R.C. KOONTS and SONS MASONRY, INC., DAVID CRAIG KOONTS, and ROY CLIFTON KOONTS, III, Plaintiffs,
FIRST NATIONAL BANK, f/k/a YADKIN BANK f/k/a NEWBRIDGE BANK f/k/a LEXINGTON STATE BANK, Defendant.
in the Court of Appeals 21 May 2019.
by defendant from order entered 5 July 2018 by Judge Martin
B. McGee in Davidson County No. 16 CVS 1474 Superior Court.
Law Group, PLLC, by Steven D. Smith, Matthew L. Spencer, and
Jonathan M. Holt, for plaintiff-appellees.
Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by
Elizabeth L. Troutman and James C. Adams, II, for
National Bank, formerly known as Yadkin Bank, formerly known
as NewBridge Bank, formerly known as Lexington State Bank
("defendant") appeals from an order denying its
motion for summary judgment. For the reasons stated herein,
we affirm in part and reverse in part.
engages in commercial lending. On or about 22 November 2004,
R.C. Koonts and Sons Masonry, Inc. (the "corporate
plaintiff") obtained a $417, 306.14 loan from defendant.
The individual plaintiffs, plaintiff David Craig Koonts
("David Koonts") and plaintiff Roy Clifton Koonts,
III ("R.C. Koonts"), who owned the corporate
plaintiff at all times relevant to this action, guaranteed
parties renewed the loan in 2005. As collateral, R.C. Koonts
and Sons Masonry, Inc., R.C. Koonts, and David Koonts
(collectively, "plaintiffs") pledged all inventory,
vehicles, accounts receivable, machinery, and equipment of
the corporate plaintiff. Plaintiffs defaulted on the loan in
2007. The parties entered into a forbearance agreement on 19
December 2007, however, plaintiffs subsequently defaulted on
January 2009, defendant filed suit against plaintiffs seeking
repayment of the loan. Defendant also instituted a claim and
delivery proceeding to seize the collateral pledged as
security for the loan. Pursuant to a 12 February 2009 court
order, defendant posted a surety bond and seized the
collateral in a claim and delivery proceeding. Plaintiffs
were unable to secure a bond to recover the collateral. On 15
October 2012, the Honorable Theodore Royster of Davidson
County Superior Court determined plaintiffs were liable to
defendant on the loan.
filed counterclaims challenging the propriety of the seizure
of collateral and requesting consequential damages.
Specifically, the counterclaims challenged the enforceability
of defendant's security interest and of the forbearance
agreement, defendant's right to seize the collateral, and
the amount of the loan that remained outstanding. The
counterclaims also alleged: the amount of collateral seized
forced the corporate plaintiff out of business, the corporate
plaintiff lost the rental value of the collateral due to the
seizure, and defendant failed to maintain the collateral in
proper condition, in violation of Article 9 of the Uniform
Commercial Code ("UCC"). Defendant moved for
summary judgment on plaintiffs' counterclaims.
matter came on for hearing before the Honorable John O.
Craig, III in Davidson County Superior Court on 15 June 2015.
On 3 November 2015, the trial court entered an order granting
partial summary judgment, as follows.
1. Insofar as [R.C. Koonts and Sons Masonry, Inc., R.C.
Koonts, and David Koonts'] counterclaims challenge [the]
seizure of collateral, pursuant to N.C. Gen. Stat. §
1-473, et. seq., they are hereby dismissed, with prejudice.
2. Insofar as [R.C. Koonts and Sons Masonry, Inc., R.C.
Koonts, and David Koonts'] counterclaims arise out of
Article 9 of the Uniform Commercial Code, N.C. Gen. Stat.
§ 25-9-100, et seq., for failure to make a commercially
reasonable disposition of the collateral, [the] claims are
not ripe at this time. The Court approves of [R.C. Koonts and
Sons Masonry, Inc., R.C. Koonts, and David Koonts] voluntary
dismissal of such claims without prejudice, [R.C. Koonts and
Sons Masonry, Inc., R.C. Koonts, and David Koonts] shall not
be required to pay the costs pursuant to Rule 41(d) when
filing or refiling such counterclaims.
3. All other counterclaims of [R.C. Koonts and Sons Masonry,
Inc., R.C. Koonts, and David Koonts] are dismissed with
a bench trial, the trial court ruled that plaintiffs owed
defendant $708, 373.80, plus interest accruing at 13.25% per
annum, plus costs. The trial court entered the final ...