Powell v. City of Newton , 200 N.C. App. 342 ( 2009 )

JACKSON, Judge.

James W. Powell, Jr. (“plaintiff’) appeals the 27 May 2008 order requiring him to execute a settlement agreement and quitclaim deed. Defendant City of Newton (“the city”), third-party defendant Shaver Wood Products, Inc. (“Shaver”), and third-party defendant W.K. Dickson Engineering, Inc. (“Dickson”) (collectively “defendants”) appeal the 19 August 2008 order denying their motion to dismiss plaintiff’s appeal. For the reasons stated below, we affirm.

Plaintiff owns land located on Jacobs Fork River in Catawba County. Plaintiff’s land abuts land owned by the city. In 2004, the city decided to build a public park on its land, retaining Dickson to oversee the project. The city retained Shaver to harvest timber from an area which needed to be cleared for the construction project. On 2 December 2005, plaintiff filed a complaint against the city alleging, inter alia, that the city had improperly cut and removed hardwood trees from his land. On 2 November 2006, the city filed a third-party complaint against Dickson and Shaver seeking indemnification.

On 14 November 2007, during a trial on the matter, the parties informed the court that they had reached an agreement in settlement of their dispute. In exchange for plaintiff’s execution of a quitclaim deed to the disputed land, the city agreed to pay plaintiff $30,000.00, while Dickson and Shaver agreed to pay plaintiff $5,000.00 each, for a total sum of $40,000.00. Attorneys for defendants and for plaintiff agreed to those terms. When asked if that was the agreement, plaintiff responded, “I don’t have any choice.” Plaintiff’s attorney informed him that he did have a choice. The court again asked plaintiff if that was his agreement, to which plaintiff responded, “Yes, that’s my agreement.” Counsel for the city noted that the agreement was subject to approval by the city council but that it was a mere technicality.

Thereafter, on 21 November 2007, a proposed written agreement' was exchanged between attorneys. The proposed agreement was modified and forwarded to the parties on 27 November 2007. Additional correspondence was exchanged on 12 December 2007, regarding the draft quitclaim deed. Plaintiff refused to execute the agreement or abide by its terms; he claimed that the agreement was not knowingly, freely, and voluntarily made, and that it was coerced. On 30 January 2008, defendants sought a court order to enforce the settlement agreement. Plaintiff then discharged his attorney. The matter was heard on 5 May 2008, and the trial court entered its order enforcing the settlement agreement on 27 May 2008. Plaintiff appeals.

After plaintiff noticed his appeal, defendants filed motions to dismiss the appeal based upon violations of the North Carolina Rules of Appellate Procedure. On 19 August 2008, the trial court denied the motions. Defendants appeal.

Plaintiff first argues that the trial court erred in enforcing the purported settlement agreement because it is void pursuant to the statute of frauds. We disagree.

“A compromise and settlement agreement terminating or purporting to terminate a controversy is a contract, to be interpreted and tested by established rules relating to contracts.” Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654 (2000) (citing Casualty Co. v. Teer Co., 250 N.C. 547, 550, 109 S.E.2d 171, 173 (1959)). Matters of contract interpretation are questions of law. Davison v. Duke University, 282 N.C. 676, 712, 194 S.E.2d 761, 783 (1973) (citations omitted). This Court reviews questions of law de novo. Staton v. Brame, 136 N.C. App. 170, 174, 523 S.E.2d 424, 427 (1999) (citing Al Smith Buick Co. v. Mazda Motor of America, 122 N.C. App. 429, 470 S.E.2d 552 (1996)).

Pursuant to North Carolina General Statutes, section 22-2, “[a]ll contracts to sell or convey any lands, ... or any interest in or concerning them, . . . shall be void unless said contract, or some memorandum or note thereof, be put in writing and signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized.” N.C. Gen. Stat. § 22-2 (2007). Contracts within the meaning of this section are required to be in writing, to prevent frauds and injuries. Winberry v. Koonce, 83 N.C. 351, 354 (1880). “The statute of frauds was designed to guard against fraudulent claims supported by perjured testimony; it was not meant to be used by defendants to evade an obligation based on a contract fairly and admittedly made.” House v. Stokes, 66 N.C. App. 636, 641, 311 S.E.2d 671, 675, cert. denied, 311 N.C. 755, 321 S.E.2d 133 (1984).

The statute of frauds requires “that all essential elements of the contract be reduced to writing.” Yaggy v. B.V.D. Co., 7 N.C. App. 590, 600, 173 S.E.2d 496, 503, cert. denied, 276 N.C. 728 (1970). “[T]he parties, the purchase price, and the property to be sold [ — ] ‘These are the essential elements of the contract.’ ” Currituck Assocs. Residential P’ship v. Hollowed, 166 N.C. App. 17, 28, 601 S.E.2d 256, 264 (2004) (citing Yaggy, 7 N.C. App. at 600, 173 S.E.2d at 503).

Here, in open court, the parties — plaintiff, the city, Dickson, and Shaver — agreed that defendants would pay to plaintiff $40,000.00 in exchange for plaintiff’s executing a quitclaim deed to the subject property. A transcript of the parties’ discussion with the trial court with respect to these basic elements was reduced to writing. In addition, the parties exchanged correspondence and a proposed “Settlement Agreement and Release” specifying the terms of the agreement more specifically, as well as a draft quitclaim deed. There can be no doubt that the essential terms of the contract were reduced to writing. The question before this Court is whether the writings were “signed by the party to be charged therewith, or by some other person by him thereto lawfully authorized” as required by the statute of frauds. N.C. Gen. Stat. § 22-2 (2007).

We note that this was not some barroom conversation between drunken neighbors, agreed to in jest, and written on a random scrap of paper. See Lucy v. Zehmer, 84 S.E.2d 516 (Va. 1954). This was an agreement among four parties represented by counsel, in a court of law, supervised by the presiding judge, who inquired of each party whether the proposed terms were agreeable. The party to be charged — plaintiff—confirmed, “Yes, that’s my agreement.” Under these circumstances, we cannot sanction plaintiff’s conduct in disavowing the agreement by refusing to sign the document memorializing its terms in writing.

This concept may best be viewed in terms of judicial estoppel. In Whitacre P’ship v. BioSignia, Inc., 358 N.C. 1, 591 S.E.2d 870 (2004), our Supreme Court set forth this State’s version of the doctrine, taken from the United States Supreme Court case of New Hampshire v. Maine, 532 U.S. 742, 149 L. Ed. 2d 968 (2001).

First, a party’s subsequent position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party’s earlier position, so that judicial acceptance of an inconsistent position in a later proceeding might pose a threat to judicial integrity by leading to inconsistent court determinations or the perception that either the first or the second court was misled. Third, courts consider whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.

Whitacre P’ship, 358 N.C. at 29, 591 S.E.2d at 888-89 (internal quotation marks and citations omitted). The essence of the doctrine is “to protect the integrity of the judicial process,” id. at 28, 591 S.E.2d at 888, a central concern when, as here, a superior court judge has been personally involved in and sanctioned in open court, settlement of a pending case. Although our research discloses no North Carolina cases that have squarely addressed this issue, we believe that the reasoning of the Appeals Court of Massachusetts is persuasive.

The primary concern of the doctrine of judicial estoppel is to protect the integrity of the judicial process. That concern would be ill served if those intimately involved in that process, litigants, attorneys, and judges, could not rely on declarations of settlement made to the court. The force of oral agreements made in open court and acted on by the court, even in the face of statutory requirements of formality has long been recognized. It defies logic and fundamental principles of fairness to allow a represented party who has sought justice in a forum to contradict and undermine an agreement it reached and acknowledged in that same forum, especially when the judge and other litigants appear to have relied on that acknowledgement [sic].

Correia v. DeSimone, 614 N.E.2d 1014, 1016 (Mass. App. Ct. 1993) (internal quotation marks and citations omitted). “There is a strong judicial interest in the prompt reporting of settlements which militates against permitting the Statute of Frauds to be raised as a defense to the enforcement of a settlement agreement.” Id.

Plaintiff’s current position that he did not agree to surrender a quitclaim deed in exchange for $40,000.00 clearly is inconsistent with his position before the trial judge that “[T]hat’s my agreement.” The judge was persuaded to accept plaintiff’s earlier position; the trial judge dismissed the jury and discontinued proceedings. Acceptance of plaintiff’s current position is simply untenable under these circumstances. If not estopped, plaintiff would impose an unfair detriment to defendants, who proceeded believing there was an agreement to settle the case. Pursuant to the doctrine of judicial estoppel, plaintiff ought not be permitted to now assert that he did not agree in open court in the presence of a trial judge to surrender a quitclaim deed to the disputed property in exchange for $40,000.00.

“ ‘[A] writing or memorandum is ‘signed’ in accordance with the statute of frauds if it is signed by the person to be charged by any of the known modes of impressing a name on paper, namely, by writing, printing, lithographing, or other such mode, provided the same is done with the intention of signing.’ ” Yaggy, 7 N.C. App. at 598, 173 S.E.2d at 501 (quoting Bishop v. Norell, 353 P.2d 1022, 1025 (1960)). “The signing of a paper writing or instrument is the affixing of one’s name thereto, with the puipose or intent to identify the paper or instrument, or to give it effect-as one’s act.” McCall v. Institute, 189 N.C. 775, 782, 128 S.E. 349, 353 (1925) (citation omitted). The “party to be charged” includes “some other person by him thereto lawfully authorized.” N.C. Gen. Stat. § 22-2 (2007).

[T]here is a presumption in North Carolina in favor of an attorney’s authority to act for the client he professes to represent. This presumption applies to both procedural and substantive aspects of a case. Special authorization from the client is required before an attorney may enter into an agreement discharging or terminating a cause of action on the client’s behalf. Where special authorization is necessary in order to make a dismissal or other termination of an action by an attorney binding on the client... it [is also] presumed . . . that the attorney acted under and pursuant to such authorization. One who challenges the actions of an attorney as being unauthorized has the burden of rebutting this presumption and proving lack of authority to the satisfaction of the court.

Harris, 139 N.C. App. at 829, 534 S.E.2d at 654-55 (internal quotation marks and citations omitted). Plaintiff did not object to his counsel’s participation in court discussions with respect to the terms of the settlement agreement. In fact, plaintiff admitted that the proposed terms constituted his agreement. At the time the agreement was reached in open court, plaintiff’s attorney had authority to act on plaintiff’s behalf to settle the suit. Further correspondence with respect to the details of that agreement were confirmatory in nature and prior to plaintiffs dismissal of counsel.

“The statute [of frauds] does not require all of the provisions of the contract to be set out in a single instrument. The memorandum required by the statute is sufficient if the contract provisions can be determined from separate but related writings.” Hines v. Tripp, 263 N.C. 470, 474, 139 S.E.2d 545, 548 (1965) (citations omitted). The parties, by their conduct, impliedly agreed to conduct themselves via electronic means, subjecting themselves to the provisions of the Uniform Electronic Transactions Act. See N.C. Gen. Stat. § 66-315(b) (2007). Pursuant to that Act, plaintiffs counsel affixed his electronic signature to emails concerning the transaction. See N.C. Gen. Stat. § 66-312(9) (2007). When the hearing transcript, draft agreement, draft quitclaim deed, and associated emails are read together, as permitted by the statute of frauds, the settlement agreement that plaintiff was ordered to execute is in total compliance with the statute of frauds. Therefore, the trial court did not err in ordering plaintiff to execute the agreement.

This result is consistent with other jurisdictions that have considered the issue. In Szymkowski v. Szymkowski, 432 N.E.2d 1209 (Ill. App. Ct. 1982), in which the parties agreed in open court to settle their dispute by the payment of $10,000.00 in exchange for a quitclaim deed, the Illinois Court of Appeals held that

[w]hen the trial court assents to a settlement, thereby rendering the sale one pursuant to order of the court, the trial court has impliedly made a determination as to the parties’ consent and their attorneys’ authority. The safeguards of the Statute of Frauds are fully met when a settlement is reached in open court in the presence of the parties.

Id. at 1212.¹

In Fuchs v. Fuchs, 409 N.Y.S.2d 414 (1978), the Supreme Court of New York enforced a settlement agreement entered into in open court but not executed thereafter. The Court held that “the transcript of the proceedings serves to establish the terms of the settlement and avoid conflicting claims as to what the parties intended. We are in agreement with those courts which have held the Statute of Frauds to be inapplicable in these circumstances.” Id. at 415 (citations omitted).

The oral stipulation was “definite and complete” and not a mere “agreement to agree” at some future time. It is clear that, under the terms of the agreement, the date of the oral stipulation was regarded as the date of settlement. The fact that certain aspects of the agreement were to be reduced to writing at a later date is not dispositive, since the parties gave “[m]utual manifestations of assent that are in themselves sufficient to make a contract!.]”

Id. (citations omitted). See also Owens v. Lombardi, 343 N.Y.S.2d 978, 981 (1973) (“[A] settlement agreement will not be impaired because of any restriction of the Statute of Frauds.”); John D. Calamari & Joseph M. Perillo, Contracts H.B. § 19-30(b) (3d ed. 1987) (“It seems to be well settled that an oral stipulation made in open court satisfies the Statute of Frauds even though the record is not signed by the party to be charged.”).

Based upon the foregoing, we cannot agree with plaintiffs contention that the statute of frauds bars the order requiring that he execute the settlement agreement he entered into in open court. Plaintiffs assignment of error is overruled.

Plaintiff also argues that the trial court erred in concluding as a matter of law that the parties had entered into a valid and binding settlement agreement of all issues. We disagree.

Plaintiff appears to contend that the trial court did not support this conclusion of law with adequate findings of fact. Plaintiff states that “before the matter was completely resolved by a jury, the Appellees filed motions to enforce the terms of negotiations!-]” Plaintiff did not enter into “negotiations” in open court; plaintiff settled his case. He listened to the attorneys relate the terms of the settlement agreement to the judge, who then questioned each of the parties as to their assent to the terms as stated. Plaintiff informed the judge that “that’s my agreement” (emphasis added).

The trial court concluded as a matter of law that “[p]laintiff entered into a valid and binding settlement of all issues” and that defendants were entitled to enforce that settlement. In support of that conclusion, the trial court made the following findings.of fact:

2. During the course of the Trial, counsel for Plaintiff, Defendant City of Newton and Third-Party Defendants, Shaver Wood Products, Inc. and W.K. Dickson Engineering, Inc. advised the Court that the parties had reached a settlement of all pending issues;

3. The terms and conditions of the settlement were recited into the record, and the presiding Judge, the Honorable James W. Morgan, confirmed with Plaintiff, James W. Powell, that he knowingly and voluntarily entered into the settlement of all issues, and further, the Court confirmed the terms and conditions of the settlement with Plaintiff;

4. That the terms and conditions of the settlement were thereafter confirmed in writing via electronic mail communications between counsel for Plaintiff and Defendant;

5. That the sum of $40,000.00 was delivered to counsel for Plaintiff along with a Settlement Agreement and Release and quitclaim deed, but Plaintiff failed and refused to execute said documents and failed and refused to consummate the settlement as agreed.

These findings of fact are supported by competent evidence in the record and are sufficient to support the trial court’s conclusion of law. This argument is without merit.

In their cross-appeal, defendants argue that the trial court erred in not dismissing the appeal for appellate rules violations. They contend that pursuant to Dogwood Dev. and Mgmt. Co., LLC v. White Oak Transp. Co., 362 N.C. 191, 657 S.E.2d 361 (2008), the violations were sufficiently gross to warrant dismissal. We disagree.

Defendants contend that the appeal should have been dismissed because (1) information concerning the transcript was not timely served, notwithstanding the fact that the transcript itself was served more than two weeks prior to the filing of the notice of appeal, pursuant to Rule 7(a) of the North Carolina Rules of Appellate Procedure, and (2) the proposed record on appeal was not timely served, pursuant to Rule 11(a) and (b). Defendants filed a motion with this Court to dismiss the appeal for the same rules violations. We denied the motion. We do not deem these rules violations sufficiently egregious to warrant dismissal of plaintiff’s appeal.

Affirmed.

Judge HUNTER, JR., Robert N. concurs. Judge WYNN dissents in a separate opinion.

1 . We note with caution, however, that the Illinois statute of frauds has a provision that it does not apply to “sales ... by any officer or person pursuant to a judgment or order of any court in this state.” 740 Ill. Comp. Stat. 80/2 (2008).