Appeal and Error_appealability_preliminary injunction_substantial right not affected
The appeal of a preliminary injunction was dismissed as interlocutory where the dispute
involved the legal status of a church and the transfer of its assets, and the court's order placed the
assets of the church and its day-to-day finances in the hands of a neutral party until the litigation
could be completed. Defendants lost no substantial right.
Davis Bibbs & Smith, P.L.L.C., by David C. Smith and Mark L.
Bibbs, for plaintiff-appellee.
Battle, Winslow, Scott & Wiley, P.A., by Marshall A. Gallop,
Jr. and M. Greg Crumpler, for defendant-appellants.
HUNTER, Judge.
St. Rose Church of Christ, Disciples of Christ, Dameion Royal,
Leslie Artis, William Smith, Curtis Best, Andrew McIntosh, Rosetta
Barnes, and St. Rose Church of Christ, Disciples of Christ, Inc.
(collectively “defendants”) appeal from (A) a preliminary
injunction filed 13 September 2002 freezing the assets of St. Rose
Church of Christ, Disciples of Christ (“the church”) and appointing
a receiver to handle the financial affairs of the church, and (B)an order filed 13 September 2002 granting the receiver specific
powers to administer the church's financial affairs. We conclude
this appeal is interlocutory and does not affect a substantial
right of the parties. Accordingly, this appeal is dismissed.
On 19 August 2002, Cecil Barnes (“plaintiff”) filed a
complaint alleging that defendant Dameion Royal (“Royal”), the
pastor of the church, had converted the legal status of the church
from an unincorporated religious association (“the association”) to
a non-profit corporation without proper authorization. The
complaint further alleged that following the conversion to a non-
profit corporation, assets of the association were transferred to
corporate accounts in breach of Royal's fiduciary duty as an agent
of the association. Plaintiff requested that the trial court
enjoin the transfer of assets and appoint a receiver to manage the
church's finances and assets.
A preliminary injunction is an interlocutory order, Wade S.
Dunbar Ins. Agency, Inc. v. Barber, 147 N.C. App. 463, 466, 556
S.E.2d 331, 334 (2001), as is an order appointing a receiver during
litigation, Lowder v. All Star Mills, 309 N.C. 695, 701, 309 S.E.2d
193, 198 (1983). “An appeal of an interlocutory order will not lie
to an appellate court unless the order deprives the appellant of a
substantial right which would be jeopardized absent a review prior
to a final determination on the merits.” Southern Uniform Rentals
v. Iowa Nat'l Mutual Ins. Co., 90 N.C. App. 738, 740, 370 S.E.2d
76, 78 (1988). “[T]he determination of whether a substantial right
is involved in the appeal depends on whether that right is one
which will be lost or irremediably and adversely affected if theorder is not reviewed before final judgment.” Id. In order to
resolve the question of the existence of a substantial right it is
usually necessary to consider the particular facts of a case and
the procedural context in which the interlocutory order arose. See
Wade S. Dunbar Ins. Agency, Inc., 147 N.C. App. at 466, 556 S.E.2d
at 334. A two-part test has emerged to decide if an immediate
appeal of an interlocutory order is warranted: “'the right itself
must be substantial and the deprivation of that substantial right
must potentially work injury . . . if not corrected before appeal
from final judgment.'” Action Cmty. Television Broadcasting
Network, Inc. v. Livesay, 151 N.C. App. 125, 129, 564 S.E.2d 566,
569 (2002) (quoting Goldston v. American Motors Corp., 326 N.C.
723, 726, 392 S.E.2d 735, 736 (1990)).
In this case, defendants note several effects of the
preliminary injunction and generally argue that the appointment of
a receiver prevents them from conducting their own business.
Assuming that the trial court's interlocutory orders do involve a
substantial right by preventing defendants from conducting their
own business, defendants have failed to show that the preliminary
injunction and appointment of the receiver will potentially result
in any harm. In fact, the orders themselves are designed to
maintain the status quo of the church's finances during this
litigation by placing the assets of the church and control of the
day to day finances in the hands of a neutral party until this
litigation involving control of those assets and finances is
completed. See Stancil v. Stancil, 94 N.C. App. 760, 763-64, 381
S.E.2d 720, 722-23 (1989) (order requiring bond to be posted, inlieu of a receiver, clearly designed to protect the status quo of
the parties was interlocutory and did not affect a substantial
right).
The order specifying the powers of the receiver authorizes the
receiver to pay the ordinary operating expenses of the church as
well as salary and a housing allowance for Royal, prohibits the
church from incurring new liabilities, and allows the receiver to
continue the collection of donations. Thus, the day to day
operation of the church is not halted by the trial court's orders,
and the effect of the orders is to prevent removal of the church's
assets prior to a determination of which entity and set of bylaws
properly controls the affairs of the church in order to prevent any
potential harm to the assets of the church. Therefore, there is no
substantial right of defendants that will be lost or irremediably
and adversely affected prior to a determination on the merits.
Accordingly this appeal is dismissed as interlocutory and not
affecting a substantial right.
Dismissed.
Judges TIMMONS-GOODSON and ELMORE concur.
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