Chemical Realty Corp. v. Home Fed. S & L Assn. of Hollywood

310 S.E.2d 33 (1983)

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Chemical Realty Corp. v. Home Fed. S & L Assn. of Hollywood

North Carolina Court of Appeals
310 S.E.2d 33 (1983)

LJ

Facts

In April 1972, Home Federal Savings and Loan Association of Hollywood (Home Federal) (defendant) entered into an agreement with the predecessor of Landmark Hotel, Incorporated (Landmark) to issue a long-term mortgage for the construction of a hotel. A title commitment was issued requiring Landmark to furnish an acceptable management contract with Hyatt House Hotel Corporation; however, the proposed management contract was not accepted. Landmark then submitted an alternative management contract with Motor Inn Management, Incorporated (Motor Inn), which was accepted. In November, a broker approached Chemical Realty Corporation (plaintiff) to become the construction lender for the hotel. Chemical Realty agreed on the condition that Landmark, Chemical Realty, and Home Federal enter into a triparty takeout agreement for the construction loan to be paid from the long-term mortgage. In December, Chemical Realty issued a loan commitment for the construction loan. Subsequently, the triparty agreement was removed from the construction-loan commitment because it was disagreeable to the parties. In April 1973, Home Federal delivered an undated letter to Chemical Realty, establishing several terms to effectuate the takeout. Home Federal extended its loan commitments to allow Chemical Realty more time to close on its construction loan. Shortly thereafter, Chemical Realty issued its construction loan to Landmark. A total of $90,000 was disbursed from Chemical Realty to Home Federal in accordance with the letter in order to extend the commitment on the long-term mortgage. However, during construction Landmark and Motor Inn reached an impasse, and construction ceased. In October 1974, Chemical Realty and Home Federal met to close on the long-term mortgage. However, Home Federal refused to close, alleging the terms of the long-term mortgage commitment had not been met. Home Federal refused Chemical Realty’s request for an extension. Landmark ultimately filed for bankruptcy, and Chemical Realty foreclosed on its deed. Chemical Realty then sued Home Federal for breach of contract for Home Federal’s refusal to close on the long-term mortgage after funds were advanced. The trial court ruled for Home Federal. However, the court’s only finding of fact concerning the letter between Chemical Realty and Home Federal was to acknowledge its existence. The court made no finding of ultimate fact and no findings of fact regarding whether Home Federal owed a contractual duty to Chemical Realty. Chemical Realty appealed, because the trial court failed to find a contract between Chemical Realty and Home Federal and failed to determine whether Chemical Realty was a third-party beneficiary of the long-term mortgage commitment.

Rule of Law

Issue

Holding and Reasoning (Wells, J.)

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