Joyner v. Adams - Brief

Joyner v. Adams COURT AND DATE: North Carolina Court of Appeals (1987) PROCEDURAL HISTORY: Trial court: granted Adams’s motion for summary judgement. Joyner appealed to the North Carolina Court of Appeals. Court of appeals: reversed and remanded for a factual finding of the parties’ intent regarding when the rent calculation of the base lease would be applied. On remand, the trial court: determined that the clause was ambiguous and that it had been drafted by Adams. The court held in Joyner’s favor. Adams appealed to the North Carolina Court of Appeals. ISSUE: Can a contract provision be enforced when the parties attribute different meanings to the provision? TRIGGER FACTS: Joyner (plaintiff) entered into a contract with Brown Investment Company (Brown) for the development of property she owned into an office park, which it would then lease. Brown agreed to lease the property at an annual rent that would increase each year under a specified price index (the “base lease”). Due to financial difficulties, Adams (defendant) was substituted for Brown as the lessee/developer. Both Joyner and Adams were experienced in real estate business. After protracted negotiations, the parties entered into a new lease. The new lease allowed Adams to pay a fixed annual rent for a period of time until he had developed all lots on the land. However, if Adams failed to develop all lots by a specified date, Adams would then be required to pay annual rent under the base lease, rather than pay the fixed rate. By the specified date, Adams had developed all but one lot. Joyner filed suit seeking to recover the difference between the fixed annual rent and the rent under the base lease. Adams filed a motion for summary judgment. PLAINTIFF’S MAIN ARGUMENTS: DEFENDANT’S MAIN ARGUMENTS: RULE (the law): A contract provision cannot be enforced when the parties attribute different meanings to the provision. HOLDING + REASONING: No. When parties have attributed different meanings to a contract term, there is no “meeting of the minds” regarding the provision and neither party’s meaning will be enforced. However, when one party knows or has reason to know of the other party’s meaning, and that other party does not know nor have reason to know of the first party’s meaning, the innocent party’s meaning will be enforced. Though ambiguity in a contract will be construed against the party who drafted the contract, the rule will not be applied when the parties were equally sophisticated and operated at arms length. The rule will also not be applied unless the evidence affirmatively shows who drafted the contract. In the current matter, the trial court failed to make findings of fact regarding whether either party knew or had reason to know of the other party’s different meaning regarding the disputed contract provision. Moreover, the trial court’s resolving contractual ambiguity in Joyner’s favor was in error. Both parties were experienced in real estate business and were, therefore, equally sophisticated. The record also indicates that the parties engaged in protracted negotiations, which included discussions regarding the provision at issue. There is nothing in the record to indicate who “drafted” the provision. Under these facts, the trial court erred in applying this rule to enter judgment for Joyner. Accordingly, the decision of the trial court is affirmed in part and reversed and remanded in part for findings regarding the parties’ knowledge of the meaning attached to the provision by the other party.