Statements of Unpaid Assessments Are Not “Transfer Fees” Under N.C. Chapter 39A, and “Excessive Price” Allegations Alone Do Not State a UDTPA Claim

1. Introduction

In Carpenter v. William Douglas Management, Inc. (4th Cir. Mar. 14, 2025), the Fourth Circuit—sitting in diversity and applying North Carolina law—affirmed dismissal of a putative class action challenging fees charged to homeowners for obtaining statements of unpaid assessments (often required to close sales of HOA-governed property).

Parties. Plaintiff-appellant Susan K. Carpenter, trustee for the H. Joe King, Jr. Revocable Trust, sued (1) William Douglas Management, Inc. (the HOA property manager) and (2) NextLevel Association Solutions, Inc., doing business as HomeWiseDocs.com (the platform used to process requests).

Core dispute. Carpenter alleged the charged amounts were “excessive” and therefore unlawful as “transfer fees” barred by North Carolina’s prohibition on “transfer fee covenants,” N.C. Gen. Stat. § 39A-3, and also actionable under the Unfair and Deceptive Trade Practices Act (UDTPA), N.C. Gen. Stat. § 75-1.1, plus several derivative common-law and statutory theories.

Key issues. The appeal turned on two questions: (1) whether fees for preparing HOA statements of unpaid assessments are “transfer fees” under Chapter 39A; and (2) whether alleging that such fees are “excessive” plausibly pleads “unfair or deceptive” conduct under the UDTPA.

2. Summary of the Opinion

The Fourth Circuit held that the complained-of fees do not meet Chapter 39A’s statutory definition of “transfer fee” because they were payable for preparing the statements and became payable upon preparation—not “upon the transfer” of the property and not “for the right to make or accept such transfer.”

The court also rejected the UDTPA theory. It refused to use the UDTPA to expand beyond the legislature’s carefully specified Chapter 39A boundaries and concluded that “excessive pricing” allegations—without more—did not plausibly plead conduct that is “immoral, unethical, oppressive, unscrupulous, or substantially injurious,” particularly in light of a factually similar North Carolina Court of Appeals decision.

Because Carpenter conceded her remaining claims “rise or fall” with the Chapter 39A and UDTPA claims, the court affirmed dismissal across the board.

3. Analysis

3.1. Precedents Cited

• Kashdan v. George Mason Univ., 70 F.4th 694 (4th Cir. 2023): cited for the motion-to-dismiss posture—accepting well-pleaded facts as true.
• Holloway v. Maryland, 32 F.4th 293 (4th Cir. 2022): cited for de novo review of Rule 12(b)(6) dismissals.
• Ashcroft v. Iqbal, 556 U.S. 662 (2009): supplies the “plausible on its face” pleading standard.
• Schilling v. Schmidt Baking Co., Inc., 876 F.3d 596 (4th Cir. 2017) and Giarratano v. Johnson, 521 F.3d 298 (4th Cir. 2008): reinforce that courts accept facts and reasonable inferences, but not legal conclusions or unwarranted inferences.
• BP Prods. N. Am., Inc. v. Stanley, 669 F.3d 184 (4th Cir. 2012): explains the federal court’s role in diversity—apply state law or predict the state supreme court.
• Assicurazioni Generali S.p.A. v. Neil, 160 F.3d 997 (4th Cir. 1998) and West v. AT&T, 311 U.S. 223 (1940): instruct that federal courts should follow state intermediate appellate decisions directly on point absent persuasive data the state supreme court would differ.
• JVC Enters. LLC v. City of Concord, 855 S.E.2d 158 (N.C. 2021): provides North Carolina’s “plain meaning first” interpretive rule—unambiguous text controls.
• Wing v. Goldman Sachs Trust Co., N.A., 876 S.E.2d 390 (N.C. 2022): supports using contemporaneous dictionary definitions to construe statutory terms.
• Fleming v. Cedar Mgmt. Grp., LLC, No. COA21-213, 2022 WL 29786 (N.C. Ct. App. Jan. 4, 2022), review denied, 883 S.E.2d 470 (N.C. 2023): an unpublished but factually near-identical state decision concluding HOA statement fees are not transfer fees and rejecting an “excessive fee” UDTPA claim; treated as having “predictive value.”
• C.F. Trust, Inc. v. First Flight Ltd., 306 F.3d 126 (4th Cir. 2002): cited for the proposition that unpublished state opinions can still be predictive for Erie purposes.
• McLeod v. Nationwide Mut. Ins. Co., 444 S.E.2d 487 (N.C. 1994): invoked to characterize statutory interpretation as a question of law for the court—used to discount defendants’ invoice labeling (“Transfer Fee”) as non-dispositive.
• Walker v. Fleetwood Homes of N.C., Inc., 653 S.E.2d 393 (N.C. 2007), Bumpers v. Comm. Bank of N. Va., 747 S.E.2d 220 (N.C. 2013), and Gray v. N.C. Ins. Underwriting Ass'n, 529 S.E.2d 676 (N.C. 2000): supply the UDTPA elements, the definition of “unfair,” and the rule that “unfair or deceptive” is a question of law.
• Grayson O Co. v. Agadir Int'l LLC, 856 F.3d 307 (4th Cir. 2017): supports waiver by failing to argue an issue in the opening brief (used regarding declaratory judgment).

3.2. Legal Reasoning

A. Chapter 39A: Why the fees were not “transfer fees”

Chapter 39A targets “transfer fee covenants” that impair marketability of title and restrain alienation. Liability attaches to recording such covenants, filing liens securing such fees, or entering agreements imposing “private transfer fee obligation.” The key definitional provision is N.C. Gen. Stat. § 39A-2(2): a “transfer fee” is a fee “payable upon the transfer of an interest in real property” or “payable for the right to make or accept such transfer.”

Applying North Carolina’s plain-meaning approach (JVC Enters. LLC v. City of Concord), the Fourth Circuit found Carpenter’s allegations failed both definitional prongs:

1. Not “payable upon the transfer.” The court used a contemporaneous dictionary definition of “payable” (and distinguished it from “due”), consistent with Wing v. Goldman Sachs Trust Co., N.A.. On the complaint’s attached documents, the fee became “to be paid” when the statements were prepared; the later closing date did not change when the obligation arose. Carpenter’s alternative theory—that “transfer” includes the whole pre-closing process—was rejected as “atextual” and overbroad.
2. Not “payable for the right to make or accept” the transfer. Even if lenders and closing attorneys practically required the statements, the fee was consideration for the service/product (the statement), not a charge for the legal right to convey or accept title. The court drew a sharp line between “prerequisites to financing/title insurance” and a fee imposed as a condition of the legal act of transfer itself.

B. The statutory “exclusion” did not reverse-engineer transfer-fee status

Carpenter heavily relied on § 39A-2(2)(h), which says certain items “shall not be considered a ‘transfer fee,’” including “[a]ny reasonable fee charged for the preparation of statements of unpaid assessments.” She argued this implies that “unreasonable” statement fees are transfer fees.

The court rejected that inference (echoing Fleming v. Cedar Mgmt. Grp., LLC) as “put[ting] the cart before the horse”: the “threshold question” is whether the charge satisfies the statutory definition at all. Exclusions clarify that common transaction charges are out of scope even if they might otherwise resemble transfer-conditioned payments (the court used realtor commissions as an illustration). An exclusion does not create a negative implication that everything outside it must be covered.

C. Invoice labels did not control the legal classification

Carpenter also pointed to documentation describing a “Transfer Fee.” The court held statutory meaning is a legal question for the court (McLeod v. Nationwide Mut. Ins. Co.), and defendants had not conceded the statutory issue by using a label on an invoice.

D. UDTPA: Why “excessive fee” allegations failed

Under Walker v. Fleetwood Homes of N.C., Inc., a UDTPA claim requires an unfair/deceptive act, in or affecting commerce, proximately causing injury. “Unfair” is defined in Bumpers v. Comm. Bank of N. Va. as conduct that offends public policy or is “immoral, unethical, oppressive, unscrupulous, or substantially injurious.” Whether conduct is unfair/deceptive is a legal question (Gray v. N.C. Ins. Underwriting Ass'n).

The court rejected two UDTPA theories:

1. No UDTPA “end run” around Chapter 39A. Carpenter argued that even if the statute was not technically violated, the fees violated the statute’s public policy and therefore UDTPA. The court refused to enlarge Chapter 39A’s carefully defined scope via UDTPA, emphasizing that the General Assembly identified what violates the public policy in Chapter 39A itself.
2. “High price” allegations alone are insufficient. The court noted Bumpers suggested high prices alone generally do not establish UDTPA (while leaving open an extreme outlier). It relied on Fleming v. Cedar Mgmt. Grp., LLC, which rejected similar allegations even where the fee was $395. Carpenter paid less than the Fleming plaintiffs; her assertions (minimal time/keystrokes; no relation to cost; unreasonable to consumers) were treated as conclusory excessive-pricing claims without facts showing the kind of egregious conduct UDTPA targets.

E. Remaining claims failed as derivative

Carpenter conceded unjust enrichment, North Carolina Debt Collection Act, negligent misrepresentation, and civil conspiracy depended on the Chapter 39A and UDTPA theories. Once those fell, the remainder necessarily failed. The court also noted waiver of any challenge to dismissal of declaratory judgment (Grayson O Co. v. Agadir Int'l LLC).

3.3. Impact

• Narrowing Chapter 39A to its text. The decision reinforces that Chapter 39A is not a general “fee reasonableness” statute for real-estate-adjacent charges; plaintiffs must show the fee is imposed upon transfer or for the right to transfer, not merely incurred because a transaction is underway.
• Limiting UDTPA as a policy backstop. The opinion signals skepticism toward using UDTPA to expand liability where the legislature has delineated specific prohibited conduct—especially in a field (real estate transaction charges) governed by detailed statutes.
• Pleading demands for “excessive fee” UDTPA claims. Post-Carpenter, plaintiffs alleging unfair pricing must plead more than “minutes to produce” and “no relation to cost”; they likely need concrete facts showing coercion, concealment, deception, discrimination, or other aggravating circumstances beyond price.
• Persuasive force of unpublished state decisions. While not binding, Fleming effectively shaped the federal court’s prediction of North Carolina law—an important Erie lesson for litigants assessing risk and strategy.
• Legislative backdrop. The court observed that in July 2020 North Carolina amended its HOA statute to set a range of reasonable charges for these statements (N.C. Gen. Stat. § 47F-3-102(13a)) and noted the early-2020 fees here fell within that range—an observation that, while not dispositive to statutory meaning, undercuts claims of extreme unfairness in comparable fact patterns.

4. Complex Concepts Simplified

“Transfer fee covenant” (Chapter 39A)

A recorded covenant or obligation that requires paying a fee because property is being transferred, typically seen as clouding title and restraining free alienation. Chapter 39A targets this specific species of fee tied to transfer rights or the transfer event.

“Payable upon transfer” vs. “payable at closing”

“Payable upon transfer” focuses on when the obligation is triggered by law/contract. A fee can be collected at closing but still become “payable” earlier when the service is performed or the statement is produced.

UDTPA (N.C. Gen. Stat. § 75-1.1)

A broad consumer-protection statute banning unfair or deceptive acts in commerce. But it is not automatically triggered by allegations that a price is too high; courts look for conduct that is substantively egregious or deceptive, not merely expensive.

Rule 12(b)(6) and “plausibility”

At the dismissal stage, courts assume well-pleaded facts are true but require enough factual content to make liability plausible, not speculative or conclusory (Ashcroft v. Iqbal).

Diversity jurisdiction and “predicting” state law

Federal courts applying state law generally follow state supreme court decisions; when none exist, they rely on intermediate appellate decisions and other indicators (BP Prods. N. Am., Inc. v. Stanley; Assicurazioni Generali S.p.A. v. Neil).

5. Conclusion

Carpenter establishes (and strongly signals for future litigants) that, under North Carolina law, fees charged to prepare HOA statements of unpaid assessments are not “transfer fees” unless they satisfy Chapter 39A’s definition—i.e., tied to the transfer event or the right to transfer, not merely associated with the transaction process. It also holds that UDTPA cannot be used to expand Chapter 39A’s reach and that “excessive fee” allegations, without concrete aggravating facts, are unlikely to state a UDTPA claim.