Nationstar Mortg. LLC v. Curry
| Decision Date | 06 November 2018 |
| Docket Number | No. COA18-351,COA18-351 |
| Citation | 822 S.E.2d 122,262 N.C.App. 218 |
| Court | North Carolina Court of Appeals |
| Parties | NATIONSTAR MORTGAGE LLC, d/b/a Champion Mortgage Company, Plaintiff, v. Jerry CURRY and Pamela Curry; Melissa Carlton Holmes; Ray M. Warren, Jr.; J. Gregory Matthews, as Personal Representative of the Estate of Eulala Warren McNeil; Secretary of Housing & Urban Development; and Satterfield Legal, PLLC, as Trustee, Defendants. |
McGuireWoods, LLP, Charlotte, by Christopher B. Karlsson, for plaintiff-appellant.
McElwee Firm, PLLC, North Wilkesboro, by John M. Logsdon, for defendant-appellees Jerry Curry and Pamela Curry.
Nationstar Mortgage, LLC, d/b/a Champion Mortgage Company ("Champion"), appeals from the trial court's order, which granted Jerry and Pamela Curry's (collectively "the Currys") motion for judgment on the pleadings. We affirm.
In 2011, Eulala W. McNeil, now deceased, owned two tracts of real property located in Wilkes County ("the Property"). On 25 January 2011, McNeil obtained a loan from and executed a promissory note payable to Sidus Financial, LLC ("Sidus"), which was secured by a deed of trust on the Property in favor of Sidus ("the Deed of Trust"). The Deed of Trust was recorded with the Wilkes County Register of Deeds on 31 January 2011 and encumbered the Property.
That same day, Sidus transferred its rights in the Deed of Trust to Metlife Home Loans, a division of Metlife Bank, N.A. ("Metlife"), through an assignment of deed of trust that was also properly recorded. Subsequently, Metlife assigned the Deed of Trust to Champion on 15 October 2012. Champion properly recorded this assignment of deed of trust the same day.
McNeil died on 11 August 2012, and Melissa Carlton Holmes was subsequently appointed as executrix of McNeil's estate. On 13 December 2012, Holmes filed a petition ("the Petition") in special proceeding 12 SP 368 ("the Special Proceeding") to seek a sale of the Property in order to repay the debts of the estate. The only respondent party named in the Petition was Ray M. Warren, an heir of McNeil.
On 18 December 2012, Holmes filed an amended petition ("the Amended Petition"), adding Metlife, Sidus, and "HUD" as additional respondent parties. Neither petition named Champion in the caption of the case. However, both the Petition and Amended Petition described Champion's Deed of Trust on the Property as a debt of the estate. Specifically, the Petition stated one of the debts of the estate was "[t]he previously stated reverse mortgage owed to Champion Lender in the current amount of $66,988.86" and petitioner prayed for the court to "sell [the Property] in order to create assets to pay the taxes and above referenced debts of the Estate."
On 26 March 2013, Robert G. Green, Jr., Esq., the attorney of record in the Special Proceeding, filed an affidavit of service by certified mail ("the Affidavit of Service") stating he had served Champion "with a copy of the Petition, Amended Petition, Notice of Hearing, and Special Proceedings Summons" by certified mail. Green also attached a copy of the signed receipt, which showed Champion had received these documents on 23 March 2013.
On 26 April 2013, the Wilkes County Clerk of Superior Court entered an order ("the Order of Sale") authorizing the sale of the Property. The Order of Sale listed the "reverse mortgage owed to Champion" as one of the debts of the estate and concluded as a matter of law that the Property should be sold to create assets to pay "the above referenced debts of the Estate." Pursuant to the Order of Sale, the appointed commissioner posted a notice of sale ("the Notice of Sale"), which included the following statements: "This sale is subject to ad valorem taxes and such other liens as may appear of record[,]" and "[t]his sale is made subject to all prior liens and encumbrances, and unpaid taxes and assessments."
The sale of the Property was conducted on 26 July 2013. After the sale remained open for a period of time for upset bids to expire, the Currys became the final bidder and purchased the Property for and paid $90,000. On 16 September 2013, the commissioner deducted fees and expenses and disbursed $84,692.69 to the executrix of the McNeil estate as proceeds from the sale of the Property. On 19 September 2013, the commissioner executed and delivered a deed for the Property to the Currys. After receiving the net sale proceeds in her capacity as executrix of the McNeil estate, Holmes embezzled the money and did not remit and pay the proceeds from the sale to extinguish the outstanding balance of the Deed of Trust to Champion.
Champion commenced this action by filing a complaint on 21 February 2017 in superior court to seek a declaration that Champion's Deed of Trust is a first lien on the Property and an order for judicial foreclosure of the Deed of Trust. In their answer, the Currys alleged (1) an affirmative defense that, by operation of collateral estoppel, the Special Proceeding Order of Sale barred Champion's claims ("the Second Affirmative Defense"), and (2) asserted a counterclaim for a declaration that Champion's lien was extinguished by the sale of the Property in the Special Proceeding and their payment of the purchase price ("the First Counterclaim").
The Currys subsequently filed a motion for judgment on the pleadings asserting their First Counterclaim and Second Affirmative Defense. Following a hearing on 18 September 2017, the trial court entered judgment on the pleadings in favor of the Currys on both their First Counterclaim and Second Affirmative Defense. The trial court's order decreed that (1) "Champion Mortgage is collaterally estopped from seeking a judicial sale of [the Property]" and (2) the "Curry[s] hold title to [the Property] free and clear of the lien of [Champion's] Deed of Trust."
Champion filed timely notice of appeal from the trial court's order granting the Currys’ motion for judgment on the pleadings.
Jurisdiction lies in this Court pursuant to N.C. Gen. Stat. § 7A-27(b)(1) (2017).
Champion argues the trial court erred by concluding as a matter of law Champion was a named party to and bound by the Special Proceeding. Champion also argues the trial court erred by granting judgment on the Currys’ First Counterclaim by decreeing the Special Proceeding extinguished Champion's prior recorded lien on the Property. Lastly, Champion argues the trial court erred in applying the doctrine of collateral estoppel in granting judgment on the Currys’ Second Affirmative Defense.
We need not reach the issue of whether Champion was collaterally estopped from seeking a judicial sale of the Property. Because Champion was on notice of and was a party to the Special Proceeding, the Currys acquired the Property free and clear of Champion's Deed of Trust.
The trial court's order granted the Currys’ motion for judgment on the pleadings pursuant to North Carolina Rule of Civil Procedure 12(c). However, when "matters outside the pleadings [have been] considered by the [trial] court in reaching its decision on the judgment on the pleadings, the motion [is] treated as if it were a motion for summary judgment" under Rule 56 on review by this Court. Helms v. Holland , 124 N.C. App. 629, 633, 478 S.E.2d 513, 516 (1996) (citation omitted).
In making its decision on the Currys’ motion for judgment on the pleadings, the trial court's order stated the court had considered the pleadings and exhibits, arguments of counsel at the hearing, and certain documents from the Special Proceeding file submitted during the 18 September 2017 hearing. One of these documents from the Special Proceeding file was the Affidavit of Service asserting Champion was served "with a copy of the Petition, Amended Petition, Notice of Hearing, and Special Proceedings Summons" by certified mail with return receipt. With these documents outside the pleadings being considered, the 12(c) motion for judgment on the pleadings will be treated for review as a motion for summary judgment under Rule 56 on appeal. See Horne v. Town of Blowing Rock , 223 N.C. App. 26, 30, 732 S.E.2d 614, 617 (2012) .
"Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that [a] party is entitled to judgment as a matter of law." Summey v. Barker , 357 N.C. 492, 496, 586 S.E.2d 247, 249 (2003) (citation and internal quotation marks omitted); see also N.C. Gen. Stat. § 1A-1, Rule 56(c) (2017).
Draughon v. Harnett Cty. Bd. of Educ. , 158 N.C. App. 208, 212, 580 S.E.2d 732, 735 (2003) (citations and quotation marks omitted), aff'd per curiam , 358 N.C. 131, 591 S.E.2d 521 (2004).
"Our standard of review of an appeal from summary judgment is de novo[.]"
In re Will of Jones , 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008) (citing Forbis v. Neal , 361 N.C. 519, 523-24, 649...
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