Midulla v. Howard A. Cain Co., Inc.Midulla v. Howard A. Cain Co., Inc.
General contractor, Howard A. Cain Co., Inc. (“defendant”), appeals from an order granting summary judgment for Joseph D. Midulla and Cheri Midulla (collectively “plaintiffs”). Fоr the reasons stated herein, we affirm the order of the trial court.
Defendant built a large single-family residence. Plaintiffs desired to purchase the house from dеfendant and communicated their offer using the standard North Carolina Bar Association — Real Estate Commission Form (“Contract”). The parties also agreed tо include several additional provisions as an Addendum to the Contract following lengthy negotiations. On 1 November 1996, defendant accepted the offer.
One оf the additional provisions made the purchase contingent upon a “[r]eview of covenants and restrictions, the body of which are satisfactory to Buyer.” Under another provision, defendant warranted “that there is no excessive water or unusual drainage under or around [the] house.” The Contract required plaintiffs to provide a $20,000.00 deposit to defendant. The Contract, in paragraph 1 of the Standard provisions, provided that “in the event that any of the conditions hеreto are not satisfied” then “the earnest money shall be returned to Buyer.”
Following construction of the residence, plaintiffs investigated the drainage on the property and discovered large amounts of standing water and blockage in a catch basin in the front of the property. Plaintiffs then decided to have the drainage system professionally inspected. The inspector recommended changing the down spouts and the catch basin from corrugated piping to PVC piping.
Plaintiffs also reviewed the covenants and restrictions. Plaintiffs thought the covenants and restrictions were too restrictive. In particular, plaintiffs believed several provisions of the covenants and restrictions exposed them to the risk of becoming obligated for payments in which they had an inadequate voice in approving.
Plaintiffs then asked defendant to replace the drainage pipes and kitchen cabinets. Plaintiffs also informed defendant оf their concerns regarding the covenants and restrictions. Defendant informed plaintiffs that the company would not pay for the replacement of thе kitchen cabinets or for the PVC pipe around the exterior of the house.
On 7 November 1996, plaintiffs informed defendant that they were exercising their option tо cancel the Contract because the covenants and restrictions were unsatisfactory and because of problems with the drainage on the рroperty. Defendant did not believe plaintiffs were canceling the Contract because the covenants and restrictions were unsatisfactory. Defendant refused to return to plaintiffs the $20,000.00 earnest money deposit, believing that plaintiffs exercised their option to cancel the Contract only to avoid their contractual obligations.
Plaintiffs filed this action to recover their earnest money deposit. Plaintiffs filed a motion for summary judgment on 26 January 1998. On 10 February 1998 summary judgment was granted for plaintiffs by the trial court. Defendant now appeals the order.
The sole issue on appeal is whether the trial court erred in granting summary judgment for plaintiffs. Defendant asserts two
First, defendant argues that plaintiffs were not entitled to judgment as a matter of law because plaintiffs violated their implied duty to act in good faith when reviewing the Contract’s covenants and restrictions. Plaintiffs counter that, while they acted in good faith in canceling the Contract with defendant, Nоrth Carolina law does not imply a duty of good faith when to do so would rewrite the express agreement between the parties.
Summary judgment is properly grantеd “if 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.R. Civ. P. 56(c);
Toole v. State Farm Mut. Auto. Ins. Co.,
The right to contract is a property right which falls under the protection of the North Carolina and United States Constitutions.
Mark TV Beverage Inc. v. Molson Breweries USA,
In the instant case, the Addendum to the Contraсt specifically provided that plaintiffs’ offer was contingent on a “[r]eview of covenants and restrictions, the body of which are satisfactory to Buyer.” Thеrefore, plaintiffs had the discretion to cancel the Contract if they were not satisfied with the covenants and restrictions governing the area where thе property was located. However, plaintiffs also had a duty to act in good faith. Defendant’s only evidence of plaintiffs’ bad faith was in the affidavit of Hоward A. Cain (“Cain”), defendant’s President. In his affidavit, Cain stated that he did not believe that plaintiffs canceled the Contract because they found the covenants and restrictions unsatisfactory. Cain asserted that plaintiffs canceled the Contract to avoid their contractual obligations. Defendant offered no еvidence of plaintiffs’ bad faith, but merely conclusory statements regarding his version of the truth. It is well-established that conclu-sory statements standing alone cannot withstand a motion for summary judgment.
Butter v. Berkeley,
Defendant next argues that the trial court erred in entering summary judgment for plaintiffs because there were material issues of fact regarding whether a drainage problem existed. Plaintiffs admit that there were issues of fact regarding the drainage conditions but they assert there were no disputed issues of fаct regarding plaintiffs’ dissatisfaction with the covenants and restrictions. We agree with plaintiffs.
While the record shows that there may have been a factual dispute concerning the condition of the drainage system, we conclude
Because no genuine issue of material fact exists, we conclude that summary judgment was properly entered in favor of plaintiffs and affirm the order of the trial court.
Affirmed.