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Perry v. Bank of America, N.A.

Court of Appeals of North Carolina

February 7, 2017

DONALD WAYNE PERRY SR. and wife PATSY K. PERRY, Plaintiffs,
v.
BANK OF AMERICA, N.A., Defendant.

          Heard in the Court of Appeals 8 September 2016.

         Appeal by plaintiffs from order entered 29 December 2015 by Judge Kevin M. Bridges in Stanly County, No. 14 CVS 1147 Superior Court.

          Scarbrough & Scarbrough, PLLC, by James E. Scarbrough and John F. Scarbrough, for plaintiffs-appellants.

          McGuireWoods LLP, by Scott I. Perle and Monica E. Webb, for defendant-appellee.

          DIETZ, Judge.

         Plaintiffs Donald Wayne Perry, Sr. and Patsy K. Perry appeal from the dismissal of their lawsuit against Bank of America. The Perrys have home equity lines of credit with Bank of America and are in default on their payments. The Perrys contend that they are not obligated to pay the outstanding balances because those balances were procured through fraud by their son, who withdrew funds from the credit lines without his parents' authorization.

          As explained below, we affirm in part and reverse in part. The Perrys sought a declaration that they were not obligated to repay the balances on the lines of credit. The sole basis on which Bank of America defends the dismissal of that declaratory judgment claim is that the claim does not allege an actual controversy. As explained below, although there may be other grounds to dismiss the claim, the claim satisfies the legal criteria for declaratory relief, and thus we reverse the dismissal of that claim and remand for further proceedings. We affirm the trial court's dismissal of the Perrys' claim under N.C. Gen. Stat. § 45-36.9 because it fails to state a claim on which relief can be granted.

         Facts and Procedural History

         On 17 December 2014, Plaintiffs Donald Wayne Perry, Sr. and Patsy K. Perry sued Defendant Bank of America, N.A. The Perrys' complaint, as amended, asserted claims for declaratory judgment, violation of N.C. Gen. Stat. § 45-36.9, injury to credit, and punitive damages. The claims arise from two home equity lines of credit that the Perrys obtained from Bank of America or its predecessors.

         In 1996, Plaintiffs obtained an equity line loan with a credit limit of $33, 100.00 secured by a deed of trust on real property located in Locust, North Carolina. In 2003, the Perrys used a mortgage loan to pay off the balance on the 1996 equity line. In 2007, the Perrys obtained a second home equity line of credit with a credit limit of $124, 000.00 secured by a deed of trust on real property located in Charlotte, North Carolina.

         In 2014, the Perrys received a notice from Bank of America that the 1996 equity line was delinquent with an outstanding balance of $19, 451.27. The Perrys also discovered that there was a balance owed on the 2007 line of credit in excess of the $124, 000 limit. According to the complaint, the Perrys believed the 1996 line of credit had been cancelled when they paid off the balance using the proceeds of their mortgage loan in 2003. The Perrys also alleged that the balances on both lines of credit were incurred through fraud by their son, who was not authorized to withdraw funds from the lines of credit. Finally, the Perrys alleged that they demanded that Bank of America cancel the deeds of trust securing the lines of credit because they owed no balance on either account but the bank refused to do so.

         On 23 September 2015, Bank of America moved to dismiss the Perrys' amended complaint. After a hearing, the trial court granted the bank's motion and dismissed all claims in the amended complaint.[1] The Perrys timely appealed.

         Analysis

         I. Dismissal of ...


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