Tort/Negligence – Real Property – Mortgages – Trustee – Breach of Fiduciary Duty Claim – No ‘Bad Faith’ Allegation

Evans v. Neill (Lawyers Weekly No. 11-07-1177, 7 pp.) (Cheri Beasley, J.) Appealed from Cumberland County Superior Court. (Gregory A. Weeks, J.) N.C. App. Unpub. Click here for the full-text opinion.

Holding: In their breach of fiduciary duty claim against the trustee of their deed of trust, plaintiffs did not allege that the trustee acted in bad faith. Although plaintiffs alleged a breach of the duty to properly service notice upon plaintiffs prior to foreclosing and selling the mortgaged property, the complaint failed to explain how the trustee’s error in serving notice constituted a failure of the duty to exercise good faith and due regard to plaintiffs’ interest.

We affirm the trial court’s grant of the trustee’s motion to dismiss the breach of fiduciary duty claim.

Although plaintiffs argue that the trustee had actual knowledge of their physical address, the record indicates that the trustee had three addresses for plaintiff, the sheriff had difficulty personally serving plaintiffs, and the deed of trust did not give a physical address for the property. Because an assertion that the trustee failed to act in good faith is necessary to state a claim for breach of fiduciary duty, the trial court’s properly granted the trustee’s motion to dismiss under N.C. R. Civ. P. 12(b)(6).