NO. COA14-683

NORTH CAROLINA COURT OF APPEALS

Filed: 3 February 2015

WELLS FARGO BANK, N.A., 

successor by merger to Wachovia 

Bank, N.A.,

Plaintiff,

v. Davidson County

No. 11-CVS-3357

EDNA S. COLEMAN a/k/a EDNA

COLEMAN, et al.,

Defendants.

Appeal by plaintiff from order entered 20 February 2014 by 

Judge A. Robinson Hassell in Davidson County Superior Court. 

Heard in the Court of Appeals 20 October 2014.

Womble Carlyle Sandridge & Rice, LLP, by Kenneth B. 

Oettinger, Jr., Chad Ewing, and Lee Davis Williams, for 

plaintiff-appellant.

Biesecker, Tripp, Sink & Fritts, L.L.P., by Joe E. 

Biesecker and Christopher A. Raines, for defendantappellee.

DIETZ, Judge.

In 2007, Robert and Edna Coleman refinanced their home 

mortgage through Wells Fargo Bank, N.A. (then Wachovia Bank). 

The Colemans’ home is situated on two lots adjacent to another 

two empty, undeveloped lots. The deed of trust prepared by 

Wachovia listed the correct street address for the Coleman home, 
-2-

but mistakenly referenced the book and page number and tax 

parcel ID of the adjacent, undeveloped lots.

In 2010, Wells Fargo attempted to foreclose on the property 

and discovered, for the first time, the mistaken references in 

the deed of trust. Wells Fargo sought reformation of the 

instrument on the ground of mutual mistake. Defendants Edna 

Coleman and the Estate of Ronald Coleman (who passed away) moved 

for summary judgment, arguing that had Wells Fargo acted with 

reasonable diligence, it would have immediately discovered the 

error. Defendants also argued that the reformation claim is 

barred by the statute of limitations, the equitable doctrine of 

laches, and the non-claim statute. The trial court granted 

Defendants’ motion for summary judgment.

We reverse and remand this case for further proceedings. A 

claim for reformation does not require proof that the party 

seeking reformation acted with reasonable diligence. Indeed, 

even if the mistake was the result of negligence or neglect, a 

trial court still has the authority to reform the instrument if 

there is clear, cogent, and convincing evidence that the mutual 

mistake prevents the instrument from embodying the parties’ 

actual, original agreement. Likewise, this action is one to 

enforce a deed of trust, with the reformation claim a necessary 
-3-

part of that enforcement effort. Thus, the non-claim statute, 

which bars certain untimely claims against a decedent’s estate, 

does not apply.

Finally, with respect to the statute of limitations and 

laches defenses, there are genuine issues of material fact that 

preclude entry of summary judgment. Both defenses turn on when 

Wells Fargo should have discovered the mistake in the exercise 

of reasonable or due diligence. There is competing evidence on 

this issue and it must be resolved by a jury. Accordingly, we 

reverse the trial court’s entry of summary judgment and remand 

for further proceedings.

Facts and Procedural History

Defendants Edna S. Coleman and the Estate of Ronald G. 

Coleman own lots 42, 43, 44, and 45 in the Rockland Shores 

Estates subdivision in Davidson County, North Carolina. 

Although the lots are neighboring, they are of considerably 

different value. Mr. Coleman acquired lots 42 and 43, which are 

commonly known as 167 Lakeview Drive, Linwood, North Carolina, 

on 3 March 1987. This property is improved with a single-family 

home and had a tax value of $95,000 at the time the complaint 

was filed in this action. Mr. Coleman and his wife acquired 

lots 44 and 45 on 24 September 1996. This unimproved property 
-4-

is located adjacent to the developed property and had a tax 

value of $11,900 at the time the complaint was filed. 

On 19 January 2007, Mr. Coleman borrowed money from Wells 

Fargo’s predecessor in interest, Wachovia Bank, N.A., in the 

principal amount of $138,567.00. A promissory note was 

completed that same day, secured by a deed of trust executed by 

both Mr. and Mrs. Coleman. The deed of trust, prepared by 

Wachovia and recorded in the Davidson County Registry on 8 

February 2007, identified the property as:

All that real property situated in the 

County of Davidson, State of North Carolina:

Being the same property conveyed to the 

Grantor by Deed recorded in Book 1007, Page 

1013, Davidson County Registry, to which 

deed reference is hereby made for a more 

particular description of this property.

Property Address: 167 Lakeview Drive

Parcel ID: 06-027-A-000-0044

The property address in the deed of trust identifies the 

developed property on lots 42 and 43, but the book and page 

description and the parcel ID identify the unimproved property

on lots 44 and 45. 

About a month before the deed of trust was executed, 

Wachovia obtained an appraisal of the developed property in 

connection with its loan to Mr. Coleman. That appraisal 
-5-

estimated the property’s value at $215,000 as of 15 December 

2006. The report specifically identified lot 42 and recites 

“Deed Book: 5700 Page: 664” as the legal description of the 

property being appraised. Although the Davidson County Register 

of Deeds does not have a book 5700, the deed at book 570, page 

664 refers to lots 42 and 43, the developed property on which 

the Colemans built their home. Wachovia did not obtain an

appraisal of the adjacent, undeveloped property. 

Defendants applied approximately $131,699.27 of the loan to 

pay off their existing mortgage on the developed property. 

Sadly, Mr. Coleman died on 28 October 2008. Mrs. Coleman

notified Wachovia shortly after her husband’s death. In 

addition, as administratrix of the Ronald G. Coleman Estate, 

Mrs. Coleman provided notice to creditors through publication in 

a local newspaper on four dates throughout January and February 

2009.

Wells Fargo acquired the loan at issue in this case on or 

about 20 March 2010, when it obtained substantially all of

Wachovia’s assets by way of merger. After the Coleman Estate 

defaulted on its payment obligations under the terms of the 

note, Wells Fargo initiated foreclosure proceedings in Davidson 

County on 8 December 2010. Defendants contested the foreclosure 
-6-

proceedings on the ground that the deed of trust contained the 

legal description of the unimproved property, rather than the 

developed property upon which Wells Fargo sought to foreclose. 

Wells Fargo voluntarily dismissed the foreclosure 

proceedings and instituted this action seeking reformation of 

the deed of trust and judicial foreclosure of the developed 

property. In the alternative, Wells Fargo sought a declaratory 

judgment or equitable lien and judicial foreclosure of the 

undeveloped property described in the deed of trust.

Both parties moved for summary judgment. At the hearing, 

the parties agreed that there were no contested issues of 

material fact and that their respective arguments were based on 

“basically the same information.” Defendants argued that Wells 

Fargo was barred from relief by the statute of limitations, 

laches, lack of reasonable diligence, and the non-claim statute. 

Without specifying the grounds on which it based its 

judgment, the superior court entered an order granting 

Defendants’ motion for summary judgment and dismissing Wells 

Fargo’s claims with prejudice. Wells Fargo timely appealed. 

Analysis

Summary judgment is appropriate where “the pleadings, 

depositions, answers to interrogatories, and admissions on file, 
-7-

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.” N.C. Gen. Stat. §

1A-1, Rule 56(c) (2013). In ruling on a motion for summary 

judgment, the trial court has no authority to resolve factual 

issues and must deny the motion if there is any genuine issue of 

material fact. Forbis v. Neal, 361 N.C. 519, 524, 649 S.E.2d 

382, 385 (2007). “Moreover, all inferences of fact . . . must 

be drawn against the movant and in favor of the party opposing 

the motion.” Id. (internal quotation marks omitted). An issue 

of fact is genuine where supported by substantial evidence, and 

“is material if the facts alleged would constitute a legal 

defense, or would affect the result of the action, or if its 

resolution would prevent the party against whom it is resolved 

from prevailing in the action.” Koontz v. City of WinstonSalem, 280 N.C. 513, 518, 186 S.E.2d 897, 901 (1972). This 

Court reviews appeals from summary judgment de novo. Stratton 

v. Royal Bank of Canada, 211 N.C. App. 78, 81, 712 S.E.2d 221, 

226 (2011). 

I. Timeliness of Wells Fargo’s Claims

A. Statute of Limitations
-8-

Defendants argue that Wells Fargo’s reformation claim is 

barred by the statute of limitations. To address this argument, 

we must first determine which statute of limitations to apply in 

this appeal. In the trial court, both parties relied entirely 

on the three-year statute of limitations “[f]or relief on the 

ground of fraud or mistake” under N.C. Gen. Stat. § 1-52(9)

(2013). On appeal, Wells Fargo argues for the first time that 

the ten-year statute of limitations applicable to sealed 

instruments, N.C. Gen. Stat. § 1-47(2), is the proper 

limitations statute for this action. 

Wells Fargo concedes that this argument was not raised 

below, but asks this Court in its discretion to suspend the 

Appellate Rules and permit the company to raise the argument for 

the first time on appeal. We decline to do so and find this 

argument waived on appeal.

1 See N.C. R. App. P. 10 (2013); 

Westminster Homes, Inc. v. Town of Cary Zoning Bd. of Adjust., 

354 N.C. 298, 309, 554 S.E.2d 634, 641 (2001) (“[I]ssues and 

theories of a case not raised below will not be considered on 

appeal.”). We therefore apply the three-year statute of 

limitations in N.C. Gen. Stat. § 1-52(9). 

 

1 Our finding of waiver on appeal does not bar the trial court 

from addressing this issue on remand.
-9-

An order granting summary judgment “based on the statute of 

limitations is proper when, and only when, all the facts 

necessary to establish the limitation are alleged or admitted, 

construing the non-movant’s pleadings liberally in his favor and 

giving him the benefit of all relevant inferences of fact to be 

drawn therefrom.” Huss v. Huss, 31 N.C. App. 463, 468, 230 

S.E.2d 159, 163 (1976). For a claim based on fraud or mistake

subject to section 1-52(9), “the cause of action shall not be 

deemed to have accrued until the discovery by the aggrieved 

party of the facts constituting the fraud or mistake.” N.C. 

Gen. Stat. § 1-52(9). A plaintiff “discovers” the mistake—and 

therefore triggers the running of the three-year limitations 

period—when he actually learns of its existence or should have 

discovered the mistake in the exercise of due diligence. See 

Hyde v. Taylor, 70 N.C. App. 523, 528, 320 S.E.2d 904, 908 

(1984). 

Our case law is clear that the question of whether a 

plaintiff has exercised due diligence is ordinarily one for the 

jury. See, e.g., Huss, 31 N.C. App. at 468, 230 S.E.2d at 163. 

“This is particularly true when the evidence is inconclusive or 

conflicting.” Forbis, 361 N.C. at 524, 649 S.E.2d at 386. 

Thus, where there is a dispute of material fact concerning when 
-10-

the plaintiff should have discovered the mistake in the exercise 

of due diligence, summary judgment is inappropriate, and the 

case must be submitted to a jury. See Spears v. Moore, 145 N.C. 

App. 706, 708, 551 S.E.2d 483, 485 (2001).

Defendants argue that Wells Fargo should have discovered 

the mistake in the deed of trust at the time it was executed and

recorded, more than three years prior to the filing of this 

action. They argue that Wells Fargo, in the exercise of due 

diligence, should have cross-referenced the legal description in 

the loan documents with the description contained in the 

Davidson County Registry. Although the deed of trust listed the 

correct street address of the developed property, the book and 

page number and parcel ID number referenced the undeveloped 

property. Defendants also contend that Wells Fargo should have 

discovered discrepancies between the information in the deed of 

trust and the same information in the appraisal report (which 

contained the correct book and page number for the developed 

property, albeit with an apparent typo). Defendants maintain

that, had Wells Fargo done any of this follow-up diligence, it 

would have discovered the mistake. Thus, Defendants assert that 

they have shown as a matter of law that Wells Fargo failed to 

exercise due diligence. We disagree.
-11-

Our Supreme Court, applying N.C. Gen. Stat. § 1-52(9), has 

held that “the mere registration of a deed, containing an 

accurate description of the locus in quo and indicating on the 

face of the record facts disclosing the alleged fraud, will not, 

standing alone, be imputed for constructive notice of the facts 

constituting the alleged fraud, so as to set in motion the 

statute of limitations.” Vail v. Vail, 233 N.C. 109, 117, 63 

S.E.2d 202, 208 (1951). Instead, “there must be facts and 

circumstances sufficient to put the defrauded person on inquiry 

which, if pursued, would lead to the discovery of the facts 

constituting the fraud.”2 Id.

In other words, the mere fact that there were indications 

of fraud or mistake on the face of the document does not trigger 

the statute of limitations as a matter of law. Instead, the 

running of the limitations period turns on the factual 

determination of when, in the exercise of due diligence, the 

party reasonably should have been expected to follow up and 

ultimately discover the mistake. This is a factual 

determination that ordinarily must be resolved by a jury. See 

id. at 118, 63 S.E.2d at 209.

 

2 Section 1-52(9) applies equally to both fraud and mutual 

mistake.
-12-

This Court confirmed the Vail holding in Huss, where we 

reversed the trial court’s grant of summary judgment in a 

reformation case based on the statute of limitations. 31 N.C. 

App. at 467-68, 230 S.E.2d at 163. In Huss, a litigant 

petitioned for a partition sale of real property allegedly owned 

by her and her ex-husband as tenants in common. Id. at 465, 230 

S.E.2d at 161. The ex-husband sought reformation, arguing that 

the inclusion of his wife’s name on the deed was the result of a 

mutual mistake, and that he had specifically requested 

assurances from the grantors of the property that it would be 

recorded solely in his name. Id. The husband conceded that he 

did not even read the deed. Nevertheless, this Court held that 

“[w]hether failure to read a deed will bar relief depends on the 

facts and circumstances in each case” and that it was for the 

jury to determine what constituted the exercise of due diligence 

on those particular facts. Id. at 468, 230 S.E.2d at 163. 

Under Vail and Huss, summary judgment is inappropriate in 

this case. The deed of trust listed the correct street address 

of the developed property. Although the legal description was 

not accurate, that mistake would have been discovered only if 

Wells Fargo had double-checked the accuracy of the book and page 

description and the parcel ID, which would have disclosed the 
-13-

mistaken references to the adjacent, undeveloped property. 

Wells Fargo maintains that, given the accurate property address, 

its failure to immediately double-check the legal description 

and discover the mistake was not unreasonable. Under Vail and 

Huss, whether this type of double-checking would be necessary 

“in the exercise of due diligence,” and at what point it should 

have taken place, are factual determinations that cannot be 

resolved at summary judgment. Accordingly, we hold that summary 

judgment was not appropriate based on Defendants’ statute of 

limitations defense. 

B. Laches

Defendants next argue that summary judgment was appropriate 

because Wells Fargo’s claims are barred by the equitable 

doctrine of laches. As with Defendants’ statute of limitations 

defense, we hold that their laches defense raises issues of fact 

that cannot be resolved at summary judgment.

“The doctrine of laches is designed to promote justice by 

preventing surprises through the revival of claims that have 

been allowed to slumber until evidence has been lost, memories 

have faded, and witnesses have disappeared.” Stratton, 211 N.C. 

App. at 88-89, 712 S.E.2d at 230 (internal quotation marks 

omitted). “Delay which will constitute laches depends upon the 
-14-

facts and circumstances of each case. When the action is not 

barred by the statute, equity will not bar relief except upon 

special facts demanding extraordinary relief.” Huss, 31 N.C. 

App. at 469, 230 S.E.2d at 163. 

Laches is an affirmative defense which must be pleaded, and 

the burden of proof is on the party asserting the defense. 

Taylor v. City of Raleigh, 290 N.C. 608, 622, 227 S.E.2d 576, 

584 (1976). To succeed on the defense of laches, the defendant 

must show that the delay “resulted in some change in the 

condition of the property or the relation of the parties.” MMR 

Holdings, LLC v. City of Charlotte, 148 N.C. App. 208, 209, 558 

S.E.2d 197, 198 (2001). “[T]he mere passage or lapse of time is 

insufficient to support a finding of laches; for the doctrine of 

laches to be sustained, the delay must be shown to be 

unreasonable and must have worked to the disadvantage, injury or 

prejudice of the person seeking to invoke it.” Taylor, 290 N.C. 

at 622-23, 227 S.E.2d at 584-85.

Here, Defendants failed to show that they are entitled to 

summary judgment on the issue of laches. On the question of 

whether the delay was reasonable, Wells Fargo forecast evidence 

explaining its delay in seeking reformation, including the fact 

that the street address on the deed of trust correctly 
-15-

referenced the developed property. It was only the book and 

page numbers and the parcel ID that allegedly were mistaken, and 

those mistakes were not apparent on the face of the document. 

Reasonableness is a quintessential fact issue, see Radford v. 

Norris, 63 N.C. App. 501, 503, 305 S.E.2d 64, 65 (1983), and the 

evidence Wells Fargo presented in this case is sufficient to 

create a genuine issue of material fact concerning whether its 

delay in discovering the mistake was reasonable. Accordingly, 

Defendants’ laches defense cannot be resolved at summary 

judgment.

C. Non-Claim Statute

Defendants next argue that because Wells Fargo failed to

present its reformation claim within the statutory window to 

present claims against a decedent’s estate, this cause of action 

is barred by the non-claim statute, N.C. Gen. Stat. § 28A-19-

3(a) (2013). We reject this argument because the non-claim 

statute does not preclude actions that seek to effectuate and 

enforce a deed of trust.

Like a statute of limitations, the non-claim statute works 

to limit the time in which a claimant may bring the suit against 

a decedent’s estate. Azalea Garden Bd. & Care, Inc. v. Vanhoy, 

196 N.C. App. 376, 386-87, 675 S.E.2d 122, 129 (2009). The 
-16-

purpose of the non-claim statute is “to provide faster and less 

costly procedures for administering estates” by allowing the 

personal representative to efficiently identify all claims 

against the estate and requiring that creditors present their 

claims within a specified time frame. Id. at 387, 675 S.E.2d at 

129. However, the statute balances these interests in 

efficiency against the rights of real property creditors, 

explicitly providing that “[n]othing in this section affects or 

prevents any action or proceeding to enforce any mortgage, deed 

of trust, pledge, lien (including judgment lien), or other 

security interest upon any property of the decedent’s estate, 

but no deficiency judgment will be allowed if the provisions of 

this section are not complied with.” N.C. Gen. Stat. § 28A-19-

3(g). 

This is an action to “enforce . . . [a] deed of trust.” 

Wells Fargo expressly seeks enforcement of the deed of trust at 

issue in this case, and its claim for reformation of the deed of 

trust—seeking to correct an alleged mutual mistake preventing 

enforcement—is a necessary part of the overall enforcement 

action. Accordingly, we hold that the non-claim statute does 

not apply and thus cannot support the trial court’s entry of 

summary judgment.
-17-

II. Wells Fargo’s Claim for Reformation

Finally, we address the merits of Wells Fargo’s reformation 

claim. “Reformation is a well-established equitable remedy used 

to reframe written instruments where, through mutual mistake or 

the unilateral mistake of one party induced by fraud of the 

other, the written instrument fails to embody the parties’ 

actual, original agreement.” Metropolitan Prop. & Cas. Ins. Co. 

v. Dillard, 126 N.C. App. 795, 798, 487 S.E.2d 157, 159 (1997). 

Where a legal instrument does not express the true intentions of 

the parties due to mutual mistake or the mistake of the

draftsman, reformation is available. McBride v. Johnson Oil &

Tractor Co., 52 N.C. App. 513, 515, 279 S.E.2d 117, 119 (1981).

On appeal, Defendants argue that summary judgment was 

appropriate on the merits based entirely on a single legal 

argument: that reformation is impermissible because Wells Fargo 

did not use “reasonable diligence” in drafting the deed of 

trust. As explained above, there is a fact dispute concerning 

whether Wells Fargo used reasonable diligence, and thus summary 

judgment would be inappropriate on this ground. But there is a 

more fundamental flaw in Defendants’ argument: there is no 

“reasonable diligence” requirement in an action for reformation

based on mutual mistake. 
-18-

A mutual mistake is one that is shared by both parties to 

the contract, “wherein each labors under the same misconception 

respecting a material fact, the terms of the agreement, or the 

provisions of the written instrument designed to embody such 

agreement.” Dillard, 126 N.C. App. at 798, 487 S.E.2d at 159. 

A party seeking reformation on the ground of mutual mistake must 

prove that the parties agreed upon a material stipulation to be 

included in the written instrument, that the stipulation was 

omitted by the parties’ mistake, and that because of the 

mistake, the written instrument does not express the parties’ 

intention. See Branch Banking & Trust Co. v. Chicago Title Ins. 

Co., 214 N.C. App. 459, 464, 714 S.E.2d 514, 518 (2011). The 

party seeking reformation must prove the existence of the mutual 

mistake by “clear, cogent and convincing evidence.” Hice v. HiMil, Inc., 301 N.C. 647, 651, 273 S.E.2d 268, 270 (1981); see 

also Durham v. Creech, 32 N.C. App. 55, 59, 231 S.E.2d 163, 166 

(1977).

Notably, “[n]egligence on the part of one party which 

induces the mistake does not preclude a finding of mutual 

mistake.” Dillard, 126 N.C. App. at 798, 487 S.E.2d at 159 

(brackets omitted). In Dillard, for example, the defendant 

provided the wrong street number on his application for a 
-19-

property insurance policy. Id. at 797-98, 487 S.E.2d at 158-59. 

This Court affirmed reformation of the policy to cover the 

correct property address despite the fact that the 

policyholder’s own neglect caused the mistake. Id. at 799, 487 

S.E.2d at 159. And in Huss, as explained above, a husband 

claimed that his ex-wife’s name was mistakenly included on a 

deed to his property. Huss, 31 N.C. App. at 465, 230 S.E.2d at 

161. The husband conceded that the existence of his ex-wife’s 

name was apparent on the face of the deed, and admitted that he 

did not even read the deed. Id. We nevertheless concluded that 

he had stated a claim for reformation, explaining that “[i]t is 

not required that the pleader allege facts as to how and why the 

mutual mistake came about.” Id. at 467, 230 S.E.2d at 162.

Simply put, a party seeking reformation of a written 

instrument need not allege or prove that the mutual mistake was 

a reasonable or neglect-free mistake. Even if the mistake 

resulted from that party’s failure to exercise reasonable 

diligence, reformation is available if there is clear, cogent,

and convincing evidence that the mistake was a mutual one and 

that it prevents the instrument from embodying the parties’ 

actual, original agreement. Dillard, 126 N.C. App. at 798-99, 
-20-

487 S.E.2d at 159; see also 25A Strong’s N.C. Index 4th 

Reformation of Instruments § 1, at 82 (2006). 

Here, Wells Fargo presented uncontested evidence that the 

deed of trust includes the correct property address of the 

developed property. The appraisal conducted during the loan 

origination process was performed on the developed property. 

Defendants applied the vast majority of the loan to pay off 

their existing mortgage on that developed property. Finally, 

and most importantly, Defendants did not forecast any evidence 

at trial tending to show that the deed of trust was intended to 

reference the undeveloped, empty lots.

Because Defendants have not forecast any evidence to rebut 

Wells Fargo’s showing of mutual mistake, Wells Fargo is entitled 

to reformation unless Defendants prevail on one of their 

defenses. As discussed above, Defendants’ statute of 

limitations and laches defenses raise issues of fact that cannot 

be resolved at summary judgment. Accordingly, we reverse the 

trial court’s entry of summary judgment and remand this case for 

further proceedings below.

Conclusion

For the reasons set forth above, there are material issues 

of fact precluding resolution of this case as a matter of law. 
-21-

Accordingly, we reverse the trial court’s entry of summary 

judgment and remand for further proceedings consistent with this 

opinion.

REVERSED AND REMANDED.

Chief Judge McGEE and Judge STEPHENS concur.