Plasman v. Decca Furniture (USA), Inc.
Plasman v. Decca Furniture (USA), Inc.
Opinion
*486 This appeal comes to the Court as the result of a bitter corporate dispute that has yet to reach the discovery phase nearly five years after the action was filed. Plaintiff Christian G. Plasman (Plasman) and third-party defendant Christian J. Plasman (Barrett) (collectively with Plasman, the Plasmans) appeal from an order of the North Carolina Business Court 1 holding them in civil contempt of court.
*764 The contempt order was entered after the Plasmans failed to comply with a Business Court order enforcing the terms of a preliminary injunction entered against them in federal court. On appeal, the Plasmans argue that the Business Court lacked jurisdiction to enter the contempt order while their appeal from the order enforcing the injunction was pending in this Court. The Plasmans then make a series of arguments that attack the sufficiency of the contempt order itself. After careful review, we conclude that the Business Court retained jurisdiction to enter the contempt order, and that the order should be affirmed in its entirety.
I. Background
In April 2002, Plasman formed Bolier & Company, LLC (Bolier), a closely held North Carolina company offering residential furniture designs that were also suited for use in the hospitality industry. Shortly thereafter, Plasman partnered with Decca Furniture, Ltd. (Decca China), which manufactured Bolier's furniture lines. Decca China then formed Decca Furniture (USA), Inc. (Decca USA) to own Decca China's interest in Bolier. Richard Herbst (Herbst) was Decca USA's president at all relevant times.
In August 2003, Plasman and Herbst executed an operating agreement that granted Decca USA a 55% majority ownership interest in Bolier, and that allowed Plasman to retain a 45% minority ownership interest for himself. The operating agreement also vested Decca USA with the authority to make all employment decisions related to Bolier. In November 2003, Plasman entered into an employment agreement with Bolier, which provided that Plasman could be terminated without cause. Plasman executed the employment agreement on his own behalf, and Herbst signed on behalf of Decca USA and Bolier. Thereafter, Plasman *487 served as President and CEO of Bolier, and his son, Barrett, worked as Bolier's operations manager.
According to defendants, despite the significant investments of Decca USA and Decca China in Bolier's operations, they sustained losses in excess of $2 million between 2003 and 2012. As a result, Decca USA terminated the employment of Plasman and Barrett on 19 October 2012. The Plasmans, however, refused to accept their terminations and continued to work out of Bolier's office space. During this time, the Plasmans set up a new bank account in Bolier's name, and they diverted approximately $600,000.00 in Bolier customer payments to that account. From these diverted funds, the Plasmans paid themselves, respectively, approximately $33,170.49 and $17,021.66 in salaries and personal expenses. Plasman also wrote himself a $12,000.00 check, dated 5 December 2012, from the new account for "Bolier Legal Fees." Decca USA eventually changed the locks to Bolier's offices.
On 22 October 2012, the Plasmans filed the instant action in Catawba County Superior Court alleging claims for, inter alia , corporate dissolution, breach of contract, fraud, constructive fraud, and trademark as well as copyright infringement. Two days later, the action was designated as a mandatory complex business case and assigned to the North Carolina Business Court. After removing the case to the United States District Court for the Western District of North Carolina, Decca USA moved Judge Richard L. Voorhees for a preliminary injunction against the Plasmans. On 27 February 2013, Judge Voorhees entered an order (the injunction) that enjoined the Plasmans from acting on Bolier's behalf in any manner. Judge Voorhees further ordered the Plasmans to return all diverted funds to Bolier within five business days, and to provide Decca USA with an accounting of those funds. Judge Voorhees did not require Decca USA to post a security bond pursuant to Rule 65(c) of the Federal Rules of Civil Procedure, but the injunction did contain various terms that were meant to protect Plasman's rights as a minority owner of Bolier while the litigation continued.
One week after the injunction was entered, the Plasmans filed their "Response to Court Order" in federal court, which challenged certain provisions of the injunction and stated that "Plaintiffs have fully complied to the best of their ability with the Court Order signed on February 27, 2013." Shortly thereafter, the Plasmans filed another motion that sought to have the federal court provide additional safeguards protecting "Plaintiffs Chris Plasman and Bolier ... pending final resolution of the merits." This motion also sought to "clarify the ... [injunction] ... to *765 specifically permit [the Plasmans] to retain funds paid to Chris Plasman *488 and Barrett Plasman for wages earned and Bolier ... expenses paid (including the $12,000.00 paid as reimbursement for legal expenses) prior to January 14, 2013[.]" Although Judge Voorhees never ruled on these motions, the Plasmans neither appealed the injunction nor properly sought to have it reconsidered.
The action was remanded to the North Carolina Business Court in September 2014 when Judge Voorhees dismissed the Plasmans' federal copyright claims and declined to exercise supplemental jurisdiction over the state law claims that remained. Upon remand, the parties filed competing motions for consideration by Judge Louis A. Bledsoe, III. In a document entitled "Plaintiffs Motion to Amend Preliminary Injunction, to Dissolve Portions of the Preliminary Injunction and Award Damages, and Motion for Sanctions[,]" the Plasmans moved Judge Bledsoe to, inter alia , amend and dissolve certain portions of the injunction. In contrast, Decca USA sought to enforce the injunction's terms. Contending that the Plasmans were in willful violation of the injunction, Decca USA moved Judge Bledsoe to hold the Plasmans in civil contempt and to impose sanctions against them. After conducting a hearing on the parties' motions, Judge Bledsoe entered an order on 26 May 2015 (the 26 May Order) denying the Plasmans' motion, and reasoning that because the preliminary injunction was carefully crafted and narrowly tailored, it should not be "modified, amended, or dissolved in any respect." 2 Although Judge Bledsoe declined to hold the Plasmans in contempt, he did grant Decca USA's motion to enforce the injunction's requirements. To that end, the Plasmans were ordered to pay Decca USA $62,191.15 plus interest and to provide the accounting required by the injunction.
On 25 June 2015, the Plasmans filed notice of appeal from the 26 May Order. Defendants later filed with this Court a motion to dismiss the Plasmans' appeal, arguing that the 26 May Order was not immediately appealable because it was an interlocutory order that did not affect a substantial right of the Plasmans.
In July 2015, the Business Court, sua sponte , directed the parties to "submit short briefs advising the Court whether this case may proceed with further pleadings and discovery, and to a determination on the merits, or whether this case must be stayed pending resolution" of *489 the Plasmans' interlocutory appeal from the 26 May Order. The case was temporarily stayed to allow for the parties' submissions. On 22 September 2015, while the Plasmans' appeal was pending in this Court, defendants filed a motion in the Business Court seeking to have the Plasmans held in contempt for failure to comply with the 26 May Order.
In October 2015, Judge Bledsoe entered an order that reflected his consideration of a stay pending appeal. Relying in part on this Court's decision in
RPR & Assocs., Inc. v. Univ. of N. Carolina-Chapel Hill
,
After holding a show cause hearing on defendants' contempt motion, Judge Bledsoe entered an order on 26 February 2016 (the Contempt Order) concluding that the Plasmans were in civil contempt of court because of their willful noncompliance with the 26 *766 May Order. The Contempt Order contained a finding that repeated Judge Bledsoe's previous determination that "the appeal of the May 26 Order was interlocutory, did not affect a substantial right, and ... did not stay the case." The Plasmans filed notice of appeal from the Contempt Order on 24 March 2016.
Roughly eight months later, in November 2016, this Court filed an opinion that dismissed the Plasmans' interlocutory appeal from the 26 May Order.
See
Bolier & Co., LLC v. Decca Furniture (USA), Inc.
, --- N.C. App. ----,
First, we conclude that Judge Voorhees' Order was, in fact, appealable. It is well settled that preliminary injunction orders issued by a federal court are immediately appealable....
*490 Second, Plaintiffs contend that their subsequent filings in federal court tolled their deadline for appealing Judge Voorhees' Order. We disagree....
Had Plaintiffs intended to seek reconsideration of Judge Voorhees' Order so as to toll their deadline for appealing the preliminary injunction, they were required to file a motion that unambiguously sought such relief. However, they failed to do so. While Plaintiffs may have held out hope that the federal court would nevertheless modify its preliminary injunction as a result of their motion, it was still incumbent upon them to protect their appeal rights during the interim by taking an appeal of Judge Voorhees' Order to the Fourth Circuit within the thirty-day deadline provided by Rule 4 of the Federal Rules of Appellate Procedure....
Finally, we reject Plaintiffs' argument that [the 26 May] Order was independently appealable. The specific aspects of [the 26 May] Order cited by Plaintiffs as depriving them of a substantial right are essentially identical to the preliminary injunction terms contained in Judge Voorhees' Order, which Plaintiffs never appealed. Thus, because Judge Bledsoe's Order merely enforces the preliminary injunction entered by Judge Voorhees, our consideration of the substantive issues raised by Plaintiffs in the present appeal would enable them to achieve a "back door" appeal of Judge Voorhees' Order well over three years after its entry.
The Plasmans now appeal from the Contempt Order.
II. Trial Court's Jurisdiction To Enter The Contempt Order
As an initial matter, we address the Plasmans' argument that their appeal from the 26 May Order stayed all proceedings in the Business Court and left the trial court without jurisdiction to enter the Contempt Order.
Under North Carolina law, the longstanding general rule is that an appeal divests the trial court of jurisdiction over a case until the appellate
*491
court returns its mandate.
E.g.
,
Bowen v. Hodge Motor Co.
,
When an appeal is perfected as provided by this Article it stays all further proceedings in the court below upon the judgment appealed from, or upon the matter embraced therein, unless otherwise provided by the Rules of Appellate Procedure; 3 but the court below may proceed upon any other matter included in the action and not affected by the judgment appealed from....
Pending the appeal, the trial judge is
functus officio
,
Bowen
,
For over a century, the Supreme Court has recognized that an appeal operates as a stay of all proceedings at the trial level as to issues that are embraced by the order appealed.
E.g.
,
Bohannon v. Virginia Trust Co.
,
In
Veazey v. Durham
, our State's high court examined the question of the circumstances under which the appeal of an interlocutory order operates as a stay of the proceedings in the trial court.
When a litigant takes an appeal to the Supreme Court from an appealable interlocutory order of the Superior Court and perfects such appeal in conformity to law, the appeal *492 operates as a stay of all proceedings in the Superior Court relating to the issues included therein until the matters are determined in the Supreme Court. G.S. Sec. 1-294....
But this sound principle is not controlling upon the record in the case at bar....
There is no more effective way to procrastinate the administration of justice than that of bringing cases to an appellate court piecemeal through the medium of successive appeals from intermediate orders. The rules regulating appeals from the Superior Court to the Supreme Court are designed to forestall the useless delay inseparable from unlimited fragmentary appeals, and to enable courts to perform their real function, i.e., to administer 'right and justice * * * without sale, denial, or delay.' N.C. Const. Art. I, Sec. 35.
This being true, a litigant cannot deprive the Superior Court of jurisdiction to try and determine a case on its merits by taking an appeal to the Supreme Court from a nonappealable interlocutory order of the Superior Court. A contrary decision would necessarily require an acceptance of the paradoxical paralogism that a party to an action can paralyze the administration of justice in the Superior Court by the simple expedient of doing what the law does not allow him to do, i.e., taking an appeal from an order which is not appealable....
[W]hen an appeal is taken to the Supreme Court from an interlocutory order of the Superior Court which is not subject to appeal, the Superior Court need not stay proceedings, but may disregard the appeal and proceed to try the action while the appeal on the interlocutory matter is in the Supreme Court.
Id.
at 363-64,
We close this opinion with an admonition given by this Court to the trial bench three-quarters of a century ago: "But certainly when an appeal is taken as in this case from an interlocutory order from which no appeal is allowed by The Code, which is not upon any matter of law and which *493 affects no substantial right of the parties, it is the duty of the Judge to proceed as if no such appeal had been taken."
Id.
at 367,
In this matter, the parties agree that the contempt order is interlocutory. Ordinarily, "there is no right of immediate appeal from interlocutory orders and judgments."
Travco Hotels, Inc. v. Piedmont Nat. Gas Co.
,
"Essentially a two-part test has developed-the right itself must be substantial and the deprivation of that substantial right must potentially work injury to [the appellant] if not corrected before appeal from final judgment."
Goldston v. Am. Motors Corp.
,
*494
Apart from the muddy waters of the substantial right test, there is also the issue of what authority a trial court possesses to rule on the interlocutory nature of an appeal.
Veazy
states that the "[trial c]ourt need not stay proceedings, but may
disregard
the appeal and proceed to try the action
while the appeal on the interlocutory matter
is in the Supreme Court."
In RPR & Assocs. , this Court established the parameters of the authority of the trial court in making this determination, stating:
Because the trial court had the authority to determine whether its order affected defendant's substantial rights or was otherwise immediately appealable, the trial court did not err in continuing to exercise jurisdiction over this case after defendant filed its notice of appeal. The trial court's determination that the order was nonappealable was reasonable in light of established precedent and the repeated denials by the appellate courts of this State to stay proceedings. Although this Court ultimately held that defendant's appeal affected a substantial right, it also held that defendant was not immune to suit. Defendant states no grounds, nor has it produced any evidence to *495 demonstrate how it was prejudiced by the trial court's exercise of jurisdiction over this case.
This Court recently applied
RPR & Assocs.
' analytical framework in the context of a civil contempt order.
See
SED Holdings, LLC v. 3 Star Properties, LLC
, --- N.C.App. ----,
While the appeal in
SED I
was pending, the defendants failed to comply with the injunction, prompting the trial court to hold a series of contempt proceedings.
SED Holdings
, --- N.C. App. at ----,
In rejecting the defendants' argument, this Court recognized that
[a]t the very least, RPR & Assocs. stands for two general propositions: (1) a trial court properly retains jurisdiction over a case if it acts reasonably in determining that an interlocutory order is not immediately appealable, and (2) that determination may be considered reasonable even if the appellate court ultimately holds that the challenged order is subject to immediate review.
*496 It is clear that injunctive orders entered only to maintain the status quo pending trial are not immediately appealable. Then again, reasonable minds may disagree as to whether a particular injunction simply maintains the status quo. Beyond that, our courts have taken a flexible approach with respect to the appealability of orders granting injunctive relief. Most relevant to this case, orders affecting a party's ability to conduct business or control its assets may or may not implicate a substantial right....
Because the injunctive relief was designed to maintain the status quo, and given that established precedent regarding the appealability of such orders is equivocal, the trial court reasonably concluded that its injunction was not immediately appealable. While this Court eventually held in SED I that defendants' appeal affected a substantial right, that decision was not dispositive of whether the trial court acted reasonably in determining that the appeal had not divested it of jurisdiction. RPR & Assocs. ,153 N.C.App. at 348 ,570 S.E.2d at 514 . As such, the trial court was not functus officio . This Court also held that the trial court's ruling on SED's motion for injunctive relief was not erroneous. Defendants therefore cannot demonstrate how they were "prejudiced by the trial court's [decision to continue to] exercise ... jurisdiction over this case" by enforcing its injunction.Id. Accordingly, pursuant to the principles announced in RPR & Assocs. , we conclude that the trial court retained jurisdiction to enter orders related to the contempt proceedings in this case while defendants' interlocutory appeal was pending in this Court.
Applying the principles of Veazy as well as the analytical framework established in RPR & Assocs. and reaffirmed in SED Holdings to the present case, we conclude that Judge Bledsoe properly retained jurisdiction to enter the Contempt Order while the Plasmans' appeal from the 26 May Order was pending *770 in this Court. After the Plasmans noted their appeal from the 26 May Order, Judge Bledsoe, sua sponte , addressed the issue of whether the Business Court's jurisdiction was stayed pending the appeal. Upon careful consideration of the parties' briefs and arguments on this issue, Judge Bledsoe unequivocally concluded that the 26 May Order did not affect any substantial right of the Plasmans. According to Judge Bledsoe, the 26 May Order was *497 not immediately appealable because it "simply ordered [the Plasmans] to comply with the never-appealed" injunction order. Judge Bledsoe reiterated this conclusion in the Contempt Order.
This Court agreed with Judge Bledsoe's analysis, and specifically refused to allow the Plasmans to mount a collateral attack on the injunction via the 26 May Order that was entered to enforce it.
See
Bolier I
, --- N.C. App. at ----,
Nevertheless, the Plasmans argue that this Court's recent decision in
Tetra Tech Tesoro, Inc. v. JAAAT Tech. Servs., LLC
, --- N.C.App. ----,
On appeal, this Court concluded that it lacked jurisdiction to review the defendant's "appeal from the preliminary injunction order because
*498
[it] did not appeal that order within thirty days and its motion to modify the preliminary injunction order, purportedly brought under Rules 59 and 60 of the Rules of Civil Procedure, did not toll the time to appeal."
In holding that "the trial court lacked jurisdiction to conduct a contempt proceeding and impose sanctions[,]"
This Court recently held that there is an exception to the Joyner rule: "a trial court properly retains jurisdiction over a case if it acts reasonably in determining that an interlocutory order is not immediately appealable." SED Holdings, LLC v. 3 Star Prop., LLC , --- N.C.App. ----, ----,791 S.E.2d 914 , 920 (2016). The analysis in SED Holdings turned on the fact that the injunction at issue merely maintained the status quo. That is not the case here. This injunction was a mandatory one; it forced a business to segregate its funds, imposed controls on the business's operations, and forced the business to conduct an accounting and provide the results of that accounting to the opposing party. Thus, when [the defendant] appealed the denial of its motion to modify that injunction, the trial court was divested of jurisdiction to enforce it.
Tetra Tech
, --- N.C.App. at ---- n.3,
Despite the Plasmans' argument to the contrary,
Tetra Tech
is easily distinguished from the present case. To begin, the decision in
Joyner
-the only case upon which the
Tetra Tech
Court relied in vacating the contempt order at issue-was rendered upon the "general rule ... that a duly perfected appeal or writ of error divests the trial court of further
*499
jurisdiction of the cause in which the appeal has been taken."
Joyner
,
Because the decisions in
Veazy
,
RPR Assocs.
, and
SED Holdings
control our analysis, we conclude that the Plasmans' appeal from the 26 May Order, which Judge Bledsoe and this Court determined was not immediately appealable, did not divest the Business Court of jurisdiction over the case. As a result, Judge Bledsoe was not
functus officio
when the Plasmans noted their appeal from the 26 May Order, and the Contempt Order was properly entered.
See
Onslow Cty. v. Moore
,
III. Scope Of Plasmans' Appeal
Because the Plasmans purport to raise eight issues on appeal, we must determine whether all of those issues are properly before us. The "Issues Presented" section of the Plasmans' principal brief lists the following issues for our consideration:
I. Whether The Trial Court Erred In Considering An Appealed Order And Finding Plasman In Contempt Of An Appealed Order?
*500 II. Whether The Trial Court Erred In Finding That The Purpose Of The Preliminary Injunction Order Is Still Served By Requiring Payment Of Money To Decca USA?
III. Whether The Trial Court Erred By Finding Failure To Pay Money To Defendants After Proper Appeal Amounts To Willful, Bad Faith Non-Compliance?
*772 IV. Whether The Trial Court Erred By Finding That Appellants Diverted Bolier's Money And Directing That Decca USA Be Paid?
V. Whether The Trial Court Erred By Failing To Find That The Federal Court Did Not Issue Required Rule 65 Security, And Failing To Find That Decca USA Has Continuously Deprived Plasman Of Statutorily Protected Member-Manager Rights?
VI. Whether The Trial Court Erred By Failing To Find That Decca USA Failed To Perform Material Terms Of The Preliminary Injunction Thereby Rendering The Injunction Unenforceable?
VII. Whether The Trial Court Erred In Requiring The Appellants To Pay Interest While Appellants Waited On Clarification Of The Court's Order?
VIII. Whether The Trial Court Erred In Considering Jointly Titled Assets And IRAs Exempt From Collection To Determine Appellants Ability To Comply With Order?
(All Caps Omitted).
Issue I has already been addressed and resolved in Section II above. After a careful review of the Plasmans' principal brief, we conclude that Issues IV, V, and VII have not been properly argued or presented. As a result, those arguments are deemed abandoned. See N.C. R. App. P. 28(b)(6) ("Issues not presented in a party's brief, or in support of which no reason or argument is stated, will be taken as abandoned."). Issues II, III, VI, and VIII have been specifically argued on appeal, and each issue is addressed below.
IV. Discussion of the Contempt Order's Merits
A. Appellate Jurisdiction
The Contempt Order is interlocutory, as it did not resolve all matters before the trial court in this case.
See
Veazey
,
B. Standard of Review and Generally Applicable Law
"In contempt proceedings[,] the judge's findings of fact are conclusive on appeal when supported by any competent evidence and are reviewable only for the purpose of passing on their sufficiency to warrant the judgment."
Clark v. Clark
,
N.C. Gen. Stat. § 5A-21(a) (2015) provides:
Failure to comply with an order of a court is a continuing civil contempt as long as:
(1) The order remains in force;
(2) The purpose of the order may still be served by compliance with the order;
(2a) The noncompliance by the person to whom the order is directed is willful; and
(3) The person to whom the order is directed is able to comply with the order or is able to take reasonable measures that would enable the person to comply with the order.
Civil contempt is designed to coerce compliance with a court order.
Adkins v. Adkins
,
*502 *773 C. Whether The Order's Purpose May Be Served By Compliance
The Plasmans argue that the purpose of the 26 May Order can no longer be served by requiring them to return to Decca USA the funds they diverted from Bolier after their terminations took effect. In making this argument, the Plasmans assert that the 26 May Order "erroneously and impermissibly awarded damages, not a fine permitted by contempt[.]" The Plasmans also contend that the payment of money was not necessary to avoid irreparable harm to Decca USA, i.e., "[t]here is no evidence that [Decca] USA needed [the] purported ... 'diverted money' to preserve [its] majority control of Bolier." These arguments are wholly lacking in merit.
Whether the issuance of the injunction was necessary to avoid irreparable harm to Decca USA was an issue ripe for Judge Voorhees' consideration in federal court.
See
Pashby v. Delia
,
Our review of the record reveals that the Plasmans have yet to return the diverted funds. We need say little more than that the purpose of the 26 May Order-to enforce compliance with the injunction's terms, including the requirement that funds diverted from Bolier's bank accounts be returned to Decca USA-could still be served by compliance with the 26 May Order. To address the Plasmans' arguments any further would permit them to mount an impermissible collateral attack on the underlying injunction. We refuse, as did the
Bolier I
Court, to "enable [the Plasmans] to achieve a 'back door' appeal of Judge Voorhees' Order well over three years after its entry."
D. Willful Noncompliance
The Plasmans next argue that Judge Bledsoe erroneously found that their noncompliance with the 26 May Order was willfill. Curiously,
*503
the Plasmans assert that the time frame in which they could appeal the injunction was tolled by the subsequent motions for modification and clarification, a contention that the
Bolier I
Court squarely rejected.
See
Bolier I
, --- N.C. App. at ----,
As an initial matter, we have already concluded above that the trial court did have jurisdiction to enter the Contempt Order. Furthermore, the record supports Judge Bledsoe's finding that the Plasmans were in willfill noncompliance of the 26 May Order at the time the Contempt Order was entered.
" 'Willful' has been defined as disobedience which imports knowledge and a stubborn resistance, and as something more than an intention to do a thing. It implies doing the act purposely and deliberately, indicating a purpose to do it, without authority-careless whether [the contemnor] has the right or not-in violation of law[.]"
Hancock v. Hancock
,
*774
Forte v. Forte
,
In the present case, Judge Bledsoe made the following findings:
{17} ... In the P.I. Order, the Federal Court first ordered the Plasmans to return to Decca USA's Bank of America lockbox all of Bolier & Co.'s monies, including but not limited to customer payments, diverted to them.... This requirement arose out of the Plasmans' purported removal of Bolier funds from Decca USA accounts between the date of their employment termination on October 19, 2012 and the date when they were finally locked out of Bolier's premises on January 14, 2013. The Plasmans used these *504 funds to pay their purported wages, expenses, and attorney's fees after their employment was terminated.
{18} The Plasmans did not return the funds as ordered by the Federal Court, and after the matter was remanded to this Court, the Court, in its May 26 Order, granted Decca USA's Motion to Enforce [the Federal Court's P.I.] Order....
{19} The Plasmans have not yet returned to Decca USA the diverted funds. The Plasmans never appealed the Federal Court P.I. Order and only filed a response to [the] Court Order seeking clarification as to the order to repay diverted funds. The Federal Court did not respond to the Plasmans' Response prior to remand. On June 25, 2015, the Plasmans filed a Notice of Appeal of this Court's May 26 Order, including the portions of the Order enforcing the Federal Court P.I. Order's requirement that the Plasmans return the diverted funds.
{20} This Court subsequently concluded that because the May 26 Order "simply ordered [the] Plasmans to comply with the never-appealed, legally valid and binding, 2013 P.I. Order," the appeal of the May 26 Order was interlocutory, did not affect a substantial right, and therefore did not stay the case....
{21} After this Court concluded that the case was not stayed, the Plasmans continued not to comply with the May 26 Order and again filed a motion to clarify this Court's holding. The Court again affirmed its conclusion that the appeal of the May 26 Order did not stay the case or affect a substantial right.... The Plasmans have continued to refuse to comply with the May 26 Order's directive to return the diverted funds.
{22} After the Court issued the Show Cause Order, the Plasmans, rather than complying with the Show Cause Order's instruction to submit evidence for in camera review or making a good faith effort to seek clarification, submitted, only minutes before the filing deadline, a document entitled Objections to Show Cause Production, Notice of Conditional Intent to Comply with Show Cause, and Request for Clarification ("Request"). The Court found *505 that filing to be "procedurally improper, substantively without merit, and completely baseless as a purported excuse [not] to comply with the clear terms of the Court's Show Cause Order...."
{23} While the May 26 Order found that the Plasmans' response to the Federal Court's P.I. Order reflected "a genuine dispute (or at least the Plasmans' genuine confusion) concerning [their obligations]," ... the Court finds that the Plasmans' belabored and continuing refusal to return the diverted funds in the face of this Court's repeated directives to do so reflects "knowledge and stubborn resistance" to the May 26 Order. The Court also finds that the Plasmans have acted with a "bad faith disregard for authority and the law" by improperly seeking to reargue the merits of the May 26 Order in this Court and the Court's conclusion that the matter is not stayed pending appeal. The Court therefore finds that the Plasmans are in willful noncompliance of the May 26 Order .
(Emphasis added and internal citations omitted).
*775
As summarized above, the Plasmans did not comply with the injunction's terms. Although the 26 May Order enforced the injunction and identified the exact amount of funds to be returned-$62,192.15 plus applicable interest-the Plasmans repeatedly filed motions in the Business Court that sought clarification of what was already clear: they were required to return the diverted funds to Decca USA. The Plasmans also stubbornly refused to accept Judge Bledsoe's conclusions that the appeal from the 26 May Order did not divest the Business Court's jurisdiction over the case, and that the trial level proceedings would not be stayed. The record is replete with instances in which the Plasmans acted with "knowledge" of and "stubborn resistance" to the 26 May Order's clear directives.
Hancock
,
E. Decca USA's Purported Noncompliance with the Injunction and 26 May Order
The Plasmans also argue that the injunction and the 26 May Order are no longer enforceable because Decca USA has refused to comply with both orders' requirement that the Plasmans be provided with certain information concerning Bolier's operations. We disagree.
*506 In making this argument, the Plasmans simply complain about relief they have not obtained from Judge Bledsoe regarding disputes outside the scope of this appeal. According to the Plasmans, "Judge Bledsoe has repeatedly failed to find that [Decca USA] has not provided [Chris] Plasman with the information or access to Bolier. To the contrary, Judge Bledsoe has repeatedly stayed discovery, refused to compel [Decca USA] to provide information." The Plasmans also argue that the Business Court was required to "issue [an] adequate [ Rule 65 ] security bond" before the injunction could be enforced.
The gravamen of these contentions is that the 26 May Order lacked essential findings and was erroneous. Even assuming that Judge Bledsoe should have made certain findings concerning Decca USA's compliance with the injunction, those findings would be immaterial to a determination of whether the Plasmans had complied with
their own
obligations under the injunction. Furthermore, "[a]n erroneous order is one 'rendered according to the course and practice of the court, but contrary to law, or upon a mistaken view of the law, or upon an erroneous application of legal principles.' "
Daniels v. Montgomery Mut. Ins. Co.
,
F. The Plasmans' Ability To Comply With The 26 May Order
Finally, the Plasmans argue that Judge Bledsoe improperly considered their jointly-held bank accounts and their individually-held investment retirement accounts (IRAs) in assessing the Plasmans' present ability to comply with the 26 May Order. Once again, we disagree.
"In determining a contemnor's present ability to pay, the appellate courts of this state have directed trial courts to 'take an inventory of the property of the plaintiff; find what are his assets and liabilities and his ability to pay and work-an inventory of his financial condition.' "
Gordon v. Gordon
,
The Plasmans rely exclusively on
Spears v. Spears
, --- N.C. App. ----,
Spears has no application here, for the protections afforded real property held by spouses as tenants by the entirety do not apply in this instance. Therefore, the jointly-held bank accounts at issue were properly considered in Judge Bledsoe's evaluation of the Plasmans' ability to comply.
We reach the same conclusion concerning the individual IRAs held by the Plasmans. Indeed, this Court has previously held that a trial court properly considered funds in a defendant's retirement account in determining that the defendant had the present ability to pay alimony arrears and purge himself of civil contempt.
Tucker v. Tucker
,
V. Conclusion
For the reasons stated above, we conclude that the trial court had jurisdiction to hold the Plasmans in civil contempt, and that the Contempt Order should be affirmed in its entirety.
AFFIRMED.
Judges BRYANT and INMAN concur.
N.C. Gen. Stat. § 7A-27(a)(3) (2015) provides for direct appeal to the North Carolina Supreme Court from certain interlocutory orders entered by a Business Court Judge in an action designated as a mandatory complex business case on or after 1 October 2014. See N.C. Sess. Law 2014-102, § 9 ("Section 1 of this act becomes effective October 1, 2014, and applies to actions designated as mandatory complex business cases on or after that date."). Because this action was designated as a mandatory complex business case before 1 October 2014, the appeal is properly before this Court.
We also note that, pursuant to the 26 May Order, Judge Bledsoe dismissed claims that were purportedly brought directly in Bolier's name. Judge Bledsoe found that, as a 45% owner of Bolier, Plasman was "not authorized to bring direct claims in Bolier's name, and must instead bring such claims, if at all, as derivative claims on Bolier's behalf as one of its members."
The Supreme Court has yet to create exceptions to the general rule codified at section 1-294.
Immediate review of interlocutory orders is also available when the trial court certifies, pursuant to Rule 54(b) of the North Carolina Rules of Civil Procedure, that there is no just reason to delay appeal of its order or judgment.
Sharpe v. Worland
,
Reference
- Full Case Name
- Christian G. PLASMAN, in His Individual Capacity and Derivatively for the Benefit Of, on Behalf of and Right of Nominal Party Bolier & Company, LLC, Plaintiffs, v. DECCA FURNITURE (USA), INC., Decca Contract Furniture, LLC, Richard Herbst, Wai Theng Tin, Tsang C. Hung, Decca Furniture, Ltd., Decca Hospitality Furnishings, LLC, Dongguan Decca Furniture Co., Ltd., Darren Hudgins, Decca Home, LLC, and Elan by Decca, LLC, Defendants, and Bolier & Company, LLC, Nominal Defendant, v. Christian J. Plasman A/K/A Barrett Plasman, Third-Party Defendant.
- Cited By
- 8 cases
- Status
- Published
- Syllabus
- Mandatory Complex Business Case, Preliminary Injunction, Order directing Party to Comply with Injunction, Effect of Pending Interlocutory appeal on Trial Court's Continuing Jurisdiction Over an Action, Civil Comtempt