{ "id": 4173493, "name": "MICHAEL KINLAW, Plaintiff v. JOHN J. HARRIS, JR., M.D., Defendant", "name_abbreviation": "Kinlaw v. Harris", "decision_date": "2009-12-08", "docket_number": "No. COA08-1584", "first_page": "252", "last_page": "269", "citations": [ { "type": "official", "cite": "201 N.C. App. 252" } ], "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": "519 S.E.2d 308", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1999, "pin_cites": [ { "page": "313" } ], "opinion_index": 0 }, { "cite": "351 N.C. 27", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155931 ], "year": 1999, "opinion_index": 0, "case_paths": [ "/nc/351/0027-01" ] }, { "cite": "Ohio Rev. Code Ann. \u00a7 2329.66", "category": "laws:leg_statute", "reporter": "Ohio Rev. Code Ann.", "pin_cites": [ { "page": "(A)(10)(b)" } ], "opinion_index": 0 }, { "cite": "Minn. Stat. \u00a7 550.37", "category": "laws:leg_statute", "reporter": "Minn. Stat.", "pin_cites": [ { "page": "(24)(a)" } ], "opinion_index": 0 }, { "cite": "Ga. Code Ann. \u00a7 44-13-100", "category": "laws:leg_statute", "reporter": "Ga. Code Ann.", "pin_cites": [ { "page": "(2)(f)" } ], "opinion_index": 0 }, { "cite": "527 F.3d 82", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 3584968, 3568282 ], "weight": 2, "year": 2008, "opinion_index": 0, "case_paths": [ "/br/389/0082-01", "/f3d/527/0082-01" ] }, { "cite": "28 Fed. Appx. 409", "category": "reporters:federal", "reporter": "Fed. Appx.", "year": 2002, "opinion_index": 0 }, { "cite": "11 U.S.C. \u00a7 522", "category": "laws:leg_statute", "reporter": "U.S.C.", "weight": 3, "pin_cites": [ { "page": "(d)(10)(E)" }, { "page": "(d)(10)(E)" }, { "page": "(d)(10)(E)" } ], "opinion_index": 0 }, { "cite": "683 N.W.2d 784", "category": "reporters:state_regional", "reporter": "N.W.2d", "case_ids": [ 9228325 ], "weight": 2, "year": 2004, "pin_cites": [ { "page": "787", "parenthetical": "\"[I]t seems to us that our legislature clearly intended that IRAs generally be exempt by expressly listing them, in contrast to 11 U.S.C. \u00a7 522(d)(10)(E), which does not mention them by name. Furthermore, the debtor's access to the funds is not completely unfettered.\"" }, { "page": "787" } ], "opinion_index": 0, "case_paths": [ "/nw2d/683/0784-01" ] }, { "cite": "26 U.S.C. \u00a7 72", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(f)(1)" } ], "opinion_index": 0 }, { "cite": "243 F.3d 242", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11122526, 11122863 ], "weight": 4, "year": 2001, "pin_cites": [ { "page": "243" }, { "page": "243-44", "parenthetical": "\"[I]t seems to us that our legislature clearly intended that IRAs generally be exempt by expressly listing them, in contrast to 11 U.S.C. \u00a7 522(d)(10)(E" }, { "page": "243-44" }, { "page": "243-44" } ], "opinion_index": 0, "case_paths": [ "/br/259/0242-01", "/f3d/243/0242-01" ] }, { "cite": "299 B.R. 465", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 9090227 ], "weight": 3, "year": 2003, "pin_cites": [ { "page": "467" }, { "page": "467", "parenthetical": "\"Section 2329.66(A)(10)(c" }, { "page": "467" } ], "opinion_index": 0, "case_paths": [ "/br/299/0465-01" ] }, { "cite": "419 F.3d 323", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 8931728, 8937118 ], "year": 2005, "pin_cites": [ { "page": "329" } ], "opinion_index": 0, "case_paths": [ "/f3d/419/0323-01", "/br/329/0323-01" ] }, { "cite": "26 U.S.C. \u00a7 408", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(a)" } ], "opinion_index": 0 }, { "cite": "544 U.S. 320", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5870372 ], "weight": 8, "year": 2005, "pin_cites": [ { "page": "327-28" }, { "page": "571-72", "parenthetical": "footnotes omitted" }, { "page": "325", "parenthetical": "\"the right to receive payment may be exempted\"" }, { "page": "326", "parenthetical": "\"IRAs can be exempted\"" }, { "page": "327-28" }, { "page": "571-72" } ], "opinion_index": 0, "case_paths": [ "/us/544/0320-01" ] }, { "cite": "146 B.R. 659", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 6512593 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/br/146/0659-01" ] }, { "cite": "44 B.R. 789", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 6558825 ], "weight": 2, "year": 1984, "pin_cites": [ { "page": "791", "parenthetical": "\"The courts have held that the exemption laws in North Carolina must be liberally construed in favor of the debtor.\"" }, { "page": "791" } ], "opinion_index": 0, "case_paths": [ "/br/44/0789-01" ] }, { "cite": "244 S.E.2d 668", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "678" }, { "page": "678" } ], "opinion_index": 0 }, { "cite": "295 N.C. 168", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561928 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "185" }, { "page": "185" } ], "opinion_index": 0, "case_paths": [ "/nc/295/0168-01" ] }, { "cite": "325 B.R. 151", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 8951482 ], "weight": 2, "year": 2005, "pin_cites": [ { "page": "154-55", "parenthetical": "internal citation omitted" }, { "page": "155" } ], "opinion_index": 0, "case_paths": [ "/br/325/0151-01" ] }, { "cite": "652 S.E.2d 321", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12639689 ], "year": 2007, "pin_cites": [ { "page": "327", "parenthetical": "stating that, \"[a]s defendant has not cited any authority in support of this argument, it is deemed abandoned and we do not address it\"" } ], "opinion_index": 1, "case_paths": [ "/se2d/652/0321-01" ] }, { "cite": "627 S.E.2d 276", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12635301 ], "year": 2006, "pin_cites": [ { "page": "279", "parenthetical": "quoting Mazda Motors of Am., Inc. v. SW. Motors, Inc., 296 N.C. 357, 361, 250 S.E.2d 250, 253 (1979)" } ], "opinion_index": 1, "case_paths": [ "/se2d/627/0276-01" ] }, { "cite": "187 N.C. App. 82", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8371967 ], "year": 2007, "pin_cites": [ { "page": "93", "parenthetical": "stating that, \"[a]s defendant has not cited any authority in support of this argument, it is deemed abandoned and we do not address it\"" } ], "opinion_index": 1, "case_paths": [ "/nc-app/187/0082-01" ] }, { "cite": "510 S.E.2d 159", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1999, "pin_cites": [ { "page": "163", "parenthetical": "quoting Mazda Motors, 296 N.C. at 361, 250 S.E.2d at 253 (internal quotation omitted)" } ], "opinion_index": 1 }, { "cite": "350 N.C. 39", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 132016 ], "year": 1999, "pin_cites": [ { "page": "45", "parenthetical": "quoting Mazda Motors, 296 N.C. at 361, 250 S.E.2d at 253 (internal quotation omitted)" } ], "opinion_index": 1, "case_paths": [ "/nc/350/0039-01" ] }, { "cite": "265 S.E.2d 379", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "385" } ], "opinion_index": 1 }, { "cite": "299 N.C. 620", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8575681 ], "year": 1980, "pin_cites": [ { "page": "629" } ], "opinion_index": 1, "case_paths": [ "/nc/299/0620-01" ] }, { "cite": "507 S.E.2d 284", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1998, "pin_cites": [ { "page": "290" } ], "opinion_index": 1 }, { "cite": "349 N.C. 290", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 571505 ], "year": 1998, "pin_cites": [ { "page": "297" } ], "opinion_index": 1, "case_paths": [ "/nc/349/0290-01" ] }, { "cite": "548 S.E.2d 513", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2001, "pin_cites": [ { "page": "517", "parenthetical": "citing Polaroid Corp. v. Offerman, 349 N.C. 290, 297, 507 S.E.2d 284, 290 (1998)" } ], "opinion_index": 1 }, { "cite": "353 N.C. 659", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 135857 ], "year": 2001, "pin_cites": [ { "page": "664", "parenthetical": "citing Polaroid Corp. v. Offerman, 349 N.C. 290, 297, 507 S.E.2d 284, 290 (1998)" } ], "opinion_index": 1, "case_paths": [ "/nc/353/0659-01" ] }, { "cite": "250 S.E.2d 250", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1979, "pin_cites": [ { "page": "253" }, { "page": "253", "parenthetical": "internal quotation omitted" } ], "opinion_index": 1 }, { "cite": "296 N.C. 357", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8566069 ], "weight": 2, "year": 1979, "pin_cites": [ { "page": "361" }, { "page": "361" } ], "opinion_index": 1, "case_paths": [ "/nc/296/0357-01" ] }, { "cite": "176 N.C. App. 711", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8301615 ], "year": 2006, "pin_cites": [ { "page": "717", "parenthetical": "quoting Mazda Motors of Am., Inc. v. SW. Motors, Inc., 296 N.C. 357, 361, 250 S.E.2d 250, 253 (1979)" } ], "opinion_index": 1, "case_paths": [ "/nc-app/176/0711-01" ] }, { "cite": "429 S.E.2d 716", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1993, "opinion_index": 1 }, { "cite": "333 N.C. 785", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2548925 ], "year": 1993, "opinion_index": 1, "case_paths": [ "/nc/333/0785-01" ] }, { "cite": "419 S.E.2d 592", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "595" } ], "opinion_index": 1 }, { "cite": "107 N.C. App. 262", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527478 ], "year": 1992, "pin_cites": [ { "page": "266" } ], "opinion_index": 1, "case_paths": [ "/nc-app/107/0262-01" ] }, { "cite": "140 S.E.2d 17", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1965, "pin_cites": [ { "page": "21" } ], "opinion_index": 1 }, { "cite": "263 N.C. 560", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571966 ], "year": 1965, "pin_cites": [ { "page": "565" } ], "opinion_index": 1, "case_paths": [ "/nc/263/0560-01" ] }, { "cite": "49 S.E. 173", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1904, "pin_cites": [ { "page": "177" } ], "opinion_index": 1 }, { "cite": "137 N.C. 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8656030 ], "year": 1904, "pin_cites": [ { "page": "236" } ], "opinion_index": 1, "case_paths": [ "/nc/137/0224-01" ] }, { "cite": "42 B.R. 317", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 6553924 ], "year": 1984, "opinion_index": 1, "case_paths": [ "/br/42/0317-01" ] }, { "cite": "519 S.E.2d 308", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1999, "pin_cites": [ { "page": "313", "parenthetical": "quoting Upchurch v. Hudson Funeral Home, Inc., 263 N.C. 560, 565, 140 S.E.2d 17, 21 (1965)" } ], "opinion_index": 1 }, { "cite": "351 N.C. 27", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 1155931 ], "weight": 2, "year": 1999, "pin_cites": [ { "page": "36", "parenthetical": "quoting Upchurch v. Hudson Funeral Home, Inc., 263 N.C. 560, 565, 140 S.E.2d 17, 21 (1965)" } ], "opinion_index": 1, "case_paths": [ "/nc/351/0027-01" ] }, { "cite": "527 F.3d 82", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 3584968, 3568282 ], "year": 2008, "opinion_index": 1, "case_paths": [ "/br/389/0082-01", "/f3d/527/0082-01" ] }, { "cite": "11 U.S.C. \u00a7 522", "category": "laws:leg_statute", "reporter": "U.S.C.", "pin_cites": [ { "page": "(d)(10)(E)" } ], "opinion_index": 1 }, { "cite": "243 F.3d 242", "category": "reporters:federal", "reporter": "F.3d", "case_ids": [ 11122526, 11122863 ], "weight": 3, "year": 2001, "pin_cites": [ { "page": "243" } ], "opinion_index": 1, "case_paths": [ "/br/259/0242-01", "/f3d/243/0242-01" ] }, { "cite": "544 U.S. 320", "category": "reporters:federal", "reporter": "U.S.", "case_ids": [ 5870372 ], "weight": 2, "year": 2005, "pin_cites": [ { "page": "327-28" }, { "page": "571-72" } ], "opinion_index": 1, "case_paths": [ "/us/544/0320-01" ] }, { "cite": "44 B.R. 789", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 6558825 ], "year": 1984, "pin_cites": [ { "page": "791", "parenthetical": "citing In re Love, 42 B.R. 317 (Bankr. E.D.N.C. 1984)" } ], "opinion_index": 1, "case_paths": [ "/br/44/0789-01" ] }, { "cite": "244 S.E.2d 668", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1978, "pin_cites": [ { "page": "678", "parenthetical": "stating that exemptions \"should always receive a liberal construction, so as to embrace all persons fairly coming within their scope\"" }, { "page": "678" } ], "opinion_index": 1 }, { "cite": "295 N.C. 168", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561928 ], "weight": 2, "year": 1978, "pin_cites": [ { "page": "185", "parenthetical": "stating that exemptions \"should always receive a liberal construction, so as to embrace all persons fairly coming within their scope\"" }, { "page": "185" } ], "opinion_index": 1, "case_paths": [ "/nc/295/0168-01" ] }, { "cite": "325 B.R. 151", "category": "reporters:specialty", "reporter": "B.R.", "case_ids": [ 8951482 ], "year": 2005, "pin_cites": [ { "page": "154-55", "parenthetical": "emphasis added" } ], "opinion_index": 1, "case_paths": [ "/br/325/0151-01" ] } ], "analysis": { "cardinality": 1321, "char_count": 47259, "ocr_confidence": 0.754, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.13676376499170415 }, "sha256": "136ead8eeb1417f04398aa2f4f939310ef228f132778e610526c0c8d63960907", "simhash": "1:8a59d9123f0e1474", "word_count": 7784 }, "last_updated": "2023-07-14T21:19:33.177262+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge JACKSON concurs.", "Judge ERVIN concurs in part and dissents in part with a separate opinion." ], "parties": [ "MICHAEL KINLAW, Plaintiff v. JOHN J. HARRIS, JR., M.D., Defendant" ], "opinions": [ { "text": "McGEE, Judge.\nThe underlying judgment in this case was entered on 3 May 2004, in which Plaintiff was awarded $567,000.00 in compensatory and punitive damages. Defendant moved to claim certain property as exempt from Plaintiff\u2019s judgment on 9 June 2004. By order entered 16 July 2004, an assistant clerk of Robeson County Superior Court ordered that Defendant\u2019s two IRA accounts and other items not relevant to this appeal were exempt property and not subject to the 3 May 2004 judgment. Upon Plaintiff\u2019s motion, a writ of execution was issued 28 November 2005 by another assistant clerk of Robeson County Superior Court, which directed the Sheriff of Durham County to satisfy the 3 May 2004 judgment out of Defendant\u2019s personal and/or real property located in Durham County, including Defendant\u2019s two IRAs. In response, Defendant filed a motion on 21 November 2007 to affirm exemption and vacate the 28 November 2005 writ of execution.\nBy order entered 21 July 2008, the trial court affirmed the 9 June 2004 motion to claim exempt property, stating:\nBy virtue of the Motion to Claim Exempt Property dated June 9, 2004 ... and the order thereon-dated July 16, 2004..., the Subject IRAs were and are legally exempt from execution in this action, and [Defendant], subject to the other provisions in this order, retains the Subject IRAs free of the enforcement of the claims of [Plaintiff] in this action.\nThe trial court further declared the writ of execution and the accompanying levy against Defendant void, and it ordered Defendant\u2019s IRAs immediately released from any restrictions \u201cplaced thereon as a result of the Writ of Execution and Notice of Levy[.]\u201d However, the trial court further ordered in relevant part that:\nShould [Djefendant make any withdrawal of any funds from the Subject IRAs, the entire amount of said withdrawal shall immediately be placed in the trust account of his counsel, [or other authorized agent], and [the funds shall be administered] in accordance with the terms herein. Defendant or [Defendant\u2019s] counsel shall immediately, thereafter give [Plaintiff\u2019s counsel notice of the withdrawal by the most expedient, verifiable means. Plaintiff shall then have five (5) business days from the date of such notification to file a motion or otherwise petition the Court to determine if the withdrawal funds are no longer exempt from execution. ... If [P]laintiff timely makes such a motion or petition, the withdrawn funds shall remain in trust or escrow pending a determination of their exempt status, or until the parties mutually agree to release of such funds.\nBoth Plaintiff and Defendant appeal from the trial court\u2019s 21 July 2008 order.\nI.\nDefendant\u2019s sole argument on appeal is that the trial court erred by requiring Defendant to place any funds withdrawn in the future from his IRAs into escrow or other trust pending a determination by the trial court as to whether those funds retained their exempt status. We agree.\nN.C. Gen. Stat. \u00a7 1C-1601 identifies property that is exempt from claims of creditors. The version of N.C. Gen. Stat. \u00a7 1C-1601 in effect for the relevant period states:\n(a) Exempt property. Each individual, resident of this State, who is a debtor is entitled to retain free of the enforcement of the claims of creditors:\n(9) Individual retirement plans as defined in the Internal Revenue Code and any plan treated in the same manner as an individual retirement plan under the Internal Revenue Code[.]\nN.C. Gen. Stat. \u00a7 lC-1601(a)(9) (2005). Plaintiff admits that Defendant\u2019s IRAs are covered under the definition of exempt retirement plans as stated in N.C. Gen. Stat. \u00a7 lC-1601(a)(9). However, Plaintiff contends that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) only applies to funds withdrawn after age 59 'A, or pursuant to certain other limited exceptions. Plaintiff argues that if Defendant withdraws funds before age 59 A and incurs a penalty for the withdrawal, because no exception applies, then Plaintiff should be able to access those funds to satisfy Plaintiff\u2019s judgment against Defendant. For this reason, Plaintiff argues that the trial court acted within its power by ordering that any funds withdrawn from Defendant\u2019s IRAs be held in escrow until a determination is made by the trial court as to whether the funds were withdrawn for proper purposes \u2014 i.e., purposes which would not incur any early withdrawal penalties.\nDefendant argues that, because N.C. Gen. Stat. \u00a7 lC-1601(a)(9) exempts his IRAs from Plaintiff\u2019s judgment against him, Plaintiff is not entitled to any funds currently held in Defendant\u2019s IRAs, and the trial court erred in ordering a process to make a determination concerning whether Plaintiff is entitled, pursuant to the 3 May 2004 judgment, to any potential funds Defendant withdraws from his IRAs. This issue is one of first impression in this State.\nExemption statutes are to be interpreted liberally. Accordingly, based on: (1) the enactment of legislation in 1995 to protect a debtor\u2019s retirement income from the claims of creditors; . . . and (4) the policy that exemption statutes are to be interpreted liberally, the Court concludes that the North Carolina General Assembly\u2019s purpose in enacting N.C. Gen. Stat. \u00a7 lC-1601(a)(9) was to protect a debtor\u2019s right to receive retirement benefits])] Rather than give a blanket exemption to all \u201cretirement\u201d plans, the General Assembly limited the exemption to any retirement tool that was \u201ctreated in the same manner as an individual retirement plan under the Internal Revenue Code.\u201d In so doing, the General Assembly prohibited debtors from labeling an ordinary savings account as an individual retirement plan and thereby shielding that asset from the reach of creditors under the charade that the exemption statute applied.\nIn re Grubbs, 325 B.R. 151, 154-55 (Bankr. M.D.N.C. 2005) (internal citation omitted); see also Elmwood v. Elmwood, 295 N.C. 168, 185, 244 S.E.2d 668, 678 (1978); In re Laughinghouse, 44 B.R. 789, 791 (Bankr. E.D.N.C. 1984) (\u201cThe courts have held that the exemption laws in North Carolina must be liberally construed in favor of the debtor.\u201d), Abrogated on different issue by In re Pinner, 146 B.R. 659 (Bankr. E.D.N.C. Oct 26, 1992).\nII.\nIn Rousey v. Jacoway, 544 U.S. 320, 161 L. Ed. 2d 563 (2005), the United States Supreme Court reasoned:\nThe statutes governing IRAs persuade us that [the petitioners\u2019] right to payment from IRAs is causally connected to their age. Their right to receive payment of the entire balance is not in dispute. Because their accounts qualify as IRAs under 26 U.S.C. \u00a7 408(a) (2000 ed. and Supp. II) [26 USCS \u00a7 408(a)], the [petitioners] have a nonforfeitable right to the balance held in those accounts, \u00a7 408(a)(4). That right is restricted by a 10-percent tax penalty that applies to withdrawals from IRAs made before the accountholder turns 59 A. Contrary to [the respondent\u2019s] contention, this tax penalty is substantial. The deterrent to early withdrawal it creates suggests that Congress designed it to preclude early access to IRAs. The low rates of early withdrawals are consistent with the notion that this penalty substantially deters early withdrawals from such accounts. Because the 10-percent penalty applies proportionally to any amounts withdrawn, it prevents access to'the 10-percent that the [petitioners] would forfeit should they withdraw early, and thus it effectively prevents access to the entire balance in their IRAs. It therefore limits the [petitioners\u2019] right to \u201cpayment\u201d of the balance of their IRAs. And because this condition is removed when the accountholder turns age 59 %, the [petitioners\u2019] right to the balance of their IRAs is a right to payment \u201con account of\u2019 age. The [petitioners] no more have an unrestricted right to payment of the balance in their IRAs than a contracting party has an unrestricted right to breach a contract simply because the price of doing so is the payment of damages.\nRousey, 544 U.S. at 327-28, 161 L. Ed. 2d at 571-72 (footnotes omitted). Following the reasoning of Rousey, we hold that Defendant\u2019s right to withdraw funds from his IRAs is not \u201cunrestricted,\u201d and thus his IRAs are not analogous to checking accounts or other non-restricted accounts. Grubbs, 325 B.R. at 155.\nThe statute pertaining to exemptions from judgments, N.C. Gen. Stat. \u00a7 lC-1601(a)(9), references the Internal Revenue Code only as it pertains to the definition of retirement plans: \u201cIndividual retirement plans as defined in the Internal Revenue Code and any plan treated in the same manner as an individual retirement plan under the Internal Revenue Code[.]\u201d There is no dispute that Defendant\u2019s IRAs fall within this definition. N.C. Gen. Stat. \u00a7 lC-1601(a)(9) does not indicate that any other provisions of federal law may be consulted in determining whether Defendant\u2019s IRAs, or the funds contained within, are exempt from Plaintiff\u2019s judgment. Defendant argues that only North Carolina law should apply. Plaintiff does not answer Defendant\u2019s argument on this point. We hold that, because N.C. Gen. Stat. \u00a7 lC-16.01(a)(9) only references the Internal Revenue Code to clarify what retirement accounts are covered by the creditor exemption, North Carolina law governs the resolution of this issue. See In re Coppola, 419 F.3d 323, 329 (5th Cir. Tex. 2005); In re Rayl, 299 B.R. 465, 467 (Bankr. S.D. Ohio 2003).\nBecause this is an issue of first impression, however, we look for guidance to decisions from other jurisdictions. In In re Brucher, 243 F.3d 242, 243 (6th Cir. Mich. 2001), the plaintiff argued that the defendant\u2019s IRA could be exempt from creditors \u201cif and only if payment thereunder is made \u2018solely... \u201con account of illness, disability, death, age or length of service.\u201d \u2019 \u201d The Sixth Circuit disagreed, stating:\nThis reading, in our view, suffers from at least two flaws. In the first place, \u00a7 522(d)(10)(E) does not contain the word \u201csolely\u201d; it merely provides that the payment must be made \u201con account of\u2019 age. Like pensions, IRAs are structured to provide maximum payments upon the participant\u2019s reaching a certain age. The fact that early withdrawal might be available \u2014 subject, in the case of IRAs, to a 10 percent penalty for withdrawals made before the beneficiary has attained the age of 59 A, see 26 U.S.C. \u00a7 72(f)(1) \u2014 is irrelevant, as the statute does not require that the payment be made \u201csolely\u201d on account of age.\nBrucher, 243 F.3d 242, 243-44; see also Clark v. Lindquist, 683 N.W.2d 784, 787 (Minn. 2004) (\u201c[I]t seems to us that our legislature clearly intended that IRAs generally be exempt by expressly listing them, in contrast to 11 U.S.C. \u00a7 522(d)(10)(E), which does not mention them by name. Furthermore, the debtor\u2019s access to the funds is not completely unfettered.\u201d); Rayl, 299 B.R. at 467 (\u201cSection 2329.66(A)(10)(c) of the Ohio Revised Code specifically refers to individual retirement accounts, individual retirement annuities, Roth IRA\u2019s and education IRA\u2019s. Unlike the Michigan statute at issue in [Lampkins v. Golden, 28 Fed. Appx. 409 (6th Cir. Jan. 17, 2002)], it does not reference the whole of \u00a7 408 of the Internal Revenue Code. Furthermore, the Ohio statute exempts [rollover IRA\u2019s] only to the extent that the contributions are less than or equal to . . . the applicable limits imposed by federal statutes.\u201d).\nWe note that even where a statute makes specific reference to payments made from IRAs, appellate courts have tended to refer to IRAs in general, and not specifically to withdrawal of funds from IRAs, even when the withdrawal of funds was in issue.\nThe parties have not argued, so we do not decide, that there is a difference between exempting the right to receive payment from an IRA versus exempting the IRA itself. The Supreme Court does not appear to perceive any difference of significance. Compare Rousey, 544 U.S. at 325 (\u201cthe right to receive payment may be exempted\u201d), with id. at 326 (\u201cIRAs can be exempted\u201d). Hence, we, too, will assume the semantic interchangeability and refer to exempting both in this opinion.\nIn re Krebs, 527 F.3d 82, 85 n.3 (3d Cir. Pa. 2008). See also Brucher, 243 F.3d at 243-44; Clark, 683 N.W.2d at 787; In re Rayl, 299 B.R. at 467.\nStatutes from certain other jurisdictions include express limitations on the exemption from creditors enjoyed by retirement funds. See e.g., 11 U.S.C. \u00a7 522(d)(10)(E); Ga. Code Ann. \u00a7 44-13-100(2)(f); Minn. Stat. \u00a7 550.37(24)(a); Ohio Rev. Code Ann. \u00a7 2329.66(A)(10)(b). N.C. Gen. Stat. \u00a7 lC-1601(a)(9) contains no such restrictions. Plaintiff\u2019s reliance on Krebs for the proposition that the trial court acted correctly in reserving the right to determine whether Defendant\u2019s withdrawals are for proper purposes is misplaced, as the relevant statute in Krebs, 11 U.S.C. \u00a7 522(d)(10)(E), includes express restrictions not included in N.C. Gen. Stat. \u00a7 lC-1601(a)(9).\nWe find the reasoning in the cases cited above persuasive. \u00d1.C. Gen. Stat. \u00a7 lC-1601(a)(9) does not contain any language evincing an intent on the part of the General Assembly to treat withdrawals from IRAs differently than funds held within IRAs, and we are not prepared to infer any such intent. The plain language of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) states that IRAs are exempt from judgment. The most straightforward and logical reading of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) is that not only are the IRAs themselves exempt, but Defendant\u2019s legal use of the IRAs, in the same manner as if there were no judgment against Defendant, is also exempt. See Krebs, 527 F.3d at 85 n.3; Brucher, 243 F.3d at 243-44.\nLogically and' practically this interpretation is the most sensible. As stated in Rousey, any early withdrawals not covered by the limited exemptions made by Defendant from his IRAs will incur serious financial penalties. Rousey, 544 U.S. at 327-28, 161 L. Ed. 2d at 571-72. This is Defendant\u2019s choice to make, however. Though early withdrawals from Defendant\u2019s IRAs may subject Defendant to serious financial penalties and prevent him from realizing the full financial benefit of the protected status of his IRAs, early withdrawals from IRAs are not illegal and do not constitute improper use of those IRAs.\nWhile we understand the dissent\u2019s concern that the protections afforded by N.C. Gen. Stat. \u00a7 lC-1601(a)(9) could allow an IRA account holder to withdraw IRA monies for purposes unrelated to retirement or other penalty-free exceptions, it is the province of the General Assembly, not this Court, to craft legislation. The dissent correctly states that there is no express exception in N.C. Gen. Stat. \u00a7 lC-1601(a)(9) providing an exemption from creditors for monies withdrawn from an IRA prior to the account holder reaching the age of 59 A, or for any of the other penalty-free exemptions provided for by the IRS. In support of its argument, the dissent cites Sara Lee Corp. v. Carter, 351 N.C. 27, 519 S.E.2d 308 (1999), stating that \u201c[g]enerally speaking\u201d (emphasis added),\nwhere the legislature has made no exception to the positive terms of the statute, the presumption is that it intended to make none, and it is a general rule of construction that the courts have no authority to create, and will not create, exceptions to the provisions of a statute not made by the act itself.\nId. at 36, 519 S.E.2d at 313.' Although we agree that the rule of statutory construction cited in Sara Lee is an appropriate rule of construction in certain circumstances, there are many rules of statutory construction, and not every rule will be appropriate in any given case. We believe this rule is inappropriate on the facts before us, as the ultimate result of its use could lead to results we believe were not intended by the General Assembly.\nIf we were to find this particular rule of construction controlling in the case before us, we would be constrained to hold that no funds are ever fully protected from execution once they are withdrawn from an IRA. This would include funds withdrawn after the age of 59 V\u00bf, penalty-free and for the purposes of support in retirement, because the language of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) contains no exception for funds withdrawn after the IRA account holder reaches the age of 59 H (\u201cIndividual retirement plans as defined in the Internal Revenue Code and any plan treated in the same manner as an individual retirement plan under the Internal Revenue Code [are exempt from the claims of creditors.]\u201d). Even Plaintiff does not construe N.C. Gen. Stat. \u00a7 lC-1601(a)(9) in this manner. As the General Assembly has not included language in N.C. Gen. Stat. \u00a7 lC-1601(a)(9) excluding the use of any IRA funds from the creditor exemption, we cannot usurp the role of the General Assembly and decide that some uses of withdrawn IRA funds will not be exempt, while other uses will be.\nAs we previously stated, it is not illegal, or on its face unethical, to withdraw IRA funds early for any reason. Early withdrawal of funds, when not covered by one of the exceptions created by the United States Congress is, however, discouraged by the substantial early withdrawal penalty.\nWe therefore hold, liberally construing the statute in favor of Defendant, Elmwood, 295 N.C. at 185, 244 S.E.2d at 678; Laughinghouse, 44 B.R. at 791, that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) exempts Defendant\u2019s IRAs and Defendant\u2019s legal use of funds contained within those IRAs, from Plaintiffs judgment. As the issue is not before us, we do not make any holding regarding any question concerning contributions Defendant may have made, or may in the future make, to his IRAs.\nIII.\nWe therefore vacate that portion of the trial court\u2019s 21 July 2008 order requiring Defendant to place in escrow any funds he may withdraw from his IRAs to await decision by the trial court as to whether the funds are subject to Plaintiff\u2019s judgment. We affirm the remainder of the trial court\u2019s 21 July 2008 order. Our holding in Defendant\u2019s appeal has also decided Plaintiff\u2019s appeal of the trial court\u2019s order. We therefore do not address Plaintiff\u2019s appeal.\nAffirmed in part, vacated in part.\nJudge JACKSON concurs.\nJudge ERVIN concurs in part and dissents in part with a separate opinion.\n. One of the retirement account numbers was listed in Defendant\u2019s motion for exemption and Defendant\u2019s motion to affirm exemption and vacate writ of execution as \u201cY99-254911.\u201d In the writ of execution one of the retirement account numbers was listed as \u201cY99-15491\u201d and in a 19 May 2008 affidavit by Defendant, one of his retirement account numbers was listed as \u201cY99-154911.\u201d No argument has been made on appeal concerning the discrepancies between the account number for this retirement account, and we assume these numbers all refer to the same account. The second retirement account is listed as \u201cY99-037842\u201d in all four documents.", "type": "majority", "author": "McGEE, Judge." }, { "text": "ERVIN, Judge,\nconcurring in part and dissenting in part.\nAlthough I concur in the remainder of the Court\u2019s decision, including its determination that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) renders funds contained in Defendant\u2019s individual retirement accounts exempt from execution despite the fact that Defendant had withdrawn monies from those accounts on two prior occasions, I respectfully dissent from the Court\u2019s decision to vacate that portion of the trial court\u2019s order that.requires Defendant to notify Plaintiff of any withdrawal from his individual retirement accounts and allows Plaintiff five business days \u201cto file a motion or otherwise petition the Court to determine if the withdrawn funds are no longer exempt from execution.\u201d As a result, I concur in the Court\u2019s opinion in part and dissent in part.\nBoth parties and the Court agree that the extent to which Defendant\u2019s individual retirement accounts can be utilized to satisfy the judgment that Plaintiff obtained against Defendant hinges upon the proper interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9). As applied to judgments entered before 1 January 2006, N.C. Gen. Stat. lC-1601(a)(9) provided that:\n(a) Exempt property. Each individual, resident of this State, who is a debtor is entitled to retain free of the enforcement of the claims of creditors:\n(9) Individual retirement plans as defined in the Internal Revenue Code and any plan treated in the same manner as an individual retirement plan under the Internal Revenue Code. For purposes of this subdivision, \u201cInternal Revenue Code\u201d means Code as defined in G.S. 105-228.90.\n\u201cThe courts have held that the exemption laws in North Carolina must be liberally construed in favor of the debtor.\u201d In re Laughinghouse, 44 B.R. 789, 791 (Bankr. E.D.N.C. 1984) (citing In re Love, 42 B.R. 317 (Bankr. E.D.N.C. 1984)); see also Elmwood v. Elmwood, 295 N.C. 168, 185, 244 S.E.2d 668, 678 (1978) (stating that exemptions \u201cshould always receive a liberal construction, so as to embrace all persons fairly coming within their scope\u201d) (quoting Goodwin v. Claytor, 137 N.C. 224, 236, 49 S.E. 173, 177 (1904)). In seeking to subject the funds contained in Defendant\u2019s individual retirement accounts to execution, Plaintiff argues that Defendant structured his court-approved equitable distribution settlement with his former spouse so as to transfer any of their marital assets that might have been subject to execution to his former wife; that the only significant assets that Defendant retained were the individual retirement accounts at issue here; and that, as evidenced by two withdrawals made in 2004 and 2005, Defendant used these individual retirement accounts as private savings vehicles rather than to provide for his retirement. Aside from the fact that two withdrawals over a four year period does not, at least in my opinion, establish the validity of Plaintiff\u2019s factual argument, Plaintiff has cited no authority demonstrating that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) is subject to an exception of th\u00e9 nature for which he contends, and I have not discovered any in the course of my own work. Generally speaking, \u201cwhere the legislature has made no exception to the positive terms of the statute, the presumption is that it intended to make none, and it is a general rule of construction that the courts have no authority to create, and will not create, exceptions to the provisions of a statute not made by the act itself.\u201d Sara Lee Corp. v. Carter, 351 N.C. 27, 36, 519 S.E.2d 308, 313 (1999) (quoting Upchurch v. Hudson Funeral Home, Inc., 263 N.C. 560, 565, 140 S.E.2d 17, 21 (1965)). As a result, given the plain language of N.C. Gen. Stat. \u00a7 lC-1601(a)(9), given the fact that the accounts at issue are clearly individual retirement accounts as defined in N.C. Gen. Stat. \u00a7 lC-1601(a)(9), and given the absence of any justification for reading the relevant statutory language to mean something other than whatit says, I agree with the majority\u2019s affirmation of the trial court\u2019s decision to \u201cvacate[] and declare[] to be null and void\u201d \u201c[t]he Writ of Execution in this matter dated\u201d 28 November 2005 and to \u201cvacate[] and declare[] to be null and void\u201d \u201c[t]he \u2018Notice of Levy\u2019 dated\u201d 9 December 2005.\nI cannot, however, agree with the remainder of the Court\u2019s decision, which vacates that portion of the trial court\u2019s order providing:\n4. Should defendant make any withdrawal of any funds from the Subject IRAs, the entire amount of said withdrawal shall immediately be placed in the trust account of his counsel, or placed with a suitable escrow agent who shall be provided with a copy of this order, and shall administer the funds in accordance with the terms herein. Defendant or his counsel shall immediately thereafter give plaintiff\u2019s counsel notice of the withdrawal by the most expedient, verifiable means. Plaintiff shall then have five (5) business days from the date of such notification to file a motion or otherwise petition the Court to determine if the withdrawn funds are no longer exempt from execution. Should the plaintiff fail to make such a motion or petition within such time, the withdrawn funds shall be paid over to defendant, free from execution and levy by plaintiff. If plaintiff timely makes such a motion or petition, the withdrawn funds shall remain in trust or escrow pending a determination of their exempt status, or until the parties mutually agree to release of such funds. The parties shall endeavor and cooperate so as to have the Court determine the status of the withdrawn funds as expeditiously as possible after any motion or petition seeking such a determination is filed.\nIn challenging the notification provision, Defendant concedes that the specific issue that he raises on appeal has not been directly addressed by the Supreme Court or by this Court. For that reason, he relies primarily on certain fundamental principles that he believes to be pertinent. First, Defendant emphasizes that exemptions from execution \u201cshould always receive a liberal construction,\u201d Elmwood, 295 N.C. at 185, 244 S.E.2d at 678, and that \u201cprovisions which restrict a debtor\u2019s access to his exemptions should be construed narrowly,\u201d so that debtors have \u201ca great deal of flexibility in claiming and maintaining their exemptions.\u201d Household Fin. Corp. v. Ellis, 107 N.C. App. 262, 266, 419 S.E.2d 592, 595 (1992), aff'd, 333 N.C. 785, 429 S.E.2d 716 (1993). Secondly, Defendant points to the basic principle of statutory construction that, \u201cwhere a literal interpretation of the language of a statute will lead to absurd results, or contravene the manifest purpose of the Legislature, as otherwise expressed, the reason and purpose of the law shall control and the strict letter thereof shall be disregarded.\u201d Union v. Branch Banking & Trust Co., 176 N.C. App. 711, 717, 627 S.E.2d 276, 279 (2006) (quoting Mazda Motors of Am., Inc. v. SW. Motors, Inc., 296 N.C. 357, 361, 250 S.E.2d 250, 253 (1979)). In reliance upon these premises, Defendant argues that \u201can interpretation of N.C. [Gen. Stat. \u00a7] lC-1601(a)(9) which exempts funds while physically in an IRA account, but immediately strips the funds of their exempt status once withdrawn by the debtor for whose benefit[] the exemption was enacted, is in fact absurd, as it renders the exemption meaningless and useless[.]\u201d According to Defendant, \u201c[a] more reasonable interpretation that avoids such an absurd result, gives effect to the legislative purpose of the exemption, and is more consistent with the principle of liberal construction for the protection of the debtor, is that it is the funds themselves that are exempt..., a status that doesn\u2019t change merely due to the funds being \u2018poured\u2019 from the IRA.\u201d As a result, Defendant\u2019s challenge to the notification provision rests exclusively on the contention that all funds ever contained within an individual retirement account are exempt from execution by virtue of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) regardless of the purpose for which those funds are eventually used.\nThe essential issue before the Court is one of statutory construction. \u201cThe principal goal of statutory construction is to accomplish the legislative intent.\u201d Lenox, Inc. v. Tolson, 353 N.C. 659, 664, 548 S.E.2d 513, 517 (2001) (citing Polaroid Corp. v. Offerman, 349 N.C. 290, 297, 507 S.E.2d 284, 290 (1998)). \u201cThe best indicia of that intent are the language of the statute . . ., the spirit of the act and what the act seeks to accomplish.\u201d Coastal Ready-Mix Concrete Co. v. Bd. of Commr\u2019s, 299 N.C. 620, 629, 265 S.E.2d 379, 385 (1980). As a result, in construing N.C. Gen. Stat. \u00a7 lC-1601(a)(9), we should focus our efforts on attempting to ascertain the protections that the General Assembly intended to provide by exempting individual retirement accounts from execution.\nIn holding that the trial court erred by including the notification provision in its order, the Court essentially accepts Plaintiff\u2019s reasoning. The Court begins its analysis by reasoning that, given the logic of Rousey v. Jacoway, 544 U.S. 320, 327-28, 161 L. Ed. 2d 563, 571-72 (2005), Defendant\u2019s \u201cIRAs are not analogous to checking accounts or other non-restricted accounts.\u201d In addition, the Court concludes that, given the absence of any indication that \u201cany other provisions of federal law may be consulted in determining whether Defendant\u2019s IRAs, or the funds contained within, are exempt from Plaintiff\u2019s judgment,\u201d \u201cNorth Carolina law governs the resolution of this issue.\u201d I agree with both of these conclusions. After noting during a discussion of authority from other jurisdictions that, \u201ceven where a statute makes specific reference to payments made from IRAs, appellate courts have tended to refer to IRAs in general, and not specifically to withdrawal of funds ' from IRAs, even when the withdrawal of funds was in issue,\u201d and that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) \u201cdoes not contain any language evincing an intent on the part of the General Assembly to treat withdrawals from IRAs differently than funds held within IRAs,\u201d the Court concludes that \u201c[t]he most straightforward and logical reading of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) is that not only are the IRAs exempt, but Defendant\u2019s legal use of the IRAs in the same manner as if there were no judgment against Defendant, is also exempt.\u201d Based on this logic, the Court decides that the trial court erred by including the notification provision in its order. I do not find this logic sufficient to justify vacating the notification provision for a number of reasons.\nFirst, the Court\u2019s decision does not effectuate the policies that underlie the exemption created by N.C. Gen. Stat. \u00a7 lC-1601(a)(9). The \u201cGeneral Assembly\u2019s purpose in enacting N.C. Gen. Stat. \u00a7 lC-1601(a)(9) was to protect a debtor\u2019s right to receive retirement benefits[.]\u201d In re Grubbs, 325 B.R. 151, 154-55 (Bankr. M.D.N.C. 2005) (emphasis added). This understanding of the legislative intent underlying N.C. Gen. Stat. \u00a7 lC-1601(a)(9) is fully consistent with the fundamental purpose of individual retirement accounts themselves, which is \u201cto provide retirement benefits to individuals.\u201d In re Brucher, 243 F.3d 242, 243 (6th Cir. 2001). As a result, I believe that the General Assembly\u2019s intent in enacting N.C. Gen. Stat. \u00a7 lC-1601(a)(9) was to protect the ability of individual retirement account owners to provide themselves with retirement benefits. Since the Court concludes that all funds that have been paid out from Defendant\u2019s individual retirement account are protected from execution by N.C. Gen. Stat. \u00a7 lC-1601(a)(9) regardless of the extent to which those funds are used to \u201cprovide retirement benefits,\u201d the construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) adopted by the Court is not consistent with the legislative intent that motivated the enactment of the relevant statutory provision, a fact that casts doubt on the validity of the construction adopted by the Court.\nSecondly, the effect of the Court\u2019s decision is to insulate any money that ever enters Defendant\u2019s individual retirement accounts from the claims of his creditors, no matter what use Defendant may make of those funds. For example, assume for purposes of discussion that Defendant withdraws a substantial sum from one or both of his individual retirement accounts in order to purchase a luxury motor vehicle, a yacht, or a vacation home. Under the Court\u2019s construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9), the mere fact that the money utilized to purchase these assets passed through Defendant\u2019s individual retirement accounts suffices to preclude Plaintiff from executing on these items of property even though they have little or nothing to do with ensuring that Defendant\u2019s retirement needs are met. As has already been noted, \u201c \u2018where a literal interpretation of the language of a statute will . . . contravene the manifest purpose of the Legislature, as otherwise expressed, the reason and purpose of the law shall control and the strict letter thereof shall be disregarded.\u2019 \u201d Frye Reg\u2019l Med. Ctr., Inc. v. Hunt, 350 N.C. 39, 45, 510 S.E.2d 159,163 (1999) (quoting Mazda Motors, 296 N.C. at 361, 250 S.E.2d at 253 (internal quotation omitted)). An interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that allows Defendant to use monies that were once contained in his individual retirement accounts in this manner without any risk that the resulting purchases will be subject to execution seems to me to run afoul of this fundamental canon of statutory construction. The fact that Defendant has not and may not make such an inappropriate use of the monies contained in his individual retirement accounts should not obscure the fact that, under the interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) adopted by the Court, he has the ability to do so with impunity. As a result, I believe that we should eschew the construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) adopted by the Court for this reason as well.\nThirdly, I am unable to agree with the full extent of the Court\u2019s reasoning, based upon decisions such as In re Krebs, 527 F.3d 82 (3rd Cir. 2008), and In re Brucher, 243 F.3d 242 (6th Cir. 2001), to the effect that providing protection for the corpus of an individual retirement account necessarily involves protecting disbursements from the account as well. Although I do not dispute that these decisions, and others upon which the Court also relies, hold that disbursements from individual retirement accounts, in addition to corpus of the account, are protected under various statutory exemption and exception provisions, I am not certain that acceptance of this proposition should end our inquiry. Like my colleagues, I agree that a certain measure of protection should be provided to disbursements made from individual retirement accounts. In addition, I join my colleagues in believing that the exemption from execution created by N.C. Gen. Stat. \u00a7 lC-1601(a)(9) would mean little in the event that Defendant could not access the funds in his individual retirement account in order to provide retirement benefits to himself and for other appropriate purposes. However, the Court appears to believe that the General Assembly intended to protect any and all disbursements from individual retirement accounts from execution, regardless of the purpose for which those disbursements are made, by enacting N.C. Gen. Stat. \u00a7 lC-1601(a)(9), while I do not believe that the General Assembly intended to provide such payments with this sort of ironclad protection. The Court\u2019s conclusion to this effect appears to rest upon the unstated premise that either all disbursements from an individual retirement account are exempt from execution under N.C. Gen. Stat. \u00a7 lC-1601(a)(9) or that none of them are, which leads to the unstated conclusion that since some such disbursements should be exempt, all of them must be. I am unwilling to go that far, because I believe, for the reasons stated in more detail above, that such a construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) is inconsistent' with the fundamental purpose \u201cof providing] retirement benefits for individuals\u201d and leads to results that are unlikely to be reflective of the General Assembly\u2019s intent. Instead, I believe that the applicable canons of construction support a more nuanced interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9), under which some disbursements from an individual retirement account remain subject to the protections of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) and some do not. Since the construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) adopted by the Court does not incorporate such a nuanced approach and since I do not believe that the decisions upon which the Court relies are inconsistent with the construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that I believe to be appropriate or compel the result reached by the Court, I am not persuaded that these decisions from other jurisdictions adequately support the result reached by the Court.\nFinally, I do not believe that an interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that exempts some, but not all, disbursements from an individual retirement account from execution runs afoul of the general principle that statutory exemptions should be \u201cliberally construed.\u201d After all, the literal language of' N.C. Gen. Stat. \u00a7 lC-1601(a)(9) only mentions the corpus of an individual retirement account, so that extending the protection of the statutory exemption to disbursements involves a liberal construction of the exemption in and of itself. Furthermore, the rule favoring \u201cliberal constructions\u201d does not, it seems to me, override the other factors that must be considered in construing statutory provisions, such as attempting to effectuate the legislative intent and avoid results that manifestly run counter to the likely intent of the General Assembly. Any construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) more \u201cliberal\u201d than the one set forth in this dissent strikes me as inconsistent with the intent of the General Assembly. As a result, I believe that the approach I have described is fully consistent with the general rule favoring the \u201cliberal construction\u201d of statutory exemptions.\nAt bottom, it seems to me that the approach adopted by the trial court reflects a proper understanding of the scope of the exemption set out in N.C. Gen. Stat. \u00a7 lC-1601(a)(9). In essence, the trial court concluded that some disbursements from Defendant\u2019s individual retirement accounts should be protected from execution and that others should not. To the extent that Defendant seeks to use monies from his individual retirement accounts for support during retirement, other purposes for which penalty-free withdrawals can be made under the provisions of federal law governing individual retirement accounts, or purposes which would be exempt from execution under other provisions of state or federal law, those monies should remain protected from execution, and the interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that I believe to be appropriate would do just that. To the extent that Defendant seeks to use monies from his individual retirement accounts in ways which are not consistent with the purposes sought to be accomplished by N.C. Gen. Stat. \u00a7 lC-1601(a)(9), such monies should not be protected from the claims of creditors. Since the only way to ascertain which disbursements are entitled to protection under N.C. Gen. Stat. \u00a7 lC-1601(a)(9) and which are not is to examine each disbursement on a case-by-case basis, the trial court set up a mechanism under which such an analysis could be conducted in an expedited manner. Given that Defendant has challenged the notification provision exclusively on the grounds that no monies that had ever passed through his individual retirement accounts could be subject to the claims of his creditors, I do not believe that we need to evaluate the extent to which the trial court had the authority to require the use of the particular approach mandated by its order. Thus, given that the trial court\u2019s order rests upon a proper understanding of the scope of the exemption set out in N.C. Gen. Stat. \u00a7 lC-1601(a)(9) and given that Defendant has not challenged the actual mechanism developed by the trial court for the purpose of evaluating withdrawals by Defendant from his individual retirement accounts, I do not see any basis for concluding that the notification provision suffers from any legal defect based upon the arguments advanced in Defendant\u2019s brief.\nAs a result, for the reasons stated above, I believe that the trial court correctly granted Defendant\u2019s motion to vacate the writ of execution that Plaintiff had procured. In addition, I do not believe that the only argument that Defendant has advanced in opposition to the notification provision in the trial court\u2019s order has any merit. Thus, I would affirm the trial court\u2019s order in its entirety. For that reason, I concur in that portion of the Court\u2019s opinion that affirms the trial court\u2019s decision to vacate the writ of execution and declares the notice of levy to be null and void, and dissent from that portion of the Court\u2019s opinion that vacates the notification provision in the trial court\u2019s order.\n. The Court contends that my reference to the principle of statutory construction enunciated in Sara Lee \u201cis inappropriate on the facts before us, as the ultimate result of its use could lead to results we believe were not intended by the General Assembly.\u201d A careful reading of this dissent indicates, however, that I have cited Sara Lee in support of my conclusion that the trial court correctly rejected Plaintiff\u2019s contention that N.C. Gen. Stat. \u00a7 lC-1601(a)(9) should be construed to allow the corpus of individual retirement accounts to be subject to execution in the event that the account owner makes early withdrawals and not in support of my conclusion that the notification provision of the trial court\u2019s order should be upheld on appeal. I do not believe that the Court disagrees with the position in connection with which I have cited Sara Lee.\n. In view of his failure to challenge the notification provision using any legal theory other than the one discussed in the text, Defendant has foregone the opportunity to contest the validity of the notification provision on any other basis. See Citifinancial Mortgage Co. v. Gray, 187 N.C. App. 82, 93, 652 S.E.2d 321, 327 (2007) (stating that, \u201c[a]s defendant has not cited any authority in support of this argument, it is deemed abandoned and we do not address it\u201d).\n. After acknowledging my \u201cconcern that the protections afforded by N.C. Gen. Stat. \u00a7 lC-1601(a)(9) could allow an [individual retirement account] holder to withdraw IRA monies for purposes unrelated to retirement or other penalty-free exceptions,\u201d the Court notes that \u201cit is the province of the General Assembly and not this Court, to craft legislation.\u201d I fully agree that the ultimate policy decisions concerning the extent to which disbursements from individual retirement accounts should be subject to the claims of creditors is a matter which is subject to control by the General Assembly; however, for the reasons stated in the text, I do not believe that the General Assembly intended to permanently immunize all funds that ever pass through individual retirement accounts from the claims of creditors regardless of the use that the account holder makes of those funds. For that reason, I believe that the interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that I have advanced is more consistent with the intent of the General Assembly than that adopted by the Court, which simply assumes, instead of demonstrating, that the General Assembly intended to countenance the results that I have described in the text.\n. As an aside, I note that certain of the statutory provisions at issue in the cases upon which the Court relies, such as 11 U.S.C. \u00a7 522(d)(10)(E), provide explicit protection to payments made from individual retirement accounts.\n. To be clear, by \"other appropriate purposes,\u201d I mean purposes which are exempt from the claims of creditors under North Carolina law, are exempt from withdrawal penalties pursuant to the provisions of federal law governing individual retirement accounts, are used to provide support during retirement, or are otherwise protected under federal law.\n. The Court appears to think that, under the interpretation of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) that I believe to be appropriate, \u201cno funds are fully protected from execution once they are withdrawn from an\u201d individual retirement account, including \u201cfunds withdrawn after the age of 59 Vz, penalty-free and for the purposes of support in retirement, because the language of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) contains no exception for funds withdrawn after the IRA account holder reaches the age of 59 Vz.\u201d The Court misapprehends my position in two respects. First, as I explained in more detail in Footnote No. 1,1 have not cited Sara Lee, 351 N.C. 27, 519 S.E.2d 308, in discussing the lawfulness of the notification provision and have not taken the position that the lack of reference to disbursements in the literal language of N.C. Gen. Stat. \u00a7 lC-1601(a)(9) means that the relevant statutory language provides no protection for payments from individual retirement accounts. Secondly, contrary to the Court\u2019s assertion, I have not taken the position that no disbursement from an individual retirement account is entitled to absolute protection from the claims of creditors. Instead, as is discussed in some detail in the text, I believe that certain disbursements from an individual retirement account, such as funds withdrawn after the age of 59 Vz for purposes of support during retirement, are protected from the claims of the account holders\u2019 creditors by N.C. Gen. Stat. \u00a7 lC-1601(a)(9). To be absolutely clear, where I differ from the Court is that I do not believe that all disbursements from an individual retirement account, regardless of the purpose for which the resulting payments are used, are permanently immunized from the claims of the account holder\u2019s creditors by N.C. Gen. Stat. \u00a7 lC-1601(a)(9). I believe that this construction of N.C. Gen. Stat. \u00a7 lC-1601(a)(9), and not that espoused by the Court, is consistent with the General Assembly\u2019s intent, since it is focused upon the reasons that led the General Assembly to exempt individual retirement accounts from execution and since I do not, for the reasons stated above, believe that the General Assembly intended to permit individual retirement account owners to purchase luxury vehicles, yachts, or vacation homes using monies derived from their individual retirement accounts while the valid claims of creditors remain unsatisfied.\n. Although the Court cites Brucher, 243 F.3d 242, as rejecting the proposition that \u201cthe defendant\u2019s IRA could be exempt from creditors \u2018if and only if payment thereunder is made solely ... on account of illness, disability, death, age or length of service,\u201d I do not believe that it conflicts with the result that I believe to be appropriate here since (1) the Sixth Circuit\u2019s actual holding was that the corpus of the debtor\u2019s individual retirement account was not subject to inclusion in his bankruptcy estate, and since (2) nothing in the Sixth Circuit\u2019s opinion suggests that any property that the debtor purchased using money derived from his individual retirement account was permanently protected from the claims of his creditors (internal quotations omitted).", "type": "concurring-in-part-and-dissenting-in-part", "author": "ERVIN, Judge," } ], "attorneys": [ "Anderson, Johnson, Lawrence, Butler & Bock, L.L.P., by Steven C. Lawrence, for Plaintiff", "McCoy Weaver Wiggins Cleveland Rose Ray, PLLC, by Jim Wade Goodman, for Defendants." ], "corrections": "", "head_matter": "MICHAEL KINLAW, Plaintiff v. JOHN J. HARRIS, JR., M.D., Defendant\nNo. COA08-1584\n(Filed 8 December 2009)\nJudgments\u2014 exempt status of IRA \u2014 withdrawn IRA funds\nThe trial court erred by requiring defendant to place funds withdrawn from his IRAs in the future into escrow or other trust pending a determination by the trial court as to whether those funds remained exempt from plaintiffs judgment against defendant for $567,000 in compensatory and punitive damages. N.C.G.S. \u00a7 lC-1601(a)(9) exempts defendant\u2019s IRAs and defendant\u2019s legal use of funds contained within those IRAs from plaintiffs judgment.\nJudge ERVIN concurring in part and dissenting in part.\nAppeals by Plaintiff and Defendant from order entered 21 July 2008 by Judge Gary L. Locklear in Superior Court, Robeson County. Heard in the Court of Appeals 19 August 2009.\nAnderson, Johnson, Lawrence, Butler & Bock, L.L.P., by Steven C. Lawrence, for Plaintiff\nMcCoy Weaver Wiggins Cleveland Rose Ray, PLLC, by Jim Wade Goodman, for Defendants." }, "file_name": "0252-01", "first_page_order": 280, "last_page_order": 297 }