U.S. Bank National Association as Trustee for Holder of SAMI II Inc. v. Estate of Wood

         Heard in the Court of Appeals 9 May 2019.

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          Appeal by Defendant Mary Wood from orders entered 1 May 2018 and 6 June 2018 by Judge R. Kent Harrell in New Hanover County Superior Court. New Hanover County, No. 17-CVS-573

         Manning Fulton & Skinner P.A., Raleigh, by Robert S. Shields, Jr., for Plaintiff-Appellee.

          Law Office of Susan M. Keelin, PLLC, Wilmington, by Susan M. Keelin, for Defendant-Appellant.

         OPINION

         COLLINS, Judge.

         Mary Wood ("Defendant") appeals from (1) an order granting U.S. Bank National Association, as Trustee for the Holder of the SAMI II Inc. Bear Stearns Arm Trust, Mortgage Pass-Through Certificates, Series 2005-12’s ("Plaintiff") and denying Defendant’s motions for summary judgment made pursuant to North Carolina Rule of Civil Procedure 56, and (2) an order granting in part and denying in part Defendant’s motion for amended findings of fact and an amended order made pursuant to North Carolina Rule of Civil Procedure 52. Defendant contends that the trial court erred by granting Plaintiff summary judgment, and by making various findings of fact and conclusions of law that were unsupported by the evidence and erroneous. We dismiss in part and reverse and remand in part.

          I. Background

         In April 2005, John Wood agreed to purchase real property in Wilmington from Barbara Buchanan for $878,000. In connection with the contemplated transaction, Alpha Mortgage Corporation ("Alpha") agreed to loan John Wood $650,000. According to the closing attorney, Alpha conditioned the loan upon (1) the loan being used to pay off an existing lien on the property allegedly held by one of Buchanan’s creditors^[1] and (2) the execution of a deed of trust on the property that would give Alpha a first-lien security interest therein. In his opinion on title, the closing attorney averred that he represented to Alpha that those conditions would be met, and that Alpha would have a first-lien security interest in the entire property.

          Closing took place on 17 June 2005. On that date: (1) according to the closing attorney, Alpha made the $650,000 loan to John Wood, and the loan proceeds were applied to pay off the existing lien on the property; (2) John Wood executed a promissory note to Alpha for $650,000 (the "Note"); (3) Buchanan recorded a General Warranty Deed in the New Hanover County Register of Deeds that transferred ownership of the property to John Wood, Annette Wood, Edward Wood, and Defendant; and (4) John Wood and Annette Wood executed a Deed of Trust giving Alpha a security interest in the property, but Edward Wood and Defendant did not.

          According to the closing attorney, the Deed of Trust should have been executed by all four subsequent owners of the property, but was executed only by John and Annette Wood due to an error on the attorney’s part. As a result, Edward Wood and Defendant took their one-half combined interest in the property unencumbered by any security interest. In December 2008, the Note went into default, and Plaintiff instituted foreclosure proceedings on the property. The foreclosure proceedings were dismissed as inactive in July 2012.

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          John Wood died in December 2015, and Edward Wood quitclaimed his interest in the property to Defendant in 2016 following their divorce, leaving Annette Wood and Defendant each holding a one-half undivided interest in the property.

         On 14 February 2017, Plaintiff filed a verified complaint in New Hanover County Superior Court seeking, inter alia, a declaratory judgment quieting title to the property pursuant to N.C. Gen. Stat. § § 1-254 and 41-10. Plaintiff filed an amended complaint on 24 April 2017.

         On 5 June 2017, Defendant filed an answer in which she generally and specifically denied the allegations of the amended complaint, raised a number of affirmative defenses (including the affirmative defense of laches), made a number of counterclaims, and moved to dismiss pursuant to N.C. Gen. Stat. § 1A-1, Rule 12(b)(6). On 27 July 2017, Plaintiff replied to Defendant’s motion to dismiss and moved to dismiss Defendant’s counterclaims pursuant to Rule 12(b)(6). On 19 March 2018, Plaintiff moved for summary judgment pursuant to N.C. Gen. Stat. § 1A-1, Rule 56. Defendant then moved for summary judgment pursuant to Rule 56 on 13 April 2018, and on 16 April 2018 moved for sanctions pursuant to N.C. Gen. Stat. § 1A-1, Rule 37.

          On 1 May 2018, the trial court entered an order (1) granting Plaintiff summary judgment on its claim to quiet title to the property under a theory of equitable subrogation, (2) granting Defendant summary judgment as to Plaintiff’s other claims, and (3) granting Plaintiff summary judgment as to Defendant’s counterclaims. On 10 May 2018, the trial court entered an order which denied Defendant’s motion for sanctions but compelled Plaintiff to provide all documents responsive to Defendant’s request for production within 30 days.

         On 14 May 2018, Defendant filed a motion for amended and additional findings of fact and for an amended order pursuant to N.C. Gen. Stat. § 1A-1, Rule 52(b), essentially asking the trial court to reverse itself and grant summary judgment for Defendant on Plaintiff’s claim to quiet title, and asking the court to amend its findings of fact and conclusions of law in the 1 May 2018 order.

         On 6 June 2018, the trial court entered an order on Defendant’s Rule 52 motion, noting that "[i]n the interest of clarity" it would make certain additional findings of fact and conclusions of law, but otherwise denied Defendant’s motion, reiterating its ultimate conclusion that it discerned no genuine issues of material fact as to the various claims before it and that ...