               IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA17-1087

                                   Filed: 5 June 2018

Transylvania County, No. 11 CVS 692

FRENCH BROAD PLACE, LLC, Plaintiff,

              v.

ASHEVILLE SAVINGS BANK, S.S.B., Defendant.


        Appeal by plaintiff from order entered 30 January 2017 by Judge Robert C.

Ervin in Transylvania County Superior Court. Heard in the Court of Appeals 2 May

2018.


        Johnston, Allison & Hord, P.A., by Martin L. White and Scott R. Miller, for
        plaintiff-appellant.

        Long, Parker, Warren, Anderson, Payne & McClellan, P.A., by Ronald K. Payne
        and Thomas K. McClellan, for defendant-appellee.


        TYSON, Judge.


        French Broad Place, LLC (“Plaintiff”) appeals the trial court’s order granting

summary judgment to Asheville Savings Bank, S.S.B. (“Defendant”) and dismissing

all of Plaintiff’s claims. We affirm the trial court’s order.

                                     I. Background

                                     A. The Project

        Plaintiff initiated development of a mixed-use construction and development

project in downtown Brevard, North Carolina, called “French Broad Place” (the
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



“Project”) in 2007. The Project was planned as a four-story building, which would

include office space, retail space, restaurants, residential condominiums, and an

attached parking garage.        The project’s estimated cost was approximately

$19,000,000.   Plaintiff sought a construction lender to finance the Project, and

eventually selected Defendant as a lender.

      Plaintiff alleges Defendant proposed a tiered or “waterfall financing structure”

that involved financing the Project in phases of development. Phase 1 allegedly

included financing for purchasing the land for the Project, designing and constructing

the building, and completion of the building shells of the individual units to the extent

that a certificate of occupancy could be obtained. Phase 1 was projected to cost

approximately $14,000,000.

      Phase 2 was to allegedly include financing for finishing the build-out of the

residential units and finishing certain common areas. Phase 2 was projected to cost

approximately $5,000,000.

      Plaintiff and Defendant executed a loan commitment dated 6 December 2007

(the “Loan Commitment”). The Loan Commitment specified Defendant would loan

Plaintiff the sum of $9,950,000.     Defendant denies that the loan it proposed to

Plaintiff was to be phased, tiered, or include “waterfall financing.”




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      The Loan Commitment included several conditions required to be met before

closing. One Loan Commitment condition required Plaintiff to obtain $700,000 in

“pre-sales” funds.

The “pre-sales” requirement of the Loan Commitment specifically states,

             Prior to any Bank funding Borrower shall provide copies of
             purchase agreements totaling a minimum of $8,820,000
             with a minimum of 10% non-refundable deposits. Of these
             pre-sales a minimum of $4,300,000 must be either
             commercial or office space. All purchase agreements must
             be reviewed and deemed acceptable by Asheville Savings
             Bank prior to Bank funding.

             Asheville Savings Bank shall be given first right of refusal
             on all pre-sales or sales to affiliated buyers. On those loans
             where Bank does not exercise that right, the Bank must
             receive and approve any and all written takeout
             commitments as well as any applicable lease agreements.

      Plaintiff alleges that after execution of the Loan Commitment, “Defendant

agreed to accept commercial leases with options to purchase in lieu of regular pre-

sale contracts, and agreed to count the leases with purchase options toward the ‘pre-

sale contract requirement’” in the Loan Commitment. Plaintiff purportedly relied

upon Defendant’s alleged allowing of the lease-option contracts to count towards the

Loan Commitment’s pre-sales requirement, and it continued development and

construction of the Project.

      According to the affidavit of Joshua Burdette, a principal of Plaintiff, on 20

March 2008, several principals of Plaintiff purportedly met with officers of



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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

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Defendant, to discuss the method by which Defendant would apply the lease-option

contracts to meet Plaintiff’s pre-sale requirements under the Loan Commitment. At

that meeting, Defendant’s officers purportedly explained to Plaintiff’s principals:

             [T]hat the lease option contracts alone could not be counted
             [towards] the required pre-sales under the Loan
             Commitment, but that [Defendant] could convert
             Plaintiff’s construction loan into individual “Takeout
             Loans,” . . . on any commercial units which were secured by
             a lease option contract, in lieu of a presale, and that the
             commercial units could simply be retained by Plaintiff as
             investment property to satisfy the presale requirements of
             the Loan Commitment.

      Around 10 June 2008, Bradley Hines, a vice-president of Defendant, contacted

members of Plaintiff, and informed them that the “Takeout Loans” arrangement

would have to change.      Plaintiff alleges Defendant instructed it to establish a

separate legal entity to purchase the commercial units for which Plaintiff had

previously obtained lease-option contracts: (1) the new entity was to establish deposit

accounts in an entirely different bank than Defendant; (2) the new entity would enter

into purchase agreements with Plaintiff for the commercial units that were subject

to lease-option contracts; (3) the new entity would be pre-qualified to obtain take-out

loans from Defendant on the commercial units secured by lease-option contracts; and,

(4) Plaintiff’s guarantors were to seek out and obtain financing term sheets from other

banks to demonstrate the marketability of the commercial units.




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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

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      Plaintiff followed Defendant’s purported recommendations, and several of

Plaintiff’s officers and guarantors formed LBS Properties, LLC (“LBS”) and

implemented the steps allegedly proposed by Defendant.

      In addition to the pre-sales requirement, another specific condition of the Loan

Commitment provided Defendant was to “seek participant funding for no less than

$2,000,000 from a participant Bank.” Plaintiff alleges it did not understand the

$9,950,000 loan commitment to be contingent upon Defendant actually obtaining the

participation from another bank.     Prior to the loan closing, Defendant informed

Plaintiff that it had not been able to obtain the participation from another bank, and,

as a result, that it would only be funding $7,750,000 of the $9,950,000 amount

specified in the Loan Commitment. Defendant also requested Plaintiff to seek a

replacement lender for the un-funded $2,000,000 of the loan.

      Plaintiff had commenced construction on the Project well in advance of the loan

closing. Plaintiff owed Metromont Corporation (“Metromont”), a subcontractor on the

Project, for portions of the Project, which had already been erected.         Plaintiff

convinced Metromont to subordinate its contractor’s lien for $2,200,000 for costs

incurred in exchange for a secured interest in the Project.

      On 8 August 2008, Plaintiff and Defendant closed on the construction loan

agreement (the “Loan Agreement”) in the specific amount of $7,750,000.00 (the

“Loan”). The Loan was evidenced by a promissory note (the “Note”) and deed of trust



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in favor of Defendant. Plaintiff asserts the Loan Commitment required Defendant to

loan the sum of $9,950,000, but that Defendant required Metromont to provide

$2,200,000 in order to close. Plaintiff also alleges Defendant underfunded the Loan

by approximately $300,000 at closing on 8 August 2008, and then wrongfully

deducted another $300,000 from a draw Plaintiff sought on the Loan for October

2008.

        In November 2008, Plaintiff submitted a change order request to Defendant in

the amount of $725,801. Defendant approved the request and the parties agreed to

a written loan modification (the “First Change in Terms Agreement”), which

increased the stated total amount of the Loan outstanding from $7,750,000 to

$8,475,801.    Plaintiff alleges Defendant unnecessarily delayed in approving the

change order until closing in January 2009.

        By March 2009, three businesses were opening on the ground floor of the

Project, several more were being constructed, and initial condominium sales were

several months away from closing. Plaintiff alleges that in March 2009, Defendant

began to refuse to finance the continued construction of the Project under the alleged

phased or tiered funding, or “waterfall financing structure,” as Defendant had

allegedly promised. Defendant also refused to provide the allegedly promised take-

out loans, which Plaintiff avers ultimately caused the Project to fail due to lack of

funding.



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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



      Pursuant to a modification agreement the parties executed on 8 June 2009 (the

“Second Change in Terms Agreement”), Defendant waived the required payment of

the first $1,000,000 in release fees, due to Defendant upon the sale of commercial

units in the Project, to help Plaintiff complete the construction on the Project. As

required by the Second Change in Terms Agreement, the parties also executed a

modification of Plaintiff’s note, deed of trust and related loan documents regarding

the Project.     This Modification was recorded at Book 510, Page 398 of the

Transylvania County Registry (“Modification of Note and Deed of Trust”).

      According to the express terms of this Modification, as of 8 June 2009:

               The total amount of all funds disbursed by Lender to
               Borrower to date under said Note, CLA [Construction Loan
               Agreement] and Deed of Trust, as amended by the LMA
               [Loan Modification Agreement] and Modification of Deed of
               Trust, included those funds deposited in the Interest
               Reserve Account, is $8,475,801.00. There are presently no
               Construction Loan funds left to be disbursed.

                                  B. The Complaint

      Plaintiff filed a verified complaint against Defendant on 28 December 2011. In

its complaint, Plaintiff asserts claims for breach of contract, unfair trade practices,

and breach of a fiduciary duty. Defendant filed a motion to dismiss, an answer and

counterclaim on 12 March 2012. In its counterclaim, Defendant seeks payment in

full on the Note and asserts Plaintiff had failed to pay the balance Defendant is owed.




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       Upon a joint motion of the parties, the Chief Justice of North Carolina

designated the matter as an exceptional case pursuant to Rule 2.1 of the General

Rules of Practice of the Superior and District Courts on 1 October 2012.

       Following discovery, Defendant filed a motion for summary judgment on 15

November 2016. Attached to Defendant’s motion for summary judgment was an

affidavit of Brian Gillespie, an employee of Defendant, and an affidavit of David A.

Kozak, an executive vice-president of Defendant.         In response to Defendant’s

affidavits, Plaintiff submitted affidavits of Joshua Burdette and Scott Latell,

principals of Plaintiff.

       The trial court entered an order granting summary judgment in favor of

Defendant on all of Plaintiff’s claims and also granting summary judgment in favor

of Defendant on its counterclaim against Plaintiff. Plaintiff filed timely notice of

appeal.


                                   II. Jurisdiction

       Jurisdiction lies in this Court pursuant to N.C. Gen. Stat. § 7A-27(b) (2017) as

an appeal from a final judgment of the superior court.


                               III. Standard of Review

       Upon ruling on a motion for summary judgment, the court views the evidence

in the light most favorable to the non-moving party and engages in a two-part

analysis of whether:

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            (1) the pleadings, depositions, answers to interrogatories,
            and admissions on file, together with the affidavits, show
            that there is no genuine issue as to any material fact; and
            (2) the moving party is entitled to judgment as a matter of
            law.

            Summary judgment is appropriate if: (1) the non-moving
            party does not have a factual basis for each essential
            element of its claim; (2) the facts are not disputed and only
            a question of law remains; or (3) if the non-moving party is
            unable to overcome an affirmative defense offered by the
            moving party.

Erthal v. May, 223 N.C. App. 373, 377-78, 736 S.E.2d 514, 517 (2012) (citations and

quotation marks omitted), disc. review denied, 366 N.C. 421, 736 S.E.2d 761 (2013).

            A defendant may show entitlement to summary judgment
            by (1) proving that an essential element of the plaintiff's
            case is non-existent, or (2) showing through discovery that
            the plaintiff cannot produce evidence to support an
            essential element of his or her claim, or (3) showing that
            the plaintiff cannot surmount an affirmative defense.
            Summary judgment is not appropriate where matters of
            credibility and determining the weight of the evidence
            exist. 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, 212, 580 S.E.2d 732, 735

(2003) (citations and quotation marks omitted), aff’d per curiam, 358 N.C. 131, 591

S.E.2d 521 (2004).



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                                   Opinion of the Court



      An order granting summary judgment is reviewed de novo on appeal.

Howerton v. Arai Helmet, Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004). The

trial court’s interpretation of a contract is also reviewed de novo, because it involves

a question of law. Harris v. Ray Johnson Constr. Co., 139 N.C. App. 827, 829, 534

S.E.2d 653, 654 (2000).

                                     IV. Analysis

                     A. Materials Considered by the Trial Court

      Plaintiff argues this Court should not consider documents contained within a

Rule 11(c) supplement to the record on appeal filed by Defendant. Plaintiff contends

Defendant only filed four documents in support of its motion for summary judgment:

(1) the motion, (2) Defendant’s unverified answer, (3) the affidavit of Brian Gillespie,

and (4) the affidavit of David A. Kozak.

      Rule 56(c) of the N.C. Rules of Civil Procedure provides that summary

judgment “shall be rendered forthwith if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that any party is entitled to a

judgment as a matter of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2017).

      The proposed record on appeal was settled by agreement between the parties

on 15 September 2017 and filed with this Court on 2 October 2017. The parties

stipulated that they disagreed on whether numerous documents constituting



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Defendant’s Rule 11(c) supplement are properly part of the record on appeal. Plaintiff

contends, while Defendant served the additional documents contained in and

constituting its Rule 11(c) supplement with its brief in support of its motion for

summary judgment upon opposing counsel and the trial court, Defendant did not offer

the documents into evidence nor file the documents with the clerk of superior court.

Defendant did present a copy to the trial court.

         Presuming, arguendo, the trial court did consider the materials attached to

Defendant’s brief submitted to the court, Plaintiff failed to make any timely objection.

Plaintiff argues it did not have to object, because the materials were not “filed” or

“offered into evidence,” even though they were provided in advance to Plaintiff and

attached to Defendant’s brief in support of its motion and were submitted to the trial

court.

         To support its assertion that it did not have to object to the documents at issue,

Plaintiff cites the reasoning of Judge Greene’s dissenting opinion in Barnhouse v. Am.

Exp. Fin. Advisors, Inc., 151 N.C. App. 507, 566 S.E.2d 130 (2002), as non-binding,

but persuasive, authority. Barnhouse involved a pre-trial motion to stay proceedings

and compel arbitration. 151 N.C. App. at 507, 566 S.E.2d at 131. The trial court

denied the defendants’ pre-trial motion to stay the proceedings and compel

arbitration. Id. at 507-08, 566 S.E.2d at 130. On the defendants’ motion to stay and

compel arbitration, the trial court had conducted a hearing and the defendants had



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submitted a brief in support of their motion and attached the alleged arbitration

agreement to their brief. Id. at 510, 566 S.E.2d at 133.

      The trial court denied the defendants’ motion to stay and compel arbitration.

Id. On appeal, this Court noted there was “no indication that the trial court made

any determination regarding the existence of an arbitration agreement” and the

“dispositive issue is whether the trial court properly denied [the] defendants’ motion

to stay proceedings without first determining whether or not an agreement to

arbitrate existed between the parties.” Id. at 508, 509, 566 S.E.2d at 131-32. This

Court reversed the trial court’s order because the trial court had not made a

determination as to whether or not an agreement to arbitrate existed, and remanded

to the trial court to make that determination. Id. at 509, 566 S.E.2d at 132.

      Judge Greene disagreed with the majority’s opinion that the trial court was to

make findings regarding the existence of an arbitration agreement. Id. at 510, 566

S.E.2d at 132 (Greene, J., dissenting). He stated the “dispositive issue is whether

defendants met their burden of showing the existence of a written agreement to

arbitrate.” Id. at 511, 566 S.E.2d at 133.

             Although defendants’ attorney attached a copy of the
             alleged agreement to the memorandum submitted to the
             trial court, the memorandum does not qualify as a Rule
             56(e) affidavit for two reasons: it was not sworn to, and it
             does not “show affirmatively that [the attorney] is
             competent to testify” with respect to the agreement. See
             N.C.G.S. § 1A-1, Rule 56(e). Furthermore, the attachment
             to the memorandum does not qualify as documentary


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                                   Opinion of the Court



             evidence because the memorandum was not filed with the
             trial court or otherwise presented into evidence.

Id. at 512, 566 S.E.2d at 134 (footnote omitted). Without reference to any authority,

the dissenting opinion argued,“[b]ecause [the arbitration agreement] was neither

presented into evidence nor filed with the trial court, plaintiff had no obligation to

lodge an objection to its consideration.” Id. at 512, n. 6, 566 S.E.2d at 134, n. 6. Judge

Greene voted to affirm the trial court’s order denying the defendants’ motion to stay

the proceedings and compel arbitration. Id. at 512, 566 S.E.2d at 134.

      Judge Greene’s reasoning in Barnhouse is inapplicable to the case at bar for

several reasons. Barnhouse involved a motion to stay the proceedings and to compel

arbitration, not a motion for summary judgment. See id. at 507, 566 S.E.2d at 131.

The majority’s opinion in Barnhouse did not instruct the trial court to disregard the

unverified agreement in determining whether an agreement to arbitrate existed upon

remand, despite the dissenting opinion’s viewpoint that the trial court could not and

properly did not consider the unverified agreement to arbitrate, attached to the

defendant’s memorandum. Id. at 509, 566 S.E.2d at 132.

      Plaintiff also cites Gemini Drilling & Found., LLC v. Nat’l Fire Ins. Co. of

Hartford to support its assertion that it did not have to object to Defendant’s

submission of the documents at issue provided for the trial court’s consideration. 192

N.C. App. 376, 665 S.E.2d 505 (2008). Gemini involved a bench trial on the plaintiff’s

contractual claims. Id. at 378-80, 665 S.E.2d at 507-08. On appeal, the defendant


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argued “the trial court erred by rejecting and refusing to consider certain exhibits

that defense counsel had marked as exhibits but did not formally offer into evidence.”

Id. at 386, 665 S.E.2d at 511. This Court noted, “[d]uring the trial, defendant marked

twenty-seven exhibits, but only formally offered into evidence five of them.” Id.

      The defendant claimed its trial counsel had used the same language to enter

into evidence the five admitted exhibits as it had eleven of the non-admitted exhibits

“but, ‘without Trial Counsel’s notice, the Court’s manner of reply changed, effectively

denying admission even though the gist of the Court’s response suggested that the

documents were entered as evidence.’” Id. (emphasis omitted).            The defendant

asserted the trial judge had made the comment, “All the evidence has now been

presented. Anything which was marked but not offered into evidence is not in

evidence in this particular case[,]” right as the trial judge left the bench, leaving the

defendant no opportunity to request the trial court to consider the exhibits that had

not been formally offered into evidence. Id.

      This Court, after reviewing the trial record, concluded the defendant “had

ample opportunity to clarify and rectify the situation[,]” because the trial judge did

not make the comment in question, quoted above, literally as the trial judge was

leaving the bench, but before closing arguments. Id. After the trial judge made the

comment in question, “[b]oth attorneys conversed with [the trial judge] before he




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closed court and [the trial judge] specifically asked defense counsel if there was

‘[a]nything else’ that he wanted the court to consider.” Id. at 387, 665 S.E.2d at 512.

       Gemini is easily distinguished from the case at bar and does not support

Plaintiff’s argument. The issue in Gemini regarded the trial exhibits and did not

involve a motion for summary judgment. See id. The exhibits in Gemini had been

presented at trial, and were not documents submitted in support of a pre-trial motion

for summary judgment. See id.

       The reasoning of Gemini actually rebuts Plaintiff’s argument. The trial court

in Gemini put the defendant on notice that it would not consider exhibits that had

been marked, but not offered into evidence. Id. On appeal, this Court overruled the

defendant’s assignment of error, because the defendant had “an ample opportunity to

clarify and rectify the situation.” Id.

       The materials at issue were not “on file” with the trial court because they had

not been filed with the clerk of court in accordance with Rule 5(d) of the Rules of Civil

Procedure. N.C. Gen. Stat. § 1A-1, Rule 5(d). Plaintiff does not deny the documents

at issue were served upon it and attached to Defendant’s brief in support of

Defendant’s motion for summary judgment in accordance with Rule 5(a1) of the Rules

of Civil Procedure. See N.C. Gen. Stat. § 1A-1, Rule 5 (2017) (requiring briefs or

memoranda in support of summary judgment, and other dispositive motions, to be

served upon each of the parties at least two days before the hearing on the motion).



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Defendant repeatedly referred to material in the documents at issue during the trial

court’s hearing on its motion for summary judgment, in which Plaintiff had ample

opportunity to object to Defendant’s submission of the documents.

      Plaintiff has failed to cite any binding authority, which supports its assertion

that it was not required to object to Defendant’s submission of the documents at issue.

Rule 56 of the Rules of Civil Procedure indicates a trial court is to only consider “the

pleadings, depositions, answers to interrogatories, and admissions on file” in deciding

whether to grant or deny summary judgment. N.C. Gen. Stat. § 1A-1, Rule 56

(emphasis supplied).

      In other contexts, this Court has repeatedly held that a party’s failure to object

to materials submitted to a trial court, which do not comply with the requirements of

Rule 56, waives that party’s objection. See Yamaha Int’l Corp. v. Parks, 72 N.C. App.

625, 629, 325 S.E.2d 55, 58 (1985) (stating that, “[o]n a motion for summary

judgment, uncertified or otherwise inadmissible documents may be considered if not

challenged by timely objection.”); Whitehurst v. Corey, 88 N.C. App. 746, 748, 364

S.E.2d 728, 729-30 (1988) (stating that “failure to object to form or sufficiency of

pleadings and affidavits waives objection on summary judgment” and an “affidavit

not conforming to Rule 56(e) is subject to motion to strike,” but objection is waived

absent the motion); Crocker v. Roethling, 217 N.C. App. 160, 165, 719 S.E.2d 83, 87-

88 (2011) (holding, in part, that the plaintiff waived ten-day procedural notice



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requirement of Rule 56(c) by participating in summary judgment hearing); N.

Carolina Nat. Bank v. Harwell, 38 N.C. App. 190, 192, 247 S.E.2d 720, 722 (1978)

(stating that “[f]ailure to make a timely objection to the form of affidavits supporting

a motion for summary judgment [under Rule 56] is deemed a waiver of any

objections.” (citations omitted)).

      Plaintiff acknowledges the materials were timely served upon it in connection

with Defendant’s brief in support of its motion for summary judgment accordance

with Rule 5(c). N.C. Gen. Stat. § 1A-1, Rule 5(c). Plaintiff had adequate notice of the

materials because of Defendant’s repeated reference to them during the hearing on

the motion for summary judgment. Plaintiff has offered no argument to support its

notion that this Court should treat the disputed materials here any differently than

other materials that do not conform to the requirements of Rule 56, and for which a

party fails to make a timely objection before the trial court. Plaintiff was required to

object to the disputed material’s failure to be filed and failed to do so. See Yamaha,

72 N.C. App. at 629, 325 S.E.2d at 58; Whitehurst, 88 N.C. App. at 748, 364 S.E.2d at

729-30; Crocker, 217 N.C. App. at 165, 719 S.E.2d at 87-88; Harwell, 38 N.C. App. at

192, 247 S.E.2d at 722. Plaintiff’s argument is overruled.

                               B. Affidavit of Scott Latell

      Defendant challenges the trial court’s consideration of the affidavit of Scott

Latell and two attached telephone conversation transcripts submitted by Plaintiff to



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the trial court. Although the trial court ultimately granted summary judgment in

favor of Defendant, Defendant contends the trial court erred in admitting and

considering the affidavit and the two attached transcripts. In light of our holding to

affirm the trial court’s order granting summary judgment to Defendant, it is not

necessary, and we decline, to address Defendant’s objection to the trial court’s

consideration of Scott Latell’s affidavit and the two attached transcripts.

                                 C. Breach of Contract

      Plaintiff argues genuine issues of material fact exist in regard to its breach of

contract claim. “The elements of a claim for breach of contract are (1) existence of a

valid contract and (2) breach of the terms of that contract.” Poor v. Hill, 138 N.C. App.

19, 26, 530 S.E.2d 838, 843 (2000).

      Plaintiff’s verified complaint alleges Defendant committed several breaches of

the agreements the parties had entered into with regard to financing the Project,

including:

                    a. failing to provide the required amount of initial
                    financing;

                    b. underfunding the loan;

                    c. delaying change-order requests;

                    d. refusing to finance the Take-Out Loans as
                    promised; and

                    e. violating the covenant of good faith and fair
                    dealing.


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      We analyze each alleged breach in turn.

           1. Failure to Provide the Required Amount of Initial Financing

      Plaintiff asserts the parties’ Loan Commitment required Defendant to provide

$9,950,000 in funds for initial financing from the Loan Agreement instead of the

$7,750,000 provided and advanced at closing. Viewing the evidence in the light most

favorable to Plaintiff including the loan documents attached to Plaintiff’s complaint,

no genuine issue of material fact exists of whether Defendant failed to provide the

initial amount of financing. When the parties closed on the loan on 8 August 2008,

in addition to the Loan Agreement, they executed a notice of final agreement

containing a merger clause indicating it supersedes the earlier executed Loan

Commitment. Specifically, the notice of final agreement states, in relevant part:


             BY SIGNING THIS DOCUMENT EACH PARTY
             REPRESENTS AND AGREES THAT: (A) THE WRITTEN
             LOAN AGREEMENT REPRESENTS THE FINAL
             AGREEMENT BETWEEN THE PARTIES, (B) THERE
             ARE     NO UNWRITTEN     ORAL   AGREEMENTS
             BETWEEN THE PARTIES, AND (C) THE WRITTEN
             LOAN AGREEMENT MAY NOT BE CONTRADICTED
             BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS,
             OR    SUBSEQUENT    ORAL   AGREEMENTS    OR
             UNDERSTANDINGS OF THE PARTIES. [Emphasis
             supplied].

In addition, the Loan Agreement provides:

             RELATIONSHIP TO THE AGREEMENT: The terms and
             provisions of this Agreement, the Note and the Related
             Documents supersede any inconsistent terms and

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            FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



              conditions of Lender’s construction loan commitment letter
              to Borrower, provided that all obligations of Borrower
              under this commitment to pay any fees to Lender or any
              costs and expenses relating to the Loan on the commitment
              shall survive the execution and delivery of this Agreement,
              the Note and the Related Documents. [Emphasis supplied].

        The plain language in the Loan Agreement, which Plaintiff does not contest it

executed, indicates the Loan Agreement’s provision for $7,750,000 in financing

supersedes the earlier Loan Commitment’s provision for $9,950,000.

        The parties also executed the Second Change in Terms Agreement in June

2009, several months after Plaintiff alleges Defendant had failed to provide the initial

amount of financing. The Second Change in Terms Agreement provides in relevant

part:

              13. Ratification of all Loan Documents, as Modified.
              Borrower and Lender agree that the Note, Deed of Trust,
              CLA [Construction Loan Agreement] and all other Loan
              Documents, as modified by the LMA [Loan Modification
              Agreement], the Modification of Deed of Trust and this
              Modification, are hereby ratified and confirmed to be in full
              force and effect and Borrower further confirms and agrees
              that there presently exists no defenses, offsets, or other
              claims with respect to the same, as modified hereby.
              [Emphasis supplied].

        Based upon the clear and unambiguous language of the Loan Agreement and

the two Change in Terms Agreements, Defendant was not obligated to provide the

$9,950,000 in financing initially specified by the Loan Commitment. Presuming¸

arguendo, Defendant was obligated to provide the $9,950,000 under the Loan



                                          - 20 -
             FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



Agreement, Plaintiff waived any claims it may have had for Defendant’s failure to

provide the initial amount of financing in the Second Change in Terms Agreement.

Plaintiff does not dispute they entered into these agreements. No genuine issue of

material fact exists with respect to this alleged breach. Defendant’s argument is

overruled.

                              2. Underfunding the Loan

      Plaintiff also alleges Defendant breached the parties’ loan contracts by

underfunding the Loan. According to the Modification of Note and Deed of Trust

executed by the parties on 18 June 2009, Defendant had disbursed all of the loan

funds it was required to disburse under the parties’ Loan Commitment, Loan

Agreement, and later modifications. The Modification of Note and Deed of Trust both

parties executed specifically provides:

               The total amount of all funds disbursed by Lender to
               Borrower to date under said Note, CLA [Construction Loan
               Agreement] and Deed of Trust, as amended by the LMA
               [Loan Modification Agreement] and Modification of Deed of
               Trust, including those funds deposited in the Interest
               Reserve Account, is $8,475,801.00. There are presently no
               Construction Loan funds left to be disbursed.

      Plaintiff has failed to produce any writing or agreement contradicting the

Modification of Note and Deed of Trust to indicate Defendant underfunded the loan.

Plaintiff has not alleged Defendant entered into any subsequent modification of the

Loan Agreement after 18 June 2009, which obligated Defendant to loan additional



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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



funds beyond the stated amount. Plaintiff’s arguments regarding Defendant’s alleged

underfunding of the loan are overruled.

                         3. Delaying Change Order Requests

      Plaintiff also alleges Defendant breached the parties’ loan agreements by its

delay in approving Plaintiff’s November 2008 change order request for $725,801. The

Loan Agreement does not indicate Defendant was required to loan any more money

at the time Plaintiff submitted its change order request. The Modification of Note

and Deed of Trust executed by the parties and attached to Plaintiff’s verified

complaint specifically states:

             WHEREAS, at the request of Borrower, Lender agreed to
             lend Borrower an additional $725,801.00 by increasing the
             amount of the Construction Loan from $7,750,000 to
             $8,475,800.00. To reflect this increase in the amount of the
             Construction Loan, Borrower and Lender entered into a
             Change In Terms Agreement dated January 23, 2009 (the
             “LMA”) increasing the amount of the Construction Loan,
             and the principal amount of the Note, from $7,750,000.00
             to $8,475,801.00.

      As analyzed above, Plaintiff specifically waived claims relating to the parties’

obligations under the Loan Agreement and related documents in the Modification of

Note and Deed of Trust, which states:

             Borrower and Lender agree that the Note, Deed of Trust,
             CLA [Loan Agreement] and all other Loan Documents, as
             modified by the LMA [Change in Terms Agreement], the
             Modification of Deed of Trust and this Modification, are
             hereby ratified and confirmed to be in full force and effect
             and Borrower further confirms and agrees that there


                                          - 22 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



             presently exists no defenses, offsets or other claims with
             respect to the same, as modified hereby.

      Plaintiff has specifically waived any claim asserting Defendant has breached

the Loan Agreement and related agreements by its purported delay in funding

Plaintiff’s change order request. The Loan Agreement and related modifications,

which Plaintiff does not deny it executed and which are attached and referenced in

its verified complaint, establish no genuine issue of material fact exists with regard

to Defendant’s alleged breach due to any purported delay in funding Plaintiff’s change

order request. Plaintiff’s arguments are overruled.

                       4. Refusing to Finance Take-Out Loans

      Plaintiff also alleges Defendant breached its loan agreements by failing to

provide take-out financing for the purchase of commercial units by LBS, the

additional ownership entity established by Plaintiff. Nothing in the terms of the Loan

Commitment, Loan Agreement, and any related modifications obligated Defendant

to provide take-out loans to either Plaintiff or LBS.

      Brian Gillespie’s affidavit, submitted by Defendant in support of its motion for

summary judgment, states, in relevant part:

             18. Shortly after the closing, Bradley Hines, with whom I
             worked on this project, and I began to make inquiry of
             French Broad Place, LLC as to how it was going with
             respect to obtaining loan commitments for the purchases
             by LBS. These communications continued over a period of
             time and we were constantly told that LBS had a lot of
             interest from other lenders to make the “take-out loans” to


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          FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



             LBS.

             19. Thereafter, an email was sent to Lyle Priest who had
             sent two emails requesting loans for take-outs for LBS and
             Mr. Priest was informed that certain documentation would
             be needed in order for the LBS loan requests to be
             considered by Asheville Savings Bank.

             20. Subsequent to the request for financial information
             sought in an email dated February 17, 2010 from Bradley
             Hines, neither LBS nor any of the principals submitted any
             of the requested information necessary for Asheville
             Savings Bank to determine whether or not such loan could
             be approved.

      Viewing the evidence in the light most favorable to Plaintiff, nothing in the

record challenges or contradicts Brian Gillespie’s sworn statement that the LBS

financial information requested by Defendant was not provided.          Additionally,

Plaintiff has not provided written documents detailing the specific terms of any take-

out loans that Defendant allegedly agreed to make, only an affidavit of Joshua

Burdette, recollecting the essential terms of potential take-out loans discussed

between the parties on 20 March 2008. As discussed supra, when the parties closed

on the construction loan on 8 August 2008, they executed a notice of final agreement

which states, in relevant part:

             BY SIGNING THIS DOCUMENT EACH PARTY
             REPRESENTS AND AGREES THAT: (A) THE WRITTEN
             LOAN AGREEMENT REPRESENTS THE FINAL
             AGREEMENT BETWEEN THE PARTIES, (B) THERE
             ARE  NO   UNWRITTEN    ORAL     AGREEMENTS
             BETWEEN THE PARTIES, AND (C) THE WRITTEN
             LOAN AGREEMENT MAY NOT BE CONTRADICTED


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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



             BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS,
             OR    SUBSEQUENT    ORAL   AGREEMENTS  OR
             UNDERSTANDINGS OF THE PARTIES. [Emphasis
             supplied].

      Plaintiff has failed to produce or indicate the existence of any written

agreement, which obligated Defendant to provide the alleged take-out loans. To the

extent Defendant or its representatives may have orally promised to provide take-out

financing prior to the execution of the Loan Agreement, the notice of final agreement

entered into between the parties expressly disclaims the existence of any oral

agreement or contract obligating Defendant to do so.

      Additionally, any commitment to make a commercial loan in excess of $50,000

must be in writing and signed by the parties pursuant to the relevant statute of

frauds. N.C. Gen. Stat. § 22-5 (2017).

      Undisputed evidence indicates LBS did not make requests for take-out loans

until February 2010, when it made requests for two loans. Both of these requests

were for take-out loans of $460,000 and $797,000, respectively, well in excess of the

$50,000 limit to trigger the statute of frauds.

      Any commitment Defendant would have made to provide take-out loans in

excess of $50,000 was required to be in writing and signed by the parties. Id. Plaintiff

has not produced any such writing nor alleged such a writing exists. Plaintiff has

failed to demonstrate any genuine issue of material fact exists that Defendant

breached an agreement to provide take-out loans.


                                          - 25 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



         5. Violating the Implied Covenant of Good Faith and Fair Dealing

      Plaintiff alleges Defendant breached their loan agreements by violating the

implied covenant of good faith and fair dealing. “In every contract there is an implied

covenant of good faith and fair dealing that neither party will do anything which

injures the right of the other to receive the benefits of the agreement.” Bicycle Transit

Authority v. Bell, 314 N.C. 219, 228, 333 S.E.2d 299, 305 (1985) (citation omitted).

      The undisputed terms of the parties’ Modification of Note and Deed of Trust

indicates Defendant had disbursed all of the loan funds it was contractually obligated

to disburse under the parties’ Loan Agreement and related modifications. Defendant

exceeded the initial terms of the parties’ Loan Agreement by agreeing to waive the

first $1,000,000 in release fees owed in order to help Plaintiff. Plaintiff has failed to

demonstrate any genuine issue of material fact that Defendant breached the covenant

of good faith and fair dealing.

                        D. Unfair or Deceptive Trade Practices

      Plaintiff alleges Defendant engaged in unfair or deceptive trade practices

based upon Defendant’s alleged breaches of the loan agreements. “Breach of contract,

even if intentional, can only create a basis for an unfair [or] deceptive trade practices

claim if substantial aggravating circumstances attend the breach.” Rider v. Hodges,

__ N.C. App. __, __, 804 S.E.2d 242, 249 (2017) (citing Watson Elec. Constr. Co. v.

Summit Cos., LLC, 160 N.C. App. 647, 657, 587 S.E.2d 87, 95 (2003)).



                                          - 26 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



      We decline to address if aggravating circumstances tend to support Plaintiff’s

unfair or deceptive trade practices claim. Plaintiff has failed to demonstrate any

genuine issues of material fact exist that Defendant breached any of the parties’ loan

agreements. See id.

                              E. Breach of Fiduciary Duty

      Plaintiff alleges Defendant owed it a fiduciary duty “to act in good faith and

with due regard to the interests of Plaintiff” and that Defendant breached its

fiduciary duty by: (1) failing to provide the required amount of initial financing; (2)

underfunding the loan; (3) delaying change-order requests; and (4) refusing to finance

take-out loans as promised.

             For a breach of fiduciary duty to exist, there must first be
             a fiduciary relationship between the parties. Such a
             relationship has been broadly defined by this Court as one
             in which there has been a special confidence reposed in one
             who in equity and good conscience is bound to act in good
             faith and with due regard to the interests of the one
             reposing confidence . . . [and] it extends to any possible case
             in which a fiduciary relationship exists in fact, and in
             which there is confidence reposed on one side, and
             resulting domination and influence on the other.

Dalton v. Camp, 353 N.C. 647, 651, 548 S.E.2d 704, 707-08 (2001) (internal quotation

marks omitted).

      To establish a claim for breach of a fiduciary duty, claimants are “required to

produce evidence that (1) defendants owed them a fiduciary duty of care; (2)

defendants . . . violat[ed] . . . their fiduciary duty; and (3) this breach of duty was a


                                          - 27 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                   Opinion of the Court



proximate cause of injury to plaintiffs.” Farndale Co., LLC v. Gibellini, 176 N.C. App.

60, 68, 628 S.E.2d 15, 20 (2006). In North Carolina, the general rule holds:

              Ordinary borrower-lender transactions . . . are considered
              arm’s length and do not typically give rise to fiduciary
              duties. In other words, the law does not typically impose
              upon lenders a duty to put borrowers’ interests ahead of
              their own. Rather, borrowers and lenders are generally
              bound only by the terms of their contract and the Uniform
              Commercial Code.

Dallaire v. Bank of Am., N.A., 367 N.C. 363, 368, 760 S.E.2d 263, 266-67 (2014)

(internal citations omitted); see Sec. Nat’l Bank of Greensboro v. Educators Mut. Life

Ins. Co., 265 N.C. 86, 95, 143 S.E.2d 270, 276 (1965) (“There was no fiduciary

relationship; the relation was that of debtor and creditor.”).

      “Nonetheless, because a fiduciary relationship may exist under a variety of

circumstances, it is possible, at least theoretically, for a particular bank-customer

transaction to give rise to a fiduciary relation given the proper circumstances.” Id. at

368, 760 S.E.2d at 267 (internal citations and quotation marks omitted). To establish

a fiduciary relationship in the creditor-debtor context, there “must [be] some

additional fact which tends to elevate the relationship above that of a typical debtor

and creditor.” Lynn v. Federal Nat. Mort. Ass’n, 235 N.C. App. 77, 82, 760 S.E.2d 372,

376 (2014).

              A fiduciary duty, in the context of a financing party to a
              corporation, arises only when the evidence establishes that
              the party providing financing to a corporation completely
              dominates and controls its affairs. Edwards v. Bank, 39


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             FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                    Opinion of the Court



               N.C. App. 261, 277, 250 S.E.2d 651, 662 (1979); Pappas v.
               NCNB Nat. Bank of North Carolina, 653 F.Supp. 699, 704
               (M.D.N.C. 1987). Further, to justify the imposition of a
               fiduciary obligation on a party financing the affairs of a
               corporation, it must be shown that the financing party
               essentially dominated the will of its debtor. In re Prima
               Co., 98 F.2d 952 (7th Cir. 1938), cert. denied, 305 U.S. 658,
               83 L.Ed. 426 (1939).

Multifamily Mortg. Tr. 1996-1 v. Century Oaks Ltd., 139 N.C. App. 140, 146, 532

S.E.2d 578, 581-82 (2000) (emphasis supplied).

      Here, there is no genuine issue that Plaintiff and Defendant were in a debtor-

creditor relationship, which is not per se a fiduciary relationship. See Dallaire, 367

N.C. at 368, 760 S.E.2d at 266-67.         Plaintiff alleges and argues Defendant so

thoroughly dominated the will of Plaintiff with respect to the Project that a fiduciary

relationship existed between them.

      Plaintiff asserts the following facts tend to show Defendant dominated and

controlled Plaintiff’s affairs: Defendant’s control of distribution and withdrawals to

members and all buy/sell agreements between the members for membership

interests, Defendant’s giving of legal advice regarding how to set up LBS, Defendant’s

dictating of financing regarding Metromont, Defendant’s promise to make take-out

loans upon which Plaintiff relied, and Plaintiff’s utter dependence on Defendant’s

financing.

      “As a matter of law, there can be no fiduciary relationship between ‘parties in

equal bargaining positions dealing at arm’s length, even though they are mutually


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           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                    Opinion of the Court



interdependent businesses.’” Dreamstreet Investments, Inc. v. MidCountry Bank, 842

F.3d 825, 831 (4th Cir. 2016) (quoting Strickland v. Lawrence, 176 N.C. App. 656,

662, 627 S.E.2d 301, 306 (2006)).

      Reviewing the evidence in the light most favorable to Plaintiff, nothing tends

to show the relationship between Plaintiff and Defendant was anything other than

an agreement between two sophisticated commercial entities dealing at arm’s length.

Undisputed evidence in the record indicates Plaintiff’s development team members

had accumulated nearly 150-years’ worth of combined experience in commercial real

estate construction and development before entering into the loan agreements with

Defendant.

      Additionally, Mark Latell, a principal of Plaintiff, indicated in his deposition

that Plaintiff had retained a consultant, Lyle Preest, to help them find lenders for the

Project. Mr. Latell described Mr. Preest as “very knowledgeable with banking and

lending and borrowing.”      Numerous emails submitted to the trial court show

correspondence between Mr. Preest and Bradley Hines, the vice-president of

commercial lending of Defendant, dating from before and after the closing of the Loan

Agreement.    These emails discuss several critical matters relating to the loan

agreements, including Plaintiff obtaining third-party financing, obtaining take-out

financing, and the pre-sales of commercial units.




                                           - 30 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



      Nothing indicates Plaintiff reposed any sort of special confidence in Defendant

to create a fiduciary relationship. Dalton, 353 N.C. at 651, 548 S.E.2d at 707.

Plaintiff’s consultation with Lyle Preest as an outside expert is inconsistent with a

fiduciary relationship. See Branch Banking & Trust Co. v. Thompson, 107 N.C. App.

53, 61, 418 S.E.2d 694, 699 (1992) (finding no fiduciary relationship on action for

summary judgment where party asserting fiduciary relationship with bank consulted

with banker and accountant before entering into agreement); see also Sullivan v.

Mebane Packaging Grp., Inc., 158 N.C. App. 19, 33, 581 S.E.2d 452, 462 (2003)

(finding evidence that complaining party obtained outside counsel rebuts existence of

fiduciary relationship necessary for constructive fraud claim). Furthermore, nothing

in the record indicates Plaintiff was foreclosed from consulting with an attorney, or

other advisors of its choice, prior to executing the Loan Commitment and Loan

Agreement with Defendant.

      No evidence tends to show Defendant “essentially dominated the will” of

Plaintiff or “completely dominate[d] and control[led]” Plaintiff’s affairs. Multifamily

Mortg., 139 N.C. App. 140, 146, 532 S.E.2d 578, 581-82 (2012) (citations omitted).

      No genuine issue of material facts exists of whether Plaintiff and Defendant

were in a fiduciary relationship. Plaintiff has not produced evidence tending to show

this essential element of a breach of fiduciary relationship claim. The trial court’s

order properly granted Defendant summary judgment on this claim.



                                         - 31 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



                  F. Defendant’s Counterclaim on Promissory Note

      Plaintiff argues the trial court erred in granting Defendant’s motion for

summary judgment on Defendant’s counterclaim for payment on the promissory note.

The promissory note was executed by Plaintiff on 8 August 2008 for the principal

amount of $7,750,000.00. This note was modified by the First Change in Terms

Agreement on 23 January 2009, and the principal amount was increased to

$8,475,801.00.   On 8 June 2009, Plaintiff executed a Second Change in Terms

Agreement, which altered the formula used to calculate the interest rate.

      In support of Defendant’s motion for summary judgment, Defendant submitted

the affidavit of David A. Kozak, executive vice-president of Defendant. David A.

Kozak stated that Defendant was owed $10,491,440.16 along with interest and

attorney’s fees per the parties’ Loan Agreement and that Plaintiff had defaulted.

      Plaintiff argues due to Defendant allegedly breaching its obligations under the

loan agreements, Plaintiff is not obligated to pay on the note. The uncontradicted

evidence in the form of the parties’ 18 June 2009 Modification of Note and Deed of

Trust shows Defendant disbursed all funds it was required to loan under the

agreements evidenced by the note.      Plaintiff has not presented any evidence to

contradict David A. Kozak’s affidavit stating Plaintiff was in default.

      Based upon our holding to affirm the trial court’s determination that

Defendant is entitled to summary judgment on Plaintiff’s breach of contract claims,



                                         - 32 -
           FRENCH BROAD PLACE, LLC V. ASHEVILLE SAVINGS BANK, S.S.B.

                                  Opinion of the Court



no genuine issue of material fact exists with regard to Defendant’s counterclaim for

collection on the stated and uncontested sums in the note with interest and

contractually-agreed attorney’s fees. Plaintiff’s arguments are overruled.

                                    V. Conclusion

      Viewing the evidence in the light most favorable to Plaintiff, Plaintiff has failed

to establish any genuine issue of material fact exists with regard to its claims for

breach of contract, unfair or deceptive trade practices, and breach of fiduciary duty.

Plaintiff has also failed to demonstrate any genuine issue of material fact exists with

respect to Defendant’s counterclaim for contribution on the promissory note.

Defendant is entitled to summary judgment as a matter of law with respect to

Plaintiff’s claims and its counterclaim. The trial court’s order granting summary

judgment to Defendant is affirmed. It is so ordered.

      AFFIRMED.

      Judges ELMORE and ZACHARY concur.




                                         - 33 -
