Monsanto Company v. ARE-108 Alexander Road, LLC

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 1:10-cv-00898-WO-LPA. Copies to all parties and the district court. [999706899]. [14-1737, 14-1776]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 14-1737

MONSANTO COMPANY,
Plaintiff - Appellee,
v.
ARE-108 ALEXANDER ROAD, LLC,
Defendant - Appellant.

No. 14-1776

MONSANTO COMPANY,
Plaintiff - Appellant,
v.
ARE-108 ALEXANDER ROAD, LLC,
Defendant - Appellee.

Appeals from the United States District Court for the Middle
District of North Carolina, at Greensboro.
William L. Osteen,
Jr., Chief District Judge. (1:10-cv-00898-WO-LPA)

Argued:

September 15, 2015

Decided:

November 25, 2015

Before DUNCAN and FLOYD, Circuit Judges, and HAMILTON, Senior
Circuit Judge.

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Affirmed by unpublished per curiam opinion.

ARGUED: Mark Everett McKeen, PAUL HASTINGS LLP, San Francisco,
California, for Appellant/Cross-Appellee.
Jonathan Michael
Watkins, MOORE & VAN ALLEN PLLC, Charlotte, North Carolina, for
Appellee/Cross-Appellant.
ON BRIEF: Joseph H. Stallings,
HOWARD, STALLINGS, FROM & HUTSON, P.A., Raleigh, North Carolina,
for Appellant/Cross-Appellee. Scott M. Tyler, MOORE & VAN ALLEN
PLLC, Charlotte, North Carolina, for Appellee/Cross Appellant.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
This case arises out of a commercial lease dispute between
landlord

ARE-108

Alexander

Monsanto

Company

Road,

(Monsanto).

The

LLC

(ARE-108)

first

issue

and

on

tenant

appeal

is

whether the disputed lease provisions pertaining to Monsanto's
obligation to pay rent are unambiguous.
provisions

are

unambiguous

and

the

We find that the lease
district

granted summary judgment in favor of Monsanto.

court

properly

The second issue

is whether North Carolina General Statutes § 6-21.2 authorizes
Monsanto to recover attorneys’ fees.

We find that it does not,

and therefore affirm the district court’s judgment on this issue
as well.

I.
ARE-108
commercial

and

Monsanto

property

located

became
in

parties

Research

to

a

Triangle

lease
Park,

for
North

Carolina after Monsanto assumed the lease from the prior tenant
in March 2005. 1

The original lease term ran from November 1,

2000 to October 31, 2010.

During this time, the tenant owed

monthly Base Rent of $26,250, adjusted annually.

Section 41 of

the lease gave the tenant the right to extend the lease by two

1

This lease is titled the “Phase 1B” lease. Monsanto and
ARE-108 are also parties to two other leases for properties in
Research Triangle Park; neither, however, is in dispute here.

3

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five-year periods, during which no Base Rent would be payable.
Section 41 states:
Extension Rights. Tenant shall have 2 consecutive
rights . . . to extend the term of this Lease for 5
years each (each, a “Term Extension”) on the same
terms and conditions as this Lease . . . . During any
Term Extension, no Base Rent . . . shall be payable;
all other Rent shall remain payable . . . .
J.A. 256.

Together, the two Term Extensions spanned November 1,

2010 to October 31, 2020.
The lease contained an attorneys’ fees clause stating that
the prevailing party in a lease dispute would be entitled to
recover “all reasonable fees and costs.”
In

May

2005,

shortly

after

J.A. 260.

Monsanto

assumed

the

lease,

Monsanto and ARE-108 executed the “First Amendment to Lease”
(First Amendment), which amended various provisions of the lease
but

explicitly

retained

Monsanto’s

extension

rights

under

Section 41:
Except as expressly amended and modified hereby, all
of the terms and provisions of the Lease shall remain
unchanged and in full force and effect . . . . In
addition, Landlord hereby confirms and agrees that
Tenant shall have all of the Extension Rights under
Section 41 of the Lease and that the Extension Rights
are in full force and effect.
J.A. 319.
Approximately
parties

executed

Amendment)

to

two
a

“among

years

later,

“Second
other

in

Amendment
things,

4

November
to

provide

2007,

Lease”
for

the

(Second

additional

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options to extend the Term . . . of the Lease.”

J.A. 329.

The

Second Amendment gave Monsanto the right to further extend the
lease after it had exercised both Term Extensions:
Additional
Right
to
Extend
Term.
Following
the
exercise by Tenant of both of its existing 5-year
extension options under Section 41 of the Lease . . .
Tenant shall have 2 consecutive rights . . . to extend
the Term of this Lease, consisting of 1 right to
extend the Term of this Lease for a period of 10
years, and 1 final right to thereafter further extend
the Term of this Lease for a period that expires on
November 30, 2034 (each, an “Additional Extension
Term”) on the same terms and conditions as this Lease
(other than Base Rent) . . . .
Id.

Together,

the

two

Additional

Extension

Terms

spanned

November 1, 2020 to November 30, 2034.
During the Additional Extension Terms, Base Rent was to be
determined by the “Market Rate,” as follows:
Upon the commencement of any Additional Extension
Term, Base Rent shall be payable at the Market Rate
(as defined below). Base Rent shall thereafter be
adjusted . . . annual[ly] . . . by a percentage . . .
. As used herein, “Market Rate” shall mean the then
market rental rate as determined by Landlord and
agreed to by Tenant, which shall in no event be less
than the Base Rent payable as of the date immediately
preceding
the
commencement
of
such
Additional
Extension Term increased by 103% multiplied by such
Base Rent.
Id.
Thus,

Base

Rent

at

the

beginning

of

each

Additional

Extension Term would be set at the Market Rate agreed to by the
parties, which could be no less than 103% of the Base Rent
payable immediately prior.

Thereafter, Base Rent would increase
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annually

by

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a

fixed

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percentage

Additional Extension Term.

for

the

remainder

of

the

If the parties could not agree on

the Market Rate, the matter would be submitted for arbitration.
Finally,

the

Second

Amendment

explained

the

relationship

between its provisions and those of the original lease, stating:
Except as amended and/or modified by this Second
Amendment, the Lease is hereby ratified and confirmed
. . . . In the event of any conflict between . . .
this Second Amendment and . . . the Lease, the . . .
Second
Amendment
shall
prevail.
Whether
or
not
specifically amended by this Second Amendment, all of
the terms and provisions of the Lease are hereby
amended to the extent necessary to give effect to the
purpose and intent of the Second Amendment.
J.A. 333.
In

October

2009,

Monsanto

notified

ARE-108

exercising its right to the first Term Extension.

that

it

was

ARE-108 sent

Monsanto a Base Rent schedule for that Term Extension, to which
Monsanto responded that it had no obligation to pay Base Rent
pursuant to the lease.

In November 2010, after the first Term

Extension had commenced, ARE-108 declared Monsanto in default
and threatened legal action.

Monsanto responded by letter dated

November 17, 2010 that it would pay the requested Base Rent
“under

protest,”

further

reserved

but
“all

reserved

the

rights

.

right
.

.

to

under

be

refunded

the

Lease

and
and

applicable law to recover . . . attorneys’ fees and costs.”
J.A. 44.

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Monsanto then filed the instant suit seeking a declaration
that it owed no Base Rent during the Term Extensions, the return
of all Base Rent paid to ARE-108 under protest, and attorneys’
fees.

Shortly

after

ARE-108

served

its

first

documents, Monsanto moved for summary judgment.
Monsanto’s

motion,

arguing

that

the

lease

request

for

ARE-108 opposed

was

ambiguous

and

ARE-108 should be permitted to obtain discovery regarding its
proper

interpretation

under

Federal

Rule

of

Civil

Procedure

56(d).
The

district

court,

adopting

the

recommendation

of

the

magistrate judge, found the lease to be unambiguous and granted
Monsanto

summary

declaratory

judgment.

judgment

The

stating

district

that:

(a)

court

issued

Monsanto

had

a
no

obligation to pay Base Rent during the two Term Extensions; (b)
Monsanto was not in default for failing to pay such Base Rent;
(c) ARE-108 was not entitled to take any adverse action against
Monsanto for failure to pay such Base Rent; and (d) Monsanto was
entitled to the return of all Base Rent, late fees, and interest
paid under protest to ARE-108.

The district court awarded as

monetary damages all Base Rent and related charges Monsanto had
paid

under

$2,023,915.24.

protest

and

prejudgment

interest,

totaling

However, the district court denied Monsanto’s

request for attorneys’ fees, finding that such fees were not
authorized by North Carolina General Statutes § 6-21.2.
7

ARE-108

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the

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court’s

grant

of

summary

judgment.

Monsanto cross-appeals its denial of attorneys’ fees.

II.
We review the district court’s grant of summary judgment de
novo, World-Wide Rights Ltd. P’ship v. Combe Inc., 955 F.2d 242,
245 (4th Cir. 1992), and its denial of a Rule 56(d) request for
discovery for abuse of discretion. 2

McCray v. Md. Dep’t of

Transp., Md. Transit Admin., 741 F.3d 480, 483 (4th Cir. 2014).
In matters of contract interpretation, we have explained:
Only an unambiguous writing justifies summary judgment
without resort to extrinsic evidence . . . . The first
step for a court asked to grant summary judgment based
on a contract’s interpretation is, therefore, to
determine whether, as a matter of law, the contract is
ambiguous or unambiguous on its face. If a court
properly determines that the contract is unambiguous
on the dispositive issue, it may then properly
interpret the contract as a matter of law and grant
summary judgment because no interpretive facts are in
genuine issue.
World-Wide Rights Ltd. P’ship, 955 F.2d at 245.
the

contract

is

ambiguous,

the

court

may

If, instead,

evaluate

extrinsic

evidence to determine whether summary judgment is proper.

2

Id.

Rule 56(d) requires that summary judgment be refused when
the nonmovant “has not had the opportunity to discover
information that is essential to his opposition.”
Pisano v.
Strach, 743 F.3d 927, 931 (4th Cir. 2014).

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Under North Carolina law, “[p]arties can differ as to the
interpretation of language without its being ambiguous.” 3
v.

City

of

Raleigh,

467

S.E.2d

410,

412

(N.C.

Walton

1996).

An

ambiguity exists “when either the meaning of words or the effect
of

provisions

is

interpretations.”
2004).
words

uncertain

or

capable

of

several

reasonable

Register v. White, 599 S.E.2d 549, 553 (N.C.

Additionally, “[a] latent ambiguity may arise where the
of

a

written

agreement

are

plain,

but

by

reason

of

extraneous facts the definite and certain application of those
words is found impracticable.”
418 (N.C. 1922).

Miller v. Green, 112 S.E. 417,

With these principles in mind, we review the

lease, as amended, to determine whether it is ambiguous as to
Monsanto’s

obligation

to

pay

Base

Rent

during

the

Term

two

Term

Extensions.

III.
Section

41

of

the

lease

granted

the

tenant

Extensions, together spanning 2010-2020, during which “no Base
Rent . . . shall be payable.”

J.A. 256.

The First Amendment

affirmed that the Section 41 rights were “in full force and
effect” when Monsanto assumed the lease.

3

J.A. 319.

ARE-108

The parties appear to agree that North Carolina law
governs the interpretation and enforcement of the lease and its
amendments.

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contends, however, that the Second Amendment implicitly revoked
Monsanto’s right to pay no Base Rent during the Term Extensions.
Even assuming arguendo that two sophisticated companies would
implicitly revoke a right worth millions of dollars, the Second
Amendment cannot reasonably be read as doing so.
The

Second

Amendment

granted

Monsanto

two

Additional

Extension Terms, together spanning 2020-2034, and set forth the
applicable

terms

and

conditions.

Nothing

in

the

Second

Amendment purported to modify the prior Term Extensions, much
less

abolish

Monsanto’s

right

to

enjoy

the

Term

Extensions

without paying Base Rent, as provided for in Section 41 of the
lease.

Rather, the Second Amendment explicitly confirmed that

the Term Extensions remained governed by Section 41.
J.A.

329

(“Following

the

exercise

by

Tenant

of

See, e.g.,

both

of

its

existing 5-year extension options under Section 41 of the Lease
. . . .”).
We
contrary.

are

not

persuaded

by

ARE-108’s

arguments

to

the

ARE-108 first notes that the Additional Extension

Terms could only be exercised after the Term Extensions and “on
the same terms and conditions as this Lease (other than Base
Rent).”

J.A. 329 (emphasis added).

ARE-108 argues that “the

specific reference to the existence of Base Rent at the time of
the potential exercise of the Additional Extension Right . . .
clarifies that Base Rent is being paid by Monsanto to ARE-108
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immediately prior to the exercise of any Additional Extension
Right.” 4

Br. of Appellant/Cross-Appellee 26-27.

108’s contorted reading.
that

new

Base

Rent

We reject ARE-

The quoted language simply indicates

provisions

would

govern

the

Additional

Extension Terms, and the paragraph that follows in the Second
Amendment specifies that Base Rent would be determined by the
Market Rate.

The quoted language has no effect on the Term

Extensions.
ARE-108 next points to the language stating that the Market
Rate “shall in no event be less than the Base Rent payable as of
the

date

immediately

preceding

the

commencement

of

such

Additional Extension Term increased by 103% multiplied by such
Base Rent.”

J.A. 329.

ARE-108 argues that if no Base Rent were

payable during the Term Extensions, which immediately preceded
the commencement of the Additional Extension Terms, the quoted
language would simply mean that the Market Rate could not be
less than zero.

ARE-108 contends that it would be “illogical”

for the parties to use such complicated language if they simply
intended for the Market Rate floor to be zero.

Resp. and Reply

Br. of Appellant/Cross-Appellee 14.

4

ARE-108 further asserts, without citation to any
particular language in the Second Amendment, that Monsanto was
to continue paying Base Rent at $26,650 per month as adjusted.

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This
Additional

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analysis,
Extension

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however,
Term.

accounts
As

only

discussed

for

above,

the
the

first
Second

Amendment established two Additional Extension Terms, with the
Market Rate to be determined at the start of each.

ARE-108

correctly observes that if no Base Rent were payable during the
Term Extensions, the Market Rate floor for the first Additional
Extension Term would be zero.

However, the parties would still

have to agree to a Market Rate, which would determine the Base
Rent

for

the

first

Additional

Extension

Term.

Thus,

when

determining the Market Rate for the second Additional Extension
Term, the Market Rate floor would not be zero, but 103% of the
Base Rent payable at the end of the first Additional Extension
Term.

With both Additional Extension Terms properly accounted

for, the 103% language has effect and is not simply a convoluted
way of saying zero.
Furthermore, the fact that the Market Rate floor for the
first Additional Extension Term may be zero does not render the
“meaning”

of

the

Second

Amendment’s

[its] provisions” uncertain.

words

or

the

“effect

Register, 599 S.E.2d at 553.

of
The

meaning is clear, even if ARE-108 finds it to be unfavorable.
See Gas House, Inc. v. S. Bell Tel. & Tel. Co., 221 S.E.2d 499,
504 (N.C. 1976) (“People should be entitled to contract on their
own terms without the indulgence of paternalism by courts in the
alleviation of one side or another from the effects of a bad
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bargain.”

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(quoting 14 Samuel Williston, A Treatise on the Law

of Contracts § 1632 (3d ed. 1961))), overruled in part by State
ex rel. Utils. Comm’n v. S. Bell Tel. & Tel. Co., 299 S.E.2d 763
(N.C. 1983).
Lastly, ARE-108 cites the Second Amendment’s clause stating
that

“[i]n

the

event

of

any

conflict”

between

the

Second

Amendment and the lease, the “Second Amendment shall prevail,”
and “the terms and provisions of the Lease are hereby amended to
the extent necessary to give effect to the purpose and intent of
this Second Amendment.”

J.A. 333.

This language is of no avail

to ARE-108 as there is no conflict between the Second Amendment
and the Base Rent-free Term Extensions established in the lease,
and no amendment to the lease is necessary to give effect to the
Second Amendment.
Ultimately,

the

language

ARE-108

cites

cannot

fairly

be

read as revoking Monsanto’s clearly established right to Base
Rent-free Term Extensions.

Thus, ARE-108 has not shown that the

lease,

capable

as

amended,

interpretations.”

is

of

multiple

Register, 599 S.E.2d at 553.

“reasonable

Nor has ARE-108

identified “extraneous facts” that make the definite application
of the amended lease impracticable. 5

5

Miller, 112 S.E. at 418.

ARE-108 insinuates that the present dispute implicates the
parties’ other, “interrelated” leases for properties in Research
Triangle Park. See, e.g., Br. of Appellant/Cross-Appellee 9-10.
(Continued)
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In

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short,

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ARE-108

has

Pg: 14 of 21

demonstrated

no

ambiguity,

latent

or

otherwise, as to whether Monsanto owes Base Rent during the Term
Extensions.

Monsanto unambiguously does not.

Because the lease is unambiguous, the district court did
not abuse its discretion in denying ARE-108’s Rule 56(d) request
for

discovery,

as

unambiguous

contracts

without resort to extrinsic evidence.

are

to

be

construed

See World-Wide Rights

Ltd. P’ship, 955 F.2d at 245; see also Piedmont Bank & Trust Co.
v. Stevenson, 339 S.E.2d 49, 52 (N.C. Ct. App. 1986), aff’d, 344
S.E.2d 788 (N.C. 1986) (“When the language of the contract is
clear and unambiguous . . . the court cannot look beyond the
terms

of

the

contract

to

determine

the

intentions

of

the

parties.”) (internal citation omitted). 6

However, ARE-108 never explains how those leases affect the
interpretation of the lease presently in dispute. Thus, those
leases do not provide a basis for finding a latent ambiguity.
ARE-108 also recites the principle that a contract
“encompasses not only its express provisions but also all such
implied provisions as are necessary to effect the intention of
the parties unless express terms prevent such inclusion.” Lane
v. Scarborough, 200 S.E.2d 622, 624 (N.C. 1973).
However, we
will not read in a provision requiring Monsanto to pay Base Rent
during the Term Extensions. Such a provision is not necessarily
implied by amended lease and contradicts its express terms.
6

For this reason, we do not consider the extrinsic evidence
submitted by ARE-108.
We also do not consider ARE-108’s
argument, raised for the first time on appeal in its reply
brief, that it was denied an opportunity to present a defense of
mutual mistake. See Muth v. United States, 1 F.3d 246, 250 (4th
Cir. 1993) (explaining that issues raised for the first time on
(Continued)
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Accordingly, we affirm the district court’s grant of
summary judgment to Monsanto.

IV.
Monsanto cross-appeals the district court’s denial of its
request

for

Statutes

§

resolution

attorneys’
6-21.2.

of

We

questions

fees

under

review
of

de

state

North

novo
law.

Carolina

the

district

Food

Lion,

General
court’s
Inc.

v.

Capital Cities/ABC, Inc., 194 F.3d 505, 512 (4th Cir. 1999).
The

North

contractual

Carolina

attorneys’

Supreme
fees

Court

provisions

has
are

explained
generally

that
not

enforceable under North Carolina law:
[T]he jurisprudence of North Carolina traditionally
has
frowned
upon
contractual
obligations
for
attorney’s fees as part of the costs of an action. . .
. Thus the general rule has long obtained that a
successful litigant may not recover attorneys’ fees,
whether as costs or as an item of damages, unless such
a recovery is expressly authorized by statute. Even in
the face of a carefully drafted contractual provision
indemnifying a party for such attorneys’ fees as may
be necessitated by a successful action on the contract
itself, our courts have consistently refused to
sustain such an award absent statutory authority
therefor.

appeal will not be considered absent exceptional circumstances);
Cavallo v. Star Enter., 100 F.3d 1150, 1152 n.2 (4th Cir. 1996)
(explaining that arguments raised for the first time in a reply
brief are not properly before the Court).

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Stillwell Enters., Inc. v. Interstate Equip. Co., 266 S.E.2d
812, 814-15 (N.C. 1980) (internal citations omitted).
Monsanto
authority
clause.

claims

necessary

that
to

§

6-21.2

enforce

the

provides
lease’s

the

statutory

attorneys’

fees

That statute “allows an award of attorneys’ fees in

actions

to

enforce

obligations

owed

under

an

evidence

of

indebtedness that itself provides for the payment of attorneys’
fees.”

Trull v. Cent. Carolina Bank & Tr., 478 S.E.2d 39, 42

(N.C. Ct. App. 1996)(quotation omitted), aff’d in part, review
dismissed in part, 490 S.E.2d 238 (N.C. 1997).

Section 6-21.2

states, in relevant part:
Obligations to pay attorneys’ fees upon any note,
conditional
sale
contract
or
other
evidence
of
indebtedness . . . shall be valid and enforceable, and
collectible as part of such debt, if such note,
contract
or
other
evidence
of
indebtedness
be
collected by or through an attorney at law after
maturity, subject to the following provisions:
. . . .
(2) If such note, conditional sale contract or
other evidence of indebtedness provides for the
payment of reasonable attorneys’ fees by the debtor,
without specifying any specific percentage, such
provision shall be construed to mean fifteen percent
(15%) of the “outstanding balance” owing on said note,
contract or other evidence of indebtedness.
N.C. Gen. Stat. § 6-21.2.

The party seeking attorneys’ fees

must provide notice to the debtor, and if the debtor pays the
outstanding balance within “five days from the mailing of such
notice . . . . the obligation to pay the attorneys’ fees shall
be void.”

Id. § 6-21.2(5).
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Monsanto argues that the lease is evidence of ARE-108’s
indebtedness to Monsanto for the Base Rent Monsanto paid under
protest, and that Monsanto is thus entitled to attorneys’ fees
of fifteen percent of the final judgment.

We disagree.

As Monsanto notes, § 6-21.2 is a remedial statute that is
“construed

liberally

Legislature.”

to

Stillwell

accomplish
Enters.,

the

Inc.,

purpose
266

of

S.E.2d

at

the
817

(quoting Hicks v. Albertson, 200 S.E.2d 40, 42 (N.C. 1972)).
Thus, while it most commonly applies to promissory notes and
conditional sale contracts, the term “evidence of indebtedness”
is

broadly

instrument,

defined
signed

or

to

include

otherwise

“any
executed

printed
by

or

the

written

obligor(s),

which evidences on its face a legally enforceable obligation to
pay money.”

Id. at 293-94 (emphasis added).

Applying this

definition, the Stillwell court found that a lease of goods was
an “evidence of indebtedness” because the lease “acknowledge[d]
a legally enforceable obligation by plaintiff-lessee to remit
rental payments to defendant-lessor as they become due,” and it
was “executed by the parties obligated under its terms.”
818.

Similarly,

a

lease

“evidence of indebtedness.”

of

real

property

may

Id. at

constitute

See, e.g., RC Assocs. v. Regency

Ventures, Inc., 432 S.E.2d 394, 397 (N.C. Ct. App. 1993).
However, even under this liberal definition, the lease here
is not evidence of the indebtedness Monsanto seeks to collect,
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Rent

namely,

the
the

paid

Base

stated,

Pg: 18 of 21

lease

that

does

not

it

evidence

under
“on

obligation to return overpaid Base Rent.
said

that

ARE-108

acknowledged

executed the lease.

such

protest.

its

face”

Simply
ARE-108’s

It therefore cannot be
an

obligation

when

it

See Stillwell Enters., Inc., 266 S.E.2d at

817 (“[A]n evidence of indebtedness . . . is a writing which
acknowledges a debt or obligation and which is executed by the
party obligated thereby.”)(emphasis added).
It is not sufficient that ARE-108 may “owe” Monsanto the
return of overpaid rent, or that the overpaid amount may be
referred to as “debt.”

Cf. Pantry Pride Enters., Inc. v. Glenlo

Corp., 729 F.2d 963, 965 (4th Cir. 1984).

To satisfy § 6-21.2,

the debt must appear “on the face” of the instrument.
similarly
implicitly

of

no

avail

available

that

to

the

tenants

Appellee/Cross-Appellant 48.

“pay-under-protest
under

all

It is

avenue

is

Br.

of

leases.”

Under Stillwell, an “evidence of

indebtedness” may not be based on an implicit debt.

Monsanto

cites no authority to the contrary, and we decline to further
extend an already broadly defined statutory term.
Indeed,

the

interpretation

advanced

by

significantly expand the scope of § 6-21.2.

Monsanto

could

For example, a

party that breaches a contract typically “owes” damages to the
non-breaching
that

all

party.

contracts

Monsanto’s
are

interpretation

therefore
18

implicitly

would

suggest

“evidence

of

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indebtedness” for damages resulting from a breach.

We do not

think such an expansive reading is appropriate for a statute
that, at its core, is meant to apply to notes, conditional sale
contracts, and similar debt instruments.
Monsanto

further

argues

that

as

a

matter

of

policy,

§ 6-21.2 should be construed as authorizing attorneys’ fees here
because, had Monsanto instead refused to pay the disputed rent,
and had ARE-108 filed suit and prevailed, ARE-108 would likely
be entitled to attorneys’ fees under § 6-21.2.
However, § 6-21.2 is not a bilateral statute.

It “governs

only attorney’s fees for the creditor’s attorney,” In re Vogler
Realty, Inc., 722 S.E.2d 459, 464 (N.C. 2012), and its purpose
“is to allow the debtor a last chance to pay his outstanding
balance and avoid litigation, not to reward the prevailing party
with the reimbursement of his costs in prosecuting or defending
the action.”

Trull, 478 S.E.2d at 42.

Thus, § 6-21.2 does not

contemplate equivalent outcomes for both parties.
Moreover,

in

the

hypothetical

scenario

proposed

by

Monsanto, ARE-108 would be entitled to attorneys’ fees because
Monsanto’s obligation to pay rent appears “on the face” of the
lease.

However, ARE-108’s obligation to return overpaid rent

does not.

In our view, the requirement that the debt appear “on

the face” of the instrument is not merely a technicality, but
serves an important policy purpose.
19

That is, because only the

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debtor may be liable for attorneys’ fees under § 6-21.2, it is
important

that

the

debt

to

which

the

attorneys’

fees

attach

appears “on the face” of the instrument executed by the debtor
(as

is

the

case

with

most

debt

instruments).

Awarding

attorneys’ fees based on an implied debt not appearing “on the
face”

of

debtors.

the

instrument

would

eliminate

this

protection

for

For this reason, granting Monsanto attorneys’ fees

here would not serve the purpose of the statute “just as much”
as

granting

ARE-108

attorneys’

scenario posed by Monsanto.

fees

would

in

the

converse

Br. of Appellee/Cross-Appellant 50.

We conclude that, under the facts presented here, the lease
is not an “evidence of indebtedness” under § 6-21.2. 7

Thus, we

affirm the district court’s denial of Monsanto’s request for
attorneys’ fees. 8

7

We therefore need not decide whether
satisfied the other requirements of this statute.
8

Monsanto

has

Our reasoning differs somewhat from the district court’s.
See
Cochran
v.
Morris,
73
F.3d
1310,
1315
(4th
Cir.
1996)(explaining that courts of appeals may “uphold judgments of
district courts on alternate grounds”). Among other things, the
district court found that Monsanto’s claim to recover overpaid
Base Rent arose, not under the lease, but under a “separate
agreement settling, in part, claims that were threatened” by
ARE-108. J.A. 720. The district court found that such separate
agreement contained no attorneys’ fees provision.
Id.
On
appeal, both parties contend that no such separate agreement
existed, and we agree.

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V.
For these reasons, we affirm the district court.
AFFIRMED

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