Contract – Promissory Note & Guaranty – Real Property – Foreclosure – Statute of Limitations – Real Party in Interest – Trusts & Estates

After defendants defaulted on their promissory note and guaranty, the plaintiff-lender foreclosed on the property securing the promissory note; however, the foreclosure was not completed because a prior deed of trust was foreclosed on. The defendant-guarantor argues the instant action is time-barred under G.S. § 1-54(6) (“Within one year an action or proceeding— . . . . For a deficiency judgment on any debt, promissory note, bond or other evidence of indebtedness after the foreclosure of a mortgage or deed of trust on real estate securing such debt, promissory note, bond or other evidence of indebtedness, which period of limitation above prescribed commences with the date of the delivery of the deed pursuant to the foreclosure sale[.]”). However, the guarantor did not raise the affirmative defense of the statute of limitations in any of her filings with the trial court. In light of the unconventional application of the a statute of limitations proposed by the guarantor, which appears to be a matter of first impression for this court, we cannot conclude that the lender was not surprised and had a full opportunity to argue and present evidence. The statute of limitations issue was not properly before the trial court.

We affirm summary judgment for the lender.

The defendant-borrower received the $150,000 loan in question from “New Vision Trust Custodian FBO James R. Hiseler IRA.” The guarantor argues New Vision Trust is not the real party in interest entitled to sue on defendants’ promissory note.

However, N.C. R. Civ. P. 17(a) says that “a party . . . in whose name a contract has been made for the benefit of another . . . may sue in his own name without joining with him the party for whose benefit the action is brought. . . .” Moreover, the use of “FBO” in “New Vision Trust Custodian FBO James R. Hiseler IRA” is a clear abbreviation for “for the benefit of.” As a result, the interactions between the parties that led to this lawsuit were between the defendant-borrower and New Vision Trust, a custodian acting for the benefit of James R. Hiseler IRA. Rule 17 permits New Vision Trust to sue in its own name, without joining James R. Hiseler IRA, as was done here.

New Vision Trust v. Eliza, LLC (Lawyers Weekly No. 012-581-22, 12 pp.) (Hunter Murphy, J.) Appealed from Wake County District Court (Margaret Eagles, J.) Daniel Gibson for plaintiff; Jeremy Jackson, Ryan Adams and William Braziel for defendant Shtal. 2022-NCCOA-927