In Re Fifth Third Bank, Nat. Ass'n

716 S.E.2d 850, 216 N.C. App. 482, 2011 N.C. App. LEXIS 2285
CourtCourt of Appeals of North Carolina
DecidedNovember 1, 2011
DocketCOA11-128
StatusPublished
Cited by13 cases

This text of 716 S.E.2d 850 (In Re Fifth Third Bank, Nat. Ass'n) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Fifth Third Bank, Nat. Ass'n, 716 S.E.2d 850, 216 N.C. App. 482, 2011 N.C. App. LEXIS 2285 (N.C. Ct. App. 2011).

Opinion

ERVIN, Judge.

Plaintiffs Jerome E. Williams, Jr., M.D., and Jerome E. Williams, Jr., M.D., Consulting LLC, appeal from an order entered 3 November 2008 compelling them to arbitrate their claims against Defendants United Community Bank (Georgia) and United Community Bank (North Carolina) 1 and dismissing all claims asserted against UCB by Plaintiff Adelle A. Williams, M.D. 2 and from orders entered 11 May 2010 (1) granting UCB’s motion to confirm the Arbitrator’s award and denying Plaintiffs’ motions to vacate or modify the Arbitrator’s award and to continue or stay consideration of UCB’s motion to confirm the Arbitrator’s award and (2) granting summary judgment in favor of Defendant United Community Bank, Inc., 3 denying Plaintiffs’ motion *484 to continue the hearing concerning UCBI’s motion for summary judgment, and dismissing all of Plaintiffs’ claims against UCBI with prejudice. On appeal, Plaintiffs argue that Judge Bell erred by denying their motion to vacate or modify the Arbitrator’s award and by granting summary judgment in favor of UCBI. After careful consideration of Plaintiffs’ challenges to the trial court’s orders in light of the record and the applicable law, we conclude that the challenged orders should be affirmed.

I. Background

A. Substantive Facts

In 2005, Dr. Williams “was made aware of the Village of Penland development through a broker, who presented the development as an investment opportunity.” At that time, Dr. Williams was told that the developers had purchased more than 1,000 acres of land in Mitchell County on which they planned to construct a mountain home community. In the event that he “decided to invest, [Dr. Williams] would receive returns on [the] investment by and through the proceeds from the sales of the finished homes in the development.” More particularly, investors like Plaintiffs would purchase lots in the Village of Penland, with the purchase of these lots to be financed through credit extended by a lending institutions. The developers, in turn, agreed to be responsible for making the required loan payments for the first two years and to re-purchase the lots in question within two years “for a purchase price equal to the sum of the amount remaining on our bank loans plus an additional 125% of the value of such bank loans.”

Dr. Williams decided to invest in the Village of Penland project (“the project”), and, acting in either his individual capacity or through Williams Consulting, bought twenty lots in the Village of Penland at a price of $125,000 per lot. Williams Consulting LLC, which is wholly owned by Dr. Williams, obtained a loan from UCB for the purpose of financing the purchase of eleven of these twenty lots by means of a loan procured through UCB in the principal amount of $1,031,250 and signed a promissory note in favor of UCB for that amount. 4 The UCB loan was secured by a deed of trust applicable to the relevant lots and by a personal guaranty executed by Dr. Williams.

Unfortunately for Plaintiffs, the developers did not use the monies procured through the use of this investment arrangement to *485 properly develop the Village of Penland. Ultimately, a number of individuals associated with the developers pled guilty to various federal crimes arising from activities relating to the project. After the failure of the project, Williams Consulting defaulted on the promissory note in favor of UCB, and Dr. Williams failed to honor his personal guaranty. The present litigation stems from a disagreement over the extent to which Plaintiffs are obligated to repay the loans that they secured for the purpose of investing in the project.

B. Procedural History

On 4 April 2008, Plaintiffs filed a complaint against UCB, UCBI, and a number of other defendants in which they sought damages stemming from the failure of their investment in the project. On 25 June 2008, UCB filed a motion to compel Plaintiffs to submit their claims to binding arbitration and to stay litigation of Plaintiffs’ claims pending completion of the arbitration process. In seeking to compel Plaintiffs to arbitrate their claims against UCB, UCB relied upon a provision contained in the promissory note executed by Williams Consulting that provided, in pertinent part, that “Lender and Borrower agree that all disputes, claims and controversies between them . . . shall be arbitrated” and that the “Federal Arbitration Act shall apply to the construction, interpretation, and enforcement of this arbitration provision.” In addition, UCB sought the dismissal of all claims asserted by Plaintiff Adelle Williams on the grounds that she had not borrowed money from UCB. On 3 November 2008, Judge Patti entered an order compelling Plaintiffs to submit their claims against UCB to binding arbitration, staying the litigation of Plaintiffs’ claims against UCB pending completion of the arbitration process, and dismissing Plaintiff Adelle Williams’ claims.

On 11 August 2008, UCB commenced an arbitration proceeding against Plaintiffs. In response, Plaintiffs submitted the claims that they had asserted against UCB in their complaint in this case for the Arbitrator’s consideration. After conducting a hearing, Arbitrator R. Wayne Thorpe issued an interim award on 25 October 2009 resolving all of the claims that had been asserted in the arbitration proceeding by both UCB and Plaintiffs. More specifically, the Arbitrator found in favor of UCB and against Plaintiffs with respect to all claims except for the unfair and deceptive trade practices claim that Plaintiffs had asserted against UCB. In a final award issued on 3 November 2009, the Arbitrator awarded UCB $602,837.34, a sum which consisted of the total amount that UCB was entitled to receive under the promissory note less the $602,837.34 in damages that the Arbitrator awarded *486 to Plaintiffs based upon their unfair and deceptive trade practices claim. As a result, the ultimate effect of the Arbitrator’s decision was to require Plaintiffs to pay one half of their outstanding indebtedness under the promissory note to UCB.

On 17 December 2009, UCB filed a motion seeking confirmation of the Arbitrator’s award and UCBI moved for summary judgment with respect to Plaintiff’s remaining claims. On 1 February 2010, Plaintiffs moved to vacate or modify both the interim and final awards and to continue or stay consideration of UCB’s motions. After providing the parties with an opportunity to be heard on 22 February 2010, Judge Bell entered two orders on 11 May 2010. In the first of these two orders, Judge Bell granted UCB’s request for confirmation of the Arbitrator’s award, denied Plaintiffs’ motion to vacate or modify the Arbitrator’s award, and denied Plaintiffs’ motion to continue or stay UCB’s confirmation motion. In his second order, Judge Bell granted UCBI’s summary judgment motion and denied Plaintiffs’ motion to continue or otherwise decline to consider UCBI’s motion. Plaintiffs noted an appeal to this Court from Judge Patti’s order of 3 November 2008 and Judge Bell’s orders of 11 May 2010.

II. Legal Analysis

A.

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Cite This Page — Counsel Stack

Bluebook (online)
716 S.E.2d 850, 216 N.C. App. 482, 2011 N.C. App. LEXIS 2285, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-fifth-third-bank-nat-assn-ncctapp-2011.