ONE NORTH McDOWELL v. McDowell Dev. Co.

389 S.E.2d 834 (1990)

98 N.C. App. 125

ONE NORTH McDOWELL ASSOCIATION OF UNIT OWNERS, INC.; Peazel Tree Associates, a North Carolina General Partnership; A. Ray Mathis, Samuel M. Millette and Robert G. Sanders, partners; Rodney S. Toth; Arthur S. Long, III, and wife, Cynthia S. Long; Ronald C. Williams; George L. Fitzgerald; W. Thomas Ray, and wife, Margaret W. Ray; George Daly, and wife, Mary H. Daly; Parker Whedon; and Bart William Shuster, Plaintiffs, v. McDOWELL DEVELOPMENT COMPANY, a North Carolina General Partnership; B.D. Rodgers, Edwin E. Harris, Hugh G. Casey, Jr., and Hal H. Tribble; Rodgers Builders, Inc.; P.C. Godfrey, Inc.; and Hal H. Tribble, Architect, Defendants.

No. 8926SC893.

Court of Appeals of North Carolina.

April 3, 1990.

*835 Perry, Patrick, Farmer & Michaux, P.A. by Roy H. Michaux, Jr., Charlotte, for plaintiff-appellants.

Weinstein & Sturgis, P.A. by James P. Crews and Michael C. Daisley, Charlotte, for defendant-appellee P.C. Godfrey, Inc.

Smith, Helms, Mullis & Moore by W. Donald Carroll, Jr., and William R. Purcell II, Charlotte, for defendant-appellees McDowell Development Co. and Harris, Casey, and Tribble.

Jones, Hewson & Woolard by H.C. Hewson, Charlotte, for defendant-appellees Rodgers Builders, Inc., and B.D. Rodgers.

WELLS, Judge.

The pertinent language of the extension agreements provides that defendants will not "assert any defense ... based upon the expiration of any statute of limitations[.]" Defendants contend that this language does not preclude them from raising a defense *836 based on G.S. § 1-50(5)[1] because this statute has been construed by our courts to be a "statute of repose," whereas the language of the agreements merely waives defenses based on "statutes of limitation." Plaintiffs argue that the language of the agreements embraces all statutes of limitation, including the "statute of repose" set forth in G.S. § 1-50(5). Alternatively, plaintiffs contend that G.S. § 1-50(5) is inapplicable because the time limit provided for in that statute had not expired at the time this action was filed. It is unecessary for us to address these contentions, for we conclude that defendants are estopped as a matter of law from challenging the terms of the extension agreements.

It is well established that the doctrine of equitable estoppel will deny the right to assert a defense based on lapse of time "when delay has been induced by acts, representations, or conduct, the repudiation of which would amount to a breach of good faith." Duke University v. Stainback, 320 N.C. 337, 357 S.E.2d 690 (1987) (and cases cited therein); see also Stereo Center v. Hodson, 39 N.C.App. 591, 251 S.E.2d 673 (1979). It is equally well established that a party who accepts the benefits of a transaction may not thereafter attack the validity of such transaction. Thompson v. Soles, 299 N.C. 484, 263 S.E.2d 599 (1980) (and cases cited therein). Although the question of estoppel is ordinarily one of fact for the jury, it becomes a question of law for the court to determine when a single inference can reasonably be drawn from the undisputed facts. Stereo Center v. Hodson, supra (citing Peek v. Wachovia Bank and Trust Company, 242 N.C. 1, 86 S.E.2d 745 (1955)).

It is undisputed that the initial extension agreements, effective until 1 September 1987, were entered into by the parties (1) in response to defendants' request, made during the summer of 1985, for an additional opportunity to correct the air conditioning system and (2) out of plaintiffs' concern that further delay could result in the loss of their claims. It is likewise undisputed that the subsequent extension agreements, effective until 1 November 1988, were entered into pursuant to defendants' additional assurances that further corrective measures would be attempted. Thus, the purpose of the agreements is plain: to preserve the rights and remedies of plaintiffs while affording defendants the additional time they requested in order to attempt corrections of the alleged defects. Public policy favors such agreements as a means of fostering flexibility in the pretrial negotiation process and encouraging alternative resolutions to disputes.

Any delay in bringing the present action was clearly occasioned by plaintiffs' reliance on defendants' representations. Moreover, it is undeniable that defendants fully received the benefit of their bargain. By virtue of the multiple extensions of time afforded by the agreementsencompassing well over three additional yearsdefendants gained the requested time to make corrections to the system. Defendants also gained the concomitant benefit of the financial flexibility to either avoid the expense of litigation upon the successful completion of the corrections, or shift the burden of incurring the costs of litigation to a significantly later date should corrective measures prove unsuccessful.

Defendants are therefore estopped from raising G.S. § 1-50(5) in bar of plaintiffs' action on two grounds: (1) having made representations upon which plaintiffs relied, defendants may not in good faith repudiate such representations to plaintiffs' detriment, and (2) having reaped the benefits from the extension agreements, defendants may not now challenge the terms thereof.

Summary judgment is appropriate only where there exists no genuine issue as to the material facts and the movant is entitled to judgment as a matter of law. N.C. R.Civ.P., Rule 56. Because defendants are *837 not entitled to summary judgment as a matter of law, the judgment and order entered below must be and are

Reversed.

COZORT and LEWIS, JJ., concur.

[1] N.C.Gen.Stat. § 1-50(5) (1983) provides in pertinent part: "a. No action to recover damages based upon or arising out of the defective or unsafe condition of an improvement to real property shall be brought more than six years from the later of the specific last act or omission of the defendant giving rise to the cause of action or substantial completion of the improvement."