In Re Foreclosure of a Deed of Trust Executed by Herndon, 245 N.C. App. 83

Randall and Nona Herndon executed a promissory note (Aug. 3, 2001) secured by a deed of trust on their Dunn, NC home; payments ceased after Nov. 1, 2007.
Long Beach endorsed the note to blank; by Nov. 2009 U.S. Bank (trustee) possessed the note and pursued foreclosure by power of sale through a substitute trustee.
U.S. Bank filed three successive foreclosure special proceedings: 09 SP 246 (filed Nov. 4, 2009; later voluntarily dismissed), 11 SP 248 (filed Dec. 8, 2011; clerk entered foreclosure order but trustee voluntarily dismissed before superior court appeal resolved), and 14 SP 36 (filed Feb. 21, 2014; clerk permitted foreclosure Aug. 21, 2014).
On appeal from the clerk’s August 2014 order, the superior court (Judge Adams) reversed and dismissed the third proceeding, concluding the second voluntary dismissal operated as an adjudication on the merits under Rule 41(a)’s two-dismissal rule.
U.S. Bank appealed, arguing (1) exclusion of a servicer’s affidavit was erroneous and (2) the two-dismissal rule did not bar the third foreclosure because each proceeding asserted defaults covering different time periods.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the superior court erred by excluding Dana Crawford’s affidavit (servicer’s affidavit)	U.S. Bank: affidavit was admissible and supported proof of default; its exclusion was error	Herndons: affidavit was never properly offered and would have been cumulative; exclusion was proper	Court: affidavit was not offered for admission; even if offered, exclusion would not be an abuse of discretion because it was cumulative and "superfluous"
Whether Rule 41(a)’s two-dismissal rule barred the third foreclosure-by-sale after two voluntary dismissals of prior foreclosure-by-sale actions	U.S. Bank: successive actions alleged defaults occurring in different time periods; acceleration does not make later defaults part of the earlier claim, so Rule 41(a) does not bar the third action	Herndons: earlier dismissal of the second action operated as an adjudication on the merits under Rule 41(a), barring a third action on the same note	Court: affirmed that acceleration does not necessarily make all future defaults identical; because each foreclosure sought to enforce defaults in different, successive time periods, the claims were not the same and Rule 41(a) did not bar the third action; superior court’s dismissal reversed

State v. Whaley, 362 N.C. 156 (abuse-of-discretion standard for excluding evidence; Rule 403 analysis)
Lifestore Bank v. Mingo Tribal Pres. Trust, 763 S.E.2d 6 (two-dismissal rule does not bar later judicial-foreclosure or money-judgment claims after two dismissed power-of-sale actions)
In re Foreclosure by Rogers Townsend & Thomas, 773 S.E.2d 101 (holding two-dismissal rule does not bar a third foreclosure-by-sale when successive actions address defaults in distinct time periods)