1. Landlord and Tenant_assignment of lease_signature of lessor_not necessary
There was a valid assignment of a lease, and the trial court correctly granted summary
judgment against the third-party defendant, where the assignment stated that the original lessee
“requested” that the lessor join in the assignment, with a blank signature block. If the lessor's
signature had been necessary for the assignment to be effective, the lease would have used
compulsory language.
2. Landlord and Tenant_assignment of lease_no signature by lessor--binding
A lease assignment agreement was binding on the third-party defendant, American Food
Corporation, and summary judgment was correctly granted against American Food, where
American Food twice agreed to assume the lease in the agreement, signed the agreement, moved
into the premises and paid the monthly rent, although it argued that it had intended to be bound
by the assignment only if it was signed by the original lessor, which never happened.
3. Landlord and Tenant_assignment of lease_no condition precedent
There was no condition precedent to a lease assignment where the agreement “requested”
the signature of the lessor. Conditions precedent are not favored, and will not be read into a
contract where they are not clearly indicated.
4. Landlord and Tenant_action for unpaid rent_affirmative defenses_facts not set out-
-summary judgment
The trial court did not err by granting summary judgment for the third-party plaintiff on
affirmative defenses where the third-party defendant failed to set out facts in dispute concerning
those defenses.
Younce Hopper Vtipil & Bradford, by Kevin P. Hopper, and
Nicholls & Crampton, by Kevin Sink, for Third-Party
Defendants-Appellants.
Faison & Gillespie, by Michael R. Ortiz and John-Paul Schick,
for Third-Party Plaintiffs-Appellees.
WYNN, Judge.
Third-Party Defendants (American Food Corporation, Marcus K.
Gurganus, Chrysanthe Georges f/k/a/ Chrysanthe Gurganus, Ernest T.
Gurganus, and Maria M. Gurganus) (hereinafter collectively referred
to as “American Food Corporation”), appeal from an order granting
summary judgment in favor of Third-Party Plaintiffs (J.M. N.C.
State, Inc., successor in interest to WAM, Inc., David J. Wilson,
Beth H. Wilson, Edwin L. Yancey, Jill L. Yancey, Kenneth B. Meyer,
and Elizabeth B. Meyer) (hereinafter collectively referred to as
“J.M. N.C. State”). After careful review, we affirm.
In 1997, pursuant to an assignment, J.M. N.C. State operated
a Jersey Mike's submarine sandwich shop on premises leased under a
commercial contract with Plaintiff Frances C. Mosely. During that
year, J.M N.C State began negotiations with American Food
Corporation, for the sale of the Jersey Mike's franchise. As a
result, on 2 January 1998, the parties signed and entered into a
Purchase and Sale Agreement which set forth the terms and
conditions of the sale. Additionally, American Food Corporation
paid a purchase price of $255,000 to assume the disputed lease and
purchase the Jersey Mike's franchise, as well as all of the
inventory, furniture, fixtures, and equipment at the store. To
facilitate the agreement, the parties entered into an Assignment,
Modification, and Assumption of Lease (“Assignment Agreement”).
Although the Assignment Agreement had a signature block for
Mosely (the landlord) to sign, this never occurred. In fact,Mosely indicated that she only became aware of the written
Assignment ten months after it was executed. In the meantime,
American Food Corporation occupied the premises, operated the
Jersey Mike's franchise, and paid all monthly rent payments
directly to Mosely, who made no objection to the payments during
this time.
In 1999, American Food Corporation sold the Jersey Mike's
franchise to Jeffrey A. Warren. This sale was for the same assets
and purchase price as the transaction between J.M. N.C. State and
American Foods Corporation. Although the record fails to show that
Mosely approved this transaction and assignment, it does show that
she accepted, without objection, monthly rent payments from Warren.
Warren stated in his affidavit that American Food Corporation
affirmatively represented at the time of the sale that he would be
getting a four-year lease, not a month-to-month tenancy. Warren
operated the store until 2001, when he closed it prompting Mosely
to bring this action for the unpaid rent due under the lease
against J.M. N.C. State who thereafter, filed an Amended Answer,
Motions, and Third-Party Complaint, which impleaded and sought
indemnification from American Food Corporation.
On 1 February 2002, Moseley voluntarily dismissed, with
prejudice, three of the Plaintiffs -- WAM, Inc., David Wilson, and
Beth Wilson. On 10 September 2002, the trial court awarded an
entry of default judgment against two of the Third-Party Defendants
-- Ernest and Maria Gurganus. On 28 March 2003, the trial court
granted summary judgment against American Food Corporation. From
that judgment, American Food Corporation appealed. ____________________________________________
“[T]he standard of review on appeal from summary judgment is
whether there is any genuine issue of material fact and whether the
moving party is entitled to a judgment as a matter of law.”
Bruce-Terminix Co. v. Zurich Ins. Co., 130 N.C. App. 729, 733, 504
S.E.2d 574, 577 (1998). Also, the evidence presented by the
parties must be viewed in the light most favorable to the
non-movant. Id. The court should grant summary judgment when “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.” N.C. Gen. Stat. §
1A-1, Rule 56(c) (2003).
The initial burden of establishing that there is no issue of
material fact lies with the movant, but once this burden is
satisfied, the burden then switches to the non-movant to show a
genuine issue of material fact. Thompson v. First Citizens Bank &
Trust Co., 151 N.C. App. 704, 706, 567 S.E.2d 184, 187 (2002). “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.” Koontz v. City of Winston-Salem, 280
N.C. 513, 518, 186 S.E.2d 897, 901 (1972). Once the movant meets
this burden, the non-movant must “produce a forecast of evidence”
demonstrating specific facts, as opposed to allegations,
establishing at least a prima facie case at trial. Thompson, 151
N.C. App. at 706, 567 S.E.2d at 187. In this appeal, American Food Corporation argues that the
trial court erred in granting summary judgment for J.M. N.C. State,
and contends that the evidence raised a genuine issue of material
fact regarding the assignment of the lease from J.M. N.C. State to
American Food Corporation. We disagree.
Under the general rules of contract construction, where an
agreement is clear and unambiguous, no genuine issue of material
fact exists and summary judgment is appropriate. Corbin v.
Langdon, 23 N.C. App. 21, 27, 208 S.E.2d 251, 255 (1974). In
contrast, an ambiguity exists in a contract if the “'language of
the [contract] is fairly and reasonably susceptible to either of
the constructions asserted by the parties.'” Taha v. Thompson, 120
N.C. App. 697, 701, 463 S.E.2d 553, 556 (1995) (citation omitted).
Also, all contemporaneously executed written instruments between
the parties, relating to the subject matter of the contract, are to
be construed together in determining what was undertaken. Yates v.
Brown, 275 N.C. 634, 640, 170 S.E.2d 477, 482 (1969).
[1] American Food Corporation argues that the Assignment
Agreement is ambiguous as to whether it requested or required
Mosely to sign the Assignment. The Assignment Agreement states,
“WHEREAS, J.M. N.C. State, Inc. has requested that Frances C.
Moseley join in this assignment to express her consent to the same
... I Consent. [Blank signature block of Frances C. Moseley].” In
construing a contract neither party can obtain an interpretation
contrary to the express language of a contract by the assertion
that it does not truly express his intent. Fidelity & Cas. Co. of
N.Y. v. Nello L. Teer Co., 250 N.C. 547, 550, 109 S.E.2d 171, 173(1959). The Assignment Agreement provision states that J.M. N.C.
State “requested” Mosely's signature. “Requested” is defined as
“[t]o express a desire for; ask for.” The American Heritage College
Dictionary 1160 (3d ed. 1997). If Mosely's signature was necessary
for the Assignment Agreement to be effective, the Assignment
Agreement could have contained the term “required,” “necessitate,”
or “mandatory.” Since the Assignment Agreement is unambiguous on
the face of the document, this Court must interpret the document as
written. Martin v. Vance, 133 N.C. App. 116, 121, 514 S.E.2d 306,
309 (1999). We hold that the Assignment Agreement did not require
Mosely's signature to be effective. Therefore, we conclude there
was a valid assignment.
[2] American Food Corporation also argues that while it and
the other parties signed the Assignment Agreement, they did not
intend to be bound by the Assignment Agreement on 2 January 1998,
but only on a later date if Mosely signed it. American Food
Corporation argues that their lack of assent to the Assignment
Agreement makes it not binding on them. We disagree.
Before a valid contract can exist, there must be mutual
agreement between the parties as to the terms of the contract.
Walker v. Goodson Farms, Inc., 90 N.C. App. 478, 486, 369 S.E.2d
122, 126 (1988). Where there is no mutual agreement, there is no
contract. If a question arises concerning a party's assent to a
written instrument, the court must first examine the written
instrument to ascertain the intention of the parties. Routh v.
Snap-On Tools Corp., 108 N.C. App. 268, 273, 423 S.E.2d 791, 795
(1992). Here, the Assignment Agreement provides:
American Food Corporation agrees to assume all
the obligations of J.M. N.C. State, Inc. as
the same were guaranteed by Edwin L. Yancey,
Jr. and Jill J. Yancey, and, Kenneth D. Meyer
and Elizabeth B. Meyer. The obligations of
American Food Corporation, including
obligations related to payment of attorney
fees, are hereby guaranteed jointly and
severally by Marcus K. Gurganus and wife,
Chrysanthe Gurganus, and Ernest T. Gurganus
and wife, Maria M. Gurganus. This is a
guarantee of payment, not of collection. It
is understood and agreed, however, that said
'Real Estate Lease' and 'Assignment,
Modification, and Assumption of Lease' will be
assumed in its entirety by American Food
Corporation.
Twice in this paragraph American Food Corporation agrees to assume
the lease. Also, American Food Corporation signed at the end of
the Assignment Agreement, Marcus K. Gurganus as President of
American Food Corporation, and Marcus K. Gurganus, Chrysanthe
Gurganus, Ernest T. Gurganus, and Maria M. Gurganus as new
guarantors. When a party affixes his signature to a contract, he
is manifesting his assent to the contract. Branch Banking & Trust
Co. v. Creasy, 301 N.C. 44, 53, 269 S.E.2d 117, 123 (1980). “The
object of a signature to a contract is to show assent.” Burden
Pallet Co., Inc. v. Ryder Truck Rental, Inc., 49 N.C. App. 286,
289, 271 S.E.2d 96, 97 (1980). Here, American Food Corporation
signed the Assignment Agreement manifesting assent to its terms on
2 January 1998.
(See footnote 1)
Since the Assignment Agreement was unambiguous and all parties
manifested their assent to the Assignment Agreement by affixing
their signature at the end, there was no material fact in dispute
making summary judgment in favor of the J.M. N.C. State proper.
Corbin, 23 N.C. App. at 27, 208 S.E.2d at 255.
[3] American Food Corporation also argues that the trial court
erred in granting summary judgment in favor of J.M. N.C. State on
the affirmative defense of “failure of conditions precedent,” as
the Purchase and Sale Agreement made Mosely's approval of the
Assignment Agreement a condition precedent. We disagree.
A condition precedent is a fact or event that must exist or
occur before there is a right to immediate performance, before
there is a breach of contract duty. Cox v. Funk, 42 N.C. App. 32,
34, 255 S.E.2d 600, 601 (1979). Conditions precedent are not
favored by the law. Craftique, Inc. v. Stevens & Co., Inc., 321
N.C. 564, 566, 364 S.E.2d 129, 131 (1988). Thus, the provisions of
a contract will not be construed as conditions precedent in the
absence of language clearly requiring such construction. In re
Foreclosure of Goforth Props., Inc., 334 N.C. 369, 375-76, 432
S.E.2d 855, 859 (1993). “'The weight of authority is to the effect
that the use of such words as 'when,' 'after,' 'as soon as,' and
the like, gives clear indication that a promise is not to be
performed except upon the happening of a stated event.” Id. at
376, 432 S.E.2d at 859 (citation omitted).
Here, the Assignment Agreement does not use any words
indicating a condition precedent. The Assignment Agreement uses
the term “requested” not “as soon as” or the like. This does notclearly indicate a condition precedent, and since condition
precedents are not favored by the law one will not be read into
this contract where the parties did not clearly indicate one. Id.
at 375-76, 432 S.E.2d at 859. American Food Corporation argues
that there is a condition precedent in the Assignment Agreement
that was not fulfilled. However, the affirmative defense related
only to the Assignment Agreement, not the Purchase and Sale
Agreement. Since the Assignment Agreement was not dependent on or
subject to the Purchase and Sale Agreement, this is a nonissue.
[4] American Food Corporation also argues that the trial court
erred in granting summary judgment in favor of J.M. N.C. State on
the alternative affirmative defenses of estoppel, failure to
mitigate damages, and lack of consideration. We disagree.
When the moving party presents an adequately supported motion
for summary judgment, the opposing party must come forward with
facts, not mere allegations, which rebut the facts set forth in the
moving party's case, or otherwise suffer a summary judgment. Frank
H. Conner Co. v. Spanish Inns Charlotte, Ltd., 294 N.C. 661, 675,
242 S.E.2d 785, 793 (1978). In this case, American Food
Corporation had to assert the affirmative defenses and support them
with facts. Id. Aside from American Food Corporation's answer,
the only responsive affidavit, of Marcus Gurganus, did not address
estoppel, mitigation of damages, or lack of consideration. J.M.
N.C. State's supporting papers sufficiently demonstrated its
entitlement to indemnification. The burden then shifted to
American Food Corporation under section 1A-1, Rule 56(c) of the
North Carolina General Statutes to show that there is a genuineissue for trial or provide an excuse for not doing so under Rule
56(f). Brooks v. Smith, 27 N.C. App. 223, 218 S.E.2d 489 (1975).
American Food Corporation failed to do either. “If the party
moving for summary judgment successfully carries his burden of
proof, the opposing party must, by affidavits or otherwise, set
forth specific facts showing that there is a genuine issue for
trial and he cannot rest upon the bare allegations or denials of
his pleading.” Hillman v. U.S. Liab. Ins. Co., 59 N.C. App. 145,
154, 296 S.E.2d 302, 308 (1982). Since American Food Corporation
failed to set forth facts in dispute with regard to the alternative
affirmative defenses, summary judgment was appropriate.
J.M. N.C. State also brought a motion for sanctions due to a
substantial disregard for appellate rules in American Food
Corporation's brief. As American Food Corporation's amended brief
did not substantially violate the appellate rules, that motion is
denied.
Affirmed.
Chief Judge MARTIN and Judge McGEE concur.
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