Court Opinion

ID: 625660
Source: CourtListenerOpinion
Date Created: 2012-03-19 19:09:39+00
Date Added: 2024-06-11T17:51:12.345260
License: Public Domain

UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT

                            No. 11-1469

SUNTRUST MORTGAGE INCORPORATED,

                      Plaintiff – Appellee,

          v.

DONALD D. BUSBY, JR.; ROBERT G. RONK; KENNARD DAVIS,

                      Defendants – Appellants,

          and

LORI A. NASSIDA; KELLY M. BAKER; MICHAEL T. BAKER; ROBERT
JOHN CUPELLI; LEIGH K. CUPELLI; DEANNA DAVIS; DEAN R.
CUMMINGS; JEFFREY A. SYKES; GUY BARMOHA; GREGORY M.
SCHUETZ; NATALIE BOUTROS; PAUL MULA,

                      Defendants.

Appeal from the United States District Court for the Western
District of North Carolina, at Bryson City.       Martin K.
Reidinger, District Judge. (2:09-cv-00003-MR-DLH)

Submitted:   January 30, 2012             Decided:   March 19, 2012

Before MOTZ, DAVIS, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Michael G. Wimer, WIMER & ASSOCIATES, P.C., Asheville, North
Carolina, for Appellants. Robert D. Perrow, J.B. McGuire Boyd,
WILLIAMS MULLEN, P.C., Richmond, Virginia; Elizabeth C. Stone,
WILLIAMS MULLEN, P.C., Raleigh, North Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

              Defendants-Appellants Donald D. Busby, Robert G. Ronk,

and Kennard Davis (hereinafter “Appellants”) appeal the district

court’s       order          granting     summary          judgment        in      favor       of

Plaintiff-Appellee              SunTrust         Mortgage,          Inc.         (hereinafter

“SunTrust”)        in     SunTrust’s         action        to   recover      a     deficiency

judgment on promissory notes following foreclosure by power of

sale on Appellants’ properties.                  Finding no error, we affirm.

              Appellants        claim     that       the    district       court       erred   in

finding Appellants’ equitable defenses barred by res judicata

because they were not raised in a proceeding under N.C. Gen.

Stat.     § 45-21.34          (2006).         The      district          court     held    that

Appellants’ defenses challenged the validity of the debt and

default,      which      a    North     Carolina      superior       court       had    already

determined to be valid during a hearing to confirm the power of

sale foreclosure pursuant to N.C. Gen. Stat. § 45-21.16 (2006).

The court further held that, while Appellants could not have

raised these equitable defenses in the hearing under § 45-21.16,

they could have raised their equitable defenses in a proceeding

to   enjoin    the      foreclosure          under    N.C.      Gen.     Stat.     § 45-21.34

(2006).       The       court    concluded         that     their      failure     to     do   so

resulted      in    the       rights    of    the     parties       to    the    foreclosure

becoming “fixed” and therefore barred Appellants from raising

such an equitable challenge in a later proceeding in a different

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forum.     The court also noted that its holding was in accord with

cases from the Eastern and Middle Districts of North Carolina.

See     Merrill      Lynch      Bus.     Fin.       Servs.,      Inc. v.     Cobb,       No.

5:07-cv-129D, 2008 WL 6155804, at *3-4 (E.D.N.C. Mar. 18, 2008);

Brumby, Jr. v. Deutsche Bank Nat'l Trust Co., No. 1:09CV144,

2010     WL     3219353      (M.D.N.C.        Aug. 13,        2010)    (adopting         the

magistrate      judge’s      report     and   recommendation,         2010    WL     617368

(M.D.N.C. Feb. 17, 2010)).

               We    find    the       district        court’s    reasoning        to     be

persuasive.         The doctrine of res judicata applies “not only to

the points upon which the court was required by the parties to

form an opinion and pronounce a judgment, but to every point

which properly belonged to the subject in litigation and which

the     parties,      [e]xercising       reasonable        diligence,        might      have

brought       forward   at    the     time    and      determined     respecting        it.”

Painter v. Wake Cnty. Bd. of Educ., 217 S.E.2d 650, 655 (N.C.

1975).        Both § 45-21.16 and § 45-21.34 are parts of a coherent

statutory framework intended to preserve the limited rights of a

mortgagor subject to a power of sale foreclosure.                       See, e.g., In

re Foreclosure of Deed of Trust by Goforth Props., Inc., 432

S.E.2d 855, 858-59 (N.C. 1995); In re Helms, 284 S.E.2d 553, 555

(N.C. Ct. App. 1981); see also Turner v. Blackburn, 389 F. Supp.

1250,    1258       (W.D.N.C.    1975).           To   permit    challenges        to    the

validity of the default outside this framework would defeat the

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legislative intent behind the North Carolina statutory scheme.

Despite the unique timing of this case, we are not persuaded

that Appellants were effectively barred from filing an action

pursuant    to   § 45-21.34.       Accordingly,          we   conclude    that    the

district    court    did   not   err   in     finding      Appellants’     defenses

barred by the doctrine of res judicata.

              Because we find Appellants’ equitable arguments to be

properly barred by res judicata, we find no merit in Appellants’

contention that a genuine issue of material fact existed with

respect to Appellants’ “quasi-estoppel” argument.                        We further

find   that    the   district    court       did   not    err   in   holding     that

Appellants’ challenge to the materiality of the default should

have been raised in the § 45-21.16 proceeding and therefore also

is barred by res judicata.

              Appellants also argue that the district court erred in

finding that they had not forecast competent evidence to support

a claim to offset SunTrust’s deficiency judgment.                        Both cases

cited by Appellants are distinguishable.                      See First Citizens

Bank & Trust Co. v. Cannon, 530 S.E.2d 581, 583 (N.C. Ct. App.

2000); Queen v. Queen, No. COA07-1207, 2008 N.C. App. LEXIS 638,

at *5-6 (N.C. Ct. App. Mar. 19, 2008).                   Thus, we find that the

district court did not err in determining that tax valuations do

not,   by   themselves,    provide     competent         evidence    sufficient    to

establish market value.          See Star Mfg. v. Atl. Coast Line R.

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Co., 23 S.E.2d 32, 36 (N.C. 1942).          We also conclude that the

district court did not err in determining that the county tax

assessor’s testimony did not provide additional support for the

tax valuation evidence and that his testimony as to valuation

was therefore inadmissible.

            Accordingly, we affirm the judgment of the district

court.     We dispense with oral argument because the facts and

legal    contentions   are   adequately   presented    in   the    materials

before   the   court   and   argument   would   not   aid   the   decisional

process.

                                                                    AFFIRMED

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