What is an attachment proceeding? It’s used when a defendant (or defendant to be) is in breach of an agreement AND is going to leave the State of North Carolina with assets.
Attachment is an ancillary proceeding to grab (or attach) property before it leaves the state or gets concealed.
The NC Court’s have stated: The purpose of attachment proceedings is to (1) afford the court in the main action quasi in rem jurisdiction so as to bring the defendants' property under the jurisdiction of the State court or (2) bring property within the custody of the court which would otherwise be unavailable for satisfaction of an ultimate judgment in a principal suit because of assignment or removal by the debtor.
Bottom line: the Courts understand that a judgment in North Carolina may do the plaintiff little good if the defendant left the state or concealed the assets so that the plaintiff has to chase it down in another jurisdiction, whether it be another state or nation.
Attachment is an ancillary proceeding and is ordered by the Clerk typically at the outset of a lawsuit or prior to a lawsuit.
§ 1-440.2. Actions in which attachment may be had.
Attachment may be had in any action the purpose of which, in whole or in part, or in the alternative, is to secure a judgment for money.
1-440.3 describes when Attachments can be used:
In those actions in which attachment may be had under the provisions of NCGS 1-440.2, an order of attachment may be issued when the defendant is
(1) A nonresident, or
(2) A foreign corporation, or
(3) A domestic corporation, whose president, vice-president, secretary or treasurer cannot be found in the State after due diligence, or
(4) A resident of the State who, with intent to defraud his creditors or to avoid service of summons,
a. Has departed, or is about to depart, from the State, or
b. Keeps himself concealed therein, or
(5) A person or domestic corporation which, with intent to defraud his or its creditors,
a. Has removed, or is about to remove, property from this State, or
b. Has assigned, disposed of, or secreted, or is about to assign, dispose of, or secrete, property.
Some cases have discussed when Attachment can be used:
Property of the judgment debtor could be attached under this section, where the judgment creditor presented evidence that the debtor had concealed himself in North Carolina and had resisted efforts by the creditor to serve him with process.
SUBDIVISION (5) OF 1-440.3 IS RESTRICTED TO CIRCUMSTANCES IN WHICH CREDITOR IS IN IMMEDIATE DANGER that the debtor will destroy or alienate the property sought to be attached. Hutchison v. Bank of N.C., 392 F. Supp. 888 (M.D.N.C. 1975).
If you have a litigation matter with a debtor that is leaving the state with assets that are part of a lawsuit, contact Kirk Sanders at 336-723-7200 to assist with your attachment proceeding or commercial litigation
Hendrick Bryant Nerhood Sanders & Otis, LLP
723 Coliseum Dr. Ste. 101
Winston-Salem, NC 27106