DOBSON — Surry County officials are attempting to have a judgment set aside in a tax foreclosure case, after having asked for the judgment nearly a year ago.
On Tuesday, Surry County Attorney Ed Woltz filed a motion asking a Surry County District Court to set aside a tax foreclosure judgment it issued in December. A memorandum in support of the motion accompanied the motion.
The memorandum provides a summary of the case, which led to a sale of a nearly 80-acre farm for less than $18,000.
DeWitt Moses Phillips and Stella Green Phillips conveyed their 80-acre farm to their son via two deeds recorded in 1996 and 1997. James DeWitt Phillips lived on the farm with his parents thereafter. The father died in 2006 and Stella Phillips died suffering with end-stage dementia in 2014.
From 2009 through 2014, no property taxes were paid on the farm. The county sought a judgment against James DeWitt Phillips, and a default judgment in the amount of $11,728.32 was entered by the court on June 20, 2014. The memorandum notes Phillips was personally served with the complaint.
A default judgment would indicate Phillips did not show for the court date associated with the action.
The county foreclosed on the property, advertised the sale appropriately and auctioned the property in accordance with N.C. General Statutes, according to Woltz.
Following an upset bid period, Donald M. York acquired the property on Dec. 29 for the amount of $17,745. According to the memorandum, the property is valued at $256,190. Phillips vacated the property voluntarily and now lives in an apartment.
The situation — with emphasis on the large discrepancy between the sale amount and the property value — came to the attention of Commissioner Eddie Harris in July of 2016. The memorandum states Harris and other county commissioners were in a state of disbelief after learning of the details of the sale.
When Commissioners Buck Golding and Van Tucker began investigating the matter, a family member called Phillips “different,” when asked if Phillips had problems looking after his affairs. Family members living close to Phillips had been unaware of the property tax issue, notes the memorandum.
Woltz notes he has also interviewed family members of Phillips about the man’s mental health. Additionally, Phillips was examined by counselors at the Surry County Health and Nutrition Center, and reports of those examinations may be made available to the court.
In short, the county is looking to nullify the judgment against Phillips and the subsequent land transaction because the man was not competent at the time he was served with the county’s complaint.
“The questions raised by the Defendant’s (Phillips) family members regarding the mental health and capacity of the Defendant at the time of the underlying foreclosure action necessitate the appointment of a guardian ad litem to represent the interests of the Defendant in further proceedings,” reads the memorandum.
A guardian ad litem would be a person appointed by the court to look out for Phillips’ interests in the case.
Under North Carolina law such a judgment can be set aside within a year of the property transaction. The memorandum cites “excusable neglect” on the part of Phillips and “newly discovered evidence” as a means to set the entire proceeding aside.
“If the Defendant was not competent, service of process was insufficient, the foreclosure was unconstitutional and the sale void,” explains a press release originating from Woltz’s office. “The board (of county commissioners) hopes that its action will result in a re-examination of the judicial process so that justice is served.”
The statement also notes board members will not comment further, as the matter is pending litigation.
Woltz said the case is unusual, given the county is attempting to reverse an action it took after learning of the additional information. That stated, there is a precedent for such an action in the N.C. rules of civil procedure. A case out of Durham County also parallels the Phillips case.
Woltz said in that case a property transaction was reversed after it was found the defendant was not properly served. If the case in Surry County were to be reversed the property would be returned to Phillips, Phillips would still owe the property taxes on the land and York would receive his money back.
Woltz stated the entire action is an attempt to do what the county perceives as ethically correct in the instance.
York, who the county asked be included as a party to the proceedings, did not return a phone call seeking comment.
Andy is a staff writer and may be reached at 415-4698.