{ "id": 4364862, "name": "BLUE RIDGE SAVINGS BANK, INC., Plaintiff v. GUY MITCHELL, AMY MITCHELL, and ELOISE MITCHELL, Defendants", "name_abbreviation": "Blue Ridge Savings Bank, Inc. v. Mitchell", "decision_date": "2012-02-07", "docket_number": "No. COA11-289", "first_page": "410", "last_page": "416", "citations": [ { "type": "official", "cite": "218 N.C. App. 410" } ], "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": "530 S.E.2d 581", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2000, "pin_cites": [ { "page": "582-83" }, { "page": "583" } ], "opinion_index": 0 }, { "cite": "138 N.C. App. 153", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11078880 ], "year": 2000, "pin_cites": [ { "page": "154-56" } ], "opinion_index": 0, "case_paths": [ "/nc-app/138/0153-01" ] }, { "cite": "232 S.E.2d 667", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1977, "pin_cites": [ { "page": "679" } ], "opinion_index": 0 }, { "cite": "292 N.C. 93", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567512 ], "year": 1977, "opinion_index": 0, "case_paths": [ "/nc/292/0093-01" ] }, { "cite": "191 U.S. 341", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 3621235 ], "weight": 2, "year": 1903, "pin_cites": [ { "page": "349" }, { "page": "213" } ], "opinion_index": 0, "case_paths": [ "/us/191/0341-01" ] }, { "cite": "97 S.E. 748", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1919, "pin_cites": [ { "page": "749", "parenthetical": "quoting Sharp v. United States, 191 U.S. 341, 349, 48 L. Ed. 211, 213 (1903)" } ], "opinion_index": 0 }, { "cite": "177 N.C. 10", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653514 ], "year": 1919, "pin_cites": [ { "page": "13", "parenthetical": "quoting Sharp v. United States, 191 U.S. 341, 349, 48 L. Ed. 211, 213 (1903)" } ], "opinion_index": 0, "case_paths": [ "/nc/177/0010-01" ] }, { "cite": "207 S.E.2d 720", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1974, "pin_cites": [ { "page": "727", "parenthetical": "quotations and citations omitted" } ], "opinion_index": 0 }, { "cite": "285 N.C. 645", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567401 ], "year": 1974, "pin_cites": [ { "page": "654-55", "parenthetical": "quotations and citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/285/0645-01" ] }, { "cite": "401 S.E.2d 858", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1991, "pin_cites": [ { "page": "859", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "102 N.C. App. 313", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523680 ], "year": 1991, "pin_cites": [ { "page": "316", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/102/0313-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 45-21.36", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "opinion_index": 0 }, { "cite": "53 S.E. 433", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1906, "pin_cites": [ { "page": "434-35", "parenthetical": "citations omitted" } ], "opinion_index": 1 }, { "cite": "140 N.C. 552", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8652597 ], "year": 1906, "pin_cites": [ { "page": "554-55", "parenthetical": "citations omitted" } ], "opinion_index": 1, "case_paths": [ "/nc/140/0552-01" ] }, { "cite": "320 S.E.2d 904", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1984, "pin_cites": [ { "page": "906", "parenthetical": "citation omitted" }, { "page": "906-07", "parenthetical": "emphasis added" } ], "opinion_index": 1 }, { "cite": "70 N.C. App. 523", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523398 ], "year": 1984, "pin_cites": [ { "page": "526", "parenthetical": "citation omitted" } ], "opinion_index": 1, "case_paths": [ "/nc-app/70/0523-01" ] }, { "cite": "530 S.E.2d 581", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 2000, "pin_cites": [ { "page": "583" }, { "page": "583" } ], "opinion_index": 1 }, { "cite": "138 N.C. App. 153", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11078880 ], "weight": 3, "year": 2000, "pin_cites": [ { "page": "156" }, { "page": "156" } ], "opinion_index": 1, "case_paths": [ "/nc-app/138/0153-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 45-21.36", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 1 } ], "analysis": { "cardinality": 750, "char_count": 16957, "ocr_confidence": 0.754, "pagerank": { "raw": 5.207966869300525e-08, "percentile": 0.32798977855465705 }, "sha256": "db9678316f25a829751a30c003dc9522a1fbca29f2f0f4c143a71389128a8993", "simhash": "1:0baff618477e9704", "word_count": 2826 }, "last_updated": "2023-07-14T20:21:59.538017+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge MCGEE concurs.", "Judge HUNTER, JR., Robert N., dissents by separate opinion." ], "parties": [ "BLUE RIDGE SAVINGS BANK, INC., Plaintiff v. GUY MITCHELL, AMY MITCHELL, and ELOISE MITCHELL, Defendants" ], "opinions": [ { "text": "ELMORE, Judge.\nGuy Mitchell, Amy Mitchell, and Eloise Mitchell (defendants) appeal from an order of summary judgment in favor of Blue Ridge Savings Bank, Inc. (plaintiff), decreeing that plaintiff is entitled to recover $32,746.96 plus interest and reasonable attorney\u2019s fees from defendants. We affirm.\nOn 19 February 2002, defendants executed a promissory note in the principal amount of $130,000.00 with an interest rate of nine percent per year. Plaintiff was the lender, and the debt was secured by a deed of trust in favor of plaintiff dated 19 February 2002. The deed of trust secured a four-acre property in Haywood County. According to the complaint, the parties modified the original promissory note on 24 March 2009, changing the interest rate to 11.5 percent per year.\nDefendants failed to make payments under the promissory note, and plaintiff foreclosed on the property. On 21 May 2010, plaintiff held a public foreclosure auction but was itself the only and highest bidder with a bid of $100,000.00. On 24 May 2010, plaintiff sent a demand letter to defendants to collect $32,746.96, the balance remaining on their loan after the net proceeds of the foreclosure sale were \u00bfpplied. Defendants did not pay the balance, and plaintiff sued them on 1 June 2010.\nIn their answer, defendants moved to dismiss for failure to state a claim. Plaintiff moved for judgment on the pleadings, or, in the alternative, summary judgment. The trial court heard plaintiffs motion on 16 November 2010, and it determined that no genuine issues of material fact existed and that plaintiff was entitled to judgment as a matter of law. Although the parties did not submit a transcript of the hearing, they agree that the following evidence was presented to the trial court: (1) the affidavit of Scott Nesbitt, Vice President of Blue Ridge Savings Bank, Inc.; (2) an appraisal report of the property, performed at plaintiffs request by James E. Hackney on 28 June 2010; and (3) the affidavit of Ann Eavenson, a co-owner of Main Street Realty in Waynesville.\nAccording to Nesbitt\u2019s affidavit, plaintiff listed the property in May 2010 and sold it five months later on 26 October 2010 for $110,000.00 in an arms-length transaction to an unrelated third party. In the appraisal, Hackney estimated the market value of the property to be $109,000.00. He also stated that plaintiff listed the property for $129,900.00 after buying it at the auction. According to Eavenson\u2019s affidavit, the property was listed for sale on 30 October 2009 for $319,900.00, it was listed again in January 2010 for $299,000.00, and \u201cduring the foreclosure period, an oral offer was made by another real estate agent on behalf of an investor in the amount of $150,000.00,\u201d though that \u201coffer was never formally reduced to a written offer to purchase.\u201d\nOn appeal, defendants argue that plaintiff violated N.C. Gen. Stat. \u00a7 45-21.36 by bidding \u201csubstantially less\u201d than the property was worth. They argue that there is a genuine issue of material fact as to the property\u2019s true value, given the range of values presented in the two affidavits and appraisal. Although we agree that there may be a genuine issue of material fact as to the property\u2019s true value, the highest of those possible values is not sufficient to show that plaintiff bid \u201csubstantially less\u201d than the property\u2019s true value, and, thus, defendants\u2019 argument fails as a matter of law.\nSection 45-21.36 \u201capplies well-settled principles of equity to provide protection for debtors whose property has been sold and purchased by their creditors for a sum less than its fair value.\u201d NCNB Nat\u2019l Bank v. O\u2019Neill, 102 N.C. App. 313, 316, 401 S.E.2d 858, 859 (1991) (citation omitted). The statute limits the \u201cpossibility of abuse leading to a windfall\u201d for the creditor. Id. It states, in relevant part:\nWhen any sale of real estate has been made by a mortgagee, trustee, or other person authorized to make the same, at which the mortgagee, payee or other holder of the obligation thereby secured becomes the purchaser and takes title either directly or indirectly, and thereafter such mortgagee, payee or other holder of the secured obligation, as aforesaid, shall sue for and undertake to recover a deficiency judgment against the mortgagor, trustor or other maker of any such obligation whose property has been so purchased, it shall be competent and lawful for the defendant against whom such deficiency judgment is sought to allege and show as matter of defense and offset... that the property sold was fairly worth the amount of the debt secured by it at the time and place of sale or that the amount bid was substantially less than its true value, and, upon such showing, to defeat or offset any deficiency judgment against him, either in whole or in part[.]\nN.C. Gen. Stat. \u00a7 45-21.36 (2009). Here, defendants argue that the amount bid ($100,000.00) was substantially less than the property\u2019s true value, which they assert could have been as little as $109,000.00 or as much as $150,000.00.\nAs a preliminary matter, we note that only the values of $100,000.00, $109,000.00, and $110,000.00 were competent evidence of the property\u2019s true value. Neither the list price of $129,000.00 nor the unaccepted oral offer of $150,000.00 is competent evidence of market value:\nIt is not the offering of property at a given price that furnishes evidence of market value; it is the actual sale by a seller willing but not obliged to sell, to a buyer willing but not obligated to buy. An owner may and frequently does place a higher price on his property than it will bring in the market. It is not until a voluntary buyer is willing to take the property at the stated price that the transaction becomes an indication of market value. A mere offer to buy or sell property is incompetent to prove its market value. The figure named is only the opinion of one who is not bound by his statement and it is too unreliable to be accepted as a correct test of value.\nNorth Carolina State Highway Com. v. Helderman, 285 N.C. 645, 654-55, 207 S.E.2d 720, 727 (1974) (quotations and citations omitted); see also Canton v. Harris, 177 N.C. 10, 13, 97 S.E. 748, 749 (1919) (quoting Sharp v. United States, 191 U.S. 341, 349, 48 L. Ed. 211, 213 (1903)) (\u201c \u2018Oral and not binding offers are so easily made and refused in a mere passing conversation and under circumstances involving no responsibility on either side as to cast no light upon the question of value. It is frequently very difficult to show precisely the situation under which these offers were made. In our judgment, they do not tend to show value, and they are unsatisfactory, easy of fabrication, and even dangerous in their character as evidence upon this subject.\u2019 \u201d). Neither party disputes that the $100,000.00 auction price and the $109,000.00 appraisal are evidence of the property\u2019s market value, though plaintiff does argue that the $110,000.00 sale price is not competent evidence of market value. However, our Supreme Court has explained that\n[s]uch subsequent sale would simply be a circumstance indicating the fair value of the property at the time of the foreclosure, the weight to be given it depending upon other circumstances such as the lapse of time between the foreclosure and the subsequent sale and the known probability, at the time of the foreclosure sale, that such subsequent sale could be made.\nWachovia Realty Inv. v. Housing, Inc., 292 N.C. 93, 113 232 S.E.2d 667, 679 (1977). Accordingly, the range of values supported by competent evidence is $100,000.00 to $110,000.00. Nevertheless, plaintiff\u2019s $100,000.00 bid at the foreclosure sale is not substantially less than the top value of $110,000.00.\nOur appellate courts have not set out particular guidelines as to what \u201csubstantially less\u201d than the property\u2019s true value means. However, this Court has affirmed a judgment that a bid that was twenty percent less than the appraised value of the property was \u201csubstantially less\u201d than the property\u2019s true value. First Citizens Bank & Trust Co. v. Cannon, 138 N.C. App. 153, 154-56, 530 S.E.2d 581, 582-83 (2000). In that case, the debtors were entitled to the defense set out in \u00a7 45-21.36 Id. at 155-56, 530 S.E.2d at 583. Here, the percentage difference between the appraised value of the property and plaintiff\u2019s bid is nine percent, and if we take the sale price of $110,000.00, the percentage difference is ten percent. These values do not approach the twenty percent difference, which we characterized as \u201csubstantially less\u201d in Cannon.\nThough the twenty percent mark is not a bright line rule or cut-off by any interpretation, defendants offer no authority (including any reference to Cannon) supporting their assertion that the bid was substantially less than the true value or fair market value of the property; indeed, the argument is based merely on the fact that both the appraised value and the subsequent sale price were more than the bid. Because the statute requires that the bid be \u201csubstantially less\u201d than true value, not just \u201cless\u201d than true value, and because defendants have offered no authority or cogent argument supporting their claim that plaintiff\u2019s bid was substantially less than the property\u2019s true value, we affirm the order of the trial court.\nAffirmed.\nJudge MCGEE concurs.\nJudge HUNTER, JR., Robert N., dissents by separate opinion.", "type": "majority", "author": "ELMORE, Judge." }, { "text": "HUNTER, JR., Robert N., Judge,\ndissenting.\nI believe the majority errs in its reading of First Citizens v. Cannon, 138 N.C. App. 153, 530 S.E.2d 581 (2000), when it holds that a nine or ten percent difference between the amount bid and the property\u2019s true value in the case sub judice is not \u201csubstantially less\u201d under N.C. Gen. Stat. \u00a7 45-21.36 because that difference is less than the twenty percent difference in Cannon. In Cannon, this Court never specifically characterized the bid amount to be \u201csubstantially less\u201d than the property\u2019s true value; this was only done by the trial court. Cannon, 138 N.C. App. at 156, 530 S.E.2d at 583. Instead, this Court addressed the appellant\u2019s argument that the trial court relied on incompetent evidence in determining the true value of the property in question. Id. This Court disagreed with the appellant\u2019s argument and affirmed the trial court\u2019s decision. Id. The appellant made no argument regarding whether the amount bid was in fact \u201csubstantially less\u201d than the value of the true property, and, as such, this Court did not address the issue. Therefore, to refer to the amount bid and property value difference of twenty percent in Cannon as a percentage this Court upheld as \u201csubstantially less\u201d is not supported in my reading of Cannon.\nI am further concerned with the majority\u2019s analysis of whether plaintiff\u2019s bid was \u201csubstantially less\u201d than the true value of the property in question. \u201cA deficiency judgment is an \u2018imposition of personal liability on [the] mortgagor for [the] unpaid balance of mortgage debt after foreclosure has failed to yield [the] full amount of due debt.\u2019 \u201d Hyde v. Taylor, 70 N.C. App. 523, 526, 320 S.E.2d 904, 906 (1984) (citation omitted).\nG.S. 45-21.36 allows a debtor to claim a setoff against a deficiency judgment to the extent that the bid at the foreclosure is substantially less than the true value of the realty, where (1) the creditor forecloses pursuant to a power of sale clause, (2) there is a deficiency, and (3) the creditor who forecloses is the party seeking a deficiency judgment.\nId. at 526, 320 S.E.2d at 906-07 (emphasis added). Defendants here seek such a deficiency judgment, yet the majority faults defendants for failing to \u201coffer [] authority (including any reference to Gannon) supporting their assertion that the bid was substantially less than the true value or fair market value of the property.\u201d However, thorough research of the case law of this state reveals that neither this Court nor our Supreme Court has provided guidance on how to show a bid amount is \u201csubstantially less\u201d than the true value of the property. I agree with the majority when it states, \u201cOur appellate courts have not set out particular guidelines as to what \u2018substantially less\u2019 than the property\u2019s true value means,\u201d neverthel\u00e9ss the majority faults defendants for failing to offer \u201cauthority or cogent argument\u201d to support their position. With no guidance provided by our appellate courts, I do not see how defendants can be penalized for failing to adequately show plaintiff\u2019s bid was \u201csubstantially less\u201d than the true value of the property.\nIn my opinion, determining the issue of whether the amount bid is \u201csubstantially less\u201d than the true value of the property is a mixed question of law and fact, similar to that of determining what a \u201creasonable time\u201d means. The North Carolina Supreme Court has held\nwhat is [a] \u201creasonable time\u201d is generally a mixed question of law and fact, not only where the evidence is conflicting, but even in some cases where the facts are not disputed; and the matter should be decided by the jury upon proper instructions on the particular circumstances of each case.\nThe time, however, may be so short or so long that the court will declare it to be reasonable or unreasonable as [a] matter of law. ...\nIf, from the admitted facts, the court can draw the conclusion as to whether the time is reasonable or unreasonable by applying to them a legal principle or a rule of law, then the question is one of law. But if different inferences may be drawn, or the circumstances are numerous and complicated and such that a definite legal rule can not be applied to them, then the matter should be submitted to the jury. It is only when the facts are undisputed and different inferences can not be reasonably drawn from them that the question ever becomes one of law.\nClaus v. Lee, 140 N.C. 552, 554-55, 53 S.E. 433, 434-35 (1906) (citations omitted) (emphasis added). Similarly, what is \u201csubstantially less\u201d is also a uniquely individualized and subjective issue: where a ninety cent bid on a property worth one dollar (a ten percent less bid) may not be \u201csubstantially less\u201d than the property\u2019s true value, a $900,000 bid on a property worth $1,000,000 (also a ten percent less bid) may be. Moreover, a bid that is ten percent less than the property value may or may not be \u201csubstantially less\u201d than the true value .of the property depending on varying market conditions. Because determining whether the amount bid is \u201csubstantially less\u201d than the true value of the property is such a unique inquiry resulting in varied results even for similar percentage differences, I believe such a determination cannot be made without looking to the particular circumstances of each case, as is done when determining \u201creasonable time.\u201d Only if such facts and particular circumstances are presented to the trial court do I believe the court may decide the issue on summary judgment. Otherwise, the case must proceed to trial. In fact, in Cannon, the trial court actually held a nonjury trial on the merits of the case before it found that the amount bid by the mortgagor was substantially less than the property\u2019s true value. Cannon, 138 N.C. App. at 156, 530 S.E.2d at 583.\nHere, the only evidence the court had to determine if the amount bid was \u201csubstantially less\u201d than the value of the property is the value bid on the property by plaintiff and the two values regarding the true value of the property, one provided by an appraiser ($109,000) and one being the sale price ($110,000). Without more evidence regarding the circumstances of the case, I believe it was improper for the trial court to decide on summary judgment that the amount bid was not \u201csubstantially less\u201d than the value of the true property and to thereby preclude defendants from a deficiency judgment. Like in Cannon, the trial court should have held a trial to enable it to determine whether plaintiff\u2019s bid was substantially less than the property\u2019s true value. This is a material question of fact in this instance, and therefore, I would reverse the trial court\u2019s order granting summary judgment in favor of plaintiff.", "type": "dissent", "author": "HUNTER, JR., Robert N., Judge," } ], "attorneys": [ "Dungan Law Firm, P.A., by James W. Kilboume, Jr., for plaintiff.", "Frank G. Queen, PLLC, by Frank G. Queen, for defendants." ], "corrections": "", "head_matter": "BLUE RIDGE SAVINGS BANK, INC., Plaintiff v. GUY MITCHELL, AMY MITCHELL, and ELOISE MITCHELL, Defendants\nNo. COA11-289\n(Filed 7 February 2012)\nReal Property \u2014 foreclosure\u2014insufficient evidence bid substantially less than true value\nThe trial court did not err in a foreclosure case by entering summary judgment in favor of plaintiff. Although there may have been a genuine issue of material fact as to the property\u2019s true value, the highest of those possible values was not sufficient to show that plaintiff bid \u201csubstantially less\u201d than the property\u2019s true value, in violation of N.C.G.S. \u00a7 45-21.36.\nAppeal by defendants from judgment entered 16 November 2010 by Judge Alan Z. Thornburg in Buncombe County Superior Court. Heard in the Court of Appeals 13 September 2011.\nDungan Law Firm, P.A., by James W. Kilboume, Jr., for plaintiff.\nFrank G. Queen, PLLC, by Frank G. Queen, for defendants." }, "file_name": "0410-01", "first_page_order": 420, "last_page_order": 426 }