Plasman v. Decca Furniture (Usa), Inc. 2015 Ncbc 83a

Plasman v. Decca Furniture (USA), Inc., 2015 NCBC 83A (Amended 10-02-2015).

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
CATAWBA COUNTY 12 CVS 2832

CHRISTIAN G. PLASMAN, in his
individual capacity and derivatively for
the benefit of, on behalf of and right of
nominal party BOLIER & COMPANY,
LLC,

Plaintiff,

v.

DECCA FURNITURE (USA), INC.,
DECCA CONTRACT FURNITURE,
LLC, RICHARD HERBST, WAI THENG
TIN, TSANG C. HUNG, DECCA
FURNITURE, LTD., DECCA
HOSPITALITY FURNISHINGS, LLC,
AMENDED ORDER AND OPINION
DONGGUAN DECCA FURNITURE CO.
LTD., DARREN HUDGINS, DECCA ON STAY PENDING APPEAL
HOME, LLC, and ELAN BY DECCA,
LLC,

Defendants,

and BOLIER & COMPANY, LLC,

Nominal Defendant,

v.

CHRISTIAN J. PLASMAN a/k/a
BARRETT PLASMAN,

Third-Party Defendant.

{1} THIS MATTER is before the Court, sua sponte, upon the July 14, 2015
Scheduling Order entered in the above-captioned case requiring the parties to submit
short briefs advising the Court whether this case may proceed with further pleadings
and discovery, and to a determination on the merits, or whether this case must be
stayed pending resolution of Plaintiff Christian G. Plasman (“Chris Plasman”) and
Third-Party Defendant Christian J. Plasman a/k/a Barrett Plasman’s (“Barrett
Plasman”) (collectively, “the Plasmans”) appeal of this Court’s May 26, 2015 Order &
Opinion (“May 26 Order”) (the “Plasmans’ Appeal”). After considering the parties’
briefs and submissions, the Court concludes that a stay is not mandated or required
by law or otherwise necessary in these circumstances and that the parties should
therefore proceed with responsive pleadings and discovery as further described
herein.
Law Offices of Matthew K. Rogers, PLLC by Matthew K. Rogers for Plaintiff
Christian G. Plasman and Third-Party Defendant Christian J. Plasman a/k/a
Barrett Plasman.

McGuireWoods LLP by Robert A. Muckenfuss, Elizabeth Zwickert
Timmermans, and Andrew D. Atkins for Defendants Decca Furniture (USA),
Inc., Decca Contract Furniture, LLC, Richard Herbst, Wai Theng Tin, Tsang
C. Hung, Decca Furniture, Ltd., Decca Hospitality Furnishings, LLC,
Dongguan Decca Furniture Co. Ltd., Darren Hudgins, Decca Home, LLC, Elan
by Decca, LLC, and Nominal Defendant Bolier & Company, LLC.

Bledsoe, Judge.
I.
PROCEDURAL AND FACTUAL BACKGROUND
{2} The factual and procedural background of this case is recited in detail in
Bolier & Co., LLC v. Decca Furniture (USA), Inc., 2015 NCBC LEXIS 55 (N.C. Super.
Ct. May 26, 2015). The Court, therefore, elects to recite only those facts and
procedural history that are necessary to resolve the issue of whether a stay should be
entered in this case pending the outcome of the Plasmans’ Appeal.
{3} On February 27, 2013, the United States District Court for the Western
District of North Carolina (Voorhees, J.) (the “Federal Court”) entered a preliminary
injunction order (“P.I. Order”), in which the Federal Court concluded that Defendant
Decca Furniture (USA) Inc. (“Decca USA”) is the majority in interest of Bolier &
Company, LLC (“Bolier”) and that Chris Plasman’s conduct in “continuing to manage
and to control the operations of Bolier” without Decca USA’s authorization or consent
“deprived the majority of this right.” Bolier & Co., LLC v. Decca Furniture United
States Inc., 2013 U.S. Dist. LEXIS 26791, at *6–7 (W.D.N.C. 2013). Among other
things, the P.I. Order required the Plasmans to return “all of Bolier[]’s monies,
including but not limited to customer payments, diverted to them or to any bank
account under their control” within five business days. Id. at *8. Additionally, the
P.I. Order required the Plasmans “to provide an accounting to Decca USA . . . of all
funds that were diverted from October 19, 2012” to the date of the entry of the P.I.
Order. Id.
{4} Shortly thereafter, rather than file a motion for reconsideration or notice of
appeal of the Federal Court’s P.I. Order, the Plasmans filed a document in Federal
Court on March 6, 2013 titled “Plaintiffs’ and Third Party Defendant’s Response to
Court Order” (the “Response”). In their Response, the Plasmans stated that they
“intended to comply with the spirit of the Court[‘s P.I.] Order, and by complying
[therein], [the Plasmans] [were] not waiving [their] rights to request reconsideration
or appeal [of the P.I. Order].” Id. at 2. The Plasmans argued that the P.I. Order did
“not reflect the current facts [because the Plasmans did] not possess any monies or
customer payments ‘diverted to them’ and [they did] not have ‘any bank account
under their control,’” they “[did] not believe they possess[ed] records other than [those
previously provided],” and they “have fully complied to the best of their ability with
the [P.I. Order].” Id. at 3–4.
{5} After the Federal Court dismissed Plaintiffs’ federal copyright infringement
claim on September 19, 2014 and declined to exercise supplemental jurisdiction over
the remaining state law claims, the Federal Court remanded the case to this Court
that same day for all further proceedings.
{6} On February 11, 2015, the Plasmans filed a motion to, inter alia, (1) amend
the P.I. Order by imposing a security bond and (2) dissolve those portions of the P.I.
Order restricting the Plasmans’ management roles in Bolier. At the time, Defendants
had filed a pending motion before this Court to enforce the P.I. Order on the grounds
that the Plasmans had failed to return purportedly diverted funds and provide an
accounting as directed by the Federal Court. In its May 26 Order, the Court denied
the Plasmans’ motion and granted Defendants’ motion by directing the Plasmans to
comply with the P.I. Order. The Plasmans filed a Notice of Appeal on June 25, 2015.
{7} Also on June 25, 2015, Chris Plasman filed a Second Amended Complaint,
and Barrett Plasman filed a document titled “Supplemented and Amended Third
Party Counterclaims.”
{8} On July 14, 2015, the Court entered a Scheduling Order (“July 14
Scheduling Order”) by which the Court required the parties to submit short briefs
advising whether this case could proceed or must be stayed pending resolution of the
Plasmans’ Appeal. See, e.g., Bowen v. Hodge Motor Co., 292 N.C. 633, 635, 234 S.E.2d
748, 749 (1977) (recognizing North Carolina’s “longstanding general rule that an
appeal removes a case from the jurisdiction of the trial court and, pending the appeal,
the trial judge is functus officio.”)
{9} In response to the Court’s July 14 Scheduling Order, Defendants moved the
Court to stay the time for their answer until fourteen (14) days after the Court
resolved the issues identified in the July 14 Scheduling Order. On July 23, 2015, the
Court entered an Order on Defendant’s Motion temporarily staying all activity in the
case other than those issues raised in the July 14 Scheduling Order.1
II.
ANALYSIS
A. Plaintiff’s Response to the P.I. Order
{10} The Court first notes that the Plasmans’ Notice of Appeal specifically
challenges those parts of the May 26 Order that deal with the Federal Court’s P.I.
Order. As explained below, however, the Court concludes that the Plasmans failed
to appeal or otherwise take any action in the Federal Court to preserve their ability
to challenge or stay enforcement of the P.I. Order and that the Plasmans’ effort to
attack the P.I. Order in this Court at this time is improper.
{11} Under the Federal Rules of Appellate Procedure, “[a]n appeal permitted by
law as of right from a district court to a court of appeals may be taken only by filing
a notice of appeal with the district clerk.” Fed. R. App. P. 3. The appeal “must be
filed with the district clerk within 30 days after entry of the judgment or order
appealed from.” Fed. R. App. P. 4.

1 On August 24, 2015, Defendants moved for clarification of the effect of the temporary stay as to

Defendants Decca Home, LLC, Elan by Decca, LLC, and nominal defendant Bolier & Co., LLC, who
were either newly-added or newly-served defendants in the Second Amended Complaint. Because the
Defendants’ July 22 Motion for Temporary Stay and this Court’s subsequent July 23 Scheduling Order
included those Defendants in the caption, the stay applied to all Defendants, and all Defendants will
be subject to the scheduling and other directives set forth in paragraph 23 of this Order and Opinion.
{12} The Plasmans’ assertion in their Response that they “are not waiving [their]
rights to request reconsideration or appeal,” leads this Court to conclude that
Plaintiffs’ Response was not intended to be a notice of appeal or a motion for
reconsideration in Federal Court. (Resp. at 2.) Instead, the Court concludes that the
Response was the Plasmans’ assertion to the Federal Court that they had “complied
to the best of their ability” with that Court’s P.I. Order. Notably, the Plasmans’
Response did not move the Federal Court for entry of an order in their favor or request
any type of relief.
{13} “In cases where a party submits a motion [after entry of an order or
judgment that] is unnamed and does not refer to a specific Federal Rule of Civil
Procedure, [the Fourth Circuit] consider[s] that motion either a Rule 59(e) motion to
alter or amend a judgment, or a Rule 60(b) motion for relief from a judgment or order.”
In re Burnley, 988 F.2d 1, 2 (4th Cir. 1992) (emphasis added). The Court concludes
that the Plasmans’ Response to the Federal Court is neither a 59(e) nor a 60(b)
motion, as the Response: (i) expressly reserved the Plasmans’ right to file a motion to
reconsider the P.I. Order; (ii) was not labeled as a motion and failed to request that
the Court take any action on the filing; and (iii) did not request any relief from the
Court.2 Accordingly, the Court concludes that the Plasmans never appealed the
Federal Court’s P.I. Order or filed a motion for reconsideration, and further that the
time for the Plasmans to file either a motion to reconsider the P.I. Order or an appeal
of the P.I. Order has long since expired. As such, the Court concludes that the
Plasmans’ Response in Federal Court does not constitute an active motion or request
for relief in this Court, the denial of which would entitle Plaintiffs to seek an appeal
to the North Carolina appellate courts. See generally Georgene Vairo, 16 Moore’s
Federal Practice § 107.43 (3d ed. 2014) (“Typically, the state court ‘will give effect to

2 Even if a motion for reconsideration can be found to be different than a motion to alter or amend a

judgment under the Federal Rules of Civil Procedure, “[t]he court has discretion to stay an injunction
pending disposition of a Rule 59(e) motion” under Fed. R. Civ. P. 62(b)(3). Fundamental Admin. Servs.,
LLC v. Anderson, 2015 U.S. Dist. LEXIS 43826, *9 (D. Md. Apr. 1, 2015). The Federal Court did not
exercise its discretion to do so here.
all pleadings filed in federal court and to all rulings made by the federal court’ while
the case was in federal court.”).
B. Plaintiffs’ Statement Regarding Stay of Action Pending Appeal
{14} The Plasmans acknowledge that their Appeal is interlocutory but claim that
the Appeal is nevertheless proper because the May 26 Order affects their substantial
right to operate and manage their business (i.e., Bolier). (Pls.’ Br. Regard. July 14,
2015 Sched. Order 5). Moreover, the Plasmans contend that their interlocutory
Appeal stays this Court’s consideration of virtually all aspects of the case, yet urge
this Court to require Defendants nonetheless to answer and proceed with discovery.
(Pls.’ Br. Regard. July 14, 2015 Sched. Order 3.)
{15} Pursuant to N.C. Gen. Stat. § 1-294,
When an appeal is perfected as provided by this Article it stays all
further proceedings in the court below upon the judgment appealed
from, or upon the matter embraced therein; but the court below may
proceed upon any other matter included in the action and not affected
by the judgment appealed from.

N.C. Gen Stat. § 1-294 (2015). Therefore,
if a party appeals an immediately appealable interlocutory order, the
trial court has no authority, pending the appeal, to proceed with the trial
of the matter. Where a party appeals from a nonappealable interlocutory
order, however, such appeal does not deprive the trial court of
jurisdiction and thus the court may properly proceed with the case.

Rpr & Assocs., Inc. v. Univ. of N. Carolina-Chapel Hill, 153 N.C. App. 342, 347,
570 S.E.2d 510, 514 (2002) (citation omitted).
{16} “An interlocutory order is immediately appealable if such order affects a
substantial right of the parties involved. A right is substantial when it will clearly
be lost or irremediably and adversely affected if the order is not reviewed before final
judgment.” Id. (internal citation omitted) (citing Cagle v. Teachy, 111 N.C. App. 244,
246, 431 S.E.2d 801, 802 (1993)).
{17} “In determining whether a substantial right is affected a two-part test has
developed—‘the right itself must be substantial and the deprivation of that
substantial right must potentially work injury to appellant if not corrected before
appeal from final judgment.’” Estate of Redden v. Redden, 179 N.C. App. 113, 116,
632 S.E.2d 794, 796 (2006) (quoting Goldston v. American Motors Corp., 326 N.C.
723, 726, 392 S.E.2d 735, 736 (1990)). When applying the two-part test, “[i]t is usually
necessary to resolve the question in each case by considering the particular facts of
that case and the procedural context in which the order from which appeal is sought
was entered.” Waters v. Qualified Personnel, Inc., 294 N.C. 200, 208, 240 S.E.2d 338,
343 (1978); see also Cagle, 111 N.C. App. at 246, 431 S.E.2d at 802 (noting that there
are "no hard and fast rules . . . for determining which appeals affect a substantial
right"). The “trial court has the authority . . . to determine whether or not its order
affects a substantial right of the parties or is otherwise immediately appealable,” and
thus whether it retains jurisdiction over the action. Rpr & Assocs., Inc., 153 N.C.
App. at 348, 570 S.E.2d at 514 (citation omitted).
{18} Based on the Court’s review of the record and the arguments of counsel, the
Court concludes that no substantial right of the Plasmans was affected by the May
26 Order compelling Plaintiffs to abide by the Federal Court’s P.I. Order. The Court’s
May 26 Order did not enter judgment against the Plasmans, did not dispose of any of
their causes of actions or defenses to Defendants’ Counterclaims, did not order them
to make a substantial payment of their own funds, or otherwise deprive them of any
rights that would be “lost or irremediably and adversely affected if the order is not
reviewed before final judgment.” Rpr & Assocs., Inc., 153 N.C. App. at 347, 570
S.E.2d at 514; see, e.g., Action Cmty. TV Broad. Network, Inc. v. Livesay, 151 N.C.
App. 125, 129, 564 S.E.2d 566, 569, (2002) (no substantial right affected where trial
court entered partial summary judgment finding defendants were not corporate
managers, stating “[w]hile we recognize a shareholder's ability to manage his or her
own closely held corporation is significant, we do not see how this right in this case
will be potentially injured before a final ruling is made [where procedural remedies
are available].”); Stancil v. Stancil, 94 N.C. App. 760, 763-764, 381 S.E.2d 720, 722-
723 (1989) (concluding substantial bond requirement to support a preliminary
injunction in a Meiselman dispute merely sought to preserve the status quo pending
final resolution and did not impair a substantial right); see also Waters, 294 N.C. at
208, 240 S.E.2d at 344 (no substantial right affected because “[a]ll defendant suffers
by its inability to appeal [the trial court order] is the necessity of rehearing its
motion.”).
{19} Rather, this Court simply ordered Plaintiffs to comply with the never-
appealed, legally valid and binding, 2013 P.I. Order requiring Plaintiffs to return
money that the Federal Court found they had diverted from Bolier. Indeed, it is
unclear how the Plasmans contend that they have a substantial right in funds that
they admit they diverted from a third-party in order to pay themselves and their
attorney, even as they continue to claim they had a right to do so. (Def.’s Br. Supp.
Mot. Enforce Order 4.)
{20} The May 26 Order also does not unfairly prohibit the Plasmans from
operating their business as Plaintiffs claim, as both the May 26 Order and the P.I.
Order specifically affirm and protect Chris Plasman’s rights as a minority member of
Bolier through the imposition of numerous safeguards. Bolier & Co., LLC, 2015
NCBC LEXIS 55, at *27, 43.
{21} Finally, the Plasmans contend they have a substantial right to a security
bond, yet fail to note that the imposition of a security bond in these circumstances is
within the sound discretion of the trial court in both federal and state court. Clarkson
Co. v. Shaheen, 544 F.2d 624, 632 (2nd Cir. 1976) (“[B]ecause, under Fed. R. Civ. P.
65, the amount of any bond to be given upon the issuance of a preliminary injunction
rests within the sound discretion of the trial court, the district court may dispense
with the filing of a bond.” (citations omitted)); Keith v. Day, 60 N.C. App. 559, 562,
299 S.E.2d 296, 298 (1983) (“[t]he [trial court] has power not only to set the amount
of security but to dispense with any security requirement whatsoever . . . ”). Based
on the totality of the circumstances, neither the Federal Court nor this Court
concluded that a bond was necessary to secure the P.I. Order, and the Plasmans have
failed to carry their burden to show that the failure to require a security bond affected
their substantial rights. See, e.g., Jeffreys v. Raleigh Oaks Joint Venture, 115 N.C.
App. 377, 380, 444 S.E.2d 252, 254 (1994) (citation omitted) (“appellant has
the burden of showing . . . that the order deprives the appellant of a substantial right
which would be jeopardized absent a review prior to a final determination on the
merits.”); Stancil, 94 N.C. App. 760 at 763-764, 381 S.E.2d at 722-723 (imposition of
security bond did not impair a substantial right).
{22} In sum, the Court is unpersuaded that the Plasmans have any substantial
rights that have been adversely impacted by the Court’s May 26 Order. To the
contrary, it appears to the Court that Plaintiffs’ Appeal of the May 26 Order reflects
a belated attempt to appeal the P.I. Order long after the 30-day time period to appeal
in Federal Court has expired, and that to the extent Plaintiffs’ rights have been
affected under these circumstances, that impact was caused by the P.I. Order in 2013
rather than by this Court’s May 26 Order. Accordingly, for the reasons noted above,
the Court concludes that this action should not be stayed pending the Plasmans’
Appeal and therefore that the case should proceed in this Court during the pendency
of the Plasmans’ Appeal.
III.
CONCLUSION
{23} WHEREFORE, the Court hereby ORDERS that:
a. the temporary stay issued by the Court’s July 23 Order is hereby
dissolved;
b. this action shall proceed in this Court during the pendency of the
Plasmans’ Appeal unless otherwise ordered by the Court;
c. Defendants shall have through and including September 8, 2015
(fourteen (14) days from the date of this Order and Opinion) to file and
serve their responses to the Second Amended Complaint and to the
Supplemented and Amended Third Party Counterclaims, as
appropriate; and
d. Defendants’ August 24 Motion for Clarification of Court Order is hereby
denied as moot.
SO ORDERED, this the 2nd day of October 2015.

/s/ Louis A. Bledsoe, III
Louis A. Bledsoe, III
Special Superior Court Judge
for Complex Business Cases