Rider v. Aderhold

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. NO. COA13-57 NORTH CAROLINA COURT OF APPEALS Filed: 16 July 2013 THOMAS A. RIDER and LINDA R. RIDER, Plaintiffs, v. Henderson County No. 11-CVS-88 RON ADERHOLD, RAD CONSTRUCTION MANAGEMENT, INC., BOSTON/SOUTH INVESTMENTS, INC., and FIRST CITIZENS BANK AND TRUST COMPANY, Defendants. Appeal by plaintiffs from order entered 9 July 2012 by Judge Bradley B. Letts in Henderson County Superior Court. Heard in the Court of Appeals 8 May 2013. Karolyi-Reynolds, PLLC, plaintiffs-appellants. by James O. Reynolds, for Ward and Smith, P.A., by Joseph A. Schouten, for defendantappellee. HUNTER, Robert C., Judge. Plaintiffs appeal from the order entered 9 July 2012 granting partial summary judgment in favor of defendant First Citizens Bank & Trust Company with respect to plaintiffs claims of breach of contract, breach of fiduciary duty, unfair or -2deceptive practices or acts ( UDPA ), and fraud. After careful review, we affirm the trial court s order. Background On or about 29 April 2009, plaintiffs Thomas and Linda Rider (individually Tom and Linda or collectively plaintiffs ) applied to defendant First Citizens Bank & Trust Company ( First Citizens ) for a construction loan to build a home in Henderson County, North Carolina. Plaintiffs met with Alicia Hearne ( Hearne ), a mortgage loan officer with First Citizens, and Gary Jones ( Jones ), a retail market executive with First Citizens. Plaintiffs and First Citizens entered into a construction loan agreement ( loan agreement ) on 8 September 2009. Tom testified that Jones told him that he would be his ears and eyes on the project. Plaintiffs entered into a contract with Greenstone Builders, Inc. ( Greenstone ) to build their home. Greenstone began work on plaintiffs home in January 2010. At some point, Greenstone be informed plaintiffs that it would unable complete the work based on unrelated financial issues. to During this meeting, Tom met with defendant Ron Aderhold ( Aderhold ), who was the general contractor for defendant RAD Construction ( RAD ). Aderhold offered to take over the construction project -3from Greenstone and allow the principal Dwyer, to be a consultant on the project. of Greenstone, Rick Plaintiffs agreed and entered into a construction agreement with RAD. First Citizens was informed of the new construction contract. Tom testified that Aderhold represented himself to be an unlimited licensed contractor in North Carolina. Aderhold s license. operated using However, he never asked to see Plaintiffs a contractor s allege that RAD actually license issued in the name of defendant Boston/South Investments, Inc. ( Boston/South ). After RAD began construction, First Citizens made the following disbursements to RAD: (1) $18,900 on 31 March 2010; (2) $40,950 on 14 May 2010; (3) $44,100 on 3 June 2010; (4) $25,200 on 20 July 2010; (5) $31,500 on 19 August 2010; (6) $25,200 on 15 September 2010; (7) $6,000 on 6 October 2010; and (8) $34,650 on 8 October 2010. The draw made on 8 October is the basis for plaintiffs remaining breach of contract claim against First Citizens that was not dismissed at the summary judgment stage. On 18 January 2011, plaintiffs filed a complaint against defendants alleging seven causes of action. their complaint claims: (1) on breach 1 of February 2011, contract Plaintiffs amended asserting against RAD, the following Aderhold, and -4Boston/South; defendants; (2) (3) breach fraud of against fiduciary all duty defendants; against (4) all breach of contract against First Citizens; (5) conversion and trespass to chattels against Aderhold and RAD; (6) UDPA against all defendants; and (7) declaratory judgment against First Citizens. On 17 judgment. February 2011, First Citizens moved for summary The matter came on for hearing on 29 May 2012. On 9 July 2012, the trial court granted First Citizens s motion for summary judgment on all claims except plaintiffs breach of contract claim related to the 8 October 2010 draw for $34,650. Plaintiffs filed their notice of appeal on 9 August 2012. Plaintiffs Notice of Appeal Initially, we must address the untimeliness of plaintiffs appeal. A party must file and serve its notice of appeal within thirty days after entry of judgment if the party has been served with a copy of the judgment within the three day period prescribed by Rule 58 of the Rules of Civil Procedure. N.C. R. App. P. 3(c) (2012). Here, the trial court s order was entered 9 July and served on the parties within three days, as evidenced by First Citizens s certificate of service indicating it faxed the order to plaintiffs on 11 July. Therefore, plaintiffs had until 8 August, 30 days later, to file their -5notice of appeal. Here, plaintiffs notice of appeal, filed 9 August, was untimely and subjects their appeal to dismissal. However, this certiorari Court to will review exercise plaintiffs its discretion claims on and their grant merits, pursuant to N.C. R. App. P. 21 (2012). Grounds For Appellate Review We note that since the trial court s order did not dispose of the entire case in controversy, it is interlocutory. See Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 ( An interlocutory order is one made during the pendency of an action, which does not dispose of the case, but leaves it for further action determine orders the are by the entire not trial court in controversy. ). usually immediately order to Although appealable, settle and interlocutory see id., our Rules of Civil Procedure allow a trial court to certify that its order is a final judgment as to one or more but fewer than all of the claims or parties only if there is no just reason for delay (2011). court s for an appeal. N.C. Gen. Stat. § 1A-1, Rule 54(b) Although not binding on this Court, we afford a trial Rule 54(b) certification great deference on appeal. Kinesis Adver., Inc. v. Hill, 187 N.C. App. 1, 9, 652 S.E.2d 284, 291 (2007). Here, the trial court certified the order, -6stating that there is no just reason for delaying entry of final judgment on said claims pending the disposition of other claims for relief involved in this action[.] Given the trial court s certification and the fact that the order in question finally resolves a number of plaintiffs claims, we address the merits of this interlocutory appeal. Arguments Plaintiffs first argue that the trial court erred in granting partial summary judgment with regard to their breach of contract, breach of fiduciary duty, and UDPA claims because they have raised substantial questions of fact. We disagree. 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) (internal quotation marks omitted). A claim existence of for a breach fiduciary of fiduciary duty. duty Governors requires Club, the Inc. v. Governors Club Ltd. P ship, 152 N.C. App. 240, 247, 567 S.E.2d 781, 786 (2002). special A fiduciary duty arises when there has been a confidence reposed in one who in equity and good -7conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence. Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 60, 418 S.E.2d 694, 699 (1992) (internal debtor-creditor quotation marks relationship omitted). generally does [A]n not ordinary give rise to such a special confidence : the mere existence of a debtorcreditor relationship between fiduciary relationship. Id. the parties does not create a Parties to a contract generally owe no special duty to one another beyond the terms of the contract and the duties set forth in the U.C.C. Here, the record does not reveal that Id. any relationship existed between plaintiffs and First Citizens beyond that of debtor-creditor. their decision Although to enter plaintiffs into the allege contract that in they part based on the assurances of Jones that he would be their eyes and ears on the project, the record does not reveal any facts suggesting that plaintiffs placed any special confidence in First Citizens that would give rise to a fiduciary duty. Moreover, while plaintiffs characterize the loan agreement as pregnant with ambiguity, we find nothing ambiguous in the loan agreement s statements regarding the relationship between the parties. The plain language of the loan agreement -8specifically states that First Citizens had other special relationship with plaintiffs. no fiduciary or Other provisions in the loan agreement similarly limit the relationship to that of lender-borrower: the [b]orrower may not rely upon the appraisals or inspections made by, on behalf of, or for the benefit of the [l]ender ; [the] appraisals and inspections do not constitute any assurances or representations to the [b]orrower ; and [t]he relationship between the [l]ender and the [b]orrower Accordingly, Citizens is solely plaintiffs owed them a that have of failed fiduciary lender to duty, and establish and the borrower. that First trial court properly granted partial summary judgment with regard to this claim. Next, with regard to their breach of contract claim, it seems that plaintiffs are arguing that First Citizens had a duty to ensure that RAD s work was done in a first-class, good and workman-like manner prior to making any disbursement. By disbursing money to RAD, an unlicensed contractor, plaintiffs contend that First Citizens breached its contractual duties. We disagree. A lender is only obligated to perform those duties expressly provided for in the loan agreement to which it is a -9party. Lassiter v. Bank of N.C., 146 N.C. App. 264, 268, 551 S.E.2d 920, 922 (2001). specifically states The loan agreement in the present case that: [t]he [l]ender may disburse construction advances upon the request and at the direction of (i) the [b]orrower, . . . or (iv) any person designated or authorized by the [b]orrower. goes on to say that [u]nless Moreover, the loan agreement the [b]orrower gives written instruction to the [l]ender to the contrary, the [l]ender is authorized, in its discretion, to disburse construction advances directly to any [b]orrower, to the account of any [b]orrower, to any [b]orrower and any contractor, subcontractor or provider of materials or supplies. At his deposition, Tom testified that he did not tell First Citizens to withhold any disbursement to RAD with regard to any of the draws that served as the basis for claims dismissed in summary judgment.1 Moreover, Tom admitted that he directed First Citizens in writing to make disbursements on 31 March, 13 May, 20 July, 19 August, and 6 October. With regard to the draws on 3 June and 15 September, Tom testified that although he did not 1 In fact, we note that the only time plaintiffs told First Citizens not to make a disbursement to RAD was with regard to the 8 October draw of $34,650, and this draw serves as the basis for plaintiffs remaining breach of contract claim against First Citizens, which was not dismissed at summary judgment. -10specifically direct First Citizens to make them, he had not communicated to First Citizens that he did not want them made. Here, plaintiffs presented no evidence that First Citizens breached its contractual duties concerning the disbursements. First Citizens was permitted to make the disbursements, in its discretion, unless plaintiffs gave written instructions to the contrary. With regard to five of the payments, Tom specifically stated that he gave written instructions to First Citizens to make the disbursements. For the 3 June and 15 September disbursements, while Tom did not explicitly tell First Citizens to make them, he never instructed First Citizens to withhold payment. Based on the terms of the agreement, First Citizens was authorized to make those disbursements even without explicit instructions to do so. Thus, plaintiffs failed to forecast evidence that First Citizens breached any of the terms of the loan agreement, and summary judgment was proper on this claim. Next, with regard to the UDPA claim, plaintiffs do not specifically state what acts or practices First Citizens engaged in that serve as the basis for their claim. Citizens s disbursement of unfair or deceptive act. the funds to RAD Presumably, First constitutes the However, as discussed above, First Citizens was authorized to make all of the disbursements to RAD -11under the terms of the loan agreement. A bank exercising its rights under a loan agreement does not engage in a deceptive or unfair practice. See Wachovia Bank & Trust Co., N.A. v. Carrington Dev. Associates, 119 N.C. App. 480, 487, 459 S.E.2d 17, 21 (1995). Moreover, even if First Citizens had breached its contractual duties, a mere breach of contract, even if intentional, is not sufficiently unfair or deceptive to sustain an action under N.C.G.S. § 75-1.1. 62, 418 S.E.2d at 700. Thompson, 107 N.C. App. at [A] plaintiff must show substantial aggravating circumstances attending the breach to recover under the Act. Id. Here, plaintiffs claim relies solely on an alleged breach of contract and includes no facts that establish the existence of aggravating circumstances. Accordingly, summary judgment was proper as to plaintiffs UDPA claim. Finally, plaintiffs argue that the trial court erred in granting partial Specifically, summary plaintiffs judgment seem to as to contend their fraud claim. that because Judge James U. Downs denied First Citizens s motion to dismiss their fraud claim on 19 April 2011, Judge Letts was precluded from subsequently judgment. allowing First Citizens s motion Plaintiffs argument is without merit. for summary [T]he denial of a motion to dismiss made under Rule 12(b)(6) does not prevent -12the court, whether in the person of the same or a different superior court judge, from thereafter allowing a subsequent motion for summary judgment made and supported as provided in Rule 56. Barbour v. Little, 37 N.C. App. 686, 692, 247 S.E.2d 252, 256 (1978). previously Thus, simply because the motion to dismiss was denied, the trial court was not precluded from entering partial summary judgment in favor of First Citizens later in the proceedings. Moreover, we note that plaintiffs claim fails as a matter of law. Plaintiffs claim for fraud is premised on their contention that First Citizens failed to inform them that RAD did not have a general contractors license but was, instead, operating under Boston/South s license. [T]he following essential elements of actionable fraud are well established: (1) False representation reasonably or calculated concealment of deceive, (3) to a material made with fact, (2) intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party. Ragsdale v. Kennedy, 286 N.C. 130, 138, 209 S.E.2d 494, 500 (1974). or misleading representation If the party relying on the false could have discovered the truth upon inquiry, the complaint must allege that he was denied the opportunity to investigate or that he could not have learned the -13true facts by exercise of reasonable diligence. Oberlin Capital, L.P. v. Slavin, 147 N.C. App. 52, 59, 554 S.E.2d 840, 846 (2001). have a that he Here, plaintiffs could have discovered RAD did not contractors could license have requested license, but never did. plead that they from were North a Carolina Tom copy of RAD s testified contractors Moreover, plaintiffs have failed to somehow denied the opportunity to investigate or that they could not have learned the true facts by reasonable diligence. Accordingly, the trial court properly granted summary judgment as to this claim. Conclusion Based on the foregoing reasons, we affirm the trial court s order granting partial summary judgment Citizens. AFFIRMED. Judges STROUD and ERVIN concur. Report per Rule 30(e). in favor of First