Five Oaks Homeowners v. Efirds Pest Control

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331 S.E.2d 296 (1985)


No. 8414SC963.

Court of Appeals of North Carolina.

July 2, 1985.

*297 Everett & Hancock by S. Allen Patterson, II, Raleigh, for plaintiff-appellant.

Patterson, Dilthey, Clay, Cranfill, Sumner & Hartzog by D. James Jones, Jr. and Theodore B. Smyth, Raleigh, for defendant-appellee.

PARKER, Judge.

The fact is undisputed that the termite inspection contract required annual reinspection payments and allowed automatic termination without notice upon failure to make the payments. Plaintiff admits that it failed to pay the annual reinspection fee for 1981 and 1982. Plaintiff contends that summary judgment was inappropriate. Plaintiff argues that having received an invoice for reinspection fees at the end of the first year, it was entitled to rely on this practice by defendant for subsequent years, and there was a genuine issue of material fact as to whether (i) defendant's regular business practice was to invoice customers for fees and (ii) whether this practice was deliberately not followed with respect to plaintiff in 1981 and 1982. The contract did not specify that defendant would invoice plaintiff each year, but plaintiff argues that defendant is equitably estopped from terminating the contract because plaintiff relied on being invoiced by defendant.

The essential elements of equitable estoppel as related to the party estopped are (i) a false representation or concealment of material facts, or conduct reasonably calculated to convey the impression that the facts are otherwise than those which the party afterwards attempts to assert; (ii) intention or expectation that such conduct be acted upon by the other party; and (iii) knowledge, actual or constructive, of the real facts. Hawkins v. M & J Finance Corp., 238 N.C. 174, 77 S.E.2d 669 (1953). As related to the party claiming the estoppel, the essential elements are (i) lack of knowledge and the means of knowledge of the truth of the facts in question; (ii) reliance upon the conduct of *298 the party to be estopped; and (iii) action based on this conduct which changes his position prejudicially. Id.

In the instant case, plaintiff has failed to show that it lacked knowledge, or the means of knowledge, of the truth of the facts. The contract provided:

The Buyer may extend this Guarantee for an unlimited number of one year periods by having the Company reinspect the premises annually and paying a reinspection fee in the amount shown on the reverse side thereof within sixty (60) days after the anniversary of this Contract's effective date. This Guarantee, and all liability of the Company, shall terminate automatically and without notice upon the Buyer's failure to make any payment in accordance with the provisions of this Contract.

When the language of a written contract is plain and unambiguous, the contract must be interpreted as written and the parties are bound by its terms, Corbin v. Langdon, 23 N.C.App. 21, 208 S.E.2d 251 (1974); neither party can deny knowledge of its contents. Since plaintiff knew from the contract that the reinspection fee was due annually, it cannot claim that defendant was estopped from cancelling the contract because it had not sent plaintiff an invoice for the reinspection fee. Absent fraud, estoppel is not available to protect a party from the consequences of its own negligence. Thomas v. Ray, 69 N.C.App. 412, 317 S.E.2d 53 (1984).

Plaintiff knew that the reinspection fee was due annually, and that the contract was subject to automatic termination for failure to make the payments. Plaintiff admits it failed to pay for years 1981 and 1982. There is, therefore, no issue of material fact, and defendant is entitled to judgment as a matter of law. The trial court's entry of summary judgment is


WEBB and BECTON, JJ., concur.

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