Curran v. Barefoot
183 N.C. App. 331, 2007 N.C. App. LEXIS 1156, 645 S.E. 2d 187 (2007)
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Rule of Law:
Specific performance is an appropriate remedy for a contract involving real property that includes incidental personal property, where the personal property is considered an integral, indivisible part of the real estate transaction and money damages would not provide a complete remedy. However, specific performance cannot be ordered for the conveyance of property the defendant demonstrably does not own.
Facts:
- Robert M. Barefoot, as trustee, owned a house, referred to as the “lake house,” on Lake Tillery in Mt. Gilead, North Carolina.
- On 19 November 2003, Robert M. Barefoot and Thomas L. Curran and Josephine Curran (plaintiffs) executed an Offer to Purchase and Contract for the lake house.
- An addendum to the contract listed specific items of personal property Robert M. Barefoot agreed to convey with the lake house, including all furniture, linens, window treatments, appliances, pictures, towels, flatware, dishes, an antique wardrobe, a small hallway table, and all watercraft and accessories, with exceptions for clothes and personal items.
- Robert M. Barefoot's original listing agreement for the lake house, drafted by his real estate agent, stated, “The following personal property is included in the listing price: All furniture, boats.”
- Thomas L. Curran and Josephine Curran made an initial offer of $525,000, which Robert M. Barefoot counter-offered to sell for $550,000, and Thomas L. Curran and Josephine Curran accepted by initialing the change on the contract.
- Robert M. Barefoot’s real estate agent, Phyllis Dunn, negotiated a $3,000 reduction in broker commissions, representing six percent of the $50,000 value Robert M. Barefoot attributed to the personal property, to induce Robert M. Barefoot to proceed with the deal.
- Thomas L. Curran and Josephine Curran contracted for a home inspection and an appraisal, and met with Robert M. Barefoot to discuss which items of furniture and personal property he would leave or remove prior to closing.
- On 23 December 2003, Robert M. Barefoot’s counsel sent a letter to Robert M. Barefoot’s real estate agent stating that the contract was terminated and Robert M. Barefoot would not appear at any closing.
- Thomas L. Curran and Josephine Curran learned of Robert M. Barefoot’s repudiation of the contract on 29 December 2003, two days before the scheduled 31 December 2003 closing date.
Procedural Posture:
- On 29 January 2004, Thomas L. Curran and Josephine Curran sued Robert M. Barefoot in a North Carolina trial court, seeking specific performance of the contract.
- After a bench trial, the trial court found an enforceable contract existed, that it should be reformed to correct mutual mistakes, that Robert M. Barefoot repudiated and breached the contract, that the real property was unique, and that Thomas L. Curran and Josephine Curran were entitled to specific performance of both the real and associated personal property.
- The trial court entered judgment on 30 December 2005, ordering specific performance.
- On 9 January 2006, Robert M. Barefoot moved for relief from the judgment under Rule 60(b) or, alternatively, for a new trial.
- The trial court denied Robert M. Barefoot's motions on 13 February 2006.
- Robert M. Barefoot, as appellant, appealed from the judgment and the order denying his motions to the North Carolina Court of Appeals, with Thomas L. Curran and Josephine Curran as appellees.
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Issue:
1. Does a trial court err by granting specific performance for a contract to convey real property when that contract also includes incidental personal property as part of a unitary transaction? 2. Does a trial court err by denying a Rule 60(b) motion for relief from judgment when the defendant is ordered to convey specific property that it does not own?
Opinions:
Majority - Tyson, Judge
1. No, the trial court did not err by granting specific performance for a contract involving both real and incidental personal property because competent evidence supported the findings that the contract was valid, the plaintiffs were ready, willing, and able to perform, and the personal property was an integral part of a unitary transaction for which money damages would not be a complete remedy. The court found that plaintiffs were ready, willing, and able to close on or around the scheduled date, especially given defendant’s repudiation of the contract which negated the need for plaintiffs to make an offer of performance. The contract’s purchase price of $550,000 was definite and mutually assented to by the parties. While specific performance is generally an extraordinary remedy for personal property, the court applied the principle that it is warranted when money damages are not a complete remedy. Here, the court viewed the furnished lake house and accessories as a “unitary vacation home” and determined that a "barren lake house without the personal property listed in the contract would not provide plaintiffs a 'complete remedy'." Citing other jurisdictions, the court affirmed that specific performance of a whole contract may be decreed where part relates to land and the rest to ordinary personal property, if the personalty is incidental to and an indivisible part of the land transaction. 2. Yes, the trial court erred by denying Robert M. Barefoot’s Rule 60(b) motion for relief from judgment in part, concerning the watercraft, because extraordinary circumstances existed where Robert M. Barefoot was ordered to convey personal property that he did not own, making performance impossible. Relief under Rule 60(b)(6) requires both "extraordinary circumstances" and that "justice demands that relief be granted." The court found these conditions met because specific performance cannot be granted for impossible performance, and Robert M. Barefoot presented new evidence (affidavit, purchase agreements, registration card) after trial showing he was not the record owner of the watercraft. The case was remanded to the trial court to award plaintiffs money damages for the fair market value of the three watercraft or other appropriate relief if Robert M. Barefoot cannot deliver clear and unencumbered title at closing.
Analysis:
This case significantly clarifies the application of specific performance in North Carolina for contracts involving both real estate and personal property, affirming that courts will look beyond the traditional distinction between the two if the personalty is an integrated, indispensable component of a larger, unique transaction, such as a furnished home. The ruling emphasizes the importance of providing a "complete remedy" to the injured party, thereby expanding the scope of specific performance beyond mere real property. Furthermore, the court's partial reversal on the Rule 60(b) motion underscores the equitable principle that specific performance will not be ordered if performance is impossible, highlighting a practical limit to the remedy and the judiciary's role in correcting judgments when new, dispositive facts emerge post-trial.
