Zaliagiris v. Zaliagiris, COA03-649.

• Decision Date: 01 June 2004
• Docket Number: No. COA03-649.,COA03-649.
• Court: North Carolina Court of Appeals
• Parties: Elizabeth Smith ZALIAGIRIS, Plaintiff v. Thomas E. ZALIAGIRIS, Sr., Defendant.

596 S.E.2d 285

164 NC App. 602

Elizabeth Smith ZALIAGIRIS, Plaintiff v. Thomas E. ZALIAGIRIS, Sr., Defendant.

No. COA03-649.

Court of Appeals of North Carolina.

June 1, 2004.

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

Horack, Talley, Pharr & Lowndes, P.A., by Kary C. Watson and Tate K. Sterrett, for defendant-appellant.

HUNTER, Judge.

Thomas E. Zaliagiris, Sr. ("defendant") appeals from an amended Judgment and Order on Equitable Distribution, Alimony, and Child Support filed 11 September 2002 and a Memorandum Order filed 30 October 2002. Because we conclude the trial court (1) erred in assessing sanctions against defendant without giving him proper due process notice, and (2) erred in failing to take into account defendant's child support obligation to a child born of a subsequent marriage in setting defendant's permanent child support payments in a case not controlled by the presumptive child support guidelines, we reverse in part and remand.

Defendant and Elizabeth Smith Zaliagiris ("plaintiff") were married on 20 August 1983 and separated on 21 January 1998. On 7 February 2000, plaintiff filed a complaint seeking custody of the two children born of the marriage, child support, post-separation support, alimony, equitable distribution, and attorney's fees. On 17 April 2000, defendant filed his answer and counterclaim. Following the resolution of the post-separation support, temporary child support, and custody claims, the remaining equitable distribution, alimony, and child support claims came on for trial on 13 February 2002. Prior to trial, the trial court, on motion of plaintiff, entered a preliminary injunction freezing all of defendant's assets, which resulted in defendant releasing his attorney and proceeding to trial pro se due to his representation he would be unable to pay an attorney.

At trial, both parties produced expert witness testimony regarding the valuation of defendant's twenty-five percent (25%) share in a business entity. T. Randolph Whitt ("Whitt"), plaintiff's expert, testified that the interest was valued at $413,000.00 on the date the parties separated and was worth $527,000.00 in August 2001. Timothy Allen Stump ("Stump"), defendant's expert, testified that on the date of separation, defendant's interest in the company was only $61,241.00, and in October 2001 was worth $172,509.00. Stump had been unaware until shortly before trial that defendant had sold his ownership interest in the business for $400,000.00 in 2001.

With regard to the child support portion of the action, both parties agree that this was not a case in which the presumptive child support guidelines apply. Prior to trial, defendant submitted an affidavit in which he stated that he was responsible for child support in the amount of $1,440.00 per month for a child born during his subsequent marriage who was not a part of the action. At trial, both plaintiff and defendant produced evidence that defendant was under a court order to pay child support for this child in the amount of $1,440.00. The record further indicates that a Catawba County District Court order requiring defendant to pay this amount was entered into evidence by defendant.¹

In a Judgment and Order filed 24 June 2002, the trial court found that the value of defendant's interest in the business was $413,000.00 on the date of separation and ordered defendant to reimburse plaintiff for the cost of hiring Whitt as an expert witness. The trial court also found that although defendant had a child from a subsequent marriage, and was now separated, he was nevertheless not under a court order or other written obligation to provide child support for that child, and thus the trial court did not factor in any other child support obligation in determining defendant's child support requirements in this case. In addition, the trial court made the award of alimony and permanent child support retroactively effective to 1 February 2002. Both parties subsequently filed motions requesting the trial court to reconsider and amend its 24 June 2002 judgment and order. As an exhibit to his motion for reconsideration, defendant attached a copy of the Catawba County child support order. A hearing was conducted on these motions on 29 August 2002, at which an affidavit from Whitt was presented showing that he had not given his expert testimony at trial on behalf of plaintiff pursuant to a subpoena. Once it was pointed out to the trial court that, as Whitt had not been subpoenaed, the expert witness fee could not be assessed as a court cost, the trial court announced sua sponte that instead of assessing the expert witness fees as costs, they would be assessed as a Rule 11 sanction against defendant. The trial court stated defendant was "going to have to pay these fees one way or another" and that the trial court would "figure out a way to" make defendant pay Whitt's expert witness fee because defendant should have stipulated to the valuation of the business. Plaintiff's counsel noted that the appropriate statute for sanctioning defendant would be N.C. Gen.Stat. § 50-21(e) for willful obstruction and unreasonable delay of an equitable distribution proceeding. The trial court later stated it would make additional findings of fact to justify the award of expert witness fees as a sanction against defendant.

On the issue of whether the award of permanent child support should be modified to reflect defendant's child support obligations to his child from the subsequent marriage, the trial court stated that even if it had considered the amount of defendant's other child support obligation, it would not have altered the trial court's ruling in this case "because [defendant] decided to have another child after he separated from his wife." The trial court further clarified "I would not have adversely affected [the amount of support to the children of his marriage to plaintiff] to allow him to support this third child because that's just something that he was going to have to ... figure out a way to do...."

The trial court entered an amended judgment and order on 11 September 2002. In this amended judgment, the trial court made no adjustment to the amount of permanent child support and did not alter its finding of fact regarding defendant's other child support obligations to his child from a subsequent marriage. Furthermore, the trial court made additional findings of fact that defendant's refusal to accept plaintiff's valuation of the business resulted in a willful obstruction and unnecessary delay of the proceedings and concluded as a matter of law that defendant should be sanctioned under both Rule 11 and N.C. Gen.Stat. § 50-21(e). As a result, defendant was ordered to not only pay a sanction in the amount of the expert witness fee of $14,500.00, but in addition to pay plaintiff's attorney's fees related to the presentation of the expert witness testimony in the amount of $4,235.00. The trial court further did not alter the effective date of alimony and permanent child support.

On 20 September 2002, defendant filed a motion for a new trial. In an order filed 30 October 2002, the trial court granted this motion in part on the limited issue of the appropriate amount of sanctions to be assessed against defendant. Before the trial court could reconsider the amount of sanctions, defendant filed a notice of appeal on 20 December 2002. The trial court subsequently entered an order filed on 14 February 2003, which reduced the amount of sanctions awarded by five dollars and awarded the sanctions solely under N.C. Gen.Stat. § 50-21(e).

The issues are whether (I) the trial court erred by summarily recasting the improper assessment of an expert witness fee as a sanction against defendant; (II) the trial court erred in failing to consider defendant's child support obligation to a child born of a subsequent marriage in a case where the presumptive child support guidelines do not apply; and (III) the trial court abused its discretion in setting the retroactive effective date of the award of alimony and child support.

At the outset, we note that it appears this appeal was taken prematurely before the trial court could enter its final ruling on the appropriate award of sanctions against defendant. To the extent, however, this is an interlocutory appeal subject to dismissal, we elect to exercise our discretion under Rule 21 of the North Carolina Rules of Appellate Procedure and grant certiorari to consider the full merits of this appeal including the 14 February 2003 order filed subsequent to the notice of appeal. The dissent, while not disagreeing with our analysis on the merits, takes issue solely with our decision to grant a writ of certiorari in this matter.

It is an appropriate exercise of this Court's discretion to issue a writ of certiorari in an interlocutory appeal where, as in this case, there is merit to an appellant's substantive arguments and it is in "the interests of justice" to treat an appeal as a petition for writ of certiorari. Sack v. N.C. State Univ., 155 N.C.App. 484, 490, 574 S.E.2d 120, 126 (2002); see also Huffman v. Aircraft Co., 260 N.C. 308, 310, 132 S.E.2d 614, 615-16 (1963)

(discussing the appropriateness of treating an appeal as a petition for writ of certiorari based on the merits of the substantive issues). Contrary to the dissent's assertions, the North Carolina Court of Appeals has the discretionary authority to treat a purported appeal as a petition for a writ of certiorari and to issue such a writ in order to consider the appeal. Staton v. Russell, 151 N.C.App. 1, 7, 565 S.E.2d 103, 107 (2002). Under Rule 21 of the North Carolina Rules of Appellate Procedure:

The writ of certiorari may be issued in appropriate circumstances by either appellate court to permit review of the judgments and orders of trial tribunals when the right to prosecute an appeal has been lost by failure to take timely...