## Facts

- Broyhill Furniture Industries, Inc. sold a furniture manufacturing plant to a buyer group that included Micro Capital Investors, Inc., and the plant was later leased for operations by The Woodsmiths Company.
- The plant and an attached warehouse were part of the same overall facility, and Broyhill continued to use the warehouse after the sale.
- The entire facility was heated by a single wood-fired boiler system that used scrap wood generated by the manufacturing operations.
- During negotiations over the sale, the parties addressed how heating costs would be handled given Broyhill’s continuing use of the warehouse space.
- The sale agreement included a provision allowing the buyers to charge Broyhill one-fourth (1/4) “of the total heating bill for the Premises,” but the contract did not define “total heating bill.”
- About four years after the sale, Woodsmiths sent Broyhill a demand letter seeking roughly $385,000 as Broyhill’s one-fourth share of heating costs over the prior four years.
- Broyhill paid $50,000 but refused to pay more without documentation supporting the claimed expenses and their connection to heating the premises.
- Woodsmiths later provided a revised breakdown that added or increased categories of claimed heating-related costs; Broyhill again refused to pay without adequate support.
- Micro Capital sued Broyhill for breach of contract, alleging Broyhill failed to pay the required one-fourth share of the “total heating bill for the Premises.”
- In the litigation, Micro Capital argued the “total heating bill” included items such as consumable supplies, utilities, equipment rental (related to boiler dust), labor, and fire/boiler insurance.
- Broyhill argued the phrase “total heating bill” was too uncertain to enforce and, at most, would cover a more limited set of customary heating charges (such as fuel inputs, boiler operator wages, and a nominal utilities charge).
- The trial court concluded the term was indefinite and dismissed the breach-of-contract claim; Micro Capital appealed.

## Issues

1. Whether the contract term requiring Broyhill to pay one-fourth “of the total heating bill for the Premises” was so vague or indefinite that it could not be enforced.
2. Whether the trial court erred by dismissing Micro Capital’s breach-of-contract claim on the ground that the “total heating bill” provision lacked a definite meaning.

## Decision

- The Court of Appeals held that the phrase “one-fourth (1/4) of the total heating bill for the Premises” was not so indefinite that it defeated contract enforcement.
- The court treated the language as capable of being given a definite meaning through evidence, even if the parties disputed which cost items counted as part of the “heating bill.”
- The court reasoned that “heating bill” is a workable commercial concept and that the reference to “the Premises” ties the obligation to heating the facility at issue.
- The court concluded the trial court resolved a fact-dependent disagreement about the scope of the heating costs as a matter of law, rather than allowing proof about what the parties intended and what costs were reasonably tied to heating.
- The judgment dismissing Micro Capital’s claim was reversed, and the case was remanded for further proceedings.

## Legal Principles

- A contract is not unenforceable for indefiniteness if the parties’ intent can be determined with reasonable certainty using ordinary rules of construction and the surrounding circumstances.
- When a contract term is uncertain in application, courts may consider extrinsic evidence (such as course of performance, trade usage, and records of actual costs) to determine meaning and required performance.
- Dismissal at the pleading stage (or judgment as a matter of law) is improper where the disputed contract language is capable of a definite meaning and factual development could establish the content of the obligation.

## Conclusion

The North Carolina Court of Appeals reversed the trial court’s dismissal of Micro Capital’s breach-of-contract claim, holding that the agreement’s requirement that Broyhill pay one-fourth of the “total heating bill for the Premises” was not fatally indefinite and could be applied using evidence about the heating system, records of expenses, and the parties’ intended allocation of heating-related costs, requiring remand for further proceedings.


Micro Capital Investors, Inc. v. Broyhill Furniture Industries, Inc., 728 S.E.2d 376 (2012)