Cato v. Crown Financial, Ltd.

EAGLES, Chief Judge. We first consider Whether the trial court erred in retrying this case de novo. Plaintiff first argues that the Walsers’ “broadside exception” to the receiver’s report was too vague to justify review and should be treated as having waived the right to review. Second, plaintiff argues that the trial should not have been de novo and that the receiver’s report should have been accorded deference. Plaintiff contends that the trial court should have interpreted G.S. 1-507.7 “in a way that serves the statute’s purpose.” Plaintiff asserts that “[p]aying for the work of an expert receiver, then throwing that work away, dis-serves the statutory purpose.” Plaintiff contends that the standard of review should be the “substantial evidence” test that courts apply to agencies’ findings. Third, plaintiff contends that by retrying the case de novo, the trial court overruled another superior court judge’s decision not to set aside the default judgment, violating the rule “that ordinarily one judge may not modify, overrule, or change the judgment of another Superior Court judge previously made in the same action.” McArdle Corp. v. Patterson, 115 N.C. App. 528, 531, 445 S.E.2d 604, 606 (1994), aff’d per curiam, 340 N.C. 356, 457 S.E.2d 596 (1995). Finally, plaintiff argues that the Walsers should not be allowed to “bootstrap their mere presence into a trial de novo.” Defendants first assert that the plain meaning of the statute requires de novo review. Defendants next argue G.S. 1-507.7 does not set forth any particular requirements for exceptions to the receiver’s report. Defendants .contend that their exceptions to the receiver’s report were sufficient to provide plaintiff with notice of the scope of the trial, and plaintiff was not prejudiced by the form of the excep [686] tion. Third, defendants argue that “requiring the jury to determine if the receiver’s report is supported by ‘substantial evidence’ would add a provision not imposed by the language of N.C. Gen. Stat. §1-507.7 and would conflict with the express requirement that the trial court judge submit the issue to a jury.” Additionally, defendants contend that requiring the jury to give deference to the receiver’s findings “would conflict with the jury’s duty to act as the sole finder of fact.” Also, defendant asserts that “the question of whether the receiver’s report is supported by substantial evidence is a question of law that is not properly within the province of the jury as fact finder.” Finally, defendants argue that “[h]ad Judge Lamm refused to hold a trial pursuant to N.C. Gen. Stat. §1-507.7, he would have overruled that portion of Judge Allen’s order that granted the Walsers the status of intervenor-defendants, because the Walsers would not have received the same rights all other parties receive under N.C. Gen. Stat. §1-507.7.” Defendants argue that by allowing the Walsers to intervene and the receivership to proceed, the Walsers and the Catos were both given a full and fair opportunity to be heard. After careful consideration of the record, briefs and contentions of both parties, we reverse. The record reveals that plaintiff has a default judgment against Crown Financial for $3,723,583.00. The trial court denied the Walser’s motion to set aside the default judgment, and the Walser’s did not pursue an appeal. That judgment is final and is the law of the case; any further ruling purporting to deny the existence or amount of that judgment is void. Although the trial court granted the Walsers the right to file pleadings, that right was necessarily limited to issues not related to the amount or validity of the unappealed from judgment. Accordingly, the receiver could not properly reduce Ms. Cato’s judgment, and the Walsers could not seek review of the Cato’s judgment by a jury. Because of our determination of the first issue, we need not address the remaining issue on appeal. We reverse and remand to the trial court for proceedings consistent with this opinion. Reversed and remanded. Judges TIMMONS-GOODSON and SMITH concur.