Crews v. CrewsÂ

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-42
Filed: 5 March 2019
Davidson County, No. 17 CVD 95
LISA DAWN CREWS, Plaintiff,
v.
JAMES SCOTT CREWS, Defendant.
Appeal by defendant from order entered 19 July 2017 by Judge J. Rodwell
Penry, Jr. in District Court, Davidson County. Heard in the Court of Appeals 17
October 2018.
Jon W. Myers, for plaintiff-appellee.
Woodruff Law Firm, P.A., by Jessica S. Bullock and Carolyn J. Woodruff, for
defendant-appellant.
STROUD, Judge.
Defendant appeals an order enforcing the Separation Agreement he had
entered into with plaintiff. Because the trial court’s findings support its conclusions
regarding the enforceability of the Separation Agreement and its order requiring
specific performance of Husband’s alimony obligation, we affirm.
I. Background
CREWS V. CREWS
Opinion of the Court
On 21 July 2016, plaintiff-wife filed a verified complaint against defendant-
husband alleging that the parties had separated in February of 2016 and had entered
into a Separation and Property Settlement agreement on 4 March 2016. Wife alleged
Husband had breached the Agreement by failing to timely pay his alimony obligation
and that he had paid only once or twice since entry of the Agreement. On 25 January
2017, Husband answered Wife’s complaint, denying the substantive allegations; he
counterclaimed for rescission of the Agreement based upon fraud in the inducement,
material breach of contract by Wife, and attorney fees. Husband alleged Wife had
concealed sexual relationships and failed to disclose material assets. Husband
alleged duress, unfairness, and unconscionability as to the Agreement. Husband also
alleged that even if the Agreement was valid, his obligation to pay alimony was
terminated by Wife’s cohabitation with another man. Husband claimed Wife had
breached the Agreement by her failure to return twenty items of personal property
which were listed in the counterclaim.
On 30 March 2017, Husband filed a motion for summary judgment. The trial
court denied Husband’s motion for summary judgement and heard all pending claims
and counterclaims. On 19 July 2017, the trial court entered an order denying
summary judgment; concluding that the Separation Agreement was enforceable,
Husband had breached the Agreement, and Wife had not breached the Agreement;
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Opinion of the Court
and ordering specific performance of Husband’s alimony obligation. Husband
appealed.
II. Specific Performance
Defendant makes three arguments regarding specific performance. Husband
does not challenge the findings of fact as unsupported by the evidence, but contends
that the findings of fact are not sufficient to support the trial court’s conclusions of
law. “The remedy of specific performance rests in the sound discretion of the trial
court and is conclusive on appeal absent a showing of a palpable abuse of discretion.”
Lasecki v. Lasecki, 246 N.C. App. 518, 540, 786 S.E.2d 286, 302 (2016) (citation,
quotation marks, and brackets omitted).
To receive specific performance, the law requires the
moving party to prove that (i) the remedy at law is
inadequate, (ii) the obligor can perform, and (iii) the obligee
has performed her obligations. We now elaborate on each
of these requirements.
First, the movant must prove the legal remedy is
inadequate. In Moore, our Supreme Court clarified that:
an adequate remedy is not a partial remedy.
It is a full and complete remedy, and one that
is accommodated to the wrong which is to be
redressed by it. It is not enough that there is
some remedy at law; it must be as practical
and as efficient to the ends of justice and its
prompt administration as the remedy in
equity.
For separation agreements, Moore established that
damages are usually an inadequate remedy because:
the plaintiff must wait until payments have
become due and the obligor has failed to
comply. Plaintiff must then file suit for the
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Opinion of the Court
amount of accrued arrearage, reduce her
claim to judgment, and, if the defendant fails
to satisfy it, secure satisfaction by execution.
As is so often the case, when the defendant
persists in his refusal to comply, the plaintiff
must resort to this remedy repeatedly to
secure her rights under the agreement as the
payments become due and the defendant fails
to comply. The expense and delay involved in
this remedy at law is evident.
In this context, even one missed payment can indicate the
remedy at law is inadequate.
Second, the movant must prove the obligor has the
ability to perform. To meet this burden, the movant need
not necessarily present direct evidence of the obligee’s
current income. For instance, the movant can meet her
burden by showing the obligee has depressed his income to
avoid payment. Additionally, if the obligor has offered
evidence tending to show that he is unable to fulfill his
obligation under a separation agreement, the trial judge
must make findings of fact concerning the defendant’s
ability to carry out the terms of the agreement before
ordering specific performance.
Third, the movant must prove she has not breached
the terms of the separation agreement. Still, general
contract principles recognize that immaterial breaches do
not eliminate the possibility of specific performance.
Reeder v. Carter, 226 N.C. App. 270, 275–76, 740 S.E.2d 913, 917–18 (2013) (citations,
quotation marks, ellipses, and brackets omitted). Defendant challenges all prongs
supporting the trial court’s order of specific performance.
A. Inadequate Remedy at Law
Husband contends that “the remedy of damages is the only remedy available
because the defendant cannot perform under the contract. Additionally, there are no
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Opinion of the Court
findings of fact or conclusions of law that the remedy of damages is inadequate.”
(Original in all caps.) As noted above, for separation agreements, “damages are
usually an inadequate remedy[.]” Id. at 275, 740 S.E.2d at 918. In Stewart v. Stewart,
this Court determined,
The breachor’s initial failure to comply establishes the
inadequacy of the breachee’s remedy at law. To make
iteration of breach prerequisite to equitable relief would
afflict the equitable remedy with the very inadequacy it
was designed to amend. Given plaintiff’s allegation
regarding defendant’s statement of intent not to comply,
and defendant’s failure to make a payment when due, we
find no abuse of the court’s discretion in ordering specific
performance.
61 N.C. App. 112, 117, 300 S.E.2d 263, 266 (1983) (emphasis added).
Here, plaintiff’s evidence showed and the trial court found that Husband had
failed to pay his alimony obligation multiple times. Husband cites to Reeder to argue
“that there must be findings of fact to support conclusion of law on the prong of legal
remedy being inadequate[;]” it appears Husband contends that the trial court must
include the magic words that “the legal remedy is inadequate” in its findings. But
Stewart establishes that a finding of a “failure to comply establishe[d] the inadequacy
of” the remedy at law. Id. Here, the trial court made a finding that “[t]he Defendant
stopped paying alimony in August of 2016” in its July 2017 order; this finding
established the inadequacy of Wife’s remedy at law. See id.
B. Husband’s Ability to Perform under the Agreement
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Opinion of the Court
Husband also contends that “the trial court erred by failing to make any
findings of fact or conclusions of law whatsoever regarding specific performance or
defendant’s ability to pay alimony.” (Original in all caps.)
As a general proposition, the equitable remedy of
specific performance may not be ordered unless such relief
is feasible; therefore courts may not order specific
performance where it does not appear that defendant can
perform. In the absence of a finding that the defendant is
able to perform a separation agreement, the trial court may
nonetheless order specific performance if it can find that
the defendant has deliberately depressed his income or
dissipated his resources.
In finding that the defendant is able to perform a
separation agreement, the trial court is not required to
make a specific finding of the defendant’s present ability to
comply as that phrase is used in the context of civil
contempt. In other words, the trial court is not required to
find that the defendant possesses some amount of cash, or
asset readily converted to cash prior to ordering specific
performance.
Condellone v. Condellone, 129 N.C. App. 675, 682–83, 501 S.E.2d 690, 695–96 (1998)
(citations, quotation marks, and brackets omitted).
Husband is correct that the trial court did not make specific findings of fact or
conclusions of law regarding his ability to specifically perform the contract by paying
the alimony. There was never any question of Husband’s ability to pay raised at trial
and the evidence tended to show his business was successful and profitable. In fact,
one of Husband’s counterclaims – which was rejected by the trial court in finding of
fact 8- was based upon his allegation that Wife had breached the “Molestation Clause”
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Opinion of the Court
of the agreement and that she was trying to damage his business. In the Agreement,
Husband received the business he established and operated, Quality Transportation
and Transports. One of Husband’s counterclaims was based upon his allegation that
Wife had breached the agreement by harassing him and threatening to contact his
customers and “ruin [his] business[.]” RP 37 Husband testified about his business,
including his relationships with Foreign Cars Italia and Bentley; his business
transported foreign cars for “high-end customers” and Husband believed Wife was
contacting them and trying to “blackmail” him. Husband did not present any
evidence of any actual financial damage to his business – although his failure to file
income tax returns for nine to ten years may have made it difficult to establish
anything about his business’s financial status – and he did not give any reason
financial reason for stopping his alimony payments in August of 2016 but rather
relied upon the allegations of fault on the part of plaintiff in his defense. At the time
of the hearing, Husband was still operating his business as he had done for many
years. When asked how much he had paid his attorneys in this case, he replied that
he wasn’t sure, but he had borrowed $65,000, $40,000 of which was from a
“handshake deal” with his girlfriend, and did not use all of that money for his attorney
fees.
Even if Wife did not present any specific evidence of Husband’s income at the
time of the hearing, the evidence showed he was still gainfully employed exactly as
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Opinion of the Court
he had been for most of their marriage. And most significantly, Husband did not
present any evidence of his inability to pay or even argue that he was unable to pay.
Instead, Husband’s entire defense relied upon trying to set aside the Agreement
based on fraud or duress and his defense of Wife’s cohabitation. Wife had the burden
to present evidence that Husband had the ability to pay, which she met by the
evidence noted above. Husband did not counter that evidence and did not make any
argument to the trial court regarding his ability to pay or Wife’s alleged failure to
present sufficient evidence of his inability to pay. He has improperly raised this
argument for the first time on appeal. See Lee v. Keck, 68 N.C. App. 320, 328, 315
S.E.2d 323, 329 (1984) (“Even the sufficiency of the evidence cannot be raised for the
first time on appeal. On appeal, defendants argue several grounds, including the
sufficiency of the evidence, which were not advanced at trial. They are, therefore, not
properly before this Court.” (citations omitted)).
While Husband and the dissent rely on Cavenaugh in support of the argument
that the trial court was required to make findings of fact regarding his ability to pay,
Husband omitted the intalicized portion below in his quote from the holding he cited:
We hold that when a defendant has offered evidence
tending to show that he is unable to fulfill his obligations
under a separation agreement or other contract the trial
judge must make findings of fact concerning the
defendant’s ability to carry out the terms of the agreement
before ordering specific performance. Because the trial
judge did not make such findings in this case, he could not
have properly exercised his discretion in decreeing specific
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CREWS V. CREWS
Opinion of the Court
performance of the separation agreement and ordering
payment of arrearages. Therefore, this case must be
remanded for additional findings of fact on defendant’s
ability to pay the arrearages and to comply with the terms
of the separation agreement in the future. If the trial judge
finds that defendant is unable to fulfill his obligations
under the agreement, specific performance of the entire
agreement may not be ordered absent evidence that
defendant has deliberately depressed his income or
dissipated his resources. If he finds that the state of
defendant’s finances warrants it, the trial judge may order
specific performance of all or any part of the separation
agreement unless plaintiff otherwise has an adequate
remedy at law.
Cavenaugh v. Cavenaugh, 317 N.C. 652, 657-58, 347 S.E.2d 19, 23 (1986) (emphasis
added) (citations omitted). Husband did not “offer[ ] evidence tending to show that
he is unable to fulfill his obligations under [the] separation agreement or other
contract[,]” id., nor did he make this argument to the trial court. See Lee, 68 N.C.
App. as 328, 315 S.E.2d as 329. This argument is without merit.
C. Wife’s Performance under the Agreement
Last, Husband argues Wife “did not perform her obligations under the
contract.” This argument is commingled with Husband’s argument regarding
material breach of contract. Husband contends “the trial court erred by finding that
. . . [Wife] did not materially breach the parties’ separation agreement by failing to
return [Husband’s] one-of-a-kind Ferrari model cars and at least $5,400 of other
personal property items[.]” (Original in all caps.) “In order for a breach of contract
to be actionable it must be a material breach, one that substantially defeats the
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Opinion of the Court
purpose of the agreement or goes to the very heart of the agreement, or can be
characterized as a substantial failure to perform.” Long v. Long, 160 N.C. App. 664,
668, 588 S.E.2d 1, 4 (2003).
The Agreement addressed the division of “Miscellaneous Tangible Property”
and provided that Husband would receive his “tools, four wheeler, golf cart and
washer/dryer and personal effects including his clothing.” Husband was also to get
such other items “as the parties mutually agree.” Since the model cars are not
specifically mentioned in the Agreement, Husband and Wife apparently agreed after
signing the Agreement that Husband would get the cars. The “one-of-a-kind Ferrari
model cars” Husband claims are worth $22,500 were not mentioned in the
Agreement. If the cars were so important that they “defeat the purpose of the”
Agreement as Husband contends, they should have been specifically listed; otherwise,
Wife could have refused to allow Husband to have the cars. “[R]escission of a
separation agreement requires proof of a material breach -- a substantial failure to
perform.” Cator v. Cator, 70 N.C. App. 719, 722-23, 321 S.E.2d 36, 38 (1984). The
trial court ultimately ordered Wife to return the cars to Husband but deteremined
that she did not breach the Agreement by her failure to return them. Furthermore,
the trial court correctly determined that Wife had performed her other obligations
under the Agreement. Husband’s argument as to Wife’s material breach as a bar to
her claims for specific performance and breach of contract is overruled.
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Opinion of the Court
III. Summary Judgment
Husband next contends that “the trial court the trial court erred in (a)
preserving ruling until after trial on the defendant-appellant’s motion for summary
judgment and (b) by denying defendant’s motion for summary judgment.” (Original
in all caps.) But denial of summary judgment is not subject to appellate review after
a full evidentiary hearing:
To grant a review of the denial of the summary judgment
motion after a final judgment on the merits, however,
would mean that a party who prevailed at trial after a
complete presentation of evidence by both sides with cross-
examination could be deprived of a favorable verdict. This
would allow a verdict reached after the presentation of all
the evidence to be overcome by a limited forecast of the
evidence. In order to avoid such an anomalous result, we
hold that the denial of a motion for summary judgment is
not reviewable during appeal from a final judgment
rendered in a trial on the merits.
Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985).
IV. Cohabitation
Husband next contends the trial court erred in failing to determine Wife was
cohabiting with another man. While Husband does claim to challenge the findings of
facts regarding cohabitation as unsupported by the competent evidence, Husband
actually focuses less on a lack of evidence and instead asks us to reweigh the evidence
in his favor, which we cannot do. See Garrett v. Burris, 224 N.C. App. 32, 38, 735
S.E.2d 414, 418 (2012), aff’d per curiam, 366 N.C. 551, 742 S.E.2d 803 (2013) (“It is
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Opinion of the Court
not the function of this Court to reweigh the evidence on appeal.”). “Where evidence
of cohabitation is conflicting, the trial court must evaluate the parties’ subjective
intent.” Craddock v. Craddock, 188 N.C. App. 806, 812, 656 S.E.2d 716, 720 (2008).
The trial court found:
10. Based upon the evidence independent of Lisa Crews
and Mr. Henderson, the Court concludes they were
not cohabitating pursuant to N.C.G.S. § 50-16.9(b).
11. There was no evidence of joint financial obligations
of a home, combining finances, pooling of resources
or consistent merging of families.
12. The court does not [find] that there was a dwelling
together continuously and habitally.
....
14. The Plaintiff took a weekend trip to Chicago to see a
male friend. There was no evidence of a sexual
relationship other than a statement by Mr.
Henderson when he had been cast aside by Lisa
Crews which the Court puts no credence in his
statement.
The trial court specifically noted the evidence it found credible and the
evidence which was not credible. Husband is correct that Mr. Henderson had said he
was living with Wife at one point, but the trial court put “no credence in his
statement.” Ultimately, the trial court made its findings on the evidence it deemed
credible; those findings are supported by the evidence and we do not review the trial
court’s determinations of credibility. See In re C.J.H., 240 N.C. App. 489, 493, 772
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Opinion of the Court
S.E.2d 82, 86 (2015) (“It is the duty of the trial judge to consider and weigh all of the
competent evidence, and to determine the credibility of the witnesses and the weight
to be given their testimony. If the trial court’s findings of fact are supported by ample,
competent evidence, they are binding on appeal, even though there may be evidence
to the contrary.” (citations and quotation marks omitted)). The trial court resolved
any conflicts in the evidence in favor of Wife, and even if the trial court could have
reached a different conclusion, the trial court’s findings are supported by the
evidence.
Husband also contends
the trial court found that “Mr. Henderson told third
parties that they were living together when he was mad at
Lisa Crews because they broke up, but later indicated that
was a lie.” (R p 157). Mere recitations of a witness’s
testimony are not findings of fact to support the court’s
conclusions of law. Schmeltzle v. Schmeltzle, 147 N.C. App.
127, 555 S.E.2d 326, 328 (2001).
But Husband’s argument takes this finding out of context. This finding is in a list of
15 findings addressing the issue of cohabitation. The other findings address
surveillance of plaintiff’s residence on several occasions and other facts relevant to
the issue of cohabitation and then indicate that the trial court did not find Mr.
Henderson to be credible: “Mr. Henderson and [Plaintiff] often had contradicting
testimony of their own facts and made it extremely difficult for the court to r[e]ly on
anything they said.” Because the trial court did not find Mr. Henderson’s or plaintiff’s
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Opinion of the Court
testimony to be credible, the trial court also found that it based its conclusions “upon
the evidence independent of [Plaintiff] and Mr. Henderson[.]” The trial court’s
findings clearly resolve the factual issues and are not merely recitations of evidence.
This argument is overruled.
V. Conclusion
For the foregoing reasons, we affirm.
AFFIRMED.
Judge DILLON concurs.
Judge BERGER concurs in part and dissents in part in separate opinion.
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No. COA18-42 – Crews v. Crews
BERGER, Judge, concurring in part, dissenting in part in separate opinion.
Because the trial court’s order of specific performance should be vacated and
the matter remanded for a new hearing, I respectfully dissent. I concur in the
remainder of the majority opinion.
In April, a two-day hearing was conducted in Davidson County District Court
that focused on many aspects of the parties’ separation agreement. The primary focus
of this hearing was breach of contract and rescission of the separation agreement.
The hearing did not address specific performance.
To receive specific performance, the law requires the
moving party to prove that [ (i) ] the remedy at law is
inadequate, [ (ii) ] the obligor can perform, and [ (iii) ] the
obligee has performed [her] obligations. 3 Suzanne
Reynolds, Lee’s North Carolina Family Law § 14.35 (5th ed.
2002).
....
[Therefore,] the movant must prove the obligor has the
ability to perform. To meet this burden, the movant need
not necessarily present direct evidence of the obligee’s
current income.
Reeder v. Carter, 226 N.C. App. 270, 275-76, 740 S.E.2d 913, 917-18 (2013) (citation
and quotation marks omitted).
Over the course of the two-day hearing, the term specific performance was not
mentioned by any party, attorney, or the trial court. In more than five hundred pages
of testimony and proceedings recorded in the transcript of hearing, neither
inadequate remedy at law nor ability to perform were uttered by any party, attorney,
CREWS V. CREWS
BERGER, J., concurring in part, dissenting in part
or the trial court. It is peculiar then that the majority is able to divine the necessary
findings of fact to support an order of specific performance from a proceeding that,
based upon the transcript, had nothing to do with specific performance.
The trial court’s order wholly fails to address or otherwise mention adequacy
of legal remedies. More striking, however, is the complete absence of any mention in
the record concerning Defendant’s ability to perform. There is no evidence in the
record to support a finding of fact that Defendant had the ability to perform and there
is no finding of fact by the trial court regarding Defendant’s ability to perform. While
magic words may not be necessary, evidence is.
The majority justifies its result by simply stating that “the evidence tended to
show [Defendant’s] business was successful and profitable.” The majority, however,
fails to support this conclusory statement with any evidence or citation to the record.
The fact that someone is deemed successful in his or her employment is purely
subjective. And, while technically, even a minimal profit makes a venture profitable,
the majority fails to state what evidence it relied on to make such a concrete
statement.
Even if we assume that this was a hearing on specific performance and that
there was evidence presented of Defendant’s ability to perform when the parties
separated, there was no evidence presented about Defendant’s ability to perform at
the time of the hearing. See Cavenaugh v. Cavenaugh, 317 N.C. 652, 657, 347 S.E.2d
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BERGER, J., concurring in part, dissenting in part
19, 23 (1986); Condellone v. Condellone, 129 N.C. App. 675, 682-83, 501 S.E.2d 690,
695-96 (1998). On this point, the majority is silent.
In addition, the majority impermissibly shifts the burden on ability to perform
from Plaintiff, as obligee, to Defendant, as obligor. Plaintiff here was required to
produce some evidence that Defendant had the ability to perform at the time of the
hearing. Plaintiff failed to present any evidence to support such a finding or
conclusion.
The majority acknowledges this shortcoming at trial by stating that “[t]here
was never any question of Husband’s ability to pay raised at trial.” That is the
problem with Plaintiff’s claim for specific performance and the majority opinion:
Plaintiff was required to “prove the obligor has the ability to perform.” Reeder, 226
N.C. App. at 276, 740 S.E.2d at 918. The fact that ability to perform was not raised
at the hearing runs counter to the majority’s reasoning. In the absence of any
evidence by the Plaintiff of Defendant’s ability to perform, Defendant was not
required to show inability to pay as the majority contends.
However, the majority discusses evidence presented by Defendant concerning
Plaintiff’s efforts to damage Defendant’s business interests, but concludes that
“Husband did not present any evidence of actual financial damage to his business[.]”
It would be interesting to see the outcome of this case if the majority applied such a
critical approach Plaintiff’s case in chief.
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BERGER, J., concurring in part, dissenting in part
4