Civil Practice – Rule 60 Relief — Real Property — Taxation — Municipal — Damages

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County of Durham v. Daye. (Lawyers Weekly No. 09-07-0189, 15 pp.) (Martha A. Geer, J.) Appealed from Durham County Superior Court. (Wade Barber & Orlando F. Hudson Jr., JJ.) N.C. App.
Holding: In ruling on a motion under N.C. R. Civ. P. 60, the trial court could grant defendants relief from the judgment against them; the trial court could not grant defendants additional affirmative relief.
We reverse the trial court’s award of damages and fees to defendants in this tax foreclosure action.
Background
Plaintiffs, the City and County of Durham, initiated a tax foreclosure action on property located at 3603 Dearborn Ave. The owners of the property, Edgar and Ella Daye, had died intestate and without lineal descendants. Their heirs were served by publication, and default was entered against them. Chidinma Nweke bought the property and made improvements to it.
When the Daye heirs learned of the foreclosure action, they filed a Rule 60 motion for relief. The heirs also sought damages, attorney’s fees and costs.
On Dec. 14, 2004, Judge Barber set aside the foreclosure sale. In a March 18, 2005, order, Judge Smith granted the county’s motion to dismiss the heirs’ claims for damages and costs. On Aug. 1, 2007, Judge Hudson awarded the heirs (1) $9,500 plus interest for lost rent; (2) $58,332 to remove Nweke’s judgment lien; and (3) $55,533 in attorney’s fees, all against both the city and the county.
Discussion
Since the heirs’ claims against the county were dismissed in Judge Smith’s March 18, 2005, order, no damages claim was pending against the county when Judge Hudson entered the final order on Aug. 1, 2007. Thus, the trial court erred in ordering the county to pay the heirs’ damages.
As to the city, Rule 60(b) is available only to set aside a prior order or judgment. It cannot be used to impose additional affirmative relief.
Defendants could not properly seek damages and fees through a Rule 60 motion, and the trial court had no authority to grant that relief under Rule 60. When Judge Barber granted defendants’ Rule 60 motion, further proceedings could then occur in the tax foreclosure action.
Although the trial court did not specifically say so, it may have deemed the petition for fees and expenses, filed after the Rule 60 motion was granted, to be in effect a counterclaim for damages for constitutional violations.
Our Supreme Court has, however, previously held that counterclaims may not be asserted in tax foreclosure actions because permitting a taxpayer to set up an opposing claim against the state or the city might seriously embarrass the government in its financial operations by delaying the collection of taxes to pay current expenses.
When defendants discovered that the Dearborn Avenue property had been sold through a foreclosure sale, they properly filed a Rule 60 motion in the cause to have the foreclosure sale set aside. Once the foreclosure sale was set aside, defendants could have then filed an independent action seeking damages that, as they alleged in their petition, “result[ed] [from] action taken against them by the County and the City of Durham.”
The trial court did not, however, have authority to award defendants damages or fees in this tax foreclosure action.
Reversed.