SunTrust Mortgage v. Donald Busby, Jr. , 469 F. App'x 205 ( 2012 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-1469
SUNTRUST MORTGAGE INCORPORATED,
Plaintiff – Appellee,
v.
DONALD D. BUSBY, JR.; ROBERT G. RONK; KENNARD DAVIS,
Defendants – Appellants,
and
LORI A. NASSIDA; KELLY M. BAKER; MICHAEL T. BAKER; ROBERT
JOHN CUPELLI; LEIGH K. CUPELLI; DEANNA DAVIS; DEAN R.
CUMMINGS; JEFFREY A. SYKES; GUY BARMOHA; GREGORY M.
SCHUETZ; NATALIE BOUTROS; PAUL MULA,
Defendants.
Appeal from the United States District Court for the Western
District of North Carolina, at Bryson City. Martin K.
Reidinger, District Judge. (2:09-cv-00003-MR-DLH)
Submitted: January 30, 2012 Decided: March 19, 2012
Before MOTZ, DAVIS, and WYNN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Michael G. Wimer, WIMER & ASSOCIATES, P.C., Asheville, North
Carolina, for Appellants. Robert D. Perrow, J.B. McGuire Boyd,
WILLIAMS MULLEN, P.C., Richmond, Virginia; Elizabeth C. Stone,
WILLIAMS MULLEN, P.C., Raleigh, North Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Defendants-Appellants Donald D. Busby, Robert G. Ronk,
and Kennard Davis (hereinafter “Appellants”) appeal the district
court’s order granting summary judgment in favor of
Plaintiff-Appellee SunTrust Mortgage, Inc. (hereinafter
“SunTrust”) in SunTrust’s action to recover a deficiency
judgment on promissory notes following foreclosure by power of
sale on Appellants’ properties. Finding no error, we affirm.
Appellants claim that the district court erred in
finding Appellants’ equitable defenses barred by res judicata
because they were not raised in a proceeding under N.C. Gen.
Stat. § 45-21.34 (2006). The district court held that
Appellants’ defenses challenged the validity of the debt and
default, which a North Carolina superior court had already
determined to be valid during a hearing to confirm the power of
sale foreclosure pursuant to N.C. Gen. Stat. § 45-21.16 (2006).
The court further held that, while Appellants could not have
raised these equitable defenses in the hearing under § 45-21.16,
they could have raised their equitable defenses in a proceeding
to enjoin the foreclosure under N.C. Gen. Stat. § 45-21.34(2006). The court concluded that their failure to do so
resulted in the rights of the parties to the foreclosure
becoming “fixed” and therefore barred Appellants from raising
such an equitable challenge in a later proceeding in a different
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forum. The court also noted that its holding was in accord with
cases from the Eastern and Middle Districts of North Carolina.
See Merrill Lynch Bus. Fin. Servs., Inc. v. Cobb, No.
5:07-cv-129D, 2008 WL 6155804, at *3-4 (E.D.N.C. Mar. 18, 2008);
Brumby, Jr. v. Deutsche Bank Nat'l Trust Co., No. 1:09CV144,
2010 WL 3219353 (M.D.N.C. Aug. 13, 2010) (adopting the
magistrate judge’s report and recommendation, 2010 WL 617368(M.D.N.C. Feb. 17, 2010)).
We find the district court’s reasoning to be
persuasive. The doctrine of res judicata applies “not only to
the points upon which the court was required by the parties to
form an opinion and pronounce a judgment, but to every point
which properly belonged to the subject in litigation and which
the parties, [e]xercising reasonable diligence, might have
brought forward at the time and determined respecting it.”
Painter v. Wake Cnty. Bd. of Educ., 217 S.E.2d 650, 655 (N.C.
1975). Both § 45-21.16 and § 45-21.34 are parts of a coherent
statutory framework intended to preserve the limited rights of a
mortgagor subject to a power of sale foreclosure. See, e.g., In
re Foreclosure of Deed of Trust by Goforth Props., Inc., 432
S.E.2d 855, 858-59 (N.C. 1995); In re Helms, 284 S.E.2d 553, 555
(N.C. Ct. App. 1981); see also Turner v. Blackburn, 389 F. Supp.
1250, 1258 (W.D.N.C. 1975). To permit challenges to the
validity of the default outside this framework would defeat the
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legislative intent behind the North Carolina statutory scheme.
Despite the unique timing of this case, we are not persuaded
that Appellants were effectively barred from filing an action
pursuant to § 45-21.34. Accordingly, we conclude that the
district court did not err in finding Appellants’ defenses
barred by the doctrine of res judicata.
Because we find Appellants’ equitable arguments to be
properly barred by res judicata, we find no merit in Appellants’
contention that a genuine issue of material fact existed with
respect to Appellants’ “quasi-estoppel” argument. We further
find that the district court did not err in holding that
Appellants’ challenge to the materiality of the default should
have been raised in the § 45-21.16 proceeding and therefore also
is barred by res judicata.
Appellants also argue that the district court erred in
finding that they had not forecast competent evidence to support
a claim to offset SunTrust’s deficiency judgment. Both cases
cited by Appellants are distinguishable. See First Citizens
Bank & Trust Co. v. Cannon, 530 S.E.2d 581, 583 (N.C. Ct. App.
2000); Queen v. Queen, No. COA07-1207, 2008 N.C. App. LEXIS 638,
at *5-6 (N.C. Ct. App. Mar. 19, 2008). Thus, we find that the
district court did not err in determining that tax valuations do
not, by themselves, provide competent evidence sufficient to
establish market value. See Star Mfg. v. Atl. Coast Line R.
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Co., 23 S.E.2d 32, 36 (N.C. 1942). We also conclude that the
district court did not err in determining that the county tax
assessor’s testimony did not provide additional support for the
tax valuation evidence and that his testimony as to valuation
was therefore inadmissible.
Accordingly, we affirm the judgment of the district
court. We dispense with oral argument because the facts and
legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional
process.
AFFIRMED
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