Copyright 1998 - N.C. Administrative Office of the Courts

L. C. WILLIAMS OIL CO., Plaintiff, v.


No. COA97-28

(Filed 21 July 1998)

Venue-- forum selection clause -- non-consumer loan

The trial court erred by denying defendant's motion to dismiss a breach of contract action for improper venue where the parties entered into an agreement with a forum selection clause requiring trial of any action in New York but the agreement constituted a "non-consumer loan transaction" and therefore fell within the exception to the statute declaring such clauses void as against public policy. N.C.G.S. § 22B-3.

    Appeal by defendant from order entered 30 October 1996 by Judge Robert H. Hobgood in Chatham County Superior Court. Heard in the Court of Appeals 17 September 1997.

    Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., by Robin K. Vinson, for plaintiff-appellee.

    Womble Carlyle Sandridge & Rice, P.L.L.C., by Johnny M. Loper, Bonnie Liles, and Christine Sandez, for defendant- appellant.

    JOHN, Judge.

    Defendant appeals denial of its motion to dismiss. We reverse the trial court.

    Pertinent facts and procedural history are as follows: Plaintiff and defendant entered into an agreement entitled "Lease/Finance Proposal" (the agreement), signed by plaintiff on or about 5 December 1995. The agreement designated defendant, NAFCO Capital Corp. (NAFCO; defendant), as "Lessor/Lender" and plaintiff, L. C. Williams Oil Co. (Williams; plaintiff), as "Lessee/Borrower." Critical to the instant appeal is whether the agreement constituted a "lease" or a "loan."

    The agreement contained the following pertinent provisions:

        Equipment Cost:        $850,000.00

        Lease Term:            60 months

        . . . .

        Monthly Rental:        $18,445.00

        . . . .