Bank of N.C. v. Equity Partners, Inc

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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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. NO. COA 12-450 NORTH CAROLINA COURT OF APPEALS Filed: 6 November 2012 BANK OF NORTH CAROLINA, Plaintiff, v. Guilford County No. 11 CVS 66 EQUITY PARTNERS, INCORPORATED, and MARK E. HORTON, Defendants. Appeal by defendants from judgment entered 3 November 2011 by Judge L. Todd Burke in Guilford County Superior Court. Heard in the Court of Appeals 8 October 2012. Robertson Haworth & Reese, P.L.L.C., by Christopher Finan and Andrew D. Irby for plaintiff-appellee. C. Rallings & Associates, PLLC, by Thomas B. Rallings, Jr., and James L. Fretwell for defendant-appellants. STEELMAN, Judge. Where plaintiff had exercised due diligence in the service of defendants in a prior foreclosure action, it was not barred from seeking a deficiency judgment from defendants. I. Factual and Procedural History -2On 14 December 2006, Equity Partners Incorporated, ( Equity Partners ) executed a $348,000.00 promissory note to Bank of North Carolina ( Bank ). trust upon estate County. Cabarrus real Mark registered agent of This debt was secured by a deed of owned E. by Equity Horton Equity Partners ( Horton ), Partners, guarantees of the debts of Equity Partners. located president executed in and personal In addition, on 30 July 2009, Horton executed a promissory note to Bank in the original amount of $27,000.00. On 9 July 2010, Bank instituted foreclosure proceedings concerning the real property of Equity Partners in the Superior Court of Cabarrus County. The foreclosure sale did not generate sufficient funds to satisfy the debt of Equity Partners. On 10 January 2011, Bank filed a complaint in this action seeking to recover the balance due on the debt of $117,065.32, together with interest and attorney s fees from Equity Partners, and from Horton as guarantor. Horton, The complaint also sought to recover from individually, the sum of $27,521.49 together with interest and attorney s fees due on the 30 July 2009 note. On 30 March 2011, Equity Partners and Horton filed answer asserting that Bank never procured proper service during the foreclosure proceeding, and that as a result they were not -3liable for any deficiency. On 31 August 2011, Bank filed a Motion for Summary Judgment. court Horton entered in attorney s summary On 3 November 2011, the trial judgment the amount fees. In of against $117,065.32, addition, judgment Equity Partners and plus interest and was entered against Horton in the amount of $27,521.49, plus interest and attorney s fees. Equity Partners and Horton appeal. II. $27,000 Note Defendants make no argument concerning the entry of summary judgment against Horton in the amount of $27,521.49, based on the 30 July 2009 note. The trial court s grant of summary judgment on this issue is affirmed. N.C. R. App. P. 28(b)(6). III. Service in Foreclosure Proceeding In their sole argument on appeal, defendants contend that the trial court erred in granting summary judgment in favor of Bank, on the grounds that there was improper service in the foreclosure proceedings. We disagree. A. Standard of Review Our standard of review of an appeal from summary judgment is de novo; such judgment is appropriate only when the record shows that there is no genuine issue as to any material fact -4and that any party is entitled to a judgment as a matter of law. 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 S.E.2d 382, 385 (2007)). B. Analysis Notice of a foreclosure hearing must be given to [a]ny person obligated to repay the indebtedness against whom holder thereof intends to assert liability therefor[.] Gen. Stat. § 45-21.16(b)(2) (2011). the N.C. Any person who does not receive such notice shall not be liable for any deficiency remaining after the [foreclosure] sale. Id. exercise due diligence in serving notice. See N.C. Gen. Stat. § 45-21.16(a). The trustee must Due diligence dictates that plaintiff use all resources reasonably available to her in attempting to locate defendants. Where the information required for proper service of process is within plaintiff's knowledge or, with due diligence, can be ascertained, service of process by publication is not proper. Fountain v. Patrick, 44 N.C. App. 584, 587, 261 S.E.2d 514, 516 (1980) (citations omitted). Prior to filing the foreclosure action, on 2 June 2010, Bank sent a written demand for payment to 1340 S. Ocean Blvd., Suite 1505, Pompano Beach, Florida 33062, by certified mail, -5return receipt requested. On 2 July 2010, this letter was returned to the sender, marked RETURN TO SENDER, UNCLAIMED, UNABLE TO FORWARD[.] When foreclosure proceedings were instituted on 9 July 2010, the notice of hearing listed five separate addresses for Equity Partners and Horton; two addresses in Kannapolis; Concord; and office box). Hearing, one one address address in in Harrisburg; Pompano one Beach, address Florida (a in post On 26 August 2010, Bank filed an Amended Notice of which was addressed to Kannapolis and Harrisburg addresses. Equity Partners at the On 27 August 2010, an order continuing the foreclosure hearing was mailed to Equity Partners and Horton at the same five addresses in North Carolina and Florida as the original notice. Defendants contend that service was not proper because Horton, guarantor of the note and registered agent of Equity Partners, was not personally served with the Notice or Amended Notice at 1340 S. Ocean Blvd., Suite 1505, Pompano Beach Florida 33062. They contend that this was a reasonably ascertainable address for defendants. They further contend that Bank s written demand for payment, dated 2 June 2010, evidenced that Bank had knowledge of the 1340 S. Ocean Blvd. address. -6 [A] plaintiff is not required to jump through every hoop later suggested by a defendant in order to meet the requirement of due diligence. This is particularly true when there is no indication in the record that any of the steps suggested by a defendant would have been fruitful. Jones v. Wallis, ___ N.C. App. ___, ___, 712 S.E.2d 180, 185 (2011). Since the notice of 2 June 2010 sent to the 1340 S. Ocean Blvd. address was returned, marked RETURN TO SENDER, UNCLAIMED, UNABLE TO FORWARD[,] it was not unreasonable for Bank to send the Notice of Hearing to other addresses, service at the 1340 S. Ocean Blvd. address. and not attempt Based upon the information available to Bank at the time of the commencement of the foreclosure action, there was nothing to indicate that an attempt to serve either of the defendants at the 1340 S. ocean Blvd. address would have been fruitful. Id. Defendants acknowledged that the addresses served by Bank were listed, either in documents signed by defendants or in the Office of the Secretary of State, as valid for service purposes. In their answers to interrogatories, defendants acknowledged that the post office box address in Pompano Beach Florida was a valid mailing address for both Equity Partners and Horton, and that the Pompano Beach post office box was a forwarding address -7for both the Carolina. Harrisburg The and the Concord addresses original notice of foreclosure in North and the order continuing the foreclosure hearing were sent to each of these addresses. Further, commencement of the on 14 September foreclosure 2010, proceedings, after Equity the Partners filed a document with the Office of the North Carolina Secretary of State listing defendants addresses as the Kannapolis and Harrisburg addresses. The filing with the Secretary of State s Office did not show the 1340 S. Ocean Blvd. address. We further note that the promissory note executed by Equity Partners stated its address as 5259 Pit Road South, Concord, NC 28027, and location contained of my business. a chief representation executive that this was or sole place offices the of There was a further covenant that Equity Partners agreed to provide you with at least 30 days notice prior to any change in my name, address, or state of organization or registration. We hold that Bank was duly diligent in service of the foreclosure proceedings upon both Equity Partners and Horton. Bank was not barred from pursuing a claim for the deficiency against defendants. AFFIRMED. The ruling of the trial court is affirmed. -8Chief Judge MARTIN and Judge ERVIN concur. Report per Rule 30(e).

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