{ "id": 4176739, "name": "DAVID NEAL WHISNANT and LOIS MILLER WHISNANT, Plaintiffs v. CAROLINA FARM CREDIT, ACA, Defendant", "name_abbreviation": "Whisnant v. Carolina Farm Credit, ACA", "decision_date": "2010-05-18", "docket_number": "No. COA09-180", "first_page": "84", "last_page": "96", "citations": [ { "type": "official", "cite": "204 N.C. App. 84" } ], "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": "663 S.E.2d 435", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12641532 ], "weight": 2, "year": 2008, "pin_cites": [ { "page": "437", "parenthetical": "\"The trial court is the trier of fact[.]\" (citation omitted)" } ], "opinion_index": 0, "case_paths": [ "/se2d/663/0435-01" ] }, { "cite": "665 S.E.2d 147", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12641725 ], "weight": 9, "year": 2008, "pin_cites": [ { "page": "152", "parenthetical": "citations and quotation marks omitted" }, { "page": "152" }, { "page": "152" }, { "page": "152" }, { "page": "152" }, { "page": "152" }, { "page": "152" }, { "page": "152" }, { "page": "152" } ], "opinion_index": 0, "case_paths": [ "/se2d/665/0147-01" ] }, { "cite": "191 N.C. App. 158", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4159501 ], "year": 2008, "pin_cites": [ { "page": "162", "parenthetical": "\"The trial court is the trier of fact[.]\" (citation omitted)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/191/0158-01" ] }, { "cite": "678 S.E.2d 671", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 2009, "pin_cites": [ { "page": "684", "parenthetical": "citation, quotation marks, and brackets omitted" }, { "page": "684" } ], "opinion_index": 0 }, { "cite": "682 S.E.2d 726", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2009, "pin_cites": [ { "page": "733", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "567 S.E.2d 403", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2002, "pin_cites": [ { "page": "410-11", "parenthetical": "citations, quotation marks, and brackets omitted" }, { "page": "410-11" } ], "opinion_index": 0 }, { "cite": "152 N.C. App. 15", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9248547 ], "year": 2002, "pin_cites": [ { "page": "25", "parenthetical": "citations, quotation marks, and brackets omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/152/0015-01" ] }, { "cite": "603 S.E.2d 808", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "818" } ], "opinion_index": 0 }, { "cite": "166 N.C. App. 519", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8411970 ], "year": 2004, "pin_cites": [ { "page": "532" } ], "opinion_index": 0, "case_paths": [ "/nc-app/166/0519-01" ] }, { "cite": "421 S.E.2d 350", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "opinion_index": 0 }, { "cite": "332 N.C. 482", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2506529, 2506243, 2504999, 2504620, 2504310 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/nc/332/0482-01", "/nc/332/0482-04", "/nc/332/0482-03", "/nc/332/0482-02", "/nc/332/0482-05" ] }, { "cite": "418 S.E.2d 694", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "107 N.C. App. 53", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527122 ], "opinion_index": 0, "case_paths": [ "/nc-app/107/0053-01" ] }, { "cite": "209 S.E.2d 315", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "parenthetical": "\"an accommodation party is always a surety\"" } ], "opinion_index": 0 }, { "cite": "286 N.C. 214", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564737, 8564769, 8564849, 8564819, 8564792 ], "year": 1974, "pin_cites": [ { "parenthetical": "\"an accommodation party is always a surety\"" } ], "opinion_index": 0, "case_paths": [ "/nc/286/0214-01", "/nc/286/0214-02", "/nc/286/0214-05", "/nc/286/0214-04", "/nc/286/0214-03" ] }, { "cite": "206 S.E.2d 775", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "779", "parenthetical": "\"an accommodation party is always a surety\"" } ], "opinion_index": 0 }, { "cite": "22 N.C. App. 371", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11305870 ], "year": 1974, "pin_cites": [ { "page": "376", "parenthetical": "\"an accommodation party is always a surety\"" } ], "opinion_index": 0, "case_paths": [ "/nc-app/22/0371-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-419", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 5, "pin_cites": [ { "page": "(a)" }, { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "123 S.E.2d 590", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1962, "pin_cites": [ { "page": "593" }, { "page": "598", "parenthetical": "citations, quotation marks, and ellipses omitted" }, { "page": "598" }, { "page": "598" } ], "opinion_index": 0 }, { "cite": "256 N.C. 110", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571475 ], "year": 1962, "pin_cites": [ { "page": "114" } ], "opinion_index": 0, "case_paths": [ "/nc/256/0110-01" ] }, { "cite": "388 S.E.2d 453", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1989, "opinion_index": 0 }, { "cite": "379 S.E.2d 865", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 9, "year": 1989, "pin_cites": [ { "page": "867" }, { "page": "867" }, { "page": "867" }, { "page": "867", "parenthetical": "quotation marks omitted" }, { "page": "867", "parenthetical": "emphasis added" }, { "page": "867" }, { "page": "867", "parenthetical": "quotation marks omitted" }, { "page": "867" }, { "page": "867" } ], "opinion_index": 0 }, { "cite": "94 N.C. App. 198", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526850 ], "weight": 2, "year": 1989, "pin_cites": [ { "page": "200" }, { "page": "199-200" } ], "opinion_index": 0, "case_paths": [ "/nc-app/94/0198-01" ] }, { "cite": "214 S.E.2d 281", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1975, "pin_cites": [ { "page": "284" }, { "page": "284", "parenthetical": "citation omitted" }, { "page": "284" } ], "opinion_index": 0 }, { "cite": "25 N.C. App. 522", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8555114 ], "year": 1975, "pin_cites": [ { "page": "525" } ], "opinion_index": 0, "case_paths": [ "/nc-app/25/0522-01" ] } ], "analysis": { "cardinality": 998, "char_count": 28656, "ocr_confidence": 0.746, "pagerank": { "raw": 1.0667989588921816e-07, "percentile": 0.5585821798877078 }, "sha256": "a511b0c953e241353d6bae22bfe515da64d85b5375dee23f8b22dd43156021f8", "simhash": "1:8390c6e2a45fac5a", "word_count": 4619 }, "last_updated": "2023-07-14T20:38:54.150336+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges GEER and ERVIN concur." ], "parties": [ "DAVID NEAL WHISNANT and LOIS MILLER WHISNANT, Plaintiffs v. CAROLINA FARM CREDIT, ACA, Defendant" ], "opinions": [ { "text": "STROUD, Judge.\nPlaintiffs appeal the trial court\u2019s order granting summary judgment on all of their claims. For the following reasons, we reverse the trial court order granting summary judgment on all claims and remand for further proceedings.\nI. Background\nPlaintiffs alleged that defendant loaned money to James and Elaine Wilson (\u201cthe Wilsons\u201d) for their greenhouse project. Plaintiffs had an extensive business relationship with defendant outside of the context of the greenhouse project. Plaintiffs allege that they relied on representations made by defendant and agreed to co-sign the Wilsons\u2019 loan documents because of the defendant\u2019s representations. At least one of the loans was secured by plaintiffs\u2019 farm, which includes their personal residence. The Wilsons were unable to repay their loans and defendant attempted to collect the balance from plaintiffs, including an action to foreclose their farm. On 17 July 2007, plaintiffs filed a verified complaint with causes of action for fraud in the inducement, actual fraud, and negligence. Plaintiffs also requested injunctive relief to prohibit the foreclosure of their property. The history of the loans is quite complex and was summarized by the trial court in its preliminary injunction order as follows:\n1. Plaintiffs are husband and wife, residents of Cleveland County and are owners of a residence and farm property located on Jackson White Road, Lawndale, North Carolina (the \u201cFarm Property\u201d) consisting of approximately fifty-one (51) acres.\n2. Defendant Carolina Farm Credit, ACA (\u201cCFC\u201d) is a lending institution and is a member institution of the Farm Credit System, with its principal place of business in Statesville, North Carolina.\n3. By letter dated June 19, 2007, Defendant notified Plaintiffs that it intended to initiate foreclosure proceedings to sell the Farm Property to satisfy certain indebtedness as hereinafter described pursuant to a Deed of Trust recorded in Book 1419 at Page 289 in the Cleveland County Registry, dated June 29, 2004.\n4. Since 1998, the Plaintiffs have borrowed money for their own use through a series of loans from the Defendant, for which loans Plaintiffs have provided as security certain deeds of trust against the Farm Property described above. These deeds of trust are dated April 3, 1998, recorded in Book 1219 at Page 609; November 22, 2002, recorded in Book 1351 at Page 2309, of the Cleveland County Registry, respectively. The present balance of such loans owed by the Plaintiffs to the Defendant as of the date of this hearing was $115,375.68, together with interest accumulating thereon at the rate of $23.7783 per day.\n5. James and Elaine Wilson (\u201cWilsons\u201d or \u201cDebtors\u201d) were the owners and operators of the South Mountain Greenhouse (the \u201cNursery\u201d). The Wilsons are the sister and brother-in-law of the Plaintiff, David Whisnant.\n6. Between December 7, 2001 and July 29, 2005, the Plaintiffs, together with the Wilsons, signed a series of promissory notes to obtain financing for the South Mountain Greenhouse. Some of the later notes in the series were executed for purposes of consolidating, modifying and refinancing earlier notes made by the makers. These loans were made for the operation of the South Mountain Greenhouse by the Wilsons.\n7. The loans described in paragraph 6 above were secured by a Deed of Trust on the Farm Property dated June 29, 2004 and recorded in Book 1419 at Page 289 of the Cleveland County Registry. Defendant also asserts that, pursuant to a Future Advances clause in the 1998 and the 2002 Deeds of Trust, these loans also are secured by the first and second priority deeds of trust against the Farm Property, though the Plaintiffs dispute this contention.\n8. The Plaintiffs and Defendant disagree as to the role of the Plaintiffs in the transactions described above: the Plaintiffs refer to themselves as \u201caccommodation makers\u201d while the Defendant refers to the Plaintiffs as \u201cco-makers.\u201d This court does not consider it necessary to determine the exact status of the Plaintiffs in these transactions at this stage of the proceedings, but does note that, according to the evidence presented to date, the Plaintiffs did not receive any of the proceeds of the loans made for the operation of the South Mountain Greenhouse.\n9. The total indebtedness presently owed arising out of the series of notes described in paragraph 6 above, as of the date of this hearing, was $122,628.66, together with interest thereon from August 20, 2007, at the rate of $30.8556 per day. There presently exists a default under the terms of payment under the applicable promissory notes for the said indebtedness.\n10. Defendant has been unable to collect any payments on the said indebtedness from the Wilsons due to the filing of a Chapter 13 Bankruptcy Petition on September 9, 2005 by the Wilsons. Defendant has obtained relief from the bankruptcy stay to proceed against collateral, consisting both of the Farm Property and a security interest in certain greenhouse equipment. The parties disagree on the present status of liens against the greenhouse property.\nOn 19 September 2007, defendant answered plaintiffs complaint alleging various affirmative defenses and requesting plaintiffs\u2019 action be dismissed. On 19 November 2007, the trial court issued a conditional preliminary injunction staying the foreclosure of the plaintiffs\u2019 farm. On 8 January 2008, plaintiffs filed a \u201cmotion for order to show cause[,]\u201d (original in all caps), for defendant\u2019s alleged violation of the preliminary injunction order; on this same date the trial court issued a show cause order and a notice of hearing. On 14 January 2008, defendant filed a motion to dismiss the show cause order, which was subsequently granted because defendant filed a voluntary dismissal of the foreclosure action.\nOn 29 February 2008, plaintiffs filed a motion to amend their complaint which was later allowed. Plaintiffs\u2019 amended complaint added a claim for unfair and deceptive trade practices. On 13 May 2008, plaintiffs filed a motion to extend the preliminary injunction order to prohibit defendant \u201cfrom noticing or filing any claim of foreclosure[.]\u201d On or about 27 June 2008, defendant filed a motion for summary judgment. On 21 August 2008, the trial court denied plaintiff\u2019s motion to extend the preliminary injunction order and granted summary judgment in favor of defendant. On 15 September 2008, plaintiffs filed a notice of appeal.\nII. Standard of Review\nWe are reviewing the trial court\u2019s order granting summary judgment in favor of defendant as to all of plaintiffs\u2019 claims.\n[T]he standard of review is whether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law. Summary judgment is appropriate when viewed in the light most favorable to the non-movant, 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.\nS.B. Simmons Landscaping v. Boggs, -N.C. App. -, -, 665 S.E.2d 147, 152 (2008) (citations and quotation marks omitted) (citing N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c)).\nIII. Summary Judgment\nPlaintiffs contend that the trial court erred in granting summary judgment in favor of defendant regarding plaintiffs\u2019 claims for negligence, fraud in the inducement, actual fraud, and unfair and deceptive trade practices. Plaintiffs also contend that by signing the notes, they were accommodation makers.\nA. Application of Suretyship Law\nIn order to determine \u201cwhether there is any genuine issue of material fact and whether the moving party is entitled to a judgment as a matter of law[,]\u201d we must first know what law to apply. S.B. Simmons Landscaping at -, 665 S.E.2d 147, 152. Plaintiffs\u2019 brief cites to Trust Co. v. Akelaitis, 25 N.C. App. 522, 525, 214 S.E.2d 281, 284 (1975) and Gant v. NCNB, 94 N.C. App. 198, 200, 379 S.E.2d 865, 867, review dismissed, 388 S.E.2d 453 (N.C. 1989), which are both cases regarding suretyship law. However, defendant contends that suretyship law is not applicable.\nDefendant attempts to distinguish this case from Akelaitis and Gant on several grounds. First, defendant argues that both Akelaitis and Gant involved \u201cmotions to dismiss, rather than motions for summary judgment. Thus, these opinions set forth limited rules for pleading claims under suretyship law without the benefit of a developed record of evidence.\u201d However, the rule of law is the same whether we are dealing with a motion to dismiss or a motion for summary judgment; this is demonstrated by Constr. Co. v. Crain and Denbo, Inc., a case which proceeded to a bench trial and where certainly there was \u201ca developed record of evidence.\u201d 256 N.C. 110, 114, 123 S.E.2d 590, 593 (1962). In Crain and Denbo, this Court articulated that\n[i]f the creditor knows or has good grounds for believing that the surety is being deceived or misled, or that he was induced to enter into the contract in ignorance of facts materially increasing the risk, of which he has knowledge, and he has an opportunity before accepting his undertaking, to inform him of such facts, good and fair dealing demand that he should make such disclosure to him; and if he accepts the contract without doing so, the surety may afterwards avoid it. It was at one time asserted that all the information in obligee\u2019s power must be given to enable the promisor to estimate the character of the risk he is invited to undertake. This view, however, finds no support today. A surety is in general a friend of the principal debtor, acting at his request, and not at that of the creditor; and, in ordinary cases, it may be assumed that the surety obtains from the principal all of the information which he requires. This is the rule applicable unless there is some fact, which the creditor knows the surety probably will not discover, of such vital importance to the risk that the creditor must have been aware that the non-disclosure would in effect amount to a contrary representation to the surety. The concealment must in fact or in law be fraudulent. There is nothing in the mere nature of the contract of suretyship itself which requires the obligee to disclose to the proposed surety all the material facts affecting the risk. There must be a duty on the part of the obligee to make the disclosure.\nId. at 120-21, 123 S.E.2d at 598 (citations, quotation marks, and ellipses omitted). Thus, the fact that we are addressing a motion for summary judgment instead of a motion to dismiss does not change the applicable law. The question we must consider as to summary judgment is whether, \u201cwhen viewed in the light most favorable to the [plaintiffs], the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is [a] genuine issue as to any material fact[,]\u201d S.B. Simmons Landscaping at -, 665 S.E.2d at 152, specifically whether defendant knew or had\ngood grounds for believing that the . . . [plaintiffs were] being deceived or misled, or that [they were] induced to enter into the contract in ignorance of facts materially increasing the risks, of which [defendant ha[d] knowledge, and [defendant] ha[d] an opportunity, before accepting [plaintiffs\u2019] undertaking, to inform [them] of such facts.\nGant at 199-200, 379 S.E.2d at 867.\nDefendant next contends that Akelaitis and Gant are distinguishable because though plaintiffs claim to be accommodation makers \u201cthe present case does not involve guarantors or sureties who were third parties to the primary loan obligations. Rather, under the plain terms of the promissory notes, [p]laintiffs were co-borrowers with the Wilsons and co-makers of the notes.\u201d\nN.C. Gen. Stat. \u00a7 25-3-419 provides that\n(a) If an instrument is issued for value given for the benefit of a party to the instrument, the \u201caccommodated party\u201d, and another party to the instrument, the \u201caccommodation party\u201d, signs the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument, the instrument is signed by the accommodation party \u201cfor accommodation\u201d.\n(b) An accommodation party may sign the instrument as maker, drawer, acceptor, or indorser and, subject to subsection (d) of this section, is obliged to pay the instrument in the capacity in which the accommodation party signs. The obligation of an accommodation party may be enforced notwithstanding any statute of frauds and whether or not the accommodation party receives consideration for the accommodation.\nN.C. Gen. Stat. \u00a7 25-3-419(a)-(b) (2007). Also, \u201c[w]hether a person is an accommodation party is a question of fact.\u201d N.C. Gen. Stat. \u00a7 25-3-419, Official Comment 3.\nThe evidence when \u201cviewed in the light most favorable to\u201d plaintiffs, see S.B. Simmons Landscaping at -, 665 S.E.2d at 152, forecasts that plaintiffs signed the 29 July 2005 promissory note and therefore incurred liability. Furthermore, plaintiffs signed the note in order for their extended family to receive financing for a greenhouse in which plaintiffs had no ownership interest and from which plaintiff would receive no financial benefit; plaintiffs were also not recipients of the loan proceeds. Thus, the evidence forecasts that plaintiffs \u201csign[ed] the instrument for the purpose of incurring liability on the instrument without being a direct beneficiary of the value given for the instrument\u201d and therefore plaintiffs would have signed \u201cfor accommodation.\u201d N.C. Gen. Stat. \u00a7 25-3-419(a). Though defendant is correct in noting that \u201c[a]n accommodation party may sign the instrument as maker, drawer, acceptor, or indorser[,]\u201d it must be further noted that\n\u201c[a]ny party to a negotiable instrument may be a surety if he signs for the accommodation of another party.\u201d Restatement of Security \u00a7 82 cmt. k (1941 & Supp. 1991-92); see also First Citizens Bank & Trust Co. v. Larson, 22 N.C. App. 371, 376, 206 S.E.2d 775, 779, cert. denied, 286 N.C. 214, 209 S.E.2d 315 (1974) (\u201can accommodation party is always a surety\u201d). This would also include makers and co-makers who sign for accommodation purposes.\nBranch Banking and Trust Co. v. Thompson, 107 N.C. App. 53, 57 n.1, 418 S.E.2d 694, 697 n.1 (citation omitted), disc. review denied, 332 N.C. 482, 421 S.E.2d 350 (1992); see also N.C. Gen. Stat. \u00a7 25-3-419, Official Comment 1 (\u201cAn accommodation party is a person who signs an instrument to benefit the accommodated party either by signing at the time value is obtained by the accommodated party or later, and who is not a direct beneficiary of the value obtained. An accommodation party will usually be a co-maker or anomalous indorser.\u201d). As the evidence \u201cviewed in the light most favorable to\u201d plaintiffs, see S.B. Simmons Landscaping at -, 665 S.E.2d at 152, forecasts they are accommodation parties and thus sureties, see Thompson at 57 n.1, 418 S.E.2d at 697 n.1, suretyship law would apply and defendant\u2019s attempt to distinguish Akelaitis and Gant fails. As we have concluded that all of defendant\u2019s arguments regarding Akelaitis and Gant fail, we now consider whether there were \u201cgenuine issue [s] of material fact\u201d in light of suretyship law. See S.B. Simmons Landscaping at -, 665 S.E.2d at 152.\nB. Genuine Issues of Material Fact\nPlaintiffs argue that all of their claims were erroneously dismissed. Defendant claims summary judgment was properly granted because \u201c[pjlaintiffs did not come forward with any evidence that [defendant] concealed or misrepresented material information regarding the financial condition of the Wilsons and South Mountain Greenhouse and because, as a matter of law, [defendant] did not owe [pjlaintiffs a duty to disclose or warrant such information.\u201d Defendant contends that \u201cthe record is nevertheless void of any evidence showing that [defendant] concealed from [plaintiffs any material information regarding the Wilsons and South Mountain Greenhouse.\u201d\nIn regard to defendant\u2019s contentions, we first note that plaintiffs need not allege defendants made an affirmative misrepresentation to them as \u201c[w]here there is a duty to speak, fraud can be practiced by silence as well as by a positive misrepresentation.\u201d Akelaitis at 525, 214 S.E.2d at 284 (citation omitted). Furthermore, defendant may also' have owed a duty to disclose to plaintiff its knowledge regarding the Wilsons\u2019 and the greenhouse\u2019s financial state. See Gant at 200, 379 S.E.2d at 867; Akelaitis at 526, 214 S.E.2d at 284 (\u201cIf the creditor knows, or has good grounds for believing that the surety is being deceived or misled, or that he was induced to enter into the contract in ignorance of facts materially increasing the risks, of which he has knowledge, and he has an opportunity, before accepting his undertaking, to inform him of such facts, good and fair dealing demand that he should make such disclosure to him; and if he accepts the contract without doing so, the surety may afterwards avoid it.\u201d (citations and quotation marks omitted)).\nIn Gant, the \u201c[pjlaintiff . . . alleged the defendant knew that she was unaware of the financial condition of the principal debtor and knew she was relying on defendant\u2019s good faith and financial expertise in making the loans.\u201d Gant at 200, 379 S.E.2d at 867 (quotation marks omitted). This Court noted that\n[t]he crux of plaintiffs complaint is that defendant failed to fulfill its obligation to inform her of the financial condition of the company whose loans she guaranteed. Although there is no fiduciary relationship between creditor and guarantor, in some instances a creditor owes a duty to the guarantor to disclose information about the principal debtor.\nIf the creditor knows, or has good grounds for believing that the surety or guarantor is being deceived or misled, or that he is induced to enter into the contract in ignorance of facts materially increasing the risks, of which he has knowledge, and he has an opportunity, before accepting his undertaking, to inform him of such facts, good and fair dealing demand that he should make such disclosure to him; and if he accepts the contract without doing so, the surety or guarantor may afterwards avoid it.\n94 N.C. App. at 199-200, 379 S.E.2d at 867 (emphasis added) (citations and brackets omitted). Although this Court has noted that \u201c[i]t is unclear whether a breach of this duty to disclose is more properly labeled a breach of the covenant of good faith and fair dealing or a claim for negligent nondisclosure[,]\u201d see First Union Nat. Bank v. Brown, 166 N.C. App. 519, 532, 603 S.E.2d 808, 818 (2004), we have recognized that an accommodation party may have a claim on this basis. See Gant at 200, 379 S.E.2d at 867. Thus, we disagree with defendant\u2019s contentions and now consider whether there were genuine issues of material fact.\nSummary judgment should not have been granted because the \u201cpleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits . . . show that there [are] . . . genuine issue[s of] . . . material fact.\u201d N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c). Plaintiff alleged defendant made material misrepresentations and Fred Miller, \u201ca commercial lender and real estate specialist in major financial institutions around the countryf,]\u201d filed an affidavit stating that \u201cCFC may have misrepresented its position regarding the Wilsons\u2019 collateral to the Whisnants.\u201d Mr. Miller further averred that\n[f]rom November 22, 2002 through June 2005, the only basis for entering into these loan agreements was the security interest that CFC had obtained in the Whisnants\u2019 farm property. Sound loan practices required that CFC inform the Whisnants in December 2001 and thereafter that there was no reasonable basis upon which to loan these monies to the Wilsons other than the equity provided by the Whisnants\u2019 real estate. If, as the Whisnants contend in their Verified Complaint, they repeatedly questioned CFC regarding the ability of the Wilsons to repay such monies as were actually disbursed by CFC to their account(s), sound loan practices would require that CFC disclose to the Whisnants, in writing, that there was no reason or evidence to believe that the Wilsons could possibly repay the principal amount of these loans.\nIn addition, David Whisnant testified during his deposition that he had worked with Carolina Farm Credit, and specifically Kathy Carroll, since 1984. Ms. Carroll had previously handled loans and deeds of trust for Mr. Whisnant, and he trusted her. Mr. Whisnant testified that it was Ms. Carroll who informed him a co-signer would be needed and that he and his wife \u201cwere depending on [Ms. Carrol] to tell [them] what [they] needed to know, as far as accommodation makers on South Mountain Greenhouse.\u201d As plaintiffs were signing more notes, they began to \u201cquestion the financial health of the South Mountain Greenhouse\u201d and were informed by Ms. Carroll that \u201ceverything looks to be running okay[,]\u201d so they continued signing loan documents.\nWe conclude that the record before us raises a \u201cgenuine issue of material fact[,]\u201d see S.B. Simmons Landscaping at \u2014, 665 S.E.2d at 152, as to whether plaintiffs were \u201cinduced to enter into the contract in ignorance of facts materially increasing the risk, of which [defendant] ha[d] knowledge, and [defendant] ha[d] an opportunity before accepting [plaintiffs\u2019] undertaking, to inform [plaintiffs] of such facts[.]\u201d Crain and Denbo at 120, 123 S.E.2d at 598. We recognize that defendant contends it neither misrepresented nor concealed material information; however, for purposes of summary judgment we must view the evidence forecast in the light most favorable to plaintiffs, and thus a genuine issue of material fact does exist. See S.B. Simmons Landscaping at -, 665 S.E.2d at 152.\n1. Negligence\nNegligence is the breach of a legal duty owed by defendant that proximately causes injury to plaintiff. In order to establish actionable negligence, a plaintiff must show that: (1) defendant failed to exercise due care in the performance of some legal duty owed to plaintiff under the circumstances; and (2) the negligent breach of such duty was the proximate cause of the injury. A duty is defined as an obligation, recognized by the law, requiring the person to conform to a certain standard of conduct, for the protection of others against unreasonable risks.\nGuthrie v. Conroy, 152 N.C. App. 15, 25, 567 S.E.2d 403, 410-11 (2002) (citations, quotation marks, and brackets omitted).\nIn Gant,\n[p]laintiff ha[d] alleged the defendant knew that she was unaware of the financial condition of the principal debtor and knew that she was relying on defendant\u2019s good faith and financial expertise in making the loans. Further, plaintiff alleged the defendant at all times knew or had sufficient information to know the principal debtor was insolvent. Plaintiff has alleged sufficient facts to state a claim against defendant, whether the cause of action is ultimately determined to be one for negligence or breach of duty of good faith, as plaintiff has labeled her claims..\nGant at 200, 379 S.E.2d at 867 (quotation marks omitted).\nHere, the evidence \u201cviewed in the light most favorable to\u201d plaintiffs raises a \u201cgenuine issue of material fact[,]\u201d S.B. Simmons Landscaping at \u2014, 665 S.E.2d at 152, as to whether defendants negligently breached a duty of disclosure to plaintiffs, see Gant at 200, 379 S.E.2d at 867, which resulted in plaintiffs being \u201cinduced to enter into the contract in ignorance of facts materially increasing the risk, of which [defendant] ha[d] knowledge, and [defendant] ha[d] an opportunity before accepting [plaintiffs\u2019] undertaking, to inform [plaintiffs] of such facts[.]\u201d Crain and Denbo at 120, 123 S.E.2d at 598; see Guthrie at 25, 567 S.E.2d at 410-11. Accordingly, the trial court improperly granted summary judgment as to plaintiff\u2019s claim for negligence.\n2. Actual Fraud\nThe essential elements of fraud are: (1) False representation or concealment of a past or existing material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party, A claim for fraud may be based on an affirmative misrepresentation of a material fact, or a failure to disclose a material fact relating to a transaction which the parties had a duty to disclose.\nHardin v. KCS Intern., Inc., -N.C. App. -, -, 682 S.E.2d 726, 733 (2009) (emphasis added) (citations, quotation marks, and brackets omitted). Plaintiffs evidence shows that defendants may have misrepresented or concealed information regarding the financial state of the greenhouse project, in order to induce plaintiffs to cosign the loan documents. Plaintiffs did co-sign the notes and are at risk of losing their farm and home because of the Wilsons\u2019 default. As plaintiffs have demonstrated genuine issues of material fact regarding fraud, the trial court erred in granting summary judgment on plaintiffs\u2019 claim for actual fraud. See id.; see also Gant at 200, 379 S.E.2d at 867.\n3. Fraud in the Inducement\n\u201cThe essential elements of fraud in the inducement are: (1) False representation or concealment of a material fact, (2) reasonably calculated to deceive, (3) made with intent to deceive, (4) which does in fact deceive, (5) resulting in damage to the injured party.\u201d Media Network v. Long Haymes Carr, Inc., -N.C. App. -, 678 S.E.2d 671, 684 (2009) (citation, quotation marks, and brackets omitted). In this instance, as the elements for fraud in the inducement and the forecast of evidence are the same as for actual fraud, we again conclude that the trial court improperly granted summary judgment.\n4. Unfair and Deceptive Trade Practices\n\u201cProof of fraud in the inducement necessarily constitutes a violation of Chapter 75 and shifts the burden of proof from the plaintiff to the defendant, which must then prove that it is exempt from Chapter 75\u2019s provisions.\u201d Media Network at -, 678 S.E.2d at 684. As we have concluded that the trial court erred in granting summary judgment as to plaintiff\u2019s claim for fraud in the inducement, we also conclude that the trial court erred in granting it as to plaintiffs claim for unfair and deceptive trade practices as \u201c[p]roof of fraud in the inducement necessarily constitutes a violation of Chapter 75[.]\u201d Id.\nC. Accommodation Party\nLastly, plaintiffs ask that we conclude they are accommodation makers; however, it is not the duty of this Court to find facts. See In re J.Z.M., 191 N.C. App. 158, 162, 663 S.E.2d 435, 437 (2008) (\u201cThe trial court is the trier of fact[.]\u201d (citation omitted)). As we noted above, there is a genuine issue of material fact as to whether plaintiffs are accommodation makers. The evidence as forecast by plaintiffs, if taken as true, demonstrates that they are accommodation makers; however, we cannot make the factual determination necessary for us to conclude that plaintiffs are accommodation makers as a matter of law. See id.\nIV. Conclusion\nAs we conclude that there was a genuine issue of material fact as to each of plaintiffs\u2019 claims, we reverse the order granting summary judgment and remand for further proceedings.\nREVERSED AND REMANDED.\nJudges GEER and ERVIN concur.", "type": "majority", "author": "STROUD, Judge." } ], "attorneys": [ "Katten Muchin Rosenman LLP, by William L. Sitton, Jr., for plaintiff s-appellants.", "Bell, Davis & Pitt, P.A., by Michael D. Phillips, for defendantappellee." ], "corrections": "", "head_matter": "DAVID NEAL WHISNANT and LOIS MILLER WHISNANT, Plaintiffs v. CAROLINA FARM CREDIT, ACA, Defendant\nNo. COA09-180\n(Filed 18 May 2010)\nSureties\u2014 accommodation makers \u2014 summary judgment \u2014 genuine issue of material fact \u2014 fraud\u2014negligence\u2014unfair trade practices\nThe trial court erred in a case arising out of loan defaults by granting summary judgment in favor of defendant bank on all claims including fraud in the inducement, actual fraud, negligence, and unfair trade practices. The record raised a genuine issue of material fact as to whether plaintiffs were induced to enter into a contract to help their extended family receive financing for a greenhouse in which plaintiffs had no ownership interest or financial benefit, in ignorance of facts materially increasing the risk of which defendant had knowledge, and defendant had an opportunity before accepting plaintiffs\u2019 undertaking to inform plaintiffs of such facts. Further, there was a genuine issue of material fact as to whether plaintiffs were accommodation makers.\nAppeal by plaintiffs from order entered 21 August 2008 by Judge Forrest D. Bridges in Superior Court, Cleveland County. Heard in the Court of Appeals 2 September 2009.\nKatten Muchin Rosenman LLP, by William L. Sitton, Jr., for plaintiff s-appellants.\nBell, Davis & Pitt, P.A., by Michael D. Phillips, for defendantappellee." }, "file_name": "0084-01", "first_page_order": 108, "last_page_order": 120 }