Court Opinion

ID: 2740191
Source: CourtListenerOpinion
Date Created: 2014-10-07 13:05:00.81069+00
Date Added: 2024-06-11T09:12:39.621267
License: Public Domain

NO. COA14-166

                  NORTH CAROLINA COURT OF APPEALS

                       Filed: 7 October 2014

IN THE MATTER OF THE FORECLOSURE
of a North Carolina Deed of Trust
executed by L.L. Murphrey Co.,
f/k/a/ L.L. Murphrey Hog Co., Lois
M. Barrow, Larry Barrow, Connie M.
Stocks, Donald Stocks and Doris
Murphrey dated April 23, 1996 and
recorded April 24, 1996 in Book            Greene County
489 at Page 620, as modified by            No.: 13 SP 61
those certain Modification and
Extension Agreements dated August
30, 1996, Recorded October 7, 1996
in Book 493 at Page 20, dated
April 4, 1997, recorded April 25,
1997 in Book 497, Page 94, dated
May 26, 1998, recorded June 29,
1998 in Book 507, Page 24 and
dated August 21, 1998, recorded
October 2, 1998, all in the Office
of the Greene County Register of
Deeds,

By Kluttz, Reamer, Hayes,
Randolph, Adkins & Carter, L.L.P.
Substitute Trustee.

    Appeal by respondents from order entered 31 October 2013 by

Judge Paul L. Jones in Greene County Superior Court.       Heard in

the Court of Appeals 27 August 2014.
                                          -2-
       Driscoll Sheedy, P.A., by Susan E. Driscoll, for appellee.

       WHITE & ALLEN, P.A., by John P. Marshall and Ashley C.
       Fillippeli, for appellants.

       ELMORE, Judge.

       Lois    M.      Barrow,      Larry     Barrow,     and   Doris      Murphrey

(respondents) appeal from the Order Denying Motion to Dismiss

and Authorizing Foreclosure entered by Judge Paul L. Jones on 31

October 2013.        After careful consideration, we affirm.

                                     I.      Background

       In the instant case, the particular real estate security

interest being foreclosed was a North Carolina Deed of Trust

entered into on 23 April 1996 by Doris Murphrey, Lois M. Barrow,

Larry Barrow, Connie M. Stocks, Donald Stocks, and L.L. Murphrey

Hog    Co.    (LLM),    a   North    Carolina     corporation,    in       favor    of

Wachovia Bank, N.A., predecessor in interest to D.A.N. Joint

Venture Properties of North Carolina, LLM (DAN).                     The deed of

trust was recorded in the Greene County Register of Deeds and

the Lenoir County Register of Deeds and amended over time by

certain modification and extension agreements.                   To secure the

deed    of    trust,    respondents         pledged   certain   items      of   real

property      as    collateral.       Wachovia    also    received     a   security

interest in LLM’s fixtures and items of personal property.                         The
                                        -3-
deed    of    trust   secures      an   indebtedness     evidenced    by   five

promissory notes       (the Wachovia notes)            executed by LLM, the

borrower, in favor of Wachovia between July 1993 and March 1999.

       LLM previously filed a voluntary petition for relief under

Chapter 11 of the Bankruptcy Code on 8 June 2000.              At that time,

LLM was in default to Wachovia for $12,790,522.36 pursuant to

the Wachovia notes.          In LLM’s Chapter 11 case, the Bankruptcy

Court entered an order confirming LLM’s fourth amended plan of

reorganization (“Confirmed Plan” or “the Plan”).                 Pursuant to

class III of the Confirmed Plan, Wachovia’s claims were divided

into    Note A and Note B.          Note A is an amortizing note in the

amount of $8,000,000; Note B is a cash flow note in the amount

of $3,500,000. Both Notes remained secured by the collateral

pledged      to   secure   the   Wachovia     notes.     Respondents,      LLM’s

principals, guaranteed Note A and Note B, which both listed a

maturity date of 30 September 2011.              Upon maturation, the Plan

provided that Note A and Note B would be recapitalized and that

the obligations of the guarantors would be limited to the amount

of recapitalized debt.

       The Confirmed Plan also specified:

              R. Execution and Delivery of Revised Loan
              Documents

              The   Debtor   and   Wachovia     will   enter   into
                        -4-
amended and restated Loan Documents (the
“Wachovia     Restated    Loan     Documents”)
consistent with the provisions of this Plan
of Reorganization. The Debtor shall execute
and
deliver such agreements, instruments and
documents as may be reasonably requested by
Wachovia.      The  Wachovia   Restated   Loan
Documents   shall   contain   reasonably   and
customary warranties, covenants and other
terms as the Debtor and Wachovia may agree
upon. The following shall constitute events
of default:

(i) Nonpayment as required under [the] terms
of Note A or Note B,

(ii) Material misrepresentation,

(iii) Material    breach       of   warranties   of
covenants,

(iv) Subsequent voluntary           or   involuntary
bankruptcy proceedings, or

(v)   Reopening    of         current     bankruptcy
proceedings.

S.   Implementation Date

The Implementation Date for Note A and Note
B shall be October 1, 2001, provided that
the following Conditions Precedent have been
met:

(i) Cash shall be available to the Debtor in
an amount sufficient to permit payment in
full of all Administrative Claims,

(ii) Eleven days shall have expired since
the Confirmation Date and no stay of the
Confirmation Order shall be in effect, and

(iii) The Wachovia and MLLC          Restated Loan
                                          -5-
              Documents   [referred   to  above   as   the
              “Wachovia Restated Loan Documents”] required
              by the
              Plan of Reorganization shall have been
              executed and delivered.

    Wachovia         did    not    execute      the   Restated    Loan    Documents

referenced      in    the    Confirmed       Plan.      Nonetheless,      LLM   made

payments pursuant to the terms of the Confirmed Plan from 1

October 2001 through 2011.            Post-confirmation, Wachovia sold the

Wachovia notes to CadleRock Joint Venture, L.P., who later sold

or assigned the Wachovia notes to DAN in 2008.                     DAN filed the

necessary notices of assignment,                 amendments,     and continuation

statements with the Greene County Register of Deeds, the Lenoir

County Register of Deeds, and the North Carolina Secretary of

State.

    Upon maturity of Note A and Note B, LLM and DAN could not

agree    to   the    amount   of    the   recapitalized        debt.      Seeking   a

determination, LLM reopened the Chapter 11 case and filed an

adversary      proceeding     in    Bankruptcy        Court.      Judge    J.   Rich

Leonard, United States Bankruptcy Judge for the Eastern District

of North Carolina, ruled that LLM’s total indebtedness due and

owing to DAN was $6,186,362.00.                  Neither party appealed this

judgment.
                                              -6-
          Thereafter, LLM filed a voluntary petition for relief under

Chapter 7 of the Bankruptcy Code on 21 May 2012.                              After LLM’s

Chapter 7 filing, DAN filed a proof of claim in the amount of

$6,056,645.26.         DAN attached a copy of LLM’s fourth amended plan

of reorganization, copies of the requisite security agreements,

and   copies     of    the    assignments          it    filed   with   the     Greene   and

Lenoir County Register of Deeds.                    In January and February 2013,

LLC’s bankruptcy trustee filed motions requesting approval to

conduct      a   proposed         public    sale    of     LLM’s   real    and    personal

property free and clear of liens.                       The trustee submitted a draft

of    a    proposed        complaint       that    he     anticipated     filing    in   an

adversary proceeding against DAN.                        The complaint alleged that

the Wachovia notes and the deed of trust were avoidable pursuant

to 11 U.S.C. § 5444(a)(3) (2013).

          The real property that was the subject of the                            proposed

public sale included five tracts of land in Greene County and

one tract of land in Lenoir County.                         As DAN asserted liens on

all   but     one     of    the    tracts     of    real     property,     it    filed    an

objection to the trustee’s motion to sell free and clear of

liens.       DAN asserted that pursuant to 11 U.S.C. § 363(f)(4), its

interest was not subject to a factual or legal dispute because

LLM: (1) did not file any objection to DAN’s proof of claim, and
                                            -7-
(2) because LLM’s indebtedness was reaffirmed in the bankruptcy

court adversary proceeding.                 See L.L. Murphrey Co. v. D.A.N.

Joint Venture III, L.P., Adv. No. 11-00139, 2011 WL 6301214

(Bankr. E.D.N.C. Dec. 16, 2011) (calculating the recapitalized

debt under the Confirmed Plan to be $6,168,362.00).

       On    6   June    2013,     Judge    Leonard       entered    an       order    (“the

Leonard order”) in the Chapter 7 case.                             The Leonard order

reviewed      the     terms   of   the     Confirmed       Plan,    particularly        the

portions that purported to require Wachovia to execute Restated

Loan Documents to reaffirm the loan.                      Judge Leonard determined

the terms of the Confirmed Plan were “unambiguous and impose[d]

an    obligation       on    the   parties,       the    debtor    and    Wachovia,      to

execute amended and restated agreements, instruments and other

loan documents consistent with the treatment provided therein.”

Judge       Leonard     further     concluded,          “[i]n     addition      to    being

explicitly required, the execution and delivery of the amended

and    restated       loan    documents      was    a    condition       precedent      for

setting the implementation date for Note A and Note B as October

1,                                                                                    2001.”

Further, Judge Leonard held that in the absence of the Restated

Loan Documents, the description of Note A and Note B and the

recitation       of     the    terms       were    insufficient          to    constitute
                                      -8-
negotiable instruments.         Accordingly, Judge Leonard found that

the trustee established the existence of a “bona fide dispute”

regarding the validity of DAN’s liens.              Judge Leonard authorized

the trustee to sell the real property free and clear of the

liens   asserted   by   DAN.     Notably,     the    Leonard     order   did   not

terminate DAN’s rights         to foreclose on the deed of trust—it

merely recognized the existence of a bona fide dispute between

the parties and authorized the trustee to proceed with the sale

of the requisite property.

       DAN filed a Notice of Hearing for Foreclosure of Deed of

Trust on 4 September 2013.            Based on the Leonard order, LLM

filed a motion to dismiss DAN’s foreclosure action on 2 October

2013.    On 31 October 2013, the matter came on for hearing before

Judge Paul L. Jones in Greene County Superior Court.                       Judge

Jones entered an order denying LLM’s motion to dismiss.                  He also

authorized the Substitute Trustee for DAN to proceed with the

foreclosure of the subject property pursuant to the power of

sale    granted   to   him   under   the    deed   of   trust.     Judge   Jones

entered the following findings of fact:

            2. The Deed of Trust secures an indebtedness
               evidenced by certain promissory notes
               executed by [LLM] in favor of Wachovia
               Bank, which were modified over time and
               through the Fourth Amended Plan (Confirmed
               Plan)   filed   in  [LLM’s]   Chapter   11
                       -9-
  Bankruptcy Case[.]

3. The Deed of Trust states that it operates
   as    security    for    “any   renewals,
   modifications or extensions” of the Notes
   identified in the Confirmed Plan, as well
   as “all present and future obligations of
   Grantor[s] to [DAN].” (Deed of Trust,
   p.3.)

5. Under the terms of the Confirmed Plan, the
   Notes were divided into two tranches: Note
   A and Note B were to “remain secured by
   that collateral pledged to Wachovia by
   [Borrower] prior to the Petition Date”.
   [sic]      Although  the  Confirmed   Plan
   required entry by Borrower and Wachovia
   into    “amended    and   restated    Loan
   Documents”, [sic] it did not specify what
   documents were required.     Instead, the
   Confirmed Plan required that Borrower
   “execute and deliver such agreements,
   instruments and documents as may be
   reasonably requested by Wachovia.”   There
   was no requirement that the Barrow Family,
   Donald Stocks or Connie Murphrey execute
   any new documents.

  . . .

8. Through the Adversary Proceeding, it was
   determined   that   the   amount   of  the
   Recapitalized Debt was $6,186,362.00. (May
   10, 2012 Order, Adv. Proc. No.: 11-00139-
   8-JRL,   p.6.)  Instead   of   paying  the
   Recapitalized Debt in full or entering
   into new loan documents for the amount of
   the Recapitalized Debt, Borrower filed for
   bankruptcy under Chapter 7 of the United
   States Bankruptcy Code, Case No.: 12-
   03837-8-JRL. (Chapter 7 Case).

9. D.A.N. Joint Venture Properties of N.C.,
   LLC is the current holder of the Notes and
                                        -10-
              the Deed of Trust.

    Respondents now appeal.

                           II. Analysis

  A. Judge Leonard’s order

    Initially,       we   note   that    defendant   challenges    finding   of

fact #2, #5, and #9 above as being unsupported by competent

evidence.      The    forgoing     analysis    addresses    each    of   these

challenged findings in substance and illustrates how each is, in

fact, supported by competent evidence.

    Much of respondents’ argument is premised on the belief

that the Leonard order constituted a final judgment purportedly

affecting the merits of the foreclosure action.                    We find it

necessary to dispel this argument at the outset of this appeal.

In their brief, respondents advance the following argument:

            The issue of whether the language of the
            Confirmed Plan, in the absence of Restated
            Loan Documents, is sufficient to constitute
            negotiable    instrument     has   already    been
            litigated and determined by the Leonard
            Order.    The    Leonard    Order    specifically
            provides    that    the   Confirmed     Plan    is
            “unambiguous and imposes an obligation on
            the parties, the debtor and Wachovia, to
            execute [Restated Loan Documents] consistent
            with the treatment provided therein.”           In
            addition,     the     Leonard      Order     holds
            specifically that “in addition to being
            explicitly    required,    the    execution    and
            delivery of the [Restated Loan Documents]
            was a condition precedent for setting the
                                       -11-
            implementation date of Note A and Note B as
            October 1, 2001.” Finally the Leonard Order
            provides   that  “these    provisions   appear
            mandatory and are not self-executing” and
            that “in the absence of [Restated Loan
            Documents], the description of Note A and
            Note B as well as the recitation of its
            terms,   obligations    and   the    treatment
            provided to Wachovia are insufficient to
            constitute negotiable instruments.” DAN does
            not and cannot meet the Holder requirement
            of N.C.
            Gen. Stat. §45-21.16(d).

            North Carolina must give full faith and
            credit to final judgments of Federal Courts.
            . . .      An Order of a Bankruptcy Court
            avoiding a mortgage lien is a Final Order. .
            . .    Issue preclusion prevents [DAN] from
            re-litigating the issue concerning holder
            status.

      Respondents     are    misguided.          “In    order      for    collateral

estoppel to apply in this case, the issues to be concluded must

be the same as those in the prior Bankruptcy Court action[.]”

In re Foreclosure Under That Deed of Trust Executed by Azalea

Garden Bd. & Care, Inc., 140 N.C. App. 45, 56, 535 S.E.2d 388,

396 (2000).       The Bankruptcy Court did not rule on the merits of

DAN’s   foreclosure    action,       and   the   Leonard     order       was   not    an

adjudication on the merits.            For example, the issue of whether

DAN   was   the   holder    of   a   valid    debt     was   not    litigated        and

determined in the bankruptcy proceeding.                 Therefore, collateral

estoppel is inapplicable.            Respondents’ counsel was aware that
                                   -12-
Judge Leonard’s order did not constitute an adjudication on the

merits   of   the   foreclosure.     During   the     foreclosure    hearing

counsel stated, “Judge Leonard’s decision is not an adjudication

. . . but it’s really darn convincing and persuasive argument as

to how it is he was going to rule.”             In respondents’ reply

brief, they clarify that their position is not that the Leonard

order    constitutes   a   final   order   avoiding    a   mortgage    lien;

instead, they aver that it is an order establishing: (1) that

the reorganization plan mandated new loan documents, and (2)

that the failure to execute new loan documents meant that the

payment obligations under the Confirmed Plan were insufficient

to constitute negotiable instruments.

    Regardless, as applied to the foreclosure action before us

on appeal, the Leonard order lacks controlling authority.              It is

merely a determination that a “bona fide dispute” exists between

LLM and DAN regarding the validity of DAN’s liens.                  Under 11

U.S.C.     §363(f), a trustee has the right to sell property free

and clear of liens if there is a bona fide dispute as to the

validity of the lien.        Despite respondents’ arguments to the

contrary, Wachovia was not required to execute Restated Loan

Documents for the Confirmed Plan to be valid and enforceable

against respondents in the foreclosure action.              As the trial
                                            -13-
court found in Finding #5, the Confirmed Plan simply provides:

“The     debtor     shall       execute      and      deliver       such       agreements,

instruments       and    documents     as    may     be   reasonably          requested    by

Wachovia.”         Thus,    the     Confirmed        Plan       allowed       Wachovia    to

determine what, if any, new loan documents Wachovia required.

Restated Loan Documents were neither required nor a condition

precedent for the Confirmed Plan to bind the parties.

       Further, respondents have waived their right to advance the

above argument because the record shows that they made timely

payments       pursuant    to    the     terms     of     the    Confirmed       Plan     for

approximately ten years.            Clement v. Clement, 230 N.C. 636, 639,

55 S.E.2d 459, 461 (1949) (holding doctrine of waiver provides

that    “[a]    person    may    waive      almost      any    right    he     has,    unless

forbidden by law or public policy.)

  B. Foreclosure by Power of Sale

       Next, we must consider whether the trial court erred in

authorizing DAN to foreclose on the subject properties.                                 In a

foreclosure by power of sale, the trial court shall enter an

order permitting foreclosure upon finding: (i) a valid debt of

which    the    party     seeking      to    foreclose         is   the      holder,     (ii)

default, (iii) right to foreclose under the instrument, and (iv)

notice    to    those     entitled.          N.C.       Gen.    Stat.     §    45-21.16(d)
                                   -14-
(2013).     Here, respondents essentially challenge the first and

third elements of N.C. Gen. Stat. § 45-21.16(d) on the basis

that DAN failed to produce competent evidence of a valid debt,

failed to show that it was the current note holder, and was

unable to show that it had a right to foreclose under the deed

of trust.     These issues are “question[s] of law controlled by

the UCC [Uniform Commercial Code], as adopted in Chapter 25 of

the North Carolina General Statutes.”        In re Bass, 366 N.C. 464,

467, 738 S.E.2d 173, 175-76 (2013).         We conclude that the trial

court did not err.

      The following documents set out the rights of the parties

in this case: (1) the five Wachovia promissory notes executed

between 1993-1999 by LLM in favor of Wachovia; (2) the deed of

trust securing the notes executed by respondents and amended

over time; (3) LLM’s fourth amended plan of reorganization filed

4 May 2001; (4) the Confirmed Plan effective 13 July 2001; and

(5)   the   order   determining   LLM’s   indebtedness   entered   in   the

adversary proceeding.      L.L. Murphrey Co. v. D.A.N. Joint Venture

III, L.P., Adv. No. 11-00139, 2011 WL 6301214 (Bankr. E.D.N.C.

Dec. 16, 2011) (calculating the recapitalized debt under the

Confirmed Plan to be $6,168,362.00).
                                              -15-
      For the reasons set forth above, we decline to address

respondents’          arguments        that       are   premised         entirely          on    the

contention that the Confirmed Plan is not enforceable against

them.       However, we will address the following three specific

arguments advanced by respondents: First, respondents aver that

DAN is not the holder of a valid debt because the Confirmed Plan

fails     to        qualify     as     a     negotiable          instrument.               Second,

respondents argue that the Confirmed Plan does not contain a

sufficient          description       of    the     debt       it     proposes       to    secure.

Third,      respondents         argue       that    the        Confirmed       Plan       was    not

intended to operate as an extension or modification of the deed

of trust.

      First, we note that DAN need not prove that it is the

holder of a negotiable instrument in order to satisfy element

one of N.C. Gen. Stat. § 45-21.16(d).                          When determining whether

a   party      is    the   holder      of     a    valid       debt,    we    must        find   (i)

sufficient          competent        evidence      of      a    valid        debt,     and       (ii)

sufficient          competent        evidence       that        the     party        seeking       to

foreclose is the current holder of the notes that evidence that

debt.     In re Adams, 204 N.C. App. 318, 322, 693 S.E.2d 705, 709

(2010).        Prong two, whether DAN is the holder of a valid debt,

need not be addressed.                 Respondents’ argument that DAN is not
                                                -16-
the “holder” of a valid debt is based on the premise that the

Confirmed Plan is a nullity.                      Accordingly, we must only find

competent evidence of a valid debt.                     In Azalea, this Court held

that   a   “valid     debt”     can        be    evidenced    by    several      documents

(including      a   confirmed        bankruptcy        plan),      each    modifying     the

terms of the other.           Azalea, 140 N.C. App. at 53, 535 S.E.2d at

394    (2000)       (finding        that        “the   compromise         and   settlement

agreement    and      plan     of    reorganization          that    were       negotiated,

amended and ratified by the parties in this case modified the

original documents[.]”) (emphasis added).                          Here, the Wachovia

notes were modified by the plan of reorganization, which was

negotiated, amended, and ratified by the parties through the

Confirmed Plan.        The Confirmed Plan set forth the maturity date

of the loans, interest rate, and events triggering default.                              LLM

(at respondents’ direction) made payments under the terms of the

Confirmed Plan for approximately ten years.                           Upon review, we

hold that the Confirmed Plan evidences a valid debt of which DAN

is the holder.

       In addition, the valid debt and DAN’s holder status is

further evidenced in the order entered by Judge Leonard.                                 See

L.L. Murphrey Co. v. D.A.N. Joint Venture III, L.P., Adv. No.

11-00139,    2011 WL 6301214        (Bankr.     E.D.N.C.     Dec.       16,   2011).
                                       -17-
Judge   Leonard    calculated       LLM’s    recapitalized        debt      under    the

Confirmed Plan at $6,168,362.00 and found that DAN became the

holder of this indebtedness in 2008.                 LLM did not appeal this

order and it is therefore binding on this Court.

      Second,     the   deed   of    trust    and   the       Confirmed     Plan    both

adequately describe the indebtedness each secures.                           In North

Carolina, a deed of trust must identify the obligation secured

so   that   all    subsequent       purchasers      or    lenders     are    afforded

sufficient notice as to the nature of the obligations secured by

the deed of trust.          In re Hall, 210 N.C. App. 409, 413, 708
S.E.2d 174, 177 (2011) (holding “[t]o be a valid lien on real

property,   North       Carolina    law     requires      a    deed   of    trust     to

specifically identify the obligation it secures.”)                          Here, the

deed of trust provides a detailed description of the obligations

secured, as follows:

            (a) Note, dated July 9, 1993, in the
            original principal amount of $1,000,000,
            executed by Larry Barrow and Lois M. Barrow
            and payable to the Beneficiary (which,
            together   with  any   and   all  renewals,
            modifications and extensions thereof, is
            hereinafter referred to as the “Barrow
            Note”).

            (b) Note, dated July 9, 1993, in the
            original principal amount of $1,000,000,
            executed by Donald Stocks and Connie M.
            Stocks  and   payable  to  the  Beneficiary
            (which, together with any and all renewals,
                                      -18-
              modifications and extensions thereof is
              hereinafter referred to as the “Stocks
              Note”).

              (c) Note, dated July 9, 1993 in the original
              principal amount of $1,131,478.94, executed
              by the Maker and payable to the Beneficiary
              (which, together with any and all renewals,
              modifications and extensions thereof, is
              hereinafter referred to as the “1993 Company
              Note”).

    The deed of trust also details the modification of the

Wachovia notes over time, including the decrease in principal

balance and extension of maturity dates.           Further, the deed of

trust contains a catchall phrase—stating it operates as security

for “any renewals, modifications or extension” of the Wachovia

notes   and    “all   present   and   future   obligations   of   [LLM   and

respondents] to [DAN].”

    The Confirmed Plan specifically describes the obligations

it secures as including:

              A. Note #1: Note #1 is a promissory note
                 dated July 9, 1993 in the original
                 principal amount of $1,131,478.94. By its
                 terms, this obligation accrued interest at
                 the annual rate of 7.15%. It was to be
                 repaid by monthly principal and interest
                 payments in the amount of $17,160.40.
                 This note matured July 10, 1999.

              B. Note #17: Note #17 is a promissory note
                 dated April 23, 1996 in the original
                 principal amount of $3,500,000.00. By its
                 terms, this obligation accrued interest at
                 the annual rate of    prime plus .75%. It
                             -19-
            was to be repaid by monthly principal
            payments in the amount of $58,334.00 plus
            accrued interest.   This note matures on
            May 1, 2001.

         C. Note #18: Note #18 is a Declining
           Revolver Note dated April 23, 1996 in the
           original      principal      amount     of
           $5,420,000.00.      By  its   terms,  this
           obligation accrued interest at the annual
           rate of 9%. It was to be repaid by
           quarterly principal payments in the amount
           of $250,000.00 plus accrued interest.
           This note matured March 15, 2000.

         D. Note #19: Note #19 is a Grain Line of
           Credit Note dated April 23, 1996 in the
           original      principal      amount    of
           $2,750,000.00.    By   its   terms,  this
           obligation accrued interest at the annual
           rate of prime plus 1%.      It was to be
           repaid by monthly interest payments with
           principal due and payable at maturity.
           This note matured February 25, 1999.

         E. Note #22: Note #22 is a future advances
           note dated March 16, 1999 in the original
           principal amount of $175,000.00. By its
           terms, this obligation accrued interest at
           the annual rate of prime plus 1.5%. It was
           to be repaid by monthly interest payments
           with   principal   due  and   payable   at
           maturity. This note matured April 15,
           1999.

We conclude that the description of the indebtedness evidenced

in the deed of trust and the Confirmed Plan is sufficient under

North Carolina law to notify creditors of the nature of the

obligations secured by the deed of trust and likewise by the
                                     -20-
Confirmed Plan.      Hall, supra.

    As    to   respondents’      third    argument,     we    note   that     they

advance no specific argument to support their position that the

Confirmed   Plan     was   not   intended   to    act   as    an   extension   or

modification of the deed of trust.               Our Supreme Court has held

that a deed of trust executed as security for a debt will secure

all renewals of the debt unless a different intent appears.

Wachovia Nat'l Bank v. Ireland, 122 N.C. 571, 29 S.E. 835 (1898)

(“The deed contains a covenant that the charge shall be binding

for all renewals of the debts specified.                     This would be so

without any agreement, unless a different intent appeared.”).

“Where a note is given merely in renewal of another note and not

in payment thereof, the effect is to extend the time for the

payment   of   the    debt   without     extinguishing       or    changing    the

character of the obligation, and, in case of default, the holder

may sue upon the original instrument.”              Dyer v. Bray, 208 N.C.
248, 180 S.E. 83 (1935).

            Where a [subsequent] contract involves the
            same subject matter as the first, but where
            no recession has occurred, the contracts
            must be construed together in identifying
            the   intent   of   the    parties    and  in
            ascertaining what provisions of the first
            contract remain enforceable, and in such
            construction    the   law     pertaining   to
            interpretation of a single contract applies.
                                     -21-
In re Fortescue, 75 N.C. App. 127, 130, 330 S.E.2d 219, 221

(1985) (citation omitted) (applying terms of a loan modification

agreement to find default of promissory note and foreclosure of

deed of trust).      “The court’s primary purpose in construing a

contract is to ascertain the intention of the parties.”                  Id. at

130, 330 S.E.2d at 222; see also In re Foreclosure of Sutton

Investments,   46   N.C.   App.     654,    659-60,    266 S.E.2d 686,    689

(1980) (concluding “that proper interpretation of the provisions

in the Note and the Deed of Trust prescribing the conditions of

default requires that the instruments be read together as one

contract rather than as two independent agreements.”)

    The     modification    of      the     Wachovia    notes    through      the

Confirmed   Plan    did    not    eliminate      the    original      debt,   as

respondents contend.         The plan of reorganization specifies:

“[Note A and Note B] shall remain secured by that collateral

pledged to Wachovia by the Debtor prior to the Petition Date and

guaranties will remain in full force and effect for the Notes

except as adjusted to reflect the amount of Recapitalized Debt,

defined   herein”   and    “[t]he    Recapitalized       Debt   shall    remain

secured by the same Pre-Petition Collateral.”                   The Confirmed

Plan provides: “The guarantors of Wachovia’s Notes A and B as

provided for under the Plan shall be the same as pre-petition,
                                      -22-
with the exception [] [of] Connie S. Murphrey[.]”                Notably, the

Confirmed Plan does not provide for a payoff of the Wachovia

notes—it merely reclassifies the preexisting debt.                 Thus, the

Confirmed Plan “set new, specific requirements that the parties

in this case intended to follow, in addition to any agreements

in the original promissory note and deed of trust, that were not

irreconcilable.”        Azalea, 140 N.C. App. at 52, 535 S.E.2d at

393.

       The deed of trust also states that it is to operate as

security for “any renewals, modifications or extensions” of the

Wachovia notes as well as “all present and future obligations of

[LLM and the Barrow family] to [DAN].”               Based on the language

of the Confirmed Plan and deed of trust, we conclude that the

parties intended for the deed of trust to operate as security

for    the   Wachovia   notes,   as   modified    under   the   terms   of   the

Confirmed Plan.

C. Statute of Limitations

       Respondents argue that DAN’s foreclosure action is barred

by the applicable statute of limitations set forth in N.C. Gen.

Stat. § 1-47(2) and (3) (2013).              We disagree and note that the

crux of the statute of limitations argument hinges on our having
                                      -23-
concluded    that    the   Confirmed    Plan    is   unenforceable    against

respondents.

      N.C. Gen. Stat. § 1-47(3) (2013) provides:

             For the foreclosure of a mortgage, or deed
             in trust for creditors with a power of sale,
             of real property, where the mortgagor or
             grantor has been in possession of the
             property,   within   ten  years   after   the
             forfeiture of the mortgage, or after the
             power of sale became absolute, or within ten
             years after the last payment on the same.

      As the statute provides, the statute of limitations does

not run until ten years after a final payment is made on an

obligation.       Respondents do not contest the fact that LLM made

payments pursuant to the terms of the Confirmed Plan through

2011.   Clearly, DAN is squarely within the requisite time frame

in   which   it   can   bring   its   foreclosure    action.   We    overrule

respondents’ argument.

                                  II.   Conclusion

      In reviewing the record in its entirety, we hold that DAN

presented competent evidence of:             (i) a valid debt of which the

party seeking to foreclose is the holder, (ii) default, (iii)

right to foreclose under the instrument, and (iv)                   notice to

those entitled as required under N.C. Gen. Stat. § 45-21.16(d).

Accordingly, we affirm the trial court’s order.
                         -24-
Affirmed.

Judges CALABRIA and STEPHENS concur.