Banking v. Peacock Farm, Inc.
| Decision Date | 06 August 2013 |
| Docket Number | No. COA12–1494.,COA12–1494. |
| Citation | 749 S.E.2d 111 |
| Parties | BRANCH BANKING AND TRUST COMPANY, Plaintiff, v. PEACOCK FARM, INC., Rodolphe T. Lynch and Willard A. Rhodes, Defendants. |
| Court | North Carolina Court of Appeals |
OPINION TEXT STARTS HERE
Appeal by defendant and cross-appeal by plaintiff from orders entered 5 June 2012 and 12 July 2012 by Judge Anderson D. Cromer in Moore County Superior Court. Heard in the Court of Appeals 5 June 2013.
Howard, Stallings, From & Hutson, P.A., by Russell W. Johnson and John N. Hutson, Jr., for plaintiff.
Van Camp, Meacham & Newman, PLLC, by James R. Van Camp, Michael J. Newman, and William M. Van O'Linda, Jr., for defendant Rodolphe T. Lynch.
Defendant Rodolphe T. Lynch appeals from an order granting summary judgment to plaintiff Branch Banking and Trust Company (“BB & T”). This order was not, however, a final judgment, but rather an interlocutory order. Still pending are Mr. Lynch's cross-claims against his codefendants, Peacock Farm, Inc. and Willard A. Rhodes, and their cross-claims against Mr. Lynch. Because the trial court did not certify the summary judgment order for immediate appeal pursuant to Rule 54(b) of the North Carolina Rules of Civil Procedure and because Mr. Lynch has not made any argument that the summary judgment order affects a substantial right that would be lost absent an immediate appeal, this Court lacks jurisdiction over this interlocutory appeal. Accordingly, we dismiss Mr. Lynch's appeal.
BB & T filed a cross-appeal from the trial court's order allowing Mr. Lynch's motion for a stay upon his posting of a $25,000.00 appeal bond. Although BB & T has asserted in its brief that the appeal affects a substantial right, its conclusory statement, without more, is insufficient to establish that this Court has jurisdiction over its appeal, especially given that the appeal is derivative of Mr. Lynch's appeal, which has been dismissed. We, therefore, also dismiss BB & T's appeal.
Willard Rhodes is a developer and the sole owner of Peacock Farm, Inc. Rudolphe Lynch operates a business that specializes in farm management and field preparation of horse farms. In spring 2007, Mr. Lynch and Mr. Rhodes began discussing development of a residential horse farm in Southern Pines, N.C. to be called Pelham Farms. The two men entered into a Memorandum of Understanding, which provided that Mr. Lynch would do the site work for the development at cost and receive 50% of the net profits from the development.
According to Mr. Lynch, he understood that Peacock Farm would initially own the Pelham Farms property, but that it would ultimately transfer the property to a separate partnership between Mr. Lynch and Mr. Rhodes. The Memorandum of Understanding, however, provided that Peacock Farm would hold title to the land, and Mr. Lynch's interest would be limited to receiving 50% of the net profits from the sale of the property:
Lynch acknowledges and agrees, that except for the right to receive one half (1/2) of the Net Profits from the sale of the Property as above defined and except for being reimbursed for the Contracted Work, Lynch does not have and will not have a claim for any payment from any source or of any nature from Peacock in connection with the Property or for any other reason; it being understood and agreed that Peacock may currently or in the future conduct other business activities unrelated to the Property in its corporate name and Lynch shall have no interest or connection which [sic] such other business of Peacock.
On 15 May 2007, Peacock Farm and Mr. Lynch executed a loan agreement with BB & T providing that BB & T would loan Peacock Farm $2,250,000.00 and that Mr. Lynch and Mr. Rhodes would each personally guarantee Peacock Farm's promissory note. On the same day, Mr. Lynch signed an agreement guaranteeing that loan. The guaranty agreement provided in part that Mr. Lynch guaranteed the debts of Peacock Farm absolutely and unconditionally “at any time, now or hereafter” acquired and that his obligation would be a primary and not secondary obligation.
On 9 August 2007, when BB & T made three additional loans to Peacock Farm, Mr. Lynch signed a separate personal guaranty with virtually identical language. The loans were also secured by a deed of trust encumbering Pelham Farms. In total, the codefendants borrowed a principal amount of $6,500,000.00 in the summer of 2007.
Sometime in early 2008, Mr. Lynch realized that he did not own half of the property that made up Pelham Farms and had no control over the development. He contacted a loan officer with BB & T to inform him that it had been his understanding that he would ultimately have an ownership interest in Pelham Farms. On 24 April 2009, Mr. Lynch through counsel wrote BB & T informing them of Mr. Lynch's understanding of his agreement with Mr. Rhodes. Mr. Lynch indicated that he would not participate in the renewal of the loan or execute any other notes.
On 12 June 2009, an employee of BB & T inadvertently emailed Mr. Lynch a document prepared by BB & T's in house counsel entitled “Problem Loan Review for Peacock Farm, Inc.” The document reviewed the file concerning the loans and addressed possible concerns with the documentation, including concerns regarding what benefit Mr. Lynch was receiving in consideration for executing his guaranty and recommending that the bank confirm that proper consideration existed.
Peacock Farm defaulted on the BB & T notes, and BB & T filed suit against Peacock Farm, Mr. Rhodes, and Mr. Lynch seeking to hold them jointly and severally liable. Mr. Lynch filed a motion to dismiss, answer, counterclaims for unfair and deceptive trade practices and breach of contract, and cross-claims against Mr. Rhodes and Peacock Farm. In the cross-claims, Mr. Lynch sought indemnity and contribution from Mr. Rhodes and Peacock Farm. Similarly, Peacock Farm and Mr. Rhodes asserted cross-claims against Mr. Lynch for contribution.
On 27 January 2012, BB & T filed a notice of voluntary dismissal with prejudice of its claims against Mr. Rhodes and Peacock Farm. On 23 February 2012, BB & T moved for summary judgment with respect to its claims against Mr. Lynch and Mr. Lynch's claims against BB & T.
Mr. Lynch moved to amend his answer on 30 May 2012 to add the defense of release. Mr. Lynch alleged in the motion that BB & T settled its claims with Peacock Farm and Mr. Rhodes and released their obligations under the notes and guaranty at issue in this action. Mr. Lynch contended that “BB & T's release of Defendants [sic] Peacock Farm, Inc. operates as a discharge of Defendant's Lynch's obligations under his guaranty....”
The trial court entered an order on 5 June 2012 granting Mr. Lynch's motion to amend his answer and granting BB & T's motion for summary judgment. The order entered judgment in favor of BB & T and against Mr. Lynch in the amount of $3,749,255.85. Mr. Lynch filed notice of appeal and moved for a stay pending appeal. On 12 July 2012, the trial court granted Mr. Lynch's motion for a stay on condition that Mr. Lynch post an appeal bond in the amount of $25,000.00. BB & T filed a notice of cross-appeal from the order granting the stay.
We first observe that this appeal is interlocutory. An order is interlocutory if it does not dispose fully of a case, but rather requires further action by the trial court in order to finally determine the rights of all the parties involved in the controversy. Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950). Here, the order granting summary judgment as to the claims between BB & T and Mr....
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Branch Banking & Trust Co. v. Peacock Farm, Inc.
...and (2) Lynch had failed to show that the 5 June 2012 order affected a substantial right. Branch Banking & Trust Co. v. Peacock Farm, Inc., ––– N.C.App. ––––, 749 S.E.2d 111 (2013) (unpublished).1 Over eight months later, Lynch obtained an order from the trial court on 16 April 2014 purport......