In re: Thompson , 253 N.C. App. 46 ( 2017 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-1014
Filed: 18 April 2017
Onslow County, No. 15 SP 756
IN RE: FORECLOSURE OF REAL PROPERTY UNDER DEED OF TRUST FROM
VICQUE THOMPSON and CHRISTALYN THOMPSON, IN THE ORIGINAL
AMOUNT OF $205,850.00, and DATED SEPTEMBER 26, 2007 and RECORDED ON
SEPTEMBER 28, 2007 IN BOOK 2953 AT PAGE 653 AND
RERECORDED/MODIFIED/CORRECTED ON FEBRUARY 27, 2015 IN BOOK
4266, PAGE 911, ONSLOW COUNTY REGISTRY[,] TRUSTEE SERVICES OF
CAROLINA, LLC, SUBSTITUTE TRUSTEE
Appeal by respondents from order entered 30 March 2016 by Judge D. Jack
Hooks in Onslow County Superior Court. Heard in the Court of Appeals 7 March
2017.
Blanco Tackabery & Matamoros, P.A., by Ashley S. Rusher and M. Rachael
Dimont, for petitioner-appellee.
The Barber Law Firm, PLLC, by Terence O. Barber, for respondent-appellants.
ZACHARY, Judge.
Appellants Vicque and Christalyn Thompson (“the Thompsons”) appeal from
an order of the trial court that allowed the substitute trustee appointed by appellee
USAA Federal Savings Bank (“the Bank”) to foreclose on a loan secured by property
owned by the Thompsons. On appeal, the Thompsons argue that the trial court erred
by failing to vacate an earlier order of the Clerk of Superior Court of Onslow County
allowing foreclosure and by entering the order permitting the foreclosure sale to
IN RE: THOMPSON
Opinion of the Court
proceed. The Thompsons contend that “the trustee did not hold legal title to the
property owned by [the Thompsons] by virtue of the faulty description in the deed of
trust” and that, as a result, the substitute trustee was “not entitled to foreclose under
the instrument.” For the reasons discussed below, we conclude that the trial court did
not err and that its order should be affirmed.
I. Background
The relevant facts of this case are largely undisputed and may be summarized
as follows: On 28 September 2007, the Thompsons acquired property located at 303
Old Pine Court, Richlands, North Carolina (“the property”). In order to purchase the
property, the Thompsons borrowed $205,850.00 from the Bank and secured the loan
with a Deed of Trust on the property. The Thompsons later defaulted on the loan by
failing to make the payment to the Bank that was due on 1 September 2013, or to
make any payments thereafter. A letter informing the Thompsons of the default was
mailed on 2 February 2014, and a pre-foreclosure notice was mailed to the Thompsons
on 2 September 2014. On 23 July 2015, Trustee Services of Carolina, LLC was
appointed as substitute trustee for the property. The Bank instructed the substitute
trustee to institute foreclosure proceedings.
On 29 July 2015, the substitute trustee filed a notice of a foreclosure hearing
to be conducted on 15 September 2015. The foreclosure hearing was continued until
17 November 2015, at which time the Clerk of Superior Court for Onslow County
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conducted a hearing and entered an order allowing the foreclosure to proceed. The
Thompsons appealed the Clerk’s order to the Superior Court of Onslow County for a
de novo hearing. The trial court conducted a hearing on 15 February 2016. On 8 April
2016, the court entered an order allowing the foreclosure to proceed. The Thompsons
entered timely notice of appeal to this Court from the trial court’s order.
II. Standard of Review
“The applicable standard of review on appeal where, as here, the trial court
sits without a jury, is whether competent evidence exists to support the trial court’s
findings of fact and whether the conclusions reached were proper in light of the
findings.” In re Foreclosure of Adams, 204 N.C. App. 318, 320, 693 S.E.2d 705, 708
(2010) (quotations and citations omitted). “Conclusions of law drawn by the trial
court from its findings of fact are reviewable de novo on appeal.” In re Foreclosure of
Bass, 366 N.C. 464, 467, 738 S.E.2d 173, 175 (2013) (citation omitted).
III. Right to Foreclose: General Principles
The general principles by which foreclosure must be conducted are well
established. “Foreclosure by power-of-sale proceedings conducted pursuant to N.C.
Gen. Stat. § 45-21.16 are limited in scope. A power-of-sale provision contained in a
deed of trust vests the trustee with the ‘power to sell the real property mortgaged
without any order of court in the event of a default.’ ” In re Foreclosure of Collins, __
N.C. App. __, __, __ S.E.2d __, __ (7 February 2017) (quoting In re Foreclosure of
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Michael Weinman Associates, 333 N.C. 221, 227, 424 S.E.2d 385, 388 (1993)). N.C.
Gen. Stat. § 45-21.16(a) (2015) requires that in order to initiate a foreclosure
proceeding, the mortgagee or trustee must file a notice of hearing with the clerk of
court and serve notice of the hearing upon the appropriate parties. The Thompsons
do not dispute that they were properly served with notice of the hearing. Thereafter,
a hearing “shall be held before the clerk of court in the county where the land, or any
portion thereof, is situated.” N.C. Gen. Stat. § 45-21.16(d) (2015). At the hearing, the
lender “bears the burden of proving that there was a valid debt, default, the right to
foreclose under power of sale, and notice.” In re Foreclosure of Brown, 156 N.C. App.
477, 489, 577 S.E.2d 398, 406 (2003). N.C. Gen. Stat. § 45-21.16(d) provides in
relevant part that:
If the clerk finds the existence of (i) valid debt of which
the party seeking to foreclose is the holder, (ii) default,
(iii) right to foreclose under the instrument, [and] (iv)
notice to those entitled to such under subsection (b), . . .
then the clerk shall authorize the mortgagee or trustee to
proceed under the instrument, and the mortgagee or
trustee can give notice of and conduct a sale pursuant to
the provisions of this Article. . . .
IV. Discussion
In this case, the Thompsons’ only challenge to the order allowing foreclosure is
their contention that the evidence fails to show that the Bank has the right to
foreclose on the property. The Thompsons assert that as a result of an error contained
in the Deed of Trust’s description of the property, the Bank “never received legal title”
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to the property and therefore has no right to foreclose on the loan secured by the Deed
of Trust. Upon careful review of the relevant jurisprudence, in light of the facts of
this case, we conclude that the Thompsons’ argument lacks merit.
Resolution of this appeal requires an examination of the contents of the
General Warranty Deed and the Deed of Trust. Both the General Warranty Deed and
the Deed of Trust (1) identify the location of the property as 303 Old Pine Ct.,
Richlands, N.C., (2) identify the property as being Lot 46 as shown on a plat recorded
in Map Book 51, Page 149, Slide 1485 of the Onslow County Registry, and (3) identify
the property as having Onslow County Tax Parcel ID Number 46B-153. The
Thompsons’ appellate argument is based upon a single error in the Deed of Trust,
evidenced in the following discrepancy between the documents:
1. The General Warranty Deed describes the property as
“all of Lot 46 as shown on a plat entitled ‘Final Plat
Walnut Hills, Section III-C’, prepared by Parker &
Associates, Inc., dated August 3, 2006 and recorded in
Map Book 51, Page 149, Slide L-1485, Onslow County
Registry.”
2. The Deed of Trust describes the property as “all of Lot
46, as shown on a plat entitled ‘Final Plat Walnut Hills,
Section II-C’ prepared by Parker & Associates, Inc., dated
August 3, 2006 and recorded in Map Book 51, Page 149,
Slide L-1485, Onslow County Registry.”
(Emphasis added). The sole difference between these documents is that the Deed of
Trust describes the property as being located in “Section II-C” of the Walnut Hills
subdivision, and the General Warranty Deed identifies the property as being located
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in “Section III-C” of the Walnut Hills subdivision. The parties agree that the Walnut
Hills subdivision did not include a “Section II-C” and that the reference in the Deed
of Trust to “Section II-C” was incorrect and referred to a location that does not exist.
The Thompsons contend that this error renders the Deed of Trust void as a matter of
law. The Bank, however, argues that the Deed of Trust’s reference to “Section II-C”
is a minor error that creates only a latent ambiguity as to the description of the
property, which may be rectified by examination of extrinsic documents referenced in
the Deed of Trust. We agree with the Bank’s analysis.
Neither the transfer of property from a buyer to a seller, nor the execution of
documents securing a loan used to purchase real estate is a modern phenomenon or
an unusual occurrence. Property has changed hands throughout North Carolina’s
history and there have been many occasions in which a party has challenged the
validity of a document evidencing a property transaction on the grounds that the
document contained an error or failed to identify the property with sufficient
certainty. Our courts have had numerous opportunities during the last 150 years to
consider the effect of an error or misnomer in a deed, promissory note, or other real
estate-related document. As a result, the law governing the issue of errors or
uncertainty in such documents has been firmly established for more than a century.
N.C. Gen. Stat. § 22-2 (2015), known as the statute of frauds, requires that all
contracts to convey land “shall be void unless said contract, or some memorandum or
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note thereof, be put in writing and signed by the party to be charged therewith, or by
some other person by him thereto lawfully authorized.” The Supreme Court of North
Carolina has held that “[a] valid contract to convey land, therefore, must contain
expressly or by necessary implication all the essential features of an agreement to
sell, one of which is a description of the land, certain in itself or capable of being
rendered certain by reference to an extrinsic source designated therein.” Kidd v.
Early, 289 N.C. 343, 353, 222 S.E.2d 392, 400 (1976). The general rule regarding the
validity of the description of property in a deed or related document is as follows:
The decisions in this State are in very general recognition
of the principle that a deed conveying real estate or a
contract concerning it, within the meaning of the statute
of frauds, must contain a description of the land, the
subject-matter of the contract, “either certain in itself or
capable of being reduced to certainty by reference to
something extrinsic to which the contract refers.”
Patton v. Sluder, 167 N.C. 500, 502, 83 S.E. 818, 819 (1914) (quoting Massey v. Belisle,
24 N.C. 170, 177 (1841)).1
“It is presumed that the grantor in a deed of conveyance intended to convey
something, and the deed will be upheld unless the description is so vague or
contradictory that it cannot be ascertained what thing in particular is meant.”
Duckett v. Lyda, 223 N.C. 356, 358, 26 S.E.2d 918, 919 (1943) (citations omitted).
Thus, “[w]hile the contract must contain a description of the land to be sold, it is not
1 The Southeastern Reporter does not report cases decided prior to 1887.
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essential that the description be so minute or particular as to make resort to extrinsic
evidence unnecessary. The line of separation is the distinction between a patent and
a latent ambiguity.” Gilbert v. Wright, 195 N.C. 165, 166, 141 S.E. 577, 578 (1928)
(citing Lewis v. Murray, 177 N.C. 17, 97 S.E. 750 (1919)). “Whether a description is
patently ambiguous is a question of law.” Kidd, 289 N.C. at 353, 222 S.E.2d at 400
(citation omitted).
Although a description of real property must adequately identify the subject
property, the law will support a deed if possible. “When a description leaves the land
‘in a state of absolute uncertainty, and refers to nothing extrinsic by which it might
be identified with certainty,’ it is patently ambiguous and parol evidence is not
admissible to aid the description. The deed or contract is void.” Kidd, 289 N.C. at 353,
222 S.E.2d at 400 (quoting Lane v. Coe, 262 N.C. 8, 13, 136 S.E.2d 269, 273 (1964)).
“ ‘A description is . . . latently ambiguous if it is insufficient in itself to identify the
property but refers to something extrinsic by which identification might possibly be
made.’ Thus, a description missing or uncertain in one document may be rendered
certain by another and together the documents may satisfy the statute of frauds.”
River Birch Associates v. City of Raleigh, 326 N.C. 100, 123, 388 S.E.2d 538, 551
(1990) (quoting Lane, 262 N.C. at 13, 136 S.E. 2d at 273 (other citation omitted). In
sum:
It is a general rule, that if the description be so vague or
contradictory, that it cannot be told what thing in
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particular is meant; the deed is void. But it is also a
general rule, that the deed shall be supported, if possible;
and if by any means different descriptions can be
reconciled, they shall be, or if they be irreconcilable, yet
if one of them sufficiently points out the thing, so as to
render it certain that it was the one intended, a false or
mistaken reference to another particular shall not
overrule that which is already rendered certain.
Proctor v. Pool, 15 N.C., 370, 373 (1833).
We have reviewed our appellate jurisprudence addressing challenges to the
validity of the identification of property described in documents such as a deed, deed
of trust, or contract for the sale of property, and observe that our Courts have
generally affirmed the validity of such documents when it is possible to ascertain the
identity of the subject property. For example, in Carson v. Ray, 52 N.C. 609, 609
(1860), our Supreme Court upheld as valid a deed in which the grantor agreed to
transfer “[m]y house and lot in the town of Jefferson, in Ashe County, North
Carolina.” The Court noted that “there was no evidence that [the grantor] owned any
other house and lot” in Jefferson, and that the deed presented only a latent ambiguity.
Similarly, in Gilbert v. Wright, supra, our Supreme Court upheld an order of the lower
court ordering specific performance of a contract to sell “the vacant lot” on the grounds
that the other documents and the factual circumstances associated with the
transaction clearly identified a specific vacant lot.
Where a document that constitutes part of the transfer of property, such as a
deed or deed of trust, describes the property in a manner that is uncertain or contains
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an error, our appellate courts generally have upheld the decision of a trial court to
admit extrinsic evidence derived from sources referred to in the challenged document,
in order to establish with greater certainty the identity of the subject property. Thus,
in Taylor v. Bailey, 34 N.C. App. 290, 237 S.E.2d 918 (1977), this Court upheld an
order by the trial court granting specific performance of a contract for the sale of
property. The contract erroneously described the property as being located in
Buncombe County, rather than giving its correct location in Henderson County. We
held that this discrepancy created only a latent ambiguity:
Defendant argues that the description before us for
construction is clearly patently ambiguous. We cannot
agree. True, there is no metes and bounds description.
However, the description gives the acreage and refers to
a deed of trust, naming the parties and the date thereof,
in which the land is described with particularity. This is
adequate to satisfy the “something extrinsic by which
identification might possibly be made.” Further, the
complaint locates the property in Henderson County.
Taylor, 34 N.C. App. at 292, 237 S.E.2d at 919 (quoting Lane at 13, 136 S.E.2d at
273). In River Birch, supra, our Supreme Court held that “[t]he trial court incorrectly
excluded evidence of the preliminary plat for the purpose of resolving a latent
ambiguity in the identity of the common area referred to in the covenants.” River
Birch, 326 N.C. at 126, 388 S.E.2d at 553. And, in Tomika Invs., Inc. v. Macedonia
True Vine Pent. Holiness Ch. of God, Inc., 136 N.C. App. 493, 524 S.E.2d 591 (2000),
the defendant claimed that the subject deed was void because of the misstatement of
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the name of one of the parties. This Court held that “there is only a latent ambiguity
in the deed” that did not render the deed void. Tomika, 136 N.C. App. at 497, 524
S.E.2d at 594.
Applying the principles discussed above to the present case, we conclude that
the erroneous reference in the Deed of Trust to “Section II-C” instead of “Section III-
C” is merely a scrivener’s error and creates only a latent ambiguity in the description
of the property. This uncertainty may be remedied by examination of the four corners
of the Deed of Trust and documents referenced therein. The Deed of Trust identifies
the property as Lot 46 of a subdivision depicted on a plat “prepared by Parker &
Associates, Inc., dated August 3, 2006 and recorded in Map Book 51, Page 149, Slide
L-1485, Onslow County Registry.” This plat correctly identifies Lot 46 as being
located in “Section III-C.” In addition, the Deed of Trust identifies the property with
a street address and tax parcel ID number, both of which correspond to the
information in the General Warranty Deed and the plat. Upon examination of the
information in the record, in the context of the long-established jurisprudence on this
subject, we conclude that the erroneous reference to “Section II-C” in the Deed of
Trust did not render the document void and that the trial court did not err by allowing
the foreclosure to go forward.
In their arguments seeking a contrary result, the Thompsons do not
acknowledge that extrinsic evidence may be utilized to clarify a latent ambiguity and
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do not discuss the law on this issue or make any attempt to distinguish cases such as
those cited above. Instead, the Thompsons cite cases that, although they may involve
a deed of trust or the transfer of property, do not address in any respect the principles
discussed in this opinion. We conclude that the Thompsons have failed to establish
that the trial court erred or that they are entitled to relief on appeal. Accordingly, we
conclude that the trial court’s order should be
AFFIRMED.
Judges BRYANT and INMAN concur.
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