{ "id": 8354105, "name": "ANTHONY SUSI, Plaintiff v. LOIS AUBIN, Defendant; NORTH COUNTRY DEVELOPMENT OF JEFFERSON COUNTY, INC., Plaintiff v. LOIS AUBIN, Defendant", "name_abbreviation": "Susi v. Aubin", "decision_date": "2005-10-04", "docket_number": "No. COA04-449; No.COA04-450", "first_page": "608", "last_page": "614", "citations": [ { "type": "official", "cite": "173 N.C. App. 608" } ], "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": "574 S.E.2d 474", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2002, "opinion_index": 0 }, { "cite": "356 N.C. 610", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1511470, 1511275, 1511283, 1511174 ], "year": 2002, "opinion_index": 0, "case_paths": [ "/nc/356/0610-02", "/nc/356/0610-04", "/nc/356/0610-03", "/nc/356/0610-01" ] }, { "cite": "560 S.E.2d 875", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "opinion_index": 0 }, { "cite": "149 N.C. App. 320", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9127650 ], "year": 2002, "opinion_index": 0, "case_paths": [ "/nc-app/149/0320-01" ] }, { "cite": "421 S.E.2d 367", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "369" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 590", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527824 ], "year": 1992, "pin_cites": [ { "page": "593" } ], "opinion_index": 0, "case_paths": [ "/nc-app/107/0590-01" ] }, { "cite": "527 S.E.2d 684", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2000, "pin_cites": [ { "page": "686" } ], "opinion_index": 0 }, { "cite": "137 N.C. App. 289", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11093030 ], "year": 2000, "pin_cites": [ { "page": "293" } ], "opinion_index": 0, "case_paths": [ "/nc-app/137/0289-01" ] }, { "cite": "348 S.E.2d 593", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "595" } ], "opinion_index": 0 }, { "cite": "318 N.C. 404", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4732110 ], "year": 1986, "pin_cites": [ { "page": "406" } ], "opinion_index": 0, "case_paths": [ "/nc/318/0404-01" ] }, { "cite": "323 S.E.2d 368", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1984, "pin_cites": [ { "page": "369" } ], "opinion_index": 0 }, { "cite": "71 N.C. App. 805", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526534 ], "year": 1984, "pin_cites": [ { "page": "806" } ], "opinion_index": 0, "case_paths": [ "/nc-app/71/0805-01" ] } ], "analysis": { "cardinality": 657, "char_count": 14035, "ocr_confidence": 0.727, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.20286259932528886 }, "sha256": "4bd927a4e4b6ad0e9ee3ad0a5b49d565dc638fd4dd7c9c6953dd623b46653d9e", "simhash": "1:0b986eb41a5b9630", "word_count": 2288 }, "last_updated": "2023-07-14T20:45:28.578783+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges TIMMONS-GOODSON and TYSON concur." ], "parties": [ "ANTHONY SUSI, Plaintiff v. LOIS AUBIN, Defendant NORTH COUNTRY DEVELOPMENT OF JEFFERSON COUNTY, INC., Plaintiff v. LOIS AUBIN, Defendant" ], "opinions": [ { "text": "GEER, Judge.\nThis opinion addresses the appeals of plaintiffs Anthony Susi and North Country Development of Jefferson County, Inc. (\u201cNorth Country\u201d) from the trial court\u2019s order in a proceeding to determine defendant Lois Aubin\u2019s exemptions, finding that the fair market value of Aubin\u2019s stock in a closely-held corporation was zero. Plaintiff Susi\u2019s appeal (No. COA04-449) and plaintiff North Country\u2019s appeal (No. COA04-450) were previously consolidated for hearing. They are now consolidated for decision. Because the trial court\u2019s findings were based, in part, on an impermissible consideration and are not adequate to set out the basis for the court\u2019s determination of the fair market value of the stock, we vacate the decision and remand for further findings of fact.\nFacts\nNorth Country is a New York corporation and Susi is its sole shareholder. Susi and Aubin are each 50% shareholders in Bluebird Corporation (\u201cBluebird\u201d), a real estate holding and development company. Although Bluebird previously owned and managed several properties, it currently owns only a residential subdivision called Harborgate, located on High Rock Lake in Davidson County, North Carolina.\nUltimately, the relationship between Susi and Aubin deteriorated. Aubin sued Susi and Bluebird regarding Harborgate, but in 2002, this Court affirmed the trial court\u2019s dismissal of that action. Aubin v. Susi, 149 N.C. App. 320, 560 S.E.2d 875, disc. review denied, 356 N.C. 610, 574 S.E.2d 474 (2002). North Country and Susi subsequently sued Aubin and her real estate brokerage company in New York state court after Aubin had defaulted on loans that Susi and North Country had made to Aubin\u2019s company and that Aubin had personally guaranteed. Susi and North Country each obtained judgments against Aubin.\nIn September 2001, pursuant to N.C. Gen. Stat. \u00a7 lC-1705(b) (2003), plaintiffs sought to enforce the foreign judgments in North Carolina, where defendant now resides. On 8 November 2001, the Davidson County Superior Court entered orders granting enforcement of two judgments, one in favor of Susi and one in favor of North Country. As required by N.C. Gen. Stat. \u00a7 lC-1603(a)(4) (2003), plaintiffs served upon Aubin a notice of her right to have exemptions designated. Aubin responded with a motion to exempt certain property, including her stock in Bluebird. Relying upon the \u201cwildcard\u201d exemption of N.C. Gen. Stat. \u00a7 lC-1601(a)(2) (2003), allowing exemption of \u201cany property\u201d not exceeding $3,500.00, Aubin asserted that the fair market value of the stock was zero and that the stock was subject to a lien of $300,480.00 held by Brinkley Walser PLLC.\nPlaintiffs objected to Aubin\u2019s motion on the grounds that the motion contained estimated values of property that were \u201cbelow the true fair market values of the subject properties,\u201d specifically including the Bluebird stock. Plaintiffs requested that the clerk of superior court set Aubin\u2019s motion for hearing and \u201cfurther requested] that the Court appoint a qualified person to examine the property owned by Aubin and to report their [sic] value to the Court pursuant to N.C. Gen. Stat. \u00a7 lC-1603(e)(8).\u201d In support of the objections, Susi submitted an affidavit stating that \u201c[d]espite the fact that the liabilities of Bluebird exceed its assets, I am willing to pay at least $3,500.00, plus any administrative fees associated with the sale of the Stock, in order to purchase the Stock subject to the lien in favor of Brinkley Walser.\u201d\nFollowing a hearing on 30 October 2003, the district court found with respect to the Bluebird stock:\nAlthough the Bluebird stock described in paragraph 8 [of the motion] may have intrinsic value to the two shareholders, Anthony Susi and Lois Aubin, it has no fair market value. The company is mired in litigation such that a third party would have no reasonable interest in buying Defendant\u2019s stock. Furthermore, it would be unfair and inequitable to allow Mr. Anthony Susi to purchase the stock for $3,500 when he has been at least partially responsible for the litigation.\nBased on its findings, the trial court concluded that \u201c[t]he exemptions requested by the Defendant Lois Aubin are proper and legal in all respects and should be approved.\u201d Plaintiffs Susi and North Country have appealed from this order to the extent it relates to the Bluebird stock.\nDiscussion\nOnce plaintiffs objected to the exemptions claimed by Aubin, the clerk was required to set Aubin\u2019s \u201cmotion for hearing by the district court judge, without a jury, at the next civil session.\u201d N.C. Gen. Stat. \u00a7 lC-1603(e)(7). At such a hearing, \u201c[t]he district court judge must determine the value of the property.\u201d N.C. Gen. Stat. \u00a7 lC-1603(e)(8). In making this determination, the district court judge \u201cmay appoint a qualified person to examine the property and report its value to the judge.\u201d Id. Following the hearing, \u201c[t]he district court judge must enter an order designating exempt property.\u201d N.C. Gen. Stat. \u00a7 lC-1603(e)(9). A party may appeal the district court\u2019s designation of exempt property to this Court, but \u201c[decisions of the Court of Appeals with regard to questions of valuation of property are final as provided in G.S. 7A-28.\u201d N.C. Gen. Stat. \u00a7 lC-1603(e)(12). See also N.C. Gen. Stat. \u00a7 7A-28(b) (2003) (\u201cDecisions of the Court of Appeals upon review of valuation of exempt property under G.S. 1C are final and not subject to further review in the Supreme Court by appeal, motion, certification, writ, or otherwise.\u201d).\nThe sole question on appeal is the trial court\u2019s valuation of Aubin\u2019s 50% ownership of Bluebird, which she had claimed as exempt under N.C. Gen. Stat. \u00a7 lC-1601(a)(2). Section lC-1601(a)(2) permits a debtor to exempt her \u201caggregate interest in any property, not to exceed three thousand five hundred dollars ($3,500) in value less any amount of the exemption used under subdivision (1).\u201d The statute defines \u201cvalue\u201d as the \u201cfair market value of an individual\u2019s interest in property, less valid liens superior to the judgment lien sought to be enforced.\u201d N.C. Gen. Stat. \u00a7 lC-1601(b). Thus, we must determine whether the trial court properly determined the fair market value of defendant\u2019s Bluebird stock.\nAlthough the General Assembly did not further define \u201cfair market value,\u201d it is generally defined as \u201c[t]he price that a seller is willing to accept and a buyer is willing to pay on the open market and in an arm\u2019s-length transaction.\u201d Black\u2019s Law Dictionary 1587 (8th ed. 2004). In this case, the trial court made only two findings of fact related to the valuation of defendant\u2019s stock in Bluebird: (1) that Bluebird is \u201cmired in litigation such that a third party would have no reasonable interest\u201d in buying Aubin\u2019s stock and (2) that it would be \u201cunfair and inequitable to allow Mr. Anthony Susi to purchase the stock for $3,500 when he has been at least partially responsible for the litigation.\u201d\nWe address the second finding first. The sole task before the district court was calculation of the fair market value of Aubin\u2019s stock. The statute is precise: it directs that \u201c[t]he district court judge must determine the value of the property.\u201d N.C. Gen. Stat. \u00a7 lC-1603(e)(8). This is a question of fact to be decided based on the evidence. Aubin has cited no authority, and we have found none, that would permit a district court to base its allowance of a party\u2019s claim of exemption on the court\u2019s assessment of the equities between the parties rather than on the actual value of the property.\nThis case highlights the problems with allowing a trial court to do so. Implicit in the trial court\u2019s finding of unfairness and inequity is an assumption that Susi behaved inappropriately in connection with unspecified litigation proceedings. To the extent that the district court was referring to the litigation that gave rise to the foreign judgments being enforced, the Davidson County District Court was prohibited from revisiting the merits of the litigation. The Davidson County Superior Court had already entered orders rejecting Aubin\u2019s defenses and directing enforcement of the judgments. To the extent the district court was referring to Aubin\u2019s litigation against Susi, this Court affirmed the dismissal of those claims. The dismissed claims cannot now be re-litigated in the guise of an exemption hearing. The pendency of the remaining litigation involving Harborgate can be considered as a factor in calculating the fair market value of Aubin\u2019s stock.\nWith respect to the first finding \u2014 that \u201c[t]he company is mired in litigation such that a third party would have no reasonable interest in buying [defendant's stock\u201d \u2014 we-are unable to determine from that single statement how or by what methodology the district court arrived at its conclusion that Bluebird\u2019s \u201cvalue\u201d was zero. Plaintiffs point to a $4.5 million offer made by an unrelated third party for Harborgate \u2014 the sole asset of Bluebird \u2014 at a point when litigation by Harborgate homeowners was already pending against Bluebird. Although Aubin responds that subsequent to that time, two other lawsuits were filed, plaintiffs counter that those two lawsuits had been disposed of at the time of the exemption proceeding. We cannot determine from the district court\u2019s order how it resolved these various factual disputes. Moreover, the record contains no evidence that, purely as a result of pending litigation, Bluebird had no fair market value.\nAubin has argued on appeal that other reasons exist for valuing her stock at zero, including (1) the negative book value of Bluebird and the lack of any evidence of good will, (2) potential purchasers\u2019 unwillingness to become Susi\u2019s partner, and (3) the lien of Aubin\u2019s law firm. The trial court, however, made no findings regarding those contentions. Further, we note that Aubin testified, contrary to her position on appeal, that she did not believe that the listed book value was accurate, but rather held the opinion that Harborgate was worth more and liabilities were significantly less. We cannot determine whether Aubin\u2019s current contentions formed any part of the basis for the trial court\u2019s valuation or, if so, how the court resolved related questions such as the book value of Bluebird or whether the law firm\u2019s lien was superior to the judgment lien.\nWe conclude that the district court\u2019s findings of fact regarding its valuation of Aubin\u2019s 50% ownership in Bluebird are not sufficiently specific for appellate review. \u201cWithout proper findings of fact, we cannot perform our review function even though there may be evidence to support the judgment.\u201d Chloride, Inc. v. Honeycutt, 71 N.C. App. 805, 806, 323 S.E.2d 368, 369 (1984).\nAccordingly, we vacate the district court\u2019s decision to the extent it sets a value of zero for Aubin\u2019s Bluebird stock and remand for further findings of fact regarding the value of that stock, including the methodology used in reaching that valuation. Cf. Patton v. Patton, 318 N.C. 404, 406, 348 S.E.2d 593, 595 (1986) (holding in an equitable distribution case that \u201cthe trial court should make specific findings regarding the value of a spouse\u2019s professional practice and the existence and value of its goodwill, and should clearly indicate the evidence on which its valuations are based, preferably noting the valuation method or methods on which it relied\u201d (internal quotation marks omitted)). As in the equitable distribution context, if it appears on appeal that the trial court reasonably determined the value of the stock based on competent evidence and on a sound valuation method or methods, the valuation will not be disturbed. Offerman v. Offerman, 137 N.C. App. 289, 293, 527 S.E.2d 684, 686 (2000).\nVacated and remanded.\nJudges TIMMONS-GOODSON and TYSON concur.\n. We note that N.C. Gen. Stat. \u00a7 1C-1601 and -1603 have been amended in the most recent session of our General Assembly. See An Act to Amend the Cap on Property of a Judgment Debtor That Is Free of the Enforcement of the Claims of Creditors, and to Exempt Certain Types of Property from Enforcement, H.B. 1176, 2006 Gen. Assemb., Reg. Sess. (N.C. 2005). Although the bill has not yet been signed into law, it is scheduled to go into effect on 1 January 2006. Its pertinent provisions modify the notice requirements under N.C. Gen. Stat. \u00a7 lC-1603(a)(4) and change the \u201cwildcard\u201d exemption allowance from $3,600.00 to $5,000.00 under N.C. Gen. Stat. \u00a7 lC-1601(a)(2).\n. Significantly, once a creditor establishes, under N.C. Gen. Stat. \u00a7 lC-1705(b), that a foreign judgment is entitled to full faith and credit, the judgment may only be attacked on the grounds of fraud, public policy, or lack of jurisdiction. Reinwand v. Swiggett, 107 N.C. App. 590, 593, 421 S.E.2d 367, 369 (1992). No evidence was offered that such grounds exist in this case.", "type": "majority", "author": "GEER, Judge." } ], "attorneys": [ "Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Reid L. Phillips and Andrew J. Haile, for plaintiffs-appellants.", "Brinkley Walser, PLLC, by G. Thompson Miller, for defendant-appellee." ], "corrections": "", "head_matter": "ANTHONY SUSI, Plaintiff v. LOIS AUBIN, Defendant NORTH COUNTRY DEVELOPMENT OF JEFFERSON COUNTY, INC., Plaintiff v. LOIS AUBIN, Defendant\nNo. COA04-449\nNo.COA04-450\n(Filed 4 October 2005)\n1. Judgments\u2014 judgment debtor exemptions \u2014 valuation\u2014 equities\nThe trial court had no authority to base its exemptions from the enforcement of judgments on its assessment of the equities rather than on the actual value of the property.\n2. Judgments\u2014 judgment debtor exemptions \u2014 valuation of stock at zero \u2014 findings\u2014not sufficient\nThe trial court\u2019s valuation of stock at zero in determining exemptions from enforcement of judgments was vacated and remanded because its findings were not sufficiently specific for appellate review. A finding that the company was so mired in litigation that a third party would have no reasonable interest in the stock did not allow a determination of the methodology used by the court.\nAppeal by plaintiffs from order entered 1 December 2003 by Judge Wayne L. Michael in Davidson County District Court. Heard in the Court of Appeals 18 November 2004.\nBrooks, Pierce, McLendon, Humphrey & Leonard, L.L.P., by Reid L. Phillips and Andrew J. Haile, for plaintiffs-appellants.\nBrinkley Walser, PLLC, by G. Thompson Miller, for defendant-appellee." }, "file_name": "0608-01", "first_page_order": 638, "last_page_order": 644 }