Printing Services v. American Cap. Group

• Decision Date: 07 November 2006
• Docket Number: No. COA06-190.,COA06-190.
• Citation: 637 S.E.2d 230
• Parties: PRINTING SERVICES OF GREENSBORO, INC., Plaintiff, v. AMERICAN CAPITAL GROUP, INC., Defendant.
• Court: North Carolina Court of Appeals

637 S.E.2d 230

PRINTING SERVICES OF GREENSBORO, INC., Plaintiff, v. AMERICAN CAPITAL GROUP, INC., Defendant.

No. COA06-190.

Court of Appeals of North Carolina.

November 7, 2006.

Appeal by defendant from judgement entered 8 November 2005 by Judge Catherine C. Eagles in Guilford County Superior Court. Heard in the Court of Appeals 23 August 2006.

Robertson, Medlin & Troutman, PLLC, by Stephen E. Robertson, Greensboro, for plaintiff-appellee.

The Wescott Law Firm P.C., by Lynanne B. Wescott, Philadelphia, PA, for defendant-appellant.

JACKSON, Judge.

American Capital Group, Inc. ("defendant") appeals from orders of the Guilford County Superior Court denying its motion for change of venue and granting a motion for summary judgment and award brought by Printing Services of Greensboro, Inc. ("plaintiff").

Plaintiff applied for financing with defendant by signing a proposed sixty-month lease agreement on 10 October 2003 and surrendering a deposit of $1,447.72. Said agreement was never signed by defendant and did not contain a description of the equipment to be leased. No equipment was ever delivered to plaintiff. Prior to 19 February 2004, defendant attempted to change the finance term from sixty months to thirty-six months, which was unacceptable to plaintiff. On 19 February 2004, plaintiff requested a full refund due to defendant's inability to "execute an initial proposal to finance a package for [plaintiff] regarding the terms." On 9 April 2004, defendant mailed a check in the amount of $697.72 to plaintiff, which plaintiff refused.

Plaintiff filed suit on 15 November 2004, seeking damages for failure to comply with North Carolina General Statutes, section 66-106 et. seq. (the "Loan Broker Act") and for breach of contract. On 3 January 2005, defendant filed a motion for change of venue, claiming the terms of the agreement included a forum selection clause, naming Orange County, California as the proper venue. A hearing on the motion was held on 7 March 2005, and the motion was denied by an order entered 3 May 2005.

Plaintiff filed a motion for summary judgment on 31 August 2005, seeking damages in the amount of $1,447.72, treble damages, and attorney's fees. The motion for summary judgment was heard on 31 October 2005, and in an order entered 8 November 2005, the motion was granted in favor of plaintiff, with damages assessed at $4,343.16 and attorney's fees ordered in the amount of $4,707.76. Defendant filed a notice of appeal on 5 December 2005.

Defendant argues five issues on appeal: 1) the trial court erred in denying defendant's motion for change of venue; 2) the trial court erred in determining that the Loan Broker Act applied to defendant; 3) the trial court erred in granting summary judgment; 4) the trial court erred in its calculation of damages; and 5) the trial court erred in the award of attorney's fees. For the reasons stated below, we affirm in part, and reverse and remand in part.

Defendant first argues the trial court erred in denying its motion for change of venue. With respect to the trial court's decision concerning clauses on venue selection, this Court applies an abuse of discretion standard of review. Mark Grp. Int'l Inc. v. Still, 151 N.C.App. 565, 566, 566 S.E.2d 160, 161 (2002). "Under the abuse-of-discretion standard, we review to determine whether a decision is manifestly unsupported by reason, or so arbitrary that it could not have been the result of a reasoned decision." Id.

The clause in question in the instant case reads, "YOU AGREE THAT THIS LEASE HAS BEEN PERFORMED AND ENTERED INTO IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, YOU CONSENT TO JURISDICTION IN ORANGE COUNTY, YOU EXPRESSLY WAIVE ANY RIGHTS TO A TRIAL BY JURY."

[T]he general rule is when a jurisdiction is specified in a provision of contract, the provision generally will not be enforced as a mandatory selection clause without some further language that indicates the parties' intent to make jurisdiction exclusive. Indeed, mandatory forum selection clauses recognized by our appellate courts have contained words such as "exclusive" or "sole" or "only" which indicate that the contracting parties intended to make jurisdiction exclusive.

Id. at 568, 566 S.E.2d at 162 (internal citations omitted). The clause in question contains no such language indicating the parties agreed to venue exclusively in California, merely that a court in Orange County, California would have jurisdiction. Therefore, the trial court did not abuse its discretion in denying defendant's motion for change of venue.

Defendant next contends the trial court erred in determining that the Loan Broker Act is applicable in the instant case. Specifically, defendant argues that: 1) defendant is not a "loan broker;" 2) plaintiff is not a "person;" and 3) the actions attendant upon the agreement were not conducted in North Carolina. As defendant's first and second arguments are intertwined, we address them together.

"Questions of statutory interpretation are questions of law, which are reviewed de novo by an appellate court." In re Proposed Assessments v. Jefferson-Pilot Life Ins. Co., 161 N.C.App. 558, 559, 589 S.E.2d 179, 180 (2003). "The cardinal principle of statutory interpretation is to ensure that legislative intent is accomplished." McLeod v. Nationwide Mutual Ins. Co., 115 N.C.App. 283, 288, 444 S.E.2d 487, 490 (1994). "To determine legislative intent, we first look to the language of the statute." Estate of Wells v. Toms, 129 N.C.App. 413, 415-16, 500 S.E.2d 105, 107 (1998) (citing Poole v. Miller, 342 N.C. 349, 351, 464 S.E.2d 409, 410 (1995)).

North Carolina General Statutes, section 66-106 provides:

A "loan broker" is any person, firm, or corporation who, in return for any consideration from any person, promises to (i) procure for such person, or assist such person in procuring, a loan from any third party; or (ii) consider whether or not it will make a loan to such person.

N.C. Gen.Stat. § 66-106(a)(1) (2003). Subsection (b) of section 66-106 designates certain groups of lenders as being exempt from the Loan Broker Act, and concludes with, "subdivision (1)(ii) above shall not apply to any lender whose loans or advances to any person, firm or corporation in North Carolina aggregate more than one million dollars ($1,000,000) in the preceding calendar year." N.C. Gen.Stat. § 66-106(b) (2003).

We are guided in our review by several principles of statutory construction.

[T]he judiciary must give "clear and unambiguous" language its "plain and definite meaning." However, strict literalism will not be applied to the point of producing "absurd results." When the plain language of a statute proves unrevealing, a court may look to other indicia of legislative will, including: "the purposes appearing from the statute taken as a whole, the phraseology, the words ordinary or technical, the law as it prevailed before the statute, the mischief to be remedied, the remedy, the end to be accomplished, statutes in pari materia, the preamble, the title, and other like means." The intent of the General Assembly may also be gleaned from legislative history. Likewise, "later statutory amendments provide useful evidence of the legislative intent guiding the prior version of the statute." Statutory provisions must be read in context: "Parts of the same statute dealing with the same subject matter must be considered and interpreted as a whole." "Statutes dealing with the same subject matter must be construed in pari materia, as together constituting one law, and harmonized to give effect to each."

Proposed Assessments, 161 N.C.App. at 560, 589 S.E.2d at 181 (internal citations omitted).

It is noteworthy that the resource used by many in North Carolina's legal community includes no reference to whom a loan is made or contemplated in its recitation of the definition of a loan broker. "For purposes of N.C. Gen.Stat. Chapter 66, Article 20, a `loan broker' is any person, firm, or corporation who, with certain exceptions, in return for any consideration, promises to procure or assist in procuring a third party loan, or considers whether or not it will make the loan." 4 Strong's North Carolina Index 4th Brokers and Factors § 20 (2001). There is little case law interpreting the term "loan broker," however, we find the recent case of Johnson v. Wornom, 167 N.C.App. 789, 606 S.E.2d 372, disc. review denied, 359 N.C. 411, 612 S.E.2d 321 (2005), to be instructive.

In Johnson, Mr. Wornom, an alleged "loan broker," agreed to guarantee a Capital Bank loan of $82,000.00 to Dexter Sports Supplements, Inc. and Powerstar, Inc., both North Carolina "corporations." Id. at 790, 606 S.E.2d at 373. As consideration, Wornom was granted, inter alia, management rights in the two businesses. Id. Charles Johnson ("Johnson"), the founder of Dexter Sports Supplements, Inc. and Powerstar, Inc., brought suit against Wornam, alleging that Wornom failed to fulfill his obligations as a loan broker, pursuant to North Carolina General Statutes, section 66-107 et seq. Id. As noted by the dissent, Johnson brought this suit in his individual capacity; however, he also brought the suit in his capacity as a shareholder of the two corporations. Moreover, Johnson had sought the initial loan on behalf of the two corporations, and Wornom in turn guaranteed the loan on behalf of the corporations. Id. The trial court granted Wornom's motion for summary judgment, finding that Wornom had not acted as a loan broker and dismissed Johnson's loan broker claim with prejudice. Id. at 790, 606 S.E.2d at 373-74. This Court reversed the lower court's grant of summary judgment in Wornom's favor, based on Wornom's promise to, and subsequent procurement of a loan from a third party in return for consideration. Id. at 792, 606 S.E.2d at 374-75. As in Johnson, the alleged "loan broker" in the instant case received consideration from a "corporation," not a "person." We hold that Johnson is controlling, in that...