1. Judgments--consent--sale of real estate
The trial court properly concluded that plaintiff had waived
his right to purchase property where plaintiff agreed to purchase
from defendants real property, plaintiff filed an action for
specific performance of the agreement, the parties entered into a
consent judgment which provided an appraisal procedure, defense
counsel sent a letter to plaintiff's counsel seeking an offer for
the property following the appraisals, plaintiff failed to
respond, defendants entered into a contract to sell the property
to a third party and requested that plaintiff remove a notice of
lis pendens, plaintiff refused to do so, defendants filed a
motion asking the trial court to declare what right plaintiff
continued to have in the property, and the trial court concluded
that plaintiff had waived his rights under the consent judgment
and was equitably estopped from asserting his rights. Although
knowing that he had the right to purchase the property according
to the terms of the consent judgment, plaintiff failed to
exercise this right even after receiving the letter sent by
defendant.
2. Estoppel--equitable--rights under consent judgment not
asserted
The trial court properly concluded that plaintiff was
estopped from asserting any rights to real property under a
consent judgment where plaintiff chose not to exercise his right
to purchase and agreed for defendants to seek a driveway permit;
defendants thereafter sent plaintiff a letter inviting an offer
based on an appraisal; and defendants were entitled to rely on
the fact that plaintiff had taken no action to exercise his right
to purchase under the consent judgment when defendants sold the
property to a third party a year later. Appeal by plaintiff from judgment entered 30 January 1998 by
Judge W. Allen Cobb in New Hanover County Superior Court. Heard
in the Court of Appeals 13 January 1999.
Allen & MacDonald, by James A. MacDonald and Mary Margaret
McEachern, for plaintiff-appellant.
Lea, Clyburn & Rhine, by J. Albert Clyburn and James W. Lea,
III, for defendants-appellees.
WALKER, Judge.
On 4 June 1986, plaintiff and defendants entered into an
agreement whereby plaintiff agreed to purchase from defendants
approximately 4.43 acres of real property located in New Hanover
County, North Carolina. Plaintiff filed this action on 16
January 1991 against defendants seeking specific performance of
their agreement.
On 11 September 1992, plaintiff and defendants entered into
a consent judgment in which the plaintiff would have the right to
purchase the property from defendants pursuant to the conditions
of the consent judgment. The consent judgment provided that each
party would obtain an appraisal and, if the two appraisals were
more than $20,000 apart, a third appraisal would be obtained.
The purchase price would then be settled by averaging the two
closest appraisals. On 1 August 1992, defendants obtained an appraisal from Gene
Merritt, of the Gene Merritt Company, who appraised the property
at $221,500. On 28 September 1992, plaintiff obtained an
appraisal from Carlton Fisher, who appraised the property at
$127,680 and stated “[t]his property has no accessibility at the
present time and valuation is based on this fact.”
Since the appraisals were more than $20,000 apart, a third
appraisal was necessary and a third appraiser was subsequently
selected by the two appraisers. Defendants then requested time
to obtain a driveway permit to allow for accessibility to the
property before the third appraisal was completed. Application
for a street and driveway access permit was made to the North
Carolina Department of Transportation and was approved on 14
November 1995. The third appraisal was completed on 18 September
1996 by Hansen S. Matthews, Jr., who appraised the property at
$510,000 and noted that the owners would be allowed to have a
driveway.
On 1 October 1996, defendants' counsel sent a letter to
plaintiff's counsel seeking an offer for the property and asked
for a response to the letter. Plaintiff failed to respond and
one year later, defendants entered into a contract to sell the
property for $435,000 to a third party.
Subsequent to the sale of the property, defendants requestedthat plaintiff remove the notice of lis pendens which had been
previously filed against the property; however, plaintiff refused
to do so. As a result, defendants filed a motion asking the
trial court to declare what right, if any, plaintiff continued to
have in the property. On 30 January 1998, the trial court
entered a judgment and found:
5. The letter of October 1, 1996
clearly sets forth the price at which the
Defendant would accept the purchase of the
property by the Plaintiff, George C. Lewis.
6. This letter placed upon the
Plaintiff an affirmative duty to tender a
response to the Defendant, but the Plaintiff
remained silent and did not respond to the
Defendant's letter of October 1, 1996 in any
manner.
. . .
9. In reliance on the failure of the
Plaintiff to respond in any manner, the
Defendant has taken affirmative action to
market and sell the property which is the
subject to the lawsuit and has in fact,
entered into contract with a third party.
10. That more than five years has
passed since the entry of the original
Consent Judgment in this case and during this
period of time, the Plaintiff has not taken
any action to enforce what he deems to be his
rights under the Consent Judgment. The
Consent Judgment is in the nature of an
option to purchase property and the Plaintiff
has failed to affirmatively take action, on a
timely basis, to exercise this option.
11. After the sending of the October 1,1996 letter, circumstances were such as to
call for some action or declaration on the
part of the Plaintiff but he failed to
respond in any way.
The trial court then concluded:
2. That the Plaintiff has waived any and all
rights to purchase the property which is the
subject to this action.
3. In addition, the Plaintiff is equitably
estopped from asserting any further rights to
this property.
As a result, the trial court then ordered:
1. That any and all rights of the Plaintiff
to purchase the above-referenced property
pursuant to the terms and conditions of the
Consent Judgment entered into between the
parties. . . are hereby voided by this
Judgment and the Plaintiff has no further
legal and/or equitable right to purchase the
property. . . .
2. That the Notice of Lis Pendens filed June
27, 1988 as 88 CVS 1884 and the Notice of Lis
Pendens filed January 16, 1991 as 91 CVS
0185, against this property, are hereby
stricken from the record. . . .
Plaintiff contends the trial court erred in concluding that
he had waived his rights under the consent judgment and that he
was equitably estopped from asserting his rights under the
consent judgment.
In reviewing a decision of a trial court, which sits withouta jury, this Court's role is “to determine whether there was
competent evidence to support its findings of fact and whether
its conclusions of law were proper in light of such facts.” In
re Norris, 65 N.C. App. 269, 274-75, 310 S.E.2d 25, 29 (1983),
disc. review denied, 310 N.C. 744, 315 S.E.2d 703 (1984).
[1]First, plaintiff argues the trial court erred in
concluding he had waived his right to purchase the property under
the consent judgment.
A consent judgment is a contract between parties entered on
the record with the trial court's approval. Yount v. Lowe, 24
N.C. App. 48, 51, 209 S.E.2d 867, 869 (1974), affirmed, 288 N.C.
90, 215 S.E.2d 563 (1975). It is well established that a party
can waive its rights in a contract if the following elements are
established: “(1) the existence, at the time of the alleged
waiver, of a right, advantage or benefit; (2) the knowledge,
actual or constructive, of the existence thereof; and (3) an
intention to relinquish such right, advantage or benefit.”
Fetner v. Granite Works, 251 N.C. 296, 302, 111 S.E.2d 324, 328
(1959).
The trial court found the consent judgment was in the nature
of an option to purchase the property and plaintiff was required
to exercise his option in a reasonable amount of time. See
Yancey v. Watkins, 17 N.C. App. 515, 518, 195 S.E.2d 89, 92,cert. denied, 283 N.C. 394, 196 S.E.2d 277 (1973). In the five
years since the consent judgment was entered, the plaintiff
failed to take any action to enforce his rights.
In addition, the consent judgment stated that the parties
were each to “select and hire a licensed real estate appraiser
who shall appraise the property owned by the defendants . . . at
its present fair market value.” (Emphasis added). Without the
driveway permit and access, the property was less valuable.
Plaintiff could have elected to purchase the property without the
driveway permit. Although knowing that he had the right to
purchase the property according to the terms of the consent
judgment, plaintiff failed to exercise this right even after
receiving the letter sent by defendants on 1 October 1996.
Therefore, all of the elements necessary to show waiver on the
part of the plaintiff have been established. Thus, the trial
court properly concluded the plaintiff had waived his right to
purchase the property.
[2]Next, plaintiff contends the trial court erred in
concluding he was equitably estopped from asserting his rights
under the consent judgment. The doctrine of equitable estoppel
can be applied when neither bad faith, fraud, nor intent to
deceive is present. Hamilton v. Hamilton, 296 N.C. 574, 576, 251
S.E.2d 441, 443 (1979). Equitable estoppel arises when a party“by acts, representations, admissions, or by silence. . . induces
another to believe that certain facts exist, and such other
person rightfully relies and acts upon that belief to his or her
detriment.” Amick v. Amick, 80 N.C. App. 291, 294, 341 S.E.2d
613, 614 (1986).
Plaintiff chose not to exercise his right to purchase the
property but agreed for defendants to seek a driveway permit. By
allowing the defendants to make this improvement to the property,
defendants were entitled to assume that plaintiff was only
interested in the property if he could obtain access.
Thereafter, defendants sent plaintiff a letter inviting an offer
based on the third appraisal; however, plaintiff did not respond.
When defendants sold the property to a third party a year later,
they were entitled to rely on the fact that plaintiff had taken
no action to exercise his right to purchase under the consent
judgment. Therefore, the trial court properly concluded that
“plaintiff had waived any and all rights to purchase the
property” and that “plaintiff is equitably estopped from
asserting any further rights to this property.”
Affirmed.
Judges LEWIS and TIMMONS-GOODSON concur.
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