{ "id": 3733789, "name": "DA DAI MAI, Plaintiff v. CAROLINA HOLDINGS, INC. and R. GREGORY TOMCHIN, Substitute Trustee, Defendants", "name_abbreviation": "Mai v. Carolina Holdings, Inc.", "decision_date": "2010-07-20", "docket_number": "No. COA09-1685", "first_page": "659", "last_page": "667", "citations": [ { "type": "official", "cite": "205 N.C. App. 659" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "394 S.E.2d 698", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1990, "pin_cites": [ { "page": "700" } ], "opinion_index": 0 }, { "cite": "100 N.C. App. 157", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526433 ], "year": 1990, "pin_cites": [ { "page": "159-60" } ], "opinion_index": 0, "case_paths": [ "/nc-app/100/0157-01" ] }, { "cite": "330 S.E.2d 643", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "645" } ], "opinion_index": 0 }, { "cite": "75 N.C. App. 351", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525900 ], "year": 1985, "pin_cites": [ { "page": "353" } ], "opinion_index": 0, "case_paths": [ "/nc-app/75/0351-01" ] }, { "cite": "235 S.E.2d 166", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "176", "parenthetical": "\"[NJotice [under N.C.G.S. \u00a7 105-392 (now N.C.G.S. \u00a7 105-375" } ], "opinion_index": 0 }, { "cite": "292 N.C. 692", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8572659 ], "year": 1977, "pin_cites": [ { "page": "708", "parenthetical": "\"[NJotice [under N.C.G.S. \u00a7 105-392 (now N.C.G.S. \u00a7 105-375" } ], "opinion_index": 0, "case_paths": [ "/nc/292/0692-01" ] }, { "cite": "94 L. Ed. 865", "category": "reporters:federal", "reporter": "L. Ed.", "year": 1950, "pin_cites": [ { "page": "873" } ], "opinion_index": 0 }, { "cite": "339 U.S. 306", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 362818 ], "year": 1950, "pin_cites": [ { "page": "314" } ], "opinion_index": 0, "case_paths": [ "/us/339/0306-01" ] }, { "cite": "462 U.S. 791", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 6194044 ], "weight": 6, "year": 1983, "pin_cites": [ { "page": "795", "parenthetical": "quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 94 L. Ed. 865, 873 (1950)" }, { "page": "185", "parenthetical": "quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 94 L. Ed. 865, 873 (1950)" }, { "page": "795" }, { "page": "185", "parenthetical": "citation and internal quotation marks omitted" }, { "page": "795" }, { "page": "185" } ], "opinion_index": 0, "case_paths": [ "/us/462/0791-01" ] }, { "cite": "515 S.E.2d 84", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "85" } ], "opinion_index": 0 }, { "cite": "133 N.C. App. 321", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11219324 ], "year": 1999, "pin_cites": [ { "page": "323" } ], "opinion_index": 0, "case_paths": [ "/nc-app/133/0321-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 105-375", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "pin_cites": [ { "page": "(c)", "parenthetical": "emphasis added" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 735, "char_count": 19760, "ocr_confidence": 0.763, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.10949576596936733 }, "sha256": "029f320fe9fde4e2d54a4cc1d97ebc8b48c158594e6ac61946a2945f2d780762", "simhash": "1:02f58067776e20f2", "word_count": 3263 }, "last_updated": "2023-07-14T21:30:55.510002+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Chief Judge MARTIN and Judge ELMORE concur." ], "parties": [ "DA DAI MAI, Plaintiff v. CAROLINA HOLDINGS, INC. and R. GREGORY TOMCHIN, Substitute Trustee, Defendants" ], "opinions": [ { "text": "BRYANT, Judge.\nOn 12 September 2008, plaintiff Da Dai Mai filed a complaint for declaratory judgment and injunctive relief against defendants Carolina Holdings, Inc., and R. Gregory Tomchin, substitute trustee, under a deed of trust granted in favor of Carolina Holdings. Plaintiff sought a declaration that the deed of trust had been extinguished and an injunction to prevent Carolina Holdings from foreclosing under the deed of trust. Carolina Holdings answered, denying plaintiff\u2019s claims and asserting various defenses and counterclaims. Both parties moved for summary judgment. On 9 September 2009, the trial court denied Carolina Holdings\u2019 motion and granted summary judgment in favor of plaintiff. Carolina Holdings appeals. As discussed below, we affirm.\nFacts\nCarolina Holdings owned and managed Eastway Apartments (\u201cthe property\u201d), an apartment complex in Charlotte. On 8 July 2002, Carolina Holdings conveyed the property to Lucky Seven, Inc., taking back a first lien purchase money deed of trust to secure a promissory note in the amount of $830,000.00. The purchase money deed of trust was recorded on 12 July 2002. On 30 July 2002, Lucky Seven conveyed the property to Li Cardwell, a relative of Lucky Seven\u2019s president, and on 31 March 2003, Li Cardwell conveyed the property to Anna Cardwell, a minor for whom Li Cardwell was custodian.\nIn 2004, the City of Charlotte began proceedings to demolish the apartments on the property. After the city condemned the property, Lucky Seven advised Carolina Holdings that it could not make note payments. Carolina Holdings gave Lucky Seven a delay on the payments. On 9 September 2004, Carolina Holdings sent the city a letter advising that it held a mortgage on the property and that Lucky Seven had agreed to turn the property over to Carolina Holdings if Lucky Seven could not find another new owner. Carolina Holdings advised that, if this occurred, Carolina Holdings would repair or demolish the property. By letter dated 17 September 2004, the city advised Carolina Holdings that its demolition order had been upheld by the Housing Appeals Board and that Anna Cardwell, the current owner, had had until 15 September 2004 to appeal to superior court.\nOn 7 January 2005, the city filed nine notices of lien for the net costs of removing or demolishing the apartments on the property, work which occurred between 20 December 2004 and 7 January 2005. On 5 July 2005, the city sent letters to the property owner and Carolina Holdings, as a lienholder of record, notifying them that if the liens were not paid within thirty days, the city would docket a judgment against the property. The city also published notice of intent to docket judgment in a local paper during July 2005. On 8 August 2005, the city filed a certificate of lien and judgment and execution issued upon the judgment for sale of the property. The notice of sale specified that it was offered to the highest bidder subject to any mortgages, liens, or taxes owed. The notice of sale was published but was not served on Carolina Holdings. The city was the high bidder at the execution sale, but plaintiff Mai filed an upset bid and purchased the property, a sale confirmed on 7 February 2006. Mai conducted a title search and discovered Carolina Holdings\u2019 deed of trust. Mai recorded his deed to the property on 15 March 2006. Carolina Holdings discovered the sale of the property in March 2007 and contacted Mai. Carolina Holdings began foreclosure proceedings on 11 July 2008. In response, on 12 September 2008, Mai filed his complaint for declaratory judgment and injunctive relief in this case.\nOn appeal, Carolina Holdings makes three arguments: that the trial court erred in granting Mai\u2019s motion for summary judgment because (I) N.C. Gen. Stat. \u00a7 105-375 is unconstitutional in that in fails to provide due process to lienholders of record; (II) the property was conveyed subject to a recorded deed of trust lien; and (III) there were irregularities in the execution sale and the price paid was inadequate.\nI\nCarolina Holdings first argues that the trial court erred in granting Mai\u2019s motion for summary judgment because N.C. Gen. Stat. \u00a7 105-375 violates the due process clauses of the United States and North Carolina Constitutions by providing insufficient notice of sale to lienholders of record. We disagree.\nSummary judgment is proper when there is no genuine issue of material fact and any party is entitled to judgment as a matter of law. N.C. Gen. Stat. \u00a7 1A-1, Rule 56(c) (2009); Hardy v. Moore County, 133 N.C. App. 321, 323, 515 S.E.2d 84, 85 (1999). \u201c[P]rior to an action which will affect an interest in life, liberty, or property protected by the Due Process Clause of the Fourteenth Amendment, a State must provide \u2018notice reasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford .them an opportunity to present their objections.\u2019 \u201d Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 795, 77 L. Ed. 2d 180, 185 (1983) (quoting Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 94 L. Ed. 865, 873 (1950)). We now turn to the relevant statutory procedures.\nOur North Carolina General Statutes provide that a city may file a lien against real property for costs associated with its demolition of a dwelling on the property because the dwelling was \u201cunfit for human habitation.\u201d N.C. Gen. Stat. \u00a7 160A-443(5)-(6) (2009). The lien should \u201cbe filed, have the same priority, and be collected as the lien for special assessment[.]\u201d N.C.G.S. \u00a7 160A-443(6)(a). \u201cAssessment liens may be foreclosed under any procedure prescribed by law for the foreclosure of property tax liens.\u201d N.C. Gen. Stat. \u00a7 160A-233(c) (2009). The relevant tax lien foreclosure procedures are set forth below:\n[t]he tax collector filing the certificate [showing the name of the taxpayer for each parcel on which the taxing unit has a lien for unpaid taxes, together with the amount of taxes, penalties, interest, and costs that are a lien thereon; the year or years for which the taxes are due; and a description of the property] shall, at least 30 days prior to docketing the judgment, send a registered or certified letter, return receipt requested, to ... all lienholders of record who have a lien against the listing taxpayer or against any subsequent owner of the property . . . stating that the judgment will be docketed and the execution will be issued thereon in the manner provided by law.\nN.C. Gen. Stat. \u00a7 105-375(c) (2005) (emphasis added). Subsection (d) provides that\n[i]mmediately upon the docketing and indexing of a certificate .. . the taxes, penalties, interest, and costs shall constitute a valid judgment against the real property described therein].]\nN.C.G.S. \u00a7 105-375(d). In addition, subsection (f) provides that\n[a]t any time prior to the issuance of execution, any person having an interest in the real property to be foreclosed may appear before the clerk of superior court and move to set aside the judgment on the ground that the tax has been paid or that the tax lien on which the judgment is based is invalid.\nN.C.G.S. \u00a7 105-375(f). Finally, subsection (i) provides that\n[a]t any time after three months and before two years from the indexing of the judgment . . . execution shall be issued at the request of the tax collector . . . [and] [i]n lieu of personal service of notice on the owner of the property, registered or certified mail notice shall be mailed to the listing owner at the listing owner\u2019s last known address at least 30 days prior to the day fixed for the sale. The notice must also be mailed to the current owner by registered or certified mail if notice was required to be mailed to the current owner pursuant to subsection (c) of this section.\nN.C.G.S. \u00a7 105-375(i), (i)(2) (2005).\nWe believe that the notice to lienholders of record required by \u00a7 105-375 is \u201creasonably calculated, under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.\u201d Mennonite, 462 U.S. at 795, 77 L. Ed. 2d at 185 (citation and internal quotation marks omitted). First, \u00a7 105-375 requires mailing a letter to lienholders of record by registered or certified mail which states \u201cthat the judgment will be docketed and the execution will be issued thereon in the manner provided by law.\u201d N.C.G.S. \u00a7 105-375(c). Furthermore, the notice apprising them of a pending execution is sent well in advance of the execution sale: the letter shall be sent \u201cat least 30 days prior to docketing the judgment[,]\u201d N.C.G.S. \u00a7 105-375(c),' and the execution sale shall not occur until at least three months following the indexing of the judgment. N.C.G.S. \u00a7 105-375(i). Second, \u00a7 105-375 affords lienholders of record an opportunity to present their objections. Following notice' of the docketing of the judgment and before the issuance of the execution, \u00a7 105-375(f) provides that \u201cany person having an interest in the real property . . . may appear before the clerk of superior court and move to set aside the judgment on the ground that the tax has been paid or that the tax lien on which the judgment is based is invalid.\u201d N.C.G.S. \u00a7 105-375(f). We therefore believe that \u00a7 105-375 comports with due process requirements.\nCarolina Holdings relies on Mennonite for the proposition that \u00a7 105-375 deprives lienholders of record of their property without due process of law. This reliance is misplaced. In Mennonite, the United States Supreme Court invalidated an Indiana statute on due process grounds because the statute required only that the city publish notice and post notice in the county courthouse of a pending tax sale. The Court held that, by failing to require notice by mail or personal service of the sale to mortgagees of the property, the statute failed to require notice \u201creasonably calculated under all circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.\u201d Id. at 795, 77 L. Ed. 2d at 185.\nAs discussed above, unlike the Indiana statute at issue in Mennonite, N.C.G.S. \u00a7 105-375 requires notice by a registered or certified letter to lienholders of record well in advance of the execution sale that the judgment will be docketed and that execution will be issued, and affords them an opportunity to object to the sale. The fact that subsection (i) does not require personal service of notice of the date fixed for the sale does not obviate the prior notice. Carolina Holdings received notice that its lien might be extinguished as required by subsection (c). See N.C.G.S. \u00a7 105-375 (c) (\u201cThe tax collector ..., shall, at least 30 days prior to docketing the judgment, send a registered or certified letter, return receipt requested, to ... all lien-holders of record\u201d) (emphasis added). The notice sent alerted Carolina Holdings \u201cthat the judgment will be docketed and the execution will be issued thereon in the manner provided by law.\u201d N.C.G.S. \u00a7 105-375 (c) (emphasis added). Carolina Holdings received due process by way of notice that a judgment had been docketed against real property on which it held a lien, and that execution would be issued as provided by our General Statutes. Therefore, the intent of N.C.G.S. \u00a7 105-375 as set out in subsection (a) \u2014 \u201cthat all persons owning interests in real property know or should know that the tax lien on their real property may be foreclosed and the property sold for failure to pay taxes\u201d \u2014 was clearly carried out in the instant case.\nMoreover, the North Carolina Supreme Court has previously suggested in dicta that the notice provisions of \u00a7 105-375 are constitutional and protect due process rights under both the federal and State constitutions. See Henderson County v. Osteen, 292 N.C. 692, 708, 235 S.E.2d 166, 176 (1977) (\u201c[NJotice [under N.C.G.S. \u00a7 105-392 (now N.C.G.S. \u00a7 105-375)],. . . would, in our opinion, be sufficient to satisfy the fundamental concept of due process of law and, therefore, to comply with Article 1, \u00a7 19, of the Constitution of North Carolina and the Due Process Clause of the Fourteenth Amendment of the Constitution of the United States.\u201d). Thus, we see no basis for defendants\u2019 argument that \u00a7 105-375 violates due process by failing to provide notice to lienholders of record. Defendants\u2019 argument that N.C.G.S. \u00a7 105-375 is unconstitutional is overruled.\nII\nCarolina Holdings next argues the trial court erred in granting summary judgment because the property was conveyed to plaintiff subject to its lien. We disagree.\n\u201cThe purchaser at the execution sale shall acquire title to the property in fee simple free and clear of all claims, rights, interests, and liens except the liens of other taxes or special assessments not paid from the purchase price and not included in the judgment.\u201d N.C.G.S. \u00a7 105-375(i). \u201c[T]he effect of a judgment foreclosing a tax lien on real property is to extinguish all rights, .title and interests in the real property subject to foreclosure . . . .\u201d Overstreet v. City of Raleigh, 75 N.C. App. 351, 353, 330 S.E.2d 643, 645 (1985).\nHere, the notice of sale offered the property to the highest bidder \u201cSUBJECT TO ANY MORTGAGES, LIENS OR TAXES\u201d that might be owed on the property, and the sheriff\u2019s deed specified that the property was conveyed to plaintiff \u201csubject to all prior liens and encumbrances.\u201d Carolina Holdings contends that this language means that the property was conveyed to plaintiff subject to its lien. However, notwithstanding the language in the notice of sale, the statute makes clear that a purchaser at an execution sale takes the property \u201cin fee simple free and clear of all claims, rights, interests, and liens except the liens of other taxes or special assessments not paid from the purchase price and not included in the judgment.\u201d N.C.G.S. \u00a7 105-375(i). Thus, only \u201cliens of other taxes or special assessments not paid from the purchase price and not included in the judgment\u201d survive a judgment foreclosing a tax lien on real property. Thus, when plaintiff purchased the property at the execution sale, he took the property free and clear of Carolina Holdings\u2019 lien. This argument is overruled.\nIll\nCarolina Holdings also argues the trial court erred in granting summary judgment because there were irregularities in the execution sale and the price paid was inadequate. We disagree.\nCarolina Holdings first contends that it did not receive proper notice of intent to docket judgment. However, \u00a7 105-375(c) requires\nthe tax collector . . . shall, at least 30 days prior to docketing the judgment, send a registered or certified letter, return receipt requested, to the listing taxpayer at his last known address, and to all lienholders of record who have a lien against the listing taxpayer or against any subsequent owner of the property... stating that the judgment will be docketed and the execution will be issued thereon in the manner provided by law.\nN.C.G.S. \u00a7 105-375(c). The record indicates that the city fully complied with the provisions of \u00a7 105-375. On 7 January 2005, the city filed notice of statutory liens in the amounts of $25,051.00; $20,212.00; $20,448.00; $6,500.00; $14,027.00; $18,303.00; $10,025.00; $4,550.00; and $16,009.00, for a total of $135,125.00, in addition to interest on that amount and a $450.00 administrative fee. On 5 July 2005, the city sent a letter by certified mail to Carolina Holdings\u2019 address at 408 W. Roosevelt Blvd., Monroe, North Carolina, 28110. The letter contained a description of the property, and stated\n[b]y copy of this letter, we are . . . giving notice to all lienholders of record],] [and] [i]f the liens plus accumulated interest, along with a[n] . . . administrative fee . . . are not paid within thirty (30) days after the date of this letter . . . the City of Charlotte will docket a judgment against the property for the full amount of the liens, any accumulated interest, and the administrative fees. An execution will be issued upon the judgment as provided by law.\nOn 8 August 2005, the city docketed a judgment against the property, and on 9 January 2006, the city held a public auction. In sum, the uncontested facts show that the city sent notice to Carolina Holdings at least 30 days prior to docketing a judgment, and then waited at least three months following the indexing of the judgment on 8 August 2005 to execute a sale of the property on 9 January 2006. We see no irregularity in the city\u2019s actions. Carolina Holdings\u2019 argument on this point is overruled.\nIn its brief to this Court, Carolina Holdings also contends that there were irregularities in the caption of the underlying judgment and notice, and that the final price was inadequate. However, our review of the record indicates that these issues were not raised in the trial court, either in the parties\u2019 pleadings or motions for summary judgment. \u201cA contention not raised in the trial court may not be raised for the first time on appeal.\u201d Town of Chapel Hill v. Burchette, 100 N.C. App. 157, 159-60, 394 S.E.2d 698, 700 (1990). Thus, we do not address these contentions by Carolina Holdings.\nAffirmed.\nChief Judge MARTIN and Judge ELMORE concur.\n. N.C.G.S. \u00a7 105-375 was amended in 2006. The prior version of the statute applied to the instant case and is therefore cited and quoted herein.\n. General Statute \u00a7 7A-109 requires \u201cthat all documents received for docketing shall be immediately indexed either on a permanent or temporary index. The rules may prescribe any technological process deemed appropriate for the economical and efficient indexing, storage and retrieval of information.\u201d N.C. Gen. Stat. \u00a7 7A-109(c) (2009).", "type": "majority", "author": "BRYANT, Judge." } ], "attorneys": [ "Bradley Arant Boult Cummings, L.L.P., by Michael C. Griffin, for plaintiff-appellee.", "John E. Hodge, Jr., for defendant-appellant Carolina Holdings, Inc." ], "corrections": "", "head_matter": "DA DAI MAI, Plaintiff v. CAROLINA HOLDINGS, INC. and R. GREGORY TOMCHIN, Substitute Trustee, Defendants\nNo. COA09-1685\n(Filed 20 July 2010)\n1. Constitutional Law\u2014 due process \u2014 municipal assessment foreclosure \u2014 notice\nN.C.G.S. \u00a7 105-375 (pre-2006), which applied here to a municipal lien foreclosure, was not unconstitutional in its notice provisions. The statute requires notice by a registered or certified letter to lienholders well in advance of the execution sale and affords an opportunity to object to the sale. The fact that personal service of notice of the date fixed for the sale was not required did not obviate the prior notice.\n2. Liens\u2014 municipal assessment \u2014 execution sale \u2014 extinguishment of deed of trust \u2014 language in notice of sale\nThe trial court did not err by granting summary judgment for plaintiff in an action in which plaintiff sought a declaratory judgment that defendant\u2019s deed of trust had been extinguished by an execution sale. Notwithstanding language in the notice of sale, plaintiff took the property free and clear of defendant\u2019s lien. N.C.G.S. \u00a7 105-375.\n3. Liens\u2014 municipal assessment and sale \u2014 free of other liens\nThe trial court did not err by granting summary judgment for plaintiff in a declaratory judgment action to determine whether an execution sale was free of defendant\u2019s lien. The uncontested facts show that the city sent defendant notice at least 30 days prior to docketing a judgment for tearing down the apartment building, then waited at least 3 months following the indexing of the judgment to execute a sale of the property. Issues concerning the caption of the underlying judgment and notice as well as the final price were not raised in the trial court and were not addressed.\nAppeal by defendants from order entered 9 September 2009 by Judge Robert P. Johnston in Mecklenburg County Superior Court. Heard in the Court of Appeals 7 June 2010.\nBradley Arant Boult Cummings, L.L.P., by Michael C. Griffin, for plaintiff-appellee.\nJohn E. Hodge, Jr., for defendant-appellant Carolina Holdings, Inc." }, "file_name": "0659-01", "first_page_order": 687, "last_page_order": 695 }