Opinion
No. COA03-900
Filed 16 November 2004 This case not for publication
Appeal by defendant from judgment entered 10 April 2003 by Judge Charles H. Henry in Lenoir County Superior Court. Heard in the Court of Appeals 31 March 2004.
Harrison Simpson, P.A., by William F. Simpson, Jr., for defendants-appellants. White Allen, P.A., by Richard J. Archie, for plaintiff-appellee.
Lenoir County, No. 02 CVS 1255.
This appeal arises from a dispute concerning an agreement between Harvey Fertilizer and Gas Company (plaintiff) and defendant Coastal Plains Restaurants, LLC (Coastal), whereby plaintiff agreed to sell, and Coastal agreed to purchase, certain real property. Coastal appeals from entry of summary judgment in favor of plaintiff, by which judgment defendant Wooten Brock, PLLC (Wooten Brock) was ordered to disburse to plaintiff the earnest money deposited into Wooten Brock's trust account by Coastal. For the reasons stated herein, we affirm. The relevant facts are as follows: on 12 April 2002, plaintiff and Coastal executed an Agreement for Purchase and Sale of Real Property (the contract) wherein plaintiff agreed to sell and Coastal agreed to purchase, for $500,000.00, certain real property located in Lenoir County, North Carolina (the subject property). Pursuant to the contract's terms, Coastal deposited earnest money in the amount of $15,000.00 with attorney Dal F. Wooten, III, a principal in Wooten Brock. The contract specified that the earnest money was to be held in Dal Wooten's escrow account, and that it would either be applied as part payment of the purchase price at closing or "disbursed as agreed upon under the provisions of Section 9 herein." Section 9 of the contract provides, in pertinent part, as follows:
Section 9. Earnest Money Disbursement: In the event this offer is not accepted, or in the event that any of the conditions hereto are not satisfied, or in the event of a breach of [the contract] by Seller, then the Earnest Money shall be returned to Buyer. . . . In the event this offer is accepted and Buyer breaches this [Contract], then the Earnest Money shall be forfeited. . . .
Section 1(c) of the contract provides that "`[c]losing' shall occur on or before May 31, 2002 with time of the essence[.]" Section 6 of the contract provides that the contract, and the rights and obligations of the parties thereunder, "are hereby made expressly conditioned upon fulfillment (or waiver by Buyer) of the following conditions[,]" the following two of which are relevant to the present appeal:
(a) New Loan: . . . Buyer must be able to obtain a firm commitment for [a] loan on or before May 25, 2002, effective through the date of closing. Buyeragrees to use its best efforts to secure such commitment and to advise Seller immediately upon receipt of lender's decision.
. . .
(f) Inspections: Buyer, its agents or representatives . . . shall have the right to enter upon the [subject property] for the purpose of inspecting, examining, performing soil boring and other testing. . . . Buyer shall have from the date of acceptance through the end of the Examination Period to perform the above inspections, examinations and testing to determine if the [subject property] is suitable for the Intended Use. If, prior to the expiration of the Examination Period, Buyer determines that the [subject property] is unsuitable . . . and provides written notice to Seller thereof, then this [contract] shall terminate, and Buyer shall receive a return of the Earnest Money. (Emphasis added)
Section 1(e) of the contract defines "examination period" as "the period beginning on [12 April 2002] and extending through May 25, 2002[.]" Finally, Section 11 provides that any notice required under the contract must be given as follows:
Section 11. Notices: Unless otherwise provided herein, all notices and other communications which may be or are required to be given by or made by any party to the other in connection herewith shall be in writing and shall be deemed to have been properly given and received on the date delivered in person or deposited in the United States mail, registered or certified, return receipt requested, to the addresses set out in Section 1(g) as to the Seller and in Section 1(h) as to the Buyer. . . . (Emphasis added)
Because underground storage tanks (USTs) were located on the subject property, plaintiff and Coastal executed, concurrently with the contract, an Environmental Remediation and Indemnity Agreement (the remediation agreement) on 12 April 2002. Under the remediation agreement, plaintiff agreed to remove the USTs within 30 days after closing and to "be responsible for all costs, expenses, damages, and penalties relating" to environmental contamination on the subject property, until such time as Coastal receives "an acknowledgment from [the North Carolina Department of Environment and Natural Resources (DENR)] that no further action is or will be required on the [subject property] with respect to the Contamination." The remediation agreement provides that if Coastal does not obtain the DENR acknowledgment by the closing date of 31 May 2002, the closing is to occur in escrow, with the deed and either the balance of the purchase price or a letter of credit to be held in escrow by Dal Wooten. Plaintiff would then have until 31 October 2002 to obtain the DENR acknowledgment, with the balance of the purchase price or letter of credit to be returned to Coastal, and the deed returned to plaintiff, if plaintiff fails to secure the DENR acknowledgment by that date.
On 28 May 2002, three days after the end of the examination period set forth in Section 1(e) of the contract, Coastal's manager, Robert L. Henkle, faxed to plaintiff a statement purporting to withdraw on Coastal's behalf from the contract to purchase the subject property "based upon the inability to receive certification that the [subject property] is environmentally fit for construction." Henkle's purported notice also stated that the $15,000.00 earnest money was not to be disbursed to plaintiff and requested that it instead be returned to Coastal. On 31 May 2002, the closing date as provided in Section 1(c) of the contract, Coastal failed to tender payment of the purchase price. On 3 October 2002, plaintiff filed suit against Coastal and Wooten Brock, seeking entry of judgment requiring Coastal to authorize Wooten Brock to disburse the earnest money to plaintiff. On 19 February 2003, plaintiff filed its motion for summary judgment. Plaintiff's motion was heard at the 7 April 2003 term of Lenoir County Superior Court. On 10 April 2003, the trial court granted plaintiff's motion for summary judgment against Coastal and ordered Wooten Brock to disburse the $15,000.00 earnest money to plaintiff. From this judgment, Coastal now appeals.
By its lone assignment of error, Coastal contends the trial court erred because genuine issues of material fact existed regarding the timeliness of Coastal's notification of its intent to withdraw from the contract. We disagree.
Summary judgment is to be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law." N.C. Gen. Stat. § 1A-1, Rule 56(c) (2003). The party moving for summary judgment has the burden of showing that no material issue of fact exists. Lexington State Bank v. Miller, 137 N.C. App. 748, 751, 529 S.E.2d 454, 455-56, disc. review denied, 352 N.C. 589, 544 S.E.2d 781 (2000). Once the moving party has met its burden, "the nonmoving party may not rely on the mere allegations and denials in his pleadings but must by affidavit, or other means provided in the Rules, set forth specificfacts showing a genuine issue of fact for the jury; otherwise, `summary judgment, if appropriate, shall be entered against [the nonmoving party].'" In re Will of McCauley, 356 N.C. 91, 101, 565 S.E.2d 88, 95 (2002) (quoting N.C. Gen. Stat. § 1A-1, Rule 56(e) (2003)).
The litigation underlying the present appeal arises from the parties' dispute over a contract for the purchase of real property. It is well-settled in North Carolina that, if the language of a contract is clear and free from ambiguity, "`the courts must enforce the contract as written' and cannot, under the guise of interpretation, `rewrite the contract or impose [terms] on the parties not bargained for and found' within the contract." State ex rel. Utils. Comm'n v. Thrifty Call, Inc., 154 N.C. App. 58, 63, 571 S.E.2d 622, 626 (2002), disc. review denied, 357 N.C. 66, 579 S.E.2d 575 (2003) (quoting Woods v. Insurance Co., 295 N.C. 500, 506, 246 S.E.2d 773, 777 (1978)).
Applying these principles to the present case, Sections 6(a) and 6(f) of the contract clearly and unambiguously provided that Coastal had until 25 May 2002 to obtain its financing commitment and complete its inspection of the subject property. Section 6(a) expressly required Coastal to "advise [plaintiff] immediately upon receipt of lender's decision" regarding financing for Coastal. Section 6(f) expressly required that if Coastal determined the subject property was unsuitable for its intended use, Coastal must provide written notice thereof to plaintiff on or before 25 May 2002 in order to terminate the contract and have the earnest moneyreturned. Section 11 provided that any notices required under the contract "shall be in writing and shall be deemed to have been properly given and received on the date delivered in person or deposited in the United States mail[.]" Section 1(c) of the contract states that closing shall occur on or before 31 May 2002 with time of the essence. Finally, Section 9 expressly provided "the Earnest Money shall be forfeited" if Coastal breached the contract.
In support of its motion for summary judgment, plaintiff submitted the affidavit of M. Todd Howard, an employee of plaintiff. Howard states in his affidavit that he "was in charge of making sure that [plaintiff] performed its obligations under [the contract]" and he was "familiar with both [plaintiff's] and Coastal's obligations under the [contract]." Howard states in his affidavit that "Coastal did not provide [plaintiff] any notice that the [subject] property was unacceptable on or before May 25, 2002[,]" and that "Coastal did not provide [plaintiff] any notice that it could not obtain financing on or before May 25, 2002." Finally, Howard avers in his affidavit that "Coastal did not tender payment of the $500,000.00 [purchase price] on May 31, 2002 as required by the [contract]."
In opposition to plaintiff's motion for summary judgment, Coastal submitted the affidavit of its manager, Henkle, wherein Henkle stated that on 28 May 2002 he " faxed" notice to plaintiff of Coastal's intent to withdraw from the contract "because the property was not environmentally satisfactory . . . This sameinformation had been orally given to Plaintiff on prior occasions." Because we conclude that these statements actually support plaintiff's showing that Coastal failed to comply with the contract's unambiguous provisions regarding the time and manner of giving notice, we are unable to discern any genuine issue of material fact created by the contents of Henkle's affidavit.
We conclude that plaintiff has carried its burden of showing that no genuine issue of material fact exists regarding Coastal's failure to notify plaintiff by 25 May 2002 of its determination that the subject property was unsuitable and its resulting intention to terminate the contract. By failing to do so, and then failing to tender the balance of the purchase price on or before 31 May 2002, Coastal breached the clear and unambiguous terms of the contract. Accordingly, by showing that there is no genuine issue as to any material fact and that plaintiff is entitled to judgment as a matter of law, we conclude that plaintiff has met the two-prong test required for a grant of summary judgment. Joines v. Anderson, 161 N.C. App. 321, 323, 587 S.E.2d 926, 927-28 (2003), disc. review improvidently allowed, 358 N.C. 154, 592 S.E.2d 559 (2004).
Affirmed.
Judges McCULLOUGH and BRYANT concur.
Report per Rule 30(e).