RL Regi N.C., LLC v. Lighthouse Cove, LLC
Decision Date | 20 August 2014 |
Docket Number | No. 427PA13.,427PA13. |
Citation | 762 S.E.2d 188 |
Court | North Carolina Supreme Court |
Parties | RL REGI NORTH CAROLINA, LLC v. LIGHTHOUSE COVE, LLC; Lighthouse Cove Development Corp., Inc.; Glen C. Stygar; John R. Lancaster; Leticia S. Lancaster; Lionel L. Yow; and Connie S. Yow. |
762 S.E.2d 188
RL REGI NORTH CAROLINA, LLC
v.
LIGHTHOUSE COVE, LLC; Lighthouse Cove Development Corp., Inc.; Glen C. Stygar; John R. Lancaster; Leticia S. Lancaster; Lionel L. Yow; and Connie S. Yow.
No. 427PA13.
Supreme Court of North Carolina.
Aug. 20, 2014.
On discretionary review pursuant to N.C.G.S. § 7A–31 and on writ of certiorari pursuant to N.C.G.S. § 7A–32(b) of a unanimous decision of the Court of Appeals, ––– N.C.App. ––––, 748 S.E.2d 723 (2013), affirming a judgment entered on 1 June 2012 by Judge Jay D. Hockenbury in Superior Court, New Hanover County. Heard in the Supreme Court on 5 May 2014.
Nelson Mullins Riley & Scarborough, LLP, Raleigh, by Christopher J. Blake and Joseph S. Dowdy, for plaintiff-appellant.
Stubbs & Perdue, P.A., Raleigh, by Matthew W. Buckmiller, for defendant-appellee Connie S. Yow.
Ward and Smith, P.A., New Bern, by Jason T. Strickland and Matthew A. Cordell, for North Carolina Bankers Association, Inc., amicus curiae.
NEWBY, Justice.
In this case we consider the effect of a waiver on claims arising from a guarantor-lender relationship, including claims under the federal Equal Credit Opportunity Act (“ECOA”). In exchange for a lender's willingness to restructure loans after default, a guarantor may waive prospective claims against the lender. Because we hold that defendant waived any potential claims, including
[762 S.E.2d 189]
those under the ECOA, we reverse the decision of the Court of Appeals.
In 2006 Regions Bank provided $4,208,000 in financing for the acquisition and partial development of approximately fifty-seven acres of land in Brunswick County to Lighthouse Cove, LLC and Lighthouse Cove Development Corp., Inc. (“the LC Entities”). The loan was secured by the real estate and guaranteed by the individual business partners and their spouses, including Lionel L. Yow and his wife, defendant Connie S. Yow. By 2009 the LC Entities had defaulted on the obligations. As part of a restructuring agreement, on 7 December 2009, defendant executed a forbearance agreement that:
recognize[d] and agree[d] that each Borrower [wa]s in default of its obligations under its respective Loan Documents as a result of the Payment Defaults and that the Lender has the present and immediate right to payment in full of all of the Obligations and the right to exercise any or all of its respective remedies contained in the Loan Documents.
According to the parties' arrangement, Regions Bank “agree[d] to not exercise any of the Collection Remedies under the Loan Documents” and to forego payments on the principal debt during the agreed upon forbearance period. In exchange, defendant waived “any and all claims, defenses and causes of action.”
Waiver of Claims. Each Obligor acknowledges that the Lender has acted in good faith and has conducted itself in a commercially reasonable manner in its relationships with each of the Obligors in connection with this Agreement and in connection with the Obligations, the [Letter of Credit] Obligations and the Loan Documents, each of the Obligors hereby waiving and releasing any claims to the contrary. Each Obligor ... releases and discharges the Lender ... from any and all claims, defenses and causes of action, whether known or unknown and whether now existing or hereafter arising, including without limitation, any usury claims, that have at any time been owned, or that are hereafter owned, in tort or in contract by any Obligor or any affiliate of an Obligor and that arise out of any one or more circumstances or events that occurred prior to the date of this Agreement.
Defendant further acknowledged that she freely and voluntarily entered into the agreement “after an adequate opportunity and sufficient period of time to review, analyze, and discuss ... all terms and conditions of this Agreement.” Eventually, the LC Entities defaulted on their obligations under the forbearance agreement.
In September 2010, plaintiff RL REGI North Carolina, LLC purchased Regions Bank's interest in the LC Entities' loans. Three months later, plaintiff filed an action seeking recovery of the indebtedness from the business partners and their spouses. Defendant asserted as an affirmative defense that plaintiff's predecessor in interest obtained her guaranty of the loans in violation of the ECOA, which, inter alia, prohibits discrimination in credit transactions based on marital status. On 22 March 2012, the trial court entered an order granting summary judgment in favor of plaintiff on all claims, counterclaims, and affirmative defenses, except those with regard to defendant. The trial court concluded that a genuine issue of material fact existed as to whether plaintiff's predecessor in interest violated the ECOA in obtaining her guaranty.
Following a jury trial, the trial court entered judgment for defendant, concluding that Regions Bank had procured her guaranty in violation of the ECOA and that this violation constituted an affirmative defense. Plaintiff appealed from both the denial of its motion for summary judgment and the post-trial judgment that concluded...
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