Court Opinion

ID: 2728213
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:30:16.745892+00
Date Added: 2024-06-11T12:40:02.778260
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in
accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of
A   p   p    e   l   l   a    t   e       P   r    o   c   e   d   u    r   e   .

                              NO. COA13-550
                     NORTH CAROLINA COURT OF APPEALS

                            Filed: 17 June 2014

JAMES B. TAYLOR FAMILY LIMITED
PARTNERSHIP, JAMES B. TAYLOR, and
MARY ANN TAYLOR,
     Plaintiffs,

      v.                                    Caldwell County
                                            No. 12-CVS-1041
BANK OF GRANITE,1
     Defendant.

      Appeal by Plaintiffs from Order entered 20 December 2012 by

Judge H. William Constangy, Jr., in Caldwell County Superior

Court. Heard in the Court of Appeals 9 October 2013.

      Law Offices of Matthew          K.   Rogers,    PLLC,   by   Matthew    K.
      Rogers, for Plaintiffs.

      Moore & Van Allen PLLC, by Scott M. Tyler, Joshua                       D.
      Lanning, and Christopher D. Tomlinson, for Defendant.

1
  The trial court’s 20 December 2012 order lists Defendant as
“BANK OF GRANITE.” On 28 June 2013, however, Defendant moved
this Court for an order substituting “CommunityOne Bank, N.A.”
for Bank of Granite because CommunityOne Bank, N.A. is the
surviving entity of a merger with Bank of Granite. We granted
that motion on 15 October 2013. Therefore, we list the original
party name in the caption, pursuant to the custom and practice
of this Court, and use the name of the substituted party
elsewhere in this opinion.
                                             -2-
       STEPHENS, Judge.

                  Procedural History and Factual Background

       This   case       arises     from     proceedings          surrounding    the     14

September 2012 foreclosure sale of three properties owned by

Plaintiff James B. Taylor Family Limited Partnership (“FLP”),

the    borrower.     A    hearing       by   the    Clerk    of     Superior    Court    to

determine whether to authorize foreclosure was set for 8 August

2012.    On   7    August       2012,    Plaintiffs         James    B.   Taylor      (“Mr.

Taylor”), Mary Ann Taylor, and FLP filed suit against Defendant

Bank     of   Granite      Association,            now   CommunityOne      Bank,       N.A.

(“Defendant”), and alleged the following:

       Prior to 1994, Mr. Taylor owned and operated a construction

business. Plaintiffs received loans from Defendant in 1994 and

1995 amounting to $1,697,061.51 for the construction of Property

1. Defendant loaned Plaintiffs $1,489,065 on 23 October 1996 for

the     construction       of     Property     2     and     the     purchase    of     the

surrounding land. These loans were consolidated on 23 November

1998 into a $3,100,000 note. Full payment on the 1998 note was

due by 3 December 2013.

       Defendant loaned Plaintiffs an additional $3,500,000 on 16

February 2000 in order to build and lease Property 3, a facility
                                        -3-
for use by Broyhill Furniture. The 2000 note was due at the end

of a twenty-year term. “The 2000 [note] was contingent on and

relied on income received relating to the Broyhill [twenty-year]

lease.”2 That same day, Plaintiffs signed a guaranty agreement,

promising   to     be   liable     on   the   2000   note.    “The    [g]uaranty

[a]greement was a part of, conditioned on[,] and dependent on

the 2000 [note] and lease terms.”3 Defendant loaned Plaintiffs

$1,200,000 on 18 October 2000 so that they could buy and rent

the property adjacent to Property 2.

    One year later, on 4 October 2001, the parties decided to

split the loan relating to Property 1 and Property 2. Therefore,

Plaintiffs signed a $2,350,000 note on Property 1 and a guaranty

agreement. Plaintiffs signed a $2,500,000 note on Property 2 and

a guaranty agreement. Both notes were set to mature on 4 October

2006.   Plaintiffs        allege    that      they   signed    both    guaranty

2
  Though Plaintiffs allege that payment on the 2000 note was
“contingent on” the receipt of income from Property 3, an
examination of the note, attached to Plaintiffs’ complaint as
Exhibit 3, indicates that “the entire remaining indebtedness”
was required to be paid by 15 December 2020. By its terms, the
2000 note states that Plaintiffs were not required to make
payments during the period leading up to 14 January 2011 unless
they secured a tenant. After that date, however, Plaintiffs were
required begin repayment whether they procured a tenant or not.
3
  A review    of    the    attached     agreement    does    not   support   this
allegation.
                                           -4-
agreements pursuant to promises by Defendant that rent payments

for the respective properties would be used to pay the loans.

       In   September      of    2005,    Plaintiffs   became      unable    to    make

payments on the notes for Properties 1 and 2 using the rent

received from their tenants. When Plaintiffs informed Defendant

of this fact, Plaintiffs allege that Defendant “acknowledged”

the notes “were reliant on sufficient tenant rental income to

pay    principal     and      interest.”     Plaintiffs     further   allege       that

Defendant      “expressly        waived     Plaintiffs[’]     default       for    [the

notes].” The parties then orally modified their agreement “so

that Plaintiff[s] would pay interest only when there were not

sufficient tenants in the relevant property, but when there were

sufficient tenants, Plaintiff[s] would make principal payments

as well as interest.”

       Plaintiffs accumulated “sufficient tenant income” to make

payments on the principal by October of 2006, when the notes

were    set    to    mature      by      their   written    terms.    Nonetheless,

Plaintiffs “understood that the term of both the loans . . . was

for    so   long    as   it     took   Plaintiff[s]    to    pay   off   the      loans

according to the rental[-]tenant[-]occupancy formula agreed with

[Defendant].” (Emphasis added).

              56. At all times, [Defendant] was aware of
              the lease terms and the “spread” between the
                                                     -5-
              money Plaintiff[s] received in rental income
              from leases and the money required to pay
              the principal of the loans back.

              57. [Defendant] loaned money based on a
              formula allowing Plaintiff[s] to profit from
              leases with reference to the terms of the
              leases for the [p]roperties.

The complaint describes a number of ways in which Defendant was

allegedly aware of Plaintiffs’ financial condition.

       Defendant sought to sell the three loans in October of 2008

for   50%    of    the     amount         owed       by    Plaintiffs.      That     same   month,

Defendant “demanded that Plaintiff[s] repay all loans relating

to Property 1, Property 2[,] or Property 3 immediately . . . .”

Alternatively, Defendant “demanded” that Plaintiffs “consolidate

the   loans       into    a    single       note          with   [a]   much    shorter      term.”

Defendant gave Plaintiffs six weeks to decide. When Plaintiffs

objected to these “demands” as “not right” and accused Defendant

of    “strong-arming”          them,        one       of    Defendant’s       vice    presidents

agreed, but said the matter was out of his control. Believing

they had no other “practical choice,” Plaintiffs agreed to the

consolidation.           Plaintiffs        signed          the    consolidated       note   and   a

personal guaranty in November of 2008.

       In    2011,       the       vice     president            informed     Plaintiffs      that

Defendant had tried to sell the loans at 50% of the amount owed,

but    was    unable          to    find         a    buyer.       “[The      vice    president]
                                          -6-
represented to [Plaintiffs] that [Defendant] intended to sell

the loans at a discount, but intended to continue to collect the

full amount of the loan, thereby reaping profits on the loans.”

In November of 2011, Plaintiffs met with Defendant “to discuss

extending the term of the [consolidated loan] or paying off the

[consolidated      loan]      at    a   discount.”    An    agent    for    Defendant

agreed    to    renew   the    note     for   another      three    years   and   told

Plaintiffs to contact a different agent “to discuss potentially

paying off the [consolidated loan] for a discount.”

    Plaintiffs called the different agent and asked for a 50%

discount because Defendant had allegedly offered to sell the

loans at that rate. The different agent denied having ever made

such an attempt and declined to allow Plaintiffs to pay off the

loans at a discount. Plaintiffs contacted the original agent

about renewing the loan. The original agent failed to express

concern or doubts about the process and did not provide a date

for completion. “At that point, Plaintiff[s] believed and [were]

led to believe[] that Defendant renewed the loan but . . . was

working    on    documents         reflecting   the     renewal.”      Accordingly,

Plaintiffs “understood [that] . . . no payments should be made

until the renewal documents were completed.”
                                             -7-
       Defendant told Plaintiffs that it needed to have “‘current

appraisals’          before     the       loan        renewal      could        be     formally

documented.”         Defendant      sought       to    have    Plaintiffs        pay       for    an

appraisal, and they did. In November of 2011, the original agent

informed Plaintiffs that “it was only a matter of time . . .”

before    the    paperwork          was    completed.         In   December,         the    agent

“promised that the loan documents would be completed” later that

month.

       On 27 December 2011, the agent presented Plaintiffs with

the renewal documents and “told Plaintiff[s] that [they would

have    to]    pay    [approximately]         $100,000[]           in   interest       accruing

from [the previous month] before [Defendant] would provide any

loan extension or renew the loan.” The documents were only open

for acceptance on that day, and Plaintiffs accused Defendant of

“punishing       Plaintiffs          for     delays”          by     presenting        renewal

documents that were only valid for one day. The parties did not

agree    to    renewal.       The    next    day      Defendant         sent    Plaintiffs        a

letter        “demand[ing]          Plaintiff[s]         turn[          ]over    rents           and

threaten[ing] foreclosure . . . .” Defendant also notified the

tenants       that    they    were        required      to     pay      rent    directly         to

Defendant.
                                      -8-
       The following month, January of 2012, a third agent for

Defendant      appraised   the     value     of     Property    1    and    informed

Plaintiffs      that   Defendant     would        “release”    the    property      if

Plaintiffs could sell it for $1,000,000. This new agent informed

Plaintiffs that the rent on the remaining properties would be

sufficient to pay off the note in nine years. Defendant sent

Plaintiffs     a   forbearance     sheet     in     February    of    2012,    which

extended the loan through March of 2012. Pursuant to the third

agent’s statements, Plaintiffs were expecting to receive a nine-

year extension.

       In March of 2012, Defendant allegedly informed Plaintiffs

for the first time “that the terms of the [consolidated note]

would not be extended for at least three years and that the

interest rate would not be reduced. . . . Plaintiff[s] submitted

a loan commitment for $3,000,000 to Defendant . . . and offered

[that commitment] to pay off [Defendant] in full.”4 Defendant

declined this offer and initiated foreclosure proceedings.

       Given   these   allegations,        Plaintiffs     asserted         causes   of

action against Defendant for (1) breach of the covenant of good

faith and fair dealing, (2) economic duress and coercion, (3)

fraud, (4) tortious interference with contract, and (5) unfair

4
    The principal owed on the consolidated note is $6,921,994.38.
                                        -9-
and deceptive trade practices. Accordingly, Plaintiffs requested

relief in the form of an injunction preventing the foreclosure

sale, compensatory damages, punitive damages, treble damages,

costs,    and    attorneys’       fees.       Defendant    moved      to    dismiss

Plaintiffs’ claims under Rule 12(b)(6) of the North Carolina

Rules    of   Civil   Procedure    on    8    October    2012.   In   its   motion,

Defendant asserted that       the clerk of court entered an order

authorizing the foreclosure sale on 8 August 2012 and denied

Plaintiffs’ motion for a preliminary injunction. According to

Defendant, the foreclosure sale went forward on 14 September

2012, and Plaintiffs’ properties were sold that day. The matter

was heard on 3 December 2012, and the trial court entered an

order    granting      Defendant’s        motion    on    27     December    2012.

Plaintiffs appealed that order on 17 January 2013.

    Approximately ten months after the trial court’s order, on

23 October 2013, Plaintiffs filed motions for relief under Rule

60(b) of the North Carolina Rules of Civil Procedure and to

amend their complaint under Rule 15. Plaintiffs notified this

Court of their motions, and we held their appeal in abeyance

pending an order by the trial court. James B. Taylor Family Ltd.

P’ship v. Bank of Granite, No. 13-550 (N.C. Ct. App. 5 December

2013),                                  available                               at
                                           -10-
http://appellate.nccourts.org/orders.php?t=&court=2&id=283136&pd

f=1&a=0&docket=1&dev=1. Plaintiffs made the following additional

allegations in their motions:

      The    trial     court         entered   a    temporary      restraining       order

(“TRO”) on 16 August 2012, nine days                        after Plaintiffs filed

their     complaint.       “Despite      the   [TRO],      the    substitute       trustee

advertised the foreclosure sale . . . ,” which was set to occur

on 7 September 2012. Plaintiffs sought discovery from Defendants

on   22   August     2012,      but    Defendant     did    not    comply     with   those

requests. On 14 September 2012, Defendant purchased the three

properties    for     less      than     the   amount      owed    by   Plaintiffs     and

transferred        title        to     three    affiliated        limited      liability

companies “without notice to Plaintiffs.” During this process,

Plaintiffs     spoke       to    the    vice   president,         who   was   no     longer

affiliated     with        Defendant.          He    informed       Plaintiffs        that

information relating to the loans was located in his files with

Defendant.

      According to Plaintiffs, Defendant had collected “at least

$517,602[] in rent from tenants [on the properties] after August

8, 2012 until the date of [the m]otion.” Property 3 was later

sold to a third party “for $275,000 more than the ‘credit bid’

for [that property].”
                                  -11-
              16. On October 16, 2013[ Mr.]           Taylor
              realized   that   discussions   and   written
              correspondence   between   [Plaintiffs]    and
              [Defendant] in October 2010 through January
              2011 evidence that Plaintiffs did not ratify
              the [c]onsolidated [l]oan . . . and [that
              Plaintiffs] effectively told [Defendant that
              they] continued to believe the properties
              were subject to independent loan value
              calculations.

In addition, Defendant brought suit against Plaintiffs on 27

September 2013 to recover the deficiency on the consolidated

note    and    for   “purported   fraudulent   conveyances”    made   by

Plaintiffs, but “intentionally withheld service of process on

Plaintiffs . . . .”

       Plaintiffs’ motion was heard on 2 December 2013. Two weeks

later, on 16 December 2013, Plaintiffs notified this Court that

the trial court intended to deny their motion. The trial court

entered its written decision on 18 December 2013, making the

following pertinent conclusions:

              8. There is no newly discovered evidence
              (not otherwise available to Plaintiffs prior
              to December 3, 2012) pursuant to Rule
              60(b)(2) that is relevant to any issue
              raised by Plaintiffs’ original [c]omplaint.

              9. Additionally, Plaintiffs fail to submit
              sufficient reasons to justify relief . . .
              pursuant   to   Rule    60(b)(1),   60(b)(3),
              60(b)(6) or otherwise under Rule 60 of the
              North Carolina Rules of Civil Procedure.
                                               -12-
As    a    result,     the       trial    court       stated    that     “if    there     were

continuing jurisdiction over [the] matter . . . , it would deny

Plaintiffs’ Rule 60 [m]otion for [r]elief and would deny as moot

Plaintiffs’ [m]otion to [a]mend under Rule 15.” Following that

decision, we issued an order stating that further appeal was

unnecessary       because         “[j]urisdiction         remains       in    this     Court.”

James B. Taylor Family Ltd. P’ship v. Bank of Granite, No. 13-

550       (N.C.      Ct.        App.     15     January        2014),        available      at

http://appellate.nc

courts.org/orders.php?t=&court=2&id=286166&pdf=1&a=0&docket=1&de

v=1. Accordingly, we directed the parties to file a supplemental

record and supplemental briefs. Id. The supplemental record was

filed on 4 February 2014. Plaintiffs and Defendant filed their

supplemental         briefs        on     19        February    and      3     March     2014,

respectively.

                                         Discussion

          On appeal, Plaintiffs contend that the trial court erred in

granting Defendant’s motion to dismiss under Rule 12(b)(6) for

failure to state a claim. Alternatively, Plaintiffs assert that

relief from the trial court’s order should be awarded pursuant

to    Rule    60(b).       We    affirm       the    trial     court’s       order   granting
                                    -13-
Defendant’s      motion   to   dismiss    and      decline    to   grant    relief

pursuant to Rule 60(b).

    I. Rule 12(b)(6)

                The motion to dismiss under [Rule]
           12(b)(6) tests the legal sufficiency of the
           complaint. In ruling on the motion the
           allegations of the complaint must be viewed
           as admitted, and on that basis the court
           must determine as a matter of law whether
           the allegations state a claim for which
           relief may be granted.

Stanback v. Stanback, 297 N.C. 181, 185, 254 S.E.2d 611, 615

(1979) (citations omitted). “This Court must conduct a de novo

review of the pleadings to determine their legal sufficiency and

to determine whether the trial court’s ruling on the motion to

dismiss was correct.” Leary v. N.C. Forest Prods., Inc., 157

N.C. App. 396, 400, 580 S.E.2d 1, 4, affirmed per curiam, 357

N.C. 567, 597 S.E.2d 673 (2003).

    In their first argument on appeal, Plaintiffs contend that

the trial court erred in granting Defendant’s motion to dismiss

because   they    properly     stated    claims     for:     (1)   the   following

“equitable    defenses     and   equitable      claims     [for]    relief”     (a)

waiver,   (b)     modification,     (c)     ratification,          (d)   lack    of

consideration,     (e)    over-reaching      and    unfair     bargaining,      (f)

economic duress, (g) fraud and estoppel, and (h) unfair trade

practices; (2) breach of the implied covenant of good faith and
                                    -14-
fair   dealing;    (3)   economic   duress;   (4)   misrepresentation    and

fraud; (5) tortious interference with contract; and (6) unfair

and    deceptive   trade   practices.      Plaintiffs   also   assert   that

discovery would reveal any missing elements of their claims and

argue that granting the motion without discovery is unfairly

prejudicial. We disagree.

            (1)     Waiver,  Modification,   Ratification,  Lack   of
                   Consideration,     Over-Reaching     and    Unfair
                   Bargaining, Economic Duress, Fraud and Estoppel,
                   and Unfair Trade Practices

       Plaintiffs assert that their complaint properly stated the

“equitable defenses and equitable claims [for] relief” listed

above.5 For support, Plaintiffs cite to various paragraphs in

their complaint and        argue that “[Defendant’s] representations

and actions in 2005 and [Defendant] accepting payments for more

than 3 years thereafter are sufficient to establish [all of

these claims].” Plaintiffs further assert that the consolidated

loan “is the result of egregious tortious conduct and cannot be

legally enforced” and claim that they “understood the parties

5
  As noted above, Plaintiffs only explicitly list (1) breach of
the covenant of good faith and fair dealing, (2) economic duress
and coercion, (3) fraud, (4) tortious interference with
contract, and (5) unfair and deceptive trade practices in their
complaint. Plaintiffs’ argument on appeal indicates that they
believe these other causes of action were impliedly stated in
the allegations of the complaint.
                                           -15-
were    operating       pursuant     to    modified       loans    and    a     course   of

dealings developed over many years.” (Emphasis added). The only

legal authority Plaintiffs provide are quotations regarding the

remedies of specific performance and reformation of contracts.

This argument lacks merit.

       As a preliminary matter, we note that Plaintiffs’ first

argument consists almost entirely of listing the eight different

“defenses and claims” that they believe were properly stated in

their    complaint       and    citing     the    paragraphs       that   they       believe

support those claims. Plaintiffs offer no specific reasons or

arguments for these claims and provide no citations in their

brief    to     the    relevant     legal       standards.     Indeed,         Plaintiffs’

claims are not even explicitly included in their complaint. This

practice      makes     it     difficult    to     properly    address         Plaintiffs’

arguments on appeal and treads dangerously close to abandonment.

See    N.C.R.    App.    P.     28(a);    see     also    United    Leasing      Corp.   v.

Miller,    45    N.C.     App.     400,    403,    263    S.E.2d    313,       316   (1980)

(“Questions raised . . . in appeals from trial tribunals but not

then    presented       and    discussed     in    a     party’s   brief       are   deemed

abandoned.”)          (citations     omitted).         Nonetheless,       we    elect     to

review Plaintiffs’ arguments on the merits and conclude that
                                           -16-
they   have   failed    to    state       any    of   the    alleged     “defenses         and

claims” described above.

       Waiver is an equitable defense to foreclosure that may be

present when the lender accepts late payments on a loan. See

Meehan v. Cable, 127 N.C. App. 336, 340, 489 S.E.2d 440, 444

(1997) (citations omitted). As Defendant notes in its brief, the

paragraphs cited by Plaintiffs as evidence of waiver only apply

to the notes on Property 1 and Property 2 from October of 2001.

“[S]uch allegations have no bearing on the [consolidated n]ote —

the loan which was secured by the properties foreclosed upon by

[Defendant].”       Indeed,    the       paragraphs     of    the    complaint       relied

upon by Plaintiffs specifically state that “[Defendant] refused

to   accept   anything       less    than       the   full    amount     of    the       . . .

[c]onsolidated       [n]ote    as        satisfaction        . . . .”     There      is     no

allegation     that     Defendant          accepted     late        payments        on    the

consolidated        note.     Therefore,         Plaintiffs’         argument        as    it

pertains to waiver is overruled.

       “Modification”        is not a stand-alone equitable                     doctrine.

What Plaintiffs appear to mean by the use of this term is that

the consolidated note was amended in a manner that prevented

foreclosure.        However,        as     Defendant         observes,        the        cited

paragraphs     of    Plaintiffs’          complaint     fail        to   reference         the
                                        -17-
consolidated       note,   which   is    the    relevant      instrument      in   this

case.     Therefore,       Plaintiffs’     argument         as    it    pertains      to

“modification” is overruled.

    “Ratification” refers to the idea that a principal may be

held liable for the actions of an individual who lacks authority

to act as an agent, but nonetheless “makes a contract as an

agent for [the principal]” when the principal, “upon discovery

of the facts, . . . ratif[ies] the contract . . . .” Patterson

v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 266 N.C. 489,

492, 146 S.E.2d 390, 393 (1966) (citations omitted). Plaintiffs

assert    that     their    complaint     reveals         Defendant     ratified    the

“rent-spread”       agreement,     i.e.,       the    alleged       agreement      that

Defendant would only accept payments to the extent they were

covered by rental payments made to Plaintiffs by their tenants.

Again, we note that these allegations refer to the 2001 notes on

Properties 1 and 2, not the consolidated note. Even assuming

those notes were modified and such modification was ratified by

Defendant, it is not relevant to Plaintiffs’ complaint or this

appeal.    Therefore,       Plaintiffs’        argument      as    it   pertains      to

“ratification” is overruled.

    “Lack     of    consideration”       refers      to    the    principle    that    a

contract must be supported by valuable consideration in order to
                                             -18-
be enforceable. See, e.g., Brown v. Ray, 32 N.C. (10 Ired.) 72,

73 (1849) (“[T]here must be a consideration to support a promise

. . . .”).        The     cited      paragraphs       of     Plaintiffs’      complaint

describe the process of consolidating the loans on properties 1

and 2, but do not allege that the parties’ agreement lacked

consideration. In addition, “[i]t is well settled that a loan is

sufficient        consideration         to    support      the      obligation      of     a

promissory note . . . .” In re Blue Ridge Holdings Ltd. P’ship,

129 N.C. App. 534, 537–38, 500 S.E.2d 446, 449 (1998) (citation

omitted); see also Smith v. Allison, 83 N.C. App. 232, 234, 349

S.E.2d   623,      624    (1986)      (deeming       evidence    that   the   promisee

intended     to    lend       the   corporation      money    and    that   funds    were

advanced to the corporation sufficient to show the existence of

consideration to support promissory notes), disc. review denied,

319   N.C.   406,       354    S.E.2d   718    (1987).       Therefore,     Plaintiffs’

argument     as    it     pertains      to    lack    of     consideration    for        the

consolidated note is overruled.

      “Over-reaching” and “unfair bargaining” are not documented

equitable doctrines in North Carolina. As Defendant notes in its

brief, however, “Plaintiffs appear to be using these terms as

synonyms for their claims of duress and breach of the covenant

of good faith and fair dealing.” Plaintiffs offer no argument
                                        -19-
regarding these particular terms, but to the extent they deal

with their other causes of action, those arguments are addressed

below.

       Similarly, Plaintiffs’       remaining “defenses and claims”                —

economic duress, fraud and estoppel, and unfair trade practices

— are synonymous with their named causes of action. Therefore,

we address those claims below.

           (2) Implied Covenant of Good Faith and Fair Dealing

       In their second argument on appeal, Plaintiffs contend that

Defendant breached an implied covenant of good faith and fair

dealing between the parties because the parties had developed a

“‘small    town’    banking       relationship,”          which    resulted      in

additional,     unwritten       terms     to     the     loans.   Specifically,

Plaintiffs     assert   their    “belie[f]”       that     “payments    [on     the]

principal and interest were required only as tenants occupied

the properties,” citing Defendant’s alleged modification of the

2001   notes   “from    time-to-time      to     reflect    the   rental   income

received.”     Plaintiffs   contend       this    constitutes     a    course    of

dealing, which should have been read into the consolidated loan.

This argument is without merit.

       “In every contract there is an implied covenant of good

faith and fair dealing that neither party will do anything which
                                         -20-
injures the right of the other to receive the benefits of the

agreement.” Williams v. Craft Dev., LLC, 199 N.C. App. 500, 506,

682 S.E.2d 719, 723 (2009) (citations and internal quotation

marks omitted), disc. review denied, 363 N.C. 859, 695 S.E.2d

452 (2010). Plaintiffs’ argument conflates the implied covenant

of good faith and fair dealing with the parol evidence rule.

Whether Defendant breached certain additional, unwritten terms

contained in the consolidated loan is relevant to a cause of

action     for   breach    of     contract,     not    breach    of     the   implied

covenant of good faith and fair dealing. As Plaintiffs do not

allege breach of contract in their complaint, this argument is

out of place.

      Furthermore, Plaintiffs’ complaint fails to properly allege

facts evidencing a breach of the covenant of good faith and fair

dealing.6 Plaintiffs assert that Defendant breached the covenant

by   (1)   failing    to   sell    the   loans    to   Plaintiffs       at    the   50%

discount    that     Defendant     allegedly     offered    to    other       would-be

purchasers and (2) “collecting rents and withholding material

information about the properties (including                     . . .    appraisals)

6
  Plaintiffs’ complaint also alleges “lack of consideration” for
the consolidated note as a part of their claim for breach of the
implied covenant of good faith and fair dealing. As we explained
in the preceding section, that argument is without merit.
                                                -21-
thereby     hindering            Plaintiffs[’]            ability        to      find        . . .

alternatives.” Defendant was                    under no contractual obligation,

however, to offer Plaintiffs a 50% discount. Such a right would

directly contradict the terms of the consolidated note, which

requires    Plaintiffs          to     pay      the    loan     in    full.   In       addition,

Defendant    had      the       right      to    collect        rents    pursuant       to    the

parties’ agreement in the deed of trust, and Plaintiffs had no

contractual or legal right to the appraisals. See, e.g., Camp v.

Leonard, 133 N.C. App. 554, 559, 515 S.E.2d 909, 913 (1999)

(“Other courts have . . . held the relationship between borrower

and    lender    is       not     a     confidential          one.      Unless     a    further

obligation      is    assumed         by   the    lender,       its     inspection       of   the

premises to be mortgaged is made only to determine whether the

property has sufficient value to secure the loan[] and is for

the    benefit       of     the       lender          only.”)        (citations        omitted).

Accordingly, Plaintiffs’ second argument is overruled.

             (3) Economic Duress

       Plaintiffs also assert that Defendant fraudulently “created

the circumstances” that led to economic duress and then “used

the economic distress7 to force and coerce Plaintiffs to sign the

[consolidated n]ote” and personal guaranty in 2008. On appeal,

7
    Plaintiffs do not distinguish between “duress” and “distress.”
                              -22-
Plaintiffs argue that their only source of income at this time

was “rent received from the properties” and allege that they

were “prevented from finding alternative[ financing] because of

[Defendant’s] fraud and refusal to provide appraisals.” These

allegations do not state a valid claim of duress.

              Duress   exists   where  one,   by   the
         unlawful act of another, is induced to make
         a contract or perform or forego some act
         under circumstances which deprive him of the
         exercise of free will. A wrongful act or
         threat is an important element of duress.
         The act threatened is wrongful if made with
         the corrupt intent to coerce a transaction
         grossly unfair to the victim and not related
         to the subject of such proceedings. . . .

Radford v. Keith, 160 N.C. App. 41, 43–44, 584 S.E.2d 815, 818

(2003). Furthermore,

              [a] mere assertion of a grievance is
         insufficient to state a claim upon which
         relief can be granted [under Rule 12(b)(6)].
         Some degree of factual particularity is
         required. The statement of a claim for
         relief must satisfy the requirements of the
         substantive law which give[s] rise to the
         pleadings. A complaint, to state a claim for
         relief, must [therefore] refer to “the
         transactions, occurrences, or series of
         transactions or occurrences[] intended to be
         proved” [as articulated in Rule 8(a) of the
         North Carolina Rules of Civil Procedure].

Alamance Cnty v. N.C. Dep’t of Human Res., 58 N.C. App. 748,

750, 294 S.E.2d 377, 378 (1982) (citations and certain internal

quotation marks omitted) (holding that the plaintiff failed to
                                  -23-
state a claim of fraud for which relief could be granted when

its complaint made only “conclusory allegations of grievances

and offer[ed] no indication of the existence of facts which, if

proven, would permit a finding of fraud . . .”); see also Biddix

v. Henredon Furniture Indus., 76 N.C. App. 30, 33, 331 S.E.2d

717, 720 (1985) (“Plaintiff’s complaint, therefore, must give

sufficient notice of the events on which he bases his claim[]

and state sufficient facts to satisfy the substantive elements

of a legally recognized claim [to avoid dismissal under Rule

12(b)(6)].”) (emphasis added).

     In this case, Plaintiffs’ complaint does not allege any

particular transactions, occurrences, or series of transactions

or   occurrences   invoking   the    elements     of   duress.   Rather,

Plaintiffs assert that Defendant “used economic duress” to force

Plaintiffs’ compliance with the contract. On appeal, Plaintiffs

offer   little   clarification,   only   noting   that   they    had   few

financial resources at the time they agreed to the consolidation

loan and attributing this fact to Defendant’s undefined “fraud.”

These “merely conclusory” allegations “offer[] no indication of

the existence of facts which, if proven, would permit a finding”

of duress. See Alamance Cnty, 58 N.C. App. at 750, 294 S.E.2d at
                                     -24-
378. Accordingly, Plaintiffs’ argument as it pertains to duress

is overruled.

             (4) Misrepresentation and Fraud

      Plaintiffs next allege that “Defendant’s representations,

acts[,] and omissions[,] both in 2008 and again in November 2011

through     December     2011,   amount   to    fraud   . . .   .”   Plaintiffs

assert    that    this   fraud   “induced      [them]   to   enter   [into]   the

[consolidated note],” was “intended to cause [them] to breach

the [consolidated note],” caused them to rely on Defendant’s

promises, and was “intentional and wanton.” These allegations do

not amount to a valid claim of fraud.

                  The elements of a civil cause of action
             for fraud are (1) a false representation or
             concealment of a material fact (2) that is
             reasonably calculated to deceive (3) made
             with intent to deceive (4) which does in
             fact deceive and (5) results in damage to
             the injured party. [For an action in fraud]
             to survive a motion to dismiss pursuant to
             Rule 12(b)(6), the complaint must allege
             with particularity all material facts and
             circumstances    constituting    the    fraud,
             although intent and knowledge may be averred
             generally. Thus, there is a requirement of
             specificity   as   to   the   element   of   a
             representation    made    by    the    alleged
             defrauder:   The   representation    must   be
             definite and specific.

Charlotte Motor Speedway, LLC v. Cnty of Cabarrus, __ N.C. App.

__,   __,   748   S.E.2d    171,   178    (2013)   (citations    and   internal
                                            -25-
quotation marks omitted) (holding that the trial court correctly

dismissed the plaintiff’s fraud claim under Rule 12(b)(6) when

the   complaint         alleged        that        the    defendant       “made     false

representation         of    material       fact[,]      . . .    concealed      material

facts regarding [the] ability to fund . . . promised amounts [of

money],” and based those allegations on a letter that did not

provide    any   “definite       and    specific”        timeframe),       disc.    review

allowed, __ N.C. __, 753 S.E.2d 664 (2014).

      Plaintiffs’ complaint is entirely devoid of particularity

as it relates to the claim of fraud. Plaintiffs merely allege in

sweeping    terms      that     Defendant      committed         fraud    and    employed

“fraudulent representations” to induce them to sign the note. As

with Plaintiffs’ claim of economic duress and similar to the

claims    from   our        opinion    in    Charlotte      Motor    Speedway,       these

allegations      are    not    sufficiently          “definite      and   specific”    to

support a claim of fraud. Accordingly, Plaintiffs’ argument is

overruled as it relates to fraud.

            (5) Tortious Interference with Contract

      Plaintiffs allege that Defendant tortiously interfered with

contracts    between        Plaintiffs       and    their   tenants       by    collecting

rent from the tenants pursuant to the terms of the consolidated

note. Even assuming the truth of these allegations, they are not
                                      -26-
sufficient    to   state    a   claim   of   tortious   interference   with

contact.

                 To establish a claim for tortious
            interference with contract, a plaintiff must
            show:

            (1) a valid contract between the plaintiff
            and a third person which confers upon the
            plaintiff a contractual right against a
            third person; (2) the defendant knows of the
            contract; (3) the defendant intentionally
            induces the third person not to perform the
            contract; (4) and in doing so acts without
            justification;   (5)  resulting   in  actual
            damage to [the] plaintiff.

            Interference is without justification if a
            defendant’s motive is not reasonably related
            to the protection of a legitimate business
            interest.

            Whether an actor’s conduct is justified
            depends upon the circumstances surrounding
            the interference, the actor’s motive or
            conduct,   the   interests   sought  to   be
            advanced, the social interest in protecting
            the freedom of action of the actor, and the
            contractual    interests   of    the   other
            party. . . .

            A complaint must show that the defendant
            acted with malice and for a reason not
            reasonably related to the protection of a
            legitimate   business  interest   of   the
            defendant party.

Sellers v. Morton, 191 N.C. App. 75, 81–82, 661 S.E.2d 915, 921

(2008)     (citations,     internal     quotation   marks,   and   brackets

omitted). If the complaint admits a motive for the interference
                                           -27-
other than malice, it must be dismissed. Filmar Racing, Inc. v.

Stewart, 141 N.C. App. 668, 674–75, 541 S.E.2d 733, 738 (2001)

(affirming        the    trial     court’s       dismissal    of    the     plaintiff’s

complaint as it related to tortious interference with contract

under Rule 12(b)(6) because the complaint only alleged that the

defendant “lacked justification” for its acts, not that it acted

maliciously) (citations omitted).

         In this case, Plaintiffs’ complaint states that Defendant

“incorrectly        and     unlawfully          relie[d]     on     terms     [in     the

consolidated        note]    which        were     caused    by     fraud,    economic

duress[,]     and       unfair    trade       practices.”    Plaintiffs       offer   no

allegation that Defendant acted maliciously. Though Plaintiffs

assert that the consolidated note is an unlawful contract, they

admit that Defendant was acting pursuant to the terms of the

consolidated note. Indeed, Plaintiffs’ complaint includes a copy

of   a    letter    from    Defendant,         which   states      its    intention   to

collect     the     rents    “to       secure     [Plaintiffs’]      obligations       to

[Defendant] with respect to [the loan].” This indicates that

Defendant was acting in reasonable protection of its legitimate

business      interests          and    not     out    of    malice.      Accordingly,

Plaintiffs have failed to state a claim of tortious interference
                                          -28-
with    contract    for     which     relief       may   be      granted,         and    their

argument is overruled as it pertains to that claim.

            (6) Unfair and Deceptive Trade Practices

       Plaintiffs      allege    that     Defendant      engaged        in    unfair         and

deceptive trade practices by “demanding” immediate payment on

all three loans in September of 2008, before the loans were

consolidated,       even    though      the    loans     were        not     in    default.

Plaintiffs      also       characterize        Defendant’s           behavior           as    an

“intentional breach of contracts accompanied [by] aggravating

circumstances” and further allege that Defendant made different

representations        regarding      the     interest        rate    charged           on   the

loans,    but   “actually       charged     interest”       at    the      higher        rates.

These    allegations       do   not   state    a    valid     claim     of    unfair         and

deceptive trade practices.

                 To establish a claim for unfair and
            deceptive trade practices, [the complaining
            party] must show: (1) that [the responding
            party] committed an unfair or deceptive act
            or practice, (2) [that] the action in
            question was in or affecting commerce, and
            (3) [that] the act proximately caused injury
            to [the complainant]. An act or practice is
            unfair   if   it   is   immoral,  unethical,
            oppressive, unscrupulous, or substantially
            injurious to [customers]. An act or practice
            is deceptive if it has the capacity or
            tendency to deceive.

            . . . .
                                         -29-
           A   mere   breach   of    contract,   even   if
           intentional, is not an unfair or deceptive
           act . . . . It is well recognized that
           actions   for   unfair   or   deceptive   trade
           practices are distinct from actions for
           breach of contract and that a mere breach of
           contract,   even   if   intentional,   is   not
           sufficiently unfair or deceptive to sustain
           an action . . . . To recover for unfair and
           deceptive trade practices, a party must show
           substantial      aggravating      circumstances
           attending the breach of contract. . . .

Bob Timberlake Collection, Inc. v. Edwards, 176 N.C. App. 33,

41–42,   626    S.E.2d    315,    322–23    (citations,       internal   quotation

marks, and certain ellipses omitted), disc. review denied, 360

N.C. 531, 633 S.E.2d 674 (2006).

       On appeal, Plaintiffs argue that “[t]he allegations show

that   [Defendant]       used    [its]    inequitable     position      and   power,

combined       with   [its]       knowledge     of    Plaintiffs’        financial

condition, to cause Plaintiffs to sign a [p]romissory [n]ote in

violation of the law.” For support, Plaintiffs cite three cases

as examples of similar conduct: Wilder v. Squires, 68 N.C. App.

310, 315 S.E.2d 63, disc. rev. denied, 311 N.C. 769, 321 S.E.2d

158 (1984) (affirming the trial court’s award of damages for

unfair   and    deceptive       trade    practices   by   a    vendor    against   a

prospective purchaser when the vendor threatened the purchaser

with loss of his deposit if the purchaser would not accept the

financing scheme offered by the vendor); Pedwell v. First Union
                                              -30-
Nat’l Bank of N.C., 51 N.C. App. 236, 275 S.E.2d 565 (1981)

(reversing       the      trial       court’s       dismissal        of    the     plaintiffs’

complaint      of      unfair       and     deceptive      trade       practices        by     the

defendant      financial            services      provider      when        the       plaintiffs

alleged     that       the    services        “conspired        to     keep       [them]      from

purchasing [a] condominium by . . . refus[ing] . . . a loan when

it   was   too      late      for     [the     plaintiffs]        to      obtain      alternate

financing,” i.e., six days before closing on the purchase); and

Fallston Finishing, Inc. v. First Union Nat’l Bank, 76 N.C. App.

347, 333 S.E.2d 321 (concluding that evidence of a breach or

threat of breach of loan commitments by the defendant bank and

of great financial hardship faced by the plaintiff corporations

raised a jury issue as to whether an accord and satisfaction

occurred), cert. denied, 314 N.C. 664, 336 S.E.2d 621 (1985). We

are unpersuaded.

      First,        the      mere     act    of     “demanding”           that    a    borrower

consolidate its loans is neither immoral, unethical, oppressive,

unscrupulous, substantially injurious, or deceptive. Cf. Shell

Trademark Mgmt. BV & Motiva Enters. v. Ray Thomas Petroleum Co.,

642 F. Supp. 2d 493 (2009) (“It was neither unfair nor deceptive

for Motiva to insist that RTP pay out their contract rather than

substitute       another        gas       station    for    the      gas      station        which
                                      -31-
closed.”). To the extent there is a power differential between

the   parties,    that    difference    is   an   organic    element   of   the

lender/borrower relationship. It is not grounds to support a

claim of unfair and deceptive trade practices. Plaintiffs do not

allege   that     Defendant   made     deceptive     statements,    used    its

authority to coerce or force Plaintiffs to agree to consolidate,

or otherwise acted inappropriately in its demand for payment.

Whether the loan payments were in default or not, the facts

alleged in the complaint reveal that Defendant gave Plaintiffs a

full six weeks to decide how to handle the situation. This is

sufficient   time    to    evaluate    Defendant’s    “demand,”     consult   a

lawyer, if necessary, and respond appropriately. The validity of

Defendant’s demand, alone, does not establish a claim of unfair

and   deceptive    trade   practices.     Even    assuming   that   Defendant

breached a contract with Plaintiffs, Plaintiffs simply do not

allege facts showing the existence of other aggravating factors

that might transform Plaintiffs’ claims from mere grievances to

colorable causes of action.

      Second, the cases cited by Plaintiffs are not applicable

here. In Wilder, the defendant threatened the plaintiff with the

loss of a substantial monetary deposit if he did not agree to

the defendant’s terms. 68 N.C. App. at 315, 315 S.E.2d at 66.
                                            -32-
Plaintiffs      allege       no     such     threat         here.        In   Pedwell,       the

plaintiffs      alleged       that        the     defendant            financial      services

provider conspired to refuse a necessary loan with only six days

remaining before closing on certain property. 51 N.C. App. at

237, 275 S.E.2d at            566. Here, unlike the financial services

provider in Pedwell, Defendant gave Plaintiffs notice of its

demand   a    full     six    weeks        before       payment         was    expected.      As

discussed above, this was a sufficient amount of time to allow

Plaintiffs    to     collect       themselves          and       respond      appropriately.

Additionally, Fallston Financing, Inc. involves economic duress,

not unfair and deceptive trade practices. 76 N.C. App. at 364,

333 S.E.2d at 331. Therefore, it is not applicable in this case.

      Lastly,    Plaintiffs’            allegations         that       Defendant      explained

its   interest     rate      on    the     loans       using       different     values      and

eventually      charged      Plaintiffs          at     the       higher      value    is    not

sufficient, alone, to establish a claim of unfair and deceptive

practices.      Even      assuming         that       Defendant          communicated        two

different methods of calculating the interest on the loans to

Plaintiffs,      the      plain         language       of        the    consolidated        note

indicates     that       “[i]nterest            will        be     calculated         on    a[n]

[a]ctual/360       basis.”        The    fact     that       Defendant        described      two

different ways of calculating such rate before the loans were
                                          -33-
consolidated       does   not     have     an    appreciable           effect    on       the

marketplace and does not amount to unfair and deceptive trade

practices. See Carcano v. JBSS, LLC, 200 N.C. App. 162, 172, 684

S.E.2d     41,    50   (2009)     (“The     ‘relevant       gauge’       of     an    act’s

unfairness or deception is the effect of the actor’s conduct on

the marketplace.”) (citation, certain internal quotation marks,

and brackets omitted). Accordingly, Plaintiffs’ argument as it

pertains to its claim of unfair and deceptive trade practices is

overruled.

             (7) Discovery

       In the alternative, Plaintiffs argue that any “technical

discrepancy” in their pleadings could be remedied by discovery.

Therefore,        Plaintiffs     assert     that       it    would       be     “unfairly

prejudicial” to allow dismissal of their case without giving

them   the    opportunity       to   review      the     “vast     majority          of   the

evidence     relating     to    the[ir]    claims”       that     is   in     Defendant’s

control. We disagree. “While absolute precision in pleading is

not    necessary,       [the]    plaintiffs        may      not    simply       state      a

generalized grievance and thereby gain the right to go on a

discovery fishing expedition.” Smith v. City of Charlotte, 79

N.C. App. 517, 529–30, 339 S.E.2d 844, 852 (1986). Plaintiffs’

argument     is    therefore     overruled.      Accordingly,          we     affirm      the
                                      -34-
trial   court’s    order   granting     Defendant’s    motion   to   dismiss

Plaintiffs’ complaint under Rule 12(b)(6) for failure to state

any claim upon which relief may be granted.

    II. Rule 60(b)

    Alternative to their argument that the trial court erred in

granting    Defendant’s      motion     to   dismiss    their    complaint,

Plaintiffs argue that relief is proper pursuant to Rule 60(b),

subsections (1)–(3) and (6), and that they should be allowed to

amend their complaint pursuant to Rule 15. We agree with the

trial court’s decision that, if it had jurisdiction over the

matter, Plaintiffs’ Rule 60(b) motion should be denied and do so

here.

            (1) Any Reason Justifying Relief

    Under Rule 60(b)(6),          the court may grant relief from a

judgment    for   any   reason   “justifying   relief.”   N.C.R.     Civ.   P.

60(b)(6).

            The grounds for setting aside judgment
            pursuant to Rule 60(b)(6) are equitable in
            nature. What constitutes cause to set aside
            judgment   pursuant  to   Rule  60(b)(6)   is
            determined by whether (1) extraordinary
            circumstances exist; and (2) whether the
            action is necessary to accomplish justice.
                                      -35-
Trivette v. Trivette, 162 N.C. App. 55, 63, 590 S.E.2d 298, 304

(2004) (citations omitted). This is a two-pronged test. See id.

    Plaintiffs argue that relief is proper under Rule 60(b)(6)

because the circumstances surrounding their case have changed so

substantially that justice demands relief. Plaintiffs describe

those    circumstances      as    follows:   First,     Defendant    filed   a

deficiency action against Plaintiffs. Second, Defendant failed

to disclose material facts before the 12(b)(6) hearing which

“support       prejudicial        irregularity     in     the     foreclosure

proceedings.” Third, the consideration paid for Property 3 was

grossly inadequate. Fourth, Defendant has neither answered the

allegations in Plaintiffs’ complaint nor allowed discovery, and

the trial court erred in refusing to allow Plaintiffs to offer

evidence at the 2 December 2013 hearing on their motion for

60(b) relief. Fifth, the decisions of the clerk of court in the

foreclosure action should not be given preclusive effect in the

deficiency action. We are unpersuaded.

                  (a) The Deficiency Action

    Plaintiffs do not provide a clear reason for why the act of

filing     a   deficiency        action   constitutes     an    extraordinary

circumstance     justifying      relief   from   the   trial   court’s   order.

Instead, Plaintiffs cite an opinion of this Court in Sloan v.
                                     -36-
Sloan, 151 N.C. App. 399, 566 S.E.2d 97 (2002). Plaintiffs also

assert that Defendant wrongly failed to reveal the following

facts in its deficiency action: Defendant’s continued receipt of

rents from tenants, the transfer of property to the affiliated

corporations, the sale of Property 3 for substantial profit, and

its intention to pursue the deficiency action.8

     We need not address the merits of Plaintiffs’ argument as

it pertains to the deficiency action or the application of our

opinion in Sloan. Even if Defendant erred in failing to reveal

certain facts in its deficiency action, the act of filing such

an   action   is    not    an   extraordinary   circumstance   justifying

relief. The proper action for Plaintiffs to pursue in the event

that a deficiency action is inappropriate is not relief pursuant

to Rule 60(b), but a motion to dismiss. See generally N.C.R.

Civ. P. 12. Therefore, Plaintiffs’ argument as it relates to the

deficiency action is overruled.

                   (b) “Prejudicial Irregularities” at Foreclosure

     Plaintiffs     also    assert   that   extraordinary   circumstances

were present justifying relief from the trial court’s judgment

8
  Plaintiffs do not specify why they believe Defendant should
have notified them of its intention to pursue the deficiency
action in that same action. Obviously, such notification would
have little value once the action was filed.
                                            -37-
because    Defendant       failed      to   disclose      certain       material     facts

relating to “prejudicial irregularit[ies]” in the foreclosure

proceedings.       Specifically,         Plaintiffs       assert     that      Defendant

incorrectly failed to disclose: the issuance of an “excessive”

6.8 million dollar bond to stay the foreclosure sale and allow

appeal, the use of “en masse” advertising by Defendant to inform

potential buyers about the foreclosure sale, and the act of

advertising the sale during the TRO. We again disagree.

    These        facts    are    not   relevant      to    the    causes       of   action

Plaintiffs       allege    in    their      complaint.      To     the    extent         that

Defendant’s      failure    to    reveal      certain     facts     relating        to    the

foreclosure proceedings was improper, it does not justify relief

from the trial court’s grant of Defendant’s motion to dismiss

under     Rule    12(b)(6).       Accordingly,       Plaintiffs’          argument         is

overruled as it relates to these so-called irregularities.

                    (c) “Grossly Inadequate” Consideration

    Lastly, Plaintiffs assert that extraordinary circumstances

sufficient to justify relief from the trial court’s order on

Defendant’s       motion    to    dismiss      are   present       in    the    form       of

“grossly inadequate” consideration paid for Property 3 in May of

2013, i.e., consideration amounting to a $275,000 profit for
                                    -38-
Defendant. For the reasons discussed in the preceding section,

this argument is without merit.

                   (d)    Discovery,  Plaintiffs’        Allegations,     and
                         Plaintiffs’ Evidence

      Plaintiffs     next   argue    that   extraordinary    circumstances

justifying relief are present in this case because Defendant

failed to answer the allegations in Plaintiffs’ complaint or

allow discovery and because the trial court refused to allow

Plaintiffs to present evidence regarding the validity of the

consolidated note and their inability to pay the 6.8 million

dollar security bond. We are unpersuaded.

      The rule of civil procedure requiring a defendant to file

counterclaims in a responsive pleading, N.C.R. Civ. P. 13(a), is

not   applicable    when    a   defendant   files   a   motion   to   dismiss

instead of a pleading. Cf. Mellon Bank, N.A. v. Ternisky, 999

F.2d 791, 795 (1993) (“[Federal Rule 13(a)] does not come into

play when a defendant files only a motion to dismiss, instead of

a pleading.”); see generally Hardin v. York Mem’l Park, __ N.C.

App. __, __, 730 S.E.2d 768, 773 (2012) (“For purposes of [Rule

15(a)], a Rule 12(b)(6) motion to dismiss is not a responsive

pleading and thus does not itself terminate [the] plaintiff’s

unconditional right to amend a complaint under Rule 15(a).”)

(citation and internal quotation marks omitted), disc. review
                                       -39-
denied,   366    N.C.     571,   738    S.E.2d    376   (2013).   Therefore,

Defendant’s failure to answer Plaintiffs’ allegations is not an

extraordinary circumstance justifying relief.

    In addition, for the reasons discussed in section I(7) of

this opinion, supra, Defendant’s failure to allow discovery does

not constitute an extraordinary circumstance justifying relief.

    Lastly, Plaintiffs allege that the trial court erred in

refusing to allow them to present evidence “which (1) supports

invalidating    the     ‘consolidated     note’   and   (2)   . . .   [proves]

Plaintiffs could not obtain a []6.8 [m]illion [d]ollar security

bond necessary to challenge the [c]lerk’s findings.” Plaintiffs

do not describe this evidence, but cite to a portion of the

transcript of the 2 December 2013 hearing in which counsel for

Plaintiffs — discussing Defendant’s deficiency action — states

the following:

          So, with that being said, Your Honor, again,
          I don’t want to — I want to preserve my
          right to offer into evidence Mr. Taylor’s
          testimony to the extent it’s necessary to
          preserve our right in the [N.C. Gen. Stat. §
          45-21.16] hearing to insure that there is no
          claim for preclusive effect. But I think
          that I’m hearing the other side acknowledge,
          and I think Your Honor, from the bench
          stated earlier that we travelled on separate
          tracks, that that’s not the intent of that
          [N.C. Gen. Stat. § 45-21.16] hearing or the
          appeal there[]from to preclude us from
          entering evidence. And with that being said
                                           -40-
              I’d leave it to Your Honor. If Your Honor
              would like me — in order to preserve that
              right I’d be glad to bring Mr. Taylor to the
              bench.

The trial court responded by saying: “At this point and time and

[sic]     I    don’t    believe      the        testimony    is     appropriate   or

necessary.”9

      This     testimony      relates      to     the   deficiency     action,    not

Plaintiffs’ Rule 60 motion for relief. Thus, it is not relevant

to   Plaintiffs’       argument     that    extraordinary         circumstances   are

present       to   justify    relief       under    Rule     60(b).    Accordingly,

Plaintiffs’        argument    as    it     relates     to   this     testimony    is

overruled.

                    (e) Claim Preclusion, Res Judicata, and Judicial
                         Estoppel

      Next, Plaintiffs argue that they would “potential[ly]” be

unfairly prejudiced by applying the clerk of court’s findings in

the foreclosure proceedings to Defendant’s deficiency case and,

9
  Plaintiffs’ use of the word “refused” to describe the trial
court’s action is inaccurate. The testimony quoted above
indicates   that  Plaintiffs   were  content   to  refrain   from
introducing the testimony as long as they could preserve their
right to use it in the hearing on Defendant’s deficiency action.
                                       -41-
therefore, that res judicata and judicial estoppel should not

apply. As discussed at length above, this argument is entirely

unrelated to Plaintiffs’ Rule 60(b) motion for relief, despite

its placement in the “extraordinary circumstances” section of

Plaintiffs’ brief. Accordingly, we decline to review it here. If

Plaintiffs    wish    to    litigate    the     validity    of   the     foreclosure

proceedings,    to    the    extent    those     issues    are    not    moot,    they

should do so in a separate action.

                    (f) Justice

      Finally, Plaintiffs assert that justice demands relief from

the   trial    court’s       order.    Because     we     have    not    found    any

extraordinary circumstances justifying relief in this case, we

need not address this argument. See Huggins v. Hallmark Enters.,

84 N.C. App. 15, 25, 351 S.E.2d 779, 785 (1987) (“Th[e test for

relief under Rule 60(b)(6)] is two-pronged, and relief should be

forthcoming only where both requisites exist.”).                        Accordingly,

Plaintiffs’     argument       for     relief     under     Rule       60(b)(6)    is

overruled.

             (2) Excusable Neglect

      Rule    60(b)(1)      provides   that     the     trial    court    may    grant

relief   to     a    party     from    a   final      order      for     “[m]istake,
                                  -42-
inadvertence, surprise, or excusable neglect.” N.C.R. Civ. P.

60(b)(1).

            To set aside a judgment on the grounds of
            excusable neglect under Rule 60(b), the
            moving party must show that the judgment
            rendered   against  him   was   due  to   his
            excusable   neglect  and   that   he  has   a
            meritorious defense. . . .

            . . . .

            The issue of what constitutes excusable
            neglect is a question of law which is fully
            reviewable on appeal. While there is no
            clear dividing line as to what falls within
            the confines of excusable neglect . . . ,
            [it] depends upon what, under all the
            surrounding circumstances, may be reasonably
            expected of a party in paying proper
            attention to his case.

            Thus, . . . deliberate or willful conduct
            cannot constitute excusable neglect, nor
            does inadvertent conduct that does not
            demonstrate diligence.

            And, clearly, an attorney’s negligence in
            handling a case should not be grounds for
            relief under the excusable neglect provision
            of Rule 60(b)(1).

Monaghan v. Schilling, 197 N.C. App. 578, 584, 677 S.E.2d 562,

566   (2009)   (citations,   internal    quotation   marks,    and   certain

ellipses omitted).

      In arguing that they are entitled to relief for excusable

neglect, Plaintiffs repeat their previous arguments in a new

context.    Specifically,    Plaintiffs    assert    that     they   delayed
                                            -43-
amending their complaint to reflect claims of grossly inadequate

consideration because they lacked access to the appraisals and

were unable to pay the 6.8 million dollar bond. Plaintiffs also

characterize their delay as excusable neglect because they were

unaware (1) that Defendant would pursue the deficiency judgment

and (2) of certain communications made by Defendant regarding

the   defense     of     ratification.       Finally,    Plaintiffs      assert       that

they were unaware of certain details regarding the foreclosure

proceedings and that this should be considered excusable neglect

sufficient to justify relief. We disagree.

      To    the     extent    Plaintiffs’          alleged    neglect       might     have

otherwise allowed them to establish some meritorious defense to

dismissal,10      such     neglect    suggests       that    Plaintiffs        were   not

paying     proper      attention     to   their     case.    The    foreclosure       sale

occurred on 14 September 2012, giving Plaintiffs ample time to

determine      whether       the     properties       were     sold     for    adequate

consideration       at    that     sale.     In    addition,       Defendant    had    no

obligation to inform Plaintiffs that it was planning to pursue a

deficiency        judgment.        Plaintiffs’       lack     of      knowledge       that

Defendant     intended       to     bring    a     deficiency      action     does    not

10
   We do not opine that it does. Indeed, as                             noted       above,
Plaintiffs had no right to access the appraisals.
                                        -44-
“excuse”    anything    related     to    their   12(b)(6)      claim.    Lastly,

Plaintiffs’     alleged      misunderstanding        about    the    nature     of

Defendant’s communications on the issue of ratification is more

akin to carelessness than excusable neglect. Accordingly, the

trial   court   did    not    err   by   indicating    that     it   would    deny

Plaintiffs’ motion, and Plaintiffs’ argument as it pertains to

Rule 60(b)(1) is overruled.

            (3) Newly Discovered Evidence

    Rule 60(b)(2) provides that the trial court may relieve a

party from a final judgment on a showing of “[n]ewly discovered

evidence which by due diligence could not have been discovered

in time to move for a new trial under Rule 59(b).” N.C.R. Civ.

P. 60(b)(2).

            To constitute “newly discovered evidence”
            within the meaning of Rule 60(b)(2), the
            evidence must be such that it could not have
            been obtained in time for the original
            proceeding through the exercise of due
            diligence. The “newly discovered evidence”
            must have been in existence at the time of
            the   trial.    This  limitation    on    newly
            discovered evidence has been justified on
            the   firm   policy  ground   that,    if   the
            situation were otherwise, litigation would
            never come to an end.

Parks v. Green, 153 N.C. App. 405, 412, 571 S.E.2d 14, 19 (2002)

(citations,     certain      internal    quotation     marks,    and     brackets

omitted).
                                         -45-
      On appeal, Plaintiffs characterize the following facts as

newly   discovered       evidence       justifying      relief        from      the    trial

court’s order: (1) the market value of the properties, which was

not discoverable by the time of the 12(b)(6) hearing because

Defendant    refused      to   provide     appraisals;          (2)       the   fact    that

Defendant       transferred       the     properties           to     the       affiliated

corporations, which was not discoverable by the time of the

12(b)(6)     hearing      because       Defendant        did        not     reveal      this

information; and (3) the fact that the May 2013 sale of Property

3    “yielded    a     substantial      profit     of    at     least       $275,000[],”

knowledge of which “was not possible at the 12(b)(6) hearing as

the events had not yet occurred.” We are unpersuaded

      First,     the     market    value      of   the     properties           does     not

constitute       newly     discovered         evidence         justifying             relief.

Plaintiffs were the owners of the properties for a number of

years and entirely capable — prior to the foreclosure sale — of

determining the market value of the property. In addition, we

have already determined that Plaintiffs’ had no right to access

the appraisals. Accordingly, this argument is overruled.

      Second,     Plaintiffs      do    not     provide       any     cogent     argument

explaining why Defendant’s decision to transfer the properties

to    the   affiliated      corporations         has    any         bearing     on     their
                                                -46-
complaint,          and    we    are     unable       to   discern       any    such     reason.

Therefore, Plaintiffs’ argument as it pertains to Defendant’s

decision        to        transfer       the     properties         to     the        affiliated

corporations is overruled.

      Third, Plaintiffs’ argument is defeated by its own words.

As noted above, newly discovered evidence sufficient to justify

relief must have been in existence at the time of the relevant

legal proceeding.               See id.     Plaintiffs         state that           the sale of

Property        3    occurred      after        the    3   December       2012       hearing    on

Defendant’s motion to dismiss, in May of 2013. Therefore, the

profit     resulting            from      the     sale        cannot     constitute        newly

discovered evidence justifying relief because the sale had not

occurred at the time of the 12(b)(6) hearing.                                   As    Plaintiffs

could not have discovered it on 3 December 2012, it cannot now

be   “newly         discovered.”          Therefore,          Plaintiffs’           argument    is

overruled.

                (4) Fraud, Misrepresentation, or Misconduct

      Rule 60(b)(3) provides that a trial court may award relief

from an order because of fraud, misrepresentation, or misconduct

by   the   nonmoving            party.    N.C.R.       Civ.    P.   60(b)(3).         Plaintiffs

allege     on       appeal      that     Defendant’s       “refusals”          to    answer    the

allegations in the complaint, answer the counterclaims in the
                                   -47-
deficiency action, or respond to Plaintiffs’ discovery requests

constitute intrinsic fraud justifying relief.

      As discussed above, Defendant’s decisions not to respond to

the   allegations   made   by   Plaintiffs   or   allow   discovery   were

appropriate. Even if those decisions were somehow inappropriate,

however, they would not constitute fraud under any definition of

the term. Therefore, Plaintiffs’ final argument is overruled.

                                Conclusion

      For the reasons stated above, the trial court’s decision

indicating it would be inclined to deny Plaintiffs’ motion for

relief pursuant to Rule 60(b) is correct, and the trial court’s

order granting Defendant’s motion to dismiss under Rule 12(b)(6)

is

      AFFIRMED.

      Judges CALABRIA and ELMORE concur.

      Report per Rule 30(e).