MacMillan v. MacMillan

• Decision Date: 03 March 2015
• Docket Number: No. COA14–831.,COA14–831.
• Citation: 771 S.E.2d 633 (Table)
• Court: North Carolina Court of Appeals
• Parties: Carol S. MacMILLAN, Plaintiff, v. Mary L. MacMILLAN, Defendant.

771 S.E.2d 633 (Table)

Carol S. MacMILLAN, Plaintiff

v.Mary L. MacMILLAN, Defendant.

No. COA14–831.

Court of Appeals of North Carolina.

March 3, 2015.

Craige Brawley Liipfert & Walker LLP, by William W. Walker, for plaintiff.

Jones Law PLLC, by Brian E. Jones, for defendant.

STEPHENS, Judge.

Defendant Mary L. MacMillan (“Mary”) appeals from the trial court's interlocutory order denying her Rule 12 motion to dismiss the complaint filed against her by Plaintiff Carol S. MacMillan (“Carol”) for unjust enrichment and a constructive trust. Mary also appeals from the trial court's decision to grant Carol's Rule 12 motion to dismiss Mary's counterclaims. In response, Carol has filed a motion with this Court to dismiss Mary's interlocutory appeal and impose Rule 34 sanctions for the frivolous prosecution thereof. After careful review, we conclude that Mary has failed to show that the interlocutory order she seeks to appeal affected a substantial right, and we consequently grant Carol's motion to dismiss and to impose Rule 34 sanctions.

I. Facts and procedural history

This is the third time this case has reached this Court on appeal. The underlying facts and procedural history of the case are as follows:

Jerrold MacMillan (“Jerrold”) and Carol were married in 1955, entered into a separation agreement in 1974, and were divorced in 1985, all in the Commonwealth of Massachusetts. In March 1985, while Jerrold was living in Winston–Salem, North Carolina, Carol registered the parties' 1974 Massachusetts separation agreement—which awarded alimony, child support, and other support to Carol—as a foreign support order in Forsyth County. Then, in September 1985, after the parties “reached a settlement agreement on all disputed issues,” presumably arising out of the 1974 separation agreement that had been registered as a foreign support order earlier that year, the district court in Forsyth County entered a consent judgment that both incorporated and modified the terms of the parties' separation agreement. Among the terms modified and brought forward into the consent judgment was one providing that Jerrold would “provide in his last will and testament, through insurance, or, if [Jerrold] dies intestate and without insurance, by hereby recognizing that [Carol] has a valid claim against [Jerrold's] estate for the payment of $18,000.00 to [Carol] upon [Jerrold's] death.” The consent judgment further provided that “[t]his obligation ... is intended, if necessary, to apply to any and all of [Jerrold's] property, however held,” and that, “[u]pon reasonable request by [Carol], [Jerrold] will from time to time furnish [Carol] proof that he is in compliance with this obligation.” In accordance with this consent judgment, Jerrold's will devised $18,000.00 to Carol “pursuant to that certain Consent Order of September 4, 1985 in the District Court of Forsyth County, North Carolina.”

When Jerrold died in May 2010, he was survived by his second wife, Mary. At the time of his death, the only asset in Jerrold's estate was one-half of a bank account he jointly owned with Mary, which was valued at $7,551.74. Upon Mary's application, those funds were distributed to Mary as a portion of the $20,000.00 year's allowance to which she was entitled as Jerrold's surviving spouse pursuant to N.C.G.S. § 30–15 ; the remaining $12,448.26 of the year's allowance to which Mary was entitled was entered as a deficiency judgment against the estate. Mary also received $35,000.00 from four separate life insurance policies belonging to Jerrold at the time of his death, for which Mary was the beneficiary.

On 1 February 2011—almost twenty-six years since both the registration of Jerrold and Carol's 1974 separation agreement as a foreign support order in Forsyth County and the entry of the trial court's 1985 consent judgment—Carol filed a “Motion to Substitute Party; Motion in the Cause; and Motion for Joinder of Party” (“Motion in the Cause”). In this Motion in the Cause, Carol sought to substitute Bryan C. Thompson (“Mr.Thompson”), Public Administrator of the Estate of Jerrold MacMillan, for Jerrold as a party defendant in the action that gave rise to both the separation agreement and the consent judgment, sought to join Mary as a defendant in the same action, and requested that the court impose a constructive trust upon Mary and order her to pay $18,000.00 to Carol from the proceeds of Jerrold's life insurance policies and other assets in accordance with the provisions directing Jerrold to do the same in the consent judgment and in Jerrold's will.

In May 2011, the trial court entered an order that substituted Mr. Thompson for Jerrold as a defendant “in this action,” concluded that the court had personal jurisdiction over Mary and overruled Mary's motion challenging the same, and joined Mary as a defendant “in this action” and ordered that Carol should serve Mary with “a copy of the Notice of Registration of Foreign Support Order, the Massachusetts Divorce Judgment and the incorporated Separation Agreement, a copy of the 1985 Consent Judgment, and [Carol's Motion in the Cause.]” Mary then moved to dismiss Carol's Motion in the Cause on grounds enumerated in N.C.G.S. § 1A–1, Rules 12(b)(1), (b)(2), (b)(4), (b)(5), and (b)(6). In July 2011, the court allowed Mary's motion to dismiss Carol's Motion in the Cause with prejudice on the grounds that such motion failed to state a claim upon which relief could be granted. Carol gave notice of appeal to this Court from the trial court's July 2011 order.

In MacMillan v. MacMillan(MacMillan I), ––– N.C.App. ––––, 723 S.E.2d 173 (2012) (unpublished), this Court considered whether the trial court erred by dismissing Carol's Motion in the Cause on the grounds that such motion failed to state a claim upon which relief could be granted. After analyzing the purpose of a constructive trust, this Court stated the following: “Here, [Carol's] pleading alleges 1) that pursuant to two court orders Jerrold was to provide the sum of $38,000.00 to [Carol] through his last will and testament,¹ 2) that according to those court orders any of Jerrold's assets, including insurance policies, could be used to pay the sum owed, 3) that at the time of his death, Jerrold's probate estate possessed insufficient funds to pay [Carol], 4) that also at the time of his death Jerrold owned three life insurance policies totaling $25,000.00, and an accidental death policy of unknown value, 5) that the proceeds of those policies were paid to Jerrold's widow, [Mary], and 6) that Jerrold willfully and intentionally violated two court orders by failing to designate his existing assets to [Carol] at the time of his death.”

This Court continued that it was “clear from her pleading” that Carol adequately alleged that the property at issue entered Mary's possession “because Jerrold breached his duty under the terms of the separation agreement and consent judgment,” and, thus, “adequately state[d] a claim for unjust enrichment and the imposition of a constructive trust.” Accordingly, this Court reversed the trial court's dismissal of Carol's Motion in the Cause.

The parties then both moved for summary judgment, which motions were denied on 10 December 2012. On 4 February 2013, the trial court entered an order granting Carol's Motion in the Cause. In its order, the trial court concluded that it had jurisdiction over the subject matter, as well as over the persons of Carol, Mary, and Mr. Thompson. The court also concluded that “Mary was aware of Jerrold's obligations” to Carol in the consent judgment, that Jerrold “willfully and intentionally violated” the consent judgment “by failing to designate $18,000.00 of his existing assets to Carol at the time of his death,” and that Mary was “unjustly enriched” by Jerrold's failure to comply with the consent judgment. The court then imposed a constructive trust on the funds received by Mary as a result of Jerrold's death. Mary appealed.

MacMillan v. Thompson (MacMillan II),––– N.C.App. ––––, 753 S.E.2d 741 (2013) (unpublished), available at 2013 WL 6234655, *2–*7 (citations omitted).

In MacMillan II,we vacated the trial court's order granting Carol's Motion in the Cause based on Mary's argument that the court erred in concluding that it had subject matter jurisdiction over Carol's lawsuit. In so holding, we noted first that,

our Supreme Court has fashioned a one-size fits all rule applicable to incorporated settlement agreements in the area of domestic law, which provides that all separation agreements approved by the court as judgments of the court will be treated ... as court ordered judgments. As such, these court ordered separation agreements, as consent judgments, are modifiable, and enforceable by the contempt powers of the court, in the same manner as any other judgment in a domestic relations case, and the parties to such judgments do not have an election to enforce such judgment by contempt or to proceed in an independent action in contract.

Id.at *9, 753 S.E.2d (citations, internal quotation marks, and brackets omitted). We found that Carol's Motion in the Cause alleged the facts necessary to support a claim of civil contempt against Jerrold. However, as we emphasized in discussing the limitations of a court's contempt powers, in order to hold a defendant in civil contempt,

the trial court must find facts in accordance with the elements identified in N.C.G.S. § 5A21(a), including that the noncompliance by the person to whom the order is directed is willful, and that 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. In other words, the court must find not only failure to comply but must also find that the defendant presently possesses the means to comply.

Id.at *10, 753 S.E.2d (citations, internal quotation marks, and brackets omitted). Thus, in light of the fact that “one who is deceased has no present ability or means to...