In re Rogers (COA24-788) 10/1/2025
Court of Appeals Reverses Foreclosure After COVID-Era Service Issue
Chris Burti, Vice President and Senior Legal Counsel

The North Carolina Court of Appeals issued a significant opinion in this case which raises critical questions about service of process, due process in foreclosure actions, and the consequences of procedural missteps by both homeowners and HOAs during the COVID-19 pandemic. The Court ultimately reversed the foreclosure of a homeowner's property, finding reversible error in the trial court's dismissal of the appeal and in the treatment of service by certified mail under pandemic-era postal procedures. The case also has application to the need to review the documentation of service of process closely in any foreclosure file in the chain of title when performing a title search.

The respondent purchased her home in 2010, subject to subdivision CCR's providing for an Owners' Association ("HOA") with assessment authority. In March 2021, the HOA sent a demand letter for $1,391.23 in unpaid assessments. When the defendant failed to pay, the HOA filed two Claims of Lien in 2021 and initiated foreclosure proceedings. The HOA's appointed trustee relied on USPS certified mail to serve the defendant with the foreclosure notices. However, due to COVID-19 delivery protocols, no signed green card was produced; instead, USPS records simply stated the mail was "Delivered, Left with Individual" with notations by postal carriers. The Clerk of Court authorized the foreclosure sale in October 2021, finding service proper. The defendant did not appear and later claimed she was unaware of the HOA or the foreclosure until the high bidder in the foreclosure contacted her directly. After more than 30 upset bids, the property was sold to the high bidder in August 2022 for $221,618.32.

The defendant filed multiple motions under Rule 60 seeking to set aside the foreclosure, asserting she never received valid notice. Both the Clerk and Superior Court rejected her arguments, concluding service was proper under Rule 4 and that the defendant had neglected her legal affairs. The trial court also awarded substantial attorney's fees against the defendant (over $26,000 combined). The defendant attempted to appeal but missed deadlines related to serving the proposed record, partly due to confusion over her counsel's involvement in ordering transcripts. The Superior Court dismissed her appeal. The defendant then petitioned the Court of Appeals for writ of certiorari.

The Court of Appeals reviewed and considered five orders of the trial court: the dismissal of the defendant's appeal (December 2023 order); the denial of Amended Motion to Set Aside Foreclosure (February 2023); the award of Trustee's fees (March 2023); the award of Attorney's fees for the HOA (March 2023); and the award of Attorney's fees for high bidder (March 2023).

The key appellate issues were: whether the trial court abused its discretion by dismissing the defendants' appeal for Rule 11 violations without applying the proper analysis for non-jurisdictional rule violations; whether service of the foreclosure hearing notices complied with Rule 4 and due process when USPS COVID-19 protocols replaced the recipient's signature with carrier notations that did not comply with USPS written procedures; and whether subsequent fee awards were valid if the underlying foreclosure judgment was void for lack of proper service.

The Court of Appeals emphasized that under Dogwood Dev. & Mgmt. Co. v. White Oak Transp. Co., 362 N.C. 191 (2008), dismissal for violations of non-jurisdictional appellate rules is appropriate only upon findings of a "substantial failure" or "gross violation." The trial court did not conduct this analysis and instead dismissed based on its view of the defendant's neglect and lack of candor. The Court held this constituted an abuse of discretion, reversed the dismissal, and reached the merits.

The Court examined whether the USPS's pandemic protocol which only requires the carrier's initials and "C19" notations in lieu of recipient signatures satisfied Rule 4's requirement of "delivering to the addressee." The HOA's affidavits of service relied solely on electronic USPS printouts without identifying the defendant as the recipient. The Court found this insufficient under Rule 4(j)(1)(c) and N.C.G.S. § 1-75.10(a)(4), which require evidence that the summons and notice were actually delivered to the addressee. Because the defendant was never properly served with the Amended Notice of Hearing, the Court concluded that the foreclosure order was void. The opinion stressed that strict compliance with Rule 4 is required, and due process cannot rest on presumptions where evidence of actual service is lacking. Since the foreclosure order was vacated, all subsequent orders - including trustee's fees and attorney's fees to the HOA and purchaser - were likewise vacated. The case was remanded for further proceedings consistent with the opinion.

There are several practical implications for practitioners. Foreclosure proceedings require strict adherence to Rule 4. Pandemic-era USPS protocols do not override statutory requirements for delivery to the addressee. Practitioners should obtain signed green cards or other clear evidence of receipt by the homeowner. Trial courts must apply the Dogwood framework before dismissing appeals for procedural missteps. Dismissal is a severe sanction and should be reserved for substantial or gross violations. Where service is defective, any judgment, including subsequent fee awards, may be void. HOAs, trustees, and purchasers risk losing substantial sums if service cannot be proven. This case highlights the importance of homeowners monitoring HOA communications, but also the limits of constructive notice where service procedures are flawed. Actual notice is not a substitute for legally sufficient service.

In re Rogers underscores the fundamental role of service of process in foreclosure proceedings and the heightened scrutiny courts will apply to service conducted under extraordinary conditions such as COVID-19. For attorneys representing HOAs, lenders, or trustees, the case is a cautionary tale: compliance with Rule 4 is non-negotiable. For appellate practitioners, it is a reminder that trial courts cannot short-circuit appeals without proper application of Dogwood. Ultimately, the Court of Appeals' decision restores a critical safeguard for homeowners facing the drastic remedy of foreclosure. Title examiners need to examine these foreclosure files carefully and this cannot be accomplished online.