Opinion
No. COA11–1119.
2012-05-15
TUCKER MATERIALS, INC., Plaintiff, v. SAFESOUND ACOUSTICS, INC., and Sherri Noble, Defendants.
Adams Hendon Carson Crow & Saenger, P.A., by E. Thomison Holman, for plaintiff-appellee. Ferikes & Bleynat, PLLC, by Edward L. Bleynat, Jr., for defendants-appellants.
Appeal by defendants from order entered 1 April 2011 by Judge James Calvin Hill in Buncombe County District Court. Heard in the Court of Appeals 20 February 2012. Adams Hendon Carson Crow & Saenger, P.A., by E. Thomison Holman, for plaintiff-appellee. Ferikes & Bleynat, PLLC, by Edward L. Bleynat, Jr., for defendants-appellants.
HUNTER, ROBERT C., Judge.
SafeSound Acoustics, Inc. (“SafeSound”) and Sherri Noble (“Noble”) (collectively “defendants”) appeal from the trial court's order granting summary judgment in favor of Tucker Materials, Inc. (“plaintiff”) and denying Noble's motion to dismiss and motion for summary judgment. Defendants contend the trial court erred in granting summary judgment in favor of plaintiff as there are genuine issues of material fact as to whether defendants owe plaintiff for materials that SafeSound allegedly ordered from plaintiff. After careful review, we agree and reverse the trial court's order on this issue. Noble also contends the trial court erred in granting summary judgment in favor of plaintiff and in denying Noble's motion for summary judgment on the issue of Noble's individual liability for SafeSound's alleged debt incurred pursuant to a credit agreement by which plaintiff extended a $20,000 .00 line of credit to SafeSound. As to this issue, we reverse the trial court's order and remand for entry of summary judgment in favor of Noble.
Background
On 26 July 2005, SafeSound completed an application for a $20,000 .00 line of credit from plaintiff (the “Credit Agreement”). The majority of the terms of the Credit Agreement concern the obligations of the “applicant,” SafeSound. However, paragraph 7 states, “The undersigned personally guarantees payment of applicant's past due accounts and further agrees to be bound by all credit terms herein.” The signature block on the Credit Agreement appears as follows:
SafeSound Acoustics, Inc.
(Print Name of Partnership, Corporation or Individual)
Sherri Noble
Signed By
Sherri Noble, Pres.
Print, Name and Title
Pursuant to the Credit Agreement the parties conducted business for a number of years with plaintiff supplying SafeSound with materials for the installation of acoustic systems. However, on 15 September 2010, plaintiff filed a complaint against defendants for breach of contract. Plaintiff alleged that in 2009 SafeSound ordered materials from plaintiff with payment due by 10 December 2009; that SafeSound paid a portion of its account balance, but $12,579.27 remained due to plaintiff at the time of filing the action. Plaintiff further alleged that, pursuant to the Credit Agreement, Noble personally guaranteed the debt SafeSound owed to plaintiff. Plaintiff sought a judgment against defendants, jointly and severally, in the amount of $12,579.27, plus interest, reasonable attorneys' fees, and costs.
On 14 February 2011, plaintiff filed a motion for summary judgment. In support of its motion, plaintiff filed an affidavit by Joan Brooks (“Brooks”), the office manager for Tucker Materials, Inc. To Brooks's affidavit, plaintiff attached email correspondence between Noble and Brooks that Brooks interpreted as an admission by Noble that defendants owed plaintiff for materials plaintiff delivered to one of defendants' construction worksites (the “Deerfield Project”) and for materials plaintiff delivered to another one of defendants' construction worksites (the “Ford Project”). Brooks further averred that after the filing of the complaint, defendants made additional payments to plaintiff reducing the principal amount defendants allegedly owed to $8,279.25 as of the filing of her affidavit.
In opposition to plaintiff's motion for summary judgment, Noble, as president of SafeSound, filed an affidavit in which she averred that SafeSound did not order the materials totaling $8,279.25, as claimed by plaintiff. Noble further averred that some materials delivered by plaintiff to the Deerfield Project were not ordered by SafeSound, but were signed for by individuals who were not employees of SafeSound nor authorized to accept materials on behalf of SafeSound. The signatures on those invoices, Noble contends, are the signatures of employees of a third party, Hester Drywall—Jessica Hughes and a person named Rooster whose last name was not known to Noble.
On 24 February 2011, Noble filed a motion to dismiss pursuant to N.C. R. Civ. P. 12(b)(6) alleging that she was not personally liable for SafeSound's debt as she signed the Credit Agreement in her capacity as president of SafeSound. Noble also filed a motion seeking, in the alternative, summary judgment pursuant to N.C. R. Civ. P. 56.
In response to Noble's affidavit, plaintiffs filed the affidavit of Rene' Sutton (“Sutton”), the employee of Tucker Materials in charge of acoustical sales. Sutton averred that the materials Noble denied SafeSound ordered from plaintiff were, in fact, ordered by SafeSound's officers, employees or representatives—with the exception of one order placed by “Jessica” of Hester Drywall. Attached to Sutton's affidavit were invoices, generated by plaintiff, which Sutton averred established that the orders in question were placed by either SafeSound's vice-president, Brad Noble, or SafeSound employee or representative, Paul Fraga.
After a hearing on the parties' motions, the trial court entered summary judgment in favor of plaintiff and denied Noble's motion for summary judgment and motion to dismiss. The trial court held SafeSound and Noble jointly and severally liable for $8,279.25, plus interest, reasonable attorneys' fees, and costs. Defendants appeal.
Discussion
A. Plaintiff's Motion for Summary Judgment
Defendants first argue the trial court erred in granting summary judgment against SafeSound as there are genuine issues of material fact as to which invoices produced by plaintiff reflect materials ordered by SafeSound versus materials ordered by a third party; the extent to which plaintiff was compensated by SafeSound for materials it ordered; and the extent to which SafeSound owes plaintiff money for those materials. We agree that summary judgment for plaintiff was not proper.
The instant case presents cross-motions for summary judgment. Summary judgment is appropriate 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 trial court may not resolve issues of fact and must deny the motion if there is a genuine issue as to any material fact. Moreover, all inferences of fact ... must be drawn against the movant and in favor of the party opposing the motion. The standard of review for summary judgment is de novo.
Forbis v. Neal, 361 N.C. 519, 523–24, 649 S.E.2d 382, 385 (2007) (internal citation and quotation marks omitted).
Defendants argue it was error to grant summary judgment in favor of plaintiff as plaintiff failed to show that the invoices for which it claims it was not paid were made by SafeSound personnel with actual or apparent authority to bind SafeSound—or that SafeSound ratified the purchase of these materials. In her affidavit, described above, Noble averred that employees of a third party, Hester Drywall, ordered materials for which plaintiff seeks payment and that these orders were not authorized by SafeSound. Plaintiff countered with an affidavit by Sutton averring that the materials were, in fact, ordered by employees or agents of SafeSound. A review of the invoices plaintiff attached to Sutton's affidavit, however, reveals invoices with illegible signatures or no signatures at all. We conclude this evidence submitted by plaintiff and defendants is subject to multiple interpretations and creates genuine issues of material fact as to whether the disputed orders were made by someone with actual or apparent authority of SafeSound and as to how much money, if any, defendants owe plaintiff. This evidence was sufficient to preclude summary judgment.
As additional support for its argument that summary judgment was proper, plaintiff places great emphasis on a series of emails between Noble and Brooks from February and March 2010; plaintiff interprets these emails as unequivocal acknowledgement by defendants of the debt SafeSound owes to plaintiff. We disagree. Plaintiff's interpretation appears to take Noble's statements out of context. Rather, when read as a whole, it is reasonable to conclude Noble's statements are merely an acknowledgement of the amount of materials plaintiff delivered to SafeSound's worksites; it is not apparent that these statements amount to an admission that defendants ordered all of the materials plaintiff delivered. That these email communications are subject to multiple interpretations raises a genuine issue of material fact as to what materials defendants ordered from plaintiff and what balance remains due to plaintiff, if any. Consequently, it was error for the trial court to grant summary judgment in favor of plaintiff.
B. Noble's Motion for Summary Judgment
Next, defendants argue the trial court erred in denying Noble's motion for summary judgment as she was not a party to the Credit Agreement and did not sign the contract as a guarantor of SafeSound's obligations under the contract. We agree.
“[C]ontracts of guaranty are subject to the more general law of contract when not otherwise provided.” O'Grady v. First Union Nat. Bank, 296 N.C. 212, 220, 250 S.E.2d 587, 593 (1978). “When the parties use clear and unambiguous terms, such contracts can be interpreted by the court as a matter of law; however, if the terms employed are subject to more than one reasonable meaning, the interpretation of the contract is a jury question.” Robertson v. Hartman, 90 N.C.App. 250, 252–53, 368 S.E.2d 199, 200 (1988).
Here, the contract makes clear that Noble is not a party to the contract in her personal capacity. The contract specifies the “Applicant” is “SafeSound Acoustics, Inc.[,]” that Sherri Noble is one of the “Owners/Officers[,]” and she is listed as holding the title of “Pres.” Additionally, the first and third lines of the signature block, illustrated above, indicates that Sherri Noble signed the contract on the second line in her capacity as president of SafeSound.
The text below the first line of the signature block specifies that the signature is that of a “Partnership, Corporation or Individual [.]” (Emphasis added.) Above this text appears the name “SafeSound Acoustics, Inc.[,]” not the name of the individual Sherri Noble. Noble's signature appears on the second line above the text “Signed By.” Noble's printed name and title follows on the third line indicating her signature was made as the president of SafeSound.
Plaintiff concedes that SafeSound entered into the written Credit Agreement and argues that Noble also entered into the same written agreement as the guarantor of SafeSound's debts. Yet, only one signature appears on the Credit Agreement. As this Court has noted, “where individual responsibility is demanded, the nearly universal practice in the commercial world is that the corporate officer signs twice, once as an officer and again as an individual.” Keels v. Turner, 45 N.C.App. 213, 218, 262 S.E.2d 845, 847 (holding the defendant personally liable under a contract where the defendant signed the contract once with his unqualified signature and once as “ ‘Homestead Builders by W.E. Turner’ ”) (citation and quotation marks omitted), disc. review denied, 300 N.C. 197, 269 S.E.2d 624 (1980). If plaintiff intended to secure a guarantor of SafeSound's debt with the signature of one of SafeSound's officers in his or her individual capacity, it failed to do so. See RD & J Props. v. Lauralea–Dilton Enters., LLC, 165 N.C.App. 737, 742, 600 S.E.2d 492, 497 (2004) (citing Keels and holding the plaintiff failed to establish that a contract existed between the plaintiff and the defendant, in his individual capacity, where the defendant signed the contract only once and did so on behalf of the corporation of which the defendant was the sole owner); Indus. Air, Inc. v. Bryant, 23 N.C.App. 281, 285, 209 S.E.2d 306, 309 (1974) (concluding the mere fact that the defendant signed his unqualified name on the contract was not sufficient to conclude he signed in his individual capacity where the name of the corporation was handwritten above his unqualified signature and the text “Owner” was printed below the signature followed by a second signature that included the title “Pres”). Here, the record shows that one signature appears on SafeSound's Credit Agreement and that Noble signed the contract in her capacity as the president of SafeSound.
Additionally, as we stated in Bryant, “[t]he intent of the parties as revealed in the transaction as a whole, and not the signatures alone, determines liability.” 23 N.C.App. at 285, 209 S.E.2d at 309 (concluding the evidence relating to the negotiations and execution of the contract did not support the conclusion that the plaintiff dealt with the defendant in his individual capacity, but rather dealt with him as an officer of the corporation). Here, as in Bryant, the evidence in the record does not support the conclusion that plaintiff dealt with Noble in any capacity other than as an officer of SafeSound.
On these facts we conclude there is no genuine issue of material fact as to Noble's individual liability for SafeSound's debt under the Credit Agreement. Noble signed the Credit Agreement in her capacity as the president of SafeSound and not in her individual capacity. Accordingly, the trial court erred in granting summary judgment in favor of plaintiff and in denying Noble's motion for summary judgment; Noble is entitled to summary judgment on this issue.
Conclusion
The trial court erred in granting summary judgment in favor of plaintiff as genuine issues of material fact exist as to the amount, if any, owed to plaintiff by SafeSound. The trial court also erred in granting summary judgment in favor of plaintiff and in denying defendant Noble's motion for summary judgment regarding Noble's individual liability for SafeSound's debts to plaintiff, if any, that arose under the Credit Agreement. On remand, the trial court shall enter an order granting summary judgment in favor of Noble on the issue of her individual liability.
Reversed and remanded. Chief Judge MARTIN and Judge STEPHENS concur.
Report per Rule 30(e).