Batten, Inc. v Jonesboro Methodist Ch., (02-633) 06/17/2003

Appeal by defendants from order entered 7 February 2002 by Judge William Z. Wood, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 13 February 2003.

Adams, Kleemeier, Hagan, Hannah & Fouts, P.L.L.C., by Eric H. Biesecker, for plaintiff-appellee.

Safran Law Offices, by Todd A. Jones and Perry R. Safran, for defendant-appellants.

HUDSON, Judge.

On 16 August 2001, plaintiff J.H. Batten, Inc. (“Batten”) filed suit alleging breach of contract against defendant Jonesboro United Methodist Church (“JUMC”); two of JUMC's trustees, Charles L. Mann, Jr. (“Mann”) and Michael R. Watson (“Watson”); and JUMC's pastor, David A. Banks (“Banks”). On 29 October 2001, Batten filed a motion for summary judgment. On 7 February 2002, after hearing arguments and reviewing briefs of the parties, Judge William Z. Wood, Jr. granted summary judgment in favor of plaintiff.

    On 4 October 1999, Batten and JUMC entered into a contract whereby Batten was to perform certain construction and renovation to a fellowship hall at JUMC. During and after the construction, disputes arose between the parties over payment terms, additional items of work to be performed under the contract, the completion of punch list items, and warranty disputes. The court appointed a mediator, and the parties held several conversations and meetings in hopes of resolving the conflict.
    On 6 August 2001, Harold Batten, a representative of plaintiff, and two representatives of JUMC, Mann and Banks, agreed during a telephone conversation to settle the dispute. The oral agreement called for JUMC to pay Batten $101,000.00 on or before 15 August 2001.
    Later that same day, JUMC, through the individual defendants, faxed Harold Batten a letter confirming the oral agreement. The letter, signed by Banks, Watson and Mann, read as follows:
        Dear Harold:

        This is to confirm our telephone agreement of earlier today. According to our understanding, a payment of $101,000 will satisfy the construction relationship between your company and the Jonesboro United Methodist Church. This figure is, on your part, a $15,000 +/- deduction on the $116,000 +/- your accountants believe the Church owes. Additionally, it is our understanding that a payment of $101,000 will satisfy not only a final amount due on the original contract, but also all change orders including the last $5,145.84 on the roof, and accrued interest over the prior one year.

        If this is indeed an accurate representationof our verbal agreement, please understand that it is our intention to remit to J.H. Batten, Inc. $101,000 on or before August 15, 2001.

        Should this meet your approval, please sign this and return it by fax. Otherwise, please send us your understanding in writing for us to sign.

        Thank you very much for your cooperation in our conversation and for your willingness to help us settle this today.

        Sincerely,

        Rev. David A. Banks, Pastor
        /s/
        Michael R. Watson, Trustee Chairman
        /s/
        Charles L. Mann, Jr., Trustee Vice-Chairman
        /s/

        ------------------                    -----
        Representative, J.H. Batten, Inc.        Date

    Mr. Batten accepted the written confirmation of the telephone agreement by signing the letter and faxing it back to JUMC on 6 August 2001. Mr. Batten expressly indicated his acceptance of the agreement by writing on the bottom of the letter, “I agree that this is a complete settlement between J.H. Batten Inc. and Jonesboro United Methodist Church.”
    On 14 August 2001, JUMC faxed another letter to Batten attempting to rescind the settlement agreement. JUMC's reason for its change of position was that, “Upon a review of our records of change orders approved and not approved that affect the total contract price we disagree on the amount of payment outstanding.” JUMC failed to make the agreed payment on or before 15 August 2001, and Batten filed this lawsuit the next day.    Summary judgment is appropriate if “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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.” G.S. § 1A-1, Rule 56(c) (2001).
        An issue is material if the facts alleged would constitute a legal defense, or would affect the result of the action, or if its resolution would prevent the party against whom it is resolved from prevailing in the action. The party moving for summary judgment has the burden of establishing the lack of any triable issue of fact. Furthermore, the evidence presented by the parties must be viewed in the light most favorable to the non-movant.

Adams v. Jefferson-Pilot Life Ins. Co., 148 N.C. App. 356, 358, 558 S.E.2d 504, 506, disc. review denied, 356 N.C. 159, 568 S.E.2d 186 (2002) (internal citations and quotations omitted).

    JUMC argues that there was no agreement to resolve the disputed issues involving the construction contract, but that its attempt to rescind the settlement agreement was merely a rejection of Batten's counteroffer.
    This Court has previously stated that compromise agreements, such as the settlement agreement reached by the parties in this case, are governed by general principles of contract law. McNair v. Goodwin, 262 N.C. 1, 7, 136 S.E.2d 218, 223 (1964). For an agreement to constitute a valid contract, the parties' minds must meet as to all the terms. If any portion of the proposed terms is not settled, or no method agreed upon by which they may be settled,there is no agreement. Boyce v. McMahan, 285 N.C. 730, 734, 208 S.E.2d 692, 695 (1974) (internal quotations and citations omitted); see also Normile v. Miller, 313 N.C. 98, 108, 326 S.E.2d 11, 18 (1985) (stating that no contract exists absent a meeting of the minds or mutual assent between the parties).
    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, “if the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract.” Id.
    “[W]hen a contract is in writing and free from any ambiguity which would require resort to extrinsic evidence, or the consideration of disputed fact, the intention of the parties is a question of law.” Bicycle Transit Auth. v. Bell, 314 N.C. 219, 227, 333 S.E.2d 299, 304 (1985) (citations omitted). Moreover, “it is a well-settled principle of legal construction that it must be presumed the parties intended what the language used clearly expresses, and the contract must be construed to mean what on its face it purports to mean.” Hagler v. Hagler, 319 N.C. 287, 294, 354 S.E.2d 228, 234 (1987) (internal quotations and citations omitted). “Whether or not the language of a contract is ambiguous or unambiguous is a question for the court to determine.” Piedmont Bank and Trust Co. v. Stevenson, 79 N.C. App. 236, 241, 339 S.E.2d 49, 52 (1986), affirmed, 317 N.C. 330, 344 S.E.2d 788 (1986). In making this determination, “words are to be given their usual andordinary meaning and all the terms of the agreement are to be reconciled if possible . . . .” Id.
    Our courts have recognized “that settlement of claims is favored in the law,” and that settlement as a means to resolve disputes should be encouraged. Chappell v. Roth, 353 N.C. 690, 692, 548 S.E.2d 499, 500 (2001).
    Here, we conclude that the 6 August 2001 letter signed by both parties and memorializing the telephone agreement reached that same day constitutes a valid contract between the parties. The plain and unambiguous language in the agreement that JUMC acknowledged would “satisfy not only a final amount due on the original contract, but also all change orders . . . and accrued interest” is valid and binding as a settlement agreement. As such, we hold that JUMC's failure to “remit to J.H. Batten, Inc. $101,000 on or before August 15, 2001” was a breach of this contract.
    There being no genuine issue of material fact in dispute and that plaintiff is entitled to judgment as a matter of law, the order of the superior court granting summary judgment in favor of plaintiff is affirmed.
    Affirmed.
    Judges MCGEE and STEELMAN concur.
    Report per Rule 30(e).