UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 16-1214
BRANDON CARTER; ERICA CARTER,
Plaintiffs – Appellants,
v.
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; CWABS, INC.
ASSET-BACKED CERTIFICATES TRUST 2005-14; THE BANK OF NEW
YORK TRUST COMPANY, N.A., solely in its capacity as Trustee
for the CWABS, Inc. Asset-Backed Certificates Trust
2005-14,
Defendants – Appellees,
and
CWABS, INC.,
Defendant.
Appeal from the United States District Court for the Eastern
District of North Carolina, at Raleigh. Malcolm J. Howard,
Senior District Judge. (5:14-cv-00395-H)
Submitted: February 17, 2017 Decided: February 23, 2017
Before NIEMEYER, DUNCAN, and WYNN, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Benjamin D. Busch, THE LAW OFFICE OF BENJAMIN D. BUSCH, PLLC,
Durham, North Carolina, for Appellants. Nathan J. Taylor, Wm.
Grayson Lambert, MCGUIREWOODS LLP, Charlotte, North Carolina,
for Appellees.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
Brandon and Erica Carter (collectively, “the Carters”)
appeal the district court’s order granting the motion to dismiss
filed by CWABS, Inc. Asset Certificates Trust, Series 2005-14
(the “Trust”). 1 On appeal, the Carters argue that the district
court erred by: (1) considering the issue of ratification, which
the Carters assert the Trust did not sufficiently raise;
(2) determining that a claim for fraud was time-barred;
(3) dismissing their claim to quiet title and for declaratory
judgment; and (4) determining that a claim for recoupment may
not be brought affirmatively. We affirm.
“We review de novo the grant of a motion to dismiss . . .
[and] accept as true the well-pled allegations of the complaint
and construe the facts and reasonable inferences derived
therefrom in the light most favorable to the plaintiff.”
Harbourt v. PPE Casino Resorts Md., LLC, 820 F.3d 655, 658 (4th
Cir. 2016). “A plaintiff must allege sufficient facts to
establish the elements of his claim and advance that claim
across the line from conceivable to plausible.” Id.
(alterations and internal quotation marks omitted).
1
Although there were three other defendants involved in the
action below, the Carters have abandoned claims against all
Defendants with the exception of the Trust.
3
Three of the Carters’ arguments need not detain us long.
With regard to ratification, 2 we conclude that the Trust
sufficiently raised that affirmative defense in its motion to
dismiss, see LSREF2 Baron, L.L.C. v. Tauch, 751 F.3d 394, 398
(5th Cir. 2014) (discussing level of specificity required), and,
therefore, that the district court did not err in considering
it, see Goodman v. Praxair, Inc., 494 F.3d 458, 464 (4th Cir.
2007) (providing circumstances under which defense may be raised
in motion to dismiss). We also conclude that the district court
correctly determined that plaintiffs may not bring affirmative
actions for recoupment. See Bull v. United States, 295 U.S.
247, 262 (1935) (“[R]ecoupment is in the nature of a defense
arising out of some feature of the transaction upon which the
plaintiff’s action is grounded.”); RL REGI N.C., LLC v.
Lighthouse Cove, LLC, 748 S.E.2d 723, 728 (N.C. Ct. App. 2013)
(noting defensive nature of recoupment), rev’d on other grounds,
762 S.E.2d 188 (N.C. 2014). To the extent that the Carters
raise on appeal a claim for recoupment in conjunction with a
declaratory action, they did not present that claim below but
instead attempted to allege a stand-alone cause of action for
2
Ratification occurs when an individual affirms a prior act
to which he or she would not have been otherwise bound, with
full knowledge of all material facts. Leiber v. Arboretum Joint
Venture, LLC, 702 S.E.2d 805, 812 (N.C. Ct. App. 2010).
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recoupment. Nor did they present to the district court the new
argument in support of their quiet title claim. Thus, those
claims are not properly before us. Pornomo v. United States,
814 F.3d 681, 686 (4th Cir. 2016) (providing standard).
Finally, we conclude that the Carters failed to adequately
plead a cause of action for fraud. 3 Under North Carolina law, 4 a
party alleging fraud must establish five elements: “(1) False
representation or concealment of a material fact, (2) reasonably
calculated to deceive, (3) made with intent to deceive,
(4) which does in fact deceive, (5) resulting in damage to the
injured party.” 5 Forbis, 649 S.E.2d at 387 (internal quotation
marks omitted).
The complaint failed to allege that either of the Carters
was actually deceived by the purportedly fraudulent deed of
3Although the district court found that the statute of
limitations barred the Carters’ fraud claim, “we may affirm a
judgment for any reason appearing on the record.” Weidman v.
Exxon Mobil Corp., 776 F.3d 214, 220 (4th Cir. 2015) (alteration
and internal quotation marks omitted).
4 It is undisputed that North Carolina law applies.
5Although the Carters argue on appeal that they need only
establish the elements for a claim of forgery, see State v.
Welch, 145 S.E.2d 902, 905 (N.C. 1966) (setting forth thee
elements for forgery claim), where plaintiffs advance a claim of
fraud by forgery, as the Carters did here, they must satisfy the
five elements required to establish a claim of fraud. See
Forbis v. Neal, 649 S.E.2d 382, 387-88 (N.C. 2007); Henson v.
Green Tree Servicing LLC, 676 S.E.2d 615, 619 (N.C. Ct. App.
2009); Piles v. Allstate Ins. Co., 653 S.E.2d 181, 186 (N.C. Ct.
App. 2007).
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trust executed in their names. To the contrary, the Carters
knew that they did not sign the mortgage note or deed of trust,
and they admitted that they paid the mortgage and lived in the
home. Moreover, there is no plausible allegation that the
alleged fraud harmed the Carters. Although they argue that harm
resulted from the difference in value between the fixed-rate
note for which they applied and the adjustable-rate note they
received, the Carters have not alleged that they actually would
have received a fixed-rate mortgage. Furthermore, the mortgage
note clearly expressed that the mortgage contained an adjustable
interest rate, and the Carters were under an obligation to read
the terms of the contract, Raper v. Oliver House, LLC, 637
S.E.2d 551, 555 (N.C. Ct. App. 2006), and had a clear
opportunity to rescind the mortgage for any reason, see 15
U.S.C. § 1635 (2012) (providing time during which rescission
must occur). Thus, the district court did not err in denying
relief on the fraud claim.
Accordingly, we affirm the district court’s judgment. We
dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before
this court and argument would not aid the decisional process.
AFFIRMED
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