Hedgepeth v. Smoky Mountain Country Club Prop. Owners Ass'n, Inc.

An unpublished opinion of the North Carolina Court of Appeals does not constitute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.

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA24-1020

Filed 20 August 2025

Swain County, No. 22CVS000065-860

SHIRA L. HEDGEPETH and RONNIE C. HEDGEPETH, Plaintiffs,

v.

SMOKY MOUNTAIN COUNTRY CLUB PROPERTY OWNERS ASSOCIATION,

INC., a North Carolina Corporation, Defendant.

Appeal by plaintiffs from order entered 10 July 2024 by Judge Steve Warren

in Swain County Circuit Court. Heard in the Court of Appeals 21 May 2025.

BA FOLK, PLLC, by J. Denton Adams, for plaintiffs-appellants.

RAYBURN COOPER & DURHAM, PA, by Ashley B. Oldfield and Ross R.

Fulton, and David A. Sawyer, for defendant-appellee.

GORE, Judge.

Plaintiffs-appellants Shira L. Hedgepeth and Ronnie C. Hedgepeth appeal the

summary judgment entered in favor of defendant. Specifically, plaintiffs argue the

trial court erred by granting summary judgment on the basis of res judicata and

collateral estoppel. Upon review of the briefs and the record, we affirm.

I.

The underlying facts of this case are available in previous opinions written by

HEDGEPETH V. SMOKY MOUNTAIN COUNTRY CLUB PROP. OWNERS ASS’N, INC.

Opinion of the Court

this Court. See In re Hedgepeth, 291 N.C. App. 309 (2023), appeal dismissed, review

denied, 898 S.E.2d 312 (N.C. 2024) (unpublished); Hedgepeth v. Smoky Mountain

Country Club Prop. Owners Ass’n, Inc., 288 N.C. App. 637 (2023) (unpublished). For

purposes of this appeal, we discuss the legal actions taken by plaintiffs and

defendant. Plaintiffs filed the present action and later an amended complaint after

the trial court denied their motion for summary judgment and denied defendant’s

motion to dismiss. Plaintiffs’ amended complaint raised the following causes of

action: declaratory judgment, quiet title, and slander of title.

On 8 August 2022, defendant initiated a foreclosure proceeding (22 SP 33,

“Foreclosure action”) on the claim of lien levied against plaintiffs and attached to

their property. Plaintiffs moved to consolidate the present action with the

Foreclosure action and to stay the foreclosure until the present action was

determined, but the trial court denied the motions citing a lack of jurisdiction in the

Foreclosure action to entertain these motions. The clerk of court entered an Order

Allowing Foreclosure, and plaintiffs appealed to the Superior Court, Swain County.

After a de novo hearing, the superior court entered an Order Allowing Foreclosure

Sale.

Plaintiffs filed an injunction action (22 CVS 272, “Injunction action”) soon after

to enjoin the foreclosure sale and obtain a declaratory judgment that defendant

lacked the authority to levy the legal fees against plaintiffs. Defendant moved to

dismiss the Injunction action under Rule 12(b)(6); the trial court granted the motion

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Opinion of the Court

by dismissing the Injunction action with prejudice. Plaintiffs appealed the dismissal

of the Injunction action and the Foreclosure action to this Court; the trial court stayed

the present action while the Injunction action and Foreclosure action were appealed.

This Court dismissed plaintiffs’ Injunction action for untimeliness of appeal and

denied the petition for writ of certiorari. We affirmed the trial court’s order in the

Foreclosure action. Plaintiffs sought discretionary review and writs of supersedeas

from the North Carolina Supreme Court for both cases, but the Court dismissed the

appeals after it denied the petitions and writs.

The trial court lifted the stay and set a hearing date for the present action.

Defendant moved for summary judgment on the basis of res judicata and collateral

estoppel with a memorandum in support and an affidavit by Ashley Oldfield.

Plaintiffs filed a memorandum in opposition to the motion and submitted an affidavit

by Brian Edlin, which opined this Court erred in its decision to affirm the trial court’s

Order Allowing Foreclosure. The trial court heard the motion and ultimately granted

summary judgment in favor of defendant. Plaintiffs timely appealed the final order.

II.

Plaintiffs appeal of right pursuant to N.C.G.S. § 7A-27(b)(1). Plaintiffs argue

the trial court erred by granting summary judgment in favor of defendant on the

grounds of res judicata and collateral estoppel. Specifically, plaintiffs argue the

present action differs from the limited review in the previous Foreclosure action but

admits there was a similarity of issues presented in the present action and the

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Injunction action. Additionally, plaintiffs argue summary judgment denied them

their constitutional right to “full due process,” and that the Ashley Oldfield affidavit

was deficient.

We review challenges to summary judgment de novo. In re Will of Jones, 362

N.C. 569, 573 (2008). Summary judgment “is appropriate only when the record shows

that there is no genuine issue of material fact and that any party is entitled to a

judgment as a matter of law.” Id. (internal quotation marks and citation omitted).

“The trial court may not resolve issues of fact and must deny the motion if there is a

genuine issue as to any material fact. Moreover, all inferences of fact must be drawn

against the movant and in favor of the party opposing the motion.” Forbis v. Neal,

361 N.C. 519, 524 (2007) (cleaned up).

Plaintiffs argue the present action and the Foreclosure action differ and should

not be adjudicated under these defenses. Plaintiffs do not argue there are any

genuine issues of material fact. Whereas defendant argues the issues raised in the

present action were previously raised not only in the Foreclosure action but also in

the Injunction action. We begin by reviewing whether the doctrine of res judicata

bars the present action based on the previously decided Injunction action because

such a determination would be dispositive to the remaining arguments on appeal.

In their reply brief, plaintiffs acknowledge the similarity of issues in the

present action and the Injunction action. Plaintiffs admit they “mentioned” the issue

of defendant’s legal authority to determine plaintiffs’ negligence and acts of

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misconduct in other briefs, including the Injunction action, but argue this issue was

not directly determined. Plaintiffs also admit the Injunction action “sought to enjoin

the foreclosure and was a proper means of asserting equitable defenses that could not

be raised” in the Foreclosure action.

To successfully assert the doctrine of res judicata, parties must demonstrate

the following: “(1) a final judgment on the merits in an earlier suit, (2) an identity of

the causes of action in both the earlier and the later suit, and (3) an identity of the

parties or their privies in the two suits.” ACC Constr. Inc. v. SunTrust Mortg., Inc.,

239 N.C. App. 252, 262 (2015).

A party is required to bring forth the whole case at one time

and will not be permitted to split the claim or divide the

grounds of recovery; thus, a party will not be permitted,

except in special circumstances, to reopen the subject of the

. . . litigation with respect to matters which might have

been brought forward in the previous proceeding.

Rodgers Builders, Inc. v. McQueen, 76 N.C. App. 16, 23 (1985). “Subsequent actions

which attempt to proceed by asserting a new legal theory or by seeking a different

remedy are prohibited under the principles of res judicata.” Bockweg v. Anderson,

333 N.C. 486, 494 (1993) (reasoning against a determination of res judicata because

the plaintiffs were not “merely chang[ing] their legal theory or seek[ing] a different

remedy, [but instead were] seeking a remedy for a separate and distinct negligent act

leading to a separate and distinct injury”).

Plaintiffs assert there are distinctions in the issues raised between the present

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action and the Foreclosure action but admit the Injunction action had similarities

with the present action. The parties do not contest that the same parties or parties

in privy involved in the present action were involved in both the Injunction action

and the Foreclosure action. Therefore, we limit review to the remaining elements for

res judicata: the causes of action raised or available in the Injunction action, and

whether there was a prior final judgment on the merits.

In the Injunction action, plaintiffs sought the following relief through a

declaratory action and injunction:

1. That the [Foreclosure] action, 22 SP 33 be dismissed

with prejudice.

2. That the [c]ourt declare that Defendants did not have

the authority [pursuant to] N.C.G.S. § 47F-3-115(e) of

the Planned Community Act to levy the $69,123

assessment.

3. That a preliminary injunction pursuant to Rule 65(b) of

the North Carolina Rules of Civil Procedure be issued

as quickly as possible, and that the injunction forbid the

Defendants from proceeding with any foreclosure sale

of the Plaintiff’s Property until this cause is heard on its

motions and all appeal[s] are exhausted.

4. The Trustee be permanently enjoined from foreclosing

the Plaintiffs’ property.

5. That the Plaintiffs have a trial by jury.

6. That the [c]ourt determine if the Plaintiffs owe any

assessment to the Defendants.

7. That Plaintiffs have a complete accounting of all

payments for legal fees made by SMCCPOA and all

assessments of legal fees from association members.

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Plaintiffs admit the injunction was a cause of action to raise equitable defenses to

prevent foreclosure. Plaintiffs state the present action is essentially a request for

“court review of the proceeding under which [plaintiffs] were deemed negligent by

[defendant].” Plaintiffs sought the following relief in the present action through

declaratory judgment, quiet title and slander of title causes of action:

1. The [c]ourt enter a [declaration] that SMCCPOA acted

beyond its scope in setting up its own tribunal and the

assessments arising from the actions of SMCCPOA are

null and void.

2. The [c]ourt enter a [declaration] that SMCCPOA Board

of Directors acted beyond their scope of duty in setting

up the tribunal, participating in the hearing, and

assessing legal fees against Hedgepeths and Youngs.

3. The [c]ourt enter a [declaration] that SMCCPOA filing

a claim of lien against the Hedgepeths only is a

retaliatory act against the Hedgepeths.

4. The [c]ourt enter an order removing the claim of lien

from the real property of the Hedgepeths.

5. The [c]ourt award damages for slander of title.

The facts in the Injunction action were nearly identical to the present action. The

only factual distinctions that we are aware of between the present action and the

Injunction action were the initiation of the foreclosure proceedings for the underlying

lien and the outcome of the Foreclosure action.

The plea of res judicata applies not only to the points upon

which the court was required by the parties to form an

opinion and pronounce a judgment, but to every point

which properly belonged to the subject in litigation and

which the parties, exercising reasonable diligence, might

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have brought forward at the time and determined

respecting it.

Williams v. Peabody, 217 N.C. App. 1, 7 (2011) (cleaned up). Having reviewed both

the present action and the Injunction action, “we believe plaintiffs’ claims in the

present lawsuit are claims which plaintiffs, exercising reasonable diligence, might

have brought forward at the time of [a previous] lawsuit.” Id. at 8 (cleaned up). Next,

we consider whether the Injunction action was a final judgment decided on the

merits.

The Injunction action was dismissed with prejudice when the trial court

granted defendant’s Rule 12(b)(6) motion. “A dismissal under Rule 12(b)(6) operates

as an adjudication on the merits unless the court specifies that the dismissal is

without prejudice.” Hoots v. Pryor, 106 N.C. App. 397, 404 (1992). Therefore, the

dismissal of the Injunction action was a final judgment on the merits. Accordingly,

in line with precedent, plaintiffs were required to bring the whole case at one time,

and there being no special circumstances brought to the court’s attention for not doing

so, are barred by res judicata. Therefore, we determine the trial court did not err by

granting summary judgment in favor of defendants. Because the doctrine of res

judicata is dispositive, we do not consider the additional issues on appeal.

III.

For the foregoing reasons, we affirm the trial court’s order granting summary

judgment.

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Opinion of the Court

AFFIRMED.

Judges ZACHARY and FREEMAN concur.

Report per Rule 30(e).

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