N.C. Court of Appeals: In re Powell- Sufficiency of Notice of Foreclosure


After falling delinquent on her mortgage in September of 2012, Nationstar sent a notice of default to Powell on March 5, 2013. This was followed by a notice of her right to dispute the debt. On April 26, 2013, the Substitute Trustee commenced foreclosure attempting service through the Sheriff’s office. Unable to serve Powell, the deputy posted the foreclosure notice on her door. Further notice was attempted through certified mail on May 1, 2013, but this was returned as unclaimed. After the foreclosure was final, Powell sought to have it set aside, asserting she had not received notice.

Powell appealed arguing N.C.G.S. § 1A-1 Rule 4(j1) requires that “when a party cannot with due diligence be served by personal delivery, registered or certified mail, or by a designated delivery
service,” (Emphasis added) the party may be served by publication (here posting of the Notice). Powell first asserted that the emphasized “or” was conjunctive, requiring attempted by all three methods, viz. personal delivery, registered/certified mail, and designated delivery service. The majority opinion rejected this, finding, based on case law that interpreted an earlier iteration of the statute, that the “or” is disjunctive. As, the majority held that attempted service by certified mail and personal service was sufficient to satisfy the “due diligence” requirement of Rul 4(j1).

In a concurring opinion, Judge Dillon agreed that normally a list an “or” should be read in the disjunctive, except, following DeMorgan’s Law, when the list begins with the words “not” or “cannot.” Then the or is conjunctive. His example is very illustrative:

if a father tells his daughter that she is not allowed to go to the movies or to the football game, the parent has effectively told the child that she is not allowed to do either activity; that is, she may not go to the movies and she may not go to the football game. However, if the father tells his daughter that she is not allowed to go to the movies and to the football game, the parent has only stated that she may not do both activities, but that she could do one or the other.

Despite this grammar lesson, Judge Dillon concluded that Rule 4(j1) only requires that the party show that with “due diligence” none of the three methods would have succeeded. Obviously, attempting and failing to obtain service in all three ways would suffice, but here with both personal service unsuccessful and certified mail refused, it was proper to conclude that service on Powell by “designated delivery service” would also have failed.


It is clear that, even with Judge Dillon’s grammatical logic, the Court of Appeals did not want to put parties into a strict service regime requiring three attempts, but there does not appear to have been any evidence introduced that “designated delivery service” would have been rejected.

Perhaps the Substitute Trustee should have used Frank Drake’s infamous “Buffy Mail” tactic, where the Notice is sent by certified mail (and of course rejected) and at the same time sent in a hand-addressed (preferably with purple ink and hearts dotting the i’s and j’s) envelope to the same address. When that is not returned, it serves as evidence of due diligence. Care would need to be taken to avoid violating 15 U.S.C. § 1692e(14) and this presumes that mortgage servicers actually care about notice.

For a copy of the opinion, please see:

Powell- Sufficiency of Notice of Foreclosure


1. Bachelor of Arts degree in English Literature from Washington University, 1993. 2. Juris Doctor degree from George Washington University, 1996. Admissions to Practice of Law: North Carolina Bar, 1996. Federal District Courts for the Eastern and Middle Districts of North Carolina. Specialty Certification: North Carolina State Bar: Certified as a Specialist in Consumer Bankruptcy. Areas of Practice: Practice limited to consumer and business debtor bankruptcy law, 1998 to present. Memberships: National Association of Consumer Bankruptcy Attorneys (NACBA). North Carolina Academy of Trial Lawyers (NCATL). North Carolina Bar Association, Bankruptcy Section. Lectures prepared and presented: North Carolina Academy of Trial Lawyers seminar on bankruptcy; Topic: Counseling the Consumer Debtor Prior to Court - C.Y.A. Forms to Help 'Gird They Loins'; 2001. Middle District Bankruptcy Seminar; Topic: Preparing Chapter 13 Plans; 2002. NACBA National Convention; Topic: Efficient Office Practices; 2003. NACBA National Convention; Topic: Chapter 7 vs. Chapter 13 Debates; 2004. Middle District Bankruptcy Seminar; Topic: Chapter 7 & 13 Hot Issues; 2004. Positions held: NACBA National Convention; Convention Chair; 2008. NACBA National Convention; Panel Moderator: Topic: Basic Bankruptcy Issues; 2008. NACBA National Convention; Panel Moderator; Topic: Chapter 13-Disposable Income and Other Issues; 2007. NACBA National Convention; Panel Moderator; Topic: Representing Members of the Military and Their Families; 2007. NACBA, Member of National Board of Directors, 2006 to present. NCATL, Chair of the Bankruptcy Section, 2003 to 2007. NACBA, Chair of the North Carolina Section, 2003 to 2007. NC Bar Association, Bankruptcy Section, Bankruptcy Council Member, 2004 to present.

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