An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. COA04-738


Filed: 5 April 2005


     v .                              Wake County
                                     No. 02 CVS 11705
Trustee for and/or doing business as
The Southside Trust,

    Appeal by defendants from judgment entered 28 August 2003 by Judge Henry W. Hight, Jr., and from judgments entered 26 November and 30 December 2003 by Judge Narley L. Cashwell in Wake County Superior Court. Heard in the Court of Appeals 26 January 2005.

    Cranfill, Sumner & Hartzog, L.L.P., by Meredith T. Black, for plaintiff appellee.

    Herring McBennett Mills & Finkelstein, PLLC, by Stephen W. Petersen and Mark A. Finkelstein, for defendant appellants.

    McCULLOUGH, Judge.

    The Southside Trust and its trustee Thomas E. Tilley (“defendants”) appeal from three orders entered in Wake County Superior Court: an order granting summary judgment in favor of the Town of Fuquay-Varina (“the Town”) with respect to liability, a judgment in the Town's favor following a jury trial on damages, and an order denying defendants' motion for judgment notwithstanding the verdict. We affirm.    On 30 August 2002, the Town filed a complaint against defendants alleging that the parties had entered into an agreement, under which the Town was to provide wastewater services to defendants, and seeking damages for breach of contract and unjust enrichment; the Town also sought a decree permitting rescission of the agreement. Defendants filed an answer denying liability. Both parties moved for summary judgment.
    The forecast of the evidence presented to the trial court at the time of the summary judgment proceedings consisted of the following: Defendant Thomas Tilley, and his son Bruce Tilley, are trustees of defendant Southside Trust, which owns and operates the Southside Mobile Home Park (“SMHP”) in Wake County, North Carolina. SMHP is located outside of the Town's corporate Limits. In 1996, Applied Water Technology (AWT), acting as an agent of defendants, submitted a request that the Town provide wastewater services for SMHP. On 8 July 1996, Town Manager Larry Bennett sent the following response to AWT:
    [T]he . . . Town Board of Commissioners . . . unanimously voted in favor of the following actions to provide sewer service to SMHP:

        1.    The daily volume of wastewater that the Town will accept is 25,000 gallons per day, to the 100 existing lots [of SMHP] only.

        . . . .

        5.    The method of measurement of wastewater discharged to the Town . . . , ownership, operation, and maintenance of measurement equipment will be the responsibility of SMHP under supervision of the Town . . . .
        6.    The method of calculating sewer charges will be based on the amount of flow, and charged in accordance to the current Water/Sewer Ordinance.

The ordinance in effect at the time provided for defendants to be charged at triple the rate charged to in-town customers of wastewater services.
    In October 1996, AWT requested an exception to the triple rate charge for SMHP. No exception was made. In March 1997, AWT requested that Town Manager Larry Bennett send a letter including the terms and conditions of the Town-provided sewer service to Southside Trust trustee Bruce Tilley; Bennett complied with this request. Bennett's correspondence to Tilley included verbatim items 1, 5, and 6 from his 8 July 1996 letter to AWT.
    In a subsequent deposition, Bruce Tilley stated that he understood that “in order to connect to the sewer facilities owned and operated by [the Town], . . . Southside would be charged based upon the amount of flow in accordance with the [then] current water/sewer ordinance, as shown in Paragraph No. 6 of th[e] letter [to AWT] dated July 8th, 1996[.]” He further admitted that he was aware that the Town's ordinance provided for SMHP to be charged triple the rate of in-town customers, and testified that, given the significant cost of the triple rate charge, he “made requests, before [SMHP] w[as] tied on, to go to double the [in-town] rates.” Likewise, defendant Thomas Tilley testified that, “before the hook- on took place,” he was aware that SMHP would be charged “three times the [normal] rate.”     Sometime during or just before November 1997, the City began providing sewer services to SMHP. Defendants permitted SMHP's wastewater to be discharged into the Town's sewer system.
    The wastewater discharged from SMHP into the Town's sewer system was measured using a meter selected by defendants in consultation with their experts. The Town's engineer approved the meter selected by defendants, but reiterated that the Town would “require that the meter be kept fully operational by [SMHP].” One of the experts hired by defendants to aid in the selection of this meter, Michael Outlaw, provided deposition testimony that he had informed defendant's agent, AWT, of the “pros and cons” of the meter system they had chosen.
    With respect to maintenance, Outlaw recommended to Bruce Tilley in a 26 June 2001 letter that defendants implement a regular maintenance and inspection schedule. In addition Outlaw testified in his deposition that, from the outset, he recommended to defendants that the meter “should be looked at on a regular basis, maybe as much as once a day until they could determine that it didn't need to be seen quite so often.” According to Outlaw, it was “[his] understanding that [this inspection] was not done on a daily basis.” Outlaw expressed an opinion that the meter was not operating properly and was producing high readings on numerous occasions throughout the years of Town-provided sewer service due to blockages caused by large solids in the sewage. He cited “insufficient maintenance” as the reason that the blockagesoccurred. In April 2003, defendants expanded the job description of an employee to include daily cleaning of the meter.
    On numerous occasions, defendants' meter indicated a discharge of more than 25,000 gallons of wastewater per day by SMHP into the Town's sewer system. The City's expert, William Lee, Jr., offered an opinion that SMHP discharged approximately 31,680 gallons of sewage per day into the Town's system. Lee excluded from his calculations any measurements which, in his opinion, represented inaccurate meter readings attributable to meter blockages.
    Defendants attributed the high discharge readings to a poorly chosen meter. In an affidavit, defendants' expert, Matthew Raynor, opined that the meter installed was not the appropriate wastewater measurement device for SMHP, that the high grease content of the wastewater at SMHP caused inaccurate readings, and that “[t]he Southside Trust . . . used its best efforts to maintain its wastewater measurement equipment at [SMHP]” because it would not be possible to clean the system continuously to address the grease problem. In his affidavit, Raynor stated:
    In my experience working with similar systems to [SMHP], a community this size (100 spaces) would easily meet the town's limitation of 25,000 gallons per day. Considering the erratic nature of the flow readings, it's my opinion that none of the readings can be trusted to be an accurate representation of the daily flows.

Likewise, Bruce Tilley provided an affidavit in which he stated, “if you discard the high meter readings . . . , [SMHP] is not discharging in excess of 25,000 gallons per day . . . . ” However, in an earlier deposition, Raynor provided testimony that propermaintenance required daily inspection of the meter, and it is not disputed that defendants selected the meter and did not implement the required daily maintenance until several years after the initiation of Town-provided sewer service.
    From the initiation of Town-provided sewer services, defendants refused to pay the amount charged by the Town. When Bruce Tilley made the payment for the first bill for wastewater service for SMHP, he returned the invoice, upon which he had handwritten the following note:
    Th[e] figure should be 2X not 3X. . . . Same as Woods of Ashbury. Please Help. We are down line of Woods of Ashbury and have helped them be able to afford to tap on, also we have paid over $42,000 to [the Town] for acreage fee. Please do not discriminate against this mobile home park. We should only pay as much as other residents on our line. Thanks. The low income tenants need this special grace.

In addition, he drafted a check sufficient to cover only two-thirds of the total amount billed. In response to further requests by defendants to reduce the rate, Bennett mailed a letter to Bruce Tilley which reiterated that “[t]riple rates are correct as approved by the Board of Commissioners.” In a request for admission during discovery, defendants admitted that they “have not always paid the amounts indicated on the monthly billing statements issued to [them] by the Town as amounts owed to the [Town] for sewer services provided to [SMHP].”
    Before the trial court, defendants asserted that the Town's bills reflected that SMHP's sewer bill was paid in full and that defendants had, in fact, overpaid for wastewater services. Thesebills relate to numerous occasions during 1999, 2000, 2001, 2002, and 2003, when the Town was unable to obtain a meter reading at SMHP because defendants either locked the access to the meter without providing a key to the Town or removed the meter from the site without notifying the Town. When meter readings were thus unavailable, the Town did not bill defendants for discharge of wastewater. For these months, the Town's computer-generated billing statements reflected no information as to the amount of wastewater discharged and assessed only a monthly administrative charge of $6.50. In an affidavit, the Town's Finance Officer stated that “the absence on the [bill] of a total dollar amount owed to the Town for consumption d[id] not indicate that the customer d[id] not owe the Town for the customer's discharge into the Town's system. Rather, the statement merely reflect[ed] the unavailability of wastewater meter reading information upon which the Town c[ould] calculate the amount to bill the customer for sewer service.” As such, any payments made by defendants during times when no consumption was registered appeared as “credits” on the Town's computer-generated billing statements, even though defendants actually owed for sewage which had been discharged but not measured.
    The trial court granted summary judgment in favor of the Town on the issue of liability and ruled that the Town is entitled to rescind the agreement. A jury trial was held to determine the Town's damages; the jury determined that the Town was entitled to recover $217,931.25 from defendants. The trial court enteredjudgment consistent with the jury's verdict and thereafter denied defendants' motion for judgment notwithstanding the verdict. Defendants now appeal.

    We first address defendants' argument that the trial court erred by granting summary judgment on the issues of whether there was an agreement between the parties and whether defendants breached the alleged agreement. We do not agree.
    Summary judgment is proper “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.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2003). “A summary judgment, interlocutory in character, may be rendered on the issue of liability alone although there is genuine issue as to the amount of damages.” Id. In ruling on a motion for summary judgment, “[t]he evidence is to be viewed in the light most favorable to the nonmoving party.” Moore v. Coachmen Industries, Inc., 129 N.C. App. 389, 394, 499 S.E.2d 772, 775 (1998) (citation omitted). This Court reviews de novo a trial court's ruling on a motion for summary judgment as the ruling involves questions of law. Va. Electric and Power Co. v. Tillett, 80 N.C. App. 383, 385, 343 S.E.2d 188, 191, cert. denied, 317 N.C. 715, 347 S.E.2d 457 (1986) (citation omitted).
    With respect to the existence of a contract between the parties, defendants contend that the evidence supports an inferencethat there was no agreement, as evidenced by the defendants' unwillingness to pay three times the in-town rate for wastewater services. Defendants properly note that “[a] valid contract may arise only where the parties assent and their minds meet as to all terms.” Walker v. Goodson Farms, Inc., 90 N.C. App. 478, 486, 369 S.E.2d 122, 126 (1988). Thus, “'[i]f the terms of the offer are changed or any new ones added by the acceptance, there is no meeting of the minds and, consequently, no contract.'” Normile v. Miller, 313 N.C. 98, 103, 326 S.E.2d 11, 15 (1985) (citation omitted). However, acceptance is properly inferred “'[w]here the offeree with reasonable opportunity to reject offered goods or services takes the benefit of them under circumstances which would indicate to a reasonable man that they were offered with the expectation of compensation.'” Anderson Chevrolet/Olds, Inc. v. Higgins, 57 N.C. App. 650, 655, 292 S.E.2d 159, 162 (1982) (quoting 1 S. Williston, A Treatise on the Law of Contracts § 91 (3d ed. 1957)); see also 2 Richard A. Lord, Williston on Contracts § 6:49 (4th ed. 1991).
    In the instant case, the undisputed evidence shows that both Thomas Tilley and Bruce Tilley knew that the Town would not begin providing wastewater services if SMHP did not pay three times the in-town rate. With this knowledge, they allowed SMHP to discharge into the Town's sewer system and did not make payment conditioned on a lower rate until after accepting wastewater services from the Town. On these facts, a contract was formed, at the latest, when SMHP began to make use of the Town's sewer system. Furthermore, defendants have made no argument concerning whether there was ameeting of the parties' minds as to the amount of the wastewater the Town would accept from SMHP and defendants' responsibility for operating and maintaining a wastewater measurement system.
    With respect to the Town's breach of contract claim, defendants argue that summary judgment was improperly granted where triable issues of fact existed. Defendants first contend that there was evidence that the Southside Trust paid the “amounts billed” by the Town. In support of this contention, defendants rely on the Town's computer-generated billing statements, some of which reflect a “credit” for defendants' account. However, it is undisputed that the statements relied upon by defendants did not reflect the amount of wastewater being discharged by SMHP because the Town was unable to obtain a meter reading. Moreover, defendants have admitted that they have not always paid the amounts billed by the Town.
    Defendants next contend that there was evidence that the Southside Trust properly maintained the wastewater meter at SMHP. However, even defendants' experts testified that the meter required daily maintenance, and defendants did not implement daily cleaning of the meter's flume until three years after the initiation of Town-provided sewer services. Moreover, although one of defendants' experts opined that “[t]he Southside Trust . . . used its best efforts to maintain its wastewater measurement equipment” and that “[t]he problem is that [the meter] does not work in the application chosen at [SMHP],” the parties' agreement imbueddefendants with full responsibility for operation and maintenance of the metering system.
    Defendants next contend that they produced evidence that SMHP had not discharged excessive wastewater into the Town's system. In support of this contention, defendants point to the affidavit of Bruce Tilley, in which he states that “if you discard the high meter readings by the . . . meter machine, [SMHP] is not discharging in excess of 25,000 gallons per day.” However, this statement is merely a bald assertion that is not even purportedly premised upon Tilley's personal knowledge of the amount of discharge. Defendants also point to their expert's opinions that most communities the size of SMHP would be able to comply with the discharge limitation, that at times SMHP did comply with the limitation, and that a faulty meter produced several unreliably high readings. However, evidence that other similarly sized communities could comply with the agreed-upon discharge limitation and that SMHP has complied with the limitation at times is insufficient to create a triable issue of fact where the Town produced otherwise uncontroverted evidence that, even where probable faulty meter readings were excluded, SMHP exceeded the discharge limitation.
     As such, the trial court's grant of summary judgment as to breach of contract was proper. This assignment of error is overruled.
    We next address defendants' argument that the trial court erred by concluding that the Town was entitled to rescind the agreement to provide wastewater services to SMHP because defendants materially breached the parties' agreement. This argument is premised upon defendants' assertion that “until the damages portion of the trial was concluded, there could be no way to accurately determine if any breach that may have occurred was material.” This argument lacks merit.
    Our Supreme Court has stated that “where there is a material breach of [a] contract going to the very heart of the instrument, the other party to the contract may elect to rescind and is not bound to seek relief at law by an award for damages.” Wilson v. Wilson, 261 N.C. 40, 43, 134 S.E.2d 240, 242 (1964). For a breach to be considered material and substantial, the violated contractual term must “'go[] to the whole consideration of the contract; . . . [be] such an essential part of the bargain that the failure of it must be considered as destroying the entire contract; or . . . [be] such an indispensable part of what both parties intended that the contract would not have been made with the covenant omitted.'” Id. at 43, 134 S.E.2d at 242-43 (citation omitted). The breach of such a contractual term is material and substantial, and the non- breaching party is entitled to sue for compensatory damages and to seek to rescind the contract if the remedy at law will not be “full and adequate.” Id.
    Though the existence of conduct amounting to breach is generally a question of fact, the determination of whether a breachis substantial and material involves a question of law. Fletcher v. Fletcher, 123 N.C. App. 744, 752, 474 S.E.2d 802, 807 (1996), disc. review denied, 345 N.C. 640, 483 S.E.2d 706-07 (1997). However, our Supreme Court has held that, under some circumstances, a jury must pass on the “nature and extent” of alleged breaches before the judge may determine the rights of the parties. Childress v. Trading Post, 247 N.C. 150, 157, 100 S.E.2d 391, 396 (1957).
    Childress involved a contract action against a homebuilder in which the plaintiffs, who were home buyers, asserted that there was a crack in the home's foundation that so weakened the foundation as to endanger the house and possibly render the house worthless; the defendant homebuilder conceded the existence of a small crack, but insisted that it did not seriously impair the foundation and could be corrected for nominal cost. Id. at 156, 100 S.E.2d at 395. The Supreme Court noted that
        [i]f defendant's version is in fact correct, to permit the plaintiffs to abandon the contract for such a trivial defect would be unjust and unfair. On the other hand, if plaintiffs' version of the condition of the foundation is correct, it may be that no fair compensation could be awarded and that in truth and in fact the house has no substantial value and hence rescission should be permitted.

Id. at 156-57, 100 S.E.2d at 395. On these facts, the Court held that “[o]nly when the terms of the contract as finally agreed upon have been ascertained and the breach or defaults in performance, if any, ascertained, and the nature and extent of those defaultsdetermined can the court fix the rights and liabilities of the parties.” Id. at 157, 100 S.E.2d at 396.
    The instant case does not involve a factual scenario analogous to the one which confronted the Court in Childress. Rather, in the instant case, summary judgment was properly granted as to the existence of a contract between the parties and defendants' breach of this contract, and the trial court properly determined that defendants' breaches were substantial and material such that the Town may rescind the contract. This assignment of error is overruled.
    We next address defendants' argument that the trial court erred by denying their motion for judgment notwithstanding the verdict (JNOV). The basis of defendants' motion for JNOV was that there was insufficient evidence from which the jury could have determined with reasonable certainty that the Town's damages were $217,931.25. This argument lacks merit.
    Under the North Carolina Rules of Civil Procedure, “a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict.” N.C. Gen. Stat. § 1A-1, Rule 50(b)(1) (2003).
            The standard is high for the party seeking a JNOV: “the motion should be denied if there is more than a scintilla of evidence to support the plaintiff's prima facie case.” The evidence supporting plaintiff['s] claims must be taken as true[;] all conflicts and inconsistencies in the evidence must beresolved in plaintiff['s] favor, and plaintiff[] must receive the benefit of every reasonable inference.

Cox v. Steffes, 161 N.C. App. 237, 243-44, 587 S.E.2d 908, 912-13 (2003), disc. review denied, 358 N.C. 233, 595 S.E.2d 148 (2004) (citation omitted). “On appeal the standard of review for a JNOV is the same as that for a directed verdict, that is whether the evidence was sufficient to go to the jury.” Tomika Invs., Inc. v. Macedonia True Vine Pent. Holiness Ch. of God, 136 N.C. App. 493, 498-99, 524 S.E.2d 591, 595 (2000).
    For the issue of damages to be submitted to the jury, there must be evidence “that allows the fact-finder to calculate the amount of damages to a reasonable certainty.” State Properties, LLC v. Ray, 155 N.C. App. 65, 76, 574 S.E.2d 180, 188 (2002). “While the claiming party must present relevant data providing a basis for a reasonable estimate, proof to an absolute mathematical certainty is not required.” Id.
    In the instant case, the Town's expert, William Lee, Jr., testified that he compiled and calculated all information which either reflected the amount of discharge from SMHP or which, in his opinion, likely affected that amount. According to Lee, his calculations revealed that the Town had received approximately 32,000 gallons of discharge from SMHP per day. Lee explained his analytical methodology and indicated that he was able to ascertain which readings indicated a problem with the meter or were otherwise unrepresentative of the actual discharge, and that he did not consider these readings in determining the daily discharge. Furthermore, the Town's former finance officer offered testimony concerning the applicable rates during the relevant time periods, the amounts billed by the Town, and the amounts paid by defendants.
    We conclude that the foregoing evidence was sufficient to permit the jury to calculate with reasonable certainty the amount of the Town's damages. Accordingly, the trial court properly denied defendants' motion for JNOV. This assignment of error is overruled.
    In addition, we have considered the remaining assignments of error brought forward in defendants' brief and have determined that they are without merit. They are, therefore, overruled.
    Judges ELMORE and LEVINSON concur.
    Report per Rule 30(e).

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