Gardner v. Gardner , 63 N.C. App. 678 ( 1983 )

JOHNSON, Judge.

The first question raised by plaintiffs appeal is whether the case of McCarty v. McCarty, 453 U.S. 210, 69 L.Ed. 2d 589, 101 S.Ct. 2728 (1981), is controlling with respect to the case before us. We hold that it is. Without reiterating the reasoning in McCarty, that case held that military non-disability retired pay was a personal entitlement, not a property interest and that state courts are precluded by federal law from dividing this payment upon dissolution of a marriage. Thus, military non-disability retired pay is not subject to state community property laws.¹ See Eubanks v. Eubanks, 54 N.C. App. 363, 283 S.E. 2d 396 (1981).

Plaintiff argues that McCarty is distinguishable from the present case in that North Carolina is not a community property jurisdiction. This argument is meritless. McCarty involved the application of California’s community property law to military non-disability retired pay. The present case involves the same law and the same alleged property interest. The only difference is that in the present case, a North Carolina court is enforcing a Louisiana judgment which applied California law. The interposition here of several judgments and two different states is of no consequence. The law and the property interests in the cases are identical for all purposes pertinent here and we answer plaintiff’s argument accordingly.

The other question raised by plaintiffs appeal is whether defendant’s right to relief is affected by the fact that the judgment from which defendant seeks relief is a Consent Judgment. Plaintiff argues that the Consent Judgment is a negotiated monetary settlement between the parties, that it is not a division of property and, therefore, that it is not affected by McCarty. In support of her argument, plaintiff points out that the Consent Judgment does not grant the relief requested in the Complaint, to wit: that the court recognize her forty percent property interest in defendant’s military retired pay. Rather, the Consent Judgment merely directs the payment of certain sums to plaintiff and releases defendant from any claims by plaintiff for support or alimony.

Plaintiff’s argument asks us to ignore completely the very basis of this dispute. The Louisiana judgments that recognize and seek to enforce plaintiff’s purported property interest are the grounds for her Complaint. Without these judgments, plaintiff would have no basis for the negotiations that led to the Consent Judgment. The terms of the Consent Judgment represent a negotiated settlement between the parties. The entry of judgment by the court and its order directing defendant to pay certain sums to plaintiff in satisfaction thereof lends legal sanction and judicial enforceability to the settlement. Walters v. Walters, 307 N.C. 381, 298 S.E. 2d 338 (1983); Stancil v. Stancil, 255 N.C. 507, 121 S.E. 2d 882 (1961); see generally, Lee, N.C. Family Law § 149 (1980).

However, the Louisiana judgments were rendered, the settlement terms negotiated, and the North Carolina Consent Judgment entered on the basis of an interpretation of the law that has since been expressly and specifically rendered incorrect by the highest court in the land. Defendant’s motion under Rule 60(b)(5) asks the trial court to recognize that, insofar as the legal basis for the Consent Judgment no longer exists, it is no longer equitable to require his compliance with it. Theriault v. Smith, 523 F. 2d 601 (1st Cir. 1975). That the judgment that actually divided the property was rendered in a foreign jurisdiction and that there is an intervening judgment enforcing that division in this state are of no consequence. The Consent Judgment was rendered in North Carolina and it is the operation of that judgment from which defendant seeks relief. Inasmuch as the interpretation of the law embodied in the Consent Judgment has been rendered incorrect by the United States Supreme Court, the continued operation of that judgment is inequitable with respect to defendant and he is entitled to prospective relief from it. The trial court correctly granted defendant’s motion under Rule 60(b)(5).

In so holding, we note that the trial court’s grant of defendant’s motion and our decision here are necessarily limited in their application to the 10 March 1981 Consent Judgment entered in Surry County and have no affect on the judgments rendered by the Louisiana courts.

In light of the foregoing decision, we need not address the trial court’s denial of plaintiffs motion for contempt except to say that under the circumstances of this case the motion was properly denied. The judgment appealed from is

Affirmed.

Judge Hill concurs. Judge Phillips dissents.

1 . Although it does not affect this decision, we note that, since McCarty, Congress has enacted 10 U.S.C. 1408, effective 1 February 1983, which allows state courts to treat military retired pay as a property interest with regard to all final decrees of divorce dated on or after the effective date of the statute.