in the Court of Appeals 5 June 2019.
by plaintiff and third-party defendant, Bethesda Road
Partners, LLC, from Judgment entered 26 February 2018, and by
defendant and third-party plaintiff Stephen M. Strachan from
Order entered 6 June 2017 and Order and Judgment entered 26
February 2018, by Judge John O. Craig, III, in Iredell County
Superior Court No. 14 CVS 1588.
Carruthers & Roth, P.A., by J. Patrick Haywood and Rachel
Scott Decker, for plaintiff and third-party defendants.
& Van Allen PLLC, by Nathan A. White and Mark A. Nebrig,
for defendants and third-party plaintiffs.
appeal arises from a dispute between a guarantor of a
promissory note and a third party entity, formed by another
guarantor, which purchased the note. The trial court did not
err in granting the note holder's Motions for Summary
Judgment on its breach of guaranty claims against the
guarantor where there were no issues of material fact. The
guarantor did not preserve a piercing the corporate veil
argument, and thus, we dismiss that argument. The trial court
did not err in denying the guarantor's Motion to Join a
limited liability company whose debt was secured by his
guaranty. The trial court did err in holding that the note
holder was only entitled to recover half of the price of the
guaranteed note. The trial court did err in applying the
Doctrine of Equitable Contribution. Since Equitable
Contribution is not an available remedy, we dismiss the
argument that the defense was waived. We therefore affirm in
part, reverse in part, dismiss in part and remand.
Factual and Procedural History
July 2007, George C. McKee, Jr. ("McKee"), Stephen
M. Strachan ("Strachan"), William Allen
("Allen"), and Timothy Bruin ("Bruin")
created ABMS Development, LLC ("ABMS") as a real
estate venture. McKee was the sole member manager of ABMS,
controlled all the books and records, and made all strategic
decisions for ABMS. On 28 February 2008, ABMS executed a
promissory note ("Note") to CommunityOne Bank
("C1 Bank") as a part of a project. C1 Bank
required each ABMS member and his spouse to execute personal
guaranties. The project failed, the Note matured, and ABMS
defaulted on its obligations.
attorney for ABMS ("ABMS Attorney") entered into
negotiations with C1 Bank on a resolution. The bank said it
would not sell the Note to any ABMS members/co-guarantors.
ABMS Attorney communicated to C1 Bank that "a different
buyer" may be interested in the purchase. ABMS Attorney
told bank that "[t]he buyer is not ABMS and the
potential investor LLC owners are different than the owners
of ABMS." ABMS Attorney confirmed that ABMS and the
guarantors would still be liable on the Note.
the sole member manager of ABMS, formed Bethesda for the sole
purpose of purchasing the Note. At the time of purchase,
Adrianne S. McKee, McKee's wife ("Mrs. McKee"),
was the sole member manager of Bethesda, so it did not appear
to have a direct connection to ABMS. However, shortly after
closing, McKee was added as a member manager. While Bethesda
held the Note, McKee, as managing member of ABMS, made no
effort to pay down the debt.
2014, Bethesda then commenced an action against Strachan,
Allen, Bruin, and their spouses ("Defendants"),
seeking damages under the Note for breach of guaranty
agreements. In September 2014, Defendants denied the
allegations and asserted claims against Bethesda and the
McKees alleging violations of the Equal Credit Opportunity
Act ("ECOA"), breach of fiduciary duty,
constructive fraud, and violation of Chapter 75 of the North
Carolina General Statutes. Bethesda and the McKees, as
third-party defendants, denied those allegations and asserted
claims against Strachan for breach of contract and unjust
enrichment. Allen, Bruin, and their spouses reached a
settlement with Bethesda and were voluntarily dismissed with
prejudice. Strachan and Appellees filed cross-motions for
summary judgment. The trial court entered an order of summary
judgment on 6 June 2017 in favor of Bethesda. In August 2017,
Strachan filed a Motion to Join ABMS as a party, which the
trial court denied. The trial court entered a final judgment
on 26 February 2018. Strachan gave timely notice of appeal on
27 March 2018. Appellees timely cross-appealed on 2 April
2018. Both appeals are now before this Court.
Standard of Review
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) (quoting Forbis
v. Neal, 361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007)).
first argument, Strachan contends that the trial court erred
in granting summary judgment in ...