Weaver-Sobel v Sobel, (04-474) 01/17/2006

Appeal by defendant from judgment entered 3 January 2003 by Judge Lisa C. Bell in Mecklenburg County District Court. Heard in the Court of Appeals 1 March 2005.

James, McElroy & Diehl, P.A., by G. Russell Kornegay, III and Preston O. Odom, III, for plaintiff-appellee.

Cheshire, Parker, Schneider, Bryan & Vitale, by Jonathan McGirt, for defendant-appellant.

    STEELMAN, Judge.

    Plaintiff and defendant were married in Houston, Texas on 28 September 1986, and moved to Charlotte, North Carolina in 1988. They separated on 22 May 1999, and were divorced on 18 May 2001. On 27 September 1986, just prior to their marriage, the parties executed a prenuptial agreement (agreement) in Texas, which stated, inter alia, that in the event of divorce, each party would keep the property that they owned separately prior to entering the marriage, including any future income or property derived therefrom; and for the first four years of marriage, earnings of the parties were to remain separate property, but earnings acquired after four years would become community property. The agreement included an“Exhibit A” and an “Exhibit B”, which listed the major items of separate property owned by the two parties. Listed as defendant's separate property was a residence in Houston, Texas, and several retirement savings accounts.
    Plaintiff filed a complaint against defendant asserting claims for child custody, child support, equitable distribution, and attorney's fees on 4 February 2000. Defendant filed his answer and counterclaim on 18 August 2000, seeking child custody, child support, equitable distribution, and attorney's fees. This answer did not mention the 1986 prenuptial agreement. Both parties filed equitable distribution affidavits on 31 October 2000. In defendant's equitable distribution affidavit, he included the “September 27, 1986 Pre-Nuptial Agreement of Parties” as a factor he believed the trial court should consider in making its distributional decisions.
    The trial of this matter was conducted over thirteen days: May 14-17, 2001; June 11-12 and 26-28 2001; July 19-20 2001; and September 3-4 2002. On 12 June 2001, after six days of trial, the trial court entered a final equitable distribution pretrial order by and with the consent of the parties.
    On 26 June 2001, the seventh day of trial, after the pretrial equitable distribution order was entered, plaintiff moved that the trial court not consider the prenuptial agreement. Plaintiff argued that the prenuptial agreement constituted an affirmative defense that defendant was required to plead in his answer. The trial court ruled that the prenuptial agreement did constitute anaffirmative defense to the equitable distribution claim, and that defendant had waived this defense by failure to plead it. The trial court then denied defendant's request to amend his answer to include the prenuptial agreement. The trial court decided its final equitable distribution order without considering the prenuptial agreement. On 3 January 2003 a final equitable distribution judgment was entered. Some claims remained unsettled, however, and the final order in this action, which addressed child support, attorney's fees and expert witness fees, was entered on 21 February 2003. Defendant appeals from the final equitable distribution judgment.
    In his first argument, defendant contends that the trial court erred as a matter of law in holding that the prenuptial agreement constituted an affirmative defense that was required to be pled under Rule 8(c) of the Rules of Civil Procedure. We disagree.
    During trial on 26 June 2001, plaintiff made an oral motion in limine that the trial court not consider any evidence regarding the prenuptial agreement. The trial court granted plaintiff's motion, ruling that the prenuptial agreement constituted an affirmative defense that was required to be pled pursuant to N.C. Gen. Stat. § 1A-1, Rule 8(c). Defendant argued that the prenuptial agreement was not an affirmative defense.
    Rule 8(c) provides that in responding to a preceding pleading a party “shall set forth affirmatively” certain enumerated defenses. It goes on to state that “any other matter constituting an avoidance or affirmative defense” shall be pled.    In this matter, plaintiff's complaint asserted a claim for equitable distribution pursuant to N.C. Gen. Stat. § 50-20 et seq. Defendant's answer also asserted a claim for equitable distribution, but made no mention of the 1988 prenuptial agreement executed in Texas. Since this agreement may affect whether certain assets are separate or marital property under N.C. Gen. Stat. § 50- 20(b), it constitutes a matter in “avoidance or affirmative defense” and was required to be pled in defendant's answer. This argument is without merit.
    In his second and third arguments, defendant contends that the trial court erred in ignoring the stipulations of the parties contained in the pretrial order and in denying his motion to amend his answer to plead the prenuptial agreement in partial bar of plaintiff's claim for equitable distribution. We agree.
    “Ordinarily, the failure to plead an affirmative defense results in a waiver unless the parties agree to try the issue by express or implied consent.” Burwell v. Giant Genie Corp., 115 N.C. App. 680, 684, 446 S.E.2d 126, 129 (1994). Defendant argues that the parties agreed to try the issue of the prenuptial agreement by express or implied consent, based in part upon the inclusion of that issue in the pretrial order under N.C. Gen. Stat. § 1A-1, Rule 16(a).
    One of the principal functions of a pretrial conference and order is the “simplification and formulation of issues.” N.C. R. Civ. P. Rule 16(a). “This process will help to narrow and define the proper focus of the case and thereby avoid the injection ofextrinsic issues into the trial which tend to confuse the fact finder and lengthen the time necessary to complete the proceeding.” G. Gray Wilson, North Carolina Civil Procedure § 16-2 (2003).
    The final Equitable Distribution Pretrial Order entered by the trial court with the consent of the parties on 12 June 2001 contains the following language.
        AND IT APPEARING that the parties have reached agreement on certain facts and on certain issues and have delineated the areas of agreement and disagreement;

        AND IT APPEARING that by their signatures affixed hereto each party stipulates agreement with the facts and issues represented as agreed upon and stipulates that the facts and issues represented as being in dispute are accurately reflected and that there are no other issues to be determined by the Court[.]

The order then went on to list items of property in a detailed schedule, which identified the property, the parties contentions as to its value, and a “short statement of issue.” With respect to items which defendant contended were his separate property under the prenuptial agreement, the short statement reads: “D contends his separate property under prenup, P contends marital.”
    Under the explicit terms of the pretrial order, the parties agreed that whether certain items of property were defendant's separate property by virtue of the prenuptial agreement, or were marital property, was an issue to be decided by the trial court. Further, nowhere in the pretrial order does it state that there was an issue before the court of whether defendant had waived the defense of the prenuptial agreement. Rather the order recited that “there are no other issues to be determined by the court.”    Rule 16(a) provides: “If any issue for trial as stated in the order is not raised by the pleadings in accordance with the provisions of Rule 8, upon motion of any party, the order shall require amendment of the pleadings.” Unlike the provisions of Rule 15(b), which are discretionary, Bass v. Johnson, 149 N.C. App. 152, 157, 560 S.E.2d 841, 845 (2002), the provisions of Rule 16 are mandatory (“the order shall require amendment of the pleadings”). Since the parties stipulated in the pretrial order that the issue of whether certain property was separate or marital by virtue of the prenuptial agreement was an issue to be decided by the trial court, that court erred in not amending the pleadings to conform to the pretrial order.
    We therefore reverse the trial court's ruling, and remand with instructions for the trial court to grant defendant's motion to amend his answer to include the prenuptial agreement. The trial court may, in its discretion, allow discovery and the presentation of additional evidence to determine the validity of the agreement and the effect, if any, that it has on the equitable distribution of property in this case.
    In light of our holding, we do not address the additional arguments presented in defendant's brief.
    REVERSED AND REMANDED.
    Judges WYNN and HUDSON concur.
    Report per Rule 30(e).

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