Ussery v. Branch Banking & Trust Co.
368 N.C. 325
| N.C. | 2015Background
- William Ussery and partner formed Chair Specialists; bank officer Mabe allegedly assured them they would qualify for a $450,000 government-backed SBA loan.
- After taking several BB&T commercial loans for the business, Ussery was told by January 2002 that no government-backed loan would be available.
- On April 18, 2002, aware no SBA loan was forthcoming, Ussery took a $425,000 commercial note from BB&T (receiving ~$99,188 net) to consolidate debts.
- Ussery later executed six written loan-modification agreements, each reaffirming the $425,000 obligation and expressly waiving all defenses and offsets against the bank.
- Ussery sued BB&T in 2008, asserting negligence, negligent misrepresentation, breach of contract, UDTP, breach of fiduciary duty, breach of good faith, and fraud based on the “bridge loan” theory; BB&T counterclaimed for the loan balance.
- Trial court granted summary judgment to BB&T; Court of Appeals reversed on equitable-estoppel grounds; Supreme Court reversed the Court of Appeals, holding Ussery waived defenses and confirmed BB&T’s entitlement to summary judgment (except for interest calculation remanded).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiff may avoid repayment of the $425,000 Note by claiming he relied on BB&T’s promise of an SBA loan | Ussery says BB&T’s assurances induced him to take the note as a bridge loan and that the bank should cancel it | BB&T points to the written $425,000 Note and six modifications that reaffirmed the debt and waived defenses; plaintiff knew SBA loan was unavailable before taking the note | Held for BB&T: the written note and modifications unambiguously established indebtedness and waiver, so plaintiff cannot avoid repayment |
| Whether plaintiff's tort and contract claims are timely / barred by statutes of limitation or equitable estoppel | Ussery argues BB&T’s alleged assurances induced delay and estop the bank from asserting time bars | BB&T asserts plaintiff knew of the claims by Jan 2002 and filed suit in 2008; moreover plaintiff executed waivers reaffirming the obligation after learning SBA loan was unavailable | Held for BB&T: plaintiff’s own evidence shows he knew the claims but reaffirmed the debt and waived defenses; equitable estoppel failure as a matter of law |
| Whether oral assurances or later settlement discussions can overcome explicit written waivers in loan modifications | Ussery contends bank representatives later told him the note would be canceled in the related litigation or resolved which justified reliance | BB&T argues oral statements contradict the clear, integrated written agreements and plaintiff’s reliance was unreasonable | Held for BB&T: reliance on oral assurances contrary to clear written waivers is unreasonable; written agreements control |
| Whether BB&T is entitled to summary judgment on its counterclaim for the loan principal and interest | Ussery contends he is not in default and raises equitable defenses tied to his claims against BB&T | BB&T relies on the Note/modifications and plaintiff’s payments history to show enforceability and default; only the interest calculation required further determination | Held for BB&T: summary judgment upheld for principal (and most claims); remand limited to correct interest calculation as previously determined by Court of Appeals |
Key Cases Cited
- RL REGI N.C., LLC v. Lighthouse Cove, LLC, 367 N.C. 425 (2014) (waiver in written forbearance/preclusive effect on asserted defenses)
- Kessing v. Nat’l Mortg. Corp., 278 N.C. 523 (1971) (summary judgment when claim or defense is baseless or only question of law exists)
- Dobson v. Harris, 352 N.C. 77 (2000) (summary judgment standard; view facts most favorably to nonmovant)
- Thompson v. Wake Cty. Bd. of Educ., 292 N.C. 406 (1977) (definition of substantial evidence)
- State ex rel. Comm’r of Ins. v. N.C. Fire Ins. Rating Bureau, 292 N.C. 70 (1977) (substantial evidence standard)
- Mills v. Lynch, 259 N.C. 359 (1963) (party charged with knowledge of written instrument’s contents)
- Pierce v. Bierman, 202 N.C. 275 (1932) (ignorance of instrument’s legal effect not a defense absent fraud or mistake)
- Int’l Harvester Credit Corp. v. Bowman, 69 N.C. App. 217 (1984) (reliance unreasonable when guaranty contradicts alleged assurances)
- Carolina Power & Light Co. v. Bowman, 229 N.C. 682 (1950) (instrument construed from its four corners)