Brandon Carter v. Mortgage Electronic Reg

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:14-cv-00395-H Copies to all parties and the district court/agency. [1000029228].. [16-1214]

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 16-1214

BRANDON CARTER; ERICA CARTER,
Plaintiffs – Appellants,
v.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; CWABS, INC.
ASSET-BACKED CERTIFICATES TRUST 2005-14; THE BANK OF NEW
YORK TRUST COMPANY, N.A., solely in its capacity as Trustee
for
the
CWABS,
Inc.
Asset-Backed
Certificates
Trust
2005-14,
Defendants – Appellees,
and
CWABS, INC.,
Defendant.

Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh.
Malcolm J. Howard,
Senior District Judge. (5:14-cv-00395-H)

Submitted:

February 17, 2017

Decided:

February 23, 2017

Before NIEMEYER, DUNCAN, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Benjamin D. Busch, THE LAW OFFICE OF BENJAMIN D. BUSCH, PLLC,
Durham, North Carolina, for Appellants. Nathan J. Taylor, Wm.

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Grayson Lambert,
for Appellees.

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MCGUIREWOODS

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LLP,

Charlotte,

North

Carolina,

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Brandon

and

Erica

Carter

(collectively,

“the

Carters”)

appeal the district court’s order granting the motion to dismiss
filed by CWABS, Inc. Asset Certificates Trust, Series 2005-14
(the “Trust”). 1

On appeal, the Carters argue that the district

court erred by: (1) considering the issue of ratification, which
the

Carters

assert

(2) determining

the

Trust

did

not

a

claim

for

fraud

that

sufficiently
was

raise;

time-barred;

(3) dismissing their claim to quiet title and for declaratory
judgment; and (4) determining that a claim for recoupment may
not be brought affirmatively.

We affirm.

“We review de novo the grant of a motion to dismiss . . .
[and] accept as true the well-pled allegations of the complaint
and

construe

therefrom

in

the

facts

and

reasonable

the

light

most

favorable

inferences
to

the

derived

plaintiff.”

Harbourt v. PPE Casino Resorts Md., LLC, 820 F.3d 655, 658 (4th
Cir.

2016).

establish
across

the

the

“A

plaintiff

elements
line

from

of

must
his

allege

claim

conceivable

sufficient

facts

and

advance

that

to

plausible.”

to

claim
Id.

(alterations and internal quotation marks omitted).

1

Although there were three other defendants involved in the
action below, the Carters have abandoned claims against all
Defendants with the exception of the Trust.

3

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Three of the Carters’ arguments need not detain us long.
With

regard

to

ratification, 2

we

conclude

that

the

Trust

sufficiently raised that affirmative defense in its motion to
dismiss, see LSREF2 Baron, L.L.C. v. Tauch, 751 F.3d 394, 398
(5th Cir. 2014) (discussing level of specificity required), and,
therefore, that the district court did not err in considering
it, see Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir.
2007) (providing circumstances under which defense may be raised
in motion to dismiss).

We also conclude that the district court

correctly determined that plaintiffs may not bring affirmative
actions for recoupment.

See Bull v. United States, 295 U.S.

247, 262 (1935) (“[R]ecoupment is in the nature of a defense
arising out of some feature of the transaction upon which the
plaintiff’s

action

is

grounded.”);

RL

REGI

N.C.,

LLC v.

Lighthouse Cove, LLC, 748 S.E.2d 723, 728 (N.C. Ct. App. 2013)
(noting defensive nature of recoupment), rev’d on other grounds,
762 S.E.2d 188 (N.C. 2014).

To the extent that the Carters

raise on appeal a claim for recoupment in conjunction with a
declaratory action, they did not present that claim below but
instead attempted to allege a stand-alone cause of action for

2

Ratification occurs when an individual affirms a prior act
to which he or she would not have been otherwise bound, with
full knowledge of all material facts. Leiber v. Arboretum Joint
Venture, LLC, 702 S.E.2d 805, 812 (N.C. Ct. App. 2010).

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recoupment.

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Nor did they present to the district court the new

argument in support of their quiet title claim.
claims are not properly before us.

Thus, those

Pornomo v. United States,

814 F.3d 681, 686 (4th Cir. 2016) (providing standard).
Finally, we conclude that the Carters failed to adequately
plead a cause of action for fraud. 3

Under North Carolina law, 4 a

party alleging fraud must establish five elements: “(1) False
representation or concealment of a material fact, (2) reasonably
calculated

to

deceive,

(3)

made

with

intent

to

deceive,

(4) which does in fact deceive, (5) resulting in damage to the
injured party.” 5

Forbis, 649 S.E.2d at 387 (internal quotation

marks omitted).
The complaint failed to allege that either of the Carters
was

actually

deceived

by

the

purportedly

fraudulent

deed

of

3

Although the district court found that the statute of
limitations barred the Carters’ fraud claim, “we may affirm a
judgment for any reason appearing on the record.”
Weidman v.
Exxon Mobil Corp., 776 F.3d 214, 220 (4th Cir. 2015) (alteration
and internal quotation marks omitted).
4

It is undisputed that North Carolina law applies.

5

Although the Carters argue on appeal that they need only
establish the elements for a claim of forgery, see State v.
Welch, 145 S.E.2d 902, 905 (N.C. 1966) (setting forth thee
elements for forgery claim), where plaintiffs advance a claim of
fraud by forgery, as the Carters did here, they must satisfy the
five elements required to establish a claim of fraud.
See
Forbis v. Neal, 649 S.E.2d 382, 387-88 (N.C. 2007); Henson v.
Green Tree Servicing LLC, 676 S.E.2d 615, 619 (N.C. Ct. App.
2009); Piles v. Allstate Ins. Co., 653 S.E.2d 181, 186 (N.C. Ct.
App. 2007).

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trust executed in their names.

To the contrary, the Carters

knew that they did not sign the mortgage note or deed of trust,
and they admitted that they paid the mortgage and lived in the
home.

Moreover,

there

is

no

plausible

alleged fraud harmed the Carters.

allegation

that

the

Although they argue that harm

resulted from the difference in value between the fixed-rate
note for which they applied and the adjustable-rate note they
received, the Carters have not alleged that they actually would
have received a fixed-rate mortgage.

Furthermore, the mortgage

note clearly expressed that the mortgage contained an adjustable
interest rate, and the Carters were under an obligation to read
the

terms

S.E.2d

of

551,

opportunity
U.S.C.

the
555

to

§ 1635

must occur).

contract,
(N.C.

rescind
(2012)

Raper

Ct.
the

v.

Oliver

App.

2006),

mortgage

for

(providing

time

House,

and
any

during

LLC,

had

a

reason,
which

637

clear
see

15

rescission

Thus, the district court did not err in denying

relief on the fraud claim.
Accordingly, we affirm the district court’s judgment.
dispense

with

contentions

are

oral

argument

adequately

because

presented

in

the
the

facts

We

and

legal

materials

before

this court and argument would not aid the decisional process.

AFFIRMED

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