Contract – Real Property – Environmental Assessment – Prior Assessment – Preliminary Report Requirement

ECS Carolinas, LLP v. Perry (Lawyers Weekly No. 12-16-0231, 12 pp.) (Rick Elmore, J.) Appealed from Durham County District Court. (M. Patricia DeVine, J.) N.C. App. Unpub. Full-text opinion.

Holding: Even though the parties’ contract called for plaintiff to give the defendant-landowner a preliminary oral report before producing its written environmental assessment, the oral report was not intended to give the landowner an opportunity to cancel the environmental assessment.

We affirm summary judgment for plaintiff. We remand for an award of post-judgment interest.

Contract Terms

The Environmental Site Assessment (ESA) Proposal, which defendant himself contends governs the parties’ relationship, did not give defendant the option to “cancel” the Phase I ESA following plaintiff’s verbal indication of its preliminary findings. The language in question states, “ECS will provide the above Phase I ESA within 15-21 business days of receiving written authorization to proceed. ECS also agrees to provide a verbal indication of our preliminary findings to you by July 10th, 2007.

“If requested, ECS will provide preliminary verbal results and recommendations prior to submittal of ECS’ written report.”

This language only requires plaintiff to provide results and recommendations before submitting its written report; it does not require plaintiff to hold off from performing the Phase I ESA until after it completed initial research into previous ESAs, shared the results of that research with defendant, and then received explicit permission from defendant to perform the Phase I ESA. Even if defendant had requested a verbal indication of plaintiff’s preliminary findings and plaintiff failed to provide it, defendant has not demonstrated why the appropriate relief would be complete withholding of payment.

Furthermore, defendant’s signed Proposal Acceptance form clearly states that he accepted the terms of the ESA Proposal and agreed to be bound by the Terms and Conditions of Service. The Conditions of Service define the scope of work as “all services provided by ECS, in its discretion, which are reasonably necessary and appropriate for the effective and prompt fulfillment of ECS’s obligations under the Agreement….” In addition, if defendant wanted to change the scope of work, the Conditions of Service required “a written amendment to the Agreement . . . be executed by the Client and ECS as soon as practicable,” and “consent to such amendments shall not be unreasonably withheld.” Defendant did not execute a written amendment to the agreement changing the scope of work.

There is no question that plaintiff fully performed under the contract and that defendant has not. Thus, defendant breached the contract, and plaintiff is entitled to recover the principal amount of $2,300 under the contract in addition to interest, fees, and costs.

Interest

Defendant argues that at the hearing before the trial court on the interest issue, plaintiff agreed to waive any post-judgment interest and, for that reason, is not entitled to interest following judgment at any rate.

Based upon a careful and thorough review of the transcript of the hearing, we disagree. It is clear from the discussion that plaintiff agreed only to waive the contract rate of 18 percent interest and accept the legal rate  of  eight percent after plaintiff filed its complaint. We remand to the district court to include the required provision of post-judgment interest.

Affirmed in part and remanded.