Suntrust Bank v. Bryant/Sutphin Properties, LLC
222 N.C. App. 821
N.C. Ct. App.2012Background
- Plaintiff and BSP entered a Commercial Note to fund a real estate project; Sutphin was a guarantor.
- Plaintiff sued for breach of the Note; BSP and Sutphin counterclaimed for several tort and contract theories.
- Defendants alleged plaintiff placedholds on Sutphin Accounts, disrupting funds needed for business operations.
- Jury found no breach of contract but found conduct meeting Section 75-1.1(a) related to holds on accounts; BSP awarded $700,000, trebled to $2,100,000, with costs.
- Trial court trebled damages and entered judgment; all parties appealed; opinion reverses the Section 75-1.1(a) award to BSP but affirms other issues.
- Key contracts include the Central Carolina Bank Deposit Agreement (Sutphin’s account) and the Ashley Terrace Loan; jury found no contract breaches.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BSP’s Section 75-1.1(a) award was proper | BSP claims conduct violated § 75-1.1(a) independent of breach | BSP argues conduct outside contract constitutes unfair practice | Not allowed; no independent § 75-1.1(a) violation proven |
| Whether § 75-1.1(a) can rest on breach of contract with substantial aggravating circumstances | BSP asserts aggravating breach-based § 75-1.1(a) claim | Sutphin argues no breach found; aggravating circumstances fail | Insufficient to sustain § 75-1.1(a) without independent breach |
| Whether the jury’s breach-of-contract findings foreclose § 75-1.1(a) claims | Plaintiff failed to breach contract; new theory not supported | Defendants rely on § 75-1.1(a) despite no breach | No viable § 75-1.1(a) claim based on contract findings; error to award |
| Whether JNOV was proper for Sutphin’s § 75-1.1(a) claim and related damages | JNOV should sustain verdict for Sutphin | Verdict supported by § 75-1.1(a) evidence | JNOV appropriate; § 75-1.1(a) award cannot stand |
| Whether the trial court erred in denying attorneys’ fees under § 75-16.1 | Fees should follow BSP’s success on § 75-1.1(a) | No fee award where § 75-1.1(a) invalid | No fees awarded; underlying § 75-1.1(a) invalid |
Key Cases Cited
- RD&J Props. v. Lauralea-Dilton Enters., LLC, 165 N.C. App. 737 (N.C. App. 2004) (unfair/deceptive acts require capacity to mislead; not mere breach)
- Norman Owen Trucking v. Morkoski, 131 N.C. App. 168 (N.C. App. 1998) (unfair or deceptive acts depend on facts and marketplace impact)
- Mitchell v. Linville, 148 N.C. App. 71 (N.C. App. 2001) (substantial aggravating circumstances required for § 75-1.1(a) relief)
- McDonald v. Scarboro, 91 N.C. App. 13 (N.C. App. 1988) (court determines whether § 75-1.1(a) applies after breach findings)
- Pedwell v. First Union Natl. Bank, 51 N.C. App. 236 (N.C. App. 1981) (directed verdict standards; consistency of verdicts)
- State v. Mumford, 364 N.C. 394 (N.C. 2010) (distinction between legally and factually inconsistent verdicts)
- Bicycle Transit Authority v. Bell, 314 N.C. 219 (N.C. 1985) (implied covenant of good faith and fair dealing in contracts)
- Ace Chemical Corp. v. DSI Transports, Inc., 115 N.C. App. 237 (N.C. App. 1994) (unfair/deceptive acts: capacity to deceive; contract context)