Kinsinger v. Smartcore, LLC

UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF NORTH CAROLINA

CHARLOTTE DIVISION

NO. 3:17-CV-00643-FDW-DCK

ERIC KINSINGER

DENISE KINSINGER,

Plaintiffs,

v. ORDER

WILLIAM H WINN JR

STEVEN MATTHEW GOOD

STAR MARKETING AND

ADMINISTRATION, INC.

TRUSTMARK LIFE INSURANCE

COMPANY

TRUSTMARK INSURANCE

COMPANY

SMARTCORE, LLC GROUP

HEALTH BENEFIT PLAN

SMARTCORE ELECTRICAL

SERVICES, LLC

SMARTCORE ELECTRIC, LLC

JARED CRAFTON CROOK

SMARTCORE, LLC,

Defendants.

THIS MATTER is before the Court on Defendant Winn and non-party Movants Misty

Winn and W.F. Winn’s Motion for Hearing and Motion in the Cause.1 (Doc. No. 180). In their

motion, Defendant Winn and non-party Movants argue funds seized by U.S. Marshalls to satisfy

a judgment were improperly seized because the judgment was not registered in North Carolina

and/or because the funds were not subject to the judgment. Id. at pp. 3-4. The Court finds the issues

presented in the Motion are sufficiently briefed such that a hearing is unnecessary; accordingly,

1 Although Misty Winn and W.F. Winn are non-party Movants, the Court refers primarily to Defendant Winn as the

movant throughout this Order for ease of understanding and judicial efficiency.

Defendant Winn and non-party Movants’ request for a hearing is denied. For the reasons stated

below, Defendant Winn and non-party Movants’ Motion, (Doc. No. 180), is GRANTED IN PART

and DENIED IN PART.

I. BACKGROUND2

Defendant Winn filed the presently pending motion in reference to a judgment entered

against him in this matter. (Doc. No. 180, p. 1). In March of this year, a hearing was conducted to

determine which portions of Defendant Winn’s property were exempt from the judgment. See

(Doc. No. 172). After the hearing, a Consent Order was filed designating the exempt property, and

a Writ of Execution against Defendant Winn was issued by the Clerk of Court on April 26, 2021.

(Doc. Nos. 177, 178).

Three months after the issuance of the Writ of Execution, Defendant Winn filed the

pending Motion, arguing that the U.S. Marshall service has improperly seized and continues to

improperly seize property from a checking account jointly owned by Defendant Winn and his wife,

Misty Winn (“Mrs. Winn”). (Doc. No. 180, pp. 2-3). Defendant Winn contends U.S. Marshalls

have improperly seized at least $24,966.60, and the seizure has caused Defendant Winn to incur

$525 in fees. Id. at p. 7.

Defendant Winn seeks a Court order directing the U.S. Marshall service and/or Plaintiffs

to return the improperly seized property and enjoining the seizure of further funds not subject to

the judgment. Id. at p. 8. Plaintiffs oppose Defendant Winn’s motion. (Doc. No. 182).

II. DISCUSSION

Defendant Winn contends his property has been improperly seized for three reasons: first,

because the judgment was not “registered, recorded, docketed, and indexed in North Carolina;”

2 Due to the complex history of this matter, the short background set forth herein reflects only those facts relevant to

the instant motion.

second, because at least some of the property seized belonged to Mrs. Winn and/or is his minor

child, W.F. Winn; and third, because funds seized were not available for attachment or levy under

N.C. GEN. STAT. § 1-362. (Doc. No. 180, pp. 4-7). The Court will address each argument in turn.

Defendant Winn first argues his property was improperly seized because the federal

judgment was not properly registered in North Carolina pursuant to 28 U.S.C. § 1962 and N.C.

GEN. STAT. § 1-237.3 (Doc. No. 180, p. 4).

28 U.S.C. § 1962 provides:

Every judgment rendered by a district court within a State shall be a lien on the

property located in such State in the same manner, to the same extent and under the

same conditions as a judgment of a court of general jurisdiction in such State, and

shall cease to be a lien in the same manner and time. This section does not apply to

judgments entered in favor of the United States. Whenever the law of any State

requires a judgment of a State court to be registered, recorded, docketed or indexed,

or any other act to be done, in a particular manner, or in a certain office or county

or parish before such lien attaches, such requirements shall apply only if the law of

such State authorizes the judgment of a court of the United States to be registered,

recorded, docketed, indexed or otherwise conformed to rules and requirements

relating to judgments of the courts of the State.

Thus, judgments obtained in federal district court are only required to be registered, recorded,

docketed, and indexed in North Carolina if North Carolina law requires it.

N.C. GEN. STAT. § 1-237 is the relevant statute addressing the issue of judgments obtained

in federal courts. In North Carolina, and relevant to this Order,

Judgments and decrees rendered in the district courts of the United States within

this State may be docketed on the judgment dockets of the superior courts in the

several counties of this State for the purpose of creating liens upon property in the

county where docketed; and when a judgment or decree is registered, recorded,

docketed and indexed in a county in like manner as is required of judgments and

decrees of the courts of this State, it shall become a lien and shall have all the rights,

force and effect of a judgment or decree of the superior court of said county . . ..

N.C. GEN. STAT. § 1-237 (emphasis added).

3 Defendant also cites In re Snavely, 314 B.R. 808 (B.A.P. 9th Cir. 2004) in support of his argument, which the

Court summarily disregards as unpersuasive.

By the plain language of the statute, North Carolina does not require judgments obtained

in federal court to be registered in North Carolina. The statute simply provides that if a federal

judgment is registered in North Carolina state court, such federal judgment will have the same

force and effect as if the judgment were issued by the state court itself. See § 1-237; S&D Land

Clearing v. D’Elegance Mgmt. Ltd., Inc., 34 F. App’x 885, 894 (4th Cir. 2002) (“[I]t is clear that

[N.C. GEN. STAT.] § 1-237 and related provisions apply when enforcement of a federal judgment

is sought in state court.” (emphasis in original)); see also Red Barn Farms, LLC v. Gen. Elec. Cap.

Corp., No. 1:09-cv-747, 2011 WL 883002, at *3 (M.D.N.C. Mar. 8, 2011) (“[T]he judgment,

having been docketing in North Carolina state courts, now has the same force and effect as if those

courts had entered the judgment themselves.”).

Here, Defendant Winn makes no argument that the federal judgment issued by this Court

is sought to be enforced in state court. Accordingly, Defendant Winn’s first argument fails.

Defendant Winn next argues at least some of the funds seized were not subject to the

judgment because some of the property seized belonged either to his wife, Mrs. Winn, or his Minor

Child, and their property is not subject to the judgment. (Doc. No. 180, pp. 4-5).

Of the largely unpersuasive legal authority cited by Defendant, Jimenez v. Brown, 509

S.E.2d 241 (N.C. Ct. App. 1998) has held “that joint accounts are attachable to the extent of a

debtor’s contribution to the account.” Id. at 246. However, in so holding, the Jimenez court

nonetheless acknowledged that “most courts . . . hold that there is a presumption that all of the

joint bank account is owned by the debtor and that the depositors have the burden to prove that

ownership of the funds is otherwise.” Id. (citation and quotation omitted). Thus, according to

Jimenez, funds in the joint accounts are subject to the judgment only to the extent the funds were

contributed by Defendant Winn himself. Funds shown to be contributed by Mrs. Winn or their

minor child are not subject to the judgment.

Defendant Winn and non-party Movants have shown that only $1,749.91 of the funds

seized were contributed by someone other than Defendant Winn. First, the bank statement

reflecting deposits and withdrawals for Defendant Winn and Mrs. Winn’s joint account reflects

only two contributions made by Mrs. Winn—one on May 21, 2021 in the amount of $850.98 and

the other on June 4, 2021 in the amount of $898.93. (Doc. No. 180-1, p. 2). Both deposits appear

to be Charlotte Mecklenburg payroll payments. Id. All other deposits appear to reflect

contributions by Defendant Winn, and Defendant Winn does not argue otherwise Id. Second, the

bank statement reflecting deposits and withdrawals for the account jointly held by Defendant Winn

and his minor child does not reflect any contributions or deposits, let alone contributions to the

account made by someone other than Defendant Winn. (Doc. No. 180-2, p. 2). In sum, Defendant

Winn and non-party Movants have shown that of the $24,966.60 seized, only $1,749.91 did not

belong to Defendant Winn and was improperly seized as not subject to the judgment.

Finally, Defendant Winn argues any funds deposited into the account by his employer,

Mongo DB, Inc. were improperly seized in violation of N.C. GEN. STAT. § 1-362. (Doc. No. 180,

p. 7). Section 1-362 provides:

The court or judge may 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 the judgment; except that

the earnings of the debtor for his personal services, at any time within 60 days next

preceding the order, cannot be so applied when it appears, by the debtor's affidavit

or otherwise, that these earnings are necessary for the use of a family supported

wholly or partly by his labor.

The statute “exempt[s] from garnishment the wages of a defendant earned in sixty days next

preceding the order where it appears, by the debtor’s affidavit or otherwise, that those earnings are

necessary for the use of a family supported wholly or partly by his labor.” Sturgill v. Sturgill, 272

S.E.2d 423, 428 (N.C. Ct. App. 1980) (citation omitted). However, “bare allegation[s] by

defendant that his income is necessary to support his . . . family [are] insufficient to support his

claim for the exemption [under § 1-362].” Id.

Here, Defendant Winn has not provided any affidavits or other documentation necessary

beyond a bare allegation that would allow this Court to determine whether Defendant Winn may

claim the § 1-362 exemption. Indeed, Defendant Winn has not even established that deposits made

into his joint account by Mongo DB were wages paid to Defendant Winn for his personal services

as opposed to some other kind of deposit. Defendant Winn’s final argument is accordingly not

persuasive to this Court, and the Court declines to hold that the funds reflected as deposits by

Mongo DB were improperly seized.*

III. CONCLUSION

IT IS THEREFORE ORDERED that Defendant Winn’s Motion in the Cause, (Doc. No.

180), is GRANTED IN PART and DENIED IN PART.> The Court hereby ORDERS the return of

$1,749.91 to non-party Movant Mrs. Winn, as such funds not subject to the judgment. The Court

further ORDERS that future funds contributed to joint accounts by Mrs. Winn are not subject to

seizure to satisfy Defendant Winn’s judgment creditors.

IT IS SO ORDERED.

Signed: August 16, 2021

Frank D. Whitney

United States District Judge ages

4The Court is also not convinced that any deposits made by Mongo DB between May and June 2021 fall into the 60-

day timeline outlined by the statute. The plain language of the statute suggests that the exemption applies to wages

earned in the 60 days prior to the relevant court order, and the funds disputed here were seized after the Court’s prior

judgment order and Writ of Execution. See N.C. GEN. STAT. § 1-362; cf. In re Maloney, No. 16-00847-5-JNC, 2-17

WL 836571, at *3 (Bankr. E.D.N.C. Mar. 2, 2017) (explaining that § 1-362 applies to wages earned in the 60 days

prior to filing a bankruptcy petition).

> Notwithstanding Defendant Winn’s partial success in this matter, the Court notes Defendant’s Motion is the latest

in a series of attempts to protract this litigation, which has been ongoing since 2017. The Court cautions Defendant

Winn and his attorneys that the Court may impose sanctions on counsel if further dilatory tactics are undertaken.