In re Foreclosure Of A Deed of Trust Executed By Davis, 051920 NCCA, COA19-1056
|Opinion Judge:||INMAN, JUDGE.|
|Party Name:||IN THE MATTER OF THE FORECLOSURE OF A DEED OF TRUST EXECUTED BY JUDSON S. DAVIS AND LOIS A. DAVISDATED FEBRUARY 24, 1999 AND RECORDED IN BOOK 2054 AT PAGE 2037 IN THE FORSYTH COUNTY PUBLIC REGISTRY, NORTH CAROLINA|
|Attorney:||Shapiro & Ingle, LLP, by Jason K. Purser, for Petitioner-Appellee. Ferikes & Bleynat, PLLC, by H. Gregory Johnson and Jane A. Dearwester, for Respondents-Appellants.|
|Judge Panel:||Judges DIETZ and DILLON concur.|
|Case Date:||May 19, 2020|
|Court:||Court of Appeals of North Carolina|
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
Heard in the Court of Appeals 15 April 2020.
Appeal by Respondents from order entered 22 July 2019 by Judge William Wood in Forsyth County No. 16 SP 1525 Superior Court
Shapiro & Ingle, LLP, by Jason K. Purser, for Petitioner-Appellee.
Ferikes & Bleynat, PLLC, by H. Gregory Johnson and Jane A. Dearwester, for Respondents-Appellants.
Because the trial court is in the best position to evaluate evidence, its findings of fact will not be disturbed on appeal unless no competent evidence supports them, and the evidence is reviewed with all inferences considered in favor of the appellee. But when a trial court's order allowing foreclosure depends upon a finding of fact not supported by competent evidence and directly conflicts with undisputed evidence, we reverse.
Respondents Judson S. Davis and Lois A. Davis appeal from the trial court's order authorizing Waterfall Victoria Trust, Series E ("Waterfall") to foreclose on real property under power of sale found in a deed of trust. Respondents contend that: (1) the trustees' absence at the foreclosure hearing before the trial court requires reversal of the order; (2) the trial court erred in finding and concluding that Waterfall possessed the right to foreclose under power of sale when the record discloses Waterfall had transferred all beneficial right, title, and interest in the deed of trust to a third party; and (3) an error in the identification of Lois A. Davis as grantee in the underlying deed that conveyed the property to Respondents precludes foreclosure. After careful review, we agree with Respondents' second argument and reverse the trial court's order.
I. Factual and Procedural Background
The record below discloses the following:
In February of 1999, Respondents executed an Adjustable Rate Note (the "Note") in favor of Collateral One Mortgage Corp. requiring repayment of an original principal balance of $191, 600. As collateral for the Note, Respondents signed a deed of trust (the "Deed of Trust") encumbering their real property located at 747 Sylvan Road in Winston-Salem, North Carolina (the "Property"). Respondents originally took possession of the Property by a deed executed in 1972; that deed, however, identified the grantees as "Judson S. Davis and wife, Lauren A. Davis," rather than by Respondent Lois A. Davis's true name.
The Note and Deed of Trust changed hands several times over the ensuing decades. In 2006, Respondents stopped making payments on the Note and, in 2010, the then-trustee sought to foreclose on the Property under the Deed of Trust. action was eventually dismissed, and a new foreclosure action was instituted in 2011. An order permitting foreclosure was entered later that year in favor of Wells Fargo as trustee for Waterfall; however, Respondents filed for Chapter 13 bankruptcy before the foreclosure sale process could be completed. Respondents also filed an adversary proceeding with the bankruptcy court, challenging Wells Fargo's possession of the Note and the 2011 foreclosure proceeding under the Servicemembers Civil Relief Act. In the course of the adversary proceeding, Waterfall filed a transfer of claim with the bankruptcy court, attesting that Wells Fargo had transferred the Note and Deed of Trust to Waterfall. The bankruptcy court later granted partial summary judgment in favor of Wells Fargo, concluding it had established its prior possession of, and interest in, the Note. Following the bankruptcy court's ruling, Wells Fargo physically transferred the original Note to Waterfall's loan servicer, Statebridge Company, LLC ("Statebridge"). Statebridge then lost the Note.
Waterfall obtained relief from the automatic stay in Respondents' bankruptcy...
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