Cnty. of Mecklenburg v. Ryan

• Decision Date: 15 February 2022
• Docket Number: COA21-205
• Citation: 871 S.E.2d 110
• Parties: COUNTY OF MECKLENBURG, A Body Politic and Corporate, Plaintiff, v. Helen Barbara RYAN, Unknown Spouse of Helen Barbara Ryan, and City of Charlotte, Lienholder, Defendants.
• Court: North Carolina Court of Appeals

871 S.E.2d 110

COUNTY OF MECKLENBURG, A Body Politic and Corporate, Plaintiff,

v.Helen Barbara RYAN, Unknown Spouse of Helen Barbara Ryan, and City of Charlotte, Lienholder, Defendants.

No. COA21-205

Court of Appeals of North Carolina.

Filed February 15, 2022

C. Ashley Lamm, for County of Mecklenburg, Plaintiff.

Lord Law Firm, PLLC, by Harrison A. Lord, Charlotte, for Helen Barbara Ryan, Defendant.

No brief filed on behalf of City of Charlotte, Defendant-Lienholder.

Offit Kurman, P.A., Charlotte, by Amy P. Hunt and Robert McNeill, for Jacob Belk, Third-Party Appellee.

WOOD, Judge.

¶ 1 Plaintiff, County of Mecklenburg, A Body Politic and Corporate ("Mecklenburg County") appeals an order setting aside an entry of default and a default judgment. Defendant Helen Ryan ("Ryan") cross appeals from the order, in which the trial court granted Ryan's motion to set aside a judgment of confirmation, but denied her motion to set aside the commissioners’ deed. After careful review of the record and applicable law, we affirm the order of the trial court in part and reverse in part.

I. Factual and Procedural Background

¶ 2 Ryan has been confined to a wheelchair since 1989 and legally blind since 1992. In 2018, Ryan owned and resided at 4810 Drakestone Court, Charlotte, North Carolina ("the Property").¹ On January 8, 2018, Mecklenburg County, through its counsel, Richard Kania of The Kania Law Firm, instituted a civil action to foreclose on the Property for past due real property taxes owed by Ryan for the years 2014, 2015, and 2016. While this action was ongoing, Ryan's 2017 property taxes and interest for 2017 property taxes became delinquent.

¶ 3 On January 8, 2018, a civil summons was issued against Ryan, but was not served. An alias and pluries summons was issued on April 17, 2018. Although Mecklenburg County attempted to serve Ryan personally, it was unsuccessful in doing so. When an officer from the Sheriff's Department attempted to serve Ryan at the Property, he reported the Property "appear[ed] vacant." Thereafter, Mecklenburg County tried serving Ryan via certified mail and by designated delivery service. Service was unsuccessful. Although "Ryan had previously informed [Mecklenburg] County (in a different context) that because of her disabilities, it can be difficult for her to access mail, and that the best way to reach her was via email," Mecklenburg County did not attempt to email Ryan.

¶ 4 Following its failed attempts to serve Ryan by personal service, Mecklenburg County served Ryan by publication, which was completed on May 22, 2018. On August 1, 2018, Mecklenburg County filed an "Affidavit of Jurisdiction and Failure to Plead" and a certificate of taxes due, which contained a statement of the amount of outstanding taxes Ryan allegedly owed. The certificate of taxes due stated that Ryan owed $20,775.33. Mecklenburg County also filed a motion for entry of default and a motion for default judgment on August 1, 2018.² Entry of default and a default judgment were entered against Ryan that same day.

¶ 5 Mecklenburg County subsequently filed a notice of sale to foreclose on the Property on September 18, 2019. The notice of sale was published on September 4, 2018, and September 11, 2018. On September 12, 2018, Ryan "became aware of the foreclosure action and immediately emailed Neal Dixon, the Mecklenburg County Tax Collector/Department Director ("Mr. Dixon") regarding the unpaid taxes." Ryan emailed the Tax Collector approximately three times but did not receive a response. On September 14, 2018, Ryan called the Mecklenburg County Tax Office and was given a payoff amount of $21,438.25.³ Ryan's affidavit states that she immediately paid this amount over the phone and was provided with confirmation codes confirming the payment. The payoff amount of $21,438.25 was deducted from Ryan's bank account that same day.⁴

¶ 6 According to Deputy Tax Director Frank Wirth, personnel from the Tax Office called Ryan fourteen times between November 10, 2015 and September 11, 2017 to discuss her delinquency. These phone calls went unanswered. In addition to the phone calls, personnel from the Tax Office completed two field visits, posted two delinquency notices, posted seven advertisements of the delinquencies in the Charlotte Observer, posted two notices of delinquency online, and sent five set-off debt submissions to the North Carolina Department of Revenue. The Tax Office never received a response from Ryan during that time. The Deputy Tax Director conceded that Ryan

attempted to make a payment on her bills in the amount of $21,438.25 by use of the Mecklenburg County Tax Office's ‘E-Pay’ feature.... The use of this service for payment ... does not provide any person-to-person contact.... Furthermore, the E-Pay payment method only provides confirmation of a payment submission; it does not provide either (i) confirmation of acceptance of the payment by the Tax Collector, nor (ii) any indication that the payment represents a payment in full that would update the record and remove the tax lien.

¶ 7 Mecklenburg County conceded at oral argument before this Court that Ryan made a payment of $21,438.25 and that the County did not refund the payment to Ryan until approximately eight to ten weeks later. Although Ryan made the payment, the County proceeded with the foreclosure sale anyway. Mecklenburg County filed a report of foreclosure sale on September 18, 2018; however, there were multiple upset bids. Jacob Belk ("Belk") made the final upset bid on October 15, 2018.

¶ 8 On October 31, 2018, Belk went to the Property and knocked on the door. Ryan did not answer the door, but Belk "stayed at the door and explained he was the new owner of the property and eventually left." "Sometime in early November 2018," Ryan posted a note on the front door of the Property, stating "if this [is] about the taxes, they were paid in full before the sale and the house still belongs to [Ryan]." Ryan also contacted the Kania Law Firm to inform them that she "has paid taxes to the County." On November 28, 2018, an employee of the Kania Law Firm responded to Ryan via email and informed her that her "right of redemption no longer exist[ed]."

¶ 9 On December 4, 2018, Mecklenburg County filed a motion for confirmation of the sale of the Property to Belk. The trial court entered judgment of confirmation of sale on December 6, 2018. Thereafter, Belk received a commissioner's deed on December 14, 2018.⁵ Mecklenburg County filed a final report of sale on January 16, 2019, showing the Property sold for $407,925.00. The final report also revealed that $21,728.02 was paid to Mecklenburg County for the 2014 through 2017 delinquent taxes. Ad valorem taxes for 2018 were paid to Mecklenburg County in the amount of $5,308.50.

¶ 10 Upon receiving the deed to the Property, Belk served Ryan with a notice to vacate the Property via first class mail, certified mail, posting a notice on the front door of the Property, and by placing a copy of the notice in the mailbox on the Property. On January 18, 2019, Belk filed an application for writ of possession of the Property. The trial court entered an order for possession of the Property on January 24, 2019.

¶ 11 On February 4, 2019, at approximately 11:00 a.m., the Mecklenburg County Sheriff's Office went to the Property and forcibly removed Ryan from the Property. Ryan was confined to her wheelchair and was undressed when the deputies entered her home. The deputies allowed her to grab a pair of pants that were too small for her and wheeled her onto the porch. Ryan attempted to explain to law enforcement officers that she had paid the outstanding taxes in full prior to the sale. Ryan was extremely upset and uncooperative as she was being forcibly removed from her home.

¶ 12 Ryan, through counsel, filed a motion to set aside the order and writ of possession on February 22, 2019. On April 9, 2019, the trial court denied Ryan's motion to set aside the order and writ for possession. In December 2019, Ryan moved to set aside the August 1, 2018 default judgment, or, in the alternative, the December 6, 2018 judgment of confirmation of the sale. Ryan also moved to strike the commissioner's deed.

¶ 13 On December 20, 2019, the trial court entered an order continuing the matter and joining Belk as a necessary party. On October 20, 2020, the trial court entered its written order in which it found that Mecklenburg County exercised due diligence under N.C. Gen. Stat. § 1A-1, Rule 4(j) ; Ryan had the right to rely on the Tax Collector's representative's oral statement as to the total amount of outstanding taxes; Ryan exercised her right of redemption; Belk was a good faith purchaser; and that Ryan was entitled to restitution.⁶ Thereafter, the trial court granted Ryan's motion to set aside the December 6, 2018 judgment of confirmation of the sale but did not set aside the commissioner's deed transferring title of the Property to Belk. Mecklenburg County timely filed its written notice of appeal on November 17, 2020. Ryan timely filed her written notice of cross-appeal on November 24, 2020.

II. Discussion

¶ 14 The parties raise several arguments on appeal, each will be addressed in turn.

A. Appellate Jurisdiction

¶ 15 As a preliminary matter, we note that this appeal is interlocutory, as the matter of restitution is still pending before the trial court. "As a matter of course, our Court does not review interlocutory orders." R.C. Koonts & Sons Masonry, Inc. v. First Nat'l Bank , 266 N.C. App. 76, 79-80, 830 S.E.2d 690, 693 (2019) (citation omitted). "If, however, the trial court's decision deprives the appellant of a substantial right which would be lost absent immediate review, we may review the appeal under N.C. Gen. Stat. §§ 1-277(a) and 7A-27(d)(1)." Id. at 80, 830 S.E.2d at 693 (citation omitted). Appealing parties have the burden to demonstrate appropriate grounds for this Court's acceptance of an interlocutory appeal. See Jeffreys v. Raleigh Oaks Joint Venture , ...