Court Opinion

ID: 4373660
Source: CourtListenerOpinion
Date Created: 2019-03-05 14:05:58.865289+00
Date Added: 2024-06-11T11:59:30.534871
License: Public Domain

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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                                   CREWS V. CREWS

                                   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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                                    CREWS V. CREWS

                                   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.

                                           - 14 -
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
2
                                     CREWS V. CREWS

                      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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               CREWS V. CREWS

BERGER, J., concurring in part, dissenting in part

                        4