SunTrust Mortgage v. Donald Busby, Jr., No. 11-1469 (4th Cir. 2012)

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 11-1469 SUNTRUST MORTGAGE INCORPORATED, Plaintiff Appellee, v. DONALD D. BUSBY, JR.; ROBERT G. RONK; KENNARD DAVIS, Defendants Appellants, and LORI A. NASSIDA; KELLY M. BAKER; MICHAEL T. BAKER; ROBERT JOHN CUPELLI; LEIGH K. CUPELLI; DEANNA DAVIS; DEAN R. CUMMINGS; JEFFREY A. SYKES; GUY BARMOHA; GREGORY M. SCHUETZ; NATALIE BOUTROS; PAUL MULA, Defendants. Appeal from the United States District Court for the Western District of North Carolina, at Bryson City. Martin K. Reidinger, District Judge. (2:09-cv-00003-MR-DLH) Submitted: January 30, 2012 Decided: March 19, 2012 Before MOTZ, DAVIS, and WYNN, Circuit Judges. Affirmed by unpublished per curiam opinion. Michael G. Wimer, WIMER & ASSOCIATES, P.C., Asheville, North Carolina, for Appellants. Robert D. Perrow, J.B. McGuire Boyd, WILLIAMS MULLEN, P.C., Richmond, Virginia; Elizabeth C. Stone, WILLIAMS MULLEN, P.C., Raleigh, North Carolina, for Appellee. Unpublished opinions are not binding precedent in this circuit. 2 PER CURIAM: Defendants-Appellants Donald D. Busby, Robert G. Ronk, and Kennard Davis (hereinafter Appellants ) appeal the district court s order granting Plaintiff-Appellee SunTrust ) in summary SunTrust SunTrust s judgment Mortgage, action to in Inc. recover favor of (hereinafter a deficiency judgment on promissory notes following foreclosure by power of sale on Appellants properties. Appellants claim Finding no error, we affirm. that the district court erred in finding Appellants equitable defenses barred by res judicata because they were not raised in a proceeding under N.C. Gen. Stat. § 45-21.34 (2006). The district court held that Appellants defenses challenged the validity of the debt and default, which a North Carolina superior court had already determined to be valid during a hearing to confirm the power of sale foreclosure pursuant to N.C. Gen. Stat. § 45-21.16 (2006). The court further held that, while Appellants could not have raised these equitable defenses in the hearing under § 45-21.16, they could have raised their equitable defenses in a proceeding to enjoin (2006). resulted the The in foreclosure court the under concluded rights of N.C. that the Gen. their parties Stat. failure to the § 45-21.34 to do so foreclosure becoming fixed and therefore barred Appellants from raising such an equitable challenge in a later proceeding in a different 3 forum. The court also noted that its holding was in accord with cases from the Eastern and Middle Districts of North Carolina. See Merrill Lynch Bus. Fin. Servs., Inc. v. Cobb, No. 5:07-cv-129D, 2008 WL 6155804, at *3-4 (E.D.N.C. Mar. 18, 2008); Brumby, Jr. v. Deutsche Bank Nat'l Trust Co., No. 1:09CV144, 2010 WL 3219353 magistrate judge s (M.D.N.C. report and Aug. 13, 2010) recommendation, (adopting 2010 WL the 617368 (M.D.N.C. Feb. 17, 2010)). We find persuasive. the district court s reasoning to be The doctrine of res judicata applies not only to the points upon which the court was required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject in litigation and which the parties, brought [e]xercising forward at the reasonable time and diligence, determined might have respecting it. Painter v. Wake Cnty. Bd. of Educ., 217 S.E.2d 650, 655 (N.C. 1975). Both § 45-21.16 and § 45-21.34 are parts of a coherent statutory framework intended to preserve the limited rights of a mortgagor subject to a power of sale foreclosure. See, e.g., In re Foreclosure of Deed of Trust by Goforth Props., Inc., 432 S.E.2d 855, 858-59 (N.C. 1995); In re Helms, 284 S.E.2d 553, 555 (N.C. Ct. App. 1981); see also Turner v. Blackburn, 389 F. Supp. 1250, 1258 (W.D.N.C. 1975). To permit challenges to the validity of the default outside this framework would defeat the 4 legislative intent behind the North Carolina statutory scheme. Despite the unique timing of this case, we are not persuaded that Appellants were effectively barred from filing an action pursuant to § 45-21.34. district court did not Accordingly, err in we finding conclude that Appellants the defenses barred by the doctrine of res judicata. Because we find Appellants equitable arguments to be properly barred by res judicata, we find no merit in Appellants contention that a genuine issue of material fact existed with respect to Appellants quasi-estoppel argument. find that the district court did not err We further in holding that Appellants challenge to the materiality of the default should have been raised in the § 45-21.16 proceeding and therefore also is barred by res judicata. Appellants also argue that the district court erred in finding that they had not forecast competent evidence to support a claim to offset SunTrust s deficiency judgment. cited by Appellants are distinguishable. Both cases See First Citizens Bank & Trust Co. v. Cannon, 530 S.E.2d 581, 583 (N.C. Ct. App. 2000); Queen v. Queen, No. COA07-1207, 2008 N.C. App. LEXIS 638, at *5-6 (N.C. Ct. App. Mar. 19, 2008). Thus, we find that the district court did not err in determining that tax valuations do not, by themselves, provide establish market value. competent evidence sufficient to See Star Mfg. v. Atl. Coast Line R. 5 Co., 23 S.E.2d 32, 36 (N.C. 1942). We also conclude that the district court did not err in determining that the county tax assessor s testimony did not provide additional support for the tax valuation evidence and that his testimony as to valuation was therefore inadmissible. Accordingly, we affirm the judgment of the district court. legal before We dispense with oral argument because the facts and contentions the court are adequately and argument presented would not in aid the the materials decisional process. AFFIRMED 6

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