Ussery v. Branch Banking and Trust Co.

• Decision Date: 21 May 2013
• Docket Number: No. COA12–940.,COA12–940.
• Citation: 743 S.E.2d 650
• Parties: William T. USSERY and wife, Carolyn B. Ussery, Plaintiffs, v. BRANCH BANKING AND TRUST COMPANY, Defendant.
• Court: North Carolina Court of Appeals

743 S.E.2d 650

William T. USSERY and wife, Carolyn B. Ussery, Plaintiffs,

v.BRANCH BANKING AND TRUST COMPANY, Defendant.

No. COA12–940.

Court of Appeals of North Carolina.

May 21, 2013.

Appeal by Plaintiffs from Order entered 16 April 2012 by Judge W. David Lee in Richmond County Superior Court. Heard in the Court of Appeals 14 February 2013.

Anderson, Johnson, Lawrence & Butler, L.L.P., Fayetteville, by Steven C. Lawrence and Stacey E. Tally, for Plaintiffs.

Bell, Davis & Pitt, P.A., Wiston–Salem, by Kevin G. Williams and Michael D. Phillips, for Defendant.

STEPHENS, Judge.

Factual Background and Procedural History

This appeal arises from communications involving Branch Banking and Trust Company (“Defendant” or “BB & T”), Mr. William T. Ussery (“Plaintiff”), and Mr. D. Wayne Barker (“Barker”) surrounding events occurring between November of 1999 and January of 2008. Before that time, the owners of a chair manufacturing business located in Rockingham, North Carolina, had approached Barker and Plaintiff to discuss the possibility of selling their struggling company, CAFCO. Barker had spent a number of years managing CAFCO, which manufactured chairs, but lacked Plaintiff's individual financial ability to start a business.

By November of 1999, Plaintiff and Barker had purchased CAFCO and its manufacturing building (“the original manufacturing building”). Their new company was known as “Chair Specialties” and was intended to manufacture specialty furniture. Plaintiff maintained a 60% ownership interest in the company and Barker held a 40% interest. Barker was responsible for the company's day-to-day operations, and the parties entered into their relationship with the understanding that Barker would eventually seek to purchase Plaintiff's interest in Chair Specialties with money obtained through a $450,000 government-backed small business loan (“the government-backed loan”).

In order to purchase equipment to operate their business, Plaintiff and Barker also took out a $100,000 loan from BB & T. Around that same time, Plaintiff purchased a second building (“the Cheraw Road building”) for $150,000. The Cheraw Road building was meant to house the Chair Specialties manufacturing operations process. Plaintiff intended to develop the original manufacturing building into a residential condominium complex. He and Barker would then use the Cheraw Road building as collateral for the government-backed loan. However, because the Cheraw Road building suffered from environmental limitations, it could not be used for manufacturing purposes until the parties had completed lead removal and abatement.

During the process of purchasing CAFCO and starting Chair Specialties, Plaintiff and Barker communicated with an employee of BB & T, Mr. Wiley Mabe (“Mabe”), concerning their plan to secure the government-backed loan. Once lead removal and abatement had been accomplished, they approached Mabe about obtaining that loan. Plaintiff alleges that Mabe “assured” them that Chair Specialties would qualify for the loan. In order to cover their expenses in the meantime, however, Plaintiff and Chair Specialties took out two more loans from BB & T over the next two years. In addition to the $100,000 note mentioned above, Chair Specialties took out a $50,000 loan in February of 2000, and Plaintiff took out a $125,000 loan in February of 2001. Plaintiff asserts that these funds were acquired in reliance on Mabe's “repeated assurances” that they would be approved for the government-backed loan.

In January of 2002, Mabe informed Plaintiff and Barker that, to his surprise, they had not qualified for the government-backed loan. After further research, Plaintiff and Barker learned that, in fact, Mabe had not submitted the loan package on time because “he did not believe that [they] would qualify.” As Plaintiff and Barker had accumulated additional debt in the past two years, Plaintiff alleges they were unable to obtain any money from another source. He further alleges that, as a result, they were forced to close Chair Specialties. Three months later, in an attempt to mitigate their losses, Barker and Plaintiff applied for and received a $425,000 loan from BB & T. The proceeds from that loan were used to pay off their three other loans, with an additional $99,187.75 going to Plaintiff.

Due in part to the terms of the final, $425,000 loan from BB & T, Barker was unable to sustain his payments. Accordingly, he brought a civil action against BB & T in May of 2003 for breach of fiduciary duty, negligence, and breach of contract. Plaintiff did not join that action and now alleges that he was dissuaded from doing so by representatives of BB & T, who allegedly assured him that “everything would be worked out in the Barker litigation” and requested that he “hold off on instituting any action[ ] to allow resolution of the Barker matter [and his own claims against BB & T].” In Plaintiff's answers to Defendant's first set of interrogatories, he stated that BB & T

gave assurances ... that [it] would resolve the matter and the Note would be canceled upon resolution of the Barker/BB & T suit. [Plaintiff] delayed filing any action against BB & T upon the assurances that the loan would be forgiven and he would be reimbursed any expenses incurred related to BB & T's failure to obtain the [government-backed loan].

Importantly, the action between Barker and BB & T was settled on 20 April 2006—after the statutes of limitation had already expired as to Plaintiff's claims. Plaintiff consulted counsel regarding those claims that summer. ¹

On 17 October 2006, Plaintiff sent a letter to BB & T demanding both cancellation of the $425,000 loan and compensatory damages resulting from BB & T's failure to obtain the government-backed loan. After talking with counsel for BB & T, however, Plaintiff agreed to delay litigation further so that Defendant could perform an environmental inspection of the Cheraw Road building. As consideration for delaying his action, BB & T held the $425,000 note in abeyance pending completion of its inspection. Plaintiff alleges that, pursuant to that agreement, BB & T then informed him that he could “ignore the computer generated delinquency notices,” which had begun to accumulate in response to his failure to make payments. On 14 August 2007, after BB & T had completed its environmental testing, Plaintiff wrote to BB & T to express his concern that “the only way for [him] to correct this situation and to be compensated for his financial losses [was] through litigation.” On 14 January 2008, Plaintiff received a letter from BB & T officially rejecting his 17 October 2006 demand for cancellation and proposing an alternate resolution.

On 25 June 2008, approximately six years and five months after he first learned that the government-backed loan had been denied, Plaintiff brought this action.² Based on his communications with BB & T, Plaintiff alleged the following independent claims: (1) negligence, (2) negligent misrepresentation, (3) breach of contract, (4) unfair and deceptive trade practices, (5) breach of fiduciary relationship, (6) breach of duty of good faith dealing, and (7) fraud. As a consequence, BB & T filed a compulsory counterclaim to collect the outstanding money, including interest, owed by Plaintiff via the $425,000 loan. BB & T noted therein its intention to collect attorneys' fees.

On 15 December 2011, BB & T moved for summary judgment on grounds that Plaintiff's action was barred by the relevant statutes of limitation. The next year, on 16 April 2012, the trial court granted BB & T's motion for summary judgment, dismissed Plaintiff's complaint with prejudice, and entered judgment in favor of BB & T. Plaintiff appeals that judgment.

Standard of Review

“Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citation and quotation marks omitted). On a motion for summary judgment, the evidence presented must be viewed in a light most favorable to the non-moving party. Duke Energy Corp. v. Malcolm, 178 N.C.App. 62, 64–65, 630 S.E.2d 693, 695 (2006). “Summary judgment is a drastic remedy which should be approached with caution. It should be awarded only where the truth is quite clear.” Bradshaw v. McElroy, 62 N.C.App. 515, 518, 302 S.E.2d 908, 911 (1983) (citations and quotation marks omitted).

Discussion

I. Statutes of Limitation

Plaintiff's claims against BB & T accrued, at the latest, in January of 2002 when he learned about Mabe's alleged misrepresentation concerning the government-backed loan. See, e.g., Bruce v. N.C.N.B., 62 N.C.App. 724, 727, 303 S.E.2d 561, 563 (1983) (“[T]he cause of action [in a case of breach of fiduciary duty] accrued at the date of the alleged breach or, at the latest, on the date it was discovered.”). Plaintiff filed his complaint on 25 June 2008. As it had been at least six years and five months since Plaintiff's asserted claims accrued, those causes of action were barred by their respective statutes of limitation. As noted in Defendant's brief, the following of Plaintiff's claims are subject to a three-year statute of limitations: (1) negligence under N.C. Gen.Stat. § 1–52(5), (2) negligent misrepresentation under section 1–52(5), (3) breach of contract under section 1–52(1), (4) breach of fiduciary relationship under section 1–52(1), (5) breach of duty of good faith and fair dealing under section 1–52(1), and (6) fraud under section 1–52(9). In addition, Plaintiff's claim of unfair and deceptive trade practices is subject to a four-year statute of limitations under N.C. Gen.Stat. § 75–16.2. Because Plaintiff did not institute proceedings based on his alleged causes of action within the time allotted, they are time-barred.

II. Equitable...