Court Opinion

ID: 9573422
Source: CourtListenerOpinion
Date Created: 2023-08-21 20:54:56.284515+00
Date Added: 2024-06-11T12:40:54.105909
License: Public Domain

TYSON, Judge,
concurring in part, dissenting in part.
I concur in parts I through IV of the majority’s opinion. I disagree with the majority’s conclusion that plaintiffs are not entitled to recover attorney’s fees under either G.S. § 6-21.2 or G.S. § 6-20. Accordingly, I respectfully dissent from part V of the majority’s opinion.
As the majority’s opinion notes, G.S. § 6-21.2 provides:
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 . . . after maturity....
N.C. Gen. Stat. § 6-21.2 (1999) (emphasis supplied). The majority’s opinion concludes that G.S. § 6-21.2 does not provide statutory authority for plaintiffs to recover attorney’s fees because “the party owed the debt, Defendant, is not seeking to recover attorney’s fees.” I disagree with this analysis.
The phrase “other evidence of indebtedness” contained in G.S. § 6-21.2 has been defined by our Supreme Court to include “any printed or written instrument, signed or otherwise executed by the obligor(s), which evidences on its face a legally enforceable obliga*14tion to pay money.” Stillwell Enterprises, Inc. v. Interstate Equipment Co., 300 N.C. 286, 294, 266 S.E.2d 812, 817 (1980). The Supreme Court stated that such a definition “does no violence to any of the statute’s specific provisions and accords well with its general purpose to validate a debt collection remedy expressly agreed upon bv contracting parties.” Id. at 294, 266 S.E.2d 817-18 (emphasis supplied).
In Stillwell, the Supreme Court reversed this Court’s holding that G.S. § 6-21.2 was inapplicable, and that an award of attorney’s fees arising out of a lease dispute was improper. Id. at 295, 266 S.E.2d at 818. The Court noted that the lease agreement at issue contained a legally enforceable obligation by the plaintiff-lessee to remit rental payments to the defendant-lessor in exchange for use of property. Id. at 294, 266 S.E.2d at 818. Holding that such an agreement “is obviously an ‘evidence of indebtedness,’ ” the Court held: “we see no reason why the obligation by plaintiff to pay attorneys’ fees incurred by defendant upon collection of the debts arising from the contract itself should not be enforced to the extent allowed by G.S. § 6-21.2.” Id. at 294-95, 266 S.E.2d at 818 (emphasis supplied).
This Court has also held that “evidence of indebtedness” under G.S. § 6-21.2 applies to a stock purchase agreement. Nucor Corp. v. General Bearing Corp., 103 N.C. App. 518, 520, 405 S.E.2d 776, 777 (1991), rev’d on other grounds, 333 N.C. 148, 423 S.E.2d 747 (1992) (holding G.S. § 6-21.2 authorizes award of attorney’s fees under agreement obligating the defendant to convey to the plaintiff outstanding stock in defendant’s corporation and to pay additional fees, where such agreement was clearly evidence of indebtedness).
Paragraph 13 of the Asset Purchase Agreement (“Agreement”) in this case expressly requires the parties to indemnify each other “for any damages incurred ... as a result of the breach of any warranty .. . including all costs, attorneys’ fees or other expenses arising out, of anv suit or action brought, to enforce anv rights conferred hereunder.” (emphasis supplied). Paragraph 13 of the Agreement further provides:
In the event of any violation by the Seller of any representations and/or warranties set forth herein, including but not limited to the provisions of Paragraph 11 hereof [“Covenant Not to Compete”], then Purchaser shall have the right, to offset anv payments that mav be due the Seller pursuant to the provisions hereof in the *15amount bv which Purchaser has been damaged bv any such breach.
(emphasis supplied).
The $1,010.00 awarded plaintiffs by the trial court is “evidence of indebtedness.” The Agreement provided for payments over and above the promissory note. Paragraph 13 of the Agreement also provides plaintiffs the right to offset the amount owed under the agreement by the $1,010.00 awarded. Plaintiffs sought such an offset and cancellation of the outstanding notes in their complaint. Plaintiffs are creditors of defendants on a “matured” debt. Thus, consistent with the Supreme Court’s holding in Stillwell, G.S. § 6-21.2 provides authority for plaintiffs to recover the attorney’s fees “upon collection of the debts arising from the contract itself.” Stillwell at 294-95, 266 S.E.2d at 818 (emphasis supplied).
The trial court’s award of attorney’s fees is also authorized by G.S. § 6-20. G.S. § 6-20 provides that, “[i]n other actions, costs may be allowed or not, in the discretion of the court, unless otherwise provided by law.” N.C. Gen. Stat. § 6-20 (1999). A trial court may, in its discretion, award attorney’s fees under G.S. § 6-20 if “just and equitable.” Batcheldor v. Boyd, 119 N.C. App. 204, 208, 458 S.E.2d 1, 3-4, disc. review denied, 341 N.C. 418, 461 S.E.2d 753 (1995) (citing Wachovia Bank & Trust Co. v. Dodson, 260 N.C. 22, 131 S.E.2d 875 (1963)); see also, Alsup v. Pitman, 98 N.C. App. 389, 390, 390 S.E.2d 750, 751 (1990) (recoverable costs under G.S. § 6-20 may, in trial court’s discretion, include expenses for depositions).
In suits in equity, the allowance of costs rests in the discretion of the court. Worthy v. Brower, 93 N.C. 492 (1885). Under G.S. § 6-20, the trial court’s allowance of attorney’s fees as a part of costs is within the court’s sound discretion qnd “will not be disturbed on appeal absent an abuse of discretion.” Wachovia Bank of North Carolina, N.A. v. Bob Dunn Jaguar, Inc., 117 N.C. App. 165, 175, 450 S.E.2d 527, 533 (1994) (citation omitted).
In this case, plaintiffs sought the equitable remedies of (1) cancellation of the Agreement, (2) prohibiting defendants from collecting any sums due under the Agreement, and (3) returning to plaintiffs any monies paid under the Agreement. The trial court ordered that defendants be “restrained from any further violations of the Agreement.” This remedy is equitable in nature. Thus, under G.S. § 6-20, the trial court had discretion to award plaintiffs costs, in-*16eluding attorney’s fees. Defendants present no evidence of an abuse of discretion in the trial court’s award. I would affirm the trial court’s award of attorney’s fees under either G.S. § 6-21.2 or G.S. § 6-20. I, therefore, respectfully dissent from part V of the majority’s opinion.