Whitaker v Whitaker, (04-10) 03/15/2005

Appeal by plaintiff from judgment entered 14 July 2003 by Judge Russell G. Walker, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 15 September 2004.

Sharpless & Stavola, P.A., by Frederick K. Sharpless and Eugene E. Lester, III, for plaintiff-appellant.

Bell, Davis & Pitt, P.A., by William K. Davis and Alan M. Ruley, for defendants-appellees.

GEER, Judge.

This case arises out of a dispute among family members over real property that the children inherited from their parents. Plaintiff Louisa B. Whitaker filed suit against her siblings John C. Whitaker, Jr., Elizabeth N. Whitaker, II, and William A. Whitaker (collectively "defendants") when the parties could not agree on how the property should be managed. In the middle of the trial of this action, the parties reached a settlement agreement that was read into the record with the trial judge obtaining each individual party's express assent to the terms of the agreement. After plaintiff subsequently refused to sign defendants' proposedconsent judgment, defendants moved for entry of judgment enforcing the terms of the settlement agreement as recited into the record. Plaintiff appeals from the resulting judgment, arguing that the trial judge altered the terms of the parties' agreement. Because we hold the judgment properly reflected the terms of the agreement, we affirm.

    The parties to this case are the sons and daughters of John and Elizabeth Whitaker. John C. Whitaker, Sr. died in 1978 and his widow Elizabeth passed away in 2000. Upon Elizabeth Whitaker's death, the four children inherited multiple pieces of real property from their parents as joint tenants, including two Winston-Salem parcels (identified as "the Homesite" and "Spicewood") and a parcel in Roaring Gap, North Carolina.
    Since their mother's death, there have been a series of disputes between plaintiff and defendants. When plaintiff and defendants could not agree regarding the administration of their mother's estate, they participated in a mediation that resulted in a handwritten Memorandum of Mediated Settlement Agreement ("the Memorandum") on 9 November 2000. Subsequently, however, plaintiff refused to sign any formal settlement agreement.
    Krispy Kreme Doughnut Corporation expressed a desire to purchase the Homesite property for its corporate headquarters. Because of Krispy Kreme's interest in the Homesite, the siblings executed an Amendment to Memorandum of Mediated Settlement Agreement ("the Amendment"), addressing how negotiations withKrispy Kreme would proceed. The Amendment provided that one family member would be the sole spokesperson and negotiator and that a vote of three out of the four siblings would be binding on the entire group. All of the siblings, including plaintiff, executed the Amendment.
    After extensive negotiations, a tentative agreement was reached between John Whitaker (the designated negotiator) and Krispy Kreme regarding the Homesite property. The three defendants _ John, Elizabeth, and William Whitaker _ approved the sale and executed the necessary documents. Under the Amendment, plaintiff was required to execute similar documents. When plaintiff was asked to execute the documents necessary to finalize the sale, she refused despite her agreement to the Amendment.
    Plaintiff instead filed this lawsuit against defendants. She claimed that defendants breached the Memorandum, the Amendment, and a trust agreement pertaining to their mother's estate and sought a declaratory judgment that she was not bound by the terms of the Amendment. Defendants counterclaimed for breach of contract, interference with contract, unfair and deceptive trade practices, fraud, and punitive damages. After cross-motions for summary judgment were granted in part and denied in part, plaintiff filed a notice of appeal. The trial court ruled that the order granting partial summary judgment was not immediately appealable because it did not affect a substantial right. This Court denied plaintiff's petition for writ of certiorari.    The trial on plaintiff's remaining claims and on defendant's counterclaims commenced before Judge Russell G. Walker, Jr. on 19 May 2003. At the close of plaintiff's evidence, the trial court granted defendant's motion for a directed verdict as to all but one of plaintiff's remaining claims. At this point, the parties negotiated a settlement agreement intended to resolve all the remaining disputes between the parties. In particular, defendants agreed to pay plaintiff $1.35 million in exchange for plaintiff's "execut[ing] deeds prepared by defendant's counsel" conveying all of her interest in the Homesite, Spicewood, and Roaring Gap parcels, with closing to take place by 4 January 2004.
    The attorneys notified the trial court of the settlement and the court, on 27 May 2003, convened the parties for a hearing at which the attorneys read the terms of the agreement into the record. When counsel for plaintiff asked whether the agreement would be reduced to writing, counsel for defendants stated: "I hope we have more success than we did in the year 2000, but if we don't, we have a judge who can help us because we're stating this on the record in the presence of the Court so that the Court can then enforce the settlement agreement." Counsel for plaintiff responded: "That's my understanding." The trial judge then asked each of the parties, "Do you agree and accept this settlement agreement and will you sign, execute and do whatever else is necessary _ the documents that are necessary to bring this about?" Plaintiff and each of the defendants stated their agreement on the record.    On 3 July 2003, after the parties could not agree on a written settlement agreement, defendants filed a motion in the cause asking the trial court for a judgment incorporating the terms of the settlement agreement read into the record on 27 May 2003. On 14 July 2003, the trial court entered the judgment from which plaintiff appeals.

    Plaintiff assigns as error the trial court's requirement that plaintiff execute and deliver to defendants general warranty deeds to the real estate at issue.   (See footnote 1) Plaintiff contends that in doing so, the trial court improperly altered and added to the terms of the parties' settlement agreement.
    "It is well-settled in North Carolina that compromises and settlements of controversies between parties are favored by our courts." State ex rel. Howes v. Ormond Oil & Gas Co., 128 N.C. App. 130, 136, 493 S.E.2d 793, 796 (1997). When, as here, the parties have entered into an oral settlement agreement and one party refuses to sign a formal, written settlement agreement, the other party may seek specific enforcement of the settlement and a trial court "may enter a judgment . . . in accordance with the terms found in the parties' settlement agreement." Id. at 137, 493 S.E.2d at 797. See also Currituck Assocs. v. Hollowell, __ N.C. App. __, __, 601 S.E.2d 256, 261 ("[W]e are bound by our previousdetermination that a settlement agreement may be enforced by filing a new action or by filing a motion in the cause . . . ."), disc. review denied and appeal pending on other grounds, 359 N.C. 187, 606 S.E.2d 902 (2004). In entering judgment, however, a trial court may not deviate from the original agreement by adding or altering terms; it may only put into effect the terms that the parties agreed upon. Laing v. Lewis, 133 N.C. App. 172, 176, 515 S.E.2d 40, 43 (1999).
    With respect to the issue of the deeds to be executed by plaintiff, the in-court settlement agreement provided:
            Number one; defendants will pay plaintiff a total of 1.35 million dollars. Plaintiff shall execute deeds prepared by defendant's counsel conveying all of her interest in the [Homesite], Spicewood, and Roaring Gap to the defendants unless otherwise agreed . . . .

(Emphasis added.) The trial court's judgment specified on this issue:
        Plaintiff and/or her LLC, Whitacres Enterprises, LLC, shall execute and deliver to Defendants general warranty deeds, to be prepared by counsel for Defendants, conveying all of their right, title and interest in the Whitaker Homesite property . . . the Spicewood property . . . and the Roaring Gap property . . . .

(Emphasis added.) Plaintiff contends that by requiring plaintiff to execute "general warranty deeds," the trial court added a term to the contract. Plaintiff suggests that a quitclaim deed should be used because there was no agreement as to the form of the deed or warranties of title. We disagree.    Plaintiff agreed, in open court, to sign "deeds prepared by defendant[s'] counsel." This language required plaintiff to sign the deed that defendants provided, regardless whether plaintiff disagreed with the specific form. Plaintiff did not reserve the right to object to or approve the deeds defendants' counsel prepared. For their part, defendants were required to act reasonably and in good faith when drawing up the deeds. Gallimore v. Daniels Constr. Co., 78 N.C. App. 747, 751-52, 338 S.E.2d 317, 319 (1986) (holding that there is a duty of good faith and fair dealing and a duty of cooperation on the part of both parties to a settlement agreement). See also Joseph M. Perillo, Calamari and Perillo on Contracts § 11.38(a) (5th ed. 2003) ("[I]n the area of indefiniteness where a contract confers on one party a discretionary power affecting the rights of the other, a duty is imposed to exercise the discretion in good faith and in accordance with fair dealing." (internal quotation marks omitted)).
    Plaintiff has not argued that a general warranty deed was unreasonable or in bad faith. Indeed, given that defendants were paying plaintiff $1.35 million with the expectation that it would settle all issues in dispute, it would not be unreasonable to expect that defendants would find a quitclaim deed unacceptable. Plaintiff simply preferred a quitclaim deed. If so, she needed to negotiate that term instead of agreeing broadly to execute the deeds prepared by defendants' counsel. See Currituck Assocs., __ N.C. App. at __, 601 S.E.2d at 265 (affirming trial court's enforcement of settlement because "we conclude appellants couldhave reasonably protected themselves by the terms of the settlement agreement," but did not).
    Because of this agreement and defendants' insistence that the deeds be general warranty deeds, the trial court did not alter the terms of the agreement by providing in its judgment that plaintiff was required to sign general warranty deeds in transferring the real estate to defendants. The trial court did not add or alter the terms but instead simply enforced the contract. Accordingly, we affirm.

    Affirmed.
    Judges HUNTER and LEVINSON concur.
    Report per Rule 30(e).

Footnote: 1