{ "id": 8522641, "name": "KENNETH F. MIZELL, Plaintiff v. GREENSBORO JAYCEES-GREENSBORO JUNIOR CHAMBER OF COMMERCE, INC., Defendant and Third-Party Plaintiff v. CONEX PARTNERSHIP, a North Carolina General Partnership consisting of Jacob H. Froelich, Jr., J. Hyatt Hammond, George W. Lyles, Jr., and Robinson O. Everett, Third-Party Defendant", "name_abbreviation": "Mizell v. Greensboro Jaycees-Greensboro Junior Chamber of Commerce, Inc.", "decision_date": "1992-02-04", "docket_number": "No. 9118SC242", "first_page": "284", "last_page": "290", "citations": [ { "type": "official", "cite": "105 N.C. App. 284" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "40 ALR3d 920", "category": "reporters:specialty", "reporter": "A.L.R. 3d", "opinion_index": -1 }, { "cite": "206 S.E.2d 162", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "opinion_index": 0 }, { "cite": "285 N.C. 418", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565013 ], "year": 1974, "opinion_index": 0, "case_paths": [ "/nc/285/0418-01" ] }, { "cite": "202 S.E.2d 334", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1974, "pin_cites": [ { "page": "341" } ], "opinion_index": 0 }, { "cite": "20 N.C. App. 528", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554226 ], "year": 1974, "opinion_index": 0, "case_paths": [ "/nc-app/20/0528-01" ] }, { "cite": "200 S.E. 398", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1939, "opinion_index": 0 }, { "cite": "214 N.C. 703", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8632892 ], "year": 1939, "opinion_index": 0, "case_paths": [ "/nc/214/0703-01" ] }, { "cite": "194 S.E.2d 133", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1973, "pin_cites": [ { "page": "146", "parenthetical": "citations omitted" }, { "page": "146", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "282 N.C. 585", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567948 ], "weight": 2, "year": 1973, "pin_cites": [ { "page": "604", "parenthetical": "citations omitted" }, { "page": "604", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/282/0585-01" ] }, { "cite": "72 S.E.2d 44", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1952, "opinion_index": 0 }, { "cite": "236 N.C. 59", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8622299 ], "year": 1952, "opinion_index": 0, "case_paths": [ "/nc/236/0059-01" ] }, { "cite": "38 S.E.2d 158", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1946, "pin_cites": [ { "page": "160" } ], "opinion_index": 0 }, { "cite": "226 N.C. 385", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8619920 ], "year": 1946, "pin_cites": [ { "page": "387" } ], "opinion_index": 0, "case_paths": [ "/nc/226/0385-01" ] }, { "cite": "59 S.E. 700", "category": "reporters:state_regional", "reporter": "S.E.", "weight": 2, "year": 1907, "opinion_index": 0 }, { "cite": "146 N.C. 281", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 11270962 ], "year": 1907, "pin_cites": [ { "page": "282" } ], "opinion_index": 0, "case_paths": [ "/nc/146/0281-01" ] }, { "cite": "353 S.E.2d 107", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1987, "pin_cites": [ { "page": "132" } ], "opinion_index": 0 }, { "cite": "319 N.C. 103", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4743692, 4740912, 4746258, 4740023, 4740696 ], "year": 1987, "opinion_index": 0, "case_paths": [ "/nc/319/0103-04", "/nc/319/0103-02", "/nc/319/0103-03", "/nc/319/0103-01", "/nc/319/0103-05" ] }, { "cite": "349 S.E.2d 75", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1986, "pin_cites": [ { "page": "76" }, { "page": "78" } ], "opinion_index": 0 }, { "cite": "83 N.C. App. 131", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8358150 ], "weight": 2, "year": 1986, "pin_cites": [ { "page": "134" } ], "opinion_index": 0, "case_paths": [ "/nc-app/83/0131-01" ] }, { "cite": "274 S.E.2d 226", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "opinion_index": 0 }, { "cite": "301 N.C. 402", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566922, 8566955, 8567057, 8567092, 8567128 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/301/0402-01", "/nc/301/0402-02", "/nc/301/0402-03", "/nc/301/0402-04", "/nc/301/0402-05" ] }, { "cite": "268 S.E.2d 539", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "541" } ], "opinion_index": 0 }, { "cite": "48 N.C. App. 64", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549041 ], "year": 1980, "pin_cites": [ { "page": "67" } ], "opinion_index": 0, "case_paths": [ "/nc-app/48/0064-01" ] }, { "cite": "269 S.E.2d 608", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1980, "pin_cites": [ { "page": "610", "parenthetical": "citation omitted" }, { "page": "611", "parenthetical": "emphasis added" }, { "page": "613" }, { "page": "613" } ], "opinion_index": 0 }, { "cite": "301 N.C. 58", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561103 ], "year": 1980, "pin_cites": [ { "page": "61", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/301/0058-01" ] } ], "analysis": { "cardinality": 708, "char_count": 15544, "ocr_confidence": 0.728, "pagerank": { "raw": 1.5342160695284873e-07, "percentile": 0.6716891602560613 }, "sha256": "a8c9717c80990b06b3f69f5ac158205273b8f47398c43614a094f5b521fe6545", "simhash": "1:9fb4cc0e40fe2d45", "word_count": 2596 }, "last_updated": "2023-07-14T19:24:40.355340+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges WELLS and ORR concur." ], "parties": [ "KENNETH F. MIZELL, Plaintiff v. GREENSBORO JAYCEES-GREENSBORO JUNIOR CHAMBER OF COMMERCE, INC., Defendant and Third-Party Plaintiff v. CONEX PARTNERSHIP, a North Carolina General Partnership consisting of Jacob H. Froelich, Jr., J. Hyatt Hammond, George W. Lyles, Jr., and Robinson O. Everett, Third-Party Defendant" ], "opinions": [ { "text": "LEWIS, Judge.\nThe facts are undisputed. On 1 October 1980, Southern Life Insurance Company conveyed land located at 332 South Greene Street (headquarters) in Greensboro, North Carolina to the defendants, the Jay cees and Junior Chamber of Commerce (Jay cees). The deed contained the following reservation of a right to Southern Life:\nIf at any time prior to the 25th anniversary of this conveyance to the Grantee [Jaycees], the Grantee should receive a bona fide written offer from a third party to purchase the property herein conveyed, which offer Grantee desires to accept, the grantee shall first give to Grantor, [Southern Life], or its successor in title [Conex] to the remaining property adjoining the property herein conveyed, thirty (30) days\u2019 written notice of such offer. ...\n(Emphasis added). Conex Partnership became the successor-in-interest to Southern Life\u2019s right of first refusal in the headquarters.\nOn 13 February 1989, plaintiff, Kenneth Mizell, as a \u201cthird party\u201d made an offer tp purchase the headquarters for $220,000.00 subject to the right of first refusal in Conex. There is no evidence in the record or the briefs of Mr. Mizell or the Jaycees as to the exact words in this offer. However, Conex\u2019s brief excerpts the reference to the right of first refusal as follows: \u201cThis Contract is subject to the terms of that certain right of first refusal contained in the deed to Seller . . . which right of first refusal is now held by the adjacent property owner, Conex Partnership, as Successor-in-Title to Southern Life Insurance Company.\u201d The Jaycees entered into a written contract for the sale of the headquarters and accepted Mr. Mizell\u2019s tender of $10,000.00 earnest money.\nAlso on 13 February 1989, Conex received thirty days written notice of Mr. Mizell\u2019s offer. By letter dated 15 March 1989, Conex notified the Jaycees of its exercise of the right of first refusal and set 14 April as the closing date. Conex paid the Jaycees $10,000.00 in earnest money and executed a sales contract which provided the same terms and conditions as those contained in Mr. Mizell\u2019s contract. On 16 March 1989, the Jaycees notified Mr. Mizell that Conex had exercised its right of first refusal and returned his $10,000.00 earnest money deposit. Mr. Mizell notified the Jaycees that he would remain ready to purchase the headquarters if the deal with Conex was not consummated. The closing did not occur as scheduled. In exchange for the Jaycees\u2019 agreement to extend the closing date to 28 April 1989, Conex, by letter dated 14 April 1989, agreed to reimburse the Jaycees for their carrying costs. Closing was again delayed and did not occur until 30 May 1989.\nOn 26 May 1989, Mr. Mizell filed a breach of contract action against the Jaycees and requested specific performance. Mr. Mizell also filed notice of lis pendens. In oral argument before this Court, Conex admitted to knowledge of the lis pendens filing prior to closing. The Jaycees filed a third-party complaint against Conex. As the facts were not in dispute, all parties requested summary judgment. The trial court granted summary judgment in favor of Conex. Plaintiff appeals.\nPlaintiff\u2019s argument is two-fold; first, the right of first refusal retained by Southern Life violates the rule against perpetuities and is therefore void as a matter of law and second, Conex\u2019s right of first refusal expired when closing was not held within 30 days. As we rule in plaintiff\u2019s favor based upon his first argument, we do not address the second.\nSometimes called a \u201cright of first refusal,\u201d \u201c[a] preemptive right \u2018requires that, before the property conveyed may be sold to another party, it must first be offered to the conveyor. . . .\u2019 \u201d Smith v. Mitchell, 301 N.C. 58, 61, 269 S.E.2d 608, 610 (1980) (citation omitted). \u201cPreemptive provisions may be contained in leases, (citation omitted), in contracts, (citation omitted), or ... in restrictive covenants contained in deeds or recorded in chains of title.\u201d Id. at 61, 269 S.E.2d at 611 (emphasis added). To be valid, preemptive provisions must be reasonable as to both duration and as to price. Id. at 66, 269 S.E.2d at 613. In Smith, our Supreme Court limited the \u201cduration of the right [of first refusal] to a period within the rule against perpetuities. . . .\u201d Id. The time limitation in the rule against perpetuities, i.e., a life in being plus 21 years, is shortened to 21 years \u201cin gross\u201d when no life in being is to be considered. Rodin v. Merritt, 48 N.C. App. 64, 67, 268 S.E.2d 539, 541 (1980), disc. rev. denied, 301 N.C. 402, 274 S.E.2d 226 (1980). The Smith Court determined that a price is reasonable if it somehow links \u201cthe price to the fair market value of the land, or to the price the seller is willing to take from third parties.\u201d Smith, at 66, 269 S.E.2d at 613.\nIn Coxe v. Wyatt, 83 N.C. App. 131, 349 S.E.2d 75 (1986), disc. rev. denied, 319 N.C. 103, 353 S.E.2d 107 (1987), a vendor sold a tract of land (first tract) to purchaser and gave him a right of first refusal in a second tract. Vendor accepted an offer to purchase the second tract from defendant Wyatt which stated: \u201c[t]his offer is subject to the right of first refusal, if effective, in favor of [purchaser] as found in Book. . . .\u201d Id. at 132, 349 S.E.2d at 76. Vendor notified purchaser of Wyatt\u2019s offer and purchaser in turn notified vendor of its intent to exercise its right of first refusal to purchase the second tract.\nUpon notification of purchaser\u2019s intent to exercise its right, Wyatt claimed that the right of first refusal was invalid and that vendor was contractually obligated to convey the property to Wyatt. When purchaser threatened suit, vendor filed a declaratory judgment action to determine the parties\u2019 legal rights in this property. Because purchaser\u2019s right of first refusal did not mention a time limit, the Coxe Court held that it violated the rule against perpetuities. Despite Wyatt\u2019s reference to the right of first refusal \u201cif effective,\u201d the Court found this language \u201cinsignificant because that right [was] void as a matter of law.\u201d Coxe, 83 N.C. App. at 134, 349 S.E.2d at 78. Vendor\u2019s acceptance of Wyatt\u2019s signed written offer \u201ccreated a valid and enforceable contract.\u201d Id. Despite purchaser\u2019s claims to the contrary, the Coxe Court found that vendor\u2019s letter notifying purchaser of Wyatt\u2019s offer did not constitute an \u201cunconditional offer\u201d to purchase independent of its right of first refusal. Id.\nThe case at bar takes Coxe one step further in time: the property in question changed hands prior to an adjudication of the parties\u2019 rights. Upon acceptance of the offer and the earnest money deposit, the Jayeees entered into a written contract with Mr. Mizell to purchase the headquarters. Like Coxe, a binding contract was formed at this point. The Jayeees only rightful means to avoid this Contract was to transfer the headquarters to Conex pursuant to a valid right of first refusal. Transfer pursuant to an invalid right of first refusal would be a repudiation and as such, the Jayeees would be liable to Mr. Mizell. The right of first refusal here, as in Coxe, violates the rule against perpetuities because Southern Life\u2019s reservation of right for 25 years extends beyond 21 years in gross. As such, this reservation of right is void and the Jayeees\u2019 conveyance pursuant to this right is, therefore, a repudiation of the Contract with Mr. Mizell. As in Coxe, Mr. Mizell\u2019s offer\u2019s reference to the right of first refusal is insignificant, as the right was void as a matter of law. Hence, Mr. Mizell has the superior claim to purchase the headquarters.\nThe singular difference between Coxe and the case at bar is that Mr. Mizell voluntarily accepted the return of his earnest money without first stating his claim that the right of first refusal was void. Our review of the Coxe briefs and record does not reveal any mention of a preclosing exchange of funds. This difference leaves the unanswered question: did the voluntary acceptance of the return of his earnest money deposit cause Mr. Mizell to waive his claim to assert an otherwise valid and binding contract with the Jayeees?\nEarnest money is \u201c[a] sum of money paid by a buyer at the time of entering a contract to indicate the intention and ability of the buyer to carry out the contract.\u201d Black\u2019s Law Dictionary 456 (5th ed. 1979). Our Supreme Court defined earnest money as \u201cpart payment of the purchase price of the property.\u201d Davis v. Martin, 146 N.C. 281, 282, 59 S.E. 700 (1907). \u201cIt is a term taken from the civil law, and was more generally used in connection with the sales of personalty to \u2018bind the bargain.\u2019 \u201d Id. Earnest money is not the consideration upon which the contract of sale is predicated. The only consideration necessary is the contract price. Crotts v. Thomas, 226 N.C. 385, 387, 38 S.E.2d 158, 160 (1946). Hence, the tender and acceptance of earnest money is neither the foundation nor an essential element of a contract to purchase land. Its tender is merely a tangible symbol of good faith.\nDefendant argues that the converse of tender, the voluntary acceptance of the return of the earnest money, caused Mr. Mizell to waive his right to assert the contract. We disagree. Plaintiff asserts the contract and seeks specific performance. Specific performance is used to compel a party to meet his contractual obligations; it is not used to rewrite a contract or to create new contractual duties. 12 N.C. Index 3d, Specific Performance \u00a7 1 (1978); See, McLean v. Keith, 236 N.C. 59, 72 S.E.2d 44 (1952). In order to seek specific performance, plaintiff must show a valid contract and his offer to perform. Peaseley v. Virginia Iron, Coal & Coke Co., 282 N.C. 585, 604, 194 S.E.2d 133, 146 (1973) (citations omitted). Plaintiff\u2019s offer to perform does not have to be shown where defendant refused to honor or repudiates the contract. See, Peaseley v. Virginia Iron, Coal & Coke Co., 282 N.C. 585, 604, 194 S.E.2d 133, 146 (1973) (citation omitted).\nWaiver of the right to seek specific performance of a contract requires: 1) abandonment of the contract, 2) acquiescence in breach of the contract, or 3) conduct inconsistent with specific performance. 81 C.J.S. Specific Performance \u00a7 25 (1977). The right to seek specific performance is waived for \u201c[l]ong delay, accompanied by acts inconsistent with the purpose of seeking specific performance.\u201d 12 N.C. Index 3d, Specific Performance \u00a7 2 (1978); Ritter v. Chandler, 214 N.C. 703, 200 S.E. 398 (1939). \u201cAs long as plaintiff is able, ready, and willing to perform the conditions of the contract remaining to be performed, he will not be barred from relief by specific performance where his failure fully to perform is excused.\u201d 81 C.J.S. Specific Performance \u00a7 111 (1977).\nMr. Mizell did not waive his right to specific performance. We do not find that acceptance of the return of earnest money was conduct inconsistent with specific performance. Mr. Mizell did everything in his power to keep the contract alive. He made it abundantly clear to the Jaycees that he would remain ready to complete the contract if the deal fell through with Conex. In oral arguments, all conceded that Mr. Mizell made known his intention to remain \u201cable, ready, and willing to perform\u201d the contract. Hence, Mr. Mizell is entitled to specific performance despite his accepting the return of his earnest money. It appears from the record that in doing so, Mr. Mizell acted in good faith, without delay, and thus the return of his earnest money did not waive his right to specific performance of the contract with the Jaycees.\nWe note that \u201c[w]here the court orders specific performance of a contract to convey land which has been conveyed by the vendor to, and paid for by, a third person, the judgment should not declare the third person\u2019s deed void and direct payment of the purchase money to the vendor but should require a conveyance by the third person and entitle him to the purchase money.\u201d 12 N.C. Index 3d, Specific Performance \u00a7 1; See, Lawing v. Jaynes, 20 N.C. App. 528, 202 S.E.2d 334, (1974), modified on other grounds, 285 N.C. 418, 206 S.E.2d 162 (1974). On remand, the trial court should order Conex to convey the headquarters to Mr. Mizell in accord with Lawing and Mr. Mizell is ordered to pay the purchase price of $220,000.00 to Conex.\nConex argues that it should be awarded its costs of carrying the property in question. \u201cWhere a third party buys from [vendor] with actual notice or knowledge of the suit, and its nature and purpose, and the specific property to be affected, he takes title burdened with the same obligations as his grantors.\u201d Lawing, at 538, 202 S.E.2d at 341. As Conex admitted to knowledge of the lis pendens filed by Mr. Mizell prior to closing on the headquarters, the claim for carrying costs is denied.\nReversed and remanded.\nJudges WELLS and ORR concur.", "type": "majority", "author": "LEWIS, Judge." } ], "attorneys": [ "Carruthers & Roth, P.A., by Richard L. Vanare and Barbara L. Curry, for plaintiff-appellant.", "Nichols, Caffrey, Hill, Evans & Murrelle, by Richard L. Pinto and Gregory A. Stakias, for defendant and third-party plaintiff.", "Hugh C. Bennett, Jr. for third-party defendant Conex Partnership." ], "corrections": "", "head_matter": "KENNETH F. MIZELL, Plaintiff v. GREENSBORO JAYCEES-GREENSBORO JUNIOR CHAMBER OF COMMERCE, INC., Defendant and Third-Party Plaintiff v. CONEX PARTNERSHIP, a North Carolina General Partnership consisting of Jacob H. Froelich, Jr., J. Hyatt Hammond, George W. Lyles, Jr., and Robinson O. Everett, Third-Party Defendant\nNo. 9118SC242\n(Filed 4 February 1992)\n1. Deeds \u00a7 59 (NCI4th)\u2014 first refusal \u2014 rule against perpetuities \u2014void\nA right of first refusal was void and a conveyance to the third party defendant pursuant to that right was a repudiation of a purchase contract with plaintiff where the right of first refusal violated the rule against perpetuities because its reservation of right for 25 years extended beyond 21 years in gross.\nAm Jur 2d, Perpetuities and Restraints on Alienation \u00a7\u00a7 65, 85.\nPre-emption rights to realty as violation of rule against perpetuities or rule concerning restraints on alienation. 40 ALR3d 920.\n2. Specific Performance \u00a7 2 (NCI3d)\u2014 offer to purchase property \u2014 void right of first refusal exercised \u2014 earnest money returned \u2014 specific performance not waived\nPlaintiff did not waive his right to specific performance where he made an offer to purchase property and his tender of earnest money was accepted; the third party defendant exercised its right of first refusal; plaintiff accepted the return of his earnest money; and the right of first refusal was held to be in violation of the rule against perpetuities. Plaintiff did everything in his power to keep the contract alive, making it abundantly clear that he would remain ready to complete the contract. On remand, the trial court should order the third party to convey the property to plaintiff and plaintiff to pay the purchase price to the third party.\nAm Jur 2d, Specific Performance \u00a7\u00a7 97, 98.\n3. Vendor and Purchaser \u00a7 10 (NCI3d)\u2014 right of first refusal void \u2014 purchased with knowledge of lis pendens \u2014 carrying costs denied\nA third party defendant which purchased property pursuant to a void right of first refusal and which was ordered to convey the property to plaintiff was denied its claim for carrying costs because it admitted knowledge of the lis pendens filed by plaintiff.\nAm Jur 2d, Lis Pendens \u00a7\u00a7 10, 11, 21, 40.\nAPPEAL by plaintiff from a judgment entered 27 December 1990 by Judge Samuel T. Currin in GUILFORD County Superior Court. Heard in the Court of Appeals 4 December 1991.\nCarruthers & Roth, P.A., by Richard L. Vanare and Barbara L. Curry, for plaintiff-appellant.\nNichols, Caffrey, Hill, Evans & Murrelle, by Richard L. Pinto and Gregory A. Stakias, for defendant and third-party plaintiff.\nHugh C. Bennett, Jr. for third-party defendant Conex Partnership." }, "file_name": "0284-01", "first_page_order": 312, "last_page_order": 318 }