The Court of Appeals held that the finding by the Mecklenburg Clerk of Court at the foreclosure hearing that Bank of America was the holder of the mortgage note was res judicata and precluded the Mazzones from making an impermissible collateral attack on this question in a subsequent action to quiet title.
The Court of Appeals here relied completely on Phil Mechanic Const. Co., Inc. v. Haywood, 72 N.C. App. 318, 322, 325 S.E.2d 1, 3 (1985) which held that “when a mortgagee or trustee elects to proceed under G.S. 45-21.1 et seq., issues decided thereunder as to the validity of the debt and the trustee’s right to foreclose are res judicata and cannot be relitigated”. This reliance may, however, be misplaced and overly broad, as in Phil Mechanic the mortgagor that sought foreclosure was barred from later making a collateral attack in a subsequent action on the specific determination by the Clerk of Court after actual litigation that its note was invalid.
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