Rufty v Rufty, 156 NC App 697 (02-564) 03/18/2003

Appeal by plaintiff from an order entered 31 October 2001 by Judge William C. Kluttz in Rowan County District Court. Heard in the Court of Appeals 9 January 2003.

Kluttz, Reamer, Blankenship, Hayes & Randolph, L.L.P., by Roman C. Pibl, for plaintiff-appellant.

Inge and Paris, P.A., by Robert L. Inge, for defendant- appellee.

    HUNTER, Judge.

    Mark R. Rufty (“plaintiff”) appeals an order finding him in civil contempt for failing to comply with a Separation and Property Settlement Agreement (“Agreement”) between him and his former wife, Karen B. Rufty (“defendant”), that was incorporated into the parties' judgment of divorce. We vacate the order and remand the case to the trial court for the reasons stated herein.
    Plaintiff and defendant were married on 30 January 1988. On 25 May 1996, the parties separated and subsequently entered into an Agreement on 29 May 1996. The Agreement contained provisions regarding, among other things, the parties' future marital home that was already under construction at the time they signed theAgreement. Paragraph 12 of the Agreement specifically addressed the division and completion of the home as follows:
            12.    REAL PROPERTY. Husband and Wife are the owners of certain real property located at 430 Lake Point Lane, Salisbury, NC 28146, which consists of a certain tract of land together with a house which is presently being built onto said land. The parties hereto agree that contemporaneously with the signing of this agreement the Husband shall execute and deliver to the Wife a deed conveying to the Wife all of the Husband's right, title, and interest in and to said real property. Thereafter, the Wife shall be responsible for maintaining the residence and shall be responsible for the mortgage payments, ad valorem taxes, insurance, and other expenses associated with the ownership of the residence and shall indemnify and save the Husband harmless from any liability therefor.

            Husband and Wife acknowledge that the Husband is a licensed general contractor and is responsible for this house being built and that the parties have been approved for a loan on this house not to exceed $140,000.00. The Husband agrees that he shall ensure that this house is completely and fully constructed and shall do so in a timely manner in accordance with previous arrangements and that he shall not cause the mortgage to exceed $115,000.00 on this house by way of its completion.

(Emphasis added.) This action arises from plaintiff's alleged non- compliance with Paragraph 12 with respect to the house being “completely and fully constructed.”
    Plaintiff substantially completed construction of the house in June of 1996. A certificate of occupancy for the house was issued on or about 27 June 1996. Around that same time, the lender also inspected the house and provided a completion certificate and appraisal for the home despite the presence of some unfinishedwork. The home was appraised at approximately $200,000.00 with a mortgage of $115,000.00.
    On 27 May 1997, plaintiff filed a complaint for absolute divorce. Defendant filed an answer and counterclaim requesting that the Agreement be incorporated into the divorce judgment and enforceable as a part thereof. A judgment of divorce was entered on 7 July 1997 that incorporated the Agreement, thus making the parties' compliance with the Agreement a court order.
    On 11 August 2000, defendant filed a motion for contempt alleging that plaintiff had failed to comply with the Agreement. Specifically, defendant alleged that plaintiff was in violation of Paragraph 12 and should therefore be held in willful contempt because he failed to perform any of the remaining work on the house after the certificates of occupancy and completion were issued. In an order filed on 1 February 2001 (“the 1 February 2001 order”), the court concluded that plaintiff had failed to comply with the Agreement. The parties were ordered to attempt to settle the damages issues by consent order or, in the event no settlement could be reached, reappear before the court for a determination of the “costs incurred by the Defendant and the cost of work still to be done on the house.”
    Unable to reach a settlement, the parties reappeared in court on 6 September 2001 for another hearing on the matter. Following that hearing, the court entered an order on 31 October 2001 (“the contempt order”) in which the court concluded that plaintiff was in civil contempt for failing to complete the construction on thehouse as required per the Agreement. The court further concluded that since plaintiff had the means and ability to comply, it was “fair and reasonable for the Plaintiff to be required to pay as a purge condition the sum of $16,763.89, constituting the total of damages suffered by Defendant as a result of the Plaintiff's willful failure to comply with the agreement ($15,263.89), plus attorney fees in the amount of $1,500.00.” Thereafter, plaintiff filed a motion to set aside the finding of civil contempt. The motion was denied on 27 November 2001. Plaintiff appeals the contempt order.
    By plaintiff's second and third assignments of error he essentially argues the court's finding him in civil contempt was arbitrary and capricious because the Agreement, specifically Paragraph 12, was ambiguous. Plaintiff contends he considered the house to be “completely and fully constructed” once he (1) received a certificate of occupancy and final completion approval by the lender for the house, and (2) the mortgage on the house did not exceed $115,000.00. However, defendant contends the house was not “completely and fully constructed” because several items in and around the home were left unfinished. Due to the parties' different interpretations of Paragraph 12, plaintiff argues the Agreement is ambiguous. We disagree.
    The essence of a marital separation agreement is a contract between a husband and wife; therefore, it “is subject to the same rules pertaining to enforcement as any other contract.” Patterson v. Taylor, 140 N.C. App. 91, 95, 535 S.E.2d 374, 377 (2000). As ina contract, an ambiguity exists in a separation agreement where the language of that agreement “is fairly and reasonably susceptible to either of the constructions asserted by the parties.” Glover v. First Union National Bank, 109 N.C. App. 451, 456, 428 S.E.2d 206, 209 (1993). The trial court's determination of whether such an ambiguity exists is a question of law. Bicket v. McLean Securities, Inc., 124 N.C. App. 548, 553, 478 S.E.2d 518, 521 (1996). “If the language used in [a separation agreement] is ambiguous and the parties' intention is unclear, the interpretation of the [agreement] is for the jury.” Marsh Realty Co. v. 2420 Roswell Ave., 90 N.C. App. 573, 576, 369 S.E.2d 113, 115 (1988) (citation omitted). Conversely, “[w]hen the language of [a separation agreement] is plain and unambiguous, its construction is a matter of law for the court.” Id. (citation omitted). In either instance, appellate review of a trial court's determination regarding whether a separation agreement is ambiguous is de novo. See Bicket, 124 N.C. App. at 553, 478 S.E.2d at 521. After reading Paragraph 12 and considering the plain meaning of the terms “completely” and “fully,” we conclude plaintiff has not complied with the Agreement. As found by the trial court in its 1 February 2001 order:
            a.    Shower door must be installed in master bathroom.

            b.    Living room fireplace must be completed with functioning gas logs.

            c.    Security system must be installed and connected to wiring at all windows and doors.
            d.    Wet bar in sun room must be completed.

            e.     Outside power boxes must be covered.

            f.    Lights must be installed in master bathroom.

            g.    Sidewalk from driveway to front door needs to be completed.

            h.    Driveway must be completed to road.
With these numerous items still in need of construction, the house clearly did not rise to the level of being fully completed.
    Additionally, nothing in the parties' Agreement stated that plaintiff's obligation would be fulfilled once a certificate of occupancy was issued and the mortgage did not exceed $115,000.00. On the contrary, the agreement only required that defendant's obligation would be to pay a mortgage not exceeding $115,000.00; if additional expenses were incurred by plaintiff while “completely and fully” constructing the house (as was the case), those expenses would be plaintiff's responsibility. The court essentially found that plaintiff acknowledged this responsibility by personally incurring additional expenses to complete the following items so as to prevent the mortgage from exceeding $115,000.00:
            a.    Caulking around windows.

            b.    Installing shutters.

            c.    Purchase and installation of closet fixtures.

            d.    Installation of shelving in living room.

            e.    Purchase of mirrors for bathroom.
            f.    Construction of retaining wall to keep water out of basement.

            g.    Preparing yard for seeding and seeding of yard.

            h.    Purchase of dead bolt.

            i.    Purchase of kitchen cabinet doors.

            j.    Cover for island in Kitchen.

    Plaintiff further argues that since the 1 February 2001 order was a component to the equitable distribution of the parties' marital property, it was improper for the trial court not to valuate the home improvements. Plaintiff contends the trial court's failure to valuate the improvements (and consider those values when it made the distributive award to defendant) resulted in a vague order that prevented him from ascertaining his duties under the Agreement. However, plaintiff was never ordered to make “improvements” to the home; he was simply ordered to completely and fully construct the home as he had obligated himself to do in the Agreement. In that respect, the only value of concern to plaintiff was the $115,000.00 value, which the mortgage of the fully completed house was not to exceed.
    Accordingly, we conclude that the Agreement was not ambiguous, and the absence of home “improvement” valuations did not result in an error by the trial court. Plaintiff's second and third assignments of error are overruled.

II.

    Having determined that the parties' Agreement was not ambiguous and was properly interpreted by the trial court, weaddress plaintiff's remaining assignment of error regarding his being found in civil contempt for violating the Agreement.
    In North Carolina, a proceeding for civil contempt is one instituted to preserve and enforce the rights of a private party to an action, and to compel obedience to a judgment or decree intended to benefit such parties. Blue Jeans Corp. v. Clothing Workers, 275 N.C. 503, 169 S.E.2d 867 (1969). Failure to comply with a court order is a continuing civil contempt as long as:
        (1)    The order remains in force;

        (2)    The purpose of the order may still be      served by compliance with the order;

        (2a)    The noncompliance by the person to whom the order is directed is willful; and

        (3)    The person to whom the order is directed is able to comply with the order or is able to take reasonable measures that would enable the person to comply with the order.

N.C. Gen. Stat. § 5A-21(a)(1)-(3) (2001). Appellate review of a trial court's finding of contempt is limited to a consideration of “whether the findings of fact by the trial judge are supported by competent evidence and whether those factual findings are sufficient to support the judgment.” McMiller v. McMiller, 77 N.C. App. 808, 810, 336 S.E.2d 134, 136 (1985).
    Here, plaintiff contends the trial court's finding of civil contempt was reversible error because there was no evidence that he was in violation of the 1 February 2001 order. However, plaintiff was found in civil contempt for violating the judgment of divorce that incorporated the Agreement, not the 1 February 2001 order. Byincorporating the Agreement into the judgment of divorce, the court was entitled to enforce the provisions of that Agreement upon a showing of willful failure to comply by plaintiff. See Henderson v. Henderson, 55 N.C. App. 506, 512, 286 S.E.2d 657, 662 (1982). Although the 1 February 2001 order did not specifically state plaintiff was in “contempt,” the order was entered in response to a Show Cause in Contempt Proceeding and stated that plaintiff had “failed to comply with the terms” of the Agreement. Further, the 1 February 2001 order contained numerous findings that evidenced plaintiff's violation of the Agreement. Thus, plaintiff's contention is without merit.
    Additionally, plaintiff argues there was insufficient evidence to support a finding that he had the ability to comply with the contempt order. “Although specific findings as to the contemnor's present means are preferable, this Court has held that a general finding of present ability to comply is sufficient basis for the conclusion of wilfulness necessary to support a judgment of civil contempt.” Hartsell v. Hartsell, 99 N.C. App. 380, 385, 393 S.E.2d 570, 574 (1990) (citing Adkins v. Adkins, 82 N.C. App. 289, 292-93, 346 S.E.2d 220, 222 (1986)). However, a careful reading of Adkins indicates that a general finding is sufficient only when there is other evidence in the record regarding defendant's assets and the sufficiency of his earnings. Id.
    In the case sub judice, the court found that “Plaintiff is a licensed general contractor who has been employed at Food Lion for fifteen years and currently serves as it's [sic] director ofconstruction. In his role he oversees bids and awards contracts for the construction of Food Lion facilities. This is a responsible position.” This finding clearly indicates that the court found plaintiff was an able-bodied, gainfully employed man. Nevertheless, where “[n]o evidence was adduced at the hearing with respect to any assets or liabilities of the [plaintiff], any inventory of his property, his present ability to work, [or] even his present salary[,]” a finding of wilfulness is unsupported by the evidence. Henderson v. Henderson, 307 N.C. 401, 409, 298 S.E.2d 345, 351 (1983). No such evidence was adduced at the hearing. The only evidence regarding some of plaintiff's assets (and liabilities) was detailed in the parties' Agreement, which was filed approximately four and a half years before the contempt order. Thus, there was no evidence to support the finding that plaintiff has the present ability to comply with the purging conditions of the contempt order.
    It should be noted that defendant also argues plaintiff waived any objection to the court's finding regarding his ability to pay because plaintiff (1) never filed a motion or presented evidence as to why he could not make the payment directed in the order, and (2) did not raise this issue when he filed a motion and brief to set aside the court's finding of civil contempt. However, defendant does not cite to, nor did we find, any North Carolina authority that implies a court's finding regarding a party's ability to comply with the purging conditions of a contempt order may be waived.    In conclusion, the Agreement between the parties contained no ambiguity. However, the trial court finding plaintiff in civil contempt for failure to “completely and fully” construct the home as required by the parties' Agreement was in error due to insufficient evidence establishing plaintiff's ability to comply with the contempt order. Thus, the contempt order must be vacated and the case remanded to the Rowan County District Court for further proceedings with respect to plaintiff's ability to comply with the contempt order's purging conditions.
    Vacated and remanded.
    Judges McGEE and CALABRIA concur.
    Report per Rule 30(e).

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