{ "id": 8437548, "name": "CABARRUS COUNTY, Plaintiff v. SYSTEL BUSINESS EQUIPMENT COMPANY, INC., Defendant", "name_abbreviation": "Cabarrus County v. Systel Business Equipment Co.", "decision_date": "2005-07-05", "docket_number": "No. COA04-1221", "first_page": "423", "last_page": "427", "citations": [ { "type": "official", "cite": "171 N.C. App. 423" } ], "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": "152 F. Supp. 2d 865", "category": "reporters:federal", "reporter": "F. Supp. 2d", "case_ids": [ 11080712 ], "year": 2001, "opinion_index": 0, "case_paths": [ "/f-supp-2d/152/0865-01" ] }, { "cite": "607 S.E.2d 275", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "opinion_index": 0 }, { "cite": "359 N.C. 190", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 3801379, 3803204, 3802819, 3801000, 3793739, 3796020, 3803038 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/nc/359/0190-02", "/nc/359/0190-01", "/nc/359/0190-06", "/nc/359/0190-07", "/nc/359/0190-04", "/nc/359/0190-03", "/nc/359/0190-05" ] }, { "cite": "598 S.E.2d 427", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2004, "pin_cites": [ { "page": "433" } ], "opinion_index": 0 }, { "cite": "165 N.C. App. 154", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8996044 ], "year": 2004, "opinion_index": 0, "case_paths": [ "/nc-app/165/0154-01" ] }, { "cite": "471 S.E.2d 118", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "121", "parenthetical": "\"[T]he alleged contract is invalid and unenforceable by virtue of N.C. Gen. Stat. \u00a7 159-28(a)\" because \"Plaintiff has failed to show that such a certificate\" existed." } ], "opinion_index": 0 }, { "cite": "122 N.C. App. 619", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11918992 ], "year": 1996, "pin_cites": [ { "page": "622-23", "parenthetical": "\"[T]he alleged contract is invalid and unenforceable by virtue of N.C. Gen. Stat. \u00a7 159-28(a)\" because \"Plaintiff has failed to show that such a certificate\" existed." } ], "opinion_index": 0, "case_paths": [ "/nc-app/122/0619-01" ] }, { "cite": "399 S.E.2d 758", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "759" } ], "opinion_index": 0 }, { "cite": "101 N.C. App. 405", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527807 ], "year": 1991, "pin_cites": [ { "page": "408" } ], "opinion_index": 0, "case_paths": [ "/nc-app/101/0405-01" ] }, { "cite": "545 S.E.2d 243", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2001, "pin_cites": [ { "page": "247", "parenthetical": "citing Cincinnati Thermal Spray, Inc. v. Pender County, 101 N.C. App. 405, 408, 399 S.E.2d 758, 759 (1991)" }, { "page": "247" } ], "opinion_index": 0 }, { "cite": "143 N.C. App. 97", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11433311 ], "weight": 2, "year": 2001, "pin_cites": [ { "page": "103", "parenthetical": "citing Cincinnati Thermal Spray, Inc. v. Pender County, 101 N.C. App. 405, 408, 399 S.E.2d 758, 759 (1991)" }, { "page": "103" } ], "opinion_index": 0, "case_paths": [ "/nc-app/143/0097-01" ] }, { "cite": "534 S.E.2d 653", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "654" } ], "opinion_index": 0 }, { "cite": "139 N.C. App. 827", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9498023 ], "year": 2000, "pin_cites": [ { "page": "829" } ], "opinion_index": 0, "case_paths": [ "/nc-app/139/0827-01" ] }, { "cite": "548 S.E.2d 499", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "500" } ], "opinion_index": 0 }, { "cite": "353 N.C. 690", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135733 ], "year": 2001, "pin_cites": [ { "page": "692" } ], "opinion_index": 0, "case_paths": [ "/nc/353/0690-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 159-28", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "year": 2004, "pin_cites": [ { "page": "(a)" }, { "page": "(a)" }, { "page": "(a)" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 493, "char_count": 9922, "ocr_confidence": 0.752, "pagerank": { "raw": 3.296944374547902e-07, "percentile": 0.8716558378500059 }, "sha256": "163897eb0deb8b3838f00054e7e486fec5e3360dfb4c36c62b45435464a4b350", "simhash": "1:3b6a46724754bc8a", "word_count": 1538 }, "last_updated": "2023-07-14T21:08:31.744997+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges BRYANT and JACKSON concur." ], "parties": [ "CABARRUS COUNTY, Plaintiff v. SYSTEL BUSINESS EQUIPMENT COMPANY, INC., Defendant" ], "opinions": [ { "text": "WYNN, Judge.\nUnder North Carolina law, any county obligation evidenced by an agreement to pay money shall include a preaudit certificate signed by a finance officer. N.C. Gen. Stat. \u00a7 159-28(a) (2004). In this appeal, Plaintiff Cabarrus County contends that a settlement agreement between itself and Defendant Systel Business Equipment Company, Inc., which did not include a signed preaudit certificate, was invalid. Because the settlement agreement failed to meet the statutory requirements, we hold that the agreement was unenforceable. Accordingly, we reverse the trial court\u2019s ruling.\nThe record reflects that in December 1999, Cabarrus County issued a request for proposed bids from companies for photocopier services. The Board of County Commissioners voted on 18 January 2000 to award the contract to Systel. On 18 July 2000, a Cabarrus County manager executed an Equipment Rental Agreement.\nOn 17 April 2001, Cabarrus County notified Systel that it was not renewing the copier contract as outlined in the Equipment Rental Agreement and requested that Systel remove its equipment from Cabarrus County\u2019s offices. Systel failed to remove its equipment, claiming that Cabarrus County remained obligated to use Systel\u2019s services under the Equipment Rental Agreement. Cabarrus County argued that the Equipment Rental Agreement could not be enforced because, inter alia, it did not include a preaudit certificate as required by statute.\nOn 26 July 2001, Cabarrus County filed an action in Superior Court, Cabarrus County to, inter alia, determine the validity of, and the rights of the parties under, the Equipment Rental Agreement. Systel filed a counterclaim for breach of contract on 8 October 2001. Systel and Cabarrus County participated in formal and informal mediation of their dispute. In February 2003, Systel presented a proposed settlement agreement, the terms of which required Cabarrus County to, inter alia, pay Systel the sum of $43,390.00, which was reduced to $21,695.00, and sign a new Equipment Lease Agreement allowing-Systel to provide photocopier equipment and services to Cabarrus County for a sixty-four month period. Cabarrus County Attorney Fletcher L. Hartsell, Jr. presented the proposed settlement agreement to the Board of County Commissioners during its 20 October 2003 meeting. The Board of County Commissioners voted to approve the proposed settlement agreement and authorized the County Manager to execute the settlement agreement documents on behalf of Cabarrus County and to prepare a budget amendment. On 21 October 2003, Mr. Hartsell reported to Systel that the Board of County Commissioners voted to approve the proposed settlement agreement. At its meeting on 27 October 2003, the Board of County Commissioners discussed the settlement agreement again, voted to rescind its approval of the settlement agreement, and directed the County Manager to continue settlement negotiations with Systel.\nSystel filed a motion to enforce the settlement agreement, which the trial court granted in an order entered 27 April 2004. The trial court concluded that the settlement agreement was valid and binding upon Cabarrus County, and Cabarrus County appealed.\nOn appeal, Cabarrus County argues that the trial court erred in concluding that a settlement agreement between itself and Systel was valid and binding despite the absence of a completed preaudit certificate. We agree.\nA settlement agreement is interpreted according to general principles of contract law, and since contract interpretation is a question of law, the standard of review on appeal is de novo. Chappell v. Roth, 353 N.C. 690, 692, 548 S.E.2d 499, 500 (2001); Harris v. Ray Johnson Constr. Co., Inc., 139 N.C. App. 827, 829, 534 S.E.2d 653, 654 (2000).\nNorth Carolina General Statutes section 159-28(a), a part of the Local Government Budget and Fiscal Control Act, states:\nIf an obligation is evidenced by a contract or agreement requiring the payment of money or by a purchase order for supplies and materials, the contract, agreement, or purchase order shall include on its face a certificate stating that the instrument has been preaudited to assure compliance with this subsection. The certificate, which shall be signed by the finance officer or any deputy finance officer approved for this purpose by the governing board, shall take substantially the following form:\n\u201cThis instrument has been preaudited in the manner required by the'Local Government Budget and Fiscal Control Act.\n(Signature of finance officer).\u201d\n\u201cWhere a plaintiff fails to show that the requirements of N.C. Gen. Stat. \u00a7 159-28(a) have been met, there is no valid contract, and any claim by plaintiff based upon such contract must fail.\u201d Data Gen. Corp. v. County of Durham, 143 N.C. App. 97, 103, 545 S.E.2d 243, 247 (2001) (citing Cincinnati Thermal Spray, Inc. v. Pender County, 101 N.C. App. 405, 408, 399 S.E.2d 758, 759 (1991)); see also L&S Leasing, Inc. v. City of Winston-Salem, 122 N.C. App. 619, 622-23, 471 S.E.2d 118, 121 (1996) (\u201c[T]he alleged contract is invalid and unenforceable by virtue of N.C. Gen. Stat. \u00a7 159-28(a)\u201d because \u201cPlaintiff has failed to show that such a certificate\u201d existed.).\nIn the case sub judice, the settlement agreement contained a preaudit certificate that was never executed by Cabarrus County: No finance officer signed the certificate. The requirements of North Carolina General Statutes section 159-28(a) were therefore not met and thus \u201cthere is no valid contract, and any claim . . . based upon such contract must fail.\u201d Data Gen. Corp., 143 N.C. App. at 103, 545 S.E.2d at 247.\nNonetheless, Systel cites Lee v. Wake County, 165 N.C. App. 154, 598 S.E.2d 427, disc. review denied, 359 N.C. 190, 607 S.E.2d 275 (2004), to support its argument that the lack of a signed preaudit certificate does not render the settlement agreement invalid and unenforceable. In Lee, this Court held that \u201can otherwise valid memorandum of agreement is not rendered void by the fact it does not bear the requisite pre-audit certificate.\u201d Id. at 162, 598 S.E.2d at 433. The crucial difference, however, between Lee and this case is that in Lee, \u201cthe subject memorandum of agreement [was] an agreement to prepare a formalized settlement compromise agreement for the [Industrial] Commission\u2019s consideration[,]\u201d and therefore the action on appeal was \u201cfor specific performance, not for the payment of money.\u201d Id. Here, in contrast, the settlement agreement, which the trial court ordered enforced, required Cabarrus County to pay Systel the sum of $21,695.00. The payment of the $21,695.00 was neither conditional nor contingent but mandatory under the settlement agreement. The settlement agreement here therefore was \u201cfor the payment of money\u201d and Lee is therefore inapplicable.\nSystel further argues that North Carolina General Statutes section 159-28(a) does not apply because the monetary obligations under the settlement agreement were to be incurred in fiscal years subsequent to the parties\u2019 contracting to the settlement agreement. Systel did not, however, (cross-)assign error to the trial court\u2019s conclusions indicating that the settlement agreement became binding only as of the Board of County Commissioners\u2019 20 October 2003 vote to approve the settlement agreement and the communication of such approval to Systel, and that payment of at least some of the obligations under the agreement would come due in fiscal year 2003. Moreover, as Systel concedes, the settlement agreement set no timeline for payment of the $21,695.00 (while the settlement agreement indicated that obligations under the lease agreement would come due first in July 2004). Payment of the $21,695.00 would therefore appear to be due immediately under the settlement agreement, and Systel\u2019s contention that \u201cit is at least arguable that the payment obligation [regarding the $21,695.00] was not due until the Lease obligations began on July 1, 2004\u201d is thus unconvincing.\nSystel cites Media Gen. Broad, of S.C. Holdings, Inc. v. Pappas Telecasting of the Carolinas, 152 F. Supp. 2d 865 (W.D.N.C. 2001), and states that \u201c[w]here a contract contains an express and unambiguous severability provision, the Court may strike an unenforceable provision from the otherwise enforceable agreement and give effect to all remaining terms.\u201d Systel fails, however, to argue that the settlement agreement at issue here includes an express severability provision\u2014 and for good reason, as the settlement agreement before this Court does not contain such a provision.\nIn sum, we find that the settlement agreement required Cabarrus County to pay Systel money and was thus subject to North Carolina General Statutes section 159-28(a). The agreement, however, lacked a preaudit certificate signed by a Cabarrus County finance officer. The settlement agreement therefore failed to meet North Carolina General Statutes section 159-28(a)\u2019s requirements, and, as a consequence, the settlement agreement is unenforceable. We therefore reverse the trial court\u2019s order enforcing the settlement agreement.\nReversed.\nJudges BRYANT and JACKSON concur.", "type": "majority", "author": "WYNN, Judge." } ], "attorneys": [ "Hartsell & Williams, P.A., by Fletcher L. Hartsell, Jr. and Christy E. Wilhelm, for plaintiff-appellant.", "Poyner & Spruill, LLP, by E. Fitzgerald Parnell, III and Cynthia L. Van Home, for defendant-appellee." ], "corrections": "", "head_matter": "CABARRUS COUNTY, Plaintiff v. SYSTEL BUSINESS EQUIPMENT COMPANY, INC., Defendant\nNo. COA04-1221\n(Filed 5 July 2005)\nCounties\u2014 preaudit certificate \u2014 settlement agreement\nAny county obligation evidenced by an agreement to pay money shall include a preaudit certificate signed by a finance officer. An agreement settling a dispute concerning rented copier equipment was not valid because it did not include the required certificate. N.C.G.S. \u00a7 159-28(a).\nAppeal by Plaintiff from order entered 27 April 2004 by Judge W. David Lee in Superior Court, Cabarrus County. Heard in the Court of Appeals 10 May 2005.\nHartsell & Williams, P.A., by Fletcher L. Hartsell, Jr. and Christy E. Wilhelm, for plaintiff-appellant.\nPoyner & Spruill, LLP, by E. Fitzgerald Parnell, III and Cynthia L. Van Home, for defendant-appellee." }, "file_name": "0423-01", "first_page_order": 453, "last_page_order": 457 }