or abide by its terms; he claimed that the agreement was not knowingly, freely, and voluntarily made, and that it was coerced. On 30 January 2008, defendants sought a court order to enforce the settlement agreement. Plaintiff then discharged his attorney. The matter was heard on 5 May 2008, and the trial court entered its order enforcing the settlement agreement on 27 May 2008. Plaintiff appeals.

After plaintiff noticed his appeal, defendants filed motions to dismiss the appeal based upon violations of the North Carolina Rules of Appellate Procedure. On 19 August 2008, the trial court denied the motions. Defendants appeal.

Plaintiff first argues that the trial court erred in enforcing the purported settlement agreement because it is void pursuant to the statute of frauds. We disagree.

"A compromise and settlement agreement terminating or purporting to terminate a controversy is a contract, to be interpreted and tested by established rules relating to contracts." Harris v. Ray Johnson Constr. Co., 139 N.C.App. 827, 829, 534 S.E.2d 653, 654 (2000) (citing Casualty Co. v. Teer Co., 250 N.C. 547, 550, 109 S.E.2d 171, 173 (1959)). Matters of contract interpretation are questions of law. Davison v. Duke University, 282 N.C. 676, 712, 194 S.E.2d 761, 783 (1973) (citations omitted). This Court reviews questions of law de novo. Staton v. Brame, 136 N.C.App. 170, 174, 523 S.E.2d 424, 427 (1999) (citing Al Smith Buick Co. v. Mazda Motor of America, 122 N.C.App. 429, 470 S.E.2d 552 (1996)).

Pursuant to North Carolina General Statutes, section 22-2, "[a]ll contracts to sell or convey any lands, ... or any interest in or concerning them, ... shall be void unless said contract, or some memorandum or note thereof, be put in writing and signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized." N.C. Gen.Stat. § 22-2 (2007). Contracts within the meaning of this section are required to be in writing, to prevent frauds and injuries. Winberry v. Koonce, 83 N.C. 351, 354 (1880). "The statute of frauds was designed to guard against fraudulent claims supported by perjured testimony; it was not meant to be used by defendants to evade an obligation based on a contract fairly and admittedly made." House v. Stokes, 66 N.C.App. 636, 641, 311 S.E.2d 671, 675, cert. denied, 311 N.C. 755, 321 S.E.2d 133 (1984).

The statute of frauds requires "that all essential elements of the contract be reduced to writing." Yaggy v. B.V.D. Co., 7 N.C.App. 590, 600, 173 S.E.2d 496, 503, cert. denied, 276 N.C. 728 (1970). "[T]he parties, the purchase price, and the property to be sold [-] `These are the essential elements of the contract.'" Currituck Assocs.-Residential P'ship v. Hollowell, 166 N.C.App. 17, 28, 601 S.E.2d 256, 264 (2004) (citing Yaggy, 7 N.C.App. at 600, 173 S.E.2d at 503).

Here, in open court, the parties—plaintiff, the city, Dickson, and Shaver—agreed that defendants would pay to plaintiff $40,000.00 in exchange for plaintiff's executing a quitclaim deed to the subject property. A transcript of the parties' discussion with the trial court with respect to these basic elements was reduced to writing. In addition, the parties exchanged correspondence and a proposed "Settlement Agreement and Release" specifying the terms of the agreement more specifically, as well as a draft quitclaim deed. There can be no doubt that the essential terms of the contract were reduced to writing. The question before this Court is whether the writings were "signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized" as required by the statute of frauds. N.C. Gen.Stat. § 22-2 (2007).

We note that this was not some barroom conversation between drunken neighbors, agreed to in jest, and written on a random scrap of paper. See Lucy v. Zehmer, 196 Va. 493, 84 S.E.2d 516 (1954). This was an agreement among four parties represented by counsel, in a court of law, supervised by the presiding judge, who inquired of each party whether the proposed terms were agreeable. The party to be charged—plaintiff—confirmed, "Yes, that's my agreement." Under these circumstances, we cannot sanction plaintiff's conduct in disavowing the agreement by refusing to sign the document memorializing its terms in writing.

This concept may best be viewed in terms of judicial estoppel. In Whitacre P'ship v. Biosignia, Inc., 358 N.C. 1, 591 S.E.2d 870 (2004), our Supreme Court set forth this State's version of the doctrine, taken from the United States Supreme Court case of New Hampshire v. Maine, 532 U.S. 742, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001).

First, a party's subsequent position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding might pose a threat to judicial integrity by leading to inconsistent court determinations or the perception that either the first or the second court was misled. Third, courts consider whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Whitacre P'ship, 358 N.C. at 29, 591 S.E.2d at 888-89 (internal quotation marks and citations omitted). The essence of the doctrine is "to protect the integrity of the judicial process," id. at 28, 591 S.E.2d at 888, a central concern when, as here, a superior court judge has been personally involved in and sanctioned in open court, settlement of a pending case. Although our research discloses no North Carolina cases that have squarely addressed this issue, we believe that the reasoning of the Appeals Court of Massachusetts is persuasive.

The primary concern of the doctrine of judicial estoppel is to protect the integrity of the judicial process. That concern would be ill served if those intimately involved in that process, litigants, attorneys, and judges, could not rely on declarations of settlement made to the court. The force of oral agreements made in open court and acted on by the court, even in the face of statutory requirements of formality has long been recognized. It defies logic and fundamental principles of fairness to allow a represented party who has sought justice in a forum to contradict and undermine an agreement it reached and acknowledged in that same forum, especially when the judge and other litigants appear to have relied on that acknowledgement [sic]....