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Bayview Loan Servicing, LLC v. Locklear

United States District Court, E.D. North Carolina, Southern Division

July 18, 2017

BAYVIEW LOAN SERVICING, LLC, Plaintiff,
v.
CAROLYN LOCKLEAR, LENNIE LOCKLEAR a/k/a, LINNIE LOCKLEAR, MERITAGE MORTGAGE CORPORATION, LUMBEE GUARANTY BANK, THE UNITED STATES OF AMERICA acting through its agency THE INTERNAL REVENUE SERVICE, and THE NORTH CAROLINA DEPARTMENT OF REVENUE, Defendants.

          ORDER

          JAMES CDEVERJH Chief United States District Judge.

         On July 3 0, 2015, Bayview Loan Servicing, LLC ("Bayview" or "plaintiff') filed a complaint in Robeson County Superior Court against Carolyn Locklear, Lennie Locklear (collectively "the Locklears"), Lumbee Guaranty Bank ("Lumbee"), Meritage Mortgage Corporation ("MMC"), the United States through its agency the Internal Revenue Service ("the IRS"), and the North Carolina Department of Revenue [D.E. 1-1]. On October 7, 2015, the IRS removed the action to this court [D.E. 1] and answered [D.E. 3]. On July 5, 2016, the court entered default against the Locklears and MMC p.E. 18].

         On September 12, 2016, the IRS moved for summary judgment [D.E. 21] and filed a memorandum in support [D.E. 22] and a statement of material facts [D.E. 23, 24]. On September 22, 2016, Bayview voluntarily dismissed Lumbee [D.E.27]. On October 3, 2016, Bayview responded to the IRS's statement of material facts [D.E. 28, 30] and motion for summary judgment [D.E. 29]. On November 17, 2016, the IRS replied [D.E. 32] and supplemented its statement of material facts [D.E. 33, 34].

         On May 31, 2017, Bayview moved for default judgment against the Locklears and MMC [D.E. 3 5] and filed a memorandum in support [D.E. 36]. On June 19, 2017, the IRS responded [D.E. 3 7]. As explained below, the court grants the IRS's motion for summary judgment and grants in part and denies in part Bayview's motion for default judgment.

         I.

         On December 12, 1995, the Locklears acquired by general warranty deed a parcel of land located at 508 Fodiesville Road in Shannon, North Carolina, which is in Robeson County ("the Fodiesville Road property"). Def's Stmt. Material Facts [D.E. 23] ¶ 1; Pl's Stmt. Material Facts [D.E. 28] ¶ 1. On December 10, 1997, Florence C. Wellons deeded to the Locklears a second parcel of land located in Shannon, North Carolina, about three miles northwest of the Fodiesville Road property ("the Shannon Heights property"). [D.E. 30] 41-42. On March 31, 1999, the Locklears executed a deed of trust in favor of MMC encumbering the Fodiesville Road property ("the Meritage Deed of Trust"). [D.E. 30] 31-38. On November 15, 2001, the Locklears borrowed $83, 000.00 from ABN Amro Mortgage Group, Inc. ("ABN"), secured by a deed of trust recorded in Book 1211, Pages 565-72 of the Robeson County Register of Deeds ("the ABN Deed of Trust"). Def's Stmt. Material Facts ¶¶ 2-3; Pl's Stmt. Material Facts ¶¶ 2-3. The Locklears used the $83, 000.00 loan secured by the ABN Deed of Trust to pay off the Meritage Deed of Trust. See Compl. [D.E. 1-1] ¶ 47; Answer [D.E. 3].

         The ABN Deed of Trust described the property it encumbered as:

A certain tract or parcel of land in Roberson [sic] County, in the State of North Carolina, described as follows
Being all of Lot No Twelve (12) as shown on that certain map entitled "Shannon Heights, Section n, " ... recorded ... in Book of Maps No Thirty-Three (33), at page Sixty-Six (66), Roberson [sic] County Registry, to which said map reference is hereby made for a more particular description of said property and the same is incorporated as a part hereof
Property Address: (for informational purposes only) 508 Fodiesville Rd. Shannon, NC 28386
which currently has the address of 508 FODIESVILLE RD, SHANNON, North Carolina 28386 ("Property Address")[.]

[D.E. 24] 25. The map recorded with the Robeson County, N.C. Register of Deeds shows the Shannon Heights property. See Register of Deeds Office, Search Records. Robeson County, N.C. Register of Deeds, http://robeson.bislandrecords.com/ (accessed July 13, 2017) (search by "Book/Page"). The Locklears own both the Shannon Heights property and the Fodiesville Road property. Def's Stmt. Material Facts ¶ 7; Pl's Stmt. Material Facts ¶ 7. The ABN Deed of Trust contains no reference to the secured property's location beyond the reference to the map and the street addresses.

         On August 14, 2006, ABN assigned the Locklears' loan to Mortgage Electronic Registration Systems, Inc. ("MERS"). Def.'s Stmt. Material Facts ¶10; Pl.'s Stmt. Material Facts ¶10. On July 1, 2008, the Locklears stopped making loan payments. Def .' s Stmt. Material Facts ¶ 11; Pl's Stmt. Material Facts ¶ 11. On July 27, 2009, the IRS recorded a Notice of Federal Tax Lien with the Robeson County Clerk of Superior Court against the Locklears, attaching both the Fodiesville Road property and the Shannon Heights property. Def.'s Stmt. Material Facts ¶¶ 12-13; Pl's Stmt. Material Facts ¶¶ 12-13. On June 7, 2011, the IRS recorded a second Notice of Federal Tax Lien with the Robeson County Clerk of Superior Court, attaching both properties. Def's Stmt. Material Facts ¶¶ 14-15; Pl's Stmt. Material Facts ¶¶ 14-15.

         On June 8, 2012, MERS assigned the loan to JPMorgan Chase Bank, N.A. ("Chase"). Def.'s Stmt. Material Facts ¶ 17; Pl's Stmt. Material Facts ¶ 17. Chase performed title searches on both properties: the Shannon Heights property's title search showed the ABN Deed of Trust as encumbering that property, and the Fodiesville Road property's title search did not show the ABN Deed of Trust as encumbering that property. Def.'s Stmt. Material Facts ¶¶ 18-19; Pl's Stmt. Material Facts ¶¶ 18-19.

         On September 6, 2014, Chase assigned the Locklears' loan to Bayview, which Bayview recorded on October 9, 2014. Def.'s Stmt. Material Facts ¶ 20; Pl's Stmt. Material Facts ¶ 20.

         On July 30, 2015, Bayview filed this action in Robeson County Superior Court [D.E. 1-1]. On October 7, 2015, the IRS removed the action to this court [D.E. 1] and answered [D.E. 3]. On July 5, 2016, the ...


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