In re Hedgepeth

1

IN THE MATTER OF THE FORECLOSURE OF THE CLAIM OF LIEN ON LOT OWNED BY [RONNIE C. HEDGEPETH AND SHIRA L. HEDGEPETH]

No. COA23-226

Court of Appeals of North Carolina

November 7, 2023

An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.

Heard in the Court of Appeals 20 September 2023.

Appeal by respondent-appellants from order entered 19 December 2022 by Judge William Coward in Swain County No. 22SP33 Superior Court.

McLean Law Firm, P.A., by Russell L. McLean, III, and The Law Office of Shira Hedgepeth, PLLC, by Shira Hedgepeth, pro se attorney appellant, for respondent-appellants.

Sanford L. Steelman, Jr., and David A. Sawyer, and Rayburn Cooper &Durham, PA, by Ashley B. Oldfield and Ross R Fulton for petitioner-appellees Smoky Mountain Country Club Property Owners Association, Inc. and Smoky Mountain Country Club.

GORE Judge

Respondent-appellants appeal the order granting the foreclosure sale of their property due to an outstanding claim of lien against the property. Upon review of the parties' briefs and the record, we affirm.

I.

Respondent-appellants bring a third appeal this year before this Court regarding the underlying disputes between themselves and petitioner-appellees, Smoky Mountain Country Club Property Owners' Association, Inc. ("Association"). Respondent-appellants became part of the Association when they purchased a townhome within the planned community in 2017. Later, the Association assessed respondent-appellants, along with all members of the Association, for repayment of the multi-million dollar judgment entered against the Association and negotiated in the amended confirmation plan during the Association's Chapter 11 bankruptcy proceedings. Respondent-appellants and other members, the Youngs, appealed the bankruptcy order in the United States District Court for the Western District of North Carolina. The federal court dismissed the appeal for lack of standing.

The Association incurred attorneys' fees in the amount of $69,623.00 while defending respondent-appellants' bankruptcy appeal. Respondent-appellants received notice of the legal fees during the bankruptcy appeal and did not object or challenge the amount in legal fees. The Association initiated a hearing before its board of directors to determine whether respondent-appellants and the Youngs should be solely assessed the outstanding legal fees pursuant to section 47F-3-115(e) of the North Carolina Planned Community Act. Neither respondent-appellants nor the Youngs attended the hearing. The Association's board of directors issued a written decision with findings of fact and conclusions of law ultimately deciding respondent-appellants and the Youngs acted negligently and with misconduct; therefore, respondent-appellants were assessed the legal fees jointly and severally. Full payment of the legal fees assessment was required by 31 May 2021, or the Association would file a lien against respondent-appellants' property and institute a nonjudicial foreclosure pursuant to section 47F-3-116.

Respondent-appellants did not pay the assessment; consequently, the Association filed a claim of lien against the property on 21 March 2022, in the amount of $69,623.00 with 8% interest per annum. In response, respondent-appellants filed a lawsuit on 1 April 2022, No. 22-CVS-65, and later an amended complaint seeking declaratory relief and to quiet title against the Association ("Prior Action").

The Association proceeded with foreclosure of respondent-appellants' property on 8 August 2022 by issuing a Notice of Hearing in Foreclosure before the clerk of court ("Foreclosure Action"). Respondent-appellants filed a 12(b)(6) motion to dismiss the foreclosure and later a motion to consolidate the case with the Prior Action and to amend the Prior Action. Additionally, respondent-appellants filed a motion to stay the foreclosure until determination of the Prior Action. On or about 16 September 2022, the clerk of court entered an order allowing foreclosure and denying the motion to stay.

Respondent-appellants appealed the Foreclosure Action decision to the Swain County Superior Court. Respondent-appellants once again filed a motion to stay the foreclosure, consolidate the case with the Prior Action, and filed a motion to waive mediation. Additionally, respondent-appellants filed a 12(b)(1) motion to dismiss the Foreclosure Action. The trial court heard the motions and denied the motion to stay the Foreclosure Action, denied the motion to set aside and dismiss the Foreclosure Action, and denied the alternative motion to consolidate the Foreclosure Action with the Prior Action. The trial court conducted a de novo bench trial, and on 19 December 2022, entered the Order Allowing Foreclosure Sale that is the subject of this appeal. Respondent-appellants timely filed a notice of appeal specifying appeal of the Order Allowing Foreclosure Sale.

II.

Respondent-appellants assert the following challenges on appeal: (1) whether the trial court erred in its finding of fact and conclusion of law that the assessment levied against respondent-appellants was a valid debt; (2) whether the trial court erred in finding the Association's assessment is authorized pursuant to section 47F-3-115(e); (3) whether the trial court erred in finding section 47F-3-115(e) permits the Association to assess its legal fees upon respondent-appellants; (4) whether the trial court erred by finding respondent-appellants waived objections to the Assessment by not participating in the hearing before the Association's board of directors; (5) whether the trial court erred by exclusively assessing the legal fees to respondentappellants and the Youngs pursuant to section 47F-3-115(e); (6) whether the trial court erred in finding the Association may assess common expenses jointly and severally against specific members; and (7) whether the trial court erred by not consolidating the Foreclosure Action with the Prior Action.

When the trial court conducts a bench trial, we review "whether competent evidence exists to support the trial court's findings of fact and whether the conclusions reached were proper in light of the findings." In re Foreclosure Under That Deed of Tr. Executed by Azalea Garden Bd. &Care, Inc., 140 N.C.App. 45, 50, 535 S.E.2d 388, 392 (2000). "[U]nchallenged findings of fact are . . . binding on appeal. Otherwise, a trial court's findings of fact are conclusive on appeal if supported by any competent evidence." Cherry Cmty. Org. v. Sellars, 381 N.C. 239, 246, 871 S.E.2d 706, 714 (2022). We review conclusions of law de novo. In re Bass, 366 N.C. 464, 467, 738 S.E.2d 173, 175 (2013).

Before we address respondent-appellants multiple claims, we believe it is necessary to first discuss our North Carolina Rules of Appellate Procedure. Essential to this Court's review is the appellants' consideration and application of the appellate rules to their arguments. Rule 28(b)(6) requires that the appealing party include citations to authorities in support of their argument; when the party fails to properly provide reason or argument with legal support, the issue is considered abandoned. See N.C. R. App. P. 28(a), (b)(6). "It is not our role to create an appeal for an appellant. That burden rests solely with the appellant." State v. Patterson, 269 N.C.App. 640, 645, 839 S.E.2d 68, 72 (2020) (internal quotation marks and citations omitted). When appellants "fail to apply any legal authority to the evidence presented below or to explain how the trial court's order was inconsistent with the law," we consider the argument abandoned under Rule 28(b)(6). K2HN Constr. NC, LLC v. Five D Contractors, Inc., 267 N.C.App. 207, 214, 832 S.E.2d 559, 564 (2019).

Merely stating elements of a claim but then failing to apply the evidence and cite to authority as to how the evidence does or does not support the elements, is insufficient. Id.

A.

Respondent-appellants first argue the trial court erred by finding and concluding the assessment was a valid debt. Respondent-appellants cite the correct elements of a valid lien, but the rest of their argument is derailed by unsupported claims, i.e., that petitioner-appellees set up their own court and how that invalidated the debt. Respondent-appellants cite no law or authority to support their argument. While they claim this is an issue of first impression, they provide no persuasive authorities or any substance to support their claims. Nor do they demonstrate a lack of competent evidence to support the finding of fact that the assessment is a valid debt. Accordingly, we determine respondent-appellants failed to comply with Rule 28(b)(6), and as a result, abandoned the issue.

B.

Next, respondent-appellants argue issues 2 and 3 separately, but they are essentially the same argument: whether section 47F-3-115(e) authorizes the Association to assess its legal fees against respondent-appellants. In support of their argument, respondent-appellants state section 47F-3-115 only allows assessments for common expenses, which they assert are defined as "maintenance [and] repair replacements of a limited common element." They apply this definition with section 47F-3-115(e) to limit its application to mean "the negligence or misconduct must be associated with the maintenance or repair of a common area." They link this application with section 47F-3-107 to ultimately conclude that the Association is limited to hearing and assessing this legal responsibility only if the amount is no more than the limit in a small claims court case.

Section 47F-3-115(e) is part of a...