Court Opinion

ID: 9781182
Source: CourtListenerOpinion
Date Created: 2023-08-30 16:20:06.530126+00
Date Added: 2024-06-11T07:34:20.320574
License: Public Domain

HUNTER, JR., Robert N., Judge,
dissenting.
I believe the majority errs in its reading of First Citizens v. Cannon, 138 N.C. App. 153, 530 S.E.2d 581 (2000), when it holds that a nine or ten percent difference between the amount bid and the property’s true value in the case sub judice is not “substantially less” under N.C. Gen. Stat. § 45-21.36 because that difference is less than the twenty percent difference in Cannon. In Cannon, this Court never specifically characterized the bid amount to be “substantially less” than the property’s true value; this was only done by the trial court. Cannon, 138 N.C. App. at 156, 530 S.E.2d at 583. Instead, this Court addressed the appellant’s argument that the trial court relied on incompetent evidence in determining the true value of the property in question. Id. This Court disagreed with the appellant’s argument and affirmed the trial court’s decision. Id. The appellant made no argument regarding whether the amount bid was in fact “substantially less” than the value of the true property, and, as such, this Court did not address the issue. Therefore, to refer to the amount bid and property value difference of twenty percent in Cannon as a percentage this Court upheld as “substantially less” is not supported in my reading of Cannon.
I am further concerned with the majority’s analysis of whether plaintiff’s bid was “substantially less” than the true value of the property in question. “A deficiency judgment is an ‘imposition of personal liability on [the] mortgagor for [the] unpaid balance of mortgage debt after foreclosure has failed to yield [the] full amount of due debt.’ ” Hyde v. Taylor, 70 N.C. App. 523, 526, 320 S.E.2d 904, 906 (1984) (citation omitted).
*415G.S. 45-21.36 allows a debtor to claim a setoff against a deficiency judgment to the extent that the bid at the foreclosure is substantially less than the true value of the realty, where (1) the creditor forecloses pursuant to a power of sale clause, (2) there is a deficiency, and (3) the creditor who forecloses is the party seeking a deficiency judgment.
Id. at 526, 320 S.E.2d at 906-07 (emphasis added). Defendants here seek such a deficiency judgment, yet the majority faults defendants for failing to “offer [] authority (including any reference to Gannon) supporting their assertion that the bid was substantially less than the true value or fair market value of the property.” However, thorough research of the case law of this state reveals that neither this Court nor our Supreme Court has provided guidance on how to show a bid amount is “substantially less” than the true value of the property. I agree with the majority when it states, “Our appellate courts have not set out particular guidelines as to what ‘substantially less’ than the property’s true value means,” nevertheléss the majority faults defendants for failing to offer “authority or cogent argument” to support their position. With no guidance provided by our appellate courts, I do not see how defendants can be penalized for failing to adequately show plaintiff’s bid was “substantially less” than the true value of the property.
In my opinion, determining the issue of whether the amount bid is “substantially less” than the true value of the property is a mixed question of law and fact, similar to that of determining what a “reasonable time” means. The North Carolina Supreme Court has held
what is [a] “reasonable time” is generally a mixed question of law and fact, not only where the evidence is conflicting, but even in some cases where the facts are not disputed; and the matter should be decided by the jury upon proper instructions on the particular circumstances of each case.
The time, however, may be so short or so long that the court will declare it to be reasonable or unreasonable as [a] matter of law. ...
If, from the admitted facts, the court can draw the conclusion as to whether the time is reasonable or unreasonable by applying to them a legal principle or a rule of law, then the question is one of law. But if different inferences may be drawn, or the circumstances are numerous and complicated and such that a definite legal rule can not be applied to them, then the matter *416should be submitted to the jury. It is only when the facts are undisputed and different inferences can not be reasonably drawn from them that the question ever becomes one of law.
Claus v. Lee, 140 N.C. 552, 554-55, 53 S.E. 433, 434-35 (1906) (citations omitted) (emphasis added). Similarly, what is “substantially less” is also a uniquely individualized and subjective issue: where a ninety cent bid on a property worth one dollar (a ten percent less bid) may not be “substantially less” than the property’s true value, a $900,000 bid on a property worth $1,000,000 (also a ten percent less bid) may be. Moreover, a bid that is ten percent less than the property value may or may not be “substantially less” than the true value .of the property depending on varying market conditions. Because determining whether the amount bid is “substantially less” than the true value of the property is such a unique inquiry resulting in varied results even for similar percentage differences, I believe such a determination cannot be made without looking to the particular circumstances of each case, as is done when determining “reasonable time.” Only if such facts and particular circumstances are presented to the trial court do I believe the court may decide the issue on summary judgment. Otherwise, the case must proceed to trial. In fact, in Cannon, the trial court actually held a nonjury trial on the merits of the case before it found that the amount bid by the mortgagor was substantially less than the property’s true value. Cannon, 138 N.C. App. at 156, 530 S.E.2d at 583.
Here, the only evidence the court had to determine if the amount bid was “substantially less” than the value of the property is the value bid on the property by plaintiff and the two values regarding the true value of the property, one provided by an appraiser ($109,000) and one being the sale price ($110,000). Without more evidence regarding the circumstances of the case, I believe it was improper for the trial court to decide on summary judgment that the amount bid was not “substantially less” than the value of the true property and to thereby preclude defendants from a deficiency judgment. Like in Cannon, the trial court should have held a trial to enable it to determine whether plaintiff’s bid was substantially less than the property’s true value. This is a material question of fact in this instance, and therefore, I would reverse the trial court’s order granting summary judgment in favor of plaintiff.