Harris v. Pinewood Development Corp.

627 S.E.2d 639, 176 N.C. App. 704, 2006 N.C. App. LEXIS 587
CourtCourt of Appeals of North Carolina
DecidedMarch 21, 2006
DocketCOA05-606
StatusPublished
Cited by7 cases

This text of 627 S.E.2d 639 (Harris v. Pinewood Development Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Harris v. Pinewood Development Corp., 627 S.E.2d 639, 176 N.C. App. 704, 2006 N.C. App. LEXIS 587 (N.C. Ct. App. 2006).

Opinions

[705]*705HUDSON, Judge.

On 27 August 2004, a jury rendered a verdict for plaintiffs Julie and Duane Harris against defendants for unfair and deceptive trade practices and awarded judgment in the amount of $326,901 plus interest. The court denied plaintiffs’ claim for attorney’s fees. On 9 November 2004, plaintiffs filed a motion for an ex parte temporary restraining order (“TRO”) enjoining defendant Ray Ritchie and various non-party entities from conveying interest in various parcels of land held by defendant Pinewood Homes, Inc., as trustee. The court entered a TRO, and on 24 November 2004, plaintiffs moved for a preliminary injunction. Following a hearing, the court granted a preliminary injunction against Ritchie and Pinewood Homes. Defendant Ritchie appeals the order granting the preliminary injunction. As discussed below, we vacate.

This case arose from Ritchie’s sale of land to plaintiffs for use as a home site. Plaintiffs alleged that defendant Ritchie concealed the fact that debris had been buried on the property. After obtaining judgment, plaintiffs began the process of execution. In the months following entry of the judgment against him, Ritchie took various actions to transfer and hide various assets of his companies, including transferring his North Carolina corporations to Nevada, transferring the presidency of Pinewood Homes to another person, and submitting a motion stating that Pinewood Homes had virtually no assets. Plaintiffs sought a preliminary injunction to prevent Ritchie and his companies from transferring assets until post-judgment proceedings were completed by satisfaction of the judgment. Ritchie is the only defendant appealing the preliminary injunction.

A preliminary injunction is interlocutory in nature. A.E.P. Industries v. McClure, 308 N.C. 393, 400, 302 S.E.2d 754, 759 (1983); State v. Fayetteville St. Christian School, 299 N.C. 351, 261 S.E.2d 908, appeal dismissed, 449 U.S. 807 (1980). Thus, issuance of a preliminary injunction cannot be appealed prior to final judgment absent a showing that the appellant has been deprived of a substantial right which will be lost should the order “escape appellate review before final judgment.” Fayetteville St. Christian School, 299 N.C. at 358, 261 S.E.2d at 913. Defendant Ritchie contends that the preliminary injunction “essentially shut down all business activity” of Ritchie and his companies, thereby affecting a substantial right to be lost. “Our courts have recognized the inability to practice one’s livelihood and the deprivation of a significant property interest to be substantial rights .. . .” Bessemer City Express, Inc. v. City of Kings Mountain, [706]*706155 N.C. App. 637, 640, 573 S.E.2d 712, 714 (2002), disc. review denied, 357 N.C. 61, 579 S.E.2d 384 (2003).

Ritchie argues that the trial court erred in granting the preliminary injunction against Ritchie and his non-party companies post-judgment and in denying his motion to dismiss the motion for preliminary injunction. We agree.

Although his brief lists two separate assignments of error and two separate questions presented, defendant Ritchie combines their discussion, and we do the same.

The purpose of a preliminary injunction is ordinarily to preserve the status quo pending trial on the merits. Its issuance is a matter of discretion to be exercised by the hearing judge after a careful balancing of the equities. Its impact is temporary and lasts no longer than the pendency of the action.

Fayetteville St. Christian School, 299 N.C. at 357-58, 261 S.E.2d at 913. N.C. Gen. Stat. § 1-485(2) provides that a preliminary injunction may be issued:

[w]hen, during the litigation, it appears by affidavit that a party thereto is doing or threatens or is about to do, or is procuring or suffering some act to be done in violation of the rights of another party to the litigation respecting 'the subject of the action, and tending to render the judgment ineffectual.

N.C. Gen. Stat. § 1-485(2) (2003). “The assumption is that a plaintiff seeking a temporary restraining order or a preliminary injunction eventually wants permanent relief. [T]here has to be an action pending to which the temporary injunction can be ancillary.” Brown v. Brown, 91 N.C. App. 335, 339, 371 S.E.2d 752, 755 (1988) (internal citation and quotation marks omitted). Where “there is no pending litigation . . ., there is no action to which the ancillary remedy against petitioner may attach and the trial court had no jurisdiction to grant the preliminary injunction.” Revelle v. Chamblee, 168 N.C. App. 227, 231, 606 S.E.2d 712, 714 (2005).

In reviewing the ruling on a preliminary injunction, the appellate court is not bound by the findings of the lower court, but there is a presumption that the lower court decision was correct. A.E.P. Indus., Inc. v. McClure, 58 N.C. App. 155, 157, 293 S.E.2d 232, 233 (1982), rev’d on other grounds, 308 N.C. 393, 302 S.E.2d 754 (1983) (internal citation omitted). A decision by the trial court to issue or deny an [707]*707injunction will generally be upheld on appeal if there is ample competent evidence to support the decision, even though the evidence may be conflicting and the appellate court could substitute its own findings. Id. at 158, 293 S.E.2d at 234.

Ritchie contends that the preliminary injunction was improperly entered because it was no longer part of a pending action. He asserts that the proceedings in 00CVS3117 were concluded, in that judgment had been entered. Defendants maintain that supplemental proceedings such as injunctive relief were not yet available because execution had not yet been returned unsatisfied, pursuant to N.C. Gen. Stat. § 1-352, which reads in pertinent part as follows:

When an execution against property of a judgment debtor, ... is returned wholly or partially unsatisfied, the judgment creditor at any time after the return, ... is entitled to an order from the court. . . requiring such debtor to appear and answer concerning his property....

N.C. Gen. Stat. § 1-352 (2005). Other remedies are available in N.C. Gen. Stat. § 1-355, which provides as follows:

Instead of the order requiring the attendance of the judgment debtor, the court or judge may, upon proof by affidavit or otherwise to his satisfaction that there is danger of the debtor leaving the State or concealing himself, and that there is reason to believe that he has property which he unjustly refuses to apply to the judgment, issue a warrant requiring the sheriff of any county where such debtor is to arrest him and bring him before the court or judge.

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Bluebook (online)
627 S.E.2d 639, 176 N.C. App. 704, 2006 N.C. App. LEXIS 587, Counsel Stack Legal Research, https://law.counselstack.com/opinion/harris-v-pinewood-development-corp-ncctapp-2006.