SIMMS v. BALL STREET VENTURES, LLC et al

Filing 6

MEMORANDUM OPINION AND ORDER, signed by MAG/JUDGE L. PATRICK AULD on 10/5/2012, that Plaintiff's Motion to Allow Conventional Filing (Docket Entry 3 ) is GRANTED IN PART in that Attorney Charles R. Hassell, Jr. may file documents in this case i n paper form through December 31, 2012, further that Plaintiff's Application for Charging Order (Docket Entry 4 ) is GRANTED and, pursuant to Federal Rule of Civil Procedure 69(a)(1) and Section 57C-5-03 of the North Carolina General Statutes, National Champion Real Estate, LLC; BDVII, LLC; BDV III, LLC; Fuller Street Development, LLC; Durham Basketball Team, LLC; FSD Master Tenant, LLC; L8, LLC; Walker CST, LLC; and West Village Condo Partnership, LLC shall direct any distributions with r espect to Brian K. Davis's membership interests to Plaintiff in the amount of $667,846.90, plus post-judgment interest at the applicable legal rate, further that Plaintiff's Motion for Writ of Garnishment (Docket Entry 5 ) is DENIED, but without prejudice to Plaintiff filing another such (or similar) motion, along with a supporting brief that sets out authority for the requested relief and (if necessary) any required affidavit. (Israel, Lisa)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
BRYAN H. SIMMS,

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Plaintiff,
v.
BALL STREET VENTURES, LLC,
et al.,
Defendants.

1:12MC1

MEMORANDUM OPINION AND ORDER
This case comes before the Court on Plaintiff’s Motion to
Allow

Conventional

Filing

(Docket

Entry

3),

Application

for

Charging Order (Docket Entry 4), and Motion for Writ of Garnishment
(Docket Entry 5).
Oct. 4, 2012.)

(See Docket Entries dated July 27, 2012, and
For the reasons that follow, the Court will

authorize Plaintiff to make paper filings through the end of 2012,
will enter a charging order pursuant to Federal Rule of Civil
Procedure 69(a)(1) and Section 57C-5-03 of the North Carolina
General Statutes, and will decline to issue the Writ of Garnishment
requested by Plaintiff, but without prejudice to his right to file
another such (or similar) motion with proper supporting materials.
BACKGROUND
Proceedings in this case began in this Court upon the filing
by Plaintiff of a Clerk’s Certification of a Judgment To Be
Registered in Another District.

(Docket Entry 1.)

The underlying

Judgment (issued on May 14, 2009, by the United States District
Court for the District of Columbia) awarded Plaintiff $667,846.90
from Defendants Ball Street Ventures, LLC, Ball Street Partners,
LLC, Ball Street Fund, LLC, and Brian K. Davis.
1.)

(Docket Entry 1-

Attorney Charles R. Hassell, Jr. thereafter entered a Notice

of Appearance on behalf of Plaintiff (Docket Entry 2) and moved for
leave to file documents in paper form, rather than through the
Court’s CM/ECF system (Docket Entry 3), on the ground that,
although admitted to this Court, he “rarely practices in [it], is
not certified for e-filing, and is in the process of winding down
his practice during the year 2012” (id. at 1).
Plaintiff

(through

Mr.

Hassell)

also

At the same time,

“appli[ed]

for

judicial

charging orders, pursuant to N.C. Gen. Stat. Sec. 57C-5-03 (2012)”
(Docket Entry 4 at 1) and “move[d] for the issuance of a Writ of
Garnishment commanding National Champion Real Estate, LLC; BDV II,
LLC;

BDV

III,

LLC;

Fuller

Street

Development,

LLC;

Durham

Basketball Team, LLC; FSD Master Tenant, LLC; L8, LLC; Walker CST,
LLC; and West Village Condo Partnership, LLC, to appear and answer,
according to law” (Docket Entry 5 at 2).
DISCUSSION
In federal court, “[a] money judgment is enforced by a writ of
execution, unless the court directs otherwise.

The procedure on

execution--and in proceedings supplementary to and in aid of

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judgment or execution--must accord with the procedure of the state
where the court is located, but a federal statute governs to the
extent it applies.”

Fed. R. Civ. P. 69(a)(1) (emphasis added).

North Carolina law, in turn, provides that, “[o]n application
. . . by any judgment creditor of a member [of a limited liability
company], [a] court [of competent jurisdiction] may charge the
membership interest of the member with payment of the unsatisfied
amount of the judgment with interest.” N.C. Gen. Stat. § 57C-5-03.
Plaintiff has registered in this Court a Judgment that makes him a
judgment creditor of Brian K. Davis and has applied for an order
from this Court charging Davis’s membership interest in nine North
Carolina limited liability companies with payment of the sums Davis
owes pursuant to that Judgment (including interest).

Accordingly,

North Carolina law, as incorporated into Federal Rule of Civil
Procedure 69(a), permits entry of a charging order in Plaintiff’s
favor against the named limited liability companies.1
Plaintiff also has “move[d] for the issuance of a Writ of
Garnishment commanding National Champion Real Estate, LLC; BDV II,
LLC;

BDV

III,

LLC;

Fuller

Street

1

Development,

LLC;

Durham

The proposed order submitted with the instant Application
includes language providing that the interest owed on the
underlying Judgment consists of sums accrued “at the legal rate of
8% per annum, pursuant to N.C. Gen. Stat. § 24-1 (2012), from May
14, 2009, the date of judgment, to the date of satisfaction.”
(Docket Entry 4-1 at 1-2.) It appears, however, that such interest
accrues as prescribed by 28 U.S.C. § 1961(a) and (b). See Forest
Sales Corp. v. Bedingfield, 881 F.2d 111, 111-13 (4th Cir. 1989).
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Basketball Team, LLC; FSD Master Tenant, LLC; L8, LLC; Walker CST,
LLC; and West Village Condo Partnership, LLC, to appear and answer,
according to law . . . .”

(Docket Entry 5 at 2 (emphasis added).)

As grounds for such action, the instant Motion states (in unsworn
fashion):

“It is believed that [the foregoing limited liability

companies] hold money of judgment debtor Brian K. Davis.”
1-2.)

(Id. at

Unlike the Application for Charging Order, which directed

the Court to Section 57C-5-03 (see Docket Entry 4 at 1), the
instant Motion for Writ of Garnishment does not cite any authority
for the relief it requests (see Docket Entry 5 at 1-2).
The Court’s research revealed that Subchapter X of the North
Carolina General Statutes (which addresses “Execution” on judgments
and consists of Article 28 entitled “Execution,” Article 29A
entitled “Judicial Sales,” Article 29B entitled “Execution Sales,”
Article 29C entitled “Validating Sections,” Article 30 entitled
“Betterments,” and Article 31 entitled “Supplemental Proceedings”),
does not contain any apparent provision(s) regarding “Garnishment.”
See N.C. Gen. Stat. §§ 1-302 - 1-368. The Supplemental Proceedings
Article within Subchapter X, however, does have sections allowing
courts to require third-parties:
property of a judgment debtor,

1) to produce records regarding

N.C. Gen. Stat. § 1-352.2(1); and

2) to submit to examination, N.C. Gen. Stat. § 1-356.2
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The instant

Additionally, “[i]n aid of [a money] judgment or [related]
execution, the judgment creditor . . . may obtain discovery from
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Motion for Writ of Garnishment, however, does not clearly request
those forms of relief.

(See Docket Entry 5.)

Subchapter X’s Supplemental Proceedings Article also includes
a provision stating that:
Upon the issuing or return of an execution against
property of the judgment debtor, or of any one of several
debtors in the same judgment, and upon affidavit that any
person or corporation has property of said judgment
debtor, or is indebted to him in an amount exceeding ten
dollars ($10.00), the court or judge may, by order,
require such person or corporation, or any officer or
members thereof, to appear at a specified time and place,
and answer concerning the same; provided, however, that
such inquiries may, in the discretion of the court, be
answered by such person or corporation, or any officers
or
members
thereof,
by
verified
answers
to
interrogatories.
N.C. Gen. Stat. § 1-360 (emphasis added).

To the extent this

provision might authorize court action of the sort Plaintiff seeks
(though not via a vehicle called a “Garnishment”), Plaintiff has
failed to submit an affidavit (or other sworn statement) of the
kind this statute appears to require.
Finally,

Subchapter

XIII

of

(See Docket Entry 5.)

the

North

Carolina

General

Statutes (entitled “Provisional Remedies”) contains Article 35
(entitled “Attachment”), which (in Part 3 entitled “Execution of
Order of Attachment; Garnishment”) provides for “Garnishment,”

any person . . . as provided in [the Federal Rules of Civil
Procedure] or by the procedure of the state where the court is
located.” Fed. R. Civ. P. 69(a)(2). The Federal Rules of Civil
Procedure, in turn, allow litigants to issue subpoenas to thirdparties to obtain relevant information. See Fed. R. Civ. P. 45.
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including issuance of a “summons to a garnishee” requiring the
summonsed person or entity to file a verified answer disclosing any
“indebted[ness] to the defendant or . . . any property of [the
defendant] in [the summonsed person’s or entity’s] possession,”
N.C. Gen. Stat. § 1-440.23.
only may issue:

Such garnishment summonses, however,

“(1) At the time of the issuance of the original

order of attachment . . . or (2) At any time thereafter prior to
judgment in the principal action . . . .”
(emphasis added).

N.C. Gen. Stat. § 1-440

Moreover, an “[a]ttachment is a proceeding

ancillary to a pending principal action . . . and is intended to
bring property of a defendant within the legal custody of the court
in order that it may subsequently be applied to the satisfaction of
any judgment for money which may be rendered against the defendant
in the principal action.”
added).

N.C. Gen. Stat. § 1-440.1 (emphasis

The Court cannot discern that these apparent pre-judgment

mechanisms have applicability in this post-judgment context.
Under

these

circumstances,

the

Court

will

deny

without

prejudice Plaintiff’s Motion for Writ of Garnishment.
CONCLUSION
Good cause exists to allow Mr. Hassell to file paper documents
with the Court for the remainder of 2012.

Further, North Carolina

law (and thus Federal Rule of Civil Procedure 69(a)(1)) authorizes
entry of the charging order sought by Plaintiff.

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Plaintiff,

however, has not made (at least at this time) a sufficient showing
for the Court to issue the Writ of Garnishment he has requested.
IT IS THEREFORE ORDERED that Plaintiff’s Motion to Allow
Conventional Filing (Docket Entry 3) is GRANTED IN PART in that
Attorney Charles R. Hassell, Jr. may file documents in this case in
paper form through December 31, 2012.
IT

IS

FURTHER

ORDERED

that

Plaintiff’s

Application

for

Charging Order (Docket Entry 4) is GRANTED and, pursuant to Federal
Rule of Civil Procedure 69(a)(1) and Section 57C-5-03 of the North
Carolina General Statutes, National Champion Real Estate, LLC; BDV
II, LLC; BDV III, LLC; Fuller Street Development, LLC; Durham
Basketball Team, LLC; FSD Master Tenant, LLC; L8, LLC; Walker CST,
LLC; and West Village Condo Partnership, LLC shall direct any
distributions with respect to Brian K. Davis’s membership interests
to Plaintiff in the amount of $667,846.90, plus post-judgment
interest at the applicable legal rate.
IT IS FURTHER ORDERED that Plaintiff’s Motion for Writ of
Garnishment (Docket Entry 5) is DENIED, but without prejudice to
Plaintiff filing another such (or similar) motion, along with a

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supporting brief that sets out authority for the requested relief
and (if necessary) any required affidavit.
This the 5th day of October, 2012.
/s/ L. Patrick Auld
L. Patrick Auld
United States Magistrate Judge

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