84 LUMBER COMPANY, L.P.,
No. 03 CVD 000691
HABITECH ENTERPRISES, INC. and
MEHDI K. DEHGHAN a/k/a
MEHDI K. DEHGAN a/k/a
Appeal by defendants from an order entered 29 September 2006
by Judge Shelley H. Desvousges in Wake County District Court.
Heard in the Court of Appeals 15 October 2007.
Smith Debnam Narron Wyche Saintsing & Myers, LLP, by Byron L.
Saintsing and Chad A. Sharkey, for plaintiff-appellee.
George B. Currin for defendants-appellants.
MARTIN, Chief Judge.
Habitech Enterprises, Inc. (Habitech) and Mehdi Dehghan (Dehghan and collectively defendants) entered into an agreement with 84 Lumber Company, L.P. (plaintiff) for the provision of goods, building materials, and labor. On 17 January 2003 plaintiff filed suit against defendants for breach of contract and breach of personal guaranty, alleging that Habitech failed to pay $55,919.94 owed on the contract and that Dehghan was liable as guarantor. Plaintiff moved for summary judgment, and the trial court granted the motion on the issue of liability but denied the motion on the issue of damages. On 11 March 2004 the parties entered into a Consent Judgment in which plaintiff agreed to refrain from recording the judgment if defendants agreed to pay plaintiff a sum of $65,000 over a specified period of time. Defendants failed to make timely payment, and on 30 March 2004 plaintiff moved to execute the judgment against defendants. The execution was returned unsatisfied by the Wake County Sheriff. Dehghan filed a Motion to Claim Exempt Property, and plaintiff filed an objection to this motion, claiming that Dehghan undervalued and omitted assets. The trial court ordered modifications to the Motion to Claim Exempt Property.
Plaintiff attempted to depose Dehghan in order to determine his assets available to satisfy the judgment. Dehghan appeared but refused to answer any questions. Plaintiff filed a Motion to Compel Dehghan to appear for deposition and testify about his property. This motion was denied. Plaintiff moved for an Order for Supplemental Examination, requesting that Dehghan be ordered to appear in court and answer questions about his property. The motion was granted, and the trial court issued an Order for Supplemental Examination. This order required Dehghan to appear at a hearing to answer questions about his property and bring documents detailing his assets to the hearing. It also forbade him from transferring or disposing of any property.
Defendants argue that the Order for Supplemental Examination must be vacated because it was unauthorized by law and exceeded the authority of the trial court. Defendants contend that theorder should have been accompanied by an affidavit or other competent evidence, and that the trial court lacked the authority to order defendants to produce documents and refrain from transferring or disposing of property.
Three statutes govern the issues on appeal. N.C.G.S. § 1-352 states that if a judgment is returned by the sheriff unsatisfied, then:
[T]he judgment creditor at any time after the return, and within three years from the time of issuing the execution, is entitled to an order from the court to which the execution is returned or from the judge thereof, requiring such debtor to appear and answer concerning his property before such court or judge, at a time and place specified in the order, within the county to which the execution was issued.
N.C. Gen. Stat. § 1-352 (2005).
N.C.G.S. § 1-352.2 states:
[A]s an additional method of discovering assets of a judgment debtor the clerk of the court or a judge of the court in the county wherein the original judgment is docketed, at any time the judgment remains unsatisfied, and within three years from the time of issuing an execution, upon motion of the judgment creditor showing good cause therefor, may:
(1) Order the judgment debtor, his agent or anyone having possession or control of property or records of or pertaining to the judgment debtor, to produce and permit the inspection and copying or photographing, by or on behalf of the moving party, of any designated documents, papers, books, accounts, all tax records, letters, objects or tangible things, not privileged, constituting property, or being evidence of property, of the judgment debtor and which are in his possession and custody, or subject to his control[.]
N.C. Gen. Stat. § 1-352.2 (2005). Finally, N.C.G.S. § 1-358 states that in order to recover assets from a judgment debtor [t]he court or judge may, by order, forbid a transfer or other disposition of, or any interference with, the property of the judgment debtor not exempt from execution. N.C. Gen. Stat. § 1-358 (2005).
These statutes are discretionary in nature, and therefore, we will not disturb the trial court's decision absent an abuse of discretion. See State ex rel. Long v. Interstate Casualty Ins. Co., 120 N.C. App. 743, 750, 464 S.E.2d 73, 77 (1995). The trial court abuses its discretion when it makes a patently arbitrary decision, manifestly unsupported by reason. Buford v. General Motors Corp., 339 N.C. 396, 406, 451 S.E.2d 293, 298 (1994).
In the present case, ordering Dehghan to appear at a hearing to answer questions about his property, to bring documents detailing his assets to the hearing, and to refrain from transferring or disposing of any property was clearly within the trial court's authority granted by N.C.G.S. §§ 1-352, 1-352.2, and 1-358, respectively. Further, N.C.G.S. § 1-352 makes no mention of any affidavit requirement that must be met before a trial court may order a judgment debtor to appear in court to answer questions about his property. Thus, the trial court did not abuse its discretion in entering the Order for Supplemental Examination.
Judges ELMORE and JACKSON concur.
Report per Rule 30(e).
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