Bank of America, N.A. v. Schmitt, 121818 NCCA, COA18-222

Docket Nº:COA18-222
Opinion Judge:DILLON, JUDGE.
Party Name:BANK OF AMERICA, N.A., Plaintiff, v. GARY W. SCHMITT and MAY L. SCHMITT, Defendants.
Attorney:Brian M. Rowlson and Michael C. Griffin for the Plaintiff. Sloan & VanHook, PLLC, by Stuart Sloan, for the Defendant.
Judge Panel:Judges ELMORE and DAVIS concur.
Case Date:December 18, 2018
Court:Court of Appeals of North Carolina
 
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BANK OF AMERICA, N.A., Plaintiff,

v.

GARY W. SCHMITT and MAY L. SCHMITT, Defendants.

No. COA18-222

Court of Appeals of North Carolina

December 18, 2018

Heard in the Court of Appeals 19 September 2018.

Appeal by Plaintiff from judgment entered 22 June 2017 and order entered 12 September 2017 by Judge Robert C. Ervin in Macon County No. 15-CVS-316 Superior Court.

Brian M. Rowlson and Michael C. Griffin for the Plaintiff.

Sloan & VanHook, PLLC, by Stuart Sloan, for the Defendant.

DILLON, JUDGE.

Plaintiff Bank of America, N.A. ("BANA"), appeals from the trial court's judgment entering a jury verdict construing the terms of a deed of trust encumbering property owned by Defendants Gary W. Schmitt and Mary L. Schmitt (together, "the Schmitts"), and from the trial court's subsequent order denying BANA's four post-trial motions. BANA argues that the trial court erred by allowing the jury to construe the deed of trust. After careful review, we vacate the trial court's judgment and remand in part, and find no error in part.

I. Background

The Schmitts own 35.47 acres of real property in Macon County (the "Property"). The Property is comprised of two contiguous tracts: Tract B (18.14 acres) and Tract C (17.33 acres). The Schmitt's primary residence is located on Tract B.

In 2001, the Schmitts obtained a construction loan to build their house on Tract B. In 2007, the Schmitts refinanced their loan from BANA, secured by a deed of trust. This deed of trust described the property to be encumbered by the physical address of Tract B, but further by the tax parcel identification number and full legal description for Tract C.

In 2008, the Schmitts refinanced the existing debt with a new loan from BANA secured by a new deed of trust (the "2008 Deed of Trust"). It is this 2008 Deed of Trust which is the subject-matter of this appeal.

The 2008 Deed of Trust described the property to be encumbered by the physical street address for Tract B, but further by the tax parcel identification numbers for both Tract B and Tract C, as well as by the legal description of Tract C alone.1

In 2015, BANA filed this action seeking a declaratory judgment and, alternatively, reformation against the Schmitts with respect to the 2008 Deed of Trust, alleging that it encumbered, or was intended to encumber, both Tract B and Tract C. The Schmitts counterclaimed for reformation, contending that the parties intended for the 2008 Deed of Trust to encumber Tract B only, where their home is located.

The trial court referred the meaning of the terms of the 2008 Deed of Trust as well as the reformation claims to the jury. The jury found that the terms of the 2008 Deed of Trust only encumbered Tract C and that neither party was entitled to reformation. The trial court entered judgment based on the jury verdict, holding that the 2008 Deed of Trust encumbered only Tract C and dismissed the parties' respective reformation claims with prejudice.

BANA subsequently filed a motion for judgment notwithstanding the verdict, a motion for a new trial, a motion to amend judgment, and a motion to amend its complaint to conform to the evidence. The trial court denied all post-trial motions.

BANA timely appealed from the trial court's judgment and from its subsequent order denying all post-trial motions.

II. Analysis

We conclude that interpretation of the 2008 Deed of Trust was...

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