Crowell v. Crowell ( 2023 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA22-737
Filed 01 August 2023
Mecklenburg County, No. 14 CVD 002667
ANDREA CROWELL, Plaintiff,
v.
WILLIAM CROWELL, Defendant.
Appeal by Plaintiff from order entered 9 May 2022 by Judge Christy T. Mann
in Mecklenburg County District Court. Heard in the Court of Appeals 10 May 2023.
Law Office of Thomas D. Bumgardner, PLLC, by Thomas D. Bumgardner, and
Plumides, Romano & Johnson, PC, by Richard B. Johnson, for plaintiff-
appellant.
No brief filed for defendant-appellee.
MURPHY, Judge.
N.C.G.S. § 1-294 strips a trial court of subject matter jurisdiction to enter
further orders during the pendency of an appeal if the issues in the new order are
embraced by the order previously appealed from. Here, the trial court entered an
order granting a preliminary injunction on behalf of Defendant during the pendency
of a previous appeal that prevented Plaintiff from disposing of property.1 However,
1 On 6 June 2023, we resolved that appeal by partially vacating the trial court’s equitable
distribution judgment and order because the trial court improperly reduced the distributive award to
a money judgment. Crowell v. Crowell, COA22-111, __ N.C. App. __, 888 S.E.2d 227, 231. However,
we rejected Plaintiff’s argument that the award’s collateral effect on her separate property violated
the law of the case. Id. at 230.
CROWELL V. CROWELL
Opinion of the Court
the appropriateness of an order based on its collateral effect on that property was the
primary issue in the second appeal; thus, the current order contains issues embraced
by the order previously appealed from, and the trial court lacked subject matter
jurisdiction to enter it.
BACKGROUND
This is the third appeal in a protracted litigation involving the distribution of
marital debt between Plaintiff Andrea Crowell and Defendant William Crowell. The
bulk of the relevant facts were recounted in the previous appeal:
Plaintiff and Defendant were married on 11 July 1998,
separated on 3 September 2013, and divorced in April
2015. As of the date of separation, Plaintiff and Defendant
had incurred a significant amount of marital debt. On 17
February 2014, Plaintiff filed a complaint against
Defendant for equitable distribution, alimony, and
postseparation support. Defendant filed an answer to the
complaint and included a counterclaim for equitable
distribution.
From 6 July 2016 to 8 July 2016, the issues of equitable
distribution and alimony were tried in Mecklenburg
County District Court. The parties had stipulated in the
final pretrial order that 14212 Stewarts Bend Lane, 14228
Stewarts Bend Lane, and 14512 Myers Mill Lane were all
Plaintiff’s separate property, and the trial court distributed
the properties, along with their underlying debts, to
Plaintiff. The trial court also found the following:
As a result of this equitable distribution
Defendant[] will have more debt than
property and Plaintiff[] will have to liquidate
her property to pay the distributive award. . .
. Neither party has any liquid marital
property left. . . . There was no choice but to
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Opinion of the Court
distribute all the debts to Defendant[] in his
case which results in a heavy burden he may
never be able to pay before his death and a
distributive award owed by Plaintiff[] that
she may never be able to pay before her death.
On 15 August 2016, the trial court entered its equitable
distribution judgment and alimony order, denying alimony
and specifically ordering Plaintiff to liquidate 14212
Stewarts Bend Lane and 14228 Stewarts Bend Lane to
satisfy the distributive award to Defendant. On 14
September 2016, Plaintiff appealed from the equitable
distribution judgment and alimony order; and, on 2
January 2018, this Court issued a divided opinion. See
Crowell v. Crowell, 257 N.C. App. 264, 285 (2018). The
Majority opinion held, in relevant part, that the trial court
did not err by “considering” Plaintiff’s separate property
and ordering her to liquidate it to satisfy a distributive
award to Defendant. Id. However, on 16 August 2019, our
Supreme Court issued a unanimous opinion reversing this
Court’s affirmation of the equitable distribution judgment
and order and remanding with further orders to remand to
the trial court. Crowell v. Crowell, 372 N.C. 362, 368
(2019). The Court concluded that “the trial court
distributed separate property . . . when it ordered Plaintiff
to liquidate her separate property to pay a distributive
award” and that “there is no distinction to be made
between ‘considering’ and ‘distributing’ a party’s separate
property in making a distribution of marital property or
debt where the effect of the resulting order is to divest a
party of property rights she acquired before marriage.” Id.Our Supreme Court ultimately held the trial court could
not order Plaintiff to liquidate her separate property to
satisfy the distributive award because “trial courts are not
permitted to disturb rights in separate property in making
equitable distribution award orders.” Id. at 370.
Pursuant to our Supreme Court’s holding, the trial court
held a hearing on 10 February 2021; and, on 16 July 2021,
the trial court issued an Amended Equitable Distribution
Judgment and Alimony Order. The trial court concluded
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Opinion of the Court
“Plaintiff[] has the ability to pay the distributive award as
outlined herein[,]” incorporated the bulk of the 2016 order
by reference, and entered the following distribution order:
1. Paragraph 6 (a) – (d) of the Decretal Section
of the Original Order is hereby amended as
follows:
In order to accomplish the equitable
distribution, Plaintiff[] is required to pay a
distributive award of Eight Hundred Sixteen
Thousand Seven Hundred Ninety-Four
Dollars and no/100 ($816,794[.00]) to be paid
as follows:
a. A lump [sum] payment of Ninety
Thousand Dollars and no/100
($90,000[.00]) within sixty (60) days from
[10 February 2021].
b. A second lump [sum] payment of One
Hundred Thousand Dollars and no/100
($100,000[.00]) within ninety (90) days of
[20 February 2021].
c. A third lump [sum] payment of Two
Hundred Ten Thousand Dollars and no/100
($210,000[.00]) on or before [10 February
2022].
d. The balance of Four Hundred Twenty-
Four Thousand Two Hundred Ninety-Four
Dollars and no/100 ([$424,294.00]) owed is
reduced to judgment and shall be taxed
with post judgment interest and collected
in accordance with North Carolina law.
2. Except as specifically modified herein, the
parties’ separate property, marital property,
and divisible property shall remain as it was
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previously classified, valued, and distributed
in the [15 August 2016 order].
3. Except as specifically modified herein, the
[15 August 2016 order] shall remain in full
force and effect.
(Marks omitted.) Plaintiff timely appealed.
Crowell v. Crowell, COA22-111, __ N.C. App. __, 2023 WL 3829196, *1-2
(unpublished).
On 3 November 2021, during the pendency of the second appeal, Defendant
filed a motion to enjoin Plaintiff from hiding or disposing of property which, if
relinquished, would prevent her from complying with her obligations under the trial
court’s Amended Equitable Distribution Judgment and Alimony Order. In an order
entered the same day, the trial court granted the motion, making, inter alia, the
following findings of fact:
12. On June 25, 2021, Plaintiff[] sold the 14212 Stewarts
Bend [Lane] property for approximately $600,000.[00.]
13. On July 16, 2021, this Court entered an [Amended
Equitable Distribution Judgment and Alimony Order].
Said order provided, in part, for Plaintiff[] to pay [the
amount specified above].
14. Despite having the cash to do so (after surreptitiously
selling the real property), Plaintiff[] has not made a single
payment owed to Defendant[.]
15. On August 13, 2021, Plaintiff[] filed a Notice of Appeal
to the Amended Order. This appeal has no legal merit and
was filed only to thwart [Defendant’s] ability to collect the
monies he has been rightfully owed for three (3) years.
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16. Plaintiff[] is strategically avoiding paying her
distributive award and is doing so in bad faith.
17. The Court has a legitimate concern that Plaintiff[] is
taking purposeful actions to make herself judgment proof
and that she intends to spend all of the Sales Proceeds from
the recent real property sale, that she intends to transfer,
sell, or otherwise dispose of CKE Properties, LLC or its
only asset, the Myers Mill House, for the purpose of
secreting any assets she may have available to pay the
distributive award outside of the reach of the Court and/or
Defendant[.]
18. To prevent irreparable harm to Defendant[] the Court
has the remedy pursuant to [N.C.G.S.] § lA-1, Rule 65 to
impose injunctive relief enjoining Plaintiff[] or anyone
acting on her behalf from wasting these assets by enjoining
Plaintiff[] and/or anyone acting on [her] behalf or at [her]
direction from liquidating, borrowing against, cashing out,
or absconding with the proceeds or ownership of received
from the sale of 14212 Stewart’s Bend Lane, CKE, or the
Myers Mill House.
19. To prevent irreparable harm to Defendant[,] the Court
has the remedy pursuant to [N.C.G.S.] § 1-440.1 to attach
all of Plaintiff[’s] assets pending Defendant[’s] execution on
the Amended Order.
20. Defendant[] has no adequate remedy at law to protect
himself from Plaintiff[’s] actions which will likely result in
the imminent waste of assets that are necessary to satisfy
Plaintiff[’s] obligations to Defendant[.] If Plaintiff[] is not
enjoined and/or her assets attached, she will likely be
judgment proof and outside of the jurisdictional reach of
the Court.
Based on these findings of fact, the trial court issued the following temporary
restraining order:
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1. The Motion in the Cause for Injunctive Relief
(Temporary Restraining Order/Preliminary
Injunction/Mandatory Injunction) is GRANTED;
2. Plaintiff[] or anyone or entity acting at her request, for
her, or in concert with her from liquidating, transferring,
leveraging, encumbering, selling, wasting, or otherwise
dissipating a) CKE Properties, LLC; b) the Myers Mill
House; and c) the Sales Proceeds from the sale of 14212
Stewart’s Bend Lane.
3. This Order Re: Injunctive Relief shall expire upon the
conclusion of a hearing commencing on [17 November]
2021 at 4:00 p.m. in Courtroom 8150.
4. At this day and time, Defendant[’s] request for
permanent injunctive relief, mandatory injunction, and
attachment shall be brought on for hearing.
5. No bond shall be required.
6. The findings of fact contained herein are for purposes of
this Order only and as required by Rule 65 of the North
Carolina Rules of Civil Procedure and are not intended to
be binding on the Court in any future proceeding.
After the 17 November 2021 hearing, the trial court orally continued the
injunction until further orders, and that continuance was reduced to a written order
on 6 May 2022. Plaintiff appealed.
ANALYSIS
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On appeal, Plaintiff attacks the validity of the injunction on a number of bases,
many of which have already been raised and resolved during prior appeals.2
However, she also challenges the injunction on the following unique bases: first, that
the trial court lacked jurisdiction to enter injunctive relief while the previous appeal
was pending; second, that the preliminary injunction was improperly initiated as an
independent cause of action; and, third, that the injunction was entered pursuant to
improper procedure. However, as the resolution of Plaintiff’s jurisdictional argument
renders her other two arguments moot, we reach only that issue.
“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.” Plasman v. Decca Furniture (USA), Inc., 253 N.C. App. 484, 491
(2017), disc. rev. denied, 371 N.C. 116 (2018); see also N.C.G.S. § 1-294 (2022) (“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; but the court
below may proceed upon any other matter included in the action and not affected by
the judgment appealed from.”). “This is [N.C.G.S. §] 1-294 in a nutshell, for the
statute itself draws a distinction between trial court’s inability to rule on matters
2 This most prominently includes her contention that the injunction violates the law of the
case and arguments derivative of that position appearing throughout her brief, which was a topic in
her second appeal. Crowell, 888 S.E.2d at 230.
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that are inseparable from the pending appeal and the court’s ability to proceed on
matters that are not affected by the pending appeal.” Plasman, 253 N.C. App. at 491
(marks omitted). When the trial court enters an order after an appeal is perfected,
whether the trial court retains subject matter jurisdiction to enter the new order
depends on whether the substantive issues in the new order “are embraced by the
order [previously] appealed.” Id.; see also Cox v. Dine-A Mate, Inc., 131 N.C. App.
542, 545 (1998) (examining the substantive issues in the order at issue in a previous
appeal for overlap with those in a later order allegedly entered without jurisdiction
under N.C.G.S. § 1-294). “Whether a trial court has subject-matter jurisdiction is a
question of law, reviewed de novo on appeal.” McKoy v. McKoy, 202 N.C. App. 509,
511 (2010).
In Romulus v. Romulus, 216 N.C. App. 28 (2011), we resolved an issue
regarding a similar operation of N.C.G.S. § 1-294. There, we held that a trial court
theoretically retains jurisdiction to enter orders securing the enforcement of an
equitable distribution judgment while an appeal is pending because, under N.C.G.S.
§ 1-289, the execution of an equitable distribution judgment is not stayed by the
perfection of an appeal. Id. at 37 (“[A]n equitable distribution distributive award is
theoretically a ‘judgment directing the payment of money’ which is enforceable during
the pendency of an appeal unless the appealing spouse posts a bond pursuant
to N.C.G.S. § 1–289[.]”); see also N.C.G.S. § 1-289 (“If the appeal is from a judgment
directing the payment of money, it does not stay the execution of the judgment unless
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a written undertaking is executed on the part of the appellant, by one or more
sureties, as set forth in this section.”). However, under the facts of that case, we
nonetheless held that the trial court was without subject matter jurisdiction to enter
a contempt order directing the payment of past-due amounts because the issue of
which amounts, if any, were due was embraced by the pending appeal. Romulus, 216
N.C. App. at 37 (“[T]he trial court does not have jurisdiction after notice of appeal is
given to determine the amount of periodic payments which have come due and remain
unpaid during the pendency of the appeal and to reduce that sum to an enforceable
judgment.”).
Here, the pending appeal concerned an Amended Equitable Distribution
Judgment and Alimony Order—reproduced in pertinent part above—specifically with
respect to whether the order complied with the law of the case and whether the trial
court was authorized to reduce the distributive award to a money judgment. Crowell,
2023 WL 3829196 at *2-4. As in Romulus, the fact that the Amended Equitable
Distribution Judgment and Alimony Order is a “judgment directing the payment of
money” under N.C.G.S. § 1-289 “theoretically” permits the trial court to act in a
manner that ensures Plaintiff’s compliance. Romulus, 216 N.C. App. at 37. However,
one of the two issues in the previous appeal concerned whether the trial court was
authorized in requiring Plaintiff to pay the sum it awarded Defendant because of the
collateral effect on Plaintiff’s separate real property. Crowell, 2023 WL 3829196 at
*2-3.
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That real property is, in part, the very property affected by the injunction at
issue in this case. Thus, the injunction concerns issues “embraced by the order
[previously] appealed[,]” and the trial court was therefore without jurisdiction to
enter it during the pendency of the that appeal. Plasman, 253 N.C. App. at 491. As
it acted without subject matter jurisdiction, we vacate the trial court’s order.3
Romulus, 216 N.C. App. at 38.
CONCLUSION
Pursuant to N.C.G.S. § 1-294, the trial court lacked subject matter jurisdiction
to enter an injunction on Defendant’s behalf. Accordingly, we vacate the trial court’s
order.
VACATED.
Judges GORE and FLOOD concur.
3 We further note that, to the extent the injunction thwarted any attempt by Plaintiff to dispose of her
assets to avoid her obligations to Defendant, Defendant may retain a viable remedy for any such
actions under the Uniform Voidable Transactions Act. See N.C.G.S. § 39-23.1 et seq. (2022); see also
N.C.G.S. § 50-16.7 (2022) (“A dependent spouse for whose benefit an order for the payment of alimony
or postseparation support has been entered shall be a creditor within the meaning of Article 3A of
Chapter 39 of the General Statutes pertaining to voidable transactions.”); Crowell v. Crowell, 257 N.C.
App. 264, 287 (2018) (Murphy, J., concurring in part and dissenting in part) (“The Majority goes to
great length to illustrate that the transfers fall within the UFTA, and I agree with the analysis
contained therein, but the Majority does not cite a single case where a transfer was rescinded without
the transferee being a party to the litigation. By requiring non-parties to act and effectively rescind
the transfers, the trial court has permanently barred CKE and Kirby from raising any defenses or
protections they may have under N.C.G.S. §§ 39-23.8 (2015) or 39-23.9(3) (2015).”), rev’d and
remanded, 372 N.C. 362 (2019).
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