GARLAND B. KINCHELOE, JR.,
THE LEEDS GROUP, L.L.C.,
and Wake County
No. 97 CVS 11839
JOHN R. GAMBLE, III,
Additional Party Defendant
and Third-Party Plaintiff,
LIBERTY RIDGE HOMES, LLC,
McDaniel & Anderson, L.L.P., by L. Bruce McDaniel, for
additional party defendant and third-party plaintiff-
Additional party defendant/third-party plaintiff John R. Gamble, III appeals orders of the trial court related to the award of compensation and attorneys' fees to the receiver of The Leeds Group, L.L.C. Gamble primarily argues on appeal that the trialcourt erred (1) in concluding that Gamble could not challenge previous applications for payment by the receiver that had already been approved by the court, (2) in failing to require the receiver to repay previously-awarded fees and compensation, and (3) in awarding additional compensation and fees that Gamble contends were excessive and not supported by the evidence. We hold that the trial court properly determined that Gamble could not challenge the previously-awarded receivership fees based on the principle that one superior court judge may not overrule another superior court judge. Further, Gamble has not properly appealed to this Court from those prior orders allowing the receiver's application for fees. Finally, the amount awarded in the properly-appealed orders is not clearly excessive and is supported by competent evidence. Because we also find Gamble's remaining assignments of error to be without merit, we affirm.
To permit Gamble to reverse course and
now engage in a second "lawsuit" against the
Receiver, would be to reward him for being
silent and essentially lie in wait as the
Court and the Receivership progressed on
without notice of his objections or claims in
a timely manner. Gamble may not now assert an
objection or claim as to those matters. For
the Court to countenance such a proceeding
would be to permit an inconsistent position in
the same litigation and matter and thereby
reward conduct which this Court can onlycharacterize as "playing fast and loose" with
the Court, prejudicial to the integrity of the
Court and detrimental to the judicial process.
The order concluded: "The Court's prior orders not objected to,
not appealed nor the subject of timely motions in the cause, are
final and not subject to being re-opened or their subject matter
litigated at this stage of the proceedings."
Following a hearing on 1 July 2003, Judge Manning, in an order filed 8 August 2003 (the "August 2003 order") addressed the receiver's applications for payment for work done from 1 March 2001 through 30 June 2003. After reviewing the applications, Gamble's objections, the total amount of receipts and disbursements from the receivership estate, and the total amounts paid previously, Judge Manning authorized payment of $8,588.10 in additional receiver compensation and $14,108.00 in attorneys' fees under N.C. Gen. Stat. § 1-507.9 (2003). On 5 September 2003, Gamble filed a notice of appeal of this August 2003 order, as well as the April 2003 order.
On 16 January 2004, Judge Manning entered a Final Judgment, providing for payment of final amounts to creditors and directing distribution of all remaining cash assets to Gamble. Judge Manning further ordered, once the final disbursements were made, that the receivership be terminated, the receiver discharged, and The Leeds Group dissolved in accordance with law. The judgment specified that "Brent E. Wood, as receiver or individually, is not a party to any appeal which may be pending and docketed in the Court of Appeals." On 20 January 2004, Gamble filed a "Final Notice ofAppeal and Amended Notice of Appeal," in which he appealed from the Final Judgment entered on 16 January 2004, the August 2003 order, and the April 2003 order.
The notice of appeal thus failed to specifically appeal from the 17
orders filed from 22 May 1998 through 6 April 2001 allowing the
applications for compensation for services rendered from the
beginning of the receivership through February 2001.
Proper notice of appeal requires that the appealing party "designate the judgment or order from which appeal is taken and the court to which appeal is taken . . . ." N.C.R. App. P. 3(d). "Without proper notice of appeal, this Court acquires no jurisdiction." Brooks v. Gooden, 69 N.C. App. 701, 707, 318 S.E.2d 348, 352 (1984). Our Court has held that a mistake in designating the judgment or in designating the part appealed from, if only a portion is designated, should not result in loss of the appeal, so long as the court is able fairly to infer an intent to appeal from a specific judgment and the appellee is not misled by the mistake. Von Ramm v. Von Ramm, 99 N.C. App. 153, 156-57, 392 S.E.2d 422, 424 (1990). Here, even if we construe Gamble's notice of appeal liberally, it does not give rise to any inference of an intent to appeal the 17 orders entered from 22 May 1998 through 6 April 2001.
N.C. Gen. Stat. § 1-278 (2003) provides another means by which an appellate court may obtain jurisdiction to review an order not included in a notice on appeal. It states: "Upon an appeal from a judgment, the court may review any intermediate order involving the merits and necessarily affecting the judgment." Id. ThisCourt has held that appellate review pursuant to N.C. Gen. Stat. § 1-278 is proper under the following conditions: (1) the appellant must have timely objected to the order; (2) the order must be interlocutory and not immediately appealable; and (3) the order must have involved the merits and necessarily affected the judgment. Brooks v. Wal-Mart Stores, Inc., 139 N.C. App. 637, 641, 535 S.E.2d 55, 59 (2000), disc. review denied, 353 N.C. 370, 547 S.E.2d 2 (2001) . All three conditions must be met. Id. at 642, 535 S.E.2d at 59.
In this case, Gamble cannot meet either of the first two requirements. As already indicated, the orders were not interlocutory, but rather were subject to immediate appeal. Even if that were not the case, Gamble did not timely object to any of the orders. Rule 46(b) of the Rules of Civil Procedure provides, as to interlocutory orders not directed to the admissibility of evidence, that "formal objections and exceptions are unnecessary." Instead,
[i]n order to preserve an exception to any such ruling or order or to the court's failure to make any such ruling or order, it shall be sufficient if a party, at the time the ruling or order is made or sought, makes known to the court the party's objection to the action of the court or makes known the action that the party desires the court to take and the party's grounds for its position.
Id. This Court has held that this requirement may be fulfilled through the filing of an opposition to the motion at issue. Gaunt v. Pittaway, 139 N.C. App. 778, 782, 534 S.E.2d 660, 662-63, appeal dismissed and disc. review denied, 353 N.C. 262, 546 S.E.2d 401(2000), cert. denied, 353 N.C. 371, 547 S.E.2d 810, cert. denied, 534 U.S. 950, 151 L. Ed. 2d 261, 122 S. Ct. 345 (2001). This opposition must, however, specify "what action [the non-movant] wanted the trial court to take and the grounds for that action." Inman v. Inman, 136 N.C. App. 707, 712, 525 S.E.2d 820, 823, cert. denied, 351 N.C. 641, 543 S.E.2d 870 (2000). In this case, Gamble did not file any opposition to the applications for payment and did not at the time of the entry of the orders make known his objections, if any, to the orders.
Further, even if the orders fell properly within the scope of Gamble's appeal, we would be precluded from reviewing the merits of those orders. N.C.R. App. P. 10(b)(1) provides: "In order to preserve a question for appellate review, a party must have presented to the trial court a timely request, objection or motion, stating the specific grounds for the ruling the party desired the court to make if the specific grounds were not apparent from the context." Because Gamble did not object to the applications filed prior to February 2001, he may not now challenge them on appeal.
Accordingly, we hold that Judge Manning did not err in holding that Gamble was barred from relitigating the merits of the applications for payment approved by the orders entered from 22 May 1998 through 6 April 2001. Further, we hold that we do not have jurisdiction on this appeal to review the merits of Gamble's arguments regarding the propriety of those orders. See Talbot v. Tyson, 147 N.C. 273, 274, 60 S.E. 1125, 1126 (1908) (noting that when considering an order awarding fees to a receiver, theappellate court could not consider a previous order appointing a receiver because the court "cannot at this stage of the case review the former order of the judge appointing the receiver, as there was no appeal from that order at the time it was made").
Id. (quoting 75 C.J.S. Receivers § 384a, at 1049). We thus review
the trial court's allowance of fees and expenses for an abuse of
discretion with a focus on whether the amount allowed was clearly
inadequate or excessive. Id. at 715-16, 129 S.E.2d at 503
(reversing order because the allowance of counsel fees was found to
be "clearly excessive"). See also Lowder v. All Star Mills, Inc.,
309 N.C. 695, 709, 309 S.E.2d 193, 203 (1983) ("The trial judge did
not abuse his discretion in awarding the counsel fees [for the
receiver's attorney]."). Unless the amount awarded to the receiver
is "based upon a wrong principle or is clearly excessive," an order
of the trial court regarding receiver compensation should be
upheld. Talbot, 147 N.C. at 274, 60 S.E. at 1126.
In North Carolina, a receiver is entitled to reasonable compensation for his services. As N.C. Gen. Stat. § 1-507.9 (2003) explains:
Before distribution of the assets of an insolvent corporation among the creditors or stockholders, the court shall allow a reasonable compensation to the receiver for his services, not to exceed five percent uponreceipts and disbursements, and the costs and expenses of administration of his trust and of the proceedings in said court, to be first paid out of said assets. The court is authorized and empowered to allow counsel fees to an attorney serving as a receiver (in addition to the commissions allowed him as receiver as herein provided) where such attorney in behalf of the receivership renders professional services, as an attorney, which are beyond the ordinary routine of a receivership and of a type which would reasonably justify the retention of legal counsel by any such receiver not himself licensed to practice law.
(Emphasis added.) The fees and expenses of the receiver are part of the costs and expenses of the receivership, and these payments should be paid as a cost and expense and not like a debt to a creditor. See Wilson Cotton Mills v. C.C. Randleman Cotton Mills, 115 N.C. 475, 485, 20 S.E. 770, 773 (1894). N.C. Gen. Stat. § 1- 507.1 (2003) limits the compensation for receivers to five percent of receipts and five percent of disbursements. Battery Bank, 126 N.C. at 539, 36 S.E. at 42. The receiver is also entitled to receive, in addition to reasonable compensation, attorneys' fees for tasks that require special legal skill and ability. King, 258 N.C. at 714, 129 S.E.2d at 502. Counsel fees should not be awarded for duties that do not require special legal skill, such as collecting assets of an estate. Id. at 715, 129 S.E.2d at 502.
In the August 2003 order, the trial court first determined the maximum amount available to the receiver as reasonable compensation for work done during the entire receivership, an amount equal to five percent of total receipts plus five percent of total disbursements (less the amount of $89,843.80 already paid to thereceiver in receiver compensation and attorneys' fees). The trial court then reviewed the receiver's applications for payment of fees and expenses for work done from 1 March 2001 through June 2003, Gamble's respective objections to those motions, and an exhibit itemizing the receiver's time and expenses from March 2001 to September 2002. The trial court reviewed each individual time entry and marked on the applications and exhibit (1) whether it approved or disapproved the entry and (2) whether the entry represented receivership work, legal services, or work done in preparing fee applications or defending against Gamble's objections. (See footnote 2) Approved entries for receivership work totaled $8,558.10, while approved entries for legal services totaled $14,108.00. These amounts were substantially less than requested by the receiver.
As its next step, the trial court returned to calculation of the maximum eligible compensation for the receiver. In the first step, above, the court had subtracted from the total disbursements of $565,822.48 the amount paid to the receiver in compensation and legal fees through 1 March 2001 ($89,843.80). The trial court then subtracted $22,656.10 (the total of $8,558.10 and $14,108.00 for compensation and legal fees from 1 March 2001 through June 2003), leaving total disbursements of $453,322.58. Five percent of that total equaled $22,666.12. By adding the five percent maximum for receipts ($26,251.12) and the five percent maximum fordisbursements ($22,666.12), the court determined that the receiver was eligible to receive a maximum of $48,957.24.
The court found that the receiver had already been paid $37,198.39 in receiver compensation pursuant to the prior court orders. When $8,588.10 (the amount found by the court to be reasonable compensation for 1 March 2001 through June 2003) was added to the amount previously paid to the receiver ($37,198.39), the total ($45,786.49) was less than the five percent cap. The court, therefore, ordered the payment of (1) the "additional sum of $8,588.10, as a reasonable compensation to the Receiver for his services rendered since March 1, 2001 to and including June 30, 2003" and (2) "the additional sum of $14,108.00 (in addition to the commissions allowed as receiver) as legal fees for professional services which are beyond the ordinary routine of a receivership as permitted by G.S. 1-507.9." The court also ruled that any fees and expenses not specifically approved by the court were denied, and Gamble's objections to the receiver's applications for payment were overruled and denied.
Gamble argues first that the trial court erred in making its ruling without requiring the receiver to submit a final accounting and report regarding his compensation and attorneys' fees. The receiver, however, submitted a 21-page table covering the period 5 November 1997 through 30 September 2002 (Exhibit B to the receiver's 22 October 2002 application), setting out the dates of each invoice, the dates of each time entry, the legal fees incurred on each date, the receiver's compensation requested for each date,the expenses incurred on each date, and the amounts paid to the receiver. The table also itemized receipts of the receivership estate and attached supporting documents, including bank statements and Internal Revenue Service Forms 1065 ("Partnership Return of Income"). Following 30 September 2002, the receiver submitted additional invoices with itemizations of time spent and services rendered for the period through June 2003. Judge Manning viewed these materials as adequate evidence, when considered in conjunction with Gamble's objections, to reach his decision. After reviewing the record, we agree that any further report by the receiver would likely be duplicative and unnecessary. Gamble had an opportunity to demonstrate any inaccuracies or inadequacies in those materials.
Gamble next argues that Judge Manning erred in failing to reduce the amounts awarded for the receiver's having made unlawful payments, having committed waste and errors in handling the estate, and having breached his fiduciary duty. Specifically, Gamble contends that the receiver should be required to repay all amounts paid to him. This argument attempts to achieve indirectly what Gamble could not achieve directly: relitigation of the amounts paid pursuant to the prior orders. Judge Manning properly restricted his focus to the amounts sought for services from 1 March 2001 through 30 June 2003. Moreover, the evidence was conflicting regarding whether the receiver acted improperly. Judge Manning had responsibility for resolving that conflict, and this Court may not substitute a different view. Gamble next challenges the factual bases for Judge Manning's calculations. He claims that (1) the findings of fact are incomprehensible, (2) the figures for the total receipts and disbursements are inaccurate, (3) the judge erred in allocating only $37,198.39 of the past-paid amounts to receiver compensation, (4) the judge erred in his determination of legal fees following 1 March 2001, and (5) the judge should have given a credit for amounts the receiver paid others to perform professional duties he should have assumed. Gamble made these arguments below, and Judge Manning disagreed.
After reviewing the record and applying the proper standard of review, we hold that Gamble has failed to demonstrate that the trial judge abused his discretion or that the amounts awarded were clearly excessive. Specifically, Gamble has not challenged the trial court's methodology. The receiver's itemized statements together with Exhibit B to the receiver's 22 October 2002 application for payment are sufficiently detailed to provide an evidentiary basis for the trial court's determinations. Further, the trial judge's handwritten notations on those documents when combined with his written order are sufficient to allow appellate review. The trial court conducted a careful analysis of the evidence, disapproved various entries, and made adjustments reallocating some entries as properly receiver compensation rather than legal fees. Even though Gamble may disagree with the findings, the trial court's findings are supported by evidence, including the receiver's exhibits and invoices. See Lowder, 309N.C. at 709, 309 S.E.2d at 203 (because the evidence supported the trial court's finding, "[t]he trial judge did not abuse his discretion in awarding the counsel fees"); see also Matthews v. Watkins, 91 N.C. App. 640, 646, 373 S.E.2d 133, 137 (1988) ("On appeal, this Court may not substitute its findings for those of the judge if there is evidence to support the findings of the judge."), aff'd per curiam, 324 N.C. 541, 379 S.E.2d 857 (1989). The amounts awarded are not "clearly excessive," and we can perceive no abuse of discretion. Accordingly, we affirm.
Gamble also assigned error to the trial court's direction that the receiver was not a party to this appeal. Gamble argues only that this aspect of the order was an attempt "to thwart Gamble's right to appeal" and that "[i]nsulating receiver Wood from Gamble's right to appeal would otherwise also abrogate Gamble's rights to due process." Gamble has not, however, been precluded from appealing, and, in light of our resolution of his appeal, we have been unable to identify any prejudice to Gamble from this ruling. We, therefore, do not address this issue.
Judges TIMMONS-GOODSON and TYSON concur.
Report per Rule 30(e).
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