Union Grove Mill. and Mfg. Co. v. Faw

• Decision Date: 04 June 1991
• Docket Number: No. 9023SC972,9023SC972
• Court: North Carolina Court of Appeals
• Parties: UNION GROVE MILLING AND MANUFACTURING COMPANY, Plaintiff, v. John A. FAW, Mary Edna Gaither Faw (now Mary Edna Gaither); N.C. Dairy Herd Improvement Assoc., Inc., Dale Pierce, Robert Laney, NCNB National Bank of North Carolina, Steve Adams, Benny Foster and Bartlett Milling Company, Defendants.

Page 508

404 S.E.2d 508

103 N.C.App. 166

UNION GROVE MILLING AND MANUFACTURING COMPANY, Plaintiff, v. John A. FAW, Mary Edna Gaither Faw (now Mary Edna Gaither);

N.C. Dairy Herd Improvement Assoc., Inc., Dale Pierce,

Robert Laney, NCNB National Bank of North Carolina, Steve

Adams, Benny Foster and Bartlett Milling Company, Defendants.

No. 9023SC972.

Court of Appeals of North Carolina.

June 4, 1991.

Eisele & Ashburn, P.A. by Douglas G. Eisele, Statesville, for plaintiff-appellee.

Hall and Brooks by John E. Hall, Wilkesboro, for defendants-appellants.

WYNN, Judge.

This appeal involves the effect of a judgment lien against one spouse on marital property which, by virtue of a divorce decree, has been converted into property held as a tenancy in common and which, by virtue of a subsequent equitable distribution award, has been awarded to the non-debtor spouse. The specific issue here is whether the non-debtor spouse takes the property subject to the lien of judgment.

Plaintiff brought this action as a special proceeding in Wilkes County Superior Court alleging that as a judgment creditor of defendant John A. Faw, it was entitled to recover one-half of the surplus proceeds remaining after a foreclosure sale of former marital property. In addition to defendant John Faw, plaintiff named as defendants the appellant, Mary Edna Gaither Faw (defendant John Faw's former wife, now Mary Edna Gaither), and several other persons or entities that had judgments against the defendant John Faw, individually (each of these judgments was docketed after plaintiff's judgment). Because issues of fact were raised by the responsive pleadings, the proceeding was transferred to the civil issue docket pursuant to the provisions of N.C.Gen.Stat. § 45-21.32(c) (1984). The record reveals the following additional facts.

During their marriage, the Faws acquired a tract of land in Readies River Township, Wilkes County, as tenants by the entireties (hereinafter referred to as "the property"). As security for the payment of certain monies, the Faws executed and delivered a deed of trust covering the property to the Federal Land Bank.

On 4 February 1988, plaintiff obtained a $34,981.09 judgment in the Iredell County Superior Court against Mr. Faw, individually. Subsequently, on 15 February 1988, plaintiff docketed the judgment in the office of the Clerk of Superior Court for Wilkes County.

In December 1988, the Federal Land Bank, through its substitute trustee, instituted foreclosure proceedings on the property after the Faws had defaulted on the underlying obligation secured by the deed of trust. Prior to the sale of the property, the Faws became divorced by judgment filed January 3, 1989; and, in June 1989, appellant (Mrs. Faw) was awarded the entire ownership of the property as part of an equitable distribution award.

Following the Faws' divorce and the division of the marital property, the substitute trustee, pursuant to an authorization from the clerk of court, conducted a sale of the property. After the foreclosure sale and subsequent extinction of the underlying debts and fees, there remained surplus proceeds in the amount of $71,375.54. Faced with the claim of the plaintiff/judgment creditor, the substitute trustee paid one-half of the proceeds to appellant and deposited the remaining one-half with the clerk of court pending a determination as to its ownership.

Thereafter, plaintiff instituted this special proceeding asserting that its judgment lien against Mr. Faw's interest in the subject property was superior in time to any other and that it was therefore entitled to the remaining one-half of the surplus proceeds. From the trial court's grant of summary judgment in favor of the plaintiff, Mrs. Faw appeals.

I

It is well established in North Carolina that summary judgment is properly granted where there are no genuine issues of material fact to be decided and the movant is entitled to judgment as a matter of law. Lee v. Shor, 10 N.C.App. 231, 178 S.E.2d 101 (1970). The appellant does not contend that there were genuine issues of material...