Citicorp Vendor Finance v Fitness Plus, 162 NC App 547 (02-1451) 02/03/2004

Appeal by Darrell G. Pendergraph (defendant) from judgment entered 24 May 2002 by Judge James R. Fullwood in District Court, Wake County. Heard in the Court of Appeals 28 August 2003.

Smith Debnam Narron Wyche Saintsing & Myers, LLP, by Byron L. Saintsing and Krista F. Norstog, for plaintiff-appellee.

Darrell G. Pendergraph, pro se.

    McGEE, Judge.

    Fitness Plus of Burlington, Inc. (Fitness Plus) executed an Equipment Lease Agreement (agreement) to lease certain fitness equipment from Middle States Capital Corporation (Middle States) on 8 October 1999. In order to induce Middle States to lease the equipment to Fitness Plus, defendant executed a continuing personal guaranty (guaranty) which was incorporated into the agreement.
    Middle States assigned the agreement and guaranty to JDR Capital Corporation (JDR) on or about 10 March 2000. JDR later assigned the agreement and guaranty to Citicorp Vendor Finance, Inc., F/K/A Copelco Capital, Inc. (plaintiff).    Fitness Plus defaulted on its obligations under the terms of the agreement by failing to make its required monthly payments. In response, plaintiff accelerated the remaining payments. On or about 18 April 2001, plaintiff sold the leased equipment after providing appropriate notice to Fitness Plus and to defendant. The proceeds of the sale were applied to the accelerated balance due under the agreement. After the application of all credits and offsets, the balance owed to plaintiff was $47,842.06, which Fitness Plus failed to pay. Defendant, as guarantor, defaulted as well.
    Plaintiff filed a complaint on 24 September 2001 seeking recovery of all monies owed under the agreement and guaranty. The agreement, guaranty, and the corporate verification were attached to the complaint. The corporate verification, signed by Citicorp Assistant Manager Libbi Sullivan, stated the allegations in the complaint were true. Defendant filed his unverified answer to the complaint on 7 March 2002. Fitness Plus failed to plead in response to the complaint and a default judgment was entered against it on 27 February 2002. Plaintiff filed a motion for summary judgment on 8 April 2002. Defendant filed an unverified answer to the motion on 19 April 2002. There was no affidavit entered by defendant in opposition to plaintiff's summary judgment motion. The trial court granted plaintiff's motion for summary judgment on 24 May 2002. According to the summary judgment, Fitness Plus and defendant are jointly and severally liable for all monies owed. Defendant appeals. Fitness Plus is not a party tothis appeal.
    "A person who executes a written instrument is ordinarily charged with knowledge of its contents." International Harvester Credit Corp. v. Bowman, 69 N.C. App. 217, 220, 316 S.E.2d 619, 621, disc. review denied, 312 N.C. 493, 322 S.E.2d 556 (1984). In the case before us, the language of the guaranty signed by defendant is unambiguous and by its provisions defendant is the guarantor of the payment owed by Fitness Plus. [R. 14] The guarantor's obligation is separate and independent from the obligation of the principal debtor. Cameron-Brown v. Spencer, 31 N.C. App. 499, 502, 229 S.E.2d 711, 712 (1976), cert. denied, 291 N.C. 710, 232 S.E.2d 203 (1977). According to the guaranty, plaintiff's cause of action against defendant, as guarantor, ripened immediately upon the default by the principal debtor, Fitness Plus. See Id. It is undisputed that Fitness Plus failed to make the payments stipulated in the agreement. Defendant admits that the agreement attached to plaintiff's complaint was executed by Fitness Plus and that he executed the attached guaranty.
    Summary judgment is to be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show 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)(2003). It is the burden of the moving party to show that no material issue of fact exists. Lexington State Bank v. Miller, 137 N.C. App. 748, 751, 529 S.E.2d 454, 455-56, disc. review denied,352 N.C. 589, 544 S.E.2d 781 (2000). Here, plaintiff's pleadings included the agreement and guaranty. Also included was the corporate verification which attested to the accuracy of the complaint in its totality, which included an account of the outstanding balance on the agreement and the default by Fitness Plus and defendant as guarantor. We conclude this was sufficient to meet plaintiff's initial burden as to its motion for summary judgment. See Id. at 751, 529 S.E.2d at 456 (a plaintiff's threshold burden met by the inclusion of two loan agreements and security agreements, as well as affidavits listing the balance remaining after offset of monies received from foreclosure sales).     The burden then shifts to the non-movant defendant to show that there remains a genuine issue of material fact. Dixie Chemical Corporation v. Edwards, 68 N.C. App. 714, 716, 315 S.E.2d 747, 750 (1984). Rule 56(e) provides that once the burden has shifted to the adverse party, the non-movant "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." N.C. Gen. Stat. § 1A-1, Rule 56(e)(2003)(emphasis added). "This is because the purpose of summary judgment is to 'allow[] one party to force his opponent to produce a forecast of evidence which he has available for presentation at trial to support his claim or defense.'" Lexington State Bank, 137 N.C. App. at 753, 529 S.E.2d at 456 (quoting Dixie, 68 N.C. App. at 717, 315 S.E.2d at 750).
    In this case, defendant submitted no affidavit or otherdocumentary evidence with his unverified answers to plaintiff's complaint and motion. Both answers consist of defendant's general allegations, denials, and conclusions unsupported by fact or law. Therefore, because defendant failed to offer evidence sufficient to rebut plaintiff's showing that no genuine issue of fact existed, we hold that the trial court properly entered summary judgment for plaintiff.
    We note that defendant argues six issues of disputed fact which he contends should have precluded the trial court from granting summary judgment in favor of plaintiff. These issues are not properly before this Court since they were not raised or argued by defendant in the trial court. See N.C. App. P. 10(b). As we stated, once plaintiff satisfied its burden of establishing that no material issue of fact existed, the burden fell to defendant to show otherwise by presenting specific facts. Here, defendant has relied entirely on the denials and conclusions stated in his pleadings.
    Affirmed.
    Judges BRYANT and GEER concur.
    Report per Rule 30(e).

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