JOHN WIELAND HOMES AND
NEIGHBORHOODS OF THE
CAROLINAS, INC. f/k/a
JOHN WIELAND HOMES AND
NEIGHBORHOODS OF NORTH
Plaintiff Union County
No. 04 CVS 01321
LV REALTY, LLC and
LONGVIEW INVESTORS, LLC,
Pratt-Thomas Epting & Walker, P.A., by G. Trenholm Walker;
Griffin Smith Caldwell Helder & Helms, P.A., by R. Kenneth
Helms, Jr., for plaintiff-appellee.
Moore & Van Allen PLLC, by James P. McLoughlin, Jr., Valecia M. McDowell, and Lindsay M. Peed, for defendant-appellants.
LV Realty, LLC and Longview Investors, LLC (collectively defendants) appeal from an order of the trial court denying their motion for summary judgment and granting partial summary judgment in favor of John Wieland Homes and Neighborhoods of the Carolinas, Inc., f/k/a John Wieland Homes and Neighborhoods of North Carolina, Inc. (plaintiff). Upon careful review, we affirm the order of the trial court. On 15 July 2004, plaintiff filed a verified complaint against defendants in Union County Superior Court seeking injunctive relief, damages, and specific performance of a real estate purchase agreement. The complaint alleged that on 14 March 2002, plaintiff and defendant entered into an agreement for plaintiff to purchase from defendant over a certain course of time eighty-three developed lots within the Longview residential development (Longview) located in Union County, North Carolina. Once purchased, plaintiff would then construct and market single-family residences on the developed lots. The purchase agreement required plaintiff to eventually close on the eighty-three lots according to a schedule and pay the specified purchase price and certain closing costs. The purchase agreement also required plaintiff to market and list the completed single-family residences through defendant LV Realty.
At the time the complaint was filed, plaintiff had completed purchase on thirty-one of the developed lots and built houses upon them. The complaint alleged that on 8 June 2004, plaintiff notified defendants it intended to close on eleven more of the eighty-three lots and proposed a closing date of 22 June 2004. Defendants, however, refused to discuss closing on the eleven lots. Plaintiff tendered a seller's proceeds check to defendants in the amount of $1,181,364.52, the full amount of the balance due on the eleven lots. Defendants refused the purchase. Plaintiff's complaint set forth numerous claims against defendants for their refusal to perform and sought specific performance of the purchase agreement. Answering plaintiff's complaint, defendants admitted the agreement was valid, that plaintiff had completed purchase of thirty-one of the lots pursuant to the agreement, and that defendants had refused any further purchase of lots by plaintiff under the agreement. Defendants asserted, however, they were not obligated to perform under the agreement because of plaintiff's material breach thereof, and set forth a counterclaim for breach of contract. Specifically, defendants alleged plaintiff breached section 18 of the purchase agreement. Section 18, titled Architectural and Construction Matters, provides as follows:
During the Inspection Period, the parties will agree on the architectural approval process for homes built by [plaintiff] on the Lots. The parties will agree upon a process whereby during the Inspection Period, [plaintiff] will submit for review by [defendants] pictures and/or drawings of homes. During the Inspection Period, [defendants] shall review the homes submitted by [plaintiff] and approve or disapprove each home. [Plaintiff] shall pay to the [defendants] a one-time architectural review fee of Five Thousand ($5,000.00) Dollars for the review of proposed plans at Closing. For all approved homes (and any homes substantially similar to such approved homes), [plaintiff] shall not be required to obtain any further architectural or site approval, regardless of when built.
The Inspection Period referred to in section 18 was an initial period of thirty days following the final signing of the agreement. Defendants alleged plaintiff breached section 18 of the purchase agreement by constructing and selling a house on Lot 7 of the Longview development that deviated from the architectural design approved by defendants. Defendants further alleged thatplaintiff had begun construction of a house on Lot 51 that similarly deviated from any approved architectural design.
Both sides moved for summary judgment, which matter came before the trial court on 10 October 2005. Plaintiff presented evidence tending to show that section 18 of the purchase agreement was inserted for the benefit of plaintiff, in order to avoid delays in the architectural approval process. John Daniels Feezor, president of the Charlotte division for plaintiff company, testified that [i]t was very important to us that we not have to go through the architectural review process on each home. So as part of the terms of the contract we negotiated for pre-approval of plans. Plaintiff submitted forty-seven home plans during the inspection period, which were pre-approved by defendants pursuant to section 18 of the purchase agreement.
The evidence further showed that on 19 August 2002, defendants filed a declaration of covenants, conditions, and restrictions for Longview (declaration) with the Union County register of deeds. The declaration established an architectural review committee for the Longview community, as well as architectural and landscape guidelines. These architectural guidelines and restrictions applied to homes built by plaintiff, and plaintiff and defendants worked together on several of the homes built by plaintiff that were not pre-approved during the inspection period in order for plaintiff to comply with the architectural restrictions contained in the declaration. Notably, the declaration granted several remedies to defendants for failure of plaintiff to abide by therestrictions. None of these remedies included unilateral termination of the purchase agreement. Nor did the purchase agreement impose conditions upon plaintiff's entitlement to close upon the lots, beyond certain timing issues and payment of fees and costs.
The specific dispute over Lot 7 arose on 8 August 2003 when an agent for LV Realty entered into a purchase contract with individual home buyers for the sale of Lot 7. The buyers of Lot 7 purchased a particular model home, but in an addendum to the purchase contract requested a deviation from the pre-approved plan, namely a modification to [the] front porch and 3-car side-entry plus 1 single car courtyard entry. Plaintiff agreed to the deviation. In a letter dated 16 March 2004, defendants informed plaintiff they had conducted an on-site inspection of the home under construction on Lot 7 and that it was architecturally acceptable. However, by letter dated 28 April 2004, defendants stated that the home under construction on Lot 7 has a 'drive thru' garage element that is odd and not an approved architectural feature for Longview. Defendants requested that plaintiff respond to the architectural review board (ARB) regarding the architectural violation. Negotiations over the violation ensued. In an electronic mailing sent 17 May 2004, a member of the ARB expressed frustration with the weak [plaintiff] process of conforming with our ARB rules and regulations. The ARB member advised defendants to make plaintiff tear out this garage and make it as tough on [plaintiff] as possible and make it the nicestproject as possible for us. He noted that plaintiff was making a fortune in Longview and that [t]he best thing that could happen to [defendants] is if [plaintiff] did pack up and leave; [defendant] could make a lot more money on those lots.
After reviewing the evidence of record and arguments by the parties, the trial court determined there were no genuine issues of material fact and that plaintiff was entitled to specific performance of the purchase agreement. The trial court denied defendants' motion for summary judgment and granted partial summary judgment to plaintiff. Defendants appeal.
We note initially that the present appeal is an interlocutory one and therefore generally not immediately appealable. However, we agree with defendants that the order of the trial court granting specific performance to plaintiff, thus requiring defendants to convey the property in question, affects a substantial right. See Watson v. Millers Creek Lumber Co., ___ N.C. App. ___, ___, 631 S.E.2d 839, 840-41 (2006) (appeal from order denying summary judgment and granting partial summary judgment in a case involving a land purchase installment contract was interlocutory but affected a substantial right as it implicated title rights to the disputed property). We therefore examine the merits of the appeal.
By their first assignment of error, defendants argue there was no meeting of the minds with regard to the architectural review process contained in section 18, and therefore the purchase agreement is invalid and cannot be enforced. This argument has no merit. In its answer and counterclaim, defendants repeatedlyasserted that the purchase agreement was a valid and enforceable agreement. 'A party is bound by his pleadings and, unless withdrawn, amended or otherwise altered, the allegations contained in all pleadings ordinarily are conclusive as against the pleader. He cannot subsequently take a position contradictory to his pleadings.' Bratton v. Oliver, 141 N.C. App. 121, 125, 539 S.E.2d 40, 43 (2000) (quoting Davis v. Rigsby, 261 N.C. 684, 686, 136 S.E.2d 33, 34 (1964)). Defendants are bound by their earlier assertions that the purchase agreement, under which plaintiff and defendants operated for two years, is a valid and enforceable agreement. We overrule this assignment of error.
By further assignment of error, defendants argue there exist genuine issues of material fact regarding whether plaintiff breached a material term of the purchase agreement, namely the architectural control provision contained in section 18. 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). Here, defendants fail to adequately identify a disputed issue of material fact that would prevent entry of summary judgment in favor of plaintiff. First, defendants fail to demonstrate how plaintiff's alleged failure to strictly abide by the ARB's architectural review process renders the purchase agreement unenforceable. We do not agree that section 18 of the purchase agreement was a material termof the contract, or that plaintiff committed any breach thereof. Section 18 does not define any essential terms or delegate any duties to the parties that plaintiff then violated. Rather, under its plain terms, the central purpose of section 18 is to provide an opportunity for plaintiff to gain pre-approval for its architectural plans during the initial thirty-day inspection period, which plaintiff did. Whether plaintiff later violated the architectural restrictions contained in Longview's declaration by agreeing to build an architectural feature on Lot 7 that was not in compliance with the ARB's guidelines is a separate matter altogether, and has no bearing on the validity of the purchase agreement.
Second, even if defendants could show that plaintiff somehow violated section 18, the purchase agreement does not condition plaintiff's right to close upon the lots it is obligated to purchase upon compliance with section 18. Indeed, the evidence tended to show that section 18 was drafted for the benefit of plaintiff, in order to avoid undue delay over architectural approval. Notably, under section 12 of the purchase agreement, plaintiff is granted the right to terminate the agreement should defendants breach the contract. However, no such reciprocal right is granted to defendants. In addition, there is no dispute that plaintiff is bound by the declaration of restrictions filed for the Longview community. The declaration of restrictions grants defendants several remedies for failure by plaintiff to abide by the architectural standards of the community. The declaration doesnot operate, however, to terminate plaintiff's right to close upon lots as set forth in the purchase agreement. As noted supra, the parties operated for two years under the purchase agreement, with defendants approving and disapproving various architectural plans and features submitted by plaintiff. Defendants initially approved the house constructed on Lot 7 after conducting its on-site inspection. Under these circumstances, the remedy for plaintiff's alleged failure to abide by the architectural provisions lies with enforcement of the restrictive covenants, not with invalidation of the entire purchase agreement. We overrule this assignment of error.
By their final assignment of error, defendants contend the purchase agreement is unenforceable because plaintiff breached its duty of good faith and fair dealing, thus rendering summary judgment inappropriate. Specifically, defendants argue plaintiff demonstrated bad faith by failing to cure the unapproved architectural feature on Lot 7 before sale of the residence, despite assurances to defendants that it would do so. Again, we disagree with defendants' position that such alleged behavior on the part of plaintiff renders the purchase agreement invalid. If plaintiff has indeed violated the architectural restrictions of the community, defendants must seek recourse through enforcement of those restrictions contained in the declaration. Plaintiff's alleged failure to cure an architectural feature, however, has no impact on the purchase agreement entered into two years earlier. We overrule this assignment of error. In conclusion, we affirm the order of the trial court denying summary judgment to defendants and granting specific performance to plaintiff.
Judges WYNN and BRYANT concur.
Report per Rule 30(e).
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