Opinion
No. COA03-372
Filed: 20 January 2004 This case not for publication
Appeal by defendant from order entered 26 November 2002 by Judge Lillian B. Jordan in Moore County District Court. Heard in the Court of Appeals 3 December 2003.
Thigpen Jenkins, L.L.P., by Arthur A. Donadio, for plaintiff-appellee. Webb Graves, P.L.L.C., by Jerry D. Rhoades, Jr., for defendant-appellant.
Moore County No. 99 CVD 985.
Gwendolyn B. Elder ("plaintiff") and Louis C. Elder ("defendant") were married on 13 September 1980 and separated on 30 August 1999. Following a claim for equitable distribution, on 17 December 2001, the parties entered into a consent order providing:
(1) Defendant will pay $75,000 to Plaintiff within 30 days* in full and final satisfaction of all E.D. [Equitable Distribution] claims.
(2) Plaintiff will provide QC [Quit Claim] deeds to Defendant for marital home at 133 Forest Hills Dr. and lot at Deercroft.
(3) All other personal property, pensions etc will remain property of the person currently in possession.
*30 day period starts running when Quit Claim deeds are presented to Defendant for filing.
Thereafter, on 17 January 2002, the court signed a typewritten recapitulation of the order. The same day, plaintiff certified she delivered the quitclaim deeds to defendant. On 20 February 2002, defendant filed a Rule 60(b) motion. On 7 March 2002, plaintiff filed a motion for a temporary injunction asking the court to enter an order prohibiting defendant from conveying the real property because although she divested herself of her interest in the property, he had not complied with the order by paying her $75,000.00. Following a 26 August 2002 hearing, the court found the following facts:
2. The terms of [the 17 December 2001 memorandum of consent order] required Defendant to pay Plaintiff the sum of $75,000.00 (Seventy-Five Thousand Dollars) within 30 days of Plaintiff's delivery to Defendant of certain Quitclaim deeds.
3. Plaintiff, Defendant and parties' counsel were questioned by the undersigned Judge in open court to determine if each understood the terms of the memorandum. Each indicated understanding and acceptance of the terms of the Memorandum.
4. Thereafter, once the Plaintiff had delivered the quitclaim deeds to Defendant, Defendant attempted to tender performance by means of an IRA "rollover".
5. Plaintiff rejected said tender by Defendant on grounds that $75,000.00 rolled into an IRA in Plaintiff's name is not the same as $75,000.00 as called for in the Memorandum. Plaintiff did not bargain for a 10% tax penalty should she attempt to use proceeds of the settlement.
6. Defendant testified that he always intended to make the transfer of funds from Defendant's IRA into an IRA to be established by Plaintiff.
7. Defendant's counsel drafted the Memorandum of Judgment/Order.
8. The Memorandum of Judgment/Order is unambiguous on its face.
Based on these findings of fact, the court concluded that defendant had failed to meet his burden of proof and was not entitled to relief from judgment under Rule 60(b). Further, the court granted plaintiff's motion preventing defendant from disposing of or encumbering the real property. From this order, defendant appeals.
Defendant asserts the trial court abused its discretion by denying his Rule 60(b) motion on the grounds that there was no meeting of the minds since defendant always intended to pay plaintiff the $75,000.00 by "rolling over" the money from his IRA to hers and not by a cash payment. Defendant also asserts the trial court erred by ruling on the motion without considering the testimony of defendant.
First, we address defendant's argument that there was no meeting of the minds with regards to the payment terms. The consent agreement reads "Defendant will pay $75,000.00 to Plaintiff. . . ." The contract is silent as to the medium of payment. However, silence as to a material term may not negate meeting of the minds and usurp formation of the contract. Instead, where parties are silent as to a material term the missing term may be either implied from surrounding circumstances or supplied by a court using a gap-filler. The missing term may be implied from external sources, including standard terms, trade or local usages, a course of dealing between the parties prior to the agreement, and a course of performance after it. . . . A gap-filler, on the other hand, is a term courts supply either because the court thinks that the parties would have agreed on the term if it had been brought to their attention or because it is `a term which comports with community standards of fairness and policy.'
J. Perillo, Calamari and Perillo on Contracts § 2.9 (5th ed. 2003) (citation omitted). Accordingly, defendant's argument, that he always intended to pay plaintiff the $75,000.00 by way of an IRA rollover does not, as he asserts, negate the meeting of the minds for formation of their contract.
Nevertheless, defendant argues the Supreme Court recently held that "a court cannot compel compliance with terms not agreed upon or expressed by the parties in the settlement agreement." Chappell v. Roth, 353 N.C. 690, 692, 548 S.E.2d 499, 500 (2001). However, in Chappell the issue presented was not that the agreement was silent as to a material term; rather, the parties had agreed defendant would pay plaintiff $20,000.00, and plaintiff would voluntarily dismiss her suit, and the parties would execute a "full and complete release, mutually agreeable to both parties." Id., 353 N.C. at 691, 548 S.E.2d at 500. However, the parties were unable to agree on a release. The Supreme Court held the agreement could not be enforced by our courts because a material term to the contract — that the parties agree on a release — had not been met. Id., 353 N.C. at 693, 548 S.E.2d at 500. We find Chappell distinguishable from the case at bar. The contract in Chappell was not silent regarding a term; therefore, the court could not imply the missing term. Rather, the contract provided the parties would later agree to the term, and when they were unable to do so, the court could not imply the term. Unlike in Chappell, in the case at bar it is possible for the court to utilize the general rules of implying or gap-filling silent material terms. Accordingly, wefind no merit to defendant's assertion that, because he believed he could pay plaintiff the $75,000.00 through an IRA rollover and plaintiff anticipated a monetary payment, there was no meeting of the minds.
Defendant next asserts the trial court erred in not accepting parol evidence of the intended payment terms. We note the general rule with regard to medium of payment is that "[u]nless the contract indicates otherwise, payment is to be made in legal tender — greenbacks." J. Perillo, Calamari and Perillo on Contracts § 21.17 (5th ed. 2003); accord 60 Am. Jur.2d, Payment, § 21, p. 726 (payment "must be in money, unless the parties agree otherwise"). In the case at bar, the consent agreement reads "Defendant will pay $75,000.00 to Plaintiff. . . ." Since the contract does not indicate the parties agreed to a non-monetary medium of payment, the default presumption is that payment must be made in money.
Generally, our courts will accept parol evidence where the contract is silent as to the medium of payment. See Mozingo v. Bank, 31 N.C. App. 157, 162, 229 S.E.2d 57, 61 (1976) ("[t]he general rule is that parol evidence is admissible to show the agreed upon method of payment on a note"); Blalock v. Clark, 137 N.C. 140, 142, 49 S.E. 88, 88 (1904) (permitting parol evidence regarding the custom for payment of large lots of cotton was by check and not by cash); Lett v. Markham, 266 N.C. 318, 319, 145 S.E.2d 907, 908 (1966) (stating the general rule that "`[i]f the contract is ambiguous or silent on the medium of payment, parol evidence with respect thereto is admissible'" (quoting 40 Am.Jur., Payment, § 294, p. 902) but holding that a contract requiring payment of $3,500.00 "called for payment in cash" and remanding for a factual determination of defendant's alleged cancellation of a debt owed him by plaintiff had sufficiently established his defense of payment); but see Kidd v. Early, 289 N.C. 343, 359, 222 S.E.2d 392, 404 (1976) (applying the general rule "that when an option to purchase real estate neither specifies the method of payment nor provides that terms are to be fixed by a later agreement, the law implies that the purchase price will be paid in cash"). Defendant argues the trial court improperly declined to consider parol evidence, his testimony that he always intended to pay plaintiff with an IRA rollover. We disagree. While in some cases our courts have permitted parol evidence tending to show the trade uses or common practices in a given field of business, no such evidence is presented in the case at bar. Moreover, even had the trial court erred, the court permitted defendant to testify to preserve the record on appeal. The parol evidence consists only of defendant's self-serving statement that he always intended to pay plaintiff through the IRA. Defendant's statement, standing alone, does not demonstrate an agreement between the parties or any reason to vary from the general principal that money is the default medium of payment.
Accordingly, we hold defendant's belief, that he could pay plaintiff $75,000.00 through a rollover, does not negate the meeting of the minds, and the contract is valid. Since the contract is silent on the medium of payment, this Court musttherefore imply the term, and without a reason to vary the general rule, we conclude payment shall be in money. Therefore, defendant owes plaintiff $75,000.00 and, since another method was not agreed upon, this payment must be monetary.
Affirmed.
Judges BRYANT and ELMORE concur.
Report per Rule 30(e).