DONALD WAYNE PERRY SR. and wife PATSY K. PERRY, Plaintiffs,
BANK OF AMERICA, N.A., Defendant.
in the Court of Appeals 8 September 2016.
by plaintiffs from order entered 29 December 2015 by Judge
Kevin M. Bridges in Stanly County, No. 14 CVS 1147 Superior
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
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
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
and Procedural History
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.
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.
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.
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. The Perrys timely appealed.
Dismissal of ...