Ward v. Nucapital Assocs., Inc.

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance with
the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA14-1249
Filed: 21 July 2015
Wake County, No. 14 CVD 2595
JOSEPH BRENT WARD, Plaintiff,
v.
NUCAPITAL ASSOCIATES, INC., and AC JOHNSON, Defendants.
Appeal by plaintiff from order entered 25 August 2014 by Judge Debra A.
Sasser in Wake County District Court. Heard in the Court of Appeals 7 April 2015.
Anderson Jones, PLLC, by Todd A. Jones, Christine F. Mayhew, and Lindsey
E. Powell, for plaintiff-appellant.
Russell Goetchus & Associates, PC, by Seth Percy, for defendant-appellees.
BRYANT, Judge.
Because the face of plaintiff’s complaint reveals no insurmountable bar to
recovery and the complaint contains adequate notice of the nature and extent of
plaintiff’s breach of contract claim, we hold that the trial court erred in granting
defendants’ Rule 12(b)(6) motion to dismiss and, thus, reverse and remand for further
proceedings.
On 28 February 2014, plaintiff Joseph Brent Ward filed a complaint against
defendants Nucapital Associates, Inc., and A.C. Johnson. In his complaint, plaintiff
alleged that he verbally contracted with defendants for plaintiff to enroll in a real
WARD V. NUCAPITAL ASSOCIATES, INC., ET AL
Opinion of the Court
estate course which was to include the provision of articles, spreadsheets, wholesaling
information, local contacts for investment purposes and “a promise of helping . . .
Plaintiff in five wholesale real estate closings (in which Defendants earned a
percentage of each closing).” Plaintiff paid defendants $7,500.00. Defendants
provided “written information, articles, spreadsheets, wholesaling information, and
local contacts for investment purposes to Plaintiff.” However, “Plaintiff has notified
Defendants of the discontent of the course and information provided” and requested
a refund, which defendants denied. Specifically, plaintiff asserted that he received
no help from defendants in participating in five wholesale real estate closings.
Plaintiff sought recovery on the basis of breach of contract, quantum meruit and
quantum valebant/unjust enrichment.
On 12 May 2014, defendants Nucapital Associates, Inc., and A.C. Johnson filed
separate motions to dismiss plaintiff’s complaint pursuant to Civil Procedure Rule
12(b)(6) for failure to state a claim upon which relief could be granted.
During a hearing held on 22 August 2014, the trial court inquired as to whether
plaintiff had asserted that the time frame defendants had to perform under the terms
of the contract had expired. Noting that plaintiff failed to allege when defendants’
performance was supposed to happen, the trial court reasoned that plaintiff could not
prevail on an action for breach of contract. And, as plaintiff alleged the existence of
an actual contract, the trial court rendered a ruling that plaintiff’s claims for recovery
under theories of quantum meruit and quantum valebant/unjust enrichment were
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precluded. In its 25 August 2014 order, the trial court found that plaintiff failed to
state a claim upon which recovery could be granted and, thus, granted defendants’
Rule 12(b)(6) motion to dismiss plaintiff’s complaint. Plaintiff appeals.
______________________________________
On appeal, plaintiff raises the following issues: Whether the trial court erred
by dismissing his claims for (I) breach of contract and (II) unjust enrichment pursuant
to Rule 12(b)(6).
Standard of review
“The standard of review of an order granting a 12(b)(6) motion is whether the
complaint states a claim for which relief can be granted under some legal theory when
the complaint is liberally construed and all the allegations included therein are taken
as true.” Burgin v. Owen, 181 N.C. App. 511, 512, 640 S.E.2d 427, 428 (2007) (citation
omitted). “[O]ur Court conducts a de novo review of the pleadings to determine their
legal sufficiency and to determine whether the trial court's ruling on the motion to
dismiss was correct.” Page v. Lexington Ins. Co., 177 N.C. App. 246, 248, 628 S.E.2d
427, 428 (2006) (citation and quotations omitted).
Dismissal under Rule 12(b)(6) is proper when one of the
following three conditions is satisfied: (1) the complaint on
its face reveals that no law supports the plaintiff's claim;
(2) the complaint on its face reveals the absence of facts
sufficient to make a good claim; or (3) the complaint
discloses some fact that necessarily defeats the plaintiff's
claim.
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Opinion of the Court
Allred v. Capital Area Soccer League, Inc., 194 N.C. App. 280, 282—83, 669 S.E.2d
777, 778 (2008).
Thus, a complaint is deemed sufficient to withstand a
motion to dismiss under Rule 12(b)(6) where no
“insurmountable bar” to recovery appears on the face of the
complaint and the complaint's allegations give adequate
notice of the nature and extent of the claim. Presnell v.
Pell, 298 N.C. 715, 719, 260 S.E.2d 611, 613 (1979). . . .
Under Rule 12(b)(6), unless matters outside the pleadings
are presented such that the court treats the motion as one
for summary judgment under N.C. R. Civ. P. 56, the motion
does not present the merits of the action, but only whether
the merits may be reached. Thus, the issue is not whether
a plaintiff will ultimately prevail but whether the claimant
is entitled to offer evidence to support the claims.
Johnson v. Bollinger, 86 N.C. App. 1, 4, 356 S.E.2d 378, 380—81 (1987) (citations and
quotations omitted). Further, “[a] claim for relief should not suffer dismissal unless
it affirmatively appears that plaintiff is entitled to no relief under any state of facts
which could be presented in support of the claim.” Presnell, 298 N.C. at 719, 260
S.E.2d at 613 (citation omitted).
I
On appeal, plaintiff argues that the trial court erred by dismissing his cause of
action for breach of contract. Plaintiff contends that he stated all requisite elements
of a breach of contract and that the time for performance is not a required element
for a breach of contract claim at the pleadings stage. We agree.
“In a breach of contract action, a complainant must show that there is (1)
existence of a valid contract, and (2) breach of the terms of that contract.” Sanders v.
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State Pers. Comm'n, 197 N.C. App. 314, 320, 677 S.E.2d 182, 187 (2009) (citation and
quotations omitted).
In support of his argument that the time for performance is not a required
element to state a claim for breach of contract, plaintiff cites Sockwell & Associates,
Inc. v. Sykes Enterprises Inc., 127 N.C. App. 139, 487 S.E.2d 795 (1997). In Sockwell,
the plaintiff Sockwell was an employee recruitment firm which entered into a
contract with the defendant, Sykes Enterprises Inc. (SEI). Id. at 140, 487 S.E.2d at
796. The contract provided that if SEI were to cancel Sockwell’s services, SEI would
be responsible for all expenses incurred and professional services rendered before
notice of cancellation was received. Id. Sockwell performed under the contract and
presented two candidates for SEI’s consideration. Thereafter, despite having
received two invoices, SEI failed to make any payment to Sockwell. Id. at 141, 487
S.E.2d at 796. Setting aside a jury verdict in favor of Sockwell on a claim for breach
of contract, the trial court reasoned that because the contract did not specify a time
by which payments were to be made, it was impossible to determine whether a breach
had occurred. Id. at 142, 487 S.E.2d at 797. This Court reversed the judgment,
holding that the trial court had misapplied the law: “[s]pecificity of payment due
dates is not required to show breach of contract for nonpayment. Our courts have
held that where no date for payment is specified in the contract, the courts will
presume a reasonable time.” Id. (citations omitted).
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Opinion of the Court
We also consider Phoenix Ltd. Partnership of Raleigh v. Simpson, 201 N.C.
App. 493, 688 S.E.2d 717 (2009), in which the plaintiff and the defendants entered
into an agreement for the sale of real property but never reached a closing. An
environmental assessment revealed the presence of contaminants, and the
defendants indicated they would rehabilitate the property rather than sell it as
contaminated property. Four years later, the plaintiff learned that the defendants
had entered into an agreement to sell the property to a third-party. The plaintiff filed
an action against the defendants claiming breach of contract. In an order for partial
summary judgment, the trial court granted the plaintiff the relief of specific
performance. On appeal, this Court considered whether the plaintiff had waived the
right to compel the defendants’ performance. Id. at 499—500, 688 S.E.2d at 722. The
Phoenix Court reasoned that “in order for the clock to start ticking on the reasonable
time frame [beyond which the plaintiff may be deemed to have waived the right to
compel specific performance], [the] defendants were required to notify [the] plaintiff
that they had completed their cleanup and were ready and able to perform.” Id. at
505, 688 S.E.2d at 725. Thus, the Court did not need to consider whether the
plaintiff’s action for specific performance was filed within a reasonable time period to
uphold the trial court’s order in favor of the plaintiff on its claim for breach of contract.
Therefore, as the provision of a specific time period for performance was not a
dispositive factor in the plaintiff’s claim for breach of contract in either Sockwell &
Associates, Inc., or Phoenix Ltd. Partnership, the failure to assert when a party’s
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Opinion of the Court
performance becomes due is not, standing alone, fatal to a claim for breach of
contract.1
In the complaint before us, plaintiff alleges that he entered into a verbal
contract with defendants “for a real estate course that included . . . Defendants
providing articles, spreadsheets, wholesaling information, local contacts for
investment purposes and a promise of helping . . . Plaintiff in five wholesale real
estate closings . . . .” Plaintiff alleges that he paid defendants $7,500.00 for the real
estate course, and that defendants “provided [plaintiff with] written information,
articles, spreadsheets, wholesaling information, and local contacts for investment
purposes . . . .” However, “Plaintiff has received no help in participating in five
wholesale real estate closings.” Further, plaintiff alleges that he made numerous
attempts to collect a refund from defendants, including sending a demand letter, all
to no avail. Plaintiff has alleged the essential elements of a breach of contract, i.e.,
the existence of a valid contract and a breach of the terms of that contract. See
Sanders, 197 N.C. App. at 320, 677 S.E.2d at 187. By this holding, at the 12(b)(6)
stage, we of course make no projection as to whether plaintiff can prevail on the
merits at the summary judgment stage, only that plaintiff has the right to proceed to
the merits of the case. “Thus, the issue is not whether . . . plaintiff will ultimately
1 We acknowledge that this Court’s opinions in Sockwell & Associates and Phoenix Ltd.
Partnership did not address rulings made at the pleadings stage, but still, we find their guidance
instructive.
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Opinion of the Court
prevail but whether [plaintiff] is entitled to offer evidence to support the claims.”
Johnson, 86 N.C. App. at 4, 356 S.E.2d at 381 (citation and quotations omitted).
As a second ground for the trial court’s 12(b)(6) dismissal of plaintiff’s breach
of contract claim, defendants allege that they owed a duty to help plaintiff in five real
estate closings only after plaintiff had properties under contract. Thus, defendants
argue, because the complaint fails to allege that plaintiff had properties under
contract, the complaint lacks sufficient assertions to satisfy the required element of
breach.
Defendants’ argument amounts to the imposition of a condition precedent prior
to the accrual of defendants’ performance. “A condition precedent is a fact or event,
occurring subsequently to the making of a valid contract, that must exist or occur
before there is a right to immediate performance, before there is a breach of contract
duty . . . .” Cox v. Funk, 42 N.C. App. 32, 34, 255 S.E.2d 600, 601 (1979); accord
Mosely v. WAM, Inc., 167 N.C. App. 594, 600, 606 S.E.2d 140, 144 (2004). We note
that “[c]onditions precedent are not favored by the law.” Craftique, Inc. v. Stevens
and Co., 321 N.C. 564, 566, 364 S.E.2d 129, 131 (1988) (citation omitted).
Contractual provisions will not be construed as conditions precedent in the
absence of language clearly and unambiguously requiring such construction. In re
Foreclosure of Goforth Props., Inc., 334 N.C. 369, 375—76, 432 S.E.2d 855, 859 (1993).
Language that clearly requires the construction of a condition precedent includes “the
use of such words as ‘when,’ ‘after,’ ‘as soon as,’ and the like[,]” because such language
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Opinion of the Court
“gives clear indication that a promise is not to be performed except upon the
happening of a stated event.” Id. at 376, 432 S.E.2d at 859 (citations and quotations
omitted).
There is no indication on the face of the complaint that the oral agreement
between plaintiff and defendants contained language such as “when,” “after,” or “as
soon as” when describing at what point defendants’ duty to help plaintiff with the
closings would accrue. Rather, plaintiff only alleges that defendants agreed to “help”
with closings. Therefore, because the complaint alleges no condition that was to occur,
or promise to be performed before defendants’ duty to perform accrued, defendants’
argument that plaintiff’s failure to assert the satisfaction of a condition precedent—
that he had properties under contract—compels the dismissal of his breach of contract
claim pursuant to Rule 12(b)(6), is overruled.
We hold that no insurmountable bar to recovery appears on the face of the
complaint, and as the complaint gives notice of the nature and extent of plaintiff’s
claim, plaintiff is entitled to present evidence to support his claim. See Johnson, 86
N.C. App. at 4, 356 S.E.2d at 380—81. Accordingly, the trial court’s order is reversed
and this matter remanded for further proceedings.
II
We do not further address plaintiff’s argument regarding relief under a theory
of quantum meruit.
REVERSED AND REMANDED.
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Opinion of the Court
Judges DAVIS and INMAN concur.
Report per Rule 30(e).
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