NORTH CAROLINA COURT OF APPEALS
Filed: 2 January 2007
v. Vance County
No. 05 CVS 292
CLARENCE E. HARGROVE, SR.,
and LINDA F. HARGROVE,
Appeal by Defendants from judgment entered 13 December 2005 by Judge Henry W. Hight, Jr. in Vance County Superior Court. Heard in the Court of Appeals 12 October 2006.
Pendergrass Law Firm, PLLC, by James K. Pendergrass, Jr. and Christopher R. Bullock, for Plaintiff-Appellee.
Legal Aid of North Carolina, by John W. Van Alst, for Defendants-Appellants.
By a Complaint filed 11 March 2005, Plaintiff Washington Mutual Bank (Plaintiff) sought a declaration that a deed of trust executed by Defendants Clarence and Linda Hargrove (Defendants) was a valid lien on property previously acquired by Defendants, but erroneously described in the warranty deed executed and recorded at the time of Defendants' acquisition of the property. When Defendants failed to timely answer the Complaint, Plaintiff obtained an entry of default on 26 May 2005. Defendants then retained counsel and their motion to set aside the entry of defaultwas granted.
On 21 July 2005, Defendants filed an Answer and also moved to dismiss Plaintiff's Complaint. On 22 November 2005, Plaintiff moved for summary judgment, and on 5 December 2005, Defendants moved to join the trustee of the deed of trust as a necessary party. Following a hearing, the trial court denied Defendants' motions to dismiss and to join the trustee, and granted Plaintiff's motion for summary judgment on 13 December 2005 . Defendants timely appealed to this Court. For the reasons discussed below, we affirm.
In 1998, Defendants purchased a manufactured home and real property located at 57 Meredith Road, Henderson, North Carolina (Lot 13") from real estate developer Donald Gupton of Creative Real Estate. At the loan closing on 20 August 1998, Defendants signed a note to Capital Mortgage Company and a deed of trust for the real property (Lot 13) to Mark A. Reinhard as trustee. On the same date, Premier Investments, an entity of Gupton's, executed a general warranty deed erroneously describing the property being conveyed to Defendants as Lot 17, rather than Lot 13, although, in all other respects, the description of the property was accurate. This deed (first deed) was thereafter recorded in the Office of the Vance County Register of Deeds on 21 August 1998.
Upon discovering the error in the first deed, the closingattorney recorded a second general warranty deed (correction deed) in the Office of the Vance County Register of Deeds on 13 January 1999, correctly describing Lot 13 as the property conveyed to Defendants. However, the deed of trust was not re-recorded after the recording of the correction deed.
Plaintiff is the successor in interest to Capital Mortgage Company and, thus, alleged that it holds the note and deed of trust on Defendants' property. Defendants ultimately defaulted on their payments on the note to Plaintiff, after which Plaintiff discovered the discrepancy in the description of Defendants' property in the first deed. Plaintiff filed this action seeking a declaration . . . that the Deed of Trust as of January 13, 1999 . . . [the date of the recording of the correction deed] constitutes a valid and enforceable lien and encumbrance against Lot 13 securing the Loan now owned and held by . . . Plaintiff. By Judgment entered 13 December 2005, Judge Hight determined that Plaintiff was entitled to judgment as a matter of law and that, accordingly, the deed of trust shall be and the same is hereby declared to be a valid lien encumbering the property described in [the correction deed.]
Defendants argue that the trial court erred by allowing Plaintiff's motion for summary judgment. We disagree.
A motion for summary judgment should be granted when, taking the evidence in a light most favorable to the non-moving party,there is no genuine issue of fact and the moving party is entitled to judgment as a matter of law. N.C. Gen. Stat. § 1A-1, Rule 56 (2005); Carolina Water Service, Inc. of North Carolina v. Town of Atlantic Beach, 121 N.C. App. 23, 464 S.E.2d 317 (1995), disc. review denied, 342 N.C. 894, 467 S.E.2d 901 (1996). A movant can meet its burden by proving that an essential element of the opposing party's claim is nonexistent, or by showing through discovery that the opposing party cannot produce evidence to support an essential element of his claim[.] Carolina Water, 121 N.C. App. at 27, 464 S.E.2d at 320 (quoting Varner v. Bryan, 113 N.C. App. 697, 701, 440 S.E.2d 295, 298 (1994)(other citations omitted)). Summary judgment is appropriate in declaratory judgment actions. Blades v. City of Raleigh, 280 N.C. 531, 187 S.E.2d 35 (1972).
Defendants' arguments arise from their contention that the deed of trust was erroneous and required reformation. However, the record reveals that the deed of trust contains no errors and needs no reformation; rather, the first deed contained an error in purporting to convey Lot 17 to Defendants instead of Lot 13. Defendants admit that they intended to purchase Lot 13, used the proceeds from the promissory note secured by the deed of trust to purchase Lot 13 and its improvements, and have owned and lived on Lot 13 since August 1998. Because the deed of trust is error-freeand needs no reformation, and because Plaintiff has not sought reformation of the deed of trust, Defendants' arguments regarding the statute of limitations for reformation of an instrument are inapposite.
Defendants next argue laches as a defense. However, when an action is not barred by the pertinent statute of limitations, equity will not bar relief on the ground of laches except upon special facts demanding exceptional relief. Howell v. Alexander, 3 N.C. App. 371, 380, 165 S.E.2d 256, 263 (1969). Here, the record reveals no special facts demanding exceptional relief since Defendants' admissions establish that the deed of trust was without error. This argument is without merit.
Defendants also argue that Plaintiff has no standing to bring this action. Plaintiff counters that its status as beneficiary of the deed of trust is sufficient to establish standing. Plaintiff's complaint alleges that it is the owner and holder of the loan under which Defendants are indebted, and the record contains no evidence to the contrary. [T]he status of holder is only significant if the creditor is attempting to enforce the instrument itself. G.E. Capital Mortg. Servs., Inc. v. Neely, 135 N.C. App. 187, 194, 519 S.E.2d 553, 558 (1999) (citing N.C. Gen. Stat. § 25-3-301 (1995)). Here, Plaintiff is not seeking enforcement of the instrument, but rather a declaration as to the validity of the deed of trust in theface of the subsequently recorded correction deed. Thus, Plaintiff had standing to bring this declaratory judgment action. See id.; Beachcomber Properties, L.L.C. v. Station One, Inc., 169 N.C. App. 820, 611 S.E.2d 191 (2005).
Defendants also argue that the trial court erred in denying their motion to join the trustee of the deed of trust as a necessary party. Again, we disagree.
In support of their contention that the trustee was a necessary party to this declaratory judgment action, Defendants direct our attention to cases in which trustees were found to be necessary parties because a property owner faced the loss of ownership of property. In this action, however, there is no threat of foreclosure or eminent domain, and Plaintiff did not seek to void or vitiate the trustee's legal title. Instead, Plaintiff sought a declaration that the deed of trust was valid in the face of the correction deed. This assignment of error is overruled.
The judgment of the trial court is
*** Converted from WordPerfect ***