Opinion
No. COA14–222.
04-07-2015
In the Matter of the Foreclosure of Deed of Trust Executed by Jason Brian VICKS and Mekeisha Vicks Dated February 12, 2007 and Recorded in the Union County Public Registry, North Carolina.
Troutman Sanders LLP, by D. Kyle Deak, for Wells Fargo Bank, N.A., as Trustee for Soundview Home Loan Trust OPT1–2007, Asset Backed Certificates, Series OPT1–2007. Jason Vicks and Mekeisha Vicks, pro se defendant-appellants.
Troutman Sanders LLP, by D. Kyle Deak, for Wells Fargo Bank, N.A., as Trustee for Soundview Home Loan Trust OPT1–2007, Asset Backed Certificates, Series OPT1–2007.
Jason Vicks and Mekeisha Vicks, pro se defendant-appellants.
BRYANT, Judge.
Where the notice of foreclosure given to respondents was proper and respondents did not appeal the Clerk's order of forfeiture within ten days of entry, the trial court did not err in denying respondents' motion to vacate the order of the Clerk of Court. Where the trial court acted within the scope of its authority by imposing a pre-filing injunction on respondents, we affirm the trial court. We dismiss respondents' argument that all of their claims have merit and are supported by law.
On 15 April 2011, a foreclosure proceeding was instituted against a deed of trust executed by respondents Jason Brian Vicks and Mekeisha Vicks, currently held by Wells Fargo Bank, N.A., as Trustee for Soundview Home Loan Trust 2007–OPT1, Asset Backed Certificates, Series 2007–OPT1 (Wells Fargo).
I. Notice of Foreclosure Hearing
The Substitute Trustee served respondents with a notice of hearing on foreclosure of deed of trust by certified mail at 420 Glen Gates Lane, Thomasville, Georgia, on 21 April 2011. On 12 May 2011, following a hearing before the Honorable J.R. Rowell, Clerk of Union County Court, the Clerk entered an order permitting foreclosure of the deed of trust. In his order, the Clerk found that each person entitled to service was duly served with proper notice; that Wells Fargo was the holder of the promissory note and the balance due pursuant to the promissory note constituted a valid debt; that respondents were in default under the terms of the promissory note and the deed of trust; that the underlying mortgage was a home loan for which the pre-foreclosure notice was provided in all material respects and for which all relevant time periods had elapsed prior to the filing of a notice of hearing; that the foreclosure sale was not barred by N.C. Gen.Stat. § 45–21.12A ; and that the deed of trust contained a power of sale. Respondents failed to appear for the 12 May 2011 hearing. Respondents also failed to appeal the Clerk's order within ten days of entry of the order. However, on 22 June 2011, respondents attempted to collaterally attack the order of forfeiture by filing an action in Superior Court asserting that they had not been served with notice of forfeiture and that Wells Fargo lacked standing to bring a foreclosure action. Respondents' action was later dismissed.
II. Motion to Vacate
On 14 August 2012, 460 days after entry of the order of forfeiture, respondents attempted to appeal the Clerk's order to Union County Superior Court. The following day, respondents filed a motion to strike an affidavit previously filed by Wells Fargo during proceedings before the Clerk. Meanwhile, on 26 August 2011, respondents filed a motion to vacate the Clerk's order based on allegations of fraud, insufficiency of service of process, and lack of standing. By order issued 15 October 2012, the Honorable Tanya T. Wallace, Superior Court Judge, denied respondents' appeal, denied their motion to vacate, and also denied “any other motions filed by [ ] respondents in this cause.” Respondents did not appeal Judge Wallace's order. On 23 October 2012, respondents filed a Rule 60(b) motion as to Judge Wallace's order and filed a second action to “Quite [sic] title” along with a motion to enjoin the foreclosure. Respondents also filed an emergency motion asking the Clerk to reconsider his order of forfeiture. Respondents' motion to reconsider was denied and the foreclosure sale was held on 23 October 2012.
On 1 November 2012, respondent Jason Brian Vicks filed for bankruptcy in the Western District of North Carolina. Due to the bankruptcy filing an order was entered on 8 November 2012 setting aside the foreclosure sale.
III. Gatekeeper Order
On 17 May 2013, Judge C.W. Bragg, presiding over Union County Superior Court, upon motion filed by Wells Fargo seeking a pre-filing injunction, entered a Gatekeeper Order after finding that respondents, acting pro se,had filed three separate lawsuits and nine motions seeking to vacate the Clerk's 12 May 2011 order of forfeiture, enjoin the foreclosure sale, or obtain a temporary injunction. The trial court concluded that because it was necessary to prevent respondents from filing any additional actions or motions collaterally attacking the validity of the Clerk's order of forfeiture, respondents needed to be enjoined from filing any further actions or motions that pertained to the foreclosure. The trial court ordered that unless such filings were accompanied by a certificate from an attorney, licensed to practice law in North Carolina, acknowledging the attorney has read the filing and concluding that the filing meets the standards of Rule 11, respondents were prohibited from filing any new actions related to the foreclosure. Furthermore, respondents' appeal of the Clerk's 5 April 2013 order was dismissed, respondents' motion for preliminary injunction was denied, respondents' Rule 60(b) motion regarding Judge Wallace's 15 October 2012 order was denied. Wells Fargo's pre-filing injunction was granted and a Gatekeeper Order entered. Respondents appeal.
On appeal, respondents raise the following issues: the trial court (I) exceeded its jurisdiction by upholding an order where the parties were not given notice and an opportunity to bring defenses and denying the motion to vacate the Clerk's order (an argument again directed at the Clerk's 12 May 2011 order of foreclosure). Further, respondents argue the trial court abused its power by (II) placing a pre-filing injunction/Gatekeeper Order on respondents; and (III) not allowing respondents to enjoin the sale of their property.
We first note that respondents' appeal, while ostensibly from the trial court's dismissal of their actions and imposition of a Gatekeeper Order, is also a thinly-veiled attempt to once again collaterally attack the 12 May 2011 order of forfeiture. Respondents did not timely or properly appeal the 12 May 2011 order, and respondents' numerous filings have been denied or dismissed as respondents were not entitled to a hearing on the merits as to the Clerk's order of forfeiture. Respondents' attempts to appeal on the merits the order of the trial court likewise fail. Nevertheless, we will address some of the issues raised by respondents.
I
Respondents argue that the trial court exceeded its jurisdiction by upholding an order where the parties were not given proper notice. Respondents contend the notice of the hearing preceding foreclosure was not filed by the mortgagee or trustee, notice was not properly served on respondents, and the Clerk of Court failed to continue the action. Respondents also contend the notice identifying the Substitute Trustee was ambiguous as to that person's identity. We disagree.
Pursuant to North Carolina General Statutes, Chapter 45 “Mortgages and Deeds of Trust,” Article 2A “Sales Under Power of Sale,” Part 2 “Procedure for Sale,” section 45–21.16 “Notice and hearing,” “[t]he mortgagee or trustee granted a power of sale under a mortgage or deed of trust who seeks to exercise such power of sale shall file with the clerk of court a notice of hearing in accordance with the terms of this section.” N.C. Gen.Stat. § 45–21.16(a) (2013).
(c) Notice shall be in writing and shall state in a manner reasonably calculated to make the party entitled to notice aware of the following:
...
(2) The name and address of the holder of the security instrument at the time that the notice of hearing is filed.
...
(4) The fact, if such be the case, that the secured creditor has accelerated the maturity of the debt.
...
(7) The right of the debtor (or other party served) to appear before the clerk of court at a time and on a date specified.... The notice shall contain all of the following:
...
b. A statement that the trustee, or substitute trustee, is a neutral party and, while holding that position in the foreclosure proceeding, may not advocate for the secured creditor or for the debtor in the foreclosure proceeding.
...
(8a) The name, address, and telephone number of the trustee or mortgagee.
Id.§ 45–21.16(c).
The record on appeal indicates that the notice of appointment of the Substitute Trustee on file with the Union County Register of Deeds states in pertinent part that “First American Title Insurance Company and any and all subsequent substitute trustees, if any, are hereby removed as Trustee and Grady I. Ingle and Elizabeth B. Ells (either of whom may act) is hereby named and appointed Substitute Trustee ....“ The Notice of Hearing on Foreclosure to Deed to Trust provided that the Substitute Trustee was Grady I. Ingle or Elizabeth B. Ells and was issued by Grady I. Ingle or Elizabeth B. Ells, Substitute Trustee. The fact that two individuals are named as alternate substitute trustees does not make the identity of the trustee ambiguous, as respondents claim. Further, it is clear the notice of foreclosure was filed by the Substitute Trustee. The Notice states that “[a]s a Substitute Trustee, our office is a neutral party and cannot advocate for the holder or servicer in this proceeding....” An address for the Substitute Trustee was also listed on the Notice.
Respondents also state “[n]otice was not served on the parties pursuant to NCGS 45–21.16(b).” We disagree.
General Statutes, section 45–21.16(b), states that notice shall be served in a manner authorized in subsection (a). Id.§ 45.21 .16(b). Pursuant to section 4521.16(a), “[t]he notice shall be served and proof of service shall be made in any manner provided by the Rules of Civil Procedure for service of summons, including service by registered mail or certified mail, return receipt requested.” Id.§ 45–21.16(a).
In this case, the record shows that copies of the Notice of Hearing, individually addressed to Jason Brian Vicks and Mekeisha Vicks at 420 Woods Gates Ln, Thomasville, Georgia, return receipt requested, were deposited with the United States Post Office for mailing by certified mail. Therefore, the record reflects that the Notice of Hearing contained the requisite information to withstand respondents' challenge.
Next, respondents contend the trial court exceeded its jurisdiction. Specifically, respondents argue that the promissory note signed by Jason Brian Vicks made the debt for the outstanding loan payable only to Sand Canyon, f/k/a Option One Mortgage, and Sand Canyon lacked the authority to assign the note to another mortgage provider. Because of a declaration from a purported representative of Sand Canyon stating that the mortgage company no longer owned any residential mortgages, respondents contend this is evidence their debt on the promissory note was extinguished and, therefore, Wells Fargo cannot be the holder of the note in due course. Respondents further contend that because the promissory note contained a provision respondents refer to as a “non-monetary undertaking,” the promissory note lost its status as a negotiable instrument capable of being assigned per N.C. Gen.Stat. § 25–3–106. We disagree.
The record reflects that on 19 April 2011, an assignment of note and deed of trust was filed with the Union County Register of Deeds. The assignment of note states that
Sand Canyon fka [sic] Option One Mortgage Corporation does hereby sell, convey and assign to Wells Fargo ... that certain note ... evidencing a repayment obligation in the original principal amount of $248,000.00 secured by that deed of trust signed by Jason Brian Vicks and Mekeisha Vicks, to First American Title Insurance Company, Trustee....
The assignment of note is stamped and signed by a representative of Sand Canyon Corporation, f/k/a Option One Mortgage Corporation.
Respondents have not presented any authority, and we find none, to support a holding that the pertinent promissory note and deed of trust lost their status as a negotiable instrument due to a provision in the promissory note that respondents agreed to “tell the Note Holder in writing that [respondents] [are] [making a prepayment or partial payment].” Therefore, the trial court did not err or exceed its jurisdiction by upholding the order of forfeiture entered by the Clerk where the notice was proper and the statutory findings were properly entered. Accordingly, respondents' arguments are overruled.
II
Respondents argue that the trial court abused its discretion by entering a Gatekeeper Order requiring that filings by respondents made after 17 May 2013 be certified by an attorney licensed in the State. We disagree.
The trial court's decision to impose or not to impose mandatory sanctions under N.C.G.S. § 1A–1, Rule 11(a) is reviewable de novoas a legal issue. In the de novoreview, the appellate court will determine (1) whether the trial court's conclusions of law support its judgment or determination, (2) whether the trial court's conclusions of law are supported by its findings of fact, and (3) whether the findings of fact are supported by a sufficiency of the evidence. If the appellate court makes these three determinations in the affirmative, it must uphold the trial court's decision to impose or deny the imposition of mandatory sanctions under N.C.G.S. § 1A–1, Rule 11(a).
Turner v. Duke Univ., 325 N.C. 152, 165, 381 S.E.2d 706, 714 (1989).
“Where no exception is taken to a finding of fact by the trial court, the finding is presumed to be supported by competent evidence and is binding on appeal.” O'Neal v. O'Neal,––– N.C.App. ––––, ––––, 739 S.E.2d 190, 193 (citation and quotations omitted), review denied,––– N.C. ––––, 752 S.E.2d 473 (2013). Respondents do not challenge the trial court's findings of fact. Therefore, the trial court's findings are deemed competent on appeal, and “we will examine whether the trial court's findings support its conclusions of law and whether those conclusions of law support the Rule 11 sanctions.” Id.
“There are three parts to a Rule 11 analysis: (1) factual sufficiency, (2) legal sufficiency, and (3) improper purpose. A violation of any one of these requirements mandatesthe imposition of sanctions under Rule 11.” Id.(citation and quotations omitted); see, e.g., Fatta v. M & M Properties Mgmt., Inc.,––– N.C.App. ––––, ––––, 735 S.E.2d 836, 845 (2012) (upholding a trial court's Gatekeeper Order precluding the plaintiff “from filing or submitting to the Iredell County Superior Court any further motion, pleading, or other document unlessthe document was signed by a North Carolina licensed attorney” in part because “the gatekeeper provision provided room for potentially meritorious filings without imposing a type of categorical ban on future filings” (emphasis added)).
Here, the trial court found that respondents failed to timely appeal the 12 May 2011 order of the Clerk of Court permitting foreclosure where the Clerk found that Wells Fargo was the holder of a valid debt. On 14 August 2012, “460 days from the entry of the Clerk's Order,” respondents attempted to appeal the 12 May 2011 order. On 15 October 2012, the trial court entered an order dismissing respondents' appeal and denying respondents' motion to vacate and any other motions filed by respondents in the cause. Respondents did not appeal from the 15 October 2012 order. On 18 October 2012, respondents filed an emergency motion for reconsideration of the Clerk's order. On 23 October 2012, respondents filed a “Motion to Enjoin Foreclosure Sale” and also initiated a second collateral lawsuit, 12 CVS 3030, Vicks v. Wells Fargo Bank, N.A.,“in an action to ‘Quiet Title’ of the property which is the subject matter of this foreclosure proceeding.” That same day, respondents also filed a Rule 60(b) motion in relation to the 15 October 2012 order. On 31 October 2012, respondents filed a motion for a temporary restraining order in an attempt to enjoin the sale of the property subject to foreclosure. On 29 November 2012, respondents filed a petition seeking to remove the Honorable J.R. Rowell, Clerk of Superior Court for Union County, for actions associated with this special proceeding. On 5 April 2013, respondents filed a second “Motion to Vacate Judgment” for the 12 May 2011 order of the Clerk of Court. On 1 May 2013, respondents filed a “Motion for Temporary Injunction” as well as a third collateral lawsuit, 13 CVS 1171, naming as defendants petitioners in the current special proceedings, the law firms Shapiro & Ingle, LLP, and the Ford Firm, LLP, and individually, Grady Ingle and Elizabeth Ells. On 2 May 2013, petitioners filed a motion for a pre-filing injunction against respondents to prevent any further attempts by respondents to avoid the effects of the order of foreclosure; respondents filed a motion to strike petitioners' motion for a pre-filing injunction on 6 May 2013.
The trial court concluded that the 12 May 2011 order entered by the Clerk of Court was the proper order controlling the merits of the foreclosure case as upheld by the trial court's 15 October 2012 order. The trial court further concluded that respondents' subsequent filing of three lawsuits and nine motions amounted to “a collateral attack on the Clerk's Order of May 12, 2011.”
4. None of the actions or motions filed by [ ] Respondents as to purported claims or defenses as they relate to the merits of this foreclosure case are well grounded in fact or warranted by existing law.
5. Respondents have acted pro se in the filings of their various motions or actions in regard to their foreclosure case and in an attempt to prevent Wells Fargo's attempt to finalize the foreclosure of their property have engaged in tactics meant to harass and delay.
6. The actions of [ ] Respondents amount to an abuse of the court system to delay the outcome of this case which has been properly litigated.
The trial court's findings support its conclusion that respondents' lawsuits and motions were intended as a collateral attack on the 12 May 2011 order of the Clerk of Court and amounted to an abuse of the court system with the purpose of delaying the outcome of the foreclosure proceeding. We hold that this amounts to an improper purpose within the scope of Rule 11 and, thus, mandates the imposition of sanctions. See O'Neal,––– N.C.App. at ––––, 739 S.E.2d at 193 ; see also Turner, 325 N.C. at 165, 381 S.E.2d at 714.
We review the appropriateness of the particular sanction imposed for an abuse of discretion. See Turner, 325 N.C. at 165, 381 S.E.2d at 714. In so doing, we note respondents' contention that “the pre-filing injunction was quite oppressive and the most damaging as each time [respondents] tried to take an action the order was used as a shield.” However, we disagree with respondents' contention.
The trial court's conclusion, that “a ‘[G]atekeeper’ [O]rder was necessary to prevent respondents from filing actions or motions attacking the validity of the Clerk's Order of May 12, 2011 as well as to prevent [respondents] from bringing individual actions against attorneys and staff acting on the behalf of [Wells Fargo],” was based on substantial evidence in the record. It was clear to the trial court that all of respondents' filings were attempts to challenge and avoid the foreclosure order. Thus, the trial court entered the following order:
Respondents are hereby ordered and enjoined from filing any action or motion in the state courts of North Carolina that pertains to the foreclosure in this case or from filing any motion or action against the Petitioner or attorneys and staff for the Petitioner whether in their corporate or individual capacities unless such motions or actions are accompanied by a certificate from an attorney, licensed to practice law in North Carolina, which states the attorney has read the document to be filed as well as this [G]atekeeper [O]rder and concludes that the purported purposed filing meets the standards of Rule 11 of the North Carolina Rules of Civil Procedure.
We find no abuse of discretion from the trial court's imposition of this most appropriate sanction of a Gatekeeper Order. In fact, out Court of Appeals issued an order on 24 April 2014 in response to multiple appellate filings stating that “[respondents] are cautioned not to file any further motions or petitions with this Court seeking a stay in these foreclosure proceedings, as that relief has already been denied by this Court repeatedly, and warned that sanctions may be imposed upon them if they do.”
Based on the foregoing, we hold that respondents have failed to demonstrate any abuse of discretion by the trial court in entering the Gatekeeper Order as an appropriate Rule 11 sanction. See Fatta,––– N.C.App. at ––––, 735 S.E.2d at 845. Accordingly, we affirm the trial court's order.
III
Finally, respondents argue that the trial court abused its discretion by not allowing respondents to enjoin the sale of the property when they brought their equitable claims before the trial court. Respondents contend “[e]very claim made and defense raised by [respondents] [was] meritorious and supported by law ....“ However, respondents provide no authority in support of this argument; therefore, it is deemed abandoned. N.C. R.App. P. 28(b)(6) (2014) (“Issues not presented in a party's brief, or in support of which no reason or argument is stated, will be taken as abandoned....”). Moreover, we note for the record that the trial court's conclusion of law 4 was supported by evidence in the record:
4. None of the actions or motions filed by [ ] Respondents as to purported claims or defenses as they relate to the merits of this foreclosure case are well grounded in fact or warranted by existing law.
Accordingly, we dismiss respondents' argument.
For the reasons stated herein, we affirm the judgment of the trial court.
AFFIRMED.
Judges DILLON and DIETZ concur.
Report per Rule 30(e).
Opinion
Appeal by respondents from order entered 17 May 2013 by Judge C.W. Bragg in Union County Superior Court. Heard in the Court of Appeals 5 November 2014.