{
  "id": 9082365,
  "name": "MAX HERRING, as assignee of BRANCH BANKING & TRUST CO., Plaintiff v. BENNETT M. KEASLER, JR., Defendant",
  "name_abbreviation": "Herring v. Keasler",
  "decision_date": "2002-06-04",
  "docket_number": "No. COA01-1000",
  "first_page": "598",
  "last_page": "601",
  "citations": [
    {
      "type": "official",
      "cite": "150 N.C. App. 598"
    }
  ],
  "court": {
    "name_abbreviation": "N.C. Ct. App.",
    "id": 14983,
    "name": "North Carolina Court of Appeals"
  },
  "jurisdiction": {
    "id": 5,
    "name_long": "North Carolina",
    "name": "N.C."
  },
  "cites_to": [
    {
      "cite": "N.C. Gen. Stat. \u00a7 1-362",
      "category": "laws:leg_statute",
      "reporter": "N.C. Gen. Stat.",
      "weight": 2,
      "opinion_index": 0
    }
  ],
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  "last_updated": "2023-07-14T19:52:10.836930+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [
      "Judges HUDSON and BIGGS concur."
    ],
    "parties": [
      "MAX HERRING, as assignee of BRANCH BANKING & TRUST CO., Plaintiff v. BENNETT M. KEASLER, JR., Defendant"
    ],
    "opinions": [
      {
        "text": "GREENE, Judge.\nMax Herring (Plaintiff), as assignee of Branch Banking & Trust Company (BB&T), appeals an order filed 16 May 2001 enjoining Plaintiff from seizing or selling Bennett M. Keasler, Jr.\u2019s (Defendant) membership interests in various limited liability companies.\nOn 3 January 1996, BB&T obtained a default judgment (the judgment) against Defendant and his wife in the amount of $29,062.57 plus interest. On 12 December 2000, BB&T assigned its interest in the judgment to Plaintiff, and Plaintiff obtained a writ of execution against Defendant on 19 March 2001. Subsequently, on 19 April 2001, Defendant filed an emergency motion seeking an order to restrain Plaintiff from attempting to have Defendant\u2019s membership interests in several limited liability companies seized and sold. In Defendant\u2019s affidavit, he stated he had a 20% membership interest in several limited liability companies, \u201cincluding River Place I, LLC; River Place II, LLC; River Place III, LLC[;] and River Place IV, LLC [(collectively, the LLCs)], which were created for the purpose of developing real estate in Wake County, North Carolina.\u201d\nIn an order dated 20 April 2001, the trial court temporarily restrained Plaintiff from seeking the seizure and sale of Defendant\u2019s membership interests in the LLCs. Thereafter, Plaintiff filed a motion on 23 April 2001 seeking an order under N.C. Gen. Stat. \u00a7 1-362 directing Defendant\u2019s membership interests in the LLCs be sold and the proceeds applied towards the judgment. Pending the sale of Defendant\u2019s membership interests in the LLCs, Plaintiff requested an order directing any distributions and allocations of those interests to be applied towards the satisfaction of the judgment (charging order). On 16 May 2001, the trial court filed an order: enjoining Plaintiff from seeking the seizure or sale of Defendant\u2019s membership interests in the LLCs; denying Plaintiffs motion, insofar as he sought to have Defendant\u2019s membership interests in the LLCs sold or transferred; and granting Plaintiff\u2019s motion for a charging order. With respect to the charging order, the trial court directed: Defendant\u2019s membership interests in the LLCs to be charged with payment of the judgment, plus interest; the LLCs to deliver to Plaintiff any distributions and allocations that Defendant would be entitled to receive on account of his membership interests in the LLCs; Defendant to deliver to Plaintiff any allocations and distributions he would receive; and Plaintiff to not obtain any rights in the LLCs, except as those of an assignee and under the respective operating agreement.\nThe dispositive issue is whether N.C. Gen. Stat. \u00a7 57C-5-03 permits a trial court to order a judgment debtor\u2019s membership interest in a limited liability company seized and sold and the proceeds applied towards the satisfaction of a judgment.\nGenerally, a trial court\nmay order any property, whether subject or not to be sold under execution (except the homestead and personal property exemptions of the judgment debtor), in the hands of the judgment debtor or of any other person, or due to the judgment debtor, to be applied towards the satisfaction of [a] judgment.\nN.C.G.S. \u00a7 1-362 (2001). North Carolina General Statutes \u00a7 57C-5-03, however, provides that with respect to a judgment debtor\u2019s membership interest in a limited liability company, a trial court \u201cmay charge the membership interest of the member with payment of the unsatisfied amount of the judgment with interest.\u201d N.C.G.S. \u00a7 67C-5-03 (2001). This \u201ccharge\u201d entitles the judgment creditor \u201cto receive ... the distributions and allocations to which the [judgment debtor] would be entitled.\u201d N.C.G.S. \u00a7 57C-5-02 (2001). The \u201ccharge\u201d \u201cdoes not dissolve the limited liability company or entitle the [judgment creditor] to become or exercise any rights of a member.\u201d Id. Furthermore, because the forced sale of a membership interest in a limited liability company to satisfy a debt would necessarily entail the transfer of a member\u2019s ownership interest to another, thus permitting the purchaser to become a member, forced sales of the type permitted in section 1-362 are prohibited. See N.C.G.S. \u00a7 57C-3-03 (2001) (except as provided in the operating agreement or articles of organization, consent of all the members of a limited liability company required to \u201c[a]dmit any person as a member\u201d).\nIn this case, despite Plaintiffs attempts to have Defendant\u2019s membership interests in the LLCs seized and sold, his only remedy is to have those interests charged with payment of the judgment under N.C. Gen. Stat. \u00a7 57C-5-03. Accordingly, the trial court did not err in ordering that the judgment be satisfied through the application of the distributions and allocations of Defendant\u2019s membership interests in the LLCs and in denying Plaintiff\u2019s motion to have Defendant\u2019s membership interests seized and sold.\nAffirmed.\nJudges HUDSON and BIGGS concur.\n. The judgment as to Defendant\u2019s wife was subsequently vacated.",
        "type": "majority",
        "author": "GREENE, Judge."
      }
    ],
    "attorneys": [
      "Michael W. Strickland & Associates, P.A., by Nelson G. Harris, for plaintiff-appellant.",
      "Hunton & Williams, by John D. Bums, for defendant-appellee."
    ],
    "corrections": "",
    "head_matter": "MAX HERRING, as assignee of BRANCH BANKING & TRUST CO., Plaintiff v. BENNETT M. KEASLER, JR., Defendant\nNo. COA01-1000\n(Filed 4 June 2002)\nExecution\u2014 limited liability companies \u2014 distributions\u2014ownership interests\nThe trial court did not err in ordering that a judgment be satisfied through the application of the distributions and allocations of defendant\u2019s membership interests in several limited liability companies and in denying plaintiffs motion to have defendant\u2019s membership interests seized and sold. N.C.G.S. \u00a7 57C-5-03 (2001).\nAppeal by plaintiff from order filed 16 May 2001 by Judge Jack W. Jenkins in Wake County Superior Court. Heard in the Court of Appeals 14 May 2002.\nMichael W. Strickland & Associates, P.A., by Nelson G. Harris, for plaintiff-appellant.\nHunton & Williams, by John D. Bums, for defendant-appellee."
  },
  "file_name": "0598-01",
  "first_page_order": 628,
  "last_page_order": 631
}