Bystry v Nemet, (02-974) 05/06/2003

Appeal by defendant from judgment dated 1 February 2002 by Judge A.A. Corbett, Jr. in Lee County District Court. Heard in the Court of Appeals 16 April 2003.

Harrington, Ward, Gilleland & Winstead, LLP, by Eddie S. Winstead, for plaintiff appellee.

Chris Kremer for defendant appellant.

BRYANT, Judge.

    Bruce Nemet (defendant) appeals from a judgment dated 1 February 2002 in favor of Brian Paul Bystry (plaintiff). On 12 October 2000, plaintiff filed a complaint against defendant alleging default under a commercial lease for failure to pay rent, failure to pay outstanding utility expenses, and failure to pay for renovations and remodeling of the demised premises. Defendant asserted in his answer that he ceased to pay rent following plaintiff's anticipatory repudiation of the lease. On 11 October and 19 November 2001, defendant filed motions for summary judgment. After the trial court denied defendant's motions for summaryjudgment, defendant waived his request for a jury trial.
    At the hearing on 5 December 2001, the trial court heard evidence from Todd Snyder (Snyder), Joni Martin (Martin), and defendant. Snyder, the division manager for plaintiff's company, testified defendant entered into a commercial lease with plaintiff on 23 April 1998. A term of the lease stated
        that in the event that the Tenant [(defendant)] is in default in the terms and conditions of this agreement, the Landlord [(plaintiff)] may terminate this agreement if the Tenant has not corrected the default condition within 14 days after receiving notice of the default condition by the Landlord and be evicted from the premises immediately thereafter.

Martin, the development director for plaintiff's company, testified she arranged leases and did collections for plaintiff. She stated defendant's payments were due under the terms of the lease on the first of each month.
    CP&L workers arrived at defendant's premises in December of 1999 to turn off the electricity. Although utility bills were defendant's responsibility under the lease, Martin requested that the bill be forwarded to plaintiff in order to avoid damage to the premises from freezing pipes. Martin further testified that she did not receive defendant's rent for February 2000. Plaintiff sent a letter dated 10 February 2000 to defendant informing him the February rent was due. The letter, which also referred to the past-due CP&L electric bill and tenant construction expenses owed by defendant, stated that defendant was in default on the lease and that plaintiff was        proceeding immediately with default proceedings to recover past due monies due on your account and to recover future rental payments until a replacement tenant can be [sic] for your vacant suite.

            Also, we are changing the locks and security codes for this suite to prevent any unauthorized entry. Please coordinate your access to the suite with our office from this point forward.

    Martin, plaintiff, and defendant met on 18 February and discussed options to settle the lease. Defendant did not respond to the two options offered by plaintiff but moved “some of the high-dollar stuff” from the premises on 19 February. Snyder initially asked defendant to stop removing items from the premises on that date, but he desisted after police declined to intervene upon learning that defendant was the tenant of the premises. Snyder then contacted plaintiff, and plaintiff subsequently had a conversation with defendant.
    Defendant received correspondence from plaintiff dated 21 February 2000 summarizing the two options for terminating the lease discussed on 18 February. The correspondence also gave notice that defendant should remove all unattached equipment and furniture from the premises by noon of 25 February 2000 because plaintiff planned to have the locks and the security codes changed. Defendant testified “[i]t was at that time that I - - I just assumed that he had discontinued - - terminated the lease and he was going to change the locks so we needed to get the rest of our equipment and stock out of there.” Defendant then “pulled the rest of our stuff out, throughout the week.” When asked if he had ever paid theFebruary 2000 rent, defendant said “[n]o, at that time we left at the end of February on not too good terms.”
    At the close of the evidence, the trial court made the following findings of fact:
        5) That on or about April 23, 1998, the Plaintiff and the Defendant, together with others, entered into a commercial lease agreement [whereby] the Defendant was to pay to the Plaintiff rent on the premises . . . .

        6) That the payments were due on the first day of each month.

        7) That the [Defendant] requested of the Plaintiff certain improvements to the premises, which lease provided that the [Defendant was] to pay the Plaintiff for such improvements, the balance of which was remaining at the time of this hearing $4,300.00.

        8) That the [Defendant] failed to pay rent for the month[] of February, 2000, and rent has not been paid for any time thereafter.

        9) That, pursuant to the lease and the Plaintiff's complaint, the Defendant is indebted to the Plaintiff for rent for the months of February through July, 2000.

        10) Further, the Defendant is indebted to the Plaintiff in the amount of $4,300.00 for the balance outstanding on renovations to the demised premises.

On the basis of these and other findings of fact, the trial court “ordered, adjudged and decreed that . . . [p]laintiff have and recover of . . . [d]efendant the sum of $15,000.00, together with interest at the legal rate from the date of the judgment until paid, in full.”

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    The dispositive issue is whether plaintiff's actionsconstituted an anticipatory breach of contract.
    Defendant contends the trial court erred by entering judgment for plaintiff. He argues plaintiff committed an anticipatory breach of the lease, thereby excusing defendant from continued performance. We disagree.
    “Breach of contract occurs when a party fails to perform a contractual duty which has become absolute.” Millis Constr. Co. v. Fairfield Sapphire Valley, 86 N.C. App. 506, 510, 358 S.E.2d 566, 569 (1987). An anticipatory breach, in contrast, occurs when “[a] breach is committed before there is a present duty of performance, and is the outcome of words evincing intention to refuse performance in the future.” Cook v. Lawson, 3 N.C. App. 104, 107, 164 S.E.2d 29, 32 (1968) (citation omitted) (internal quotations omitted). When defendant received plaintiff's correspondence on 10 February 2000, he was already in breach of the terms of the lease agreement due to his nonpayment of the rent and failure to pay utility bills. Plaintiff's correspondence notified defendant he was in default of the lease. Although the correspondence stated plaintiff was “changing the locks and security codes for this suite to prevent any unauthorized entry[,]” plaintiff did not take that action until fifteen days later on 25 February 2000. The parties discussed lease termination options on 18 February, and defendant removed some of his equipment from the premises on the following day.
    Defendant had fourteen days under the terms of the lease to correct the default after receiving notice on 10 February fromplaintiff; however, he failed to pay the February 2000 rent in order to cure his default. Defendant testified it was upon receipt of plaintiff's correspondence dated 21 February 2000 that he “just assumed that he had discontinued - - terminated the lease.” Plaintiff's actions to terminate the lease following defendant's default were not an anticipatory breach but, rather, were actions permitted under the lease in the event of a default, and plaintiff was, in fact, given the contractual fourteen days to cure the default. We note defendant has abandoned his two remaining assignments of error. See N.C.R. App. P. 28(b)(6). Accordingly, we affirm the trial court's judgment.
    Affirmed.
    Judges HUNTER and ELMORE concur.
    Report per Rule 30(e).

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