Court Opinion

ID: 2729029
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:38:24.671071+00
Date Added: 2024-06-11T15:43:39.596367
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An unpublished opinion of the North Carolina Court of Appeals does not constitute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 Appellate Procedure.

                                NO. COA13-974
                       NORTH CAROLINA COURT OF APPEALS

                               Filed: 4 March 2013

RALPH M. FOSTER and SHYVONNE L.
STEED-FOSTER,
     Plaintiffs,

      v.                                      Durham County
                                              No. 12 CVS 6015
WELLS FARGO, NA; FEDERAL NATIONAL
MORTGAGE ASSOCIATION, AKA FANNIE
MAE; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS INCORPORATED,
AKA, MERS; and SHAPIRO AND INGLE;
     Defendants.

      Appeal by plaintiffs from order entered 29 April 2013 by

Judge Paul G. Gessner in Durham County Superior Court.                    Heard in

the Court of Appeals 9 January 2014.

      Ralph M. Foster and Shyvonne               L.    Steed-Foster,      pro    se,
      plaintiffs-appellants.

      Womble, Carlyle, Sandridge, and Rice, LLP, by Amanda G. Ray
      and Jesse A. Schaefer, for defendants-appellees.

      HUNTER, JR., Robert N., Judge.

      Ralph M. Foster and Shyvonne L. Steed-Foster (“Plaintiffs”)

appeal     from   a   final    order    dismissing     their     complaint      with

prejudice for failure to state a claim upon which relief can be
                                        -2-
granted.         Plaintiffs      contend      that     their     complaint    is

sufficiently particular to state causes of action for fraud,

unfair    and    deceptive     trade    practices,     and    civil    conspiracy

against     Wells    Fargo,    Federal     National    Mortgage       Association

(“Fannie     Mae”),       Mortgage      Electronic     Registration       Systems

Incorporated (“MERS”), and the law firm of Shapiro and Ingle

(collectively, “Defendants”).            Plaintiffs also contend that the

trial court erred in dismissing the complaint with prejudice

without issuing a written order disposing of Plaintiffs’ pending

motions.     For the following reasons, we affirm the trial court’s

order.

                     I.     Factual & Procedural History

    On 10 December 2012, Plaintiffs filed a complaint against

Defendants      in   Durham    County    Superior     Court    alleging   fraud,

unfair and deceptive trade practices, and civil conspiracy.                   The

complaint       requested     damages      and   a     permanent      injunction

preventing Wells Fargo from foreclosing on Plaintiffs’ property.

The body of Plaintiffs’ complaint characterizes the foreclosure

practices of Defendants as a “scheme” devised by Fannie Mae to

defraud the court.          Most of Plaintiffs’ allegations are general

in nature, with only a few alleging specific facts that took
                                         -3-
place in Plaintiffs’ case.             The specific facts that are alleged,

and that are pertinent to our review, are as follows.

      On 26 February 2012, Plaintiffs executed a promissory note

in the amount of $340,506 in favor of TBI Mortgage Company in

order to purchase property at 308 South Bend Drive in Durham.

The note was secured by a deed of trust, which was attached and

incorporated into the complaint by reference.                      The deed of trust

identifies     MERS      as    TBI   Mortgage        Company’s      nominee.         The

complaint also included a copy of a corporate assignment of the

deed of trust from MERS, as nominee of TBI Mortgage Company, to

Wells Fargo.       A copy of the promissory note was not attached to

the complaint.

      Plaintiffs allege that the promissory note was indorsed in

blank   by   TBI    Mortgage     Company      and    sold     to   Fannie   Mae,     who

securitized       the    loan.       Plaintiffs       allege       that   Fannie     Mae

required Wells Fargo to make false representations to Plaintiffs

regarding Wells Fargo’s status as an owner and holder of the

promissory    note.        Specifically,       Plaintiffs      allege     that     Wells

Fargo represented itself as a loan servicer for TBI Mortgage

Company and as the owner and holder of both the promissory note

and   deed   of    trust.        Plaintiffs         further    allege     that     these

representations         were   false    and    that     in     reliance     on     these
                                        -4-
representations, Plaintiffs were induced to pay principal and

interest      payments   on    their    mortgage      to   “Wells   Fargo     and/or

Fannie Mae.”       According to Plaintiffs, they had no choice but to

rely on these representations because “Wells Fargo controlled

the     relevant    document     and    information        regarding    the    true

ownership of their loan but chose to hide such information from

[P]laintiffs.”        Shapiro and Ingle allegedly perpetuated Wells

Fargo’s false representations by sending collection letters to

Plaintiffs corroborating Wells Fargo’s claims.

      On 5 February 2013, Defendant Shapiro and Ingle filed a

motion to dismiss the complaint pursuant to N.C. R. Civ. P.

12(b)(6).       On 15 February 2013, the remaining Defendants also

filed a motion to dismiss Plaintiffs’ complaint.                       Thereafter,

Plaintiffs filed an amended complaint adding a claim to quiet

title    to   their   property    and    a    claim    for    injunctive    relief.

Plaintiffs also filed a motion for “Permanent and or Temporary

Injunctive Relief” asking the trial court to “issue a permanent

injunction against any attempt by defendants and Wells Fargo

Bank,    NA   to   commence    future    foreclosure         proceedings    against

their property.”

      A hearing on the motions was scheduled for 11 April 2013.

Before the hearing took place, Plaintiffs filed a motion for
                                         -5-
leave to file a second amended complaint and withdrew their

first amended complaint.          At the hearing, Plaintiffs advised the

trial court that they wished to proceed under their original

complaint.       By    order   dated     29    April     2013,    the   trial   court

dismissed    Plaintiffs’       complaint       with      prejudice.      Plaintiffs

filed timely notice of appeal.

                               II.    Jurisdiction

      Plaintiffs’       appeal       from     the     superior      court’s     order

dismissing the complaint with prejudice lies of right to this

Court pursuant to N.C. Gen. Stat. § 7A-27(b) (2013).

                                  III. Analysis

      Plaintiffs’ appeal presents two questions for our review:

(1)   whether    the   trial     court      erred   in    dismissing    Plaintiff’s

complaint pursuant to N.C. R. Civ. P. 12(b)(6); and (2) whether

the trial court properly considered Plaintiff’s pending motions

prior to entry of the dismissal order.                 We address each in turn.

A. Dismissal Pursuant to Rule 12(b)(6)

      Plaintiffs’ contend that their complaint is sufficiently

particular to state claims of fraud, unfair and deceptive trade

practices,      and    civil     conspiracy         against      Defendants.      We

disagree.
                                        -6-
    In      reviewing     the     trial     court’s        decision     to        dismiss

Plaintiffs’       complaint,    “[t]his    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, aff’d per curiam, 357 N.C.

567, 597 S.E.2d 673 (2003).               “‘On a Rule 12(b)(6) motion to

dismiss,    the    question     is    whether,   as    a     matter    of       law,   the

allegations of the complaint, treated as true, state a claim

upon which relief can be granted.’”                    Allred v. Capital Area

Soccer League, Inc., 194 N.C. App. 280, 282, 669 S.E.2d 777, 778

(2008) (quoting Wood v. Guilford Cty., 355 N.C. 161, 166, 558

S.E.2d     490,    494   (2002)).         Accordingly,        we      must      consider

Plaintiffs’       complaint     “to   determine       whether,     when         liberally

construed, it states enough to give the substantive elements of

a legally recognized claim.”1             Governors Club, Inc. v. Governors

Club Ltd. P’Ship, 152 N.C. App. 240, 246, 567 S.E.2d 781, 786

(2002) (internal citations omitted), aff’d per curiam, 357 N.C.

46, 577 S.E.2d 620 (2003).

1
  Both parties cite to material outside of the four corners of
Plaintiffs’ original complaint for factual propositions and to
support their argument.    However, the trial court’s dismissal
order addressed Plaintiffs’ original complaint and our review is
limited to that document on appeal.
                                         -7-
    1. Fraud

    Plaintiffs’ first cause of action against Defendants is for

fraud.     The essential elements of actionable fraud are “(1)

[f]alse representation or concealment of a material fact, (2)

reasonably         calculated   to     deceive,   (3)   made    with    intent   to

deceive, (4) which does in fact deceive, (5) resulting in damage

to the injured party.”            Ragsdale v. Kennedy, 286 N.C. 130, 138,

209 S.E.2d 494, 500 (1974).

    “Allegations of fraud are subject to more exacting pleading

requirements than are generally demanded by our liberal rules of

notice pleading.”          Harrold v. Dowd, 149 N.C. App. 777, 782, 561

S.E.2d 914, 918 (2002) (quotation marks and citation omitted).

Pursuant      to    N.C.   R.   Civ.    P.   9(b),   “[i]n     all   averments   of

fraud . . . the         circumstances        constituting    fraud     or   mistake

shall    be    stated      with      particularity.”         Furthermore,     “the

particularity requirement is met by alleging time, place and

content of the fraudulent representation, identity of the person

making the representation and what was obtained as a result of

the fraudulent acts or representations.”                    Terry v. Terry, 302

N.C. 77, 85, 273 S.E.2d 674, 678 (1981).

    Here, Plaintiffs’ claims of fraud relate to the alleged

false representations made by Wells Fargo concerning its status
                                        -8-
as a loan servicer for TBI Mortgage Company and its status as a

holder of the promissory note.                However, Plaintiffs’ complaint

fails to specifically identify any individual acting on behalf

of Wells Fargo (or any other defendant) who allegedly made these

representations.      Accordingly, Plaintiff’s allegations of fraud

were properly dismissed.              See Trull v. Cent. Carolina Bank &

Trust Co., 117 N.C. App. 220, 224, 450 S.E.2d 542, 545 (1994)

(“A    complaint     charging      fraud      against       a     corporation         must

specifically       allege       the      time        and        occasion        of      the

misrepresentation      or    concealment        of     material         fact    and     the

individual   who     made    the   misrepresentation             or   concealment       in

order to satisfy the requirements of Rule 9(b).”); Coley v. N.C.

Nat. Bank, 41 N.C. App. 121, 125, 254 S.E.2d 217, 220 (1979)

(“It is not sufficient to conclusorily allege that a corporation

made    fraudulent    misrepresentations;             the     pleader      in    such     a

situation must allege specifically the individuals who made the

misrepresentations      of    material        fact,     the      time     the    alleged

misstatements were made, and the place or occasion at which they

were made.”).

       2. Unfair and Deceptive Trade Practices

       Plaintiffs’ complaint also alleges that Defendants engaged

in unfair and deceptive trade practices in violation of N.C.
                                        -9-
Gen. Stat. § 75-1.1 (2013).            “To state a claim for unfair and/or

deceptive trade practices, the plaintiffs must allege that (1)

the defendants committed an unfair or deceptive act or practice,

or   an   unfair     method    of     competition,         (2)    in    or     affecting

commerce,      (3)   which   proximately      caused       actual      injury    to    the

plaintiffs or to the plaintiffs’ business.”                      Birtha v. Stonemor,

N. Carolina, LLC, ___ N.C. App. ___, ___, 727 S.E.2d 1, 10

(2012).

      Plaintiffs’       complaint      does    not    allege        new      conduct    by

Defendants constituting an unfair and deceptive trade practice.

Rather, the complaint merely references the same conduct alleged

as    being      fraud,       i.e.,     Wells        Fargo’s        alleged        false

representations concerning its right to collect payment on the

promissory note.        In reviewing whether this alleged conduct is

sufficiently particular to state a claim for relief under N.C.

R. Civ. P. 8(a), we note that this Court is not required to

accept    as     true   allegations       that       are    “merely          conclusory,

unwarranted      deductions    of     fact,   or     unreasonable         inferences.”

Good Hope Hosp., Inc. v. N.C. Dep’t of Health & Human Servs.,

174 N.C. App. 266, 274, 620 S.E.2d 873, 880 (2005) (quotation

marks and citation omitted). Furthermore, “[d]ismissal is proper

when . . . the complaint on its face reveals the absence of
                                          -10-
facts sufficient to make a good claim.”                   Bissette v. Harrod, ___

N.C. App. ___, ___, 738 S.E.2d 792, 797 (2013) (quotation marks

and citations omitted).

       Here, Plaintiffs’ assertion that Wells Fargo committed an

unfair or deceptive act is premised on Plaintiffs’ unsupported

characterization          of      the     mortgage     industry’s       foreclosure

practices     as    a    “fraudulent       [s]cheme”      and   assumptions    made

therefrom.         We   do     not   accept   as   true    those     allegations   in

Plaintiffs’ complaint which are based on unwarranted deductions

of fact and unreasonable inferences.

       Moreover,        Plaintiffs’        complaint       alleges     that   their

promissory note was indorsed in blank and sold to Fannie Mae.

Later, the complaint alleges that Wells Fargo “controlled the

relevant document and information regarding the true ownership

of their loan.”         The complaint also alleges that Wells Fargo was

never the owner of the deed of trust, yet includes a copy of a

corporate assignment of the deed of trust from MERS, acting as

nominee for TBI Mortgage Company, to Wells Fargo.                       Given these

allegations, it is insufficient for Plaintiffs to allege that

they paid principal and interest payments to Wells Fargo “to

their damage.”          Plaintiffs have failed to allege that the sums

paid   were   not       applied      to   their    outstanding     mortgage   debt.
                                       -11-
Without      such   an   allegation,   Plaintiffs      have    not    alleged   an

actual injury proximately resulting from Wells Fargo’s alleged

misrepresentations.             Accordingly,       Plaintiffs’        unfair    and

deceptive trade practices claim was properly dismissed.

       3. Civil Conspiracy

       The final claim asserted in Plaintiffs’ complaint is civil

conspiracy.         Again,    the   basis    of   Plaintiffs’    claim    is    the

alleged false representations made by Wells Fargo in connection

with its right to collect on the promissory note.                        However,

“there is not a separate civil action for civil conspiracy in

North Carolina.”         Dove v. Harvey, 168 N.C. App. 687, 690, 608

S.E.2d 798, 800 (2005).

              In civil conspiracy, recovery must be on the
              basis of sufficiently alleged wrongful overt
              acts.   The charge of conspiracy itself does
              nothing more than associate the defendants
              together and perhaps liberalize the rules of
              evidence to the extent that under proper
              circumstances the acts and conduct of one
              might be admissible against all.

Id. (quotation marks and citation omitted).                    Because we hold

Plaintiffs have not sufficiently alleged the underlying wrongful

acts    of    fraud      or   unfair   and    deceptive       trade    practices,

Plaintiffs’ civil conspiracy claim is without merit.
                                        -12-
B. Plaintiffs’ Pending Motions

     Finally, Plaintiffs contend that the trial court erred in

dismissing      their    complaint     with    prejudice     without    issuing   a

written    order    disposing     of    Plaintiffs’   motion      for   injunctive

relief    and    their   motion   for    leave   to   file    a   second   amended

complaint.        This argument is without merit because the trial

court’s order does address the substance of these motions.                     The

order includes the following:

            8.     During the April 11, 2013[] hearing,
                   Plaintiffs advised the Court that they
                   wished to proceed under their original
                   Complaint  rather   than  the  Amended
                   Complaint.

            9.     Withdrawal of the Amended Complaint
                   arguably effectuates a dismissal of
                   this civil action, but the Court will
                   rule on the merits of the Motions in
                   light of Plaintiffs’ desire to proceed
                   under their original Complaint and to
                   promote judicial economy.

            10.    Plaintiffs appear to seek a permanent
                   injunction against any foreclosure sale
                   under the Deed of Trust without regard
                   to   whether   there   is   a present—or
                   future—default   under    the promissory
                   note secured by the Deed of Trust.

            11.    Plaintiffs   are   not   entitled   to  a
                   permanent     injunction     against    a
                   foreclosure   sale   of   the   Property.
                   Likewise, Plaintiff’s [sic] remaining
                   claims fail to state a claim on which
                   relief may be granted.
                                  -13-
We affirm the trial court’s dismissal order in its entirety.

                            IV.   Conclusion

    For   the   foregoing   reasons,     we   affirm   the   trial   court’s

order dismissing Plaintiffs’ complaint with prejudice.

    Affirmed.

    Judges STROUD and DILLON concur.

    Report per rule 30(e).