Appeal by defendant from order signed 21 December 2000 by
Judge Jane V. Harper in District Court, Mecklenburg County. Heard
in the Court of Appeals 6 December 2001.
R. Lee Myers and Timothy M. Stokes for plaintiff-appellee.
Joe T. Millsaps for defendant-appellant.
McGEE, Judge.
Donna I. Newlands (plaintiff) and Francis A. Newlands
(defendant) were married on 12 June 1965. Plaintiff and defendant
separated on 16 November 1992 and on that date executed a
Separation and Property Settlement Agreement (separation
agreement). The separation agreement stated in part:
8. Equitable Distribution. This
[separation agreement] is intended to define
the manner in which the marital property shall
be distributed between the parties under . . .
N.C.G.S. § 50-20 et. seq. The parties agree
and stipulate that there has been a full,
frank and exhaustive discussion of the assets
and the liabilities held by each party and by
themselves jointly, and they do hereby waive
and relinquish any further right to make any
additional inquiry or investigation into the
nature, extent or value of any assets which
are or may be owned or held by the otherparty. The distribution of the marital
property as defined in this document is just,
fair and reasonable and shall constitute an
equitable distribution of the marital property
in satisfaction of [N.C.G.S.] § 50-20 et. seq.
Each party releases, relinquishes and
renounces any additional or further claim for
equitable distribution of the marital
property, and either party may plead this
document in bar of or as a defense to any
further claim for equitable distribution.
This document is executed pursuant to the
provisions of N.C.G.S. § 50-20(b).
Additionally, each party recognizes that this
is a full, final and permanent settlement of
all of their marital property rights which
shall remain effective . . . . The parties
further agree that no court shall have any
authority to modify or change in any respect
the terms and conditions of this equitable
distribution of marital property.
. . .
21. Disclosure and Inducement. Each
party warrants to the other that he or she has
made a full and complete disclosure as to his
or her financial status. Each has informed
the other as to all assets, real and personal,
tangible and intangible, in which each party
has any interest, legal or equitable.
FURTHER, EACH HAS MADE DISCLOSURE AS TO THE
REASONABLE WORTH OR MARKET VALUE OF SUCH
ASSETS. These assets include interest in
pension, profit sharing and/or retirement
benefits; all real estate; all business
interests; all life insurance; all medical,
casualty, disability or other insurance
coverage; all cash or other deposit accounts;
all stocks, bonds and/or mutual funds; all
tangible, personal property . . . . Further,
each has made a full and complete disclosure
as to all income or other funds received by
each from any source whatsoever. The
disclosures made by each are recognized as
being material and are made to induce the
other to execute this Agreement. In the event
of a later determination of any material
misrepresentation or omission with respect to
the financial condition as outlined above,
then such material misrepresentation or
omission may be the basis for a determinationthat this Agreement is null and void.
In the separation agreement, plaintiff and defendant also agreed to
execute a Qualified Domestic Relations Order (QDRO) transferring a
portion of defendant's tax-deferred savings plan to plaintiff.
Plaintiff filed a complaint on 30 November 1992 requesting
equitable distribution of the marital property pursuant to N.C.
Gen. Stat. § 50-20 et. seq. The trial court entered a QDRO on 14
December 1992. The parties were divorced on 4 August 1997.
Plaintiff filed a notice of equitable distribution hearing on or
about 19 January 2000. Defendant filed a motion to dismiss
plaintiff's equitable distribution claim on 8 May 2000. The trial
court granted defendant's motion to dismiss in an order dated 2
June 2000, which states in relevant part:
THIS CAUSE came on for hearing before the
Honorable Jane V. Harper, District Court Judge
Presiding . . . on defendant's Motion to
Dismiss for laches and failure to comply with
the Rules of Court.
. . .
The Court having reviewed the file and
having heard arguments of counsel observes
that the Complaint, Summons and a Consent
Qualified Domestic Relations Order were filed
prior to December 12, 1992 by plaintiff's
counsel. Thereafter, there was no activity in
the file for a period in excess of seven
years, at which time plaintiff gave notice of
an Equitable Distribution Pretrial Hearing
scheduled for Jan. 18, 2000.
NOW, THEREFORE, in the discretion of the
Court defendant's Motion to Dismiss is allowed
and plaintiff's claim is dismissed except for
the Consent QDRO referenced above.
Plaintiff appealed the 2 June 2000 order to our Court and wevacated the order of the trial court and remanded the matter for
appropriate findings of fact in an unpublished opinion, Newlands v.
Newlands, 148 N.C. App. 215, 560 S.E.2d 244 (2001)(Newlands I).
Plaintiff filed the complaint in the action before us on 12
September 2000 (Newlands II) alleging that defendant breached the
terms of the separation agreement by failing to disclose to
plaintiff "the value of one or more of the IBM Pension or
Retirement accounts held by or on behalf of the [d]efendant by
IBM." As a result of the alleged breach, plaintiff requested that
the trial court rescind and set aside the separation agreement and
declare the separation agreement null and void. Plaintiff also
claimed she was entitled to equitable distribution of marital
property pursuant to N.C. Gen. Stat. § 50-20, et. seq. and
requested the trial court to divide the marital property.
Defendant was served with copies of the summons and complaint
at his residence in Boynton Beach, Florida on 19 September 2000.
In response to plaintiff's complaint, defendant filed a motion to
dismiss on 11 October 2000 alleging (1) lack of personal
jurisdiction, (2) lack of subject matter jurisdiction, and (3)
failure to state a claim for relief.
Plaintiff filed a voluntary dismissal without prejudice of her
claim for equitable distribution on 14 November 2000. Following a
hearing, the trial court signed an order dated 21 December 2000
denying defendant's motion to dismiss, concluding that the trial
court had both personal and subject matter jurisdiction and that
the complaint stated a claim for relief. Defendant appeals fromthis order.
I.
We must first determine whether this appeal is properly before
our Court. "An interlocutory order is one made during the pendency
of an action, which does not dispose of the case, but leaves it for
further action by the trial court in order to settle and determine
the entire controversy."
Veazey v. City of Durham, 231 N.C. 357,
361-62, 57 S.E.2d 377, 381,
reh'g denied, 232 N.C. 744, 59 S.E.2d
429 (1950). An interlocutory order is not immediately appealable,
unless otherwise authorized by statute.
Id. The purpose of this
rule "is to prevent fragmentary, premature, and unnecessary appeals
by permitting the trial divisions to have done with a case fully
and finally before it is presented to the appellate division."
Waters v. Personnel, Inc., 294 N.C. 200, 207, 240 S.E.2d 338, 343
(1978).
Generally, an order denying a motion to dismiss is
interlocutory and therefore not immediately appealable.
RPR &
Assocs. v. State, 139 N.C. App. 525, 527, 534 S.E.2d 247, 249
(2000) (citation omitted).
Nevertheless, when denial of a motion
to dismiss affects a substantial right, a party has a right to
immediate appeal.
Summey v. Barker, 142 N.C. App. 688, 689, 544
S.E.2d 262, 264 (2001) (citing N.C. Gen. Stat. § 1-277(a) and 7A-
27(d)(1)).
In the case before us, defendant contends the trial court
erred in denying his motion to dismiss because the trial court
lacked personal jurisdiction. A denial of a motion to dismissbased upon lack of personal jurisdiction is immediately appealable
pursuant to N.C. Gen. Stat. § 1-277(b) (1999). Defendant's appeal
in this case, based upon lack of personal jurisdiction, is
therefore immediately appealable.
Defendant also contends the trial court erred in denying his
motion to dismiss because the trial court lacked subject matter
jurisdiction. Ordinarily, an "order denying a motion to dismiss
for lack of subject matter jurisdiction is interlocutory and not
immediately appealable."
Shaver v. Construction Co., 54 N.C. App.
486, 487, 283 S.E.2d 526, 527 (1981). However, when a defendant
"challenge[s] the trial court's power to exercise personal
jurisdiction over him, we must, at [the same] time, decide the
issue he has raised concerning subject matter jurisdiction."
Church v. Carter, 94 N.C. App. 286, 288, 380 S.E.2d 167, 168 (1989)
(citing N.C. Gen. Stat. § 1-75.4 (1983), which states that subject
matter jurisdiction is a prerequisite to a court exercising
personal jurisdiction). Accordingly, in the case before us,
because defendant challenged both subject matter and personal
jurisdiction, defendant's appeal on the issue of subject matter
jurisdiction is also properly before this Court.
Finally, defendant contends the trial court erred in denying
his motion to dismiss because plaintiff failed to state a claim for
relief. An order denying a motion to dismiss for failure to state
a claim is interlocutory and not immediately appealable.
Teachy v.
Coble Dairies, Inc., 306 N.C. 324, 326, 293 S.E.2d 182, 183 (1982).
If an appeal of right does not lie from an interlocutory order,this Court in its discretion may nevertheless entertain an appeal
from that decree by the issuance of a writ of certiorari. N.C.
Gen. Stat. § 7A-32(c) (1999); N.C.R. App. P. 21. In the present
case, defendant has filed a petition for a writ of certiorari
asking this Court to review the denial of his motion to dismiss for
plaintiff's failure to state a claim. In the interest of judicial
economy, we elect to do so in order to hear defendant's appeal in
its entirety.
II.
Defendant first argues that the trial court erred in denying
his motion to dismiss because the trial court did not have subject
matter jurisdiction.
N.C. Gen. Stat. § 1-294, states that
[w]hen an appeal is perfected . . . it stays
all further proceedings in the court below
upon the judgment appealed from, or upon the
matter embraced therein; but the court below
may proceed upon any other matter included in
the action and not affected by the judgment
appealed from.
N.C. Gen. Stat. § 1-294 (1999).
Defendant argues essentially that the issues in the case now
before us are the same issues determined by our Court in
Newlands
I. He further argues that in this case, plaintiff is seeking to
set aside the separation agreement in order to pursue an equitable
distribution of marital property, which claim was dismissed by the
trial court in
Newlands I. According to defendant, plaintiff's
voluntary dismissal of her claim for equitable distribution in this
case does not alter the fact that the matters embraced in
NewlandsI and in the case before us are the same. Defendant argues that
the issues in
Newlands II are the same "matter[s] embraced in the
judgment" in
Newlands I, and the appeal in
Newlands I stayed all
further proceedings by the trial court, pursuant to N.C.G.S. § 1-
294. We disagree.
The trial court's order in
Newlands I addressed issues related
to defendant's motion to dismiss plaintiff's notice of an equitable
distribution hearing due to laches and failure to comply with local
rules of court. In the complaint filed in the case now before us,
plaintiff alleges that defendant violated the terms of the parties'
separation agreement. Plaintiff asked the trial court to "rescind
and set aside the [separation agreement] and to declare [the] same
null and void" and to make an equitable distribution of marital
property. Plaintiff later filed a voluntary dismissal of her claim
for equitable distribution. Thus, in the case before us, there is
no claim by plaintiff for equitable distribution pursuant to N.C.
Gen. Stat. § 50-20
et. seq. There is nothing in the
Newlands I
order showing that the validity of the separation agreement was
previously determined by the trial court.
The trial court, in determining that it had subject matter
jurisdiction in
Newlands II, did not improperly proceed on a matter
included within the action then pending before this Court. The
trial court therefore correctly found it had subject matter
jurisdiction.
III.
Defendant also argues that the trial court did not havepersonal jurisdiction over him because when he was served with the
summons and complaint in the present case, he had been divorced
from plaintiff for over three years and was a "bona fide resident
of the State of Florida."
Upon review of an order determining personal jurisdiction, we
must determine if the trial court's findings of fact are supported
by competent evidence.
Replacements, Ltd. v. Midwesterling, 133
N.C. App. 139, 140, 515 S.E.2d 46, 48 (1999). In this case, the
trial court found in relevant part that
2. Defendant is a resident of the State
of Florida. . . .
3. The complaint alleges that the parties
were formerly husband and wife and resided
together in the State of North Carolina. In
1992, while residing in North Carolina, they
entered into a [separation agreement] which
was executed here and which by its terms was
to be governed by North Carolina law. They
were subsequently divorced by a judgment of
this court.
The trial court concluded it had personal jurisdiction over
defendant.
Our State's long-arm statute, N.C. Gen. Stat. § 1-75.4 (1999),
"lists twelve 'circumstances' under which a court, having subject
matter jurisdiction, will also acquire personal jurisdiction."
Church, 94 N.C. App. at 290, 380 S.E.2d at 169. Defendant argues
that plaintiff must comply with the requirements of N.C.G.S. § 1-
75.4(12), which states that:
[a] court of this State having jurisdiction of
the subject matter has jurisdiction over a
person served in an action . . . under . . .
the following circumstances:
. . .
(12) Marital Relationship. - In any action
under Chapter 50 that arises out of the
marital relationship within this State,
notwithstanding subsequent departure from the
State, if the other party to the marital
relationship continues to reside in this
State.
N.C. Gen. Stat. § 1-75.4(12) (1999). Defendant argues that because
plaintiff took a voluntary dismissal of her equitable distribution
claim, no statutory basis for long-arm jurisdiction exists under
N.C. Gen. Stat. § 1-75.4(12) because plaintiff's action was not
brought under Chapter 50 of our General Statutes.
Defendant also argues that "[a]lthough the contract of
separation was signed in North Carolina, once divorce ensues and
Defendant departs this jurisdiction, no statute authorizes
jurisdiction by the [trial court] over [defendant], and Plaintiff
is required to go to Florida to obtain personal jurisdiction over
Defendant." We disagree.
The trial court's findings of fact supporting its conclusion
that the trial court had personal jurisdiction over defendant rely
on the separation agreement, and a proper statutory basis exists
for plaintiff to assert personal jurisdiction over defendant based
upon the separation agreement. Subsection 5(c) of our long-arm
statute states that our courts have jurisdiction over an action
which:
[a]rises out of a promise, made anywhere to
the plaintiff or to some third party for the
plaintiff's benefit, by the defendant to
deliver or receive within this State, or to
ship from this State goods, documents of
title, or other things of value[.]
N.C. Gen. Stat. § 1-75.4(5)(c) (1999).
"A separation agreement is enforceable at law as is any other
contract." Pope v. Pope, 38 N.C. App. 328, 330, 248 S.E.2d 260,
261 (1978). Because "a separation agreement is treated just like
any other contract under North Carolina law and since G.S.1-
75.4(5)(c) applies to 'Local . . . Contracts,' it is clear that
the statute governs separation agreements as well as purely
commercial contracts." Id.
We hold that the trial court's findings are supported by
competent evidence in the record and the trial court did not err in
asserting personal jurisdiction over defendant.
Defendant also argues that N.C. Gen. Stat. § 50-11 destroyed
the right of plaintiff to serve defendant with a complaint for
equitable distribution. N.C. Gen. Stat. § 50-11 reads in part:
(a) After a judgment of divorce . . . all
rights arising out of the marriage shall cease
and determine except as hereinafter set out[.]
. . .
(e) An absolute divorce obtained within this
State shall destroy the right of a spouse to
equitable distribution under G.S. 50-20 unless
the right is asserted prior to judgment of
absolute divorce[.]
N.C. Gen. Stat. § 50-11(a), (e) (1999). However, as stated above,
this is not an action for equitable distribution, but instead an
action to declare the separation agreement invalid. Defendant's
argument is without merit.
IV.
Finally defendant contends the trial court erred in denyinghis motion to dismiss because plaintiff failed to state a claim for
relief. N.C.G.S. § 1A-1, Rule 12(b)(6).
Upon review of the trial court's denial of defendant's motion
to dismiss, we must determine "whether, as a matter of law, the
complaint, treating its allegations as true, is sufficient to state
a claim upon which relief may be granted."
McCarn v. Beach, 128
N.C. App. 435, 437, 496 S.E. 2d 402, 404,
disc.
review denied, 348
N.C. 73, 505 S.E.2d 874 (1998).
As previously stated, plaintiff's outstanding claim is based
upon breach of contract. To assert a claim for breach of contract,
the claimant must show there is a valid contract and the terms of
that contract were breached.
Lake Mary Ltd. Part. v. Johnston, 145
N.C. App. 525, 536, 551 S.E.2d 546, 554,
disc. review denied, 354
N.C. 363, 557 S.E.2d 538 (2001). Taking plaintiff's allegations as
true, she has alleged sufficient facts to establish a claim upon
which relief can be granted. In her complaint, plaintiff alleged
the parties executed a separation agreement, and that defendant
failed to fully disclose to her the value of certain accounts, as
required by the terms of the separation agreement.
Defendant does not dispute plaintiff's underlying breach of
contract claim. Instead, he contends that
res judicata bars the
present action, because in
Newlands I and II "the parties are the
same; the issues are the same, and the judgment is mutually binding
and estops either party from raising the precise issue a second
time."
Res judicata is an affirmative defense that is properly raisedin a pleading to a preceding pleading. N.C. Gen. Stat. § 1A-1,
Rule 8(c) (1999). However, if a "'complaint discloses an
unconditional affirmative defense which defeats the claim asserted
or pleads facts which deny the right to any relief on the alleged
claim it will be dismissed.'"
Brown v. Brown, 21 N.C. App. 435,
437, 204 S.E.2d 534, 536 (1974) (quoting
Sutton v. Duke, 277 N.C.
94, 176 S.E.2d 161 (1970)).
As we have previously determined,
Newlands I embraced matters
concerning plaintiff's request for equitable distribution, her
notice of equitable distribution hearing, and defendant's motion to
dismiss such notice of hearing. In the case now before us,
plaintiff seeks to rescind the separation agreement entered into
between the parties. The causes of action are not the same and the
trial court did not err in finding plaintiff had stated a claim for
relief.
The trial court did not err in denying defendant's motion to
dismiss for failure to state a claim upon which relief can be
granted, because plaintiff's complaint properly states a claim for
breach of contract and is not barred by
res judicata. Defendant's
assignment of error is overruled.
The 21 December 2000 order of the trial court is affirmed.
Affirmed.
Judges HUNTER and BRYANT concur.
Report per Rule 30(e).
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