Wells Fargo Bank, N.A. v. Fischer

• Court: Court of Appeals of North Carolina
• Decided: August 5, 2014
• Docket: 13-1273
• Status: Unpublished

Opinion

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA13-1273 NORTH CAROLINA COURT OF APPEALS

Filed: 5 August 2014

WELLS FARGO BANK, N.A., Plaintiff,

v. Mecklenburg County No. 12 CVS 12252 KEVIN SCOTT FISCHER, Defendant.

Appeal by Defendant from order entered 22 July 2013 by

Judge Robert T. Sumner in Mecklenburg County Superior Court.

Heard in the Court of Appeals 7 May 2014.

Parker Poe Adams & Bernstein LLP, by William L. Esser IV and Katie M. Iams, for Plaintiff.

Ellis & Parker PLLC, by L. Neal Ellis, Jr., and Nathaniel Parker, for Defendant.

STEPHENS, Judge.

Procedural and Factual Background

This appeal arises from an attempt by Plaintiff Wells Fargo

Bank, N.A., to collect damages and attorney’s fees from

Defendant Kevin Scott Fischer as a result of his default on two

promissory notes executed in 2008. In 2006, Fischer signed -2- purchase agreements on two lots, numbers 77 and 78, in a

development known as “Grandfather Vistas.”1 The purchase of the

lots was part of a large investment scheme which has resulted in

other lawsuits and appeals to this Court. In greatly simplified

form, the scheme involved the sale of certain lots by the

Grandfather Vistas developers to investment purchasers for

$500,000 each. Under the scheme, the developers promised to

repurchase the lots from the investment purchasers after twelve

months for $625,000 apiece and also promised to cover all

interest payments on the loans. Thus, in effect, they offered

the investment purchasers a guaranteed return of $125,000 in

twelve months on each lot purchased. The developers arranged

for Wells Fargo and two other banks to be “preferred lenders” in

the sale of the lots. The other two lenders used an appraiser

named A. Greg Anderson exclusively for appraisals as part of

their underwriting process. Wells Fargo employed several

appraisers to value properties in Grandfather Vistas, including

Kyle Knight, who appraised Fischer’s lots. Every lot,

regardless of the appraiser used, was appraised at $500,000, the

1 The record suggests that Fischer purchased additional lots using loans from another lender. Those loans are not part of this action. -3- exact minimum value required to support the 90% loan-to-value

loans the developers had arranged with the preferred lenders as

part of the investment scheme.2 The money raised by the sales

was supposed to finance the development of Grandfather Vistas,

such that the developers would end up with a development of

residential lots ready for sale after their repurchase from the

investment purchasers. However, the money raised by the sales

was not put back into the development, the developers never

repurchased the lots, and, by 2007, Grandfather Vistas

collapsed, leaving the investment purchasers with large loan

obligations and lots worth only a fraction of their appraised

values. Several of the developers later faced criminal charges

in connection with the investment scheme.

Fischer’s two loans from Wells Fargo were evidenced by two

promissory notes dated 27 September 2006, each in the original

principal amount of $455,717. Each required Fischer to make

monthly interest payments for 25 months and to repay the entire

amount of the principal and accrued interest by 27 September

2008. Following the collapse of Grandfather Vistas, Fischer

asked Wells Fargo to refinance both of his loans, which Wells

2 The loans were originally made by Wachovia Bank, N.A. Wells Fargo is the successor by merger to Wachovia Bank, N.A. -4- Fargo agreed to do. On 15 October 2008, Fischer executed and

delivered to Wells Fargo two promissory notes, each in the

original principal amount of $458,621.57. Under each of the

2008 notes, Fischer was required to make monthly payments for 35

months and to repay the entire amount of the original principal

and accrued interest by 15 October 2011. Fischer defaulted on

both 2008 notes.

In December 2008, Fischer and other investment purchasers

initiated a lawsuit against, inter alia, the developers, Wells

Fargo, other lenders involved in the scheme, and Anderson (“the

Fazzari case”).3 The Fazzari plaintiffs brought claims of, inter

alia, negligence, negligent misrepresentation, conversion, and

civil conspiracy against Wells Fargo, alleging that the bank had

conspired with the other defendants to sell overvalued lots

based on inflated appraisals and had engaged in wrongful conduct

in making the loans used to purchase Grandfather Vistas lots.

Fischer sought damages and rescission of the 2008 notes.

In the Fazzari case, on 15 July 2011, Anderson moved for

summary judgment on all remaining claims4 against him, asserting

3 None of the Wells Fargo appraisers were named as defendants in the Fazzari case. 4 The record in the Fazzari case suggests that some of the -5- inter alia, that the Fazzari plaintiffs could not show reliance

on any of his alleged misrepresentations. On the same date, the

lenders filed motions for summary judgment as to all remaining

claims against them, on their counterclaims against the Fazzari

plaintiffs, and for attorneys’ fees. On 16 February 2012, the

court entered summary judgment in favor of Anderson on all

claims against him. By order entered 8 March 2012, the court

dismissed all remaining claims against Wells Fargo and the other

lender defendants in the Fazzari case.

On 25 June 2012, Wells Fargo initiated this action against

Fischer by filing a complaint alleging Fischer had defaulted on

the 2008 notes. On 8 October 2012, Fischer filed an answer and

motion to dismiss, asserting that Wells Fargo had failed to

state a claim upon which relief could be granted because the

issue of any monies owed under the 2008 notes was not ripe while

the Fazzari appeal was pending. On 19 June 2013, Wells Fargo

moved for summary judgment, supporting that motion with

Fischer’s responses to its requests for admissions, the

affidavit of a bank employee, and portions of Fischer’s

original Fazzari plaintiffs settled or withdrew their claims, or otherwise dropped out of that case before the lenders and appraiser filed their motions for summary judgment. -6- deposition from the Fazzari case. In response, Fischer argued

that resolution of the summary judgment motion should be

postponed and supported this request with (1) an amended joint

motion for continuance filed by the parties on 28 March 2013,

which sought to continue the trial date in the matter in light

of the complexity of the underlying factual circumstances; and

(2) a copy of the 10 July 2013 default judgment order entered

against the developer defendants in the Fazzari case. Following

a hearing, on 22 July 2013 the trial court entered an order

granting summary judgment in favor of Wells Fargo. Fischer

appeals.

Discussion

Fischer argues that the trial court erred in entering

summary judgment for Wells Fargo and granting a money judgment

against Fischer. We disagree.

It is well settled that summary judgment is appropriate only if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law. . . . The record is considered in the light most favorable to the party opposing the motion.

Marcus Bros. Textiles, Inc. v. Price Waterhouse, LLP, 350 N.C.

214, 219-20, 513 S.E.2d 320, 324 (1999) (citation, internal -7- quotation marks, and emphasis omitted). “The movant has the

burden of establishing the lack of any triable issue of fact.”

Rankin v. Food Lion, 210 N.C. App. 213, 215, 706 S.E.2d 310, 312

(2011) (citation and internal quotation marks omitted).

However, “[o]nce the party seeking summary judgment makes the

required showing, the burden shifts to the nonmoving party to

produce a forecast of evidence demonstrating specific facts, as

opposed to allegations, showing that he can at least establish a

prima facie case at trial.” Id. at 217, 706 S.E.2d at 313

(citation and internal quotation marks omitted; italics added).

“[A]ffidavits or other material offered which set forth facts

which would not be admissible in evidence should not be

considered when passing on the motion for summary judgment.”

Id. at 218, 706 S.E.2d at 314 (citation and internal quotation

marks omitted). Further, “the trial court may not consider an

unverified pleading when ruling on a motion for summary

judgment.” Id. at 220, 706 S.E.2d at 315-16 (citation and

internal quotation marks omitted).

Here, Fischer admitted executing the 2008 notes which

required full repayment no later than October 2011 and

defaulting on those obligations such that their unpaid balance

is in the amount alleged by Wells Fargo. In his answer, Fischer -8- alleged three affirmative defenses: (1) that Wells Fargo

breached the implied duty of good faith and fair dealing in

making the loans; (2) estoppel, unclean hands, and laches; and

(3) the risk of inconsistent verdicts in light of the Fazzari

case. However, Fischer failed to present any affidavits or

other sworn evidence in support of these defenses.5 Having

admitted defaulting on the 2008 notes and failing to forecast

evidence in support of even a prima facie case for his alleged

affirmative defenses, Fischer simply did not meet his burden on

summary judgment. See id. at 217, 706 S.E.2d at 313.

Further, we note that, even had Fischer presented sworn

evidence in support of his affirmative defenses, he would not

prevail on the merits of those defenses in light of our decision

in the Fazzari case. “[I]f the granting of summary judgment can

be sustained on any grounds, it should be affirmed on appeal.

If the correct result has been reached, the judgment will not be

disturbed even though the trial court may not have assigned the

5 Fischer notes that he did submit a document entitled “Exhibit A Detailed Statement of Facts Supporting Defenses/Counterclaims asserted by Fischer (including references to documents and deposition transcripts from the Fazzari Litigation).” However, this document is both unsworn and, more importantly, merely a summary of excerpts from evidence in the Fazzari case. Accordingly, the document was not evidence to be considered by the trial court in ruling on the summary judgment motion. -9- correct reason for the judgment entered.” Rankin, 210 N.C. App.

at 215, 706 S.E.2d at 313 (citation, internal quotation marks,

and brackets omitted). We have considered and rejected

Fischer’s arguments in the Fazzari case, filed contemporaneously

with this opinion. See Fazarri v. Infinity Partners, LLC, __

N.C. App. __, __ S.E.2d __ (2014). For the reasons discussed in

that opinion, summary judgment for Wells Fargo was proper in

this action to collect on the 2008 notes, even had Fischer

adequately supported his alleged affirmative defenses. See

Rankin, 210 N.C. App. at 215, 706 S.E.2d at 313 (“If the correct

result has been reached, the judgment will not be disturbed . .

. .”). Accordingly, the trial court’s order granting Wells

Fargo’s motion for summary judgment is

AFFIRMED.

Judges STROUD and MCCULLOUGH concur.

Report per Rule 30(e).