UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

S & D LAND CLEARING, United 

States of America, for the use and

benefit of; MIKE MITCHELL, d/b/a

Malaco,

Plaintiffs-Appellees,

v.

D’ELEGANCE MANAGEMENT LIMITED,

INCORPORATED,  No. 01-1553

Defendant-Appellant,

and

ENVIRONMENTAL CORRECTIONS

CORPORATION, a/k/a Waste Control

Services; UNIVERSAL SURETY OF

AMERICA,

Defendants. 

D’ELEGANCE MANAGEMENT LIMITED, 

INCORPORATED, United States of

America for the use and benefit of,

Plaintiff-Appellant,

v.

UNIVERSAL SURETY OF AMERICA,

 No. 01-1509 Defendant-Appellee,

and

ENVIRONMENTAL CORRECTIONS

CORPORATION, a/k/a Waste Control

Services,

Defendant. 
MIKE MITCHELL, d/b/a Malaco, 

Plaintiff-Appellee,

and

S & D LAND CLEARING, United

States of America, for the use and

benefit of,

Plaintiff,

v.

VEZINA, LAWRENCE & PISCITELLI,  No. 01-1576

P.A.,

Intervenor-Appellant.

and

D’ELEGANCE MANAGEMENT LIMITED,

INCORPORATED; ENVIRONMENTAL

CORRECTIONS CORPORATION, a/k/a

Waste Control Services; UNIVERSAL

SURETY OF AMERICA,

Defendants. 

2 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
S & D LAND CLEARING, United 

States of America, for the use and

benefit of; MIKE MITCHELL, d/b/a

Malaco,

Plaintiff-Appellee,

and

UNIVERSAL SURETY OF AMERICA,

Defendant-Appellee,

v.  No. 01-2043

VEZINA, LAWRENCE & PISCITELLI,

P.A.,

Intervenor-Appellant,

and

D’ELEGANCE MANAGEMENT LIMITED,

INCORPORATED; ENVIRONMENTAL

CORRECTIONS CORPORATION, a/k/a

Waste Control Services,

Defendants. 

Appeals from the United States District Court

for the Eastern District of North Carolina, at Wilmington.

James C. Fox, Senior District Judge.

(CA-97-49-7-F, CA-97-212-F)

Argued: February 26, 2002

Decided: April 25, 2002

Before WILKINSON, Chief Judge, and WILKINS and

WILLIAMS, Circuit Judges.

Nos. 01-1553, 01-1509, and 01-1576 affirmed in part and dismissed

in part, and No. 01-2043 dismissed by unpublished per curiam opinion. 

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 3
COUNSEL

ARGUED: Stephen Bruce Rakusin, Ft. Lauderdale, Florida; Michael

A. Piscitelli, VEZINA, LAWRENCE & PISCITELLI, P.A., Ft. Lauderdale, Florida, for Appellants. Augustus Graham Shirley, II,

LEWIS & ROBERTS, Raleigh, North Carolina, for Appellees. ON

BRIEF: Charles D. Meier, MARSHALL, WILLIAMS & GORHAM,

L.L.P., Wilmington, North Carolina; Robert Gibbs Watt, WATT,

TIEDER & HOFFAR, McLean, Virginia, for Appellants. C. Hamilton

Jarrett, III, CONNER, GWYN, SCHENCK, P.L.L.C., Raleigh, North

Carolina, for Appellees. 

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c). 

OPINION

PER CURIAM: 

D’Elegance Management Limited, Incorporated (D’Elegance) and

its counsel, the law firm of Vezina, Lawrence and Piscitelli (VLP)

(collectively Appellants), appeal from three orders of the district court

in two related cases that arise out of the removal of debris in North

Carolina following Hurricane Fran. The two cases, one brought by

D’Elegance seeking payment from two bonds issued by Universal

Surety of America (Universal) to cover clean-up work performed by

D’Elegance (the Bond Case) and the other brought against

D’Elegance by Mike Mitchell d/b/a Malaco and S&D Land Clearing

(collectively Malaco) seeking damages with regard to work it did to

assist in the clean-up1 (the Debris Case), reach this court for the sec1Both cases originally included claims under the Miller Act, 40

U.S.C.A. §§ 270a-270d (West 1986). Persons asserting claims under this

Act must bring their claims "in the name of the United States for the use

of the person suing." 40 U.S.C.A § 270b(b). For the ease of reference,

however, we will refer to the cases as having been brought by

D’Elegance and Malaco. 

4 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
ond time. See United States for Use and Benefit of S & D Land Clearing v. D’Elegance Ltd., Inc., No. 9802758, 2000 WL 966034 (4th Cir.

July 13, 2000) (D’Elegance I) (affirming the district court’s judgment

in the Debris Case except for its decision to set aside Malaco’s compensatory damage award); United States for Use and Benefit of

D’Elegance, Ltd., Inc. v. Universal Surety of Am., No. 99-2195, 2000

WL 1224164 (4th Cir. Aug. 29, 2000) (D’Elegance II) (reversing the

district court’s grant of summary judgment in the Bond Case against

D’Elegance as to first bond and affirming its grant of summary judgment against D’Elegance as to second). Although these current

appeals have not been formally consolidated, they are factually interrelated to such a degree that we conclude it is appropriate to resolve

them in a single opinion. 

Appellants challenge three orders issued by the district court. First,

on March 16, 2001, in the Bond Case, the district court ordered Universal to pay the judgment against it in the amount of $250,000, plus

costs in the amount of $5,231.87 and post-judgment interest, into the

Office of the Clerk of the Court. Second, on March 21, 2001, in the

Debris Case, the district court, on Malaco’s motion, commenced supplemental proceedings to enforce the judgment against D’Elegance

and ordered Appellants not to transfer any property of D’Elegance

that was not exempt from execution. Third, on July 3, 2001, the district court denied VLP’s motion for leave to file a Notice of Charging

Lien in the Bond Case. Because the district court has not ruled on the

ultimate fate of the funds paid by Universal to the Office of the Clerk

of the Court, the challenges to the March 16 and July 3 orders are

unreviewable as interlocutory. With regard to the appeal from the

March 21 order, the district court did not err in allowing supplemental

proceedings and the order not to transfer D’Elegance’s property was

appropriate under such proceedings. 

I.

On September 6, 1996, Hurricane Fran, a category 3 hurricane on

the Saffir/Simpson Hurricane Scale, made landfall on the North Carolina coast near Cape Fear. Hurricane Fran, one of the costliest in

United States history, killed 34 people and caused over $3.2 billion

in property damage. 

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 5
On September 18, 1996, the U.S. Army Corps of Engineers (the

Corps) awarded a contract to Waste Control Services for the removal

of debris in eight counties in North Carolina. Waste Control then subcontracted with D’Elegance for the removal of construction and

demolition debris (C & D debris) in both Pender and New Hanover

Counties. D’Elegance agreed to remove at least 5,000 cubic yards of

such debris a day. Waste Control, as required by its contract with the

Corps, executed and delivered two payment bonds that would provide

coverage for the protection of its subcontractors, with Waste Control

as principal and Universal as surety. 

D’Elegance in turn subcontracted with Malaco to perform all of

D’Elegance’s debris-removal work, misrepresenting to Malaco that

the work would involve not only C & D debris but also vegetative

debris.2 Malaco subcontracted with a trucking company for enough

trucks to meet D’Elegance’s quota of 5,000 cubic yards per day. Once

removal began, however, D’Elegance used other haulers, leaving

most of Malaco’s debris removal capacity unutilized. The small

amount of C & D debris Malaco was allowed to remove was the least

profitable.3 Malaco encountered other difficulties, including

D’Elegance’s efforts to hire away Malaco’s truck drivers with promises of higher pay and warnings that Malaco did not have a contract

and was not going to get paid. Malaco continued to haul C & D debris

until October 29, 1996, at which time Waste Control instructed

Malaco to cease work on the project because Malaco was not going

to be paid by D’Elegance. Although D’Elegance did pay $55,344 to

Malaco and $80,629.33 directly to Malaco’s subcontractors, at the

time of the work stoppage, D’Elegance owed Malaco a balance of

$62,232.54 for the debris Malaco had removed. On November 4,

1996, D’Elegance offered to pay Malaco if the latter would sign a

backdated contract with terms materially different from the original

contract, but Malaco declined. This situation left Malaco deeply

indebted to its subcontractors. At the same time, Waste Control did

2Removing vegetative debris is quicker than removing C & D debris

and therefore is more profitable. D’Elegance, however, had only contracted with Waste Control to remove C & D debris. 

3For example, Malaco was not allowed to remove C & D debris that

already had been stockpiled. 

6 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
not pay the full amount of D’Elegance’s $2,752,684 invoice, leaving

a balance of at least $369,623.23. 

On March 5, 1997, Malaco initiated the Debris Case by filing a

complaint against Waste Control, D’Elegance, and Universal. Malaco

claimed, among other things, that D’Elegance had breached its contract with Malaco and had violated North Carolina’s unfair and deceptive trade practices statute. See N.C. Gen. Stat. § 75-1.1 (1999)

(Chapter 75). D’Elegance counter-claimed against Malaco for breach

of contract, asserting that Malaco had failed to meet the 5,000 cubic

yards per-day quota and had failed to pay its subcontractors in a

timely fashion. D’Elegance initiated the Bond Case on December 3,

1997, by filing suit against Waste Control and Universal to recover

the unpaid balance from its invoice. On February 25, 1998, the district

court consolidated the Bond Case and the Debris Case. 

The case was tried before a jury in August 1998, and the jury

found, with regard to the claims in the Debris Case, in favor of

Malaco and against D’Elegance.4 With regard to the claims in the

Bond Case, the district court declared a mistrial, and consequently,

the cases were severed on January 27, 1999. 

On appeal of the Debris Case, this court affirmed the denial of

D’Elegance’s motion for judgment as a matter of law, the denial of

treble damages, and the registration of the judgment.5See

D’Elegance I, at *9. We reversed, however, the district court’s ruling

to set aside the jury’s fraud verdict and ordered that the jury’s fraud

award should be reinstated and trebled pursuant to Chapter 75. Id.

(affirming in part and reversing in part, but not remanding). As a

result, D’Elegance became indebted to Malaco for a total of

$841,828.00, plus interest: $400,000 in compensatory damages for

4On November 10, 1998, D’Elegance transferred substantial assets to

its principals, Donnie and Metra Hughes, and to Artem, Inc. 

5The district court certified the judgment for registration in another

district on March 17, 1999. On October 12, 1999, a Writ of Execution

was issued in the Southern District of Florida, where D’Elegance, which

is incorporated in the state of Florida, had a bank account. The writ was

submitted to the United States Marshals Service but was returned unsatisfied on November 10, 1999. 

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 7
breach of contract; $300,000.00 in trebled compensatory damages for

fraud; and $141,828.00 for attorney’s fees, costs, and expenses. 

In the Bond Case, the district court granted Universal’s motion for

summary judgment as to both payment bonds on August 5, 1999.

D’Elegance appealed and on August 29, 2000, we determined that the

district court erred in failing to grant D’Elegance’s motion for partial

summary judgment as to the value of the first payment bond.6See

D’Elegance II, at * 4. With regard to the second bond, we affirmed

the grant of summary judgment against D’Elegance and remanded for

further proceedings. Id.

Following our decisions in the two cases, the district court entered

the three orders that are now the subject of this appeal. Specifically,

D’Elegance brings appeals No. 01-1509 and 01-1553 challenging the

district court’s March 16, 2001 and March 21, 2001 orders, respectively, and VLP brings appeals No. 01-1576 and 01-2043 challenging

the district court’s March 21, 2001 and July 3, 2001 orders, respectively. 

II.

We initially must consider the existence of appellate jurisdiction

sua sponte. Braswell Shipyards, Inc. v. Beazer East, Inc., 2 F.3d 1331,

1336 (4th Cir. 1993). Generally, our jurisdiction extends to "final

decisions" of the district courts, as well as certain types of interlocutory decisions that are rendered immediately appealable by the district

court’s certification order, by a specific form of statutory authorization, or under the "collateral order" doctrine. See 28 U.S.C.A.

§§ 1291, 1292 (West 2000); Fed. R. Civ. P. 23(f); Cohen v. Beneficial

Industr. Loan Corp., 337 U.S. 541, 546 (1949) (explaining the "collateral order" doctrine); Technosteel, LLC v. Beers Constr. Co., 271

F.3d 151, 154 (4th Cir. 2001) (cataloging the bases of appellate jurisdiction). 

6Shortly following this decision, on September 22, 2000, D’Elegance

allegedly assigned its rights against Universal to VLP. 

8 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
A. THE MARCH 16, 2001 ORDER

D’Elegance, in appeal No. 01-1509, seeks to appeal the district

court’s March 16, 2001 order that the funds due in the Bond Case be

paid into the Office of the Clerk of the Court pending final resolution

of Malaco’s claims. Universal, the party actually ordered to pay the

funds and the only other party in appeal No. 01-1509, takes no position regarding the propriety of the requirement that it pay the funds

into the Clerk’s Office and does not cross-appeal the district court’s

entry of partial summary judgment in D’Elegance’s favor in the Bond

Case. Universal’s only contention on appeal is that, regardless of who

is entitled to the funds that Universal has paid into the Clerk’s Office

at the district court’s direction, Universal has fully discharged its obligations under the district court’s judgment in the Bond Case.

D’Elegance does not contend otherwise. As between D’Elegance and

Universal, the only parties to the Bond Case, there is presently no dispute for this court to adjudicate. Insofar as D’Elegance seeks to challenge the requirement that Universal pay funds into the Clerk’s

Office, that challenge is, in substance, addressed to a controversy

between D’Elegance and Malaco regarding the payment of

D’Elegance’s judgment debt in the Debris Case. 

As between D’Elegance and Malaco, the district court’s March 16

order requiring that the Bond Case proceeds be paid into the Clerk’s

Office does not finally resolve the question of what party or parties

are entitled to the funds. Instead, the district court seeks to hold the

funds pending a resolution of the question of entitlement to them. In

other words, the March 16 order, while nominally entered in the Bond

Case, is in fact a temporary and intermediate measure directed

towards the resolution of issues that have not been finally adjudicated

in the supplemental proceedings stemming from the judgment in the

Debris Case. The district court’s preliminary decision thus constitutes

a classic interlocutory order incident to sound case management that

is not "final" under 28 U.S.C.A. § 1291 and that we are without jurisdiction to disturb.7 Technosteel, 271 F.3d at 154 (explaining that,

7Even if the district court’s order requiring that funds be paid into the

Clerk’s Office were "final," it is far from clear that D’Elegance is a

proper party to challenge it, as Appellants both contend that D’Elegance

has assigned its entire interest in Universal’s payment in the Bond Case

to VLP. 

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 9
subject to certain exceptions not relevant here, appellate jurisdiction

is limited to final orders). 

B. THE MARCH 21, 2001 ORDER

Appellants next contend that the district court erred in entering, on

March 21, 2001, an order barring Appellants from disposing of or

interfering with any "property of D’Elegance not exempt from execution in this case pending final ruling on [Malaco’s] Motion for Supplemental Proceedings." (No. 01-1509 J.A. at 291.) We have

jurisdiction to review the district court’s interlocutory order granting

the injunction. See 28 U.S.C.A. § 1292(a)(1). Appellants argue (1)

that no injunction was warranted because Malaco is not entitled to

supplemental proceedings;8 (2) that the injunction is void because the

district court failed to comply with the requirements of Federal Rule

of Civil Procedure 65; and (3) that the injunction is overbroad. We

review the district court’s entry of an injunction for abuse of discretion, but to the extent that pure questions of law determine the propriety of an injunction, our review is de novo. Commodity Futures

Trading Comm’n v. Kimberlynn Creek Ranch, Inc., 276 F.3d 187, 191

(4th Cir. 2002). 

1. The Propriety of Supplemental Proceedings

Appellants argue that Malaco did not meet the prerequisites under

North Carolina law for the initiation of supplemental proceedings.

Federal Rule of Civil Procedure 69 provides that:

Process to enforce a judgment for the payment of money

8We have jurisdiction to review this question because, at the threshold,

if Malaco was not entitled to initiate supplemental proceedings, the district court’s injunction, entered pursuant to those proceedings, cannot

stand. Thus, the question of whether Malaco met the basic prerequisites

for the initiation of supplemental proceedings is "intimately bound up

with" the grant of the injunction. Nationsbank Corp. v. Herman, 174

F.3d 424, 427 (4th Cir. 1999) (holding that jurisdiction over denial of

summary judgment was appropriate where issue of exhaustion of administrative remedies was "intimately bound up with" propriety of a preliminary injunction). 

10 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
shall be a writ of execution, unless the court directs otherwise. The procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on

and in aid of execution shall be in accordance with the practice and procedure of the state in which the district court is

held, existing at the time the remedy is sought, except that

any statute of the United States governs to the extent that it

is applicable. 

Thus, North Carolina law generally governs the procedure for supplementary proceedings in this case. The initiation of supplemental proceedings in North Carolina is governed by N.C. Gen. Stat. § 1-352,

which provides:

When an execution against property of a judgment debtor

. . . issued to the sheriff of the county where he resides or

has a place of business, or if he does not reside in the State,

to the sheriff of the county where a judgment roll or a transcript of a judgment is filed, is returned wholly or partially

unsatisfied, the judgment creditor at any time after the return

. . . is entitled to an order from the court . . . requiring such

debtor to appear and answer concerning his property . . . .

Appellants first contend that Malaco lacks a judgment in its favor

and thus, that D’Elegance is not a "judgment debtor" against whom

supplemental proceedings are permitted. This argument fails because

in the Debris Case, the district court entered judgment against

D’Elegance, and this Court affirmed that judgment in part and

reversed in part, but we did not remand. D’Elegance I, at *9. Indeed,

in D’Elegance’s appeal of the district court’s judgment in the Debris

Case, we specifically affirmed the registration of the judgment in

Florida. Thus this court consistently has recognized the finality of the

judgment against Appellants. 

Appellants next argue that supplemental proceedings are unavailable to Malaco because Malaco has not adequately attempted to avail

itself of execution procedures. Supplemental proceedings are not

available under North Carolina law until an execution is attempted

and is unsuccessful in whole or in part. FDIC v. British-American

Corp., 726 F. Supp. 622, 631 (E.D.N.C. 1989). Appellants contend

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 11
that Malaco’s unsuccessful attempt to execute the judgment in the

Southern District of Florida was an insufficient predicate for supplemental proceedings in North Carolina, because only the court that

ordered execution of the judgment may initiate supplemental proceedings under North Carolina law. North Carolina Nat’l Bank v. C.P.

Robinson Co., 352 S.E.2d 684, 687 (N.C. 1987). We are mindful,

however, that under Rule 69, "any aspects of the assimilated practices

and procedures that are uniquely designed to enforce state judgments

are not assimilated, nor is any aspect that may be inconsistent with the

federal policy of affording judgment creditors the right to a writ of

execution to enforce money judgments in federal courts." United

States for the use and benefit of Global Bldg. Supply v. Harkins Builders, Inc., 45 F.3d 830, 833 (4th Cir. 1995). Because "state procedure

was designed for state courts, not federal," it may be necessary to

employ hybrid procedures in Rule 69 cases. Travelers Indemn. Co. v.

Hash Mgmt., Inc., 173 F.R.D. 150, 153-54 (M.D.N.C. 1997). North

Carolina state venue rules cannot govern the enforcement in federal

court of federal judgments where a debtor’s property is located in a

state other than the one in which the judgment was rendered. Consequently, Appellants are incorrect; North Carolina law, as assimilated

by Rule 69, does not require that supplemental proceedings in this

case be conducted by a federal court in Florida. When Malaco’s writ

of execution was returned unsatisfied from the Southern District of

Florida, Malaco had a "writ of execution . . . returned wholly or partially unsatisfied," as is required by N.C. Gen. Stat. § 1-352.9

D’Elegance next argues that Malaco must docket its federal judgment in the North Carolina state courts in order to obtain supplemental proceedings in the district court. The basis for this argument is

N.C. Gen. Stat. § 1-237, which accords to properly docketed federal

judgments the force and effect of a lien under state law. D’Elegance

then argues that under N.C. Gen. Stat. § 1-313(1), Malaco may not

execute against property until the appropriate North Carolina sheriff

has levied upon that property. D’Elegance’s argument, however,

9Because the writ of execution was served in Florida, and Malaco registered its judgment in the Southern District of Florida, D’Elegance’s

argument that the docketing of a federal judgment in North Carolina state

court is a prerequisite to execution in North Carolina does not impair the

validity of Malaco’s attempt to execute in Florida. 

12 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
would produce results that are, to say the least, idiosyncratic. In this

case, the only property in North Carolina which is subject to the judgment appears to be Universal’s surety payment, which has been

placed in the custody of the Clerk’s Office of the district court.

D’Elegance would have Malaco docket a federal judgment in state

court for the purpose of causing a state sheriff to levy upon funds held

by the clerk of the federal court that rendered the judgment, as a prerequisite to allowing the federal court to determine the entitlement to

those funds. The circularity of this procedure is evident, and it is clear

that § 1-237 and related provisions apply when enforcement of a federal judgment is sought in state court. Similarly, § 1-352’s requirement that a writ of execution against a non-resident be issued to the

"sheriff of the county where a judgment roll or transcript of a judgment is filed," is logically inapplicable here, because a federal judgment need not be filed in state court to confer on the federal court

jurisdiction to determine the entitlement to funds paid into the clerk’s

office of the district court pursuant to the federal judgment. 

Malaco has established the prerequisites to initiate supplemental

proceedings under Federal Rule of Civil Procedure; it has complied

with the applicable requirements of North Carolina law by showing

that it registered its judgment in the Southern District of Florida, that

it attempted to execute the judgment in that district, and that the writ

of execution was returned unsatisfied. Consequently, the basic predicate for the district court’s injunction — the propriety of supplemental

proceedings — has been established.10

10Appellants contend, further, that supplemental proceedings are

improper because VLP has a valid priority lien on Universal’s payment

in the Bond Case. This contention goes to the ultimate disposition of

property in the supplemental proceedings; yet to date, the district court

has taken no reviewable, final action other than the entry of the injunction against asset transfers. Because the district court has not finally

determined anyone’s entitlement to any property, we restrict our consideration to the propriety of initiating supplemental proceedings — a necessary predicate to the reviewable injunction — and will not address the

course of the proceedings except insofar as the injunction is implicated.

Similarly, VLP cannot obtain review of the district court’s refusal, in its

July 3 order, to allow it to file a lien against the Universal payment,

because the basic issue is whether Malaco is entitled to the funds, or

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 13
2. The Propriety of Injunctive Relief

Appellants next argue that the district court’s injunction against

asset transfers, in its March 21 order, is invalid because it fails to

comply with the requirements for the entry of a preliminary injunction. In general, a district court is required to balance the likelihood

and degree of irreparable injury to each party and determine the likelihood of success on the merits before granting a preliminary injunction. Blackwelder Furniture Co. v. Seilig Mfg. Co., 550 F.2d 189, 195

(4th Cir. 1977). Further, legal remedies must ordinarily be inadequate

to permit the award of equitable relief, and Federal Rule of Civil Procedure 65(c) requires a party seeking a preliminary injunction to post

a bond "in such sum as the court deems proper." Appellants argue that

the district court was required to find that the balance of irreparable

injury favored Malaco before granting an injunction barring Appellants from engaging in transfers of non-exempt assets. Appellants

argue that the district court’s injunction harms D’Elegance’s ability

to operate as a viable, ongoing business concern, as well as

D’Elegance’s ability to pay its attorneys, and thus, that the balance of

hardships favors Appellants. Appellants further argue that Malaco has

not shown that legal remedies are inadequate and has not posted a

bond as is required by Rule 65. We review the district court’s grant

of injunctive relief for abuse of discretion. Kimberlynn Creek, 276

F.3d at 191. North Carolina law, rendered applicable here by Rule 69,

provides that "[t]he court or judge may, by order, forbid a transfer or

other disposition of, or any interference with, the property of a judgment debtor not exempt from execution." N.C. Gen. Stat. § 1-358

(1999). 

whether, instead, VLP, on either a lien theory or an assignment theory,

is entitled to the funds. There is no reason why the denial of VLP’s

attempt to file a Notice of Charging Lien cannot effectively be reviewed

on appeal from a determination of which party is entitled to the Universal

funds, and accordingly we find no reason to review the validity of VLP’s

asserted charging lien at this stage. Cf. United States v. Lawrence, 201

F.3d 536, 537 (4th Cir. 2000) (holding that the collateral order doctrine

allows appellate jurisdiction for an interlocutory appeal of an order made

during the course of litigation that is "related to matters outside the

stream of the main action and would not be subject to effective review

as part of the final judgment in the action." (citation omitted)). 

14 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
At the outset, we must address the interaction of Rule 69, which

authorizes supplemental proceedings in accordance with the practice

of the relevant state, and Rule 65 and related requirements for the

entry of injunctive relief by the district courts. Appellants argue that

Rule 65 requires Malaco to post a bond in order to obtain injunctive

relief in a supplemental proceeding. We reject this contention because

it is undercut by Federal Rule of Civil Procedure 62, which provides

that a stay of execution pending appeal requires the appellant to post

a bond. It would be a strange outcome if, before it lost the prior

appeal, D’Elegance was required to post a bond to avoid execution of

the judgment, but after the judgment against D’Elegance on the merits

survived all available appeals and D’Elegance failed to pay it, Malaco

became obligated to post a bond in order to pursue supplemental proceedings. A party seeking a preliminary injunction prior to the final

adjudication of liability must post a bond in order to ensure a source

of recovery in the event that the injunction is erroneous. Once there

is a judgment (in this case, a judgment that has survived all available

appeals), however, the party seeking enforcement of the judgment

need not post security to obtain satisfaction of its rights under the

court’s judgment. 

Similarly, findings regarding the balance of irreparable harm and

the likelihood of success on the merits are not required here. Under

Rule 69, only if North Carolina courts required findings regarding the

likelihood of success on the merits and the balance or irreparable

injury would such findings be a prerequisite to the entry of the order

in this case. United Int’l Holdings, Inc. v. Wharf Holdings Ltd., 210

F.3d 1207, 1356 (10th Cir. 2000) ("Wharf argues the turnover order

was in effect a mandatory injunction entered by the court without

making the factual findings that are a prerequisite to a grant of injunctive relief. Under the plain language of [Rule 69], such factual findings are necessary only if compelled by . . . a federal statute or the

applicable state rules for execution of judgments."). North Carolina’s

articulation of the substantive standards for an order freezing assets

in supplemental proceedings is not an aspect of North Carolina law

that is unique to proceedings in state court. Thus, under Rule 69,

North Carolina law governs the question of whether the district court

must make findings regarding the balance of irreparable harm and the

likelihood of success on the merits. Id.; cf. Global Bldg. Supply, 45

F.3d at 833 (aspects of state procedures that are uniquely designed to

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 15
enforce state judgments are not assimilated under Rule 69). Appellants cite no authority indicating that North Carolina requires such

findings, and no federal statute operates to require them in this context. Here, Malaco has a final judgment; it is thus conclusively established that D’Elegance is liable to Malaco, and it is uncontested that

this judgment is as yet unsatisfied. If the "merits" are framed as Malaco’s entitlement to satisfaction of its judgment from D’Elegance’s

non-exempt assets, such entitlement is a necessary implication of

D’Elegance having a fully adjudicated and unsatisfied judgment debt

to Malaco, and any irreparable injury stems from D’Elegance’s adjudicated liability and nonpayment of that liability.11 It would be inapposite to require a judgment creditor to make some special showing

of hardship to achieve collection of a valid judgment. 

3. The Breadth of the Injunction

D’Elegance next argues that the "trial court erred in extending a

blanket injunction as to restraint of future transfers and dispositions

in a supplemental proceeding." (No. 01-1553, Appellant’s Br. at 47.)

As noted above, under § 1-358 a court may forbid transfers of a judgment debtor’s property. D’Elegance argues that the injunction is overbroad because it applies to future assets. (No. 01-1553, Appellant’s

Br. at 46.) The district court’s order, however, only applies to property that is not exempt from execution under North Carolina law

(non-exempt property). Under North Carolina law, future earnings are

exempt from execution. See Jacobi-Lewis Co. v. Charco Enterprises,

466 S.E.2d 338, 339 (N.C. App. 1996) (citing Harris v. Hinson, 360

S.E.2d 118,120 (N.C. App. 1987)). In other words, "future earnings,

wages or salaries to become due, or which become due after service

of the order for examination," Motor Finance v. Putnam, 50 S.E.2d

670, 671 (N.C. 1948) (citation omitted), are exempt from execution

and therefore not affected by the district court’s injunction. The North

11If D’Elegance’s non-exempt assets are insufficient to pay its judgment debt, it cannot suffer irreparable injury by virtue of having assets

temporarily frozen which represent less than the amount of assets that it

is obligated to pay outright to Malaco. If, on the other hand,

D’Elegance’s non-exempt assets exceed its debt to Malaco, it has a remedy readily at hand for any harm caused by impairment of its right to

transfer non-exempt assets: it can pay its judgment debt. 

16 S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED
Carolina Court of Appeals, however, has suggested that while future

earnings are exempt from supplemental proceedings, other subsequently acquired property may be non-exempt. See Harris, 360

S.E.2d at 121. 

III.

In conclusion, we find that we have jurisdiction to review the district court’s March 21, 2001 order prohibiting transfers of non-exempt

assets and that we have jurisdiction to review the question of Malaco’s threshold entitlement to supplemental proceedings, as the propriety of the March 21 order is intimately bound up with the question

of whether supplemental proceedings are warranted. We hold that

Malaco is entitled to supplemental proceedings, that the injunction

meets the requirements of Rule 69, and that the injunction is not overbroad. We find that we lack jurisdiction to review the district court’s

March 16, 2001 order requiring Universal to make its payment in the

Bond Case into the Clerk’s Office or the district court’s July 3, 2001

order denying VLP’s motion to file a Notice of Charging Lien, as neither order is final or reviewable. Accordingly, we affirm the district

court’s entry of injunctive relief in appeals No. 01-1553 and 01-1576,

dismiss appeal No. 01-2043 for lack of jurisdiction, affirm the district

court’s judgment in appeal No. 01-1509 as between Universal and

D’Elegance, and dismiss for lack of jurisdiction D’Elegance’s challenge to the district court’s order that funds be paid into the Clerk’s

Office rather than directly to D’Elegance in appeal No. 01-1509. 

No. 01-1553 - AFFIRMED IN PART AND

DISMISSED IN PART

No. 01-1509 - AFFIRMED IN PART AND

DISMISSED IN PART

No. 01-1576 - AFFIRMED IN PART AND

DISMISSED IN PART

No. 01-2043 - DISMISSED

S & D LAND CLEARING v. D’ELEGANCE MANAGEMENT LIMITED 17