Opinion
No. COA15-334
05-03-2016
STEPHANIE D. LUECK, Plaintiff, v. FRANK S. LUECK, Defendant.
Warrick, Bradshaw & Lockamy, P.A., by Frank L. Bradshaw, for plaintiff-appellee. Sullivan & Tanner, P.A., by Brent Tanner, for defendant-appellant.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure. Sampson County, No. 12 CVD 1304 Appeal by defendant from orders and advisory opinion entered 18 August 2014 and 6 March 2015 by Judge Henry L. Stevens, IV in Sampson County District Court. Heard in the Court of Appeals 21 October 2015. Warrick, Bradshaw & Lockamy, P.A., by Frank L. Bradshaw, for plaintiff-appellee. Sullivan & Tanner, P.A., by Brent Tanner, for defendant-appellant. GEER, Judge.
Defendant Frank S. Lueck appeals from an equitable distribution order entered 18 August 2014, as well as from an order allowing plaintiff Stephanie D. Lueck's motion for appraisal of retirement benefits and an advisory order on plaintiff's Rule 60 motion, both entered 6 March 2015 after defendant had filed his notice of appeal. Defendant contends that the trial court erred when it distributed the military pension without any evidence or findings as to the pension's value and further argues that the trial court lacked jurisdiction to enter the order granting plaintiff's motion for appraisal and the advisory order.
We believe that the trial court, in entering its advisory order, was following the procedure set out by this Court in Bell v. Martin, 43 N.C. App. 134, 142, 258 S.E.2d 403, 409 (1979), rev'd on other grounds, 299 N.C. 715, 264 S.E.2d 101 (1980). Because the trial court's order indicates that the trial court, if it had jurisdiction, would have granted plaintiff's motion under Rule 60(b) of the Rules of Civil Procedure, we dismiss this appeal and remand to the trial court for entry of a final order on that motion.
Facts
Plaintiff and defendant were married on 29 April 1996. They had one child during the marriage, born on 25 October 1996. Defendant has been employed by the United States Army for 27 years, including during the entire course of the marriage. Plaintiff and defendant separated on 21 August 2012.
Plaintiff commenced this action by filing a complaint on 19 September 2012 in Cumberland County, North Carolina, asserting claims for divorce from bed and board, equitable distribution, child custody, child support, post separation support, and alimony. Defendant filed a motion for change of venue on 4 October 2012, which was granted, and the case was transferred to Sampson County District Court. Defendant filed an answer and counterclaims on 3 December 2012 for divorce from bed and board, child custody, and equitable distribution.
The trial court held a hearing on the alimony and equitable distribution claims on 18 February 2014 and 19 February 2014. At the hearing, defendant, in closing arguments, raised for the first time the fact that the military retirement had not been appraised or otherwise valued. Plaintiff's counsel responded by arguing that the value of the pension had already been discussed, that he planned "to give her the marital portion, half of the marital portion of the retirement[,]" and that "[n]either party chose or wanted to spend the money to get the pension appraised." When asked whether there was any kind of stipulation as to the military retirement, defendant's counsel stated: "We had negotiated during the process, and that was one of the things, but there's no formal stipulation or any consensus entered . . . ." The trial judge took the matter under advisement and ordered that the current orders regarding post-separation support remained in effect until he could get an order in place.
The trial judge entered an order for child custody and child support on 11 March 2014, in which plaintiff and defendant were awarded joint legal custody of their minor child. On 26 March 2014, plaintiff filed a motion for entry of judgment, requesting that the district court issue a ruling on all pending issues including equitable distribution, post-separation support, and alimony. In her motion, plaintiff noted that the parties appeared on 18 February 2014 for a hearing on all pending issues and that the trial court "took the matter under advisement so that the Court could review the evidence presented[,]" but that the court had not yet ruled on the matter.
On 16 April 2014, plaintiff filed a motion for appraisal of retirement benefits and for attorney's fees and sanctions. In her motion, plaintiff pointed out that defendant had requested a hearing on all issues and certified he was ready for such a hearing, but then "failed to raise any issues or bring to the Court's attention that the Defendant's retirement had not been appraised or valued as required by the appellate courts of this State." Plaintiff asserted further that prior to the hearing, the parties had agreed that "there was no need for such an appraisal" and that plaintiff "would be entitled to the requisite proportionate share based upon a coverure [sic] fracture for one half of the marital portion of the Defendant's retirement benefits with the U.S. Armed Forces[,]" but then defendant waited until his closing argument to raise as an issue the fact that the pension had not been appraised.
Plaintiff argued that defendant's actions were in bad faith and either party "could have easily had the retirement benefits appraised and the Defendant could have easily made the Court aware of such an issue before setting the matter for hearing." Instead, plaintiff argued, defendant's actions forced the trial court to conduct further hearings. Therefore, the court was now required to appraise defendant's military retirement benefits, and plaintiff requested that the court order defendant to pay the costs associated with an appraisal.
In his response to plaintiff's motion for appraisal of retirement benefits and for attorney's fees and sanctions, defendant stated that he had submitted interrogatories to plaintiff "during the pendency of the equitable distribution and alimony claims[,]" asking plaintiff for "the identity, subject matter and substance of facts and opinions for any experts that Plaintiff intended to use at trial." Plaintiff, however, never identified or provided information on any expert witnesses she intended to use at trial in her interrogatory responses. Defendant further argued that he was not required to bring to the court's attention that the military retirement had not been appraised or valued. Defendant maintained that plaintiff had the burden of presenting evidence as to the value of an asset she sought to divide and that there was "no filed agreement, order, or stipulations that determined a value for the military retirement or otherwise waived the valuation of the Defendant's military retirement."
The trial court entered a final equitable distribution order on 18 August 2014 and made the following findings of fact regarding defendant's military pension:
12. The most valuable asset accumulated during the marriage is the Defendant's military retirement that both parties have made possible through Defendant's service in arms and the Plaintiff's service to the Defendant and his family.
. . . .
17. As to the value of the Defendant's military retirement, there was no evidence or testimony provided during the trial for equitable distribution although the distribution of the military retirement
was discussed during settlement negotiations between the parties.The court went on to divide the marital property and debts, including granting a one-half share of the marital portion of defendant's military retirement to plaintiff.
18. The Plaintiff made an oral motion after the close of evidence during her closing argument to preserve her ability to value the military retirement. In light of the fact that both parties earned the military retirement by law and have relied on receiving it, it would be harsh, unjust, and unfair/inequitable to Plaintiff if she did not receive her portion of the Defendant's retirement.
19. Based on the formula under North Carolina law, the Plaintiff should receive her one-half share of the marital portion of the Defendant's military retirement.
The court also entered an alimony order on 18 August 2014, which found defendant to be a supporting spouse and plaintiff to be a dependent spouse. Further, the court stated that "when the Plaintiff receives any of the Defendant's military retirement, the monthly alimony amount of $1,000.00 should be reduced by the amount of retirement Plaintiff receives . . . ." Defendant timely appealed the final equitable distribution order on 15 September 2014. On 19 December 2014, defendant served his proposed record on appeal, which indicated, in its proposed issues, that he would argue that the trial court erred in dividing the pension since the pension had never been valued.
On 30 December 2014, plaintiff filed a motion to correct judgment and/or for relief from judgment pursuant to Rule 60 asserting that the previously entered equitable distribution order contained clerical errors and that the district court "failed to include certain findings regarding the retirement benefits of the Defendant that are necessary for the Court to provide a fair and full report of the proceedings." Plaintiff attached as an exhibit to her motion an amended order with her suggested changes and proposed additional facts.
Plaintiff suggested that the trial court should include in the order findings that (1) neither party raised any issues before the equitable distribution hearing began as to any necessary appraisals that needed to be done; (2) defendant did not raise any issue about needing the military retirement benefits appraised until closing arguments; (3) the trial court "held open the issue of the Defendant's retirement benefits"; (4) the trial court met with counsel for the parties in chambers and determined that since plaintiff was a dependent spouse and defendant the supporting spouse, it was necessary for the court to appraise the military retirement benefits and it would be equitable to require defendant to pay for such appraisal; (5) defendant subsequently notified the trial court that he no longer wished for benefits to be appraised and agreed to distribute the retirement "by a percentage award of the marital portion of the Defendant's retirement benefits"; and (6) the trial court relied on defendant's withdrawal of his argument that an appraisal was necessary and "elected to simply enter this Equitable Distribution Judgment." Plaintiff also contended that "should the Court determine that such findings are more substantial than clerical errors, the lack of such findings regarding the Defendant's retirement benefits constites [sic] a mistake, inadvertence, and/or excusable neglect warranting the Court to set-aside the previously entered Judgment and to enter a Judgment that includes such findings."
On 16 January 2015, plaintiff filed a notice of objections to defendant's proposed record on appeal, objecting to the fact that the record "does not include the Plaintiff's Motion to Correct Judgment and/or for relief from Judgment and does not include the trial court's ruling on said pending Motion." Plaintiff additionally filed a motion for judicial settlement of the record on appeal.
The trial court held a hearing on 4 February 2015 regarding plaintiff's request for judicial settlement of the record and plaintiff's Rule 60 motion to correct judgment and/or for relief from judgment. At that hearing, plaintiff's counsel claimed that it was his good-faith belief that both parties planned to use the coverture fracture method to divide the military pension, based on his discussions and negotiations with defendant's counsel.
Plaintiff's counsel also asked for an advisory order on plaintiff's Rule 60 motion to correct judgment, arguing that the equitable distribution order did not accurately reflect the procedural history of the parties' discussions regarding the division of the military retirement during settlement negotiations. Specifically, plaintiff contended that the record was devoid of any reference to an in-chambers conference between the trial judge and counsel for both parties that occurred at some point after the equitable distribution hearing and after plaintiff filed her motion for appraisal. Plaintiff's counsel stated:
We sat down, I believe, the week of January -- I can't recall the actual date. I will include that in the order.
I think it was shortly after the May filing of the hearing.
But at that hearing on my motion for appraisal of the retirement benefits, the Court ruled that appraisal should be allowed, that request should be allowed.
Defense counsel indicated that [defendant] no longer desired to have it appraised or did not want to have it appraised and was willing to proceed with the coverture fracture used, as I previously thought was the understanding.
I would ask the Court to treat that motion as a motion to re-open evidence and to enter an order based upon that motion allowing evidence to be re-opened, to allow the pension to be appraised, however declining to require it since [defendant] decided not to proceed on that and agreed to use the coverture fraction.
Plaintiff's counsel also mentioned his intent to prepare an affidavit in support of his position that he was under a good-faith impression that the parties had planned to use the coverture fraction and asked the court to order that it be included as part of the record on appeal. Finally, plaintiff's counsel asked the court -- with respect to the motion to correct the judgment -- to enter an advisory order on how the court would rule on that motion. Counsel argued that the judgment on equitable distribution previously entered "did not mention that the Court held open the ruling on the pension, did not mention the motion. It didn't mention the Court's willingness to re-open evidence, and I would like for that to be reflected in the record."
Defendant's counsel, in response, contended that there were no binding stipulations or orders regarding the division of the military pension, and any discussions regarding coverture fraction were solely in the context of settlement discussions "and not as a basis to form reliance on either party." Defendant made no specific references to the in-chambers meeting plaintiff's counsel referenced. Tiffany Naylor, former counsel for defendant, was present and testified: "I feel OK providing an affidavit that states that I think [plaintiff's counsel] had a good faith belief that an appraisal was not required and that the military pension would not be an issue in the hearing or the division of the pension would not be an issue in the hearing."
The transcript for the hearing on 18 and 19 February 2014 on equitable distribution lists both Ms. Naylor and Mr. Brent Tanner as defendant's counsel. Ms. Naylor stated at the 4 February 2015 hearing: "I previously represented [defendant]. I believe I was released in an earlier order . . . ." The order releasing her does not appear to be in the record on appeal.
At the 4 February 2015 hearing, the trial judge commented that he "recall[ed] the evidence very well and the conversation that occurred in court." The trial judge noted that the evidence presented at the previous hearing "supported the idea that [the parties] had lived their lives spending the money that they had. . . . So[,] it was pretty evident to the Court that the intent of both parties was to live off of the military retirement that both parties had earned." He continued:
And it came up at the end of the evidence or during closings that we hadn't valued the military retirement, which is obviously the main chunk of the property that was to be distributed at that time.
At that time, when [plaintiff's counsel] asked to re-open the case, he said he had not presented that evidence on the good-faith basis or belief that the parties had met ahead of time and agreed that they were not going to present that evidence, that they were just going to go by the coverture fraction . . . .
And I believe at that time Ms. Naylor did agree that she had had that conversation and indicated so on the record.
I don't remember if it was by a nod, but I recall her agreeing that that was the case.
The judge then appeared to address the in-chambers meeting referenced by plaintiff:
And that then it came back, and that the Court had the intent to allow the parties to re-open evidence in order to present the appraisal of the military retirement, so that it could be distributed.
That then it came back in court and the agreement was that we were not going to go forward with the appraisal when I indicated that I was going to have the Defendant pay for the appraisal.
And at that time, we didn't go forward, because again, we were going to just go with the military distributing the retirement based on the formula.
At the end of the hearing, the trial judge concluded that plaintiff "had lived her life supporting [defendant]" and, therefore, "had earned that portion of the retirement[.]" Further, the trial judge ruled that "the equitable thing to do would be to allow that evidence [about the previous understanding of the parties regarding the military appraisal] to come in, because the only reason it didn't come in was based on the belief that we were going to go forward with just doing it on the formula." The trial judge indicated he would issue an advisory order reflecting his intent to allow the motion to re-open the case and that the pension should be divided between the parties once it has been appraised using the coverture formula.
The trial court entered two orders on 6 March 2015, one addressing plaintiff's motion for an appraisal and one addressing the Rule 60 motion to correct the judgment and/or for relief from judgment. In its "Advisory Opinion" addressing plaintiff's Rule 60 motion, the trial court acknowledged that it no longer had jurisdiction over the case due to the pending appeal, but stated that the advisory opinion was issued to assist this Court on appeal. The court attached to the advisory opinion an amended equitable distribution order, supplementing the findings of fact and indicating that defendant had notified the trial court that he no longer desired the military retirement to be appraised and wanted the court to divide it by a percentage award.
Specifically, the advisory opinion indicated that the trial court would, if it had jurisdiction, amend the findings of fact in the equitable distribution order as follows:
9. That it would be unequitable to allow the Defendant to use the representations made to the Plaintiff's counsel that there was a stipulation as to the use of the coverture fracture for the distribution of the Defendant's military retirement as a sword to prevent the distribution of the military retirement.
10. That this Court, having reviewed the case law presented by the Defendant's legal counsel, and having heard arguments of counsel, held open the issue of the Defendant's retirement benefits to re-open evidence as to allow the parties to present additional evidence to this Court.
11. That on April 16, 2014, the Plaintiff, by and through counsel, filed a Motion for the Appraisal of Retirement Benefits and for Attorneys Fees and Sanctions as to allow the presentation of additional evidence[.]
12. That the Defendant filed a Response to the Plaintiff's Motion and the Defendant's own Motion for Attorneys Fees and Sanctions.
13. That the Court met with legal counsel for the parties in chambers and determined that since the Plaintiff had been determined to be a dependent spouse and the Defendant a supporting spouse, and provided the relative earning capacities of both parties, determined it is necessary for the Court to require the Defendant's retirement benefits to be appraised and further that it would be equitable for the Court to order the Defendant to provide the costs of such appraisal and that the debt incurred for the appraisal would be addressed by this Court in a final equitable distribution judgment.
14. That having heard the determination of the Court but before an order could be entered the Defendant, by and through counsel, notified the Court that he no longer desired for his military retirement to be appraised and that he desired for the Court to divide and/or distribute the retirement, along with the parties' additional marital and divisible property, by a percentage award of the marital portion of the Defendant's retirement benefits.
15. That due to the Defendant's withdrawal of his argument that an appraisal of the Defendant's retirement was necessary the Court, in lieu of multiple orders, elected to simply enter this Equitable Distribution Judgment.
The second order entered on 6 March 2015, addressing plaintiff's motion for appraisal of retirement benefits and for attorney's fees and sanctions, noted that the trial court found "there exists good and proper cause to order an appraisal of the Defendant's military pension and to tax the costs of such appraisal to the Defendant[,]" such that plaintiff's motion should be allowed. The court continued, however, and explained that after notifying the parties of the trial court's decision "to tax the costs of the appraisal to the Defendant[,]" defendant's counsel notified the court that defendant no longer desired to have the military benefits appraised and that he "was satisfied with the Court distributing his military pension by the coverture fracture as previously proposed by the Plaintiff." Consequently, the trial court concluded: "That based upon the agreement and stipulation of the parties there is no need for an appraisal of the Defendant's retirement benefits as the parties have agreed to distribute the Defendant's military pension by the coverture fracture."
On 16 March 2015, defendant filed a supplemental notice of appeal to this Court from both the trial court's order on plaintiff's motion for appraisal of retirement benefits and for attorney's fees and sanctions and from the court's advisory opinion. The Rule 11(c) supplement to the record was filed on 23 March 2015 and included plaintiff's Rule 60 motion and the trial court's two 6 March 2015 orders. In addition, on 12 June 2015, defendant filed a petition for writ of certiorari "out of an abundance of caution should this Court find that a direct appeal is not the proper mechanism for seeking review of either the Advisory Opinion or the Order for Appraisal."
Discussion
On appeal, defendant first contends that the trial court erred in distributing his military pension through equitable distribution without first valuing it. Defendant acknowledges that a portion of his military pension was marital property, since he served in the United States Army during the course of the marriage and his employment continued through the time of the equitable distribution proceedings. The distribution of marital and divisible property by North Carolina courts is governed by N.C. Gen. Stat. § 50-20 (2015). Marital property includes "all vested and nonvested pension, retirement, and other deferred compensation rights, and vested and nonvested military pensions eligible under the federal Uniformed Services Former Spouses' Protection Act." N.C. Gen. Stat. § 50-20(b)(1) (emphasis added).
Defendant argues that because, as the trial court found in its equitable distribution order, no evidence was submitted as to valuation, the equitable distribution order should be reversed and the military pension removed from the equitable distribution, citing Johnson v. Johnson, 230 N.C. App. 280, 750 S.E.2d 25 (2013) and Albritton v. Albritton, 109 N.C. App. 36, 426 S.E.2d 80 (1993). In Johnson, this Court noted that " '[t]he burden of showing the property to be marital is on the party seeking to classify the asset as marital and the burden of showing the property to be separate is on the party seeking to classify the asset as separate.' " 230 N.C. App. at 285, 750 S.E.2d at 29 (quoting Atkins v. Atkins, 102 N.C. App. 199, 206, 401 S.E.2d 784, 787 (1991)). "Additionally, the party claiming property to be marital has the burden of presenting evidence on the value of such property[.]" Id. (internal quotation marks omitted). See also Albritton, 109 N.C. App. at 41, 426 S.E.2d at 83 (holding that "the burden was clearly on plaintiff, as the one seeking an interest in defendant's pension plan, to provide the trial court with evidence of the pension plan's value as of the date of separation").
In the cases defendant cites, however, it was known prior to the equitable distribution hearing that the spouse's entitlement to part of the pension and the value of the pension was an issue that had to be addressed at the hearing. In Johnson, the defendant's military pension was listed on a pretrial order "and was in a 'list of marital property and debts upon which there is disagreement as to distribution and disagreement as to value.' " 230 N.C. App. at 282, 750 S.E.2d at 28. In Albritton, the defendant received a monthly payment from a pension plan which "[was] the source of the dispute between the parties" and was defendant's sole source of income. 109 N.C. App. at 38, 426 S.E.2d at 82.
Here, by contrast, plaintiff contended at the equitable distribution hearing that the parties had agreed there would be no appraisal because of the cost, and the pension would just be divided. Defendant, on the other hand, denied any agreement, claiming: "We had negotiated during the process, and that was one of the things, but there's no formal stipulation or any consensus entered to my knowledge on that particular thing, Judge." Thus, in this case, unlike Johnson and Albritton, there was a material dispute as to whether the parties had reached an agreement on the division of the military pension plan or whether it was still in contention.
In Bishop v. Bishop, 113 N.C. App. 725, 731, 440 S.E.2d 591, 595-96 (1994), this Court outlined a five-step process for determining the value of a vested pension, using the present value of the pension from the date of separation:
First, the trial court must calculate the amount of monthly pension payment the employee, assuming he retired on the date of separation, will be entitled to receive at the later of the earliest retirement age or the date of separation. This calculation must be made as of the date of separation and "shall not include contributions, years of
service or compensation which may accrue after the date of separation." N.C.G.S. § 50-20(b)(3) [(Supp. 1993)]. The calculation will however, include "gains and losses on the prorated portion of the benefit vested at the date of separation." Id. Second, the trial court must determine the employee-spouse's life expectancy as of the date of separation and use this figure to ascertain the probable number of months the employee-spouse will receive benefits under the plan. Third, the trial court, using an acceptable discount rate, must determine the then-present value of the pension as of the later of the date of separation or the earliest retirement date. Fourth, the trial court must discount the then-present value to the value as of the date of separation. In other words, determine the value as of the date of separation of the sum to be paid at the later of the date of separation or the earliest retirement date. This calculation requires mortality and interest discounting. See [3 William M. Troyan et al., Valuation & Distribution of Marital Property] § 45.23 [(1987)]. The mortality and interest tables of the Pension Benefit Guaranty Corporation, a corporation within the United States Department of Labor, are well suited for this purpose. Id. Finally, the trial court must reduce the present value to account for contingencies such as involuntary or voluntary employee-spouse termination and insolvency of the pension plan. This calculation cannot be made with reference to any table or chart and rests within the sound discretion of the trial court.This Court has held that the Bishop test only applies "[a]bsent an agreement between the parties." Lund v. Lund, ___ N.C. App. ___, ___, 779 S.E.2d 175, 178 (2015). Whether an agreement was reached in this case, therefore, was a material issue that had to be resolved at the trial level.
The trial court did not specifically resolve this issue at the hearing, but rather, at the end of the hearing, indicated it was taking the matter under further advisement. Plaintiff, following that hearing, filed a motion for appraisal of the retirement benefits, seeking not only an appraisal but also to have defendant pay for it. Defendant opposed the motion, yet the record, as filed by defendant, does not indicate any resolution of that motion. Likewise, the trial court's equitable distribution order contained no resolution of the dispute regarding whether there was an agreement between the parties, and it does not even mention plaintiff's motion for appraisal. Instead, the trial court simply proceeded to award half of the marital portion of the pension to plaintiff as she had requested at the hearing.
If the record contained nothing further, it might appear that Johnson and Albritton were controlling, or, alternatively, we would need to remand to have the dispute about the agreement resolved. However, plaintiff filed a Rule 60 motion, and the trial court entered an order addressing that motion that provides clarity and resolves the factual dispute. Defendant argues that the trial court lacked jurisdiction to enter the Rule 60 order. While we agree with defendant that the amended equitable distribution order was not proper under Rule 60(a), we reach the opposite conclusion when we evaluate the order under Rule 60(b).
First, under Rule 60(a):
Clerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the judge at any time on his own initiative or on the motion of any party and after such notice, if any, as the judge orders. During the pendency of an appeal, such mistakes may be so corrected before the
appeal is docketed in the appellate division, and thereafter while the appeal is pending may be so corrected with leave of the appellate division." 'Clerical mistakes' are typographical errors, mistakes in writing or copying something into the record, or other, similar mistakes that are not changes in the court's reasoning or determination." In re J.K.P., ___ N.C. App. ___, ___, 767 S.E.2d 119, 124 (2014), disc. review denied, 368 N.C. 250, 771 S.E.2d 314 (2015).
Moreover, "[i]n construing this rule, our courts have drawn a distinction between changes that remedy clerical errors or omissions and changes that affect the substantive rights of the parties. The former is permissible under Rule 60(a), whereas the latter is not." Ice v. Ice, 136 N.C. App. 787, 791-92, 525 S.E.2d 843, 846 (2000). " 'A change in an order is considered substantive and outside the boundaries of Rule 60(a) when it alters the effect of the original order.' " Id. at 792, 525 S.E.2d at 846 (quoting Buncombe Cnty. ex rel. Andres v. Newburn, 111 N.C. App. 822, 825, 433 S.E.2d 782, 784 (1993)).
Here, the trial court's advisory opinion and amended judgment indicate changes to the original order that are more than just clerical -- they supplement prior findings of fact and explain the court's reasoning in reaching the conclusion that it did. Consequently, we find that an amended equitable distribution order like the one here is not a correction of clerical errors, but rather is a substantive change. See, e.g. In re D.D.J., D.M.J., 177 N.C. App. 441, 444, 628 S.E.2d 808, 811 (2006) (finding amended custody order made a substantial substantive change and noting that "[a]lthough [petitioner] relies upon Rule 60(a) of the Rules of Civil Procedure, authorizing the correction of clerical mistakes in judgments, courts do not have the power under Rule 60(a) to affect the substantive rights of the parties or to correct substantive errors in their decisions"). Accordingly, we hold that the amendments to the equitable distribution order in this case went beyond clerical corrections and, therefore, the trial court did not have subject matter jurisdiction to enter the amended equitable distribution order.
The trial court, however, called its order addressing plaintiff's Rule 60 motion an advisory opinion and indicated it was entering the order to assist this Court. Since the trial court would have had jurisdiction to enter a Rule 60(a) order if such order were proper, an advisory opinion would only be necessary if the court was entering the opinion under Rule 60(b). It is apparent from the language of the advisory opinion, therefore, that the trial court also treated plaintiff's motion as a Rule 60(b) motion and was following the procedure this Court set out in Bell v. Martin, 43 N.C. App. 134, 258 S.E.2d 403 (1979), rev'd on other grounds, 299 N.C. 715, 264 S.E.2d 101 (1980).
In Bell, this Court held:
It appears to us that the better practice is to allow the trial court to consider a Rule 60(b) motion filed while the appeal is pending for the limited purpose of indicating, by a proper entry in the record, how it would be inclined to
rule on the motion were the appeal not pending. At the time the motion is made in the lower court the movant should notify the appellate court so that it may delay consideration of the appeal until the trial court has considered the 60(b) motion. Upon an indication of favoring the motion, appellant would be in position to move the appellate court to remand to the trial court for judgment on the motion and the proceedings would thereafter continue until a final, appealable judgment is rendered. An indication by the trial court that it would deny the motion would be considered binding on that court and appellant could then request appellate court review of the lower court's action. This procedure allows the trial court to rule in the first instance on the Rule 60(b) motion and permits the appellate court to review the trial court's decision on such motion at the same time it considers other assignments of error.Id. at 142, 258 S.E.2d at 409. This Court ultimately concluded in Bell "that the trial court should have considered appellant's Rule 60(b) motion for the limited purpose of indicating how it would have been inclined to rule on the motion and the trial court erred in dismissing the Rule 60(b) motion." Id. at 143, 258 S.E.2d at 409.
One underlying rationale for the adoption of the procedure set out in Bell "is that when determination of a Rule 60(b) motion requires the resolution of controverted questions of fact, the trial court is in a far better position to pass upon it than is this Court." Talbert v. Mauney, 80 N.C. App. 477, 479, 343 S.E.2d 5, 7 (1986). "Thus, a ruling on a pending Rule 60(b) motion is favored before the merits of an appeal are considered because it allows the appellate court to completely dispose of all issues in a case." Town of Leland v. HWW, LLC, 203 N.C. App. 374, 692 S.E.2d 487, 2010 WL 1528825, at *4, 2010 N.C. App. LEXIS 568, at *4 (2010) (unpublished).
In this case, whether the trial court erred in how it addressed the distribution of the military pension in the equitable distribution order depends in part on what happened at the conference in chambers and subsequently with respect to the motion for an appraisal. The trial court's equitable distribution order as filed, however, addressed neither the motion for an appraisal nor the conference in chambers. Indeed, it was only after defendant served the proposed record on appeal with his proposed issues that it became apparent that there were factual issues in dispute in regards to what happened at the in-chambers conference and subsequent to that meeting related to the distribution of the military pension. Accordingly, we cannot know whether the trial court erred until those factual issues are resolved.
The court's advisory opinion addresses the factual issues necessary for a review of the adequacy of the equitable distribution order. Specifically, it included additional findings of fact regarding the conference the trial judge held in chambers with the parties, the finding that defendant was the supporting spouse and it would be equitable for the court to order defendant to pay for the appraisal costs, and defendant's notification to the trial court that he was withdrawing his argument that an appraisal was necessary.
In addition, the trial judge advised this Court in the advisory opinion that if the judge had jurisdiction, he would have been inclined to grant the Rule 60(b) motion. Under such circumstances, the proper procedure for this Court is to dismiss the appeal and remand to allow the trial court to decide the motion. See Hall v. Cohen, 177 N.C. App. 456, 458, 628 S.E.2d 469, 471 (2006) ("Where, as here, the trial court entered an inclination to rule in favor of defendant and grant his Rule 60(b) motion, we dismiss the instant appeal and remand this matter to the trial court for entry of a final order on defendant's Rule 60(b) motion."). Accordingly, since the advisory opinion indicates that the trial court, if it had jurisdiction, would have granted the Rule 60(b) motion, we dismiss this appeal and remand for the trial court to enter a final order on the Rule 60(b) motion.
Defendant, however, argues that plaintiff failed to meet her burden under Rule 60(b)(1) of showing "[m]istake, inadvertence, surprise, or excusable neglect[.]" We hold that plaintiff's motion set forth an adequate basis for concluding that the equitable distribution order should be set aside based on "surprise," especially given defendant's omission of any reference in the record on appeal to the conference with the judge held in chambers.
Accordingly, we find that plaintiff's motion was a proper Rule 60(b) motion. Consequently, we dismiss this appeal and remand for the trial court to enter a final order on plaintiff's Rule 60(b) motion. In addition, although we hold that the trial court lacked jurisdiction to enter its order granting the motion for an appraisal, once the trial court properly allows the Rule 60(b) motion, it will then have authority to enter the order.
DISMISSED AND REMANDED.
Judges HUNTER, JR. and DILLON concur.
Report per Rule 30(e).