GUILFORD COUNTY EX REL. HOLT v. Puckett , 191 N.C. App. 693 ( 2008 )

JACKSON, Judge.

The Guilford County Child Support Enforcement Agency (“plaintiff’) appeals — purportedly on behalf of Stella M. Holt (“Holt”) — an order granting defendant’s motion for attorney’s fees. After careful review, we reverse and remand this matter to the trial court.

On 17 November 2005, plaintiff filed a complaint seeking to establish paternity, pursuant to North Carolina General Statutes, section 49-14 (2008), and current support, pursuant to North Carolina General Statutes, section 50-13.4 (2008), as well as to recover past paid public assistance from defendant for a juvenile whom Holt claimed was fathered by defendant. [R p. 34-36] On 29 August 2006, defendant filed a response denying paternity and counterclaiming for attorney’s fees pursuant to North Carolina General Statutes, section 50-13.6 (2008), and by separate motion requested a paternity test be performed. The paternity test excluded defendant as the father, and the case was dismissed voluntarily by plaintiff on 28 November 2006. On 27 March 2007, the district court granted defendant’s motion for attorney’s fees, ordering Holt to pay $750.00 of defendant’s more than $2,000.00 in accumulated attorney’s fees. Plaintiff appeals.

In plaintiff’s only argument on appeal, it contends that the trial court abused its discretion by ordering Holt to pay a portion of defendant’s attorney’s fees. We agree.

We note that the order by the district court purportedly awards attorney’s fees to defendant pursuant to North Carolina General Statutes, section 50-13.6. That statute reads: “In an action or proceeding for the custody or support, or both, of a minor child, . . . the court may in its discretion order payment of reasonable attorney’s fees to an interested party acting in good faith who has insufficient means to defray the expense of the suit.” This Court has stated explicitly that “]t]his statute does not apply to civil actions to establish paternity under G.S. 49-14. We can perceive no reasonable construction of G.S. 50-13.6 that would extend its coverage that far.” Smith v. Price, 74 N.C. App. 413, 423, 328 S.E.2d 811, 818 (1985), rev’d on other grounds by 315 N.C. 523, 340 S.E.2d 408 (1986).

However, this Court also has stated explicitly that costs involved in prosecuting a paternity action may be awarded under North Carolina General Statutes, section 6-21(10), which states: “Costs in the following matters shall be taxed against either party, or apportioned among the parties, in the discretion of the court: . . . [i]n proceedings regarding illegitimate children under Article 3, Chapter 49 of the General Statutes.” See Napowsa v. Langston, 95 N.C. App. 14, 26, 381 S.E.2d 882, 889 (1989) (“attorney’s fees incurred in prosecuting paternity actions may not be awarded under Section 50-13.6, but may only be assessed as costs under Section 6-21(10).”). Award of attorney’s fees as costs under section 6-21(10) is discretionary. N.C. Gen. Stat. § 6-21.

Plaintiff argues that assessing attorney’s fees to Holt in the instant case is inequitable. Although we have been unable to find any precedent in this jurisdiction — or any other — addressing the peculiar fact situation presented in the instant case, we hold that the laws governing child support enforcement in this state, along with general principles of equity, do not support the assessment of attorney’s fees against Holt. North Carolina General Statutes, section 110-128 (2008), states the purposes of Article 9 of the North Carolina General Statutes:

The purposes of this Article are to provide for the financial support of dependent children; to enforce spousal support when a child support order is being enforced; to provide that public assistance paid to dependent children is a supplement to the support required to be provided by the responsible parent; to provide that the payment of public assistance creates a debt to the State; to provide that the acceptance of public assistance operates as an assignment of the right to child support; to provide for the location of absent parents; to provide for a determination that a responsible parent is able to support his children; and to provide for enforcement of the responsible parent’s obligation to furnish support and to provide for the establishment and administration of a program of child support enforcement in North Carolina.

Because Holt was receiving child support benefits from plaintiff, plaintiff had both “the authority and the duty to pursue an action against the responsible parent for the maintenance of the child and recovery of amounts paid by the county for support of the child.” Settle v. Beasley, 309 N.C. 616, 618, 308 S.E.2d 288, 289 (1983). Plaintiff filed the instant suit, and, notwithstanding the fact that the suit purportedly was filed “on behalf of’ Holt, plaintiff was the real party in interest, not Holt. The suit was filed for the economic benefit of plaintiff, not of Holt. Id,, at 618-19, 308 S.E.2d at 289. Upon the filing of this action by plaintiff, Holt was required to assist plaintiff in the prosecution of the action, or face the termination of her child support benefits, and possible charges of contempt of court resulting in fines and jail time.¹ N.C. Gen. Stat. § 110-131 (2008); see also Beasley, 309 N.C. at 618, 308 S.E.2d at 289.

The dissent points out that Holt “is a named plaintiff in every document in the record on appeal.” “[T]he courts will look beyond the nominal party whose name appears of record arid consider the legal questions raised as they may affect the real party in interest.” Id. at 618, 308 S.E.2d at 289. Furthermore, we do not, as the dissent suggests, indicate that only a real party in interest is subject to orders of the trial court. What we do hold, as is further addressed below, is that in this instance and on these facts, to hold Holt responsible for attorney’s fees for an action she did not initiate, and in which she was required to participate, would be inequitable.

Plaintiff’s claims against defendant constituted subrogation, pursuant to which plaintiff stepped into the shoes of Holt, and obtained all her rights and obligations in the action filed against defendant. In re A Declaratory Ruling by the N. C. Comm’r of Ins. Regarding 11 N.C.A.C. 12.0319, 134 N.C. App. 22, 24, 517 S.E.2d 134, 137 (.1999); Trustees of Garden of Prayer Baptist Church v. Geraldco Builders, Inc., 78 N.C. App. 108, 114, 336 S.E.2d 694, 697-98 (1985); see also In re Parentage of I.A.D., 126 P.3d 79 (Wash. Ct. App. 2006).

“The doctrine [of subrogation] is one of equity and benevolence, and, like contribution and other similar equitable rights, was adopted from the civil law, and its basis is the doing of complete, essential and perfect justice between all the parties without regard to form, and its object is the prevention of injustice.” Jeffreys v. Hocutt, 195 N.C. 339, 342, 142 S.E. 226, 227 (1928) (quotes and citation omitted); see also Wallace v. Benner, 200 N.C. 124, 130-32, 156 S.E. 795, 798-99 (1931). “It is a fundamental premise of equitable relief that equity regards as done that which in fairness and good conscience ought to be done.” Lankford v. Wright, 347 N.C. 115, 118, 489 S.E.2d 604, 606 (1997) (quotes and citations omitted). “Equity regards substance, not form”. Id. And equity “will not allow technicalities of procedure to defeat that which is eminently right and just”. Id.

Holt did not file the instant action, was not the real party in interest, and was compelled to participate fully in plaintiffs action, including naming the individual she believed was her child’s biological father. There is no showing in the record that Holt named defendant as the biological father maliciously, fraudulently, or in bad faith. The fact that defendant was not, in fact, the child’s father does not prove otherwise.

The dissent appears to equate naming defendant as the biological father in the action as proof of intentional deception on the part of Holt. We are not prepared to make that leap, and the trial court made no such finding of fact. The trial court did state in its third finding of fact that defendant alleged in an affidavit that he “is not now and never has been acquainted with [Holt].” This is not enough to constitute an adoption of the allegations of the defendant as facts by the trial court. In re Anderson, 151 N.C. App. 94, 96-97, 564 S.E.2d 599, 601-02 (2002). Therefore, the trial court’s findings of fact do not support the dissents assertion that “[c]learly, the trial court believed defendant had no relationship with plaintiff mother, a finding that would justify an award of attorney’s fees.” As the trial court does not make any findings of fact concerning Holt’s honesty, motivation or good faith in initially naming defendant as the biological father, and as it further makes no finding of fact in which it adopts defendant’s assertion that he did not know Holt, we may not, as the dissent suggests, infer the trial court’s opinion — one way or the other. Id. We hold that the assessment of attorney’s fees to Holt was inequitable — neither right nor just.

By footnote, the dissent states: “there was nothing to prohibit plaintiff agency from contacting defendant when plaintiff mother named him as the father and instigating paternity testing at that time before filing an action against him.” We are in complete agreement with the dissent on this point. Had plaintiff taken this course of action, neither defendant nor Holt would have been forced to participate in this action, and neither would have been assessed attorneys fees by the trial court. The dissent’s observation lends support to the equity of holding that if attorney’s fees are to be assessed to either of the “named” plaintiffs, it is more equitable that Guilford County, not Holt, bear that burden.

The very fact that plaintiff was entitled to file the instant action is proof that Holt is a woman of limited means, as she was dependant on assistance from plaintiff for the support of her child. In light of the stated purposes of Article 9, in particular “to provide for the financial support of dependent children”, the assessment of attorney’s fees against Holt — who is not in a position to provide for her child without assistance — for an action filed by plaintiff, is not only inequitable, but contrary to the stated purposes of the Article which granted plaintiff the right and duty to file the action in the first place.²

We believe the dissent is correct in emphasizing our citation above, stating that equity requires ‘the doing of complete, essential and perfect justice between all the parties without regard to form, and its object is the prevention of injustice.’ ” Hocutt, 195 N.C. at 342, 142 S.E. at 228 (emphasis added). We are in no manner ignoring the rights of defendant in this opinion. The trial court determined that it would be equitable for defendant to receive some compensation for his attorney’s fees, and we do not quarrel with that determination. Our quarrel merely is with the trial court’s choice of the source of that compensation.

We hold that the trial court abused its discretion, and reverse that portion of the trial court’s order assessing $750.00 in attorney’s fees to Holt, and remand to the trial court for further action in accordance with this holding. The trial court may, in its discretion, make findings of fact and conclusions of law determining whether plaintiff, not Holt, should bear any portion of defendant’s attorney’s fees, pursuant to the appropriate statutory authority.

Reversed and Remanded.

Judge HUNTER dissents in a separate opinion. Judge BRYANT concurs.

1 . Contrary to the assertion of the dissent, we do not “predict” this outcome, we merely point out that pursuant to statute, it is “possible.”

2 . The dissent misses our point concerning the “stated purpose of Article 9.” We are not suggesting that Holt’s financial support from plaintiff will be terminated, but that a mother who requires financial support to care for her child can ill afford to pay $750.00, and that were she forced to do so, it may well negatively impact that child, whose support is one of plaintiffs stated purposes for existing in the first place.