United States District Court, W.D. North Carolina, Charlotte Division
D. Whitney Chief United States District Judge.
MATTER is before the Court on Jonathan D. Feit of James,
McElroy & Diehl, P.A.'s Motion to Withdraw or Dismiss
this Court's Order to Show Cause (the
“Motion”). (Doc. No. 445). This Court issued an
Order to Show Cause on June 22, 2018, ordering Mr. Feit to
show cause and appear before the Court on July 9, 2018. (Doc.
No. 432). Mr. Feit appeared at the July 9, 2018 show cause
hearing as ordered by the Court. Following this hearing,
where Mr. Feit had a full opportunity to respond and be
heard, Mr. Feit filed this Motion on July 13, 2018. (Doc. No.
445). In the exercise of its discretion, the Court considers
Mr. Feit's Motion despite its filing after the show cause
January 22, 2018, after a seven day trial, the jury found
Defendants WDS, Inc., Jennifer Maier, and Brian Ewert liable
to Plaintiffs Cargill, Inc. and Cargill Meat Solutions, Corp.
(“Cargill”) for several claims and found for each
of the claims that Cargill was entitled to recover $35, 177,
269. (Doc. No. 314). In its Order addressing Defendants'
post-trial motions under Federal Rules of Civil Procedure
50(b) and 59(a), the Court allowed judgment on the verdict on
all claims. (Doc. No. 366). Claims against Brian Ewert
included conversion, fraud, conspiracy to defraud Cargill or
engage in commercial bribery that damaged Cargill, violation
of the Racketeer Influenced and Corrupt Organizations Act
(“RICO”) § 1962(a), (c), and (d), and
violation of the Unfair and Deceptive Trade Practices Act.
(Doc. No. 366). The resulting amended judgment against all
Defendants, reflecting trebled/threefold damages,
pre-judgment interest, attorneys' fees, and taxable
costs, totals $111, 173, 491.51. (Doc. No. 366). Eventually,
a writ of execution against Brian Ewert was entered on April
12, 2018. (Doc. No. 373). Cargill filed a Motion to Charge
Interests of Judgment Debtor Brian Ewert on April 13, 2018.
(Doc. No. 375).
addition to prior correspondences with subject lines
referencing “Ewert” and “Cargill, ”
on April 28, 2018, C. Richard Rayburn, Jr. of Rayburn Cooper
& Durham, P.A., emailed Ed Hinson of James, McElroy & Diehl,
P.A. (Doc. No. 443-2). Rayburn Cooper and Durham P.A., as
clarified in later emails to counsel for Cargill, represents
entities owned by Brian Ewert, including DLP, RFS, RTL, and
DLP Holdings. (Doc. No. 443-4). Mr. Hinson and Mr. Feit, the
subject of this Court's Show Cause Order, work for the
same firm, James, McElroy & Diehl, P.A. The April 28, 2018
email had the subject “Tracy Ewert.” (Doc. No.
443-2 at 4). Tracy Ewert is Brian Ewert's wife. The April
28, 2018 email stated:
I have heard from my client that everyone is scrambling to
come up with the retainer and have you in for Tracey ASAP.
(Doc. No. 443-2 at 4).
April 30, 2018, the Court granted in part and denied in part
the Motion to Charge Interests of Judgment Debtor Brian
Ewert. (Doc. No. 395). The Court's April 30, 2018 Order
addressed Plaintiffs' application for an order charging
the limited liability company and partnership interests held
by Judgment Debtor Brian Ewert with payment of the judgment
and post-judgment interest (the “Charging
Order”). This Court held:
Ewert's ownership interests in the NC Entities are
subject to the entry of a charging order under N.C. Gen.
Stat. §§ 57D-5-03 and 59-703. Plaintiffs shall have
the rights of an assignee of such interests, namely, the
right to receive the distributions and allocations or any
other payment obligation to Ewert to which Ewert becomes
entitled based on his ownership interest in a NC entity.
(Doc. No. 395 at 2). The Court then ordered, adjudged, and
2. Ewert's ownership interests in ODDS, LLC; DLP, LLC (or
any iteration of DLP, including, without limitation,
“Diverse Label Printing” and “DLP
Distributions”); DLP Holdings, LLC; Jet Me Around, LLC
(or any iteration of the same, including, without limitation,
“JMA, LLC”); B-Pak Manufacturing Solutions, LLC;
Refrigerated Trucking & Logistics, LLC; WDS Canada, LLC; WDS
Laundry Services, LLC; or TBE, LLC are charged with payment
of the Judgment, including post-judgment interest.
4. Each NC Entity shall pay directly to Plaintiffs all
distributions, allocations, dividends, or payments owing to
Ewert by such NC Entity in satisfaction of the Judgment until
the Judgment is satisfied or further Order of the Court.
6. Ewert is enjoined and prohibited from circumventing the
terms or purposes of this Order.
(Doc. No. 395 at 2- 3).
email dated April 30, 2018, Mr. Rayburn forwarded to Mr.
Hinson an email from counsel for Cargill. The forwarded email
had an attachment entitled “Charging Order.pdf.”
The body of the forwarded email stated:
Attached is an order Judge Whitney entered today directing
various entities owned in part or in whole by Brian Ewert,
including DLP, to make all distributions allocations,
dividends and payments owing to Ewert to Cargill, Inc. and
Cargill Meat Solutions, Corp.
Can you let us know which of these entities you represent?
Thank you, Jane Maschka
(Doc. No. 443-2 at 7).
7, 2018, a Salary Advance Promissory Note in the amount of
$20, 000 was signed by Tracy Ewert. (Doc. No. 448-3 at 2).
The Note states “the undersigned promises to pay
DIVERSE LABEL PRINTING, LLC or order, the principal sum of
TWENTY THOUSAND AND NO/100 DOLLARS ($20, 000.00), with
interest at the rate of two and eighteen hundredths per cent
(2.18%) per annum, accrued annually[.]” (Doc. No. 448-3
at 2). The Note indicates payments “shall be withheld
from the maker's salary paycheck for a total of
seventy-nine bi-weekly pay periods[.]” (Doc. No. 448-3
at 2). DLP's bank statement reflects, a wire out of $20,
000.000 with the description of “BNF JAMES MCELROY AND
DIEHL;REF TRACY EWERT” on May 8, 2018. (Doc. No. 448-4
email dated May 8, 2018, Mr. Feit of James, McElroy & Diehl,
P.A. emailed Mr. Rayburn stating:
I hope you are well. I was hoping you would have some time to
have a chat about the Ewert matter(s). Thanks.
(Doc. No. 443-2 at 11). The $20, 000 Note was marked as
satisfied May 9, 2018. (Doc. No. 448-3 at 2).
2018, Tracy Ewert retained Mr. Feit to represent her in a
domestic case against her husband, Brian Ewert. (Doc. No.
445-7 at 1). On May 9, 2018, Raboteau T. Wilder, Jr. of
Terpening Wilder Law appeared on behalf of Brian Ewert in
this proceeding (Doc. No. 406) and filed a response to
Cargill's Motion for Issuance of An Arrest Warrant and
Injunctive Relief Against Defendant Brian Ewert, Diverse
Label Printing, LLC, ODDS, LLC, Resnex Mfg., Inc., DLP
Holdings, LLC, Refrigerated Trucking & Logistics, LLC, Jet Me
Around LLC, B-Pak Manufacturing Solutions, LLC, RFS, Inc., H.
Vaughn Ramsey, as Trustee of the Brian C. Ewert Irrevocable
Trust, and Brian Ewert, as Trustee of the Brian C. Ewert
Revocable Trust (Doc. No. 407).
16, 2018, but effective May 1, 2018, Diverse Label Printing,
LLC (“DLP”) and Brian Ewert executed an
employment agreement. (Doc. No. 443-3 at 1). The employment
During the Employment Period, as compensation for the
services rendered by Employee to Company, Company will pay to
Employee compensation of $50, 000.00/month less federal and
state income tax withholding and other customary employee
deductions as required by law, payable in accordance with
Company's customary payroll practices.
(Doc. No. 443-3 at 1).
on May 16, 2018, Mr. Feit on behalf of Tracy Ewert filed a
Verified Complaint in Mecklenburg County against Brian Ewert,
ODDS, LLC, DLP Holdings, LLC, RFS, Inc., Refrigerated
Trucking and Logistics, LLC, Jet Me Around, LLC, Diverse
Label Printing, LLC, WDS, Inc., B-Pak Manufacturing
Solutions, LLC, WDS Canada, LLC, WDS Laundry Services LLC,
and TBE LLC (the “Complaint”). (Doc. Nos. 442-1,
445-2, 445-8). This state court case was assigned docket
number 18-CVD-9391. (Doc. Nos. 442-1, 445-2). Tracy Ewert,
alleging a separation date of April 17, 2018, sought
postseparation support, alimony, child support, child
custody, equitable distribution, and injunctive relief in the
Complaint. (Doc. Nos. 442-1, 445-2, 445-7). The Complaint had
three exhibits: the jury's verdict in this case, the
initial amended judgment from this case, and Tracy and Brian
Ewert's premarital agreement. (Doc. No. 442-1, 445-2).
on Chapter 7A's delegation of authority to district
courts on domestic claims, Mr. Feit sought injunctive relief
for his client under N.C. Gen. Stat. 50-20(i) and N.C. Gen.
Stat. 1A-1, Rule 65 in the district court division of North
Carolina's General Court of Justice. (Doc. No. 445-7 at
2). Mr. Feit, on behalf of Tracy Ewert, also moved and
obtained an ex parte temporary restraining order before the
Honorable Christy T. Mann. (Doc. No. 445-7 at 2; Doc. No.
445-8 at 2). The May 16, 2018 Temporary Restraining Order
(“TRO”) entered by Judge Mann (“TRO”)
Pending further Order of this Court, Defendant ODDS, LLC; DLP
Holdings, LLC; RFS, Inc.; Refrigerated Trucking and
Logistics, LLC; Jet Me Around, LLC; Diverse Label Printing,
LLC; WDS, Inc.; B-Pak Manufacturing Solutions, LLC; WDS
Canada, LLC; WDS Laundry Services LLC; and TBE LLC shall not
make any distributions to Defendant/Father; Cargill, Inc.
and/or Cargill Meat Solutions, Corp.; or any other creditor.
(Doc. Nos. 429-1, 445-4).
E. Shook of Rayburn Cooper & Durham, P.A. sent a letter to
Mr. Feit on May 25, 2018. He stated in the letter:
As you are aware, my firm represents Diverse Label Printing,
LLC, DLP Holdings, LLC, Refrigerated Trucking & Logistics,
LLC, and RFS, Inc. with respect to certain business matters.
I have reviewed the Ex Parte Temporary Restraining Order as
it relates to my clients. As we discussed, we interpret and
understand paragraph 2 of the decretal portion on page 3 of
the Order to mean that the referenced entities, including my
clients, are enjoined from making any distributions to Mr.
Ewert on account of his ownership in such entity. In
addition, we interpret the Order to prohibit any distribution
or other payment or transfer of assets (on account of a
charging order or otherwise) to Cargill, Inc. and/or Cargill
Meat Solutions, Corp. or any other creditor where such
distributions payments, or transfers would be outside the
ordinary course of business.
Based on the above interpretation, we do not believe the
regular salary payments to Mr. Ewert and regular payments to
creditors and others made in the ordinary course of business
are prohibited or enjoined by this Order. Please confirm that
this is your understanding as well.
(Doc. No. 443-2 at 14).
Dear Ben, I have your letter of May 25 and I agree with your
interpretation of the Ex Parte ...