Swain v. Swain
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An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. NO. COA14-181 NORTH CAROLINA COURT OF APPEALS Filed: 5 September 2014 LEVONNE H. SWAIN, Plaintiff, v. Craven County No. 10 CVD 888 BRYAN S. SWAIN, Defendant. Appeal by defendant from order and judgment entered 17 June 2013 by Judge Paul Quinn in Craven County District Court. Heard in the Court of Appeals 14 August 2014. Chesnutt, Clemmons & Peacock, P.A., by Gary H. Clemmons, for plaintiff-appellee. McCotter Ashton, P.A., defendant-appellant. by Rudolph A. Ashton, III, for HUNTER, JR., Robert N., Judge. Bryan S. Swain ( Defendant ) appeals from an order granting Levonne H. Swain s ( Plaintiff ) motion for summary judgment and concluding that the separation agreement and property settlement entered affirm. into by the parties is valid and enforceable. We -2Plaintiff and Defendant were married on 30 December 1999. On 10 June 2009, the parties separated. parties entered into Agreement ( the Plaintiff received, furnishings, acquired by and a Separation Agreement ). inter the parties and Property Pursuant alia, approximately On 3 August 2009, the the to the Agreement, home, household marital eighty during Settlement acres the of real marriage. property Defendant received, inter alia, a 1999 Jeep Wrangler, full ownership of his 401(k) assets, a gun collection, and a division of shop tools acquired by the parties during the marriage. Defendant was also paid $15,000 from his father-in-law as an incentive to sign the Agreement. On 14 June 2010, Plaintiff began this action by filing a complaint seeking a judgment of absolute divorce from Defendant based on a one year separation. Defendant filed an answer on 29 July 2010 alleging that the Agreement resolved all issues which arose out of the marriage and requested a judgment of absolute divorce. Before a hearing in the matter, Defendant obtained new counsel and on 9 August 2010, Defendant filed an amended answer and counterclaim seeking rescission of the Agreement and an equitable distribution of property upon divorce pursuant to N.C. Gen. Stat. § 50-20 (2013). Specifically, Defendant alleged that -3the Agreement fundamental should be unfairness, rescinded (2) based mental on: (1) incapacity, patent (3) and coercion, duress, and undue influence, and (4) mistake. Following a reply by Plaintiff to Defendant s counterclaim, the parties began discovery. Thereafter, on 22 January 2013, Plaintiff moved for partial summary judgment on the issue of whether the Agreement was valid and enforceable, asserting that Defendant had ratified the Agreement. was held on 3 June 2013. A hearing on the motion On 17 June 2013, the trial court entered an order and judgment granting Plaintiff s motion and concluding Plaintiff that then the moved Agreement for was summary valid judgment and on enforceable. the issue of absolute divorce, which the trial court granted on 23 July 2013. Defendant appeals. Before this Court, Defendant contends that the trial court erred in granting summary judgment in favor of Plaintiff with respect to the validity of the Agreement because there are genuine issues of material fact concerning Defendant s grounds for rescission. Specifically, Defendant contends that he forecasted evidence sufficient to send the following issues to the trier of fact: (1) mental capacity, (2) coercion, duress, and undue influence, and (3) constructive fraud. -4Although Defendant s answer and counterclaim did not allege constructive fraud as a basis for rescission, the hearing transcript reveals that argument was made on the issue before the trial court at the motion hearing. At the hearing, Defendant argued that the evidence supported a finding that the parties, as husband and wife, were in a fiduciary relationship when the Agreement was signed and that Plaintiff took advantage of that herself. relationship to procure a settlement favorable to See generally Searcy v. Searcy, 215 N.C. App. 568, 573, 715 S.E.2d 853, 857 (2011) ( A claim based on constructive fraud is sufficient if it alleges facts and circumstances (1) which created the relation of trust and confidence, and (2) [which] led transaction up in to which and surrounded [the party] the is consummation alleged to of have the taken advantage of his position of trust. (internal quotation marks and citation omitted) (first alteration in original)). [T]he nature of summary judgment procedure (G.S. 1A-1, Rule 56), coupled with our generally liberal rules relating to amendment of pleadings, require that unpleaded affirmative defenses be deemed part of the pleadings where such defenses are raised in a hearing on motion for summary judgment. Thus, although it is better practice to require a formal amendment to the pleadings, unpleaded defenses, when raised by the evidence, should be considered in resolving a motion -5for summary judgment. Ridings v. Ridings, 55 N.C. App. 630, 632, 286 S.E.2d 614, 615 16 (1982) (internal quotation marks and citations omitted) (alteration in original); see also Searcy, 215 N.C. App. at 575, 715 S.E.2d at 858 (considering a constructive fraud claim based on evidence presented at the hearing on summary judgment). Accordingly, we consider Defendant s constructive fraud claim properly before us. Court makes no However, because Defendant s brief to this argument with respect to the fundamental unfairness of the Agreement or mistake, these issues have been waived on appeal. on appeal briefs. is See N.C. R. App. P. 28 ( The scope of review limited to issues so presented in the several Issues not presented and discussed in a party s brief are deemed abandoned. ). Summary judgment is appropriate where 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. 56(c). N.C. R. Civ. P. We review a trial court s order granting or denying summary judgment de novo. considers the matter anew Under a de novo review, the court and freely substitutes its own -6judgment for that of the lower tribunal. Craig v. New Hanover Cnty. Bd. of Educ., 363 N.C. 334, 337, 678 S.E.2d 351, 354 (2009) (internal quotation marks and citations omitted). Parties to a marriage may, by written agreement, forego their right to equitable distribution and decide between themselves how their marital estate will be divided following divorce. N.C. Gen. Stat. § 50-20(d). [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). Thus, such agreements are subject to recission on the grounds of (1) lack of mental capacity, (2) mistake, (3) fraud, (4) duress, or (5) undue influence. Searcy, 215 N.C. App. at 572, 715 S.E.2d at 857. However, 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 so long as, at the time of the ratification, the victim had full knowledge of the facts and was then capable of acting freely. 278 N.C. 181, 197, 179 S.E.2d 697, 706 07 (1971). Link v. Link, Likewise, a transaction entered into by a party who lacks capacity may be ratified so as to preclude a subsequent suit to set the -7transaction aside. at 616 17. party Ridings, 55 N.C. App. at 633 34, 286 S.E.2d Because there is a presumption of competence, the countering evidence of ratification on the basis of incompetency must present evidence of continued incompetence at the time of the ratification. A party authoriz[ing] expressly or ratifies or by Id. at 634, 286 S.E.2d at 617. an otherwise implication. agreement approv[ing] Thus, by retroactively [it], . . . either ratification can occur where a party accepts benefits and performs under an agreement. Goodwin v. Webb, 152 N.C. App. 650, 656, 568 S.E.2d 311, 315 (2002) (Greene, (internal J., citation dissenting) omitted), (alteration reversed for in reasons original) stated dissenting opinion by 357 N.C. 40, 577 S.E.2d 621 (2003). in For example, in Lowry v. Lowry, 99 N.C. App. 246, 393 S.E.2d 141 (1990), we upheld ratification where summary the judgment plaintiff on the acquiesced basis and of a received benefits under a separation agreement for almost three years without complaint. Id. at 253 54, 393 S.E.2d at 145 46; see also Tripp v. Tripp, 266 N.C. 378, 380, 146 S.E.2d 507, 508 (1966) (finding ratification where the plaintiff made no complaint until after she had received the benefits under the contract for two full years); Hill v. Hill, 94 N.C. App. 474, -8479, 380 S.E.2d 540, 544 (1989) (finding ratification where wife continued to accept benefits long after she became aware of the alleged wrongdoing). Here, we do not need to address whether there were genuine issues of material fact concerning Defendant s alleged grounds for rescission at uncontroverted subsequently Agreement on the time evidence ratified 3 in the August the Agreement the record agreement. 2009 and was shows made that Defendant did not because Defendant signed present a the formal objection to the Agreement until he filed his amended answer and counterclaim on 10 August 2010. of time, Wrangler, tools. Defendant the gun and possessed and his collection, the division 1999 Jeep the shop of Defendant did not attempt to return these assets to the marital estate. spent received During the intervening period the Moreover, Defendant received, deposited, and $15,000 from his father-in-law. Defendant also deposited $24,000 in 401(k) assets into his bank account and spent at least a portion of that money. Furthermore, Defendant in admitted both that under legal disability. evidence shows a he his answer was not and amended presently answer, incompetent or Without resolving whether the record genuine issue of material fact as to -9Defendant s alleged grounds for rescission when the Agreement was made, we hold that Defendant has failed to produce evidence of incompetence, fraud, coercion, duress, or when Defendant acquiesced in the Agreement. undue influence Accordingly, we hold that Defendant has ratified the Agreement and is estopped from denying its authority. 121 S.E.2d 876 (1961). See Pulley v. Pulley, 255 N.C. 423, Thus, the trial court did not err in granting Plaintiff s motion for summary judgment with respect to the validity of the Agreement. The affirmed. AFFIRMED. Judges STEELMAN and GEER concur. Report per Rule 30(e). trial court s order is
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