W. S. Clark & Sons, Inc. v. Ruiz

360 S.E.2d 814 (1987)

W.S. CLARK & SONS, INC.
v.
John RUIZ and Kathy Ruiz.

No. 874SC142.

Court of Appeals of North Carolina.

October 20, 1987.

R. Michael Bruce, Goldsboro, for plaintiff-appellee.

N. Leo Daughtry, Smithfield, for defendants-appellants.

ARNOLD, Judge.

Defendants contend that the trial court erred in failing "to submit to the jury the questions of fact as to the liability of the defendant Kathy Ruiz on the account of John Ruiz."

The credit application signed by both parties clearly stated that the "[a]pplicant acknowledges receipt of a copy of this credit application and agreement, and agrees to the terms disclosed herein." Beneath both parties signatures on the application appears the words "Applicant's Signature."

The trial court was correct to conclude as a matter of law that the language of the credit application and agreement was not ambiguous and to instruct the jury that the issue remaining was the amount that Kathy and John Ruiz were indebted to defendant. If the language of a contract is plain and unambiguous, the construction of the agreement is a matter of law for the court. Kent Corporation v. Winston-Salem, 272 N.C. 395, 158 S.E.2d 563 (1968). Defendants' contention is without merit.

Defendants also contend that the trial court committed reversible error by allowing attorney fees to plaintiff. We disagree.

G.S. 6-21.2 states:

Obligations to pay attorneys' fees upon any note, conditional sale contract or other evidence of indebtedness, in addition to the legal rate of interest or finance charges specified therein, 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. (Emphasis added.)

The term "evidence of indebtedness" as used in this section refers to any printed or written instrument signed or otherwise executed by the obligor(s) which evidences on its face a legally enforceable obligation to pay money. Four Season Homeowners Assoc., Inc. v. Sellers, 72 N.C.App. 189, 323 S.E.2d 735 (1984). A formal credit agreement executed by the parties prior to the establishment of an open account is evidence of indebtedness; and if such an agreement contains a provision for attorney's fees it will be legally enforceable pursuant to G.S. 6-21.2. Supply, Inc. v. Allen, 30 N.C.App. 272, 227 S.E.2d 120 (1976).

The credit application signed by both parties provided the following language concerning attorney fees: "I(We), the undersigned, do hereby ... agree to pay reasonable attorney fees incurred by W.S. Clark & Sons, Inc. (or any subsidiary company) as a result of default, but not to exceed fifteen percent (15%) of balance due." Since the agreement only mentioned reasonable attorney fees and did not specify an exact amount to be paid, G.S. 6-21.2 governs and the trial court properly allowed the plaintiff to recover reasonable fees amounting to 15% of the outstanding balance owed on defendants' account.

No error.

HEDRICK, C.J., and ORR, J., concur.