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Bank of New York Mellon v. Withers

Court of Appeals of North Carolina

April 7, 2015

THE BANK OF NEW YORK MELLON F/K/A THE BANK OF NEW YORK AS SUCCESSOR TO JP MORGAN CHASE BANK NATIONAL ASSOCIATION AS TRUSTEE FOR THE BENEFIT OF THE CERTIFICATE OF HOLDERS OF EQUITY ONE ABS, INC. MORTGAGE PASS THROUGH CERTIFICATES SERIES 2003-2, Plaintiff
v.
JUNE WITHERS, CHARLES L. STEEL, IV, SOLELY IN HIS CAPACITY AS GUARDIAN OF THE ESTATE OF JUNE WITHERS, RHONDA WITHERS, MARGARET YOUNG, ROBERT YOUNG, SHELIA SMITH, FAYE KEARNEY, ROBERT KEARNEY, NORTH CAROLINA DEPARTMENT OF REVENUE, BRANCH BANKING AND TRUST COMPANY AND HSBC MORTGAGE SERVICES, INC., Defendants

Heard in the Court of Appeals February 17, 2015

Durham County. No. 12 CVS 2253.

Affirmed.

Ragsdale Liggett, by Dorothy Bass Burch and Ashley H. Campbell, for The Bank of New York Mellon, plaintiff-appellee.

Berman & Associates, by Gary K. Berman, for Margaret Young, Shelia Smith, and Faye Kearney, defendant-appellants.

Judges McCullough and Dietz concur.

OPINION

Page 763

Appeal by defendants from an order for summary judgment to quiet title under the doctrine of equitable subrogation entered 9 May 2014 by Judge Howard E. Manning, Jr. in Durham County Superior Court.

CALABRIA, Judge.

In 2002, June (" June" ) Withers was the sole owner of the property located at 121 West Cornwallis Road in Durham, NC (the " property" ). At the time, June and her daughter, Rhonda (" Rhonda" ) Withers, sought a home loan from Popular Financial Services (" PFS" ) to refinance the prior deed of trust on the property from Accredited Home Lenders (" AHL" ). To qualify for the loan, June and Wanda agreed to two conditions: (1) that PFS would have a first position lien on the property through a deed of trust executed by June and Rhonda Withers and (2) that June would execute a quitclaim deed with June as grantor and June and Rhonda as joint tenants. Accordingly, PFS instructed the closing attorney Natasha Newkirk (" Newkirk" ) to prepare a deed with June as the grantor and June and Rhonda as joint tenants and to pay the prior deed of trust to AHL in full.

Page 764

Newkirk prepared a quitclaim deed that not only included June and Rhonda as grantees, but also mistakenly included June's three other daughters, Margaret Young (" Young" ), Shelia Smith (" Smith" ), and Faye Kearney (" Kearney" ). Therefore, June conveyed an undivided interest to June, Rhonda, Young, Smith, and Kearney as tenants in common. On 10 January 2003, Newkirk recorded both the erroneous quitclaim deed and the deed of trust in Durham County. Therefore, June and Rhonda shared only a two-fifth interest in the property instead of the entire property. Newkirk, as directed by PFS, also paid the AHL deed of trust in full. PFS assigned the PFS deed of trust to the Bank of New York Mellon (" plaintiff" ).

On 6 March 2012, plaintiff filed an action against the five tenants seeking, inter alia, to reform the deed of trust to include the portions of property held by Young, Smith, and Kearney so as to impose a constructive trust on the entirety of the property or, in the alternative, to equitably subrogate the deed of trust to the prior deed of trust held by AHL. June passed away on 28 December 2013. Rhonda executed a quitclaim deed to plaintiff transferring the entirety of her interest in the property, including any interest obtained following the passing of her mother, June. Therefore, the only remaining defendants were Young, Smith, and Kearney.

Plaintiff and the remaining defendants filed motions for summary judgment. After a hearing, the trial court denied plaintiff's attempts to reform the deed of trust and to impose a constructive trust and granted defendants' motions for summary judgment on those issues. At the same time, the trial court granted plaintiff's motion for summary ...


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