Connolly v. Sharpe, 8022SC196

• Decision Date: 07 October 1980
• Docket Number: No. 8022SC196,8022SC196
• Citation: 49 N.C.App. 152,270 S.E.2d 564
• Parties: Raymond CONNOLLY and wife, Mary Connolly v. Betty Rich SHARPE and husband, Charles Sharpe.
• Court: North Carolina Court of Appeals

Page 564

270 S.E.2d 564

49 N.C.App. 152

Raymond CONNOLLY and wife, Mary Connolly v. Betty Rich SHARPE and husband, Charles Sharpe.

No. 8022SC196.

Court of Appeals of North Carolina.

Oct. 7, 1980.

Martin L. Kesler, Jr., Taylorsville, for plaintiffs-appellees.

W. P. Burkhimer, Lenoir, for defendants-appellants.

VAUGHN, Judge.

Though defendants bring several assignments of error, there are only two basic issues. The first is whether G.S. 1-440.1 et seq., which permits prejudgment attachment, without prior notice and opportunity to be heard, violates the federal and state constitutions. We must affirm the constitutionality of the statute. The second is whether prejudgment attachment may be issued without supporting factual evidence that defendants had attempted to defraud any creditor. We hold it was prejudicial error to order attachment upon plaintiffs' bare affidavit in this case and reverse.

We need not present a detailed constitutional analysis of the attachment statute here. The question defendants seek to raise has already been answered adversely to their contentions. Supply Service v. Thompson, 35 N.C.App. 406, 241 S.E.2d 364 (1978). The statute complies with procedural due process as required by the federal constitution. Hutchinson v. Bank of North Carolina, 392 F.Supp. 888 (M.D.N.C.1975). Also, it has withstood attack under our state constitution. Properties, Inc. v. Ko-Ko Mart, Inc., 28 N.C.App. 532, 222 S.E.2d 267, cert. den., 289 N.C. 615, 223 S.E.2d 392 (1976).

Nevertheless, plaintiffs were required to submit an affidavit meeting statutory requirements before attachment could be ordered. Whitaker v. Wade, 229 N.C. 327, 49 S.E.2d 627 (1948). Plaintiffs' affidavit recited the elements of G.S. 1-440.11(a)(1) and in pertinent part stated:

3. That the ground for attachment in this action is that the defendant is:

x A person or a domestic corporation which, with intent to defraud his or its creditors,

x Has removed, or is about to remove, property from this State, or

x Has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete, property.

4. That the facts and circumstances supporting allegations or acts committed with intent to defraud creditors are as follows: Defendants, Betty and Charles Sharpe, are believed to have destroyed a house belonging to them in Alexander County, by fire, one week after obtaining a $5,000.00 increase in insurance coverage on that property.

Plaintiffs presented no evidence other than the affidavit at the hearing upon defendants' motion to dismiss the attachment. We conclude that plaintiffs' affidavit was insufficient to support prejudgment attachment.

Attachment is a statutory remedy which must be strictly construed; however, substantial compliance with the statutory requirements will suffice. Bethell v. Lee, 200 N.C. 755, 158 S.E. 493 (1931). Attachment against resident defendants must be based on an affidavit setting forth the facts and circumstances supporting allegations that they have done or are about to do any act with intent to defraud their creditors. G.S. 1-440.11(a)(2)(b); Howard Co. v. Baer, 203 N.C. 355, 166 S.E. 77 (1932). Failure to set forth supporting facts and circumstances in a definite and distinct manner causes the attachment affidavit to be fatally defective. Finch v. Slater, 152 N.C. 155, 67 S.E. 264 (1910).

Plaintiffs requested the extraordinary remedy of prejudgment attachment relying only on a belief that defendants had destroyed their house one week after obtaining a $5000.00 increase in insurance coverage. No further facts were ever given to establish a justification for this belief. Plaintiffs did not even provide the date on which defendants allegedly destroyed their house. We cannot tell whether the timing of the destruction was a motivating factor in plaintiffs' request for protection by the attachment process. We are compelled, however, to agree with defendants that the attachment appears to have been "issued on the basis of no more than a rumor, with no evidence offered at any time, in the affidavit or at the hearings, to support the rumor." The affidavit should have stated more particulars concerning defendants' destruction of their house enabling the court to determine whether there had been a fraudulent...