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RL REGI North Carolina, LLC v. Lighthouse Cove, LLC

Supreme Court of North Carolina

August 20, 2014

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

Heard in the Supreme Court May 5, 2014.

Counsel Amended September 17, 2014.

From NC Court of Appeals. No. 12-1279. R. Chris Dillon, Judge. From New Hanover. No. 10CVS5742. Allen Baddour, Judge.

Nelson Mullins Riley & Scarborough, LLP, by Christopher J. Blake and Joseph S. Dowdy, for plaintiff-appellant.

Stubbs & Perdue, P.A., by Matthew W. Buckmiller and Trawick H. Stubbs, for defendant-appellee Connie S. Yow.

Ward and Smith, P.A., by Jason T. Strickland and Matthew A. Cordell, for North Carolina Bankers Association, Inc., amicus curiae.

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.

OPINION

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 [367 N.C. 426] may waive prospective claims against the lender. Because we hold that defendant waived any potential claims, including

Page 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 ...


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