Opinion
NO. COA12-230
12-18-2012
IN THE MATTER OF THE FORECLOSURE OF THE COMMERCIAL DEED OF TRUST OF RICHARD R. BEAUCHEMIN AND WIFE, SANDRA M. BEAUCHEMIN, RECORDED IN BOOK 1669, at PAGE 118 OF THE JACKSON COUNTY PUBLIC REGISTRY.
Matney & Associates, P.A., by David E. Matney, III and Amy P. Mody, for respondents-appellants. Van Winkle, Buck, Wall, Starnes and Davis, P.A., by Esther E. Manheimer and Lynn Dee Moffa, for petitioner-appellee.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.
Jackson County
No. 11 SP 138
Appeal by respondents from order entered 30 September 2011 by Judge Alan Z. Thornburg in Jackson County Superior Court. Heard in the Court of Appeals 26 September 2012.
Matney & Associates, P.A., by David E. Matney, III and Amy P. Mody, for respondents-appellants.
Van Winkle, Buck, Wall, Starnes and Davis, P.A., by Esther E. Manheimer and Lynn Dee Moffa, for petitioner-appellee.
HUNTER, Robert C., Judge.
Respondents Richard and Sandra Beauchemin (collectively "appellants" or, individually, "Dr. Beauchemin" or "Ms. Beauchemin") appeal from the trial court's order authorizing Raintree Realty and Construction, Inc., as substitute trustee, to proceed with foreclosure under a power of sale in the deed of trust recorded in Book 1669 at Page 118 in the Jackson County Register of Deeds. After careful review, we affirm the trial court's order.
Background
On 18 April 2007, Eyetooth, LLC ("Eyetooth"), a limited liability company whose only members-managers were Dr. Beauchemin and Dr. Richard Hoodenpyle ("Dr. Hoodenpyle"), executed a commercial promissory note ("promissory note") borrowing $1.5 million from HomeTrust Bank ("appellee") to finance a development project in Haywood County. Dr. Hoodenpyle and Dr. Beauchemin signed the promissory note as members-managers of Eyetooth. The promissory note was secured by two deeds of trust: (1) a commercial deed of trust on real property owned by Eyetooth in Haywood County ("Eyetooth DOT"), and (2) a deed of trust on real property owned by appellants in Jackson County ("Beauchemin DOT"). The Beauchemin DOT includes 117 acres surrounding, but not including, appellants' house in Jackson County.
We note that both Dr. Beauchemin and Dr. Hoodenpyle also executed Mortgage Loan Guaranty Agreements on 18 April 2007 as additional collateral for the promissory note. The parties stipulated that the Beauchemin DOT secures the promissory note. Furthermore, appellee conceded that the Jackson County foreclosure "did not involve any claim by HomeTrust Bank to recover under the guaranties[.]" For purposes of this opinion, we will treat the parties' stipulation and appellee's concession as correct and consider the Beauchemin DOT as security for the promissory note. However, it appears that the Beauchemin DOT was security for the guaranty agreement executed by Dr. Beauchemin which was a personal guarantee of the promissory note. The guaranty is not a part of the record. The inclusion of all documents necessary for an understanding of the arguments on appeal, as required by N.C.R. App. P. 9(a)(1)(e) (2012), is the responsibility of the appellant. See Smith v. Heath, 208 N.C. App. 467, 470, 703 S.E.2d 194, 196 (2010) (noting that "'it is the appellant's responsibility to make sure that the record on appeal is complete and in proper form.'") (citing Miller v. Miller, 92 N.C. App. 351, 353, 374 S.E.2d 467, 468 (1988)). Without a copy of the guaranty agreement, we are unable to determine its terms. Therefore, although appellants urge us to consider the Beauchemin DOT as a "limited guaranty," we decline to do so based on the stipulation and failure to include a copy of the guaranty agreement in the record.
In September 2009, appellee began foreclosure proceedings on the Eyetooth DOT in Haywood County ("Haywood County foreclosure"). Appellee's attorney attested that he placed a copy of the Haywood County notice of hearing in foreclosure ("Haywood County notice of hearing") in the mail, postage prepaid, certified return receipt requested, to Richard R. Beauchemin at 70 Westcare Drive, Ste. 403 in Sylva, N.C. Dr. Beauchemin had an office at WNC Eye Care, located at this address, when the Haywood County notice of hearing was sent. A copy of the return receipt for the certified mailing was attached to the affidavit indicating that the mailing was received and signed for by Denise Stephens on 3 September 2009. Denise Stephens was employed by WNC Eye Care as the "front desk person" at the time she signed the receipt.
On 5 January 2010, the Haywood County clerk of court entered an order in foreclosure on the Eyetooth DOT ("Haywood County order"). The Haywood County order found that Dr. Beauchemin was served by certified mail, return receipt requested on 3 September 2009 and concluded that appellee provided notice to all persons entitled to notice. The Haywood County property was originally sold on 5 March 2010, but the sale was set aside when Eyetooth filed for bankruptcy prior to the date that the upset bid period expired. Once the bankruptcy stay was lifted, a notice of resale was mailed to Dr. Beauchemin at his office address. The Haywood County property was sold in foreclosure, and the amount applied to the balance due under the note was $780,787, leaving a debt of $990,482.06. The Haywood County order was not appealed.
On 27 April 2011, appellee filed a notice of hearing in foreclosure in Jackson County on the Beauchemin DOT ("Jackson County foreclosure"). The parties to this appeal made the following stipulations: (1) "no payments have been made on an indebtedness evidenced by that certain promissory note executed by Eyetooth"; (2) the Beachemin DOT secured the promissory note; (3) the notice of hearing met all the statutory requirements of N.C. Gen. Stat. § 45-21.16(b) and was provided to all persons entitled to such notice; (4) the underlying mortgage is not a home loan; (5) no one occupies the property as a principal residence; (6) the foreclosure sale is not barred by the debtors' military service; and (7) the Beauchemin DOT contains the power of sale. On 4 August 2011, the Jackson County clerk of court entered an order authorizing foreclosure. Appellants appealed the Clerk's order to Jackson County Superior Court. On 30 September 2011, the trial court entered an order in foreclosure ("Jackson County order"). Appellants appealed the Jackson County order to this Court.
Appellants filed for bankruptcy, but the Bankruptcy Court for the Western District of North Carolina has provided relief from the automatic stay to allow this Court to decide the merits of the appeal.
Arguments
Appellants contend that the trial court erred in concluding that there was a valid debt since they were not given proper notice of the Haywood County foreclosure pursuant to N.C. Gen. Stat. § 45-21.16(b)(2). Because we find that appellants are attempting to collaterally attack the judgment of the Haywood County clerk of court, we will not address these arguments on appeal.
While appellants contend that the issue is whether they received proper notice of the Haywood County foreclosure, the issue before us is whether this Court has jurisdiction to review appellants' argument. Here, appellants are trying to challenge the Haywood County order's conclusion that Dr. Beauchemin was properly served with the Haywood County notice of hearing through an appeal of the Jackson County order. The Haywood County order was issued in a separate action, the Haywood County foreclosure, and the issue of whether Dr. Beauchemin was properly served in that action should have been raised in an appeal of that order. Thus, appellants are attempting to collaterally attack the Haywood County order. "A collateral attack on a judicial proceeding is an attempt to avoid, defeat, or evade it, or deny its force and effect, in some incidental proceeding not provided by law for the express purpose of attacking it." Regional Acceptance Corp. v. Old Republic Surety Co., 156 N.C. App. 680, 682, 577 S.E.2d 151, 154 (1999) (internal quotations marks omitted). "North Carolina does not allow collateral attacks on judgments." Id. Because the Haywood County order was not appealed, it became a final order not subject to collateral attack. Therefore, we have no jurisdiction to address the sufficiency of Dr. Beauchemin's notice of the Haywood County foreclosure because that proceeding is not before us. Accordingly, Dr. Beauchemin was properly served with the Haywood County notice of hearing. The only issue we can decide is whether Dr. Beauchemin received proper notice in the Jackson County foreclosure, and the parties stipulated that he did.
With regard to appellants' argument that service was invalid because Ms. Beauchemin was not served with the Haywood County notice of hearing, she did not sign the promissory note; she only signed the Beauchemin DOT. Thus, she was not entitled to notice of the Haywood County foreclosure since the Beauchemin DOT was collateral for the promissory note. However, Ms. Beauchemin was entitled to notice of the Jackson County foreclosure, which the parties stipulated she received.
Even if we had concluded that the Beauchemin DOT was security for the guaranty agreement, Ms. Beauchemin would still not be entitled to notice of the Haywood County foreclosure because there was no allegation she signed the guaranty agreement.
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Appellants' remaining arguments are also based on their contention that they did not receive proper notice of the Haywood County foreclosure. Since we have previously decided that Dr. Beauchemin was properly served with the Haywood County notice of hearing and Ms. Beauchemin was not entitled to notice, we need not address these arguments on appeal.
Conclusion
Based on the foregoing reasons, we affirm the Jackson County order of foreclosure.
AFFIRMED.
Judges BRYANT and STEELMAN concur.
Report per Rule 30(e).