Real Property — Mortgages – Foreclosure – Quiet Title Action – Civil Practice – Res Judicata

Mazzone v. Bank of America, N.A. (Lawyers Weekly No. 14-16-1138, 8 pp.) (Lisa Bell, J.) Appealed from Mecklenburg County Superior Court (Richard Boner, J.) N.C. App. Unpub.

Holding: Elements necessary to plaintiffs’ quiet title and false claim actions were decided in defendant’s foreclosure proceeding, which plaintiffs did not appeal. As a result, res judicata bars plaintiffs’ claims.

We affirm the trial court’s grant of defendant’s motion to dismiss.

In their complaint, plaintiffs allege that a cloud of title existed on the subject property because the assignment of their deed of trust was not valid, and, therefore, defendant was not the proper holder of their promissory note and had no right to foreclose on the subject property. However, these allegations constitute an impermissible collateral attack on the clerk of court’s order from the foreclosure hearing, and are barred by res judicata.

The clerk made the requisite findings of fact: (1) defendant was the holder of the note sought to be foreclosed on, (2) plaintiffs had defaulted on the note, and (3) the note and deed of trust gave defendant the right to foreclose on the subject property. Plaintiffs failed to appeal the clerk’s order. As such, after 10 days had lapsed, the clerk’s findings from the foreclosure hearing became binding, and plaintiffs are now barred from re-litigating these issues that are essential to maintain their quiet title action.

The validity of the debt, defendant’s status as holder of the note, and defendant’s right to foreclose on the subject property were established by the clerk’s order. As such, plaintiffs cannot allege any of the facts necessary to support a claim against defendant for registering a false claim under G.S. § 47B-6.

Affirmed.