Forest Ridge Townhomes Corp. of Greensboro v. Heag Pain Mgmt. Ctr. (Mar. 18, 2026)

Case details
Full caption
Forest Ridge Townhomes Corporation of Greensboro v. Heag Pain Management Center et al.
Country
United States
Jurisdiction
North Carolina (NC)
Court
North Carolina Supreme Court
Decided
Mar. 18, 2026
Disposition
Affirmed
Majority
Murry (J.), joined by Griffin (Justice), Freeman (Justice)
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 762385Unpublished DispositionOnly the Westlaw citation is currently available.NOTE: THIS OPINION WILL NOT APPEARIN A PRINTED VOLUME. THE DISPOSITIONWILL APPEAR IN THE REPORTER.An unpublished opinion of the North Carolina Courtof Appeals does not constitute controlling legalauthority. Citation is disfavored, but may be permittedin accordance with the provisions of Rule 30(e)(3)of the North Carolina Rules of Appellate Procedure.Court of Appeals of North Carolina.FOREST RIDGE TOWNHOMESCORPORATION OF GREENSBORO, Petitioner,v.HEAG PAIN MANAGEMENT CENTER,P.A., K&S RESOURCES, LLC, CHARLIEW. MORGAN, HEIR, and GREENSBOROREALTY & INVESTMENTS, LLC, Respondents.No. COA 25-600|Filed 18 March 2026Guilford County, No. 24SP001805-400Appeal by Respondents from order entered 14 February 2025by Judge Lora C. Cubbage in Guilford County SuperiorCourt. Heard in the Court of Appeals 20 November 2025.Attorneys and Law FirmsRuby Chase Taliercio, PLLC, by Margaret M. Chase, forPetitioner–Appellee.Gordon Law Offices, by Harry G. Gordon, for Respondents–Appellants.OpinionMURRY, Judge.*1 Greensboro Realty & Investments, LLC and K&SResources, LLC (Respondents) appeal from the trial court's14 February 2025 order disbursing surplus funds from aforeclosure action to Forest Ridge Townhomes Corporationof Greensboro (Petitioner) as the superior lienholder. For thereasons below, this Court affirms the trial court's order.I. BackgroundThis matter arises from a surplus-funds proceeding thatPetitioner initiated after a foreclosure sale on 3221 CypressPark Road, Unit C, in Greensboro, North Carolina (Property).On 20 November 2017, Petitioner filed a claim of lien againstthe Property totaling $1,403.90 in unpaid homeowners’association (HOA) assessments, subject to a senior lienthat had encumbered the Property since 1988. Petitionercommenced foreclosure proceedings on the Property toenforce its lien in February 2018. During the foreclosureproceeding, the owner of the Property filed for bankruptcyin the Middle District of North Carolina, which triggeredan automatic stay of all proceedings against him. See11 U.S.C. § 362(a). In December 2019, the trial courtdeclared Petitioner's foreclosure action inactive pending thebankruptcy's resolution. On 13 January 2021, Respondentsobtained their respective interests in the Property subject toexisting liens.After the Middle District closed the Property owner'sbankruptcy case, the senior lienholder commencedforeclosure proceedings on the Property, culminating in aFebruary 2022 foreclosure sale. See generally In re Davis,No. 19-11318, 2020 WL 3485122 (Bankr. M.D.N.C. June25, 2020). Following the satisfaction of the senior lien, theforeclosure sale yielded $44,586.02 in surplus funds.On 16 May 2024, Petitioner filed a petition seeking thedisbursement of the surplus funds from the foreclosuresale in satisfaction of its lien. At the time of this filing,$41,952.95 remained of the surplus funds. Following ahearing, the Guilford County Clerk of Superior Court orderedthe disbursement of $20,335.36 in surplus funds to Petitioner.On 6 December 2024, Respondents appealed the order tothe Guilford County Superior Court for a hearing de novo,alleging that Petitioner's proceeding was time-barred underthe three-year statute of limitations for foreclosure actionsunder N.C.G.S. § 47-3-116. The matter was transferred sixdays later after a hearing before the Assistant Clerk.Prior to the hearing de novo, Petitioner's counsel submittedan affidavit of attorneys’ fees on 7 February 2025, itemizing$14,414.50 in attorneys’ fees to-date. On 10 February 2025,the trial court heard the parties’ respective presentationsof evidence regarding the validity and enforceability ofPetitioner's lien. Upon the trial court's remarking on thelien amount increase from $1,403.90 to $12,496.88 over the
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.2previous eight years, Petitioner's counsel explained that theincrease represented “five years of dues” unpaid between2019 and 2022. The trial court concluded that Petitionerinstituted a “foreclosure proceeding to enforce” its lien“within the required time period prescribed in [N.C.G.S.]§ 47F-3-116” and that the inactivation of the foreclosureproceeding without prejudice due to the Property owner'sbankruptcy proceeding “d[id] not render ... Petitioner's lieninvalid.” Following the hearing, the trial court enteredan order on 14 February 2025 disbursing $26,911.38 insurplus funds to Petitioner, of which $12,496.88 representedunpaid assessments and $14,414.50 constituted Petitioner'sattorneys’ fees.*2 Respondents moved for a “New Trial / Amendmentof Judgment and Order, for Reconsideration, and Rule 60Relief” on 24 February 2025, to which Petitioner respondedand objected on 3 March 2025. Due to the trial judge'sretirement on 28 February 2025, Petitioner also movedto dismiss Respondents’ motion for lack of subject-matterjurisdiction. Before the calendaring of their motion forhearing, Respondents timely appealed from both the 14February 2025 disbursement order and the trial court's“fail[ure] to hear” their 24 February 2025 motion.II. JurisdictionThis Court has jurisdiction to hear Respondents’ appeal fromthe trial court's order disbursing surplus funds because it isa “final order” of the Superior Court resolving the priorityof surplus-funds distribution between the parties. N.C.G.S. §7A-27(b)(2); see In re Foreclosure of Lien, 219 N.C. App.320, 325 (2012) (exercising jurisdiction over superior court'sorder authorizing foreclosure in special proceeding because itis a “final judgment” under § 7A-27(b)).III. AnalysisOn appeal, Respondents argue that the trial court erred inentering the order disbursing surplus funds because Petitionerbased its petition “on a 2017 claim of lien and commencementof an HOA foreclosure in 2018 under N.C.G.S. § 47F-3-116,”which the trial court “never reactivated” after 2019.Alternatively, Respondents argue that the trial court erred byfailing to hear their 24 February 2025 motion and ask thisCourt to “consider the merits” of that motion.We review appeals from non-jury proceedings for whether“competent evidence” supports the trial court's findings offact and “whether the conclusions reached were proper inlight of the findings.” Walker v. First Fed. Sav. & Loan Ass'n,93 N.C. App. 528, 532 (1989). “Unchallenged findings offact are presumed correct and are binding on appeal.” BranchBanking & Trust Co. v. Schiphof, 192 N.C. App. 696, 700(2008). We review the trial court's conclusions of law de novo.See id. For the reasons below, we affirm the trial court's orderdisbursing surplus funds to Petitioner.A. DisbursementFirst, Respondents argue that the trial court erred in enteringthe order disbursing surplus funds to Petitioner. Theycontend that Petitioner's failure to “reactivate” its foreclosureproceeding rendered the petition for surplus funds untimelyunder the applicable three-year statute of limitations. SeeN.C.G.S. § 47F-3-116. They also characterize the trial court'sdisbursement to Petitioner of $26,911.38 in surplus funds, ofwhich $14,414.50 constituted attorneys’ fees, as a violationof the $1,200 statutory fee cap for HOA foreclosures. See id.§ 47F-3-116(f)(12). For the reasons below, we hold that thetrial court did not err by ordering this disbursement.1. Lien ValidityRespondents claim that Petitioner's failure to “reactivate”its foreclosure proceeding concurrently with the seniorlienholder's foreclosure action rendered its petition for surplusfunds untimely under the three-year statute of limitations inN.C.G.S. § 47F-3-116. We disagree.1a. Lien Priority*3 Respondents contest the underlying validity ofPetitioner's lien. An HOA may file a claim of lien for past-dueunpaid assessments on a property with “the clerk of superiorcourt in the county in which the lot is located,” N.C.G.S. §47F-3-116(a), and may subsequently foreclose on the lien toenforce it, see Willow Bend HOA v. Robinson, 192 N.C. App.405, 418 (2008). “Once filed, a claim of lien secures all sumsdue the association through the date filed and any sums dueto the association thereafter,” which may include late fees andother charges as provided in the association's declaration of
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.3covenants. N.C.G.S. § 47F-3-116(a). The association must“institute[ ]” “proceedings to enforce the lien ... within threeyears after the filing of the claim of lien in the office of theclerk of superior court.” Id. § 47F-3-116(c).Liens “registered in the office of the register of deeds”generally “have priority based on the order of registration asdetermined by the time of registration.” Id. § 47-20(a); seeHome Realty Co. & Ins. Agency v. Red Fox Country ClubOwners Ass'n, 274 N.C. App. 258, 266–67 (2020). A lienfor unpaid assessments filed under N.C.G.S. § 47F-3-116“is prior to all liens and encumbrances on a lot” except for(1) those recorded before its filing and (2) “liens for realestate taxes and other governmental assessments and chargesagainst the lot.” N.C.G.S. § 47F-3-116(d). But should a seniorlienholder commence foreclosure proceedings, the resultingforeclosure sale “extinguishe[s]” all junior liens “imposed onthe property subsequent to the execution and recording ofthe ... senior instrument.” Dixieland Realty Co. v. Wysor, 272N.C. 172, 175 (1967). And when a foreclosure sale yieldssurplus funds, the liens attach to that surplus in order ofpriority just as they did to the subject property. See In reCastillian Apts., 281 N.C. 709, 711 (1972) (quoting 3 Joneson Mortgages § 2164 (8th ed. 1928)). A claimant of surplusfunds may “institute[ ]” a “special proceeding ... before theclerk of the superior court ... to determine who is entitledthereto.” N.C.G.S. § 45-21.32.Here, the parties do not contest that Petitioner validly filed itsclaim of lien on 20 November 2017 for $1,403.90 in unpaidassessments on the Property, subject to a senior lien that hadencumbered the Property since 1988. On 13 January 2021,Respondents obtained their interests in the Property subjectto existing liens, including the senior lien and Petitioner'slien. When the senior lienholder commenced foreclosureproceedings on the Property, the resulting February 2022foreclosure sale “extinguished” all junior liens on theProperty, including Petitioner's lien and Respondents’ liens.See Dixieland Realty Co., 272 N.C. at 175. Because the liensattached to the foreclosure sale's surplus funds in the sameorder as they did to the Property, Petitioner's lien is the nextclaim in priority entitled to the surplus funds. See CastillianApts., 281 N.C. at 711.b. Statute of LimitationsRespondents also claim that Petitioner failed to file itssurplus-funds petition within the three-year statute oflimitations. See N.C.G.S. § 47F-3-116(c). They believe thatthe trial court erroneously allowed Petitioner to “avoid” thestatute of limitations and “fil[e] its 2024 Petition [for surplusfunds] seven ... years after filing its 2017 claim of lien.”Under N.C.G.S. § 47F-3-116, an HOA must “institute[ ]”“proceedings to enforce [its] lien ... within three years afterthe filing of the claim of lien.” Id. But nowhere does thisstatute require a lienholder to complete a foreclosure actionon an encumbered property within three years. Respondentsmisconstrue the trial court's disbursement order, whichproperly determined that Petitioner instituted the foreclosureproceeding within the statutory three-year period. See id.Further, Respondents are mistaken to the extent they arguePetitioner's claim for surplus funds is untimely becausethe right to claim surplus funds does not arise “until thesurplus proceeds [a]re paid over to the clerk of court.” In reForeclosure of Deed of Tr., 303 N.C. 514, 520 (1981) (citingN.C.G.S. § 45-21.32(a)). Indeed, binding authority indicatesthe contrary. See id. (holding that, “[o]nce properly attached tothe underlying property, the [parties’] liens ... continued in theproceeds generated by sale at foreclosure”); Mass. Bonding& Ins. Co. v. Knox, 220 N.C. 725, 730 (1942) (explainingthat a foreclosure action “instituted within the ... [statutory]period ... suspends the running of the statute of limitations”).Because the trial court correctly determined that Petitionerinitiated this proceeding within the applicable time period,we hold that the trial court properly upheld the validity ofPetitioner's lien. See N.C.G.S. § 45-21.32(a).2. Calculation of Lien Amount*4 Having confirmed the lien's validity, we next addressthe completeness and accuracy of its amount of $12,496.88in unpaid assessments and $14,414.50 in attorneys’ fees.Respondents argue that the trial court erred by relying onincompetent evidence and erroneous conclusions to supporteach disbursement amount. Upon review of the record, wedismiss Respondent's argument as meritless and affirm thetrial court's order in full.a. Unpaid AssessmentsRespondents claim that the trial court erred by disbursing$12,496.88 in surplus funds to satisfy Petitioner's lienbecause Petitioner offered “no sworn testimony or detailedinformation” at the 10 February 2025 hearing to “raise
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.4the total [lien amount] from $1,403.90 to $12,496.88.”Respondents contend that the trial court relied solely onPetitioner's “mystery Affidavit of Debt” for the $12,496.88amount. We review this claim only for “whether competentevidence ... support[s these] findings of fact.” Walker, 93 N.C.App. at 532.A HOA's validly filed “claim of lien secures all sums due theassociation through the date filed and any sums due to theassociation thereafter,” including “fees, charges, late charges,and other charges imposed.” N.C.G.S. § 47F-3-116(a). Here,Petitioner's 2017 claim of lien sought $1,403.90 in unpaidassessments and “any additional sums due to the associationhereafter” under § 47F-3-116. The 10 February 2025managing agent's affidavit attests to the lien amount's increaseto $12,496.86 as of that date.2 Contrary to Respondents’assertion, the trial court did not rely solely on this affidavitin determining the distribution of surplus funds. At the 10February 2025 hearing, rather, Petitioner's counsel clarifiedthat “the dues ... owed during that time period” between 2019and 2022 totaled $12,496.86 in response to the trial court'sindependent inquiry regarding the lien amount. When thetrial court asked how the amount increased from the 2017lien amount of $1,403.90, Petitioner's counsel explained,“[I]t's five years of dues.” Because the trial court properlyconsidered both parties’ evidence and the relevant statutein its surplus-funds disbursement, the trial court did not errin calculating the disbursement amount of $12,496.86 forunpaid assessments.b. Attorneys’ FeesRespondents next claim that the trial court's $14,414.50 awardviolates the $1,200 cap on attorneys’ fees under N.C.G.S. §47F-3-116. See N.C.G.S. § 47F-3-116(f)(12). We review denovo a trial court's award of attorneys’ fees under the authorityof a statute that declares an HOA “shall be entitled to recoverthe[m]” in the course of litigation. N.C.G.S. § 47F-3-116(e)(emphasis added); see Willow Bend HOA, 192 N.C. App. at418 (citing Turner v. Duke Univ., 325 N.C. 152, 165 (1989)).To award attorneys’ fees, a trial court must “consider thetime and labor expended, the skill required, the customaryfee for like work, and the experience and ability of theattorney.” Belcher v. Averette, 152 N.C. App. 452, 457(2002). For a nonjudicial foreclosure proceeding to enforcea claim of lien under N.C.G.S. § 47F-3-116, an HOA cannotexceed $1,200 in combined attorneys’ fees and trustee'scommission in conducting the foreclosure proceeding andresulting foreclosure sale. See N.C.G.S. § 47F-3-116(f)(12).But in a special proceeding to determine the ownership ofsurplus funds under N.C.G.S. § 45-21.32, a trial court may“allow a reasonable attorney's fee for any attorney appearingon behalf of the party or parties who prevail, to be paid outof the funds in controversy,” without express limitation. Id. §45-21.32(d).*5 Here, Petitioners filed their petition for surplus fundsunder N.C.G.S. § 45-21.32, which the trial court expresslycited as the basis for awarding Petitioners’ attorneys’ fees.The trial court's award of attorneys’ fees matches the$14,414.50 amount requested in Petitioner's 13 February2025 affidavit. This affidavit included the standard hourlyrates of all attorneys who worked on this matter and claimedthat these rates were “consistent with [their] knowledgeof attorneys of similar skill and experience in GuilfordCounty and surrounding areas.” The affidavit further attestedthat Petitioner's counsel “believe[d] the time and expensesexpended on this matter” “were necessary and reasonablein scope and amount” when “consider[ing] ... the amountat stake and the complexity of the issues raised.” Petitioneralso attached an itemized ledger of work completed, timeexpended, and amounts billed, totaling $14,414.50. The trialcourt properly considered Petitioners’ affidavit in awarding$14,415.50 in attorneys’ fees to Petitioner out of the surplusfunds. Because the trial court also supported its award ofunpaid assessments of $12,496.86 with competent evidence,we affirm the trial court's total disbursement of $26,911.38for Petitioner.B. Improper Rule 52, 59, and 60 FilingsRespondents argue that the trial court erred by “failing togrant” their 12 February 2025 “Request for Findings ofFact and Conclusions of Law” under Rule 52. See N.C.R. Civ. P. 52(a)(1) (requiring specific findings and legalconclusions for all non-jury “actions tried upon the facts”).They additionally claim the trial court erred by “failingto hear” their 24 February 2025 “Motion for New Trial /Amendment of Judgment and Order, for Reconsideration, andRule 60 Relief.” These arguments are meritless.We reiterate that the Rules of Civil Procedure do not applyto a special proceeding for surplus funds under N.C.G.S. §45-21.32. See In re Ernst & Young, LLP, 363 N.C. 612, 616(2009) (citing N.C. R. Civ. P. 1). Even assuming otherwise,
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.5Respondents do not show insufficient findings under Rule 52to support the trial court's disbursement. The order detailsthirty findings of fact that recount the relevant proceduralhistory of this matter, including the superior priority ofPetitioner's lien to Respondents’ interests in the Property, thetotal indebtedness secured by Petitioner's lien, and the properlegal authority for the trial court's disbursement of surplusfunds to satisfy that lien.Respondents also fail to show any “insufficiency of theevidence,” “error of law,” or “any other reason” under Rule 59to justify amending the trial court's order. N.C. R. Civ. P. 59(a)(7)–(9). Nor do Respondents assert proper grounds underRule 60 to set aside the trial court's judgment for mistake,fraud, newly discovered evidence, or any other valid reason.Id. 60(b). Instead, Respondents’ Rule 52, 59, and 60 filingsoutline essentially the same misplaced claims they argue onappeal, relying largely on inapplicable law, misapprehensionsof applicable law, and misleadingly selective presentation ofthe facts surrounding this proceeding. Thus, we dismiss thesefilings as meritless. See ACC Constr., 239 N.C. App. at 265(“emphatically declin[ing]” to allow plaintiff to “distort[ ] theprocedural history” of the matter).C. Other ContentionsRespondents make other claims irrelevant or otherwiseinappropriate to this appeal, each of which we dismiss asmeritless.First, Respondents argue that the trial court “fail[ed] to applythe bar of latches and estoppel” to “multiple” alleged failuresby Petitioner's counsel “and its manager” to respond toRespondent's counsel's communications regarding a separateaction. Aside from inappropriately referencing a matteroutside the scope of this appeal, Respondents’ failure tocite any legal authority for this misplaced assertion deems itabandoned. See N.C. R. App. P. 28(b)(6).Second, Respondents argue that the 2018 senior lienholder'sforeclosure action bars Petitioner's petition for surplus fundsunder the prior-pending-action doctrine. See Shore v. Brown,324 N.C. 427 (1989) (prior action in same cause betweensame parties abates subsequent action). Respondents’argument is meritless because the prior-pending-actiondoctrine does not apply to special proceedings. See In reForeclosure of Deed of Tr., 369 N.C. 222, 222 (2016) (The“contractual right of foreclosure by power of sale under a deedof trust is a non-judicial proceeding.”).*6 Third, Respondents argue that Petitioner's “action toproceed on time-barred debt and ... efforts to avoid all statutesof limitation on this consumer debt constitute a violation ofthe Fair Debt Collection Practices Act” (FDCPA). (Citing15 U.S.C. § 1692 et. seq.) They claim that the unpaid HOAassessments constitute consumer debt and that Petitioner'scounsel “acts as a ‘debt collector’ subject to the FDCPA”in seeking to satisfy Petitioner's lien from the surplus funds.Respondents again mischaracterize this matter as anythingother than a surplus-funds proceeding under N.C.G.S. §45-21.32 by shoehorning in an irrelevant statute. We thusdismiss this argument as meritless.Fourth, Respondents vaguely speculate that permitting thedisbursement of surplus funds to Petitioner would allow“HOAs all over North Carolina” to maintain liens inperpetuity, impose unlimited fees, and otherwise “abuse”property owners by forgoing the procedural requirementsof N.C.G.S. § 47F-3-116. Respondents assert that theseabuses would in turn “significant[ly] impact” mechanics’liens under N.C.G.S. § 44 and create “title problems”in real-estate transactions. They provide no pertinentlegal authority for these assertions despite N.C.G.S.§ 47F-3-116 expressly disclaiming any effect on “thepriority of mechanics’ or materialmen's liens.” N.C.G.S. §47F-3-116(d).3 Respondents’ purely conjectural assertionsare meritless.Fifth, Respondents argue that Petitioner's counsel violated herprofessional duty of candor to the tribunal by failing to informthe trial court at the 10 February 2025 trial de novo that thisCourt's recent decision in RM Contrs., LLC v. Wiggins, 294N.C. App. 172 (2024), contradicted “her novel legal theorythat there is no time limit at all for prosecuting an inactivatedclaim of lien.” See N.C. R. Prof. Conduct 3.3 (candor to thetribunal). Respondent's counsel's citation to RM Contrs. ascontrolling precedent belies his own lack of understandingin this matter because that case addresses the discharge ofmechanics’ liens under N.C.G.S. § 44-16(a)(3) for untimelyenforcement and does not relate to special proceedings forsurplus funds under N.C.G.S. § 45-21.32. See RM Contrs.,294 N.C. App. at 172. As Petitioner states in its brief onappeal, this Court is similarly “at a loss to understand howN.C.G.S. § 44-16(a)(3) ... has any relevance to any issue inthis case.”
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.6Sixth, Respondents allege that the trial court unfairly favoredPetitioner's counsel at trial by claiming “that the trial courtjudge deferred to what she viewed as the expertise of and herfriend relationship with [Petitioner's] counsel” based on twoisolated statements. Upon review of the record, we dismiss asmeritless this accusation of judicial partiality. See Hamptonv. Scales, 248 N.C. App. 144, 156 (2016) (“An appellatecourt cannot assume or speculate that there was prejudicialerror when none appears on the record before it.” (quotationomitted)).D. Sanctions*7 Finally, Petitioner moves to sanction Respondents andtheir counsel for “substantially failing to comply” with N.C.Rules of Appellate Procedure 25(b), 28, and 34(a)(3) in theirappellate brief. Petitioner further asks this Court to sanctionRespondents for bringing this appeal for an improper purposeto “harass” Petitioner, “thereby needlessly increasing thecost of litigation” under Rule 34(a)(2) by their “erratic andunethical misrepresentations of both fact and law.”We may “impose a sanction against a party or attorney orboth when” the party's attorney files “a petition, motion,brief, record, or other item” that “grossly violate[s] appellatecourt rules” or “grossly disregard[s] the requirements of afair presentation of the issues.” N.C. R. App. P. 34(a)(3).Sanctions are also permissible where “the appeal was not wellgrounded in fact,” “was not warranted by existing law,” or“was taken or continued for an improper purpose, such asto harass or to cause unnecessary delay or needless increasein the cost of litigation.” Id.34(a)(1)–(2). In consideringwhether to impose sanctions, the reviewing court “shouldfirst determine whether the noncompliance is substantial orgross under Rules 25 and 34.” Dogwood Dev. & Mgmt. Co.v. White Oak Transp. Co., 362 N.C. 191, 201 (2008). Suchdetermination includes, “among other factors, whether andto what extent the noncompliance impairs the court's task ofreview,” as well as “the number of rules violated.” Id. at 200.In light of our preceding analysis, we decline to imposeRule 34 sanctions for Respondents’ appeal because theirlegal errors and meritless arguments—dire as they are—do not rise to the level of “gross ... noncompliance.”Dogwood, 362 N.C. at 201. Our decision to forgo sanctionsdoes not diminish the severity of our chastisement ofRespondents for bringing meritless and misplaced arguments.Respondents cite no relevant legal authority for theirfundamental misapprehension of the difference between aforeclosure action under N.C.G.S. § 47F-3-116 and a surplus-funds proceeding under N.C.G.S. § 45-21.32. They vainlyattempt to buttress their misguided argument with claims thatmisrepresent the factual history of the matter and challengethe integrity of the proceedings. Respondents further burdenour review with irrelevant legal authority, some of whichappears to be AI-generated work product that they failedto adequately examine. We admonish Respondents for theseobstacles to our review. In light of our preceding analysis, thisCourt affirms the trial court's order disbursing surplus fundsto Petitioner.IV. ConclusionFor the reasons discussed above, this Court affirms the trialcourt's 14 February 2025 order disbursing $26,911.38 insurplus funds from a foreclosure action to Plaintiff as thesuperior lienholder.AFFIRMED.Report per Rule 30(e).Judges GRIFFIN and FREEMAN concur.All CitationsSlip Copy, 2026 WL 762385 (Table)Footnotes1Respondents fail to cite any relevant legal authority in support of their argument, which defies both precedentand logic. They primarily attempt to support their claim by citing to RM Contrs., LLC v. Wiggins, 294 N.C.App. 172 (2024), in which this Court addressed the enforceability of mechanics’ or materialmen's liens. See
FOREST RIDGE TOWNHOMES CORPORATION OF..., Slip Copy (2026) © 2026 Thomson Reuters. No claim to original U.S. Government Works.7id. at 175–76 (citing N.C.G.S. § 44A-8, -16(a) (2025)). Because N.C.G.S. § 47-3-116 governs the priorityof homeowners’ association (HOA) liens, RM Contrs. is irrelevant to this matter. See, e.g., N.C.G.S. §47F-3-116(d) (expressly limiting subsection to “not affect ... priority of mechanics’ or materialmen's liens”).Respondents also incompletely cite “Porter v. Bank, 251 N.C. 573, 577, 111 S.E.2d 904.” Assuming thatRespondents refer to Porter v. Cits. Bank of Warrenton, 251 N.C. 573 (1960), that case does not address anHOA lien under § 47F-3-116 or a surplus-proceedings claim under § 45-21.32 and is thus irrelevant to thisappeal. See Porter, 251 N.C. at 580–81 (holding that an order for alimony pendente lite under § 50-16 did notgive petitioner wife superior lien on surplus funds from foreclosure sale of respondent husband's property).These case citations are the totality of purported legal authority Respondents use to support their assertionthat Petitioners must “reactivate” the 2018 foreclosure action to validate their 2024 surplus-funds proceedings.Aside from the lack of supporting authority rendering this argument abandoned, we underscore the logicalincongruity of requiring Petitioners to commence foreclosure proceedings on an already-foreclosed property.See N.C. R. App. P. 28(b)(6).2We also dismiss as meritless Respondents’ assertion that the 10 February 2025 filing date of the managingagent's affidavit violated the ten-day notice requirement for the service of a motion for summary judgmentunder North Carolina Rules of Civil Procedure 6 and 56. The Rules of Civil Procedure do not apply to specialproceedings, which includes a surplus-funds proceeding under N.C.G.S. § 45-21.32. See In re Ernst & Young,363 N.C. 612, 616 (2009); N.C. R. Civ. P. 1 (civil-procedure rules inapplicable when “differing procedure isprescribed by statute”); N.C.G.S. § 45-21.32(a) (a surplus-funds proceeding is a special proceeding).3Respondents’ speculation on the alleged “impact” of this matter on mechanics’ liens, as well as theirinapplicable FDCPA claim, strongly resemble similar arguments in a record filing titled “Perplexity.AIAnswers,” attached as an exhibit to Respondents’ “Motion for New Trial / Amendment of Judgment and Order,for Reconsideration, and Rule 60 Relief.” In the motion, Respondents’ counsel explains that he “did traditionalresearch but supplemented it with research through Perplexity.AI, Professional Version” and provides a URLlink to the same: “https://www. perplexity.ai/.”To the extent that the irrelevance of Respondents’ cited legal authorities results from the failure ofRespondents’ counsel to adequately review AI-generated work product, we chastise him for this regrettableoversight. See N.C. State Bar, Formal Op. 1 (2024) (holding attorney “individually responsible for reviewing,evaluating, and ultimately relying” on AI-generated work product); accord Benjamin v. Costco WholesaleCorp., 779 F. Supp. 3d 341, 347 (E.D.N.Y. 2025) (noting the “panoply of sanctions against attorneys whosubmitted fake cases” hallucinated by AI).End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
ProvenanceKnow exactly where this document came from.Members see the sourcing behind every authority on DocPost — so you can check the record yourself and cite with confidence.Request access