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The Bank of Hampton Roads v. Wilkins

Court of Appeals of North Carolina

August 6, 2019

THE BANK OF HAMPTON ROADS, Plaintiff
v.
LUCIEN S. WILKINS, HOWARD F. MARKS, JR., STEPHEN D. SAIEED, and BRUNSWICK PROFESSIONAL PROPERTIES, INC, Defendants

          Heard in the Court of Appeals 8 May 2019.

          Appeal by Defendant Stephen D. Saieed from Order entered 7 May 2018 by Judge R. Kent Harrell in New Hanover County No. 10 CVS 3647 Superior Court.

          Block, Crouch, Keeter, Behm & Sayed, LLP, by Christopher K. Behm, for plaintiff-appellee.

          Stubbs & Perdue, P.A., by Matthew W. Buckmiller, for defendant-appellant.

          HAMPSON, JUDGE.

         Factual and Procedural Background

         Stephen D. Saieed (Defendant) appeals from an Order to Amend Charging Order (Order) filed on 7 May 2018, amending 4 April 2017 Charging Orders (Charging Order) to reflect that O'Mahoney Holdings, LLC-and not O'Mahoney Holdings, LTD-is the assignee and holder of the Charging Order against corporate entities in which Defendant has an interest. The Record tends to show the following:

         On 5 August 2010, the Bank of Hampton Roads (Bank) filed a complaint against Defendant and others, seeking to collect on a defaulted loan by Brunswick Professional Properties, LLC, on which loan Defendant was a guarantor (10-CVS-3647 Action). On 20 April 2011, the trial court entered its Order Granting Summary Judgment Against all Defendants (Judgment).[1] Pursuant to a Purchase Agreement, Bank then assigned the Judgment to "O'Mahoney Holdings, LTD" on 14 March 2016 (Assignment of Judgment). Thereafter, on 4 April 2017, O'Mahoney Holdings, LTD sought and obtained the Charging Order against eight limited-liability companies in which Defendant allegedly had an interest.

         After the Charging Order was obtained in favor of O'Mahoney Holdings, LTD, a separate lawsuit was filed by O'Mahoney Holdings, LLC against Defendant and various limited-liability companies allegedly associated with Defendant (17-CVS-4280 Action). Sometime after the filing of the 17-CVS-4280 Action, Defendant filed a motion to dismiss apparently alleging, inter alia, that O'Mahoney Holdings, LLC was not the holder of the Judgment and therefore not the real party in interest.[2] This motion appears to have been based on the fact that the Assignment of Judgment and Charging Order instead named "O'Mahoney Holdings, LTD."

         In response, O'Mahoney Holdings, LLC filed its Motion to Correct Order Nunc Pro Tunc Based on Misnomer of O'Mahoney Holdings, LLC (Motion to Correct) on 28 February 2018. In its Motion to Correct, counsel for O'Mahoney Holdings, LLC explained that the designation of LTD instead of LLC was a "clerical error" created by the LLC's principal and sole managing member, Matthew F. Collins (Collins), who-since the creation of O'Mahoney Holdings, LLC-believed the corporate descriptor was LTD not LLC. This mistake was repeated by counsel for O'Mahoney Holdings, LLC on all contracts and court documents up until 2018. In its Motion to Correct, O'Mahoney Holdings, LLC sought to amend, pursuant to Rule 60(a) of the North Carolina Rules of Civil Procedure, the Assignment of Judgment, the Charging Order, and all other related court proceedings to correct this misnomer.

         On 20 March 2018, the trial court entered an order in the 10-CVS-3647 Action, the 17-CVS-4280 Action, and a separate, related action, finding O'Mahoney Holdings, LLC was not the holder of the Judgment and thus was not the real party in interest. The trial court noted the Assignment of Judgment was a private contract and that the Charging Order therefore was not subject to revision under Rule 60(a) until the Assignment of Judgment was corrected. The trial court then allowed O'Mahoney Holdings, LLC six months to correct the issues regarding the Assignment of Judgment.

         On 23 March 2018, O'Mahoney Holdings, LLC filed an Amendment to the Assignment of Judgment (Amended Assignment of Judgment), which "correct[ed] a scrivener's error contained in the [Purchase] Agreement and [Assignment of Judgment] whereby O'Mahoney Holdings, LLC was inadvertently referred to as O'Mahoney Holdings, Ltd." On 6 April 2018, O'Mahoney Holdings, LLC filed in this 10-CVS-3647 Action its Renewed Motion to Correct Order Nunc Pro Tunc Based on Misnomer of O'Mahoney Holdings, LLC (Renewed Motion to Correct) seeking again to correct this misnomer in the Assignment of Judgment, Charging Order, and all related proceedings under Rule 60(a). The same day, O'Mahoney Holdings, LLC filed its Motion for Ratification on Standing seeking to ratify the standing of O'Mahoney Holdings, LLC as the real party in interest in the various actions.

         On 7 May 2018, the trial court entered its Order amending the Charging Order under Rule 60(a) "to reflect that O'Mahoney Holdings, LLC is the assignee and holder of the judgment against [Defendant]." The trial court also noted the "Charging Order as amended shall be effective as of the date originally entered." The same day, the trial court entered its Order Addressing Real Party in Interest (Real Party in Interest Order) finding "O'Mahoney Holdings, LLC is the real party in interest as Plaintiff and that their status as the real party in interest will relate back to the filing of the commencement of this action." On 6 June 2018, ...


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