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Civil Practice – Judgments – Execution – Supplemental Proceedings – Subject Matter Jurisdiction

After a default judgment was entered against defendant, a writ of execution was issued. Before the judgment creditor made any attempt to satisfy the writ of execution, the trial court allowed the judgment creditor to initiate a supplemental proceeding: an ex parte order pursuant to G.S. §§ 1-358 and -360. Since the supplemental proceeding was directed at defendant’s property in the hands of a third party not a party to the suit, the trial court had subject matter jurisdiction over the supplemental proceeding, despite the lack of any prior attempt to satisfy the writ of execution.

We affirm the trial court’s order in aid of execution.

Sections 1-358 and -360 do not require a return of the execution unsatisfied prior to any supplemental proceeding. The trial court’s ex parte order was entered to prevent transfer of defendant’s property and/or funds by a financial institution, a third party with access to the property. Since the writ of execution was issued prior to the supplemental proceeding of an Ex Parte Order per Sections 1-358 and 1-360, we conclude the trial court had proper subject matter jurisdiction to grant the Order and such order was valid.

Defendant also challenges the trial court’s finding he failed to meet his burden of proof to claim exemption of his earnings for family purposes the 60 days prior to levy. We disagree.

G.S. § 1-362 explicitly requires exemption from execution or garnishment of the debtor’s earnings if the debtor shows by affidavit these “earnings are necessary for the use of a family supported wholly or partly by his labor.”

The trial court determined defendant failed to meet his burden of proof showing equitable reasons for exemption of any seized funds sixty days prior to levy, and that he failed to prove the seized funds were needed for family purposes under § 1-362. The trial judge explained defendant’s funds were commingled and used without “sufficient segregation” for business expenses, such as for taking clients to dinner and paying taxes.

Further, defendant’s spreadsheet in support of his affidavit included both business expenses and family expenses and did not distinguish between these expenses. Defendant testified that all expenses were family expenses since he is self-employed. Defendant testified he expended $15,000 per month in expenses, yet his wife claimed the family expenses were $6,000 per month.

Even after levying the total amount for satisfaction of the judgment, the joint bank account still held $38,461.54 from defendant’s deposits, not including the funds contributed by his wife. Accordingly, competent evidence supported the trial court’s finding that defendant failed to meet his burden of proof for exemption under § 1-362.


Radiance Capital Receivables Twenty One, LLC v. Lancser (Lawyers Weekly No. 011-211-22, 16 pp.) (Fred Gore, J.) Appealed from Dare County Superior Court (Jerry Tillett, J.) Gregory Chocklett for plaintiff; Casey Varnell for defendant. 2022-NCCOA-789

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