Opinion
No. COA14–236.
03-17-2015
Bruce Ray JONES, Plaintiff, v. Joy Mann JONES, Defendant.
Doster, Post, Silverman, Foushee, Post & Patton, P.A., by Jonathan Silverman, for plaintiff-appellant. Harrington, Gilleland, Winstead, Feindel & Lucas, LLP, by Eddie S. Winstead, III and Susan M. Feindel, for defendant-appellee.
Doster, Post, Silverman, Foushee, Post & Patton, P.A., by Jonathan Silverman, for plaintiff-appellant.
Harrington, Gilleland, Winstead, Feindel & Lucas, LLP, by Eddie S. Winstead, III and Susan M. Feindel, for defendant-appellee.
GEER, Judge.
Plaintiff Bruce Ray Jones filed a complaint seeking to rescind a separation agreement he entered into with his former wife, defendant Joy Mann Jones, on the grounds of duress, coercion, undue influence, and substantive and procedural unconscionability. Plaintiff appeals from the trial court's order granting defendant's motion for summary judgment based on the affirmative defense of ratification. The uncontroverted evidence shows that under the terms of the agreement, plaintiff received possession of three vehicles, a camper, and personal property and retained as his sole property assets totaling approximately 30% of the net marital estate and that plaintiff performed under the agreement by making alimony payments. In addition, plaintiff has failed to produce evidence of duress or undue influence that continued in the months after the parties entered into the agreement. Because the uncontroverted evidence, therefore, establishes that plaintiff ratified the separation agreement, we affirm.
Facts
The parties were married on 21 October 1978. They had two children during their marriage: Heather, born 28 September 1985, and Sarah, born 13 November 1990. In early October 2011, defendant discovered that plaintiff was having an extramarital affair with a co-worker, Wynonna Hovatter. Defendant met with an attorney and hired a private investigator to follow plaintiff to gather evidence of the affair. On 14 October 2011, defendant confronted plaintiff in their home about the affair. The parties' daughters accompanied defendant to the couple's home and waited outside during the confrontation.
The confrontation lasted for about four hours and was extremely emotional. Plaintiff admitted to having an affair and begged for forgiveness. Defendant told plaintiff that she still loved plaintiff and wanted her daughters to have a father. Defendant said that plaintiff could continue to stay in their home and carry on with their lives as if they were married if he signed a separation agreement. Defendant presented plaintiff with a list of demands and told plaintiff that signing a separation agreement was a condition to saving the relationship and healing the family. She made it clear that if plaintiff did not sign the agreement, there would be no chance of reconciliation.
Plaintiff signed a separation agreement five days later on 19 October 2011, without consulting an attorney. The separation agreement provided, in pertinent part, the following terms. Plaintiff agreed to transfer the marital residence and adjoining property, owned by the parties as tenants by the entirety, to defendant. Plaintiff would, however, remain responsible for the maintenance of the property. Defendant agreed to assume liability for the outstanding debt to BB & T on the first mortgage on the property, and plaintiff agreed to assume sole liability for the outstanding debt on the second mortgage owed to BB & T and pay it in full within 48 months.
Plaintiff's Progress Energy 401(k) Savings and Stock Ownership Plan and his Progress Energy Pension Plan would be equally divided between the parties by a Qualified Domestic Relations Order (“QDRO”). Plaintiff's Wells Fargo Individual Retirement Account would remain his sole and separate property, and defendant's State Employee's Retirement Account would remain her sole and separate property. Defendant would receive title and possession of the Chevrolet Equinox, and the 2011 Chevrolet Cruz, 1997 Chevrolet Silverado, 1999 Chevrolet, and a camper would be the sole and separate property of plaintiff. Plaintiff would assume sole liability for a BB & T home equity line of credit and pay it in full within 48 months. Plaintiff also agreed to maintain a life insurance policy with a face value of at least $300,000.00 naming defendant as beneficiary and the parties' two daughters as alternate beneficiaries.
Additionally, plaintiff agreed to pay alimony in the amount of $3,750.00 per month beginning 1 November 2011. The agreement specified that the alimony would continue until plaintiff remarried or cohabitated with another person as defined in N.C. Gen.Stat. § 50–16.9(b) (2013) or until either plaintiff or defendant died.
Subsequently, plaintiff conveyed the marital residence and adjoining property to defendant by non-warranty deed on 19 October 2011. He began making alimony payments in November 2011, and, on 15 February 2012, he consented to the entry of two QDROs for his Progress Energy 401(k) and Pension Plan.
On 24 April 2012, plaintiff initiated this action to vacate and declare void the separation agreement on the grounds that it was procedurally and substantively unconscionable and that the execution of the agreement was the result of duress, coercion and undue influence by defendant upon plaintiff. Defendant filed an answer and counterclaim for attorney's fees on 12 July 2012. On 22 August 2012, plaintiff moved to dismiss defendant's counterclaim.
On 17 May 2013, defendant moved for summary judgment and to amend her answer to allege the affirmative defense of ratification. On 4 June 2013, the trial court denied defendant's motion for summary judgment and granted defendant's motion to amend her answer. The same day, defendant filed an amended answer alleging the affirmative defense of ratification. On 21 June 2013, plaintiff moved to dismiss defendant's amended counterclaim for attorney's fees. On 1 August 2013, defendant moved for summary judgment on the grounds of ratification.
On 9 December 2013, the trial court granted plaintiff's motion to dismiss defendant's counterclaim. On 18 December 2013, the trial court entered an order granting defendant's motion for summary judgment, finding “there is no genuine issue as to any material fact and that the Defendant is entitled to a judgment as a matter of law based on the affirmative defense of ratification [.]” Plaintiff timely appealed the order to this Court.
Discussion
On appeal, plaintiff argues that the trial court erred in granting defendant's motion for summary judgment because there existed genuine issues of material fact as to whether plaintiff had ratified the separation agreement. We disagree.
Summary judgment is appropriate “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” N.C.R. Civ. P. 56(c). This Court reviews de novo an order granting summary judgment, viewing the evidence in the light most favorable to the non-moving party. Honeycutt v. Honeycutt, 208 N.C.App. 70, 77, 701 S.E.2d 689, 694 (2010).
This Court has held that “ ‘[a] marital separation agreement is generally subject to the same rules of law with respect to its enforcement as any other contract.’ “ Reeder v. Carter,––– N.C.App. ––––, ––––, 740 S.E.2d 913, 917 (2013) (quoting Moore v. Moore, 297 N.C. 14, 16, 252 S.E.2d 735, 737 (1979) ). “To be valid, ‘a separation agreement must be untainted by fraud, must be in all respects fair, reasonable and just, and must have been entered into without coercion or the exercise of undue influence, and with full knowledge of all the circumstances, conditions, and rights of the contracting parties.’ “ Eubanks v. Eubanks, 273 N .C. 189, 196, 159 S.E.2d 562, 567 (1968) (quoting Taylor v. Taylor, 197 N.C. 197, 201, 148 S.E. 171, 173 (1929) ).
However, it is well settled that “a transaction procured by either fraud, duress or undue influence may be ratified by the victim so as to preclude a subsequent suit to set the transaction aside.” Link v. Link, 278 N.C. 181, 197, 179 S.E.2d 697, 706 (1971). It is well established that
[a] party ratifies an agreement by retroactively authorize[ing] or otherwise approv[ing][it], ... either expressly or by implication. Thus, ratification can occur where a party accepts benefits and performs under an agreement. The act only constitutes ratification if it is done with full knowledge that the acceptance of benefits or the performance arises pursuant to the agreement and is done so without any duress.
Goodwin v. Webb, 152 N.C.App. 650, 656–57, 568 S.E.2d 311, 315 (2002) (Green, J., dissenting) (internal citations and quotation marks omitted), reversed per curiam for reasons stated in dissenting opinion, 357 N.C. 40, 577 S.E.2d 621 (2003).
In Ridings v. Ridings, 55 N.C.App. 630, 630, 286 S.E.2d 614, 615 (1982), the plaintiff-husband sought to set aside a separation agreement on the grounds of mental incompetency and undue influence. The trial court granted the defendant-wife's motion for summary judgment. Id.at 631, 286 S.E.2d at 615. This Court affirmed on the grounds that the plaintiff had ratified the separation agreement. Id.at 634, 286 S.E.2d at 617.
This Court first noted that the evidence in the record failed to reveal any undue influence occurring after the agreement was signed on 8 June 1978. Id.at 632, 286 S.E.2d at 616. Then, the Court pointed out that from 8 June 1978 until 29 November 1978 when the plaintiff filed the action to rescind the agreement, the plaintiff “accepted and retained all benefit growing out of the agreement.” Id.Specifically, the defendant-wife had made payments on the marital residence and contributed to its general maintenance and “transferred to plaintiff certain property listed in the separation agreement, including title to and possession of a 1974 Cadillac automobile.” Id.Additionally, the plaintiff “recognized the legitimacy of the agreement by continued performance thereunder after any purported duress had terminated” by making alimony payments and “conveying full possession and title of the parties' 1967 Chevrolet automobile.” Id.This Court concluded that where the plaintiff “acquiesced for months in the separation agreement,” he failed to show grounds for rescission based upon undue influence. Id.at 632–33, 286 S.E.2d at 616.
Here, plaintiff argues that defendant exerted undue influence on him to force him to sign the separation agreement by taking advantage of his emotional and vulnerable state of mind when she confronted him on 14 October 2011 and by leading him to believe that signing the separation agreement was his only chance of salvaging his marriage and maintaining a relationship with defendant and his daughters. However, we need not address whether there were genuine issues of material fact concerning undue influence and duress at the time the parties entered the separation agreement because uncontroverted evidence in the record shows that plaintiff subsequently ratified the agreement.
We first note that here, as in Ridings,the record does not reveal any acts of undue influence by defendant after the date the agreement was signed. Indeed, the evidence in the record shows that shortly after the parties entered into the separation agreement, it became clear to plaintiff that there was no chance of reconciliation.
Defendant sent plaintiff an email on 4 November 2011 stating: “I had hoped that you would chose [sic] us and someday be able to come back home, but I understand now that it would have been nearly impossible. I just was holding on to our plans for the future, and knew that it would have made things easier for the girls. So I wasn't misleading you. That was my hope.” Plaintiff himself acknowledged that reconciliation was not going to occur in a handwritten note found under defendant's pillow on 20 November 2011, in which he wrote: “I wish we would have had a chance to reconcile. I understand why we can't. I see the signs now that you never had that in mind.” Finally, at plaintiff's 25 September 2012 deposition, plaintiff testified that he resumed a sexual relationship with Ms. Hovatter “[s]ince I found out I couldn't come home” and that he had been living with her “[a]bout eight months, eight and a half months.”
This evidence establishes that as early as November 2011, defendant made it clear to plaintiff that they would not be getting back together and that by no later than February 2012, defendant was no longer under the impression that he could salvage his marriage. Thus, the leverage defendant allegedly used to coerce plaintiff into signing the separation agreement—the possibility of reconciliation—ceased to exist shortly after plaintiff signed the agreement.
Nonetheless, even after plaintiff realized that defendant had no intention of trying to save their marriage, plaintiff retained benefits and continued to perform his obligations under the agreement. Specifically, plaintiff received title to three automobiles as his sole and separate property and received possession of personal property including a camper, a tractor, a mower, and a bushhog. On 15 February 2012, plaintiff consented to the entry of two QDROs under which he received a 50% interest in his Progress Energy 401(k) and pension plan. Additionally, plaintiff made alimony payments to defendant from November 2011 until December 2012. Thus, through plaintiff's acceptance and retention of benefits, and continued performance under the separation agreement, he acquiesced in the separation agreement and ratified it.
Plaintiff argues, however, that he did not receive any benefit under the agreement because he “had nothing of value passed from [defendant] to him, received only 30% of the net marital estate and obligated himself to pay the majority of his net monthly income for his lifetime to [defendant] as alimony at a time when his financial future with Progress Energy was in an extraordinarily precarious position.” We disagree. The transfer of property constitutes a benefit under a separation agreement. See Goodwin, 152 N.C.App. at 657, 568 S.E.2d at 316 (Greene, J., dissenting) (receipt of $160,000.00 check, tracts of land, and truck constituted benefits under separation agreement). See also Ridings, 55 N.C.App. at 632, 286 S.E.2d at 616 (transfer to plaintiff-husband of “certain property listed in the separation agreement, including title to and possession of a 1974 Cadillac automobile” constituted benefit under separation agreement).
This holds true even if the party seeking to rescind the agreement believes that they are entitled to more benefits than received under the agreement. See Honeycutt, 208 N.C.App. at 84, 701 S.E.2d at 695 (holding plaintiff's retention of assets received under settlement agreement demonstrated ratification of the agreement even though plaintiff argued she was entitled to more than she received).
In conclusion, plaintiff has failed to point to any evidence in the record of any continued exercise of undue influence or duress by defendant after plaintiff executed the separation agreement. Because the uncontroverted evidence shows that plaintiff complied with the terms of the separation agreement and received benefits thereunder in the form of the transfer of certain marital property, there is no genuine issue of material fact as to whether defendant ratified the agreement, and we affirm the trial court's granting of defendant's motion for summary judgment.
Affirmed.
Chief Judge McGEE and Judge STROUD concur.
Report per Rule 30(e).
Opinion
Appeal by plaintiff from order entered 18 December 2013 by Judge Jacquelyn L. Lee in Lee County District Court. Heard in the Court of Appeals 25 September 2014.