Opinion
No. COA12–904.
2013-02-19
Smith Debnam Narron Drake Saintsing & Myers, L.L.P. by Connie E. Carrigan for plaintiff-appellee. Nexsen Pruet, PLLC by R. Daniel Boyce for defendant-appellant.
Appeal by defendant from order entered 19 December 2011 by Judge Shannon R. Joseph in Wake County Superior Court. Heard in the Court of Appeals 30 January 2013. Smith Debnam Narron Drake Saintsing & Myers, L.L.P. by Connie E. Carrigan for plaintiff-appellee. Nexsen Pruet, PLLC by R. Daniel Boyce for defendant-appellant.
STEELMAN, Judge.
Where defendant breached the contract and failed to respond to plaintiff's notice of breach, the trial court properly granted plaintiff's motion for summary judgment.
I. Factual and Procedural History
On 1 August 2007, Jordan's Construction, Inc. (plaintiff) and Forest Springs, LLC (defendant) entered into an Agreement for Sale and Purchase of Lots (“the Agreement”) under the terms of which plaintiff agreed to purchase eighty subdivided lots from defendant. Upon execution of the Agreement, plaintiff paid defendant $200,000 in earnest money. Plaintiff was to purchase the lots in accordance with a detailed schedule set forth in the Agreement. The trigger for the activation of plaintiff's obligation to purchase the lots was the “Effective Date” as set forth in paragraph 4 of the Agreement. “The ‘Effective Date’ for the Lots is the date on which all of the conditions precedent contained in this Section 4 have been accomplished and the Purchaser has been notified in writing that such conditions precedent have been accomplished.” Defendant never sent the notice required by paragraph 4 of the Agreement.
Paragraph 12 of the Agreement provided that upon breach by one party, the other party was required to provide written notice of the breach and give the party alleged to have breached the agreement fifteen days to cure the breach. On 16 February 2009, plaintiff sent defendant written notice of defendant's failure to prepare the lots in accordance with the Agreement and afforded defendant fifteen days to cure the default. Defendant never responded to plaintiff's notice of default.
On 5 March 2009, plaintiff initiated this action against defendant seeking to recover its $200,000 earnest money together with interest. It further sought a declaration that it had no further obligations under the Agreement. On 11 May 2009, defendant filed its answer and counterclaims, which sought monetary damages for breach of contract and a declaration that it was entitled to retain the $200,000 earnest money.
On 29 April 2010, defendant filed a Chapter 11 bankruptcy proceeding in the Eastern District of North Carolina. The bank that held the mortgage on the subdivision that was the subject of the Agreement obtained permission from the bankruptcy court to foreclose the property. Subsequently, defendant dismissed the bankruptcy proceeding on 19 April 2011.
On 23 June 2011, plaintiff moved for summary judgment. On 19 December 2011, the trial court entered an order granting plaintiff's motion for summary judgment and directed plaintiff to have and recover $200,000 from defendant together with interest and costs, including attorney's fees, in the amount of $37,338.79. Defendant's counterclaims were dismissed with prejudice.
Defendant appeals.
II. Standard of Review
“Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that ‘there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.’ “ In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008)(quoting Forbis v. Neal, 361 N.C. 519, 523–24, 649 S.E.2d 382, 385 (2007)).
III. Summary Judgment
In its only argument, defendant contends that there were genuine issues of material fact as to whether defendant breached the Agreement, whether plaintiff breached the Agreement, and which party breached the Agreement first. We disagree.
“The elements of a claim for breach of contract are (1) existence of a valid contract and (2) breach of the terms of that contract.” Poor v. Hill, 138 N.C.App. 19, 26, 530 S.E.2d 838, 843 (2000).
In the instant case, defendant does not dispute the validity of the Agreement, but does dispute whether there was a breach. Paragraph 4 of the Agreement required defendant to send written notice to plaintiff that the lots were developed and ready for purchase. After receiving written notice, plaintiff was then obligated to purchase the lots. There is no evidence in the record that shows plaintiff was ever notified by defendant in writing that the conditions precedent had been accomplished. Defendant contends that an e-mail dated 1 July 2008 gave plaintiff notice that the lots were ready to be purchased. The e-mail states, “I would suggest at the end of next week we would have shoulders graded correctly and you would be able to punch the lots.” This suggestion does not suffice as written notice that all conditions precedent had been accomplished. Defendant failed to provide the notice required under paragraph 4 of the Agreement. Plaintiff was thus under no obligation to purchase the lots.
Defendant also contends that plaintiff first breached the Agreement by “failing to purchase [l]ots as required[.]” As discussed above, plaintiff was under no obligation to purchase the lots because it had not received the required written notice from defendant. Further, under paragraph 12 of the Agreement, if one party breaches the Agreement, the non-breaching party must give the breaching party notice of the breach. Specifically, paragraph 12(C) provides:
In the event that Seller or Purchaser breach their obligations under the Agreement, then the non-breaching party shall give the breaching party written notice of such breach and fifteen (15) days to cure the default. In the event the breaching party shall fail to cure the default within the fifteen (15) day period, then the nonbreaching party shall have the right to (i) cancel and terminate this Agreement as to all unsold Lots or (ii) exercise any rights or remedies available in this Agreement.
There is no evidence in the record indicating that defendant provided plaintiff with written notice of plaintiff's breach of the contract and the right to cure as required by the Agreement.
Rather, the record shows that plaintiff gave defendant written notice of defendant's breach stating, “no lots have yet been developed or sold [to plaintiff]” and plaintiff “demands immediate cure of this default[.]” Defendant failed to respond to this notification and failed to cure the default. Based upon the record before this Court, we hold that there were no genuine issues of material fact. The trial court properly granted summary judgment for plaintiff.
Based upon the foregoing rulings, we need not address defendant's remaining arguments.
AFFIRMED. Judges GEER and HUNTER, JR., ROBERT N. concur.
Report per Rule 30(e).