Court Opinion

ID: 4146575
Source: CourtListenerOpinion
Date Created: 2017-02-21 14:07:43.759767+00
Date Added: 2024-06-11T07:46:26.597809
License: Public Domain

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

                                          -2-
                               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

                                         -3-
                               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

                                          -4-
                               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,

                                          -5-
                               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

                                            -6-
                               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

                                          -7-
                              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

                                         -8-
                              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

                                         -9-
                               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.

                                          - 10 -
                               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.

                                          - 11 -
                               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

                                          - 12 -
                               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

                                          - 13 -
                              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.

                                         - 14 -