Opinion
No. COA09-1215
Filed 15 June 2010 This case not for publication
Appeal by Defendant from an order entered 28 April 2009 by Judge William G. Stewart in Wilson County District Court. Heard in the Court of Appeals 10 March 2010.
Narron Holdford, P.A., by I. Joe Ivey, for Plaintiff-Appellee. Morrison Law Firm, PLLC, by Janice A. Walston, for Defendant-Appellant.
Wilson County No. 07 CVD 2665.
James Andy Martin (Defendant) appeals from the trial court's order granting Martha L. Martin (Plaintiff) specific performance of certain terms contained in the Separation Agreement between the parties, directing Defendant to pay Plaintiff $9,874.47 in education expenses for which he was responsible, and awarding the costs of the action to Plaintiff to be paid by Defendant. For the following reasons, we affirm as to the order of specific performance but reverse as to the award of costs.
Plaintiff and Defendant were previously married and subsequently divorced. Three children were born of the marriage before the parties separated on 24 July 1999. On 20 August 1999, the parties entered into an agreement (Separation Agreement) providing for, inter alia, shared joint custody of the minor children, with Plaintiff providing the primary residence, and detailing Defendant's visitation schedule. Among the settlement terms negotiated, Plaintiff and Defendant included a paragraph titled "EDUCATION," wherein they agreed that they "shall each pay for one-half of the cost of each child's college education including, but not limited to, tuition, room and board, books, and miscellaneous fees." The Separation Agreement was not incorporated into the parties' divorce judgment.
The eldest child of the parties' marriage, Andrew, was accepted by the University of North Carolina at Chapel Hill (UNC) and matriculated as a freshman in the fall of 2007. As soon as UNC made the financial information available as to the cost of tuition, room, board, and related expenses, Plaintiff provided Defendant with those figures and continued to update him as to the costs of their son's college education. Defendant, however, had made no contribution to Andrew's post-secondary education as of the date of trial in this action. Plaintiff also paid all expenses incurred for their son through the first semester of his sophomore year, and Defendant failed to reimburse Plaintiff for her payment thereof. It is anticipated that the other two children of the marriage, based on positive academic performance, will be eligible for, apply to, and attend college.
In December of 2007, Plaintiff filed a complaint for recovery of the amount owed by Defendant and for specific performance of the education provisions contained in the Separation Agreement. The matter was heard at the 30-31 October 2008 term of Wilson County Civil Non-Jury District Court. After conducting a bench trial on the merits and reviewing all the evidence before it, the district court entered an order on 28 April 2009, nunc pro tunc 31 October 2008, finding Defendant in breach of the Separation Agreement's education provisions and granting Plaintiff's request that she recover from Defendant one-half of the amount she had expended in costs associated with their eldest son's freshman academic year. The order further decreed that Defendant specifically perform his obligations as they appear in the education section of the Separation Agreement by paying one-half of each child's college education expenses, including all amounts already owed for Andrew's sophomore year. From this order, Defendant appeals.
STANDARD OF REVIEW
Our review of a bench trial order is clearly defined:
"It is well settled in this jurisdiction that when the trial court sits without a jury, the standard of review on appeal is whether there was competent evidence to support the trial court's findings of fact and whether its conclusions of law were proper in light of such facts." While findings of fact by the trial court in a non-jury case are conclusive on appeal if there is evidence to support those findings, conclusions of law are reviewable de novo.
Lee v. Lee, 167 N.C. App. 250, 253, 605 S.E.2d 222, 224 (2004) (quoting Shear v. Stevens Building Co., 107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992)); see also Scott v. Scott, 336 N.C. 284, 291, 442 S.E.2d 493, 497 (1994) ("The well-established rule is that findings of fact by the trial court supported by competent evidence are binding on the appellate courts even if the evidence would support a contrary finding."). In reviewing the equitable remedy of specific performance, however, we are limited to an abuse of discretion standard. See Harborgate Prop. Owners Ass'n v. Mountain Lake Shores Dev. Corp., 145 N.C. App. 290, 295, 551 S.E.2d 207, 210 (2001).
I.
Defendant first argues that an unincorporated separation agreement is a contract, governed by contract law, and must be interpreted and enforced as such. We agree with Defendant's assertion. See, e.g., Condellone v. Condellone, 129 N.C. App. 675, 681, 501 S.E.2d 690, 695 (1998) ("A marital separation agreement which has not been incorporated into a court order is `generally subject to the same rules of law with respect to its enforcement as any other contract.'" (quoting Moore v. Moore, 297 N.C. 14, 16, 252 S.E.2d 735, 737 (1979)); see also 3 Suzanne Reynolds, Lee's North Carolina Family Law § 14.33a, at 14-93 (5th ed., rev. vol. 2002) ("A valid separation agreement that has not become part of a court decree is a contract, and the parties may enforce it in the same manner as any other contract.").
Contrary to Defendant's argument, however, the trial court did find as a fact that "[t]he Separation Agreement was not incorporated into the parties' divorce judgment" and concluded as a matter of law that "[t]he Separation Agreement is a valid contract entered into by the parties." Moreover, the trial court concluded not only that Defendant was "in breach of the provisions of the Separation Agreement" but also that "Plaintiff is entitled to an order of [s]pecific performance in order to obtain the benefit promised to her by the Defendant in the Separation Agreement." Thus, the language used and the remedies implemented by the trial court clearly demonstrate that the judge interpreted and enforced the Separation Agreement pursuant to contract law. Accordingly, the trial court did exactly what Defendant contends it should have done, and therefore, this argument is meritless.
II.
Defendant argues that the education section of the Separation Agreement is ambiguous and cannot reasonably be enforced and that the trial court failed to so find. We disagree.
As set out above, "[q]uestions relating to the construction and effect of separation agreements . . . are ordinarily determined by the same rules which govern the interpretation of contracts generally." Lane v. Scarborough, 284 N.C. 407, 409, 200 S.E.2d 622, 624 (1973). Because a court's primary purpose when interpreting a contract "is to ascertain the intention of the parties at the moment of its execution," the terms of a separation agreement between a husband and wife, like any contract, are construed to achieve their intent at the time they entered into the agreement. Id. at 409-10, 200 S.E.2d at 624. "If the plain language of a contract is clear, the intention of the parties is inferred from the words of the contract." Walton v. City of Raleigh, 342 N.C. 879, 881, 467 S.E.2d 410, 411 (1996).
The determination as to "`whether contract language is ambiguous is a question for the court.'" Piedmont Bank and Trust Co. v. Stevenson, 79 N.C. App. 236, 241, 339 S.E.2d 49, 52, aff'd per curiam, 317 N.C. 330, 344 S.E.2d 788 (1986). In making this conclusion, "words are to be given their usual and ordinary meaning and all the terms of the agreement are to be reconciled if possible[.]" Id. Moreover, we must "presume[] 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) (internal quotation marks and citation omitted). Where the plain language is clear such that a contract in writing is "`free from any ambiguity which would require resort to extrinsic evidence, or the consideration of disputed fact, the intention of the parties is a question of law.'" Shelton v. Duke Univ. Health Sys., 179 N.C. App. 120, 123, 633 S.E.2d 113, 115 (2006) (quoting Lane, 284 N.C. at 410, 200 S.E.2d at 624). Thus, "[w]here the terms of a separation agreement are plain and unambiguous, the court will determine the legal effect and enforce it as written by the parties." Blount v. Blount, 72 N.C. App. 193, 195, 323 S.E.2d 738, 740 (1984).
Defendant argues that he intended the education provision of the Separation Agreement to mean "a modest education with student loans and scholarships for a child or children with whom he enjoyed an ongoing, active relationship based upon the regular visitation set forth in the Separation Agreement." He claims he did not intend that his obligation to pay for his children's education expenses would extend to the current situation, which he describes as "a four (4) year education at a well-respected state school with a private dormitory and new laptop through the school program — independent of all other provisions of the Separation Agreement, thereby excusing [Plaintiff] from any obligations to support the visitation schedule." Essentially, Defendant's argument is that his intent, at the time he entered into the Separation Agreement, was that his responsibility for one-half of his children's college expenses would arise only if he maintained an active role in his children's lives through sustained visitation and contributed to the college application and decision-making process. We must first determine, however, whether the terms of the Separation Agreement are ambiguous because if the language is clear, the court has no authority to consider extrinsic evidence in ascertaining the intent of the parties. See Hartman v. Hartman, 80 N.C. App. 452, 454, 343 S.E.2d 11, 13 (1986) ("`When the language of the contract is clear and unambiguous, . . . the court cannot look beyond the terms of the contract to determine the intentions of the parties[.]'" (quoting Piedmont Bank, 79 N.C. App. at 240, 339 S.E.2d at 52)).
In the instant case, the provision concerning the parties' shared contribution to their children's college education is not ambiguous. Defendant argues that the terms "college" and "room and board" are undefined as are the details regarding how payments are to be made, rendering the education section of the Separation Agreement ambiguous on its face. We conclude, however, that when given their plain and ordinary meaning, these terms clearly express the parties' intent at the time they negotiated the Separation Agreement. For, the education paragraph on its face purports to memorialize the parties' voluntary undertaking to share equally the costs associated with each of their children's post-secondary, undergraduate education.
In Rosen v. Rosen, 105 N.C. App. 326, 413 S.E.2d 6 (1992), this Court held that the defendant's obligation under the separation agreement "to assist the said children in the obtaining of educational training beyond high school . . . limited to those expenses reasonably incurred in the obtaining of an undergraduate college degree or the completion of a course in a specific vocation" lacked mutuality of agreement and was void for indefiniteness because there was no provision "relating to a specific amount or percentage for which defendant was responsible." Id. at 327-28, 413 S.E.2d at 7-8. Where the college expenses clause in this case specifically allocates 50% of the costs to each party, Defendant's argument that the provision is too indefinite to be enforced must fail.
The provision clearly states that each party shall pay one-half of the cost of each child's college education and the expenses related thereto. The language in this particular section is consistent with and similar to several college education clauses that have been considered by our courts. See, e.g., Smith v. Smith, 121 N.C. App. 334, 337, 465 S.E.2d 52, 54 (1996) (enforcing defendant's agreement in consent order to "pay for the higher education of the minor child which shall include college, technical school or other educational opportunities past the high school level," including "fees, tuitions, lodging, books, travel, clothing and other necessary and reasonable expenses, which would customarily be incurred in the pursuit of higher education" where the provision placed no limit on the cost of tuition or the location of a college); see also Boyles v. Boyles, 70 N.C. App. 415, 319 S.E.2d 923 (1984) (enforcing separation agreement requiring defendant "to pay the tuition and other expenses incidental to a college education for each of the children" and holding other incidental expenses includes the obligation to pay not only "tuition, fees, books," and other educational expenses, but also "room and board"). The instant agreement employs these same terms, which are simple, straightforward, well-understood words to which common, ordinary meanings are attached.
Moreover, the instant education clause does not place any limits on the choice of school, the maximum tuition or incidental expenses anticipated, or the enforceability of the provision as dependant upon any other provision of the Separation Agreement or the level of each party's involvement in the college decision-making process. Because this provision is not ambiguous, we do not consider Defendant's alleged assumptions or expectations at the time he and Plaintiff entered into the Separation Agreement. Accordingly, the parties' intention is a question of law for the court, and having reviewed the plain and unambiguous language of the provision for college education expenses, we conclude the trial court did not err by failing to find the terms therein ambiguous.
III.
Defendant contends that the trial court erred in ordering specific performance. We disagree.
Defendant first argues that specific performance is not an enumerated remedy in the Separation Agreement and may not be properly awarded in this matter. As set out above, however, separation agreements are ordinarily governed by contract law, and "[t]he enforcement of agreements for child support reflects the general principles on enforcement of agreements." Reynolds, supra, at § 14.17g, at 14-59. "If the agreement to support a child past majority has not become part of a court decree, then for breach of the agreement the non-breaching party has available all the remedies ordinarily available for breach of contract." Id. In addition to standard contract remedies at law, including actions for breach and recovery of monetary damages, "[e]quity also recognizes actions for specific performance as remedial alternatives for breaches of contract, an option with special significance for separation agreements that often obligate a party to make periodic payments." Id. at § 14.33a, at 14-94.
Although our courts are powerless to order child support, with limited exceptions, past the age of majority, see N.C. Gen. Stat. § 50-13.4(b)(2) (2009), our case law "clearly establishes that a parent can assume contractual obligations to his child greater than the law otherwise imposes." Ross v. Voiers, 127 N.C. App. 415, 417, 490 S.E.2d 244, 246 (1997) (quoting Williams v. Williams, 97 N.C. App. 118, 122, 387 S.E.2d 217, 219 (1990)); see also Church v. Hancock, 261 N.C. 764, 765, 136 S.E.2d 81, 82 (1964) ("[A] parent can bind himself by contract to support a child after emancipation and past majority, and such contract is enforcible [sic] as any other contract."). This Court has recognized that "[t]he most common of these provisions is one providing for the payment of college expenses of the children." Altman v. Munns, 82 N.C. App. 102, 104, 345 S.E.2d 419, 422 (1986). Where this case involves a similar agreement for post-majority support, recognized by the trial court as a valid contract between the parties, all remedies for breach thereof, including specific performance, are available.
We agree with Defendant that "[t]he equitable remedy of specific enforcement of a contract is available only when the plaintiff can establish that an adequate remedy at law does not exist." Moore, 297 N.C. at 16, 252 S.E.2d at 737. However, the trial court found, and we agree, that "Plaintiff does not have an adequate remedy at law to enforce the provision of the Separation Agreement pertaining to the children's education." See Rose v. Rose, 66 N.C. App. 161, 163, 310 S.E.2d 626, 628 (1984) (stating the question of adequacy is one of fact). "It is not enough that there is some remedy at law; equity will intervene if the legal remedy is not as efficient and practical to meet plaintiff's needs." Id.
Where separation agreements often provide for periodic payments, "[a] plaintiff who relies on damages to compensate for the breach of a separation agreement which has not been incorporated into a court order generally does not have an adequate remedy at law." Condellone, 129 N.C. App. at 682, 501 S.E.2d at 695; see also Reynolds, supra, at § 14.35b, at 14-99 ("Because separation agreements often involve periodic payments, . . . the law recognizes that legal relief is usually inadequate, and the moving party has little difficulty with this element, especially for an order involving future payments."). In such cases, the need for "successive lawsuits to recover in a piecemeal fashion" often renders the remedy at law inadequate. Moore, 297 N.C. at 18, 252 S.E.2d at 738; see also Stewart v. Stewart, 61 N.C. App. 112, 117, 300 S.E.2d 263, 266 (1983) (affirming specific performance of separation agreement where "defendant had stated that he would not comply with the terms" and "no valid reason appear[ed] for compelling a party to accumulate arrearages before seeking specific performance").
Defendant attempts to distinguish these cases from the present case by arguing that the plaintiffs in the former needed the alimony and support payments provided by separation agreement for their own subsistence. These decisions, however, are not so limited. Although Defendant's obligation to pay one-half of his children's college expenses does not necessarily involve periodic payments, the rationale in favor of specific performance is the same. The payments required by the education provision of the Separation Agreement are indisputably recurring, for each college semester for each child. Moreover, Defendant had not contributed once to his son's education over the course of three semesters and has essentially stated he did not intend to perform in his defense of this action. The trial court found not only that the other two children would in all likelihood attend college, requiring future payments, but also that Plaintiff has been required to seek judicial enforcement of other provisions contained in the Separation Agreement. Therefore, we hold the trial court did not err in concluding Plaintiff had no adequate remedy at law.
Not only must a party seeking specific performance prove that his remedy at law is inadequate but also that he has performed his obligations. See Cavenaugh v. Cavenaugh, 317 N.C. 652, 656-57, 347 S.E.2d 19, 22 (1986). Defendant argues that Plaintiff materially breached the terms of the Separation Agreement by frustrating the visitation provisions therein and by making unilateral decisions during their son's college application process. We disagree.
Defendant first contends that Plaintiff's actions with regard to the visitation schedule, as set out in the Separation Agreement, amounted to a material breach and thereby preclude the remedy of specific performance. Although Defendant's brief details the collapse of the visitation arrangement between himself and his children, the trial court found "as a fact that the Plaintiff did not engage in a pattern of behavior such as to deprive the Defendant of his right of visitation with his minor children as contained in the Separation Agreement and in a subsequent Court Order." After reviewing the record, we conclude the trial court's finding is supported by competent evidence. Moreover, the trial court concluded that "[t]he provisions of the Separation Agreement are independent and therefore a breach by the Plaintiff of a separat[e] provision, even if it occurred, is not a defense to the enforceability of the provision of the paragraph entitled "EDUCATION."
"[A] critical issue in deciding whether a spouse's breach of a provision of a separation agreement is a defense is determining whether the provisions are interdependent or dependent." White v. Bowers, 101 N.C. App. 646, 650, 400 S.E.2d 760, 762 (1991). When the question of separability arises in the context of a separation agreement that does not adequately address the issue, "there is a presumption that provisions in a separation agreement . . . are separable[.]" White v. White, 296 N.C. 661, 671-72, 252 S.E.2d 698, 704 (1979); see also Williford v. Williford, 10 N.C. App. 451, 455, 179 S.E.2d 114, 117 (holding provisions for custody and visitation in separation agreement were independent of provisions for support and maintenance so that wife's breach of visitation provisions was no defense to husband's obligation to pay support and maintenance); Reynolds, supra, at § 14.47c, at 14-133 ("The presumption that provisions are independent is especially strong when either spousal support or child support is at issue, and the law presumes that the contractual duty to pay support is independent of the other provisions of the agreement.").
Here, the trial court found as a fact that "the Separation Agreement contains no provisions determining whether or not the respective paragraphs thereof are dependent or independent." After considering all the evidence presented at the bench trial, the court concluded that the parties intended for all provisions of the Separation Agreement to be independent of each other. This conclusion is supported by competent evidence, and accordingly, we hold that any breach of the visitation provisions by Plaintiff would not excuse Defendant's performance of the post-majority child support provision.
Defendant also argues that Plaintiff materially breached the education expenses provision itself by failing to consult Defendant about any of the college decisions. The education paragraph of the Separation Agreement, however, provides only that each party is responsible for one-half of their children's college expenses. Plaintiff's performance is consistent with the agreement between the parties, where she had contacted Defendant to inform him Andrew was applying to UNC, made all financial information related thereto available to Defendant, paid all costs associated with Andrew's attendance at UNC, and sought financial assistance from Defendant pursuant to their agreement as the costs became due and after she had paid them. Defendant does not contest these findings of fact. Furthermore, there is no evidence that Plaintiff's failure to consult Defendant, after making him aware of the ongoing application process, or her unilateral decision-making were conducted in bad faith to unnecessarily increase the total cost of Andrew's college education. We hold there is competent evidence to support the trial court's findings; therefore, its conclusion that Plaintiff had complied with the Separation Agreement was proper.
Defendant argues that the trial court's finding that he has the ability to pay the amounts ordered is insufficient to support the order of specific performance. We disagree.
The general rule is that "the equitable remedy of specific performance may not be ordered `unless such relief is feasible'; therefore courts may not order specific performance `where it does not appear that defendant can perform.'" Condellone, 129 N.C. App. at 682, 501 S.E.2d at 695 (quoting 81 C.J.S. Specific Performance § 18, at 733 (1977)). "[W]hen a defendant has offered evidence tending to show that he is unable to fulfill his obligations under a separation agreement . . . the trial judge must make findings of fact concerning the defendant's ability to carry out the terms of the agreement before ordering specific performance." Cavenaugh, 317 N.C. at 657, 347 S.E.2d at 23.
The trial court found as a fact that "Defendant offered as evidence his testimony and a Financial Affidavit in support of his claim that his expenses exceeded his monthly income." The trial court also found that Defendant is well-employed and earns more than $65,000 per year, no unusual or unexpected expenses make it impossible for him to comply with the education provision, and he has the ability to carry out his agreed-upon obligation to pay his portion of his children's college educations. Defendant argues that these findings are "vague" and fail to reflect that the evidence before the trial court was fully considered. The trial court, however, "[i]n finding that the defendant is able to perform a separation agreement, . . . is not required to make a specific finding of the defendant's `present ability to comply' as that phrase is used in the context of civil contempt." Condellone, 129 N.C. App. at 683, 501 S.E.2d at 696. "In other words, the trial court is not required to find that the defendant `possesses some amount of cash, or asset readily converted to cash' prior to ordering specific performance." Id. (citing McMiller v. McMiller, 77 N.C. App. 808, 809, 336 S.E.2d 134, 135 (1985)).
Here, the trial court considered Defendant's sworn testimony and Financial Affidavit, which not only reflected a $400 per month shortfall in Defendant's expenses over his income but also indicated a comfortable lifestyle and showed a number of voluntary deductions for benefits. Notwithstanding Defendant's evidence that he could not fulfill the obligations of the education provision, the trial court properly concluded, after reviewing Defendant's income and items of expenditure in detail, that he has the ability to pay the portion of his children's college education as he agreed to do in the Separation Agreement. Thus, we hold the trial court did not err in awarding specific performance to Plaintiff.
IV.
Defendant argues that the trial court had no authority to award attorney fees and costs in this matter. The trial court awarded costs of the action to Plaintiff to be paid by Defendant but failed to specify the authority under which such costs were awarded, indicate any specific amount to be paid, or reference any schedule of fees and costs that may have calculated the amount owed. "[T]he trial court's authority to award costs is strictly limited to `those items (1) specifically enumerated in the statutes, or (2) recognized by existing common law.'" Morgan v. Steiner, 173 N.C. App. 577, 581, 619 S.E.2d 516, 519 (2005) (quoting Department of Transp. v. Charlotte Area, 160 N.C. App. 461, 468, 586 S.E.2d 780, 784 (2003)). This Court has established a three-pronged test to determine if costs may be properly assessed:
First, if the costs are items provided as costs under N.C. Gen. Stat. § 7A-305, then the trial court is required to assess these items as costs. Second, for items not costs under N.C. Gen. Stat. § 7A-305, it must be determined if they are "common law costs" under the rationale of Charlotte Area. Third, as to "common law costs" we must determine if the trial court abused its discretion in awarding or denying these costs under N.C. Gen. Stat. § 6-20.
Lord v. Customized Consulting Specialty, Inc., 164 N.C. App. 730, 734, 596 S.E.2d 891, 895 (2004). In this case, the reasons for the amount of costs awarded are entirely unclear. Where the trial court failed to specify which, if any, of the costs set forth in N.C. Gen. Stat. § 7A-305(d) were assessable against Defendant in this case or indicate that additional costs were recoverable pursuant to N.C. Gen. Stat. § 6-20, the order lacks sufficient findings for us to determine if there was an abuse of discretion. Moreover, Plaintiff offered no evidence as to the costs or attorney's fees expended in the matter, and where there are neither findings of fact setting out the total fees and costs or an itemization thereof, nor findings that the amount is undisputed, we are unable to rule upon the propriety of the award. Accordingly, we reverse that portion of the trial court's order awarding the costs of the action to Plaintiff and taxed against Defendant.
For the foregoing reasons, the order of the trial court is affirmed in part and reversed in part.
Affirm in part, Reverse in part.
Judges BRYANT and STEELMAN concur.
Report per Rule 30(e).