Yadkin Valley Bank & Trust Co. v. Northwestern Bank, 80 N.C. App. 716 (1986)

May 20, 1986 · North Carolina Court of Appeals · No. 8523SC1378

80 N.C. App. 716

YADKIN VALLEY BANK AND TRUST COMPANY, JOHN EVERETT HUTCHINSON and RUTH LAURA DAVIS HUTCHINSON v. NORTHWESTERN BANK, CHORE-BOY, INC., DAIRYMEN, INC. and LINDA McGEE, Trustee

No. 8523SC1378

(Filed 20 May 1986)

Judgments § 38— U.S. District Court judgment as res judicata

A U.S. District Court judgment was res judicata as to plaintiffs’ claim that defendants wrongfully removed equipment from plaintiffs’ farm after plaintiffs had instituted bankruptcy proceedings.

Appeal by plaintiffs from Rousseau, Judge. Order entered 9 August 1985 in Superior Court, Wilkes County. Heard in the Court of Appeals 14 May 1986.

This is a civil action wherein plaintiffs seek to recover damages from defendants alleging that defendant Chore-Boy, Inc., as instructed by defendant Northwestern Bank and defendant Dairymen, Inc., negligently removed dairy equipment from a farm owned by plaintiffs Hutchinsons, after the Hutchinsons had instituted bankruptcy proceedings. Plaintiffs alleged that defendants removed the equipment in violation of the automatic stay provision of 11 U.S.C. Sec. 362. Plaintiffs further alleged that defendants’ conduct constituted unfair and deceptive trade practices and sought treble damages pursuant to G.S. 75-16 and attorney’s fees pursuant to G.S. 75-16.1. On 14 June and 21 June 1985, defendants Dairymen, Inc., Northwestern Bank and Chore-Boy, Inc., filed motions for summary judgment. On 9 August 1985, after a hearing, the trial judge entered an order granting defendants’ motions for summary judgment. Plaintiffs appealed.

Daniel J. Park for plaintiffs, appellants.

Barnett & Alagia, by David B. Perkins, Jr., and Brooks, Pierce, McLendon, Humphrey & Leonard, by Mack Sperling, for defendant, appellee, Dairymen, Inc.

Petree Stockton & Robinson, by Dudley Humphrey and Robert E. Price, Jr., for defendants, appellees, Northwestern Bank and Chore-Boy, Inc.

HEDRICK, Chief Judge.

The record before us affirmatively discloses that plaintiffs filed an adversary proceeding in the United States Bankruptcy Court for the Middle District of North Carolina alleging that defendants Dairymen, Inc., Northwestern Bank, and Chore-Boy, Inc., had negligently violated an automatic stay in bankruptcy by removing dairy equipment from a farm operated by plaintiffs Hutchinsons and that defendants’ conduct constituted an unfair and deceptive trade practice. On 19 October 1984, United States Bankruptcy Judge James B. Wolfe, Jr., entered an order dismissing plaintiffs’ complaint against defendants Dairymen, Inc., Northwestern Bank and Chore-Boy, Inc. On 5 June 1985, the judgment of the bankruptcy court was affirmed by United States District Judge Frank W. Bullock, Jr. We hold that the judgment of the United States District Court is res judicata as to plaintiffs’ claim. The record discloses an insurmountable bar to plaintiffs’ claim and therefore the trial court’s entry of summary judgment for defendants was proper.

Affirmed.

Judges Arnold and Eagles concur.