Jpmorgan Chase Bank v. Browning

750 S.E.2d 555

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, Plaintiff

v.Linda D. BROWNING, a/k/a Linda Browning and Leslie Browning a/k/a Leslie Deanne Browning Davis, Defendants.

No. COA13–358.

Court of Appeals of North Carolina.

Nov. 19, 2013.

Appeal by plaintiff JPMorgan Chase Bank from order entered 26 October 2012 by Judge Sharon Tracey Barrett in Cherokee County Superior Court. Heard in the Court of Appeals 12 September 2013.

Roberson Haworth & Reese, High Point, by Alan B. Powell, Christopher C. Finan, and Matthew A.L. Anderson, for plaintiff-appellant.

Cowan & Cowan, P.A., by Ronald M. Cowan, for defendant-appellees.

HUNTER, JR., ROBERT N., Judge.

JPMorgan Chase Bank (“Plaintiff”) appeals from a 26 October 2012 order granting summary judgment in favor of Linda Browning and Leslie Browning (collectively “Defendants”). Upon review, we affirm the trial court's order granting summary judgment and denying Plaintiff's motion to amend.

I. Facts & Procedural History

Plaintiff filed a civil summons, notice of lis pendens, and its complaint on 2 December 2011 in Cherokee County Superior Court. Defendants filed an answer and counterclaims on 23 February 2012. Plaintiff replied to the counterclaims on 14 June 2012. Defendants filed a motion for summary judgment on 20 August 2012. Plaintiff filed a motion for leave to amend its complaint on 1 October 2012.

The summary judgment motion and motion to amend the pleadings were heard simultaneously by the Honorable Sharon T. Barrett on 26 October 2012. Judge Barrett granted Defendants' motion for summary judgment and denied Plaintiff's motion for leave to amend. The trial court served Plaintiff with this order on 19 November 2012, and notice of appeal was timely filed on 29 November 2012. The record and exhibits presented on appeal tended to show the following facts.

This action concerns title to real property located at 179 Peachtree Street in Murphy, North Carolina (“Peachtree”). A brief history of the chain of title shows Defendants' grandparents Evan Alonzo Browning (“Evan”) and Fleta Browning (“Fleta”) previously owned Peachtree. Fleta passed away, leaving Evan as the sole owner as a surviving tenant by the entirety. Evan then conveyed Peachtree to Defendants on 26 August 1986 by a properly recorded deed, reserving a life estate for himself. Evan passed away on 27 October 1989. Defendants later conveyed a one-third interest to their father William Evan Browning (“Father”) by general warranty deed on 31 March 1989. Father deeded his one-third interest in Peachtree to himself and his wife Mildred Browning on 13 January 1992, creating a tenancy by the entirety. Mildred Browning predeceased her husband in 1999.

On 24 April 2001, Father individually executed a promissory note payable to First–Citizens Bank and Trust Company in the amount of $162,000 (“First Note”). On the same date, to secure the First Note, Defendants and Father executed a deed of trust (“First Deed of Trust”) to secure repayment of the First Note. The uniform settlement statement shows a title examination fee of $275.00 paid to Hyde, Hoover, & Lindsay, a Murphy, North Carolina law firm. As part of the closing, Attorney Charles W. McHan, Jr. notified Defendants that they needed to sign the First Deed of Trust in order for Father to complete the transaction. Defendants signed the First Deed of Trust, but not the First Note.

On or near 16 August 2005, Father executed a second promissory note in the amount of $236,300.00, payable to Gordon Lending Corporation, Plaintiff's predecessor in interest (“Second Note”). Father simultaneously executed a deed of trust (“Second Deed of Trust”), which was later recorded on 29 August 2005 in the Cherokee County Registry. Advantage Equity Services of Pittsburgh, Pennsylvania completed a “Title Commitment” for Father and his then—deceased wife, Mildred Browning. On the “Title Commitment,” Schedule B, Item 3 required as a condition of closing that a “loan termination authorization must be signed by the borrowers for each mortgage appearing on the title.” In the mortgages section of this document, the First Deed of Trust is listed, along with mortgagees “William E. Browning, Unmarried, Linda D. Browning, Unmarried, and Leslie D. Browning Davis, Unmarried.” There is also a title insurance fee of $405.50 and a title exam fee of $185.00 listed on the “Title Commitment” document.

Defendants did not execute either the Second Note or the Second Deed of Trust. The 29 August 2005 Second Deed of Trust listed the borrowers as Father and his then-deceased wife, Mildred Browning, but not Defendants. Despite the title commitment requirement, then-deceased Mildred Browning did not sign the Second Deed of Trust. The record does not show Defendants signed a “loan termination authorization.”

At closing, Gordon Lending Corporation disbursed $153,711.09 from the proceeds of the Second Note to satisfy the First Note and First Deed of Trust. The Second Deed of Trust was drafted by Gordon Lending Corporation. Additionally, the closing statement from Gordon Lending Corporation did not include any charges for checking the chain of title or for attorney's fees, although a $475 fee was paid to Advantage Equity Services. The record lacks any indication of involvement by a licensed North Carolina attorney in the second transaction.

Father died intestate on 13 September 2006 with Defendants being his only heirs. By letter dated 15 December 2006, the administrator of Father's estate notified the then-holder of the Second Deed of Trust, Plaintiff's predecessor in interest, Washington Mutual Bank, that (i) Father never owned more than a one-third interest in Peachtree; (ii) each of Defendants owned a one-third interest; and (iii) the Second Deed of Trust constituted a lien on only a one-third tenancy in common interest in Peachtree. The administrator also notified Washington Mutual that “it does not appear that a local attorney did any title examination and [does appear] that the whole transaction was handled by an out-of-state closing company, which may violate North Carolina statutes dealing with the authorized practice of law.” The administrator also forwarded copies of the closing documents to the North Carolina State Bar for any appropriate action. Washington Mutual acknowledged receipt of this letter by its own letter dated 25 January 2007. Washington Mutual replied that it had “initiated an investigation of the allegations you raise and will advise you of our determination when concluded.”

On 25 September 2008, the Federal Deposit Insurance Company labeled Washington Mutual Bank a “Failed Bank.” Plaintiff, JPMorgan Chase, assumed the liabilities and purchased the assets of Washington Mutual Bank. Plaintiff is now the holder in due course of the Second Note and the beneficiary of the Second Deed of Trust.

Plaintiff filed a complaint in Cherokee County Superior Court requesting: (i) that the Second Deed of Trust be declared a valid lien; (ii) to establish a trust in the property or to reform the Second Deed of Trust; (iii) to quiet title; or (iv) in the alternative, to find for Plaintiff that Defendants were unjustly enriched. While Plaintiff sought relief at trial on all four grounds, Plaintiff seeks review only of the trial court's treatment of its unjust enrichment claim and argues the trial court abused its discretion in denying Plaintiff's request for leave to amend its complaint. Plaintiff therefore has abandoned the remaining three grounds raised in the trial court. SeeN.C. R.App. P. 28(b)(6) (2011) (“Issues not presented in a party's brief, or in support of which no reason or argument is stated, will be taken as abandoned.”).

II. Jurisdiction & Standard of Review

Jurisdiction lies in this Court pursuant to N.C. Gen.Stat. § 7A–27(b) (2011), as Plaintiff appeals from a final order of the superior court as a matter of right.

The first issue on appeal is whether the trial court properly granted summary judgment with respect to Plaintiff's unjust enrichment claim; this issue is reviewed de novo. In Re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008). The standard of review relating to the granting or denial of a summary judgment motion is whether there is a genuine issue of material fact and whether the moving party is entitled to judgment as a matter of law. Oliver v. Roberts, 49 N.C.App. 311, 314, 271 S.E.2d 399, 401 (1980), cert. denied,276 S.E.2d 283 (1981). “In ruling on the motion, the court must consider the evidence in the light most favorable to the nonmovant, who is entitled to the benefit of all favorable inferences which may reasonably be drawn from the facts proffered.” Averitt v. Rozier, 119 N.C.App. 216, 218, 458 S.E.2d 26, 28 (1995). Summary judgment may be properly shown by “ ‘proving that an essential element of the plaintiff's case is non-existent.’ ” Kinesis Adver., Inc. v. Hill, 187 N.C.App. 1, 10, 652 S.E.2d 284, 292 (2007) (quoting Draughon v. Harnett Cnty. Bd. of Educ., 158 N.C.App. 705, 708, 582 S.E.2d 343, 345 (2003)).

The second issue on appeal is whether the court improperly denied a request for leave to amend Plaintiff's complaint and is reviewed under an abuse of discretion standard. “Leave to amend should be granted when ‘justice so requires,’ or by written consent of the adverse party ... The granting or denial of a motion to amend is within the sound discretion of the trial judge, whose decision is reviewed under an abuse of discretion standard.” House Healers Restorations, Inc. v. Ball, 112 N.C.App. 783, 785–86, 437 S.E.2d 383, 385 (1993) (internal citation omitted). “If the trial court articulates a clear reason for denying the motion to amend, then our review ends. Acceptable reasons for which a motion to amend may be denied are ‘undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies, undue prejudice and futility of the amendment.’ ” NationsBank of N.C., N.A. v. Baines, 116 N.C.App. 263, 268, 447 S.E.2d...