McVicker v. McVicker ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute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.
NO. COA14-47
NORTH CAROLINA COURT OF APPEALS
Filed: 17 June 2014
LINDA H. MCVICKER,
Plaintiff,
v. Wake County
No. 07 CVD 14785
LAWRENCE A. MCVICKER and MVOC,
LLC,
Defendants.
Appeal by defendant from orders entered 1 October and 28
October 2013 by Judge Christine Walczyk in Wake County District
Court. Heard in the Court of Appeals 20 May 2014.
Smith Debnam Narron Drake Saintsing & Myers, L.L.P., by
John W. Narron and Alicia Jurney, for plaintiff-appellee.
Wyrick Robbins Yates & Ponton LLP, by Tobias S. Hampson, K.
Edward Greene, and Heidi C. Bloom, for defendant-appellant.
HUNTER, Robert C., Judge.
Defendant-appellant Lawrence McVicker (“defendant”)1 appeals
the orders issued 1 October and 28 October 2013 adjudicating him
in civil contempt and denying his motion to dismiss plaintiff’s
motion for order to show cause. On appeal, defendant argues
1
Although MVOC, LLC was named as a defendant, the consent
judgment in arbitration expressly notes that it is not a party
to the arbitration nor is it bound by the terms of the judgment.
-2-
that the trial court erred by: (1) denying his motion to dismiss
the contempt proceeding; (2) holding him in civil contempt; and
(3) ordering defendant be held in contempt for amounts allegedly
unpaid which were not alleged at the time of the contempt
proceeding.
After careful review, we affirm the trial court’s orders.
Background
Plaintiff-appellee Linda McVicker (“plaintiff”) and
defendant were married in 1979 and separated in April 2007.
After separating, they entered into an agreement providing
initial transfers of certain assets to plaintiff and agreeing to
submit their claims for alimony and equitable distribution to
arbitration. A consent judgment in the arbitration was entered
31 August 2009, which was confirmed by the trial court on 21
September 2009 (the “consent judgment”). The consent judgment
provided, among other things, that plaintiff was entitled to a
distributive award of $6,242,000, including a 50% membership
interest in the business defendant co-owned, MVOC, LLC (“MVOC”).
Moreover, the consent judgment required defendant pay plaintiff
$11,200 per month until the distributive award is paid in full.
Of the monthly payments, 50% would be treated as post-separation
support and 50% would constitute as payment towards the
-3-
distributive award until plaintiff received $1,500,000 toward
the distributive award; at that time, the full payment would
count towards the distributive award, and defendant’s obligation
to pay post-separation support would terminate. The consent
judgment provided that the distributive award must be satisfied
in full by 30 June 2015. As security for the distributive
award, the consent judgment gave plaintiff a valid, perfected
security interest in defendant’s residence, vehicles, and two
bank accounts. Furthermore, the consent judgment also provided
that the distributive award “shall also be secured by the
following provisions”:
In the event [p]laintiff asserts that
[d]efendant has committed an Act of Default
with respect to any provision of this
Consent Judgment, [p]laintiff may file a
Motion for a Charging Order with respect to
any distribution that becomes due to
[d]efendant from MVOC, LLC. Plaintiff shall
afford [d]efendant five days’ written notice
of the hearing of her Motion for a Charging
Order.
On 21 May 2013, plaintiff filed a motion for order to show
cause, claiming that defendant had willfully failed to comply
with the consent judgment by not making monthly payments towards
the distributive award. Specifically, plaintiff contended that
defendant had not made a payment since 15 February 2013. The
trial court issued an order to appear and show cause on 21 May
-4-
2013 after finding probable cause to believe that defendant was
in civil or criminal contempt based on his failure to pay
plaintiff in accordance with the terms of the consent judgment.
On 20 September 2013, defendant filed a motion to dismiss
plaintiff’s show cause motion, claiming that: (1) the trial
court had no authority to find him in contempt; (2) plaintiff’s
only available remedy to enforce the consent judgment was to
file a charging order against defendant’s distributions from
MVOC pursuant to the terms of the consent judgment; and (3)
defendant does not have the present ability to comply with the
consent judgment.
The matter came on for hearing on 26 September 2013. The
trial court entered an order adjudicating defendant in civil
contempt after finding defendant had sufficient means and
ability to comply with the show cause order and ordered a purge
amount of $62,572. The purge amount was based on defendant’s
partial payment in April of $4,298 (which left a balance of
$6,572 due to plaintiff) and his failure to make any monthly
payments in May, June, July, August, and September 2013. Should
defendant fail to pay the purge amount to plaintiff by 30
September 2013, the trial court ordered that defendant be
arrested and held until he paid the purge amount. Furthermore,
-5-
the trial court denied defendant’s motion to dismiss. Defendant
appeals.
Arguments
First, defendant argues that the trial court erred in
denying his Rule 12(b)(6) motion to dismiss the show cause
order. Specifically, the crux of defendant’s argument is that
the express terms of the consent judgment only allowed plaintiff
to seek a charging order with respect to defendant’s
distributions from MVOC to enforce the distributive award should
defendant default in his obligations under the consent judgment.
Consequently, defendant argues that civil contempt was not an
available remedy upon default; thus, the trial court should have
granted the motion to dismiss the contempt proceeding. In other
words, defendant alleges that plaintiff’s sole and exclusive
remedy for his failure to comply with the distributive award is
a charging order, not contempt. We disagree.
The standard of review for a motion to dismiss pursuant to
Rule 12(b)(6) is “whether, as a matter of law, the allegations
of the complaint, treated as true, are sufficient to state a
claim upon which relief may be granted under some legal theory.”
Block v. County of Person, 141 N.C. App. 273, 277, 540 S.E.2d
415, 419 (2000) (citation omitted). “This Court must conduct a
-6-
de novo review of the pleadings to determine their legal
sufficiency and to determine whether the trial court’s ruling on
the motion to dismiss was correct.” Leary v. N.C. Forest
Prods., Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1, 4, aff’d per
curiam, 357 N.C. 567, 597 S.E.2d 673 (2003).
A court-adopted consent judgment is enforceable by the
trial court’s contempt power because it is a decree of the court
and not simply a contract. White v. White, 296 N.C. 661, 665,
252 S.E.2d 698, 701 (1979). Generally, “[t]o hold a defendant
in civil contempt, the trial court must find the following: (1)
the order remains in force, (2) the purpose of the order may
still be served by compliance, (3) the non-compliance was
willful, and (4) the non-complying party is able to comply with
the order or is able to take reasonable measures to comply.”
Shippen v. Shippen, 204 N.C. App. 188, 190, 693 S.E.2d 240, 243
(2010) (citing N.C. Gen. Stat. § 5A–21 (2009)). Here, defendant
does not allege that the trial court failed to find the four
requirements under section 5A-21; instead, defendant contends
that the express language of the consent judgment provides that
plaintiff’s only and exclusive remedy if defendant defaults on
his monthly payments is a charging order.
-7-
Paragraph 18 of the consent judgment provided that: “In
order to buy out [p]laintiff's equitable distribution interest
in [d]efendant’s fifty percent (50%) membership interest in the
business MVOC, LLC, [d]efendant shall pay to [p]laintiff . . . a
cash distributive award in the amount of Six Million Two Hundred
Forty-two thousand dollars ($6,242,000.00).” In paragraph 20,
the judgment stated that the distributive award would be secured
by defendant’s residence, vehicles, and two bank accounts.
Finally, in paragraph 21, the consent judgment stated:
The Distributive Award set forth herein
shall also be secured by the following
provisions:
. . .
(b) In the event [p]laintiff asserts that
[d]efendant has committed an Act of Default
with respect to any provision of this
Consent Judgment, [p]laintiff may file a
Motion for a Charging Order with respect to
any distribution that becomes due to
[d]efendant from MVOC, LLC. Plaintiff shall
afford [d]efendant five days’ written notice
of the hearing of her Motion for a Charging
Order.
Thus, the issue is whether the consent judgment by its own
express terms limits enforcement of the distributive award
solely to a charging order or whether a charging order is simply
one remedy in addition to all other ones available at law.
-8-
“A consent judgment is a court-approved contract subject to
the rules of contract interpretation. 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); see also State ex
rel. Envtl. Mgmt. Comm'n v. House of Raeford Farms, Inc., 101
N.C. App. 433, 444, 400 S.E.2d 107, 114 (1991) (holding that a
consent judgment is to be interpreted using its plain language).
This Court has noted that
to interpret the nature and import of the
consent judgment more precisely, courts are
not bound by the “four corners” of the
instrument itself. The agreement, usually
reflecting the intricate course of events
surrounding the particular litigation, also
should be interpreted in the light of the
controversy and the purposes intended to be
accomplished by it.
Hemric v. Groce, 169 N.C. App. 69, 75, 609 S.E.2d 276, 282
(2005). Moreover, our Supreme Court has held that:
A contract must be construed as a whole, and
the intention of the parties is to be
collected from the entire instrument and not
from detached portions, it being necessary
to consider all of its parts in order to
determine the meaning of any particular part
as well as of the whole. Individual clauses
in an agreement and particular words must be
considered in connection with the rest of
the agreement, and all parts of the writing,
and every word in it, will, if possible, be
given effect.
-9-
Robbins v. C. W. Myers Trading Post, Inc., 253 N.C. 474, 477,
117 S.E.2d 438, 440-41 (1960).
In interpreting the consent judgment, the parties
mistakenly focus exclusively on paragraph 21(b), which reads:
should defendant default with regard to any provision of the
consent judgment, “[p]laintiff may file a Motion for a Charging
Order with respect to any distribution that becomes due to
[d]efendant from MVOC, LLC.” Specifically, the parties disagree
as to whether the term “may” means that plaintiff must obtain a
charging order to enforce the distributive award or if it
indicates that a charging order is simply one remedy available
to plaintiff. However, the parties’ arguments fail to take into
account the entire document and construe it as a whole. See id.This particular provision, which secures the distributive award,
must be construed along with the other provisions that relate to
security or collateral for enforcement of the distributive
award. As our Supreme Court has noted, by focusing solely on
one sentence or even one term in paragraph 21(b), “[t]his
conclusion disregards the cardinal principle that a contract
must be construed as a whole and not by placing undue emphasis
on isolated provisions.” Davis v. Dennis Lilly Co., 330 N.C.
314, 327, 411 S.E.2d 133, 140 (1991). In other words, to
-10-
ascertain the meaning of paragraph 21(b), the Court needs to
look at the entire consent judgment and give meaning to all
provisions.
In paragraph 20, the consent judgment provides that the
distributive award would be secured by a security interest in
defendant’s residence, vehicles, and two bank accounts. The
consent judgment goes on to say that the distributive award
“shall also” be secured, in the case of default, by a charging
order with respect to defendant’s distributions from MVOC.
Under defendant’s logic, the distributive award could not be
enforced by the collateral listed in paragraph 20—in which the
consent judgment plainly and unambiguously provided her a
security interest; instead, the only remedy available would be a
charging order for distributions from MVOC. This interpretation
would render superfluous this entire provision of the consent
judgment that gave plaintiff security interests in other
collateral. Construing the consent judgment in its entirety and
giving effect to all provisions, it is clear that a charging
order is one option for enforcing the distribution award
provisions; however, the consent judgment does not take all
other legal remedies away from plaintiff. In fact, it does the
opposite by giving plaintiff the option of enforcing her
-11-
security interest in other collateral. In addition, it is
important to note that the consent judgment specifically states
that the distributive award “shall also” be secured by a
charging order, indicating that it had provided plaintiff
additional enforcement remedies other than a charging order.
Thus, in summary, construing paragraph 21(b) of the consent
judgment as a whole with the entire document, the phrase
“[p]laintiff may file a Motion for a Charging Order” in the case
of default should not be read as limiting enforcement of the
distributive award solely to filing a charging order. Instead,
that specific provision simply contemplates one type of remedy
available but does not mean that a charging order is her sole
remedy. Therefore, the trial court did not err in denying
defendant’s motion to dismiss on this basis.
Next, defendant argues that the trial court erred in
finding that he acted willfully. Specifically, defendant
contends that the trial court could not find that his
noncompliance was willful when he believed that the consent
judgment could only be enforced by a charging order. We
disagree.
The standard of review for contempt
proceedings is limited to determining
whether there is competent evidence to
support the findings of fact and whether the
-12-
findings support the conclusions of law.
Findings of fact made by the judge in
contempt proceedings are conclusive on
appeal when supported by any competent
evidence and are reviewable only for the
purpose of passing upon their sufficiency to
warrant the judgment.
Watson v. Watson, 187 N.C. App. 55, 64, 652 S.E.2d 310, 317
(2007). “In order to find that a defendant acted willfully, the
court must find not only failure to comply but that the
defendant presently possesses the means to comply.” Miller v.
Miller, 153 N.C. App. 40, 50, 568 S.E.2d 914, 920 (2002)
(internal citations and quotation marks omitted).
As discussed, construing the consent judgment in its
entirety, a charging order was not plaintiff’s sole remedy for
enforcing the distributive award. Accordingly, defendant’s
contention that his acts were not willful because plaintiff did
not seek a charging order before filing a motion to show cause
is without merit. Moreover, with regard to defendant’s failure
to comply with the consent judgment, he admitted that he had not
made the full April payment nor had he made any payment in May,
June, July, August, or September. Furthermore, the trial court
made numerous findings showing that defendant not only had the
means to comply with the consent judgment but that he also spent
substantial sums on home improvements instead of making his
-13-
monthly payments to plaintiff. Specifically, the trial court
found that he spent approximately $29,000 to improve his pool,
redesign his kitchen, and purchase draperies. In addition, the
trial court noted that defendant made around $10,000 per month
and that he had numerous liquid assets that he could have
liquidated to make those payments, including two bank accounts—
one of which had a balance of approximately $89,000—and several
vehicles. These findings are binding because they are all
supported by competent evidence, and defendant does not
challenge these findings on appeal. See Tucker v. Tucker, 197
N.C. App. 592, 594, 679 S.E.2d 141, 143 (2009). Finally, these
findings support the conclusion that defendant’s noncompliance
was willful because they show that defendant not only had the
means to comply but that he also purposefully did not comply
with the consent judgment. Therefore, defendant’s argument is
without merit.
Finally, defendant argues that the trial court erred in
holding him in civil contempt based on amounts allegedly unpaid
which were not alleged at the time of the contempt proceeding.
Specifically, defendant contends that the amounts due in June,
July, August, and September were not subjects of the contempt
-14-
motion or order to show cause, which was filed in May 2013. We
disagree.
“Civil contempt or punishment [a]s for contempt is applied
to a continuing act, and the proceeding is had to preserve and
enforce the rights of private parties to suits and to compel
obedience to orders and decrees made for the benefit of such
parties.” Rose's Stores, Inc. v. Tarrytown Ctr., Inc., 270 N.C.
206, 214, 154 S.E.2d 313, 319 (1967) (internal citations and
quotation marks omitted). Here, in plaintiff’s motion for order
to show cause, she pled that defendant had stopped paying the
$11,200 monthly payment as required by the consent judgment.
This motion was filed 21 May 2013; however, the hearing on her
motion was held on 26 September 2013. At the time of the
hearing, defendant had still not made any payments. Since civil
contempt is a way in which to require a party to get current on
periodic payments, see Brown v. Brown, 171 N.C. App. 358, 361,
615 S.E.2d 39, 41 (2005) (“An order for the periodic payments of
child support or a child support judgment that provides for
periodic payments is enforceable by proceedings for civil
contempt.”), the trial court had authority to determine which
periodic payments defendant had yet to pay at the time of
hearing. There is no reason why the trial court could not take
-15-
into account the periodic payments defendant missed in the time
between the motion being filed and the hearing, a period of four
months, given that the express purpose of civil contempt is to
protect a party from a “continuing act.” See Rose's Stores, 270
N.C. at 214, 154 S.E.2d at 319. In this case, some of the
“continuing acts” occurred after plaintiff filed her motion in
the months before the hearing—specifically, in June, July,
August, and September. Furthermore, defendant himself testified
that he owed plaintiff $6,572 for April and had not made any
monthly payments on the distributive award in May, June, July,
August, and September (the month in which the hearing was held).
Thus, defendant clearly established that he owed $62,572 to
plaintiff, and defendant’s argument is without merit.
Conclusion
Based on the language of the consent judgment and
construing all provisions in their entirety, we conclude that a
charging order was one, but not the sole, remedy available to
plaintiff to enforce the distributive award, and we affirm the
trial court’s denial of defendant’s motion to dismiss on this
basis. Furthermore, because there was competent evidence
presented at the hearing that defendant’s noncompliance was
willful, we affirm the order adjudicating him in civil contempt.
-16-
Finally, the trial court did not err in holding defendant in
contempt for failing to make monthly payments in June, July,
August, and September.
AFFIRMED.
Judges McGEE and ELMORE concur.
Report per Rule 30(e).