Opinion of the Court
I. Background
Plaintiff and Defendant were married in 2013 and separated on 12 October
2021. During their marriage, Plaintiff and Defendant formed Fenix, an insurance
brokerage company. Fenix’s business assists individuals to procure “Affordable Care
Act” health insurance policies. Defendant is the sole “100% woman-owned”
shareholder and serves as the company’s president, while Plaintiff managed all the
company’s daily operations, customer and revenue generation, and business
practices. Fenix acquired thousands of clients, raised substantial revenue, and its
assets are the primary source of dispute in the equitable distribution action.
Plaintiff filed a verified complaint against Defendant on 8 June 2023, to assert
claims for custody of the parties’ minor child and equitable distribution of the marital
property, including Fenix. Defendant answered, asserted a counterclaim, and sought
equitable distribution.
The parties engaged in considerable litigation regarding Fenix. As the
equitable distribution case progressed, Plaintiff moved on three occasions for the trial
court to restrain or enjoin Defendant’s ability to withdraw or dispose of funds held by
Fenix. Those motions were denied.
Defendant and Fenix sued Plaintiff in a civil action in New Hanover County
Superior Court on 18 October 2023. Defendant and Fenix alleged Plaintiff had
formed a new corporation with a similar name, and had purportedly used Fenix’s
property and records to divert customers, agents, and business away from Fenix and
-2-
to his new corporation. The complaint asserts claims for conversion, unfair and
deceptive trade practices, civil liability for theft by employee/embezzlement,
misappropriation of trade secrets, unjust enrichment, computer trespass, tortious
interference with prospective contracts or economic advantage, and piercing the
corporate veil.
The case was designated as a complex business case to establish jurisdiction
in the North Carolina Business Court. The Business Court required Plaintiff to
return certain business records and property belonging to Fenix by order entered 29
November 2023, but the court stayed further proceedings until the outcome of this
equitable distribution action. Roesel v. Roesel, 2023 NCBC LEXIS 157 (November 29,
2023).
Fenix filed its motion to intervene in the equitable distribution action on 15
March 2024. The motion was heard before the trial court on 16 December 2024. The
trial court concluded the “court can classify, value and distribute Fenix between the
two existing parties to the action, without ordering Fenix itself to do anything (sell or
buy assets, expand or contract advertising, etc[.])” and denied the motion. Fenix
appeals.
II. Jurisdiction
Interlocutory orders are generally not immediately appealable to invoke
jurisdiction. Duquesne Energy, Inc. v. Shiloh Indus. Contractors, 149 N.C. App. 227,
229, 560 S.E.2d 388, 389 (2002). This Court has held a trial court’s denial of a motion
-3-
to intervene affects a substantial right. Anderson v. Seascape at Holden Plantation,
LLC, 232 N.C. App. 2, 7, 753 S.E. 2d 691, 696 (2014); High Rock Lake Partners, LLC
v. N.C. Dep’t of Transp., 204 N.C. App. 55, 62, 693 S.E. 2d 361 367 (2012). This Court
has jurisdiction to review the trial court’s ruling on a motion to intervene pursuant
to N.C. Gen. Stat. § 7A-27(b)(3)(a) (2023) (an appeal of right lies from an interlocutory
order of the superior or district court which “affects a substantial right”). This appeal
is properly before us.
III. Standard of Review
This Court reviews the denial of a motion to intervene de novo. Anderson, 232
N.C. App. at 8, 753 S.E. 2d at 697. Under de novo review, this Court considers “the
matter anew and freely substitutes its own judgment for that of the trial court.” Id.
(citation and quotation marks omitted).
IV. Intervention of Right
Rule 24 of the North Carolina Rules of Civil Procedure addresses both
interventions as a matter of right and permissive interventions. N.C. Gen. Stat. §
1A-1, Rule 24 (2023). Fenix asserts it should have been permitted to intervene under
subsection (a)(2) of the statute, which provides an applicant with an intervention of
right
[w]hen the applicant claims an interest relating to the property or transaction which is the subject of the action and he is so situated that the disposition of the action may as a practical matter impair or impede his ability to protect
-4-
that interest, unless the applicant’s interest is adequately represented by existing parties.
N.C. Gen. Stat. §1A-1, Rule 24(a)(2) (2023).
A. Fenix’s Interest
“The prospective intervenor seeking such intervention as a matter of right
under Rule 24(a)(2) must show . . . [:] (1) it has a direct and immediate interest
relating to the property or transaction[;] (2) denying intervention would result in a
practical impairment of the protection of that interest[;] and[,] (3) there is inadequate
representation of that interest by existing parties.” Anderson, 232 N.C. App. at 8,
753 S.E.2d at 697 (quoting Virmani v. Presbyterian Health Servs. Corp., 350 N.C. 449,
458-59, 515 S.E.2d 675, 682 (1999)). Fenix argues it meets these three criteria and
the trial court should have permitted it to intervene as a matter of right in the
equitable distribution action under Rule 24(a)(2). N.C. Gen. Stat. § 1A-1, Rule
24(a)(2). We disagree.
Fenix asserts Plaintiff used Fenix’s records, website, email addresses and
industry reputation to form and operate a competing business, placed Fenix in a
position of irreparable harm, and Fenix has a direct interest in protecting its assets
from further wrongful action by Plaintiff. Even if Plaintiff has caused harm to Fenix
by his competing business, Fenix has failed to show how it would be better suited to
protect its assets as a party to the equitable distribution litigation between the true
owners thereof.
-5-
The trial court’s function in an equitable distribution action is: “(1) to
determine which property is marital property, (2) to calculate the net value of the
property, fair market value less encumbrances, and (3) to distribute the property in
an equitable manner.” Beightol v. Beightol, 90 N.C. App. 58, 63, 367 S.E.2d 347, 350
(1988) (citing Cable v. Cable, 76 N.C. App. 134, 137, 331 S.E. 2d 765, 767, disc. rev.
denied, 315 N.C. 182, 337 S.E. 2d 856 (1985)). The trial court found and it is
undisputed the ownership of Fenix is marital property and Defendant is the sole
shareholder.
The trial court’s role is limited to calculating the value of Fenix and
distributing it, along with the remainder of the marital estate, among the parties. Id.
Fenix has failed to show how the valuation and distribution of the company’s assets
might, as a practical matter, impair or impede its ability to protect its interests. N.C.
Gen. Stat. § 1A-1, Rule 24(a)(2) (2023). This argument is overruled.
Fenix also claims an interest in the equitable distribution action, because a
distributive award may force it to take action, such as issue shares or transfer assets
to Plaintiff. See Campbell v. Campbell, 241 N.C. App. 227, 231, 773 S.E.2d 93, 96
(2015) (“[W]here a separate legal entity has not been made a party to an action, the
trial court does not have the authority to order that entity to act.”). We disagree.
If Fenix is distributed to Plaintiff, it would not be required to issue shares. All
of the Fenix shares are the sole individual property of Defendant “not the property of
the corporation.” Brown v. Jackson, 179 N.C. 363, 368, 102 S.E. 739, 742 (1920). Any
-6-
distributive award which grants Plaintiff shares in Fenix would require only for
Defendant to assign or transfer her shares to Plaintiff. Id. Fenix’s assets and
liabilities, including cash accounts and debts, establish the value of Defendant’s
shares. When the trial court distributes those shares, it will do so by “using [their]
net value.” N.C. Gen. Stat. § 50-20(c) (2023). The shares are Defendant’s personal
property, in which Fenix has no interest, and of which the court found it “can classify,
value and distribute” as it would any other personal property of the parties. See
Brown, 179 N.C. at 368, 102 S.E. at 742.
Fenix cites this Court’s decisions in Campbell, 241 N.C. App. 227, 773 S.E.2d
93 and Geoghagan v. Geoghagan, 254 N.C. App. 247, 803 S.E.2d 172 (2017) to support
its argument. In both cases, this Court opined a closely held business was a necessary
party, requiring the trial court to include the business in the equitable distribution
proceeding. In Campbell, the Court determined the LLC at issue was a necessary
party because the trial court had directed and ordered it to distribute $350,000 cash
to one of the former spouses. 241 N.C. App. at 239-30, 773 S.E.2d at 95. The Court
held “[b]ecause [the LLC] was not made a party to the present action, the trial court
did not have the authority to exercise control over [it]” and vacated the preliminary
injunction order. Id. at 232, 773 S.E.2d at 96.
Likewise, in Geoghagan, this Court determined the corporation at issue and
its subsidiaries were necessary parties because the equitable distribution order had
prohibited it from paying one of the former spouses his regular salary. 254 N.C. App.
-7-
at 251, 803 S.E.2d at 176. In both cases, and unlike the case before us, the entities
being joined was necessary because the trial court’s distributive award ordered them
to take, or to refrain from taking, action as an entity. Fenix has not demonstrated
the reasonable likelihood of a scenario where the court would require authority over
it, and to compel intervention as a party, in order, as the trial court found, for it to
“classify, value and distribute” the marital estate between the parties. Brown, 179
N.C. at 368, 102 S.E.2d at 742.
b. Adequate Representation
A proposed intervenor must also show there is an inadequate representation
of its interest by the existing parties. Anderson, 232 N.C. App. at 8, 753 S.E.2d at
697. When the party seeking intervention has the same ultimate objective as a party
to the suit, a presumption arises its interests are adequately represented, against
which the petitioner must demonstrate an adversity of interest, collusion, or
nonfeasance. Virginia v. Westinghouse Elec. Corp., 542 F.2d 214, 216 (4th Cir. 1976)
(citing Ordnance Container Corp. v. Sperry Rand Corp., 478 F.2d 844, 845 (5th Cir.
1973)).
While Fenix has not succinctly identified its ultimate objective in the outcome
of the case, it appears from the record and claims against Plaintiff are to preserve
and protect its business. Fenix has produced nothing tending to show its interests
are adverse to Defendant, or any collusion or nonfeasance exists. Id. Fenix’s sole
shareholder is a party to the equitable distribution proceeding and Fenix was also
-8-
represented before the trial court by her counsel. Presuming Fenix had shown a
direct and immediate interest in the action, it failed to meet its burden to overcome
the presumption its interests are adequately represented by Defendant. Id.
V. Conclusion
The trial court properly concluded Fenix has not demonstrated and does not
have an intervention of right under Rule 24. N.C. Gen. Stat. § 1A-1, Rule 24. We
affirm the trial court’s order denying Fenix’s motion to intervene in the equitable
distribution action between Plaintiff and Defendant. It is so ordered.
AFFIRMED.
Chief Judge DILLON and Judge CARPENTER concur.
-9-