Court Opinion

ID: 2728805
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:36:27.80961+00
Date Added: 2024-06-11T15:43:29.296837
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfav ored, 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. COA13-844
                     NORTH CAROLINA COURT OF APPEALS

                            Filed: 15 April 2014

GIRLVESTER DEVANE (ANDERSON),
     Plaintiff,

      v.                                    Pender County
                                            No. 12 CVS 1082
AURORA LOAN SERVICES, LLC,
     Defendant.

      Appeal by Plaintiff from Order entered 6 February 2013 by

Judge Phyllis M. Gorham in Pender County Superior Court. Heard

in the Court of Appeals 11 December 2013.

      Coleman Law,       P.L.L.C.,     by    Nathaniel     T.    Coleman,    for
      Plaintiff.

      Renner St. John for Defendant.

      STEPHENS, Judge.

              Factual Background and Procedural History

      This case arises from events surrounding the foreclosure

sale of property located at 14505 Ashton Road, Rocky Point,

North Carolina (“the property”). Following the sale, Plaintiff

Girlvester    Devane    Anderson,    the    borrower,    filed   suit   against
                                             -2-
Defendant Aurora Loan Services, LLC, the lender, and made the

following pertinent allegations in her complaint:

      On 15 March 2006, Plaintiff executed a note and deed of

trust        on     the    property.      Thereafter,     Defendant    “erroneously

communicated” to Plaintiff that repayment had been breached on

five separate occasions. Plaintiff was “accused” of violating

repayment terms a sixth time in September of 2010 and spoke with

one     of        Defendant’s       representatives     about   the    matter.    The

representative            informed    Plaintiff    that   Defendant    had   applied

Plaintiff’s payments to the wrong account. Plaintiff requested

an accounting and was placed on a new payment plan. Her original

payments were not applied to the new plan.

      In      December       of   2010,    Defendant    “induced   Plaintiff     into

applying for a Home Loan Modification plan” (“the modification

plan”). Defendant informed Plaintiff that the modification plan

“would make up for any mix-up caused by . . . [D]efendant,” but

instructed Plaintiff that “payments could not be made” while the

modification          plan    was    being   developed.    Defendant    “failed    to

disclose the financial risk of not making payments” and told

Plaintiff that the modification plan was “a sure thing.”1

1
  According to Plaintiff, Defendant also commented that “the
misapplication of payments was ‘the worst mess we have ever
                                       -3-
    Defendant       initiated    foreclosure        proceedings      while     the

modification plan was pending and “misled Plaintiff by telling

her that all the information needed for the HAMP2 package was

received” when, in fact, more information was needed.3 On 18

October 2011, Defendant told Plaintiff that “the HAMP package

only needed to be updated by providing the most recent banking

information,” which Plaintiff provided. Defendant later informed

Plaintiff that “the information was complete.” On 28 October

2011, however, Plaintiff learned that the modification plan was

rejected “because all the HAMP information was not received.”

    A   foreclosure        hearing     was    set   for   2   November       2011.

Defendant allegedly informed Plaintiff that the hearing would be

postponed   until    all    of   the    HAMP    documents     were     received.

Nonetheless, the hearing went ahead as planned, and the clerk of

seen,’” which Plaintiff construes as an admission of fault.
2
  Though Plaintiff does not define this acronym in her complaint,
a cursory search indicates that it is a federal government loan
package named the “Home Affordable Modification Program.” See In
re Raynor, __ N.C. App. __, __, 748 S.E.2d 579, 582 (2013)
(referring to and defining the HAMP program); see also Home
Affordable    Modification   Program,   MAKINGHOMEAFFORDABLE.gov,
http://www.makinghomeaffordable.gov/programs/lower-payments/Page
s/hamp.aspx.
3
  Plaintiff does not provide a               time   context   for    Defendant’s
allegedly misleading statements.
                                      -4-
superior court made the following pertinent findings of fact:4

(1) Defendant holds the note and deed of trust on the property,

which “evidences a valid debt”; (2) the note is in default; (3)

the deed gives Defendant the right to foreclose; (4) “[n]otice

of this hearing has been served on the record owners of the real

estate and to all other persons against whom the noteholder

intends to assert liability for the debt”; (5) the loan is a

home loan, pre-foreclosure notice was provided under N.C. Gen.

Stat. § 45-102, and “the periods of time established by” Chapter

45,     Article   II    have   elapsed;      (6)    Defendant    attempted   to

communicate with Plaintiff “to resolve the matter voluntarily

prior to the foreclosure hearing[,] pursuant to [N.C. Gen. Stat.

§] 45-21.16C[,] but such attempts were unsuccessful”; and (7)

the sale is not barred by N.C. Gen. Stat. § 45-21.12A. Based on

those    findings      of   fact,   the     clerk   of   court    ordered    and

authorized the substitute trustee to proceed with foreclosure.

      In her complaint, Plaintiff alleges that

            she was informed [by Defendant] that the
            foreclosure had been conducted. Plaintiff
            was   informed  by   a  representative of
            [D]efendant that there was a note in the

4
  Plaintiff does not include the clerk of court’s order in her
complaint. However, in paragraph 16 she incorporates by
reference the entire Pender County file on the foreclosure
proceedings.
                                          -5-
            file indicating the intent to postpone the
            hearing[.] However, the person that was
            handling the file went on vacation prior to
            executing   the   order   to   postpone   the
            [h]earing   set   for   November   2,   2011.
            Defendant then informed . . . Plaintiff that
            even though the [h]earing was not stopped
            that the new payment agreement would be
            worked out because the documentation was
            already on file.5

On 8 November 2011, Defendant called Plaintiff and purportedly

informed her to “be prepared” to begin repayment. Defendant also

allegedly provided contradictory statements regarding the amount

of repayment.

     On     13    and    22     November       2011,   respectively,      Defendant

informed Plaintiff (1)           that “all files had been checked and

. . .     there    was    no    longer     a    foreclosure       date   set”   and,

contrarily,       (2)    that    “the     foreclosure      sale    had   not    been

postponed.”       Plaintiff      “faxed    a     written   complaint      to    . . .

Defendant” on 22 November 2011, requesting the foreclosure sale

be stopped, and Defendant allegedly promised to respond within

5
  This allegation wrongly implies that Plaintiff was not given
proper notice of the 2 November 2011 hearing and was not present
at that hearing. The clerk of superior court’s order and the
exhibit attached to Plaintiff’s complaint state, however, that
both parties were given proper notice of the proceeding. In
addition, counsel for Plaintiff did not dispute Defendant’s
repeated statements at the 4 February 2013 hearing that
Plaintiff “was present at the [2 November 2011 foreclosure]
hearing and was allowed to present any and all evidence that she
had at that time.”
                                              -6-
seventy-two hours. Plaintiff did not receive a response, and the

property was sold to Defendant the next day, 23 November 2011.

      Plaintiff filed her complaint on 16 March 2012, alleging

the following “causes of action”: (1) violations of sections 90

through 94 of Chapter 40 of the North Carolina General Statutes,

(2)     breach     of       contract,    (3)        unfair     and     deceptive          trade

practices, (4) equitable relief, (5) constructive fraud,6 (6)

negligent        misrepresentation,            and     (7)     constructive          trust.7

Plaintiff     requested        relief     in    the     form    of     damages,       costs,

attorneys’       fees,      interest,     a    constructive          trust,    the    market

value    of   the       property,       reasonable         rental     income     from       the

property,     and       a    jury   trial      on    the     issues     raised       in     the

complaint.       Defendant      moved     to    dismiss       the     complaint       on     20

December 2012 pursuant to Rules 8(a), 9(b), and 12(b)(6) of the

North Carolina Rules of Civil Procedure. A hearing on the motion

was held 4 February 2013.

6
  Though Plaintiff labels constructive fraud as her “SIXTH” cause
of action, the claim appears to be the fifth in her complaint.
Accordingly, the numbering of Plaintiff’s remaining causes of
action is off by one.
7
  We note that equitable relief and constructive trust are not
causes of action. They are remedies. To the extent Plaintiff’s
complaint refers to them as causes of action, it is incorrect.
See generally Felt City Townsite Co. v. Felt Inv. Co., 50 Utah
364, 374, 167 P. 835, 839 (1917) (“The remedy is no part of the
cause of action.”).
                                 -7-
    During the hearing, Defendant asserted that Plaintiff was

present at the 2 November 2011 foreclosure proceeding. Plaintiff

did not dispute this fact and acknowledged that she had failed

to appeal the clerk of court’s order on the foreclosure sale in

a timely manner. At the conclusion of the hearing, the trial

court   granted   Defendant’s   motion   to   dismiss   and   made   the

following comment to counsel for Plaintiff:

          It is unfortunate that your client didn’t
          retain an attorney at an earlier stage, who
          knows what the end result would have been.
          But at this point, I find that none of these
          causes of action[] exist and therefore I am
          going to dismiss this complaint.

The trial court memorialized its decision in a written order

filed 6 February 2013. Plaintiff appeals.

                         Standard of Review

               The motion to dismiss under N.C.R. Civ.
          P. 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
                                      -8-
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).

                                   Discussion

       On appeal, Plaintiff argues that the trial court erred in

dismissing     her     complaint   because   each   cause   of   action     was

“properly pled.” Defendant counters by arguing that the trial

court properly determined that Plaintiff failed to state any

claim on which relief could be granted. We affirm.

       Under N.C. Gen. Stat. § 45-21.16(d), the clerk of court

“shall authorize” a trustee to proceed with foreclosure on a

deed of trust if the clerk finds the existence of:

              (i) [a] valid debt of which the party
              seeking to foreclose is the holder, (ii)
              default, (iii) [the] right to foreclose
              under the instrument, (iv) notice to those
              entitled to such under subsection (b), (v)
              that . . . pre-foreclosure notice . . . was
              provided in all material respects, and that
              the periods of time established by Article
              11 of [Chapter 45] elapsed, and (vi) that
              the sale is not barred by [section] 45-
              21.12A.

N.C.   Gen.    Stat.    §   45-21.16(d)   (2013).   The   clerk’s   order    is

considered a “judicial act and may be appealed to the judge of

the district or superior court having jurisdiction at any time

within 10 days after said act.” N.C. Gen. Stat. § 45-21.16(d1).
                               -9-
         Equitable defenses to foreclosure . . . may
         not be raised in a hearing pursuant to
         [section] 45-21.16 or on appeal therefrom
         but must be asserted in an action to enjoin
         the foreclosure sale under [section] 45-
         21.34.   By  contrast,   evidence  of  legal
         defenses tending to negate any of the . . .
         findings required under [section] 45-21.16
         may properly be raised and considered.

In re Goforth Props., Inc., 334 N.C. 369, 374–75, 432 S.E.2d

855, 859 (1993). Section 45-21.34 states that any person with an

interest in real property “may apply to a judge of the superior

court, prior to the time that the rights of the parties to the

sale or resale become fixed pursuant to [section] 45-21.29A to

enjoin such sale . . . upon any . . . legal or equitable ground

which the court may deem sufficient . . . .” N.C. Gen. Stat. §

45-21.34 (2013) (emphasis added). The rights of the parties to

the sale or resale of real property are fixed “[i]f an upset bid

is not filed following a sale, resale, or prior upset bid within

the period specified within this Article,” which is ten days in

this case. N.C. Gen. Stat. § 45-21.29A (2013).

         For   reasons    of    judicial    economy   and
         efficient resolution of disputes, . . .
         [section   45-21.16(d)      provides    a   more
         appropriate process to resolve who is truly
         the equitable or legal owner of . . . any
         property    sought     to    be    sold    under
         foreclosure. The right to foreclose under
         the   instrument    is    more   than   a   mere
         recitation of words specifying a power of
         sale. The [c]lerk of [c]ourt must decide
                                       -10-
             whether the person given the power of sale
             under the [d]eed of [t]rust has a right to
             foreclose under the instrument.

In re Michael Weinman Assocs. Gen. P’ship, 333 N.C. 221, 230,

424 S.E.2d 385, 390 (1993) (internal quotation marks omitted).

This is not “a mere perfunctory role.” Id.

      In this case, the clerk of court entered its order on 2

November 2011 and authorized the sale to proceed. Therein, the

clerk found, among other things, that Defendant was the holder

of a valid debt, Plaintiff had defaulted on that debt, Defendant

had   the    right    to   foreclose    under    the   deed     of   trust,   and

Plaintiff had notice of the hearing. Plaintiff was present at

the hearing and had the opportunity to bring any legal defenses

and arguments that she wished. In addition, Plaintiff had the

opportunity     to    raise    any   equitable      arguments    regarding    the

foreclosure in a separate action under section 45-21.34 at any

point before the ten-day upset period elapsed. See N.C. Gen.

Stat. §§ 45-21.29A, 21.34. Plaintiff did not appeal the order or

assert an action in equity to enjoin the foreclosure during the

ten-day     upset    period.   Therefore,     the    rights     of   the   parties

became fixed at the close of the upset period, and Plaintiff has

no further legal or equitable recourse. See N.C. Gen. Stat. §

45-21.29A; Goad v. Chase Home Fin., LLC, 208 N.C. App. 259, 263,
                                            -11-
704 S.E.2d 1, 4 (2010) (“As a result, in the absence                                    of a

properly      filed   upset    bid,     the    rights        of    the   parties        to   a

foreclosure sale become fixed ten days after the filing of the

report of the sale. However, even if no upset bid is submitted,

the rights of the parties to a foreclosure sale will not become

fixed    in    the    event    that     a    temporary       restraining         order       or

preliminary      injunction        is   properly      obtained           prior     to    the

expiration of the ten-day period for filing upset bids.”); see

also Haughton v. HSBC Banks USA, __ N.C. App. __, 737 S.E.2d 191

(2013)     (unpublished       opinion),       available           at   2013   WL    432575

(affirming the trial court’s dismissal under Rule 12(b)(6) of

the   plaintiff’s       complaint       concerning       a    previous        foreclosure

proceeding when the plaintiff failed to appeal the clerk of

court’s order allowing foreclosure).8 Accordingly, we hold as a

matter of law that Plaintiff has failed to state a claim for

which    relief       may     be   granted.        Plaintiff’s           arguments       are

overruled, and the trial court’s order dismissing her complaint

is

      AFFIRMED.

8
  Haughton is an unpublished opinion and, therefore, has no
precedential effect. N.C.R. App. P. 30(e). Nonetheless, the
facts in Haughton are similar to those in this case, and we find
the rationale used by the previous panel of this Court to be
persuasive.
                         -12-
Judges STEELMAN and DAVIS concur.

Report per Rule 30(e).