William Scherer v. Steel Creek Property Owners Ass'n ( 2017 )


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  •                               UNPUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    No. 16-1485
    WILLIAM R. SCHERER; ANNE SCHERER,
    Plaintiffs - Appellants,
    v.
    STEEL CREEK PROPERTY OWNERS ASSOCIATION; PAUL IOOSS,
    Defendants - Appellees,
    and
    STEPHEN IOOSS,
    Defendant.
    Appeal from the United States District Court for the Western
    District of North Carolina, at Asheville. Martin K. Reidinger,
    District Judge. (1:13-cv-00121-MR-DLH)
    Submitted:   February 7, 2017               Decided:   March 29, 2017
    Before NIEMEYER, SHEDD, and KEENAN, Circuit Judges.
    Affirmed by unpublished per curiam opinion.
    James M. Kimzey, Candace A. Mance, CONRAD & SCHERER, LLP,
    Brevard, North Carolina, for Appellants. Jeffrey S. Bolster, J.
    Wriley McKeown, BOLSTER ROGERS & MCKEOWN, LLP, Charlotte, North
    Carolina; Paul E. Culpepper, YOUNG, MORPHIS, BACH & TAYLOR,
    L.L.P., Hickory, North Carolina, for Appellees.
    Unpublished opinions are not binding precedent in this circuit.
    2
    PER CURIAM:
    William R. Scherer and Anne Scherer appeal the decision of
    the   district       court   in    this    diversity         action    raising    various
    claims pursuant to North Carolina law.                        The claims related to
    property the Scherers purchased in the Steel Creek development
    of    Transylvania      County,      North       Carolina.        The    property     was
    subject    to    thirteen       protective        covenants      (“the    Covenants”),
    compliance      with    which      was    overseen      by    Steel     Creek    Property
    Owners Association (“the POA”).                  As relevant here, the Covenants
    established rules for new construction and for road maintenance
    fees.
    Based     on   interactions         with    the   POA     over    development    of
    buildings and roads to be part of a horse farm the Scherers were
    developing on their Steel Creek property and on disputes over
    assessments     by     the   POA    for    the    Scherers’      lots,    the    Scherers
    filed this suit against the POA and two of its officers. 1                            The
    complaint alleged, as relevant here, several violations of the
    North Carolina Debt Collection Act, N.C. Gen. Stat. §§ 75-50 to
    -56 (2015) (NCDCA), and sought declaratory relief and attorney’s
    fees.     Following discovery, the POA and the Scherers cross-moved
    1 The Scherers do not challenge the district court’s
    dismissal of the single claim against Paul Iooss—one of the
    POA’s officers.    The other officer, Stephen Iooss, is not a
    party to this appeal.
    3
    for summary judgment.          The district court found the retroactive
    assessments imposed on the Scherers to be proper but held that
    the POA had overstated the rate of interest.                    Accordingly, the
    court awarded the Scherers a rebate of the overcharged interest.
    The   court    denied    all    requests       for     declaratory     relief   and
    declined to enter a fee award for either side.                       The Scherers
    timely appealed.
    I. NCDCA Claims
    We review a district court’s grant of summary judgment de
    novo, “viewing all facts and reasonable inferences therefrom in
    the light most favorable to the nonmoving party.”                        Smith v.
    Gilchrist, 
    749 F.3d 302
    , 307 (4th Cir. 2014) (internal quotation
    marks omitted).       Summary judgment is appropriate “if the movant
    shows that there is no genuine dispute as to any material fact
    and the movant is entitled to judgment as a matter of law.”
    Fed. R. Civ. P. 56(a); see Anderson v. Liberty Lobby, Inc., 
    477 U.S. 242
    , 248 (1986).
    The     elements   of     a     claim   for      unfair   debt    collection
    practices     under   the     NCDCA    are    spread    between   two    statutes.
    First, a plaintiff must establish (1) the existence of a debt,
    (2) owed by a consumer, and (3) attempted to be collected by a
    debt collector.       Reid v. Ayers, 
    531 S.E.2d 231
    , 233 (N.C. Ct.
    App. 2000); see N.C. Gen. Stat. § 75-50(1)-(3) (2015) (defining
    terms).     Second, a plaintiff “must satisfy the more generalized
    4
    requirements of all unfair or deceptive trade practice claims,”
    
    Reid, 531 S.E.2d at 234
    ,   namely,   “that   [(4)]   the   defendants
    committed an unfair or deceptive act or practice, or an unfair
    method of competition, [(5)] in or affecting commerce, [(6)]
    which proximately caused actual injury to the plaintiff[] or to
    the plaintiff[’s] business,” Walker v. Sloan, 
    529 S.E.2d 236
    ,
    243 (N.C. Ct. App. 2000); see N.C. Gen. Stat. § 75-1.1 (2015). 2
    The   Scherers   sought   recovery   under   the   NCDCA   for   the   POA’s
    allegedly illegal demands for retroactive assessments of road
    maintenance fees and interest, improper threats of liens and
    attorney’s fees, and harassing dunning letters.              Four of the
    Scherers’ five NCDCA arguments are predicated on the contention
    that the POA sought assessments to which it was not entitled.
    Before the district court, the Scherers contended that equitable
    estoppel and the doctrine of accord and satisfaction precluded
    the POA from imposing retroactive assessments.             On appeal, the
    Scherers make no mention of these arguments, instead claiming
    that the POA cannot recover retroactive assessments based on the
    doctrine of quasi-estoppel. 3        Because each of these arguments
    2With respect to the fourth element, nonexhaustive lists of
    qualifying unfair or deceptive acts or practices are enumerated
    in N.C. Gen. Stat. §§ 75-51 to -55 (2015).
    3These two types of estoppel have different elements and
    are thus distinct claims.     Compare Countrywide Home Loans,
    Inc. v. Bank One, N.A., 
    661 S.E.2d 259
    , 262-63 (N.C. Ct. App.
    (Continued)
    5
    either has been abandoned or is raised for the first time on
    appeal, these four NCDCA claims necessarily fail.                                 See In re
    Under Seal, 
    749 F.3d 276
    , 289-91 (4th Cir. 2014) (“[T]he failure
    to     first    present           claims    to       the    district    court     generally
    forecloses       our        consideration        of    [such]      matters   on    appeal.”
    (internal quotation marks omitted)); Mayfield v. Nat’l Ass’n for
    Stock Car Auto Racing, Inc., 
    674 F.3d 369
    , 377 (4th Cir. 2012)
    (“A party’s failure to raise or discuss an issue in his brief is
    to be deemed an abandonment of that issue.” (internal quotation
    marks omitted)).
    As to their remaining NCDCA claim, the Scherers asserted
    that    the    POA     incorrectly         stated      in    a   2013   letter     that   the
    assessments      were        past    due    and       had   accrued     interest.         Even
    assuming this to be true, such conduct does not fall within
    § 75-54(4)’s proscription on falsely representing the character
    of a debt, in our view.                    Thus, we conclude that the district
    court properly dismissed this claim.
    II. Declaratory Relief
    We     review        for    abuse    of    discretion        a   district    court’s
    decision       not     to     entertain     a     claim      for   declaratory      relief.
    2008)   (defining   equitable   estoppel), with  Shell  Island
    Homeowners Ass’n, Inc. v. Tomlinson, 
    517 S.E.2d 406
    , 413 (N.C.
    Ct. App. 1999) (defining quasi-estoppel).
    6
    Ellis v.     La.-Pac.     Corp.,    
    699 F.3d 778
    ,   788    (4th   Cir.    2012).
    Declaratory relief may be granted only where there is an actual
    controversy     under     Article     III       of     the    Constitution.         Volvo
    Constr. Equip. N. Am., Inc. v. CLM Equip. Co., 
    386 F.3d 581
    , 592
    (4th Cir. 2004).           To determine whether an actual controversy
    exists, courts look to “whether the conflicting contentions of
    the   parties       present   a    real,    substantial         controversy        between
    parties having adverse legal interests, a dispute definite and
    concrete, not hypothetical or abstract.”                      Babbitt v. United Farm
    Workers     Nat’l    Union,   
    442 U.S. 289
    ,    298   (1979)    (ellipsis        and
    internal quotation marks omitted).
    The    Scherers     argue     that    the        district     court   abused       its
    discretion     in    declining      (1)    to    declare      that    the   POA    cannot
    prevent their development of a horse farm, 4 (2) to define the
    terms “improved” and “vacant” under the Covenants, as related to
    the rate of fees due on each of their lots, and (3) to declare
    the   “harmony       of   design”    provision          in    the    Covenants      to    be
    arbitrary and unenforceable.
    The district court found the first request moot because the
    POA had conceded in its opposition to the Scherers’ motion for
    4The Scherers styled this request as a freestanding cause
    of action for equitable estoppel.    However, the substance of
    this claim clearly relates to the declaratory relief sought in
    their complaint.
    7
    summary judgment that it did not challenge the Scherers’ right
    to build a horse farm on their property or oppose the plans
    submitted and the development to date.                    The Scherers made no
    arguments    below    concerning    the       continued     viability     of   this
    claim.    For the first time on appeal, the Scherers argue that
    the voluntary cessation exception to the mootness doctrine keeps
    this   controversy    alive.     See     Friends     of    the   Earth,   Inc.   v.
    Laidlaw Envtl. Servs., Inc., 
    528 U.S. 167
    , 189 (2000).                     Because
    this argument was not presented to the district court, it is not
    properly before us.      See In re Under 
    Seal, 749 F.3d at 290
    .
    Similarly, the Scherers’ complaint did not ask the court to
    define the terms “improved” and “vacant,” nor did the Scherers
    seek this relief at the summary judgment stage.                    The Scherers
    also failed to include their harmony of design claim in their
    complaint.      See Wahi v. Charleston Area Med. Ctr., Inc., 
    562 F.3d 599
    , 617 (4th Cir. 2009) (“[A] plaintiff may not raise new
    claims    after      discovery     has       begun   without      amending       his
    complaint.”).     We therefore decline to review these claims on
    appeal.
    III. Attorney’s Fees
    We review fee award determinations for abuse of discretion.
    Jones v. Southpeak Interactive Corp. of Delaware, 
    777 F.3d 658
    ,
    675 (4th Cir. 2015).      Noting that the POA was successful on most
    of the Scherers’ claims, but that the Scherers prevailed on the
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    calculation of interest, the district court declined to award
    attorney’s    fees    to    either   side.       We   find    this   to    be   an
    appropriate exercise of discretion.
    IV. Conclusion
    Accordingly, we affirm the order of the district court.                    We
    dispense     with    oral   argument    because       the    facts   and    legal
    contentions    are   adequately      presented   in    the   materials      before
    this court and argument would not aid the decisional process.
    AFFIRMED
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