An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Proced ure.

NO. COA 02-124


Filed: 15 April 2003


v .                         Wake County
                            No. 97 CVS 12204

    Appeal by defendants from judgments entered 14 September 1999 by Judge E. Lynn Johnson (liability) and 26 January 2001 by Judge Narley L. Cashwell (damages) in Wake County Superior Court. Originally scheduled to be heard in the Court of Appeals on 10 October 2002. Reassigned to this panel by order of Chief Judge Eagles dated 21 January 2003.

    Smith, Debnam, Narron, Wyche, Story & Myers, L.L.P., by John W. Narron, for plaintiff-appellee.

    Young, Moore & Henderson, P.A., by Robert C. deRosset, for defendant-appellants.

    HUDSON, Judge.

    Defendants appeal two judgments, one entered 14 September 1999 addressing the issues of liability and one entered 26 January 2001 awarding plaintiff $327,690.00 for breach of contract. Defendants also appeal the order denying post-judgment motions. For the reasons explained below, we reverse both judgments and remand for new determinations of all issues.
    In his complaint, plaintiff Curtis M. Dail alleged that on 21June 1994, he and defendants entered into a written contract whereby plaintiff would sell and defendants would purchase a certain parcel of real estate located in Cary, North Carolina. The terms of the written agreement provided that the purchase price of the real estate was to be $371,250.00 and that closing was to take place on or before 21 June 1995. In the event that closing did not take place prior to 21 June 1995, the agreement provided that the purchase price would increase at the rate of $263.00 per day, but that “[i]n no event shall closing occur after June 21, 1997.” The agreement further provided under paragraph 4(c) that “[t]here must be no restriction, easement, zoning or other governmental regulation that would prevent the reasonable use of the real property for residential purposes.”
    Plaintiff further alleged that he notified defendants at various times between 13 June 1997 and 22 July 1997, as well as other unspecified times, that he was ready, willing, and able to close pursuant to the contract; that defendants refused to close pursuant to the contract; that defendants' time for performance became overdue as of 21 June 1997; and that plaintiff was damaged by defendants' failure to close.
    Defendants answered alleging, inter alia, that sewer service was not available to the subject property, which prevented the Town of Cary from approving the subdivision and thus prevented the reasonable use of this property for residential purposes. Thus, defendants contend that since this condition remained unsatisfied as of 21 June 1997, they were not in breach of the contract.    The case was heard at a bench trial before Judge E. Lynn Johnson, who bifurcated the trial and heard only the liability portion. After hearing testimony and receiving evidence from both sides, Judge Johnson determined that Defendant breached the contract with Plaintiff and, on 14 September 1999, issued his judgment that contained, inter alia, the following findings of fact and conclusions of law:
        2. On or about June 21, 1994, the Plaintiff loaned to the Defendants the sum of     $275,172.00 which sum was to be repaid in the amount of $371,250.00 on or before June 21, 1995, and if not paid by that date it would continue to incur interest or finance charges thereafter at the rate of $263.00 a day until paid in full.

        3. This June 21, 1994 loan transaction was entered into by the parties in the following form and format:
            a. Plaintiff loaned Defendants $275,172.00 which Defendants then used to exercise its option to purchase the “Upchurch Property” for $186,830.00 and place title to the same in the name of the Plaintiff. With the $275,172.00 loan proceeds, Defendants paid Upchurch $186,830.00 as the purchase price for the “Upchurch Property” and paid First Dominion Properties the sum of $89,170.00 as a “fee for assignment of option and option money[.]”

            b. Simultaneously with the closing of the “Upchurch Property” on June 21, 1994, the Defendants both individually and corporately executed an “Offer to Purchase and Contract” which was received in evidence as Plaintiff's Exhibit 3. Under the terms of Exhibit 3, Defendants were to purchase the “Upchurch Property” from the Plaintiff in return for the sumof $371,250.00 on or before June 21, 1995. If not purchased by that date, Plaintiff's Exhibit 3 required the imposition of additional cost at the rate of $263.00 a day after June 21, 1995 on the obligation of the Defendants to pay the Plaintiff for this property. These terms are entirely consistent with the loan terms described by Plaintiff as summarized in paragraph 2 above.


        4. Plaintiff would never have made the loan of $275,172.00 to the Defendants had Plaintiff known that Defendants were purchasing the “Upchurch Property” for $186,830.00. The Plaintiff did not believe he was “purchasing the property”. He believed he was simply loaning money and taking the property as security for the loan. For that reason he was not concerned about the access that the property had to sewer and he was not concerned at all about paragraph 4(c) of Plaintiff's Exhibit 3.



        2. Despite the written documentation executed in connection with this transaction, the parties intended that the Plaintiff would make a loan to the Defendants of $275,172.00 to be repaid in the amount of $371,250.00 on or before June 21, 1995 and if not repaid by that date the Plaintiff would thereafter incur additional interest or finance charges at the rate of $263.00 a day until paid.

        3. That for purposes of this transaction and to carry out the true intent of the parties, paragraph 4(c) of the Offer to Purchase and Contract is severable from the contract entered into by the parties.

The judgment concluded by ordering the parties to appear “at their first available opportunity” for trial on the issue of damages.
    The damages portion of the trial was heard by Judge Cashwellon 22 and 23 January 2001. On 26 January 2001, Judge Cashwell ruled that the amount of damages to be awarded to Plaintiff was to be determined as of 14 September 1999, the date of Judge Johnson's order finding liability. Judge Cashwell calculated that the Plaintiff's damages for Defendants' breach was $327,690.00, and entered judgment accordingly.
    On 5 February 2001, Defendants filed a motion asking the court to amend its findings of fact and conclusions of law or alternatively, for relief from the judgment. This motion was denied, and Defendants now appeal to this Court from both judgments and the order on the post-judgment motions.
    “The standard of review on appeal from a judgment entered after a non-jury trial is 'whether there is competent evidence to support the trial court's findings of fact and whether the findings support the conclusions of law and ensuing judgment.'” Cartin v. Harrison, 151 N.C. App. 697, 699, 567 S.E.2d 174, 176 (2002), disc. review denied, 356 N.C. 434, 572 S.E.2d 428 (2002) (citations omitted).
    In general, a court interprets a contract according to the intent of the parties to the contract. Bueltel v. Lumber Mut. Ins. Co., 134 N.C. App 626, 631, 518 S.E.2d 205, 209 (1999), disc. review denied, 351 N.C. 186, 541 S.E.2d 709 (1999). In addition, “[i]f the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract.” Id. “It is well-established law that, when a contract is plain and unambiguous on its face, it will be interpreted by the courts as amatter of law,” First Citizens Bank & Tr. Co. v. 4325 Park Rd. Assocs., 133 N.C. App. 153, 156, 515 S.E.2d 51, 54 (1999), disc. review denied, 350 N.C. 829, 539 S.E.2d 284 (1999), and “the court's only duty is to determine the legal effect of the language used and to enforce the agreement as written,” Atlantic and East Carolina Ry. Co. v. Southern Outdoor Advert., Inc., 129 N.C. App. 612, 617, 501 S.E.2d 87, 90 (1998) (citations omitted).
    Parol evidence as to the parties' intent and other extrinsic matters will not be considered if the language of the contract is not susceptible to differing interpretations. Bicket v. McLean Securities, Inc., 124 N.C. App 548, 552-53, 478 S.E.2d 518, 521 (1996), disc. review denied, 346 N.C. 275, 487 S.E.2d 538-39 (1997). Put another way, the terms of a contract “may not be contradicted by parol or extrinsic evidence, unless the terms of the instrument itself are ambiguous and require explanation.Cordaro v. Singleton, 31 N.C. App. 476, 479, 229 S.E.2d 707, 709 (1976) (emphasis in original).
    N.C. Gen. Stat. § 1A-1, Rule 52(a) “requires the trial court to make specific findings on all facts established by the evidence and essential to support the conclusions of law reached.” Joyner v. Adams, 87 N.C. App. 570, 576, 361 S.E.2d 902, 905 (1987). “When crucial findings of fact are absent from the trial court's judgment, the case must be remanded for further findings” and “the purpose of adequate findings is to allow the reviewing court to determine from the record whether the judgment and the conclusions of law underlying it represent a correct application of the law.” Id.
    Here, the face of the order reveals that the trial court took into consideration the parties' oral testimony as to their intent in entering into this contract. For example, finding of fact 7 states in pertinent part that “the true intent of the parties to this transaction was to create a loan between the parties based upon the oral history of this transaction as given by the parties in open court” (emphasis added). However, the trial court made no determination that the language contained in the written contract was ambiguous. A predicate finding as to ambiguity is a “crucial finding” that the court must enter prior to considering parol and extrinsic evidence of the parties' intent in entering into the contract.
    While we understand that “[t]he trial court's determination of whether the language of a contract is ambiguous is a question of law [and an appellate court's] review of that determination is de novo,” we are unable to determine whether the written contract is ambiguous because the record before us does not contain the complete written contract between the parties. Salvaggio v. New Breed Transfer Corp., 150 N.C. App. 688, 690, 564 S.E.2d 641, 643 (2002) (citations omitted). Paragraph 6(a) of the contract provides that certain provisions “on the REVERSE SIDE HEREOF . . .” will not be given effect. However, the record on appeal does not include the reverse side of the contract. Thus, we are unable to conduct a de novo review of the entire contract as written to determine whether an ambiguity exists, and thus, we remand for thetrial court to do so, and, thereafter, to address the remaining issues necessary for disposition of the case.
    Reversed and remanded.
    Judges TIMMONS-GOODSON and LEVINSON concur.
    Report per Rule 30(e).

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