                            NO. COA13-1303

                   NORTH CAROLINA COURT OF APPEALS

                          Filed: 5 August 2014


JOSEPH FAZZARI, et al.,
     Plaintiffs,

    v.                               Mecklenburg County
                                     Nos. 08 CVS 27336, 09 CVS 18264
INFINITY PARTNERS, LLC, et al.,
     Defendants.




    Appeals by Plaintiffs1 from orders entered 8 and 22 March

2012 by Judge W. Erwin Spainhour in Mecklenburg County Superior

Court.   Heard in the Court of Appeals 7 May 2014.


    Ellis & Parker PLLC,2 by L. Neal Ellis, Jr., and Nathaniel
    Parker, for Plaintiffs.

    McGuireWoods LLP, by H. Landis Wade, Jr., and Steven N.
    Baker, for Defendant Fifth Third Bank.

    Robinson Bradshaw & Hinson, P.A., by Douglas M. Jarrell and
    Ty E. Shaffer, for Defendant Wachovia Bank, N.A., now known
    as Wells Fargo Bank, N.A.


    STEPHENS, Judge.

1
   The specific plaintiffs appealing from each order are
identified in our discussion of the procedural history of this
case.
2
  Plaintiffs’ brief styles their appellate counsel as “Ellis &
Anthony” while their reply brief lists “Ellis & Parker, PLLC[.]”
Both briefs name the same two individual attorneys.
                                         -2-



                Procedural History and Factual Background

       This appeal arises from the 2007 failure of Grandfather

Vistas, a real estate development located in Caldwell County.

In 2006, approximately 1,000 acres of land in Caldwell County

was    purchased   for       $10.9   million,        which   Defendants         Infinity

Partners, LLC; Infinity Real Estate Partners, LLC; Source One

Communities LLC; Prudential Source One, LLC; and Peerless Real

Estate Services, Inc.,3 planned to develop.                       The purchase was

financed    through      a     “land     banking”      program      in        which    the

developers sold approximately sixty ten-acre lots for $500,000

each    (“the   founders’       lots”),       with    “buyback”    contracts          that

guaranteed the developers would repurchase each lot for $625,000

within one year.       The purchase contracts for the founders’ lots

also    included    provisions         for     the    developers         to     pay    the

purchasers’ interest from closing until the repurchase.                                The

purchase   contracts     stated        that   purchasers     would       obtain       fixed

rate financing on a thirty-year term at an initial interest rate

not to exceed 7.5% per annum with a loan-to-value ratio of at




3
  The defendants noted here are referred to collectively as “the
developers.”
                                  -3-
least 90%.4    Following repurchase of the founders’ lots, the

developers planned to subdivide the lots into one-acre retail

parcels for resale.     Defendant Blue River Ridge at Blowing Rock,

LLC was formed by Peerless and Source One to purchase, own, and

develop   Grandfather   Vistas   and    to   eventually   buy   back   the

founders’ lots.

    The developers used a real estate company to market the

founders’ lots, and the real estate company, in turn, created a

marketing plan that relied on preferred lender arrangements with

First Charter Bank of North Carolina;5 Wachovia Bank, N.A.;6 and

SunTrust Banks, Inc.7 (collectively, “the lenders”).            Beginning

in May 2006, the developers began selling founders’ lots, and



4
  However, as discussed herein, no Plaintiff obtained a loan on
these terms.   Rather, all of their loans for purchase of the
founders’ lots were of much shorter terms, many for as little as
two years.
5
  First Charter Bank was acquired by Fifth Third Bank, N.A.,
which, following a merger on 30 September 2009, became known as
Fifth Third Bank.    Throughout this opinion, unless otherwise
specified, defendants Brian Kiser and Jeff Collins, former loan
officers with what was then First Charter Bank, are included in
all references to “Fifth Third” or “the lenders.”
6
  Wachovia Bank, N.A., was a subsidiary of Wachovia Corporation.
On 31 December 2008, Wachovia Corporation merged with Well Fargo
& Company.    We refer to this defendant hereafter as “Wells
Fargo.”
7
  The proper party was actually SunTrust Mortgage, Inc., a wholly
owned subsidiary of SunTrust Banks, Inc.
                                       -4-
Plaintiffs were among the purchasers.                 SunTrust and Fifth Third

used Defendant A. Greg Anderson, d/b/a Anderson & Associates,

(“Anderson”) exclusively to perform appraisals of the founders’

lots in connection with those sales.                Wells Fargo did not employ

Anderson     for   any   appraisals    at     issue    in    this   appeal,     using

several other appraisers instead (“the Wells Fargo appraisers”).

Anderson and the Wells Fargo appraisers valued every founder’s

lot at $500,000, regardless of the lot’s specific qualities or

location     in    Grandfather    Vistas.       That    value       was   the   exact

minimum      amount   needed     in   order    to     meet    the    loan-to-value

provision of the purchase contracts.                  The actual value of the

lots ranged from $40,000 to $81,000.8

       Little of the money raised through sales of the founders’

lots   was    invested    in   Grandfather      Vistas,      and     by   2007,   all

8
  Anderson was later suspended by the North Carolina Appraisal
Board because of his involvement in another land development
scheme gone awry which likewise resulted in lawsuits and
subsequent appeals to this Court.    This Court affirmed summary
judgment for Anderson and another appraiser in that matter. See
Williams v. United Cmty. Bank, __ N.C. App. __, 724 S.E.2d 543
(2012).   Fifth Third, Peerless, and several of the individual
developer   defendants  were   also   involved   in  that   land
development/investment scheme.   In an opinion filed 6 December
2011, this Court affirmed summary judgment in favor of Fifth
Third against the Williams plaintiffs on, inter alia, Chapter 75
claims.   See In re Fifth Third Bank, N.A., 217 N.C. App. 199,
719 S.E.2d 171 (2011), cert. denied, 366 N.C. 231, 731 S.E.2d
687 (2012).
                                           -5-
development activity had ceased.                   None of the founders’ lots

were    ever    repurchased      from    Plaintiffs.         As    a    result,        on    16

December 2008, Plaintiffs initiated a lawsuit in file number 08

CVS 27336 against various defendants, including, inter alia, the

developers, the lenders, and Anderson.                      Plaintiffs’ complaint

included claims          against the lenders            for fraud, fraud in the

inducement, negligence, negligent misrepresentation, conversion,

civil    conspiracy,       and    unfair     and       deceptive       trade    practices

(“UDTP”) pursuant to Chapter 75 of our General Statutes.9                          Claims

brought        against    Anderson       included        fraud,        fraud      in        the

inducement, negligence, negligent misrepresentation, conversion,

civil    conspiracy,       and   UDTP.10         The   lenders     filed       answers       in

February       and   March       2009,     asserting       various       defenses           and




9
  Plaintiffs did not bring claims for fraud, fraud in                                       the
inducement, or UDTP against Wells Fargo or SunTrust Bank.
10
  On 19 May 2009, the Chief Justice designated the case in file
number 08 CVS 27336 and a related case in file number 09 CVS
6239 as exceptional pursuant to Rule 2.1 of the General Rules of
Practice for the Superior and District Courts.      The Honorable
Timothy L. Patti, resident Superior Court Judge in Gaston
County, was designated to preside over the cases.     The case in
09 CVS 6239 appears to involve a lawsuit by two additional
purchasers of founders’ lots against Anderson, the lenders, the
developers and others involved in the investment scheme.
                                    -6-
counterclaims,   including      default   by   Plaintiffs       on   promissory

notes securing their loans.11

     On 15 July 2011, Anderson moved for summary judgment on all

remaining    claims   against    him,12   asserting,      inter      alia,   that

Plaintiffs    could   not   show   reliance    on   any    of     his   alleged

misrepresentations.     On the same date, the lenders filed motions

for summary judgment as to all remaining claims against them,13

on their counterclaims against Plaintiffs, and for attorneys’

fees.   On 16 February 2012, the court14 entered summary judgment

in favor of Anderson on all claims against him (“the Anderson



11
   By order entered 27 July 2009, Plaintiffs were permitted to
file an amended complaint, and the lenders filed amended
responsive pleadings thereafter.
12
   From our review of the extraordinarily extensive record in
these appeals, it appears that some of the original plaintiffs
settled or withdrew their claims, or otherwise dropped out of
the case before the lenders and Anderson filed their motions for
summary judgment.
13
   In the motions, Wells Fargo listed Plaintiffs’ remaining
claims against it as negligence, negligent misrepresentation,
conversion, and civil conspiracy.
14
   As noted supra, the Chief Justice designated Judge Patti to
preside over the matter.   Judge Patti signed orders entered in
the matter through September 2010.      Following Judge Patti’s
retirement, the Honorable W. Erwin Spainhour presided over the
matter and signed all orders entered by the court from July 2011
on, including the lenders’ summary judgment order and Anderson’s
summary judgment order.
                                    -7-
summary judgment order”).          On 8 March 2012, the trial court

entered an order which         (1) granted the lenders’ motions for

summary     judgment,   (2)   dismissed   with    prejudice     all    remaining

claims against the lenders, (3) denied Plaintiffs’ motion to

amend their complaint to add UDTP claims against Wells Fargo and

SunTrust,15 and (4) taxed costs against Plaintiffs (“the lenders’

summary judgment order”).         On the same day, the court entered

judgments in favor of the lenders on their counterclaims against

Plaintiffs Joseph Fazzari (Fifth Third); Danuta K. McIvor (Fifth

Third); Scott W. McQuay (Fifth Third); Charles H. Owens (Fifth

Third); William Decker (Fifth Third); Carol H. Harris (Wells

Fargo); Roscoe E. Harris         (Wells Fargo); Renee C. Miller, as

Trustee of Renee C. Miller Living Trust (Wells Fargo); Darryl

Strack (Wells Fargo); Kathryn M. Strack (Wells Fargo); Christa

S. Tighe (Wells Fargo); and James K. Tighe, Jr. (Wells Fargo).

On 19 March 2012, the court entered an order allowing Anderson’s

verified bill of costs.          On 22 March 2012, the court entered

orders allowing the lenders’ verified bills of costs.

       In   June   2013,   Plaintiffs     filed    a   motion    for    default

judgment against Defendants Kevin J. Foster, Neil O’Rourke, and



15
     See footnote 9, supra.
                                            -8-
Anthony Porter.         Orders of default had previously been entered

against    these    defendants,            who    had    key     roles      in    managing

Peerless, one of the Grandfather Vistas development entities.

The motion also sought voluntary dismissals with prejudice of

the   remaining    claims       against      Defendants        P.     Marion      Rothrock;

Rothrock Engineering; Blue River Ridge at Blowing Rock, LLC;

Grandfather Vistas, LLC; Infinity Partners, LLC; and Infinity

Real Estate Partners, LLC.                 On 10 July 2013, the trial court

entered    a   final      order       in    the     matter       which      (1)     granted

Plaintiffs’ motion for default judgment jointly and severally

against    Foster,      O’Rourke,          and     Porter        in   the      amount     of

$22,588,156.07,         and     (2)        granted       Plaintiffs’         motion       to

voluntarily dismiss with prejudice and without costs the other

remaining defendants.

      On   8   August    2013,    Plaintiffs            Joseph    Fazzari;        K.   Scott

Fischer;   Thomas    L.       Barnhardt;         Kimberly    Barnhardt;          Windspirit

Properties, LLC; William Decker; Douglas M. Ellis; Kelly Ellis;

Lynn Falero; Ralph Falero; Kenneth Fischer; Carol H. Harris;

Roscoe E. Harris; Scott W. McQuay; Renee C. Miller, as Trustee

of Renee C. Miller Living Trust; Charles H. Owens; Danuta K.

McIvor; Darryl Strack; and James K. Tighe, Jr., gave notice of

appeal from the 8 March 2012 lenders’ summary judgment order and
                                   -9-
the 22 March 2012 lenders’ cost orders.16               On the same date,

Plaintiffs Joseph Fazzari; Danuta K. McIvor; Scott W. McQuay;

Charles H. Owens; William B. Decker; Carol H. Harris; Roscoe E.

Harris; Renee C. Miller; Darryl J. Strack; Kathryn M. Strack;17

Christa S. Tighe; and James K. Tighe, Jr., gave notice of appeal

from the 8 March 2012 judgments entered against them on the

various lenders’ counterclaims.18

     On   16   December   2013,   Wells   Fargo   moved      to   dismiss   the

appeals in COA13-1303 of Darryl Strack; James K. Tighe, Jr.;

16
  On 5 March 2014, Plaintiffs’ counsel notified this Court that
K. Scott Fischer and Kenneth Fischer, the only remaining
appellants as to SunTrust, had reached a final settlement of all
matters at issue in this appeal, and moved to dismiss SunTrust
from the appeal. That motion was allowed by order of this Court
entered 7 March 2014. Accordingly, in the discussion section of
this opinion, “the lenders” refers only to Wells Fargo and Fifth
Third.
17
   Kathryn M. Strack       withdrew      her   notice   of    appeal   on   26
September 2013.
18
   On 8 August 2013, in COA13-1304, various plaintiffs gave
notice of appeal from the 16 February 2012 Anderson summary
judgment order and the 19 March 2012 cost order. On 18 November
2013, some of those plaintiff-appellants gave notice that they
were withdrawing their appeals as to the Anderson summary
judgment order, but did not withdraw their appeals from the cost
order.   However, on 30 April 2014, the remaining plaintiff-
appellants gave notice to this Court that they had reached a
final settlement of all claims against Anderson, rendering the
appeal in COA13-1304 moot.   They moved to dismiss that appeal,
and this Court granted that motion and dismissed the appeal in
COA13-1304 by order entered 30 April 2014.
                                       -10-
Christa       S.   Tighe;    and    Renee      Miller    (collectively,          “the

bankruptcy appellants”).           The motion was referred to this panel

by order entered 6 January 2014.                In June and July 2012, the

bankruptcy appellants filed cases under Chapter 7 of the United

States Bankruptcy Code.            In September and October 2012, all of

the bankruptcy appellants’ obligations to Wells Fargo arising

from    the    costs   order    and    the     judgments     on    Wells   Fargo’s

counterclaims were discharged.                Wells Fargo asserts that the

bankruptcy appellants could recover a windfall if this Court

resolves this appeal in Plaintiffs’ favor.                       In light of the

result reached in this matter, resolving all issues in favor of

the lenders as discussed below, we dismiss as moot Wells Fargo’s

motion to dismiss.

                                    Discussion

       Plaintiffs argue that the trial court erred in granting the

lenders’      motion   for   summary   judgment     on     the    claims   for    (1)

negligence and negligent misrepresentation and (2) UDTP.19                        We

affirm.

I. Standard of review



19
   Plaintiffs have abandoned their appeals as to the trial
court’s grant of summary judgment on their claims for fraud and
civil conspiracy by failing to argue them in their brief.   See
N.C.R. App. P. 28(a).
                                       -11-
              It is well settled that summary judgment is
              appropriate     only    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.     The movant must clearly
              demonstrate the lack of any triable issue of
              fact and entitlement to judgment as a matter
              of law.    The record is considered in the
              light most favorable to the party opposing
              the motion.

Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C.

214, 219-20, 513 S.E.2d 320, 324 (1999) (citations, internal

quotation marks, and emphasis omitted).

II. Negligence and negligent misrepresentation claims

       Plaintiffs   first    contend     that    the   trial   court   erred   in

granting      summary    judgment   on   their    negligence     and   negligent

misrepresentation claims against the lenders.               We disagree.

              North Carolina expressly recognizes a cause
              of action in negligence based on negligent
              misrepresentation. It has long been held in
              North Carolina that the tort of negligent
              misrepresentation   occurs when (1) a party
              justifiably relies, (2) to his detriment,
              (3)   on    information   prepared   without
              reasonable care, (4) by one who owed the
              relying party a duty of care.

Walker v. Town of Stoneville, 211 N.C. App. 24, 30, 712 S.E.2d

239,    244     (2011)    (citations     and     internal      quotation   marks

omitted).
                                     -12-
       In general, “a lender is only obligated to perform those

duties expressly provided for in the loan agreement to which it

is a party.”        Camp v. Leonard, 133 N.C. App. 554, 560, 515

S.E.2d 909, 913 (1999) (holding lender owed no duty to borrower

with respect to inspection or appraisal of its collateral); see

also Lassiter v. Bank of N.C., 146 N.C. App. 264, 268, 551

S.E.2d 920, 923 (2001) (holding lender owed borrower no duty to

inspect house being built with loan proceeds); Perry v. Carolina

Builders Corp., 128 N.C. App. 143, 150, 493 S.E.2d 814, 818

(1997) (holding lender owed no duty to ensure loan proceeds were

used   for   a    specific   purpose   in   the   absence   of    an   express

contract provision); Wells v. N.C. Nat’l Bank, 44 N.C. App. 592,

596, 261 S.E.2d 296, 298 (1980) (holding lender had no duty “to

attend to details of the plaintiff’s [land] purchase other than

the financial services it offered”).

       Plaintiffs acknowledge that the lenders did not violate any

duties   expressly    provided   for   in   their    loan   agreements,   but

contend that the lenders owed them duties which “flow from at

least two sources:      [(1)] a common law negligence duty and [(2)]

the    Mortgage    Lending   Act.”     We   are     unpersuaded   by   either

contention.

             A fiduciary duty arises when there has been
             a special confidence reposed in one who in
                                          -13-
             equity and good conscience is bound to act
             in good faith and with due regard to the
             interests of the one reposing confidence.
             However,     an     ordinary     debtor-creditor
             relationship generally does not give rise to
             such   a   special     confidence:    the   mere
             existence of a debtor-creditor relationship
             between the parties does not create a
             fiduciary relationship. This is not to say,
             however, that a bank-customer relationship
             will   never    give   rise   to   a   fiduciary
             relationship given the proper circumstances.

Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 60-61,

418 S.E.2d 694, 699 (citations, internal quotation marks, and

brackets omitted), disc. review denied, 332 N.C. 482, 421 S.E.2d

350 (1992).

       Plaintiffs cite this Court’s opinion in Dallaire v. Bank of

Am.,     N.A.,   for   the     proposition       that,    “when     a   financial

institution      undertakes    to    provide     a   customer    with   a   service

beyond    that   inherent     in    the    creditor-debtor      relationship,    it

must do so reasonably and with due care.”                 __ N.C. App. __, __

n.5,   738    S.E.2d   731,    735    n.5    (2012)    (emphasis    added).     In

Dallaire, we reversed and remanded a grant of summary judgment

in favor of the bank because there existed a question of fact

“as to whether or not [the lender] sought to give legal advice

to   [the    investment   purchasers].”          Id.     Likewise,      Plaintiffs

assert that the lenders here went beyond the role of commercial

lending when they acted as “cheerleaders” and “promoters” of
                                     -14-
Grandfather Vistas by using Anderson and other appraisers to

“churn[] out ‘cookie cutter’ appraisals,” “interfered with the

usual   appraisal   process,”    and    “falsified    loan   documents     and

concealed the true purpose of the loans from underwriters[.]”20

     However,   our   Supreme    Court      has   recently   reversed    this

Court’s decision in        Dallaire, reaffirming that, “[g]enerally,

the home loan process is regarded as an arm’s length transaction

between   parties     of     equal     bargaining    power    and,      absent



20
   As noted supra, Anderson performed all the appraisals of
founders’ lots for SunTrust and Fifth Third, but Wells Fargo
used other appraisers in its underwriting process and did not
employ Anderson.   In his appraisals, Anderson used only other
lots within Grandfather Vistas as comparable properties, or
“comps,” a crucial part of the valuation process.    Plaintiffs
assert that the lenders withheld information about the buyback
and other provisions in the purchase contracts in an effort to
manipulate the appraisal process to ensure inflated values.
Plaintiffs also argue that Anderson’s use of other Grandfather
Vistas’ lots as comps shows that the appraisal process was
“rigged” toward inflated values.  However, at least two of the
Wells Fargo appraisers testified that they were aware of the
buyback provision and considered the provision in performing
their appraisals. One of those appraisers took the further step
of using properties located from 16 to 23 miles outside of
Grandfather Vistas as comps in his appraisal.   The Wells Fargo
appraisers still valued each founder’s lot at $500,000.
Accordingly, even if there were a cause of action for negligent
underwriting of loans for the purchase of real estate,
Plaintiffs would be unlikely to prevail since the actions
complained of (concealment of contract agreement provisions and
the use of Anderson for numerous appraisals) do not appear to
have had any impact on the appraised values of the founders’
lots.
                                        -15-
exceptional circumstances, will not give rise to a fiduciary

duty.”    Dallaire v. Bank of Am., N.A., __ N.C. __, __, __ S.E.2d

__, __ (2014), available at 2014 N.C. LEXIS 408.                      The Supreme

Court went on to hold that, even in an exceptional circumstance

where a loan officer owes a borrower some duty beyond the terms

of the loan agreement, “a borrower cannot establish a claim for

negligent misrepresentation based on a loan officer’s statements

. . . if the borrower fails to make reasonable inquiry into the

validity of those statements.”                 Id. at __, __ S.E.2d at __.

Thus, where the borrowers

            put forth no evidence that they made [such
            an] inquiry or were prevented from doing so,
            they   have   failed   to   demonstrate  the
            justified reliance necessary to support
            their negligent misrepresentation claim. . .
            . [and] the trial court [does] not err in
            granting summary judgment for [the lender on
            the borrowers’] negligent misrepresentation
            claim.

Id. at __, __ S.E.2d at __.

      Here, far from being exceptional circumstances outside the

normal creditor-debtor relationship, appraisals and underwriting

are     integral     parts    of       the     commercial      lending     process.

Plaintiffs cite no case from this State in which courts have

found    that   a   lender   had   a    common    law   duty    to   the   borrower

regarding the manner in which the lender undertook appraisals or
                                             -16-
underwriting in connection with making loans.                           To the contrary,

our    State’s        case     law   is     clear    that        such    appraisals      and

underwriting are for the benefit of the lenders, not for the

borrowers.      See, e.g., Camp, 133 N.C. App. at 559, 515 S.E.2d at

913.    Simply put, in North Carolina, there is no cause of action

for negligent underwriting of loans for the purchase of real

estate.     Further, even were there such a claim under the law of

this   State,      Plaintiffs        have    forecast       no    evidence     that    they

undertook their own independent inquiries into the values of the

lots (such as obtaining their own independent appraisals) or

were prevented from doing so.                 Accordingly, Plaintiffs could not

demonstrate        the    justified        reliance      necessary        to   support     a

negligent misrepresentation claim.

       We   find      Plaintiffs’         reliance     on    the        lenders’     alleged

violations       of      the      Mortgage     Lending      Act     (“MLA”)21        equally

unavailing.        Plaintiffs cite Guyton v. FM Lending Servs., Inc.,

for the proposition that the MLA provides a source of duties for

tort-based    causes         of    action    because     “the      relevant        statutory

language [of the MLA] expressly prohibits misrepresentation or

concealment of the material facts likely to influence, persuade,



21
  The MLA was repealed effective 31 July 2009.                           N.C. Sess. Laws
2009-374, s. 1.
                                      -17-
or induce an applicant for a mortgage loan or a mortgagor to

take a mortgage loan.”            199 N.C. App. 30, 43, 681 S.E.2d 465,

475 (2009) (citations, internal quotation marks, ellipsis, and

some brackets omitted)).          In Guyton, the plaintiffs alleged that

the lender defendant “actively and intentionally withheld the

information that the property lay in a flood plain — including

retention of surveys and certifications that contained relevant

information     and    affirmative    obstruction        of   [the   p]laintiffs’

access    to   important    information      —    in    order   to   induce   [the

p]laintiffs to purchase the property.”                 Id. at 42-43, 681 S.E.2d

at 475.

    We reject Plaintiffs’ reliance on the MLA on two bases.

First, the MLA applied only to loans taken by natural persons

“primarily     for    personal,    family,   or    household     use,   primarily

secured by either a mortgage or deed of trust on residential

real property located in North Carolina.”                N.C. Gen. Stat. § 53-

243.01(15) (2005) (emphasis added).              Here, it is undisputed that

the loans taken out by Plaintiffs were to finance the purchase

of founders’ lots as investments and not for residential use by

the investment purchasers.           The founders’ lots were explicitly

marketed as investment vehicles.             The evidence in the record is

that no Plaintiff took out a loan to purchase a founder’s lot
                                              -18-
“primarily    for      personal,        family,        or    household         use[.]”         Id.

Plaintiffs’ own complaint describes the sale of the founders’

lots as an “Investment Scheme” and consistently refers to the

investment       purchasers            as     “investors.”                The         investment

purchasers,      who    purchased           the    founders’       lots     explicitly         and

intentionally      for    investment              purposes,    cannot          now    claim    the

protection of a statutory scheme explicitly intended to govern

residential rather than investment real estate mortgages.

      Despite     the     fact    that        the     loans   were     indisputably            for

investment       purposes,       Plaintiffs           urge    that    the        lenders       are

estopped from       avoiding       the applicability of the MLA on this

basis because “[t]he lenders treated the loans as residential or

home loans in order to avoid their own commercial/investment

guidelines which would have prevented these loans from meeting

the   90%   [loan-to-value]            financial        condition         in    the    purchase

contracts.       The lenders’ guidelines for investment loans would

permit loans only in the range of 65% to 80% [loan-to-value].”

Plaintiffs       defeat    their       own        argument    on     this       point.         The

lenders’ internal guidelines regarding permitted loan-to-value

ratios for various types of loans are not intended to protect

Plaintiffs or any other borrowers.                      Rather, those policies are

intended    to    protect        the        lenders    and    presumably             reflect    an
                                        -19-
assessment      of   the    relative     riskiness     of       residential    versus

commercial real estate loans.               The MLA applied to residential

loans and was intended to protect residential borrowers.                           See

N.C. Gen. Stat. § 53-243.01(15).                  As noted supra, Plaintiffs

were not residential borrowers and their loans were                           not, in

fact,   residential        loans.      No   labeling       or    treatment    by   the

lenders    in   their      internal     underwriting        process    altered     the

loans’ true nature so as to bring them under the ambit of the

MLA.

       Second, as discussed supra, even if the MLA did apply to

Plaintiffs’ loans such that it could be the source of duties for

their     negligence-based      causes      of     action,       for   the    reasons

previously      stated,      Plaintiffs        could   not        demonstrate      the

justified reliance required to prevail on those claims.                       In sum,

we reject both of Plaintiffs’ arguments and conclude that the

trial court did not err in granting summary judgment for the

lenders on the negligence-based claims.

III. UDTP claims

       Plaintiffs    Decker,        Fazzari,     McIvor,    McQuay,     and    Owens22

(collectively, “the Fifth Third plaintiffs”) also contend that



22
  Plaintiffs did not assert any claims under Chapter 75 against
Wells Fargo.    In addition, the appeal in COA13-1303 as to
                                      -20-
the trial court erred in granting summary judgment on their UDTP

claims against Fifth Third.         We disagree.

       It is well established that

             [a] claim for unfair and deceptive trade
             practices under N.C. Gen. Stat. § 75.1-1
             must allege that:        (1) the defendant
             committed an unfair or deceptive act or
             practice,    or   an    unfair    method  of
             competition, (2) in or affecting commerce,
             (3) which proximately caused actual injury
             to the plaintiff or to the plaintiff’s
             business.    Where an unfair or deceptive
             practice claim is based upon an alleged
             misrepresentation by the defendant, the
             plaintiff must show actual reliance on the
             alleged   misrepresentation    in   order to
             establish that the alleged misrepresentation
             proximately caused the injury of which [the]
             plaintiff complains.

Sunset Beach Dev., LLC v. Amec, Inc., 196 N.C. App. 202, 211,

675 S.E.2d 46, 53 (2009) (citations, internal quotation marks,

and    brackets   omitted).       “Actual     reliance   is    demonstrated    by

evidence [the] plaintiff acted or refrained from acting in a

certain      manner    due   to   [the]      defendant’s      representations.”

Pleasant Valley Promenade v. Lechmere, Inc., 120 N.C. App. 650,

663,   464    S.E.2d   47,   57   (1995)    (citation    omitted).     Where   a

plaintiff cannot forecast evidence of actual reliance, summary



SunTrust was dismissed by order of this Court entered 7 March
2014.   The five plaintiffs named here are the only Fifth Third
borrowers remaining in this appeal.
                                         -21-
judgment for the defendants is proper.                   Sunset Beach Dev., LLC,

196 N.C. App. at 212, 675 S.E.2d at 54.

     On   appeal,       the   Fifth    Third    plaintiffs     allege      that       they

relied on misrepresentations by Fifth Third and the appraisals

by Anderson in making their decisions to take out the loans on

which they later defaulted.               The Fifth Third plaintiffs also

assert    that      Fifth     Third     wrongfully       withheld        the     buyback

agreements from their underwriters and Anderson in an effort to

inflate the appraisals.

     As for the alleged misrepresentations, our review of the

record    reveals    that     Decker,    Fazzari,       McIvor,    and    McQuay       all

testified that Fifth Third did not make any misrepresentations

to them in regard to their loans.                       Owens testified that an

employee of Fifth Third told him that Grandfather Vistas was

“beautiful,      that    it   should     do     well”    and   vouched         that   the

developers    were      the   “real     deal.”23        However,    even       if   these

statements could be construed as factual misrepresentations as

opposed to mere expressions of opinion, the remarks were made

after     Owens      signed     the      purchase        agreement,        and,        not

23
   The Fifth Third plaintiffs quote an additional alleged
affirmative misrepresentation made by an agent of the bank to
another borrower, but that borrower is not a party to this
appeal.   Accordingly, the statement is irrelevant in resolving
the appeal of the Fifth Third plaintiffs.
                                               -22-
surprisingly,         Owens    testified         that     he    did     not   rely    on    the

statements in deciding whether to buy his lot.

     In regard to the assertion that Fifth Third withheld the

buyback    agreements         from    Anderson,         the    Fifth     Third    plaintiffs

fail to note that Anderson testified to having a copy of at

least     one    contract       which          included       the      buyback    agreement.

Further, as noted in footnote 20 supra, appraisers for Wells

Fargo who were provided with copies of the buyback agreement

still reached a value of $500,000 for each of the founders’ lots

they appraised.

     As    for    the    Fifth       Third      plaintiffs’         alleged      reliance    on

Anderson’s appraisals, we find this appeal governed by the same

reasoning       employed      in     In    re     Fifth        Third     Bank,    N.A.,     and

Williams,       and     in    light       of     the    virtually         identical       facts

presented here, we reach the same result.                           As noted supra, those

appeals involved, inter alia, UDTP claims by investors who took

out loans from Fifth Third to purchase lots in a development

called the Villages of Penland as part of an investment scheme.24

In re Fifth Third Bank, N.A., 217 N.C. App. at 202, 719 S.E.2d



24
  Williams was an appeal from the grant of summary judgment in
favor of Anderson, while In re Fifth Third Bank, N.A., arose
from a summary judgment order in favor of the lender. We refer
to the appeals collectively as “the Penland cases.”
                                     -23-
at 173-74.    In the Penland cases, as here, the plaintiffs were

purchasers of lots in another real estate investment scheme in

which   Anderson   (and    another   appraiser)   appraised    a     large   of

number of lots at an identical, inflated value to meet the loan-

to-value conditions required to obtain bank loans.             Id. at 207-

08, 719 S.E.2d at 177.           The Penland scheme, like that here,

involved   contracts      that   promised   repurchase   of   lots    with   a

guaranteed profit for the investors.          Id. at 207, 719 S.E.2d at

177.     As with Grandfather Vistas, the development was never

completed, and investors were left with large loans and lots

worth only a fraction of their appraised values.               Id. at 202,

719 S.E.2d at 174.

       In Williams, we noted that, “[w]here a plaintiff cannot

forecast evidence of actual reliance, summary judgment for the

defendants is proper[,]” __ N.C. App. at __, 724 S.E.2d at 549

(citation omitted), and then observed:

           All   of  the   evidence   shows that   [the
           p]laintiffs made their decisions to invest
           in the development and contracted to do so
           without any awareness of, much less reliance
           on, the Anderson[] appraisals.   Even had .
           . .    Anderson[]    appraised   the    lots
           differently, [the p]laintiffs would still
           have been obligated to purchase them at the
           prices agreed to in the purchase contracts.
           [The p]laintiffs cannot have relied on
           information they did not see and did not
           know existed (some of which did not, in
                                    -24-
              fact, yet exist) at the time of their
              decisions.       Because   [the    p]laintiffs
              forecast no evidence that they actually
              relied on the appraisals in deciding to make
              their investments, the trial court properly
              granted   summary   judgment    to   .   .   .
              Anderson[].

Id. at __, 724 S.E.2d at 550.          Likewise, in In re Fifth Third

Bank, N.A., in considering summary judgment for Fifth Third on

UDTP claims, we concluded that “no evidence tend[ed] to show

that   [the    p]laintiffs’   decision      to   invest   .    .   .    bore    any

relation to the appraised value of the lots which they purchased

or that [the p]laintiffs relied in any way upon the allegedly

defective     appraisals   which   [Fifth    Third]   procured         when    they

decided to invest . . . .”         217 N.C. App. at 211, 719 S.E.2d at

179.     As a result, we affirmed summary judgment in favor of

Fifth Third on the plaintiffs’ UDTP claims.                   Id. at 213, 719

S.E.2d at 180.

       Here, just as in the Penland cases, the purchase contracts

were not subject to any appraisal contingencies.25                     Just as in



25
  The Fifth Third plaintiffs assert that the purchase agreements
did contain an appraisal contingency condition, to wit, language
stating that a buyer “must be able to obtain a conventional loan
at a fixed rate in the principal amount of 90% [loan-to-value]
for a term of 30 years at an initial interest rate not to exceed
7.5% per annum . . . .”        However, none of the purchasers
obtained 30-year conventional loans on the terms specified in
this language. Rather, each of the loans involved much shorter
                                        -25-
the   Penland      cases,     the   Fifth   Third    plaintiffs      signed     their

purchase   contracts,         obligating    them     to   go    forward   with    the

purchase      of   the    founders’    lots,    before         Anderson   had    even

performed the appraisals in question.                     Thus, just as in the

Penland cases, the Fifth Third plaintiffs “cannot have relied on

information they did not see and did not know existed (some of

which   did    not,      in   fact,   yet   exist)    at    the    time   of    their

decisions” to sign the purchase contracts.26                     See Williams, __



terms and higher rates of interest.
26
  As in the Penland cases, the Fifth Third plaintiffs’ lack of
reliance on the appraisals is not surprising since neither the
developers nor the purchasers of the lots were concerned about
the actual value of the founders’ lots.     The purchase of the
lots by the Fifth Third plaintiffs was simply a necessary step
in an investment scheme which they believed would guarantee them
a quick $125,000 profit.   Under the scheme, the profit for the
Fifth Third plaintiffs had nothing to do with the value of the
lots themselves; all that mattered was the promise in the
purchase contract for the developers to (1) pay the interest on
the purchase loans and (2) repurchase each lot for $125,000 more
than the sales price in one year. Indeed, it is unclear whether
the   sales  of   the  founders’    lots were   more  accurately
characterized as securities transactions, which fall outside the
provisions of Chapter 75. See In re Fifth Third, N.A., 217 N.C.
App. at 211 n.6, 719 S.E.2d at 179 n.6 (“The fact that the
purchase price that [the p]laintiffs paid for the lots in
question was identical and bore no apparent relation to the
actual value of the relevant lots in their undeveloped state may
cut against, instead of in favor of, [the p]laintiffs’ position.
The fact that each lot was appraised and priced at the same
value may suggest that the investments in question amounted to a
securities transaction not subject to the UDTP [Act], rather
than a loan.”) (citations omitted).
                                       -26-
N.C. App. at __, 724 S.E.2d at 550.                We are utterly unable to

distinguish the relevant circumstances here from those presented

in the Penland cases, and thus we reach the same result.                      See In

re Appeal from Civil Penalty, 324 N.C. 373, 384, 379 S.E.2d 30,

37 (1989) (holding that “[w]here a panel of the Court of Appeals

has   decided   the   same    issue,    albeit     in    a    different     case,   a

subsequent panel of the same court is bound by that precedent,

unless it has been overturned by a higher court”).                       In light of

the    Fifth    Third    plaintiffs’          inability        to   show      either

misrepresentations      or     reliance       on   the       allegedly     negligent

appraisals, the trial court properly granted summary judgment on

their UDTP claims.           Accordingly, the Fifth Third plaintiffs’

UDTP arguments are overruled.

      AFFIRMED.

      Judges STROUD and MCCULLOUGH concur.
