Stegall v. Stegall

• Decision Date: 16 October 1990
• Docket Number: No. 8922DC1090,8922DC1090
• Citation: 100 N.C.App. 398,397 S.E.2d 306
• Court: North Carolina Court of Appeals
• Parties: Sylvia Benfield STEGALL v. Ernest William STEGALL.

Page 306

397 S.E.2d 306

100 N.C.App. 398

Sylvia Benfield STEGALL v. Ernest William STEGALL.

No. 8922DC1090.

Court of Appeals of North Carolina.

Oct. 16, 1990.

Harris, Pressly & Thomas by Gary W. Thomas, Statesville, for plaintiff-appellant.

Tucker, Hicks, Hodge, & Cranford by John E. Hodge, Jr. and Fred A. Hicks, Charlotte, for defendant-appellee.

ARNOLD, Judge.

This case concerns (1) the consequences of entering into a separation agreement under duress and coercion, (2) the legal ramifications of multiple separation agreements and (3) the effect of reconciliation upon a separation agreement.

The first question presented on appeal is whether the district court judge properly granted summary judgment barring plaintiff's action to have the 1988 separation agreement set aside due to duress and coercion. To answer this question we must first determine if there is a material issue of fact surrounding the circumstances under which plaintiff entered into the 1988 separation agreement. Defendant contends summary judgment was properly granted because the evidence raised no material issue of fact, but only a question of law: did plaintiff sign the separation agreement under duress and coercion.

Summary judgment is proper when there is no genuine issue as to any material fact. N.C.R.Civ.P., Rule 56(c). "It is a drastic remedy, not to be granted 'unless it is perfectly clear that no issue of fact is involved and inquiry into the facts is not desirable to clarify the application of the law.' " Carlton v. Carlton, 74 N.C.App. 690, 691, 329 S.E.2d 682, 683 (1985) (citations omitted). The moving party has the burden to establish the lack of any triable issue of fact. Id.

In this case, each party submitted affidavits. Plaintiff's affidavit states that she was forced to sign the agreement under duress and coercion. Defendant denies this allegation. Taking plaintiff's affidavit as true, we find there is a genuine issue of material fact on the question of duress and coercion concerning the 1988 separation agreement.

Furthermore, when examining whether both parties freely entered into a separation agreement, trial courts should use considerable care because contracts between husbands and wives are special agreements.

Courts have thrown a cloak of protection about separation agreements and made it their business, when confronted, to see to it that they are arrived at fairly and equitably. To warrant equity's intervention, no actual fraud need be shown, for relief will be granted if the settlement is manifestly unfair to a spouse because of the other's overreaching.

Johnson v. Johnson, 67 N.C.App. 250, 255, 313 S.E.2d 162, 165 (1984). "The relationship between husband and wife is the most confidential of all relationships, and transactions between them, to be valid, must be fair and reasonable.... [A] separation agreement ... must have been entered into without coercion...." Eubanks v. Eubanks, 273 N.C. 189, 195-96, 159 S.E.2d 562, 567 (1968). "[A] court of equity will refuse to enforce a separation agreement, like any other contract, which is unconscionable or procured by duress, coercion or fraud." Knight v. Knight, 76 N.C.App. 395, 398, 333 S.E.2d 331, 333 (1985).

"Duress is the result of coercion." Link v. Link, 278 N.C. 181, 191, 179 S.E.2d 697, 703 (1971). "Duress exists where one, by the unlawful act of another, is induced to make a contract or perform or forego some act under circumstances which deprive him of the exercise of free will." Id. at 194, 179 S.E.2d at 705 (citations omitted). "It may exist even though the victim is fully aware of all facts material to his or her decision." Id. at 191, 179 S.E.2d at 703.

Factors relevant in determining whether a victim's will was actually overcome include "the age, physical and mental condition of the victim, whether the victim had independent advice, whether the transaction was fair, whether there was independent consideration for the transaction, the relationship of the victim and alleged perpetrator, the value of the item transferred compared with the total wealth of the victim, whether the perpetrator actively sought the transfer and whether the victim was in distress or an emergency situation." Curl v. Key, 64 N.C.App. 139, 142, 306 S.E.2d 818, 820 (1983), reversed on other grounds, 311 N.C. 259, 316 S.E.2d 272 (1984).

The effect of the 1988 separation agreement upon the 1983 agreement is the second question presented. Any analysis of the construction and effect of a separation agreement will at least begin by applying the same rules used to interpret contracts generally. Lane v. Scarborough, 284 N.C. 407, 409, 200 S.E.2d 622, 624 (1973). When a separation agreement is in writing and free from ambiguity, its meaning and effect is a question of law for the court. Id. at 410, 200 S.E.2d at 624.

The 1988 separation agreement provides for the distribution of the parties' property. Neither party contends that the agreement is ambiguous or unclear. Specifically, the 1988 agreement contains an "Entire Agreement" provision which states: "[t]his agreement contains the entire understanding of the parties, and there are no representations, warranties, covenants, or undertakings other than those expressly set forth herein." Also, the agreement states that its purpose is to provide "for a final settlement of all marital and property rights." In addition, the 1988 agreement makes no reference to the 1983 separation agreement. "It is a well-settled principle of legal construction that '[i]t must be presumed the parties intended what the language used clearly expresses, and the contract must be construed to mean what on its face it purports to mean.' " Hagler v. Hagler, 319 N.C. 287, 294, 354 S.E.2d 228, 234 (1987) (citation omitted). The language of the 1988 separation agreement clearly and unambiguously establishes that the parties' intention was to fully dispose of their respective property rights. Accordingly, we hold that the 1983 separation agreement has been modified by the subsequent 1988 separation agreement if the 1988 agreement is not declared invalid due to duress and coercion.

Finally, the third question we must decide is whether the 1983 separation agreement is itself an enforceable contract in the event that the 1988 agreement is declared void. On this point defendant first argues that in determining the intended effects of the 1983 separation agreement it is necessary to separate the property settlement provisions from the marital/support components of the separation agreement. It is his contention that even if the four-year reconciliation voided the marital/support provisions of the agreement, the property provisions of the document are still in effect. We disagree.

Defendant cites Buffington v. Buffington, 69 N.C.App. 483, 317 S.E.2d 97 (1984), in support of his argument that the four-year reconciliation had no effect on the property provisions of the 1983 agreement. Buffington, however, does not apply here. Since Buffington was handed down in 1984, a fire storm of criticism has been leveled at this Court's improper interchange of the terms "separation agreement" and "property settlement" in that opinion. Sharp, Semantics as Jurisprudence: The Elevation of Form Over Substance in the Treatment of Separation Agreements in North Carolina, 69 N.C.L.Rev., Issue 2 (forthcoming publication, January 1991); Note, Property Settlement or Separation Agreement: Perpetuating the Confusion--Buffington v. Buffington, 63 N.C.L.Rev. 1166, 1173 (1985); Note, Contractual Agreements as a Means of Avoiding Equitable Distribution--Buffington v. Buffington, 21 Wake Forest L.Rev. 213, 233 (1985).

North Carolina courts have long recognized a distinction between separation agreements and property settlements. A "pure" separation agreement is a contract in which the husband and wife agree to live apart. Most separation agreements provide for support for the wife and custody and support for minor children. 2 R. Lee, N.C. Family Law § 187 (4th ed.1980). The traditional view, and the one followed in North Carolina, is that separation agreements are void as against public policy unless the parties are living apart at the time the document is executed or they plan to separate shortly thereafter. Furthermore, reconciliation of the parties voids the executory provisions of a separation agreement. In re Estate of Adamee, 291 N.C. 386, 391, 230 S.E.2d 541, 545 (1976). A "true" property settlement, on the other hand, involves the release and division of property and property interests between the parties. Lee, supra, at § 187; see generally Sharp, Divorce and the Third Party: Spousal Support, Private Agreements, and the State, 59 N.C.L.Rev. 819 (1981). Parties may enter into property settlements at any time, before, during or after marriage. N.C.Gen.Stat. § 50-20(d) (1987). Of course, in most separations the parties choose to resolve both their marital and property considerations in one document, which leads to the situation we are faced with here, whether reconciliation has the same effect on the marital/support provisions of the agreement that it has on the property provisions in the same document. Specifically, while reconciliation may nullify the marital/support provisions of an agreement, does it also invalidate the property provisions of a separation agreement? Much of the confusion surrounding this issue can be traced to Buffington.

In 1981, the General Assembly enacted N.C.Gen.Stat. § 50-20(d), which provided that before, during, or after marriage the parties may provide by agreement for the distribution of their "marital property." In Buffington, a couple executed a separation agreement but then lived together for eighteen days. Id. at 484, 317 S.E.2d at 97. The wife later sought equitable distribution on the grounds that the cohabitation after execution rendered the agreement void. This Court held "the public policy of our state, as expressed by G.S. § 50-20(d), permits...