IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-796
Filed: 17 May 2016
Wake County, No. 14 CVS 3108
COLLEEN BLONDELL, Plaintiff,
v.
SHAKIL AHMED, SHABANA AHMED, MICHAEL FEKETE and SUSAN
ELIZABETH FEKETE, individually, Defendants.
Appeal by Plaintiff from order entered 12 January 2015 by Judge Howard E.
Manning, Jr., in Wake County Superior Court. Heard in the Court of Appeals 12
January 2016.
Martin & Gifford, PLLC, by William H. Gifford, Jr., for the Plaintiff-Appellant.
Jordan Price Wall Gray Jones & Carlton, PLLC, by J. Matthew Waters and
Joseph E. Propst, for the Defendants-Appellees.
DILLON, Judge.
Plaintiff Colleen Blondell (“Agent”) brought this action to collect a real estate
commission she claims is due under a listing agreement (“Listing Agreement”) that
her real estate firm entered into with Defendants Shakil and Shabana Ahmed
(“Sellers”) to sell Sellers’ home. Agent appeals from the trial court’s order granting
the Sellers’ motion for summary judgment. Because we believe that there is a
genuine issue of fact as to whether Sellers breached their duty of good faith and fair
BLONDELL V. AHMED
Opinion of the Court
dealing when they negotiated for the termination of the Listing Agreement, we
reverse and remand for further proceedings consistent with this opinion.
I. Background
Agent is a real estate broker licensed by the North Carolina Real Estate
Commission. She works as an agent with the firm Kiegiel, LLC d/b/a Keystone
Properties (“Keystone Properties”). Sellers owned a home in Wake County. A
timeline of events necessary for understanding the issues on appeal is as follows:
A. Parties Enter Into Listing Agreement; Agent Procures Offer
In March 2013, Sellers and Keystone Properties entered into the Listing
Agreement. The parties used the “Exclusive Right to Sell Listing Agreement” form
produced by the North Carolina Association of REALTORS®, Inc.1 Pursuant to the
Agreement, the listing would be for a period of one year (expiring in March 2014).
On 3 April 2013, Agent showed Sellers’ home to Michael and Susan Fekete2
(“Buyers”). On 6 April 2013, Buyers made an offer which Agent presented to Sellers.
Sellers promptly rejected the offer. Over the course of the next few weeks, Agent had
a number of communications with both Sellers and Buyers regarding the Sellers’
home.
1 This Association is a private organization comprised of licensed real estate brokers.
Membership in the Association is not compulsory. The relationship between the Association and its
broker members is analogous to the relationship between licensed attorneys and the North Carolina
Bar Association.
2 The Feketes were named defendants in this action; however, Agent has since dismissed all
claims against the Feketes.
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Opinion of the Court
B. Parties Enter Termination Agreement; Sellers Sell Home To Buyers
On 22 April 2013, the Sellers informed Agent that they no longer wished to list
their home for sale and of their desire to terminate the Listing Agreement.
Accordingly, Agent prepared the Termination Agreement using another form
provided by the Association of REALTORS® (entitled “Termination of Agency
Agreement and Release,” hereinafter “Termination Agreement”). This Termination
Agreement essentially provided that the parties would no longer be bound by the
Listing Agreement. Further, the Termination Agreement provided that it would
become “effective on the date that it has been signed by both the Parties.” (Emphasis
added.)
That same evening (22 April), Agent e-mailed Sellers, attaching the
Termination Agreement unsigned. The next day (23 April), Sellers executed the
Termination Agreement and e-mailed it back to Agent.
Sometime thereafter, but prior to 2 May 2013 – without the knowledge of Agent
– Buyers and Sellers met to discuss a possible transaction. On 2 May 2013, Sellers
and Buyers tentatively agreed to a purchase price for the home. On 9 May 2013,
Buyers presented a written offer to Sellers based on their verbal understanding.
Prior to executing Buyers’ offer, Sellers contacted Agent about the status of the
Termination Agreement (which Sellers had signed and returned on 23 April). During
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Opinion of the Court
this communication, Sellers did not disclose to Agent that they had a written offer
from Buyers that they intended to sign.
On 10 May 2013, Agent executed the Termination Agreement on behalf of
Keystone Properties and e-mailed a copy to Sellers.
On 11 May 2013, Sellers executed the contract to sell their home to Buyers.
The transaction closed in late June 2013, unbeknownst to Agent.
Agent commenced this action against Sellers contending that, pursuant to the
Listing Agreement, Sellers became obligated to pay Keystone Properties a real estate
commission when Sellers sold their home to Buyers.3 Sellers answered, alleging that
no commission was due because the Listing Agreement had been terminated in the
Termination Agreement. After a hearing, the trial court entered summary judgment
in favor of Sellers. Agent timely appealed.
II. Analysis
The parties agree that the Listing Agreement would entitle Keystone
Properties to a real estate commission in the absence of an effective termination
agreement. Specifically, the Listing Agreement obligated Sellers to pay a commission
if their home sold within the Agreement’s one-year term.
3 Keystone Properties assigned to Agent all of their rights – including the right to any
commission that may be owed – in the Listing Agreement.
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Opinion of the Court
The Termination Agreement, however, unambiguously states that Sellers were
released from any obligation they may otherwise have under the Listing Agreement.
Specifically, the Termination Agreement states:
2. Termination of Agreement. The Parties agree that
all rights and obligations arising on account of the [Listing]
Agreement are hereby terminated, and hereby release each
other from their respective obligations under the
Agreement.
3. Release from Liability. The Parties further release
and forever discharge each other and their respective
successors in interest from any and all claims, demands,
rights and causes of action of whatsoever kind and nature
arising from the [Listing] Agreement and the agency
relationship existing between them.
Accordingly, if the Termination Agreement is enforceable, Sellers would be entitled
to summary judgment in this case.
Agent argues that Sellers should not be allowed to benefit from the
Termination Agreement. Specifically, Agent contends that Sellers breached their
duty of good faith and fair dealing when Sellers negotiated for the termination of the
Listing Agreement without disclosing to Agent or Keystone Properties that Sellers
were negotiating directly with Buyers.
It is axiomatic that Sellers owed a duty of good faith and fair dealing to
Keystone Properties during the term of the Listing Agreement and during the
negotiation of the termination of that Agreement. Indeed, our Supreme Court has
recently reiterated the long standing principle that there is implied in every contract
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Opinion of the Court
a covenant of good faith and fair dealing. Arnesen v. Rivers Edge Golf Club, ___ N.C.
___, ___, 781 S.E.2d 1 (2015); see also Great Am. Ins. Co. v. C.G. Tate Constr. Co., 303
N.C. 387, 399, 279 S.E.2d 769, 776 (1981) (recognizing “the common law principle
that implicit in every contract is the obligation of each party to act in good faith”).
Also, our Court has consistently held that “[i]t is a basic principle of contract law that
a party who enters into an enforceable contract is required to act in good faith and to
make reasonable efforts to perform his obligations under the agreement.”
Weyerhaeuser Co. v. Godwin Bldg. Supply Co., 40 N.C. App. 743, 746, 253 S.E.2d 625,
627 (1979).
The parties dispute when the Listing Agreement was actually terminated.
Sellers contend that the Listing Agreement terminated on 23 April when Sellers
executed the Termination Agreement. Sellers point to the language in Agent’s 22
April e-mail (attaching the Termination Agreement unsigned) in which Agent stated:
Attached you will find the Termination Agreement for the
listing of your home. Please sign the form and return it to
me at your earliest convenience thereby severing any
obligation we have with one another.
Sellers contend that the e-mail constituted an offer that was accepted when they
signed the agreement on 23 April. However, based on the Parol Evidence Rule, which
has been adopted by our Supreme Court, we cannot consider this e-mail language
because it contradicts the unambiguous language contained in the Termination
Agreement. See Root v. Allstate Ins. Co., 272 N.C. 580, 587, 158 S.E.2d 829, 835
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Opinion of the Court
(1968) (recognizing the general rule that “when a written instrument is introduced
into evidence, its terms may not be contradicted by parol or extrinsic evidence, and it
is presumed that all prior negotiations are merged into the written instrument”) The
Termination Agreement unambiguously stated that “[t]his Agreement shall be
effective on the date it has been signed by both the Parties.”
Our Court has recognized that the Parol Evidence Rule is a rule of substantive
law which “prohibits the consideration of evidence as to anything which happened
prior to or simultaneously with the making of a contract which would vary the terms
of the agreement.” Harrell v. First Union Nat. Bank, 76 N.C. App. 666, 667, 334
S.E.2d 109, 110 (1985). In Harrell, the plaintiff signed a “Letter of Consent” with a
bank that provided that certain common stock he owned could be used as collateral
for advances to his son-in-law in the future. Id. At the time of signing, however, the
plaintiff told the loan officer (defendant) that he did not want any advances to be
made to his son-in-law unless he approved the advances, though the “Letter of
Consent” did not require that he approve advances. The loan officer replied, “That’s
right.” Id. Subsequently, several advances were made to the son-in-law secured by
the plaintiff’s stock without the plaintiff’s approval, and the loan officer sold the stock
when the loans were not paid. The plaintiff filed an action for the wrongful sale of
his stock, and this Court affirmed the trial court’s directed verdict in favor of the
bank, holding that the Parol Evidence Rule barred the Court from considering the
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Opinion of the Court
communication made contemporaneously with the signing of the contract. Id. at 667,
334 S.E.2d at 110-11.
Here, there is nothing within the four corners of the Termination Agreement
that obfuscates or contradicts the term that it would not be effective until signed by
both parties. Just as this Court did not consider a conversation that the plaintiff had
with a loan officer in Harrell directly contradicting a term in the contract, we cannot
consider the language in Agent’s 22 April e-mail. The Termination Agreement is
unambiguous. See Thompson v. First Citizens Bank & Trust Co., 151 N.C. App. 704,
709, 567 S.E.2d 184, 188 (2002) (“Generally, the parol evidence rule prohibits the
admission of evidence to contradict or add to the terms of a clear and unambiguous
contract.”). Accordingly, we hold that the Listing Agreement was not terminated nor
did the obligations thereunder cease until the Termination Agreement was executed
by Agent (on behalf of Keystone Properties) on 10 May. That is, Sellers’ execution of
the Termination Agreement was an offer to terminate the Listing Agreement, which
was not accepted until the Termination Agreement was executed by Agent.
Having concluded that the Listing Agreement was still in full effect until 10
May, we conclude that there is evidence which creates a genuine issue of material
fact whether Sellers breached their duty of good faith and fair dealing under that
Agreement. Specifically, prior to 10 May, before Sellers’ offer to terminate the Listing
Agreement was accepted by Agent and while Sellers still owed a duty of good faith
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Opinion of the Court
and fair dealing toward Agent under the Listing Agreement: (1) Agent presented an
offer from Buyers to Sellers, which would involve the paying of a commission to Agent
under the Listing Agreement; (2) Sellers rejected the offer and then informed Agent
that they no longer wanted to list their house for sale; (3) Sellers made an offer to
Agent to terminate the Listing Agreement; (4) Sellers began negotiating directly with
Buyers; (5) Sellers received a written offer in hand from Buyers that they were
prepared to sign and which would not involve the paying of any real estate
commission; (6) with Buyers’ offer in hand, Sellers contacted Agent and asked her to
accept their offer to terminate the Listing Agreement; (7) Sellers made the request to
Agent without disclosing to Agent that they were about to accept Buyers’ offer; and
(8) Sellers signed Buyers’ offer almost immediately after receiving the fully executed
Termination Agreement from Agent. Clearly, a jury could determine that Sellers
breached their duty of good faith and fair dealing by failing to disclose to Agent the
pending offer when they asked Agent to accept their offer to terminate the Listing
Agreement.
We are persuaded by our Court’s decision in Jaudon v. Swink, 51 N.C. App.
433, 276 S.E.2d 511 (1981). In Jaudon, the real estate agent had a listing agreement
with a homeowner/seller which was terminable at the will of either party. During
the term of the listing, the agent showed the seller’s home to the eventual buyers
twice. During the second showing, the buyers made an offer through the agent which
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Opinion of the Court
the seller promptly rejected. The seller then told the agent that he was terminating
their listing agreement. The next day, the buyers went back to the seller’s home and
entered into a contract to purchase the home directly from the seller. Id. at 433-34,
276 S.E.2d at 512. This Court held that the evidence in Jaudon was “sufficient to
submit to the trier of the facts [to determine] whether defendant terminated the
listing agreement in good faith.” Id. at 436, 276 S.E.2d at 513.
As in Jaudon, there is sufficient evidence in the instant case to raise a genuine
issue of material fact as to whether the Sellers breached their implied contractual
duty of good faith and fair dealing. The questions of whether the Ahmeds breached
their duty of good faith and whether Blondell is entitled to her real estate commission
are issues of fact for the jury to decide. Id.; Lindsey v. Speight, 224 N.C. 453, 455, 31
S.E.2d 371, 372 (1944). Accordingly, the trial court erred in granting the Sellers’
motion for summary judgment.
REVERSED AND REMANDED.
Judge ZACHARY concurs.
Judge BRYANT dissents by separate opinion.
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No. COA15-796 – Blondell v. Ahmed
BRYANT, Judge, dissenting.
The majority opinion reverses and remands the trial court’s order on summary
judgment, determining that there existed a genuine issue of material fact regarding
whether Sellers breached their duty of good faith and fair dealing when they
“negotiated for the termination of the Listing Agreement.” Because I do not see
evidence in the record to indicate a genuine issue of material fact, i.e., that Sellers
violated their duty of good faith and fair dealing, especially where Agent herself
represented that she no longer had an agreement with Sellers, I respectfully dissent.
I disagree with the majority that the facts are at issue. All parties agree on
the facts and the basic timeline of the relevant events. Therefore, our obligation on
appeal is to review de novo whether the trial court erred as a matter of law in granting
summary judgment. See In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576
(2008).
In order to reverse the trial court as the majority would do, there has to be
evidence to indicate Sellers intended to deceive or conceal material facts from Agent.
See In re Estate of Loftin, 285 N.C. 717, 722, 208 S.E.2d 670, 674 (1974) (citations
omitted) (holding that in order to obtain relief from a contract on the ground that it
was procured by fraud, a party must show false representation of a past or subsisting
material fact, made with fraudulent intent and with knowledge of its falsity, which
representation was relied upon when the party executed the instrument); see also
BLONDELL V. AHMED
BRYANT, J., dissenting
Hester v. Hubert Vester Ford, Inc., ___ N.C. App. ___, ___, 767 S.E.2d 129, 136 (2015)
(holding that where plaintiff presented evidence that defendant intentionally made
false representations which induced plaintiff to sign a contract, plaintiff’s claim for
fraud should survive summary judgment). However, Agent can point to nothing that
would indicate such. Rather, Agent, in her deposition and brief, is able to offer only
vague equivocations as to Sellers’ alleged intent to fraudulently conceal from plaintiff
the existence of the 9 May offer which resulted in the contract executed 11 May 2013.
In fact, in ruling on summary judgment as to Agent’s claims for breach of contract,
fraud, or unjust enrichment, the trial court particularly noted that, in addition to the
records and arguments of counsel, it reviewed the deposition of “Plaintiff Colleen
Blondell,” before determining that defendants were entitled to judgment as a matter
of law.
Agent’s vague allegations in her complaint and in her deposition fail to
establish a factual basis for her claims and are insufficient to give rise to an inference
of Sellers’ intent to deceive plaintiff. Agent’s allegations fail especially where Sellers
did not initiate contact with Buyers as Sellers did not know the identity of the party
who made the previous offer through Agent until Buyers sent their letter dated 25
April 2013. Indeed, the fact that earlier that same day, on 25 April 2013, Agent
emailed Buyers stating that she no longer worked with Sellers, cuts decidedly against
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BLONDELL V. AHMED
BRYANT, J., dissenting
Agent’s argument and the majority opinion, that Agent and Sellers’ Listing
Agreement was still valid.
In Jaudon v. Swink, 51 N.C. App. 433, 276 S.E.2d 511 (1981), upon which the
majority opinion relies, this Court found that because the seller of the real estate in
question was present when the realtor brought the buyer to the home, it could be
inferred that the seller knew the identity of the buyer. Id. at 436, 276 S.E.2d at 513.
Here, Sellers first came to know the identity of Buyers as a result of Buyers’
25 April 2013 letter to Sellers; the parties never met in person until 30 April 2013.
Despite the fact that both the seller in Jaudon and Sellers here executed contracts to
sell their respective properties the day after their listing agreements with their
realtors terminated (in Jaudon the agreement and termination were both oral), id.
at 433–34, 276 S.E.2d at 512, the facts in the instant case make clear that the
termination of the Listing Agreement was instigated by Agent on 22 April 2013, over
two weeks before Sellers executed a contract to sell their home with Buyers on 10
May 2013, regardless of when Agent ultimately signed the Termination Agreement.
Indeed, Sellers promptly returned the signed Termination Agreement on 23 April
2013, which then remained in Agent’s possession, unsigned for seventeen days. The
majority characterizes this transaction—Sellers’ signing of the Termination
Agreement on 23 April 2013—as an offer by Sellers to terminate the Listing
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BLONDELL V. AHMED
BRYANT, J., dissenting
Agreement, which offer was not accepted until signed by Agent on 10 May 2013. I
disagree with this characterization.
Nevertheless, even assuming Agent and Sellers’ obligations towards one
another were terminated at the latest on 10 May 2013, as Agent cannot point to any
evidence in the record that would give rise to an inference of fraud or
misrepresentation to survive a motion for summary judgment, I would affirm the trial
court’s entry of summary judgment in favor of Sellers.
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