Court Opinion

ID: 2729402
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:41:29.128119+00
Date Added: 2024-06-11T12:40:06.522641
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                                NO. COA13-552
                       NORTH CAROLINA COURT OF APPEALS

                              Filed: 7 January 2014

I.B.S.A., INC., d/b/a INDEPENDENT
BUILDERS SUPPLY ASSOCIATION, INC.,
     Plaintiff,

      v.                                      Johnston County
                                              No. 11 CVS 3878
BUILDER’S SUPPLY, INC., BRENDA B.
SCHLIE, JOHN T. SCHLIE, DAVID M.
BOLDON, DAVID BOLDON, INC., and
CONTRACTOR’S LUMBER COMPANY,
     Defendant.

      Appeal by defendants from order entered 1 October 2012 by

Judge   James    Ammons,     Jr.    in   Johnston    County    Superior      Court.

Heard in the Court of Appeals 10 October 2013.

      Daughtry, Woodard, Lawrence & Starling,                     by   Luther     D.
      Starling, Jr., for plaintiff-appellee.

      Terry F. Rose, for defendants-appellants.

      HUNTER, JR., Robert N., Judge.

      Builder’s Supply, Inc., Brenda B. Schlie, John T. Schlie,

David M. Boldon, David Boldon, Inc., and Contractor’s Lumber

Company     (collectively,         “Defendants”)     appeal     from    an    order
                                          -2-
denying their motion to transfer venue.                     Because we find the

action to be predominantly transitory and not local, we affirm.

                      I.    Factual & Procedural Background

      I.B.S.A.,        Inc.,      d/b/a      Independent          Builders      Supply

Association,     Inc.       (“Plaintiff”)        obtained    a    judgment     against

Defendant Builder’s Supply Inc. (“Builder’s Supply”) in Lincoln

County Superior Court File No. 08-CVS-1819 on 4 December 2008

for   $325,709.77.           At   the     time    the     judgment    was     entered,

Defendants Brenda Schlie and David Boldon owned all of the stock

of and were the only officers of Builder’s Supply.

      Brenda and John Schlie owned five acres in Lincoln County

on    which    Builder’s       Supply     conducted       its     business     (“Store

Property”).          From   the   complaint,       it    appears     that    Builder’s

Supply owned real property in Maple Leaf Subdivision in Lincoln

County (“Maple Leaf Property”).             David Boldon was the sole owner

and officer of Defendant David Boldon, Inc.                      David Boldon, Inc.

owed Builder’s Supply $100,000 on an account.

      On 3 February 2009, the Clerk of Court in Lincoln County

issued   a    writ    of    execution     against       Builder’s    Supply    in   the

amount of $334,869.71 plus interest from 30 September 2008.                         The

writ of execution was returned unsatisfied on 6 July 2009.
                                              -3-
    On 28 May 2009, during the time period that the writ of

execution was outstanding, Brenda Schlie, individually and on

behalf of Builder’s Supply, executed and filed a confession of

judgment in favor of her husband, Defendant John Schlie, in the

amount of $119,173.90.

    On 19 July 2009, Builder’s                      Supply sent an open             letter,

written by Brenda Schlie, stating that Builder’s Supply would be

going out of business and would not have sufficient funds to pay

unsecured creditors.

    In August 2009, Plaintiff sent Builder’s Supply a request

to verify its records and accounts.                       Neither Brenda Schlie nor

Builder’s Supply responded to the request.                             On 24 September

2009,   the    Clerk       of   Court    in    Lincoln        County   issued     an    order

requiring      Brenda       Schlie       to    appear         and   testify       regarding

Builder’s Supply’s assets and enjoining the transfer of assets.

Attempts      to    serve       Brenda        Schlie      at     her     residence       were

unsuccessful.          A    similar     order       on   20    October    2009    was    also

unable to be served at Brenda Schlie’s residence.

        On    11   December       2009,       David      Boldon     filed   Articles       of

Incorporation       forming       Defendant          Contractor’s        Lumber     Company

(“Contractor’s Lumber”).                On 22 December 2009, Brenda and John

Schlie transferred the Store Property to Contractor’s Lumber.
                                         -4-
All inventory and remaining assets in the store were transferred

to Contractor’s Lumber.              Contractor’s Lumber never opened for

business        and     the    transfers       were        made     either        without

consideration or without fair and adequate consideration.

      On 27 August 2010, Contractor’s Lumber held an auction to

sell the Store Property and the building supplies and equipment.

Although   the        Store   Property   itself      did    not     sell,    the     goods

yielded net proceeds of $42,837.45.

      On 29 February 2010, David Boldon, Inc. obtained a judgment

against Builder’s Supply, despite the fact that David Boldon,

Inc. owed in excess of $100,000.00 to Builder’s Supply.                              As a

result of that judgment, the Maple Leaf Property was placed in

the name of David Boldon, Inc., on 21 October 2010.1

      On 30 November 2011, Plaintiff filed a complaint in the

present action in Johnston County: 1) asking the court to pierce

the   corporate        veil   with   regard     to    David       Boldon    and    Brenda

Schlie;    2)    alleging      fraudulent      transfer      of    Builder’s       Supply

inventory and of the Maple Leaf Property; and 3) alleging that

the   confession        of    judgment   in     favor       of     John     Schlie     was

fraudulent.

1
  For purposes of this opinion, we assume the Maple Leaf Property
was subject to the judgment lien at the time of this transfer.
                                          -5-
       On 28 December 2011, Builder’s Supply, David Boldon, David

Boldon,       Inc.   and     Contractor’s       Lumber     filed      a     “motion     for

removal” of the action to Lincoln County on the ground that the

complaint sought to set aside the deed to property located in

Lincoln County.             On 19 March 2012, Builder’s Supply, Brenda

Schlie, and John Schlie filed a similar motion for removal.                              On

1 October 2012, the trial court denied the motion for removal.

On 25 October 2012 and 29 October 2012, Defendants filed timely

notice of appeal.

                     II.    Jurisdiction & Standard of Review

       This    Court   has    jurisdiction          to   hear   the   instant      appeal

pursuant       to    N.C.    Gen.     Stat.     §    7A–27(b)(3)          (Supp.   2013).

Although parties generally have “no right of immediate appeal

from   interlocutory         orders    and    judgments[,]”        Goldston        v.   Am.

Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990),

Defendants have an appeal of right under N.C. Gen. Stat. § 7A-

27(b)(3) because they appeal from an “interlocutory order or

judgment of a superior court or district court in a civil action

or proceeding which . . . [a]ffects a substantial right.”                                As

our Supreme Court has stated, “[a]lthough the initial question

of venue is a procedural one, there can be no doubt that a right

to venue established by statute is a substantial right.                                 Its
                                      -6-
grant or denial is immediately appealable.”               Gardner v. Gardner,

300 N.C. 715, 719, 268 S.E.2d 468, 471 (1980) (internal citation

omitted).

    “Issues    of    statutory     construction     are    questions     of     law,

reviewed de novo on appeal.” McKoy v. McKoy, 202 N.C. App. 509,

511, 689 S.E.2d 590, 592 (2010).            “‘Under a de novo review, the

court considers the matter anew and freely substitutes its own

judgment’ for that of the lower tribunal.”                 State v. Williams,

362 N.C. 628, 632–33, 669 S.E.2d 290, 294 (2008) (quoting In re

Greens of Pine Glen Ltd., 356 N.C. 642, 647, 576 S.E.2d 316, 319

(2003)).

                                 III. Analysis

    On     appeal,    Defendants    argue    the    trial    court      erred    by

denying their motions to remove the case to Lincoln County. We

disagree and affirm the trial court’s ruling.

    Under     N.C.     Gen.   Stat.     §    1-76    (2011),       actions      for

“[r]ecovery   of     real   property,   or    of    an    estate   or   interest

therein, or for the determination in any form of such right or

interest, and for injuries to real property must be tried in the

county in which the subject of the action, or some part thereof,

is situated[.]”        On the other hand, N.C. Gen. Stat. § 1-82

(2011) prescribes that “[i]n all other cases the action must be
                                -7-
tried in the county in which the plaintiffs or the defendants,

or any of them, reside at its commencement, or if none of the

defendants reside in the State, then in the county in which the

plaintiffs, or any of them, reside[.]”

    To determine which statute applies to a given set of facts,

our Supreme Court has stated:

          If the judgment to which plaintiff would be
          entitled   upon   the  allegations   of   the
          complaint will affect the title to land, the
          action is local and must be tried in the
          county where the land lies unless defendant
          waives the proper venue; otherwise, the
          action is transitory and must be tried in
          the county where one or more of the parties
          reside at the commencement of the action.

Thompson v. Horrell, 272 N.C. 503, 504–05, 158 S.E.2d 633, 634–

35 (1968).

    Our Supreme Court has further explained:

          an action is not necessarily local because
          it incidentally involves the title to land
          or a right or interest therein, or because
          the judgment that may be rendered may settle
          the rights of the parties by way of
          estoppel.   It  is   the   principal   object
          involved in the action which determines the
          question,  and   if  title   is   principally
          involved or if the judgment or decree
          operates directly and primarily on the
          estate or title, and not alone in personam
          against the parties, the action will be held
          local.
                                        -8-
Rose’s Stores, Inc. v. Tarrytown Center, Inc., 270 N.C. 201,

206,    154   S.E.2d   320,    323   (1967)     (emphasis     added)     (quotation

marks and citation omitted).            Thus, in the present case, we look

for    the    “principal      object”     of    Plaintiff’s        action.        See

Kirkland’s Stores, Inc. v. Cleveland Gastonia, LLC, ___ N.C.

App. ___, ___, 733 S.E.2d 885, 889 (2012).

       Taken together, Plaintiff’s action seeks to collect money

on an account and to enforce its judgment against the debtor and

his    allies,   whose   actions     have      been   taken   in    an   effort   to

defraud creditors.         The complaint, in effect, is an effort to

aid in executing the Plaintiff’s prior judgment.                     Unlike cases

in which determining the ownership of legal interests in land is

paramount, here the dispute is centered solely on a remedy which

is monetary damages.          Put differently, Plaintiff does not desire

to adjudicate the title to the property per se but is only

concerned with the amount of equity, if any, remaining at the

time of the transfer, which could be used to pay the judgment.

The only realty at issue in this case appears to be the Maple

Leaf Property in which Plaintiff already has a superior lien.

It    is   therefore   obvious    the    Plaintiff’s     requested       relief   of

setting aside the transfer is surplusage and not the main object
                                         -9-
of   the   suit.         Under   these    facts,      we   hold   the   action   is

transitory in nature and not local.

      Because      the   principal      object   of    Plaintiff’s      action   is

recovery of monetary damages, Plaintiff’s action is incidental

to the principal object of recovering assets that were allegedly

fraudulently transferred.            Therefore, venue is transitory and

the trial court did not err in denying Defendants’ motions for

removal.

                                  IV.    Conclusion

      For the foregoing reasons, the decision of the trial court

is

      AFFIRMED.

      Judges ERVIN and DAVIS concur.

      Report per Rule 30(e).