CAPITAL REALTY, INC.,
Plaintiff
v
.
Wake County
No. 04 CVS 10226
GEORGIA ALSTON JONES;
MANSON OTIS JONES, JR.;
HERMAN LEVERN JONES, and
CAROLYN WILLIAMS JONES,
Defendants
Harris & Hilton, P.A., by Nelson G. Harris, for plaintiff-
appellee.
Boxley, Bolton, Garber & Haywood, L.L.P., by Kenneth C.
Haywood, for defendant-appellant Georgia Alston Jones.
HUNTER, Judge.
Georgia Alston Jones (“defendant”) appeals through her legal
guardians from judgment of the trial court granting summary
judgment in favor of Capital Realty, Inc. (“plaintiff”) and
ordering defendant to pay $110,000.00 as damages for breach of a
real estate contract. Defendant argues summary judgment was
improperly granted because material issues of fact exist regarding
plaintiff's production of a buyer, defendant's competency at the
time she signed the contract, and whether the contract is the
result of undue influence. Defendant also contends the trial courterred in awarding attorneys' fees. For the reasons set forth
herein, we affirm the judgment of the trial court.
On 21 July 2004, plaintiff filed a complaint against defendant
in Wake County Superior Court alleging breach of a real estate
listing agreement. The complaint alleged that on 22 May 2004,
defendant entered into an exclusive listing agreement for plaintiff
to market through its agent, Melanie Osborne (“Osborne”), certain
property (“the property”) owned by defendant and her son, Manson
Jones (“Manson”) as tenants in common. Under the terms of the
listing agreement, defendant and Manson agreed to pay plaintiff as
commission ten percent (10%) of the gross sale of the property.
Plaintiff had the exclusive right to sell the property, with a
listed sales price of $950,000.00, until 22 November 2005. The
listing agreement further provided that:
In the event [defendant] sells or otherwise
disposes of [her] interest in the Property,
[defendant] shall remain liable for payment of
the commissions provided for in this and any
other agreement of which it is a part,
including, without limitation, the commission
obligations set forth in Paragraph 7.a. or
7.b. unless the purchaser or transferee
assumes all of such obligations in writing and
[plaintiff] agrees in writing to such
assumption.
On 15 June 2004, defendant and Manson entered into an
agreement for the sale of the property with Filmore C. Johnson
(“Johnson”), a buyer produced by plaintiff. The purchase price was
listed as $1,100,000.00, with a closing date of on or before 21
September 2004. On 2 July 2004, however, defendant changed her
mind regarding sale of the property and conveyed as a gift her one-half undivided interest in the property to her son, Herman Jones
(“Herman”) and his wife, Carolyn. Defendant thereafter sent a
letter to Osborne dated 3 July 2004 informing her and plaintiff
that defendant “no longer want[ed] to use [their] services.”
On 15 July 2004, defendant suffered a heart attack and stroke.
Plaintiff filed its complaint against her on 21 July 2004. The
complaint alleged that defendant committed an anticipatory breach
of the listing agreement by conveying her interest in the property
and sought damages. On 30 July 2004, Herman was declared to be the
interim guardian of defendant's person and her estate. Defendant
was declared incompetent on 13 September 2004 and legal guardians
were appointed for her person and her estate.
Plaintiff filed a motion for summary judgment, which was heard
by the trial court on 28 September 2005. Upon reviewing the
matter, the trial court found there were no genuine issues of
material fact and plaintiff was entitled to judgment as a matter of
law. The trial court entered judgment in favor of plaintiff in the
amount of $110,000.00, the amount equivalent to the ten percent
(10%) commission to which plaintiff was entitled under the listing
agreement, and awarded attorneys' fees in the amount of $16,500.00.
Plaintiff voluntarily dismissed defendants Herman and Carolyn and
obtained a default judgment against Manson. Thus, present
defendant is the only defendant remaining in the case. Defendant
appeals.
Summary judgment is proper when there is no genuine issue of
material fact and the movant is entitled to judgment as a matter oflaw. N.C. Gen. Stat. § 1A-1, Rule 56(c) (2005); Cashion v. Texas
Gulf, Inc., 79 N.C. App. 632, 633, 339 S.E.2d 797, 798 (1986). “An
issue is material if the facts alleged would constitute or would
irrevocably establish any material element of a claim or defense.”
Anderson v. Canipe, 69 N.C. App. 534, 536, 317 S.E.2d 44, 46
(1984). “An issue is genuine if it may be maintained by
substantial evidence.” Id.
Defendant first argues genuine issues of material fact exist
concerning whether plaintiff adequately performed under the terms
of the listing agreement and produced a buyer who was ready, able
and willing to purchase the property. We find no merit to this
argument.
Defendant signed an “exclusive right to sell” listing
agreement with plaintiff. Such an agreement “prohibit[s] the owner
from selling both personally and through another broker, without
incurring liability for a commission to the original broker.” Joel
T. Cheatham, Inc. v. Hall, 64 N.C. App. 678, 681, 308 S.E.2d 457,
459 (1983).
In accordance with cases of other
jurisdictions, in the event the owner breaches
this type of agreement, he is liable for the
commission which would have accrued if the
broker had obtained a purchaser during the
period of the listing. The broker need not
show that he could have performed by tendering
an acceptable buyer, or that he was the
procuring cause of the sale. The owner may
breach the agreement by arranging a sale in
violation of the agreement or by action which
renders the broker's performance impossible.
Id. at 681-82, 308 S.E.2d at 459 (emphasis added) (holding that
summary judgment was properly granted in favor of the plaintiff
real estate broker where the defendant property owner sold the
property in question to a third party in breach of the exclusive
listing agreement).
In the instant case, defendant conveyed her one-half interest
in the property on 2 July 2004, barely five weeks after entering
into the exclusive listing agreement with plaintiff. Defendant's
action rendered performance by plaintiff under the agreement
impossible. The listing agreement gave plaintiff the exclusive
right to sell the property until 22 November 2005. Thus, at the
time defendant breached the agreement, plaintiff still had almost
seventeen months to perform under the agreement. Because defendant
conveyed her half-interest in the property during the time set
forth in the exclusive listing agreement, rendering plaintiff's
performance impossible, she is in breach of the agreement and
plaintiff is entitled to the commission it would have earned but
for such breach. See id.; Adaron Group, Inc. v. Industrial
Innovators, Inc., 90 N.C. App. 758, 760, 370 S.E.2d 66, 67 (1988)
(holding that summary judgment was properly granted to the
plaintiff real estate broker for commission on the sale of property
arising from breach by the defendant of an exclusive listing
agreement).
Defendant nevertheless cites the case of Egan v. Guthrie, 94
N.C. App. 307, 380 S.E.2d 135 (1989), in support of her argument
that issues of material fact exist regarding plaintiff'sperformance under the listing agreement. In Egan, the defendant
property owners privately agreed to sell the property at issue,
which was under an exclusive listing agreement with the plaintiff
real estate broker, to a third party prior to the expiration of the
agreement. Id. at 310, 380 S.E.2d at 137. Completion of the sale
took place two days after expiration of the listing agreement. The
plaintiff did not procure the buyer of the property. After
learning of the sale, the plaintiff brought suit for the commission
to which it claimed it was entitled, and the trial court granted
summary judgment in favor of the plaintiff. Upon review, this
Court stated that, “[n]othing else appearing, [the defendants']
actions would have constituted a breach of the exclusive right to
sell agreement by [the] defendants and entitled [the] plaintiff to
a commission on the sale and summary judgment in this case.” Id.
However, the Court noted that “[u]nder the contract in this case,
[the] plaintiff was obligated to make, at a minimum, reasonable
efforts to sell the owner's property in order to entitle [the]
plaintiff to a commission.” Id. at 311, 380 S.E.2d at 138.
Because the plaintiff had produced no evidence that it had made any
effort to sell the property in question, the Court held that issues
of material fact existed regarding the plaintiff's compliance with
the performance required by the listing contract and reversed the
trial court.
Unlike the case of Egan, plaintiff here had seventeen more
months to perform under the listing agreement. Most notably,
however, plaintiff produced ample evidence that it substantiallyperformed in the five weeks before defendant breached the
agreement. Plaintiff procured a buyer for the property, Johnson,
who entered into an agreement on 15 June 2004 with defendant and
Manson for the sale of the property with a purchase price of
$1,100,000.00. Defendant, however, conveyed away her interest in
the property before the sale of the property could be completed.
Although defendant attempts to cast doubt on Johnson's ability to
perform under the purchase agreement, it was defendant's actions
which rendered performance by Johnson and plaintiff impossible.
Defendant cannot now claim some future possibility of lack of
performance by Johnson as grounds for creating issues of material
fact. See Anderson, 69 N.C. App. at 536, 317 S.E.2d at 46 (in
order to be genuine issues of material fact, such issues must be
maintained by substantial evidence). As plaintiff produced
substantial evidence of its performance under the listing
agreement, the present case is unlike the situation in Egan, and
the trial court properly granted summary judgment in favor of
plaintiff.
Defendant further argues genuine issues of material fact exist
as to whether she was competent at the time she signed the listing
agreement. This argument has no merit. There is no substantial
evidence in the record to suggest that defendant was incompetent at
the time she signed the listing agreement. Indeed, all evidence is
to the contrary. The evidence tended to show that defendant
personally managed her business affairs, including the management
of multiple properties she owned. Her son Herman testified thatdefendant was “very lucid” until her heart attack and stroke, and
that any dementia she experienced developed after her stroke. He
stated that she had no “significant medical problems prior to the
stroke” besides diabetes, and that she was a “strong-willed woman”
who “would get up and go everyday, and do everything[.]” According
to Herman, defendant “had thought it through” and decided she
wanted to keep the property in the family, but wanted to convey her
interest in the property for tax purposes. Osborne testified by
affidavit that defendant appeared completely competent during the
multiple times that Osborne dealt with her. Because defendant
presented no substantial evidence to suggest she was not competent
at the time she entered into the listing agreement, we overrule
this assignment of error.
Defendant next contends there was evidence she was acting
under the undue influence of her son Manson at the time she entered
into the listing agreement. However, defendant never asserted this
defense in her answer to plaintiff's complaint. The defense of
undue influence must be affirmatively pled. N.C. Gen. Stat. §
1A-1, Rule 8(c) (2005); Howell v. Landry, 96 N.C. App. 516, 526,
386 S.E.2d 610, 616 (1989) (noting that where affirmative defenses
such as undue influence are neither pled nor litigated, such issues
are not properly raised and will not be addressed by this Court).
As defendant did not plead undue influence as an affirmative
defense, nor is there evidence of record that such was litigated
before the trial court, we overrule this assignment of error. Defendant argues the trial court erred in awarding attorneys'
fees, contending there is no statutory authority authorizing the
award of attorneys' fees in this case. We do not agree. Section
6-21.2 of the North Carolina General Statutes authorizes the award
of attorneys' fees in cases of breach of contract where there is
“evidence of indebtedness.” N.C. Gen. Stat. § 6-21.2 (2005). The
statute also provides that:
If such note, conditional sale contract or
other evidence of indebtedness provides for
the payment of reasonable attorneys' fees by
the debtor, without specifying any specific
percentage, such provision shall be construed
to mean fifteen percent (15%) of the
“outstanding balance” owing on said note,
contract or other evidence of indebtedness.
N.C. Gen. Stat. § 6-21.2(2) (2005). “Evidence of indebtedness
signifies a written agreement or acknowledgment of debt, such as a
promissory note or conditional sales contract, which is executed
and signed by the party obligated under the terms of the
instrument.” Supply, Inc. v. Allen, 30 N.C. App. 272, 277, 227
S.E.2d 120, 124 (1976).
The exclusive listing agreement in the present case is
evidence of indebtedness on defendant's part to pay the ten percent
(10%) commission owed to plaintiff. The listing agreement
specifies that should plaintiff be forced to institute legal action
to enforce the agreement, plaintiff “shall be entitled to
reasonable attorney's fees and costs.” Pursuant to section 6-
21.2(2), plaintiff was entitled to a reasonable attorneys' fee of
fifteen percent (15%) of the $110,000.000 commission, or$16,500.00, which the trial court awarded. We hold the trial court
properly awarded attorneys' fees, and we overrule this assignment
of error.
Finally, defendant argues the trial court improperly failed to
consider all of the evidence submitted at the summary judgment
hearing. As evidence therefor, defendant cites the language of the
judgment of the trial court, wherein the trial court states it is
granting summary judgment to plaintiff after “having reviewed the
pleadings of record[.]” Assuming arguendo that the trial court's
statement indicates it failed to review all of the evidence
submitted in the case, this Court has conducted a thorough de novo
review of all of the evidence, and we hold the trial court did not
err in granting summary judgment in favor of plaintiff. We
therefore affirm the judgment of the trial court.
Affirmed.
Judges HUDSON and CALABRIA concur.
Report per Rule 30(e).
*** Converted from WordPerfect ***