Anderson v. Aurora Loan Servs., LLC ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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
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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
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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.
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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.
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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.”
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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.”).
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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
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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).
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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
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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,
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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.
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Judges STEELMAN and DAVIS concur.
Report per Rule 30(e).