                               NO. COA13-838

                   NORTH CAROLINA COURT OF APPEALS

                            Filed: 4 March 2014


FIRST BANK,

    Plaintiff,

    v.                                 Montgomery County
                                       No. 11 CVS 74
S&R GRANDVIEW, L.L.C.; DONALD J.
RHINE; JOEL R. RHINE; GORDON P.
FRIEZE, JR.; MAXINE GANER; SHARON
R. SILVERMAN, EXECUTRIX OF THE
ESTATE OF STEVEN S. SILVERMAN; and
MARTIN J. SILVERMAN,

    Defendants.


    Appeal by defendant Donald J. Rhine from order entered 26

February 2013 by Judge Vance Bradford Long in Montgomery County

Superior Court.   Heard in the Court of Appeals 10 December 2013.


    Nexsen Pruet, PLLC, by M. Jay DeVaney and Brian T. Pearce,
    for plaintiff-appellee.

    Wilson & Ratledge, PLLC, by Michael A. Ostrander, and Saffo
    Law Firm, P.C., by Anthony A. Saffo, for defendant-
    appellant.


    HUNTER, Robert C., Judge.


    Donald J. Rhine (“defendant”) appeals from a charging order

entered   in   favor   of     First   Bank     (“plaintiff”)   charging

defendant’s membership interest in an LLC to satisfy payment of
                                            -2-
a judgment.          On appeal, defendant argues that the trial court

erred by: (1) concluding that the charging order “effectuated an

assignment” of defendant’s membership interest in the LLC; and

(2) enjoining defendant from exercising his rights as a member

of the LLC and ordering that his membership rights “lie fallow”

until the judgment is satisfied.

    After careful review, we reverse the trial court’s order

and remand for entry of a new charging order consistent with

this opinion.

                                         Background

    On     7    September         2012,   the     trial    court       entered    monetary

judgment       for    plaintiff      against      defendant       in    excess    of   $3.5

million    based       on       defendant’s     default      on   various      loans     and

guaranty agreements.              In an effort to collect on this judgment,

plaintiff       filed       a   motion    seeking      a   charging      order     against

defendant’s      membership         interest      in   S&R    Grandview,         LLC   (“the

LLC”), a limited liability company of which defendant was a

member and manager.               After a hearing on 18 February 2013, the

trial   court        granted      plaintiff’s     motion,     and      after   concluding

that the charging order “effectuate[d] an assignment,” ordered

the following:

               1. Defendant D. Rhine’s membership interest
               in S&R Grandview, L.L.C. is hereby charged
                          -3-
    with payment of the unsatisfied amount of
    First Bank’s Judgment, including interest
    that has accrued after the date of the
    Judgment.

    2. First Bank shall hereafter have the
    rights of an assignee of Defendant D.
    Rhine’s    membership    interest   in S&R
    Grandview, L.L.C., and all members and
    managers of S&R Grandview, L.L.C. shall
    treat First Bank as such an assignee.

    3. Until such time as the full amount of the
    Judgment has been paid to First Bank,
    Defendant D. Rhine shall be enjoined from
    exercising any of the rights of a member of
    S&R Grandview, L.L.C.

    4. First Bank shall receive any and all
    distributions   and  allocations   from   S&R
    Grandview, L.L.C. to which Defendant D.
    Rhine is entitled, until the full amount of
    the Judgment has been paid to First Bank.

    5.   The   members  and   managers  of   S&R
    Grandview, L.L.C., shall not allow any
    distribution or allocation to Defendant D.
    Rhine unless and until First Bank’s Judgment
    has been fully satisfied.

    6. S&R Grandview, L.L.C. shall not allow
    Defendant D. Rhine to circumvent the terms
    or purpose of this Charging Order.

    7. This order does not allow First Bank to
    exercise any rights of a member of S and R
    [sic] Grandview, LLC except as set out in
    paragraph 4 above.     Defendant D. Rhine’s
    membership right shall lie fallow until the
    judgement [sic] is satisfied except as set
    out in paragraph 4 above.


Defendant filed timely notice of appeal from this order.
                                          -4-
                                       Discussion

        I. Effect of Charging Order on LLC Membership Interest

    Defendant brings two related arguments on appeal: (1) the

trial     court     erred      by    concluding      that    the     charging     order

effectuated an assignment of his membership interest in the LLC

to plaintiff, and (2) the trial court erred by enjoining him

from exercising his management rights in the LLC and ruling that

these rights “lie fallow.”               We agree as to both arguments and

reverse the trial court’s order.

    Both issues on appeal involve interpretation of N.C. Gen.

Stat.     §§    57C-5-02,       -03     (2011).          Questions      of   statutory

interpretation are questions of law, which are reviewed de novo

by this Court. Dare Cnty. Bd. of Educ. v. Sakaria, 127 N.C. App.

585, 588, 492 S.E.2d 369, 371 (1997); Carolina Power & Light Co.

v. City of Asheville, 358 N.C. 512, 517, 597 S.E.2d 717, 721

(2004).     The primary objective of statutory interpretation is to

give effect to the intent of the legislature. Polaroid Corp. v.

Offerman, 349 N.C. 290, 297, 507 S.E.2d 284, 290 (1998).                            The

plain     language     of   a       statute   is    the     primary     indicator    of

legislative intent.            Begley v. Emp’t Sec. Comm’n, 50 N.C. App.

432, 436, 274 S.E.2d 370, 373 (1981).                    However, where the plain

language       is   unclear,    this    Court      may   also   glean    the    General
                                          -5-
Assembly’s    intent     from    legislative         history.      Lenox,      Inc.    v.

Tolson,    353    N.C.    659,     664,        548   S.E.2d     513,     517   (2001).

Likewise, “[l]ater statutory amendments provide useful evidence

of   the   legislative    intent     guiding         the   prior   version      of    the

statute.” Wells v. Consol. Judicial Ret. Sys., 354 N.C. 313,

318, 553 S.E.2d 877, 880 (2001).                 Finally, statutory provisions

must be read in context: “Statutes dealing with the same subject

matter     must    be    construed        in     pari      materia,      as    together

constituting one law, and harmonized to give effect to each.”

Williams v. Williams, 299 N.C. 174, 180–81, 261 S.E.2d 849, 854

(1980) (internal citations omitted).

      Section     57C-5-03      allows    a     judgment      creditor    to    seek    a

charging order against a debtor-member’s interest in an LLC to

satisfy the judgment.        It provides:

            On application to a court of competent
            jurisdiction by any judgment creditor of a
            member, the court may charge the membership
            interest of the member with payment of the
            unsatisfied amount of the judgment with
            interest. To the extent so charged, the
            judgment creditor has only the rights of an
            assignee of the membership interest. This
            Chapter does not deprive any member of the
            benefit of any exemption laws applicable to
            his membership interest.

N.C. Gen. Stat. § 57C-5-03 (emphasis added).                       Because section

57C-5-03 states that the judgment creditor “has only the rights
                                      -6-
of an assignee of the membership interest,” it is proper to read

section 57C-5-03 together with section 57C-5-02, which sets out

the rights of an assignee of an LLC membership interest. See

Williams, 299 N.C. at 180-81, 261 S.E.2d at 854.             Section 57C-5-

02 provides:

          Except as provided in the articles of
          organization     or    a     written    operating
          agreement,     a    membership     interest    is
          assignable    in    whole    or   in   part.   An
          assignment of a membership interest does not
          dissolve the limited liability company or
          entitle the assignee to become or exercise
          any rights of a member. An assignment
          entitles the assignee to receive, to the
          extent assigned, only the distributions and
          allocations to which the assignor would be
          entitled but for the assignment. Except as
          provided in the articles of organization or
          a written operating agreement, a member
          ceases to be a member upon assignment of all
          of   his   membership     interest.   Except   as
          provided in the articles of organization or
          a written operating agreement, the pledge
          of, or granting of a security interest,
          lien, or other encumbrance in or against,
          all or any part of the membership interest
          of a member shall not cause the member to
          cease to be a member or the secured party to
          have the power to exercise any rights or
          powers of a member.

N.C.   Gen.    Stat.   §   57C-5-02    (emphasis   added).       Membership

interests are defined by N.C. Gen. Stat. § 57C-1-03(15) (2011)

as “[a]ll of a member’s rights in the limited liability company,

including without limitation the member’s share of the profits
                                           -7-
and    losses    of     the    limited     liability    company,   the     right   to

receive distributions of the limited liability company assets,

any right to vote, and any right to participate in management.”

       Plaintiff argues that “[t]he only reasonable way to read

N.C.    Gen.    Stat.    §     57C-5-02    and   N.C.   Gen.   Stat.   §    57C-5-03

together and to give import to each of the clauses included in

each statute is to conclude that the entry of a charging order

amounts to an assignment of the debtor’s membership interest”

and after entry of a charging order “a debtor ceases to be a

member in the limited liability company to which the charging

order   applies.”         To     reach    this   conclusion,   plaintiff        argues

that: (1) a charging order assigns a debtor’s economic interest

in an LLC to a judgment creditor; (2) the only LLC membership

rights that are freely transferable are economic rights, and

thus,   assignment       of     economic    rights     “effectuates    a   full    and

complete assignment of a limited liability company interest”;

and (3) because “a member ceases to be a member upon assignment

of all of his membership interest,” N.C. Gen. Stat. § 57C-5-02,

a charging order terminates the debtor-member’s membership in

the LLC.

       We   disagree          with   plaintiff’s     interpretation        of    these

statutes.       First, we do not read sections 57C-5-02 and 57C-5-03
                                        -8-
as effectuating an assignment of the debtor’s membership rights,

either in whole or in part.                Section 57C-5-03 clearly states

that “the judgment creditor has only the rights of an assignee

of the membership interest.”               An assignee has the right “to

receive,      to   the    extent   assigned,   only     the   distributions     and

allocations to which the assignor would be entitled but for the

assignment.”        N.C. Gen. Stat. § 57C-5-02.          Thus, under the plain

language of these statutes, a charging order gives a judgment

creditor the right to receive distributions and allocations to

which     the   debtor-member      would   have   been    entitled     until   the

judgment is satisfied.             Nowhere in these provisions does the

General Assembly mandate an assignment of membership interests

from a debtor to a judgment creditor through a charging order.

“Where the language of a statute is clear and unambiguous, there

is   no    room     for   judicial   construction       and   the    courts    must

construe the statute using its plain meaning.” Burgess v. Your

House of Raleigh, Inc., 326 N.C. 205, 209, 388 S.E.2d 134, 136

(1990) (citation omitted).             Section 57C-5-03 does exactly what

it says; it “charge[s] the membership interest of the member

with payment of the unsatisfied amount of the judgment with

interest.”         Had the General Assembly intended a charging order

to   assign     all   membership     interests    and    terminate    a   debtor’s
                                      -9-
membership   in   an   LLC,   as    plaintiff   contends,   it   could   have

easily included language to that effect.           Absent such language,

we are bound by the words used by the General Assembly, and we

hold that a charging order does not effectuate an assignment of

a debtor-member’s total interest in an LLC.

    Recent amendments to the North Carolina Limited Liability

Company Act support our conclusion that a charging order does

not effectuate an assignment.            Effective 1 January 2014, the

General Assembly repealed Chapter 57C and enacted a new North

Carolina Limited Liability Company Act in Chapter 57D. See 2013

Sess. Laws 157, §§ 1,2.            N.C. Gen. Stat. § 57D-5-03 clarifies

the rights of a judgment creditor seeking a charging order as

follows:

           (a) On application to a court of competent
           jurisdiction by any judgment creditor of an
           interest owner, the court may charge the
           economic interest of an interest owner with
           the payment of the unsatisfied amount of the
           judgment with interest. To the extent so
           charged, the judgment creditor has only the
           right to receive the distributions that
           otherwise would be paid to the interest
           owner with respect to the economic interest.

           (b) A charging order is a lien on the
           judgment debtor’s economic interest to the
           extent provided in this section from the
           time that such charging order is served upon
           the LLC in accordance with Rule 4(j)(8) of
           the Rules of Civil Procedure. . . .
                                           -10-
             (c) This Chapter does not deprive any
             interest owner of a right, including any
             benefit of any exemption law applicable to
             the interest owner’s ownership interest.

             (d) The entry of a charging order is the
             exclusive   remedy   by  which a judgment
             creditor of an interest owner may satisfy
             the judgment from or with the judgment
             debtor’s ownership interest.


N.C. Gen. Stat. § 57D-5-03 (2013) (emphasis added).                          Although

the newly revised North Carolina Limited Liability Company Act

does not apply to this case, see N.C. Gen. Stat. § 57D-11-03,

the    clarified     portions        of     section     57D-5-03        support     our

conclusion that the General Assembly did not intend for section

57C-5-03     to   effectuate    an    assignment,       enjoin    a     debtor-member

from exercising managerial rights, or cause the debtor-member to

cease to be a member in the LLC.

       Although plaintiff contends that this conclusion leads to

irreconcilable results, again we disagree.

       First, plaintiff argues that to conclude that a charging

order does not effectuate a total assignment, this Court would

have    to    reconcile    “why      the     interest    received       by   a    party

receiving a charging order is identical to the interest received

by a party who is otherwise assigned a membership interest in a

limited      liability    company.”           We   disagree      with     plaintiff’s
                                              -11-
contention that these interests are identical.                            Section 57C-5-03

provides that a trial court “may charge the membership interest

of the member with payment of the unsatisfied amount of the

judgment with interest.”                 N.C. Gen. Stat. § 57C-5-03 (emphasis

added).      Inherent in the concept of a charging order is that

once the judgment is paid, the debtor-member’s interest in the

LLC    is   no    longer        charged.       An       assignee     of   a    member’s   LLC

membership interest has no such limitation.                           Thus, contrary to

plaintiff’s           argument,       although      a    judgment     creditor      has   the

economic rights of an assignee until the judgment is satisfied,

the interests that the two parties have are not identical.

       Second, plaintiff argues that because the term “charging

order” is not included in the last sentence of section 57C-5-02,

which prescribes situations where a member loses some economic

rights but retains membership in the LLC, the General Assembly

could not have intended this provision to apply to charging

orders.     Although the term “charging order” is not specifically

mentioned        by    name,     we    find   that       it   fits   within      the   “other

encumbrance[s] in or against, all or any part of the membership

interest” for which the provision applies.                           See N.C. Gen. Stat.

§     57C-5-02        (“[T]he     pledge      of,       or    granting    of    a   security

interest, lien, or other encumbrance in or against, all or any
                                             -12-
part of the membership interest of a member shall not cause the

member to cease to be a member or the secured party to have the

power to exercise any rights or powers of a member.”) (emphasis

added).         Plaintiff      argues     that       because     encumbrances     do   not

include actual transfer of rights until they are enforced, and

charging orders permit the judgment creditor to actually receive

distributions          and     allocations,          charging     orders    cannot       be

encumbrances.          The flaw in this logic is the assumption that

charging orders are never “enforced.”                        The plain language of

sections 57C-5-02 and 57C-5-03, specifically that the debtor’s

membership interest is “charge[d]” and the judgment creditor has

the right to “receive . . . the distributions and allocations to

which     the     assignor        would        be     entitled,”      demonstrates        a

legislative intent for charging orders to act as encumbrances

that     are    “enforced”       whenever          the   debtor-member      would      have

received        distributions           or         allocations      from    the        LLC.

Furthermore, the General Assembly has clarified that charging

orders     are        encumbrances,          not     assignments,     and       that   the

imposition       of    a     charging   order        does   not   affect    a    member’s

managerial rights. Specifically, section 57D-5-03(b) states that

“A charging order is a lien on the judgment debtor’s economic

interest[.]”           The subsequent amendment of the charging order
                                         -13-
statute is strong evidence that the General Assembly intended

charging orders under 57C-5-03 to be encumbrances that do not

affect a debtor’s managerial interest, contrary to plaintiff’s

contention and the trial court’s order.                 See Wells, 354 N.C. at

318, 553 S.E.2d at 880.

    Third, plaintiff argues that because section 57C-5-03 is

included in the Article of the North Carolina Limited Liability

Company    Act     entitled    “Assignment        of    Membership      Interests;

Withdrawal,” charging orders must be interpreted to effectuate

assignments.      Although we agree that the title of an Article in

which a statute is placed can be relevant when interpreting the

statute,   the     placement   of    a    statute      within   an    Act   is   less

probative of legislative intent than the plain language of the

statute itself.        “[I]n interpreting a statute, we first look to

understand       the   legislative       intent     behind      the    statute     by

examining the plain language of the statute.” State v. Moore,

167 N.C. App. 495, 503, 606 S.E.2d 127, 132 (2004) (emphasis

added) (citing Elec. Supply Co. v. Swain Elec. Co., 328 N.C.

651, 656, 403 S.E.2d 291, 294 (1991)).                 “[W]hen confronted with

a clear and unambiguous statute, courts are without power to

interpolate,      or   superimpose,       provisions      and   limitations       not

contained therein.”        In re Hamilton, __ N.C. App. __, __, 725
                                     -14-
S.E.2d 393, 396 (2012).            Here, the plain language of section

57C-5-03 unambiguously states that a charging order gives the

judgment creditor the rights of an assignee.                 N.C. Gen. Stat. §

57C-5-03.       It   does    not    provide     for    actual   assignment    of

membership rights from debtor to judgment creditor.                     The fact

that section 57C-5-03 was placed by the General Assembly in an

Article     entitled        “Assignment       of      Membership       Interests;

Withdrawal” does not change this outcome.

                                   Conclusion

    After careful review, we hold that under the plain language

of section 57C-5-03, a charging order does not effectuate an

assignment of a debtor’s membership interest in an LLC and does

not cause a debtor to cease being a member in an LLC.                   Thus, we

reverse   the   trial   court’s     charging       order   enjoining    defendant

from exercising his membership rights in the LLC and ordering

that his membership rights “lie fallow” and remand for entry of

a charging order consistent with this opinion.



    REVERSED AND REMANDED.

    Judges MCGEE and ELMORE concur.
