Wells Fargo Bank, N.A. v. Fischer ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA13-1273
NORTH CAROLINA COURT OF APPEALS
Filed: 5 August 2014
WELLS FARGO BANK, N.A.,
Plaintiff,
v. Mecklenburg County
No. 12 CVS 12252
KEVIN SCOTT FISCHER,
Defendant.
Appeal by Defendant from order entered 22 July 2013 by
Judge Robert T. Sumner in Mecklenburg County Superior Court.
Heard in the Court of Appeals 7 May 2014.
Parker Poe Adams & Bernstein LLP, by William L. Esser IV
and Katie M. Iams, for Plaintiff.
Ellis & Parker PLLC, by L. Neal Ellis, Jr., and Nathaniel
Parker, for Defendant.
STEPHENS, Judge.
Procedural and Factual Background
This appeal arises from an attempt by Plaintiff Wells Fargo
Bank, N.A., to collect damages and attorney’s fees from
Defendant Kevin Scott Fischer as a result of his default on two
promissory notes executed in 2008. In 2006, Fischer signed
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purchase agreements on two lots, numbers 77 and 78, in a
development known as “Grandfather Vistas.”1 The purchase of the
lots was part of a large investment scheme which has resulted in
other lawsuits and appeals to this Court. In greatly simplified
form, the scheme involved the sale of certain lots by the
Grandfather Vistas developers to investment purchasers for
$500,000 each. Under the scheme, the developers promised to
repurchase the lots from the investment purchasers after twelve
months for $625,000 apiece and also promised to cover all
interest payments on the loans. Thus, in effect, they offered
the investment purchasers a guaranteed return of $125,000 in
twelve months on each lot purchased. The developers arranged
for Wells Fargo and two other banks to be “preferred lenders” in
the sale of the lots. The other two lenders used an appraiser
named A. Greg Anderson exclusively for appraisals as part of
their underwriting process. Wells Fargo employed several
appraisers to value properties in Grandfather Vistas, including
Kyle Knight, who appraised Fischer’s lots. Every lot,
regardless of the appraiser used, was appraised at $500,000, the
1
The record suggests that Fischer purchased additional lots
using loans from another lender. Those loans are not part of
this action.
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exact minimum value required to support the 90% loan-to-value
loans the developers had arranged with the preferred lenders as
part of the investment scheme.2 The money raised by the sales
was supposed to finance the development of Grandfather Vistas,
such that the developers would end up with a development of
residential lots ready for sale after their repurchase from the
investment purchasers. However, the money raised by the sales
was not put back into the development, the developers never
repurchased the lots, and, by 2007, Grandfather Vistas
collapsed, leaving the investment purchasers with large loan
obligations and lots worth only a fraction of their appraised
values. Several of the developers later faced criminal charges
in connection with the investment scheme.
Fischer’s two loans from Wells Fargo were evidenced by two
promissory notes dated 27 September 2006, each in the original
principal amount of $455,717. Each required Fischer to make
monthly interest payments for 25 months and to repay the entire
amount of the principal and accrued interest by 27 September
2008. Following the collapse of Grandfather Vistas, Fischer
asked Wells Fargo to refinance both of his loans, which Wells
2
The loans were originally made by Wachovia Bank, N.A. Wells
Fargo is the successor by merger to Wachovia Bank, N.A.
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Fargo agreed to do. On 15 October 2008, Fischer executed and
delivered to Wells Fargo two promissory notes, each in the
original principal amount of $458,621.57. Under each of the
2008 notes, Fischer was required to make monthly payments for 35
months and to repay the entire amount of the original principal
and accrued interest by 15 October 2011. Fischer defaulted on
both 2008 notes.
In December 2008, Fischer and other investment purchasers
initiated a lawsuit against, inter alia, the developers, Wells
Fargo, other lenders involved in the scheme, and Anderson (“the
Fazzari case”).3 The Fazzari plaintiffs brought claims of, inter
alia, negligence, negligent misrepresentation, conversion, and
civil conspiracy against Wells Fargo, alleging that the bank had
conspired with the other defendants to sell overvalued lots
based on inflated appraisals and had engaged in wrongful conduct
in making the loans used to purchase Grandfather Vistas lots.
Fischer sought damages and rescission of the 2008 notes.
In the Fazzari case, on 15 July 2011, Anderson moved for
summary judgment on all remaining claims4 against him, asserting
3
None of the Wells Fargo appraisers were named as defendants in
the Fazzari case.
4
The record in the Fazzari case suggests that some of the
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inter alia, that the Fazzari plaintiffs could not show reliance
on any of his alleged misrepresentations. On the same date, the
lenders filed motions for summary judgment as to all remaining
claims against them, on their counterclaims against the Fazzari
plaintiffs, and for attorneys’ fees. On 16 February 2012, the
court entered summary judgment in favor of Anderson on all
claims against him. By order entered 8 March 2012, the court
dismissed all remaining claims against Wells Fargo and the other
lender defendants in the Fazzari case.
On 25 June 2012, Wells Fargo initiated this action against
Fischer by filing a complaint alleging Fischer had defaulted on
the 2008 notes. On 8 October 2012, Fischer filed an answer and
motion to dismiss, asserting that Wells Fargo had failed to
state a claim upon which relief could be granted because the
issue of any monies owed under the 2008 notes was not ripe while
the Fazzari appeal was pending. On 19 June 2013, Wells Fargo
moved for summary judgment, supporting that motion with
Fischer’s responses to its requests for admissions, the
affidavit of a bank employee, and portions of Fischer’s
original Fazzari plaintiffs settled or withdrew their claims, or
otherwise dropped out of that case before the lenders and
appraiser filed their motions for summary judgment.
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deposition from the Fazzari case. In response, Fischer argued
that resolution of the summary judgment motion should be
postponed and supported this request with (1) an amended joint
motion for continuance filed by the parties on 28 March 2013,
which sought to continue the trial date in the matter in light
of the complexity of the underlying factual circumstances; and
(2) a copy of the 10 July 2013 default judgment order entered
against the developer defendants in the Fazzari case. Following
a hearing, on 22 July 2013 the trial court entered an order
granting summary judgment in favor of Wells Fargo. Fischer
appeals.
Discussion
Fischer argues that the trial court erred in entering
summary judgment for Wells Fargo and granting a money judgment
against Fischer. We disagree.
It is well settled that summary judgment is
appropriate only 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 any party is entitled to a judgment as
a matter of law. . . . The record is
considered in the light most favorable to
the party opposing the motion.
Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C.
214, 219-20, 513 S.E.2d 320, 324 (1999) (citation, internal
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quotation marks, and emphasis omitted). “The movant has the
burden of establishing the lack of any triable issue of fact.”
Rankin v. Food Lion, 210 N.C. App. 213, 215, 706 S.E.2d 310, 312
(2011) (citation and internal quotation marks omitted).
However, “[o]nce the party seeking summary judgment makes the
required showing, the burden shifts to the nonmoving party to
produce a forecast of evidence demonstrating specific facts, as
opposed to allegations, showing that he can at least establish a
prima facie case at trial.” Id. at 217, 706 S.E.2d at 313(citation and internal quotation marks omitted; italics added).
“[A]ffidavits or other material offered which set forth facts
which would not be admissible in evidence should not be
considered when passing on the motion for summary judgment.”
Id. at 218, 706 S.E.2d at 314 (citation and internal quotation
marks omitted). Further, “the trial court may not consider an
unverified pleading when ruling on a motion for summary
judgment.” Id. at 220, 706 S.E.2d at 315-16 (citation and
internal quotation marks omitted).
Here, Fischer admitted executing the 2008 notes which
required full repayment no later than October 2011 and
defaulting on those obligations such that their unpaid balance
is in the amount alleged by Wells Fargo. In his answer, Fischer
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alleged three affirmative defenses: (1) that Wells Fargo
breached the implied duty of good faith and fair dealing in
making the loans; (2) estoppel, unclean hands, and laches; and
(3) the risk of inconsistent verdicts in light of the Fazzari
case. However, Fischer failed to present any affidavits or
other sworn evidence in support of these defenses.5 Having
admitted defaulting on the 2008 notes and failing to forecast
evidence in support of even a prima facie case for his alleged
affirmative defenses, Fischer simply did not meet his burden on
summary judgment. See id. at 217, 706 S.E.2d at 313.
Further, we note that, even had Fischer presented sworn
evidence in support of his affirmative defenses, he would not
prevail on the merits of those defenses in light of our decision
in the Fazzari case. “[I]f the granting of summary judgment can
be sustained on any grounds, it should be affirmed on appeal.
If the correct result has been reached, the judgment will not be
disturbed even though the trial court may not have assigned the
5
Fischer notes that he did submit a document entitled “Exhibit A
Detailed Statement of Facts Supporting Defenses/Counterclaims
asserted by Fischer (including references to documents and
deposition transcripts from the Fazzari Litigation).” However,
this document is both unsworn and, more importantly, merely a
summary of excerpts from evidence in the Fazzari case.
Accordingly, the document was not evidence to be considered by
the trial court in ruling on the summary judgment motion.
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correct reason for the judgment entered.” Rankin, 210 N.C. App.
at 215, 706 S.E.2d at 313 (citation, internal quotation marks,
and brackets omitted). We have considered and rejected
Fischer’s arguments in the Fazzari case, filed contemporaneously
with this opinion. See Fazarri v. Infinity Partners, LLC, __
N.C. App. __, __ S.E.2d __ (2014). For the reasons discussed in
that opinion, summary judgment for Wells Fargo was proper in
this action to collect on the 2008 notes, even had Fischer
adequately supported his alleged affirmative defenses. See
Rankin, 210 N.C. App. at 215, 706 S.E.2d at 313 (“If the correct
result has been reached, the judgment will not be disturbed . .
. .”). Accordingly, the trial court’s order granting Wells
Fargo’s motion for summary judgment is
AFFIRMED.
Judges STROUD and MCCULLOUGH concur.
Report per Rule 30(e).