D.G. II, LLC v. Nix

713 S.E.2d 140, 213 N.C. App. 220, 2011 N.C. App. LEXIS 1374
Court of Appeals of North Carolina·Decided July 5, 2011·No. COA10-1458·Published·Cited by 7 cases

Opinion

CALABRIA, Judge.

D.G. II, LLC (“plaintiff’), appeals the trial court’s 2 October 2009 order granting Clifford E. Nix’s (“Nix”) and Johnson Boat Works’ (“JBW”) (collectively, “defendants”) motion for partial summary judgment against plaintiff on the issue of, inter alia, unfair and deceptive practices (“UDP”); the 7 May 2010 judgment denying additional damages for plaintiff; and the 15 September 2010 order denying plaintiff’s motion for a new trial. We affirm.

I. BACKGROUND

On 11 May 2006, John Floyd (“Floyd”) entered into a contract (“the contract”) on plaintiff’s behalf with defendants for the construction of a 57-foot sport fishing boat (“the boat”) to be used in a charter-for-hire fishing business. Under the terms of the contract, plaintiff was required to pay a deposit in the amount of $100,000.00 (“the deposit”) to defendants, and to pay the balance of the purchase price of $1,250,000.00 within five days of receipt of notice from defendants that the boat was completed. Furthermore, defendants agreed to build and deliver the boat in accordance with the specifications stated in the contract. The contract required defendants to transfer the boat’s title and deliver possession of the boat to plaintiff on or before 31 July 2006. On 11 May 2006, plaintiff deposited $100,000.00 with defendants.

Prior to 12 July 2006, defendants informed Floyd that the boat would not be completed until 7 September 2006 rather than 31 July 2006, “due primarily to the diversion of subcontractors to other boats under construction by competitors.” As compensation for the delay, defendants proposed to include a “teak deck,” worth approximately $5,000.00, at no additional cost to plaintiff. Defendants also offered plaintiff the option to terminate the contract and recover its deposit in full. Plaintiff declined to terminate the contract and elected to proceed.

*222 On 14 July 2006, plaintiff delivered a letter to defendants explaining the reasons that defendants’ delay in completing the boat until 7 September 2006 was “unacceptable” and “disastrous.” Plaintiff had made “extensive plans to launch its charter business late in the 2006 season” since the “fishing season will be drawing to an end in the late summer or early fall of this year . . . .” Plaintiff also stated that the delay in delivery would prevent its participation “in the Pirate’s Cove Tournament in mid-August. . .” and that “[i]t is hard to overstate the importance of participation in this tournament to [plaintiffs] business.” Plaintiff reminded defendants that participation in the tournament was discussed at the time the parties signed the contract.

Plaintiff also proposed a counteroffer in the 14 July 2006 letter to defendants and offered defendants one of three options: (1) defendants would pay plaintiff consequential damages of $100,750.00 and deliver the boat “at a mutually agreeable time” at the price and under the conditions provided for in the contract; (2) plaintiff would provide an irrevocable letter of credit for the balance of the purchase price owed on the boat on or before 2 August 2006, defendants would exercise the letter of credit when plaintiff took possession of the boat in April 2007, the boat would meet certain additional inspection and certification requirements, and defendants would pay plaintiff the captain’s salary of more than $4,000.00 per month plus employment expenses until 31 March 2007 or delivery of the boat; or (3) plaintiff would take delivery of the boat during the first week of October 2006 for the purchase price stated in the contract, along with eight additional specifications to be added to the boat, and payment of two months’ captain’s salary and expenses.

Prior to receiving a response to the 14 July 2006 letter, plaintiff notified defendants on 31 July 2006 that it was “ready, willing and able” to perform under the contract. However, defendants did not deliver the boat to plaintiff on 31 July 2006, or at any other time. On 3 August 2006, Floyd informed defendants again that plaintiff desired to have the boat.

On 9 August 2006, defendants informed plaintiff that Floyd “made direct threats toward [defendants] concerning litigation that he intends to file and the damages ... he plans to seek. In other words, [defendants] believe that Mr. Floyd intends to file suit regardless of any proposal for completion of the boat.” On 10 August 2006, defendants informed plaintiff, in writing, that defendants “will be terminating the contract based on [plaintiff’s] anticipatory breach . . . .” On 11 August 2006, plaintiff sent a letter to defendants stating that the boat *223 “must be completed and delivered no later than October 13,2006” and proposed another counteroffer. Defendants did not respond to the proposal.

On 18 August 2006, defendants informed plaintiff that it was their “understanding” that plaintiff would not be purchasing the boat. Defendants mailed a draft of an agreement which would “terminate]] the relationship” between the parties, and offered to refund the deposit if plaintiff released all claims it may have had against defendants under the contract. Also on 18 August 2006, defendants signed a contract to sell the boat to another buyer named Christopher Schultz (“Schultz”) for $1,475,000.00. The sale price to Schultz was $125,000.00 more than the price of the boat stated in the contract' between plaintiff and defendants.

On 6 September 2006, plaintiff filed a complaint against defendants in Dare County Superior Court, seeking, inter alia, specific performance of the contract, damages in an amount in excess of $10,000.00, and a restraining order prohibiting defendants from “selling, assigning, or in any way encumbering, damaging or misusing” the boat. Plaintiff also filed an amended complaint, adding Schultz and the broker for the Schultz sale, MacGregor Yachts, Inc. (“MacGregor”), as defendants. Plaintiff asserted a claim of UDP against defendants and MacGregor and sought, inter alia, specific performance and damages for lost profits and income as a result of its inability to proceed with its business plan for the operation of a commercial sport fishing enterprise during the period from 1 August 2006 until 18 October 2006. Approximately one month later, Schultz requested that defendants return his deposit for the boat. Later, defendants entered into a second contract with Schultz to sell him the boat for $1,400,000.00, which was $50,000.00 more than the amount stated in the contract between plaintiff and defendants. Subsequently, the trial court granted Schultz’s and MacGregor’s motion to dismiss.

On 21 December 2006, plaintiff informed defendants that it desired to purchase the boat under the contract and “would drop all charges against [defendants].” Defendants answered and asserted counterclaims for, inter alia, breach of contract. On 28 March 2007, plaintiff again expressed interest in purchasing the boat and “resolving outstanding matters regarding various claims at a later date.” Plaintiff deposited the amount of $1,250,000.00 in its attorney’s trust account and was prepared to close immediately and take possession of the boat. On 2 July 2007, plaintiff requested that defendants return the deposit, but defendants did not respond.

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D.G. II, LLC v. Nix, 713 S.E.2d 140, 213 N.C. App. 220, 2011 N.C. App. LEXIS 1374 (N.C. Ct. App. 2011).

713 S.E.2d 140 (D.G. II, LLC v. Nix) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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