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Catawba County v. Loggins

Supreme Court of North Carolina

September 29, 2017


          Heard in the Supreme Court on (11 April 2017).

         On discretionary review pursuant to N.C. G.S. § 7A-31 of a unanimous decision of the Court of Appeals, ___ N.C.App. ___, 784 S.E.2d 620 (2016), affirming an order entered on 29 December 2014 by Judge Gregory R. Hayes in District Court, Catawba County.

          David W. Hood for plaintiff-appellant.

          Blair E. Cody, III for defendant-appellee.

          Joshua H. Stein, Attorney General, by John F. Maddrey, Solicitor General, Gerald K. Robbins, Special Deputy Attorney General, and Benjamin Kull, Assistant Attorney General, for North Carolina Department of Health and Human Services, amicus curiae.

          MORGAN, JUSTICE.

         I. Background and Procedural History

         In this appeal we consider whether a district court has jurisdiction to modify a child support order without a party filing a motion to modify asserting that there is a change in circumstances. The Court of Appeals concluded that the district court did not have jurisdiction because Catawba County, by and through its Child Support Agency, ex rel. Shawna Rackley (plaintiff) failed to comply with procedural mandates to file a motion to modify the child support order at issue as required by N.C. G.S. § 50-13.7(a) (2015). We hold that the district court maintained continuing jurisdiction to modify the child support order and that plaintiff's failure to file a motion to modify the child support order did not divest the district court of jurisdiction. Accordingly, we reverse and remand the Court of Appeals decision.

         On 15 February 1999, the District Court in Catawba County entered a Voluntary Support Agreement and Order (VSA) under which Jason Loggins (defendant) agreed to pay "$0.00" in child support for his two children with Shawna Rackley (Ms. Rackley). Additionally, starting 1 March 1999, defendant was to reimburse the State $1, 996.00 for public assistance paid on behalf of his children. Defendant was also required to provide health insurance for the minor children through his employer or when it was available at a reasonable cost.

         Defendant failed to reimburse the State as required, and on 19 October 2000 plaintiff filed a motion to show cause. The district court ordered defendant to appear, but he failed to do so. Defendant was arrested and later released on a $500.00 cash bond that was allocated to his arrearage. After hearing the matter in January 2001, the district court found that defendant was employed at Carolina Hardwoods earning $9.95 per hour, and was able to comply with the 1999 VSA. The court ordered defendant to make $50.00 monthly payments towards his then-arrearages of $1, 165.12.

         Subsequently, a second VSA titled "Modified Voluntary Support Agreement and Order" was signed by defendant on 25 June 2001. This agreement did not reference the original VSA or the 1999 order, nor did it show that the district court established defendant's paternity in 1999. The parties did attach a child support worksheet stating defendant had a monthly gross income of $1, 724.66 and recommending $419.00 for his monthly child support obligation.[1] The 2001 VSA was approved by the court and entered on 28 June 2001. This order is the basis of all controversy on appeal. In the 2001 VSA, defendant agreed to pay $419.00 per month in child support starting 1 July 2001 and to reimburse the State $422.78 for public assistance given to his children. In addition, defendant agreed to provide health insurance to his children through his then-employer, Crown Heritage, Inc. Unlike the 1999 VSA, the 2001 VSA contains no modification provision.

         Throughout the following years, defendant failed to comply with the 2001 VSA. Accordingly, the trial court entered consent contempt orders on 20 November 2003, 21 July 2005 and 25 January 2007. Each time defendant admitted to being in civil contempt for his failure to pay amounts due under the 2001 VSA. By 2007, the amount defendant owed totaled $16, 422.28. In the 2007 consent order, the trial court ordered defendant to make monthly child support payments totaling $479.00 with $60.00 going towards arrears. On 5 April 2007, the district court concluded defendant was in compliance with the 25 January 2007 order and determined that his arrearages were $15, 572.80. The district court ordered defendant to continue his monthly child support payments of $419.00 plus $60.00 towards arrears. Eventually, defendant again failed to pay the child support ordered by the court.

         On 7 April 2011, defendant filed, pro se, a motion to modify the 2007 consent order. Defendant stated there was a change in circumstances because he "draw[s] unemployment, [and his] kids [ages 17 and 18] have quit school." The district court heard the matter on 11 August 2011. Ms. Rackley failed to appear. On 15 September 2011 the district court found a change in circumstances, noting that "[d]efendant was drawing unemployment benefits, since has obtained fulltime employment. Oldest child . . . has emancipated according to [ N.C. G.S. § 50-13.4(c)]." Based on the child support guidelines, the district court reduced defendant's monthly child support obligation to $247.00 and found his arrears to be $6, 640.75.

         On 13 March 2014, defendant, now represented by counsel, moved the district court pursuant to N.C. G.S. § 1A-1, Rule 60, to set aside the 2001 VSA as void. Defendant contended that "prior to June 28, 2001 there was [sic] not any motions filed by [Ms. Rackley] or on her behalf to modify the 'then' existing child support obligation [of $0.00 under the 1999 VSA]." A hearing was held on 31 July 2014, during which defendant asserted that the 1999 VSA was a permanent order and that the trial court did not have jurisdiction to modify it without a motion in the cause by plaintiff and a showing of a change in circumstances. He argued that the 2001 VSA was void and, as a result, unenforceable. Plaintiff's counsel conceded, "There's no indication that [the 1999 VSA] was a temporary order. We use the colloquial term 'permanent' although every order can be modified, but I would agree that that's what we normally refer to as a permanent order rather than a temporary order." Following the hearing, defense counsel tendered a draft order to the district court without serving it upon plaintiff's counsel. The district court entered an order on 18 December 2014 granting defendant's motion but a few days later set aside that order because it contained "errors and was not presented following approved procedure" in that defendant did not serve the proposed order on plaintiff before tendering it to the court.

         On 29 December 2014, the district court entered a second order granting defendant's Rule 60 Motion. The district court found that it did not have jurisdiction to enter the 2001 VSA because there was no precipitating motion filed by plaintiff or on her behalf, nor was there any proof of a change in circumstances; therefore, the order resulting from the 2001 VSA was void. Plaintiff filed a timely notice of appeal.

         In the Court of Appeals, plaintiff argued, in pertinent part, that the district court erroneously concluded that a motion to modify a child support obligation must precede a modification order. The Court of Appeals reasoned that the plain language of N.C. G.S. § 50-13.7(a) "requires a 'motion in the cause and a showing of changed circumstances' as a necessary condition for the [district] court to modify an existing support order." Catawba County ex rel. Rackley v. Loggins, ___ N.C.App. ___, ___, 784 S.E.2d 620, 625-26 (2016) (quoting N.C. G.S. § 50-13.7(a) (2015)). The Court of Appeals recognized that a district court is without authority to sua sponte modify an existing support order. Id. at ___, 784 S.E.2d at 626 (quoting Royall v. Sawyer, 120 N.C.App. 880, 882, 463 S.E.2d 578, 580 (1995)). Therefore, according to the Court of Appeals, it was "impossible to enforce the second [VSA] and order because the trial court did not have jurisdiction to accept the second [VSA] and enter the modified order." Id. at ___, 784 S.E.2d at 626 (citation omitted).

         II. Standard of Review

         Rule 12(b)(1) of the Rules of Civil Procedure allows for dismissal based upon a trial court's lack of jurisdiction over the subject matter of the claim. N.C. G.S. § 1A-1, Rule 12(b)(1) (2015). We review the decision of a trial court to dismiss an action for lack of subject matter jurisdiction de novo. Harris v. Matthews, 361 N.C. 265, 271, 643 S.E.2d 566, 570 (2007); see Baumann-Chacon v. Baumann, 212 N.C.App. 137, 139, 710 S.E.2d 431, 433 (2011) (applying a de novo standard of review to a district court's decision to dismiss a plaintiff's claims for child support for lack of subject matter jurisdiction).

         III. ...

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