Houey et al v. TD Bank, N.A.
ORDER denying Pltfs' 53 Motion for Attachment Lien and 54 Motion for Quiet Title Action; granting Pltfs' 59 Motion for Extension of Time construed by the Court as a motion to continue, and action CONTINUED from Nov. trial term; denying Michelle Smith's 60 Motion to Intervene; parties to respond on or before 45 days from entry of this order to issue re: Consent Order entered on 9/12/12 in US Bankruptcy Court. Signed by District Judge Martin Reidinger on 10/29/12. (Pro se litigant served by US Mail.)(ejb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CIVIL CASE NO. 1:11cv225
HELEN CLIETTE HOUEYand
CAROLINA FIRST BANK, TD BANK,
THIS MATTER is before the Court on the following matters:
The Plaintiffs’ Motion for Attachment Lien [Doc. 53];
The Plaintiffs’ Motion for Quiet Title Action [Doc. 54];
The Court’s Order entered September 17, 2012 requiring the Plaintiffs
to advise the Court in writing on or before fifteen business from entry of
the Order of their intention to pursue this action [Doc. 51];
The Plaintiffs’ Motion for Extension of Time [Doc. 59]; and
The Motion to Intervene of Michelle Smith [Doc. 60].
In August 2011, Plaintiffs Helen Cliette Houey (Helen) and Emmanuel
Houey, appearing pro se, filed a thirty-seven page Complaint in state court
alleging eighteen causes of action against the Defendants. [Doc. 1-1]. The
Houeys alleged $290,000.00 in damages stemming from the Defendants’
foreclosure of real property allegedly owned solely by Helen in Shelby, North
Carolina. [Id.]. The property at issue had been pledged as collateral for a
commercial promissory note which Defendant has asserted is in default. [Id.].
TD is the successor by merger to Carolina First Bank and it removed the
action to this Court on September 8, 2011 on the basis of diversity and federal
question jurisdiction.1 [Doc. 1].
In response to the removal, Michelle Smith (Smith), who asserts that
she is Helen’s daughter, filed a motion to remand the action to state court.
[Doc. 1-1 at 56; Doc. 10]. Two days later, TD filed a motion to dismiss certain
claims set out in the Complaint. [Doc. 7]. Smith then filed a motion to cancel
the foreclosure sale. [Doc. 12]. Smith signed both of the motions on Helen’s
behalf, even though she is not an attorney. [Doc. 10; Doc. 12]. On November
7, 2011, Smith also filed a response to TD’s motion to dismiss certain claims
The Court hereafter refers to the Defendants in the singular since TD
has succeeded to all interest of Carolina First Bank.
and signed the pleading on behalf of her mother. [Doc. 19 at 18].
By Order entered November 8, 2011, this Court denied the motions filed
by Smith without prejudice. [Doc. 18]. In the Order, the Court explained to
Smith that she does not have any authority to represent her mother because
she is not an attorney. [Id.]. The Order contained a notice to the Houeys, as
pro se Plaintiffs, of the burden on them to come forward with a response to
TD’s Motion to Dismiss, and they were instructed to file a response to that
motion on or before November 23, 2011. [Id.]. Smith was cautioned that she
was not allowed to file any response to the motion on behalf of her mother.
[Id.]. Despite the Court’s admonitions, Smith continued to file documents
which she signed on behalf of her mother. [Doc. 22; Doc. 23; Doc. 24; Doc.
25]. These documents have been stricken from the record. [Doc. 26].
On December 1, 2011, the pro se Plaintiffs filed an untimely response
to TD’s Motion to Dismiss. [Doc. 29]. TD promptly moved to strike that
response for being untimely. [Doc. 32]. On December 1, 2011, the Plaintiffs
also filed a motion to enjoin the impending foreclosure sale and a motion for
leave to amend their Complaint to add Smith as a party plaintiff. [Doc. 27,
Doc. 28]. In that motion, Plaintiffs disclosed that after the Order Allowing
Foreclosure was entered by the state court, Helen executed a quit claim deed
purporting to convey her interest in the property in question to Smith. [Id.]. A
copy of the deed was attached to the motion. [Id.]. On December 2, 2011,
Smith moved for leave to intervene in the action as a plaintiff and requested
an extension of time within which to retain an attorney. [Doc. 30; Doc. 31]. In
response to the motion to stop the final foreclosure sale, TD disclosed that
no appeal had been taken from the state court’s Order Allowing Foreclosure
dated August 10, 2011 and it had become final. [Doc. 33].
On March 5, 2012, in an apparent effort to prevent the foreclosure sale,
Helen filed for bankruptcy protection. [Doc. 40]. On April 25, 2012, Helen,
along with Smith, moved once again to enjoin the foreclosure of the property
at issue. [Doc. 46]. In response, TD disclosed that the property had been sold
at foreclosure on February 28, 2012 to TD as the highest bidder. [Doc. 48].
In fact, the Deed had already been recorded. [Id. at 2].
On August 10, 2012, this Court ruled that the automatic stay provisions
of the United States Bankruptcy Code do not apply to this action. [Doc. 49].
The Court requested that the Plaintiffs’ Bankruptcy Trustee advise whether he
would continue to pursue this action. [Id.]. In the same Order, the Court also
dismissed ten of the eighteen claims asserted by the Plaintiffs in their
Complaint and denied the Plaintiffs’ motions for injunctive relief and denied
Smith’s motion to intervene. [Id.].
On September 10, 2012, Steven G. Tate, Standing Chapter 13 Trustee,
advised the Court that although he has standing to pursue this action, he
would decline to do so. [Doc. 50]. He also advised that it was his position as
Trustee that the Plaintiffs have an independent basis for standing to pursue
the case. [Id.]. In the opinion of Mr. Tate, however, the costs of the litigation
versus the potential benefit to the bankruptcy estate did not warrant further
On September 11, 2012, the Plaintiffs attempted to appeal the Court’s
August 10, 2012 ruling. [Doc. 52]. The appeal, however, was interlocutory as
to any claim other than the denial of injunctive relief and, in any event, was
untimely filed. 28 U.S.C. §1292(a)(1); Fed.R.App.P. 4(a)(1)(A). On the same
day that the Plaintiffs filed the Notice of Appeal, they filed two additional
documents, a Motion for Attachment Lien and a Motion for Quiet Title Action.
[Doc. 53, Doc. 54].
In light of the Chapter 13 Trustee’s opinion as to the value of this action,
this Court entered an Order on September 17, 2012 requiring the Plaintiffs to
notify the Court whether they intended to continue the prosecution of this
action. [Doc. 51]. They were required to inform the Court within fifteen days
of the entry of the order. [Id.]. That time period expired on October 4, 2012,
without the Plaintiffs having complied. In the Order, the Court specifically
warned the Plaintiffs that their failure to comply with the Order could result in
the dismissal of the action without prejudice and without any further notice. [Id.
On September 25, 2012, the Defendant TD filed two pleadings in
response to the purported motions for attachment and quiet title. [Doc. 56,
Doc. 57]. In each pleading, the Defendant disclosed that on September 12,
2012 the Plaintiffs entered into a Consent Order in the United States
Bankruptcy Court for the Western District of North Carolina. [Doc. 56-1 at 2].
In that Order, the Plaintiffs, through counsel, agreed “[t]hat the automatic stay
[had not] been applicable to the real property located at 211 Merit Drive,
Shelby, North Carolina and TD Bank’s foreclosure of that property is complete
and valid.” [Id. at 3].
On October 12, 2012, Helen filed the pending motion for an extension
of deadlines due to her health. [Doc. 59]. Helen disclosed in this motion that
she has suffered a stroke, is currently in a rehabilitation facility, is unable to
walk and cannot clearly speak. [Id.]. The Court construes this motion as one
to continue the case from the November trial calendar.
On the same date, Helen’s daughter, Smith, moved again for leave to
As previously noted, on August 10, 2012, this Court dismissed every
cause of action except the following claims: (1) Count IV for breach of the
contractual covenants of good faith and fair dealing; (2) Count IX for violations
of the North Carolina Consumer Economic Protection Act; (3) Count X for
violations of the North Carolina Homeowner and Homebuyer Protection Act;
(4) Count XI for violations of the North Carolina Extend Emergency
Foreclosure Program; (5) Count XII for violations of the North Carolina
Predatory Lending Law; (6) Count XIII for violations of the Uniform
Commercial Code; (7) Count XIV for violations of the Fair Credit Reporting
Act;2 and (8) Count XVIII for wrongful foreclosure. However, in the Consent
Order entered in the United States Bankruptcy Court for the Western District
of North Carolina, the Plaintiffs, through counsel, stipulated “[t]hat the
automatic stay [had not] been applicable to the real property located at 211
Merit Drive, Shelby, North Carolina and TD Bank’s foreclosure of that property
is complete and valid.” [Doc. 56-1 at 2-3](emphasis added). Since each of the
15 U.S.C. §1681.
remaining claims in this case is based on the Plaintiffs’ contention that the
foreclosure and the proceedings leading up to it were wrongful and thus
invalid, it appears to the Court that this stipulation negates all the Plaintiffs’
The Court will, however, provide the parties with an
opportunity to address this issue.
As to the Plaintiffs’ Motion for Attachment Lien and Motion for Quiet Title
Action, the Consent Order which they entered into in Bankruptcy Court
renders each motion moot. As a result, each will be denied.
As to Smith’s latest motion to intervene, it is denied for the same
reasons as previously stated in this Court’s Order of August 10, 2012. [Doc.
49 at 16-22]. Smith is cautioned not to file such a motion again. She is also
advised once again that as she is not an attorney she may not file response
to this Order on behalf of her mother.
IT IS, THEREFORE, ORDERED that the Plaintiffs’ Motion for
Attachment Lien [Doc. 53] and Motion for Quiet Title Action [Doc. 54] are
The Defendant did not move for summary judgment as to such
claims presumably because the Stipulation filed by the Plaintiffs in their
bankruptcy proceeding was filed after the deadline for a summary judgment
motion in this action had expired. [Doc. 11].
IT IS FURTHER ORDERED that the Plaintiffs’ Motion for Extension of
Time [Doc. 59] is construed by the Court as a motion to continue and as such,
is hereby GRANTED. This action is hereby CONTINUED from the November
IT IS FURTHER ORDERED that the Motion to Intervene of Michelle
Smith [Doc. 60] is hereby DENIED.
IT IS FURTHER ORDERED that on or before forty-five (45) days from
entry of this Order, the parties may respond to the issue of whether the
Consent Order entered in the United States Bankruptcy Court on September
12, 2012 operates to negate each of the remaining claims in this action. Such
response may not exceed ten (10) pages in length, double spaced in fourteen
point type. Failure to provide response may result in the dismissal of this
action without further notice.
Signed: October 29, 2012