Landlord/Tenant — Commercial Lease – Oral Modification – Statute of Frauds – Accord & Satisfaction

Nixon Associates, LLC v. Brown (Lawyers Weekly No. 15-16-0058, 14 pp.) (Mark Davis, J.) Appealed from New Hanover County Superior Court (W. Allen Cobb Jr., J.) N.C. App. Unpub.

Holding: According to defendant-tenant Brown, when she expressed doubt that her business could generate enough income to pay the rent required by the parties’ lease, the plaintiff-landlord’s now-deceased owner and manager told her to “do the best you can.” Even if this could have been considered a modification of the lease’s rental amount, since the lease was for more than three years, any such oral modification would be barred by the statute of frauds.

We affirm summary judgment for the landlord in the amount of $251,334 for back rent and $37,700 in attorneys’ fees.

Although written contracts may be orally modified – even if the contract says that only written modifications are binding – this rule does not apply if the original contract was subject to the statute of frauds.

The tenants’ checks, for amounts less than the rent set out in the lease, are not sufficient writings to satisfy the statute of frauds. The checks do not indicate that they were being tendered in full payment of the monthly rent by any sort of notation on the checks’ memo line, and the late owner’s statement that Brown should “do the best [she] can” does not, without more, support the conclusion that plaintiff agreed to permanently forego unpaid rent and accept defendants’ monthly checks as fully satisfying defendants’ rent obligation.

Since defendants did not forecast evidence that the lease was validly modified, the original lease agreement governs defendants’ rent obligation.

Where defendants offered no evidence of (1) the existence of a dispute concerning the amount of rent owed pursuant to the lease or (2) a discussion between the parties that Brown’s checks were intended to satisfy defendants’ monthly rental obligation in full, defendants have not made out the affirmative defense of accord and satisfaction.

Since the forecast of evidence does not support defendants’ contention that plaintiff demonstrated an intention to give up its right to collect the unpaid rent owed under the lease agreement, the affirmative defense of waiver fails as a matter of law.

Affirmed.