Court Opinion

ID: 3158264
Source: CourtListenerOpinion
Date Created: 2015-11-25 20:00:49.452834+00
Date Added: 2024-06-11T12:47:21.318930
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                               No. 14-1737

MONSANTO COMPANY,

                 Plaintiff - Appellee,

           v.

ARE-108 ALEXANDER ROAD, LLC,

                 Defendant - Appellant.

                               No. 14-1776

MONSANTO COMPANY,

                 Plaintiff - Appellant,

           v.

ARE-108 ALEXANDER ROAD, LLC,

                 Defendant - Appellee.

Appeals from the United States District Court for the Middle
District of North Carolina, at Greensboro.   William L. Osteen,
Jr., Chief District Judge. (1:10-cv-00898-WO-LPA)

Argued:   September 15, 2015                 Decided:   November 25, 2015

Before DUNCAN and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.
Affirmed by unpublished per curiam opinion.

ARGUED: Mark Everett McKeen, PAUL HASTINGS LLP, San Francisco,
California, for Appellant/Cross-Appellee.       Jonathan Michael
Watkins, MOORE & VAN ALLEN PLLC, Charlotte, North Carolina, for
Appellee/Cross-Appellant.     ON BRIEF: Joseph H. Stallings,
HOWARD, STALLINGS, FROM & HUTSON, P.A., Raleigh, North Carolina,
for Appellant/Cross-Appellee. Scott M. Tyler, MOORE & VAN ALLEN
PLLC, Charlotte, North Carolina, for Appellee/Cross Appellant.

Unpublished opinions are not binding precedent in this circuit.

                                2
PER CURIAM:

     This case arises out of a commercial lease dispute between

landlord     ARE-108   Alexander     Road,       LLC   (ARE-108)        and     tenant

Monsanto   Company     (Monsanto).         The   first    issue    on     appeal    is

whether the disputed lease provisions pertaining to Monsanto's

obligation to pay rent are unambiguous.                We find that the lease

provisions     are   unambiguous     and    the    district       court       properly

granted summary judgment in favor of Monsanto.                The second issue

is whether North Carolina General Statutes § 6-21.2 authorizes

Monsanto to recover attorneys’ fees.              We find that it does not,

and therefore affirm the district court’s judgment on this issue

as well.

                                      I.

     ARE-108     and    Monsanto     became      parties    to     a    lease      for

commercial    property   located     in    Research      Triangle      Park,     North

Carolina after Monsanto assumed the lease from the prior tenant

in March 2005. 1       The original lease term ran from November 1,

2000 to October 31, 2010.            During this time, the tenant owed

monthly Base Rent of $26,250, adjusted annually.                    Section 41 of

the lease gave the tenant the right to extend the lease by two

     1 This lease is titled the “Phase 1B” lease. Monsanto and
ARE-108 are also parties to two other leases for properties in
Research Triangle Park; neither, however, is in dispute here.

                                       3
five-year periods, during which no Base Rent would be payable.

Section 41 states:

      Extension Rights. Tenant shall have 2 consecutive
      rights . . . to extend the term of this Lease for 5
      years each (each, a “Term Extension”) on the same
      terms and conditions as this Lease . . . . During any
      Term Extension, no Base Rent . . . shall be payable;
      all other Rent shall remain payable . . . .

J.A. 256.     Together, the two Term Extensions spanned November 1,

2010 to October 31, 2020.

      The lease contained an attorneys’ fees clause stating that

the prevailing party in a lease dispute would be entitled to

recover “all reasonable fees and costs.”              J.A. 260.

      In   May    2005,   shortly    after      Monsanto   assumed     the   lease,

Monsanto and ARE-108 executed the “First Amendment to Lease”

(First Amendment), which amended various provisions of the lease

but   explicitly       retained     Monsanto’s       extension     rights      under

Section 41:

      Except as expressly amended and modified hereby, all
      of the terms and provisions of the Lease shall remain
      unchanged and in full force and effect . . . . In
      addition, Landlord hereby confirms and agrees that
      Tenant shall have all of the Extension Rights under
      Section 41 of the Lease and that the Extension Rights
      are in full force and effect.

J.A. 319.

      Approximately       two    years    later,     in    November    2007,     the

parties     executed      a     “Second       Amendment    to    Lease”      (Second

Amendment)       to   “among    other     things,    provide     for   additional

                                          4
options to extend the Term . . . of the Lease.”               J.A. 329.    The

Second Amendment gave Monsanto the right to further extend the

lease after it had exercised both Term Extensions:

      Additional   Right  to   Extend  Term.  Following  the
      exercise by Tenant of both of its existing 5-year
      extension options under Section 41 of the Lease . . .
      Tenant shall have 2 consecutive rights . . . to extend
      the Term of this Lease, consisting of 1 right to
      extend the Term of this Lease for a period of 10
      years, and 1 final right to thereafter further extend
      the Term of this Lease for a period that expires on
      November 30, 2034 (each, an “Additional Extension
      Term”) on the same terms and conditions as this Lease
      (other than Base Rent) . . . .

Id.     Together,    the    two   Additional      Extension    Terms   spanned

November 1, 2020 to November 30, 2034.

      During the Additional Extension Terms, Base Rent was to be

determined by the “Market Rate,” as follows:

      Upon the commencement of any Additional Extension
      Term, Base Rent shall be payable at the Market Rate
      (as defined below). Base Rent shall thereafter be
      adjusted . . . annual[ly] . . . by a percentage . . .
      . As used herein, “Market Rate” shall mean the then
      market rental rate as determined by Landlord and
      agreed to by Tenant, which shall in no event be less
      than the Base Rent payable as of the date immediately
      preceding   the  commencement   of   such  Additional
      Extension Term increased by 103% multiplied by such
      Base Rent.

Id.

      Thus,   Base   Rent    at   the       beginning   of   each   Additional

Extension Term would be set at the Market Rate agreed to by the

parties, which could be no less than 103% of the Base Rent

payable immediately prior.        Thereafter, Base Rent would increase

                                        5
annually     by   a    fixed    percentage          for       the        remainder     of   the

Additional Extension Term.           If the parties could not agree on

the Market Rate, the matter would be submitted for arbitration.

     Finally,     the   Second    Amendment             explained         the     relationship

between its provisions and those of the original lease, stating:

     Except as amended and/or modified by this Second
     Amendment, the Lease is hereby ratified and confirmed
     . . . . In the event of any conflict between . . .
     this Second Amendment and . . . the Lease, the . . .
     Second   Amendment  shall   prevail.  Whether or  not
     specifically amended by this Second Amendment, all of
     the terms and provisions of the Lease are hereby
     amended to the extent necessary to give effect to the
     purpose and intent of the Second Amendment.

J.A. 333.

     In    October     2009,   Monsanto       notified          ARE-108         that   it   was

exercising its right to the first Term Extension.                               ARE-108 sent

Monsanto a Base Rent schedule for that Term Extension, to which

Monsanto responded that it had no obligation to pay Base Rent

pursuant to the lease.           In November 2010, after the first Term

Extension had commenced, ARE-108 declared Monsanto in default

and threatened legal action.          Monsanto responded by letter dated

November 17, 2010 that it would pay the requested Base Rent

“under    protest,”     but    reserved       the       right       to    be    refunded    and

further     reserved    “all    rights        .     .     .    under        the    Lease    and

applicable law to recover . . . attorneys’ fees and costs.”

J.A. 44.

                                          6
       Monsanto then filed the instant suit seeking a declaration

that it owed no Base Rent during the Term Extensions, the return

of all Base Rent paid to ARE-108 under protest, and attorneys’

fees.        Shortly    after   ARE-108        served    its     first    request     for

documents, Monsanto moved for summary judgment.                        ARE-108 opposed

Monsanto’s     motion,    arguing       that    the     lease    was     ambiguous    and

ARE-108 should be permitted to obtain discovery regarding its

proper   interpretation         under    Federal       Rule     of   Civil   Procedure

56(d).

       The    district    court,    adopting      the     recommendation       of     the

magistrate judge, found the lease to be unambiguous and granted

Monsanto      summary    judgment.         The        district       court   issued     a

declaratory      judgment       stating        that:     (a)     Monsanto      had    no

obligation to pay Base Rent during the two Term Extensions; (b)

Monsanto was not in default for failing to pay such Base Rent;

(c) ARE-108 was not entitled to take any adverse action against

Monsanto for failure to pay such Base Rent; and (d) Monsanto was

entitled to the return of all Base Rent, late fees, and interest

paid under protest to ARE-108.                 The district court awarded as

monetary damages all Base Rent and related charges Monsanto had

paid     under     protest       and     prejudgment            interest,     totaling

$2,023,915.24.         However, the district court denied Monsanto’s

request for attorneys’ fees, finding that such fees were not

authorized by North Carolina General Statutes § 6-21.2.                        ARE-108

                                          7
appeals   the    district    court’s      grant    of   summary    judgment.

Monsanto cross-appeals its denial of attorneys’ fees.

                                    II.

      We review the district court’s grant of summary judgment de

novo, World-Wide Rights Ltd. P’ship v. Combe Inc., 955 F.2d 242,

245 (4th Cir. 1992), and its denial of a Rule 56(d) request for

discovery for abuse of discretion. 2              McCray v. Md. Dep’t of

Transp., Md. Transit Admin., 741 F.3d 480, 483 (4th Cir. 2014).

In matters of contract interpretation, we have explained:

      Only an unambiguous writing justifies summary judgment
      without resort to extrinsic evidence . . . . The first
      step for a court asked to grant summary judgment based
      on a contract’s interpretation is, therefore, to
      determine whether, as a matter of law, the contract is
      ambiguous or unambiguous on its face. If a court
      properly determines that the contract is unambiguous
      on the dispositive issue, it may then properly
      interpret the contract as a matter of law and grant
      summary judgment because no interpretive facts are in
      genuine issue.

World-Wide Rights Ltd. P’ship, 955 F.2d at 245.               If, instead,

the   contract   is   ambiguous,   the    court   may   evaluate   extrinsic

evidence to determine whether summary judgment is proper.            Id.

      2Rule 56(d) requires that summary judgment be refused when
the nonmovant “has not had the opportunity to discover
information that is essential to his opposition.”      Pisano v.
Strach, 743 F.3d 927, 931 (4th Cir. 2014).

                                     8
      Under North Carolina law, “[p]arties can differ as to the

interpretation of language without its being ambiguous.” 3                               Walton

v.   City      of    Raleigh,     467 S.E.2d 410,    412     (N.C.      1996).     An

ambiguity exists “when either the meaning of words or the effect

of   provisions        is    uncertain     or       capable    of     several     reasonable

interpretations.”            Register v. White, 599 S.E.2d 549, 553 (N.C.

2004).      Additionally, “[a] latent ambiguity may arise where the

words     of    a    written     agreement          are   plain,      but   by    reason    of

extraneous facts the definite and certain application of those

words is found impracticable.”                      Miller v. Green, 112 S.E. 417,

418 (N.C. 1922).             With these principles in mind, we review the

lease, as amended, to determine whether it is ambiguous as to

Monsanto’s          obligation     to     pay        Base     Rent    during       the    Term

Extensions.

                                           III.

      Section        41     of   the    lease       granted     the    tenant      two    Term

Extensions, together spanning 2010-2020, during which “no Base

Rent . . . shall be payable.”                       J.A. 256.        The First Amendment

affirmed that the Section 41 rights were “in full force and

effect” when Monsanto assumed the lease.                             J.A. 319.       ARE-108

      3The parties appear to agree that North Carolina law
governs the interpretation and enforcement of the lease and its
amendments.

                                                9
contends, however, that the Second Amendment implicitly revoked

Monsanto’s right to pay no Base Rent during the Term Extensions.

Even assuming arguendo that two sophisticated companies would

implicitly revoke a right worth millions of dollars, the Second

Amendment cannot reasonably be read as doing so.

       The    Second     Amendment      granted     Monsanto      two     Additional

Extension Terms, together spanning 2020-2034, and set forth the

applicable      terms    and    conditions.             Nothing   in     the    Second

Amendment purported to modify the prior Term Extensions, much

less   abolish     Monsanto’s        right    to   enjoy    the   Term    Extensions

without paying Base Rent, as provided for in Section 41 of the

lease.       Rather, the Second Amendment explicitly confirmed that

the Term Extensions remained governed by Section 41.                      See, e.g.,

J.A.   329    (“Following      the    exercise     by    Tenant   of   both    of   its

existing 5-year extension options under Section 41 of the Lease

. . . .”).

       We    are   not    persuaded      by    ARE-108’s      arguments        to   the

contrary.       ARE-108 first notes that the Additional Extension

Terms could only be exercised after the Term Extensions and “on

the same terms and conditions as this Lease (other than Base

Rent).”      J.A. 329 (emphasis added).                 ARE-108 argues that “the

specific reference to the existence of Base Rent at the time of

the potential exercise of the Additional Extension Right . . .

clarifies that Base Rent is being paid by Monsanto to ARE-108

                                         10
immediately prior to the exercise of any Additional Extension

Right.” 4        Br. of Appellant/Cross-Appellee 26-27.         We reject ARE-

108’s contorted reading.            The quoted language simply indicates

that       new   Base    Rent   provisions    would   govern   the   Additional

Extension Terms, and the paragraph that follows in the Second

Amendment specifies that Base Rent would be determined by the

Market Rate.            The quoted language has no effect on the Term

Extensions.

       ARE-108 next points to the language stating that the Market

Rate “shall in no event be less than the Base Rent payable as of

the    date       immediately     preceding    the    commencement    of   such

Additional Extension Term increased by 103% multiplied by such

Base Rent.”         J.A. 329.    ARE-108 argues that if no Base Rent were

payable during the Term Extensions, which immediately preceded

the commencement of the Additional Extension Terms, the quoted

language would simply mean that the Market Rate could not be

less than zero.           ARE-108 contends that it would be “illogical”

for the parties to use such complicated language if they simply

intended for the Market Rate floor to be zero.                 Resp. and Reply

Br. of Appellant/Cross-Appellee 14.

       4ARE-108 further asserts, without citation to any
particular language in the Second Amendment, that Monsanto was
to continue paying Base Rent at $26,650 per month as adjusted.

                                        11
       This   analysis,      however,     accounts   only     for   the     first

Additional     Extension     Term.      As   discussed   above,     the   Second

Amendment established two Additional Extension Terms, with the

Market Rate to be determined at the start of each.                        ARE-108

correctly observes that if no Base Rent were payable during the

Term Extensions, the Market Rate floor for the first Additional

Extension Term would be zero.            However, the parties would still

have to agree to a Market Rate, which would determine the Base

Rent    for   the    first   Additional      Extension   Term.      Thus,    when

determining the Market Rate for the second Additional Extension

Term, the Market Rate floor would not be zero, but 103% of the

Base Rent payable at the end of the first Additional Extension

Term.    With both Additional Extension Terms properly accounted

for, the 103% language has effect and is not simply a convoluted

way of saying zero.

       Furthermore, the fact that the Market Rate floor for the

first Additional Extension Term may be zero does not render the

“meaning”     of    the   Second   Amendment’s   words   or   the   “effect    of

[its] provisions” uncertain.            Register, 599 S.E.2d at 553.          The

meaning is clear, even if ARE-108 finds it to be unfavorable.

See Gas House, Inc. v. S. Bell Tel. & Tel. Co., 221 S.E.2d 499,

504 (N.C. 1976) (“People should be entitled to contract on their

own terms without the indulgence of paternalism by courts in the

alleviation of one side or another from the effects of a bad

                                        12
bargain.”          (quoting 14 Samuel Williston, A Treatise on the Law

of Contracts § 1632 (3d ed. 1961))), overruled in part by State

ex rel. Utils. Comm’n v. S. Bell Tel. & Tel. Co., 299 S.E.2d 763

(N.C. 1983).

       Lastly, ARE-108 cites the Second Amendment’s clause stating

that       “[i]n    the   event   of   any      conflict”    between      the   Second

Amendment and the lease, the “Second Amendment shall prevail,”

and “the terms and provisions of the Lease are hereby amended to

the extent necessary to give effect to the purpose and intent of

this Second Amendment.”            J.A. 333.      This language is of no avail

to ARE-108 as there is no conflict between the Second Amendment

and the Base Rent-free Term Extensions established in the lease,

and no amendment to the lease is necessary to give effect to the

Second Amendment.

       Ultimately,        the   language     ARE-108     cites   cannot    fairly   be

read as revoking Monsanto’s clearly established right to Base

Rent-free Term Extensions.             Thus, ARE-108 has not shown that the

lease,       as     amended,      is   capable      of      multiple      “reasonable

interpretations.”          Register, 599 S.E.2d at 553.            Nor has ARE-108

identified “extraneous facts” that make the definite application

of the amended lease impracticable. 5                  Miller, 112 S.E. at 418.

       5
       ARE-108 insinuates that the present dispute implicates the
parties’ other, “interrelated” leases for properties in Research
Triangle Park. See, e.g., Br. of Appellant/Cross-Appellee 9-10.
(Continued)
                                           13
In    short,    ARE-108    has   demonstrated     no   ambiguity,      latent   or

otherwise, as to whether Monsanto owes Base Rent during the Term

Extensions.       Monsanto unambiguously does not.

       Because the lease is unambiguous, the district court did

not abuse its discretion in denying ARE-108’s Rule 56(d) request

for   discovery,      as   unambiguous    contracts    are   to   be   construed

without resort to extrinsic evidence.                  See World-Wide Rights

Ltd. P’ship, 955 F.2d at 245; see also Piedmont Bank & Trust Co.

v. Stevenson, 339 S.E.2d 49, 52 (N.C. Ct. App. 1986), aff’d, 344
S.E.2d 788 (N.C. 1986) (“When the language of the contract is

clear and unambiguous . . . the court cannot look beyond the

terms      of   the   contract   to   determine    the    intentions     of     the

parties.”) (internal citation omitted). 6

However, ARE-108 never explains how those leases affect the
interpretation of the lease presently in dispute. Thus, those
leases do not provide a basis for finding a latent ambiguity.
     ARE-108 also recites the principle that a contract
“encompasses not only its express provisions but also all such
implied provisions as are necessary to effect the intention of
the parties unless express terms prevent such inclusion.” Lane
v. Scarborough, 200 S.E.2d 622, 624 (N.C. 1973).      However, we
will not read in a provision requiring Monsanto to pay Base Rent
during the Term Extensions. Such a provision is not necessarily
implied by amended lease and contradicts its express terms.
       6
       For this reason, we do not consider the extrinsic evidence
submitted by ARE-108.      We also do not consider ARE-108’s
argument, raised for the first time on appeal in its reply
brief, that it was denied an opportunity to present a defense of
mutual mistake. See Muth v. United States, 1 F.3d 246, 250 (4th
Cir. 1993) (explaining that issues raised for the first time on
(Continued)
                                         14
     Accordingly, we affirm the district court’s grant of

summary judgment to Monsanto.

                                         IV.

     Monsanto cross-appeals the district court’s denial of its

request    for      attorneys’    fees     under       North      Carolina    General

Statutes   §     6-21.2.    We    review       de   novo    the    district   court’s

resolution     of    questions    of     state      law.    Food     Lion,    Inc.   v.

Capital Cities/ABC, Inc., 194 F.3d 505, 512 (4th Cir. 1999).

     The     North     Carolina    Supreme          Court   has     explained    that

contractual       attorneys’      fees     provisions        are     generally       not

enforceable under North Carolina law:

     [T]he jurisprudence of North Carolina traditionally
     has   frowned   upon   contractual   obligations   for
     attorney’s fees as part of the costs of an action. . .
     . Thus the general rule has long obtained that a
     successful litigant may not recover attorneys’ fees,
     whether as costs or as an item of damages, unless such
     a recovery is expressly authorized by statute. Even in
     the face of a carefully drafted contractual provision
     indemnifying a party for such attorneys’ fees as may
     be necessitated by a successful action on the contract
     itself, our courts have consistently refused to
     sustain such an award absent statutory authority
     therefor.

appeal will not be considered absent exceptional circumstances);
Cavallo v. Star Enter., 100 F.3d 1150, 1152 n.2 (4th Cir. 1996)
(explaining that arguments raised for the first time in a reply
brief are not properly before the Court).

                                          15
Stillwell Enters., Inc. v. Interstate Equip. Co., 266 S.E.2d
812, 814-15 (N.C. 1980) (internal citations omitted).

     Monsanto     claims    that   §    6-21.2     provides        the   statutory

authority    necessary     to   enforce     the    lease’s    attorneys’       fees

clause.     That statute “allows an award of attorneys’ fees in

actions     to   enforce   obligations      owed    under     an    evidence    of

indebtedness that itself provides for the payment of attorneys’

fees.”    Trull v. Cent. Carolina Bank & Tr., 478 S.E.2d 39, 42

(N.C. Ct. App. 1996)(quotation omitted), aff’d in part, review

dismissed in part, 490 S.E.2d 238 (N.C. 1997).                 Section 6-21.2

states, in relevant part:

          Obligations to pay attorneys’ fees upon any note,
     conditional   sale   contract   or  other  evidence of
     indebtedness . . . shall be valid and enforceable, and
     collectible as part of such debt, if such note,
     contract   or   other   evidence   of  indebtedness be
     collected by or through an attorney at law after
     maturity, subject to the following provisions:
          . . . .
          (2) If such note, conditional sale contract or
     other evidence of indebtedness provides for the
     payment of reasonable attorneys’ fees by the debtor,
     without specifying any specific percentage, such
     provision shall be construed to mean fifteen percent
     (15%) of the “outstanding balance” owing on said note,
     contract or other evidence of indebtedness.

N.C. Gen. Stat. § 6-21.2.           The party seeking attorneys’ fees

must provide notice to the debtor, and if the debtor pays the

outstanding balance within “five days from the mailing of such

notice . . . . the obligation to pay the attorneys’ fees shall

be void.”    Id. § 6-21.2(5).

                                       16
       Monsanto argues that the lease is evidence of ARE-108’s

indebtedness to Monsanto for the Base Rent Monsanto paid under

protest, and that Monsanto is thus entitled to attorneys’ fees

of fifteen percent of the final judgment.                We disagree.

       As Monsanto notes, § 6-21.2 is a remedial statute that is

“construed       liberally      to     accomplish       the        purpose      of   the

Legislature.”        Stillwell       Enters.,    Inc., 266 S.E.2d     at   817

(quoting Hicks v. Albertson, 200 S.E.2d 40, 42 (N.C. 1972)).

Thus, while it most commonly applies to promissory notes and

conditional sale contracts, the term “evidence of indebtedness”

is     broadly    defined      to    include     “any     printed          or   written

instrument,      signed   or    otherwise      executed       by    the    obligor(s),

which evidences on its face a legally enforceable obligation to

pay money.”        Id. at 293-94 (emphasis added).                    Applying this

definition, the Stillwell court found that a lease of goods was

an “evidence of indebtedness” because the lease “acknowledge[d]

a legally enforceable obligation by plaintiff-lessee to remit

rental payments to defendant-lessor as they become due,” and it

was “executed by the parties obligated under its terms.”                         Id. at

818.      Similarly,      a    lease   of     real   property        may     constitute

“evidence of indebtedness.”             See, e.g., RC Assocs. v. Regency

Ventures, Inc., 432 S.E.2d 394, 397 (N.C. Ct. App. 1993).

       However, even under this liberal definition, the lease here

is not evidence of the indebtedness Monsanto seeks to collect,

                                         17
namely,   the       Base    Rent    that   it    paid    under    protest.       Simply

stated,   the       lease   does    not    evidence     “on   its     face”   ARE-108’s

obligation to return overpaid Base Rent.                   It therefore cannot be

said    that     ARE-108      acknowledged       such    an     obligation     when    it

executed the lease.           See Stillwell Enters., Inc., 266 S.E.2d at

817 (“[A]n evidence of indebtedness . . . is a writing which

acknowledges a debt or obligation and which is executed by the

party obligated thereby.”)(emphasis added).

       It is not sufficient that ARE-108 may “owe” Monsanto the

return of overpaid rent, or that the overpaid amount may be

referred to as “debt.”             Cf. Pantry Pride Enters., Inc. v. Glenlo

Corp., 729 F.2d 963, 965 (4th Cir. 1984).                     To satisfy § 6-21.2,

the debt must appear “on the face” of the instrument.                             It is

similarly      of    no    avail    that   the   “pay-under-protest           avenue   is

implicitly      available      to    tenants     under    all     leases.”       Br.   of

Appellee/Cross-Appellant 48.               Under Stillwell, an “evidence of

indebtedness” may not be based on an implicit debt.                            Monsanto

cites no authority to the contrary, and we decline to further

extend an already broadly defined statutory term.

       Indeed,      the     interpretation       advanced        by   Monsanto     could

significantly expand the scope of § 6-21.2.                           For example, a

party that breaches a contract typically “owes” damages to the

non-breaching        party.        Monsanto’s    interpretation        would     suggest

that    all    contracts       are     therefore        implicitly      “evidence      of

                                            18
indebtedness” for damages resulting from a breach.              We do not

think such an expansive reading is appropriate for a statute

that, at its core, is meant to apply to notes, conditional sale

contracts, and similar debt instruments.

     Monsanto    further   argues   that   as    a   matter    of   policy,

§ 6-21.2 should be construed as authorizing attorneys’ fees here

because, had Monsanto instead refused to pay the disputed rent,

and had ARE-108 filed suit and prevailed, ARE-108 would likely

be entitled to attorneys’ fees under § 6-21.2.

     However, § 6-21.2 is not a bilateral statute.             It “governs

only attorney’s fees for the creditor’s attorney,” In re Vogler

Realty, Inc., 722 S.E.2d 459, 464 (N.C. 2012), and its purpose

“is to allow the debtor a last chance to pay his outstanding

balance and avoid litigation, not to reward the prevailing party

with the reimbursement of his costs in prosecuting or defending

the action.”     Trull, 478 S.E.2d at 42.       Thus, § 6-21.2 does not

contemplate equivalent outcomes for both parties.

     Moreover,     in   the   hypothetical      scenario      proposed   by

Monsanto, ARE-108 would be entitled to attorneys’ fees because

Monsanto’s obligation to pay rent appears “on the face” of the

lease.   However, ARE-108’s obligation to return overpaid rent

does not.   In our view, the requirement that the debt appear “on

the face” of the instrument is not merely a technicality, but

serves an important policy purpose.        That is, because only the

                                    19
debtor may be liable for attorneys’ fees under § 6-21.2, it is

important        that    the     debt   to    which    the    attorneys’     fees   attach

appears “on the face” of the instrument executed by the debtor

(as     is      the    case    with     most     debt       instruments).        Awarding

attorneys’ fees based on an implied debt not appearing “on the

face”      of    the    instrument      would       eliminate   this      protection   for

debtors.         For this reason, granting Monsanto attorneys’ fees

here would not serve the purpose of the statute “just as much”

as    granting         ARE-108    attorneys’         fees    would   in    the   converse

scenario posed by Monsanto.                  Br. of Appellee/Cross-Appellant 50.

      We conclude that, under the facts presented here, the lease

is not an “evidence of indebtedness” under § 6-21.2. 7                           Thus, we

affirm the district court’s denial of Monsanto’s request for

attorneys’ fees. 8

       7We therefore need not decide whether                               Monsanto    has
satisfied the other requirements of this statute.
       8
       Our reasoning differs somewhat from the district court’s.
See   Cochran  v.   Morris,  73 F.3d 1310,  1315   (4th  Cir.
1996)(explaining that courts of appeals may “uphold judgments of
district courts on alternate grounds”). Among other things, the
district court found that Monsanto’s claim to recover overpaid
Base Rent arose, not under the lease, but under a “separate
agreement settling, in part, claims that were threatened” by
ARE-108. J.A. 720. The district court found that such separate
agreement contained no attorneys’ fees provision.       Id.   On
appeal, both parties contend that no such separate agreement
existed, and we agree.

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                          V.

For these reasons, we affirm the district court.

                                                   AFFIRMED

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