Cynthia Butler v. First Citizens Bank & Trust Company

• Court: Court of Appeals for the Fourth Circuit
• Decided: September 2, 2022
• Docket: 22-1079
• Status: Unpublished

Opinion

USCA4 Appeal: 22-1079 Doc: 21 Filed: 09/02/2022 Pg: 1 of 4

UNPUBLISHED

UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT

No. 22-1079

In re: CYNTHIA A. BUTLER,

Debtor. _______________________

DANIEL C. BRUTON, Trustee in Bankruptcy for Cynthia A. Butler,

Plaintiff - Appellant,

v.

FIRST CITIZENS BANK & TRUST CO.; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.,

Defendants - Appellees.

Appeal from the United States District Court for the Middle District of North Carolina, at Greensboro. Catherine C. Eagles, District Judge. (1:21-cv-00685-CCE-UA)

Submitted: August 15, 2022 Decided: September 2, 2022

Before NIEMEYER and MOTZ, Circuit Judges, and FLOYD, Senior Circuit Judge.

Affirmed by unpublished per curiam opinion.

ON BRIEF: Daniel C. Bruton, BELL, DAVIS & PITT, PA, Winston-Salem, North Carolina, for Appellant. Alan B. Powell, Andrew D. Irby, ROBERSON HAWORTH & REESE, PLLC, High Point, North Carolina; Stephanie E. Goodbar, Matthew P. Weiner, USCA4 Appeal: 22-1079 Doc: 21 Filed: 09/02/2022 Pg: 2 of 4

POYNER SPRUILL, LLP, Raleigh, North Carolina, for Appellees.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

Daniel C. Bruton, the Chapter 7 trustee for debtor Cynthia A. Butler, appeals the

district court's order affirming the bankruptcy court's order granting First Citizen Bank &

Trust Co.’s and Mortgage Electronic Registration Systems, Inc.’s Fed. R. Civ. P. 12 (b)(6)

motions to dismiss his adversary complaint. Finding no reversible error, we affirm.

“In reviewing the judgment of a district court sitting in review of a bankruptcy court,

we apply the same standard of review that was applied by the district court.” Copley v.

United States, 959 F.3d 118, 121 (4th Cir. 2020). Thus, “we review the bankruptcy court’s

legal conclusions de novo, its factual findings for clear error, and any discretionary

decisions for abuse of discretion.” Id.

“A motion to dismiss pursuant to Rule 12(b)(6) tests the sufficiency of the claims

pled in a complaint.” Sheppard v. Visitors of Va. State Univ., 993 F.3d 230, 234 (4th Cir.

2021). “[A] complaint must contain ‘a short and plain statement of the claim showing that

the pleader is entitled to relief.’” Id. (quoting Fed. R. Civ. P. 8(a)(2)). To survive a motion

to dismiss for failure to state a claim, “[f]actual allegations must be enough to raise a right

to relief above the speculative level” and sufficient “to state a claim to relief that is plausible

on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007). “Labels,

conclusions, recitation of a claim’s elements, and naked assertions devoid of further factual

enhancement will not suffice.” ACA Fin. Guar. Corp. v. City of Buena Vista, 917 F.3d

206, 211 (4th Cir. 2019). Further, in assessing the sufficiency of a complaint, “[w]e may

also consider documents incorporated into the complaint by reference” or “attached to the

motion to dismiss, so long as they are integral to the complaint and authentic.” U.S. ex rel.

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Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136 (4th Cir. 2014) (internal

quotation marks omitted).

The trustee has the power to “avoid any transfer of property of the debtor or any

obligation incurred by the debtor that is voidable by . . . a bona fide purchaser of real

property.” 11 U.S.C. § 544(a)(3). The trustee’s “right to avoid is determined by whether,

under state law, a bona fide purchaser of the property would have taken the property subject

to the lien. If a bona fide purchaser would not have taken it subject to the lien, then neither

would the [t]rustee.” In re McCormick, 669 F.3d 177, 180 (4th Cir. 2012). We conclude

that the bankruptcy court correctly applied North Carolina law to determine that the notarial

certificate at issue substantially complied with the law, Bruton failed to overcome the

presumption of regularity, and thus Bruton could not avoid the lien. See, e.g., Freeman v.

Morrison, 199 S.E. 12, 13-15 (N.C. 1938); Mfrs.’ Fin. Co. v. Amazon Cotton Mills Co.,

109 S.E. 67, 68-69 (N.C. 1921); N.C. Gen. Stat. § 10B-99(a) (2021).

Accordingly, we affirm the district court’s order. We dispense with oral argument

because the facts and legal contentions are adequately presented in the materials before this

court and argument would not aid the decisional process.

AFFIRMED