              IN THE COURT OF APPEALS OF NORTH CAROLINA

                                   No. COA19-661

                                 Filed: 3 March 2020

Henderson County, No. 18-CVD-1056

SUSAN GREEN, Plaintiff,

             v.

LISA BLACK, Defendant.


      Appeal by Defendant from order entered 26 November 2018 by Judge C.W.

McKeller in Henderson County District Court. Heard in the Court of Appeals 7

January 2020.


      Cosgrove Law Office, by Timithy R. Cosgrove, for Plaintiff-Appellee.

      Stam Law Firm, by R. Daniel Gibson, for Defendant-Appellant.


      COLLINS, Judge.


      Defendant Lisa Black appeals from the trial court’s 26 November 2018 order

granting Plaintiff Susan Green’s motion for summary judgment made pursuant to

North Carolina Rule of Civil Procedure 56. Defendant contends that there exist

genuine issues of material fact regarding (1) the construction of the promissory note

that is central to the parties’ dispute and (2) whether the parties breached that note,

and that the trial court erred by granting Plaintiff summary judgment. We affirm.
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                                     Opinion of the Court



                                I.        Background

      On 21 April 2015, Plaintiff loaned Defendant $50,000 in exchange for a

promissory note (the “Note”). Under the terms of the Note, which Defendant drafted,

Defendant promised to pay Plaintiff the $50,000 principal plus “interest payable on

the unpaid principal at the rate of 2% per annum (or a total of $1000 USD), calculated

yearly and not in advance.” The Note also set forth as follows:

             2. This Note will be paid on December 1, 2015. If any
             additional amount is required to fulfill the obligation of
             $51,000 USD total to [Plaintiff], an additional Note will be
             created for the remaining amount due. All diligence will
             be made to meet this payment obligation on the first date
             it is due.

      As of 1 December 2015, Defendant had paid only $32,000 of the $51,000 the

parties agree Defendant owed Plaintiff under the Note. Thereafter, Defendant paid

an additional $6,150 towards the outstanding debt she owed to Plaintiff under the

Note, which Plaintiff accepted. Defendant also attempted to make other partial

payments on the debt which Plaintiff refused to accept.

      On 26 June 2018, Plaintiff filed a verified complaint in which she (1) alleged

that Defendant had defaulted on the Note and (2) sought the remaining $12,850 she

alleged she was owed under the Note. Defendant answered the complaint on 27 July

2018. In her answer, Defendant admitted that she had not fully paid her debt

obligation under the Note, but argued that she “has never refused to pay back this

loan, is not in default of this loan, and is waiting for a reasonable payment schedule


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to be written and agreed to between [Plaintiff] and [Defendant] for this loan.”

Defendant further stated that she “has in good faith made payments to the Plaintiff

on the first of each month, voluntarily beginning on [sic] January 2016, until the

Plaintiff would meet to create a new Note and mutually agreed upon payment

schedule.” Regarding the “payment schedule” she sought, Defendant pled that:

                 Item Number 2 of the Note states that the Note be paid on
                 December 1, 2015, and if any additional amount is still
                 owed of the $51,000USD, after that date, of the personal
                 loan to [Plaintiff], that an additional new Note will be
                 created between [Plaintiff] and [Defendant] with a
                 mutually agreed upon payment schedule for the remaining
                 amount due. Both [Plaintiff] and [Defendant] on th[e Note]
                 were fully aware of this fact and it was communicated at
                 length upon the signed acceptance of the [Note] by both
                 parties.

       Defendant moved to dismiss1 Plaintiff’s complaint on 21 August 2018, and filed

a memorandum of law in support arguing, inter alia, that the complaint should be

dismissed because “Defendant is willing to repay the loan, but is waiting for a meeting

with the Plaintiff to be able to create a new repayment Note with mutually agreed

upon repayment terms and schedule.”2

       Plaintiff moved for summary judgment pursuant to N.C. Gen. Stat. § 1A-1,

Rule 56, on 24 October 2018. On that same date, Plaintiff also filed an affidavit of


       1 The pro se motion to dismiss does not specify the procedural rule under which the motion

was brought.

       2   The record does not reflect whether the trial court ruled upon Defendant’s motion to dismiss.


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                                          Opinion of the Court



her own in support of her motion for summary judgment, in which she stated that the

Note “contains ambiguous language upon which the Defendant is relying as a defense

to the Plaintiff’s complaint.”         On 15 November 2018, Plaintiff’s counsel filed an

affidavit in support of Plaintiff’s motion for summary judgment noting that there

were checks written by Defendant to Plaintiff in 2016 which “Plaintiff refused to cash

upon advice of Counsel” and for which “Defendant has mistakenly credited herself”

in her filings to the trial court. Both Plaintiff and Plaintiff’s counsel attested that the

sum due under the Note was $12,850, as sought by the complaint. Defendant did not

respond to Plaintiff’s motion for summary judgment with an opposing motion or any

affidavit or other proffer of evidence of her own.3

        On 26 November 2018, the trial court entered an order granting Plaintiff’s

motion for summary judgment, and Defendant timely appealed.

                                         II.     Discussion

        This Court has said:

                The purpose of summary judgment is to eliminate formal
                trials where only questions of law are involved by
                permitting penetration of an unfounded claim or defense in
                advance of trial and allowing summary disposition for
                either party when a fatal weakness in the claim or defense
                is exposed.


        3  Defendant’s pro se filings reflected within the record on appeal are not verified. Accordingly,
Defendant’s filings contain mere allegations, which are not evidence, and do not create triable issues
of fact in the face of contradictory evidence. Cf. Page v. Sloan, 281 N.C. 697, 705, 190 S.E.2d 189, 194
(1972) (“A verified complaint may be treated as an affidavit if it (1) is made on personal knowledge, (2)
sets forth such facts as would be admissible in evidence, and (3) shows affirmatively that the affiant
is competent to testify to the matters stated therein.”).

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                                  Opinion of the Court



             Summary judgment is proper 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 party moving for
             summary judgment ultimately has the burden of
             establishing the lack of any triable issue of fact.
             ....
             Once the party seeking summary judgment makes the
             required showing, the burden shifts to the nonmoving
             party to produce a forecast of evidence demonstrating
             specific facts, as opposed to allegations, showing that he
             can at least establish a prima facie case at trial. To hold
             otherwise . . . would be to allow plaintiffs to rest on their
             pleadings, effectively neutralizing the useful and efficient
             procedural tool of summary judgment.

Draughon v. Harnett Cty. Bd. of Educ., 158 N.C. App. 208, 211-12, 580 S.E.2d 732,

735 (2003) (internal quotation marks, brackets, and citations omitted).

             Our standard of review of an appeal from summary
             judgment is de novo. The evidence produced by the parties
             is viewed in the light most favorable to the non-moving
             party. If the evidentiary materials filed by the parties
             indicate that a genuine issue of material fact does exist, the
             motion for summary judgment must be denied.

Nationstar Mortg. LLC v. Curry, 822 S.E.2d 122, 125-26 (N.C. Ct. App. 2018) (internal

quotation marks, brackets, and citations omitted).

      Defendant contends that the trial court erred by granting Plaintiff’s motion for

summary judgment “because (1) the Note’s terms are ambiguous or, if they are

unambiguous, [Defendant] was not in default and (2) the Note contains an

unenforceable agreement to agree or, if it is enforceable, [Plaintiff] breached the


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                                    Opinion of the Court



Note.”     Both the purported ambiguity and the agreement to agree upon which

Defendant’s arguments on appeal focus are found within Section 2 of the Note.

Accordingly, based upon the “pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits[,]” N.C. Gen. Stat. § 1A-1, Rule 56

(2018), we must determine whether Section 2 (1) reflects an ambiguity or (2) if it does

not, was breached by Plaintiff, such that Plaintiff is not entitled to judgment as a

matter of law on her breach of contract claim.

         As noted above, Section 2 reads as follows:

               2. This Note will be paid on December 1, 2015. If any
               additional amount is required to fulfill the obligation of
               $51,000 USD total to [Plaintiff], an additional Note will be
               created for the remaining amount due. All diligence will
               be made to meet this payment obligation on the first date
               it is due.

Defendant argues that Section 2 is ambiguous because it is

               susceptible to at least two interpretations.            First,
               [Defendant] will pay on 1 December 2015 and, if she does
               not, she is in default. Second, [Defendant] should make a
               diligent effort to pay by 1 December 2015 but this is only
               the “first date” the loan is due. If [Defendant] does not pay
               by 1 December 2015, the parties will create an “additional
               Note” for the amount remaining due.

         In effect, then, Defendant argues that it was impossible for her to default on

the Note, because the second sentence of Section 2 (the “Second Sentence”)

contemplated that “an additional Note will be created for the remaining amount due”

if Defendant did not pay in full on the “first date.” As mentioned above, in her answer,


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Defendant pled that she “has never refused to pay back this loan, is not in default of

this loan, and is waiting for a reasonable payment schedule to be written and agreed

to between [Plaintiff] and [Defendant] for this loan.”                Plaintiff does not contest

Defendant’s construction of the Second Sentence, but argues that because it “would

leave [Plaintiff] at the mercy of [Defendant] and could result in [Plaintiff] not ever

getting paid,” the Second Sentence is “wholly repugnant to the original intent of the

parties” and “serves to undo the very basis of the bargain[,]” and “should be set aside

or rejected.”

       Like the parties, we read the Second Sentence as the parties’ agreement that

in the event Defendant did not fully pay off her debt under the Note by 1 December

2015, the parties would then negotiate an additional promissory note for the

outstanding debt. The Second Sentence therefore reflects a mutual conditional offer

to execute an additional promissory note—importantly, on unspecified terms, and

therefore subject to future agreement by the parties—in the event of Defendant’s

default. Because the record demonstrates that there was a meeting of the minds

regarding the Second Sentence, the Note is not ambiguous.4

       However, the question remains whether the Second Sentence is enforceable. If

enforceable, Plaintiff’s failure to execute an additional promissory note with


       4   Plaintiff’s statement in her affidavit that the Note contains unspecified “ambiguous
language” does not control our analysis. See International Paper Co. v. Corporex Constructors, Inc., 96
N.C. App. 312, 317, 385 S.E.2d 553, 556 (1989) (“A contract that is plain and unambiguous on its face
will be interpreted by the court as a matter of law.” (citation omitted)).

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Defendant upon Defendant’s default would itself be a breach of the Note’s terms, such

that Defendant’s breach arguably might be excused.

       “An offer to enter into a contract in the future must, to be binding, specify all

of the essential and material terms and leave nothing to be agreed upon as a result

of future negotiations.” Young v. Sweet, 266 N.C. 623, 625, 146 S.E.2d 669, 671

(1966).

       The Second Sentence contains no specifics regarding the terms of the

additional promissory note, and Defendant repeatedly argues that that new note’s

terms, including its “payment schedule[,]” and any rate of interest accruing upon the

unpaid debt, would have to be “mutually agreed upon” by the parties before the new

note could be executed. Because it does not contain specifics, and instead leaves

everything “to be agreed upon as a result of future negotiations[,]” we conclude that

the Second Sentence is void for uncertainty and unenforceable.5 See Young, 266 N.C.

at 625, 146 S.E.2d at 671 (in real-estate context, “[a] covenant to let the premises to

the lessee at the expiration of the term without mentioning any price for which they




       5 Were we to hold the Second Sentence to be enforceable, Defendant would have court-enforced
leverage to refuse to pay back the unpaid debt except for on wildly-unjust terms: e.g., Defendant could
hold firm that she would only agree to a new note that allowed her to pay one cent every fifty years,
without any interest, in which case inflation would render the unpaid debt wholly valueless.

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are to be let, or to renew the lease upon such terms as may be agreed on, in neither

case amounts to a covenant for renewal, but is altogether void for uncertainty.”).

      The next question is whether the void Second Sentence may be set aside and

the remainder of the Note enforced, or whether the entire Note is unenforceable by

virtue of the unenforceable provision. Our Supreme Court has said:

             When a contract contains provisions which are severable
             from an illegal provision and are in no way dependent upon
             the enforcement of the illegal provision for their validity,
             such provisions may be enforced. It is well established that
             the fact that a stipulation is unenforceable because of
             illegality does not affect the validity and enforceability of
             other stipulations in the agreement, provided they are
             severable from the invalid portion and capable of being
             construed divisibly.

Rose v. Vulcan Materials Co., 282 N.C. 643, 658, 194 S.E.2d 521, 531-32 (1973)

(internal quotation marks and citations omitted).         This Court has said that the

question of whether an unenforceable contractual provision is severable depends

upon whether the provision is “the main purpose or essential feature of the

agreement[,]” or whether other such provisions are “dependent on” the unenforceable

provision. Robinson, Bradshaw, & Hinson, P.A. v. Smith, 129 N.C. App. 305, 314,

498 S.E.2d 841, 848 (1998) (upholding summary judgment on contingency-fee

contract: “Despite the invalidity of this section of the contract, the remainder of the

contingency fee contract is still enforceable because it is also severable from, and not

dependent in its enforcement upon, the void portion. The severable portion is not the



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main purpose or essential feature of the agreement.” (citation omitted)); Am. Nat’l

Elec. Corp. v. Poythress Commercial Contractors, Inc., 167 N.C. App. 97, 101, 604

S.E.2d 315, 317 (2004) (upholding summary judgment for defendant: “We therefore

conclude that the ‘pay when paid’ clause of the contract is indeed unenforceable, but

that it is severable from the rest of the contract and does not defeat the other portions

of the contract, such as the notice of delay provision, which are in no way dependent

on the illegal provision.”).

       The main purpose of a promissory note is to memorialize an agreement to

exchange money for a promise to pay the money back with interest on a date certain.

The amount of the principal loaned, the amount of interest that accrues thereupon,

and the date when the borrower is required to pay back the principal with accrued

interest to the lender are all examples of essential provisions of a promissory note

that cannot be severed from the note. The Second Sentence, which only contemplated

what the parties would do in the event of default, and upon which none of the Note’s

essential provisions described above depend,6 is not such an essential provision. We


       6 An argument that the Second Sentence effectively renders the due-date provision
meaningless—and that the due-date provision therefore is “dependent on” the Second Sentence—
would fail, because the parties agree that the Note’s due date was 1 December 2015. The
determination of the Note’s due date therefore is “dependent on” nothing else. See infra (rejecting
Defendant’s argument that the Note had multiple due dates).

        Further, if construed to render the due-date provision meaningless, the Second Sentence is
irreconcilable with the first sentence of Section 2—i.e., the due-date provision—and is repugnant to
the general purpose of the Note, which further supports our conclusion that the Second Sentence must
be set aside as unenforceable. See Davis v. Frazier, 150 N.C. 447, 451, 64 S.E. 200, 201 (1909) (“It is



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accordingly conclude that it is severable from the Note and should be set aside, and

that the remainder of the Note may be enforced.

        The final question is therefore whether Plaintiff has established via the

“pleadings, depositions, answers to interrogatories, and admissions on file, together

with the affidavits[,]” N.C. Gen. Stat. § 1A-1, Rule 56, that there are no genuine issues

of material fact regarding whether (1) Defendant defaulted on the Note (construing

the Second Sentence as stricken therefrom) and (2) Plaintiff is owed $12,850 as a

result, such that Plaintiff is entitled to judgment as a matter of law for that amount.

        Regarding the default, Defendant admitted in her answer that she (1) agreed

to the Note, (2) received $50,000 from Plaintiff, and (3) had not paid Plaintiff the

entirety of the principal and interest due under the Note as of 1 December 2015. As

mentioned above, Defendant argues in her brief on appeal that the Note could be

interpreted to mean that 1 December 2015 was the “first date” the loan is due,

which—rather than creating a date upon which Defendant’s failure to pay would

create a default—merely triggered the Second Sentence’s obligation to create an

“additional Note” for the amount outstanding. However, Defendant has directed our

attention to no authority setting forth that a loan can become due on multiple dates

such that the legal import of nonpayment by the borrower upon the “first date” the



an undoubted principle that a subsequent clause irreconcilable with a former clause and repugnant to
the general purpose and intent of the contract will be set aside.” (internal quotation marks and citation
omitted)).


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loan is due is somehow qualified by a latter due date, and we are aware of no such

authority. In the absence of authority to the contrary, we reject Defendant’s theory

that the Note contemplated multiple due dates as an unreasonable construction that

would render an absurd result. See Fairbanks, Morse & Co. v. Twin City Supply Co.,

170 N.C. 315, 321, 86 S.E. 1051, 1054 (1915) (“All instruments should receive a

sensible and reasonable construction, and not such a one as will lead to absurd

consequences or unjust results[.]”).    The admissions within Defendant’s answer

accordingly amount to an admission that Defendant defaulted on the Note.

      Regarding the amount owed, Defendant admitted in her answer to owing

$12,250 to Plaintiff under the Note as of 27 July 2018. Later, in her 21 August 2018

memorandum in support of her motion to dismiss, Defendant stated that the amount

she owed was $11,050. As mentioned above, both Plaintiff and her counsel stated in

their affidavits that Defendant owed Plaintiff $12,850, as sought in the complaint.

      The affidavit submitted by Plaintiff’s counsel in support of Plaintiff’s motion

for summary judgment (1) explains that the difference in the amounts of outstanding

debt claimed by the parties is the result of checks written by Defendant to Plaintiff

in 2016 which “Plaintiff refused to cash upon advice of Counsel” and for which

“Defendant has mistakenly credited herself” and (2) attaches a 5 July 2016 letter

written by Defendant contemplating that she had written checks to Plaintiff which

were “Not Cashed” as of that date. Defendant did not respond to Plaintiff’s motion



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for summary judgment with any opposing motion or any affidavits or other evidence

of her own,7 and nowhere has (1) argued that Plaintiff’s counsel’s characterization of

any particular check as uncashed is inaccurate or (2) disputed that she wrote the

letter in the record indicating that various attempts by Defendant to pay Plaintiff

had been refused. Accordingly, because Defendant has not directed our attention to

any authority standing for the proposition that Plaintiff was required to cash

Defendant’s checks or otherwise accept anything offered by Defendant in partial

payment for the outstanding debt owed by Defendant under the Note, we conclude

that it was proper for the trial court to conclude as a matter of law that Defendant

owed Plaintiff $12,850 under the Note as the complaint and Plaintiff’s affidavits

claimed.

                                        III.     Conclusion

        Because we conclude that Plaintiff has demonstrated that no genuine issue of

material fact exists and that Plaintiff is entitled to judgment as a matter of law on

her breach of contract claim, we affirm the trial court’s 26 November 2018 order

granting Plaintiff summary judgment thereupon.

        AFFIRMED.


        7 As mentioned above, see supra note 3, Defendant’s pro se filings are not verified, and therefore
cannot create triable issues of fact in the face of Plaintiff’s affidavits. N.C. Gen. Stat. § 1A-1, Rule
56(e) (“When a motion for summary judgment is made and supported as provided in this rule, an
adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by
affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a
genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered
against him.”).

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Judges BRYANT and ZACHARY concur.




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