Opinion
No. COA10-514
Filed 7 June 2011 This case not for publication
Appeal by Defendant from orders entered 3 November and 9 November 2009 by Judge Gary Cash in District Court, Buncombe County. Heard in the Court of Appeals 1 November 2010.
Robert J. Deutsch, P.A., by Tikkun A.S. Gottschalk and Robert J. Deutsch, for Plaintiff-Appellee. Wyrick Robbins Yates Ponton LLP, by K. Edward Greene, Tobias S. Hampson, and Edward Eldred, for Defendant-Appellant.
Buncombe County No. 04-CVD-3124.
Clarence David Dillingham (Defendant) appeals from an order finding him in civil contempt of consent orders requiring him to pay postseparation support to Judy Metcalf Dillingham (Plaintiff). Plaintiff filed an action against Defendant on 22 July 2004, seeking, inter alia, postseparation support, alimony, and equitable distribution. The trial court entered a consent order for postseparation support on 21 July 2005 (the 2005 consent order) which provided that Defendant pay $4,000 per month to Plaintiff until Plaintiff's equitable distribution claim was resolved.
The trial court entered an order on 29 December 2006 stating that "there are no unresolved issues pending in this file." The trial court then directed the clerk of superior court to close the file. The word "unresolved" in the order bears a handwritten mark in ink, and it appears that the mark was intended to be an underlining of the word, "unresolved." The order further stated that "it appears that this case is no longer an active lawsuit, no issue herein having [been] noticed for hearing since at least July 2005." The order also purported to "dismiss the unresolved issues pending herein without prejudice." Finally, the order stated: "This action may be reinstated without prejudice by the [c]ourt upon proper motion of a party."
Plaintiff filed a "motion to re-open file" on 1 June 2007, alleging that "[a]ll outstanding issues including equitable distribution, alimony and attorney fees are still unresolved." The trial court granted Plaintiff's motion in an order entered 11 June 2007 (the order to re-open the file). In its order, the trial court stated that, "based upon the alleged outstanding issues including equitable distribution, alimony and attorney fees, the [c]ourt orders that this case be re-opened."
The trial court entered a second consent order on 19 October 2007, dismissing Plaintiff's equitable distribution claim. The trial court entered a third consent order on 20 February 2008 (the 2008 consent order), which contained the following language:
[T]he parties having signed a previous Consent Order for Post Separation Support dated July 26, 2005 providing for Defendant to make certain payments to Plaintiff; and the parties being currently engaged in litigation . . . relative to the partition of certain real property, the resolution of which litigation is necessary for the resolution of the remaining issues in this matter; and the parties having agreed to enter into this Consent Order in order to continue the terms of the July 25 [sic], 2005 Consent Order, until the resolution of the Superior Court case, without prejudice to the rights of either party to move the Court to continue, amend, or dismiss the July 26, 2005 Consent Order after the resolution of the Superior Court case[.]
The "superior court case" referred to in the 2008 consent order was a separate proceeding between Plaintiff and Defendant regarding the partition of real property owned by the parties.
Plaintiff filed a verified motion for an order to show cause on 29 July 2009, contending that Defendant had failed to comply with the terms of the 2005 consent order. The trial court entered an order to show cause on 30 July 2009, ordering Defendant to "appear before the [trial] [c]ourt and show cause, if any exists, why he should not be held in willful contempt[.]" Defendant filed an amended N.C. Gen. Stat. § 1A-1, Rule 60(b) motion on 17 September 2009 to set aside the order to re-open the file, as well as the 2008 consent order. Defendant's motion also sought, in the alternative, to terminate both those orders.
The trial court held a hearing on Plaintiff's motion to show cause and on Defendant's amended N.C.G.S. § 1A-1, Rule 60(b) motion on 22 October 2009. After hearing evidence and arguments, the trial court entered an order on 3 November 2009, holding Defendant in civil contempt for failure to comply with the 2005 and 2008 consent orders. Defendant was ordered incarcerated until he paid an arrearage of $22,500 for postseparation support to Plaintiff. The incarceration order was stayed until 12 November 2009 to allow Defendant time to purge himself of the contempt by paying the arrearage. In an order entered 9 November 2009, the trial court denied Defendant's amended Rule 60(b) motion. Defendant appeals the trial court's 3 November 2009 order and its 9 November 2009 order.
I. Defendant's N.C. Gen. Stat. § 1A-1, Rule 60(b) Motion
Defendant first argues that the trial court erred in denying his N.C.G.S. § 1A-1, Rule 60(b) motion to set aside judgment because the order to re-open the file and the 2008 consent order were void. Defendant contends that both orders were void because "the court was without jurisdiction to enter the Order to Re-Open File and the 20 February 2008 Consent Order[.]" "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) (citations omitted). Because Defendant contends the trial court lacked subject matter jurisdiction to enter the order to re-open file and the 2008 consent order, we review the trial court's ruling denying Defendant's N.C.G.S. § 1A-1, Rule 60(b) motion de novo.
Defendant's argument is predicated on his reading of the trial court's order to close the file as an involuntary dismissal pursuant to N.C. Gen. Stat. § 1A-1, Rule 41(b). Defendant asserts that an involuntary dismissal "terminates adversarial proceedings, `strips the trial court of authority to enter further orders in the case,' . . . and leaves the parties `as if the suit had never been filed.'" (Citations omitted). Defendant argues that, because Plaintiff did not file a new complaint within one year, the trial court was divested of subject matter jurisdiction and, therefore, lacked jurisdiction to enter either the order to re-open the file or the 2008 consent order.
We disagree with Defendant's characterization of the order to close the file. That order contained a finding that there were "no unresolved issues pending in this file[,]" and then stated that the trial court "dismiss[es] the unresolved issues pending herein[.]" Thus, it is unclear whether the order to close the file actually dismissed any issues.
However, beyond this internally contradictory language, we note that, by its very terms, the trial court's order to close the file conflicts with the requirements of N.C. Gen. Stat. § 1A-1, Rule 41(b) (2009), which provides that, "[f]or failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim therein against him." Further,
[i]f the court specifies that the dismissal of an action commenced within the time prescribed therefor, or any claim therein, is without prejudice, it may also specify in its order that a new action based on the same claim may be commenced within one year or less after such dismissal.
Id.
Our Court has held that a trial court may, under certain circumstances, enter a dismissal for failure to prosecute even without a motion by the defendant. Blackwelder Furniture Co. v. Harris, 75 N.C. App. 625, 627, 331 S.E.2d 274, 275 (1985) ("We disagree with the contention that the trial judge does not have authority to dismiss a claim pursuant to Rule 41(b) in the absence of a motion by defendant to do so. Whether a judge may dismiss a claim pursuant to G.S. Sec. 1A-1 Rule 41(b) depends on the facts and circumstances surrounding the particular case.").
However, "mere lapse of time does not justify dismissal if the plaintiff has not been lacking in diligence[,]" but instead "is proper only where the plaintiff manifests an intention to thwart the progress of the action to its conclusion, or by some delaying tactic plaintiff fails to progress the action toward its conclusion."
Eakes v. Eakes, 194 N.C. App. 303, 309, 669 S.E.2d 891, 895 (2008) (citation omitted).
In the present case, we note that Defendant did not move for an involuntary dismissal. The trial court's order to close the file contains no findings addressing whether Plaintiff "`manifest[ed] an intention to thwart the progress of the action to its conclusion, or by some delaying tactic [P]laintiff fail[ed] to progress the action toward its conclusion.'" Id. at 309, 669 S.E.2d at 895 (citation omitted) . The sole findings contained within the order to close the file are: (1) "there are no unresolved issues pending in this file" and (2) "it appears that this case is no longer an active lawsuit, no issue herein having noticed for hearing since at least July 2005[.]"
Further, the trial court's order explicitly allows Plaintiff's action to be "reinstated without prejudice . . . upon proper motion of a party." N.C.G.S. § 1A-1, Rule 41(b) does allow for dismissal without prejudice, but the rule clearly states that an action must be "recommenced" by the plaintiff's filing a complaint within one year. In the present case, the trial court's order specifically states that the action can be re-opened "upon proper motion of a party." Thus, the plain language of the order dictates a different procedure and effect from that provided by N.C.G.S. § 1A-1, Rule 41(b).
Despite the confusing language concerning "unresolved issues [,]" we conclude that the trial court's order to close the file was not intended to constitute an involuntary dismissal pursuant to N.C.G.S. § 1A-1, Rule 41(b). Rather, we conclude, as did the trial court in ruling on Defendant's N.C.G.S. § 1A-1, Rule 60(b) motion, that the order to close the file was "an administrative order routinely entered only for the purpose of rendering a case inactive for Family Court statistical reasons[.]" We therefore hold that the order to close the file did not divest the trial court of subject matter jurisdiction. This portion of Defendant's argument is without merit.
II. Satisfaction of the 2005 Consent Order
Defendant next argues that the trial court was without authority to enter the 2008 consent order because that order modified the terms of the 2005 consent order, which became fully satisfied when Plaintiff voluntarily dismissed the equitable distribution portion of her action. Defendant contends that the 2005 consent order stated that he was obligated to pay postseparation support "until the entry of an Equitable Distribution Judgment in this action[.]" Defendant argues that, when Plaintiff dismissed her equitable distribution claim, the trial court was divested of jurisdiction to modify the 2005 consent order.
However, Defendant's argument relies on his contention that the order to close the file was an involuntary dismissal pursuant to N.C.G.S. § 1A-1, Rule 41(b). In this second argument, Defendant does not contend that the trial court lacked subject matter jurisdiction to enter any postseparation support order. Rather, Defendant contends that the trial court was without authority to enter any order altering the 2005 consent order because, by its own terms, the 2005 consent order no longer required payment of postseparation support after dismissal of Plaintiff's equitable distribution claim.
A consent order "`is a court-approved contract subject to the rules of contract interpretation.'" Turner v. Hammocks Beach Corp., 363 N.C. 555, 559, 681 S.E.2d 770, 774 (2009) (citation omitted). "`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.'" Whitesides v. Whitesides, 271 N.C. 560, 563-64, 157 S.E.2d 82, 85 (1967) (citation omitted). "It is well established that our General Assembly has specifically conferred on the district court division subject matter jurisdiction over domestic relations cases[.]" Sloan v. Sloan, 151 N.C. App. 399, 403, 566 S.E.2d 97, 100 (2002); see also N.C. Gen. Stat. § 7A-244 (2009) ("The district court division is the proper division without regard to the amount in controversy, for the trial of civil actions and proceedings for annulment, divorce, equitable distribution of property, alimony, child support, child custody and the enforcement of separation or property settlement agreements between spouses, or recovery for the breach thereof.").
In the present case, the parties entered into the 2008 consent agreement whereby they adopted the terms of the 2005 consent order and extended those terms until resolution of a separate action between the parties for partition of certain real property. The 2008 consent order provides:
[T]he parties having signed a previous Consent Order for Post Separation Support dated July 26, 2005 providing for Defendant to make certain payments to Plaintiff; and the parties being currently engaged in litigation . . . relative to the partition of certain real property, the resolution of which litigation is necessary for the resolution of the remaining issues in this matter; and the parties having agreed to enter into this Consent Order in order to continue the terms of the July 25 [sic], 2005 Consent Order, until the resolution of the Superior Court case, without prejudice to the rights of either party to move the Court to continue, amend, or dismiss the July 26, 2005 Consent Order after the resolution of the Superior Court case[.]
Thus, Defendant asserts that the 2008 consent order "modifies" the 2005 consent order. However, we view the 2008 consent order as a new agreement between the parties that expressly incorporates the terms of the 2005 consent order. Defendant makes no argument that the trial court lacked authority to enter a new postseparation support order. Because the trial court has subject matter jurisdiction over the orders in this case, and because we conclude the 2008 consent order was a new agreement between the parties, we find Defendant's argument concerning satisfaction of the 2005 consent order without merit. Therefore, the trial court had jurisdiction to enter the 2008 consent order and the trial court properly denied Defendant's N.C.G.S. § 1A-1, Rule 60(b) motion.
III. Contempt
Defendant also argues that the trial court erred in adjudicating him in civil contempt because the "2005 consent order was not in force when the [c]ourt adjudicated [him] in contempt." "`In contempt proceedings[,] the judge's findings of fact are conclusive on appeal when supported by any competent evidence and are reviewable only for the purpose of passing on their sufficiency to warrant the judgment.'" Hancock v. Hancock, 122 N.C. App. 518, 523, 471 S.E.2d 415, 418 (1996) (citation omitted).
To hold a defendant in civil contempt, the trial court must find the following: (1) the order remains in force, (2) the purpose of the order may still be served by compliance, (3) the non-compliance was willful, and (4) the non-complying party is able to comply with the order or is able to take reasonable measures to comply.
Shippen v. Shippen, ___ N.C. App. ___, ___, 693 S.E.2d 240, 243 (2010) (citation omitted).
Defendant first argues that the trial court erred in finding him in contempt of the 2 005 consent order because it was not in force. The trial court's 3 November 2009 contempt order contains the following pertinent findings:
7. Defendant is the sole owner of Dillingham Construction Company, Inc., which presently has substantial debt and does not have sufficient revenue to cover its operating costs. Defendant also owns an IRA account in the amount of $50,000.
8. Defendant has been voluntarily paying $1,200 per month to the parties' adult son.
9. Defendant has the ability to pay the arrearage of $22,500 due Plaintiff, and has the ability to pay the ongoing obligations in the Consent Orders.
Having determined that the 2008 consent order was a new agreement incorporating the terms of the 2005 consent order, we find no error in the trial court's finding that Defendant was in contempt of "the 2005 and 2008 consent orders."
Defendant next argues that the trial court erred because the: "Evidence and Findings Do Not Support the [trial court's] Determinations" that: (1) Defendant willfully failed to comply with the order; (2) Defendant had the ability to pay during May, June, July, and August of 2009; and (3) Defendant had the ability to pay arrearage when the contempt order was entered. We begin by noting that the trial court's contempt order labels its determination that "Defendant's noncompliance was willful" as a conclusion of law. However, the great weight of our State's appellate jurisprudence treats this determination as a finding of fact. See Smith v. Smith, 247 N.C. 223, 225, 100 S.E.2d 370, 371-72 (1957) ("However, the order attaching the plaintiff for contempt is fatally defective in that it is not supported by a finding of fact that the conduct of the plaintiff in failing or refusing to make the payments required by the former order of the court was willful."); see also Hancock, 122 N.C. App. at 523, 471 S.E.2d at 418 ("Since a willful failure by [the] plaintiff to abide by the consent judgment would support a finding of contempt in this case, we must review the record to determine if it contains competent evidence to support a finding of willfulness."); accord Shippen, N.C. App. at, 693 S.E.2d at 243-44. "A trial court's `mislabeling' a determination, however, is `inconsequential' as the appellate court may simply re-classify the determination and apply the appropriate standard of review." State v. Hopper, N.C. App. ___, ___, 695 S.E.2d 801, 805 (2010) (citation omitted). Therefore, we will review the record to determine if there was sufficient competent evidence to support the trial court's determination that Defendant's noncompliance was "willful."
Defendant asserts that the term "willful" "imports knowledge and a stubborn resistance." (Citation omitted). Defendant contends that "[n]one of the court's findings suggest [Defendant] `stubborn[ly]' refused to pay." We disagree. "Evidence which does not show a person to be guilty of `purposeful and deliberate acts' or guilty of `knowledge and stubborn resistance' is insufficient to support a finding of willfulness." Hancock, 122 N.C. App. at 523, 471 S.E.2d at 418 (citation omitted). "Willfulness `involves more than deliberation or conscious choice; it also imports a bad faith disregard for authority and the law.'" Id. (citation omitted). We note that civil contempt proceedings must be initiated by an interested party filing a motion "based on a sworn statement or affidavit from which the court determines there is probable cause to believe there is civil contempt." Shumaker v. Shumaker, 137 N.C. App. 72, 76, 527 S.E.2d 55, 57 (2000) (citation omitted). "The burden then moves to the opposing party to show cause why he should not be found in contempt of court. The party alleged to be delinquent has the burden of proving either that he lacked the means to pay or that his failure to pay was not willful." Id. (citation omitted).
In Meehan v. Lawrence, 166 N.C. App. 369, 602 S.E.2d 21 (2004), our Court addressed whether there was sufficient evidence to support a determination that a defendant's noncompliance was willful. In Meehan, we held that the trial court's finding of contempt was supported by evidence, stating:
Substantial evidence further shows defendant's "knowledge and stubborn resistance" to satisfy this portion of the 1996 Order. Defendant admitted he "stopped the health insurance four months before there was any `agreement'" reached during the October 1997 meeting. He continually requested plaintiff to provide health insurance for the children, but she objected.
Defendant knew of his obligation under the 1996 Order, yet failed to provide insurance coverage for his children from June 1997 to August 2002. His "stubborn resistance" to plaintiff's repeated demand for him to comply with the 1996 Order supports the trial court's order finding him to be in civil contempt.
Id. at 379-80, 602 S.E.2d at 28 (citation omitted).
In the present case, Plaintiff testified that Defendant called her in June of 2009 and told her that he had written a check to her. Defendant told Plaintiff that he wanted her to meet him in person to read a judicial opinion that he felt supported his position in the partition case. Plaintiff never met with Defendant and he never gave Plaintiff the check. Plaintiff also testified that Defendant "quit taking a salary and let the company be his bank." Defendant agreed that "the company has always been our bank." An accountant for Defendant's company testified that Dillingham Construction Company had written a check to Plaintiff in the amount of $4,500 but later "reversed it."
We hold that there was sufficient competent evidence that Defendant's noncompliance in this case was the result of "purposeful and deliberate acts" and was indicative of a bad faith disregard for authority and law. Contrast Forte v. Forte, 65 N.C. App. 615, 616, 309 S.E.2d 729, 730 (1983) ("The trial judge's finding of fact that plaintiff stopped making payments, not in defiance of authority, but in a good faith reliance on defendant's agreement to support the child if he would waive his visitation rights, is supported by competent evidence, and is thus conclusive on us."). We therefore conclude that the trial court's finding that Defendant willfully refused to comply with the terms of the consent orders was supported by competent evidence.
Defendant next argues the findings do not support the trial court's determination that Defendant had the ability to pay during May, June, July, and August of 2009. Defendant also contends that the trial court erred in determining that he had the ability to pay the arrearage and purge himself of contempt. Defendant contends that the sole evidence regarding his ability to pay was based on his IRA accounts. Defendant asserts that there was no evidence that he had "unfettered access" to those accounts. Defendant cites no authority for the proposition that a party must have unfettered access to funds in an IRA account before the funds may be considered in determining whether the party has the ability to comply with an order. Defendant does not argue now, nor did he argue at trial, that his access to the IRA funds was, in fact, "fettered" in any way. There was no evidence suggesting that Defendant was unable to access the funds in his IRA account, or what penalty he might have suffered for doing so.
"`The majority of cases have held that to satisfy the present ability test [a] defendant must possess some amount of cash, or asset readily converted to cash.'" Tucker v. Tucker, 197 N.C. App. 592, 595, 679 S.E.2d 141, 143 (2009) (citation omitted). In Tucker, this Court held that:
the trial court properly considered the assets that [the] defendant had available at the time of the hearing to satisfy the $10,000.00 payment towards the alimony arrears and specifically based its conclusion regarding defendant's ability to pay upon the fact that defendant had available, inter alia, $6,200.00 from his 401K account and a $2,000.00 cashier's check, which together would comprise $8,200.00 of the $10,000.00.
Id. at 597, 679 S.E.2d at 144. Compare Sloan, 151 N.C. App. at 408, 566 S.E.2d at 103 ("Here, defendant's current wife testified that she [was] president of F.M. Sloan Associates, Inc., insurance agency; that defendant [was] vice-president; that defendant work[ed] regularly for the agency; and that due to a notification from the Internal Revenue Service to garnish defendant's wages, defendant ha[d] not taken a salary so as not to pay the indebtedness. [The] [d] efendant's wife also testified that she receives a weekly salary of $650, that she received a profit of $15,000, that the agency hired a third employee at a salary of $400 per week, and that the agency pays defendant's medical bills and $1,213.42 per month on their marital residence. The trial court's findings of defendant's ability to pay the debt and willful failure to pay are clearly supported by the evidence.").
The evidence presented at the contempt hearing in this matter included the following: (1) Defendant had been paying $1,200 a month voluntarily to the parties' adult son; (2) Defendant used $40,000 of his company's money to pay for legal fees incurred in the partition action related to this case in August of 2 009; and (3) Defendant owned "a couple of" IRA accounts valued at "something over $50,000." Defendant does not challenge the trial court's finding that he owned an IRA account in the amount of $50,000. Based on the above, we find that there was competent evidence to support the trial court's finding that Defendant had the ability to pay monthly during the summer of 2009, as well as the $22,500 arrearage. The amount contained in the IRA account was sufficient for Defendant to have paid not only the monthly requirements during May, June, July, and August, but also the arrearage.
We therefore conclude that the trial court's findings of fact were supported by competent evidence, and that those findings supported the trial court's conclusions of law. Defendant did not meet his burden of proving that his noncompliance was due to his inability to pay; nor did he prove that it was not willful. We therefore hold the trial court did not err in finding Defendant in civil contempt.
Affirmed.
Chief Judge MARTIN and Judge ERVIN concur.
Report per Rule 30(e).