{ "id": 4079191, "name": "LINDA G. DOBSON, Plaintiff v. SUBSTITUTE TRUSTEE SERVICES, INC., SUBSTITUTE TRUSTEE, AND WELLS FARGO BANK MINNESOTA, N.A., AS TRUSTEE FOR EQUIVANTAGE HOME EQUITY LOAN TRUST, 1996-4, NOTEHOLDER, EQUIVANTAGE INC., AND AMERICA'S SERVICING COMPANY, Defendants", "name_abbreviation": "Dobson v. Substitute Trustee Services, Inc.", "decision_date": "2011-05-17", "docket_number": "No. COA10-632", "first_page": "45", "last_page": "59", "citations": [ { "type": "official", "cite": "212 N.C. App. 45" } ], "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": "665 S.E.2d 147", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12641725 ], "year": 2008, "pin_cites": [ { "page": "152" } ], "opinion_index": 0, "case_paths": [ "/se2d/665/0147-01" ] }, { "cite": "291 S.E.2d 149", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1982, "opinion_index": 0 }, { "cite": "305 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568293, 8568358, 8568327, 8568267, 8568222 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/305/0300-03", "/nc/305/0300-05", "/nc/305/0300-04", "/nc/305/0300-02", "/nc/305/0300-01" ] }, { "cite": "284 S.E.2d 553", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1981, "pin_cites": [ { "page": "555" } ], "opinion_index": 0 }, { "cite": "55 N.C. App. 68", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526709 ], "weight": 2, "year": 1981, "pin_cites": [ { "page": "70-71" } ], "opinion_index": 0, "case_paths": [ "/nc-app/55/0068-01" ] }, { "cite": "693 S.E.2d 705", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 2010, "pin_cites": [ { "page": "709" }, { "page": "709-10" } ], "opinion_index": 0 }, { "cite": "283 S.E.2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "520" } ], "opinion_index": 0 }, { "cite": "304 N.C. 371", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567849 ], "year": 1981, "pin_cites": [ { "page": "375" } ], "opinion_index": 0, "case_paths": [ "/nc/304/0371-01" ] }, { "cite": "192 N.C. App. 155", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 4160344 ], "year": 2008, "pin_cites": [ { "page": "163-64" } ], "opinion_index": 0, "case_paths": [ "/nc-app/192/0155-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-301", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "opinion_index": 1 }, { "cite": "248 S.E.2d 385", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1978, "pin_cites": [ { "page": "387" }, { "page": "528" }, { "page": "388", "parenthetical": "\"As evidence that a [party] is holder of a note is an essential element of a cause of action upon such note, the [debtor] was entitled to demand strict proof of this element.\" (emphasis added)" } ], "opinion_index": 1 }, { "cite": "38 N.C. App. 525", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554858 ], "year": 1978, "pin_cites": [ { "page": "527" } ], "opinion_index": 1, "case_paths": [ "/nc-app/38/0525-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-3-110", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "pin_cites": [ { "page": "(c)(2)", "parenthetical": "\"If an instrument is payable to (i) a trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named . . . .\"" } ], "opinion_index": 1 }, { "cite": "2011 WL 646664", "category": "reporters:specialty_west", "reporter": "WL", "year": 2011, "pin_cites": [ { "parenthetical": "rejecting a party's contention that the Court must accept as true all statements found in the affidavits in the record, stating, \"our standard of review does not require that we accept a witness' characterization of what 'the facts' mean\"" } ], "opinion_index": 1 }, { "cite": "596 S.E.2d 344", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2004, "pin_cites": [ { "page": "349", "parenthetical": "\" 'Statements in affidavits as to opinion, belief, or conclusions of law are of no effect.' \" (quoting 3 Am. Jur. 2d, Affidavits \u00a7 13)" } ], "opinion_index": 1 }, { "cite": "164 N.C. App. 615", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8899642 ], "year": 2004, "pin_cites": [ { "page": "622", "parenthetical": "\" 'Statements in affidavits as to opinion, belief, or conclusions of law are of no effect.' \" (quoting 3 Am. Jur. 2d, Affidavits \u00a7 13)" } ], "opinion_index": 1, "case_paths": [ "/nc-app/164/0615-01" ] }, { "cite": "577 S.E.2d 398", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2003, "pin_cites": [ { "page": "406" } ], "opinion_index": 1 }, { "cite": "156 N.C. App. 477", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9191190 ], "year": 2003, "pin_cites": [ { "page": "489" } ], "opinion_index": 1, "case_paths": [ "/nc-app/156/0477-01" ] }, { "cite": "306 S.E.2d 123", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 8, "year": 1983, "pin_cites": [ { "page": "125", "parenthetical": "\"It is the fact of possession which is significant in determining whether a person is a holder, and the absence of possession defeats that status.\" (cited with approval in Adams, - N.C. App. at -, 693 S.E.2d at 709-10)" }, { "page": "124" }, { "page": "124" }, { "page": "125" }, { "page": "124-25" }, { "page": "124-25" } ], "opinion_index": 1 }, { "cite": "63 N.C. App. 547", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525742 ], "weight": 4, "year": 1983, "pin_cites": [ { "page": "550", "parenthetical": "\"It is the fact of possession which is significant in determining whether a person is a holder, and the absence of possession defeats that status.\" (cited with approval in Adams, - N.C. App. at -, 693 S.E.2d at 709-10)" }, { "page": "548" }, { "page": "549-50" } ], "opinion_index": 1, "case_paths": [ "/nc-app/63/0547-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 25-1-201", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "pin_cites": [ { "page": "(b)(21)", "parenthetical": "emphasis added" } ], "opinion_index": 1 }, { "cite": "N.C. Gen. Stat. \u00a7 45-21.16", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "pin_cites": [ { "page": "(d)", "parenthetical": "in order for the foreclosure to proceed, the clerk of court must find, inter alia, the existence of a \"valid debt of which the party seeking to foreclose is the holder\" (emphasis added)" } ], "opinion_index": 1 }, { "cite": "284 S.E.2d 553", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 7, "year": 1981, "pin_cites": [ { "page": "554", "parenthetical": "\"When the opposing party, however, admits that the documents shown him are correct copies of the original, the original need not be produced.\"" }, { "page": "554" }, { "page": "555" }, { "page": "554" }, { "page": "554" }, { "page": "554" } ], "opinion_index": 1 }, { "cite": "55 N.C. App. 68", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526709 ], "weight": 3, "year": 1981, "pin_cites": [ { "page": "70" }, { "page": "70" }, { "page": "70" } ], "opinion_index": 1, "case_paths": [ "/nc-app/55/0068-01" ] }, { "cite": "693 S.E.2d 705", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 6, "year": 2010, "pin_cites": [ { "page": "709" }, { "page": "709-10" }, { "page": "710", "parenthetical": "\"Because respondents do not dispute that the photocopies are 'correct copies' of the original instruments,\" the alleged note holder was not required to produce the original promissory note and deed of trust to establish possession." }, { "page": "710" } ], "opinion_index": 1 }, { "cite": "283 S.E.2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "520" } ], "opinion_index": 1 }, { "cite": "304 N.C. 371", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567849 ], "year": 1981, "pin_cites": [ { "page": "375" } ], "opinion_index": 1, "case_paths": [ "/nc/304/0371-01" ] } ], "analysis": { "cardinality": 1026, "char_count": 36035, "ocr_confidence": 0.75, "pagerank": { "raw": 8.044796797563603e-08, "percentile": 0.4659628804613705 }, "sha256": "31db690f6ff193c1566d62c337cdeba9019b287301d5e6d662200cf1451fffec", "simhash": "1:8b9c46f350767653", "word_count": 5903 }, "last_updated": "2023-07-14T17:12:23.503415+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge STEELMAN concurs.", "Judge HUNTER, ROBERT N., JR., dissents with a separate opinion." ], "parties": [ "LINDA G. DOBSON, Plaintiff v. SUBSTITUTE TRUSTEE SERVICES, INC., SUBSTITUTE TRUSTEE, AND WELLS FARGO BANK MINNESOTA, N.A., AS TRUSTEE FOR EQUIVANTAGE HOME EQUITY LOAN TRUST, 1996-4, NOTEHOLDER, EQUIVANTAGE INC., AND AMERICA\u2019S SERVICING COMPANY, Defendants" ], "opinions": [ { "text": "STEPHENS, Judge.\nFactual and Procedural Background\nOn 31 July 1996, Plaintiff Linda G. Dobson (\u201cDobson\u201d) and her husband borrowed, at a yearly rate of 12.41% interest, $50,400.00 from Equivantage, Inc. (\u201cEquivantage\u201d). Dobson executed a promissory note in favor of Equivantage in that same amount, the terms of which (1) required Dobson to make monthly payments of interest and principal amounting to $534.38, not including escrow; (2) charged a fee to Dobson for any late payments in the amount of \u201c4.000% of [the] overdue payment of principal and interest;\u201d and (3) stated that Dobson would be in default under the note if she did not pay the full amount of each monthly payment on its due date. Along with the note, Dobson executed a deed of trust securing Dobson\u2019s promise to pay with property located in Magnolia, North Carolina, and owned by Dobson and her husband.\nIn September 2001, Equivantage assigned the note and deed of trust to Defendant Wells Fargo Bank Minnesota, N.A. (\u201cWells Fargo\u201d). In October 2001, \u201cDobson became delinquent under the repayment terms.\u201d At that time, the unpaid principal balance on the note was $49,288.96. To cure Dobson\u2019s delinquency under the note, the parties agreed to the following modifications of the note: (1) $3,987.30 was capitalized as principal, resulting in an unpaid principal balance of $53,276.26; (2) Dobson was required to make monthly payments of interest and principal in the amount of $578.19 and escrow payments estimated at $62.51; and (3) the new maturity date was to be 1 November 2026. The loan modification agreement was signed by Dobson in February 2002.\nDobson made regular payments under the note between March 2002 and November 2003. However, Dobson stopped making payments after November 2003, and in March 2004, Wells Fargo \u201ccaused to be filed a foreclosure action assigned special proceeding number 04 SP 94.\u201d On 2 April 2004, following commencement of foreclosure proceedings, Dobson filed a bankruptcy petition in the Eastern District of North Carolina to stay the foreclosure. The bankruptcy court created a bankruptcy plan and stayed foreclosure for several years until, on 18 July 2007, the bankruptcy court dismissed Dobson\u2019s case for failure to comply with the provisions of the bankruptcy plan.\nIn September 2007, Defendant Substitute Trustee Services, Inc. (\u201cSTS\u201d), as substitute trustee for Wells Fargo, filed a foreclosure action with the Duplin County Clerk of Superior Court. In an order filed 25 October 2007, the Duplin County Clerk of Superior Court found that (1) Wells Fargo is the holder of the note; (2) \u201c[t]he total due under the note and [d]eed of [t]rust was undetermined;\u201d and (3) \u201c[t]here was insufficient evidence that [Dobson] was in default under the terms of the [d]eed of [t]rust.\u201d The Clerk of Superior Court then ordered that \u201cthe foreclosure of the deed of trust... is dismissed with prejudice.\u201d\nOn 29 October 2007, Wells Fargo gave notice of appeal of the dismissal to the Duplin County Superior Court. On 1 November 2007, Dobson filed a complaint against Wells Fargo, STS, Equivantage, and Defendant America\u2019s Servicing Company (\u201cASC\u201d) (collectively, \u201cDefendants\u201d) seeking (1) both a preliminary and permanent injunction against the foreclosure proceedings; (2) an equitable accounting and appointment of a referee; and (3) appointment of a mediator. On 13 November 2007, the trial court granted Dobson\u2019s request for a preliminary injunction.\nDefendants answered Dobson\u2019s complaint on 14 January 2008, and on 10 September 2009, following a lengthy period of discovery, Dobson filed a motion for partial summary judgment. In an order entered 6 October 2009, Superior Court Judge Russell J. Lanier, Jr., denied Dobson\u2019s motion for partial summary judgment on the permanent injunction claim, but held open Dobson\u2019s motion on the requests for appointment of a referee and for an equitable accounting. On 30 November 2009, Defendants filed their own motion for summary judgment, requesting that Dobson\u2019s action be dismissed. At the 7 December 2009 hearing on Defendants\u2019 motion, Dobson \u201crenewed and reopened\u201d her previous summary judgment motion, which action was allowed by the trial court. On 28 December 2009, following the hearing on the motions for summary judgment, the trial court denied Defendants\u2019 motion and partially granted Dobson\u2019s motion for summary judgment by \u201cpermanently enjoin[ing] [Defendants] from foreclosing upon, or taking any steps of any nature to cause the foreclosure of the [d]eed of [t]rust. . . until such a time as Defendants can establish that they are the owner and holder of the [n]ote[] and the amount owed by [Dobson].\u201d Wells Fargo and ASC gave notice of appeal of Judge Lanier\u2019s order on 27 January 2010.\nDiscussion\nSummary judgment is proper when, viewed in the light most favorable to the nonmovant, \u201cthe 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.\u201d See S.B. Simmons Landscaping & Excavating, Inc. v. Boggs, 192 N.C. App. 155, 163-64, 665 S.E.2d 147, 152 (2008).\nOn appeal, Defendants argue that the trial court erred by granting partial summary judgment for Dobson because, based on the evidence before the court, Dobson was not entitled to judgment as a matter of law. For the following reasons, we agree.\n\u201cA party moving for summary judgment may prevail if it meets the burden ... of showing through discovery that the opposing party cannot produce evidence to support an essential element of his or her claim.\u201d Bone Int\u2019l, Inc. v. Brooks, 304 N.C. 371, 375, 283 S.E.2d 518, 520 (1981). In this case, the trial court concluded that Defendants should be enjoined from pursuing foreclosure because, as a matter of law, the evidence presented by Defendants was insufficient \u201cto prove the existence of the facts necessary to allow a foreclosure.\u201d Specifically, the court concluded that Defendants failed to present legally sufficient evidence to establish (1) that Wells Fargo is the holder of the note and (2) the amount owed by Dobson on the note. Both of these conclusions are erroneous.\nOn the issue of Wells Fargo\u2019s status as holder of the note, Defendants presented the following evidence to establish that Wells Fargo is the holder of the note: (1) an affidavit by the vice president of loan documentation of Wells Fargo, which states that \u201c[t]he owner and holder of the [n]ote and indebtedness is[] Wells Fargo;\u201d (2) an affidavit by a default litigation specialist with Wells Fargo, which states that \u201cWells Fargo is the present and current holder of the [n]ote;\u201d (3) a photocopy of the original note; and (4) a photocopy of the document assigning the note to \u201cNorwest Bank Minnesota,\u201d which is \u201cnow known as Wells Fargo.\u201d\nDespite this evidence establishing Wells Fargo as the holder of the note, Dobson argues on appeal \u2014 and successfully argued before the trial court \u2014 that Wells Fargo has not proven that it is the holder of the note because it failed to produce the original note. This argument is unavailing.\nUnder similar circumstances, this Court has held that where there is no evidence that photocopies of a note or deed of trust are not exact reproductions of the original instruments, a party need not present the original note or deed of trust and may establish that it is the holder of the instruments by presenting photocopies of the note or deed of trust. In In re Adams, \u2014 N.C. App. \u2014, 693 S.E.2d 705 (2010), respondents argued that a foreclosing party \u201cdid not present competent evidence that it had possession of the Note and Deed of Trust because it offered only photocopies of the Note and Deed of Trust, rather than the original instruments.\u201d Id. at \u2014, 693 S.E.2d at 709. Based on a previous decision in In re Helms, 55 N.C. App. 68, 284 S.E.2d 553 (1981), disc. review denied, 305 N.C. 300, 291 S.E.2d 149 (1982)\u2014in which this Court \u201cdetermined that the photocopies of the promissory note and deed of trust were sufficient competent evidence to establish the required elements under [the foreclosure statute,]\u201d id. at \u2014, 693 S.E.2d at 709 (citing Helms, 55 N.C. App. at 70-71, 284 S.E.2d at 555) \u2014 the Court in Adams held that \u201c[b]ecause respondents do not dispute that the photocopies are \u2018correct copies\u2019 of the original instruments, we conclude that [a foreclosing party] was not required to present the original Note and Deed of Trust at the foreclosure hearing to establish that it was in possession of these instruments.\u201d Id. at \u2014, 693 S.E.2d at 709-10.\nIn this case, although Dobson does not admit that the photocopy of the note is a correct copy, Dobson has presented no evidence to dispute the fact that Wells Fargo is the holder of the note. Dobson contends in her brief that she \u201cspecifically disputes that the photocopy of the [n]ote is a true and correct copy of the original.\u201d However, Dobson\u2019s only \u201cdispute\u201d of the authenticity of the note comes from her 7 December 2009 affidavit, in which she states that \u201cI cannot confirm the authenticity of the copy of the [n]ote produced by the Defendants.\u201d This bare statement by Dobson is insufficient to cast doubt on Defendants\u2019 evidence that Wells Fargo is the holder of the note and does not serve as evidence that the copies are not exact reproductions.\nDobson further contends that in its \u201cresponse to [Dobson\u2019s] first request for admission,\u201d Wells Fargo itself denied possession of the original note and, therefore, Defendants are required to establish that Wells Fargo is the holder of the note by presentation of the original note. Again, we are unpersuaded by Dobson\u2019s argument. The response by Wells Fargo that Dobson characterizes as Defendants\u2019 denial of possession of the original note reads as follows:\nWells Fargo did not prepare the loan origination documents, and is unsure as to whether the documents attached to [Dobson\u2019s] first request for admission constitute the complete set of loan origination documents used by Equivantage in the formation of [Dobson\u2019s] home loan. Because Wells Fargo did not originate this account, Wells Fargo denies that the documents attached to [Dobson\u2019s] first request for admission are true and correct copies of the loan origination documents signed by [Dobson] and used by Equivantage in the formation of [Dobson\u2019s] home loan.\nHowever, Wells Fargo admits that the documents attached to [Dobson\u2019s] first request for admissions are true and correct copies of all loan origination documents currently in the possession of Wells Fargo that were acquired when Wells Fargo was assigned the payment rights to [Dobson\u2019s] account.\nIn our view, this statement by Wells Fargo clearly is not a denial of possession of the original note. The statement, read in its entirety, appears to (1) deny that the \u201cattached documents\u201d constitute all of the loan origination documents used by Equivantage in the formation of Dobson\u2019s home loan, and (2) admit that the \u201cattached documents\u201d are \u201ctrue and correct copies\u201d of all loan origination documents currently in possession of Wells Fargo and provided by Equivantage. Accordingly, rather than the above-quoted statement serving to deny Wells Fargo\u2019s possession of the original note, the statement admits that the photocopies of the original documents offered by Defendants are correct copies of the documents in Wells Fargo\u2019s possession, which include the original note. Because Defendants presented sufficient evidence to show that Wells Fargo is the holder of the note, we hold that the trial court erred by concluding that the evidence, taken in the light most favorable to Defendants, was insufficient to establish that Wells Fargo is the holder of the note.\nAs for whether Defendants presented sufficient evidence to establish the amount owed by Dobson on the note, the record contains evidence of the note itself, a 2002 modification of the note, the' deed of trust, records of Dobson\u2019s payments and modifications of Dobson\u2019s payment schedule from bankruptcy proceedings, and computer printouts of Defendants\u2019 records of Dobson\u2019s payments and charges from January 2000 to February 2009. This evidence, taken in the light most favorable to Defendants, is sufficient to establish the amount owed by Dobson under the note.\nThe deed of trust and the note, both the original and as modified, set out the following information constituting the entirety of Dobson\u2019s obligations to Defendants: (1) the total amounts of principal owed and interest charged; (2) the amount of Dobson\u2019s initial monthly payment; (3) the due date of the monthly payments and the date on which payments are considered late; (4) the calculation and application of late charges; and (5) the types of expenses for which Dobson is responsible with respect to the property. This listing of Dobson\u2019s obligations, combined with the data from Defendants\u2019 records of Dobson\u2019s payments and charges, provide all of the information necessary to determine what amount is owed by Dobson. Although arriving at that determination may take some time and effort, and perhaps a calculator, the evidence contained in the record in this case is not insufficient, as a matter of law, to allow the trial court to make that determination.\nAccordingly, we hold that the trial court erred by granting summary judgment for Dobson based on the court\u2019s erroneous conclusions that, as a matter of law, Defendants failed to present sufficient evidence to show the amount owed by Dobson under the note and to show that Wells Fargo is the holder of the note. We note that this holding should be viewed in the context of summary judgment, and should not be interpreted as finding Defendants\u2019 evidence sufficient to warrant final judgment in Defendants\u2019 favor. Obviously, if the trial court, in a later proceeding beyond the summary judgment stage, finds Defendants\u2019 evidence incomplete, unreliable, or unconvincing, the court could ultimately conclude that Defendants failed to present sufficient evidence such that a permanent injunction is appropriate. However, based on the evidence presented in the case thus far, such a conclusion should not be made summarily by the court, but instead should be made only after meaningful consideration of the evidence, which apparently the trial court was loath to provide.\nBased on the foregoing, we remand \u201cto let\u201d the trial court \u201cworry with it.\u201d\nREVERSED AND REMANDED.\nJudge STEELMAN concurs.\nJudge HUNTER, ROBERT N., JR., dissents with a separate opinion.\n. The note and deed of trust were assigned to \u201cNorwest Bank Minnesota, National Association, as trustee of Equivantage Home Equity Loan Trust 1996-4 under the pooling and servicing agreement dated as of November 1,1996.\u201d According to affidavits, Norwest Bank Minnesota is \u201cnow known as Wells Fargo.\u201d\n. From the transcript of the summary judgment hearing:\nTHE COURT: I just don\u2019t like this mess. It\u2019s confusing. It\u2019s imprecise. I think probably the best thing to do is to let the Court of Appeals worry with it.\nTHE COURT: Prepare an order and hopefully the folks up at Raleigh will be a lot smarter than I am and can figure this thing out. I am just not comfortable with the facts at all.", "type": "majority", "author": "STEPHENS, Judge." }, { "text": "HUNTER, JR., Robert N., Judge,\ndissenting.\nAs the majority notes, to prevail on her motion for summary judgment, Dobson has the burden of showing Defendants \u201ccannot produce evidence to support an essential element of [their] claim.\u201d Bone Int\u2019l, Inc., 304 N.C. at 375, 283 S.E.2d at 520. I conclude Dobson has met her burden, demonstrating that Wells Fargo failed to present competent evidence sufficient to establish a genuine issue of material fact that it is the holder of Dobson\u2019s promissory note, an essential element of Defendants\u2019 claim. Therefore, I respectfully dissent.\nIn reaching the conclusion that Defendants have produced sufficient evidence to establish that Wells Fargo is the holder of Dobson\u2019s note, the majority cites Adams and concludes:\nUnder similar circumstances, this Court has held that where there is no evidence that photocopies of a note or deed of trust are not exact reproductions of the original instruments, a party need not present the original note or deed of trust and may establish that it is the holder of the instruments by presenting photocopies of the note or deed of trust. (Emphasis added.)\nI would like to conclude the majority does not intend this statement to stand for the proposition that a party may establish it is the holder of a promissory note merely \u201cby presenting photocopies of the note.\u201d Because the record before this Court lacks any competent evidence that Wells Fargo is in possession of the Note, however, that is precisely what the majority permits.\nThus, my disagreement with the majority\u2019s decision is threefold. First, I conclude that our case law has established a narrow exception whereby an alleged holder may establish possession of a negotiable instrument without producing the original instrument, but that exception does not apply to the instant case. Second, I am concerned the majority\u2019s decision will be construed to permit an alleged holder of a negotiable instrument to establish it is in possession of an instrument merely by producing photocopies of the instrument. Third, I conclude Defendants have failed to produce competent evidence sufficient to establish that Wells Fargo is in possession of Dobson\u2019s promissory note. Without such evidence, Wells Fargo cannot establish it is the holder of the Note.\nA. Interpretation of In re Helms and In re Adams\nWe have recently stated in Adams, the Uniform Commercial Code\u2019s (\u201cUCC\u201d) definition of \u201cholder\u201d applies to foreclosure proceedings held pursuant to section 45-21.16(d) of our General Statutes. In re Adams, \u2014 N.C. App. at \u2014, 693 S.E.2d at 709; see N.C. Gen. Stat. \u00a7 45-21.16(d) (2009) (in order for the foreclosure to proceed, the clerk of court must find, inter alia, the existence of a \u201cvalid debt of which the party seeking to foreclose is the holder\u201d (emphasis added)). The UCC, as codified in our General Statues, defines a \u201cholder\u201d as \u201c[t]he person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession.\u201d N.C. Gen. Stat. \u00a7 25-1-201(b)(21) (2009) (emphasis added). Thus, establishing that a party is in possession of a note is essential in order to establish that party is the holder of the note. See Connolly v. Potts, 63 N.C. App. 547, 550, 306 S.E.2d 123, 125 (1983) (\u201cIt is the fact of possession which is significant in determining whether a person is a holder, and the absence of possession defeats that status.\u201d (cited with approval in Adams, \u2014 N.C. App. at \u2014, 693 S.E.2d at 709-10)) (emphasis added).\nDefendants are correct in stating that this Court has also held an alleged note holder need not produce the original promissory note at the foreclosure hearing, but only if the debtor concedes the photocopies of the note admitted into evidence are accurate copies of the original. See Adams, \u2014 N.C. App. at \u2014, 693 S.E.2d at 710 (\u201cBecause respondents do not dispute that the photocopies are \u2018correct copies\u2019 of the original instruments,\u201d the alleged note holder was not required to produce the original promissory note and deed of trust to establish possession.); In re Helms, 55 N.C. App. at 70, 284 S.E.2d at 554 (\u201cWhen the opposing party, however, admits that the documents shown him are correct copies of the original, the original need not be produced.\u201d). Adams thus applied the exception, created in Helms, to the requirement that the party seeking to foreclose must produce the original note to establish that it is in possession of the instrument- \u2014 \u2022 when the opposing party concedes the photocopies are correct copies of the instrument. Our holdings do not, however, relieve an alleged holder of the burden of establishing the party is in possession of the original instrument, nor \u2014 when the accuracy of the photocopy of the note is contested \u2014 do our holdings relieve the party of the burden of producing the original instrument.\nIn Helms, possession of the note and deed of trust were not at issue. Rather, the appellant argued the \u201cbest evidence\u201d rule required production of the original note and deed of trust by the party alleging to be the holder of the note. Helms, 55 N.C. App. at 70, 284 S.E.2d at 554. We concluded, however, that where the party seeking to foreclose produced photocopies of the note and deed of trust, and the debtors contested only the interest rate term within the note, it was unnecessary to produce the originals; the interest rate \u2014 and thus the amount of the debt due \u2014 is not relevant to a foreclosure proceeding. Id. Having established that the photocopies of the instruments were properly introduced, we then concluded there was sufficient evidence in the record to support the trial court\u2019s findings. Id. at 71, 284 S.E.2d at 555. That conclusion, however, does not imply that the photocopies were the only evidence of possession. Significantly, the opinion states there was evidence introduced in the trial court that the party seeking foreclosure was the holder of the note and deed of trust. Id. at 69, 284 S.E.2d at 554. On appeal, rather, the appellant argued the best evidence rule required production of the original note, and we concluded that, under the circumstances presented in Helms, it did not. Id. at 70, 284 S.E.2d at 554.\nSimilarly, in Adams, this Court concluded that, where the debtor did not dispute that the photocopies of the note and deed of trust were \u201ccorrect copies\u201d of the originals, the party claiming to be the holder of the instruments did not need to produce the originals to establish it was in possession of the instruments. Adams, \u2014 N.C. App at \u2014, 693 S.E.2d at 710. I do not interpret this holding in Adams to mean that a photocopy of the promissory note is, by itself, sufficient evidence to prove possession of the instrument. Rather, I conclude Adams merely applied Helms to reject the respondents\u2019 argument that even though they did not dispute the photocopies produced were not \u201cexact reproductions\u201d the original note must be produced. Id. As stated in Helms, \u201c[w]hen the opposing party, however, admits that the documents shown him are correct copies of the original, the original need not be produced.\u201d 55 N.C. App. at 70, 284 S.E.2d at 554.\nHere, Dobson contests the authenticity of the photocopy of the Note and, as discussed further below, the record contains evidence that the copy produced is not an exact reproduction of the original. Therefore, I conclude, the exception to the requirement to produce the original instrument, articulated in Helms and reiterated in Adams, does not apply to the present case.\nMoreover, the lender bears the burden of proving the existence of their right to foreclose under section 45-21.16 of our General Statutes. Adams, \u2014 N.C. App. at \u2014, 693 S.E.2d at 709 (citing In re Foreclosure of Brown, 156 N.C. App. 477, 489, 577 S.E.2d 398, 406 (2003)). The majority\u2019s holding, however, impermissibly shifts the burden of proving Defendants\u2019 photocopy of the Note is not an accurate copy of the original to Dobson, when it is the Defendants who, allegedly, have possession of the instrument.\nAssuming arguendo that our holdings permit Defendants to establish possession of the promissory note by means other than production of the original instrument, I conclude the evidence offered by Defendants is not competent evidence of Defendants\u2019 possession of the Note.\nB. Defendants\u2019 Affidavits\nIn support of their argument that Wells Fargo is the holder of Dobson\u2019s promissory note, Defendants submitted affidavits from two Wells Fargo employees. Neither affidavit, however, alleges any facts that would allow this Court to conclude that Defendants are in possession of Dobson\u2019s note.\nThe affidavit by Yolanda Williams, Vice President of Loan Documentation at Wells Fargo, makes the conclusory statement that \u201c[t]he owner and holder of the Note and indebtedness is: Wells Fargo Bank Minnesota, NA, as Trustee for Equivantage Home Equity Loan Trust, 1997-1.\u201d This statement of the identity of the alleged holder is not a statement of fact, but is a legal conclusion that is to be determined on the basis of factual allegations. As such, the statement is irrelevant as to the determination of the holder of the instrument as defined under the UCC. See Lemon v. Combs, 164 N.C. App. 615, 622, 596 S.E.2d 344, 349 (2004) (\u201c \u2018Statements in affidavits as to opinion, belief, or conclusions of law are of no effect.\u2019 \u201c (quoting 3 Am. Jur. 2d, Affidavits \u00a7 13)); see also Speedway Motorsports Int\u2019l Ltd. v. Bronwen Energy Trading, Ltd., \u2014 N.C. App. \u2014, \u2014 n.2, \u2014 S.E.2d \u2014, \u2014 n.2 \u2014, slip. op. at 12 n.2, No. 09-1451, 2011 WL 646664 (Feb. 15, 2011) (rejecting a party\u2019s contention that the Court must accept as true all statements found in the affidavits in the record, stating, \u201cour standard of review does not require that we accept a witness\u2019 characterization of what \u2018the facts\u2019 mean\u201d).\nFurthermore, Williams avers in her affidavit that Dobson\u2019s note was assigned to \u201cEquivantage Home Equity Loan Trust, 1997-1.\u201d This is not the same trust indicated by the indorsement on the photocopy of the Note, nor is it the same trust to which Defendants claim the Note is presently assigned: \u201cEquivantage Home Equity Loan Trust 1996-4.\u201d Thus, as Williams\u2019 affidavit alleges no facts to establish who is in physical possession of the Note, makes an irrelevant conclusion of law as to the identity of the holder, and alleges the Note has been assigned to a different trust, I conclude the Affidavit is not competent evidence that Defendant Wells Fargo Bank Minnesota, N.A. as Trustee for Equivantage Home Equity Loan Trust 1996-4 is the holder of Dobson\u2019s note.\nThis discrepancy between Williams\u2019 affidavit and the indorsement on the Note also demonstrates the danger of permitting photocopies of the promissory note to suffice as the sole evidence of possession: there is at least one assignment of Dobson\u2019s note that is not evidenced by the photocopy of the instrument. Granted, if the Note were endorsed as Williams describes, rather than as shown on the photocopy of the Note, the instrument would still be payable to Wells Fargo, as a trustee. See N.C. Gen. Stat. \u00a7 25-3-110(c)(2) (2009) (\u201cIf an instrument is payable to (i) a trust, an estate, or a person described as trustee or representative of a trust or estate, the instrument is payable to the trustee, the representative, or a successor of either, whether or not the beneficiary or estate is also named . . . .\u201d) (emphasis added). Williams\u2019 averment that the Note was assigned to a different trust, however, demonstrates the potential for multiple suits on the same promissory note if proof of possession could be established merely by producing ' a photocopy of the instrument, as contemplated in Liles v. Myers: an alleged holder \u201ccould negotiate the instrument to a third party who would become a holder in due course, bring a suit upon the note in her own name and obtain a judgment in her favor.\u201d 38 N.C. App. 525, 527, 248 S.E.2d 385, 387 (1978). Permitting such evidence to establish that a party seeking foreclosure is in possession of the promissory note would provide little protection from such an \u201cinequitable occurrence\u201d contemplated by the Liles Court. Id. at 528, 248 S.E.2d at 388 (\u201cAs evidence that a [party] is holder of a note is an essential element of a cause of action upon such note, the [debtor] was entitled to demand strict proof of this element.\u201d (emphasis added)).\nThe second affidavit produced by Defendants, that of Jennifer L. Robinson, Default Litigation Specialist for Wells Fargo, suffers similar inadequacies. Robinson avers that Dobson\u2019s note was assigned to \u201cNorwest Bank Minnesota, National Association as Trustee of Equivantage Home Equity Loan Trust 1996-4 under the pooling and servicing agreement dated as of November 01 1996, now known as Wells Fargo.\u201d She then makes the conclusory statement, \u201cWells Fargo is the present and current holder of the Note.\u201d Again, a determination of the entity that is the holder of a negotiable instrument under the UCC is a legal conclusion to be determined on the basis, of factual allegations; Robinson\u2019s opinion as to Wells Fargo\u2019s status as the holder of the Note is irrelevant. Without any allegation of facts that would allow this Court to determine Wells Fargo is in possession of Dobson\u2019s note, Robinson\u2019s affidavit is not competent evidence of Well Fargo\u2019s status as the holder of the Note.\nC. Wells Fargo\u2019s Answer\nThe majority also points to Wells Fargo\u2019s Answer to one of Dobson\u2019s Requests for Admission as support for concluding Wells Fargo is in possession of Dobson\u2019s note:\nWells Fargo did not prepare the loan origination documents, and is unsure as to whether the documents attached to [Dobson\u2019s] first request for admission constitute the complete set of loan origination documents used by Equivantage in the formation of [Dobson\u2019s] home loan. Because Wells Fargo did not originate this account, Wells Fargo denies that the documents attached to [Dobson\u2019s] first request for admission are true and correct copies of the loan origination documents signed by [Dobson] and used by Equivantage in the formation of [Dobson\u2019s] home loan.\nHowever, Wells Fargo admits that the documents attached to [Dobson\u2019s] first request for admission are true and correct copies of all loan origination documents currently in the possession of Wells Fargo that were acquired when Wells Fargo was assigned the payment rights to [Dobson\u2019s] account.\nI agree with the majority, this statement is not a denial of possession of the original note as Dobson contends. I cannot, however, agree that this statement is an admission that Wells Fargo is in possession of the original note. The statement is merely an admission that the documents that were attached to Dobson\u2019s Request for Admission were true and correct copies of all loan origination documents that Wells Fargo possessed at the time the statement was made; it does not state that Wells Fargo was in possession of all of the loan origination documents.\nIn my view, the majority\u2019s interpretation contradicts itself. To conclude this answer states that Wells Fargo possesses the' original note, the majority necessarily interprets its Answer to state that Wells Fargo possesses all of the loan origination documents. This is contradicted by the first paragraph of the Answer in which Wells Fargo states it is \u201cunsure\u201d whether the documents provided by Dobson \u201cconstitute the complete set\u201d of the loan origination documents. Wells Fargo\u2019s counsel reiterated this uncertainty in the hearing on Defendants\u2019 Motion for Summary Judgment: \u201cWe don\u2019t know if these are all of the origination documents. They were the copies that were provided to us when Wells Fargo purchased the loan, and that\u2019s basically the answer we said.\u201d\nIf, as the majority suggests, Wells Fargo\u2019s Answer establishes that it possesses all of the loan origination documents, including the original note, how could Wells Fargo not know whether the documents provided by Dobson were a complete set of all of the original documents? This discrepancy makes the majority\u2019s interpretation of Wells Fargo\u2019s Answer untenable, and I cannot adopt their conclusion.\nOur decision in Connolly, 63 N.C. App. 547, 306 S.E.2d 123, provides further support for concluding that Defendants\u2019 evidence is not sufficient to establish that Wells Fargo is the holder of the Note. In Connolly, the petitioners sought to foreclose on a promissory note and deed of trust and were denied at the special proceeding before the clerk of court. 63 N.C. App. at 548, 306 S.E.2d at 124. Several years prior to instituting foreclosure proceedings on the note, the petitioners assigned and delivered that note to a bank as collateral for a loan for which they were the debtors. Id. at 549, 306 S.E.2d at 124. At the time the petitioners instituted foreclosure proceedings with the clerk of court, their loan from the bank had not been repaid and the bank retained possession of the note they pledged as collateral and which they sought to foreclose. Id.\nThe petitioners appealed the decision by the clerk of court for a de novo hearing. During the hearing, the petitioners \u201cintroduced the originals of the note and deed of trust,\u201d but also testified \u201cthey had left the [] note at the bank, for security purposes.\u201d Id. at 551, 306 S.E.2d at 125. The trial court found the bank was in \u201cphysical possession\u201d of the note and concluded, as a matter of law, the petitioners were not the holders of the note at the institution of the foreclosure proceedings. Id. at 549-50, 306 S.E.2d at 124-25.\nOn appeal to this Court, we concluded that, despite the fact that the party seeking foreclosure introduced the original note at the time of the de novo hearing, the trial court\u2019s findings of fact did not address whether petitioners were in possession of the note at the time of the trial. Connolly, 63 N.C. App. at 549-50, 306 S.E.2d at 124-25. Such requirement for \u201cstrict proof\u2019 that the party seeking to foreclose is in possession of the promissory note cannot be reconciled with the majority\u2019s reliance on Defendants\u2019 evidence.\nIn sum, I conclude Helms established, and Adams applied, a narrow exception to the requirement that the party seeking to foreclose must produce the original note to establish possession of that note; the exception is permitted only in those cases where the parties do not dispute that photocopies of the note are \u201ccorrect copies\u201d of the original instrument. Assuming arguendo that our holdings permit a party seeking to foreclose under a power of sale to establish possession of the promissory note by means other than production of the original instrument, I find no competent evidence in the record from which this Court could determine that Wells Fargo is the holder of Dobson\u2019s note. Neither of the affidavits provided by Defendants, nor the answer provided by Wells Fargo allege possession of the instrument. Thus, Defendants have failed to present competent evidence sufficient to establish a genuine issue of material fact to survive Plaintiff\u2019s Motion for Summary Judgment. Accordingly, I would affirm the trial court\u2019s Order.\n. I recognize the UCC provides that a negotiable instrument may be enforced by \u201c(i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to G.S. 25-3-309 or G.S. 25-3-418(d).\u201d N.C. Gen. Stat. \u00a7 25-3-301 (2009). As Defendants have claimed to be the holder of the Note, however, my analysis is limited to Defendants\u2019 status as the holder of the instrument.", "type": "dissent", "author": "HUNTER, JR., Robert N., Judge," } ], "attorneys": [ "Legal Aid of North Carolina, Inc., by Celia Pistolis, John Christopher Lloyd, and Anne J. Randall, for Plaintiff.", "Hutchens, Senter & Britton, P.A., by John A. Mandulak, for Defendants." ], "corrections": "", "head_matter": "LINDA G. DOBSON, Plaintiff v. SUBSTITUTE TRUSTEE SERVICES, INC., SUBSTITUTE TRUSTEE, AND WELLS FARGO BANK MINNESOTA, N.A., AS TRUSTEE FOR EQUIVANTAGE HOME EQUITY LOAN TRUST, 1996-4, NOTEHOLDER, EQUIVANTAGE INC., AND AMERICA\u2019S SERVICING COMPANY, Defendants\nNo. COA10-632\n(Filed 17 May 2011)\nMortgages and Deeds of Trust\u2014 foreclosure \u2014 evidence of owner of note and amount owed \u2014 photocopies\nThe trial court erred by granting summary judgment for plaintiff in a foreclosure action based on the court\u2019s erroneous conclusions that defendants failed as a matter of law to present sufficient evidence to show the amount owed and that Wells Fargo was the holder of the note. Such a conclusion on this evidence should not be made summarily, but only after meaningful consideration of the evidence.\nJudge HUNTER, Jr., Robert N., dissenting.\nAppeal by Defendants from order entered 28 December 2009 by Judge Russell J. Lanier, Jr., in Duplin County Superior Court. Heard in the Court of Appeals 17 November 2010.\nLegal Aid of North Carolina, Inc., by Celia Pistolis, John Christopher Lloyd, and Anne J. Randall, for Plaintiff.\nHutchens, Senter & Britton, P.A., by John A. Mandulak, for Defendants." }, "file_name": "0045-01", "first_page_order": 55, "last_page_order": 69 }