An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-275
                       NORTH CAROLINA COURT OF APPEALS

                            Filed: 16 September 2014


IN RE:
                                              Union County
Foreclosure of Real Property                  No. 11 SP 578
Under Deed of Trust from GREGORY
THOMAS ALDRIDGE, in the original
amount of $129,500.00, dated April
2, 2007 and recorded in Book 4515,
Page 789, Union County Registry


      Appeal by respondent from order entered 19 September 2013

by Judge Kevin M. Bridges in Union County Superior Court.                     Heard

in the Court of Appeals 28 August 2014.


      Brock & Scott, PLLC, by Gregory D. Spink and Graham H.
      Kidner,   for   petitioner-appellee  Trustee Services of
      Carolina, LLC and Bank of America, N.A.

      Steven D. Starnes, P.A., by Steven D.                        Starnes,     for
      respondent-appellant Gregory Thomas Aldridge.

      Baucom, Claytor, Benton, Morgan & Wood, P.A., by Rex C.
      Morgan,   for   third-parties-appellees Phillip Compton,
      Jeffrey Compton, and Debra Compton.

      The Duggan Law Firm, P.C., by Christopher Duggan; and
      Lewis, Rice & Fingersh, L.C., by Benjamin A. Lipman, for
      intervenor-appellee Lawyer's Weekly, LLC.


      GEER, Judge.
                                            -2-
      Respondent Gregory Thomas Aldridge appeals from an order

denying Mr. Aldridge's motion pursuant to Rule 60(b) of the

Rules of Civil Procedure to set aside a foreclosure sale on the

grounds      that    the    notice    of    sale    was   not    advertised      in   a

newspaper published in the county where the property was located

as required by N.C. Gen. Stat. § 45-21.17(1)(b) (2013).                        We need

not address the majority of Mr. Aldridge's arguments because (1)

we hold that he has failed to demonstrate that any error in

publication was a material irregularity, and (2) the property

was purchased by a bona fide purchaser for value without notice

of   any    irregularity.        The       trial    court,    therefore,      properly

concluded that Mr. Aldridge was not entitled to set aside the

foreclosure sale and denied his Rule 60(b) motion.

                                           Facts

      On 2 April 2007, Mr. Aldridge executed a deed of trust in

the amount of $129,500.00 for the benefit of Bank of America,

N.A.,      which    was    recorded    in    Book    04515,     Page   0789    in   the

Register of Deeds of Union County, North Carolina.                            The real

property described in the deed of trust is located at 2316 Mount

Pleasant Church Road, Monroe, North Carolina, 28112.                            PRLAP,

Inc. was designated as trustee in the original deed of trust.

On 31 December 2010, Bank of America appointed Trustee Services

of Carolina, LLC as substitute trustee.
                                     -3-
    On 5 April 2011, Trustee Services of Carolina initiated a

proceeding to foreclose on the property in accordance with the

deed of trust.     The foreclosure hearing was continued until 31

January 2012.     On that date, the clerk entered an order allowing

the foreclosure sale.     Mr. Aldridge did not appeal the order.          A

notice of the foreclosure sale was published in The Mecklenburg

Times on 10 February and 17 February 2012, and Mr. Aldridge was

served with notice 20 days prior to the sale.

    The foreclosure sale was held on 22 March 2012, and Bank of

America was the highest bidder.            The bid remained open for 10

days and Bank of America assigned the bid to Federal Home Loan

Mortgage Corporation ("Freddie Mac").           No upset bid was made.

On 20   April 2012,     Trustee Services of Carolina prepared the

final report and account of foreclosure sale for submission to

the Assistant Clerk for audit and approval in accordance with

sections 45-21.31 and 45-21.33 of the North Carolina General

Statutes.

    The Assistant Clerk audited and recorded the final report

on 26 April 2012.        According to the final report, the sale

generated   proceeds    totaling     $152,390.29.      The   Affidavit   of

Publication     filed   with   the   final    report   stated   that     The

Mecklenburg Times is a newspaper published, issued, and entered

as second-class mail in the City of Charlotte, in Mecklenburg
                                        -4-
County, and meets all the requirements and qualifications of

N.C. Gen. Stat. § 1-597 to publish legal advertisements.

    On 3 August 2012, Freddie Mac sold the property to Phillip

Compton for $129,900.00.            On 31 August 2012, Phillip Compton

reconveyed     the    property    to    his     parents,    Jeffrey   and    Debra

Compton, since they had supplied the funds for the purchase of

the property.

    On 22 March 2013, Mr. Aldridge moved under Rule 60(b) to

set aside the foreclosure sale for lack of proper notice of

sale.   Judge Kevin M. Bridges heard Mr. Aldridge's motion on 29

July 2013 and entered an order on 20 August 2013 setting aside

the foreclosure sale based upon his finding that The Mecklenburg

Times is not published in Union County, North Carolina, and,

therefore, the publication of the notice of sale was not in

accordance    with    N.C.   Gen.      Stat.    §   45-21.17   and    was   wholly

ineffective.

    Thereafter, petitioners Trustee Services                   of Carolina and

Bank of America, the Comptons, and Lawyers Weekly, the owner of

The Mecklenburg Times, filed motions to reconsider pursuant to

Rules 59 and 60 of the Rules of Civil Procedure.                 On 9 September

2013,   the   trial    court     granted       Lawyer's    Weekly's   motion    to

intervene and the motions for reconsideration were heard before

Judge Bridges.
                                     -5-
      In an order entered 19 September 2013, the trial court

found that The Mecklenburg Times is a newspaper published in

Union County in accordance with N.C. Gen. Stat. § 45-21.17 and

that the rights of the parties to the foreclosure sale became

fixed on 3 April 2012 in accordance with N.C. Gen. Stat. § 45-

21.29A.   It concluded that Mr. Aldridge's Rule 60(b) motion to

set   aside   the   foreclosure    sale    was   not   a   proper   means   for

challenging the sale, but rather the only legal or equitable

method available to      Mr. Aldridge       to enjoin or challenge the

foreclosure sale was to apply to the superior court to enjoin

the sale pursuant to N.C. Gen. Stat. § 45-21.34 prior to the

time the rights of the parties became fixed.                The trial court

granted the motions for reconsideration, vacated the 20 August

2013 order setting aside the foreclosure sale, and denied Mr.

Aldridge's 22 March 2013 motion to set aside the foreclosure

sale.   Mr. Aldridge timely appealed the order to this Court.

                                  Discussion

      On appeal, Mr. Aldridge argues that the trial court erred

in concluding that Rule 60(b) is not a proper mechanism for

moving to set aside a foreclosure sale pursuant to a power of

sale and that his only legal or equitable recourse was to seek

to enjoin or challenge the sale by filing suit under N.C. Gen.

Stat. § 45-21.34 (2013) prior to the time that the rights of the
                                  -6-
parties to the foreclosure sale became           fixed.        Further, Mr.

Aldridge contends that the trial court erred in finding that The

Mecklenburg Times is published in Union County.            He argues that

because The Mecklenburg Times was not published in Union County,

the advertisement of the sale was ineffective, entitling him to

have the sale set aside.        Finally, Mr. Aldridge contends that

even if the property was sold to a bona fide purchaser for

value, he is entitled to have the defective foreclosure set

aside if justice requires it.

      This appeal involves a foreclosure by power of sale.                "'A

power of sale is a contractual arrangement in a mortgage or a

deed of trust which confer[s] upon the trustee or mortgagee the

power to sell the real property mortgaged without any order of

court in the event of a default.'"       In re Foreclosure of Adams,

204 N.C. App. 318, 321, 693 S.E.2d 705, 708 (2010) (emphasis

added) (quoting In re Foreclosure of Michael Weinman Assocs.,

333 N.C. 221, 227, 424 S.E.2d 385, 388 (1993)).                It is used as

"'a   means   of   avoiding   lengthy   and    costly   foreclosures      by

action,'   whereby   '[t]he   parties   have   agreed     to    abandon   the

traditional foreclosure by judicial action in favor of a private

contractual    remedy   to    foreclose.'"       Id.    (quoting     In    re

Foreclosure of Michael Weinman Assocs., 333 N.C. at 227, 424

S.E.2d at 388).      A foreclosure pursuant to a power of sale is
                                      -7-
strictly regulated by Article 2A of Chapter 45 of the General

Statutes.     Phil Mech. Constr. Co. v. Haywood, 72 N.C. App. 318,

322, 325 S.E.2d 1, 3 (1985).

       Nevertheless, prior to exercising the power to sell the

property, N.C. Gen. Stat. § 45-21.16 (2013) requires notice to

all interested parties, a hearing before the clerk of superior

court, and an order authorizing the sale.                 "The intent of the

1975    General     Assembly    in   enacting     the    notice    and   hearing

provisions of G.S. 45-21.16 was not to alter the essentially

contractual nature of the remedy, but rather to satisfy the

minimum due process requirements of notice to interested parties

and hearing prior to foreclosure and sale which the district

court in Turner v. Blackburn, 389 F. Supp. 1250 (W.D.N.C. 1975),

held that our then existing statutory procedure lacked."                    In re

Foreclosure of Burgess, 47 N.C. App. 599, 603, 267 S.E.2d 915,

918 (1980).

       Consequently, "[b]ecause the hearing under G.S. 45-21.16 is

designed to provide a less timely and expensive procedure than

foreclosure    by    action,    it   does   not   resolve    all    matters    in

controversy between mortgagor and mortgagee."               In re Foreclosure

of Helms, 55 N.C. App. 68, 72, 284 S.E.2d 553, 555 (1981).

Rather, any other issues that arise regarding the foreclosure

proceedings       should   be   asserted    in    a     separate   action     and
                                             -8-
"equitable defenses to the foreclosure, . . . should be asserted

in   an   action    to   enjoin       the    foreclosure     sale    under      G.S.   45–

21.34."     Id.

       Once the clerk authorizes the foreclosure sale, the parties

may proceed with the sale in accordance with the statute.                          After

the sale is held, the rights of the parties to the sale become

fixed automatically if no upset bid is filed within the period

specified    by    statute.           N.C.   Gen.    Stat.    §    45-21.29A     (2013).

Significantly, unlike a judicial foreclosure, further judicial

action in the form of an order of confirmation of sale is not

required to complete the sale.                     As explained in Certain-Teed

Prods. Corp. v. Sanders, 264 N.C. 234, 244, 141 S.E.2d 329, 336

(1965), "[w]here a foreclosure sale is conducted in accordance

with the provisions of Article 2A of Chapter 45 of the General

Statutes, and no upset bid is filed as provided in G.S. 45-

21.27,    there    is    no    legal    requirement     that       the   clerk    either

confirm the sale or direct the execution of a trustee's deed as

a    prerequisite       to    legal    consummation      of       such   sale    by    the

trustee."

       Although no confirmation of sale is required, N.C. Gen.

Stat. § 45-21.33 (2013) mandates a final report of the sale and

an audit by the clerk of superior court:

                 (a) A person who holds a sale of real
            property pursuant to a power of sale shall
                     -9-
file with the clerk of the superior court of
the county where the sale is held a final
report and account of his receipts and
disbursements within 30 days after the
receipt of the proceeds of such sale. . . .

     (b) The clerk shall audit the account
and record it.

     (c) The person who holds        the   sale
shall also file with the clerk --

         (1)   A copy of the notices of sale
               and resale, if any, which
               were posted, and

         (2)   A copy of the notices of sale
               and resale, if any, which
               were     published    in     a
               newspaper, together with an
               affidavit    of    publication
               thereof, if the notices were
               so published;

         (3)   Proof as required by the
               clerk,   which    may    be   by
               affidavit, that notices of
               hearing, sale and resale were
               served    upon    all    parties
               entitled thereto under G.S.
               45-21.16,      45-21.17,     45-
               21.17A, and 45-21.30. In the
               absence of an affidavit to
               the contrary filed with the
               clerk, an affidavit by the
               person holding the sale that
               the notice of sale was posted
               in the area designated by the
               clerk of superior court for
               posting public notices in the
               county or counties in which
               the property is situated 20
               days prior to the sale shall
               be proof of compliance with
               the requirements of G.S. 45-
               21.17(1)a.
                                      -10-


    "[T]he clerk's audit pursuant to section 45–21.33(a) and

(b) is a ministerial act that is limited to determining merely

'whether the entries in the report reflect the actual receipts

and disbursements made by the trustee' in the absence of a grant

of original jurisdiction to determine additional matters."                     In

re Foreclosure of Vogler Realty, Inc., 365 N.C. 389, 396, 722

S.E.2d 459, 464 (2012) (quoting In re Foreclosure of Webber, 148

N.C. App. 158, 161, 557 S.E.2d 645, 647 (2001)).                  However, N.C.

Gen. Stat. § 45-21.34 provides that "[a]ny owner of real estate,

or other person, firm or corporation having a legal or equitable

interest therein, may apply to a judge of the superior court,

prior to the time that the rights of the parties to the sale or

resale becoming fixed pursuant to G.S. 45-21.29A to enjoin such

sale,   upon    the   ground   that   the    amount   bid    or   price   offered

therefor   is    inadequate     and   inequitable      and    will   result    in

irreparable damage to the owner or other interested person, or

upon any other legal or equitable ground which the court may

deem sufficient[.]"

    Our Supreme Court has held that N.C. Gen. Stat. § 45-21.34

does not affect a party's right to set aside a foreclosure sale

in addition to seeking to enjoin the sale.             Swindell v. Overton,

310 N.C. 707, 714, 314 S.E.2d 512, 517 (1984).                In Swindell, the

plaintiff brought an action to have a foreclosure sale set aside
                                    -11-
because the trustee improperly conducted the foreclosure sale by

selling two tracts of land together, which resulted in a sales

price below the fair market value of the properties if sold

separately.    Id. at 710, 314 S.E.2d at 515.             This Court held

that the plaintiffs could not seek to set aside the foreclosure

sale because their action was not brought until after the sale

was confirmed.      Id. at 711, 314 S.E.2d at 515.

      The Supreme Court reversed, holding that a power of sale

foreclosure sale may be set aside upon a showing of a material

and   prejudicial    irregularity   in     the   sale.   Id.   at   713,   314

S.E.2d at 517.      The Court further explained:

                 Our holding today is not affected by
           N.C.G.S. 45-21.34, .35.        These statutes
           limit    injunctive  relief   in   foreclosure
           proceedings.    Here, we are applying common
           law equitable principles to set aside a
           foreclosure sale.      These principles are
           unaffected by these statutes.

Id. at 714, 314 S.E.2d at 517.        Thus, a party is not barred from

bringing an independent action to set aside a foreclosure sale

after the rights of the parties to the sale have become fixed.

Id. at 712, 314 S.E.2d at 516.

      With respect to an action to set aside a foreclosure sale,

the Court explained:

           [I]t is    the materiality of the irregularity
           in such    a sale, not mere inadequacy of the
           purchase    price, which is determinative of a
           decision    in equity to set the sale aside.
                                          -12-
              Where an irregularity is first alleged,
              gross inadequacy of purchase price may then
              be considered on the question of the
              materiality of the irregularity.       Where
              inadequacy of purchase price is necessary to
              establish    the    materiality    of    the
              irregularity, it must also appear that the
              irregularity or unusual circumstance caused
              the inadequacy of price.

Id. at 713, 314 S.E.2d at                 516    (internal citations omitted).

Thus, "[u]nder Swindell, the trial court [is] required (1) to

evaluate      the    adequacy     of    the     sales    price,     (2)    to    identify

whether any irregularities occurred in connection with the sale,

and    (3)    to    determine     if    the     irregularities      were     material."

Beneficial Mortg. Co. of N.C. v. Peterson, 163 N.C. App. 73, 80,

592 S.E.2d 724, 728 (2004).

       Here, even assuming without deciding, that a party could

proceed      under    Rule     60(b)    rather    than    through     an    independent

action, Mr. Aldridge has not shown a material and prejudicial

irregularity sufficient to set aside the sale.                        He has merely

identified an irregularity in procedure: that notice of sale was

not    advertised      in    a   newspaper      published      in   Union       County    as

required by N.C. Gen. Stat. § 45-21.17.                     Mr. Aldridge makes no

argument as to how this purported irregularity was material or

that    the    sales    price     was    inadequate      other      than    making       the

conclusory         assertion     that    the    defect    in    publication        was    a

serious defect.
                                       -13-
       This Court explained in Beneficial Mortgage Company that

"[i]n deciding whether an irregularity is material, we must look

at     its    natural    and    probable    effect    on   the    sales   price.

Potential effect and not actual effect is all that is required

if the ultimate sales price is grossly inadequate: Actuality of

injury is not a prerequisite of relief.                The potentialities of

the error, considered in connection with the grossly inadequate

price, compel the conclusion that the irregularity in the sale

was material and prejudicial -- sufficient in nature to justify

the interposition of a court of equity."               163 N.C. App. at 83,

592    S.E.2d    at     730    (internal   citation    and    quotation    marks

omitted).

       Mr. Aldridge has made no attempt to show that the sales

price was grossly inadequate.              As a result, he has not shown

that    any    irregularity     in   the   advertisement     of   the   sale   was

material and prejudicial.            Without such a showing, he was not

entitled to seek to set aside the sale after the rights of the

parties to the sale had become fixed.                Compare id. ("Given the

potential effect that the irregularities had on the sales price

for the Dixes' home combined with the gross inadequacy of the

ultimate sales price, we hold that the trial court did not err

in setting aside the sale.").
                                         -14-
       In addition, our Supreme Court has held that "where the

defect in a foreclosure sale renders the sale voidable . . . the

mortgagor's right of redemption can be cut off if the land is

bought by a bona fide purchaser for value without notice.                             In

such instances, a plaintiff is left with an action for damages

against the trustee as his only remedy."                  Swindell, 310 N.C. at

714, 314 S.E.2d at 517.            Here, Mr. Aldridge did not move to set

aside the foreclosure until after the property was sold first to

Freddie Mac and then to the Comptons.                    Mr. Aldridge does not

challenge the trial court's finding that the Comptons are bona

fide purchasers for value without notice of any alleged defects

in   the    foreclosure      sale.        Consequently,      even        assuming    the

advertisement of the sale was defective, Mr. Aldridge's right of

redemption was cut off when the Comptons purchased the property.

Mr. Aldridge's only remaining remedy is to sue the trustee for

breach of fiduciary duty.

       While Mr. Aldridge argues that the defective advertisement

of the sale was such a serious defect that he should still be

able   to   proceed       notwithstanding       the   bona   fide    purchaser      for

value, our Supreme Court rejected his argument in                             Phipps v.

Wyatt,     199    N.C.    727,   155   S.E.   721     (1930).       In    Phipps,    the

appellant        argued   that   an    improper     advertisement        of   the   sale

combined with a grossly inadequate sales price entitled him to
                                    -15-
set aside the sale notwithstanding the existence of a bona fide

purchaser for value.        Id. at 732, 155 S.E. at 723.       The Court

explained that "[w]hile such sale would be set aside as to the

purchaser, a subsequent or remote grantee without notice and in

good    faith   takes   a    good   title   against   such   defects   or

irregularities in the sale of which he had no notice."            Id. at

731-32, 155 S.E. at 723.

       Based on Swindell and Phipps, we hold that the trial court

properly concluded that Mr. Aldridge did not establish a basis

for setting aside the foreclosure sale.          For that reason, the

trial court did not err in denying Mr. Aldridge's Rule 60(b)

motion, and we affirm.


       Affirmed.

       Judge STEELMAN concurs.

       Judge ROBERT N. HUNTER, JR. concurred in this opinion prior

       to 6 September 2014.

       Report per Rule 30(e).
