in the Court of Appeals 25 April 2019.
by Defendant Tia M. Stocks from summary judgment entered 25
April 2018 by Judge Henry W. Hight in Wake County, No. 17 CVS
6521 Superior Court.
Law Office of John T. Benjamin, Jr., P.A., by John T.
Benjamin, Jr., and Aleksandra E. Anderson, for
Janvier Law Firm, PLLC, by Kathleen O'Malley, for
Defendant-Appellant Tia M. Stocks.
Howard, Stallings, From, Atkins, Angell & Davis, P.A., by
Douglas D. Noreen and Rebecca H. Ugolick, for
Defendant-Appellant Frances J. Stocks, in his Capacity as the
executor of the estate of Lewis H. Stocks.
brief filed by Defendant Jeremy B. Wilkins.
Tia M. Stocks ("Ms. Stocks") appeals from the trial
court's entry of summary judgment reforming a deed of
trust and ordering judicial foreclosure in favor of
Plaintiff-Appellee Wells Fargo, N.A. ("Wells
Fargo"). Following careful review, we reverse the trial
court's entry of summary judgment and hold Wells
Fargo's reformation action is barred by the applicable
statute of limitations.
Factual and Procedural History
March 2002, Ms. Stocks' father, Lewis H. Stocks
("Mr. Stocks"), executed a Limited Power of
Attorney naming Ms. Stocks attorney-in-fact for the limited
purpose of executing certain documents necessary to purchase
a house in Garner, North Carolina (the "Property"),
for Ms. Stocks' use as a residence. Mr. Stocks arranged
to purchase the property through a loan with First Union
National Bank ("First Union"), and a general
warranty deed conveying the Property to Ms. Stocks- as sole
owner-was filed on 26 March 2002. Consistent with her
father's loan arrangement, Ms. Stocks executed a
promissory note as attorney-in-fact for Mr. Stocks in First
Union's favor in the amount of $88, 184.50 (the
"First Note") on 27 March 2002; she also recorded a
deed of trust for that amount (together with the First Note
as the "First Loan") that same day, which named
herself and her father as borrowers and listed First Union as
the First Note was paid off, First Union became Wachovia;
Wachovia, in turn, became holder of the First Note. In late
2004, Mr. Stocks sought to refinance the First Loan with
Wachovia and, on 12 January 2005, executed a new promissory
note for $83, 034.00 in Wachovia's favor (the
"Note"). Ms. Stocks was not named as a borrower on
the Note. On 19 January 2005, Ms. Stocks executed a new deed
of trust with Wachovia under seal (the "Deed of
Trust"), listing her as the borrower and stating she was
"indebted to [Wachovia] in the principal sum of U.S.$
83034.00 which indebtedness is evidenced by Borrower's
Note dated 01/12/05." Because Ms. Stocks was not a
signatory to or debtor under the Note, the language of the
Deed of Trust mistakenly secured a non-existent debt. Ms.
Stocks, however, made payments on the Note.
2016, Wachovia had merged with Wells Fargo, Mr. Stocks had
passed away, and Ms. Stocks had ceased paying the Note. Wells
Fargo sent a right to cure letter to Mr. Stocks' estate
(the "Estate") on 2 March 2016, but no further
payments were forthcoming. Wells Fargo thereafter commenced
non-judicial foreclosure proceedings on the Property; during
the course of those proceedings, Wells Fargo learned for the
first time that, because of the mistake in the Deed of Trust,
the Note was not secured by the Property.
correct the error, Wells Fargo filed a complaint on 26 May
2017 requesting reformation of the Deed of Trust and a
judicial sale of the Property; in the alternative, Wells
Fargo requested imposition of an equitable lien on the
Property. The complaint also alleged a breach of contract
against the Estate for its default on the Note, as well as
claims for quiet title and declaratory judgment that would
establish the Deed of Trust as a valid lien on the Property
as security for the Note.
Stocks filed an answer to Wells Fargo's complaint
asserting the statute of limitations as a defense to
reformation. The Estate filed its answer and crossclaims
against Ms. Stocks for breach of contract, unjust enrichment,
and unfair and deceptive trade practices. Following further
pleading and discovery, Wells Fargo moved for summary
judgment on all claims.
summary judgment hearing, Wells Fargo contended that Ms.
Stocks' statute of limitations defense, premised on
Section 1-52(9), failed as a matter of law. That statute,
which applies to claims arising from mistake, does not begin
to run until the claimant "actually learns of [the
mistake's] existence or should have discovered the
mistake in the exercise of due diligence[, ]" Wells
Fargo Bank, N.A. v. Coleman, 239 N.C.App. 239, 244, 768
S.E.2d 604, 608 (2015) (citation omitted), and Wells Fargo
asserted that Ms. Stocks had failed to forecast any evidence
demonstrating that the mistake was or should have been
discovered more than three years prior to suit. Counsel for
Ms. Stocks argued that Wells Fargo should have discovered the
mistake at the time the Deed of Trust was executed. The trial
court rejected Ms. Stocks' statute of limitations
argument and entered summary judgment for Wells Fargo on its
claims for reformation and judicial foreclosure. Ms. Stocks