Case Name: Joyner v. Adams
Plaintiff: Joyners (husband and wife)
Defendant: J.R. Adams (substitute lessee/developer)
Citation: 87 N.C. App. 570 (1987)
Key Facts: Joyner leased a property to an investment company to develop it (“base lease”). The original investment company was not able to complete this, so Adams assumed the lessee/developer position. The lease obligated Adams to have subdivided “all of the undeveloped land…and have it developed and eligible for the execution of a “lot lease” by September 30, 1980 (recomputation provision). By that date, Adams had executed separate lot leases and built buildings on all but one lot. However, that lot was subdivided, graded, and had installed water and sewer lines, etc.
Joyner filed a complaint seeking to recover the rent which it would have received had the last lot be developed.
Adams said that from his experience and the local real estate market, a lot is considered “developed” when water and sewer lines are installed and the lot is otherwise ready for the construction of a building.
Procedural Posture: The trial awarded judgment for plaintiff based on the rule that ambiguity in contract terms must be construed most strongly against the party which drafted the contract.
Judgment: Remanded because in order for the court to use the rule below “the form of expression in words was actually chosen by one party rather than by the other” in order to apply the rule.
Rule: Ambiguity in contract terms must be construed most strongly against the party which drafted the contract (typically used in adhesion contracts). The court stated that the plaintiff can prevail only if the trial court concludes that the defendant knew or at least had reason to know of the meaning he intended while the plaintiff did not know (or have reason to know) of the meaning the defendant intended. This would mean that there was no meeting of the minds on the term “developed.” Where both parties have knowledge of the other parties understanding, then there is no meeting of the minds. Therefore, the first step is to figure out if one party has knowledge of the term when the other party doesn’t.