Articles Posted in North Carolina Supreme Court

by
The Supreme Court affirmed the North Carolina Business Court’s substantive decision interpreting N.C. Gen. Stat. 105-130.5(b)(1) so as to preclude The Fidelity Bank from deducting “market discount income” relating to discounted United States obligations for North Carolina corporate income taxation purposes. The Supreme Court, however, reversed the Business Court’s decision to dismiss the second of two judicial review petitions that Fidelity Bank filed in these cases and remanding that matter to the North Carolina Department of Revenue with instructions to vacate that portion of the Department’s second amended final agency decision relating to the deductibility issue for lack of subject matter jurisdiction, holding that the Business Court’s decision to dismiss the portions of the second judicial review petition challenging the Department’s decision concerning the deductibility issue in the second amended final agency decision was erroneous. View "Fidelity Bank v. N.C. Department of Revenue" on Justia Law

by
Borrowers executed a promissory note to purchase real property. The debt was secured by a deed of trust on the underlying real property. Bank, the alleged holder of note and subject deed of trust, filed a complaint against Borrowers under the deed of trust, seeking judicial foreclosure and judgment on the note, alleging that Borrowers defaulted under the terms of the note by failing to make payments. Borrowers moved to dismiss for failure to state a claim, arguing that the evidence was insufficient to establish that Bank failed to establish its status as a holder of the note and therefore did not have the right to foreclose. The court of appeals affirmed. The Supreme Court reversed, holding that Plaintiff’s complaint adequately stated a cause of action for judicial foreclosure and that the court of appeals erred by applying the requirements applicable in non-judicial foreclosure by power of sale to Plaintiff’s judicial foreclosure action. View "U.S. Bank National Ass’n v. Pinkney" on Justia Law

by
Plaintiffs were individual investors in undeveloped real estate that purchased real property shortly before the collapse of the real estate market. In 2010, Plaintiffs commenced this action seeking to recover against a bank and its appraisers for their alleged participation in a scheme to defraud investors by artificially inflating property values. Specifically, Plaintiffs alleged that they would not have purchased the real property but for faulty appraisal information and that the bank should have disclosed the inflating appraised property values to them. The trial court granted Defendants’ motion to dismiss on the basis that Plaintiffs did not receive the appraisals at the time of their decisions to purchase. The Supreme Court affirmed, holding that because it was undisputed that Plaintiffs decided to purchase the investment properties without consulting an appraisal and obligated themselves to purchase the properties independent of the loan process, Defendants were entitled to dismissal of all claims. View "Arnesen v. Rivers Edge Golf Club & Plantation, Inc." on Justia Law

by
Plaintiffs obtained loans from Defendant, a bank. Plaintiffs later, on behalf of themselves and all those similarly situated, filed a complaint alleging that Defendant's loan transactions violated North Carolina's unfair and deceptive practices statute. Specifically, Plaintiffs alleged that they paid loan discount fees but did not receive discounted loans and that the fees they were charged in connection with origination of their loans were unnecessary and unreasonable. The trial court granted partial summary judgment for Plaintiffs on their loan discount claims and excessive pricing claims under N.C. Gen. Stat. 75-1.1. The court of appeals affirmed entry of summary judgment on Plaintiffs' loan discount claims but reversed the grant of summary judgment on the excessive fees claims. The Supreme Court reversed, holding (1) issues of material fact existed in regards to Plaintiffs' loan discount claims; and (2) Plaintiffs' excessive pricing claims were not recognized by section 75-1.1. Remanded. View "Bumpers v. Cmty. Bank of N. Va." on Justia Law

by
In 2005, Tonya Bass executed an adjustable rate promissory note with Mortgage Lenders Network USA. The Note was then transferred several times: from Mortgage Lenders to Emax Financial Group, from Emax to Residential Funding Corporation, and from Residential Funding to U.S. Bank. The Note evidenced these transfers by three stamped imprints. In 2009, U.S. Bank filed this foreclosure action after Bass failed to make timely payments. The trial court dismissed the foreclosure action, concluding that because the Note was not properly indorsed and conveyed to Emax or Residential Funding, U.S. Bank was not the rightful holder of the Note. The court based its ruling that the first stamp was "unsigned" and failed to establish negotiation from Mortgage Lenders to Emax. The Supreme Court reversed, holding (1) the indorsements on the Note unambiguously indicated the intent to transfer the Note from each preceding lender and finally to U.S. Bank; and (2) therefore, U.S. Bank was the holder of the Note and had the authority to bring this foreclosure action against Bass. View "In re Foreclosure of Bass" on Justia Law

by
Salem Logistics entered into a loan agreement with Ark Royal Capital that required Salem to instruct its customers to send payments directly to an account maintained by Ark at Wachovia Bank. Salem subsequently agreed to provide freight bill auditing services to Variety Wholesalers. Salem requested that Variety send the amounts on the master invoices directly to the Wachovia account but did not inform Variety that the account was actually controlled by Ark. Variety later terminated its contract with Salem and filed suit for recovery of money it had forwarded to Salem that had not been paid to carriers. When Variety discovered the Wachovia account actually belonged to Ark, Variety added Ark as a defendant. The trial court entered summary judgment for Variety on its claim of conversion against Ark and for Ark on Variety's claim of constructive trust and ordered Ark to pay Variety $888,000. The court of appeals reversed and entered summary judgment for Ark on both issues. The Supreme Court reversed and remanded on both issues, holding (1) summary judgment was improper because there were genuine issues of material fact to be resolved; and (2) accordingly, the trial court also erred in its award of damages to Variety. View "Variety Wholesalers, Inc. v. Salem Logistics Traffic Servs." on Justia Law