{ "id": 11466853, "name": "L. C. WILLIAMS OIL CO., Plaintiff v. NAFCO CAPITAL CORP., Defendant", "name_abbreviation": "L. C. Williams Oil Co. v. NAFCO Capital Corp.", "decision_date": "1998-07-21", "docket_number": "No. COA97-28", "first_page": "286", "last_page": "292", "citations": [ { "type": "official", "cite": "130 N.C. App. 286" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "80 B.R. 774", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 6545681 ], "weight": 2, "year": 1987, "pin_cites": [ { "page": "780", "parenthetical": "lessee's promises to pay maintenance, insurance, taxes and all other expenses related to ownership indicia of secured loan rather than lease" } ], "opinion_index": 0, "case_paths": [ "/br/80/0774-01" ] }, { "cite": "333 S.E.2d 373", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 629680 ], "year": 1985, "pin_cites": [ { "page": "375", "parenthetical": "circumstance that lender/lessor was a financing company rather than supplier an important factor in determining equipment lease actually a secured loan" } ], "opinion_index": 0, "case_paths": [ "/ga-app/175/0445-01" ] }, { "cite": "424 S.E.2d 918", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "opinion_index": 0 }, { "cite": "333 N.C. 254", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2549314, 2546630, 2549526, 2549465, 2547486 ], "year": 1993, "opinion_index": 0, "case_paths": [ "/nc/333/0254-02", "/nc/333/0254-05", "/nc/333/0254-04", "/nc/333/0254-03", "/nc/333/0254-01" ] }, { "cite": "389 S.E.2d 429", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "433" } ], "opinion_index": 0 }, { "cite": "97 N.C. App. 575", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522283 ], "year": 1990, "pin_cites": [ { "page": "581" } ], "opinion_index": 0, "case_paths": [ "/nc-app/97/0575-01" ] }, { "cite": "206 S.E.2d 242", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1974, "pin_cites": [ { "page": "249" }, { "page": "249" } ], "opinion_index": 0 }, { "cite": "285 N.C. 452", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8565104 ], "weight": 2, "year": 1974, "pin_cites": [ { "page": "461" }, { "page": "461-62" } ], "opinion_index": 0, "case_paths": [ "/nc/285/0452-01" ] }, { "cite": "72 N.C.L. Rev. 1608", "category": "journals:journal", "reporter": "N.C. L. Rev.", "weight": 2, "year": 1994, "pin_cites": [ { "page": "1613" } ], "opinion_index": 0 }, { "cite": "407 S.E.2d 222", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "pin_cites": [ { "page": "227", "parenthetical": "citations omitted" } ], "opinion_index": 0 }, { "cite": "329 N.C. 330", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2553288 ], "year": 1991, "pin_cites": [ { "page": "338", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/329/0330-01" ] }, { "cite": "265 S.E.2d 379", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "385", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "299 N.C. 620", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8575681 ], "year": 1980, "pin_cites": [ { "page": "629", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/299/0620-01" ] }, { "cite": "448 S.E.2d 528", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "opinion_index": 0 }, { "cite": "337 N.C. 694", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2551555, 2551689, 2552697, 2552187, 2550815 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/nc/337/0694-01", "/nc/337/0694-05", "/nc/337/0694-02", "/nc/337/0694-04", "/nc/337/0694-03" ] }, { "cite": "444 S.E.2d 487", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "490" } ], "opinion_index": 0 }, { "cite": "115 N.C. App. 283", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12127010 ], "year": 1994, "pin_cites": [ { "page": "288" } ], "opinion_index": 0, "case_paths": [ "/nc-app/115/0283-01" ] }, { "cite": "129 N.C. App. 773", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11652977 ], "year": 1998, "opinion_index": 0, "case_paths": [ "/nc-app/129/0773-01" ] }, { "cite": "369 S.E.2d 119", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "120", "parenthetical": "denial of motion to dismiss for improper venue is an interlocutory order because it does not entirely dispose of case as to all parties and issues" } ], "opinion_index": 0 }, { "cite": "90 N.C. App. 577", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525482 ], "year": 1988, "pin_cites": [ { "page": "579", "parenthetical": "denial of motion to dismiss for improper venue is an interlocutory order because it does not entirely dispose of case as to all parties and issues" } ], "opinion_index": 0, "case_paths": [ "/nc-app/90/0577-01" ] } ], "analysis": { "cardinality": 724, "char_count": 13502, "ocr_confidence": 0.75, "pagerank": { "raw": 1.1648324733344911e-07, "percentile": 0.5848891190181358 }, "sha256": "c4ba5deae5c9c44b4183ae3eeac05ba805ba9f03980b9d0190cd3735bb7b5770", "simhash": "1:2128ab01602c0a0a", "word_count": 2107 }, "last_updated": "2023-07-14T19:24:27.441929+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges GREENE and TIMMONS-GOODSON concur." ], "parties": [ "L. C. WILLIAMS OIL CO., Plaintiff v. NAFCO CAPITAL CORP., Defendant" ], "opinions": [ { "text": "JOHN, Judge.\nDefendant appeals denial of its motion to dismiss. We reverse the trial court.\nPertinent facts and procedural history are as follows: Plaintiff and defendant entered into an agreement entitled \u201cLease/Finance Proposal\u201d (the agreement), signed by plaintiff on or about 5 December 1995. The agreement designated defendant, NAFCO Capital Corp. (NAFCO; defendant), as \u201cLessor/Lender\u201d and plaintiff, L. C. Williams Oil Co. (Williams; plaintiff), as \u201cLessee/Borrower.\u201d Critical to the instant appeal is whether the agreement constituted a \u201clease\u201d or a \u201cloan.\u201d\nThe agreement contained the following pertinent provisions:\nEquipment Cost: $850,000.00\nLease Term: 60 months\nMonthly Rental: $18,445.00\nPurchase Option: At the termination of the lease, upon such advance notice as the Lessor shall agree to, the Lessee shall have the option to purchase the leased equipment for ($1.00) one dollar.\nIn addition, pursuant to a clause of the agreement entitled \u201cCollateral,\u201d the parties agreed that NAFCO would retain \u201cfree and clear title as well as a first lien position on all of the equipment encompassed under the [agreement],\u201d and further agreed that the \u201cquicksale value\u201d of the equipment exceeded $1,000,000.00. A subsequent provision entitled \u201cAdditional Collateral\u201d also required Williams to furnish NAFCO \u201can assignment of account receivables[] in the amount of $600,000.00\u201d to secure timely lease payments. The \u201cDefault\u201d clause provided that, in the event of default by either party, \u201cany and all fees, deposits and advance rentals [paid by Williams] shall not be refunded and will be deemed liquidated damages.\u201d\nThe agreement concluded with the following statement:\nAll actions or disputes arising out of this agreement shall be tried in the State of New York and County of New York and the laws of the State of New York shall apply.\nPlaintiff filed the instant complaint 20 August 1996, alleging, inter alia, breach of contract. Defendant\u2019s subsequent motion to dismiss, filed 27 September 1996, was denied by order entered 30 October 1996. Defendant gave timely notice of appeal.\nFollowing hearing of oral argument herein, the parties jointly filed with this Court a request to \u201cstay[] or hold[] this matter in abeyance\u201d until resolution of a bankruptcy proceeding naming NAFCO as debtor which had been filed 25 September 1997 in the United States Bankruptcy Court for the Eastern District of New York. On 4 May 1998, counsel for NAFCO filed with this Court a copy of an order of the Bankruptcy Court dated 20 March 1998 closing the case.\nAlthough defendant\u2019s appeal is interlocutory, see Burlington Industries, Inc. v. Richmond County, 90 N.C. App. 577, 579, 369 S.E.2d 119, 120 (1988) (denial of motion to dismiss for improper venue is an interlocutory order because it does not entirely dispose of case as to all parties and issues), this Court has recently held the denial of a motion to dismiss for improper venue based upon a forum selection clause to be properly appealable. See Cox v. Dine-A-Mate, Inc., Entertainment Publications, Inc., and CUC International, Inc., 129 N.C. App. 773, \u2014, \u2014 S.E.2d \u2014, \u2014 (1998). The circumstances sub judice being indistinguishable from Cox, we therefore proceed to consider defendant\u2019s appeal.\nDefendant argues the forum selection clause \u201crequires that the claims contained in the Complaint be brought, if at all, in courts of New York County, New York,\u201d and that the courts of North Carolina therefore constitute an improper venue. The parties agree that N.C.G.S. \u00a7 22B-3 (1996) is determinative of defendant\u2019s argument. The section provides as follows:\nExcept as otherwise provided in this section, any provision in a contract entered into in North Carolina that requires the prosecution of any action or the arbitration of any dispute that arises from the contract to be instituted or heard in another state is against public policy and is void and unenforceable. This prohibition shall not apply to non-consumer loan transactions ....\nDefendant maintains, inter alia, that denial of its motion to dismiss was error because the agreement comprised a \u201cnon-consumer loan transaction\u201d as opposed to a lease, thereby falling within the exception set out in G.S. \u00a7 22B-3. Accordingly, defendant continues, the forum selection clause in the agreement was enforceable, requiring dismissal of plaintiff\u2019s complaint for lack of jurisdiction in North Carolina courts. The salient issue, therefore, is whether the agreement sub judice constituted a \u201cnon-consumer loan transaction.\u201d\nBecause G.S. \u00a7 22B-3 does not define \u201cnon-consumer loan,\u201d we must rely upon the rules of statutory construction to ascertain the meaning of these terms. Statutory interpretation presents a question of law, and the cardinal principle thereof is to ensure accomplishment of the legislative intent. McLeod v. Nationwide Mutual Ins. Co., 115 N.C. App. 283, 288, 444 S.E.2d 487, 490, disc. review denied, 337 N.C. 694, 448 S.E.2d 528 (1994). To achieve this end, we must consider \u201cthe language of the statute ... the spirit of the act and what the act seeks to accomplish.\u201d Concrete Co. v. Board of Commissioners, 299 N.C. 620, 629, 265 S.E.2d 379, 385 (1980) (citation omitted). Further, we \u201caccord[] words undefined in the statute their plain meaning as long as it is reasonable to do so.\u201d Woodson v. Rowland, 329 N.C. 330, 338, 407 S.E.2d 222, 227 (1991) (citations omitted).\nOur General Assembly drafted G.S. \u00a7 22B-3 out of concern that enforcement of forum selection clauses would work to the disadvantage of the general public. Joseph E. Smith, Civil Procedure \u2014 Forum Selection \u2014 N.C. Gen. Stat. \u00a7 22B-3 (1994), 72 N.C.L. Rev. 1608, 1613 (1994). Thus, the statute was drafted broadly, allowing exception solely for \u201cnon-consumer loan transactions,\u201d in the interest of protecting consumers and those with little bargaining power. Id.\nIn the chapter of our General Statutes entitled \u201cLoan Brokers,\u201d the term loan is defined as\nan agreement to advance money or property in return for the promise to make payments therefor, whether such agreement is styled as a loan,... a lease or otherwise.\nN.C.G.S. \u00a7 66-106(2) (Cum. Supp. 1997). Black\u2019s Law Dictionary defines a \u201cconsumer loan\u201d as one\nwhich is made or extended to a natural person for family, household, personal or agricultural purposes and generally governed by truth-in-lending statutes and regulations.\nBlack\u2019s Law Dictionary 937 (6th ed. 1990). Therefore, the adjective \u201cconsumer\u201d in G.S. \u00a7 22B-3 operates to describe that which is used by \u201ca natural person for family, household, personal or agricultural purposes.\u201d Id.; see also N.C.G.S. \u00a7 25-9-109(1) (1995) (\u201cconsumer goods\u201d are goods \u201cused or bought for use primarily for personal, family or household purposes\u201d); N.C.G.S. \u00a7 25A-2(a)(3) (Cum. Supp. 1997) (\u201cconsumer credit sale\u201d involves \u201cgoods or services . . . purchased primarily for a personal, family, household or agricultural purpose\u201d). We therefore conclude that a \u201cnon-consumer loan\u201d is one not extended to a natural person, and not used for \u201cfamily, household, personal or agricultural purposes.\u201d Black\u2019s Law Dictionary 937 (6th ed. 1990).\nBearing the foregoing in mind, we examine the agreement at issue. Defendant contends the parties contemplated a loan from defendant to plaintiff, whereas plaintiff argues the parties intended a lease.\nTo determine whether an agreement constitutes a loan or a lease, the entire contract must be taken into consideration, without giving special prominence or effect to any one detached term or condition. Food Service v. Balentine\u2019s, 285 N.C. 452, 461, 206 S.E.2d 242, 249 (1974). It is a question of the parties\u2019 intent \u201cas shown by the language they employed.\u201d Id. \u25a0\nArticle 2A of the Uniform Commercial Code covers leases. N.C.G.S. \u00a7\u00a7 25-2A-101-25-2A-532 (1995). G.S. \u00a7 25-2A-103Q) defines \u201clease\u201d in relevant part as\na transfer of the right to possession and use of goods for a term in return for consideration, but a sale ... or retention or creation of a security interest is not a lease.\n(emphasis added). According to N.C.G.S. \u00a7 25-1-201(37) (1995), a \u201csecurity interest\u201d is \u201can interest in personal property or fixtures which secures payment or performance of an obligation.\u201d Subsection (a) of G.S. \u00a7 25-1-201(37) provides:\nWhether a transaction creates a lease or security interest is determined by the facts of each case; however, a transaction creates a security interest if:\n(iv) The lessee has an option to become the owner of the goods for no additional consideration or nominal additional consideration upon compliance with the lease agreement.\nThe agreement sub judice expressly granted plaintiff the option, upon termination of the lease, \u201cto purchase the leased equipment for . . . one dollar.\u201d This option to purchase for nominal consideration at the end of the 60 months payment term is precisely the type of transaction anticipated by G.S. \u00a7 25-l-201(37)(a) and defined thereunder as a security interest, not a lease. See id.; see also Borg-Warner Acceptance Corp. v. Johnston, 97 N.C. App. 575, 581, 389 S.E.2d 429, 433 (1990), cert. denied, 333 N.C. 254, 424 S.E.2d 918 (1993). The collateral and default provisions of the agreement further protected defendant\u2019s security interest in the subject equipment.\nThe agreement also stated defendant would provide equipment to plaintiff in exchange for plaintiffs promise to make monthly payments of $18,445.00 for 60 months, a total of $1,106,700.00. It is noteworthy that the agreement likewise designated the \u201cquicksale value\u201d of the property to be \u201cin excess of $1,000,000.00.\u201d The agreement thus in substance anticipated a loan transaction, regardless of its \u201cLease/Finance Proposal\u201d designation. See G.S. \u00a7 66-106(2); Balentine\u2019s, 285 N.C. at 461-62, 206 S.E.2d at 249 (A principal test for determining whether contract comprises a conditional sale or lease is whether party is \u201cobligated at all events to pay the total purchase price of the property which is the subject of the contract. ... \u2018A lease of personal property is substantially equivalent to a conditional sale when the buyer is bound to pay rent substantially equal to the value of the property and has the option of becoming, or is to become, the owner of the property after all the rent is paid.\u2019 \u201d) (quoting 8 C.J.S. Bailments \u00a7 3(3) (1962)) (citations omitted).\nIn addition, other factors indicate the parties intended a loan transaction as opposed to a lease. For example, it is undisputed that NAFCO is a financing company. See Litton Industries Credit Corp. v. Lunceford, 333 S.E.2d 373, 375 (Ga. Ct. App. 1985) (circumstance that lender/lessor was a financing company rather than supplier an important factor in determining equipment lease actually a secured loan). Also, plaintiff, not NAFCO, was responsible for maintenance, insurance, taxes and expenses on the property which was the basis of the transaction. See In Re Rex Group, 80 B.R. 774, 780 (Bankr. E.D. Va. 1987) (lessee\u2019s promises to pay maintenance, insurance, taxes and all other expenses related to ownership indicia of secured loan rather than lease). Finally, we note paragraph forty-two of plaintiff\u2019s complaint characterizes the transaction as \u201ca loan within the meaning of [G.S. \u00a7] 66-106(2).\u201d Additionally, the agreement refers to NAFCO as \u201cLessor/Lender,\" Williams as \u201cLessee/Borrower,\u201d and, in one section entitled \u201cExpenses,\u201d refers to the transaction as a \u201cloan\u201d (emphasis added). Based on the foregoing facts and analysis, we hold the agreement sub judice anticipated a secured loan.\nFurther, the agreement contemplated a commercial transaction, and not a consumer one. The loan was intended for the mutual benefit of plaintiff and defendant, both corporate entities and not \u201cnatural person[s].\u201d Black\u2019s Law Dictionary 937 (6th ed. 1990). Moreover, as defendant\u2019s brief emphasizes, the loan was intended for a business purpose, rather than \u201cfamily, household personal or agricultural purposes.\u201d Id.\nWe conclude, therefore, that the agreement sub judice constituted a \u201cnon-consumer loan transaction.\u201d Further, we hold that the forum selection clause within the agreement falls within the exception provided in G.S. \u00a7 22B-3 and therefore is not \u201cvoid and unenforceable\u201d under the section. G.S. \u00a7 22B-3. Thus, the appropriate forum for dispute of the claims raised in plaintiff\u2019s complaint is, according to the agreement, the State of New York, and the trial court erred by denying defendant\u2019s motion to dismiss for improper venue.\nReversed.\nJudges GREENE and TIMMONS-GOODSON concur.", "type": "majority", "author": "JOHN, Judge." } ], "attorneys": [ "Smith, Anderson, Blount, Dorsett, Mitchell & Jemigcm, L.L.P., by Robin K. Vinson, for plaintiff-appellee.", "Womble Carlyle Sandridge & Rice, P.L.L.C., by Johnny M. Loper, Bonnie Liles, and Christine Sandez, for defendant-appellant." ], "corrections": "", "head_matter": "L. C. WILLIAMS OIL CO., Plaintiff v. NAFCO CAPITAL CORP., Defendant\nNo. COA97-28\n(Filed 21 July 1998)\nVenue\u2014 forum selection clause \u2014 non-consumer loan\nThe trial court erred by denying defendant\u2019s motion to dismiss a breach of contract action for improper venue where the parties entered into an agreement with a forum selection clause requiring trial of any action in New York but the agreement constituted a \u201cnon-consumer loan transaction\u201d and therefore fell within the exception to the statute declaring such clauses void as against public policy. N.C.G.S. \u00a7 22B-3.\nAppeal by defendant from order entered 30 October 1996 by Judge Robert H. Hobgood in Chatham County Superior Court. Heard in the Court of Appeals 17 September 1997.\nSmith, Anderson, Blount, Dorsett, Mitchell & Jemigcm, L.L.P., by Robin K. Vinson, for plaintiff-appellee.\nWomble Carlyle Sandridge & Rice, P.L.L.C., by Johnny M. Loper, Bonnie Liles, and Christine Sandez, for defendant-appellant." }, "file_name": "0286-01", "first_page_order": 318, "last_page_order": 324 }