{ "id": 11916228, "name": "WILLIAM E. NORTHINGTON and NORTHINGTON REALTY COMPANY, Plaintiffs JOHN MICHELOTTI and ADVANTAGE REAL ESTATE, INC., Defendants", "name_abbreviation": "Northington v. Michelotti", "decision_date": "1995-12-19", "docket_number": "No. COA95-79", "first_page": "180", "last_page": "185", "citations": [ { "type": "official", "cite": "121 N.C. App. 180" } ], "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": "266 S.E.2d 593", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "602" } ], "opinion_index": 0 }, { "cite": "300 N.C. 204", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560941 ], "year": 1980, "pin_cites": [ { "page": "217" } ], "opinion_index": 0, "case_paths": [ "/nc/300/0204-01" ] }, { "cite": "208 S.E.2d 692", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "695", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "285 N.C. 730", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8569825 ], "year": 1974, "pin_cites": [ { "page": "734", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/285/0730-01" ] }, { "cite": "250 S.E.2d 587", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1978, "pin_cites": [ { "page": "594" } ], "opinion_index": 0 }, { "cite": "296 N.C. 212", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565499 ], "year": 1978, "pin_cites": [ { "page": "221" } ], "opinion_index": 0, "case_paths": [ "/nc/296/0212-01" ] }, { "cite": "340 S.E.2d 510", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "512" } ], "opinion_index": 0 }, { "cite": "79 N.C. App. 688", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523153 ], "year": 1986, "pin_cites": [ { "page": "690" } ], "opinion_index": 0, "case_paths": [ "/nc-app/79/0688-01" ] } ], "analysis": { "cardinality": 543, "char_count": 11361, "ocr_confidence": 0.765, "pagerank": { "raw": 2.678172350063448e-07, "percentile": 0.8264267530655263 }, "sha256": "c4fc7f37c01b381815a2246900c793eece888036d42236f9f932f350239d683b", "simhash": "1:02b63d3d1fb17b31", "word_count": 1763 }, "last_updated": "2023-07-14T20:54:48.563497+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges JOHNSON and SMITH concur." ], "parties": [ "WILLIAM E. NORTHINGTON and NORTHINGTON REALTY COMPANY, Plaintiffs JOHN MICHELOTTI and ADVANTAGE REAL ESTATE, INC., Defendants" ], "opinions": [ { "text": "WALKER, Judge.\nPlaintiff Northington Realty Company (Northington Realty) is a Winston-Salem corporation owned by plaintiff William E. Northington (Northington) and his wife. In April, 1993, the corporation was operating as a Century 21 real estate franchise. Defendant John Michelotti (Michelotti) was the sales manager and broker-in-charge of Northington Realty until his resignation on 19 April 1993. Michelotti stayed on at Northington Realty as an independent contractor/sales agent through the end of the month.\nIn May 1993, Michelotti sought to purchase an existing Century 21 franchise, but Northington opposed such a purchase. On 20 May 1993, following negotiations regarding future business dealings, Northington and Michelotti signed a document prepared by Northington in his own handwriting. The document read as follows: This Agreement of Understanding entered into by Mr. John N. Michelotti and Mr. William E. Northington documents an agreement that they have entered into. The agreement is as follows:\n1) Michelotti and his wife are operating a Century 21 Real Estate Franchize [sic] known as Century 21 Advantage. Michelotti and his wife will incorporate this franchize [sic] as soon as possible since time is of the essence. The stock issued will be as follows\u2014 Northington to receive 65% of the stock and Michelotti to receive 35% of the stock.\n2) Northington is operating a Century 21 real estate office known as Century 21 Alliance through a corporation known as Northington Realty. In exchange for the 65% ownership of Century 21 Advantage Northington will transfer . . . 35% of their shares to Michelotti. Thus the distribution of the outstanding shares of Northington Realty will be Michelotti 35% and the Northington\u2019s [sic] 65%.\n3) It is also agreed between the parties that there shall exist an understanding between the parties ... that addresses the issue of:\na) Buy out of one stock holder of the other.\nb) [A] non compete agreement between the parties.\nc) That ownership in any future business activities in the area of real estate, construction, insurance or real estate support services will be on a 50/50 ownership.\nThereafter, on 28 May 1993, Michelotti formed defendant Advantage Real Estate, Inc. (Advantage Real Estate) as a Century 21 franchise. Plaintiffs immediately began transferring the majority of the corporate assets of Northington Realty to Advantage Real Estate. On 9 June 1993, after meeting with Michelotti and Northington, Michelotti\u2019s attorney, Mr. W. McNair Tornow, faxed to Northington\u2019s attorney a document labeled \u201cLetter of Intent.\u201d This document contained terms reflecting the general information found in the handwritten document of 20 May 1993, along with specific terms regarding the issues raised in Paragraph 3 of the handwritten document. The \u201cLetter of Intent\u201d also contained a provision regarding Northington\u2019s agreement to be a passive investor in Advantage Real Estate.\nOn 2 July 1993, the parties executed a Department of the Treasury Internal Revenue Service Form 2553, requesting the federal government to grant Advantage Real Estate \u201cS corporation\u201d status for tax purposes. This form reflected that Northington owned 65% of Advantage Real Estate and Michelotti owned 35%.\nAfter the Form 2553 was executed, Northington informed Michelotti that he did not agree with the contents of the \u201cLetter of Intent\u201d and that he would not sign it. No stock was ever transferred between the parties.\nPlaintiffs instituted this action on 4 November 1993, alleging breach of contract, unjust enrichment, breach of fiduciary duty, a claim for dividends, and punitive damages. Michelotti filed a counterclaim seeking compensation from Northington Realty based on his services as sales manager and broker-in-charge of that corporation. Plaintiffs filed a motion for partial summary judgment on their breach of contract claim. Following a'hearing, the trial court granted plaintiffs\u2019 motion and ordered that the shares of stock in defendant Advantage Real Estate be issued in accordance with the agreement. Summary judgment is appropriate only when there is no genuine issue of material fact to be resolved, thereby entitling the movant to judgment as a matter of law. Little v. National Service Industries, Inc., 79 N.C. App. 688, 690, 340 S.E.2d 510, 512 (1986). Defendants claim that summary judgment was improper here because there existed a genuine issue of fact as to whether the 20 May 1993 handwritten document constituted the final understanding between the parties. We agree.\nIn support of their motion for summary judgment, plaintiffs offered the handwritten agreement of 20 May 1993, which they claim clearly and unambiguously provided that Northington would receive 65% and Michelotti 35% of the issued and outstanding shares of defendant corporation. Plaintiffs also submitted a letter from Michelotti to property management clients of Century 21 Alliance dated 28 May 1993 announcing the formation of Century 21 Advantage. Plaintiffs claim this letter indicates that defendants believed they had a contract with plaintiffs, thereby refuting defendants\u2019 argument that the 20 May 1993 document was merely an \u201cagreement to agree.\u201d Plaintiffs also submitted the IRS Form 2553 signed by both parties and Michelotti\u2019s deposition testimony that when he signed the form he was aware that it recited a 65-35 split of Advantage Real Estate\u2019s stock. Finally, plaintiffs submitted the purported \u201cLetter of Intent\u201d prepared by Michelotti\u2019s attorney, which plaintiffs claim contains \u201cmaterial inconsistencies and substitutions\u201d from the 20 May 1993 document. Plaintiffs argue that the \u201cLetter of Intent\u201d represented nothing more than Michelotti\u2019s attempt to renegotiate the terms of the original \u201ccontract,\u201d in which he had agreed to be a minority shareholder, in order to obtain rights not normally associated with minority shareholder status.\nIn opposition to plaintiffs\u2019 motion, defendants offered the affidavit of Michelotti. Michelotti opined therein that while he and Northington did discuss the ownership of Northington Realty and Advantage Real Estate, \u201cno oral contract was ever reached and he and I never agreed upon the material terms of a future business relationship.\u201d Michelotti stated that Northington asked him to sign the handwritten document \u201cto make him [Northington] feel better until an attorney could prepare a formal document.\u201d According to Michelotti, it was not the intention of either party at the time the handwritten document was signed that it would constitute a contract or complete understanding and agreement.\nMichelotti further averred that there were terms agreed to by the parties during their negotiations that were omitted from the handwritten document (e.g., that Northington would be a passive investor in Advantage Real Estate and that Michelotti would obtain a 50% ownership interest at some future date). He stated that the parties had agreed to have an attorney prepare a formal contract; to that end, Michelotti\u2019s attorney prepared the \u201cLetter of Intent\u201d which Northington ultimately refused to sign. Michelotti\u2019s affidavit concluded with the statement, \u201cParagraph 3 of [the handwritten document] stated that Plaintiff Northington and I would reach an understanding and agreement addressing three issues. No such agreement was ever reached.\u201d\nDefendants also submitted the \u201cLetter of Intent\u201d prepared by Michelotti\u2019s attorney. This document states in part,\nWhereas, the parties hereto after several discussions and negotiations by and among themselves have certain understandings as to the arrangement and relationship between the parties henceforth; and\nWhereas, the parties are desirous of reducing their understandings to writing via this Letter of Intent, with the further understanding and condition that additional legal documents will be effectuated and executed subsequently ....\nFinally, defendants submitted the deposition testimony of Northington, in which he acknowledged that at the time the handwritten document was signed, he contemplated that he and Michelotti would \u201csubsequently . . . execute an attorney-prepared formal document covering [the] points and possibilities\u201d outlined in Paragraph 3 of the handwritten document.\nIt is a well-settled principle of contract law that a valid contract exists only where there has been a meeting of the minds as to all essential terms of the agreement. O\u2019Grady v. Bank, 296 N.C. 212, 221, 250 S.E.2d 587, 594 (1978).\n.To constitute a valid contract, the parties \u201cmust assent to the same thing in the same sense, and their minds must meet as to all the terms. If any portion of the proposed terms is not settled, or no mode agreed on by which they may be settled, there is no agreement.\u201d\nBoyce v. McMahan, 285 N.C. 730, 734, 208 S.E.2d 692, 695 (1974) (citation omitted); see also 1 Joseph M. Perillo, Corbin on Contracts, \u00a7 2.8(a) (revised edition 1993) (as long as the parties know there is an essential term not yet agreed upon, there is no contract). Where the parties agree to make a document or contract which is to contain any material term that is not already agreed on, no contract has been made; \u201ca so-called \u2018contract to make a contract\u2019 is not a contract at all.\u201d Corbin, supra at \u00a7 2.8(a). Whether mutual assent has been established and whether a contract was intended between the parties are questions for the trier of fact. Snyder v. Freeman, 300 N.C. 204, 217, 266 S.E.2d 593, 602 (1980).\nThe materials submitted by the parties present a genuine issue as to whether the handwritten document reflected a \u201cmeeting of the minds\u201d between the parties as to all essential terms of their agreement or whether it merely amounted to an \u201cunderstanding\u201d or an \u201cagreement to agree.\u201d Under our case law, this issue should have been left to the jury to resolve, and the trial court erred in granting summary judgment to plaintiffs on their breach of contract claim. The trial court\u2019s order must therefore be reversed and this cause must be remanded for trial. Having thus decided, we need not address the remaining assignments of error brought forward by defendants.\nReversed and remanded for proceedings consistent with this opinion.\nJudges JOHNSON and SMITH concur.", "type": "majority", "author": "WALKER, Judge." } ], "attorneys": [ "White and Grumpier, by Dudley A. Witt, for plaintiffs-appellees.", "Jacobson & Beavers, by Kenneth R. Jacobson and Robert E. Boydoh, Jr., for defendants-appellants." ], "corrections": "", "head_matter": "WILLIAM E. NORTHINGTON and NORTHINGTON REALTY COMPANY, Plaintiffs JOHN MICHELOTTI and ADVANTAGE REAL ESTATE, INC., Defendants\nNo. COA95-79\n(Filed 19 December 1995)\nContracts \u00a7 11 (NCI4th)\u2014 handwritten document signed by parties \u2014 contract or agreement to agree \u2014 genuine issue of fact \u2014 summary judgment improper\nIn an action for breach of contract concerning the ownership and operation of real estate franchises, the trial court erred in granting summary judgment for plaintiffs where a genuine issue existed as to whether a document handwritten by plaintiff and signed by plaintiff and defendant reflected a \u201cmeeting of the minds\u201d between the parties as to all essential terms of their agreement or whether it merely amounted to an understanding or an \u201cagreement to agree.\u201d\nAm Jur 2d, Contracts \u00a7\u00a7 26, 35.\nAppeal by defendants from order entered 19 October 1994 by Judge Lester P. Martin, Jr. in Forsyth County Superior Court. Heard in the Court of Appeals 24 October 1995.\nWhite and Grumpier, by Dudley A. Witt, for plaintiffs-appellees.\nJacobson & Beavers, by Kenneth R. Jacobson and Robert E. Boydoh, Jr., for defendants-appellants." }, "file_name": "0180-01", "first_page_order": 214, "last_page_order": 219 }