Opinion and Order Granting in Part and Denying in Part Plaintiff's Motion for Summary Judgment and Denying Defendant's Motion for Summary Judgment. The Court considered cross motions for summary judgment from the Plaintiff, Lent Christopher Carr, II, and the Defendant, County of Hoke. The dispute prompting the adversary proceeding involves the Defendant’s secured claim for 2015, 2016, and 2017 real property taxes. After the Plaintiff remitted a check to the Defendant to pay the taxes, the Defendant allegedly issued a tax receipt noting all the taxes as paid in full and issued a satisfaction of judgment marking the 2015 and 2016 taxes as paid in full. The check was later returned unpaid by the issuing bank. The Plaintiff filed the adversary proceeding to object to the Defendant’s claim under 11 U.S.C. § 502(b)(1), arguing that the tax claim is unenforceable under North Carolina law because the tax receipt and the satisfaction of judgment were never revoked and the appropriate records reflect that the taxes were paid.
      The Court considered North Carolina statutes and case law regarding the payment of county taxes, particularly when they are marked as paid but the remitted check is not honored by the issuer. In this situation, North Carolina law requires that the county tax collector promptly notify the taxpayer to request a return of the tax receipt and correct the appropriate records before it can resume collection of the unpaid taxes. See N.C. Gen. Stat. § 105-357(b); Miller v. Neal, 23 S.E.2d 852, 854–55 (N.C. 1943). With respect to the 2015 and 2016 taxes, the Defendant neither corrected the appropriate records as required by § 105-357(b) nor revoked the satisfaction of judgment to show the fact of nonpayment. Under these circumstances, the Defendant cannot collect on the 2015 and 2016 taxes.
      However, the Court determined there is a material factual dispute surrounding the 2017 taxes—for which a judgment was not obtained—that prevents a finding that either party is entitled to judgment as a matter of law. Specifically, the parties set forth competing assertions that create doubt as to whether the tax receipt issued to the Plaintiff referenced full payment of the 2017 taxes, which would trigger the procedural requirements of § 105-357(b). Neither party produced a copy of the document for the Court’s review. The Court also rejected the Plaintiff’s alternative basis for summary judgment, finding the Plaintiff does not qualify as a good faith purchaser because he was charged with notice that the 2017 taxes would become due after the property was conveyed to him and had actual knowledge that the check was returned unpaid.
      Accordingly, the Court granted partial summary judgment for the Plaintiff with respect to the 2015 and 2016 taxes, and denied both cross-motions for summary judgment with respect to the 2017 taxes because of the material fact in dispute.