{ "id": 8350910, "name": "FINOVA CAPITAL CORPORATION, Plaintiff v. BEACH PHARMACY II, LTD and STEVEN C. EVANS, Defendants", "name_abbreviation": "Finova Capital Corp. v. Beach Pharmacy II, Ltd.", "decision_date": "2005-12-20", "docket_number": "No. COA05-404", "first_page": "184", "last_page": "191", "citations": [ { "type": "official", "cite": "175 N.C. App. 184" } ], "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": "558 S.E.2d 197", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 2001, "pin_cites": [ { "page": "198" }, { "page": "209-10" }, { "page": "198" } ], "opinion_index": 0 }, { "cite": "148 N.C. App. 208", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9364908 ], "year": 2001, "pin_cites": [ { "page": "209" } ], "opinion_index": 0, "case_paths": [ "/nc-app/148/0208-01" ] }, { "cite": "199 S.E. 83", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1938, "pin_cites": [ { "page": "88" } ], "opinion_index": 0 }, { "cite": "214 N.C. 288", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8630161 ], "year": 1938, "pin_cites": [ { "page": "294" } ], "opinion_index": 0, "case_paths": [ "/nc/214/0288-01" ] }, { "cite": "380 S.E.2d 615", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1989, "pin_cites": [ { "page": "617", "parenthetical": "citation omitted" }, { "page": "617" } ], "opinion_index": 0 }, { "cite": "94 N.C. App. 524", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527513 ], "year": 1989, "pin_cites": [ { "page": "527", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/94/0524-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 1-52", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2003, "pin_cites": [ { "page": "20" } ], "opinion_index": 0 }, { "cite": "332 S.E.2d 51", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1985, "pin_cites": [ { "page": "62", "parenthetical": "citations omitted" }, { "page": "62" } ], "opinion_index": 0 }, { "cite": "314 N.C. 1", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4696910 ], "year": 1985, "pin_cites": [ { "page": "19-20", "parenthetical": "citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/314/0001-01" ] }, { "cite": "215 S.E.2d 162", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1975, "pin_cites": [ { "page": "165" } ], "opinion_index": 0 }, { "cite": "26 N.C. App. 138", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8550092 ], "year": 1975, "pin_cites": [ { "page": "142" } ], "opinion_index": 0, "case_paths": [ "/nc-app/26/0138-01" ] }, { "cite": "586 S.E.2d 247", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2003, "pin_cites": [ { "page": "249" } ], "opinion_index": 0 }, { "cite": "357 N.C. 492", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 491872 ], "year": 2003, "pin_cites": [ { "page": "496" } ], "opinion_index": 0, "case_paths": [ "/nc/357/0492-01" ] } ], "analysis": { "cardinality": 606, "char_count": 14669, "ocr_confidence": 0.757, "pagerank": { "raw": 6.599905439574588e-08, "percentile": 0.4034999723922128 }, "sha256": "2f76a0184131fa80b268bb31b18c03b795272aa1eac435eb44988df414c873d4", "simhash": "1:eb1ad7e6a3093ed0", "word_count": 2331 }, "last_updated": "2023-07-14T22:29:36.119960+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges HUDSON and LEVINSON concur." ], "parties": [ "FINOVA CAPITAL CORPORATION, Plaintiff v. BEACH PHARMACY II, LTD and STEVEN C. EVANS, Defendants" ], "opinions": [ { "text": "TYSON, Judge.\nFinova Capital Corporation (\u201cplaintiff\u201d) appeals from order entered denying its motion for summary judgment and granting summary judgment in favor of Beach Pharmacy II, Ltd. and Steven C. Evans (\u201cdefendants\u201d) and order denying plaintiff\u2019s motion for reconsideration. We affirm in part, reverse in part, and remand.\nI. Background\nInternational Display Ltd. and its affili\u00e1ted companies (\u201cRecomm\u201d) operated a nationwide network of electronic message boards and kiosks. Recomm marketed and distributed to pharmacists, veterinarians, and optometrists. Recomm\u2019s customers (\u201clessees\u201d) acquired the equipment and executed finance leases. Plaintiff is a finance company (\u201clessor\u201d) who provided lease financing to customers such as defendants who leased Recomm\u2019s equipment.\nOn 13 May 1993, plaintiff\u2019s predecessor-in-interest, Bell Atlantic TriCon Leasing Corporation, and defendant Beach Pharmacy II, Ltd. entered into a written lease for Recomm\u2019s office- equipment. Defendant Steven C. Evans guaranteed the lease agreement. In 1996, Recomm and its affiliated companies filed for Chapter 11 bankruptcy protection in United States Bankruptcy Court for the Middle District of Florida. The bankruptcy cases were subsequently consolidated by order dated 1 April 1998.\nA debtor\u2019s plan of reorganization was filed. The plan proposed a resolution to pending litigation between the lessors, lessees, and Recomm. The bankruptcy court entered an order confirming the plan of reorganization on 13 May 1999. The confirmation order and plan of reorganization modifies the lease agreements between the lessors and the lessees.\nThe confirmation order releases the lessors from all claims that otherwise may have been raised by the lessees in connection with the matters occurring prior to the 30 June 1998 effective date. It also releases the lessees from all claims that otherwise may have been raised by the lessors in connection with matters occurring prior to the effective date. The plan of reorganization recalculated the amount of lease payments the lessors were due.\nOn 30 June 1998, plaintiff sent defendants a letter which advised them of the modifications to their lease agreement and presented them with options to pay the amount owed under the lease as modified. Defendants failed to select a payment option and were deemed to have selected \u201cOption 4,\u201d which obligated defendants to pay the balance due over a period of time. Plaintiff alleged defendants failed to pay the amount due and filed a complaint in Wake County Superior Court on 18 October 2001 for breach of the lease agreement.\nDefendants filed an answer asserting the affirmative defenses of laches, estoppel, and statute of limitations. Defendants amended their answer to assert their defenses did not relate \u201cto time, conduct and/or events\u201d occurring prior to 30 June 1998 \u201cbased on the contracts created by the Middle District of Florida Bankruptcy Court\u2019s May 13, 1998 Confirmation Order in the RECOMM bankruptcy case.\u201d This case was subsequently removed to the Dare County Superior Court. Plaintiff filed a motion for summary judgment on 6 July 2004. The trial court issued an order granting summary judgment in favor of defendants and denying plaintiffs motion. Plaintiff moved for the trial court to reconsider its order granting summary judgment in favor of defendants. The trial court reaffirmed its earlier order. Plaintiff appeals.\nII. Issue\nThe sole issue on appeal is whether the trial court erred in denying plaintiff\u2019s motion for summary judgment and granting summary judgment in favor of defendants and denying its motion for reconsideration.\nIII. Standard of Review\nSummary judgment is proper if the \u201cpleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2003). The evidence must be considered in a light most favorable to the non-moving party. Summey v. Barker, 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003). When reviewing a lower court\u2019s grant of summary judgment, our standard of review is de novo. Id.\nWe note that the trial court is not required to make findings of fact in an order granting summary judgment. Insurance Agency v. Leasing Corp., 26 N.C. App. 138, 142, 215 S.E.2d 162, 165 (1975). \u201cThere is no necessity for findings of fact where facts are not at issue, and summary judgment presupposes that there are no triable issues of material fact.\u201d Id.\nIV. Summary Judgment in Favor of Defendants\nA. Statute of Limitations\nPlaintiff argues the trial court erred by granting summary judgment in favor of defendants based on the running of the statute of limitations.\nDefendants argue \u201c[a]n action for breach of contract must be brought within three years from the time of the accrual of the cause of action.\u201d Penley v. Penley, 314 N.C. 1, 19-20, 332 S.E.2d 51, 62 (1985) (citations omitted); N.C. Gen. Stat. \u00a7 1-52 (2003). Generally, a cause of action accrues when the right to institute a suit arises. Id. at 20, 332 S.E.2d at 62. \u201cThe statute begins to run on the date the promise is broken.\u201d Id. Plaintiff contends the lease in this case is governed by the Uniform Commercial Code and subject to a four-year statute of limitations. We agree.\nThe Uniform Commercial Code provides, \u201c[a]n action for default under a lease contract, including breach of warranty or indemnity, must be commenced within four years after the cause of action accrued.\u201d N.C. Gen. Stat. \u00a7 25-2A-506(l) (2003). The Uniform Commercial Code recites the definition of a lease:\n\u201cLease\u201d means a transfer of the right to possession and use of goods for a term in return for consideration, but a sale, including a sale on approval or a sale or return, or retention or creation of a security interest is not a lease. Unless the context clearly indicates otherwise, the term includes a sublease. The term includes a motor vehicle operating agreement that is considered a lease under \u00a7 7701(h) of the Internal Revenue Code.\nN.C. Gen. Stat. \u00a7 25-2A-103Q) (2003).\nThe lease agreement entered into on 13 May 1993 was originally structured with a four-year lease term. The final payment, prior to modification, was due on 13 April 1997. An injunction was entered in the Recomm bankruptcy action in March 1996, which stayed collection efforts pursuant to the lease agreements and tolled the statute of limitations period. The bankruptcy court\u2019s confirmation order was docketed on 30 June 1998 and the stay imposed by the injunction was lifted.\nThe parties\u2019 obligations under the lease were modified by the confirmation order. The statute of limitations for filing this action began to run on 30 June 1998. After the lease agreement was modified, defendants were obligated to make twenty consecutive monthly payments of $530.00 beginning August 1998 and one payment of $289.65 in April 2000. Plaintiff filed the complaint on 13 October 2001.\n\u201cThe general rule regarding the running of the statute of limitations for installment contracts is that the limitations period begins running from the time each individual installment becomes due.\u201d Vreede v. Koch, 94 N.C. App. 524, 527, 380 S.E.2d 615, 617 (1989) (citation omitted). Plaintiff is barred from recovering only those installment payments due prior to 14 October 1997, four years preceding the 13 October 2001 date on which it filed suit. Id. at 528, 380 S.E.2d at 617. The trial court erred in granting summary judgment in favor of defendants based on the expiration of the statute of limitations.\nB. Laches\nDefendants argue the trial court correctly granted summary judgment in their favor based on the equitable doctrine of laches. We disagree.\nThe equitable doctrine of laches will be applied \u201cwhere lapse of time has resulted in some change in the condition of the property or in the relations of the parties which would make it unjust to permit the prosecution of the claim[.]\u201d Teachey v. Gurley, 214 N.C. 288, 294, 199 S.E. 83, 88 (1938). The facts and circumstances of the case determine whether the delay will constitute laches. MMR Holdings, LLC v. City of Charlotte, 148 N.C. App. 208, 209, 558 S.E.2d 197, 198 (2001). \u201c[T]he delay must be shown to be unreasonable and must have worked to the disadvantage, injury or prejudice of the person seeking to invoke the doctrine of laches[.]\u201d Id. at 209-10, 558 S.E.2d at 198.\nPlaintiff sent a letter to defendants dated 30 June 1998 which set forth defendants\u2019 options in making the required payments. The letter stated the first revised monthly payment was due August 1998. Under \u201cOption 4,\u201d defendants were required to make monthly payments over a period of twenty-one months. Under this plan, the final payment was due in April 2000. Plaintiff filed suit for breach of the lease agreement on 13 October 2001. Defendants failed to demonstrate how they were prejudiced by plaintiff\u2019s alleged delay in filing the complaint. Id. The record does not support the trial court\u2019s granting of summary judgment in favor of defendants based on the equitable doctrine of laches.\nV. Denial of Plaintiff\u2019s Motion for Summary Judgment,\nPlaintiff argues the trial court erred in denying its motion for summary judgment and its motion for reconsideration. We disagree.\nPlaintiff is designated as a \u201cparticipating lessor\u201d and defendants are designated as \u201cparticipating lessees\u201d under the reorganization plan confirmed by the bankruptcy court. The reorganization plan recalculates the amount the participating lessees owe the participating lessors under their lease agreements. The reorganization plan provides the participating lessors shall deliver a statement to their participating lessees setting forth the balance due, the lessees\u2019 options with respect to paying the balance, and instructions for exercising such options. Pursuant to the reorganization plan and confirmation order, plaintiff sent defendants a letter setting forth defendants\u2019 payment options. Defendants failed to select a payment option under the modified lease and was deemed to have selected \u201cOption 4.\u201d\nThe bankruptcy court\u2019s confirmation order provides that \u201cthe Leases as modified are valid and binding as between the Released Lessor Parties and Participating Lessees only in accordance with their terms ....\u201d Plaintiff argues the trial court failed to recognize the scope and effect of the bankruptcy court\u2019s confirmation order in denying its motion for summary judgment. While the confirmation order modifies the lease agreement and is binding on the parties, genuine issues of material fact remain regarding whether defendants breached the lease agreement as modified. The trial court did not err in denying plaintiff\u2019s motion for summary judgment and its motion for reconsideration. This assignment of error is overruled.\nVI. Conclusion\nThe trial court erred in granting summary judgment in favor of defendants based on the expiration of the statute of limitations and the equitable doctrine of laches. Because genuine issues of material fact exist regarding defendants\u2019 alleged breach of the lease agreement, the trial court properly denied plaintiff\u2019s motion for summary judgment and its motion for reconsideration.\nThat portion of the trial court\u2019s order granting summary judgment to defendants is reversed. That portion of the trial court\u2019s order denying plaintiffs motion for summary judgment and plaintiff\u2019s motion for reconsideration is affirmed.\nAffirmed in part, Reversed in part, and Remanded.\nJudges HUDSON and LEVINSON concur.", "type": "majority", "author": "TYSON, Judge." } ], "attorneys": [ "Smith Debnam Narron Wyche Saintsing & Myers, L.L.P., by Byron L. Saintsing and Connie E. Carrigan, for plaintiff-appellant.", "Dixon and Dixon Law Offices, PLLC, by David R. Dixon, for defendants-appellees." ], "corrections": "", "head_matter": "FINOVA CAPITAL CORPORATION, Plaintiff v. BEACH PHARMACY II, LTD and STEVEN C. EVANS, Defendants\nNo. COA05-404\n(Filed 20 December 2005)\n1. Statutes of Limitation and Repose\u2014 installment contracts \u2014 period begins running from time each individual installment due\nThe trial court erred in a breach of lease agreement case by granting summary judgment in favor of defendant lessees based on the running of the statute of limitations where the lease agreement was modified by a bankruptcy confirmation order, defendants thereafter failed to meet their obligation to make twenty consecutive monthly payments of $530.00 beginning August 1998 and one payment of $289.65 in April 2000, and plaintiff filed the complaint on 13 October 2001, because: (1) the lease in this case is governed by the Uniform Commercial Code and is subject to a four-year statute of limitations, and the statute of limitations for filing this action began to run on 30 June 1998; (2) the general rule regarding the running of the statute of limitations for installment contracts is that the limitations period begins running from the time each individual installment becomes due; and (3) plaintiff is barred from recovering only those installment payments due prior to 14 October 1997, four years preceding the 13 October 2001 date on which it filed suit.\n2. Laches\u2014 failure to show change in condition of property or in relations of parties \u2014 failure to demonstrate prejudice\nThe trial court erred in a breach of lease agreement case by granting summary judgment in favor of defendant lessees based on the equitable doctrine of laches, because: (1) laches will only be applied where lapse of time has resulted in some change in the condition of the property or in the relations of the parties which would make it unjust to permit the prosecution of the claim; and (2) defendants failed to demonstrate how they were prejudiced by plaintiffs alleged delay in filing the complaint when under the payment plan, the final payment was due in April 2000 and plaintiff filed suit for breach of the lease agreement on 13 October 2001.\n3. Leases of Personal Property\u2014 modification of lease agreement \u2014 breach\u2014summary judgment\nThe trial court did not err in a breach of lease agreement case by denying plaintiff lessor\u2019s motion for summary judgment and its motion for reconsideration even though plaintiff contends the trial court failed to recognize the scope and effect of the bankruptcy court\u2019s confirmation order, because while the confirmation order modifies the lease agreement and is binding on the parties, genuine issues of material fact remain regarding whether defendants breached the lease agreement as modified.\nAppeal by plaintiff from orders entered 20 September 2004 and 6 January 2005 by Judge William C. Griffin, Jr., in Dare County Superior Court. Heard in the Court of Appeals 17 November 2005.\nSmith Debnam Narron Wyche Saintsing & Myers, L.L.P., by Byron L. Saintsing and Connie E. Carrigan, for plaintiff-appellant.\nDixon and Dixon Law Offices, PLLC, by David R. Dixon, for defendants-appellees." }, "file_name": "0184-01", "first_page_order": 218, "last_page_order": 225 }