in the Court of Appeals 20 February 2017.
by Defendant and cross-appeal by Plaintiffs from order
entered 1 June 2016 by Judge David L. Hall in Guilford County
Superior Court Guilford County, No. 15 CVS 8933.
Sharpless & Stavola, by Eugene E. Lester, III, for the
Benson, Brown & Faucher, PLLC, by James R. Faucher, for
appeal from an order granting Defendant's motion for
summary judgment on Plaintiffs' claims. Defendant
cross-appeals from the same order which also granted
Plaintiffs' motion for summary judgment on
Defendant's counterclaim. For the following reasons, we
affirm in part, reverse in part, and remand for further
Martha Cooper ("Owner") owns legal title to a
certain single-family home (the "Property") that
was secured by an adjustable rate mortgage. In 2011, Owner
desired to sell the Property for a little over her mortgage
balance, which was then approximately $366, 000; however, the
Property was in some disrepair, making it hard to sell.
Kent and Christy Lee ("Tenants") desired to
purchase the Property, but their credit did not allow them to
qualify for a loan in 2011.
parties, therefore, entered into an agreement styled
"Lease and Option to Purchase Agreement" (the
"Agreement") to allow Tenants to lease the Property
for a term of four years (through June 2015), during which
time Tenants could qualify for a loan and purchase the
Property for a price equal to Owner's mortgage balance.
The Agreement called for Tenants to make monthly rental
payments equal to the Owner's mortgage payment, which
would reduce Owner's mortgage balance. The rental
payments would adjust as Owner's mortgage payment
adjusted. The Agreement also called for Tenants to make an
initial $31, 500 payment as an "option fee."
According to Tenants' deposition testimony, this
"option fee" was applied to Owner's mortgage
balance in order to reduce the monthly mortgage payment, and
thereby reduce Tenants' rental payment to a more
remained in the Property past June 2015 without exercising
their option to purchase the Property. Tenants also allegedly
defaulted on their rental payments.
October 2015, Owner obtained an order of summary ejectment,
which returned possession of the Property to her. Tenants did
not appeal that order.
thereafter, Tenants commenced this action, alleging various
claims including a claim to recover "equity" that
they accrued in the Property during the four years they made
payments pursuant to the Agreement. Owner counterclaimed for
unpaid rent and for damage to the Property.
parties filed cross motions for summary judgment. The trial
court essentially dismissed all claims and counterclaims,
entering summary judgment for Owner on Tenants' claims
and entering summary judgment ...