SED Holdings, LLC v. 3 Star Props. , 250 N.C. App. 215 ( 2016 )


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  •              IN THE COURT OF APPEALS OF NORTH CAROLINA
    No. COA16-385
    Filed: 1 November 2016
    Durham County, No. 14 CVS 5766
    SED HOLDINGS, LLC, Plaintiff,
    v.
    3 STAR PROPERTIES, LLC, JAMES JOHNSON, TMPS LLC, MARK HYLAND,
    AND HOME SERVICING, LLC, Defendants.
    Appeal by defendants from orders entered between 24 September 2015 and 5
    January 2016 by Judge G. Wayne Abernathy in Durham County Superior Court.
    Heard in the Court of Appeals 21 September 2016.
    Graebe Hanna & Sullivan, PLLC, by Douglas W. Hanna, for plaintiff-appellee.
    Law Offices of Hayes Hofler, P.A., by R. Hayes Hofler, III, for defendants-
    appellants.
    ZACHARY, Judge.
    Generally, when a party gives notice of appeal from a trial court order, that
    appeal deprives the trial court of jurisdiction to proceed on any matter embraced by
    the challenged order. But this general rule is subject to exceptions, one of which
    applies in the instant case. Here, a preliminary injunction was granted against
    defendants, and they appealed that interlocutory order to this Court. While the
    appeal was pending, the trial court held contempt proceedings and entered several
    show cause orders to enforce the terms of its injunction. The trial court ultimately
    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    held defendants in civil contempt. After determining that the injunction was subject
    to immediate review, this Court held that the injunction order was properly entered.
    Defendants now appeal the entry of the contempt orders, and they argue that their
    notice of appeal from the injunction deprived the trial court of jurisdiction, rendering
    the contempt orders null and void. For the reasons that follow, we conclude that the
    trial court retained jurisdiction to enter contempt orders pending defendants’ first
    appeal and, accordingly, we affirm the entry of those orders.
    I. Background
    The factual genesis of this case was the execution of a “Non-Performing Note
    and Mortgage Loan Sale Agreement” (Agreement) between plaintiff SED Holdings,
    LLC (SED) and defendant 3 Star Properties, LLC (3 Star). Both SED and 3 Star are
    in the business of buying and selling pools of residential mortgage loans. Defendant
    Mark Hyland (Hyland) is the managing member of defendant TMPS LLC (TMPS), a
    Texas-based limited liability company. 3 Star had previously purchased the loan pool
    at issue in this case from TMPS. Defendant James Johnson is a managing member
    of 3 Star, and he negotiated the terms of the Agreement with SED.
    Pursuant to the Agreement, which was executed on 20 June 2014, SED agreed
    to purchase 1,235 mortgages—with a total outstanding value of $71,180,364.00—
    from 3 Star for $13,880,171.00. SED agreed to pay $2,000,000.001 of the purchase
    1   $300,000.00 of the initial payment was the earnest money deposit.
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    price in cash at closing, and to pay the remaining principal balance of $11,880,171.00
    pursuant to the terms of a promissory note (the Note). A Security Agreement was
    also executed by the parties. The Agreement required SED to use the following third
    parties to hold, inspect, cure, and process the loans until the Note was paid off: (1)
    Brown and Associates, a Texas law firm, acted as custodian of the records; and (2)
    defendant Home Servicing, LLC (Home Servicing) was responsible for servicing the
    loan files.   This requirement stemmed from Hyland and TMPS’s pre-existing
    relationship with Brown & Associates and Home Servicing.
    The Agreement also contained a “put back” provision that allowed SED to
    return to 3 Star any loan or asset that either suffered from an “incurable documentary
    defect” or was unsecured by a valid first mortgage. The put back provision had to be
    invoked within 45 days of closing. Critically, the Security Agreement provided that
    if SED defaulted on the terms of the sale, 3 Star had the right to take possession of
    all assets and attempt to sell them on behalf of SED.
    Problems arose after SED inspected the mortgage pool in July 2014. According
    to SED, the entire deal rested on certain representations made by Johnson and 3
    Star, most notably that each mortgage was secured by real property and that 3 Star
    owned all loans contained in the pool. Taking the position that these representations
    were materially false, SED claimed that 3 Star owned only a few of the loans, many
    of which were unsecured and essentially worthless. SED attempted to return 605
    loans for a refund, but 3 Star did not respond to the “put back” notice.
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    Instead, 3 Star claimed that SED had defaulted on the Agreement’s terms and
    had not made a good-faith attempt to sell the non-performing mortgages it acquired
    from 3 Star. As a result, 3 Star served SED with a notice of default on 17 October
    2014 and expressed an intention to exercise its right to sell assets from the loan pool
    on behalf of SED. In response, SED filed a verified complaint2 against defendants in
    Durham County Superior Court on 1 December 2014. The complaint alleged claims
    for, inter alia, breach of contract, fraud, negligent misrepresentation, and civil
    conspiracy, and also contained a motion asking for preliminary injunctive relief.
    Defendants then filed a motion to dismiss the complaint for lack of subject matter
    jurisdiction and improper venue based on a forum selection clause in the Security
    Agreement and a choice of law provision in the Agreement, which provided,
    respectively, that any actions would be filed in Harris County, Texas, and that Texas
    law would govern.
    After the trial court heard defendants’ motion to dismiss and SED’s motion for
    injunctive relief, it entered two orders on 13 February 2015. One order denied
    defendants’ motion to dismiss, and the other order granted SED’s motion for
    injunctive relief. The injunction prohibited defendants from “selling . . . or otherwise
    making any dispositions of any of the loans sold to SED[,]” and it instructed
    defendants to place any monies they collected from transactions related to the loan
    2
    We note that the essence of the complaint was that defendants acted in concert to defraud
    SED under the Agreement.
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    sale in escrow pending the case’s resolution.            SED was instructed to post a
    $100,000.00 bond to protect and secure defendants’ rights. On 19 February 2015,
    defendants gave notice of appeal from both of the trial court’s orders. See SED
    Holdings, LLC v. 3 Star Properties, LLC, __ N.C. App. __, 
    784 S.E.2d 627
    (2016) (“SED
    I”).
    Although the denial of defendants’ motion to dismiss and the granting of SED’s
    motion for a preliminary injunction were interlocutory orders, this Court addressed
    the merits of defendants’ arguments concerning each order. Id. at __, 784 S.E.2d at
    630-31. Because the preliminary injunction froze monies related to the mortgage pool
    sale, the SED I Court held that it affected defendants’ substantial “right to use and
    control [their] assets.” Id. at __, 784 S.E.2d at 630. However, the trial court’s
    injunction was ultimately upheld. Id. at __, 784 S.E.2d at 632. This Court’s mandate
    in SED I was issued on 25 April 2016.
    While the appeal in SED I was pending, the trial court conducted a series of
    contempt proceedings and issued several orders (“the contempt orders”) between
    September 2015 and January 2016. Those proceedings were prompted by SED’s
    motion to show cause why defendants should not be held in civil contempt for failure
    to comply with the injunction. SED’s motion to show cause contained allegations that
    defendants had violated the injunction by selling loans related to the Agreement and
    disbursing funds that were required to be held in escrow. On 24 September 2015, the
    trial court entered an order that commanded defendants to show cause why they
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    should not be held in civil contempt. The show cause order contained the following
    pertinent findings of fact:
    12. On . . . 28 [July] 2015, SED sent an email to Home
    Servicing . . . requesting the following information on the
    assets: (1) Payoff date; (2) Next due date; (3) Acquired
    UPB; (4) Beginning UPB; and (5) Ending UPB. This
    information is necessary in order to properly market the
    assets and obtain the maximum value in a potential sale. .
    ..
    13. The affidavit submitted by SED, and the evidence
    attached to the Motion to Show Cause, support the fact
    that Home Servicing . . . refused to provide the requested
    information based on instructions given to it by
    [d]efendants 3 Star, Johnson, TMPS[,] . . . and . . . Hyland.
    ...
    14. The affidavit submitted by SED, and the evidence
    attached to the Motion to Show Cause, support the fact
    that . . . Home Servicing . . . has refused to provide a
    disclosure of all monies [it has] collected . . . and/or held in
    escrow regarding the assets at issue.
    Based on these findings, the trial court concluded as a matter of law that: (1) the
    injunction did not affect a substantial right of defendants and was thus not
    immediately appealable, and (2) the trial court retained jurisdiction to enforce the
    terms of its injunction while defendants’ appeal was pending in this Court. The
    parties eventually agreed to a consent order that required Home Servicing to produce
    servicing data on the loan pool; however, the information that was produced indicated
    that loans covered by the injunction had been sold and that Home Servicing had failed
    to deposit service fees it collected from those transactions in escrow. Consequently,
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    the trial court entered additional show cause orders to enforce the injunction. The
    trial court ultimately entered a 5 January 2016 order that held defendants in civil
    contempt. Defendants now appeal the entry of the contempt orders.
    II. Standard of Review
    Appellate review of a contempt order is ordinarily “limited to determining
    whether there is competent evidence to support the findings of fact and whether the
    findings support the conclusions of law.” Middleton v. Middleton, 
    159 N.C. App. 224
    ,
    226, 
    583 S.E.2d 48
    , 49 (2003) (citation omitted). Yet in this case, defendants do not
    directly attack the contempt orders; instead, they challenge the trial court’s subject
    matter jurisdiction to enter those orders. “The standard of review for lack of subject
    matter jurisdiction is de novo.” Keith v. Wallerich, 
    201 N.C. App. 550
    , 554, 
    687 S.E.2d 299
    , 302 (2009) (citation omitted).
    III. Analysis
    Defendants’ sole argument on appeal is that that the trial court lacked
    jurisdiction to enter any of its contempt orders. According to defendants, the trial
    court had no jurisdiction over the case following their 19 February 2015 notice of
    appeal from the injunction. The gravamen of defendants’ argument is that the orders
    entered while the appeal was pending are nullities and should be vacated. We
    disagree.
    The longstanding, general rule in North Carolina is that when a party gives
    notice of appeal, the trial court is divested of jurisdiction until the appellate court
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    returns a mandate in the case. E.g., Lowder v. All Star Mills, Inc., 
    301 N.C. 561
    , 580,
    
    273 S.E.2d 247
    , 258 (1981) (“The well-established rule of law is that ‘an appeal from
    a judgment rendered in the Superior Court suspends all further proceedings in the
    cause in that court, pending the appeal.’ ”) (quoting Harris v. Fairley, 
    232 N.C. 555
    ,
    556, 
    61 S.E.2d 619
    , 620 (1950)); Hoke v. Atl. Greyhound Corp., 
    227 N.C. 374
    , 375, 
    42 S.E.2d 407
    , 408 (1947). To that end, our General Assembly has provided that an
    appeal from a trial court order or judgment automatically “stays all further
    proceedings in the court below upon the judgment appealed from, or upon the matter
    embraced therein[.]” N.C. Gen. Stat. § 1-294 (2015). Pending the appeal, the trial
    judge is generally functus officio, France v. France, 
    209 N.C. App. 406
    , 410, 
    705 S.E.2d 399
    , 404 (2011), Latin for “having performed his or her office,” which is defined
    as being “without further authority or legal competence because the duties and
    functions of the original commission have been fully accomplished.” Black’s Law
    Dictionary 743 (9th ed. 2009). The principle behind the common law doctrine of
    functus officio, which safeguards the rule codified in section 1-294, “stems from the
    general rule that two courts cannot ordinarily have jurisdiction of the same case at
    the same time.” RPR & Assocs., Inc. v. Univ. of N. Carolina-Chapel Hill, 153 N.C.
    App. 342, 347, 
    570 S.E.2d 510
    , 513 (2002), cert. denied and disc. review denied, 
    357 N.C. 166
    , 
    579 S.E.2d 882
    (2003).
    Even so, the rule codified at section 1-294 and, by extension, the functus officio
    doctrine, are not without exceptions. For instance, even when a party has noted an
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    appeal, the trial court “retains jurisdiction to take action which aids the appeal, . . .
    and to hear motions and grant orders,” when those matters are “ ‘not affected by the
    judgment appealed from.’ ” Faulkenbury v. Teachers’ & State Employees’ Ret. Sys. of
    N. Carolina, 
    108 N.C. App. 357
    , 364, 
    424 S.E.2d 420
    , 422 (quoting N.C. Gen. Stat. §
    1-294), aff’d per curiam, 
    335 N.C. 158
    , 
    436 S.E.2d 821
    (1993).          Section 1-294’s
    automatic stay is easily applied in the context of a final judgment, “one which disposes
    of the cause as to all the parties, leaving nothing to be judicially determined between
    them in the trial court.” Veazey v. City of Durham, 
    231 N.C. 357
    , 361-62, 
    57 S.E.2d 377
    , 381 (1950). A final judgment “is always appealable,” for the trial court has
    completed its duties. Embler v. Embler, 
    143 N.C. App. 162
    , 164, 
    545 S.E.2d 259
    , 261
    (2001). Yet an interlocutory order, one that “does not dispose of the case, but leaves
    it for further action by the trial court in order to settle and determine the entire
    controversy[,]” is generally not appealable. 
    Veazey, 231 N.C. at 362
    , 57 S.E.2d at 381.
    North Carolina law therefore recognizes that merely giving notice of appeal from an
    interlocutory order does not automatically deprive the trial court of jurisdiction.
    Instead, the scope of a trial court’s continuing jurisdiction—if jurisdiction continues
    at all—largely depends upon whether the interlocutory order being challenged is
    eligible for immediate review.
    If a party appeals from an interlocutory order that is immediately appealable,
    the trial court’s jurisdiction is removed and it may not proceed on any matters
    embraced by the order. Patrick v. Hurdle, 
    7 N.C. App. 44
    , 45, 
    171 S.E.2d 58
    , 59
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    (1969); see also N.C. Gen. Stat. § 1-294. “Where a party appeals from a nonappealable
    interlocutory order, however, such appeal does not deprive the trial court of
    jurisdiction and thus the court may properly proceed with the case.” RPR & 
    Assocs., 153 N.C. App. at 347
    , 570 S.E.2d at 514 (citation omitted). The latter rule serves to
    prevent litigants from delaying “the administration of justice [by] bringing cases to
    an appellate court piecemeal through the medium of successive appeals from
    intermediate orders.” 
    Veazey, 231 N.C. at 363
    , 57 S.E.2d at 382.
    Immediate review is available where an interlocutory order “affects a
    substantial right that ‘will clearly be lost or irremediably adversely affected if the
    order is not review[ed] before final judgment.’ ” Edmondson v. Macclesfield L-P Gas
    Co., 
    182 N.C. App. 381
    , 391, 
    642 S.E.2d 265
    , 272 (2007) (quoting Blackwelder v. Dept.
    of Human Res., 
    60 N.C. App. 331
    , 335, 
    299 S.E.2d 777
    , 780 (1983)); see also N.C. Gen.
    Stat. § 1-277(a) (2015) (“An appeal may be taken from every judicial order or
    determination of a [trial] judge . . . which affects a substantial right claimed in any
    action or proceeding[.]”); N.C. Gen. Stat. § 7A-27(b)(3) (2015) (providing a right of
    appeal from any interlocutory order that, inter alia, affects a substantial right). As
    our Supreme Court has acknowledged, this determination must be made on a case-
    by-case basis: “[T]he ‘substantial right’ test for appealability of interlocutory orders
    is more easily stated than applied. It is usually necessary to resolve the question in
    each case by considering the particular facts of that case and the procedural context
    in which the order from which appeal is sought was entered.” Waters v. Qualified
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    Pers., Inc., 
    294 N.C. 200
    , 208, 
    240 S.E.2d 338
    , 343 (1978). Despite the muddy waters
    of the substantial right test, it is clear that a trial court need not await the appellate
    court’s decision as to whether an appeal has been attempted from a nonappealable
    interlocutory order. Indeed, because “a litigant cannot deprive the trial court of
    jurisdiction to determine a case on its merits by appealing from a nonappealable
    interlocutory order[,]” Velez v. Dick Keffer Pontiac-GMC Truck, Inc., 144 N.C App.
    589, 591, 
    551 S.E.2d 873
    , 875 (2001), “[t]he trial court has the authority . . . to
    determine whether or not its order affects a substantial right of the parties or is
    otherwise immediately appealable.” RPR & 
    Assocs., 153 N.C. App. at 348
    , 570 S.E.2d
    at 514 (citations omitted).
    In the instant case, the trial court determined that its injunction did not affect
    a substantial right and thus was not immediately appealable. As a result, the court
    found that it retained jurisdiction to hold contempt proceedings and enforce its
    injunction order. SED contends that the facts related to jurisdiction in RPR Assocs.
    are indistinguishable from those in the present case. After careful review, we agree.
    In RPR Assocs., the defendant appealed from an interlocutory order denying
    its motion to dismiss based on sovereign 
    immunity. 153 N.C. App. at 344
    , 570 S.E.2d
    at 512. Despite the appeal, the plaintiff continued to pursue its claims at the trial
    level and argued that the interlocutory order was not immediately appealable. 
    Id. at 344-45,
    570 S.E.2d at 512. In response, the defendant moved the trial court on two
    occasions to stay proceedings pending the appeal, but both motions were denied. 
    Id. - 11
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
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    at 
    345, 570 S.E.2d at 512-13
    . This Court initially granted the defendant’s motion for
    a temporary stay pending the appeal and then later dissolved it. 
    Id. at 345,
    570
    S.E.2d at 512. Our Supreme Court also denied the defendants’ petitions for certain
    extraordinary writs. 
    Id. Upon consideration
    of the defendant’s appeal from the denial of its motion to
    dismiss, this Court determined that the interlocutory order affected a substantial
    right, but ultimately held that the motion to dismiss was properly denied because
    sovereign immunity had been waived. RPR & Assocs. v. State, 
    139 N.C. App. 525
    ,
    527, 
    534 S.E.2d 247
    , 250 (2000), affirmed per curiam, 
    353 N.C. 362
    , 
    543 S.E.2d 480
    (2001) (“RPR I”). However, after the interlocutory appeal was heard by this Court in
    RPR I, but before the decision was filed, the trial court proceeded to the case’s merits,
    heard evidence, and entered a final judgment. RPR & 
    Assocs., 153 N.C. App. at 346
    ,
    570 S.E.2d at 513. Both parties appealed from that judgment, and the defendant
    argued that the trial court’s jurisdiction over the case was terminated once the
    defendant’s interlocutory notice of appeal was entered in RPR I. 
    Id. After explaining
    that the functus officio doctrine does not apply to nonappealable interlocutory orders,
    this Court rejected the defendant’s argument, reasoning that
    [b]ecause the trial court had the authority to determine
    whether its order affected [the] defendant’s substantial
    rights or was otherwise immediately appealable, the trial
    court did not err in continuing to exercise jurisdiction over
    this case after [the] defendant filed its notice of appeal. The
    trial court’s determination that the order was
    nonappealable was reasonable in light of established
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    precedent and the repeated denials by the appellate courts
    of this State to stay proceedings. Although this Court
    ultimately held that [the] defendant’s appeal affected a
    substantial right, it also held that defendant was not
    immune to suit. [The d]efendant states no grounds, nor
    has it produced any evidence to demonstrate how it was
    prejudiced by the trial court’s exercise of jurisdiction over
    this case.
    
    Id. at 349,
    570 S.E.2d at 515.
    At 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.
    Given this backdrop, we conclude that both the procedural posture of this case,
    and the jurisdictional issues it presents, are substantially similar to the situation in
    RPR & Assocs. Defendants filed notice of appeal on 19 February 2015 from the trial
    court’s order granting SED’s motion for preliminary injunctive relief. Meanwhile, the
    trial court proceeded with contempt proceedings to enforce the order. As with the
    motion to dismiss based upon sovereign immunity in RPR & Assocs., this Court held
    that defendants’ interlocutory appeal of the injunction affected a substantial right
    and was immediately appealable. SED I, __ N.C. App. ___, 784 S.E.2d at 630. But
    “such a holding was not a foregone conclusion.” RPR & 
    Assocs., 153 N.C. App. at 348
    ,
    570 S.E.2d at 514.
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
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    It is clear that injunctive orders entered only to maintain the status quo
    pending trial are not immediately appealable. Barnes v. St. Rose Church of Christ,
    Disciples of Christ, 
    160 N.C. App. 590
    , 592, 
    586 S.E.2d 548
    , 550 (2003); Stancil v.
    Stancil, 
    94 N.C. App. 760
    , 763-64, 
    381 S.E.2d 720
    , 722-23 (1989); Dixon v. Dixon, 
    62 N.C. App. 744
    , 745, 
    303 S.E.2d 606
    , 607 (1983). 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.
    In Barnes, after the plaintiff alleged that a pastor had improperly converted
    the legal status of a church from an unincorporated religious association to a non-
    profit corporation and breached his fiduciary duties by transferring the church’s
    assets to corporate accounts, the trial court enjoined the transfer of assets and
    appointed a receiver to manage the church’s finances and assets pending a resolution
    on the 
    merits. 160 N.C. App. at 591
    , 586 S.E.2d at 549. On appeal, the defendants
    argued that the injunction and appointment of a receiver prevented the church from
    conducting its own business. 
    Id. at 592,
    586 S.E.2d at 550. This Court disagreed,
    noting that because the injunctive relief did not halt the church’s day-to-day
    operations and was designed to maintain the status quo of the church’s finances
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
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    during the litigation, no substantial right had been affected, and thus the challenged
    orders were not immediately appealable. 
    Id. By contrast,
    in Scottish Re Life Corp. v. Transamerica Occidental Life Ins. Co.,
    which involved a high-stakes dispute over reinsurance contracts, the preliminary
    injunction was subject to immediate review: “Given the large amount of money at
    issue in this case [($30,000,000.00)], the fact that the trial court impinged appellant’s
    right to the use and control of those assets, and the unavoidable and lengthy delays
    [of planned arbitration proceedings in the matter,] . . . we hold that appellant must
    be granted its appeal to preserve a substantial right.” 
    184 N.C. App. 292
    , 294-95, 
    647 S.E.2d 102
    , 104 (2007).
    Here, the trial court adopted Barnes’ reasoning to support its determination
    that the preliminary injunction was not immediately appealable, while this Court in
    SED I cited Scottish Re Life Corp. to support its determination that the preliminary
    injunction was immediately appealable. SED I, __ N.C. App. __,784 S.E.2d at 630.
    The decisions in Barnes and Scottish Re Life Corp. underscore the fact that there are
    “[n]o hard and fast rules . . . for determining which appeals affect a substantial right.”
    Cagle v. Teachy, 
    111 N.C. App. 244
    , 246, 
    431 S.E.2d 801
    , 802 (1993). Furthermore,
    this Court clearly explained the injunction’s purpose in SED I:
    [SED] claims it would incur irreparable harm if
    [d]efendants were able to liquidate the monies or
    mortgages arising from the mortgage sale. Prohibiting
    [d]efendants from moving these assets for the pendency of
    litigation maintains the status quo and protects the
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    monetary and injunctive relief [SED] seeks. Moreover,
    [d]efendants’ rights are protected by the $100,000.00 bond
    posted by [SED].
    __ N.C. App. at __, 784 S.E.2d at 632.
    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.
    IV. Conclusion
    Given the particular facts at issue and the procedural context in which the
    contempt orders were entered, the trial court acted reasonably in continuing to
    exercise jurisdiction over the case while defendants’ appeal of the injunction was
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    SED HOLDINGS, LLC V. 3 STAR PROPERTIES, LLC
    Opinion of the Court
    pending in this Court. Furthermore, because the injunction was ultimately upheld,
    the contempt orders entered to enforce it did not prejudice defendants. Consequently,
    the trial court retained jurisdiction to enter the contempt orders and we affirm the
    entry of each order.
    AFFIRMED.
    Judges ELMORE and ENOCHS concur.
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