Case Summaries

By Rachel Beard, A.T. Debnam, Daphne Edwards, Rebecca Poole, Jeff Russell and Jennifer Smith

Equitable Distribution; Appeal After Remand; Value Of Marital Residence; Law Of the Case

Lund v. Lund (Lund II), No. COA16-813 (March 21, 2017)

(related Court of Appeals case: Lund v. Lund, __ N.C. App. __, 779 S.E.2d 175 (2015) (Lund I)

Plaintiff-wife appeals from the trial court’s revised equitable distribution order entered after the Court of Appeals remanded for further findings of fact. The Court of Appeals affirmed the trial court’s decision.

The plaintiff appealed based on the following issues: Finding wife’s evidence on the value of the marital home was speculative and not credible, failing to value and distribute, as divisible property, the increase in value of the marital home from the date of separation through the date of trial, failing to properly consider unequal distributional factors raised by wife and to make appropriate findings of fact with regard to those factors and failing to conduct a further hearing on remand as to the date of distribution valuations and unequal distribution factors.

As to the plaintiff’s first issue, wife testified to a range of value for the marital home that the court found was speculative and not credible. Wife’s expert testified to a value of the marital residence that was eight months prior to the date of the trial. The trial court presumably found this value to remote to the date of trial to use it as evidence to evaluate the divisible property value. The plaintiff failed to show that the determination that there was no divisible property related to the marital residence was manifestly unsupported by reason to amount to an abuse of discretion. With regard to plaintiff’s issue concerning the failure to consider unequal distribution factors raised by wife and to make appropriate findings of fact, the Court of Appeals noted that the plaintiff made the same exact argument, word for word, in her previous appeal. Since that issue was previously addressed in Lund 1, that issue was dismissed. With regard to failing to have a hearing upon remand, the Court of Appeals said the trial court was not required to consider additional evidence, only to determine the existence of divisible property and it was appropriate for the trial court to consider competent evidence it had received at trial and make further findings. Based on the foregoing the Court of Appeals affirmed the trial court’s revised equitable distribution order.

Equitable Distribution; Distributive Award

Porter v. Porter, No. COA16-329 (March 21, 2017)

Husband appeals from the trial court’s equitable distribution order. The Court of Appeals reversed in part and remanded for the trial court to enter an order clearly establishing the distributive award payment due, interest rate, and terms of payment.

First, husband argues that the trial court erred in its classification and valuation of his 1/3 interest in a business called “Rugworks.” The Court of Appeals disagreed and held that his arguments at trial were almost exclusively related to valuation. Husband’s classification basket was empty at trial, and he cannot put new eggs in it now. Other than the initial $50,000 investment, the trial court had no evidence upon which it could classify husband’s interest in Rugworks as separate as he now contends.

Second, husband contends that (1) the trial court’s order improperly requires him to pay 8 percent interest on the full amount of the distributive award for the entire 15 years; (2) the trial court failed to find that he has the ability to pay the award as ordered; and (3) the trial court erred by extending the period of payment beyond six years.

In response to contention (1), the Court of Appeals agreed and remanded for the trial court to establish the award and make clear that this amount may be paid prior to the time set out in the order if husband is able to do so in order to avoid some interest. In response to contention (2), the Court remanded to the trial court for additional findings regarding husband’s ability to pay the award as directed by the trial court, whether in the same amount as previously ordered or in a different amount. In response to contention (3), husband made no showing and no argument regarding how the distributive payments should be done or over what time period. However, both parties agreed that husband would be unable to pay the award immediately or even within six years, so an extended payment schedule was necessary. On remand, the trial court has the discretion to allow additional evidence to the extent that it finds that doing so is necessary to the determination of the question of the distributive award.

Permanency Planning Review Hearing Requirements; Constitutionally Protected Status Of Parents; Requirement That a Parent Be Found Unfit For a Change In Guardianship Placement

In re R.P., No. COA16-856 (March 21, 2017)

The Court of Appeals reversed and remanded a Mecklenburg County permanency planning review order and an order appointing a guardian. After multiple instances of domestic violence between the parents, the Court awarded guardianship of a minor child to his maternal aunt. However, the orders failed to make findings that the minor’s father was unfit or had acted inconsistent with his constitutionally protected status. Furthermore, the trial court had limited evidence in a permanency planning hearing to visitation and never heard evidence regarding guardianship – thus the father had not waived his right to review the issue. The trial court must make findings of unfitness or that the parent acted inconsistent with his constitutionally protected status before the court can grant guardianship of a child to a non-parent.

Separation and Property Settlement Agreement/Amendment/Summary Judgment

Kelley v. Kelley, No. COA16-425, (April 4, 2017)

Defendant appealed from an interlocutory order denying his motion for summary judgment on the validity of an amendment to the parties’ separation agreement which was not notarized. Because the order denying his motion for summary judgment included a finding of fact that ruled upon the primary legal issue of the case and eliminated defendant’s defense, the Court of Appeals considered the interlocutory order as affecting a substantial right and therefore properly before the Court. Considering the merits of the case, the Court of Appeals reversed and remanded the trial court’s order, holding that because the parties’ amendment to their separation agreement was not notarized it was void.

The parties validly executed a separation agreement in 1994. The separation agreement required, by its terms, that any modification or waiver of its provisions be in writing and executed with the same formality as the separation agreement. In 2003 the parties—then unrepresented by counsel—executed an amendment to the separation agreement that was not notarized. In 2014, plaintiff sued defendant for breach of the 2003 amendment. Defendant made a motion for summary judgment raising the invalidly of the 2003 amendment. plaintiff filed a cross-motion for summary judgment seeking enforcement of the separation agreement. Following a hearing, the trial court denied both motions for summary judgment and included a finding that the 2003 amendment was “not void as a matter of law.” Defendant appealed.

The Court of Appeals noted that had the trial court’s order simply stated there was a genuine issue of material fact, there would be nothing for the Court of Appeals to review at this time. However, because the order contained a finding of fact—which orders denying summary judgment should not contain—and because the finding ruled on the primary legal issue in the case, the Court considered the appeal. Because the separation agreement required that modifications be executed with the same formality as the original separation agreement, the parties are bound by its terms. Additionally, the Court of Appeals cited Greene v. Greene, 77 N.C. App. 821 (1985) and Jones v. Jones, 162 N.C. App. 134 (2004) for the proposition that modifications to separation agreements must be in writing and acknowledged in accordance with N.C. Gen. Stat. § 52-10.1, even when the parties are no longer married. Therefore, the parties 2003 amendment to the separation agreement was void because it was not notarized. The Court of Appeals also dismissed plaintiff’s arguments of estoppel and ratification, because void contracts cannot be a basis for estoppels or ratification.

Termination of Parental Rights

In re L.L.O., No. COA16-1098 (April 4, 2017)

In this case, the trial court terminated the respondent-parents parental rights under N.C.G.S. § 7B-1111(a)(1) and (2), finding there was a likelihood that neglect of the child, L.L.O., would be repeated and that respondent-parents willfully left their child in foster care without showing reasonable progress to correct the conditions which led to the child’s removal. L.L.O. was born premature, weighing one pound and fourteen ounces. When she went home with the respondent-parents, she was rushed to the hospital in respiratory distress shortly thereafter. She was released and had a doctor’s appointment the next day. Respondent-Parents failed to take her to the appointment. The Department of Social Services received a report of medical neglect and a social worker took respondent-parents and L.L.O. to the doctor’s appointment. Thereafter, the child was prescribed medication, which respondent-parents neglected to give her as instructed. Respondent-parents missed another doctor’s appointment for the child. DSS filed a petition alleging neglect for failing to provide medical care and obtained nonsecure custody of L.L.O. The court adjudicated L.L.O. neglected and ordered respondent-parents to submit to drug tests and develop a case plan with DSS, with goals for the parents of securing employment, refraining from drug and alcohol use, and visiting the child.

After a permanency plan hearing, the trial court ordered DSS could cease reunification efforts and changed the plan from reunification to adoption. DSS filed a motion to terminate parental rights under N.C.G.S. § 7B-101 and the trial court terminated respondent-parents’ parental rights under N.C.G.S. § 7B-1111(a)(1) and (2), as stated above.

On appeal, the Court held that the trial court failed to make a finding of fact that there was a likelihood of repetition of neglect if the child was returned to their care. While the court made findings that respondent-parents failed to take drug tests, failed to get employment, and failed to comply with visitation schedules, the court did not find neglect was likely to reoccur. The Court also found that the trial court failed to make a finding of fact that respondent-parents willfully left the child in foster care without making reasonable progress. The Court stated that there was conflicting evidence regarding their reasonable progress and that the court’s findings were inadequate to resolve the conflict. The Court vacated the court’s order that grounds existed under N.C.G.S. § 7B-111(a)(1) and (2) to terminate parental rights and remanded.

UCCJEA; NCGS 50A-201 Et Seq.; Jurisdiction; Termination Of Parental Rights

In Re: T.E.N., No. COA16-1011, (April 4, 2017)

Father appeals from an order terminating his parental rights in Guilford County, North Carolina. This case originally began in Brick, N.J. T.E.N. was born out of wedlock to respondent-father and petitioner-mother in May 2009. Due to domestic violence occurring between the parties, mother obtained a domestic violence protective order in September 2009. This order also allowed father visitation with T.E.N. Mother obtained a final restraining order on Oct. 26, 2011 from Ocean County, New Jersey Superior Court barring the father from her residence, place of employment and from having contact with her or her friend. This final restraining order also awarded mother temporary custody of T.E.N.

On Feb. 12, 2012, the Ocean County Superior Court issued an amended final restraining order which barred father from T.E.N.’s daycare facility. In 2013, mother sought permission from the New Jersey court to relocate with T.E.N. to North Carolina. The New Jersey court granted mother’s request and she moved to North Carolina in August 2013. Father remained in New Jersey.

In October 2013, father sought modification of his visitation arrangement with T.E.N. before the New Jersey court. In this October 2013 order the father was allowed one weekend a month with T.E.N. and the parties were to alternate transportation of the child between North Carolina and New Jersey. After one visit, father did not see T.E.N. again.

Mother filed a petition in Guilford County to terminate father’s parental rights on Jan. 6, 2015 alleging that father had willfully abandoned the juvenile and failed to pay for the care, support and education of the juvenile as required by the custody agreement for a period of one year or more preceding the filing of the petition. On April 29, 2016 the trial court in Guilford County found the existence of willful abandonment and entered an order terminating father’s parental rights.

Father appealed this order terminating his parental rights arguing the trial court did not have subject matter jurisdiction over the termination proceedings under provisions of the UCCJEA. The North Carolina Court of Appeals agreed with father and vacated the order terminating his parental rights.

The Court of Appeals stated that a North Carolina court cannot modify an out of state custody determination unless two conditions are met. First, the North Carolina court must possess jurisdiction to make an initial determination under N.C. Gen. Stat. §50A-201(a)(1) or N.C. Gen. Stat. §50A-201(a)(2). In this case, both parties agree that North Carolina was the “home state” of T.E.N. on the date of commencement of the proceeding.

The second condition is met if one of the following occurs:

• The court of the other state determines it no longer has exclusive, continuing jurisdiction under G.S. 50A-202 or that a court of this State would be a more convenient forum under G.S. 50A-207; or
• A court of this State or a court of the other state determines that the child, the child’s parents and any other person acting as a parent do not presently reside in the other state.

N.C. Gen. Stat. §50A-203.

Here, father still resides in New Jersey. Guilford County District Court did not gain jurisdiction over the case through N.C. Gen. Stat. §50A-203(2). However, the Guilford County Court made a finding which indicate they concluded it could assert subject matter jurisdiction pursuant to N.C. Gen. Stat. §50A-203(1)  The court’s finding was that “the New Jersey Family Court on March 28, 2014, transferred the jurisdiction of custody proceedings from New Jersey to North Carolina.”  In this case mother testified at the termination hearing that the New Jersey court had transferred jurisdiction to North Carolina in March of 2014, but no order was produced, introduced into evidence or made a part of the record on appeal. Without an order from New Jersey relieving itself of jurisdiction, Guilford County District Court lacked any basis to conclude it had acquired subject matter jurisdiction. The North Carolina Court of Appeals concluded that neither method of obtaining jurisdiction under N.C. Gen. Stat. §50A-203(1) was satisfied, the Guilford County District Court erroneously determined it had subject matter jurisdiction. The order terminating father’s parental rights was vacated.