Green v. Green , 236 N.C. App. 526 ( 2014 )

NO. COA14-150
NORTH CAROLINA COURT OF APPEALS
Filed: 7 October 2014
MICHAEL L. GREEN,
Plaintiff,
v. Nash County
No. 09-CVD-2527
JANA M. GREEN,
Defendant.
Appeal by defendant from judgment entered 12 July 2013 by
Judge John J. Covolo in District Court, Nash County. Heard in
the Court of Appeals 12 August 2014.
Teresa DeLoatch Bryant, for plaintiff-appellee.
Judith K. Guibert, for defendant-appellant.
STROUD, Judge.
Defendant Estate of Jana M. Green1 appeals from a judgment
on equitable distribution entered by the District Court, Nash
County on 12 July 2013. On appeal, defendant argues, inter
alia, that the trial court erred by imposing sanctions against
her which decreed that she had “forfeited her right to file her
equitable distribution affidavit or any other documents or
1
Defendant died during the pendency of this appeal, on 7
February 2014, and by order of this Court her estate was
substituted as a party to this appeal. We will nevertheless
refer to the appellant as “defendant” in this opinion.
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matters pertaining to same and that the identification,
valuation, and classification of assets and debts as set forth
in the Plaintiff’s said affidavit shall be those that shall be
considered by the Court.” The record indicates that the order
which set a deadline of 4 December 2012 for the filing of
defendant’s equitable distribution affidavit was entered after 4
December 2012, on 10 December 2012, so that she had no notice of
the deadline until after it had passed. Due to the lack of
notice and other serious procedural and legal errors, we reverse
the order of 10 December 2012, the 19 December 2012 judgment,
and the 12 July 2013 judgment thereafter entered.
I. Background
Plaintiff and defendant were married in 1990 and separated
from one another on or about 15 October 2009. On 1 December
2009, plaintiff filed a complaint for divorce from bed and board
and equitable distribution. On 28 December 2009, attorney Larry
A. Manning obtained an extension of time for defendant to
answer, extending the time to 30 January 2009. Through
defendant’s counsel Mr. Manning, defendant filed her answer and
counterclaims for divorce from bed and board, post-separation
support, equitable distribution, and attorney’s fees on 2
February 2010. On 5 August 2010, plaintiff filed a request for
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production of documents regarding defendant’s counterclaim for
post-separation support, which had been served upon defendant,
through her counsel; on the same date, plaintiff also filed a
reply to defendant’s counterclaims, which was also served upon
defendant’s counsel. At this point, the record falls silent for
nearly two years.
The next document which appears in the supplement to the
record is a hand-written letter, dated 3 February 2012, from
defendant to the Nash County Clerk of Court, which states as
follows: “Please send any documents or order in this case to
[defendant’s name and an address in Indiana.] Mr. Larry Manning
has refused to notify or forward any court dates, motions,
orders in this case so I can have a chance to protect my right.”
The record does not contain a motion for withdrawal by Mr.
Manning, any order releasing him as the attorney of record for
defendant, nor any indication of why he disappeared from the
case.2
2
“An attorney at law is a sworn officer of the court with an
obligation to the public, as well as his clients, for the office
of attorney at law is indispensable to the administration of
justice. The attorney’s obligation crystallizes into one of
noblesse oblige. As between the attorney and his client the
relationship may ordinarily be dissolved in good faith at any
time, but before an attorney of record may be released from
litigation he must satisfy the court that he is justified in
withdrawing. The first requirement for his withdrawal is proof
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On 17 October 2012, the trial court entered the “Seventh
District Judge Designation on Equitable Distribution of
Property[;]” (“Judge Designation”) (original in all caps), this
document stated that “the parties hereby request designation of
John J. Covolo as the judge to determine the equitable
distribution claim.” Although the “Judge Designation” document
has blanks for the signatures of attorneys for both plaintiff
and defendant to agree to Judge Covolo, the document was signed
only by R. D. Kornegay, attorney for plaintiff; defendant’s
attorney’s signature line is blank. The “Judge Designation”
document also has a second section which states that “[t]he
parties are unable to agree upon designation of a Judge to
determine the equitable distribution issues. [(sic)] hereby
applies to the Court for designation of a Judge.” Plaintiff’s
attorney signed the second section of the “Judge Designation”
of timely notice to his client.” Smith v. Bryant, 264 N.C. 208,
211, 141 S.E.2d 303, 306 (1965) (citations and quotation marks
omitted). Rule 16 of North Carolina’s General Rules of Practice
for the Superior and District Courts, entitled “Withdrawal of
Appearance[,]” provides that “No attorney who has entered an
appearance in any civil action shall withdraw his appearance, or
have it stricken from the record, except on order of the court.
Once a client has employed an attorney who has entered a formal
appearance, the attorney may not withdraw or abandon the case
without (1) justifiable cause, (2) reasonable notice to the
client, and (3) the permission of the court.” North Carolina’s
General Rules of Practice for the Superior and District Courts,
rule 16.
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document as well, so it is unclear whether the parties had
agreed on the designation or if they did not agree. In any
event, the Chief Judge of District Court in Nash County, William
C. Farris, signed the “Judge Designation” document, designating
Judge Covolo to determine the equitable distribution claim.
On 22 October 2012, nearly three years after plaintiff
filed his equitable distribution complaint, he filed his
equitable distribution affidavit (“ED Affidavit”).3 There is no
certificate of service indicating that plaintiff’s ED Affidavit
was served upon defendant or any counsel for defendant.4 On the
3
North Carolina General Statute § 50-21(a) requires that
“[w]ithin 90 days after service of a claim for equitable
distribution, the party who first asserts the claim shall
prepare and serve upon the opposing party an equitable
distribution inventory affidavit listing all property claimed by
the party to be marital property and all property claimed by the
party to be separate property, and the estimated date-of-
separation fair market value of each item of marital and
separate property.” N.C. Gen. Stat. § 50-21(a) (2009).
Furthermore, in District Court in Nash County, North Carolina
Rule 4 of the “Rules for Trial and Settlement Procedures in
Equitable Distribution and Other Family Financial Cases[,]”
(“Local Rules”) (original in all caps), the ED Affidavit
“required by G.S. 50-21(a) shall be prepared using the form of
affidavit attached to the Rules. Unless extended for good cause
by the court, statutory time limits on the exchange of properly
prepared affidavits are to be strictly observed. There shall be
a presumption that sanctions are to be imposed upon willful non-
compliance.” Local Rules, rule 4.
4
According to the Cc: line of the letter from plaintiff’s
counsel to the Nash County Assistant Clerk of Court, requesting
that the ED Affidavit be filed, he sent both plaintiff and
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same date, plaintiff filed a notice of hearing upon the
equitable distribution claim, setting the hearing for 6 November
2012, and this notice of hearing was served upon defendant by
mail to her at the address she provided in Indiana.5 The record
contains no indication that plaintiff had complied with any of
the requirements of North Carolina General Statute § 50-21(d),
including a scheduling and discovery conference6, possible
mediation7, and a final pretrial conference.8
Thereafter, the trial court entered an “ORDER OF
CONTINUANCE” which continued “this matter” to 4 December 2012
(“Continuance Order”). We cannot discern exactly what was
defendant a copy of the ED Affidavit on or about 17 October
2012.
5
The notice also stated that “[t]he issuing party is ready for
hearing upon the issues to be calendared, but the parties have
not agreed upon the court date.” (Emphasis in original.)
6
“Within 120 days after the filing of the initial pleading or
motion in the cause for equitable distribution, the party first
serving the pleading or application shall apply to the court to
conduct a scheduling and discovery conference.” N.C. Gen. Stat.
§ 50-21(d) (2009).
7
Mediation is required by Rule 7 of the Local Rules prior to
scheduling an equitable distribution case for trial, unless the
case has been exempted from mediation. See Local Rules, rule 7.
Mediation is to “be completed within 90 days of the scheduling
conference or 210 days of the filing of the complaint, whichever
occurs first.” Local Rules, rule 10(c).
8
Rule 10(d) of the Local Rules requires that “[a] final pre-
trial conference shall be held within 60 days of the completion
of mediation.” Local Rules, rule 10(d).
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continued to when by the Continuance Order, nor could counsel at
the oral argument of this case explain the meaning of the
Continuance Order. Normally hearings are continued to a date in
the future instead of the past, but here though the Continuance
Order was filed on 6 November 2012, the trial court signed the
order on 6 December 2012. To be clear, the trial court did not
even abbreviate the date but wrote out “6th . . . December[.]”
We assume that the clock for the Clerk of Court’s office was
working properly, so perhaps the trial judge inadvertently wrote
the wrong month when signing the Continuance Order. But there
were court dates set for both 6 November 2012 -- plaintiff’s
notice of hearing for the equitable distribution claim -- and 4
December 2012 -- Continuance Order for “this matter[.]”
Furthermore, though the Continuance Order provides numerous
reasons for the trial court to check for why the matter is being
continued, none are checked on this Continuance Order. Lastly,
in the consent portion of the Continuance Order, only
plaintiff’s attorney has signed. There is no indication in the
record that the Continuance Order was served upon defendant or
any counsel for defendant.
On 10 December 2012, the trial court entered an order (“ED
Affidavit Order”) which states that it was based upon the
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hearing held on 6 November 2012, “upon the Plaintiff’s request
for the Court to structure a time frame within which any and all
matters pertaining to equitable distribution or any remaining
9
issues raised in the pleading would be disposed of . . . .”
Defendant was not present or represented. The ED Affidavit
Order stated as follows:
[I]t appearing that the Plaintiff has in
fact filed his equitable distribution
affidavit in timely fashion but the
Defendant, for whatever reason has failed or
refused to do so; and it appears as if the
Defendant has not appeared in court but has
had some alleged reason not to be in court
each occasion the case has been set for
trial; and on the occasion first mentioned
hereinabove, the Defendant forwarded a
correspondence dated November 5, 2012, which
she did not copy Plaintiff’s attorney with
(with the exception of the copy of a
purported medical document at the bottom
thereof) which was either in the file or
provided to the presiding judge by the Clerk
when the calendar was called; and
Plaintiff’s attorney indicated to the Court
that they thought it was frivolous,
unreasonable, and inequitable for the
Defendant to be able to continually avoid a
hearing in this case for reasons that cannot
9
We note that the Local Rules, particularly Rule 10, provide
detailed “timelines” for equitable distribution cases. See
Local Rules, rule 10(c). Under Rule 11, “[f]or good cause the
Presiding Judge may modify the [rule 10] timelines[,]” but the
record contains no indication of any order modifying the rules.
See Local Rules, rule 11. Perhaps the 10 December 2012 order
could be considered as an order modifying the requirements of
the rules except that it does not mention any statute or local
rule nor does it mention any “good cause” for modification. Id.
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be substantiated when they have otherwise
complied with the law and needed for the
Court to take action to structure time
limits within which things could happen; and
the Court reviewed the medical document at
the bottom of the Plaintiff’s November 5
correspondence but could not decipher or
understand the handwriting therein and did
not find the letter or the attachment to be
reasonable under the circumstances; and,
based upon the pleadings in the file and the
motion of Plaintiff’s counsel, the Court
does ORDER,
ADJUDGE, AND DECREE as follows:
1. That the Defendant shall have
until December 4, 2012 in which to file her
equitable distribution affidavit, which is
already well passed [(sic)] the time allowed
by law, and should she not have her
affidavit filed by that time her right to do
so shall be forfeited and she and the Court
will be bound by the information set forth
in the Plaintiff’s Equitable Distribution
Affidavit and thereafter she will not be
allowed any additional time within which to
file said document.
2. That if either party desires any
further discovery, it shall be completed on
or before December 4.
3. That at the December 4 calendar,
the Court shall determine a final date for
trial in this matter.
4. For such other and further relief
as the Court seems just and proper in the
nature of this cause.
The record contains no indication that the ED Affidavit Order
was served on defendant or any counsel for defendant.
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The letter regarding a medical excuse referred to in the ED
Affidavit Order was a letter from defendant, dated 5 November
2012, in which she stated that her surgeon, Dr. Benjamin Chiu,
of Kokomo, Indiana, had forbidden her from traveling to the
hearing on 6 November 2012. At the bottom of defendant’s letter
was a handwritten note, which we have no difficulty deciphering,
on a prescription form for Howard Regional Health System, of
Kokomo, Indiana, stating that “Pt. to be excused from
travel/work until follow up visit in 1-2 weeks[.]” Defendant
also stated in the letter that she had told plaintiff’s attorney
the dates she could attend court, and he set the 6 November 2012
date against her wishes.
Defendant’s medical condition was a recurring theme
throughout the case. Defendant’s counterclaim alleged that she
suffered “from a number of medical conditions” which made “her
unable to support herself.” Plaintiff replied that defendant
“malingers” and would “say or do anything that she can to not
work an honest day’s work.” But the record contains no
substantive evidence regarding defendant’s medical condition.
In addition, despite the trial court’s statement in the ED
Affidavit Order that “the Defendant has not appeared in court
but has had some alleged reason not to be in court each occasion
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the case has been set for trial[,]” our record contains no
indication whatsoever that this case had ever been set for any
sort of hearing before 6 November 2012.
On 4 December 2012, the matter came on for hearing again,
and a judgment was filed on 19 December 2012 as a result of this
hearing (“Sanctions Order”). The Sanctions Order stated as
follows:
[I]t appearing that the matter was before
the Court based upon the Plaintiff’s request
(all of which was relayed to the Court at
its last session when Judge Covolo was
presiding) asking that the Defendant forfeit
her right to file any further equitable
distribution documents for her failure to
have her equitable distribution affidavit
filed with the Court the date first
referenced hereinabove, and for the Court to
set this case before the undersigned Judge
Presiding, who is the designated judge, for
the final equitable distribution hearing on
January 8, 2013; and it appearing that the
Plaintiff was in court with his attorney of
record, Robert D. Kornegay, Jr., and that
the Defendant was not in court, although
attorney Katherine Fisher informed the Court
that she had been contacted by the
Defendant, and had a telephone conference
scheduled with her the following day
(December 5) at 3:00 p.m.; and, based upon
the pleadings in the file, the statement of
counsel, and the proceedings, the Court does
make the following FINDINGS OF FACT:
1. That all parties have had due and
adequate notice of the proceedings and that
the parties and the subject party are
properly before the Court.
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2. That the last order of the Court
gave to the Defendant the right and
opportunity to file her equitable
distribution affidavit by the date first
referenced hereinabove, but that no
pleadings of any other or further type have
been filed with or received by the Court.
That the Defendant has had plenty [of]
adequate time under all the circumstances to
file her pleadings and for her lack or
inability of having done so, the Court does
find that it is not unreasonable that the
Defendant has therefore forfeited any
further right to file her equitable
distribution affidavit and the
identification, valuation, and
classification of all said assets and debts
as provided by the Plaintiff in his
equitable distribution affidavit shall
hereinafter be those values that shall be
considered and heard by the Court.
3. That there has been discovery
pending since August of 2010, whereby the
Plaintiff filed discovery on the Defendant
and she has not made any valid attempt to
provide the information required therein by
law.
4. That this matter has been pending
for a long period of time and it is right,
fair, and reasonable that the parties should
be able to move forward with their lives and
conclude the issues raised in the litigation
and therefore the case will be set for trial
on the issue of equitable distribution of
property at the undersigned Judge’s next
session of court for January 8, 2013.
NOW, THEREFORE, based upon the foregoing
Findings the Court makes the following
CONCLUSIONS OF LAW:
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1. That all parties have had due and
adequate notice of these proceedings and
that the parties and the subject matter are
properly before the Court.
2. That the Defendant has forfeited
her right to file her equitable distribution
affidavit or any other documents or matters
pertaining to same and that the
identification, valuation, and
classification of assets and debts as set
forth in the Plaintiff’s said affidavit
shall be those that shall be considered by
the Court.
NOW, THEREFORE, based upon the
foregoing Findings and Conclusions the Court
does hereby ORDER, ADJUDGE AND DECREE:
1. That the Defendant has forfeited
her right to file her equitable distribution
affidavit or any other documents or matters
pertaining to same and that the
identification, valuation, and
classification of assets and debts as set
forth in the Plaintiff’s said affidavit
shall be those that shall be considered by
the Court.
2. That this case is hereby set for
hearing on equitable distribution of
property at the Undersigned’s next session
of court for January 8, 2013.
3. That this matter shall be retained
for further consideration by the court.
The record contains no indication that the Sanctions Order was
served upon defendant or any counsel for defendant.
The 8 January 2013 court date was continued, by consent of
both plaintiff and defendant, to the March or April 2013 term of
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court with Judge Covolo. An order for peremptory setting for 5
March 2013 was filed on 17 January 2013, and this was served
upon defendant. On 23 January 2013, plaintiff’s counsel also
filed a notice of hearing on equitable distribution for 5 March
2013, and this was served upon defendant.
The equitable distribution trial was held on 5 March 2013.
Plaintiff was present with his attorney and defendant was
present, pro se. The 12 July 2013 judgment (“ED Judgment”)
stated,
the Defendant has forfeited her right to
file her equitable distribution affidavit or
any other documents or matters pertaining to
the same by virtue of a Judgment dated
December 14, 2012, of record in this matter,
and that as a result thereof the Plaintiff’s
equitable distribution affidavit, and his
documentation in support thereof, in
addition to the testimony of the parties,
and any documentation offered by the
Defendant, was the sole source of the
Court’s identification, valuation, and
classification of marital property; and,
based upon the pleadings in the file, the
testimony of the parties and their
documentary evidence, and the statement of
counsel, the Court does make the following
FINDINGS OF FACT[.]
Ultimately, the trial court made findings of fact consistent
with plaintiff’s ED Affidavit and evidence and awarded an
unequal distribution of property in favor of plaintiff.
Defendant filed a pro se “NOTICE OF APPEAL” appealing “the
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ruling and judgment of the Nash County District Court entered on
July 12, 2013[.]”
II. Jurisdiction
Defendant asserts on appeal that the ED Judgment of 12 July
2013 is a final, appealable order, and she also challenges the
“December 10, 2012 discovery order and the December 19, 2012
sanctions Judgment” which were interlocutory orders and not
immediately appealable; this is true, but defendant also failed
to give notice of appeal identifying the ED Affidavit Order and
the Sanctions Order, so we must first consider whether this
Court has jurisdiction to consider her appeal as to these
decisions.
We note that while Rule 3(d) of the
Rules of Appellate Procedure provides that
the notice of appeal shall designate the
judgment or order from which appeal is
taken, N.C. Gen. Stat. § 1–278 (2013)
provides: Upon an appeal from a judgment,
the court may review any intermediate order
involving the merits and necessarily
affecting the judgment. This Court has held
that even when a notice of appeal fails to
reference an interlocutory order, in
violation of Rule 3(d), appellate review of
that order pursuant to N.C. Gen. Stat. § 1–
278 is proper under the following
circumstances: (1) the appellant must have
timely objected to the order; (2) the order
must be interlocutory and not immediately
appealable; and (3) the order must have
involved the merits and necessarily affected
the judgment. All three conditions must be
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met.
Tinajero v. Balfour Beatty Infrastructure, ___ N.C. App. ___,
___, 758 S.E.2d 169, 175 (2014) (citation and quotation marks
omitted).
We find that all three conditions for defendant’s appeal as
to the ED Affidavit Order and the Sanctions Order have been met.
See id. As to the timeliness of defendant’s objection, based
upon the record before us, we cannot determine when, if ever,
the ED Affidavit Order and the Sanctions Order were served upon
defendant. Clearly defendant became aware of the ED Affidavit
Order and the Sanctions Order at some point in time, but there
is no certificate of service10 on either document. Under North
Carolina General Statute § 1A-1, Rule 58, the ED Affidavit Order
and the Sanctions Order should have been served upon defendant
within three days of their entry:
Subject to the provisions of Rule
54(b), a judgment is entered when it is
reduced to writing, signed by the judge, and
filed with the clerk of court. The party
10
North Carolina General Statute § 1A-1, Rule 5(b) requires that
“[a] certificate of service shall accompany every pleading and
every paper required to be served on any party or nonparty to
the litigation, except with respect to pleadings and papers
whose service is governed by Rule 4. The certificate shall show
the date and method of service or the date of acceptance of
service and shall show the name and service address of each
person upon whom the paper has been served.” N.C. Gen. Stat. §
1A-1, Rule 5(b) (2009).
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designated by the judge or, if the judge
does not otherwise designate, the party who
prepares the judgment, shall serve a copy of
the judgment upon all other parties within
three days after the judgment is entered.
Service and proof of service shall be in
accordance with Rule 5.
N.C. Gen. Stat. § 1A-1, Rule 58 (2009). Under North Carolina
Rule of Appellate Procedure Rule 3, defendant would have had 30
days to appeal from the ED Affidavit Order or Sanctions Order if
she had been served with them “within the three day period
prescribed by Rule 58 of the Rules of Civil Procedure; or (2)
within 30 days after service upon the party of a copy of the
judgment if service was not made within that three day
period[.]” N.C.R. App. P. 3(c). Since we do not know when or
if defendant was ever “served” with the ED Affidavit Order or
the Sanctions Order, we cannot discern how she would have made
any more timely objection to the ED Affidavit Order and the
Sanctions Order than she has by her appeal of the ED Judgment
resulting from them.
Next, both the ED Affidavit Order and Sanctions Order were
interlocutory, as they did not make a final determination of all
claims and issues. See Hamilton v. Mortg. Info. Servs., Inc.,
212 N.C. App. 73, 76, 711 S.E.2d 185, 188 (2011) (“An
interlocutory order is one made during the pendency of an
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action, which does not dispose of the case, but leaves it for
further action by the trial court in order to settle and
determine the entire controversy.” (citation and quotation marks
omitted)).
Finally, both the ED Affidavit Order and Sanctions Order
“involved the merits and necessarily affected the judgment.”
Tinajero, ___ N.C. App. at ___, 758 S.E.2d at 175. As a result
of the ED Affidavit Order and Sanctions Order defendant could
not challenge plaintiff’s evidence as to the identification,
classification, and valuation of the martial property and debts;
these are the central issues in any equitable distribution
claim. Thus, we have jurisdiction to consider defendant’s
appeal as to the ED Affidavit Order and Sanctions Order. See
Tinajero ___ N.C. App. at ___, 758 S.E.2d at 175.
III. Imposition of Sanctions Without Notice
Defendant first argues that “the trial court erred in
imposing sanctions against defendant which prohibited her from
filing an equitable distribution affidavit and prevented her
from presenting her case.” (Original in all caps.) The
sanctions were imposed in the trial court’s Sanctions Order,
which found that defendant had failed to comply with the ED
Affidavit Order. Defendant contends that the ED Affidavit
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Order, which set a 4 December 2012 deadline for filing her ED
Affidavit, had not yet been entered when the deadline had
passed. We need not engage in any analysis to determine that
defendant’s argument is factually correct -- 10 December 2012 is
after 4 December 2012. Even if defendant had been present in
court on 6 November 2012, when it seems that the trial court
addressed this issue, an order is not entered until it is signed
and filed, and the ED Affidavit was signed on 24 November 2012
and filed on 10 December 2012. See N.C. Gen. Stat. § 1A-1, Rule
58 (2011) (“Subject to the provisions of Rule 54(b), a judgment
is entered when it is reduced to writing, signed by the judge,
and filed with the clerk of court.”)
Plaintiff does not even attempt to argue in his brief that
defendant had notice of the 4 December 2012 deadline, but in his
approximately two page argument which is devoid of citation of
any authority, claims that defendant had “a full and fair
opportunity to present her case at trial[,]” (original in all
caps), because at trial the trial court did permit her to
testify and asked her “broad and open-ended questions[.]”
Plaintiff also contends that the 10 December 2012 order actually
gave defendant an extension of time to file her ED Affidavit, an
argument which is directly contradicted by the order itself.
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Plaintiff argues that defendant “began representing herself” on
3 February 2012 –- this fact is not supported by the record --
and that she “was served on 17 October 2012 with the Plaintiff’s
Equitable Distribution Inventory Affidavit[.]” Actually, the
only indication in the record of the service of plaintiff’s ED
Affidavit is the Cc: line at the bottom of plaintiff’s counsel’s
transmittal letter to the Assistant Clerk of Court, asking that
plaintiff’s ED Affidavit be filed; there is no certificate of
service on defendant. But even if we assume that plaintiff is
correct, and plaintiff mailed his ED Affidavit to defendant on
17 October 2012, plaintiff argues that defendant’s ED Affidavit
would have been due on 19 November 2012.11 Plaintiff claims that
since the ED Affidavit Order deadline was 4 December 2012, the
ED Affidavit Order actually gave defendant 15 extra days to file
her ED Affidavit, beyond the time allowed by North Carolina
General Statute § 50-21. Plaintiff’s argument is inexplicable,
given the finding in the ED Affidavit Order, based upon the
stated hearing date of 6 November 2012, that “Defendant, for
whatever reason has failed or refused to” file her ED Affidavit
in a “timely fashion[.]” (Emphasis added.) In addition, the ED
11
Plaintiff’s brief actually argues that “Defendant’s EDIA was
due on or before 19 November 2014[;]” we assume plaintiff means
2012, as that was the year when the 10 December 2012 order was
entered.
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Affidavit Order decreed that “the Defendant shall have until
December 4, 2012 in which to file her equitable distribution
affidavit, which is already well passed [(sic)] the time allowed
by law[.]” (Emphasis added.) That is, on 6 November 2012,
despite the fact that according to plaintiff, defendant’s ED
Affidavit was not due until 19 November 2012, the trial court
found that defendant has “for whatever reason . . . failed or
refused to” file her ED Affidavit in a “timely fashion” and that
the time for filing of her ED Affidavit was “already well
passed” (sic). Plaintiff’s argument is, to use the words of
the trial court’s ED Affidavit Order describing defendant’s
failure to appear in court on 6 November 2012, “frivolous [and]
unreasonable[.]”
We realize that many things may have happened in this case
which are not revealed by the record, despite the fact that
counsel for plaintiff and defendant participated in the
settlement of the record on appeal and would presumably have
included all documents necessary for us to review the issues
presented. In fact, several of the documents which do show
various important dates were added as supplements to the record.
We agree that this equitable distribution case took entirely too
long, far beyond the time guidelines set by both North Carolina
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General Statute § 50-21 and by the Local Rules. See N.C. Gen.
Stat. § 50-21; Local Rules, rule 10. Yet we feel compelled to
note that plaintiff filed the initial equitable distribution
claim, and thus he had the obligation under North Carolina
General Statute § 50-21(a) to file his ED Affidavit within 90
days. See N.C. Gen. Stat. § 50-21(a). Instead, plaintiff filed
his ED Affidavit approximately two years and 10 months after he
filed his complaint. This is not, as the ED Affidavit Order
described it, “timely[.]” The trial court also found in its
Sanctions Order that defendant failed to respond to the “REQUEST
FOR PRODUCTION OF DOCUMENTS” served upon her in August of 2012;
this is true, but essentially irrelevant to the equitable
distribution claim, as this request for production included only
three requests, the first of which was directed to defendant’s
counterclaim for post-separation support. While it is true that
defendant also failed to take actions that she should and could
have taken to comply with the time requirements of equitable
distribution and have the case resolved sooner, both parties
were complicit in the delay. Also, the record before this Court
does not reveal that defendant ever failed to respond to any
sort of discovery request relevant to the equitable distribution
claim and does not reveal that she ever failed to appear at any
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court date other than the 6 November 2012 and 4 December 2012
dates previously discussed.
As we have established that defendant had no notice of the
4 December 2012 deadline before it had passed, we must now
consider whether she had sufficient notice that she may face
sanctions, in the form of barring her from presentation of
evidence as to the identification, valuation, and classification
of the property to be distributed and a decree that the trial
court would determine the “identification, valuation, and
classification of assets and debts” according to plaintiff’s ED
Affidavit. Although neither the trial court’s ED Affidavit
Order or Sanctions Order cite any statutory basis for imposition
of sanctions against defendant, nor did plaintiff file any
motion seeking relief based upon any statute or rule, it appears
that the sanctions were based upon North Carolina General
Statute § 50-21(e):
(e) Upon motion of either party or
upon the court’s own initiative, the court
shall impose an appropriate sanction on a
party when the court finds that:
(1) The party has willfully obstructed
or unreasonably delayed, or has
attempted to obstruct or
unreasonably delay, discovery
proceedings, including failure to
make discovery pursuant to G.S.
1A-1, Rule 37, or has willfully
obstructed or unreasonably delayed
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or attempted to obstruct or
unreasonably delay any pending
equitable distribution proceeding,
and
(2) The willful obstruction or
unreasonable delay of the
proceedings is or would be
prejudicial to the interests of
the opposing party.
Delay consented to by the parties is not
grounds for sanctions. The sanction may
include an order to pay the other party the
amount of the reasonable expenses and
damages incurred because of the willful
obstruction or unreasonable delay, including
a reasonable attorneys’ fee, and including
appointment by the court, at the offending
party’s expense, of an accountant,
appraiser, or other expert whose services
the court finds are necessary to secure in
order for the discovery or other equitable
distribution proceeding to be timely
conducted.
N.C. Gen. Stat. § 50-21(e).
This Court has determined in Megremis v. Megremis that the
adequacy of notice of potential sanctions under North Carolina
General Statute § 50-21 is a question of law which we review de
novo:
Notice and opportunity to be heard
prior to depriving a person of his property
are essential elements of due process of law
which is guaranteed by the Fourteenth
Amendment of the United States Constitution.
Whether a party has adequate notice is a
question of law. In order to pass
constitutional muster, the person against
whom sanctions are to be imposed must be
-25-
advised in advance of such charges.
Moreover, a party has a due process right to
notice both (1) of the fact that sanctions
may be imposed, and (2) the alleged grounds
for the imposition of sanctions.
179 N.C. App. 174, 178-79, 633 S.E.2d 117, 122 (2006)
(citations, quotation marks, and brackets omitted); see also
Suntrust Bank v. Bryant/Sutphin Prop., LLC, ___ N.C. App. ___,
___, 732 S.E.2d 594, 598 (2012) (“For questions of law, we apply
de novo review.” (citation and quotation marks omitted)).
As also noted in Megremis, North Carolina General Statute
§ 50-21(e) does not set forth any specific requirements for
notice, so we have looked to similar statutory provisions for
guidance:
N.C.G.S. § 50-21(e) is silent as to
what type of notice is required under the
statute and how far in advance notice must
be given to a party facing sanctions. Under
N.C. Gen. Stat. § 1A-1, Rule 11, a motion
requesting sanctions must be served within
the period prescribed by N.C. Gen. Stat. §
1A-1, Rule 6(d), not later than five days
before the hearing on the Rule 11 motion.
N.C.G.S. § 50-21(e) includes conduct
sanctioned under N.C. Gen. Stat. § 1A-1,
Rule 37, as well as a separate, more
general, sanctions provision specific to an
equitable distribution proceeding. Under
Rule 37, a trial court may impose sanctions,
including attorney’s fees, upon a party for
discovery violations. Our Court has held
that a party sanctioned under Rule 37 had
ample notice of sanctions where the moving
party’s written discovery motion clearly
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indicated the party was seeking sanctions
under Rule 37. Moreover, at a hearing on
the discovery motion, the sanctioned party
was given the opportunity to explain to the
trial court any justification for the
party’s delinquency in responding to
discovery.
Megremis, 179 N.C. App. at 179, 732 S.E.2d at 121 (citations
omitted).
As in Megremis, “plaintiff filed no written motion seeking
sanctions.” Id. at 179, 732 S.E.2d at 121. Here, the sanctions
issue was initially addressed at the hearing on 6 November 2012.
The notice of hearing for 6 November 2012 stated that the
hearing was set for plaintiff to “make application for relief in
the form of equitable distribution of property and for
attorney’s fees, costs and such other relief as provided in
Chapter 50 of the North Carolina General Statutes and as prayed
for in the pleadings.” No motion to compel or motion for
sanctions was filed. No scheduling or pretrial conferences were
ever held, although both are required by North Carolina General
Statute § 50-21(d) and by the Local Rules. See N.C. Gen. Stat.
§ 50-21(d); Local Rules, rule 10. Instead, plaintiff asked the
trial court at the 6 November 2012 hearing, where defendant was
not present, “to structure a time frame within which any and all
matters pertaining to equitable distribution or any remaining
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issues raised in the pleading would be disposed of[,]” and the
trial court did this by setting forth the 4 December 2012
deadline previously discussed at length.
We can safely say that the complete absence of notice of
potential sanctions under North Carolina General Statute § 50-
21(e) is not adequate notice. See N.C. Gen. Stat. § 50-21(e).
We also disagree with plaintiff that the Sanctions Order “did
not adversely affect [defendant] during the hearing.” Plaintiff
does not dispute that the trial court’s ED Judgment makes
findings of fact and conclusions of law as to “the
identification, valuation, and classification of assets and
debts” strictly in accord with plaintiff’s ED Affidavit, as the
Sanctions Order decreed.
As we must reverse the ED Judgment, we will not address
each of defendant’s arguments about the failure of the trial
court to properly classify, value, and distribute the property.
But because these issues will arise again on remand, for
guidance to the trial court, we will note that North Carolina §
50-20(c) creates a presumption of an equal distribution, and the
trial court must make findings of fact as to the factors under
North Carolina General Statute § 50-20(c) to support an unequal
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distribution. N.C. Gen. Stat. § 50-20(c) (2009). In its ED
Judgment, the trial court based its unequal distribution on
reasons that include but are not limited to
the following:
a. The Defendant’s failure to work
and contribute to the marital estate.
b. The debt that the Defendant
incurred during the marriage and the fact
that Plaintiff had to pay off what he did
both during the marriage and after the
separation.
c. The Defendant was not a stay at
home mother but spent a large part of her
time up and down the road and with her
family and friends in Indiana, that although
it appears to the Court that she was capable
and able bodied, did not work substantially
or materially and contribute towards the
marital estate or the needs of the family.
d. The fraud perpetrated on the
Plaintiff to believe that the child born
during their relationship was his and the
fact that he was primarily responsible for
that child’s support to and through the age
of 19.
e. The fact that the Plaintiff ended
up paying the educational loans for the
Defendant’s son by another relationship
without any help or contribution from the
Defendant.
f. The Defendant took out a false and
frivolous domestic violence action against
the Plaintiff in order to better her
position in court when she could not sustain
the burden of proof with regards thereto.
g. The fact that the Plaintiff
basically raised and supported her three
children from a prior marriage from the date
they became married until the date they aged
out or moved out of their home.
Most if not all of these factors except possibly (b) appear to
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fall under the “catch-all” provision of North Carolina General
Statute § 50-20(c)(12): “Any other factor which the court finds
to be just and proper[,]” but only factors which address the
economic aspects of the marriage are relevant to the
distribution.12 See Smith v. Smith, 314 N.C. 80, 87, 331 S.E.2d
682, 687 (1985) (“Thus, under 50-20(c)(12), the only other
considerations which are just and proper within the theory of
equitable distribution as expressed by 50-20(c)(1)-(11) are
those which are relevant to the marital economy. Therefore, we
hold that marital fault or misconduct of the parties which is
not related to the economic condition of the marriage is not
germane to a division of marital property under 50-20(c) and
should not be considered.” (quotation marks omitted)). Many of
the trial court’s findings of fact and conclusions of law
address factors which are simply irrelevant to equitable
distribution because they are not economic factors as defined by
Smith. See id.
One particularly egregious example of the trial court’s
consideration of irrelevant evidence is the paternity of the
12
In fact, the findings as to distributional factors which were
disapproved by the Supreme Court in Smith v. Smith, bear some
resemblance to those in this case, as the trial court there
found that defendant generally failed in many ways in her duties
as a wife and mother. 314 N.C. 80, 331 S.E.2d 682 (1985).
-30-
parties’ now-adult child. Plaintiff alleged in his complaint
that “one child was born of the marriage who is past the age of
majority[;]” defendant’s answer admitted this fact. Since this
fact was judicially admitted by both parties, it would appear
that paternity of the child was not a disputed issue. See
Hinton v. Hinton, 70 N.C. App. 665, 672, 321 S.E.2d 161, 165
(1984) (“It has long been established that where there is an
admission in the final pleadings defining the issues and on
which the case goes to trial, such admission is a judicial
admission which conclusively establishes the fact for the
purposes of that case and eliminates it entirely from the issues
to be tried.”). Furthermore, support of a child of the
marriage, minor or adult, is not a proper distributional factor
under North Carolina General Statute § 50-20(c). See N.C. Gen.
Stat. § 50-20(c); see also Godley v. Godley, 110 N.C. App. 99,
117, 429 S.E.2d 382, 393 (1993) (“Defendant further argues that
the trial court’s finding that plaintiff has voluntarily taken
in their 22 year old son, David, was irrelevant to the equitable
distribution proceeding. We agree and hold that this factor was
improperly considered as a distributional factor. The trial
judge also improperly considered the fact that the minor child,
Catherine, was still residing at the marital residence at the
-31-
time of trial. North Carolina General Statutes § 50-20(f)
provides that the court shall provide for equitable distribution
without regard to alimony or child support.”). Yet in this
equitable distribution case, to which the adult son is not a
party, plaintiff sought to bastardize his child.
At trial, plaintiff took the position that his son is not
his biological child. Defendant had become pregnant prior to
the marriage, and plaintiff was aware of the possibility that he
may not be the child’s father, as defendant “told the Plaintiff
that she was 99.5% sure that the child was his[.]” Plaintiff
testified that he had a DNA test performed on his son, on the
pretense of doing a drug test, and attempted to present as
evidence the results of this DNA test to prove that he was not
the biological father of said son. The trial court quite
properly sustained defendant’s objection to the admission of
this DNA evidence. Despite the exclusion of the evidence, the
trial court then made finding of fact number 6 “[t]hat in the
recent past the Plaintiff had DNA samples tested and established
to the best of scientific means under current circumstances that
the child was and is not his biological child.” Based upon
finding of fact number 6, the trial court concluded that this
factor was one which supported the unequal distribution: “[t]he
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fraud perpetrated on the Plaintiff to believe that the child
born during their relationship was his and the fact that he was
primarily responsible for that child’s support to and through
the age of 19.” Many of the other factors upon which the order
relies are also irrelevant as they do not relate to the marital
economy.13 As the judgment must be reversed, we will not address
any of the other findings of fact or conclusions of law
challenged by defendant.
For the foregoing reasons, we reverse the ED Affidavit
Order, the Sanctions Order, and the ED Judgment. We are
particularly troubled by the need to vacate the ED Judgment, and
thus prolong this case which has already been pending for over
four and one-half years, especially since defendant has died
during this case. In addition, an equitable distribution claim
is one of the very few types of cases which has a statutory
scheme which sets forth a timeline for each stage of the case.
See N.C. Gen. Stat. § 50-21. We are concerned by the complete
13
Factor (b) supporting the unequal distribution was “[t]he debt
that the Defendant incurred during the marriage and the fact
that Plaintiff had to pay off what he did both during the
marriage and after the separation.” Factor (b) seems to address
the economy of the marriage, but was perhaps misplaced; the
trial court may classify debts as marital or separate and may
determine what credit should be given for payment of debts after
the date of separation, but should not both give credit for
payment of debts and give an unequal distribution on this basis,
as this gives double credit for the debt payment.
-33-
absence of any mention of the timeline and scheduling
requirements of North Carolina General Statue § 50-21 and the
Local Rules; such statutory provisions and rules are intended to
prevent exactly the sort of delay and waste of judicial
resources which this case demonstrates. On remand, we direct the
Chief District Court Judge to set a date for a scheduling
conference, as directed by Rule 10(b) of the Local Rules, with
proper notice of this scheduling conference to plaintiff and
defendant, so that the trial court may set forth a new schedule
for this case on remand in accord with North Carolina General
Statute § 50-21 and the Local Rules, to the extent possible from
this point forward.
IV. Conclusion
For the foregoing reasons, we reverse the ED Affidavit
Order, the Sanctions Order, and the ED Judgment; and we remand
for further proceedings consistent with this opinion.
REVERSED and REMANDED.
Judges MCGEE and BRYANT concur.