Court Opinion

ID: 9348026
Source: CourtListenerOpinion
Date Created: 2022-12-19 22:06:46.381032+00
Date Added: 2024-06-11T16:41:28.568149
License: Public Domain

IN THE SUPREME COURT OF NORTH CAROLINA

                                     2022-NCSC-106

                                       No. 240PA21

                                  Filed 4 November 2022

     IN THE MATTER OF THE FORECLOSURE OF A LIEN BY EXECUTIVE
     OFFICE PARK OF DURHAM ASSOCIATION, INC. AGAINST MARTIN E. ROCK
     A/K/A MARTIN A. ROCK

           On discretionary review pursuant to N.C.G.S. § 7A-31 of a unanimous decision

     of the Court of Appeals, 277 N.C. App. 444, 2021-NCCOA-211, vacating an order

     entered on 4 March 2019 by Judge John M. Dunlow in Superior Court, Durham

     County and remanding for dismissal. Heard in the Supreme Court on

     29 August 2022.

           Jordan Price Wall Gray Jones & Carlton, PLLC, by J. Matthew Waters and
           Hope Derby Carmichael, for petitioner-appellant.

           Mark Hayes for respondent-appellee.

           Sellers, Ayers, Dortch & Lyons, PA, by Cynthia A. Jones, for Community
           Associations Institute, amicus curiae.

           BARRINGER, Justice.

¶1         In this matter, we address whether a condominium formed prior to the

     enactment of the North Carolina Condominium Act in 1985 has the power of sale for

     foreclosure pursuant to section 3-116 of that Act for nonpayment of an assessment
      IN RE FORECLOSURE OF A LIEN BY EXEC. OFF. PARK OF DURHAM ASS’N AGAINST ROCK

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     that occurred after 1 October 1986. For the reasons addressed herein, given the plain

     language of the statute addressing the applicability of the North Carolina

     Condominium Act and the plain language of the condominium’s declaration, we

     conclude that petitioner Executive Office Park of Durham Association, Inc. (Executive

     Office) has the power of sale for foreclosure pursuant to N.C.G.S. § 47C-3-116.

     Therefore, we reverse the decision of the Court of Appeals, which vacated the trial

     court’s order authorizing sale, and remand to the Court of Appeals to address the

     argument of respondent Martin Rock (Rock) that the Court of Appeals declined to

     address.

                                      I.      Background

¶2         In 1982, Executive Office Park Developers, LP filed a declaration of unit

     ownership (Declaration) for a condominium development with Executive Office as the

     governing entity. As relevant to this matter, Executive Office filed a claim of lien on

     23 October 2018 against three units owned by Rock, alleging that assessments and

     other charges from 2018 remained unpaid for more than thirty days. Subsequently,

     the substitute trustee initiated a power of sale foreclosure. The clerk of superior court

     entered an order authorizing sale, which Rock appealed. The trial court affirmed the

     order authorizing sale. Thereafter, Rock appealed to the Court of Appeals.

¶3         Before the Court of Appeals, Rock argued that Executive Office lacked the

     power of sale for foreclosure and that he was not in default. The Court of Appeals
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                                         2022-NCSC-106

                                       Opinion of the Court

     concluded that Executive Office lacked the power of sale for foreclosure because it is

     the governing entity for a condominium formed and governed by a declaration signed

     in 1982 that was not amended to bring it within the provisions of the North Carolina

     Condominium Act. Foreclosure of a Lien by Exec. Off. Park of Durham Ass’n v. Rock,

     277 N.C. App. 444, 2021-NCCOA-211, ¶¶ 19–23. The Court of Appeals also indicated

     that Executive Office’s Declaration did not include the power of non-judicial

     foreclosure. Id. ¶ 21. The Court of Appeals, therefore, vacated the trial court’s order

     affirming the clerk of court’s order authorizing sale and remanded for dismissal. Id.

     ¶ 22. The Court of Appeals declined to address Rock’s remaining argument that he

     was not in default. Id.

¶4         Executive Office petitioned this Court for discretionary review pursuant to

     N.C.G.S. § 7A-31. This Court allowed the petition for discretionary review.

                                       II.   Analysis

¶5         On appeal to this Court, Executive Office argues that the Court of Appeals

     erred because the clear and express language of N.C.G.S. § 47C-1-102(a) provides

     that “[section] 47C-3-116 (Lien for Assessments) . . . appl[ies] to all condominiums

     created in this State on or before October 1, 1986, unless the declaration expressly
      IN RE FORECLOSURE OF A LIEN BY EXEC. OFF. PARK OF DURHAM ASS’N AGAINST ROCK

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     provides to the contrary,” N.C.G.S. § 47C-1-102(a) (2021) (emphasis added),1 and

     Executive Office’s Declaration does not expressly prohibit power of sale foreclosures.

¶6         We agree that the Court of Appeals erred. This Court reviews decisions by the

     Court of Appeals for error of law. N.C. R. App. P. 16(a). Questions of statutory

     interpretation are questions of law and are reviewed de novo. In re Summons Issued

     to Ernst & Young, LLP, 363 N.C. 612, 616 (2009).

¶7         In its entirety, N.C.G.S. § 47C-1-102(a) states:

                  This Chapter applies to all condominiums created within
                  this State after October 1, 1986. G.S. 47C-1-105 (Separate
                  Titles and Taxation), 47C-1-106 (Applicability of Local
                  Ordinances, Regulations, and Building Codes), 47C-1-107
                  (Eminent Domain), 47C-2-103 (Construction and Validity
                  of Declaration and Bylaws), 47C-2-104 (Description of
                  Units), 47C-2-121 (Merger or Consolidation of
                  Condominiums), 47C-3-102(a)(1) through (6) and (11)
                  through (16)(Powers of Unit Owners’ Association), 47C-3-
                  103 (Executive board members and officers), 47C-3-107.1
                  (Procedures for fines and suspension of condominium
                  privileges or services), 47C-3-108 (Meetings), 47C-3-111
                  (Tort and Contract Liability), 47C-3-112 (Conveyance or
                  Encumbrance of Common Elements), 47C-3-116 (Lien for
                  Assessments), 47C-3-118 (Association Records), 47C-3-121
                  (American and State flags and political sign displays), and
                  47C-4-117 (Effect of Violation on Rights of Action;
                  Attorney’s Fees) and G.S. 47C-1-103 (Definitions), to the
                  extent necessary in construing any of these sections, apply
                  to all condominiums created in this State on or before
                  October 1, 1986, unless the declaration expressly provides
                  to the contrary. Those sections apply only with respect to

           1 In June 2022, the General Assembly amended this subsection. Act of 29 June 2022,
     S.L. 2022-12, § 3.(a), https://www.ncleg.gov/Sessions/2021/Bills/Senate/PDF/S278v4.pdf.
     Executive Office has not argued that this amendment applies to this matter.
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                     events and circumstances occurring after October 1, 1986,
                     and do not invalidate existing provisions of the
                     declarations, bylaws, or plats or plans of those
                     condominiums.

       N.C.G.S. § 47C-1-102(a) (emphasis added).

¶8             As relevant to this matter, the legislature provided in subsection 47C-3-116(f)

       that:

                     Except as provided in subsection (h) of this section, the
                     association, acting through the executive board, may
                     foreclose a claim of lien in like manner as a mortgage or
                     deed of trust on real estate under power of sale, as provided
                     in Article 2A of Chapter 45 of the General Statutes, if the
                     assessment remains unpaid for 90 days or more.

       N.C.G.S. § 47C-3-116(f) (2021).

¶9             When construing statutes, courts first look “to the language of the statute

       itself.” Hieb v. Lowery, 344 N.C. 403, 409 (1996). “When the language of a statute is

       clear and without ambiguity,” courts must “give effect to the plain meaning of the

       statute.” Diaz v. Div. of Soc. Servs., 360 N.C. 384, 387 (2006). In these circumstances,

       “judicial construction of legislative intent is not required.” Id.

¶ 10           Here, the statute is clear: “unless the declaration expressly provides to the

       contrary,” the power of sale permitted by N.C.G.S. § 47C-3-116(f) “appl[ies] to all

       condominiums created in this State on or before October 1, 1986 . . . with respect to

       events and circumstances occurring after October 1, 1986.” N.C.G.S. § 47C-1-102(a).
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¶ 11         Since it is undisputed that the condominium at issue was created in North

       Carolina before 1 October 1986 and the assessments and non-payment at issue in this

       case occurred after 1 October 1986, Executive Office possesses the power of sale

       permitted by N.C.G.S. § 47C-3-116(f) “unless the declaration expressly provides to

       the contrary.” N.C.G.S. § 47C-1-102(a).

¶ 12         In the Declaration, the declarant indicates its desire and intention “to submit”

       the property “to the provisions of the North Carolina Unit Ownership Act (Chapter

       47A, North Carolina General Statutes).”

¶ 13         Then, in paragraph 12 in the subparagraph entitled “Powers,” the Declaration

       states as follows:

                    The Association shall have all of the powers and duties set
                    forth in the Unit Ownership Act, except as limited by this
                    Declaration and the Bylaws, and all of the powers and
                    duties reasonably necessary to operate the condominium
                    as set forth in this Declaration and the Bylaws and as they
                    may be amended from time to time.

¶ 14         Subsequently, in paragraph 15 entitled “Assessments,” it states:

                           Any sum assessed remaining unpaid for more than
                    thirty (30) days shall constitute a lien upon the delinquent
                    unit or units when filed of record in the Office of the Clerk
                    of Superior Court of Durham County in the manner
                    provided for by Article 8 of Chapter 44 of the General
                    Statutes of North Carolina as amended. The lien for unpaid
                    assessments shall also secure reasonable attorney’s fees
                    incurred by the Manager or the Board of Directors incident
                    to the collection of such assessment or the enforcement of
                    such lien. In any foreclosure of a lien for assessments, the
                    owner of the unit subject to the lien shall be required to pay
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                     a reasonable rental for the unit, and the Manager or Board
                     of Directors shall be entitled to the appointment of a
                     receiver to collect the same.

¶ 15          The foregoing language neither expressly excludes foreclosure by power of sale

       nor limits Executive Office’s foreclosure authority to only judicial foreclosures.2

       Rather, the Declaration expressly allows for foreclosure of a claim of lien but does not

       elaborate further. In other words, no provision in the Declaration before us is

       “invalidated” by the application of N.C.G.S. § 47C-3-116(f), which permits the power

       of sale for foreclosure in certain circumstances. See N.C.G.S. § 47C-1-102(a) (“Those

       sections apply only with respect to events and circumstances occurring after October

       1, 1986, and do not invalidate existing provisions of the declarations . . . .”) (emphasis

       added)).

¶ 16          Rock argues that the declarant’s indication in the Declaration of its desire and

       intention “to submit” the property “to the provisions of the North Carolina Unit

       Ownership Act” bars Executive Office’s use of non-judicial foreclosure. However, the

       North Carolina Unit Ownership Act neither expressly excludes foreclosure by power

       of sale nor limits foreclosure authority to only judicial foreclosures. See N.C.G.S.

       § 47A-22(b) (2021). Further, the North Carolina Unit Ownership Act in effect when

       the Declaration was filed required a declaration of intent by the owners to submit

              2In fact, the paragraph on “Assessments” uses the term “any foreclosure,” and the
       subparagraph on “Powers” indicates that Executive Office “shall have . . . all of the powers
       and duties reasonably necessary to operate the condominium.”
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       their property to the Act to be filed with the register of deeds to create unit ownership.

       N.C.G.S. § 47A-2 (1981). Thus, this reference to the North Carolina Unit Ownership

       Act simply satisfies the requirement in N.C.G.S. § 47A-2. Rock’s reliance on this

       reference is therefore misplaced. Thus, we conclude that the Declaration does not

       expressly provide to the contrary.

                                       III.     Conclusion

¶ 17         The Court of Appeals erred by failing to reference and apply the plain language

       of N.C.G.S. § 47C-1-102(a) when addressing respondent Rock’s contention that the

       condominium association Executive Office lacked the power of sale for foreclosure.

       Having construed the statute according to its plain language and determined that

       Executive Office’s Declaration does not contain a provision “expressly to the contrary”

       of the power of sale for foreclosure permitted by N.C.G.S. § 47C-3-116(f), we reverse

       the Court of Appeals’ decision. We further remand this case to the Court of Appeals

       to address Rock’s remaining argument that he was not in default that the Court of

       Appeals did not reach and is not before this Court.

             REVERSED AND REMANDED.