GYPSY C. GILLIAM,
A. C. HAWKINS,
Douglass & Douglass, by Thomas G. Douglass, for plaintiff-
Stephenson & Stephenson, LLP, by James B. Stephenson II and Dena White Waters, for defendant-appellee.
Gypsy C. Gilliam (plaintiff) appeals from a directed verdict on 4 May 2004 in her action for damages for breach of contract and unfair deceptive trade practice against A. C. Hawkins (defendant). The issues before the Court are whether the trial court committed reversible error in: (I) granting defendant's motion for a directed verdict on the issues of breach of contract and unfair deceptive trade practice, (II) finding insufficient evidence to submit the case to the jury on the issue of breach of contract, and (III) concluding that a letter signed and incorporated by plaintiff at closing was unambiguous. In the summer of 1988, plaintiff agreed to sell her business, Gypsy's General Store (GSS), a leased premise inside Raleigh- Durham Airport (RDU), to defendant for the price of $150,000.00. The purchase included GSS's assets, its good will, and the remaining three-year lease for the space in which it was located at RDU. Plaintiff's attorney drafted the Agreement and Bill of Sale for the Purchase of Assets (Agreement) and prepared the promissory note (Note) in the principal amount of One Hundred Fifty Thousand Dollars ($150,000.00) plus interest at the rate of ten percent (10%) per annum for twenty (20) years. Under the terms of the Note, defendant was required to pay plaintiff monthly installments of One Thousand Four Hundred Forty-Seven and 55/100 Dollars ($1,447.55).
On 24 August 1988, the parties met for the closing at plaintiff's attorney's office. Before executing the Agreement and Note, defendant raised concerns about plaintiff remaining, at RDU's request, on the lease until the expiration of the three-year term. Due to defendant's concerns, plaintiff's attorney drafted a letter addressed to defendant from plaintiff. The letter, an amendment to the Agreement, set out the obligations of defendant if he were to lose the lease. The letter was read by both parties and signed by plaintiff at defendant's request.
From 1988 until the end of 2000, defendant ran the GSS at RDU and made his monthly payments to plaintiff pursuant to the Agreement and Note. During this time, defendant also made additional payments in order to reduce the principal. In total,defendant has paid Eighty-Seven Thousand Nine Hundred Sixty Three and 95/100 Dollars ($87,963.95) to plaintiff.
After plaintiff's initial lease ended, defendant twice negotiated his own lease from RDU for a total of nine years, at which time plaintiff's name was removed from the lease. Defendant eventually stopped using the name Gypsy's General Store and operated the store under a new name, Par Avion.
In February 2000, RDU Airport Authority changed its leasing policies by leasing all vendor space in the entire terminal to a single company, who then subleased to individual vendors. In response to this change in policy, defendant and his daughter attempted to obtain a lease with the new management company. However, they were denied a new lease because the new management company wanted to bring in national chain concessionaires and vendors.
Defendant's daughter notified plaintiff that the lease was not being renewed, and that defendant was sending the final payment due under the terms of their Agreement as amended by the letter. Plaintiff insisted that their agreement required defendant to pay the entire purchase price. However, defendant insisted that since the lease had been lost under conditions that were not the fault of either party, he was not obligated to pay the remaining balance. Defendant sent a copy of the letter to plaintiff to confirm his understanding of the contract. The letter sent by defendant contained an alteration not found on plaintiff's copy of the letter. After defendant refused to return plaintiff's phone calls, plaintiff then filed an action for breach of contract and unfair deceptive practices against defendant. Defendant denied the allegations in the complaint and moved for directed verdict after the plaintiff rested her case. Defendant alleged that even if the letter was read as originally typed, he should still prevail because (1) the language of the letter was clear that if the lease was lost through no fault of either party, defendant would be released from his obligation; or (2) that if the letter was ambiguous, it must be interpreted in favor of defendant as the non- drafting party. After hearing oral arguments from counsel for both parties and reviewing the evidence presented, the trial court granted defendant's motion.
Plaintiff contends the trial court erred in granting defendant's directed verdict motion because there was sufficient evidence to submit the breach of contract issue to the jury. We disagree.
On a defendant's motion for directed verdict, the plaintiff's evidence must be taken as true and considered in the light most favorable to the plaintiff. The trial court should give the plaintiff the benefit of every reasonable inference that may legitimately be drawn from the evidence, with contradictions, conflicts, and inconsistencies being resolved in the non-movant's favor. Bryant v. Nationwide Mut. Fire Ins. Co., 313 N.C. 362, 369, 329 S.E.2d 333, 338 (1985); Whaley v. White Consol. Indus., Inc., 144 N.C. App. 88, 92, 548 S.E.2d 177, 180 (2001). If thereis more than a scintilla of evidence supporting each element of the non-movant's claim, the motion should be denied. Poor v. Hill, 138 N.C. App. 19, 26, 530 S.E.2d 838, 843 (2000). The elements for breach of contract consist of (1) existence of a valid contract and (2) breach of the terms of that contract. Id.
Here, neither plaintiff nor defendant dispute the existence of a valid contract between the parties, or that the letter was a valid amendment to the contract. The letter, signed at the same time as the Agreement and Note, amended the contract, and together with the Agreement and the Note defined the rights, duties, and obligations of the parties. The letter presented into evidence as Plaintiff's Exhibit 3 reads:
Dear Mr. Hawkins:
This letter is to confirm our understanding that through no fault on our part you lose your right to continue to operate Gypsy's General Store in the Raleigh- Durham Airport, you will be no longer obligated under the terms of the Agreement and Bill of Sale executed this 24th day of August, 1988.
Very truly yours,
Gypsy C. Gilliam
The letter sent by defendant and marked as Plaintiff's Exhibit
4 contained an alteration. A y was added to the second our,
thus, the letter read: through no fault on your part.
Evidence was conflicting as to when a y was added to the second our in defendant's letter. Plaintiff argues the y was added fraudulently by defendant. Defendant denied making any alterations to the letter, but contends that even without thealteration, the letter, as originally written, is unambiguous and provides only a single interpretation.
In interpreting a contract, the court's principle objective is to determine the intent of the parties to the agreement. Glover v. First Union National Bank, 109 N.C. App. 451, 456, 428 S.E.2d 206, 209 (1993). Generally, '[w]hen the language of [a] contract is clear and unambiguous, construction of the agreement is a matter of law for the court[,] and the court cannot look beyond the terms of the contract to determine the intentions of the parties.' Financial Servs. of Raleigh, Inc. v. Barefoot, 163 N.C. App. 387, 395, 594 S.E.2d 37, 42 (2004) (citations omitted). The parties will be presumed to have intended what the terms of the contract clearly express. Id. at 395, 594 S.E.2d at 43.
However, if the terms of the contract are ambiguous then resort to extrinsic evidence is necessary and the question is one for the jury. Barrett Kays & Assoc. v. Colonial Building Co., 129 N.C. App. 525, 528, 500 S.E.2d 108, 111 (1998). Appellate review of a trial court's determination of whether a contract is ambiguous is de novo. Id.
An ambiguity exists in a contract when either the meaning of the words or the effect of the provisions is uncertain or capable of several reasonable interpretations. Id. Stated another way, an agreement is ambiguous if there is uncertainty in the writing as to what the parties' agreement was. Id. (citing International Paper Co. v. Corporex Constructors, Inc., 96 N.C. App. 312, 317, 385 S.E.2d 553, 556 (1989)). Giving the plaintiff the benefit of every reasonable inference and viewing the evidence in the light most favorable to the plaintiff, the Agreement, as amended by plaintiff's letter, is plain and unambiguous. The letter is addressed to defendant only and is signed by plaintiff only. The letter does not mention plaintiff's husband nor is plaintiff's husband mentioned in either the Note or Agreement. The letter does not distinguish between the two separate our[s]. The terms of the contract clearly expresses that if through no fault on our part you lose your right to continue to operate Gypsy's General Store in the Raleigh-Durham Airport, you will be no longer obligated under the terms of the Agreement[.] The only logical interpretation of the letter is that plaintiff and defendant had an understanding that if defendant lost the right to continue to operate the store through no fault of either party, he would no longer be obligated under the terms of the Agreement. As the letter is plain and unambiguous, the court cannot look beyond the terms of the contract to ascertain the intent of the parties.
Plaintiff has failed to show defendant breached the terms of the contract as set forth in the Agreement and amended by the letter. Because plaintiff has failed to provide a scintilla of evidence that prove a prima facie case as to each element of breach of contract, plaintiff's appeal must be denied.
Judges McGEE and LEVINSON concur.
Report per Rule 30(e).
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