Court Opinion

ID: 3004784
Source: CourtListenerOpinion
Date Created: 2015-09-25 16:11:27.569205+00
Date Added: 2024-06-11T11:45:58.639302
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA

                                     No. 277A13

                           FILED 25 SEPTEMBER 2015

WILLIAM T. USSERY and wife, CAROLYN B. USSERY

              v.
BRANCH BANKING AND TRUST COMPANY

      Appeal pursuant to N.C.G.S. § 7A-30(2) from the decision of a divided panel of

the Court of Appeals, ___ N.C. App. ___, 743 S.E.2d 650 (2013), reversing and

remanding an order granting summary judgment for defendant entered on 16 April

2012 by Judge W. David Lee in Superior Court, Richmond County. Heard in the

Supreme Court on 7 January 2014.

      Anderson, Johnson, Lawrence & Butler, L.L.P., by Stacey E. Tally and Steven
      C. Lawrence, for plaintiff-appellees.

      Bell, Davis & Pitt, P.A., by Michael D. Phillips and Kevin G. Williams, for
      defendant-appellant.

      NEWBY, Justice.

      In this case we consider whether a plaintiff may recover against his bank for

its failure to provide a government-backed business loan when, after learning no such

loan was available, plaintiff sought and obtained a new commercial loan with the

same bank and subsequently expressly waived all offsets and defenses. Plaintiff’s

claims arise in contract and in tort, and all of them rely upon one key date: the date

on which plaintiff was made aware no government-backed loan was available. In his
                                    USSERY V. BB&T

                                    Opinion of the Court

complaint plaintiff alleges that he incurred his indebtedness in anticipation of

receiving a government-backed loan as promised by his bank. The undisputed facts,

however, show that plaintiff chose to obtain a new commercial loan after learning no

government-backed loan was available, and he repeatedly reaffirmed his obligations

under the commercial loan and expressly waived any offsets and defenses to the loan

and against the bank. Therefore, the trial court properly granted summary judgment

for defendant, and the decision of the Court of Appeals is reversed.

       Viewing the facts in the light most favorable to plaintiff, the nonmoving party,

the record reveals the following: In 1998 plaintiff William “Pete” Ussery1 and his

business partner, D. Wayne Barker, launched a venture to establish a furniture

assembling business.      Barker had years of managerial experience at CAFCO

Industries, Inc. (CAFCO), a local chair manufacturer, and plaintiff had greater

financial resources, was a seasoned real estate developer and businessman, and sat

on the board of a bank. In response to a decrease in sales, CAFCO was in the process

of closure and liquidation, and the owners had approached plaintiff to discuss the sale

of the company’s old manufacturing building (the CAFCO building).

       1Plaintiffs are William Ussery and his wife, Carolyn Ussery. The record reflects
that William Ussery was the primary actor in the following events, and we refer to him in
the singular as “plaintiff” for clarity.

                                            -2-
                                    USSERY V. BB&T

                                    Opinion of the Court

      Plaintiff and Barker formed their business, Chair Specialists, Inc.,2 with

plaintiff holding sixty percent of the equity and Barker holding the remaining forty

percent.    According to their business plan, Barker would run the day-to-day

operations and plaintiff would provide the startup capital to fund the enterprise.

Plaintiff planned to individually purchase the CAFCO building and develop it into

residential condominiums, and the operations of Chair Specialists would be housed

in a different location. The long-range plan was for Barker to obtain a government-

backed business loan with which to purchase plaintiff’s interest in Chair Specialists

and repay plaintiff for the startup expenses.

      In November 1999, plaintiff bought equipment from CAFCO to use at Chair

Specialists. For $150,000 plaintiff also purchased the “Cheraw Road Building,”3 a

commercial facility in Hamlet, North Carolina, to house Chair Specialists’ operations.

The Cheraw Road Building had been contaminated with lead and required clean up

and abatement; moreover, following remediation of the property, the building would

serve as collateral for any future business loan. Plaintiff transferred ownership of

the Cheraw Road Building to Chair Specialists and retained a deed of trust on the

property.    Plaintiff then purchased, individually, the CAFCO Building for

approximately $100,000.

      2  The business is referred to as “Chair Specialists” and “Chair Specialties”
interchangeably throughout the record.
       3 The Cheraw Road Building is also referred to as the “Tartan Building” throughout

the record.

                                            -3-
                                  USSERY V. BB&T

                                  Opinion of the Court

      Plaintiff alleges that sometime in 1999, Barker and he first met with Wiley

Mabe, a commercial lending officer for Branch Banking and Trust Company (BB&T),

to discuss their business plan and learn about available government-backed loans.

Mabe allegedly reviewed the business plan and assured plaintiff and Barker that

Barker and Chair Specialists would qualify for and receive a $450,000 small business,

government-backed loan.

      Between 1999 and 2001, plaintiff obtained three commercial loans from BB&T

for the startup of Chair Specialists and to reimburse himself for his purchases. The

loans were in the amounts of (1) $100,000 on 6 December 1999, with plaintiff and

Barker as debtors; (2) $50,000 on 25 February 2000, with Chair Specialists as debtor

and plaintiff and Barker as guarantors; and (3) $125,000 on 21 February 2001, with

plaintiff and his spouse as debtors.

      By January 2002, Mabe notified all parties that no government-backed loan

was available, nor would BB&T extend a long-term loan to them. According to

plaintiff, Barker and he had inquired into the status of the application frequently and

were repeatedly assured that they would receive the loan. Upon further inquiry,

Barker discovered that neither he nor the business could qualify for a government-

backed loan elsewhere because of the additional debt incurred between 1999 and

2001. The Small Business Administration (SBA) advised Barker that Mabe had not

                                          -4-
                                  USSERY V. BB&T

                                  Opinion of the Court

submitted the application documents to the SBA because Mabe did not believe Barker

would qualify for a loan.

      Knowing that no government-backed loan was available, plaintiff and Barker

closed Chair Specialists in early 2002 and set about selling the accompanying real

and personal property. According to Barker, plaintiff then approached BB&T to

inquire about a single loan to consolidate his debts associated with the business and

reduce his monthly expenditures while he attempted to sell the company’s assets. On

18 April 2002, fully aware that no government-backed loan was available and that he

had various potential causes of action against BB&T, plaintiff nonetheless obtained

a commercial loan of $425,000 from BB&T (the $425,000 Note). The $425,000 Note

provided in part: “For value received, the undersigned . . . promises to pay to Branch

Banking and Trust Company . . . the sum of . . . $425,000.00 . . . .” The $425,000 Note

secured a one-year, interest-only loan, with accrued interest payments due quarterly,

and was payable in full on 18 April 2003. As a condition of the loan, BB&T required

Barker to issue a $122,000 promissory note to plaintiff.        After paying off the

antecedent debts, plaintiff personally received $99,187.75 in cash proceeds from the

$425,000 loan.

      On 15 April 2003, fifteen months after learning that no government-backed

loan was available and one year after executing the $425,000 Note, plaintiff entered

into the first of a total of six promissory note modification agreements. In the first

                                          -5-
                                  USSERY V. BB&T

                                  Opinion of the Court

modification BB&T agreed to extend the maturity date of the $425,000 Note by an

additional year and allowed plaintiff to continue making quarterly, interest-only

payments. In exchange, plaintiff reaffirmed his payment obligation and waived any

offsets and defenses against the Note or the bank.

      All six note modification agreements contained express and unambiguous

language to this effect:

      [A]ll other terms, conditions, and covenants of [the $425,000 Note]
      remain in full force and effect, and . . . all other obligations and
      covenants of Borrower(s), except as herein modified, shall remain in full
      force and effect, and binding between Borrower(s) and [the] Bank . . . .
             ....

             . . . The original obligation of the Borrower(s) as evidenced by the
      [$425,000 Note] above described is not extinguished hereby. It is also
      understood and agreed that except for the modification(s) contained
      herein said [$425,000 Note] . . . shall be and remain in full force and
      effect. . . . Borrower and Debtor(s)/Grantor(s), if any, jointly and
      severally consent to the terms of this Agreement, waive any objection
      thereto, affirm any and all obligations to Bank and certify that there are
      no defenses or offsets against said obligations or the Bank, including
      without limitation the [$425,000 Note].

(Emphasis added.) Plaintiff was current on the interest-only payments required

under the $425,000 Note at the time of his first loan modification, and he continued

to make quarterly interest payments through 27 April 2006.

      In May 2003, just over a month after the execution of plaintiff’s first note

modification, Barker filed suit against BB&T (the Barker litigation) for its alleged

misrepresentations and failure to use reasonable efforts to obtain a government-

                                          -6-
                                   USSERY V. BB&T

                                   Opinion of the Court

backed loan for Chair Specialists. Barker’s complaint stated claims of negligence,

breach of contract, and breach of fiduciary duty. According to plaintiff, after the

Barker litigation commenced, plaintiff discussed with BB&T that he was

contemplating filing a separate suit against the bank or joining the Barker litigation

as an additional party. Plaintiff alleges that BB&T, through its agent Charles Smith,

told him “everything would be worked out in the Barker litigation” and there was no

need to join the Barker litigation or bring a separate action. Plaintiff contends that

BB&T further promised that “the [$425,000 Note] would be canceled upon resolution

of the [Barker litigation]. . . . [T]he loan would be forgiven, and [plaintiff] would be

reimbursed any expenses incurred related to BB&T’s failure to obtain the

[government-backed loan].” Plaintiff admits, however, that “no agents or employees

of BB&T ever proposed a specific plan for resolving the issues.”

      Thereafter, on 25 May 2004, plaintiff executed his second modification of the

$425,000 Note, which contained provisions identical to the first, but extended the

maturity date to 25 February 2005. It allowed plaintiff to continue interest-only

payments, affirmed plaintiff’s continuing obligation to repay the debt, and waived

any offsets and defenses. Plaintiff was current on his interest payments at that time.

      On 21 March 2005, plaintiff executed his third modification of the $425,000

Note, which, except for extending the loan maturity date to 20 March 2006, contained

provisions identical to the first two modifications, allowing plaintiff to continue

                                           -7-
                                   USSERY V. BB&T

                                   Opinion of the Court

quarterly interest-only payments, affirming plaintiff’s obligation to repay the debt,

and waiving any offsets and defenses. Plaintiff was current on his interest payments

at that time.

      Around 20 April 2006, the Barker litigation settled confidentially.

      On 26 April 2006, plaintiff executed his fourth modification of the $425,000

Note, which extended the loan maturity date several months to 25 June 2006 and

now allowed plaintiff to accrue all interest due until maturity. The modification

contained provisions identical to its three predecessors affirming plaintiff’s obligation

to repay the debt and waiving any offsets and defenses. Plaintiff remained current

on his interest payments at that time.

      In the summer of 2006, plaintiff consulted legal counsel, apparently for the

first time. BB&T had not cancelled the $425,000 Note, and plaintiff was denied

access to the terms of the Barker litigation settlement. On 5 July 2006, plaintiff and

his counsel first met with BB&T representatives and agreed to discuss resolution of

the matter.

      On 24 July 2006, plaintiff executed his fifth modification of the $425,000 Note,

which extended the loan maturity date several more months to 22 October 2006,

allowed plaintiff to continue to accrue interest, and contained provisions identical to

                                           -8-
                                  USSERY V. BB&T

                                  Opinion of the Court

the former modifications affirming plaintiff’s obligation to repay the debt and waiving

any offsets and defenses. Plaintiff was current on his interest payments at that time.

      According to plaintiff, on 17 October 2006, “having not received a settlement

proposal from BB&T,” his counsel wrote BB&T and demanded cancellation of the

$425,000 Note, plus compensation for interest, costs, and expenses incurred in

acquisition of the Cheraw Road Building and for startup and financing costs related

to Chair Specialists. BB&T responded by e-mail on 20 October 2006. BB&T held a

deed of trust on the Cheraw Road Building as collateral for the $425,000 Note, and

the bank sought to conduct an environmental inspection and assess the value of the

property. BB&T requested confirmation that the parties understood that they would

“let the environmental inspections, appraisals, etc. run their course to see where we

are,” and, as related to the $425,000 Note, reiterated that “[a]nything of substance

would have to come through the regional offices here first.”

      Plaintiff’s counsel agreed to that understanding on 23 October 2006 and noted

in his e-mail to BB&T’s representative that he would await “completion of the

environmental assessment and BB&T’s decision relative to the subject transaction

and [plaintiff’s] position on the matter before acting further.” Around this time and

continuing into 2007, plaintiff allowed contractors retained by BB&T to have access

to the Cheraw Road Building to conduct their environmental inspections and

assessments.

                                          -9-
                                    USSERY V. BB&T

                                    Opinion of the Court

       On 21 November 2006, plaintiff executed his sixth and final modification of the

$425,000 Note, which extended the loan maturity date several additional months to

19 February 2007, allowed plaintiff to continue to accrue interest, and contained

provisions identical to the former modifications affirming plaintiff’s obligation to

repay the debt and waiving any offsets and defenses.

       In April 2007, in an unrelated, separate loan transaction, BB&T denied

plaintiff’s request to extend a loan on a different commercial property because,

according to plaintiff, BB&T was “looking at writing off approximately ‘$160,000.00

on the [$425,000 Note].’ ”4

       On 14 August 2007, over five and a half years after plaintiff’s evidence shows

he first became aware that no government-backed loan was available, plaintiff’s

counsel wrote BB&T and demanded that the bank “cancel the $425,000.00 Note as

satisfied” and “reimburse [plaintiff] the sum of $192,812.00,” for a total of

$617,812.00, in exchange for which plaintiff would convey the Cheraw Road Building

to BB&T; otherwise, plaintiff would initiate a lawsuit. Plaintiff’s counsel noted that

“this is a very reasonable settlement proposal.” BB&T’s counsel rejected plaintiff’s

demand outright, noting in a letter dated 14 January 2008 that plaintiff’s claims are

       4 For internal accounting purposes BB&T did write down the indebtedness by
$180,000, but the internal entries did not alter plaintiff’s $425,000 Note or his repayment
obligations, and plaintiff has not alleged otherwise. As plaintiff has asserted in his
complaint, any harm remains founded on BB&T’s alleged failure to obtain the government-
backed loan.

                                           -10-
                                  USSERY V. BB&T

                                  Opinion of the Court

“without merit and clearly time-barred,” but he expressed a willingness to work

towards a resolution of BB&T’s potential claims against plaintiff. Counsel’s letter

included a counterproposal giving plaintiff six months to sell the Cheraw Road

Building and, after applying the proceeds from that sale to the $425,000 Note,

allowing plaintiff to pay eighty-five percent of any deficiency balance remaining in

twenty-four equal monthly installments, without interest.

      On 25 June 2008, six years and five months after plaintiff first became aware

that no government-backed loan was available, plaintiff filed his complaint asserting

seven causes of action, each of which incorporates by reference and is based in part

upon the following allegations:

             9.     On or about April 18, 2002, based upon the assurances that
      Barker and Chair Specialties would quality [sic] for a business loan,
      Plaintiffs obtained a $425,000 loan from BB&T, signing a promissory
      note in said amount payable to BB&T in full upon its maturity on April
      18, 2003, with accrued interest payable on a quarterly basis through
      maturity. As collateral for the loan, the Plaintiffs granted a Deed of
      Trust to BB&T in the amount of $425,000.00, with the Cheraw Road
      building as collateral, and also entered into a Security Agreement with
      BB&T.
             ....

            11.   Plaintiffs allege under information and belief that with the
      start up of Chair Specialties and the securing of a $450,000.00
      [government-backed loan] by Barker and Chair Specialties, that Barker
      and Chair Specialties would be able to pay in full the Promissory Note
      issued by the Plaintiffs to Barker and his wife, and also pay off the
      $425,000.00 business loan obtained by the Plaintiffs for the start up of
      Chair Specialties.

            12.   On April 18, 2002 notes and closing documents were all
      executed with the knowledge of Mabe and BB&T, and under the full

                                         -11-
                                  USSERY V. BB&T

                                 Opinion of the Court

      assurance to the Plaintiffs that the business loan for Chair Specialties
      would be approved.

             13.   Plaintiffs allege upon information and belief that within
      the weeks that followed the April 18, 2002 closing on the $425,000.00
      loan from BB&T to the Plaintiffs, Barker contacted Mabe to obtain a
      status on the paperwork for the Chair Specialties business loan, and
      upon his inquiry, Mabe within the course and scope of his authority with
      BB&T, assured Barker that the loan paperwork was “on track” and that
      the loan would be approved.

            14.   Plaintiffs allege upon information and belief that in
      January of 2003, Mabe called Barker and informed him that he had bad
      news, and that much to Mabe’s surprise, the [government-backed] loan
      had been denied.
            ....

            33.    Defendants have failed and refused to cancel the [$425,000
      Note] and reimburse the Plaintiffs for expenses incurred based upon the
      Defendant’s breach and failure to procure original financing for Chair
      Specialties and Barker.

      In essence, plaintiff argues in his complaint that he sought the $425,000 loan

as a “bridge loan” to be repaid with the proceeds of the anticipated $450,000

government-backed loan. Unable to repay the $425,000 Note with funds from the

expected $450,000 government-backed loan, plaintiff asserts the following claims: (1)

negligence, (2) negligent misrepresentation, (3) breach of contract, (4) unfair and

deceptive trade practices, (5) breach of fiduciary relationship, (6) breach of BB&T’s

duty of good faith dealing, and (7) fraud. In addition to compensatory damages,

plaintiff requested punitive damages and a declaratory judgment voiding the

$425,000 Note and cancelling the bank’s deed of trust on the Cheraw Road Property.

                                        -12-
                                      USSERY V. BB&T

                                      Opinion of the Court

       Despite the foundational allegation in the complaint that plaintiff obtained the

$425,000 loan in reliance upon a representation that the government-backed loan

was forthcoming, the actual facts established by plaintiff’s own affidavit and

discovery, and by the affidavit of his business partner Barker, are that BB&T had

already notified plaintiff that no such government-backed loan was available by

January 2002, several months before plaintiff obtained the $425,000 loan in April

2002. Plaintiff has not filed a motion to amend his pleading.

       In its answer BB&T raised the statutes of limitation5 as an affirmative defense

and filed a compulsory counterclaim to collect the outstanding principal and interest

owed on the $425,000 Note. In plaintiff’s reply to BB&T’s counterclaim, he pled, as

one of his affirmative defenses, the claims from his complaint, stating that “Plaintiffs

plead and rely upon the original claims set forth in their Complaint as a bar to the

Counterclaim.”6

       5  Plaintiff’s claims for negligence, negligent misrepresentation, breach of contract,
breach of fiduciary relationship, breach of duty of good faith and fair dealing, and fraud are
subject to a three-year statute of limitations. N.C.G.S. § 1-52(1), (5), (9) (2013). Plaintiff’s
unfair and deceptive trade practices claim is subject to a four-year statute of limitations.
Id. § 75-16.2 (2013). Based on the purported claims having arisen in January 2002, the
three-year statute of limitations would have run in January 2005, and the four-year statute
of limitations would have run in January 2006.
        6 Plaintiff raises seven defenses in his reply to BB&T’s counterclaim. First, plaintiff

does not dispute execution of the $425,000 Note or the accompanying six modification
agreements or the benefits therein, but denies he is in default. He then asserts six
affirmative defenses: (1) “unclean hands,” (2) “modification and novation,” (3) “laches,” (4)
“waiver and estoppel,” (5) “Defendant’s failure to mitigate,” and (6) “the original claims set
forth in [plaintiff’s] Complaint.”

                                              -13-
                                  USSERY V. BB&T

                                  Opinion of the Court

        On 15 December 2011, BB&T moved for summary judgment on the grounds

that, inter alia, there is no genuine dispute of material fact regarding plaintiff’s

indebtedness under the $425,000 Note or that plaintiff’s claims are time-barred. On

16 April 2012, the trial court granted summary judgment in favor of BB&T,

concluding that BB&T is entitled to damages of $645,382.79, plus costs and interest,

and attorney fees. On appeal, plaintiff argued, inter alia, that the record establishes

a genuine issue of material fact whether BB&T should be equitably estopped from

asserting the statutes of limitation defense and whether the promissory note and

deed of trust are enforceable. BB&T reiterated its argument that plaintiff’s claims

are in fact time-barred and that it is entitled to summary judgment on the $425,000

Note.

        In a divided opinion, the Court of Appeals held that the events alleged by

plaintiff raised an inference that BB&T was equitably estopped from asserting the

statutes of limitation as a defense when its assurances to plaintiff may have induced

his delay in filing suit and reversed the trial court’s grant of defendant’s motion for

summary judgment. Ussery v. Branch Banking & Trust Co., ___ N.C. App. ___, ___,

743 S.E.2d 650, 658 (2013). The dissent rejected the majority’s equitable estoppel

analysis, concluding that no genuine issue of material fact existed regarding

plaintiff’s claims and that BB&T’s alleged “assurances” were “nothing more than

mere ‘promises’ that Defendant would work to resolve Plaintiff’s claims in the future.”

Id. at ___, 743 S.E.2d at 659 (Dillon, J., concurring in part and dissenting in part).

                                         -14-
                                     USSERY V. BB&T

                                     Opinion of the Court

The dissent noted that, in any event, “the alleged oral ‘assurance’ [by BB&T] that the

[$425,000 Note] would not have to be paid back under any circumstance is in direct

contradiction to the terms of the six written [modification] agreements executed by

Plaintiff.” Id. at ___, 743 S.E.2d at 661. Nonetheless, the dissent agreed with the

majority that a genuine issue of material fact remained regarding the amount of

interest accrued on the $425,000 Note, for which defendant sought recovery in its

counterclaim.7 Id. at ___, ___, 743 S.E.2d at 658-59, 662.

       Summary judgment is proper “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show 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.” N.C.G.S. § 1A-1, Rule 56(c) (2013). The movant is

entitled to summary judgment: (1) “where a claim or defense is utterly baseless in

fact,” or (2) when only a question of law arises based on undisputed facts. Kessing v.

Nat’l Mortg. Corp., 278 N.C. 523, 533, 180 S.E.2d 823, 829 (1971) (citations omitted).

“All facts asserted by the [nonmoving] party are taken as true and . . . viewed in the

light most favorable to that party.” Dobson v. Harris, 352 N.C. 77, 83, 530 S.E.2d
829, 835 (2000) (citations omitted).       This Court reviews appeals from summary

       7 This final issue was not appealed by either party and is not before this Court. See,
e.g., Town of Midland v. Wayne, ___ N.C. ___, ___, 773 S.E.2d 301, 305-06 (2015)
(recognizing that when a party has not sought further review of an issue, the decision of the
Court of Appeals on that matter is final).

                                            -15-
                                  USSERY V. BB&T

                                  Opinion of the Court

judgment de novo. Dallaire v. Bank of Am., 367 N.C. 363, 367, 760 S.E.2d 263, 266

(2014) (citations omitted).

      A genuine issue of material fact “is one that can be maintained by substantial

evidence.” Dobson, 352 N.C. at 83, 530 S.E.2d at 835 (citation omitted). “Substantial

evidence is such relevant evidence as a reasonable mind might accept as adequate to

support a conclusion,” Thompson v. Wake Cty. Bd. of Educ., 292 N.C. 406, 414, 233
S.E.2d 538, 544 (1977) (quoting State ex rel. Comm’r of Ins. v. N.C. Fire Ins. Rating

Bureau, 292 N.C. 70, 80, 231 S.E.2d 882, 888 (1977)), and means “more than a

scintilla or a permissible inference,” id. at 414, 233 S.E.2d at 544 (quoting State ex.

rel. Comm’r of Ins. v. N.C. Auto. Rate Admin. Office, 287 N.C. 192, 205, 214 S.E.2d
98, 106 (1975)). When the proof offered by either party establishes that no cause of

action or defense exists, summary judgment may be granted. Kessing, 278 N.C. at

535, 180 S.E.2d at 830 (citation omitted).

      It is undisputed that, several months after plaintiff became aware that the

desired government-backed loan was unavailable and thus learned of his potential

claims against BB&T, he nonetheless sought and obtained a new $425,000 loan from

BB&T, thereby consolidating his existing debts and giving him $99,187.75 in

additional cash. The record reveals no misrepresentation inducing plaintiff to obtain

this loan.   Plaintiff then executed a series of six modifications, all of which

                                         -16-
                                    USSERY V. BB&T

                                   Opinion of the Court

unambiguously reaffirmed the $425,000 Note obligation and expressly waived any

offsets and defenses against the indebtedness or the bank.

      BB&T is entitled to summary judgment on its counterclaim seeking repayment

of the $425,000 Note because, relying on the contractual terms of the loan documents,

plaintiff repeatedly reaffirmed his indebtedness and expressly waived his defenses

and offsets. Likewise, because plaintiff’s own claims incorporate and rely upon his

indebtedness, comprised of both the $425,000 Note and subsequent modifications,

plaintiff’s waiver necessarily included his claims, and summary judgment for BB&T

on that basis is proper. Moreover, plaintiff’s claims as pled in his complaint rely upon

the premise that the $425,000 Note was a “bridge loan” obtained before he knew the

government-backed loan was not available, but his own evidence directly contradicts

this assertion.

      In interpreting contracts, we construe them as a whole. Singleton v. Haywood

Elec. Membership Corp., 357 N.C. 623, 629, 588 S.E.2d 871, 875 (2003) (“The various

terms of the [contract] are to be harmoniously construed . . . .” (alteration in original)

(quoting Gaston Cty. Dyeing Mach. Co. v. Northfield Ins. Co., 351 N.C. 293, 299, 524
S.E.2d 558, 563 (2000))). Each clause and word is considered with reference to each

other and is given effect by reasonable construction. Sec. Nat’l Bank of Greensboro v.

Educators Mut. Life Ins. Co., 265 N.C. 86, 93, 143 S.E.2d 270, 275 (1965) (“[A]

paragraph or excerpt must be interpreted in context with the rest of the agreement.”

                                          -17-
                                   USSERY V. BB&T

                                   Opinion of the Court

(quoting 1 Strong’s North Carolina Index: Contracts § 12, at 585 (1957))).           We

determine the intent of the parties by using “the plain meaning of the written terms.”

RL REGI N.C., LLC v. Lighthouse Cove, LLC, 367 N.C. 425, 428, 762 S.E.2d 188, 190

(2014) (citing Powers v. Travelers Ins. Co., 186 N.C. 336, 338, 119 S.E. 481, 482

(1923)). Contracting parties understand that “liability to the burden is a necessary

incident to the right to the benefit.” Id. at 428-29, 762 S.E.2d at 190 (quoting Norfleet

v. Cromwell, 70 N.C. 510, 516, 70 N.C. 633, 641 (1874) (citations omitted)). “It is the

general law of contracts that the purport of a written instrument is to be gathered

from its four corners . . . .” Carolina Power & Light Co. v. Bowman, 229 N.C. 682,

693-94, 51 S.E.2d 191, 199 (1949) (Stacy, C.J., dissenting) (citations omitted). One

who executes a written instrument is ordinarily charged with knowledge of its

contents, see, e.g., Mills v. Lynch, 259 N.C. 359, 362, 130 S.E.2d 541, 543-44 (1963),

and he may not base his action on ignorance of the legal effect of its provisions in the

absence of considerations such as fraud or mistake, Pierce v. Bierman, 202 N.C. 275,

279, 162 S.E. 566, 568 (1932).

      “Parties are [generally] free to waive various rights, including those arising

under statutes.” RL REGI, 367 N.C. at 428, 762 S.E.2d at 190 (citations omitted).

“Waiver is the intentional relinquishment of a known right,” and as such, “knowledge

of the right and an intent to waive it must be made plainly to appear.” Brady v.

Funeral Benefit Ass’n, 205 N.C. 5, 7, 169 S.E. 823, 824 (1933) (citation omitted). A

debtor who, on the one hand, acknowledges his debt obligations and waives any

                                          -18-
                                  USSERY V. BB&T

                                  Opinion of the Court

defenses against that obligation cannot, at the same time, claim he reasonably relied

on contemporaneous assurances that the very same debt would be canceled. See Int’l

Harvester Credit Corp. v. Bowman, 69 N.C. App. 217, 220, 316 S.E.2d 619, 621, disc.

rev. denied, 312 N.C. 493, 322 S.E.2d 556 (1984) (holding the defendants’ reliance

unreasonable as a matter of law when the defendants signed a guaranty that

expressly contradicted the creditor’s assurance).

      Recently, in RL REGI North Carolina, LLC v. Lighthouse Cove, LLC, we held

that a spousal guarantor’s execution of a forbearance agreement that “waiv[ed] all

defenses” precluded her assertion of a statutory affirmative defense after she was

sued for defaulting on the underlying loan. 367 N.C. at 428-30, 762 S.E.2d at 190-91.

In reaching this conclusion, we relied on traditional contract interpretation

principles. Id. at 428-30, 762 S.E.2d at 190-91. The defendant in RL REGI executed

a guaranty agreement with her bank to support financing for a real estate

development project. Id. at 426, 762 S.E.2d at 189. The loan went into default, after

which the parties entered into a restructuring arrangement; in conjunction with that

transaction, the defendant executed an accompanying forbearance agreement. Id. at

426, 762 S.E.2d at 189. According to that arrangement, the bank agreed not to

exercise its collection remedies under the loan documents and to forego payments on

the principal debt during the forbearance period. Id. at 426, 762 S.E.2d at 189. In

exchange, the defendant “waived ‘any and all claims, defenses and causes of action.’ ”

Id. at 426, 762 S.E.2d at 189. The plaintiff lender later sued the defendant seeking

                                         -19-
                                   USSERY V. BB&T

                                   Opinion of the Court

recovery of the indebtedness.     Id. at 427, 762 S.E.2d at 189.       In response, the

defendant asserted an affirmative defense, arguing that the bank had obtained her

guaranty in violation of the federal Equal Credit Opportunity Act. Id. at 427, 762

S.E.2d at 189.

      Reading the plain language of the forbearance agreement, we held that,

regardless of whether the bank had violated the Act, the defendant had waived that

defense. Id. at 428, 762 S.E.2d at 190 (“We must decide the case, therefore, . . . by

what is written in the contract actually made by them.” (alteration in original)

(quoting Powers, 186 N.C. at 338, 119 S.E. at 482)). The defendant acknowledged

that she had freely and voluntarily signed the forbearance agreement after having

adequate time to review, analyze, and discuss its provisions. Id. at 426-27, 762 S.E.2d

at 189. Despite the defendant’s later assertion to the contrary, we found “nothing

facially illegal about this loan relationship,” in which the lender agreed to modify a

loan upon certain conditions. Id. at 429, 762 S.E.2d at 191 (“[P]arties routinely forego

claims in settlement agreements.”).           The defendant’s waiver “was not a

precondition . . . to receive the . . . loan, but rather it was a negotiated settlement.”

Id. at 430, 762 S.E.2d at 191. The defendant guarantor chose to accept the benefits

of the forbearance agreement, which provided leniency in repayment of her debt, and

she thus “acknowledged the enforceability of her guaranty and waived a wide array

of potential claims [or defenses].” Id. at 429, 762 S.E.2d at 190.

                                          -20-
                                    USSERY V. BB&T

                                   Opinion of the Court

      Here the language in both the $425,000 Note and accompanying modifications

clearly and unambiguously establishes plaintiff’s indebtedness.         In exchange for

incurring the $425,000 Note, plaintiff received benefits, including capital, an

additional $99,187.75 in cash proceeds, consolidation of his debts, and reduction of

his monthly expenses through interest-only payments. Likewise, plaintiff benefitted

from the six loan modification agreements, each of which extended the maturity date

of the $425,000 Note and allowed him to make interest-only payments, or via the

later modifications, accrue the interest until maturity.          The language in the

promissory note executed by plaintiff in conjunction with his receipt of the $425,000

states that “[f]or value received, the undersigned . . . promises to pay.” Plaintiff later

reaffirmed that his obligation to repay the debt “shall remain in full force and effect”

on six different occasions.     We accept the Note and modifications as accurate

statements of the parties’ contractual agreement.

      Given that parties are generally free to waive various rights, RL REGI, 367

N.C. at 428-29, 762 S.E.2d at 190, plaintiff accepted the terms of the modification

agreements, which benefitted him, in exchange for plaintiff’s reaffirmation of his loan

obligation and waiver of his offsets and defenses against BB&T. With each loan

modification plaintiff again consented to the agreement, “waiv[ed] any objection

thereto,” and “certif[ied] that there are no defenses or offsets against” either the

“obligations or the Bank.” The text is clear and unambiguous. Plaintiff offers no

contrary interpretation of his waiver. If plaintiff relied on verbal assurances contrary

                                          -21-
                                     USSERY V. BB&T

                                     Opinion of the Court

to the documents he signed, such reliance cannot be reasonable, and he was “misled

through his own want of reasonable care and circumspection.” Hawkins v. M & J

Fin. Corp., 238 N.C. 174, 179, 77 S.E.2d 669, 673 (1953); see RL REGI, 367 N.C. at

429, 762 S.E.2d at 190. Plaintiff’s waiver acknowledging his obligation and waiving

any offsets or defenses against the $425,000 Note makes summary judgment proper

for BB&T on its counterclaim seeking repayment of the indebtedness.

       Each of plaintiff’s claims as pled seeks to defeat the $425,000 Note based on

plaintiff’s bridge loan theory: that he would not have incurred the obligation but for

BB&T’s assurance that a government-backed loan would be available. By tying each

of his claims to the $425,000 Note or to BB&T’s refusal to cancel it, plaintiff

acknowledges that his claims are efforts to defeat that indebtedness and, therefore,

constitute defenses or offsets against that obligation.8             Construing plaintiff’s

       8 Plaintiff’s stated claims each incorporate by reference his bridge loan theory as
outlined in his complaint, and each claim reveals, inter alia, the following reliance upon
cancellation of the $425,000 Note and accompanying loan agreements:
       (1) Plaintiff’s negligence claim relies on BB&T’s refusal to “cancel the Deed of Trust
and Security Agreement” accompanying the $425,000 Note.
       (2) Plaintiff’s negligent misrepresentation claim provides that BB&T misrepresented
that the “[$425,000 Note] would be canceled” and that, “based upon [BB&T’s] refusal to
cancel the [accompanying] Deed of Trust,” plaintiff has been “precluded from selling the
property” serving as collateral for the loan.
       (3) Plaintiff’s breach of contract claim asserts that plaintiff “enter[ed] into the
$425,000.00 Promissory Note . . . as the bridge loan for Chair Specialties,” and requests
that plaintiff “be indemnified on the $425,000.00 note and bridge loan.”
       (4) Plaintiff’s unfair and deceptive trade practices claim relies in part on
“representations to induce [plaintiff] to enter into the alleged [$425,000 Note]” and
representations that “BB&T would cancel the [$425,000 Note].”
       (5) Plaintiff’s breach of fiduciary relationship claim relies on “[BB&T’s] assurance to

                                            -22-
                                     USSERY V. BB&T

                                     Opinion of the Court

indebtedness as a whole, and in light of established principles of reasonable

construction and interpretation, we find the $425,000 indebtedness valid and

conclude that plaintiff waived his claims and defenses as they are offsets or defenses

to that indebtedness; therefore, summary judgment is proper for BB&T on plaintiff’s

claims.

       Furthermore, plaintiff’s claims as pled are logically flawed, and plaintiff fails

to establish a genuine issue of material fact regarding his claims. Plaintiff cannot

prove, even under his own asserted timeline, that he obtained the $425,000 Note in

anticipation of the government-backed loan. In his complaint, plaintiff alleges that

on 18 April 2002, he executed the $425,000 Note with BB&T in anticipation of

securing a government-backed loan in the future. Plaintiff further alleges that in the

weeks that followed, BB&T assured plaintiff that his government-backed loan was

“on track” and that it would be approved. Nevertheless, by his own affidavit and

interrogatories, plaintiff admits that by January 2002, BB&T had already notified

him that no such government-backed loan would be available.                Plaintiff further

the Plaintiff[ ] that all matters involving the Plaintiff’s $425,000.00 note, and any expenses
incurred would be resolved,” and BB&T’s failure to “resolve the issue related to the
$425,000.00 loan and damages” and its “refus[al] to cancel the [accompanying] Deed of
Trust.”
        (6) Plaintiff’s breach of duty of good faith dealing claim relies on BB&T’s actions in
“the various respects alleged above,” referring to the allegations in the aforementioned
claims, all of which rely in large part upon the $425,000 Note.
        (7) Plaintiff’s fraud claim relies on BB&T’s “representations that the [$425,000 Note]
and the associated business expenses would be resolved.”

                                            -23-
                                    USSERY V. BB&T

                                    Opinion of the Court

admits he had transitioned to closing Chair Specialists and was in the process of

selling the associated equipment and other property “by the beginning of 2002.”

Plaintiff’s business partner Barker, by his affidavit, acknowledged the same: “Mr.

Mabe contacted me in January of 2002 and stated that . . . the [government-backed

loan] had been denied. . . . In early 2002 . . . we were forced to close Chair Specialists.”

Barker characterized the transaction at issue as a “consolidation loan,” stating that

“[i]n early 2002, being unable to obtain [the government-backed] loan . . . [plaintiff]

thereafter approached BB&T about a single loan of $425,000.00 to consolidate the

debt on the building and reduce his monthly expenditures.” Even taking the evidence

in the light most favorable to plaintiff, BB&T could not have issued the $425,000 Note

in anticipation of a future government-backed loan that the bank had already advised

plaintiff would not be forthcoming. Plaintiff’s blanket assertions cannot overcome his

own evidence to the contrary. See Whitacre P’ship v. Biosignia, Inc., 358 N.C. 1, 26,

591 S.E.2d 870, 886 (2004) (“[A] party to a suit should not be allowed to change his

position with respect to a material matter in the course of litigation.” (quoting Roberts

v. Grogan, 222 N.C. 30, 33, 21 S.E.2d 829, 830-31 (1942))); Dobson, 352 N.C. at 83,

530 S.E.2d at 835 (providing that summary judgment is proper when “the opposing

party cannot produce evidence to support an essential element of her claim” (emphasis

added) (citations omitted)). Though a plaintiff may amend his complaint, and leave

to do so “shall be freely given when justice so requires,” N.C.G.S. § 1A-1, Rule 15(a)

(2013), plaintiff failed to do so despite such fundamental, logical defects.

                                           -24-
                                   USSERY V. BB&T

                                   Opinion of the Court

      In conclusion, the $425,000 Note and modifications clearly establish plaintiff’s

indebtedness and his waiver of offsets and defenses against BB&T. Plaintiff’s waiver

necessarily included, and extended to, his claims against the $425,000 Note or the

bank. Taking the evidence in the light most favorable to plaintiff, BB&T is entitled

to summary judgment in its favor as to all claims set forth in plaintiff’s complaint and

all but the interest claim stated in BB&T’s counterclaim; accordingly, the decision of

the Court of Appeals which is before us is reversed. Regarding the interest claim, the

Court of Appeals unanimously held that the trial court erred in calculating the

amount of interest due on the $425,000 Note and remanded that issue for

determination at trial.    That matter was not before this Court on appeal, and

therefore, the decision of the Court of Appeals as to that issue remains undisturbed.

Accordingly, this case is remanded to the Court of Appeals for further remand to the

Superior Court, Richmond County, for further proceedings not inconsistent with this

opinion.

      REVERSED AND REMANDED.

      Justice ERVIN did not participate in the consideration or decision of this case.

                                          -25-