Opinion
No. 06-1448.
Filed November 6, 2007.
Stokes County No. 02-CVD-147.
Appeal by defendant from Order entered 20 June 2005 and from judgment entered 2 May 2006 by Judge Charles M. Neaves, Jr., in Stokes County District Court. Heard in the Court of Appeals 10 May 2007.
Theodore M. Molitoris for plaintiff-appellee. John J. Korzen for defendant-appellant.
This is defendant's second appeal arising out of the parties' equitable distribution hearing held 7 April 2004, which resulted in an equitable distribution judgment filed in Stokes County District Court on 15 June 2004. Defendant filed notice of appeal from that judgment on 12 July 2004 (" Robertson I"). On 20 June 2005, during the pendency of the appeal of Robertson I, the trial court entered an interim distribution order pursuant to N.C. Gen. Stat. § 50-20(i1). Robertson I was heard in this Court on 19 October 2005. On 6 December 2005, the equitable distribution judgment was vacated by this Court and remanded to the trial court "for entry of a new judgment, based upon the existing record, and containing further and appropriate findings of fact regarding the fair market value of the business." Robertson v. Robertson, 174 N.C. App. 784, 790, 625 S.E.2d 117, 121 (2005) (internal citations and quotations omitted). On remand of Robertson I, the trial court held a hearing on 13 April 2006, and entered an amended equitable distribution judgment on 2 May 2006.
Defendant appeals from both the 20 June 2005 interim order and the 2 May 2006 amended order. For the reasons stated below, we vacate the interim distribution order of 20 June 2005, but affirm the amended equitable distribution judgment of 2 May 2006.
I. Background
The procedural and factual background up to the entry of the first equitable distribution judgment ("first judgment") on 15 June 2004 is set forth in Robertson I. The first judgment, inter alia, allocated the marital home to defendant but gave plaintiff a security interest in the home until defendant had paid $90,000 to plaintiff. Defendant subsequently failed to make monthly mortgage payments on the marital home, and it went into foreclosure.
On 11 January 2005, after entry of the first judgment and while Robertson I was on appeal, plaintiff filed a motion for contempt regarding defendant's failure to pay the sum of $50,000.00 on the equitable distribution distributive award and failure to make monthly mortgage payments on the marital home. In response, defendant made a voluntary payment to plaintiff of $18,099.11 on 24 February 2005. On 17 May 2005, also while Robertson I was on appeal, plaintiff filed another motion regarding defendant's failure to pay the sum of $50,000.00 on the distributive award and failure to make mortgage payments on the marital home. This motion, however, failed to make reference to any statute or rule under which plaintiff was seeking relief. The motion alleged that although the home was valued at $124,000.00 in the first judgment, it sold for $84,000.00 in the foreclosure sale, leaving net proceeds of approximately $20,000.00 after payment of the mortgage, court costs, and expenses. Plaintiff further alleged that the closing of the foreclosure sale was imminent and that the high bidder in the foreclosure assigned the bid to defendant's sister. Plaintiff alleged that defendant and his sister had both been convicted in federal court for failure to pay taxes and that they had "in the past worked closely together in illegal transactions involving tax payments." Plaintiff requested that "the Court issue an Exparte Order restraining the Defendant and attorney Curtis Howell [sic] from secreting, transferring, or disbursing foreclosure sale proceeds, and monies, if any, on deposit in the trust account or in the physical possession of said attorney" and that "the Court conduct a hearing and enter a permanent restraining order determining the appropriate division and transfer of these monies."
We note that plaintiff's motion did not request an interim equitable distribution order pursuant to N.C. Gen. Stat. § 50-20(i1). In fact, plaintiff's motion did not cite any statutory basis or even any clear legal rationale for the relief sought. Therefore, plaintiff's motion did not comply with N.C. Gen. Stat. § 1A-1, Rule 7(b)(1) ("[A] motion . . . shall state with particularity the grounds therefor[.]"), or with Rule 6 of the General Rules of Practice For the Superior and District Courts ("All motions, written or oral, shall state the rule number or numbers under which the movant is proceeding.").
No issue was raised as to the deficiencies of plaintiff's motion before the trial court, so we will not belabor the point, but we would stress that "it would be of great benefit to the trial court and this appellate court for counsel to name and number the rule pursuant to which the motion is made." Currituck Assocs.-Residential P'Ship v. Hollowell, 166 N.C. App. 17, 22, 601 S.E.2d 256, 260 (2004) (internal citations and quotations omitted), aff'd per curiam, 360 N.C. 160, 622 S.E.2d 493 (2005).
In any event, it is not clear to this Court why plaintiff chose to file a motion ex nihilo rather than protecting her interests by docketing the judgment as provided by N.C. Gen. Stat. § 1-234.
The trial court immediately entered an ex parte order upon plaintiff's 17 May 2005 motion, restraining disbursement of the foreclosure proceeds pending further hearing. On 6 June 2005 the trial court held a hearing on plaintiff's motion, with appearances of counsel for both parties. On 20 June 2005, the court entered the interim distribution order. The order contained the following findings of fact:
1. An Equitable Distribution Judgment was entered by the undersigned Judge Presiding June 9, 2004 [sic]. This Equitable Distribution Judgment required the Defendant to pay $50,000 forthwith and to make the monthly mortgage payments on the marital home. The Defendant has not made any of these payments, but has caused the marital home to be subject to a foreclosure proceeding in the Superior Court of Rockingham County, North Carolina, case number 04 SP 587.
2. This matter became [sic] before the Court on a Show Cause Motion February 24, 2005 and on that date, the Defendant made a voluntary payment to the Plaintiff in the amount of $18,099.11.
3. The marital home was found by this Court in the Equitable Distribution Judgment to have a fair market value of $124,000 and a first mortgage in the amount of $59,420 with a net value of $64,508.
4. The last and highest bidder at the foreclosure proceeding was William McCollum, who has assigned his bid to Joyce Robertson Adkins, the Defendant's sister. Rockingham County attorney, Curtis Howe, currently has in his trust account $84,000 deposited by Joyce R. Adkins and the foreclosure trustee is the Charlotte law firm, Kellum and Pettit, which is prepared to close this transaction.
5. While this matter is on appeal to the North Carolina Court of Appeals, the Trial Court has authority to grant an interim allocation of marital assets pursuant to General Statute 50-20 et. [sic] seq. and the Court does hereby allocate the net proceeds after satisfaction of the first mortgage and Court costs to be delivered by the trustee, Kellum and Pettit, directly to the Plaintiff, Theresa Brown, in its entirety, by payment through the office of Theodore M. Molitoris, 823 West Fifth Street, Winston-Salem, North Carolina 27101, counsel for the Plaintiff.
The trial court then made conclusions of law that it had "jurisdiction of the parties and the subject matter" of the proceeding, that the court was authorized by N.C. Gen. Stat. § 50-20 et seq. to make an "interim allocation of marital assets pending this appeal to the North Carolina Court of Appeals," and that there was no just reason for the court not to make "an interim allocation of the net sale proceeds of the marital home" to plaintiff. The trial court ordered the foreclosure trustee to pay the net foreclosure sales proceeds directly to plaintiff, through her attorney. Defendant now appeals from the interim order. On 6 December 2005, this Court filed Robertson I, vacating the first judgment and remanding the case to the trial court for further findings of fact regarding the valuation of the business. On remand, the trial court entered an amended equitable distribution judgment on 2 May 2006 ("second judgment"), from which defendant also now appeals.
II. Interim Distribution Order
Defendant argues that the district court erred by entering an interim distribution order while the prior appeal in this case was pending. Defendant contends that N.C. Gen. Stat. § 50-20(i1) (2005) does not allow entry of an interim order after a final equitable distribution judgment has been filed. Defendant further contends that when the appeal of the first judgment was filed, N.C. Gen. Stat § 1-294 deprived the district court of jurisdiction to issue further orders in the case. Plaintiff's brief did not address this argument at all.
"A judgment is void . . . when the issuing court has no jurisdiction over the parties or subject matter in question or has no authority to render the judgment entered." Burton v. Blanton, 107 N.C. App. 615, 616, 421 S.E.2d 381, 382. (1992). "As a general rule an appeal takes the case out of the jurisdiction of the trial court[.]" Carpenter v. Carpenter, 25 N.C. App. 307, 308, 212 S.E.2d 915, 916 (1975); N.C. Gen. Stat. § 1-294 (2005). However, a specific statute trumps the general rule and leaves jurisdiction with the trial court in the matter covered by the statute. In re Huber, 57 N.C. App. 453, 459, 291 S.E.2d 916, 920, disc. review denied and appeal dismissed, 306 N.C. 557, 294 S.E.2d 223 (1982); see, e.g., N.C. Gen. Stat. § 50-16.7(j) (expressly creating an exception to N.C. Gen. Stat. § 1-294 for alimony civil contempt proceedings). In the case sub judice, the trial court was deprived of jurisdiction by N.C. Gen. Stat. § 1-294, which absent an exception to the general rule, renders void the interim distribution order.
We next consider whether N.C. Gen. Stat. § 50-20(i1) confers jurisdiction on the district court to enter an interim distribution order during the pendency of an appeal of a final equitable distribution judgment. We conclude that it does not. N.C. Gen. Stat. § 50-20(i1), together with N.C. Gen. Stat. § 7A-244 (2005), confers subject matter jurisdiction on the district court to enter interim equitable distribution orders "at any time after an action for equitable distribution has been filed and prior to the final judgment of equitable distribution." N.C. Gen. Stat. § 50-20(i1). N.C. Gen. Stat. § 50-20(i1) does not thereby provide an exception allowing the district court subject matter jurisdiction to enter an interim order while the final judgment in the case is on appeal. In the case sub judice, the trial court entered the interim order after the final judgment in the case had been entered, and while an appeal was pending. The interim order was void for lack of subject matter jurisdiction when it was entered. Accordingly, we vacate the interim order filed on 20 June 2005.
III. Amended Distribution Order
A. Business Valuation Defendant first contends that the district court erred by basing its valuation of defendant's business upon evidence presented by plaintiff's business valuation expert. Defendant argues that plaintiff's expert witness, Cathy Diaz (Diaz), based her valuation on incompetent evidence and used an unsound methodology. Defendant contends that Diaz valued the business only as of 23 February 2002, although the date of separation was 31 December 2001. Defendant also argues that his business, water well drilling, is highly cyclical and that the two months of 2002 upon which Diaz based her evaluation were during the "worst drought in the state's history." Defendant argues that we should remand to the trial court again for revaluation of the business based on the testimony of defendant's expert witness, which defendant contends is the only competent evidence in the record.
On appellate review of an equitable distribution judgment, "[i]t is well established that a trial court's conclusions of law must be supported by its findings of fact." Robertson v. Robertson, 167 N.C. App. 567, 574, 605 S.E.2d 667, 671 (2004). When this Court concludes that the trial court's findings are insufficient to support its conclusions, the case is remanded for further findings. Minter v. Minter, 111 N.C. App. 321, 329, 432 S.E.2d 720, 725, disc. review denied, 335 N.C. 176, 438 S.E.2d 201 (1993). On remand, the trial court may be instructed to: (1) make findings "based on the existing record without taking further evidence," id., (2) "take additional evidence and make appropriate findings," McIver v. McIver, 92 N.C. App. 116, 128, 374 S.E.2d 144, 151 (1988), or (3) receive additional evidence in its discretion, Rhew v. Rhew, 138 N.C. App. 467, 472, 531 S.E.2d 471, 475 (2000). In Robertson I, this Court chose the first option, instructing the trial court to base its new findings "upon the existing record." 174 N.C. App. at 790, 625 S.E.2d at 121 (emphasis added) (citing Minter).
As a general rule, when an appellate court passes on questions and remands the case for further proceedings to the trial court, the questions therein actually presented and necessarily involved in determining the case, and the decision on those questions become the law of the case, both in subsequent proceedings in the trial court and on a subsequent appeal, provided the same facts and the same questions, which were determined in the previous appeal, are involved in the second appeal.
Transportation, Inc. v. Strick Corp., 286 N.C. 235, 239, 210 S.E.2d 181, 183 (1974) (internal citations and quotations omitted). In Robertson I, defendant made the identical arguments regarding Diaz's "incompetent evidence" and "unsound methodology." With those arguments squarely before it, this Court rejected them and instructed the trial court to base its findings on remand "upon the existing record." 174 N.C. App. at 790, 625 S.E.2d at 121. This Court did not hold that Diaz's testimony was incompetent or that her methodology was unsound, and did not direct the trial court to base its new findings only upon the evidence presented by defendant's expert witness. We held only that the trial court failed to indicate clearly the evidence upon which its valuation relied and the valuation method which the court used. That ruling is the law of the case, and we are governed by it. See N.C.N.B. v. Virginia Carolina Builders, 307 N.C. 563, 567, 299 S.E.2d 629, 631 (1983) ("[W]e conclude that once a panel of the Court of Appeals has decided a question in a given case that decision becomes the law of the case and governs other panels which may thereafter consider the case."). We will not revisit arguments regarding the competence or soundness of Diaz's testimony.
On remand of Robertson I, the trial court, in accordance with this Court's instructions, issued an amended order in which it made additional findings of fact, based on the evidence in the record, regarding the evidence upon which it relied and its method of valuing the business:
4. Cathy Diaz, CPA evaluated the Parson Wall Company using the (1) asset approach, (2) income approach and (3) market approach. She calculated that the fair market value of this asset on February 23, 2002 was $417,580 less a discount for marketability (10%) ($41,758) and that the common equity value was $375,000 (rounded). While the Court has determined the parties' separation date to be seven weeks earlier (December 31, 2001), Diaz determined from the information provided there was no appreciable difference in value during those seven weeks. Her report dated October 28, 2003 is incorporated herein by reference as though fully set forth herein.
. . . .
Net FMV of the well-drilling business including the fixed assets and liabilities is $375,000.00 less $13,694.00 (Defendant's separate interest.) [or] $361,306.00.
These are "appropriate findings of fact regarding the fair market value of the business[,]" 174 N.C. App. at 790, 625 S.E.2d at 121, sufficient to comply with this Court's instructions in Robertson I. Accordingly, defendant's assignment of error is overruled.
B. Ability to Pay Distributive Award
Defendant's last two arguments deal with the distributive award. Defendant first contends that the district court erred by its failure to make findings as to whether defendant had liquid assets sufficient to pay the distributive award. However, defendant made the same assignment of error verbatim in his first appeal to this Court but failed to argue the issue. In Robertson I, this Court noted that "defendant has failed to present argument on one of his original six assignments of error. Pursuant to N.C.R. App. P. 28(b)(6)(2005), the omitted assignment of error is deemed abandoned." 174 N.C. App. at 785, 625 S.E.2d at 118. The omitted assignment of error in Robertson I concerned defendant's ability to pay the distributive award.
Interlocutory appeals are generally forbidden in order "to promote judicial economy by eliminating the unnecessary delay and expense of repeated fragmentary appeals and by preserving the entire case for determination in a single appeal." Love v. Moore, 305 N.C. 575, 580, 291 S.E.2d 141, 146 (1982); see also N.C. Gen. Stat. § 15A-1419(a)(3) (2005) (a motion for appropriate relief should be denied if the defendant was in a position to raise the issue in an earlier appeal but failed to do so). While the instant appeal is not interlocutory, we find the reasoning of Love compelling. If defendant had argued the issue in the first appeal, this Court would have had the opportunity, had we deemed it necessary, on remand in Robertson I to direct the trial court to make additional findings of fact regarding defendant's ability to pay the distributive award. Defendant abandoned the issue, so our opinion in Robertson I did not address it or direct the trial court to take any action in this regard. If on remand the trial court had ordered defendant to pay a larger distributive award in its second judgment than the first judgment, defendant may have had grounds to assert his ability to pay as a new issue in this appeal, as the factual basis would be different. However, the distributive award in the second judgment is exactly the same amount as in the first judgment. To consider this question now would be to allow a fragmentary appeal, with its attendant unnecessary delay and expense, to the detriment of judicial economy. This assignment of error is therefore overruled.
Defendant also argues that the trial court failed to take into consideration and give defendant credit for the funds paid to plaintiff under the interim distribution order. Defendant cites N.C. Gen. Stat. § 50-20(i1) for the proposition that the trial court must take the interim distribution order into consideration in the final judgment. Although this proposition is a correct statement of the law, it has no application to this case. Defendant's argument misconstrues the nature of the second judgment, which is necessarily based upon the facts as they existed on the date of the equitable distribution hearing. The amended order speaks as of 25 May 2004.
As explained above, in Robertson I we instructed the trial court to make additional findings of fact "based upon the existing record." 174 N.C. App. at 790, 625 S.E.2d at 121 (emphasis added). The record in the instant appeal shows that, as instructed, the trial court did not receive additional evidence about events which had transpired since the equitable distribution hearing held in April 2004. Therefore, the trial court had no evidence before it regarding sums paid by defendant after the equitable distribution hearing. The trial court could not make additional findings of fact, conclusions of law, or decretal provisions based upon matters which were not in evidence (or even in existence) at the equitable distribution hearing and upon which it never received any evidence of record. The trial court had no authority to address these enforcement issues in the second judgment, and it did not err when it failed to do so. Accordingly, this assignment of error is without merit.
We note that in any future proceedings before the trial court in which plaintiff is seeking to enforce the second judgment, defendant may present evidence as to any payments he has made to plaintiff which should be credited to the distributive award.
IV. Conclusion
For the foregoing reasons, the 20 June 2005 interim equitable distribution order is vacated. The amended equitable distribution judgment of 2 May 2006 is affirmed. AFFIRMED as to equitable distribution judgment; interim equitable distribution order VACATED.
Judges McCULLOUGH and BRYANT concur.
Report per Rule 30(e).