In this opinion the Court of Appeals affirmed a Superior Court order reforming a deed and granting summary judgment in favor of the plaintiff Estate. The dispute arose when the plaintiffs intended to sell an eight-acre tract with a house, but the purchase contract and deed mistakenly included both that tract and a seven-acre parcel across the frontage road. Although the defendant initially acknowledged the error through counsel, he later refused to sign a correction deed.

On appeal, the defendant argued that summary judgment was improper due to factual disputes, that a necessary party, the mortgage lender, was not joined, and that the trial court abused its discretion by denying his motion to continue after his late-filed affidavits were excluded.

The Court held that mutual mistake justified reformation. It found that the evidence clearly showed both parties intended the sale of only the eight-acre tract with the house and that North Carolina law permits reformation even where one party's negligence contributed to the drafting error. It also determined that the defendant failed to raise the joinder issue at trial, and it cannot be raised for the first time on appeal. The opinion concludes that no abuse of discretion in the trial court's denying a continuance as the defendant had months to conduct discovery and respond but waited until the Friday before the Monday hearing to serve affidavits therefore, exclusion of late filings was proper. As the latter two issues primarily focus on procedural matters, we will limit our discussion to the reformation issues discussed in the case. The opinion provides a comprehensive discussion of the equitable remedy of reformation of deeds in cases of mutual mistake. For practitioners, this case reinforces the substantive principles governing contract and deed reformation.

Mary C. Black originally acquired two parcels of real property in Aberdeen, North Carolina: eight acres on the north side of the frontage highway including a residence, and a seven-acre tract on the south side. Both parcels were identified with the same parcel identification number (PIN 00046723). In 2009, Black also purchased an adjacent three-acre parcel on the south side, with a separate PIN (20090102). Upon her death, her estate decided to sell the properties: (1) the ten-acre tract on the south side (seven-acre and three-acre parcels combined), and (2) the eight-acre parcel with the house on the north side, as two separate tracts. The estate listed the ten-acre tract for sale on June 6, 2022, and separately listed the eight-acre tract with the house on July 10, 2022. The ten-acre tract went under contract on June 9, 2022.

While the ten-acre tract was under contract, Defendant Derek S. Barber, through his fiancée Jeanna Mathias, expressed interest in the house and eight-acre tract. The estate, through its agent Leasa Haselden, acted as dual agent for the transaction. Barber made an offer of $305,000, which the estate accepted. On August 6, 2022, the parties executed a purchase agreement.

However, the contract listed the property only by PIN 00046723, which covered both the eight-acre and seven-acre tracts. This omission would later prove critical as the contract did not clarify that only the eight-acre tract on the north side was being sold in this transaction. The mortgage lender for the transaction appraised only the house and eight-acre tract on the north side. The appraisal valued the property at $307,000, closely matching the purchase price, the defendant received a copy of the appraisal which included the house and eight-acre parcel, and the parties closed on August 25, 2022. The deed, prepared using the same parcel number, included a non-certified plat showing both the north and south tracts. The opinion notes that the deed was "prepared without a title search", however we surmise that the deed merely contained a disclaimer that commonly included by the drafter, so it may not be safe to assume that the loan was closed without the benefit of s title search. The deed was recorded on October 19, 2022, thus conveying both parcels.

Months later, Haselden realized the mistake of the deed having conveyed the seven-acre tract in addition to the intended eight-acre tract. Discussions ensued about correcting the error. Barber's closing attorney, Raymond Gatti, even emailed Plaintiffs' counsel that Barber was "agreeable to correcting the situation." Despite this, Barber became unresponsive and refused to execute a corrective deed.

In 2024, the Estate filed a complaint seeking reformation of the contract and deed based on mutual mistake and the trial court granted summary judgment for the plaintiffs, ordering reformation. The defendant appealed.

The Court reviewed summary judgment de novo, citing General Fidelity Ins. Co. v. WFT, Inc., 269 N.C. App. 181, 837 S.E.2d 551 (2020), and reiterated that summary judgment is proper when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. The Court emphasized that evidence must be viewed in the light most favorable to the nonmoving party, consistent with White v. Consolidated Planning, Inc., 166 N.C. App. 283, 603 S.E.2d 147 (2004).

Reformation, the Court observed, is a well-established equitable remedy used to correct written instruments when mutual mistake prevents them from reflecting the true intent of the parties. Citing Metropolitan Property & Casualty Ins. Co. v. Dillard, 126 N.C. App. 795, 487 S.E.2d 157 (1997), the Court reaffirmed that reformation applies when a document does not express the true agreement of the parties because of a mutual mistake or the draftsman's error. Wells Fargo Bank, N.A. v. Coleman, 239 N.C. App. 239, 768 S.E.2d 604 (2015), was also instructive, holding that even when mistakes arise from negligence, reformation remains available if clear, cogent, and convincing evidence supports mutual mistake.

The Court explained the burden, citing Hice v. Hi-Mil, Inc., 301 N.C. 647, 273 S.E.2d 268 (1981), that mutual mistake must be proven by "clear, cogent, and convincing evidence." Here, such evidence included:

• Separate listings for the eight-acre tract and the ten-acre tract.
• Appraisal of only the eight-acre tract.
• Purchase price aligning with that appraisal.
• Defendant's attorney's email conceding the mistake.

The Court emphasized that the attorney client relationship in this instance continued after the closing and seemed to place great weight on the statement in the attorney's email. The opinion states: "Additionally, by the plain language of the email, Defendant authorized his closing attorney to convey the message that he was 'agreeable to correcting the situation.' Moreover, if Defendant wanted to dispute the validity of his attorney's statement, Defendant could have produced evidence to the contrary. Instead, Defendant only challenged the duration of the attorney-client relationship." Thus, as in Dillard and Wells Fargo, the Court found that the written instruments failed to reflect the parties' actual agreement, and reformation was warranted.

This case underscores several important lessons for practitioners:

1. Reformation and Negligence: As Dillard and Wells Fargo establish, negligence in drafting does not preclude reformation when both parties are mistaken. Accuracy in property descriptions remains paramount, but equity will correct mutual mistakes.
2. Burden of Proof: Hice clarifies that mutual mistake requires "clear, cogent, and convincing evidence." Practitioners must gather documentation and testimony to satisfy this standard.
3. Appellate Review Standards: The Court's reliance on Morin and In re Custodial Law Enforcement Recording reinforces that appellate courts defer to trial court discretion absent arbitrary or unreasonable rulings.