Johnson v. Johnson

• Citation: 817 S.E.2d 466,259 N.C.App. 823
• Decision Date: 05 June 2018
• Docket Number: No. COA17-502,COA17-502
• Parties: Ernie Franklin JOHNSON, Plaintiff, v. Kristy Humphrey JOHNSON, Defendant.
• Court: Court of Appeal of North Carolina (US)

259 N.C.App. 823

817 S.E.2d 466

Ernie Franklin JOHNSON, Plaintiff,

v.Kristy Humphrey JOHNSON, Defendant.

No. COA17-502

Court of Appeals of North Carolina.

Filed: June 5, 2018

Tharrington Smith, LLP, Raleigh, by Evan B. Horwitz and Jeffrey R. Russell, for plaintiff-appellee.

Homesley, Gaines, Dudley, & Clodfelter, LLP, by Leah Gaines Messick and Christina E. Clodfelter, Statesville, for defendant-appellant.

BERGER, Judge.

Kristy Humphrey Johnson ("Defendant") appeals from an order entered on December 14, 2016 denying her motion to set aside a separation agreement executed by the parties on May 19, 2015. Defendant argues the trial court erred because the separation agreement (1) lacks consideration, (2) is void as a matter of public policy, and (3) is procedurally and substantively unconscionable. Defendant further argues her marital relationship with Ernie Franklin Johnson ("Plaintiff") was reconciled, thereby voiding the separation agreement. We disagree and affirm the trial court.

Factual and Procedural Background

Plaintiff and Defendant were married on October 16, 1999, and two minor children were born of the marriage. Defendant was convicted of larceny in 2014, and was subject to supervised probation during the last year of the marriage. In January 2015, Plaintiff engaged an attorney to begin drawing up a separation agreement due to familial problems over the Christmas holiday. Plaintiff and Defendant began discussing separation due to Defendant's criminal activity and drug addiction, resulting in the execution of the Separation Agreement on May 19, 2015. Defendant moved out of the marital residence on that day.

In June 2015, Plaintiff allowed Defendant to return to the marital residence under the condition that she not expose the family to drug use or other illegal activity. Defendant lived in the marital residence from June 2015 until August 14, 2016. Upon learning of Defendant's arrest for felonious hit and run on August 14, 2016, Plaintiff changed the locks on the residence. Defendant was incarcerated for one week, and on August 20, 2016, attempted to return to the residence, but was denied entry. Defendant moved to a motel in Statesville where she was employed at the time.

On August 26, 2016, Plaintiff filed a complaint for child custody and child support, and a motion for immediate temporary custody of the minor children. The trial court entered an ex parte order granting Plaintiff temporary custody until September 6, 2016. On September 12, 2016, the trial court entered an order granting both Plaintiff and Defendant shared custody of the minor children. Both parties were ordered to complete a Partners in Parenting Education class.

On September 7 and 14, 2016, Defendant filed an answer and counterclaims and an amended answer and counterclaims, respectively, for child custody, child support, post-separation support and alimony, equitable distribution, and attorney's fees. Defendant also filed a motion to set aside the Separation Agreement. On September 12, 2016, the trial court held a hearing on Defendant's motion. On December 14, 2016, the trial court entered an order denying Defendant's motion to set aside the Separation Agreement, finding that the Separation Agreement was enforceable, and that Defendant had not proven by a preponderance of the evidence that the parties had reconciled. From this order, Defendant timely appeals.

Analysis

Defendant argues that the trial court erred in (1) finding the Separation Agreement was supported by consideration; (2) finding that Plaintiff and Defendant did not reconcile; and (3) finding that the Separation Agreement is enforceable because it is not procedurally and substantively unconscionable. We disagree.

I. Jurisdiction

Initially, we must consider if this Court has jurisdiction to hear Defendant's appeal. "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."

Kanellos v. Kanellos , ––– N.C. App. ––––, ––––, 795 S.E.2d 225, 228 (2016) (citation and quotation marks omitted). "Generally, there is no right to appeal from an interlocutory order." Id. (citation and quotation marks omitted). Here, the appealed order did not resolve all issues of this case and is interlocutory. Defendant had pending claims of child custody, child support, post-separation support, alimony, equitable distribution, and attorney's fees. The trial court had not made a final determination of all rights of all parties in this action.

"An appeal may be taken from every judicial order or determination of a judge of a superior or district court, upon or involving a matter of law or legal inference, whether made in or out of session, which affects a substantial right claimed in any action or proceeding ...." N.C. Gen. Stat. § 1-277(a) (2017) ; see also Waters v. Personnel, Inc. , 294 N.C. 200, 207, 240 S.E.2d 338, 343 (1978). A two-part test has evolved to evaluate whether a substantial right is implicated: "(1) the right itself must be substantial, and (2) the enforcement of the substantial right must be lost, prejudiced or be less than adequately protected by exception to entry of the interlocutory order." Beroth Oil Co. v. NC Dept. of Transp. , ––– N.C. App. ––––, ––––, 808 S.E.2d 488, 496 (2017) (citation and quotation marks omitted).

In the case sub judice , Defendant appeals from an order denying Defendant's motion to set aside the Separation Agreement in an action for child custody, child support, post-separation support and alimony, equitable distribution, and attorney's fees. Certainly, Defendant's interests in custody, division of marital property acquired over sixteen years, and spousal support are substantial rights. See Case v. Case , 73 N.C. App. 76, 78-79, 325 S.E.2d 661, 663, disc. rev. denied , 313 N.C. 597, 330 S.E.2d 606 (1985) (holding that a summary judgment order validating a separation agreement affected equitable distribution as a substantial right and thus was proper for interlocutory review). The trial court's determination of the validity and enforceability of the Separation Agreement directly impacts those rights in this action as Defendant stands to gain or lose rights associated with the Separation Agreement. The trial court's order affected Defendant's substantial rights, and this Court has jurisdiction to consider Defendant's appeal.

II. Separation Agreement

"In reviewing a trial judge's findings of fact, we are strictly limited to determining whether the trial judge's underlying findings of fact are supported by competent evidence, in which event they are conclusively binding on appeal ...."

Reeder v. Carter , 226 N.C. App. 270, 274, 740 S.E.2d 913, 917 (2013) (citation and internal quotation marks omitted).

"Findings of fact made by the trial judge are conclusive on appeal if supported by competent evidence, even if there is evidence to the contrary." Sisk v. Transylvania Cmty. Hosp., Inc. , 364 N.C. 172, 179, 695 S.E.2d 429, 434 (citation, quotation marks, brackets, and ellipses omitted), rehearing denied , 364 N.C. 442, 702 S.E.2d 65 (2010).

A. Consideration

Defendant contends the Separation Agreement is void for lack of consideration because both parties did not receive a valuable bargained-for exchange at the execution of their Separation Agreement on May 19, 2015. We disagree.

Any married couple is hereby authorized to execute a separation agreement not inconsistent with public policy which shall be legal, valid, and binding in all respects; provided, that the separation agreement must be in writing and acknowledged by both parties before a certifying officer as defined in G.S. 52-10(b).

N.C. Gen. Stat. § 52-10.1 (2017). "[A] separation agreement is void and unenforceable unless it was executed in the manner and form required by N.C.G.S. § 52-10.1." Raymond v. Raymond , ––– N.C. App. ––––, ––––, 811 S.E.2d 168, 174 (2018) (citation, internal quotation marks, and brackets omitted). "A separation agreement is a contract," and must be supported by consideration. Id. ; see Harris v. Harris , 50 N.C. App. 305, 314, 274 S.E.2d 489, 494, appeal dismissed , 302 N.C. 397, 279 S.E.2d 351 (1981). Generally, separation agreements establish consideration through the material terms of the mutual promises entered into between the parties. McDowell v. McDowell , 61 N.C. App. 700, 704-05, 301 S.E.2d 729, 731 (1983) ; 3 Suzanne Reynolds, Lee's North Carolina Family Law § 14.8 (5th rev. ed. 2002).

In the case sub judice , the parties entered into a Separation Agreement on May 19, 2015, in which both parties acknowledged there was sufficient consideration at the time of its execution. The contract included a provision defining consideration as "the promises, undertakings and agreements herein contained, as well as other good and valuable consideration, the receipt of which is hereby acknowledged." The Separation Agreement established benefits and rights for both Plaintiff and Defendant, including language giving Defendant rights to child custody and visitation for both minor children, property settlement and distribution, and insurance policy benefits. The Separation Agreement is not void due to a lack of consideration because both parties received items of value and benefits accorded to them through the execution of the contract.

B. Separation

Defendant next contends the trial court erred by finding the parties separated at the time of the signing of the Separation Agreement, thereby rendering the Separation Agreement void. We disagree.

A separation agreement is valid if it is "executed while the parties are separated or are planning to separate immediately." Napier v. Napier , 135 N.C. App. 364, 367, 520 S.E.2d 312, 314 (1999) (citation and internal quotation marks omitted), disc. review denied , 351 N.C. 358, 543 S.E.2d 132 (2000). "[S]eparation agreements entered into while the parties are still living together but ...