Court Opinion

ID: 9852848
Source: CourtListenerOpinion
Date Created: 2023-09-24 05:37:54.733641+00
Date Added: 2024-06-11T09:22:35.755279
License: Public Domain

TYSON, Judge,
dissenting.
I respectfully dissent from the majority opinion that affirms the trial court’s judgment for plaintiff.
I would hold that plaintiff’s prior breach of the contract excused defendant’s performance. Alternatively, I would hold that the trial court’s conclusions of law that defendant unilaterally breached the contract are not supported by its findings of fact that defendant’s conduct was an unequivocal repudiation of the contract. I would hold that defendant is entitled to a refund of her earnest money.
I. NOTICE
In addition to the facts set out in the majority’s opinion, I add the following: Plaintiff’s attorney was given notice by defendant’s attorney of three outstanding deeds of trust recorded against the property, on or about 18 July 1997, ten days prior to the scheduled closing date. Defendant’s attorney, Randolph E. Shelton, Jr., Esq., was called at trial as a witness for plaintiff. Shelton testified that he gave plaintiff’s attorney oral notice of three outstanding deeds of trust against the property as is the custom and practice of the area. Shelton testified that in over 20 years of real property practice, he could not recall *380giving or receiving written notice. Shelton explained the custom by stating,
[w]e see each other all the time. The real estate lawyers see each other all the time in the court house, and the register of deeds office. Between personal contact and telephone, that’s the way we handle those. If it were something other than a mortgage . . . Perhaps we would make the discussions more formally in writing. But we’re just talking about dealing with the deeds of trust, that’s just routine.
Shelton also testified that he did not consider the deeds of trusts to be “defects in title.” Plaintiff testified that he was aware of the three deeds of trust long before the closing date of 28 July 1997, and took no steps to get them canceled as of the closing date or any reasonable time thereafter. Plaintiff further testified that the deeds of trust were not canceled or released until January 1998 and April 1999.
Plaintiff knew of the outstanding deeds of trust long before closing and knew it could not transfer title for the property to defendant as required by the contract until the deeds of trust were canceled or released. Plaintiff’s attorney was told about the deeds of trust ten days prior to the scheduled closing. Plaintiff never demanded written notice of the outstanding deeds of trust.
During testimony, one of plaintiff’s principles, Jess Dishner, was asked the question, “did you ever provide notice to Mrs. Brown saying, T have now cleared the title and... I will close this sale on a certain date?’ ” Dishner answered “no.” I would hold that plaintiff received any required notice of “defects in title” and took no steps to perform its obligations at closing, or a reasonable time thereafter.
II. NON-PERFORMANCE BY PLAINTIFF
The contract called for closing date on or before 1 August 1997. The closing date was set for 28 July 1997, by mutual agreement of the parties. Defendant drove sixteen hours from Florida to attend the closing. All parties were present at the closing. None of the three deeds of trust had been canceled or released as of the closing date. At closing, contrary to the contract, plaintiff offered defendant a “wrap around mortgage” which was rejected by defendant and her attorney. Notwithstanding these events, defendant signed all required closing documents and left the documents and the remaining funds with her attorney with instructions to complete closing, if plaintiff delivered title in conformity with the contract.
*381Under section 5 of the contract, plaintiff contracted “to convey fee simple marketable title to the Property by general warranty deed, subject only to the exceptions hereinafter described free and clear of all encumbrances.” Plaintiffs failure to deliver the title in accordance with Section 5 of the contract on the closing date, or a reasonable time thereafter, constituted a prior breach, excusing defendant’s performance, and allowing defendant to terminate the contract.
Plaintiff argues that performance by one party to a contract is excused, if the other party has repudiated the contract, making a tender of performance by the non-breaching party a futility. Dixon v. Kinser, 54 N.C. App. 94, 101, 282 S.E. 2d 529, 534 (1981).
North Carolina recognizes that defendant breaches the contract if she repudiated her obligation under the contract before her performance was immediately due. In order to establish such repudiation and to excuse their own non-performance, plaintiff has the burden of showing by the greater weight of the evidence, that defendant engaged in positive and unequivocal acts and conduct which were clearly inconsistent with the contract. Bell v. Brown, 227 N.C. 319, 322, 42 S.E.2d 92, 94 (1947). Since the only evidence communicated to plaintiff was defendant’s broker’s mid-August note to plaintiff’s broker indicating defendant’s desire to void the contract, and requesting the refund of the deposit, there is no positive and unequivocal indication that defendant would not perform the contract. The fully executed documents and funds were still being held by defendant’s attorney, awaiting plaintiff’s performance. Defendant could do nothing more to complete the closing, other than what she had already done.
This Court has held that “in order to constitute anticipatory repudiation, the words or conduct evidencing an intention to breach the contract must be a ‘positive, distinct, unequivocal, and absolute refusal’ to perform the contract when the time fixed for performance arrives.” Gordon v. Howard, 94 N.C. App. 149, 152, 379 S.E.2d 674, 676 (1989) (quoting Nesser v. Laurel Hill Assocs., 93 N.C. App. 439, 443, 378 S.E.2d 220, 223 (1989)).
In Gordon, after entering into a contract for the purchase of a house, the buyers wrote directly to the seller that “[m]y purpose in writing is to tell you that my wife and I have decided not to purchase lot number 22 in Glenn Kerry . . . therefore, kindly return my $10,000 deposit.” Id. at 150, 379 S.E.2d at 675. This Court held that the letter was only an offer to withdraw from the contract conditional upon a *382return of the earnest money and not unequivocal repudiation of the contract. Id. at 152, 379 S.E.2d at 676.
The only finding of fact that bears on the issue of repudiation is that defendant “on or about 4 August 1997, notified her real estate agent that she declared the contract null and void, ordered the agent to halt the deal completely and requested the return of her down payment.” The trial court further found “[t]he agent passed this information to defendant’s attorney.” (Emphasis supplied). This telephone message to defendant’s real estate agent and subsequently to her attorney was not unequivocal notice of repudiation to the plaintiff nor was the letter dated 14 August 1997 from defendant’s agent to plaintiff’s agent an unequivocal repudiation of the contract. I cannot distinguish the facts in this case from those in Gordon. Id.
Assuming defendant did repudiate the contract, the repudiation itself does not ipso facto constitute a breach. It is not a breach of the contract unless it is treated as such by the adverse party. Gordon at 153, 379 S.E.2d at 676. After receipt of the 14 August 1997 letter by its agent, plaintiff continued to demand performance by defendant. However, plaintiff never tendered its performance required by the contract, namely: to present and convey title in fee, free and clear of all encumbrances to defendant as of date of closing, or a reasonable period of time thereafter.
Plaintiff’s failure to perform by delivering title free from encumbrances at or within a reasonable period of time after scheduled closing and never tendering the title required by the contract excused defendant’s performance under the contract. Due to plaintiffs prior breach of the contract, defendant was justified in terminating the contract and is due return of the earnest money deposit. I would reverse the decision of the trial court.