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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
CB&H BUSINESS SERVICES, L.L.C., Plaintiff, v. J.T. COMER
CONSULTING, INC. and CBH PENSIONS, INC., Defendants
Filed: 17 July 2007
Contracts_sale of business_change of name
Changing the name of a business which had been sold from CB&H to CBH did not
comply with the agreement's provision allowing the buyer to use the seller's CB&H name for
only one year and requiring the buyer to change the name after that time. The clear purpose of
the agreement was to allow the buyer to transition the business to itself, ceasing use of the old
name (the letters were not random, but stood for the name of the established firm) and using its
own name. Defendant attempted instead the subterfuge of removing the ampersand from the
name. The trial court should have enforced the agreement, and erred by granting summary
judgment for defendants.
Judge STEPHENS dissenting.
Appeal by plaintiff from judgment entered 28 July 2006 by
Judge Robert P. Johnston in Mecklenburg County Superior Court.
Heard in the Court of Appeals 23 April 2007.
Hamilton Moon Stephens Steele & Martin, P.L.L.C., by T.
Jonathan Adams and Mark R. Kutny, and McSweeny, Crump,
Childress & Gould, P.C., by R. Paul Childress, Jr. and Katrina
Clark Forrest, for plaintiff-appellant.
Arthurs & Foltz, by Douglas P. Arthurs, for defendants-
The presence of quotation marks around a phrase in a contract
does not require a court to construe the phrase in a technical
sense. The trial court erroneously granted summary judgment for
defendants in this matter.
The facts in this matter are not in dispute. On 14 December
2001, CB&H Business Services, L.L.C. (plaintiff), and J.T. ComerConsulting, Inc. (Comer), entered into an Asset Purchase
Agreement (agreement). The agreement provided for plaintiff to
sell to Comer its pension administration division, CB&H Employee
Benefits Group, in exchange for $400,000.00. The term CB&H
refers to the accounting firm Cherry, Bekaert and Holland, LLP,
which joined in the agreement for the sole purpose of agreeing not
to compete with Comer for a period of five years. Two sections of
the agreement referenced Comer's use of the name CB&H:
2.6 Goodwill. The goodwill associated with
the Business, the exclusive right of
Buyer to represent itself as carrying on
the Business previously conducted by
Seller, except as otherwise agreed
herein, the right for one (1) year
following closing to use the names CB&H
Employee Benefits Group and CB&H Pension
Services, Inc. owned by seller....
13.2 Successors and Assigns. Neither this
Agreement nor any of the rights or
obligations hereunder may be assigned by
a party without the written consent of
the other party. Subject to the
foregoing, the provisions hereof shall
inure to the benefit of, and be binding
upon, the successors, permitted assigns,
heirs, executors and administrators of
the parties hereto. Provided, however,
Buyer is hereby authorized to assign its
rights under this contract to an
affiliate which is in the process of
being formed under the name of CB&H
Pension Services, Inc. so long as the
name of this corporation is changed one
(1) year following Closing to remove
CB&H from its name.
On or about 11 December 2001, CB&H Pension Services, Inc., a new
North Carolina corporation, was formed by filing of articles of
incorporation with the Secretary of State. Comer assigned its
rights under the agreement to the new corporation. By letter dated13 August 2002, the North Carolina CB&H Pension Services, Inc.,
submitted to plaintiff its new logo and proposed name of CBH
Pensions (with no ampersand). The letter stated Please advise
that the change is acceptable under our CB&H contract. On 28
August 2002, plaintiff wrote to counsel for Comer and the North
Carolina CB&H Pension Services, Inc. (together, hereinafter
defendants), and advised we do not believe that the elimination
of the ampersand sign, retaining CBH is in the spirit of our
agreement per Section 13.2. By subsequent letter, plaintiff
advised defendants that plaintiff's former clients were confused as
to whether plaintiff was still handling their accounts. Under the
terms of the agreement defendants were required to remove CB&H
from the name of the North Carolina CB&H Pension Services, Inc., by
14 December 2002. On 5 February 2003, the name of the North
Carolina CB&H Pension Services, Inc., was changed to CBH Pensions,
On 30 November 2005, plaintiff filed a complaint against Comer
and its assignee CBH Pensions, Inc., seeking: (1) specific
performance of the terms of the agreement; (2) a declaratory
judgment that defendants breached the agreement and should be
required to remove any reference to CBH or any variation from their
corporate name; (3) costs; (4) attorney fees; and (5) interest.
Plaintiff asserted no claim for monetary damages. On 7 June 2006,
defendants filed a motion for summary judgment. On 30 June 2006,
plaintiff filed a motion for summary judgment. On 25 July 2006,the trial court granted defendants' motion for summary judgment and
dismissed plaintiff's complaint with prejudice. Plaintiff appeals.
In its sole argument on appeal, plaintiff contends that the
trial court erroneously denied its motion for summary judgment. We
Summary judgment is proper 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) (2005). On
appeal, an order allowing summary judgment is reviewed de novo.
Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674,
Contracts must be interpreted according to their entirety or
four corners. Stephens Co. v. Lisk, 240 N.C. 289, 293, 82 S.E.2d
99, 102 (1954) (internal citation omitted). It is well settled
that where the language of a contract is plain and unambiguous, it
is for the court and not the jury to declare its meaning and
effect. Lowe v. Jackson, 263 N.C. 634, 636, 140 S.E.2d 1, 2
(1965). The heart of a contract is the intention of the parties,
which is to be ascertained from the expressions used, the subject
matter, the end in view, the purpose sought, and the situation of
the parties at the time. Gould Morris Electric Co. v. Atlantic
Fire Insurance Co., 229 N.C. 518, 520, 50 S.E.2d 295, 297 (1948).
[P]unctuation or the absence of punctuation in a contract is
ineffectual to control its construction as against the plain
meaning of the language. Huffman v. Occidental Life Ins. Co., 264N.C. 335, 337-338, 141 S.E.2d 496, 498 (1965); see also 17A Am. Jur.
2d Contracts § 366 (2006).
Defendants assert that because the term CB&H is surrounded
by quotation marks in section 13.2 of the agreement that this
requires that we give it a technical meaning. They argue that any
modification of the term CB&H changes the term, and that the
removal of the ampersand complies with the agreement. In support
of this argument, defendants cite the case of Rawls v. Rideout, 74
N.C. App. 368, 328 S.E.2d 783 (1985), for the concept that:
Generally words set off in quotation marks should be given their
technical meanings. We have thoroughly reviewed the Rawls case
and can find no such holding, either express or implied, in that
opinion. Rawls does discuss punctuation, but discusses
parentheses, and not quotation marks. It holds that parentheses
are used to set off supplementary or illustrative material; they
'tend to minimize the importance of the elements they enclose.'
Id. at 372, 328 S.E.2d at 786 (internal citation omitted). We find
this holding to be inapplicable to the issues presented in the
A review of the entire agreement in the case sub judice
reveals that Comer or its assigns could use the names CB&H
Employee Benefits Group and CB&H Pension Services, Inc., for a
period of one year following 14 December 2001. The clear purpose
of this provision was to allow Comer to transition the business
from plaintiff to itself. The letters CB&H were not random
letters in the names of these entities. They stood for Cherry,Bekaert & Holland, a well-known and established firm of certified
public accountants. At the end of one year, Comer and its assigns
were to cease using CB&H in their name, and use their own name.
This, defendants were not willing to do. Instead, defendants
attempted to engage in the subterfuge of removing the ampersand
from the name, and asserting that this complied with the provisions
of section 13.2 of the agreement. This is nonsense. The critical
portion of the name was not the ampersand, but the letters C-B-H,
which stood for Cherry, Bekaert & Holland. It is clear from
reading the entire agreement which includes the non-compete clause
executed by Cherry, Bekaert & Holland, LLP, that this was the
intent of the parties. The trial court should have enforced the
agreement and its failure to do so was error.
We do not reach defendant's argument that ambiguities in an
agreement should be construed against the drafter because we hold
that there is no ambiguity in the agreement. See Novacare
Orthotics & Prosthetics E., Inc. v. Speelman, 137 N.C. App. 471,
476, 528 S.E.2d 918, 921 (2000).
The trial court's order granting summary judgment in favor of
defendants and dismissing plaintiff's complaint is reversed. This
matter is remanded to the trial court for entry of judgment in
favor of plaintiff, directing that defendants shall immediately
remove any reference to CBH or any variation thereof from their
corporate names or aliases. There being no basis for attorney's
fees asserted in the complaint, and there being no claim formonetary damages, and thus no basis for an award of interest, the
trial court's dismissal of these claims is affirmed.
REVERSED in part, AFFIRMED in part.
Chief Judge MARTIN concurs.
Judge STEPHENS dissents in a separate opinion.
STEPHENS, Judge, dissenting.
In its sole argument on appeal, Plaintiff contends that the
trial court erroneously denied its motion for summary judgment. I
It is the simple law of contracts that as a man consents to
bind himself, so shall he be bound. Troitino v. Goodman, 225 N.C.
406, 414, 35 S.E.2d 277, 283 (1945) (quotations and citations
omitted). Whenever a court is called upon to interpret a contract
its primary purpose is to ascertain the intention of the parties at
the moment of its execution. Lane v. Scarborough, 284 N.C. 407,
409-10, 200 S.E.2d 622, 624 (1973) (citations omitted). If the
plain language of a contract is clear, the intention of the parties
is inferred from the words of the contract. Walton v. City of
Raleigh, 342 N.C. 879, 881, 467 S.E.2d 410, 411 (1996) (citing
Lane, 284 N.C. at 410, 200 S.E.2d at 624-25). When the language
of a contract is clear and unambiguous, effect must be given to its
terms, and the court, under the guise of constructions, cannot
reject what the parties inserted or insert what the parties elected
to omit. Weyerhaeuser Co. v. Carolina Power & Light Co., 257 N.C.
717, 719, 127 S.E.2d 539, 541 (1962) (emphasis added) (citingHartford Acc. & Indem. Co. v. Hood, 226 N.C. 706, 710, 40 S.E.2d
198, 201 (1946)).
The language of the contract in the case at bar is plain,
unambiguous, and clear. One year following closing, CB&H Pension
Services, Inc. was required to remove 'CB&H' from its name. The
contract does not require CB&H Pension Services, Inc. to change its
name such that it cannot easily be confused with a CB&H entity[,]
nor does it require CB&H Pension Services, Inc. to remove 'CB&H'
or 'CBH' from [its] name[,] (emphasis added) as Plaintiff
contends. The majority takes Plaintiff's contentions one step
further, however, concluding that Defendants must remove any
reference to 'CBH' or any variation thereof from their corporate
names or aliases. (Emphasis added). This is illogical. Surely
the contract does not prevent Defendants' use of BHC _ a
variation of CBH _ in a corporate name. Plaintiff and the
majority would have this Court insert words into an otherwise plain
and unambiguous agreement. It would have been a simple matter for
the parties themselves to insert such words into their agreement.
This, the parties did not do. This Court should not do it for
them. I vote to affirm the trial court.
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