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A trustee in a power of sale foreclosure has a fiduciary duty to both the debtor and the creditor.  In re Foreclosure of Vogler Realty, Inc., 365 N.C. 389, 397 (2012).  The trustee must be impartial in the performance of his or her duties as a disinterested third party and may not give an unfair advantage to one party to the detriment of the other.  Id.  See also In re Foreclosure by Goddard & Peterson, PLLC, 789 S.E.2d 835, 841 (2016); In re Foreclosure of Real Property for $143,600.00, 156 N.C. App. 477, 483 (2003).  This duty is recognized in G.S. Chapter 45, which requires that the notice of hearing include a statement that the trustee is a neutral party and, while holding that position, may not advocate for the creditor or the debtor in the foreclosure proceeding.  G.S. 45-21.16(c)(7)(b).

A trustee may be held liable for breach of fiduciary duty through a civil action brought in district or superior court.  See Goddard, 789 S.E.2d at 841.  If the trustee is an attorney or represented by an attorney, then the attorney also may be subject to sanctions by the N.C. State Bar for violating the N.C. Rules of Professional Conduct.  This includes Rule 1.7(a) which prohibits the common representation of multiple clients if the representation involves a concurrent conflict of interest.  A number of ethics opinions drafted by the Ethics Committee of the State Bar provide guidance to an attorney serving as or representing a trustee in a power of sale foreclosure.  See CPR 94; CPR 166; CPR 201; CPR 220; CPR 297; CPR 305; RPC 3; RPC 64; RPC 82; RPC 90; 2004 FEO 3; 2008 FEO 11; 2011 FEO 5; 2013 FEO 5; and 2014 FEO 2.

A new law, Session Law 2017-206, went into effect on August 30, 2017 codifies a number of these opinions. The law contains a modification and addition to G.S. Chapter 45-10 and directly applies to those situations in foreclosure proceedings where an attorney is serving as the trustee.  This post will give some preliminary thoughts on the new law as well as briefly discuss some of the related ethics opinions.  For a more detailed review and application to a particular case in your practice, I would recommend reviewing the full ethics opinions cited herein.

In a previous post I talked about the law related to who can appear on behalf of a party in a small claims case. To briefly reiterate, small claims law makes two exceptions to the general rule requiring parties to be represented by an attorney if they do not choose to represent themselves. One exception allows corporations to appear in small claims court through an agent. See Duke Power Co. v. Daniels, 86 NC App 469 (1987).  The other exception, applicable only in summary ejectment actions, allows agents with actual knowledge of the relevant facts to sign the summary ejectment complaint and (presumably) represent the plaintiff/owner in the small claims action. See GS 7A-216 and 7A-223. Both exceptions are well-established and reasonably straightforward, subject to a few somewhat uncertain points I addressed in my previous post.

READ POST "New Law: Who Can Appear on Behalf of a Party in Small Claims Court and on Appeal? (December 20, 2017)"

Imagine this scenario: Judge A had a busy civil calendar before leaving for vacation.  Although all the hearings are complete, the judge did not make rulings on some issues.  As […]

The new North Carolina Uniform Power of Attorney Act (the Act) goes into effect on January 1, 2018.  I recently blogged about the judicial relief provisions under the Act here.   Next Tuesday, December 12th from noon to 1:15 pm, the School of Government in partnership with the N.C. Administrative Office of the Courts will be offering a free webinar on this new law.  The Honorable James Stanford, Clerk of Superior Court, Orange County, Allison Smith, NCAOC assistant legal counsel, Janice Davies, an attorney with Davies Law, PLLC, and I will be presenting. Anyone can register for the webinar here.  Note, registration closes tomorrow at noon.

The North Carolina General Assembly recently made two important changes to Chapter 50B regarding civil domestic violence protective orders. S.L. 2017-92, “Domestic Violence Appeals and Modifications”, was effective October 1, 2017.

This is a bittersweet post as it is a goodbye to my friend and colleague, LaToya Powell, who has decided to leave the School of Government (SOG). Tomorrow is her last day, and I hope you will join me in wishing her well.

In lawsuits against units of local government, the general rule is that the trial court must throw out the plaintiff’s claims if the unit raises the defense of governmental immunity and the complaint fails to allege a waiver of that immunity.  This blog post looks at how detailed a waiver allegation must be for a complaint to survive an assertion of governmental immunity.

The Concept of Waiver

As I’ve explained in prior blog posts (here, here, and here), the defense of governmental immunity protects cities, counties, and other units of local government from civil liability for negligence and other claims – though not constitutional claims – that arise from the performance of governmental functions.  The courts have recognized that a unit may waive this immunity through any of the three actions described in the next section.  Essentially, by acting in any of those ways, a unit consents to be sued for any civil claims that fall within the scope of the waiver.

What is a gatekeeper order?

We have a new report available at the School of Government (SOG) for your weekend reading.  The report is titled Multidisciplinary Evaluations Assembled by LME/MCOs in Adult Guardianship Proceedings in North Carolina. 

With the passage of “Raise the Age” legislation this year, juvenile justice officials, the court system, law enforcement agencies, and various other state officials are busy planning and preparing for […]