CommunityOne Bank, N.A. v. Boone Station Partners, LLC
Docket: No. COA14–932.
Court: Court of Appeals of North Carolina; May 19, 2015; North Carolina; State Appellate Court
Plaintiff CommunityOne Bank appeals an order dismissing claims against guarantors Stephen D. Saieed and Dr. Howard F. Marks based on the statute of limitations, while claims against Boone Station Partners, LLC, the maker of the promissory note, remain pending. The appeal is considered interlocutory because it does not resolve the entire case and lacks certification under Rule 54(b). The plaintiff failed to prove that the appeal affects a substantial right warranting immediate review, leading to its dismissal.
The facts outline that on July 27, 2007, Boone Station executed a promissory note for $7,910,921.26 and secured it with a deed of trust, with Saieed and Marks providing personal guarantees. A Renewal Note on April 24, 2009, increased the principal to $9,605,000.00, with Marks signing an additional guaranty. Following a default acknowledged in a Forbearance Agreement, Boone Station failed to make payments due by August 15, 2010, prompting foreclosure proceedings that resulted in a public auction sale on June 10, 2011, for $5,100,000.00, insufficient to cover the debt. Marks filed for Chapter 11 bankruptcy on May 10, 2011, and Saieed agreed to settle his debt for $20,000.00 but did not fulfill this obligation. The plaintiff initiated the lawsuit on October 17, 2013, against Saieed and Marks, who moved to dismiss the claims based on the statute of limitations. The trial court granted the dismissal on March 28, 2014, leading to the plaintiff's appeal.
The court clarified that an interlocutory order does not generally allow for appeal unless specific conditions, such as certification by the trial court or substantial rights at stake, are met. In this instance, neither condition was satisfied.
Jurisdiction for this appeal hinges on whether the order deprives the appellant of a substantial right that would be at risk without a review before a final determination. The plaintiff contends that a substantial right exists due to overlapping factual issues in the claims. However, the court finds that the plaintiff has not demonstrated any likelihood of inconsistent verdicts arising from the claims against Boone Station and the defendants Saieed and Marks. North Carolina law dictates that a substantial right is affected only when both the same factual issues are present in both trials and there is a possibility of inconsistent verdicts. The mere fact that claims stem from a single event does not automatically imply a risk of inconsistent verdicts.
In this case, the plaintiff seeks recovery on a promissory note guaranteed by Saieed and Marks after a foreclosure sale did not cover the debt. The trial court dismissed claims against Saieed and Marks due to the expiration of the statute of limitations, while Boone Station's similar motion is still pending. The liability of Saieed and Marks arises from their guaranty contracts, which are distinct from Boone Station’s obligations under separate contracts. The court has previously ruled that no risk of inconsistent verdicts exists when claims arise from different contracts with varying legal duties. Thus, the claims against Boone Station and the guarantors are treated independently, affirming the trial court's dismissal of the claims against Saieed and Marks.
Plaintiff asserts a potential for inconsistent verdicts, arguing that while Boone Station's liability remains unresolved, defendant guarantors claim defenses that depend on Boone Station not being liable for any deficiency after the foreclosure sale. Plaintiff suggests that Boone Station might be found liable, yet the guarantors could contest this liability. However, plaintiff has not cited any provisions in the guaranties or case law indicating that the guarantors can relitigate Boone Station's liability if a final judgment is appealed and reversed. The only case referenced by plaintiff, Heritage Operating, L.P. v. N.C. Propane Exch. LLC, involved a dismissed appeal due to a failure to prove the existence of inconsistent verdicts, leading to the conclusion that the appeal did not affect a substantial right. It is the appellant's responsibility to provide valid grounds for an interlocutory appeal, which plaintiff has not demonstrated here. Consequently, the appeal is dismissed, with reference to High Point Bank & Trust Co. v. Hoffman Builders, Inc. for persuasive reasoning, despite it being unpublished and non-binding. Judges STEPHENS and DILLON concur. The appeal arises from an order dated March 28, 2014, by Judge Phyllis M. Gorham, heard on January 22, 2015.
