Foster v. Wells Fargo, NA ( 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An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA13-974
NORTH CAROLINA COURT OF APPEALS
Filed: 4 March 2013
RALPH M. FOSTER and SHYVONNE L.
STEED-FOSTER,
Plaintiffs,
v. Durham County
No. 12 CVS 6015
WELLS FARGO, NA; FEDERAL NATIONAL
MORTGAGE ASSOCIATION, AKA FANNIE
MAE; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS INCORPORATED,
AKA, MERS; and SHAPIRO AND INGLE;
Defendants.
Appeal by plaintiffs from order entered 29 April 2013 by
Judge Paul G. Gessner in Durham County Superior Court. Heard in
the Court of Appeals 9 January 2014.
Ralph M. Foster and Shyvonne L. Steed-Foster, pro se,
plaintiffs-appellants.
Womble, Carlyle, Sandridge, and Rice, LLP, by Amanda G. Ray
and Jesse A. Schaefer, for defendants-appellees.
HUNTER, JR., Robert N., Judge.
Ralph M. Foster and Shyvonne L. Steed-Foster (“Plaintiffs”)
appeal from a final order dismissing their complaint with
prejudice for failure to state a claim upon which relief can be
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granted. Plaintiffs contend that their complaint is
sufficiently particular to state causes of action for fraud,
unfair and deceptive trade practices, and civil conspiracy
against Wells Fargo, Federal National Mortgage Association
(“Fannie Mae”), Mortgage Electronic Registration Systems
Incorporated (“MERS”), and the law firm of Shapiro and Ingle
(collectively, “Defendants”). Plaintiffs also contend that the
trial court erred in dismissing the complaint with prejudice
without issuing a written order disposing of Plaintiffs’ pending
motions. For the following reasons, we affirm the trial court’s
order.
I. Factual & Procedural History
On 10 December 2012, Plaintiffs filed a complaint against
Defendants in Durham County Superior Court alleging fraud,
unfair and deceptive trade practices, and civil conspiracy. The
complaint requested damages and a permanent injunction
preventing Wells Fargo from foreclosing on Plaintiffs’ property.
The body of Plaintiffs’ complaint characterizes the foreclosure
practices of Defendants as a “scheme” devised by Fannie Mae to
defraud the court. Most of Plaintiffs’ allegations are general
in nature, with only a few alleging specific facts that took
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place in Plaintiffs’ case. The specific facts that are alleged,
and that are pertinent to our review, are as follows.
On 26 February 2012, Plaintiffs executed a promissory note
in the amount of $340,506 in favor of TBI Mortgage Company in
order to purchase property at 308 South Bend Drive in Durham.
The note was secured by a deed of trust, which was attached and
incorporated into the complaint by reference. The deed of trust
identifies MERS as TBI Mortgage Company’s nominee. The
complaint also included a copy of a corporate assignment of the
deed of trust from MERS, as nominee of TBI Mortgage Company, to
Wells Fargo. A copy of the promissory note was not attached to
the complaint.
Plaintiffs allege that the promissory note was indorsed in
blank by TBI Mortgage Company and sold to Fannie Mae, who
securitized the loan. Plaintiffs allege that Fannie Mae
required Wells Fargo to make false representations to Plaintiffs
regarding Wells Fargo’s status as an owner and holder of the
promissory note. Specifically, Plaintiffs allege that Wells
Fargo represented itself as a loan servicer for TBI Mortgage
Company and as the owner and holder of both the promissory note
and deed of trust. Plaintiffs further allege that these
representations were false and that in reliance on these
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representations, Plaintiffs were induced to pay principal and
interest payments on their mortgage to “Wells Fargo and/or
Fannie Mae.” According to Plaintiffs, they had no choice but to
rely on these representations because “Wells Fargo controlled
the relevant document and information regarding the true
ownership of their loan but chose to hide such information from
[P]laintiffs.” Shapiro and Ingle allegedly perpetuated Wells
Fargo’s false representations by sending collection letters to
Plaintiffs corroborating Wells Fargo’s claims.
On 5 February 2013, Defendant Shapiro and Ingle filed a
motion to dismiss the complaint pursuant to N.C. R. Civ. P.
12(b)(6). On 15 February 2013, the remaining Defendants also
filed a motion to dismiss Plaintiffs’ complaint. Thereafter,
Plaintiffs filed an amended complaint adding a claim to quiet
title to their property and a claim for injunctive relief.
Plaintiffs also filed a motion for “Permanent and or Temporary
Injunctive Relief” asking the trial court to “issue a permanent
injunction against any attempt by defendants and Wells Fargo
Bank, NA to commence future foreclosure proceedings against
their property.”
A hearing on the motions was scheduled for 11 April 2013.
Before the hearing took place, Plaintiffs filed a motion for
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leave to file a second amended complaint and withdrew their
first amended complaint. At the hearing, Plaintiffs advised the
trial court that they wished to proceed under their original
complaint. By order dated 29 April 2013, the trial court
dismissed Plaintiffs’ complaint with prejudice. Plaintiffs
filed timely notice of appeal.
II. Jurisdiction
Plaintiffs’ appeal from the superior court’s order
dismissing the complaint with prejudice lies of right to this
Court pursuant to N.C. Gen. Stat. § 7A-27(b) (2013).
III. Analysis
Plaintiffs’ appeal presents two questions for our review:
(1) whether the trial court erred in dismissing Plaintiff’s
complaint pursuant to N.C. R. Civ. P. 12(b)(6); and (2) whether
the trial court properly considered Plaintiff’s pending motions
prior to entry of the dismissal order. We address each in turn.
A. Dismissal Pursuant to Rule 12(b)(6)
Plaintiffs’ contend that their complaint is sufficiently
particular to state claims of fraud, unfair and deceptive trade
practices, and civil conspiracy against Defendants. We
disagree.
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In reviewing the trial court’s decision to dismiss
Plaintiffs’ complaint, “[t]his Court must conduct a de novo
review of the pleadings to determine their legal sufficiency and
to determine whether the trial court’s ruling on the motion to
dismiss was correct.” Leary v. N.C. Forest Prods., Inc., 157
N.C. App. 396, 400, 580 S.E.2d 1, 4, aff’d per curiam, 357 N.C.
567, 597 S.E.2d 673 (2003). “‘On a Rule 12(b)(6) motion to
dismiss, the question is whether, as a matter of law, the
allegations of the complaint, treated as true, state a claim
upon which relief can be granted.’” Allred v. Capital Area
Soccer League, Inc., 194 N.C. App. 280, 282, 669 S.E.2d 777, 778
(2008) (quoting Wood v. Guilford Cty., 355 N.C. 161, 166, 558
S.E.2d 490, 494 (2002)). Accordingly, we must consider
Plaintiffs’ complaint “to determine whether, when liberally
construed, it states enough to give the substantive elements of
a legally recognized claim.”1 Governors Club, Inc. v. Governors
Club Ltd. P’Ship, 152 N.C. App. 240, 246, 567 S.E.2d 781, 786
(2002) (internal citations omitted), aff’d per curiam, 357 N.C.
46, 577 S.E.2d 620 (2003).
1
Both parties cite to material outside of the four corners of
Plaintiffs’ original complaint for factual propositions and to
support their argument. However, the trial court’s dismissal
order addressed Plaintiffs’ original complaint and our review is
limited to that document on appeal.
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1. Fraud
Plaintiffs’ first cause of action against Defendants is for
fraud. The essential elements of actionable fraud are “(1)
[f]alse representation or concealment of a material fact, (2)
reasonably calculated to deceive, (3) made with intent to
deceive, (4) which does in fact deceive, (5) resulting in damage
to the injured party.” Ragsdale v. Kennedy, 286 N.C. 130, 138,
209 S.E.2d 494, 500 (1974).
“Allegations of fraud are subject to more exacting pleading
requirements than are generally demanded by our liberal rules of
notice pleading.” Harrold v. Dowd, 149 N.C. App. 777, 782, 561
S.E.2d 914, 918 (2002) (quotation marks and citation omitted).
Pursuant to N.C. R. Civ. P. 9(b), “[i]n all averments of
fraud . . . the circumstances constituting fraud or mistake
shall be stated with particularity.” Furthermore, “the
particularity requirement is met by alleging time, place and
content of the fraudulent representation, identity of the person
making the representation and what was obtained as a result of
the fraudulent acts or representations.” Terry v. Terry, 302
N.C. 77, 85, 273 S.E.2d 674, 678 (1981).
Here, Plaintiffs’ claims of fraud relate to the alleged
false representations made by Wells Fargo concerning its status
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as a loan servicer for TBI Mortgage Company and its status as a
holder of the promissory note. However, Plaintiffs’ complaint
fails to specifically identify any individual acting on behalf
of Wells Fargo (or any other defendant) who allegedly made these
representations. Accordingly, Plaintiff’s allegations of fraud
were properly dismissed. See Trull v. Cent. Carolina Bank &
Trust Co., 117 N.C. App. 220, 224, 450 S.E.2d 542, 545 (1994)
(“A complaint charging fraud against a corporation must
specifically allege the time and occasion of the
misrepresentation or concealment of material fact and the
individual who made the misrepresentation or concealment in
order to satisfy the requirements of Rule 9(b).”); Coley v. N.C.
Nat. Bank, 41 N.C. App. 121, 125, 254 S.E.2d 217, 220 (1979)
(“It is not sufficient to conclusorily allege that a corporation
made fraudulent misrepresentations; the pleader in such a
situation must allege specifically the individuals who made the
misrepresentations of material fact, the time the alleged
misstatements were made, and the place or occasion at which they
were made.”).
2. Unfair and Deceptive Trade Practices
Plaintiffs’ complaint also alleges that Defendants engaged
in unfair and deceptive trade practices in violation of N.C.
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Gen. Stat. § 75-1.1 (2013). “To state a claim for unfair and/or
deceptive trade practices, the plaintiffs must allege that (1)
the defendants committed an unfair or deceptive act or practice,
or an unfair method of competition, (2) in or affecting
commerce, (3) which proximately caused actual injury to the
plaintiffs or to the plaintiffs’ business.” Birtha v. Stonemor,
N. Carolina, LLC, ___ N.C. App. ___, ___, 727 S.E.2d 1, 10
(2012).
Plaintiffs’ complaint does not allege new conduct by
Defendants constituting an unfair and deceptive trade practice.
Rather, the complaint merely references the same conduct alleged
as being fraud, i.e., Wells Fargo’s alleged false
representations concerning its right to collect payment on the
promissory note. In reviewing whether this alleged conduct is
sufficiently particular to state a claim for relief under N.C.
R. Civ. P. 8(a), we note that this Court is not required to
accept as true allegations that are “merely conclusory,
unwarranted deductions of fact, or unreasonable inferences.”
Good Hope Hosp., Inc. v. N.C. Dep’t of Health & Human Servs.,
174 N.C. App. 266, 274, 620 S.E.2d 873, 880 (2005) (quotation
marks and citation omitted). Furthermore, “[d]ismissal is proper
when . . . the complaint on its face reveals the absence of
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facts sufficient to make a good claim.” Bissette v. Harrod, ___
N.C. App. ___, ___, 738 S.E.2d 792, 797 (2013) (quotation marks
and citations omitted).
Here, Plaintiffs’ assertion that Wells Fargo committed an
unfair or deceptive act is premised on Plaintiffs’ unsupported
characterization of the mortgage industry’s foreclosure
practices as a “fraudulent [s]cheme” and assumptions made
therefrom. We do not accept as true those allegations in
Plaintiffs’ complaint which are based on unwarranted deductions
of fact and unreasonable inferences.
Moreover, Plaintiffs’ complaint alleges that their
promissory note was indorsed in blank and sold to Fannie Mae.
Later, the complaint alleges that Wells Fargo “controlled the
relevant document and information regarding the true ownership
of their loan.” The complaint also alleges that Wells Fargo was
never the owner of the deed of trust, yet includes a copy of a
corporate assignment of the deed of trust from MERS, acting as
nominee for TBI Mortgage Company, to Wells Fargo. Given these
allegations, it is insufficient for Plaintiffs to allege that
they paid principal and interest payments to Wells Fargo “to
their damage.” Plaintiffs have failed to allege that the sums
paid were not applied to their outstanding mortgage debt.
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Without such an allegation, Plaintiffs have not alleged an
actual injury proximately resulting from Wells Fargo’s alleged
misrepresentations. Accordingly, Plaintiffs’ unfair and
deceptive trade practices claim was properly dismissed.
3. Civil Conspiracy
The final claim asserted in Plaintiffs’ complaint is civil
conspiracy. Again, the basis of Plaintiffs’ claim is the
alleged false representations made by Wells Fargo in connection
with its right to collect on the promissory note. However,
“there is not a separate civil action for civil conspiracy in
North Carolina.” Dove v. Harvey, 168 N.C. App. 687, 690, 608
S.E.2d 798, 800 (2005).
In civil conspiracy, recovery must be on the
basis of sufficiently alleged wrongful overt
acts. The charge of conspiracy itself does
nothing more than associate the defendants
together and perhaps liberalize the rules of
evidence to the extent that under proper
circumstances the acts and conduct of one
might be admissible against all.
Id. (quotation marks and citation omitted). Because we hold
Plaintiffs have not sufficiently alleged the underlying wrongful
acts of fraud or unfair and deceptive trade practices,
Plaintiffs’ civil conspiracy claim is without merit.
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B. Plaintiffs’ Pending Motions
Finally, Plaintiffs contend that the trial court erred in
dismissing their complaint with prejudice without issuing a
written order disposing of Plaintiffs’ motion for injunctive
relief and their motion for leave to file a second amended
complaint. This argument is without merit because the trial
court’s order does address the substance of these motions. The
order includes the following:
8. During the April 11, 2013[] hearing,
Plaintiffs advised the Court that they
wished to proceed under their original
Complaint rather than the Amended
Complaint.
9. Withdrawal of the Amended Complaint
arguably effectuates a dismissal of
this civil action, but the Court will
rule on the merits of the Motions in
light of Plaintiffs’ desire to proceed
under their original Complaint and to
promote judicial economy.
10. Plaintiffs appear to seek a permanent
injunction against any foreclosure sale
under the Deed of Trust without regard
to whether there is a present—or
future—default under the promissory
note secured by the Deed of Trust.
11. Plaintiffs are not entitled to a
permanent injunction against a
foreclosure sale of the Property.
Likewise, Plaintiff’s [sic] remaining
claims fail to state a claim on which
relief may be granted.
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We affirm the trial court’s dismissal order in its entirety.
IV. Conclusion
For the foregoing reasons, we affirm the trial court’s
order dismissing Plaintiffs’ complaint with prejudice.
Affirmed.
Judges STROUD and DILLON concur.
Report per rule 30(e).