In Re Hackley

713 S.E.2d 119
CourtCourt of Appeals of North Carolina
DecidedJune 21, 2011
DocketCOA10-757
StatusPublished
Cited by10 cases

This text of 713 S.E.2d 119 (In Re Hackley) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Hackley, 713 S.E.2d 119 (N.C. Ct. App. 2011).

Opinion

713 S.E.2d 119 (2011)

In The Matter of the Foreclosure of the Deed of Trust of Ormsby King HACKLEY, III, Grantor,
As Recorded in Book 1932, at Page 689 of the Henderson County Public Registry.
Raintree Realty & Construction, Inc., Substitute Trustee.
See Appointment of Substitute Trustee as Recorded in Book 1390, at Page 190 of the Henderson County Registry.

No. COA10-757.

Court of Appeals of North Carolina.

June 21, 2011.

*120 Van Winkle, Buck, Wall, Starnes and Davis, P.A., Asheville, by Travis L. Smuckler and Larry C. Harris, Jr., for petitioner-appellees.

F.B. Jackson and Associated Law Firm, PLLC, Hendersonville, by Angela S. Beeker, for respondent-appellant.[1]

STROUD, Judge.

Ormsby King Hackley, III, ("respondent") appeals from a trial court's order authorizing Raintree Realty & Construction, Inc., as the substitute trustee, to proceed with a foreclosure sale of certain real property as permitted by the deed of trust. Because the foreclosure has been completed and the real property duly conveyed to the highest bidder at the foreclosure sale, and because we are unable to consider respondent's claims that the completed sale is void as in violation of a bankruptcy stay, this appeal is moot, so we dismiss respondent's appeal.

On 25 March 2009, United Bank and Trust Company ("the secured creditor"), filed a "Notice of Hearing in Foreclosure" with the Clerk of Superior Court, Henderson County ("the clerk"), requesting to proceed with a foreclosure and sale on a real estate security interest "described in a Deed of Trust dated, executed by [respondent], to Charles E. Jones, original Trustee for the benefit of United Bank and Trust Company, the original holder of the Note." The notice further stated that the deed of trust was given to secure a note made and executed by respondent in the amount of $200,000; respondent was in default on the note; the real estate security interest was described as a "1/4 undivided interest" in certain real property located in Henderson County and recorded in Deed Book 690 at Page 299 of the Henderson County Registry ("the subject real property"); Raintree Realty & Construction, Inc., was named as the substitute trustee; and a hearing was set on 21 April 2009 before the clerk. On 28 April 2009, the clerk continued the foreclosure hearing to 21 May 2009. On 29 May 2009, the secured creditor filed an "Amended Notice of Hearing in Foreclosure" changing the date of the hearing to 23 June 2009. Following two continuances, the hearing was held on 20 August 2009, and the clerk issued an order on 1 September 2009 denying the petition for foreclosure and sale. On 9 September 2009, the secured creditor appealed from the clerk's order to Superior Court, Henderson County. On 19 December 2009, the Superior Court entered an "Order in Foreclosure[,]" permitting the trustee to proceed with the foreclosure sale. On 17 *121 December 2009, the trustee filed a "Notice of Sale" of the subject real property. On 15 January 2010, respondent, filed a "Notice of Appeal" from the 19 December 2009 order permitting the trustee to proceed with the foreclosure sale. On 19 January 2010, respondent filed a "Notice of Bankruptcy" stating that "pursuant to 11 U.S.C § 362(a), the filing of said petition operates as an automatic stay of the initiation or continuation of any actions against [respondent], or its property in the above-styled action." On the same date, respondent filed a "Voluntary Petition" for Chapter 7 bankruptcy with the "United States Bankruptcy Court, North District of Georgia[.]" On 20 January 2010, the substitute trustee filed its first "Notice of Postponement of Sale" stating that the sale for the subject real property set for 20 January 2010 would be postponed until 9 February 2010. On 9 February 2010, the substitute trustee filed a second "Notice of Postponement of Sale" stating that the sale for the subject real property set for 9 February 2010 would be postponed until 19 April 2010.

On appeal, respondent contends that the trial court erred in authorizing the foreclosure sale as (1) the promissory note did not constitute a valid debt; (2) the judicial foreclosure action and deficiency judgment entered in the Kentucky Circuit Court on the same promissory note were res judicata and precluded a second foreclosure on the same note in North Carolina; (3) the subordination of a second mortgage to a third mortgage was not valid; and (4) "the proceeds of the sale of the collateral securing the first, second and third mortgages in Kentucky should have been applied to satisfy the second mortgage securing the note at issue." In addition to addressing respondent's arguments on appeal, the secured creditor also raises the additional argument that respondent's appeal is moot and should be dismissed.

Even though it is raised by the secured creditor, we first address the issue of mootness as this issue is dispositive and generally, an "appeal presenting a question which has become moot will be dismissed." Matthews v. North Carolina Dep't of Transp., 35 N.C.App. 768, 770, 242 S.E.2d 653, 654 (1978) (citation omitted). The secured creditor argues that "because [the] debtor failed to post a bond to stay the foreclosure sale and the subject real property was foreclosed upon and sold to a third party, debtor's appeal should be denied based on the doctrine of mootness."

Our Supreme Court has stated that "[a] case is considered moot when a determination is sought on a matter which, when rendered, cannot have any practical effect on the existing controversy." Lange v. Lange, 357 N.C. 645, 647, 588 S.E.2d 877, 879 (2003) (citation and quotation marks omitted). When the questions originally at issue in a case are no longer at issue when the case is on appeal, the appeal is moot and should be dismissed. N.C. Press Assoc., Inc. v. Spangler, 87 N.C.App. 169, 171, 360 S.E.2d 138, 139 (1987). Specifically, the secured creditor argues that "the Debtor failed to post the bond required by N.C. Gen.Stat. § 1-292 to stay the execution of the judgment of the trial court, [and] the Secured Creditor proceeded by holding a valid foreclosure sale on April 19, 2010[;]" that this foreclosure sale "fixed" the rights of the parties as to the subject real property; and therefore, "rendered any appeal by the Debtor moot[.]" Respondent argues that when he filed for Chapter 7 Bankruptcy on 19 January 2010, "[p]ursuant to 11 U.S.C § 362, the filing of the bankruptcy imposed an automatic stay on the ... foreclosure proceeding." Respondent further contends that the secured creditor did nothing "to acquire [ ] relief from [the bankruptcy] stay[,]" and the bankruptcy had not closed, been dismissed or discharged when the trustee sold the subject real property at foreclosure; therefore, the foreclosure sale was in violation of the bankruptcy stay. Respondent further argues that because the sale was in violation of the bankruptcy stay, the trustee's deed was invalid, as the secured creditor proceeded with a foreclosure sale in violation of N.C. Gen.Stat. § 45-21.22, and therefore, his appeal is not moot.

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Cite This Page — Counsel Stack

Bluebook (online)
713 S.E.2d 119, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-hackley-ncctapp-2011.