249 N.C. App. 346
N.C. Ct. App.2016Background
- Plaintiff Tatita Sanchez bought a home in the Cobblestone subdivision and paid homeowners association (HOA) dues from closing until July 30, 2014.
- On July 30, 2014 the HOA's counsel sent a letter stating Sanchez's lot was never subject to the HOA declaration and that she was not a member; she could join only by executing a supplemental declaration.
- Sanchez stopped paying dues and sued in small claims court seeking reimbursement of ~$4,000 she had paid; the magistrate and the trial court awarded her a refund based on unjust enrichment.
- Defendant HOA appealed, arguing (1) a contract implied in fact bound Sanchez to pay dues and (2) Sanchez is estopped from denying the obligation to pay.
- The Court of Appeals accepted the trial court's findings of fact (unchallenged) and reviewed legal conclusions de novo.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a contract implied in fact obligating payment of dues | No enforceable contract existed; payments were made under a mistake and remedy is unjust enrichment/restitution | The parties' conduct (payment + HOA benefits) created an implied-in-fact contract to pay dues | No implied-in-fact contract; trial court correctly concluded no contract existed given findings (minimal use of amenities, lack of notice) |
| Equitable estoppel (quasi‑estoppel) to bar Perez from denying obligation | Sanchez relied on lack of legal obligation once informed and ceased payments; she had no reasonable way to know she wasn't obligated | HOA: Sanchez accepted membership benefits and paid dues, so she should be estopped from denying the obligation | Estoppel not established; trial court did not err in rejecting estoppel given factual findings (rarely used amenities, lack of notice) |
| Remedy — unjust enrichment / restitution | Plaintiff entitled to restitution because HOA was unjustly enriched by receiving dues without legal right to require them | HOA argued unjust enrichment inappropriate because an implied contract existed | Court affirmed restitution as appropriate because no contract (implied-in-fact) existed; unjust enrichment remedy permissible under those facts |
Key Cases Cited
- Lake Toxaway Cmty. Ass'n, Inc. v. RYF Enters., Inc., 226 N.C. App. 483, 742 S.E.2d 555 (N.C. Ct. App. 2013) (identifies circumstances where use of amenities supported an implied‑in‑fact contract)
- Whitfield v. Gilchrist, 348 N.C. 39, 497 S.E.2d 412 (N.C. 1998) (explains quantum meruit and contract implied in law vs. fact)
- Booe v. Shadrick, 322 N.C. 567, 369 S.E.2d 554 (N.C. 1988) (unjust enrichment inapplicable where an actual contract exists)
- Miles v. Carolina Forest Ass'n, 167 N.C. App. 28, 604 S.E.2d 327 (N.C. Ct. App. 2004) (upholding implied‑in‑fact contract where owners continued paying and received clear, material benefits)
- Reidy v. Whitehart Ass'n, 185 N.C. App. 76, 648 S.E.2d 265 (N.C. Ct. App. 2007) (discusses quasi‑estoppel where party accepted benefits under a transaction)
- Wells v. Foreman, 236 N.C. 351, 72 S.E.2d 765 (N.C. 1952) (describes unjust enrichment where one party expends money under a contract and the other accepts benefits but refuses performance)