Court Opinion

ID: 2733078
Source: CourtListenerOpinion
Date Created: 2014-09-16 12:03:57.385017+00
Date Added: 2024-06-11T10:18:47.784983
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An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-250
                       NORTH CAROLINA COURT OF APPEALS

                           Filed:     16 September 2014

SECURITY CREDIT CORPORATION, INC.,
     Plaintiff

      v.                                      Johnston County
                                              No. 13 CVS 2155
MICHAEL S. BAREFOOT, and JESSICA
BAREFOOT MASSENGILL,
     Defendants

      Appeal by defendants from order entered 11 October 2013 by

Judge Thomas H. Lock in Johnston County Superior Court.                       Heard

in the Court of Appeals 27 August 2014.

      The Armstrong Law Firm, P.A., by L. Lamar Armstrong, Jr.
      and L. Lamar Armstrong, III, for plaintiff-appellee.

      Hairston Lane Brannon, PA, by M. Brad Hill and James E.
      Hairston Jr., for defendant-appellants.

      CALABRIA, Judge.

      Michael     S.   Barefoot      (“Barefoot”)      and    Jessica     Barefoot

Massengill      (“Massengill”)       (collectively      “defendants”)       appeal

from the trial court’s order granting summary judgment in favor

of    Security      Credit      Corporation,        Inc.     (“plaintiff”)        on
                                          -2-
plaintiff’s claim of fraudulent transfer.                     We dismiss the appeal

as interlocutory.

      On 15 April 2010, plaintiff obtained a judgment against

Barefoot in the amount of $1,507,332.00.                    On 6 October 2010, the

trial court ordered this amount to be offset by a cross-judgment

in   favor     of    Barefoot   against        plaintiff.        After      the   offset,

Barefoot still owed plaintiff $614,837.60 pursuant to the 15

April 2010 judgment.

      On 31 July 2012, the Johnston County Clerk of Superior

Court issued a writ of execution against Barefoot’s property in

order     to    satisfy     plaintiff’s         remaining      judgment.          On     25

September 2012, the Johnston County Sheriff returned the writ of

execution       to   the   Clerk,    indicating        that    it    was    unsatisfied

because the Sheriff was “unable to locate non-exempt property.”

      In June 2013, Barefoot transferred twenty-six of his shares

in   GSW,      Incorporated     (“GSW”)        to     his   daughter,       Massengill.

Barefoot       retained    ownership      of    the   remaining      twenty-four        GSW

shares.        Massengill did not provide any monetary consideration

or value to Barefoot in exchange for the shares.                             GSW’s only

assets    were       two   parcels   of    real       property      which    were      both

encumbered by loans that had been secured by deeds of trust in

one or both of the properties.                 For both pieces of property, the
                                            -3-
amount of the liens encumbering each parcel exceeded the total

value of the property.

       Plaintiff initiated an action against defendants by filing

a complaint and then an amended complaint in Johnston County

Superior Court.            Plaintiff sought to have the stock transfer

from Barefoot to Massengill set aside as fraudulent pursuant to

N.C.   Gen.    Stat.       §    39-23.1,    et    seq.,    the     Uniform     Fraudulent

Transfer      Act    (“UFTA”).           Plaintiff      also     sought   to    have    an

unrelated transfer of real property from Barefoot to Massengill

set aside pursuant to the UFTA.                    On 8 August 2013, plaintiff

filed a motion for summary judgment only as to its claim seeking

to   set   aside     the       fraudulent   transfer       of    GSW   stock.      On   11

October    2013,      the       trial    court     granted       plaintiff’s     motion.

Defendants appeal.

       As an initial matter, we note that both parties agree that

the trial court’s order was interlocutory because it did not

resolve       all     of        the     claims     in      plaintiff’s       complaint.

“[I]mmediate        appeal      of    interlocutory       orders    and   judgments     is

available in at least two instances. First, immediate review is

available when the trial court enters a final judgment as to one

or more, but fewer than all, claims or parties and certifies

there is no just reason for delay. ... Second, immediate appeal
                                      -4-
is   available    from   an    interlocutory        order    or    judgment   which

affects a substantial right.” Sharpe v. Worland, 351 N.C. 159,

161-62,     522 S.E.2d 577,   579        (1999)    (internal     quotations

omitted).    In the instant case, the trial court’s order did not

include a certification that there is no just reason for delay

pursuant    to    N.C.   Gen.    Stat.      §     1A-1,     Rule    54(b)   (2013).

Therefore, this appeal is only properly before us if it affects

a substantial right.

      Defendants note that the only assets held by GSW are two

parcels of real property.            Based upon this fact,              defendants

contend that their appeal affects a substantial right because

“[t]his Court has regularly found that an order involving the

title to property necessarily affects a substantial right and

may be immediately appealed,” and the determination of who owns

GSW also decides who owns GSW’s real property. In support of

their   argument,    defendants      rely       primarily    upon    this   Court’s

opinion in Phoenix Ltd. P’ship of Raleigh v. Simpson, 201 N.C.

App. 493, 688 S.E.2d 717 (2009).

      In Phoenix, the plaintiff and the defendants entered into a

lease agreement which included an option by which the defendants

could require the plaintiff to purchase the leased property from

them. Id. at 495, 688 S.E.2d at 719.                 The defendants exercised
                                        -5-
this option, but the parties failed to close on the property by

the date specified in the contract. Id. at 496, 688 S.E.2d at

720.    The defendants initiated an action against the plaintiff

seeking    specific     performance     of     the    option      contract,     and    in

response the defendants filed several counterclaims against the

plaintiff. Id. at 497-98, 688 S.E.2d at 721.                          This Court held

that    the   trial     court’s     interlocutory           order      which    granted

specific      performance      to     the     plaintiff         and     required      the

defendants to convey          the property       at issue         to the plaintiff

affected a substantial right.

       Phoenix   is     distinguishable        from       the     instant      case   in

multiple respects.          First, in Phoenix, the resolution of the

remaining      claims    in     the     case        was     dependent        upon     the

determination of ownership of the property at issue. Id. at 495-

99, 688 S.E.2d at 719-21.           As defendants concede, the remaining

claim in this case “pertains to an entirely separate and wholly

unrelated transaction and occurrence.”                    More importantly, the

trial court’s order in the instant case did not actually resolve

any issues regarding ownership of real property, since there is

no dispute in this case that GSW is the legal owner of the two

parcels.       The    trial   court’s       order    only       determined     who    was

entitled to own GSW.           Defendants do not cite any cases which
                               -6-
hold that the determination of ownership of a business entity,

the issue actually determined by the trial court, affects a

substantial right.   As a result, they have failed to meet their

burden of establishing that the trial court’s order affects a

substantial right which permits immediate appellate review.   See

FMB, Inc. v. Creech, 198 N.C. App. 177, 181, 679 S.E.2d 410, 413

(2009)(holding that an appeal did not affect a substantial right

when the parties did not stipulate that remaining claims were

dependent upon resolution of the appeal and when there was “no

dispute . . . as to who had legal title to the property.”).

Defendants’ appeal must therefore be dismissed.

    Dismissed.

    Judges ELMORE and STEPHENS concur.

    Report per Rule 30(e).