Gurganus v. Gurganus , 252 N.C. App. 1 ( 2017 )


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  •               IN THE COURT OF APPEALS OF NORTH CAROLINA
    No. COA16-163
    Filed: 21 February 2017
    Onslow County, No. 01 CVD 954
    MARY N. GURGANUS, Plaintiff,
    v.
    CHARLES M. GURGANUS, Defendant.
    Appeal by defendant from orders entered 3 September 2015 by Judge William
    M. Cameron III in Onslow County District Court. Heard in the Court of Appeals
    25 August 2016.
    Sullivan & Tanner, P.A., by Mark E. Sullivan and Ashley L. Oldham, for
    plaintiff-appellee.
    The Lea/Schultz Law Firm, P.C., by James W. Lea III and Paige E. Inman, for
    defendant-appellant.
    McCULLOUGH, Judge.
    Charles M. Gurganus (“defendant”) appeals from summary judgment orders
    entered in favor of Mary N. Gurganus (“plaintiff”) concerning the termination of
    alimony, plaintiff’s share of defendant’s military retirement benefits, and
    maintenance of a Survivor Benefit Plan (“SBP”) to the benefit of plaintiff. For the
    following reasons, we affirm.
    I.       Background
    GURGANUS V. GURGANUS
    Opinion of the Court
    Plaintiff and defendant were married on 1 April 1978. On 15 March 2001,
    plaintiff filed a complaint in Onslow County District Court seeking a divorce from bed
    and board on grounds of adultery, constructive abandonment, alcohol abuse, and
    other indignities to render plaintiff’s condition intolerable and life burdensome.
    Along with the divorce from bed and board, plaintiff sought alimony, custody of their
    minor child, child support, possession of the marital residence, attorneys fees, post
    separation support, and equitable distribution.
    On 2 May 2001, the trial court entered a temporary order requiring “defendant
    . . . to pay to plaintiff as postseparation and as support for the minor daughter, the
    sum of $3,500.00 per month . . . .” The temporary order was entered nunc pro tunc to
    the hearing date, 27 April 2001.
    Defendant filed an answer and counterclaim on 29 May 2001, in which
    defendant denied the allegations asserted as the bases of plaintiff’s claim for divorce
    from bed and board. Defendant also asserted his own claims for a divorce from bed
    and board and equitable distribution, while seeking to avoid paying alimony and
    attorneys fees. Plaintiff submitted a reply on 22 June 2001.
    The matter came on for hearing during the 10 September 2001 term of Onslow
    County District Court.    Judgment was entered on 5 April 2002, nunc pro tunc
    10 September 2001. That judgment granted plaintiff a divorce from bed and board
    from defendant, ordered defendant to pay alimony to plaintiff, and equitably
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    GURGANUS V. GURGANUS
    Opinion of the Court
    distributed the marital property with an unequal distribution to the benefit of
    plaintiff. As part of the equitable distribution, plaintiff was to receive a percentage
    of defendant’s military retirement benefits, including amounts to be paid under
    defendant’s SBP. An additional order concerning defendant’s SBP coverage was
    entered with the consent of the parties on 8 April 2003.
    Following a 31 July 2003 hearing on the court’s own Rule 60(a) motion, an
    order was entered on 8 August 2003, nunc pro tunc 31 July 2003, to correct a clerical
    mistake in the 5 April 2002 judgment.
    Years later after defendant retired from the military, on 7 July 2014, defendant
    filed a motion in the cause asserting three claims.          First, defendant sought
    termination or reduction of alimony because plaintiff would be receiving a percentage
    of his military retirement benefits. Second, defendant sought a declaratory judgment
    regarding use of the “Seifert Formula” in the 5 April 2002 judgment to calculate
    plaintiff’s allotment of defendant’s military retirement benefits contending that
    plaintiff should not benefit from his rise in the military ranks and the corresponding
    increase in his retirement benefits that was attained due to his active efforts post-
    separation. Third, defendant sought to have the expense of the SBP assigned to
    plaintiff.
    On 23 September 2014, defendant filed a motion to amend his motion in the
    cause to add a fourth claim, that his active efforts to rise in the military ranks and
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    GURGANUS V. GURGANUS
    Opinion of the Court
    improve his income and plaintiff’s actions against him to impede his advancement
    “constitutes a material and substantial change in circumstances warranting a
    modification of the [judgment] pursuant to the case of White v. White, 
    152 N.C. App. 588
    , 
    568 S.E.2d 283
    (N.C. Ct. App. 2002), aff’d, 
    579 S.E.2d 248
    (N.C. 2003).”
    Discovery then ensued.
    On 1 April 2015, plaintiff filed a motion for summary judgment on grounds
    that res judicata barred reconsideration of plaintiff’s share of defendant’s retirement
    benefits and defendant’s SBP coverage. Plaintiff’s summary judgment motion came
    on for hearing in Onslow County District Court before the Honorable William M.
    Cameron III on 19 August 2015. On 3 September 2015, the court entered three
    separate orders granting summary judgment in favor of plaintiff on each of the three
    claims asserted in defendant’s 7 July 2014 motion in the cause. The court determined
    there was no basis in the law for granting defendant’s motion in the cause; therefore,
    plaintiff was entitled to a percentage of defendant’s retirement benefits as calculated
    in the 5 April 2002 judgment and defendant was responsible for the SBP premium as
    set forth in the 8 April 2003 order.
    Defendant filed notice of appeal from each of the three summary judgment
    orders on 22 September 2015.
    II.    Discussion
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    GURGANUS V. GURGANUS
    Opinion of the Court
    On appeal, defendant argues the trial court erred in entering summary
    judgment because genuine issues of material fact exist as to whether purposeful acts
    by both parties amount to a substantial change in circumstances that warrants
    modification of the 5 April 2002 judgment. Defendant also asserts that the equitable
    distribution in the 5 April 2002 judgment is invalid because the trial court lacked
    subject matter jurisdiction. We address these issues in reverse order.
    1.     Jurisdiction
    For the first time in the long history of this case, defendant now challenges the
    court’s jurisdiction to enter the equitable distribution portion of the 5 April 2002
    judgment. While it is clear that this is the first time the trial court’s subject matter
    jurisdiction has been challenged in this case, our law is equally clear that issues
    challenging subject matter jurisdiction may be raised at any time, even for the first
    time on appeal. See Lemmerman v. A.T. Williams Oil Co., 
    318 N.C. 577
    , 580, 
    350 S.E.2d 83
    , 85 (1986) (“The question of subject matter jurisdiction may be raised at
    any time, even in the Supreme Court.”). Thus, the issue is properly before this Court.
    “Whether a trial court has subject-matter jurisdiction is a question of law,
    reviewed de novo on appeal.” McKoy v. McKoy, 
    202 N.C. App. 509
    , 511, 
    689 S.E.2d 590
    , 592 (2010). “Subject matter jurisdiction is conferred upon the courts by either
    the North Carolina Constitution or by statute.” Harris v. Pembaur, 
    84 N.C. App. 666
    ,
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    GURGANUS V. GURGANUS
    Opinion of the Court
    667, 
    353 S.E.2d 673
    , 675 (1987). Regarding equitable distribution, N.C. Gen. Stat. §
    50-21(a) provides, in pertinent part, that:
    [a]t any time after a husband and wife begin to live
    separate and apart from each other, a claim for equitable
    distribution may be filed and adjudicated, either as a
    separate civil action, or together with any other action
    brought pursuant to Chapter 50 of the General Statutes, or
    as a motion in the cause as provided by G.S. 50-11(e) or (f).
    N.C. Gen. Stat. § 50-21(a) (2015).
    As detailed above, in this case plaintiff filed a complaint for divorce from bed
    and board on 15 March 2001 and defendant responded by filing an answer and
    counterclaim for a divorce from bed and board on 29 May 2001. In those pleadings,
    both plaintiff and defendant prayed that the court equitably distribute the marital
    property unequally in their respective favors. Yet, there is no separation date alleged
    in those pleadings. The first mention of a separation date in the record is in the
    2 May 2001 temporary support order, in which the court found that plaintiff and
    defendant “lived together as husband and wife until on or about March 22, 2001 when
    the defendant began to move his personal clothing and items from the marital
    residence.” The court then found, again, that the parties separated on approximately
    22 March 2001 in the 5 April 2002 judgment.
    Both parties agree that, under N.C. Gen. Stat. § 50-21(a), the separation of the
    parties provides the court with subject matter jurisdiction to adjudicate a claim for
    equitable distribution. But defendant claims the court lacked jurisdiction to enter
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    GURGANUS V. GURGANUS
    Opinion of the Court
    the equitable distribution portion of the judgment in this case because neither party
    alleged a separation date in their pleadings. Defendant also claims that neither
    plaintiff nor his pleadings contained a proper claim for equitable distribution because
    it was only mentioned in the prayers for relief and, in both pleadings, was paired with
    a claim for divorce from bed and board, indicating the parties had not separated. We
    disagree with both of defendant’s arguments.
    We first note that this Court has held that “a pleading requesting the court to
    enter an order distributing the parties’ assets in an equitable manner is sufficient to
    state a claim for equitable distribution.” Coleman v. Coleman, 
    182 N.C. App. 25
    , 28,
    
    641 S.E.2d 332
    , 336 (2007) (citing Hunt v. Hunt, 
    117 N.C. App. 280
    , 
    450 S.E.2d 558
    (1994)). Thus, the prayers for relief in both pleadings put the parties on notice that
    both sought equitable distribution and those requests were sufficient to state a claim
    for equitable distribution. Moreover, the mere fact that the equitable distribution
    claims were asserted alongside claims for a divorce from bed and board does not
    defeat the equitable distribution claims. Defendant has cited no authority for his
    assertion that such claims are improper together and we have found no such
    authority. In fact, a review of cases shows that claims for a divorce from bed and
    board and equitable distribution are often paired together in pleadings.
    Concerning the required separation of the parties as a prerequisite for
    jurisdiction to adjudicate an equitable distribution claim, there is no indication in the
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    GURGANUS V. GURGANUS
    Opinion of the Court
    record that the parties were separated at the time plaintiff filed her complaint. The
    record does show, however, that the parties separated on or about 22 March 2001,
    before defendant filed his answer and counterclaim. Defendant also alleges in his
    answer and counterclaim that he commuted weekly to North Carolina from where he
    was stationed in Virginia to visit plaintiff and their children until it became clear
    that reconciliation was impossible, then defendant stopped making weekly trips.
    Therefore, regardless of whether the parties were separated at the time plaintiff filed
    the complaint, the record is clear that the parties were separated by the time
    defendant asserted his claim for equitable distribution. Therefore the trial court did
    have subject matter jurisdiction to equitably distribute the marital property.
    2.     Summary Judgment
    Defendant also challenges the trial court’s grant of summary judgment in favor
    of plaintiff on the claims in his 7 July 2014 motion in the cause.         Specifically
    defendant contends the trial court erred in entering summary judgment with respect
    to his claims to alter the plaintiff’s share of his military retirement benefits and to
    terminate alimony. We disagree in both instances.
    “Our standard of review of an appeal from summary judgment is de novo; such
    judgment is appropriate only when the record shows that ‘there is no genuine issue
    as to any material fact and that any party is entitled to a judgment as a matter of
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    GURGANUS V. GURGANUS
    Opinion of the Court
    law.’ ” In re Will of Jones, 
    362 N.C. 569
    , 573, 
    669 S.E.2d 572
    , 576 (2008) (quoting
    Forbis v. Neal, 
    361 N.C. 519
    , 524, 
    649 S.E.2d 382
    , 385 (2007)).
    A.    Retirement Benefits
    Concerning the division of defendant’s military retirement benefits for
    purposes of equitable distribution, the Court has previously addressed the
    permissible methods of division in Seifert v. Seifert, 
    319 N.C. 367
    , 
    354 S.E.2d 506
    (1987). In that case, the issue before the Court was “whether the trial court erred in
    deferring, until actual receipt, an anticipated award of military pension and
    retirement benefits calculated under a present value valuation method.” 
    Id. at 367,
    354 S.E.2d at 507. In deciding that the court did err, the Court concluded that “both
    present value and fixed percentage are permissible methods of evaluating pension
    and retirement benefits in arriving at an equitable distribution of marital property.”
    
    Id. at 371,
    354 S.E.2d at 509. The Court further explained the fixed percentage
    method as follows:
    Under this method if, after valuing the marital estate, the
    court finds a distributive award of retirement benefits
    necessary to achieve an equitable distribution, the
    nonemployee spouse is awarded a percentage of each
    pension check based on the total portion of benefits
    attributable to the marriage. The portion of benefits
    attributable to the marriage is calculated by multiplying
    the net pension benefits by a fraction, the numerator of
    which is the period of the employee spouse’s participation
    in the plan during the marriage (from the date of marriage
    until the date of separation) and the denominator of which
    is the total period of participation in the plan. The
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    GURGANUS V. GURGANUS
    Opinion of the Court
    nonemployee spouse receives this award only if and when
    the employee spouse begins to receive the benefits.
    Under the fixed percentage method, deferral of payment is
    possible without unfairly reducing the value of the award.
    The present value of the pension or retirement benefits is
    not considered in determining the percentage to which the
    nonemployee spouse is entitled. Moreover, because the
    nonemployee spouse receives a percentage of the benefits
    actually paid to the employee spouse, the nonemployee
    spouse shares in any growth in the benefits. Yet, the
    formula gives the nonemployee spouse a percentage only of
    those benefits attributable to the period of the marriage,
    and that spouse does not share in benefits based on
    contributions made after the date of separation.
    Finally, so long as the trial court properly ascertains the
    net value of the pension and retirement benefits to
    determine what division of the property will be equitable,
    application of the fixed percentage method does not . . .
    violate the mandate that the court must identify the
    marital property, ascertain its net value, and then
    equitably distribute it. On the contrary, valuation of these
    benefits, together with other marital property, is necessary
    to determine the percentage of these benefits that the
    nonemployee spouse is equitably entitled to receive.
    
    Id. at 370-71,
    354 S.E.2d at 509 (internal citations omitted). Subsequent to Seifert,
    the Court’s analysis was codified in N.C. Gen. Stat. § 50-20.1.
    In this case, the court used the fixed percentage method to determine the
    portion of defendant’s military retirement benefits to allocate to plaintiff. The Court
    provided the following formula in the 5 April 2002 judgment: (23 years / total years
    of defendant’s service) x 50% = % to be paid to the plaintiff.
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    GURGANUS V. GURGANUS
    Opinion of the Court
    On appeal, defendant recognizes that Seifert controls the division of military
    retirement benefits in North Carolina. Yet, defendant claims that he “raises a novel
    question of law regarding the application of Seifert to pension division and whether
    there should be a narrow set of circumstance that allow modification of an equitable
    distribution order if the failure to do so results in manifest unfairness . . . .”
    Defendant further claims “[t]he instant case is an example of how while the fixed
    percentage method does not unfairly reduce a non-employee spouse’s award, it does,
    at times, unfairly inflate the amount received by the non-employee spouse and results
    in a grossly different valuation than the present value method of valuation.” Thus,
    defendant requests that this Court consider a different method of valuation based on
    changes in circumstances.     Those changes in circumstances are alleged acts by
    plaintiff to thwart defendant’s advancement in the military and defendant’s active
    efforts to advance his military career.
    Upon review, we are not convinced that the equitable distribution portion of
    the judgment should be altered due to the alleged changes in circumstances.
    Although defendant admits that the law favors finality of equitable distribution
    judgments, defendant relies on this Court’s decision in White v. White, 
    152 N.C. App. 588
    , 
    568 S.E.2d 283
    (2002), aff’d per curiam, 
    357 N.C. 153
    , 
    579 S.E.2d 248
    (2003), to
    argue that this Court has allowed modification of orders based on changes of
    circumstances in the past.
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    GURGANUS V. GURGANUS
    Opinion of the Court
    Upon the parties divorce in White, a consent order was entered incorporating
    an agreement by the parties for the distribution of the marital property, including
    that defendant was entitled to one-half of the plaintiff’s pension accumulated during
    the marriage. 
    Id. at 590,
    568 S.E.2d at 284. Years later, after the plaintiff retired
    and defendant began receiving benefits from plaintiff’s pension, plaintiff applied for
    and began receiving disability benefits, which in turn caused the amount of benefits
    classified as retired pay to decrease and resulted in a significant decrease in the
    amount of benefits available to defendant. 
    Id. at 590-91,
    568 S.E.2d at 284. As this
    Court explained, “[i]n short, [the] plaintiff unilaterally acted so as to diminish [the]
    defendant’s share of [the] plaintiff’s monthly benefits while simultaneously
    maintaining his own monthly benefits, as well as increasing his after-tax income.”
    
    Id. at 591,
    568 S.E.2d at 284. As a result, the defendant filed a motion in the cause
    seeking a modified or amended qualifying order increasing her percentage of
    plaintiffs’ retired pay. 
    Id. at 591,
    568 S.E.2d at 284. On appeal of the denial of her
    motion, this Court held the trial court erred. 
    Id. at 592,
    568 S.E.2d at 285.
    Upon review of White, we agree with plaintiff’s assertion that White is
    distinguishable from the present case. In White, this Court allowed modification
    where the plaintiff had, subsequent to the equitable distribution order, elected to
    receive disability benefits in place of retired pay and, thereby, diminished the benefits
    to be received by the defendant. In that instance, modification was allowed to enforce
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    GURGANUS V. GURGANUS
    Opinion of the Court
    the intent of the original equitable distribution order. In the present case, defendant
    attempts to modify plaintiff’s allocation of his military retirement benefits because
    those benefits have increased post-separation as a result of his continued military
    service; which was foreseeable at the time the court entered the 5 April 2002
    judgment. We hold White does not control in this case.
    The formula used by the court to calculate the fixed percentage of defendant’s
    military retirement benefits to be awarded to plaintiff is exactly the formula set forth
    in Seifert and N.C. Gen. Stat. § 50-20.1(d). We decline defendant’s request to consider
    a new formula and agree with the trial court that “[t]here is no basis in law for
    granting [d]efendant’s motion or amended motion[;]” therefore, “[p]laintiff is entitled
    to a share of the [d]efendant’s military retired pay as stated in the April 5, 2002
    judgment . . . .”
    B.     Alimony
    On appeal, defendant also argues the trial court erred in entering summary
    judgment on his claim to terminate the alimony awarded in the 5 April 2002
    judgment. We are not convinced the order sought by defendant is necessary.
    The pertinent decretal portions of the judgment required defendant to pay
    $2,500.00 per month to plaintiff as alimony and provided for the reduction of alimony
    payments as follows:
    Further, at such time as plaintiff begins to receive her
    portion of the defendant’s military retirement pay, the
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    GURGANUS V. GURGANUS
    Opinion of the Court
    defendant may reduce the amount of alimony he pays by
    the actual sum received by the plaintiff from the military
    retirement pay such that the plaintiff receives a total of
    $2,500.00 per month.
    Defendant asserts, and the record shows, that the amount of defendant’s
    retirement pay received by plaintiff is greater than the alimony ordered in the
    judgment. Therefore, under the terms of the judgment, and without further order of
    the court, defendant is entitled to reduce the alimony paid to zero. Because defendant
    is no longer required to pay any alimony under the terms of the judgment, an
    additional order terminating alimony would be of no consequence. Thus, we hold the
    trial court did not err in entering summary judgment.
    III.   Conclusion
    For the reasons discussed above, we hold the trial court had jurisdiction to
    equitably distribute the marital property in the 5 April 2002 judgment and did not
    later err in granting summary judgment in favor of plaintiff on the claims asserted
    in defendant’s 7 July 2014 motion in the cause. The trial court’s orders are affirmed.
    AFFIRMED.
    Judges HUNTER, Jr., and DIETZ concur.
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Document Info

Docket Number: COA16-163

Citation Numbers: 796 S.E.2d 811, 252 N.C. App. 1, 2017 WL 672169, 2017 N.C. App. LEXIS 89

Judges: McCULLOUGH

Filed Date: 2/21/2017

Precedential Status: Precedential

Modified Date: 10/19/2024