William Scherer v. Steel Creek Property Owners Ass'n

UNPUBLISHED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Affirmed by unpublished per curiam opinion.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Unpublished opinions are not binding precedent in this circuit.
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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.
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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
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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)
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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).
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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.
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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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