{
  "id": 4174750,
  "name": "COMMUNITY ONE BANK, N.A. f/k/a FIRST GASTON BANK, Plaintiff v. WILLIAM GUY BOWEN and JERRY L. KELLAR, Defendants",
  "name_abbreviation": "Community One Bank, N.A. v. Bowen",
  "decision_date": "2010-02-02",
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  "last_updated": "2023-07-14T21:18:34.741992+00:00",
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    "judges": [],
    "parties": [
      "COMMUNITY ONE BANK, N.A. f/k/a FIRST GASTON BANK, Plaintiff v. WILLIAM GUY BOWEN and JERRY L. KELLAR, Defendants"
    ],
    "opinions": [
      {
        "text": "BRYANT, Judge.\nDefendant Jerry L. Kellar appeals from a trial court order entered 12 March 2009 granting plaintiff Community One Bank, N.A.\u2019s motion for summary judgment. For the reasons stated herein, we affirm.\nFacts\nOn 11 November 1994, William Bowen executed and delivered to plaintiff a promissory note for the principal sum of $115,000.00 and a deed of trust granting a lien on the real property located at 115 Lee Ballenger Road, Kings Mountain in Gaston County. Bowen also executed and delivered a security agreement which granted plaintiff a lien on Bowen\u2019s 1982 mobile home.\nOn 15 December 2006, Bowen executed a second promissory note to renew the promissory note executed 11 November 1994 for the principal sum of $93,257.09. Per Kellar\u2019s affidavit, plaintiff would not initially renew or extend the loan contract past its maturity date of 15 June 2007. But, prior to 15 December 2006, Kellar examined the tax value of the real property and mobile home and determined the value for the 2003 tax year to be $96,640.00. As a result, on 15 December 2006, Kellar agreed to guarantee Bowen\u2019s loan: in the event Bowen could not make the payments, Kellar agreed to purchase Bowen\u2019s real property and mobile home and take over the loan.\nUnknown to Kellar, prior to entering into a guaranty of Bowen\u2019s loan, the fire insurance coverage on Bowen\u2019s mobile home lapsed. And, on 15 May 2007, Bowen\u2019s property caught fire. At no time prior to the fire, did Bowen or plaintiff inform Kellar the fire insurance coverage lapsed. Per Kellar\u2019s affidavit, the fair market value of Bowen\u2019s property after the fire was $20,000.00. On 15 June 2007, the promissory note matured and the outstanding balance became due and payable.\nOn 3 July 2007, plaintiff filed a complaint requesting a declaratory judgment, a judicial sale of real property, and a monetary judgment against defendants, Bowen and Kellar, jointly and severally, for the principal sum of $94,755.60 as well as interest of $23.87 per diem from 30 May 2007 until paid. Kellar answered and counterclaimed on grounds of negligent misrepresentation and negligent concealment as well as unfair and deceptive trade practices. Both parties filed motions for summary judgment. In an order filed 12 March 2009, the trial court granted plaintiff\u2019s motion for entry of default judgment and summary judgment and denied Kellar\u2019s counterclaim. Kellar appeals.\nSummary judgment \u201cshall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.\u201d N.C. R. Civ. P. 56(c) (2007). We review an order granting summary judgment de novo. McCutchen v. McCutchen, 360 N.C. 280, 285, 624 S.E.2d 620, 625 (2006) (citation omitted).\nOn appeal, Kellar presents one question: did the trial court err in granting plaintiff\u2019s motion for summary judgment. In support, Kellar raises two arguments: A) because plaintiff was aware of the lapse in Bowen\u2019s fire insurance coverage prior to Kellar becoming a guarantor of Bowen\u2019s loan, plaintiff is equitably estopped from claiming damages from Kellar; and B) Kellar\u2019s obligation under the guaranty is discharged to the extent plaintiff impaired the value of the collateral securing the loan. We disagree.\nA\nEquitable estoppel arises when one party, by his acts, representations, or silence when he should speak, intentionally, or through culpable negligence, induces a person to believe certain facts exist, and that person reasonably relies on and acts on those beliefs to his detriment. There need not be actual fraud, bad faith, or an intent to mislead or deceive for the doctrine of equitable estoppel to apply.\nGore v. Myrtle/Mueller, 362 N.C. 27, 33, 653 S.E.2d 400, 405 (2007) (internal citations omitted). However, here, the contract between Kellar, as guarantor of Bowen\u2019s debt, and plaintiff stated the following:\nThe liability of the [guarantor] shall not be affected or impaired by . .. (vi) any failure to obtain collateral security... or to see to the proper or sufficient creation and perfection thereof ... or to protect, insure, or enforce any collateral security ....\nMoreover, Kellar gave the following testimony during his deposition:\nQ [Counsel]: How do you know that someone at [plaintiff] . . . would provide supplemental insurance coverage prior to the fire loss?\nA [Kellar]: I don\u2019t know that. I know that the bank requires insurance on any collateral they\u2019ve got a loan on, and I presumed it was in place.\n[Defendant] Bowen would have been the one to have paid the premium or [plaintiff] would have been the one to have put the forced insurance in place and paid it because this is standard operating procedure. It wasn\u2019t something that I would go in asking about.\nWhere the parties contracted for the provision which states Kellar\u2019s liability to plaintiff would not be affected by Kellar\u2019s failure to \u201cinsure[] or enforce any collateral security[,]\u201d and Kellar assumed that fire insurance coverage was in place but gave no indication that plaintiff promoted such an assumption, plaintiff is not equitably estopped from claiming damages from Kellar.\nB\nNext, Kellar argues that his obligation is discharged to the extent plaintiff impaired the value of Bowen\u2019s property. In support of his argument, he cites North Carolina General Statutes, section 23-3-605(e).\nIf the obligation of a party to pay an instrument is secured by an interest in collateral and a person entitled to enforce the instrument impairs the value of the interest in collateral, the obligation of an endorser or accommodation party having a right of recourse against the obligor is discharged to the extent of the impairment.\nN.C. Gen. Stat. \u00a7 25-3-605(e) (2007). However, here, the fire insurance coverage lapsed prior to the contract between Kellar and plaintiff. Moreover, there is no indication plaintiff acted to void the fire insurance policy. Therefore, we hold the trial court did not err in granting plaintiffs motion for summary judgment.\nAffirmed.\nJudges HUNTER, Robert C. and JACKSON concur.\n. Thereafter, plaintiff First Community Bank, N.A. changed its name to FB Bank, a Division of First National Bank and Trust Company.\n. Thereafter, plaintiff changed its name to Community One Bank.\n. The record indicates the last fire insurance policy covering the property expired 15 April 2004.",
        "type": "majority",
        "author": "BRYANT, Judge."
      }
    ],
    "attorneys": [
      "Gray, Layton, Kersh, Soloman, Furr, & Smith, P.A., by Ted F. Mitchell, for defendant Jerry L. Kellar, appellant.",
      "Kellam & Pettit, P.A., by William Walt Pettit, for plaintiffappellee."
    ],
    "corrections": "",
    "head_matter": "COMMUNITY ONE BANK, N.A. f/k/a FIRST GASTON BANK, Plaintiff v. WILLIAM GUY BOWEN and JERRY L. KELLAR, Defendants\nNo. COA09-972\n(Filed 2 February 2010)\n1. Estoppel\u2014 equitable \u2014 guarantor of loan \u2014 assumption that fire insurance in place\nPlaintiff was not equitably estopped from claiming damages from defendant Kellar, the guarantor of a loan, for a mobile home which burned where Kellar and plaintiff contracted for a provision stating that Kellar\u2019s liability would not be affected by Kellar\u2019s failure to insure or enforce any collateral security, and Kellar assumed that fire insurance was in place but gave no indication that plaintiff promoted such an assumption.\n2. Uniform Commercial Code\u2014 negotiable instruments*\u2014 impairment of collateral\nThe trial court did not err by granting plaintiff\u2019s motion for summary judgment on a claim against Kellar, the guarantor of a loan on a mobile home which burned, where Kellar argued that the obligation was discharged to the extent that lapsed fire insurance impaired the value of the property. The coverage lapsed before the contract between Kellar and plaintiff, and there was no indication that plaintiff acted to void the policy.\nAppeal by defendant from judgment entered 12 March 2009 by Judge Richard D. Boner in Gaston County Superior Court. Heard in the Court of Appeals 2 December 2009.\nGray, Layton, Kersh, Soloman, Furr, & Smith, P.A., by Ted F. Mitchell, for defendant Jerry L. Kellar, appellant.\nKellam & Pettit, P.A., by William Walt Pettit, for plaintiffappellee."
  },
  "file_name": "0367-01",
  "first_page_order": 395,
  "last_page_order": 399
}