Court Opinion

ID: 6350860
Source: CourtListenerOpinion
Date Created: 2022-06-17 16:05:49.3554+00
Date Added: 2024-06-11T09:15:40.133784
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA

                                       2022-NCSC-74

                                         No. 43A21

                                     Filed 17 June 2022

     DAWN REYNOLDS-DOUGLASS

                  v.
     KARI TERHARK

           Appeal pursuant to N.C.G.S. § 7A-30(2) from the unpublished decision of a

     divided panel of the Court of Appeals, No. COA-20-112, 2020 WL 7974326 (N.C. Ct.

     App. Dec. 31, 2020), finding no error in an order entered on 20 September 2019 by

     Judge Ned W. Mangum in District Court, Wake County. Heard in the Supreme Court

     on 14 February 2022.

           David G. Omer for plaintiff-appellee.

           Williams Mullen by Michael C. Lord for defendant-appellant.

           ERVIN, Justice.

¶1         This case involves the issue of whether the trial court erred by awarding

     attorney’s fees in an action seeking the recovery of money owed under a contract to

     purchase real estate which obligated the buyer to pay the seller a due diligence fee

     and an earnest money deposit. After the buyer breached the real estate contract, the

     seller brought an action in small claims court for the purpose of recovering the due

     diligence fee that was owed to her pursuant to that agreement. The real estate
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     contract also provided that the prevailing party in an action seeking to recover the

     earnest money deposit was entitled to collect “reasonable attorney’s fees” from the

     opposing party. After the trial court awarded the requested attorney’s fees on appeal

     from a decision of the magistrate in plaintiff’s favor, the buyer appealed, arguing that

     the contract did not constitute an “evidence of indebtedness” pursuant to N.C.G.S. §

     6-21.2 and that the requested attorney’s fee award lacked sufficient support in the

     relevant statutory provision. A majority of the Court of Appeals found no error in the

     challenged attorney’s fees award. After careful consideration of the record in light of

     the applicable law, we affirm the decision of the Court of Appeals.

¶2         In mid-2017, plaintiff Dawn Reynolds-Douglass and her husband employed a

     real estate agent named Dee Love to assist them in listing their home for sale. As

     part of that process, Ms. Love advised plaintiff and her husband to complete a

     “Residential Property and Owners’ Association Disclosure Statement” as required by

     Chapter 47E of the General Statutes of North Carolina. Plaintiff and her husband

     completed the required disclosure statement, except for leaving two items blank, the

     first of which addressed whether the property was “subject to any utility or other

     easements, shared driveways, party walls or encroachments” and the second of which

     addressed whether “any fees [were] charged by the association or by the association’s

     management company in connection with the conveyance or transfer of the lot or

     property to a new owner.”
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¶3         On 23 July 2017, Ms. Love hosted an open house at which plaintiff’s residence

     could be viewed by potential buyers, including defendant Kari Terhark. On the

     following day, defendant met with Ms. Love for the purpose of reviewing the

     disclosure statement that plaintiff and her husband had completed. At the conclusion

     of the review process, defendant signed each page of the disclosure statement and

     executed an “Offer to Purchase and Contract” in which she agreed to purchase

     plaintiff’s property for $250,000. The Offer to Purchase and Contract provided, in

     pertinent part:

                  (d) “Purchase Price”:

                        $250,000.00 paid in U.S. Dollars upon the following
                        terms:

                        $2,000.00 BY DUE DILIGENCE FEE made payable
                        and delivered to Seller by the Effective Date.

                        ....

                        $2,500.00 BY (ADDITIONAL) EARNEST MONEY
                        DEPOSIT made payable and delivered to Escrow
                        Agent named in Paragraph 1(f) by cash, official bank
                        check, wire transfer or electronic transfer no later
                        than August 14, 2017 . . . .

                        ....

                        $245,500.00 BALANCE of the Purchase Price in
                        cash at Settlement (some or all of which may be paid
                        with the proceeds of a new loan).

     In addition, the Offer to Purchase and Contract provided:
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(e) “Earnest Money Deposit”: The Initial Earnest Money
Deposit, the Additional Earnest Money Deposit and any
other earnest monies paid or required to be paid in
connection with this transaction, collectively the “Earnest
Money Deposit,” shall be deposited and held in escrow by
Escrow Agent until Closing, at which time it will be
credited to Buyer, or until this Contract is otherwise
terminated. . . . In the event of breach of this Contract by
Buyer, the Earnest Money Deposit shall be paid to Seller
as liquidated damages and as Seller’s sole and exclusive
remedy for such breach, but without limiting Seller’s rights
under Paragraphs 4(d) and 4(e) for damage to the Property
or Seller’s right to retain the Due Diligence Fee. It is
acknowledged by the parties that payment of the Earnest
Money Deposit to Seller in the event of a breach of this
Contract by Buyer is compensatory and not punitive, such
amount being a reasonable estimation of the actual loss
that Seller would incur as a result of such breach. The
payment of the Earnest Money Deposit to Seller shall not
constitute a penalty or forfeiture but actual compensation
for Seller’s anticipated loss, both parties acknowledging
the difficulty [of] determining Seller’s actual damages for
such breach. If legal proceedings are brought by Buyer or
Seller against the other to recover the Earnest Money
Deposit, the prevailing party in the proceeding shall be
entitled to recover from the non-prevailing party
reasonable attorney fees and court costs incurred in
connection with the proceeding.

....

(i) “Due Diligence Fee”: A negotiated amount, if any, paid
by Buyer to Seller with this Contract for Buyer’s right to
terminate the Contract for any reason or no reason during
the Due Diligence Period. It shall be the property of Seller
upon the Effective Date and shall be a credit to Buyer at
Closing. The Due Diligence Fee shall be non-refundable
except in the event of a material breach of this Contract by
Seller . . . .
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     On the same date, plaintiff and her husband accepted defendant’s offer by initialing

     each page of the Offer to Purchase and Contract and signing the final page. After

     both parties had executed the Offer to Purchase and Contract, plaintiff and her

     husband removed their residence from the real estate market in anticipation of

     closing.

¶4         On 27 July 2017, defendant sent an e-mail to Ms. Love in which she stated that

     she intended to cancel the contract unless plaintiff and her husband agreed to reduce

     the purchase price by $5,500. In response, Ms. Love told defendant that she was in

     breach of the contract that she had made with plaintiff and plaintiff’s husband.

     Defendant did not pay the $2,000 due diligence fee or the $2,500 earnest money

     deposit fee that were due to plaintiff and plaintiff’s husband under the contract, with

     further negotiations that were intended to facilitate a closing ultimately proving

     unsuccessful.

¶5         On 29 September 2017, plaintiff, proceeding pro se, filed a complaint against

     defendant in small claims court seeking to recover the $2,000 due diligence fee. On

     30 October 2017, the magistrate entered a judgment in favor of plaintiff and against

     defendant in the amount of $2,000. After defendant noted an appeal to the district

     court from the magistrate’s judgment, the matter was referred to arbitration on 24

     January 2018, with the arbitrator ultimately entering an award in the amount of

     $2,000 in favor of plaintiff. On 26 January 2018, defendant filed a separate claim
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     against plaintiff in small claims court in which she sought $4,500 in damages and

     alleged that plaintiff had breached the purchase contract and was in “violation of the

     Property Disclosure Act” and in “violation of form 352-T,” with plaintiff having

     retained an attorney in light of the filings of defendant’s separate claim.

¶6         On or about 27 April 2018, plaintiff, acting through counsel, filed an amended

     complaint in which she sought to recover $2,000 for non-payment of the due diligence

     fee; $2,500 in damages for non-payment of the earnest money deposit; attorney’s fees

     and court costs; and $9,000 in compensatory damages, an amount which plaintiff

     claimed to be the “reasonable difference between (i) the purchase price of the Property

     pursuant to the Agreement and (ii) the market value of the Property after it had to

     be re-listed.” On 29 June 2018, defendant, who was also acting through an attorney

     at this point in the litigation, filed an answer to plaintiff’s amended complaint. On

     20 December 2018, plaintiff filed a motion seeking the entry of summary judgment

     in her favor, with defendant having filed a cross-motion seeking summary judgment

     in her own favor on 4 February 2019.

¶7         On 26 February 2019, the trial court entered an order granting summary

     judgment in favor of plaintiff. On 19 September 2019, plaintiff filed a motion seeking

     to have the trial court determine the amount of damages that she was entitled to

     recover and an application seeking an award of $15,564.74 in fees and costs, including

     attorney’s fees, with plaintiff’s counsel having asserted in an attached affidavit that
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     plaintiff had incurred $13,067.70 in attorney’s fees and $577.04 in court costs in

     prosecuting this action and $1,920 in attorney’s fees relating to a bankruptcy petition

     that defendant had also filed. On 20 September 2019, the trial court entered an order

     finding that plaintiff was entitled to recover $18,343.92 from defendant, including

     $2,000 relating to the due diligence fee; $2,500 relating to the earnest money deposit;

     $776.22 in pre-judgment interest relating to the due diligence fee and earnest money

     deposit; and $13,067.70 in attorney fees. Defendant noted an appeal to the Court of

     Appeals from the trial court’s order.

¶8         In seeking relief from the trial court’s order before the Court of Appeals,

     defendant, proceeding pro se, argued that the trial court had erred by (1) granting

     summary judgment in plaintiff’s favor in spite of the existence of genuine issues of

     material fact concerning the extent to which plaintiff had complied with the

     Residential Property Disclosure Act; (2) denying defendant’s summary judgment

     motion; and (3) finding that plaintiff was entitled to recover attorney’s fees. In

     rejecting defendant’s challenge to the trial court’s decision to enter summary

     judgment in plaintiff’s favor with respect to the merits of plaintiff’s claim, the Court

     of Appeals held that the trial court had correctly concluded that there were no

     genuine issues of material fact concerning the extent to which plaintiff was entitled

     to recover the due diligence fee and earnest money deposit from defendant. Reynolds-

     Douglass v. Terhark, No. COA-20-112, 2020 WL 7974326, at *2 (N.C. Ct. App. Dec.
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     31, 2020) (unpublished). In reaching this result, the Court of Appeals noted that

     plaintiff had filled out a standard disclosure statement; that defendant had “attested

     that she had received and examined [the s]tatement by signing each page, including

     the pages upon which [the inadvertently missing items] appeared”; that defendant

     had been “given the opportunity to read and review both documents”; that defendant

     had “attested that she did so” without having sought clarification regarding the

     statement before making an offer to purchase the property; and that defendant “did

     not argue that the Disclosure Statement was invalid until well after litigation had

     commenced in this matter.” Reynolds-Douglass, 2020 WL 7974326, at *3.

¶9         In rejecting defendant’s challenge to the trial court’s attorney’s fees award, the

     Court of Appeals held that the trial court had correctly awarded $13,067.70 in

     attorney’s fees to plaintiff. Id. After noting that a party attempting to overturn an

     award of attorney’s fees must prove that the trial court had abused its discretion, the

     Court of Appeals determined that defendant had not “challenge[d] the amount of the

     attorney’s fees award, only the award itself.” Id. According to the Court of Appeals,

     the trial court was authorized to award attorney’s fees in this case pursuant to

     N.C.G.S. § 6-21.2, which provides that “parties to ‘any note, conditional sale contract

     or other evidence of indebtedness’ [can] recover attorney’s fees resulting from a

     breach of the same, ‘not in excess of fifteen percent (15%) of the outstanding balance

     owing.’ ” Reynolds-Douglass, 2020 WL 7974326, at *4 (citing N.C.G.S. § 6-21.2). In
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the Court of Appeals’ view, the Offer to Purchase and Contract, which obligated

defendant to pay the due diligence fee and earnest money deposit to plaintiff and

provided that, “[i]f legal proceedings [we]re brought by Buyer or Seller against the

other to recover the Earnest Money Deposit, the prevailing party in the proceeding

shall be entitled to recover from the non-prevailing party reasonable attorney’s fees

and costs incurred in connection with the proceeding,” constituted an “evidence of

indebtedness” for purposes of N.C.G.S. § 6-21.2, so that an award of attorney’s fees

was authorized in this instance. Reynolds-Douglass, 2020 WL 7974326, at *3–4. In

reaching this conclusion, the Court of Appeals relied upon Stillwell Enters., Inc. v.

Interstate Equip. Co., 300 N.C. 286 (1980), in which this Court determined that “[t]he

term ‘evidence of indebtedness’ as used in N.C.[G.S.] § 6-21.2 refers to 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.” Reynolds-Douglass, 2020

WL 7974326, at *4 (quoting Stillwell, 300 N.C. at 294). In light of the fact that the

Offer to Purchase and Contract in this case “was a printed instrument signed by both

parties” which “on its face evidenced a legally enforceable obligation for Defendant to

pay the Due Diligence fee and Earnest Money Deposit to Plaintiff,” the Court of

Appeals reasoned that the contract constituted an “evidence of indebtedness” for

purposes of N.C.G.S. § 6-21.2, so that the trial court was authorized to make an award

of attorney’s fees in plaintiff’s favor. Id.
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¶ 10         Although Judge Murphy agreed with his colleagues in concluding that the trial

       court had not erred by granting summary judgment in plaintiff’s favor, he disagreed

       with his colleagues’ decision to uphold the trial court’s attorney’s fees award.

       Reynolds-Douglass, 2020 WL 7974326, at *5 (Murphy, J., concurring, in part, and

       dissenting, in part). As an initial matter, Judge Murphy concluded that the Offer to

       Purchase and Contract did not authorize the recovery of attorney’s fees because the

       appropriateness of such an award hinged upon whether “legal proceedings [we]re

       brought . . . to recover the Earnest Money Deposit” and because this proceeding had

       initially been brought for the purpose of recovering the due diligence fee rather than

       the earnest money deposit. Reynolds-Douglass, 2020 WL 7974326, at *5–6.

¶ 11         In addition, Judge Murphy concluded that N.C.G.S. § 6-21.2 did not authorize

       an award of attorney’s fees in this case given that the Offer to Purchase and Contract

       did not constitute an “evidence of indebtedness” or a “note or conditional sale

       contract” as required by the relevant statutory provision. Reynolds-Douglass, 2020

       WL 7974326, at *6. According to Judge Murphy, the majority at the Court of Appeals

       had erroneously extended Stillwell to encompass a real estate contract even though

       the principle enunciated in Stillwell was “only relevant for commercial transactions”

       in light of our statements that the definition of an “evidence of indebtedness” adopted

       in that case did “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
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       by contracting parties” and that N.C.G.S. § 6-21.2 was intended to “supplement those

       principles of law generally applicable to commercial transactions.”         Reynolds-

       Douglass, 2020 WL 7974326, at *7 (quoting Stillwell, 300 N.C. at 293–94). As a

       result, Judge Murphy would have held that the Offer to Purchase and Contract at

       issue in this case was not an “evidence of indebtedness” for purposes of Stillwell and

       that his colleagues’ determination to the contrary was “overbroad” and would

       authorize an award of attorney’s fees pursuant to “every contract where one party is

       to pay money [as an] evidence of indebtedness.” Id.

¶ 12         In the same vein, Judge Murphy would have held that the Offer to Purchase

       and Contract was not an “evidence of indebtedness” for purposes of the relevant

       statutory provision given that “[t]he general purpose of N.C.G.S. § 6-21.2 is to

       ‘validate a debt collection remedy expressly agreed upon by contracting parties’ ” and

       that, at least in his view, a contract to purchase real estate did not fit within the

       confines of this stated purpose. Reynolds-Douglass, 2020 WL 7974326, at *8. Finally,

       Judge Murphy noted that, even if the Offer to Purchase and Contract in this case

       constituted an “evidence of indebtedness” for purposes of N.C.G.S. § 6-21.2, the

       amount of attorney’s fees awarded in this case should be capped at 15% of the $2,000

       due diligence fee, making the trial court’s decision to award a total of $13,067.70 in
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       attorney’s fees unlawfully excessive. Id. Defendant noted an appeal to this Court

       from the Court of Appeals’ decision based upon Judge Murphy’s dissent.1

¶ 13         In seeking relief from the Court of Appeals’ decision before this Court,

       defendant, who is currently represented by counsel, begins by arguing that the Offer

       to Purchase and Contract did not authorize an award of attorney’s fees in plaintiff’s

       favor given that, while the contract authorized such an award in an action brought

       “to recover the Earnest Money Deposit,” the present case had been initiated for the

       purpose of recovering the due diligence fee. In view of the fact that she had never

       paid the earnest money deposit to plaintiff, defendant contends that there had never

       been an earnest money deposit that plaintiff was entitled to recoup and that the

       $2,500 amount that plaintiff was authorized to collect pursuant to the Offer to

       Purchase and Contract relating to the earnest money deposit constituted nothing

       more than an award of liquidated damages.

¶ 14         Secondly, defendant argues that the Offer to Purchase and Contract did not

       constitute an “evidence of indebtedness” for purposes of N.C.G.S. § 6-21.2 as defined

       in Stillwell given that the relevant statutory provision “applies to ‘supplement those

       principles of law generally applicable to commercial transactions’ and is only relevant

       for financial debt instruments akin to promissory notes and conditional sale

             1 Although defendant sought discretionary review of the Court of Appeals’ decision
       with respect to certain additional issues, this Court denied defendant’s petition.
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       contracts.” In defendant’s view, neither the due diligence fee nor the earnest money

       deposit resemble the recurring rental payments provided for in the lease agreement

       that was at issue in Stillwell, with the essential thrust of the Offer to Purchase and

       Contract as a real estate agreement precluding it from being “an instrument of

       indebtedness within the scope of Section 6-21.2[ ].” As further support for this

       contention, defendant directs our attention to Forsyth Mun. Alcoholic Beverage

       Control Bd. v. Folds, 117 N.C. App. 232, 238 (1994), which she describes as holding

       that attorney’s fees could not be collected in an action arising from the breach of a

       contract for the sale of real property, and Calhoun v. WHA Med. Clinic, PLLC, 178

       N.C. App. 585, 604 (2006), in which the Court of Appeals analyzed whether an

       employer-employee agreement came within the scope of N.C.G.S. § 6-21.2. As a

       result, defendant contends that the Court of Appeals’ determination that the Offer to

       Purchase and Contract constituted an “evidence of indebtedness” conflicts with the

       purpose sought to be served by N.C.G.S. § 6-21.2, which is to “validate a debt

       collection remedy expressly agreed upon by contracting parties.” Stillwell, 300 N.C.

       at 294.

¶ 15         Thirdly, defendant argues that, in accordance with the literal language of the

       Offer to Purchase and Contract, she cannot be held liable to plaintiff for the earnest

       money deposit given that the deposit was to be “payable and delivered to Escrow

       Agent.” Defendant asserts that her obligation to pay the earnest money deposit had
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       not “matured” at the time that the agreement was cancelled on 27 July 2017 since

       the earnest money deposit was not due to be paid until 14 August 2017. Defendant

       also notes that N.C.G.S. § 6-21.2(5) requires a party seeking to recover attorney’s fees

       to provide notice to the debtor “that the provisions relative to payment of attorneys’

       fees in addition to the ‘outstanding balance’ [of the debt] shall be enforced” and

       contends that plaintiff had failed to provide proper notice that she intended to seek

       an award of attorney’s fees in this action. Finally, defendant claims that Judge

       Murphy correctly concluded that the trial court’s decision to award a total of

       $13,067.70 in attorney’s fees violated the statutory cap on attorney’s fees awards set

       out in N.C.G.S. § 6-21.2.

¶ 16          In seeking to persuade us to affirm the Court of Appeals’ decision, plaintiff

       begins by arguing that defendant’s contentions that the earnest money deposit was

       owed to the escrow agent rather than plaintiff, that plaintiff’s claim for the earnest

       money deposit had not “matured,” and that plaintiff had failed to provide proper

       notice of its attorney’s fees claim were not properly before this Court given that these

       issues had not been mentioned by either the majority or dissenting opinions at the

       Court of Appeals, citing N.C. R. App. P. 16(b) (providing that, “[w]hen the sole ground

       of the appeal of right is the existence of a dissent in the Court of Appeals,” this Court’s

       review “is limited to a consideration of those issues that are . . . specifically set out in

       the dissenting opinion as the basis for that dissent”). In addition, plaintiff contends
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       that she was allowed to collect attorney’s fees under the contract pursuant to N.C.G.S.

       § 6-21.2 given that the Offer to Purchase and Contract expressly allowed for the

       recovery of attorney’s fees by “the prevailing party” in a proceeding brought to recover

       the earnest money deposit.

¶ 17         According to plaintiff, defendant’s contention that the Offer to Purchase and

       Contract does not constitute an “evidence of indebtedness” as defined in Stillwell is

       “inconsistent with both established case law and the plain language of” N.C.G.S. § 6-

       21.2. More specifically, plaintiff contends that the Offer to Purchase and Contract is

       “(i) a printed or written instrument, (ii) signed or otherwise executed by the obligor(s),

       (iii) which evidences on its face a legally enforceable obligation to pay money,” with

       this being all that is required of an “evidence of indebtedness” in accordance with

       Stillwell, 300 N.C. at 294. In plaintiff’s view, defendant’s assertion that N.C.G.S. §

       6-21.2 only applies to “commercial” agreements lacks merit given that nothing in the

       relevant statutory language limits the applicability of N.C.G.S. § 6-21.2 to

       commercial agreements, with plaintiff having pointed to the decisions of the Court of

       Appeals in Crist v. Crist, 145 N.C. App. 418 (2001) (holding that a promissory note

       provided in the context of a domestic relations dispute was subject to N.C.G.S. § 6-

       21.2), and Four Seasons Homeowners Ass’n, Inc. v. Sellers, 72 N.C. App. 189, 192

       (1984) (holding that a “Declaration of Covenants, Conditions and Restrictions”

       applicable to a subdivision constituted an “evidence of indebtedness” for purposes of
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       N.C.G.S. § 6-21.2), as further support for this contention. According to plaintiff,

       treating the Offer to Purchase and Contract as an “evidence of indebtedness” is

       “directly” consistent with the purpose sought to be served by N.C.G.S. § 6-21.2, which

       is intended to “validate a debt collection remedy expressly agreed upon by contracting

       parties.” Stillwell, 300 N.C. at 294.

¶ 18         Finally, plaintiff asserts that she is entitled to retain the full amount of the

       trial court’s attorney’s fees award, with the $13,067.70 amount set out in the trial

       court’s order not being excessive given that she had incurred these fees in the course

       of defending the judgment that she had previously obtained before the magistrate

       and that was affirmed multiple times throughout defendant’s subsequent appeals.

       More specifically, plaintiff asserts that, although she represented herself in the initial

       small claims proceeding before the magistrate and in the subsequent arbitration

       proceeding, she had decided that she needed to hire an attorney after defendant

       sought relief from the magistrate’s decision and the arbitrator’s award and asserted

       separate claims against plaintiff. In the absence of an award of attorney’s fees “for

       time expended in defense of” her judgment, plaintiff contends that it would not have

       been “economically feasible . . . to try and preserve that judgment,” citing City Fin.

       Co. of Goldsboro v. Boykin, 86 N.C. App. 446, 449 (1987) (holding that, “[u]pon a

       finding that defendants were entitled to attorney’s fees in obtaining their judgment,

       any effort by defendants to protect that judgment” during subsequent appeals “should
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       likewise entitle them to attorney’s fees”), and Eley v. Mid/East Acceptance Corp. of

       N.C., 171 N.C. App. 368, 377 (2005) (holding that, “because plaintiff was entitled to

       attorneys’ fees for hours expended at the trial level, we hold plaintiff is entitled to

       attorneys’ fees on appeal, especially in light of the limited amount of money at issue

       in the litigation”). As a result, plaintiff urges us to affirm the Court of Appeals’

       decision in its entirety.

¶ 19          According to well-established North Carolina law, “to overturn the trial judge’s

       determination on the issue of attorneys’ fees, the defendant must show an abuse of

       discretion,” unless the “appeal presents a question of statutory interpretation,” in

       which case “full review is appropriate,” with the trial court’s conclusions of law being

       subject to de novo review. Finch v. Campus Habitat, L.L.C., 220 N.C. App. 146, 147

       (2012) (quoting Bruning & Federle Mfg. Co. v. Mills, 185 N.C. App. 153, 155–56

       (2007)). As a result, we will decide any issues of statutory construction de novo while

       evaluating the nature and extent of any statutorily authorized attorney’s fees awards

       for an abuse of discretion.

¶ 20          “[T]he general rule [in North Carolina] 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.” Stillwell, 300 N.C. at 289

       (citing Hicks v. Albertson, 284 N.C. 236 (1973)). According to N.C.G.S. § 6-21.2, which

       authorizes an award of attorney’s fees in certain actions,
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                     [o]bligations to pay attorney[’s] fees upon any note,
                     conditional sale contract or other evidence of indebtedness,
                     in addition to the legal rate of interest or finance charges
                     specified therein, 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:

                     (1)   If such note, conditional sale contract or other
                     evidence of indebtedness provides for attorney[’s] fees in
                     some specific percentage of the “outstanding balance” as
                     herein defined, such provision and obligation shall be valid
                     and enforceable up to but not in excess of fifteen percent
                     (15%) of said “outstanding balance” owing on said note,
                     contract or other evidence of indebtedness.

                     (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.G.S. § 6-21.2 (2021). As a result, N.C.G.S. § 6-21.2 creates an exception to the

       general rule providing that each party to civil litigation is responsible for bearing his

       or her own attorney’s fees applicable to “any note, conditional sale contract, or other

       evidence of indebtedness.” For that reason, the next issue that we must address is

       whether the Offer to Purchase and Contract comes within the ambit of N.C.G.S. § 6-

       21.2.

¶ 21           After carefully considering the record and the applicable law, we hold that the

       majority at the Court of Appeals correctly concluded that the Offer to Purchase and
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                                         Opinion of the Court

       Contract at issue in this case constituted an “evidence of indebtedness” for purposes

       of N.C.G.S. § 6-21.2. In Stillwell, 300 N.C. at 287, this Court examined an agreement

       pursuant to which the defendant had leased a road scraper to the plaintiff. According

       to the lease agreement, the plaintiff was required to make “monthly rental payments”

       to the defendant, with the plaintiff “further agree[ing] to pay to lessor a reasonable

       attorney’s fee if the obligation evidenced hereby be collected by an attorney at law

       after maturity.” Id. at 289. After granting summary judgment in the defendant’s

       favor following the plaintiff’s refusal to make payments required under the lease, the

       trial court awarded over $24,000 to the defendant, with this amount having included

       more than $2,000 in attorney’s fees. Id. at 288. Although the Court of Appeals

       vacated the trial court’s attorney’s fee award “on the grounds that the lease was not

       the type of agreement which would entitle defendant to recover for attorneys’ fees

       under the general provisions of [N.C.]G.S. [§] 6-21.2,” this Court reinstated the trial

       court’s decision on the grounds that the lease agreement did, in fact, constitute an

       “evidence of indebtedness” for purposes of N.C.G.S. § 6-21.2. Id. at 289, 294.

¶ 22         In construing the reference to an “evidence of indebtedness” contained in

       N.C.G.S. § 6-21.2, we began by acknowledging that we were required to “give that

       interpretation to the term at issue which best harmonizes with the language, spirit,

       and intent of the act in which it appears.” Id. at 292 (citing Stevenson v. City of

       Durham, 281 N.C. 300 (1972)). After noting that N.C.G.S. § 6-21.2 had “become
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                                      Opinion of the Court

effective on the same date as the Uniform Commercial Code,” we concluded that the

relevant statutory provision “was intended to supplement those principles of law

generally applicable to commercial transactions,”2 id. at 293 (cleaned up), before

holding that

               the term “evidence of indebtedness” in N.C.G.S. § 6-21.2 is
               intended to encompass more than security agreements or
               traditional debt financing arrangements. It is of course
               clear that a “note” or “conditional sale contract” is the most
               common type of “evidence of indebtedness” contemplated
               by the statute; indeed, it is in connection with these types
               of agreements that attorneys’ fee provisions are most
               commonly employed. However, the express terms of
               Section 5 of the statute, along with the terms employed in
               other provisions, demonstrate that G.S. 6-21.2 applies not
               only to notes and conditional sale contracts, but also to
               such “other evidence of indebtedness” as “other writings
               evidencing an unsecured debt” or “any other such security
               agreement which evidences both a monetary obligation and
               a lease of specific goods.” N.C.G.S. § 6-21.2(5). We agree,
               therefore, that “these provisions indicate, either explicitly
               or implicitly, that an evidence of indebtedness is a writing
               which acknowledges a debt or obligation and which is
               executed by the party obligated thereby.”                More
               specifically, we hold that the term “evidence of
               indebtedness” as used in N.C.G.S. § 6-21.2 has reference to
               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. Such a
               definition, we believe, does no violence to any of the
               statute’s specific provisions and accords well with its

       2 The fact that a particular statutory provision was enacted in part to “supplement”
the law relating to “commercial transactions” does not, as matter of logic, mean that the
application of the relevant statutory provision should be limited to such transactions in the
event that the literal language of the statute suggests that it should be given a broader scope.
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                                            Opinion of the Court

                       general purpose to validate a debt collection remedy
                       expressly agreed upon by contracting parties.

                              Viewed in light of this definition, defendant’s lease
                       agreement with plaintiff is obviously an “evidence of
                       indebtedness.” The contract acknowledges a legally
                       enforceable obligation by plaintiff-lessee to remit rental
                       payments to defendant-lessor as they become due, in
                       exchange for the use of the property which is the subject of
                       the lease.     The contract, including the provision in
                       Paragraph 21 for attorneys’ fees, is in writing and is
                       executed by the parties obligated under its terms. Plaintiff
                       has made no assertion that the contract represents
                       anything less than an arm’s length transaction
                       consummated by mutual agreement between the
                       parties. Under these circumstances, 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 N.C.G.S. § 6-21.2.

       Id. at 293–95 (cleaned up).       Thus, the appropriate definition of an “evidence of

       indebtedness” for purposes of N.C.G.S. § 6-21.2 is the one that this Court enunciated

       in Stillwell.

¶ 23          As the Court of Appeals recognized, the Offer to Purchase and Contract at issue

       in this case was signed by both parties and, on its face, evidences a legally enforceable

       obligation that defendant pay the plaintiff both the due diligence fee and the earnest

       money deposit. As was the case in Stillwell, there has been “no assertion that the

       contract represents anything less than an arm’s length transaction consummated by

       mutual agreement between the parties.” See Stillwell, 300 N.C. at 294. In light of

       this set of circumstances, there is no reason for treating the attorney’s fees provision
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                                          Opinion of the Court

       contained in the Offer to Purchase and Contract as anything other than an “evidence

       of indebtedness” that is enforceable pursuant to N.C.G.S § 6-21.2.

¶ 24         A careful examination of the language in which N.C.G.S. § 6-21.2 is couched,

       the circumstances surrounding its enactment, and the subsequent decisions

       construing the relevant statutory language provides no support for defendant’s

       contention that N.C.G.S. § 6-21.2 does not apply outside the context of a commercial

       agreement.    As we noted in Stillwell, “[t]he statute, being remedial, ‘should be

       construed liberally to accomplish the purpose of the Legislature and to bring within

       it all cases fairly falling within its intended scope.’ ” 300 N.C. at 293 (quoting Hicks

       v. Albertson, 284 N.C. 236, 239 (1973)). For that reason, this Court has previously

       rejected any contention that N.C.G.S. § 6-21.2 should be construed narrowly.

       Moreover, while our opinion in Stillwell did indicate that the “legislative history [of

       N.C.G.S. § 6-21.2] demonstrate[d] that it was intended to supplement those principles

       of law generally applicable to commercial transactions,” we did not hold that the

       relevant statutory language only applied in the context of a commercial transaction,

       note that Stillwell expressly rejected such a limited reading of the relevant statutory

       language, and reiterate that this Court described N.C.G.S. § 6-21.2 as having been

       “enacted to amend certain provisions of the State’s Uniform Commercial Code ‘and

       other related statutes.’ ” Id. at 293 (quoting Chapter 562 of the 1967 Session Laws).

       As a result, Stillwell reflects a much more expansive interpretation of the relevant
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                                          Opinion of the Court

       statutory language, pursuant to which “the term ‘evidence of indebtedness’ as used

       in [N.C.]G.S. [§] 6-21.2 has reference to 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 294, than that advocated for by defendant.

¶ 25         As we have already noted, defendant has directed our attention to Forsyth

       Mun. Alcoholic Beverage Control Bd. v. Folds, 117 N.C. App. 232, 238 (1994), which

       she describes as holding that attorney’s fees awards are not available in actions

       arising from the breach of a contract for the sale of real property. In that case, the

       Court of Appeals stated that:

                           As a general rule contractual provisions for
                    attorney’s fees are invalid in the absence of statutory
                    authority. This is a principle that has long been settled in
                    North Carolina and fully reviewed by our Supreme Court
                    in Stillwell . . . .

                           This Court has recently enunciated an exception to
                    that principle in the case of separation agreements in
                    particular, Edwards v. Edwards, 102 N.C. App. 706, 403
                    S.E.2d 530, cert. denied 329 N.C. 787, 408 S.E.2d 518
                    (1991); Bromhal v. Stott, 116 N.C. App. 250, 447 S.E.2d 481
                    (1994) (Greene, J. dissenting in part), and indeed in the
                    case of settlement agreements in general. Carter v. Foster,
                    103 N.C. App. 110, 404 S.E.2d 484 (1991).

                           Nevertheless, we know of no basis in North Carolina
                    law for the allowance of attorney’s fees in a dispute arising
                    out of a contract for the sale of real property, as is involved
                    in this case. Therefore, on the basis of those well-settled
                    principles, we reverse the judgment of the trial court
                    insofar as it allowed attorney’s fees to the plaintiffs . . . .
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                                      Opinion of the Court

Id. at 238. In addition, defendant relies upon Calhoun v. WHA Med. Clinic, PLLC,

178 N.C. App. 585, 604 (2006), in which the Court of Appeals attempted to determine

whether N.C.G.S. § 6-21.2 allowed for the collection of attorney’s fees in an action

relating to the breach of an employer-employee agreement. As a result of the fact

that the trial court had “made no findings of fact [as to] whether the contract at issue

[wa]s a ‘printed or written instrument, signed or otherwise executed by the obligor(s),

which evidences on its face a legally enforceable obligation to pay money’ or whether

this contract relates to commercial transactions” as required by Stillwell, the Court

of Appeals remanded that case to the trial court for further findings of fact. Id. at

604–05. In view of the fact that neither of these decisions purports to alter the

definition of an “evidence of indebtedness” set out in Stillwell or addresses claims for

the recovery of specific fees of the sort that are at issue in this case, neither of them

supports defendant’s argument that N.C.G.S. § 6-21.2 has no application outside the

context of a commercial agreement.3

       3 As an aside, we note that nothing in either the relevant statutory language or in
Stillwell suggests that any sort of transaction or category of transactions is categorically
excluded from the definition of an “evidence of indebtedness” for which an award of attorney’s
fees is authorized pursuant to N.C.G.S. § 6-21.2. Instead, the test for determining whether
a particular instrument is or is not an “evidence of indebtedness” is the more generic one set
out in Stillwell. Similarly, we note that Stillwell involved a contract for a lease of equipment,
which does not fall within the category of “notes, securities, mortgages, [or] deeds of trust.”
See also Four Seasons Homeowners Ass’n, Inc. v. Sellers, 72 N.C. App. 189, 192 (1984)
(holding that a “Declaration of Covenants, Conditions and Restrictions” signed by
homeowners in a subdivision was an “evidence of indebtedness” pursuant to N.C.G.S. § 6-
21.2); Crist v. Crist, 145 N.C. App. 418 (2001) (holding that a note provided in the context of
a domestic relations dispute was subject to N.C.G.S. § 6-21.2).
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                                          Opinion of the Court

¶ 26         Defendant’s other arguments concerning the applicability of N.C.G.S. § 6-21.2

       to the circumstances at issue in this case are equally unavailing. Although plaintiff

       attempted to recover the due diligence fee in her initial small claims action, she

       restated her pleadings on appeal to assert a claim for the earnest money deposit as

       well. As a result, this action clearly involves a “legal proceeding[ ] . . . brought by

       Buyer or Seller against the other to recover the Earnest Money Deposit” in which

       plaintiff is authorized to seek and obtain an award of attorney’s fees.

¶ 27         Moreover, as plaintiff notes, defendant’s contentions relating to the identity of

       the party to whom the earnest money deposit was due, the “maturity” of plaintiff’s

       claim for the earnest money deposit, and the absence of notice were not mentioned in

       either of the opinions filed at the Court of Appeals and are not properly before the

       Court for that reason. In addition, none of those arguments have any substantive

       merit. Although the Offer to Purchase and Contract did provide that the earnest

       money deposit should be made “payable and delivered to Escrow Agent,” defendant’s

       failure to make the required payment to the escrow agent constituted a breach of

       contract sufficient to trigger plaintiff’s right to recover the earnest fee deposit from

       defendant as liquidated damages.        The same provision of the contract defeats

       defendant’s contention that plaintiff’s right to recover the amount of the earnest

       money deposit had not yet “matured.” Finally, defendant is not entitled to any relief

       from the trial court’s attorney’s fees award based upon an alleged lack of notice given
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                                          Opinion of the Court

       that defendant continued to participate in the litigation of this case before the trial

       court without objecting on the basis of an alleged lack of notice after having been

       informed in the amended complaint that plaintiff sought to obtain an award of

       attorney’s fees from defendant.

¶ 28         Finally, we hold that the trial court did not err in awarding $13,067.70 in

       attorney’s fees to plaintiff given that the relevant fees were incurred in the course of

       defending the judgment that plaintiff had initially received from the magistrate. In

       City Fin. Co. of Goldsboro, 86 N.C. App. at 449, the Court of Appeals held that the

       trial court had erred by refusing to award additional attorney’s fees that the

       defendants had incurred while defending a judgment that they had obtained in an

       action brought pursuant to N.C.G.S. § 75-1.1 from a motion for relief from judgment

       pursuant to N.C.G.S. § 1A-1, Rule 60, on the theory that, “[u]pon a finding that

       defendants were entitled to attorney’s fees in obtaining their judgment, any effort by

       defendants to protect that judgment should likewise entitle them to attorney’s fees.”

       In reaching this conclusion, the Court of Appeals noted that this Court had previously

       upheld an award of attorney’s fees pursuant to N.C.G.S. § 6-21.1(a) on the theory that

                    [t]he obvious purpose of this statute is to provide relief for
                    a person who has sustained injury or property damage in
                    an amount so small that, if he must pay his attorney out of
                    his recovery, he may well conclude that [it] is not
                    economically feasible to bring suit on his claim. In such a
                    situation the Legislature apparently concluded that the
                    defendant, though at fault, would have an unjustly
                    superior bargaining power in settlement negotiations. . . .
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                                          Opinion of the Court

                    This statute, being remedial, should be construed liberally
                    to accomplish the purpose of the Legislature and to bring
                    within it all cases fairly falling within its intended scope.

       City Fin. Co. of Goldsboro, 86 N.C. App. at 449–50 (second and third alterations in

       original) (quoting Hicks v. Albertson, 284 N.C. 236, 239 (1973)); see also Gray v. N.C.

       Ins. Underwriting Ass’n, 352 N.C. 61, 76 (2000) (allowing the consideration of a

       request for an award of attorney’s fees on remand in reliance upon City Fin. Co. of

       Goldsboro); Eley v. Mid/East Acceptance Corp. of N.C., Inc., 171 N.C. App. 368 (2005);

       Garlock v. Henson, 112 N.C. App. 243, 247 (1993). Similarly, in this case, it “would

       not have been economically feasible,” id. at 450, for plaintiff to continue to defend the

       judgment that she had obtained before the magistrate if the trial court lacked the

       authority to award attorney’s fees in connection with the proceedings before the

       district court, with a contrary determination necessarily placing plaintiff in the

       position of either incurring legal fees in excess of the judgment amount in order to

       defend it or abandoning her attempts to seek relief based upon defendant’s breaches

       of contract. As a result, in light of the general principle enunciated by the Court of

       Appeals in City Fin. Co. of Goldsboro and upheld by this Court in Gray, the trial court

       did not err by awarding plaintiff $13,067.70 in attorney’s fees in this case.

¶ 29         A careful review of the record demonstrates that defendant owed plaintiff the

       due diligence fee, the amount of the earnest money deposit, and attorney’s fees

       incurred during the legal proceedings undertaken to recover those fees. In view of
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                                  Opinion of the Court

the fact that these terms are clear and unambiguous and the fact that the parties

agreed to them, we are unable to discern any reason for concluding that the Offer to

Purchase and Contract does not constitute a written “obligation to pay money” or an

“evidence of indebtedness” pursuant to N.C.G.S. § 6-21.2. In addition, we are unable

to see why the limitation upon the amount of attorney’s fees set out in N.C.G.S. § 6-

21.2 should hinder plaintiff’s ability to recoup attorney’s fees incurred in defense of

the judgment that she obtained before the magistrate. As a result, for all of these

reasons, the decision of the Court of Appeals is affirmed.

      AFFIRMED.
             Justice BERGER dissenting.

¶ 30         The Court’s approach today marks a significant change in the jurisprudence of

       our State. Because the majority has turned away from the principle that “the non-

       allowance of counsel fees has prevailed as the policy of this state at least since 1879,”

       Stillwell Enters., Inc. v. Interstate Equip. Co., 300 N.C. 286, 289, 266 S.E.2d 812, 814

       (1980), I respectfully dissent.

¶ 31         This Court previously stated that “[a]lthough [N.C.]G.S. [§] 6-21.2 was not

       itself codified as a constituent section of Chapter 25 of the General Statutes (the

       Uniform Commercial Code [or UCC]), we believe its legislative history clearly

       demonstrates that it was intended to supplement those principles of law generally

       applicable to commercial transactions.” Id. at 293, 266 S.E.2d at 817. Relying on

       Stillwell, the Court of Appeals has held that there is “no basis in North Carolina law

       for the allowance of attorney’s fees in a dispute arising out of a contract for the sale

       of real property.” Forsyth Mun. Alcoholic Beverage Control Bd. v. Folds, 117 N.C.

       App. 232, 238, 450 S.E.2d 498, 502 (1994). Thus, N.C.G.S. § 6-21.2 is not applicable

       to this case and recovery of attorney’s fees is not permitted by the statute.

¶ 32         Even assuming that recovery of attorney’s fees was allowable here, subsection

       6-21.2(2) sets forth a specific formula to be used in calculating allowable attorney’s

       fees absent such a formula or designation in the contract, as is the case here. Because

       no such formula is stated in the contract, the statutory formula must be used in
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                                             2022-NCSC-74

                                          Berger, J., dissenting

       calculating attorney’s fees. The majority today expands the application of section 6-

       21.2 beyond what this Court has previously determined to be the intent of the

       legislature by failing to utilize the calculation method expressly called for in the

       statute.

¶ 33           “[T]he jurisprudence of North Carolina traditionally has frowned upon

       contractual obligations for attorney’s fees as part of the costs of an action.” Stillwell,

       300 N.C. at 289, 266 S.E.2d at 814 (quoting Supply, Inc. v. Allen, 30 N.C. App. 272,

       276, 227 S.E.2d 120, 123 (1976)). The rule has “long obtained” that attorney’s fees

       are not awarded “unless such a recovery is expressly authorized by statute[,] . . .

       [e]ven in the face of a carefully drafted contractual provision indemnifying a party for

       such attorneys’ fees.” Id. at 289, 266 S.E.2d at 814–15 (citation omitted); see also

       Baxter v. Jones, 283 N.C. 327, 330, 196 S.E.2d 193, 196 (1973) (“Except as so provided

       by statute, attorneys’ fees are not allowable.”).           In other words, a statute must

       expressly allow for recovery of attorney’s fees before a court can order payment of the

       same.

¶ 34           Section 6-21.2 allows for recovery of reasonable attorney’s fees for collection

       “upon any note, conditional sale contract or other evidence of indebtedness.” N.C.G.S.

       § 6-21.2 (2021). When applying N.C.G.S. § 6-21.2, we have instructed that the statute

       “ ‘should be construed liberally to accomplish the purpose of the Legislature and to

       bring within it all cases fairly falling within its intended scope.’ ” Stillwell, 300 N.C.
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                                                2022-NCSC-74

                                             Berger, J., dissenting

       at 293, 266 S.E.2d at 817 (quoting Hicks v. Albertson, 284 N.C. 236, 239, 200 S.E.2d

       40, 42 (1972)).

¶ 35          The majority contends that “Stillwell reflects a much more expansive

       interpretation of the relevant statutory language” to include any written “evidence of

       indebtedness.” This interpretation would allow collection of attorney’s fees for any

       case in which there is written evidence of a legally enforceable debt.                      This

       determination runs counter to this Court’s stated goal in Stillwell to interpret the

       statute based on the legislature’s purpose in enacting the law and its subsequent

       determination that the statute’s purpose was to supplement laws intended to govern

       commercial transactions.

¶ 36          The term “evidence of indebtedness” is used throughout the General Statutes

       of North Carolina to refer to notes, securities, mortgages, deeds of trust, and similar

       written documents.1 See, e.g., N.C.G.S. § 25-9-109(d)(14) (2021); N.C.G.S. § 45-36.3(a)

              1 The majority appears to quote this language in footnote 3 to support its expansive
       reading. However, the majority omits “or similar documents” from the quoted language. This
       omission is meaningful because a lease of equipment is a “similar document.” For example,
       in a mortgage, title remains with the seller while the buyer makes installment payments
       until the debt is paid off. While not exactly the same, a lease contemplates an ongoing debt
       relationship in which an owner of property retains title while the terms of the lease are
       satisfied. In addition, a lease is also similar to the definition of a conditional sales contract,
       which is defined as “[a] contract for the sale of goods under which the buyer makes periodic
       payments and the seller retains title to or a security interest in the goods.” Retail Installment
       Contract, Black’s Law Dictionary (11th ed. 2019); (the definition of conditional sales contract
       in Black’s says see Retail Installment Contract); see also North Carolina Estate Settlement
       Practice Guide § 18:5 (2013).
               At any rate, while the lease in Stillwell is similar to a mortgage or a conditional sales
       contract, it is clearly distinguishable from a residential real estate contract like the one at
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                                               2022-NCSC-74

                                            Berger, J., dissenting

       (2021); N.C.G.S. § 47-20(d) (2021); N.C.G.S. § 53-232.10(a) (2021); N.C.G.S. § 54B-

       244(b)(3)(h) (2021); N.C.G.S. § 58-7-173(1), (6)–(7) (2021); N.C.G.S. § 78A-2(11)

       (2021); N.C.G.S. § 115C-413 (2021); N.C.G.S. § 122D-3(4) (2021). The residential

       sales contract here is far different from the written evidence of indebtedness

       contemplated by the statute.

¶ 37          Furthermore,     the    majority’s    reading     of   Stillwell   as   an   “expansive

       interpretation” of section 6-21.2 goes against North Carolina’s history of barring the

       recovery of attorney’s fees unless expressly authorized by the legislature. Because

       this Court previously determined that the legislature intended section 6-21.2 to apply

       solely to commercial transactions under the UCC, it should not be applied to a private

       sale of real property. Our inquiry should end there.

¶ 38          However, even if we assume that section 6-21.2 applies, the majority

       disregards the statutory formula set forth therein concerning the calculation of

       attorney’s fees. Subsection (2) of this statute, expressly provides that

                     [i]f 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.

       issue in this case because a residential real estate contract does not on its face contemplate
       an ongoing debt relationship between the buyer and seller and does not provide for
       installment payments or one party retaining title to the property.
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                                              2022-NCSC-74

                                           Berger, J., dissenting

       N.C.G.S. § 6-21.2(2).

¶ 39         The contract at issue states that if legal proceedings are brought “to recover

       the Earnest Money Deposit, the prevailing party in the proceeding shall be entitled

       to recover . . . reasonable attorney fees.” If section 6-21.2 applies here, as the majority

       holds, the 15% limitation on recovery is applicable because the contract gives no

       specific formula for calculating attorney’s fees. The statute does not provide any

       alternative calculation method.

¶ 40         Instead, the trial court based the amount granted for attorney’s fees in this

       case, $13,067.70, on an attorney’s affidavit of fees incurred. The majority justifies

       this amount based on a single Court of Appeals decision to award attorney’s fees

       based on the attorney’s time spent on an appeal in order to make it “economically

       feasible” to defend a judgment. See City Fin. Co. of Goldsboro v. Boykin, 86 N.C. App.

       446, 450, 358 S.E.2d 83, 85 (1987).

¶ 41         The legislature has never authorized payment of attorney’s fees based on an

       attorney’s time spent on a case. Furthermore, the statute at issue in City Fin. Co. of

       Goldsboro, N.C.G.S. § 75-16.1, is similar to N.C.G.S. § 6-21.1, which differs

       significantly from the statute at issue here. Section 6-21.1 provides no formula for

       attorney’s fees to be awarded and only applies to recovery of attorney’s fees in suits

       for personal injury, suits for property damage, or suits against insurance companies;

       none of which are at issue today.
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                                             2022-NCSC-74

                                          Berger, J., dissenting

¶ 42          The statute at issue today is clear: to determine the proper amount for

       attorney’s fees we simply ascertain the outstanding balance of the contract and award

       fifteen percent of that amount. N.C.G.S. § 6-21.2(2). Here, the contract designates

       that “[i]n the event of breach of this Contract by Buyer, the Earnest Money Deposit

       shall be paid to Seller as liquidated damages and as Seller’s sole and exclusive remedy

       for such breach.”    It further states that this amount “is compensatory and not

       punitive, [with] such amount being a reasonable estimation of the actual loss that

       Seller would incur as a result of such breach.” This provision clarifies that it does not

       preclude the seller from the right to retain the due diligence fee, which a separate

       section designates as $2,000, but it also expressly states that the award of attorney’s

       fees is “to recover the Earnest Money Deposit.” Thus, the contract ties the recovery

       of attorney’s fees directly and exclusively to the earnest money deposit.

¶ 43          Having determined that section 6-21.2 applies, subsection (2) calls for recovery

       of attorney’s fees based on a percentage of the outstanding balance. The contractual

       provision at issue expressly ties attorney’s fees to the earnest money deposit.

       Therefore, the proper calculation of attorney’s fees would be: $2,500 (earnest money

       deposit) x 15% (statutory rate) = $375 (in attorney’s fees). There is no basis for an

       award of $13,067.70 under any statute, and such a large award would appear to

       incentivize costly litigation.
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                                             2022-NCSC-74

                                          Berger, J., dissenting

¶ 44         Ultimately, the majority’s decision to allow the collection of attorney’s fees in

       any case involving written evidence of a debt, and to allow the collection of any

       amount of attorney’s fees spent defending such a judgment, including on appeal, are

       policy decisions that have no statutory basis. “The General Assembly is the ‘policy-

       making agency [of this State]’ because it is a far more appropriate forum than the

       courts for implementing policy-based changes to our laws.” Rhyne v. K-Mart Corp.,

       358 N.C. 160, 169, 594 S.E.2d 1, 8 (2004). Regardless of whether these changes may

       be perceived as beneficial for litigants, the justice system, or this State, they have no

       basis in our General Statutes, and any such a policy shift should be undertaken by

       the legislature, not this Court.

             Justice BARRINGER joins in this dissenting opinion.