College Road Animal Hospital, PLLC v. Cottrell

NO. COA14-29
NORTH CAROLINA COURT OF APPEALS
Filed: 16 September 2014
COLLEGE ROAD ANIMAL HOSPITAL, PLLC;
PHILLIP LANZI and JAMIE LANZI,
Plaintiffs

New Hanover County
v.
No. 12 CVS 3404

JON KEDRICK COTTRELL and JULIE COTTRELL,
Defendants

Appeal by defendants from order entered 11 September 2013

by Judge Paul L. Jones in New Hanover County Superior Court.

Heard in the Court of Appeals 5 June 2014.

Marshall, Williams & Gorham, LLP, by John L. Coble, for
Plaintiffs.

Law Offices of G. Grady Richardson, Jr., P.C., by G. Grady
Richardson, Jr., for Defendants.

ERVIN, Judge.

Defendants Jon Kedrick Cottrell and Julie Cottrell appeal

from an order granting summary judgment in favor of Plaintiffs

College Road Animal Hospital, Phillip Lanzi, and Jamie Lanzi,

and ordering Defendants to pay 50% of all past due and future

payments required under a loan obtained from Bank of America.

On appeal, Defendants contend that the trial court erred by

entering summary judgment in favor of Plaintiffs and,

concomitantly, declining to enter summary judgment in their

favor on the grounds that the Lanzis and the Cottrells were not
 -2-
principals under the loan and that the existence of an express

contract between the parties precluded the maintenance of an

action for unjust enrichment. After careful consideration of

Defendants’ challenges to the trial court’s order in light of

the record and the applicable law, we conclude that summary

judgment was improperly entered in favor of Plaintiffs, that

summary judgment should have been entered in favor of Ms.

Cottrell with respect to Plaintiffs’ contribution claim, and

that summary judgment should have been entered in favor of

Defendants with respect to Plaintiffs’ unjust enrichment claim;

that the trial court’s order should be reversed; and that this

case should be remanded to the New Hanover County Superior Court

for further proceedings not inconsistent with this opinion.

I. Factual Background

A. Substantive Facts

In May of 2009, Dr. Cottrell purchased the 50% interest in

College Road that had been previously owned by Dr. Robert

Weedon. Prior to that date, Dr. Cottrell had been employed by

College Road and operated its Carolina Beach location. After

purchasing Dr. Weedon’s interest, Dr. Cottrell was responsible

for operating the Carolina Beach location while Dr. Lanzi was

responsible for operating the College Road location.
 -3-
On 16 September 2009, College Road obtained a $293,000 loan

from Bank of America for the purpose of making capital

improvements at the Carolina Beach location. According to the

loan agreement, the “Borrower shall make all scheduled payments

to Lender.” In addition, “[e]ach Borrower and each Guarantor

agree[d] that [their] obligation to make payments to [the]

Lender on the Indebtedness under [the] Agreement [was] absolute

and unconditional.” The “dismissal, resignation or other

withdrawal” from College Road’s practice by “any licensed

professional who is an owner or shareholder” was prohibited

under the loan agreement. The list of incidents of default

specified in the loan agreement included, in addition to a

failure to make required payments, any failure to adhere to any

of the other covenants set forth in that document.

Dr. Lanzi and Dr. Cottrell signed the loan agreement in the

section designated for the signature of the borrower. In

addition, the two men, along with their wives, executed the

guaranty agreement. The loan agreement was modified on 11 March

2010 to increase the principal amount from $293,000 to $312,000,

with final disbursement under the loan agreement having been

made in December of 2010.1

1
LaWe Holdings, LLC, an entity in which Dr. Lanzi and Dr.
Weedon were involved, became involved in this series of
transactions as an additional guarantor on 28 October 2009.
 -4-
On 17 May 2011, the Cottrells sent an email to Dr. Lanzi

indicating that Dr. Cottrell was relinquishing his interest in

College Road and defaulting on his agreement to purchase shares

in Dr. Weedon’s business. On 15 June 2011, Dr. Lanzi’s attorney

responded to the Cottrells’ e-mail by accepting Dr. Cottrell’s

resignation and indicating that Dr. Lanzi did not wish to enter

into an employer-employee relationship with Dr. Cottrell. On 20

July 2011, the Cottrells’ attorney notified Bank of America that

Dr. Cottrell was no longer affiliated with College Road and that

the Cottrells had terminated their personal guarantee with

respect to any further advances made to or obligations incurred

by College Road.

According to Dr. Lanzi, he and Dr. Cottrell understood that

the two of them would contribute half of the funds needed to

repay the loan. The actual payments under the loan agreement,

however, were made by College Road, with the funds needed for

the making of these payments having been derived from the

operation of both the College Road and Carolina Beach locations.

After the termination of Dr. Cottrell’s relationship with the

practice, College Road continued to make the required regular

monthly payments, which totaled $74,165.80 at the time of the

hearing in the trial court, without any contribution from Dr.
 -5-
Cottrell. Bank of America has never made any demand for payment

upon Dr. Cottrell.

B. Procedural History

On 29 August 2012, Plaintiffs filed a complaint against

Defendants alleging claims sounding in equitable contribution

and unjust enrichment. On 27 September 2012, Defendants filed

an answer in which they denied the material allegations of

Plaintiffs’ complaint. On 5 June 2013, Plaintiffs filed a

motion seeking the entry of summary judgment in their favor that

was accompanied by an affidavit executed by Dr. Lanzi. On 28

August 2013, Defendants filed a motion seeking the entry of

summary judgment in their favor that was accompanied by an

affidavit executed by Dr. Cottrell. On 11 September 2013, the

trial court entered an order granting Plaintiffs’ summary

judgment motion, denying Defendants’ summary judgment motion,

ordering Defendants to pay $37,082.90, an amount that

represented half of the monthly payments that had been made to

Bank of America under the loan agreement between July 2011 and

May 2013, and ordering Defendants to provide 50% of the funds

used to make the remaining payments required under the loan

agreement. Defendants noted an appeal to this Court from the

trial court’s order.

II. Legal Analysis
 -6-
A. Standard of Review

“Summary judgment is proper when ‘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.’” Broughton v.

McClatchy Newspapers, Inc., 161 N.C. App. 20, 26, 588 S.E.2d 20,

25 (2003) (quoting N.C. Gen. Stat. § 1A-1, Rule 56(c)). During

the consideration of a motion for summary judgment:

The moving party bears the burden of
demonstrating the lack of triable issues of
fact. Koontz v. City of Winston-Salem, 280
N.C. 513, 518, 186 S.E.2d 897, 901 (1972).
Once the movant satisfies its burden of
proof, the burden then shifts to the non-
movant to present specific facts showing
triable issues of material fact. Lowe v.
Bradford, 305 N.C. 366, 369-70, 289 S.E.2d
363, 366 (1982). On appeal from summary
judgment, “we review the record in the light
most favorable to the non-moving party.”
Bradley v. Hidden Valley Transp., Inc., 148
N.C. App. 163, 165, 557 S.E.2d 610, 612
(2001), aff’d, 355 N.C. 485, 562 S.E.2d 422
(2002).

Id. at 26, 588 S.E.2d at 25-26. We will now utilize this

standard of review in analyzing the validity of Defendants’

challenges to the trial court’s order.

B Substantive Legal Analysis

1. Contribution Claim
 -7-
The first of the two theories upon which Plaintiffs based

their claim against Defendants was that of contribution.2

“Contribution is generally defined as ‘the right of one who has

discharged a common liability or burden to recover of another

also liable [the fractional] portion which he ought to pay or

bear.’” Irvin v. Egerton, 122 N.C. App. 499, 501, 470 S.E.2d

336, 337 (1996) (alteration in original) (quoting 18 C.J.S.

Contribution § 2, at 4 (1990)). Although “[i]t is a

prerequisite to a claim for contribution that the party seeking

contribution ‘satisfy, by payment or otherwise, more than his

just proportion of the common obligation or liability,’” id.

(quoting 18 Am. Jur. 2d Contribution § 9, at 16 (1985)), this

Court has determined that a plaintiff is “entitled to

contribution” and has “satisfied more than his just proportion

of that common obligation” when the “parties ha[d] a monthly

obligation” and “each month . . . the plaintiff paid more than

one-half of the monthly obligation.” Id. As a result, a

plaintiff seeking contribution-based relief is simply required

to prove that the obligation exists, that the parties are both

required to pay the obligation, and that one obligor has paid a
2
In view of the fact that the trial court did not
specifically delineate whether it found in favor of Plaintiffs
on the basis of a contribution theory, an unjust enrichment
theory, or both, we must analyze the validity of both of the
theories set out in Plaintiffs’ complaint in order to determine
whether the trial court’s order should be affirmed or reversed.
 -8-
portion of the obligation for which the other obligor was

legally responsible. Id.; see also Nebel v. Nebel, 223 N.C.

676, 686, 28 S.E.2d 207, 214 (1943) (stating that “[t]he right

to sue for contribution does not depend upon a prior

determination that the defendants are liable”); N.C. Gen. Stat.

§ 25-3-116(b) (providing that “a party having joint and several

liability who pays the instrument is entitled to receive from

any party having the same joint and several liability

contribution in accordance with applicable law”). As a result

of the fact that the trial court’s order awarded relief against

both Dr. Cottrell and Ms. Cottrell, we must examine their

liability under a contribution theory separately.

a. Ms. Cottrell’s Liability

As we have already noted, a litigant’s ability to obtain

relief on the basis of a contribution theory assumes that the

plaintiff and the defendant are both obligated to make the

underlying payment. For that reason, Plaintiffs were required

to show that Ms. Cottrell was liable under the loan agreement in

order to obtain relief from her based upon a contribution

theory. We do not believe that Plaintiffs have made the

required showing.

The only signatures appearing in the portion of the loan

agreement at which the borrower or borrowers were supposed to
 -9-
sign were those of Dr. Lanzi and Dr. Cottrell, who were the sole

owners of interests in College Road. On the other hand, a

careful review of the record clearly establishes that Ms.

Cottrell did not sign the loan agreement in the location

designated for the borrowers and that the only location in the

loan agreement at which the signatures of either Ms. Lanzi or

Ms. Cottrell appear is at the conclusion of the guaranty

agreement. As a result, an examination of the loan agreement

reveals that Ms. Cottrell never agreed to shoulder any

obligations under that document except those set out in the

guaranty agreement.

“A guaranty is a promise to answer for the payment of a

debt or the performance of some duty in the event of the failure

of another person who is himself primarily liable for such

payment or performance.” Branch Banking & Trust Co. v. Creasy,

301 N.C. 44, 52, 269 S.E.2d 117, 122 (1980). While “a surety is

primarily liable for the discharge of the underlying obligation,

and is engaged in a direct and original undertaking which is

independent of any default,” “[a] guarantor’s duty of

performance is triggered at the time of the default of another.”

Id. at 52-53, 269 S.E.2d at 122 (citations omitted).

Consistently with this fundamental legal principle, the guaranty

agreement contained in the loan agreement provides, in pertinent
 -10-
part, that the guarantors “shall immediately pay to [the] Lender

the outstanding balance of all Indebtedness” “[i]f [the]

Borrower fails to pay all or any part of any indebtedness when

due.”

According to the undisputed evidence contained in the

record, the loan at issue in this case is current. For that

reason, neither Ms. Lanzi nor Ms. Cottrell are currently liable

for any amount owed to Bank of America under the loan agreement.

Thus, Ms. Cottrell is not jointly obligated with the other

parties to pay the amount owed to Bank of America under the loan

agreement. As a result, the trial court erred by entering

summary judgment in favor of Plaintiffs and against Ms. Cottrell

on the basis of a contribution theory.

b. Guarantors’ Liability

Secondly, Plaintiffs argue that Dr. Lanzi and Dr. Cottrell

were primarily liable on the note given the presence of their

signatures on the loan agreement in the block marked for

borrowers and were, simultaneously, secondarily liable for the

amount owed under the loan as evidenced by their signatures at

the conclusion of the guaranty agreement. Although Plaintiffs

appear to suggest that the joint obligation required for the

successful assertion of a contribution claim can arise from Dr.

Cottrell’s status as a guarantor, we do not find this contention
 -11-
persuasive in light of the principle that “[a] guarantor’s duty

of performance is triggered at the time of the default of

another,” id. at 52, 269 S.E.2d at 122, and the fact that the

guaranty agreement at issue in this case provides that the

“Guarantor shall immediately pay to Lender the outstanding

balance of all Indebtedness” if “Borrower fails to pay all or

any part of any Indebtedness when due.” As a result, given that

a guaranty agreement constitutes nothing more than a “promise to

pay the debt of another at maturity if not paid by the principal

debtor,” O’Grady v. First Union Nat’l Bank, 296 N.C. 212, 220,

250 S.E.2d 587, 593 (1978), and the fact that “[t]he right to

sue upon an absolute guaranty of payment arises immediately upon

the failure of the principal debtor to pay at maturity,” id.,

the parties to the present guaranty agreement have no current

obligation to make any payment to Bank of America relating to

the loan agreement. As a result, to the extent that the trial

court’s decision to grant summary judgment in Plaintiffs’ favor

rested upon the understanding that Dr. Cottrell’s decision to

sign the guaranty agreement rendered him jointly liable on the

underlying obligation created by the loan agreement, that

decision constituted an error of law.3

3
In their brief, Plaintiffs emphasize the fact that Dr.
Cottrell’s withdrawal from the practice constituted an incident
of default under the loan agreement. Although Plaintiffs’
 -12-
c. Individual Liability

The principal argument advanced in Plaintiffs’ brief in

support of the trial court’s order is a contention that, since

Dr. Lanzi and Dr. Cottrell signed the loan agreement in their

individual capacities, they are co-borrowers under the loan

agreement and are jointly obligated to repay the loan.

According to Defendant, however, Dr. Lanzi and Dr. Cottrell

signed the loan agreement as agents of College Road instead of

in their individual capacities. As a result of the fact that

the record demonstrates the existence of a genuine issue of

material fact concerning the capacity in which Dr. Lanzi and Dr.

Cottrell signed the loan agreement, we conclude that the trial

court erred by granting summary judgment in favor of Plaintiffs

and against Dr. Cottrell with respect to the contribution issue

and that this issue needs to be decided after a full trial on

the merits.

According to N.C. Gen. Stat. § 25-3-402(b):

(1) If the form of the signature shows
unambiguously that the signature is
made on behalf of the represented

assertion is clearly correct as a factual matter, the record
contains no indication that Bank of America has actually
declared the loan in default. In addition, the liability of the
guarantors is triggered by nonpayment rather than the occurrence
of any incident of default. As a result, the fact that Dr.
Cottrell’s withdrawal from the practice constituted an incident
of default under the loan agreement has no bearing on the proper
resolution of this case.
 -13-
person who is identified in the
instrument, the representative is not
liable on the instrument.

(2) Subject to subsection (c) of this
section, if (i) the form of the
signature does not show unambiguously
that the signature is made in a
representative capacity, or (ii) the
represented person is not identified in
the instrument, the representative is
liable on the instrument to a holder in
due course that took the instrument
without notice that the representative
was not intended to be liable on the
instrument. With respect to any other
person, the representative is liable on
the instrument unless the
representative proves that the original
parties did not intend the
representative to be liable on the
instrument.

Although the Supreme Court has clearly stated that, “when the

issue to be decided is the intent of a party, the general rule

is that it is a question of fact to be determined by a jury,”

United Labs., Inc. v. Kuykendall, 322 N.C. 643, 663, 370 S.E.2d

375, 388 (1988), that rule is modified in cases involving

negotiable instruments by N.C. Gen. Stat. § 25-3-402(b), which

provides that the signatory to a negotiable instrument is liable

to a holder in due course unless his or her signature

unambiguously shows that it was made in the person’s

representative capacity or the represented party is not named in

the instrument and that the signatory of such an instrument is

liable to anyone else other than a holder in due course unless
 -14-
he or she demonstrates that the original parties did not intend

for the representative party to be liable on the instrument. As

a result, in cases in which the party seeking to hold a

signatory liable on the instrument is a person or entity other

than a holder in due course,4 “[t]he presumption is that nothing

else appearing, a person who signs his or her name on the right-

hand bottom corner of the face of a promissory note is a maker

of that note and is primarily liable thereon.” Federal Land

Bank of Columbia v. Lieben, 86 N.C. App. 342, 346, 357 S.E.2d

700, 703 (1987). However, “this presumption may be rebutted by

parol evidence that the signer of the note is a surety and that

the creditor knew at the time he received the note that the

signer of the note was signing as a surety.” Id. Thus,

although “one who places his unqualified signature on an

instrument as maker or indorser will not be able to escape

liability as such by a mere assertion that he intended to sign

only as the representative of a corporation of which he is an

4
Although Plaintiff correctly notes that Bank of America
appears to be a holder in due course as defined in N.C. Gen.
Stat. § 25-3-402(a), that fact has no bearing on the proper
resolution of this case given that Bank of America has not
attempted to enforce the note and is not a party to this action.
As a result of the fact that College Road, Dr. Lanzi, and Ms.
Lanzi do not hold the loan agreement, they cannot, by
definition, be holders in due course, rendering the provisions
of N.C. Gen. Stat. § 25-3-402(b) applicable to claims asserted
on behalf of holders in due course irrelevant to a proper
resolution of this case.
 -15-
officer or director,” Keels v. Turner, 45 N.C. App. 213, 217,

262 S.E.2d 845, 847, disc. review denied, 300 N.C. 197, 269

S.E.2d 264 (1980), Dr. Cottrell is entitled to attempt to rebut

the presumption that he signed the note as a maker with parol or

other evidence.

As Plaintiffs correctly note, the signatures of Dr. Lanzi

and Dr. Cottrell on the loan document appear in the section in

which the borrower or borrowers were supposed to sign and do not

unambiguously reflect that the two men signed the loan agreement

in a solely representative, rather than an individual, capacity.

In addition, Dr. Lanzi asserted in his affidavit that the loan

agreement was executed by Dr. Cottrell and himself “with the

understanding and agreement that [the parties] would be

responsible for contributing one-half of the payment of the loan

amount due.” On the other hand, the loan agreement

unambiguously named College Road as the sole borrower without

providing any indication that either Dr. Lanzi or Dr. Cottrell,

whose names only appear on the signature line, had executed the

loan agreement in their individual capacities. Moreover, the

sole borrower named in the loan modification agreement, which

only Dr. Lanzi signed, was College Road. Finally, the sole

borrower named in the final disbursement notification, which Dr.

Lanzi signed in his capacity as a “member,” was College Road.
 -16-
In his affidavit, Dr. Cottrell asserted that the parties signed

the loan agreement and the final disbursement statement “as

owners and on behalf of College Road.” Finally, Plaintiff’s

counsel stated at the summary judgment hearing that their

clients did not “contest that the borrower under the loan is the

PLLC.” As a result, a simple examination of the contents of the

various loan and loan-related documents, the parties’

affidavits, and the comments made by the parties’ counsel at the

summary judgment hearing suggest the existence of a genuine

issue of material fact concerning the capacity in which Dr.

Lanzi and Dr. Cottrell signed the loan agreement.

Our conclusion that Dr. Cottrell forecast sufficient

evidence to demonstrate the existence of a genuine issue of

material fact concerning the extent to which he and Dr. Lanzi

signed the loan agreement in a representative or an individual

capacity is bolstered by a number of other factors. For

example, the undisputed record evidence establishes that College

Road made all of the payments required under the loan agreement,

that the amortization schedule provided by Bank of America

listed College Road as the sole borrower, and that the

additional guarantee provided by LaWe Holdings was secured

“[f]or the purpose of inducing Bank of America . . . to make,

extend and renew a loan” made on behalf of a borrower elsewhere
 -17-
identified as College Road. In addition, the record clearly

reflects that both Dr. Lanzi and Dr. Cottrell executed a

guaranty agreement intended to secure the loan. As we have

already noted, “[a] guaranty is a promise to answer for the

payment of a debt or the performance of some duty in the event

of the failure of another person who is himself primarily liable

for such payment or performance.” Branch Banking & Trust Co.,

301 N.C. at 52, 269 S.E.2d at 122; see also Investment

Properties v. Norburn, 281 N.C. 191, 195, 188 S.E.2d 342, 345

(1972) (stating that obligations arising out of guaranty

agreements are “separate and independent of the obligation of

the principal debtor”); EAC Credit Corp. v. Wilson, 281 N.C.

140, 146, 187 S.E.2d 752, 756 (1972) (stating that “[d]ecisions

of [the Supreme] Court [have] treat[ed] the obligation of a

guarantor of payment separate and distinct from that of the

maker” on the theory that the “‘contract of guaranty is [the

guarantors’] own separate contract jointly and severally to pay

the debts’” and that guarantors “‘are not in any sense parties

to the [note].’” (final alteration in original) (quoting Arcady

Farms Milling Co. v. Wallace, 242 N.C. 686, 689, 89 S.E.2d 413,

415 (1955)); Sykes v. Everett, 167 N.C. 600, 608, 83 S.E. 585,

590 (1914) (holding “that a surety is considered as a maker of

the note [while] a guarantor is never a maker”). As this Court
 -18-
has previously 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, 45 N.C. App. at 218, 262

S.E.2d at 847 (quoting 19 Am. Jur. 2d Corporations § 1343

(1965)). In light of that logic, a reasonable finder of fact

could conclude that the signatures of Dr. Lanzi and Dr. Cottrell

on the loan agreement were affixed in their capacity as officers

of College Road and that their signatures on the guaranty

agreement were affixed in their individual capacity.5 As a

result, after “review[ing] the record in the light most

favorable to the non-moving party,” Broughton, 161 N.C. App. at

26, 588 S.E.2d at 25, we hold that there is a genuine issue of

material fact with respect to the issue of whether the parties,

including Bank of America, intended that Dr. Lanzi and Dr.

Cottrell signed the loan agreement in their representative or

individual capacities and that the trial court erred to the

extent that it entered summary judgment in favor of Plaintiffs

with respect to the contribution issue on the basis of a

5
In view of the fact that the evidence concerning the
intention with which Dr. Lanzi and Dr. Cottrell signed the loan
agreement conflicts, we need not comment upon the absence of any
evidence concerning the intentions with respect to this issue
that Bank of America, which was clearly one of the “original
parties,” N.C. Gen. Stat. § 25-3-402(b)(2), may have had.
 -19-
determination that Dr. Cottrell signed the loan agreement in his

individual, rather than a representative, capacity.6

2. Unjust Enrichment Claim

The second claim asserted in Plaintiffs’ complaint sounded

in unjust enrichment. “The general rule of unjust enrichment is

that where services are rendered and expenditures made by one

party to or for the benefit of another, without an express

contract to pay, the law will imply a promise to pay a fair

compensation therefor,” Atlantic Coast Line R.R. Co. v. State

Highway Comm’n, 268 N.C. 92, 95-96, 150 S.E.2d 70, 73 (1966),

with the availability of an unjust enrichment remedy “‘based

upon the equitable principle that a person should not be

permitted to enrich himself unjustly at the expense of

another.’” Hinson v. United Fin. Servs., Inc., 123 N.C. App.

469, 473, 473 S.E.2d 382, 385 (quoting Atlantic Coast Line R.R.

Co., 268 N.C. at 96, 150 S.E.2d at 73), disc. review denied, 344

N.C. 630, 477 S.E.2d 39 (1996). On the other hand, “[t]he
6
The same logic defeats Defendants’ contention that the
trial court erred by failing to enter summary judgment in their
favor with respect to Plaintiffs’ contribution claim. As a
practical matter, the fact that the signatures of Dr. Lanzi and
Dr. Cottrell on the loan agreement were not unambiguously made
in their representative, rather than their individual,
capacities coupled with the statement in Dr. Lanzi’s affidavit
to the effect that the parties contemplated that they would be
equally responsible for repaying the loan amount would suffice
to permit a trier of fact to conclude that Dr. Cottrell signed
the loan agreement as a maker and was subject to individual
liability for the resulting indebtedness.
 -20-
hallmark rule of equity is that it will not apply ‘in any case

where the party seeking it has a full and complete remedy at

law,’” id. (quoting Jefferson Standard Ins. Co. v. Guilford

Cnty., 225 N.C. 293, 300, 34 S.E.2d 430, 434 (1945)), which

means that, “[w]here, as here, there is a contract which forms

the basis for a claim, ‘the contract governs the claim and the

law will not imply a contract.’” Id. (quoting Booe v. Shadrick,

322 N.C. 567, 570, 369 S.E.2d 554, 556 (1988)); see also

Whitfield v. Gilchrist, 348 N.C. 39, 42, 497 S.E.2d 412, 415

(1998) (holding that “[o]nly in the absence of an express

agreement of the parties will courts impose a [quasi-contract]

or a contract implied in law in order to prevent an unjust

enrichment”); Vetco Concrete Co. v. Troy Lumber Co., 256 N.C.

709, 713, 124 S.E.2d 905, 908 (1962) (holding that “[i]t is a

[well-established] principle that an express contract precludes

an implied contract with reference to the same matter”). In

light of the principle that unjust enrichment relief is not

available in instances governed by an express contract,

Defendants argue that the “contractual relationship between the

Company and the Bank concerning the Loan to the Company, and the

separate contractual relationship between the Bank and the

[guarantors] on the Guaranty, are clearly defined and governed
 -21-
by said respective, express agreements.” Defendants’ argument

has merit.7

As an initial matter, we have no hesitation in concluding

that the loan agreement constitutes a “contract which forms the

basis for [Plaintiffs’] claim.” Hinson, 123 N.C. App. at 473,

473 S.E.2d at 385. In addition, the loan agreement clearly

governs the rights and responsibilities of all of the parties to

that instrument with respect to the loan payment process. More

specifically, the loan agreement provides that “[t]he liability

of Borrower and each Guarantor hereunder is joint and several

. . . upon an Event of Default hereunder.” Although there is,

as we have previously determined, a material factual dispute

over the extent to which Dr. Lanzi and Dr. Cottrell are

individually liable as borrowers and although the failure of

payment necessary to trigger the obligation of the guarantors to

make payment has clearly not yet occurred, there is no question

but that the loan agreement makes each borrower jointly and

severally liable8 for the entire amount of the resulting

7
In their brief, Plaintiffs failed to respond to this aspect
of Defendants’ challenge to the lawfulness of the trial court’s
order. Instead, their brief makes clear that the unjust
enrichment claim was asserted in the alternative in the event
that their contribution claim did not succeed.
8
As this Court has previously stated, “[w]hen joint and
several liability is imposed, ‘each liable party is individually
responsible for the entire obligation.’” In re D.A.Q., 214 N.C.
App. 535, 539, 715 S.E.2d 509, 512 (2011) (quoting Black’s Law
 -22-
indebtedness. Similarly, as we have previously noted, the loan

agreement provides that, in the event that the borrowers fail to

make any payment required under the loan agreement, the

guarantors become liable for the full amount owed. “If a

principal obligation is guaranteed by two or more persons, each

must pay the proportional share of the liability, and a

guarantor who has paid more than his or her share is entitled to

contribution from the others and may sue to enforce that right.”

38 Am. Jur. 2d Guaranty § 100 (2010). As a result, since the

loan agreement, when read in conjunction with applicable

principles of North Carolina law, fully governs the relationship

between the parties concerning the extent, if any, to which they

are liable for any indebtedness arising under that instrument,

the trial court erred to the extent that it entered summary

judgment in Plaintiffs’ favor and failed to enter summary

Dictionary 997 (9th ed. 2009)). Thus, in instances involving
joint and several liability, “‘the liability of each defendant
is not necessarily dependent upon the liability of any other
defendant, and [the] plaintiff may be made whole by a full
recovery from any defendant.’” Harlow v. Voyager Commc’ns V,
348 N.C. 568, 572, 501 S.E.2d 72, 74 (1998) (quoting 10 James W.
Moore et al., Moore’s Federal Practice ¶ 55.25, at 55-46 (3d ed.
1997)). As a result, given that “[c]ontribution is generally
defined as the right of one who has discharged a common
liability or burden to recover of another also liable [the
fractional] portion which he ought to pay or bear,” Irvin, 122
N.C. App. at 501, 470 S.E.2d at 337 (alteration in original), a
person who has paid a disproportionate share of a debt is
entitled to contribution from any other person who was jointly
and severally liable for the payment of that debt.
 -23-
judgment in Defendants’ favor with respect to the unjust

enrichment claim asserted in Plaintiffs’ complaint.

III. Conclusion

Thus, for the reasons set forth above, we conclude that the

trial court erred by granting summary judgment in favor of

Plaintiffs, by failing to grant summary judgment in favor of Ms.

Cottrell with respect to Plaintiffs’ contribution claim, and by

failing to grant summary judgment in favor of Defendants with

respect to Plaintiffs’ unjust enrichment claim. As a result,

the trial court’s order should be, and hereby is, reversed and

this case should be, and hereby is, remanded to the New Hanover

County Superior Court for further proceedings not inconsistent

with this opinion.

REVERSED and REMANDED.

Judges ROBERT N. HUNTER, JR. concurred in this opinion

prior to 6 September 2014.

Judge DAVIS concurs.