Brandon Carter v. Mortgage Electronic Reg
UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 5:14-cv-00395-H Copies to all parties and the district court/agency. .. [16-1214]
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UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
BRANDON CARTER; ERICA CARTER,
Plaintiffs – Appellants,
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
Defendants – Appellees,
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)
February 17, 2017
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Affirmed by unpublished per curiam opinion.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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Unpublished opinions are not binding precedent in this circuit.
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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
(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 review de novo the grant of a motion to dismiss . . .
[and] accept as true the well-pled allegations of the complaint
Harbourt v. PPE Casino Resorts Md., LLC, 820 F.3d 655, 658 (4th
(alterations and internal quotation marks omitted).
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.
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Three of the Carters’ arguments need not detain us long.
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
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
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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Nor did they present to the district court the new
argument in support of their quiet title claim.
claims are not properly before us.
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
(4) which does in fact deceive, (5) resulting in damage to the
injured party.” 5
Forbis, 649 S.E.2d at 387 (internal quotation
The complaint failed to allege that either of the Carters
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.”
Exxon Mobil Corp., 776 F.3d 214, 220 (4th Cir. 2015) (alteration
and internal quotation marks omitted).
It is undisputed that North Carolina law applies.
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.
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.
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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
alleged fraud harmed the Carters.
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
Thus, the district court did not err in denying
relief on the fraud claim.
Accordingly, we affirm the district court’s judgment.
this court and argument would not aid the decisional process.
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