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An  unpublished  opinion  of  the  North  Carolina  Court  of  Appeals  does  not  constitute
controlling legal  authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule  30(e)(3) of the  North Carolina Rules of Appellate Procedure.
NO. COA11-321
NORTH CAROLINA COURT OF APPEALS
Filed:  15 November  2011
ALEXANDER EVANS and
ALICE FAYE EVANS,
Plaintiffs,
v.                                                                                              Cumberland County
No.  09-CVS-6428
DAVID W. NEILL, ELIZABETH B.
ELLS, DOROTHY DEBRA,
CITIFINANCIAL SERVICES, INC.,
CITIFINANCIAL SERVICES,
INC.,  309, LLC and UPTON TYSON,
Defendants.
                                                                                                Appeal  by  Plaintiffs  from  orders  entered   19  November                                          2009
and                                                                                             29  November                                    2010  by  Judge  Gregory  A.  Weeks  in  Cumberland
                                                                                                County  Superior  Court.                        Heard  in  the  Court  of  Appeals                    14
September  2011.
Stark  Law  Group,  PLLC,  by  Thomas  H.  Stark  and  Seth  A.
Neyhart, for Plaintiff-Appellants.
Shapiro  and  Ingle,  by  Jason  K.  Purser,  for  Defendant-
Appellees.
BEASLEY, Judge.
                                                                                                Alexander  Evans  and  Alice  Faye  Evans                                                             (Plaintiffs)  appeal
from  the                                                                                       19  November                                    2009  order  dismissing  their  claim  for




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breach  of  fiduciary  duty  against  Defendants  David  W.  Neill,
Elizabeth  B.  Ells,  and  Dorothy  Debra                                      (Substitute  Trustees)  and
the  29  November  2010  order  denying  Plaintiffs’  motion  for  relief
from order.    For the following reasons, we affirm.
On  29  December  2000,  Plaintiffs  executed  a  note  payable  to
Associates  Financial  Services  of  America,  Inc.,  predecessor  to
Citifinancial   Services,   Inc.                                               309,   LLC                    (Citi).                                                 They   also
executed  a  Deed  of  Trust  to  secure  the  debt.    The  Deed  of  Trust
described  the  collateral,  but  did  not  specify  the  address  of  the
property.
Plaintiffs  made  payments  on  the  note  until  December                     2005.
Plaintiffs  failed  to  pay  the  remaining  balance  and  Defendant
Substitute  Trustees  (Substitute  Trustees)  instituted  foreclosure
proceedings on or about  13 April  2006.
The  Substitute  Trustees  attempted  to  serve  Plaintiffs  with
notice  of  hearing  at  three  different  addresses:                          1012  Vesper
Lane,  1437  Halsey  Loop,  and  1319  Cypress  Lake  Road.    The  Sheriff
was  not  able  to  personally  serve  Plaintiffs  and  posted  service
at  1012  Vesper  Lane.    The  1012  Vesper  Lane  property  was  not  the
collateral described in the Deed of Trust.
On                                                                             17  May                       2006,  the  Cumberland  County  Clerk,  unaware  that
the  notice  was  deficient  and  without  the  presence  of  Plaintiffs,
entered   an   order   permitting   foreclosure   on   the   property
described  as  collateral  in  the  Deed  of  Trust.    Consequently,  the




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property  was  sold  and  conveyed  to  Defendant  Upton  Tyson  (Tyson)
in July  2006.
On  6  July  2009,  Plaintiffs  filed  a  complaint  that  sought  to
quiet  title,  alleged  breach  of  fiduciary  duty  by  David  W.  Neill,
Elizabeth  B.  Ells,  and  Dorothy  Debra  (Substitute  Trustees),  and
claimed  violation  of  due  process  based  on  improper  notice  of  the
foreclosure  hearing.    The  complaint  also  named  Citi  and  Tyson  as
Defendants.
The  Substitute  Trustees  filed  a  12(b)(6)  motion  to  dismiss
as  to  the  claim  of  breach  of  fiduciary  duty.     After  hearing
arguments,  the  trial  court  granted  Defendants’  motion  to  dismiss
on                                                                           19  November                                                                          2009.   The  trial  court  proceeded  as  to  the
                                                                                                                  remaining  issues  and  by  order  entered  on                                                       29  November                    2010  set
                                                                             aside  the  foreclosure  as  void.                                                                                                        Prior  to  the  final  order,
Plaintiffs  filed  a  motion  for  relief  from  the  order  granting
Substitute  Trustees’  motion  to  dismiss.     On                           29  November                         2010,
the   trial   court   denied   the   motion   for   relief   from   order.
Plaintiffs  filed  notice  of  appeal  on                                    29  December                         2010  from  the
12(b)(6)  dismissal  and  the  denial  of  the  motion  for  relief  from
order pursuant to Rule  60(b)(2).
The  sole  issue  on  appeal  is  whether  the  trial  court  erred
in    granting    the    Substitute    Trustees’                             12(b)(6)    motion.
Plaintiffs  assert  that  the  complaint  states  a  claim  for  breach
of fiduciary duty against the Substitute Trustees.    We disagree.




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“In  reviewing  the  grant  of  a  motion  to  dismiss  for  failure
to  state  a  claim,  the  question  for  an  appellate  court   is
whether,  as  a  matter  of  law,  the  allegations  of  the  complaint,
treated  as  true,  are  sufficient  to  state  a  claim  upon  which
relief  may  be  granted  under  some  legal  theory,  whether  properly
labeled  or  not.”    George  v.  Administrative  Office  of  the  Courts,
142  N.C.  App.                                                               479,                                          482,   542  S.E.2d                                                          699,                                 702         (2001)                    (internal
                                                                              quotation  marks  and  citations  omitted).                                                                                                                                “The  complaint  should
be  liberally  construed,  and  the  court  should  not  dismiss  the
complaint  unless  it  appears  beyond  doubt  that                           [the]  plaintiff
could  prove  no  set  of  facts  in  support  of  his  claim  which  would
entitle  him  to  relief.”    Goodman  v.  Holmes  &  McLaurin  Attorneys
at  Law,                                                                      192  N.C.  App.                               467,   473,                                                                 665  S.E.2d                          526,        531                       (2008)
(internal quotation marks and citations omitted).
“Dismissal    of    a    complaint    under    Rule
12(b)(6)  is  proper  when  one  of  the  following
three  conditions  is  satisfied:                                             (1)  when  the
complaint  on  its  face  reveals  that  no  law
supports   plaintiff's   claim;                                               (2)   when   the
complaint  on  its  face  reveals  the  absence  of
                                                                                                                                   fact  sufficient  to  make  a  good  claim;                          (3)
                                                                                                                                   when  some  fact  disclosed  in  the  complaint
                                                                                                                                   necessarily defeats plaintiff's claim.”
                                                                                                                                   Shepard  v.  Ocwen  Fed.  Bank,  FSB,  172  N.C.  App.               475,                                 477,        617
S.E.2d                                                                        61,                                           63     (2005)                                                               (quoting  Jackson  v.  Bumgardner,   318  N.C.
                                                                                                                                   172,  175,  347  S.E.2d  743,  745  (1986)  (citations  omitted)).                                                    “To
state  a  claim  for  breach  of  fiduciary  duty,  a  plaintiff  must




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allege   that   a   fiduciary   relationship   existed   and   that   the
fiduciary  failed  to  act  in  good  faith  and  with  due  regard  to
[plaintiff's]  interests[.]”    Toomer  v.  Branch  Banking  &  Tr.  Co.,
171  N.C.  App.                                                                58,                     70,     614  S.E.2d   328,         337   (2005)   (internal
quotation marks and citations omitted).    Good faith is
[a]  state  of  mind  consisting  in                                           (1)  honesty
in  belief  or  purpose,                                                       (2)  faithfulness  to
one’s  duty  or  obligation,                                                   (3)  observance  of
reasonable   commercial   standards   of   fair
dealing  in  a  given  trade  or  business,  or  (4)
absence  of  intent  to  defraud  or  to  seek
unconscionable advantage.
Black’s  Law  Dictionary  (7th  ed.  1999).    Although  our  Courts  have
not  explicitly  defined  “good  faith”  in  the  context  of  the  duties
of   fiduciaries,   we   have   discussed   the   distinction   between
negligence  of  a  fiduciary  and  a  fiduciary  acting  in  bad  faith.
See  Edwards  v.  Bank,  39  N.C.  App.  261,  268,  250  S.E.2d  651,  656-
57  (1979).    The  Edwards  Court  explained  the  distinction  between
negligence and bad faith.
The  distinction  between  them  is  that  bad
faith,  or  dishonesty,  is,  unlike  negligence,
wilful.  The  mere  failure  to  make  inquiry,
even                                                                           though                  there   be            suspicious
circumstances,  does  not  constitute  bad  faith
unless  such  failure  is  due  to  the  deliberate
desire   to   evade   knowledge   because   of   a
belief  or  fear  that  inquiry  would  disclose  a
vice  or  defect  in  the  transaction,  that  is
to   say,   where   there   is   an   intentional
closing of the eyes or stopping of the ears.
Id. at  268,  250 S.E.2d at  657  (internal quotation marks and
citations omitted).




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A  review  of  the  complaint  shows  that  Plaintiffs  properly
alleged  the  existence  of  a  fiduciary  duty,  but  did  not  plead
that  Substitute  Trustees  acted  in  bad  faith.    Plaintiffs  argue
that  “[d]espite  the  fact  that  the  substitute  trustees  had  actual
knowledge  of  the  Plaintiffs  physical  address,  the  Substitute
Trustee   Defendants   failed   to   properly   serve   notice   upon
Plaintiff   in   breach   of   their   fiduciary   duties   prior   to
foreclosing  and  selling  the  property.”                                   Although  Plaintiffs
allege  a  breach  of  duty,  the  complaint  fails  to  explain  how
Defendants’  error  in  serving  notice  constituted  a  failure  of
their  duty  to  exercise  good  faith  and  due  regard  to  Plaintiffs’
interest.    See  Toomer,                                                    171  N.C.  App.  at  70,   614  S.E.2d  at  337.
Further,  the  record  indicates  that  the  Substitute  Trustees  had
three   addresses   for   Plaintiffs,   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  Defendants  failed  to  act  in  good  faith  is  a  necessary
element  to  state  a  claim  of  breach  of  fiduciary  duty,  the  trial
court  properly  granted  Defendant  trustees’                               12(b)(6)  motion  to
dismiss.
Plaintiffs  also  state  as  an  issue  in  the  record  on  appeal
that  the  trial  court  erred  by  denying  their  Rule                     60  motion  for
relief from order.    We dismiss this issue.




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Pursuant  to  the  North  Carolina  Rules  of  Civil  Procedure,
Rule  60(b)(2)  permits  the  court  to  “relieve  a  party  or  his  legal
representative  from  a  final  judgment,  order,  or  proceeding  for  .
.  .  [n]ewly  discovered  evidence  which  by  due  diligence  could  not
have  been  discovered  in  time  to  move  for  a  new  trial[.]”    N.C.
Gen.  Stat.  §  1A-1,  Rule  60(b)(2)  (2009).    Here,  Plaintiffs  gave
notice  of  appeal  based  on  the  trial  court’s  denial  of  their  Rule
60(b)(2)  motion,  but  failed  to  make  any  argument  in  their  brief
as to this contention.    Therefore, this issue is dismissed.
Affirmed.
Judges STEPHENS and ERVIN concur.
Report per Rule  30(e).

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