Opinion
No. COA11–1087.
2012-08-7
James Joseph BEGLEY, Plaintiff, v. Jessica M. BEGLEY, Defendant.
Aylward Family Law, by Ilonka Aylward, for plaintiff-appellant. No appellee brief filed.
Appeal by plaintiff from order entered 19 January 2011 by Judge K. Dean Black in Lincoln County District Court. Heard in the Court of Appeals 22 February 2012. Aylward Family Law, by Ilonka Aylward, for plaintiff-appellant. No appellee brief filed.
BRYANT, Judge.
Where the parties executed a rescission to a contract, which was thereafter incorporated into a judicial decree, the trial court erred in concluding that it did not have subject matter jurisdiction and granting defendant's Rule 60 motion for lack of subject matter jurisdiction over a consent order. We reverse and remand the trial court's order.
We refer throughout this opinion to the Memorandum of Judgment/Order of 10 September 2010. We note that the Consent Order dated 19 November 2010 is the written formal acknowledgement by the trial court of the 10 September 2010 Memorandum.
Facts and Procedural History
Plaintiff James Joseph Begley and defendant Jessica M. Begley were married in 1997 and had three children from the marriage. On 27 April 2009, plaintiff and defendant entered into a “Contract of Separation, Property and Marital Rights Settlement” (“the Contract”). The Contract settled matters between the parties regarding their property rights, alimony, child custody, and child support.
On 14 May 2010, plaintiff filed a complaint for child support stating that although the parties had entered into the Contract, “[t]he vague and over-encompassing child support requirement set by the Contract exceed[ed] the reasonable needs of the minor children, and, instead, provide[d] for large discretionary expenses of Defendant.” Plaintiff later filed an amended complaint adding claims of child custody and attorney's fees. On 26 July 2010, defendant filed her answer and counterclaims.
Prior to a scheduled date to hear the parties' claims and counterclaims, plaintiff and defendant agreed to settle matters in a Memorandum of Judgment/Order entered on 10 September 2010 (“the Memorandum”). On 19 November 2010, the Contract, modified by the Memorandum, was confirmed by the trial court and incorporated into a consent order entitled “Consent Order for Child Support and Child Custody” (“the Consent Order”).
On 18 November 2010, defendant filed a Motion for Relief from Judgment or Order from the Memorandum claiming that it was void. Defendant asserted that because no claim for equitable distribution was ever before the court and all property issues had been settled in the Contract, the court lacked subject matter jurisdiction and had no authority to enter the Memorandum. Thereafter, plaintiff filed a motion to dismiss defendant's Motion for Relief from Judgment or Order and a motion for declaratory judgment, seeking a declaration as to the enforceability of the Memorandum.
Defendant sought relief from the Memorandum Order—signed by the Honorable K. Dean Black on 10 September 2010 and then incorporated into the 19 November 2010 Consent Order.
On 19 January 2011, the trial court entered an order which concluding the following:
2. At the time of the hearing on September 10, 2010, resulting in the entry of the [Memorandum], neither party had presented a claim for equitable distribution or property division; therefore the court did not have subject matter jurisdiction over equitable distribution or any property division claims or issues. The court did not have authority to provide for an equitable distribution or any property distribution including the changes made to the property division provisions of the Contract by the [Memorandum].
3. Since the court did not have subject matter jurisdiction over any property issues the court did not have the authority to enter the [Memorandum].
4. The [Memorandum], and the [Consent order] should be set aside pursuant to the provisions of Rule 60(b) of the North Carolina Rules of Civil Procedure.
IT IS ORDERED that the Defendant's Motion is granted. The [Memorandum] and [Consent order] are hereby set aside. Plaintiff's Motion to Dismiss Defendant's Rule 60 Motion is denied.
From this order, plaintiff appeals.
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Plaintiff's sole issue on appeal is whether the trial court erred in voiding the Consent order for lack of subject matter jurisdiction.
Under Rule 60, “the court may relieve a party or his legal representative from a final judgment, order, or proceeding” if the judgment is void. N.C. Gen.Stat. § 1A–1, Rule 60(b)(4) (2011). “While the standard of appellate review of a trial court's ruling on a Rule 60(b) motion is generally for an abuse of discretion, whether a trial court has subject matter jurisdiction is a question of law, which is reviewable on appeal de novo.” Yurek v. Shaffer, 198 N.C.App. 67, 75, 678 S.E.2d 738, 743 (2009) (internal citations and quotation omitted).
“A universal principle as old as the law is that the proceedings of a court without jurisdiction of the subject matter are a nullity, and without subject matter jurisdiction, a court has no power to act[.]” Boseman v. Jarrell, 364 N.C. 537, 548, 704 S.E.2d 494, 502 (2010) (internal citations and quotations omitted).
In the instant case, the trial court concluded that because neither party presented a claim for equitable distribution or property division, it did not have subject matter jurisdiction over those claims or issues. This was error.
It is generally held that provisions in judgments and decrees entered by consent of all the parties may be sustained and enforced, though they are outside the issues raised by the pleadings, if the court has general jurisdiction of the matters adjudicated.
Davis v. Davis, 78 N.C.App. 464, 470, 337 S.E.2d 190, 193 (1985). Because the trial court has general jurisdiction of all domestic matters, the trial court “properly entered [the Consent order] even though it contained a provision which was outside of the pleadings.” Id. (citation omitted).
Further, the trial court found that the Consent order “dealt with the issues before the court but also altered the parties' equitable distribution of property as set forth in the [C]ontract.” The Contract contained provisions regarding the settlement and distribution of all of the parties' marital property and all other property rights. It also contained a provision entitled “WAIVER OF RIGHTS TO EQUITABLE DISTRIBUTION” which provided, in pertinent part, that “[e]ach party expressly waives any and all other rights, whether now in existence or acquired hereafter, to claim an equitable distribution ... and this Agreement may be pleaded in bar of any such claim for relief in any suit filed hereafter.”
The Consent order attempted to alter the parties' equitable distribution of property as set forth in the Contract. For example, as the trial court stated in its 19 January 2011 order:
[T]he equitable distribution in the Contract granted possession of the former marital home to the Defendant for the next 16 years at which time it was to be sold with all net proceeds divided equally between the parties. During that time the Plaintiff was contractually obligated to pay the first (1st) mortgage, the second (2nd) mortgage, and all expenses related to the residence. Despite the property division set forth in the Contract[, the Consent order] required the Defendant to move from the home and gave ownership of it to the Plaintiff.
Based on the foregoing, the trial court held that it did not have subject matter jurisdiction over any property issues and therefore, had no authority to enter the Consent order.
“The principle is well-established that [a] consent judgment is a contract between the parties entered upon the record with the approval and sanction of the court,” and “must be construed in the same manner as a contract to ascertain the intent of the parties.” Davis, 78 N.C.App. at 469, 337 S.E.2d at 192 (citation and quotation marks omitted). A consent judgment should be “interpreted in light of the surrounding controversy and purposes intended to be accomplished by it.” Id. “Moreover, the entire agreement must be examined with an understanding of the result to be accomplished and the situation of the parties at the moment the contract is made.” Montgomery v. Montgomery, 110 N.C.App. 234, 239, 429 S.E.2d 438, 441 (1993) (citations and quotation marks omitted).
Generally,
[a] separation agreement and property settlement entered into by the parties which fully disposes of the property rights arising out of a marriage acts as a bar to equitable distribution. Unless both parties legally consent to rescinding the agreement, the court is without the power to discard valid contracts between the parties and to order equitable distribution.
Rabon v. Rabon, 102 N.C.App. 452, 455–56, 402 S.E.2d 461, 463 (1991) (citations omitted).
In the present case, defendant, who was represented by counsel, signed the Memorandum that was memorialized in the Consent order. By signing the Memorandum, defendant stipulated to the following, in pertinent part:
(b) the provisions of this Memorandum are fair and reasonable and each party has had ample opportunity to obtain legal advice concerning the legal effect and terms of this Memorandum;
(c) this Memorandum is enforceable by the contempt powers of the court should any party not comply with its terms[.]
In essence, the Memorandum and its confirmation by the trial court into the Consent order functioned as a rescission of the Contract. In her Motion for Relief from Judgment or Order, defendant merely argued that because property division was not an issue presented before the court and because the Contract waived the parties' rights to equitable distribution, the trial court lacked subject matter jurisdiction. “Once a memorandum of judgment is incorporated into a consent judgment, the parties lose their contract defenses.... Parties seeking to set aside a consent judgment are limited to proving lack of consent, fraud, mutual mistake, or unilateral mistake under some misconduct.” Griffith v. Curtis, 205 N.C.App. 462, ––––, 696 S.E.2d 701, 704 (2010) (citations omitted). Defendant failed to raise any of the applicable defenses. We hold that the trial court had subject matter jurisdiction over this matter and erred in setting aside both the Memorandum and the Consent order by granting defendant's Rule 60 motion.
The order of the trial court is reversed and remanded for further proceedings in accordance with this opinion.
Reversed and remanded. Judges HUNTER, JR., ROBERT N. and BEASLEY concur.
Report per Rule 30(e).