IN THE MATTER OF NORTH CAROLINA (FUTURE ADVANCE) DEED OF TRUST BY NICOR, LLC TO JERONE C. HERRING AND SUBSEQUENTLY D. TALMADGE SCARBOROUGH III, SUBSTITUTE TRUSTEE RECORDED AT BOOK 1770, PAGE 152 OF THE MOORE COUNTY REGISTRY SUBSTITUTION OF TRUSTEE RECORDED AT BOOK 4862, PAGE 263, IN THE MOORE COUNTY REGISTRY IN THE MATTER OF NORTH CAROLINA DEED OF TRUST AND SECURITY AGREEMENT BY NICOR, LLC TO BB&T COLLATERAL SERVICECORPORATION AND SUBSEQUENTLY D. TALMADGE SCARBOROUGH III, SUBSTITUTE TRUSTEE RECORDED AT BOOK 2988, PAGE 461 OF THE MOORE COUNTY REGISTRY SUBSTITUTION OF TRUSTEE RECORDED AT BOOK 4862, PAGE 265, IN THE MOORE COUNTY REGISTRY IN THE MATTER OF NORTH CAROLINA DEED OF TRUST AND SECURITY AGREEMENT BY FOREST HAVEN, LLC TO BB&T COLLATERAL SERVICE CORPORATION AND SUBSEQUENTLY D. TALMADGE SCARBOROUGH III, SUBSTITUTE TRUSTEE RECORDED AT BOOK 2793, PAGE 393 OF THE MOORE COUNTY REGISTRY SUBSTITUTION OF TRUSTEE RECORDED AT BOOK 4862, PAGE 269, IN THE MOORE COUNTY REGISTRY IN THE MATTER OF NORTH CAROLINA DEED OF TRUST AND SECURITY AGREEMENT BY NICOR, LLC TO BB&T COLLATERAL SERVICECORPORATION AND SUBSEQUENTLY D. TALMADGE SCARBOROUGH III, SUBSTITUTE TRUSTEE RECORDED AT BOOK 3216, PAGE 62 OF THE MOORE COUNTY REGISTRY SUBSTITUTION OF TRUSTEE RECORDED AT BOOK 4862, PAGE 267, IN THE MOORE COUNTY REGISTRY
in the Court of Appeals 27 March 2019.
by respondents from orders entered 26 April 2018 by Judge
Tanya T. Wallace in Moore County Superior Court Nos. 17 SP
Mullins Riley & Scarborough LLP, by Leslie Lane Mize and
D. Martin Warf, for petitioner-appellee.
Clayton Myrick McClanahan & Coulter, by Noel B. McDevitt,
Jr., and West & Smith, LLP, by Stanley W. West, for
Nicor, LLC and Forest Haven, LLC (hereinafter
"Nicor," "Forest Haven," and collectively
"Obligors") appeal from orders of sale in three
proceedings permitting foreclosure of certain real property
"described in the [d]eeds of [t]rust in accordance with
the terms and provisions of the power of sale contained
therein." Prior to commencing foreclosure proceedings,
RREF II WBC Acquisitions, LLC ("RREF"), then the
holder of the notes, filed Obligors' confession of
judgment entitling RREF to judgment for the entire
outstanding amount owed on the promissory notes securing the
deeds of trust. The trial court entered judgment in
RREF's favor and stayed the foreclosure proceedings.
Obligors argued before the trial court, and now argue before
this Court, that the entry of judgment in RREF's favor
for the aggregate debt secured by the deeds of trust on the
property precluded the holder of the notes from subsequently
foreclosing on the properties. Due to the limited scope of
power-of-sale foreclosure proceedings, we conclude that this
argument was not properly before the trial court.
Accordingly, we affirm the trial court's orders of sale
period of nearly twelve years, Nicor executed five promissory
notes with principal amounts totaling $1, 351, 200.00 and
secured repayment by executing three deeds of trust,
originally for the benefit of BB&T Collateral Service
Corporation ("BB&T"). Thereafter, BB&T
assigned the Nicor promissory notes and deeds of trust to
May 2015, Forest Haven executed a promissory note in the
original principal amount of $933, 500.00, and secured
repayment of the note by executing a deed of trust in favor
of BB&T. BB&T assigned the Forest Haven promissory
note and deed of trust to RREF.
defaulted; however, in October 2015, Obligors and RREF
entered into a forbearance agreement, which provided Obligors
additional time to satisfy their debts. The agreement
acknowledged the current amount of the debt owed and the
existence of defaults under the promissory notes. RREF agreed
not to exercise its rights under the loan documents until the
earlier of 31 August 2016, or Obligors' failure to comply
with the terms of the forbearance agreement (including any
event of default). In addition, Obligors agreed to entry of
judgment in RREF's favor if Obligors failed to satisfy
the terms of the forbearance agreement, and they accordingly
executed a confession of judgment. Obligors further permitted
RREF, "[u]pon termination of the Forbearance
Period," to initiate foreclosure proceedings upon the
Nicor and Forest Haven deeds of trust that "have not
[been] paid off under the terms of this Agreement."
year later, in October 2016, the parties executed a
"Modification of Forbearance Agreement" extending
the forbearance period to 31 August 2017. The second
forbearance agreement included confession of judgment and
foreclosure provisions that were identical to those contained
in the first forbearance agreement.
subsequently failed to comply with the terms of the modified
forbearance agreement, and RREF filed the confession of
judgment on 8 August 2017 in Moore County Superior Court.
That day, the clerk of court entered judgment against
Obligors in the amount of $1, 834, 071.42, plus interest at
the annual rate of 12% to be calculated from the filing of
the confession of judgment.
October 2017, RREF initiated three power-of-sale foreclosure
proceedings before the Moore County Clerk of Superior Court.
After initiating the foreclosure proceedings, RREF assigned
the Nicor and Forest Haven promissory notes and deeds of
trust to CL45 MW Loan 1, LLC ("CL45"), the current
holder of the notes. The assistant clerk of superior court
consolidated the matters for hearing, and concluded that the
requirements of N.C. Gen. Stat. § 45-21.16 were
satisfied. On 1 February 2018, the assistant clerk of court
entered an order of sale in each proceeding allowing CL45 to
proceed with the power-of-sale foreclosures on the real
estate described in the deeds of trust.
appealed, and the matters were consolidated for a de
novo hearing in Moore County Superior Court on 12 March
2018, the Honorable Tanya T. Wallace presiding. On 26 April
2018, Judge Wallace concluded that the requirements of N.C.
Gen. Stat. § 45-21.16 were satisfied and entered orders
of sale permitting foreclosure. Obligors timely filed notices
argue on appeal that the trial court erred in permitting the
foreclosures to proceed after the holder of the notes had
already obtained a judgment against Obligors for the entire
amount of the debt secured by the deeds of trust. For the
reasons explained ...