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Lasecki v. Lasecki

Court of Appeals of North Carolina

December 19, 2017

KEVIN S. LASECKI, Plaintiff,
v.
STACEY M. LASECKI, Defendant.

          Heard in the Court of Appeals 15 May 2017.

         Appeal by Plaintiff from orders entered 14 June 2016 and 13 July 2016 by Judge Edward L. Hedrick, IV, in District Court, Iredell County No. 13 CVD 1797.

          Homesley, Gaines, Dudley & Clodfelter, LLP, by Christina Clodfelter and Edmund L. Gaines, for Plaintiff-Appellant.

          No brief for Defendant-Appellee.

          MCGEE, Chief Judge.

         I. Factual and Procedural Background

         Kevin S. Lasecki ("Plaintiff") and Stacey M. Lasecki ("Defendant") married in 1993, and three children were born to the marriage. Plaintiff and Defendant separated and executed a separation agreement ("Separation Agreement") on 24 August 2012, that resolved issues of child custody, equitable distribution, child support, alimony, and attorney's fees. The separation agreement was never incorporated into an order of the trial court. Plaintiff had earned $286, 505.00 in 2011, and earned $264, 446.00 in 2012, working for Bath Solutions, Inc. ("Bath Solutions"). In the separation agreement, Plaintiff and Defendant agreed, inter alia, that Plaintiff would pay Defendant $2, 900.00 per month in child support and $3, 600.00 per month in alimony. They further agreed that, in the event either party breached the separation agreement, the breaching party would be liable for the other party's attorney's fees.

         Plaintiff lost his job with Bath Solutions in early 2013, but soon found employment with Phoenix Sales and Distribution ("Phoenix Sales"), at an annual salary of $160, 000.00. Plaintiff filed a complaint on 1 August 2013, alleging that his income had significantly decreased since the execution of the separation agreement and requested that the trial court issue an order setting his child support obligation pursuant to the North Carolina Child Support Guidelines. Defendant answered on 19 September 2013, and counterclaimed for specific performance of Plaintiff's child support and alimony obligations under the separation agreement. Defendant also sought specific performance of unpaid joint credit card debt and attorney's fees, payment of child support and alimony arrearages, and "such other and further relief as to the court may seem just, fit and proper."

         Phoenix Sales terminated Plaintiff's employment on 1 May 2014. The trial court held a hearing on the pending claims on 17 and 18 July 2014, while Plaintiff was still unemployed and seeking a new job. Frontline Products, LLC ("Frontline") offered Plaintiff a job in Arizona on or about 21 July 2014, which Plaintiff immediately accepted. Plaintiff moved to reopen the case on 23 July 2014, to allow additional testimony regarding his new employment and income. The trial court denied Plaintiffs motion on 14 August 2014. The trial court entered an order on 28 August 2014, finding that it was "feasible for Plaintiff to earn $150, 000.00 and with those earnings to support Defendant and their children." The trial court then concluded the $2, 900.00 monthly child support amount set forth in the separation agreement was reasonable, and that Plaintiff was able to pay the full $2, 900.00 monthly amount in child support and a reduced monthly amount of $1, 385.00 in alimony. The trial court ordered as specific performance that Plaintiff pay these monthly amounts, as well as $9, 592.50 for Defendant's attorney's fees, and awarded a money judgment of $54, 432.31 for child support and alimony arrearages.

         Plaintiff moved for a new trial on 3 September 2014, arguing that the trial court should consider his new employment and income and that it erred in imputing to him an annual income of $150, 000.00. The trial court denied Plaintiffs motion on 10 September 2014. Plaintiff gave notice of appeal on 23 September 2014, and the matter was heard by this Court on 9 September 2015. By opinion filed 5 April 2016, this Court affirmed in part and vacated and remanded in part, stating: "We vacate the portions of the order in which the trial court ordered specific performance of $2, 900.00 monthly in child support and $1, 385.00 monthly in alimony. We therefore remand the case to the trial court for further proceedings consistent with this opinion[.]" Lasecki v. Lasecki, ___ N.C. App.___, ___, 786 S.E.2d 286, 304 (2016) ("Lasecki I"). This Court's reasoning for vacating the child support and alimony award portions of the trial court's order was because the trial court based its decision on the amounts of child support and alimony that Plaintiff was capable of paying on an imputed income of $150, 000.00 when Plaintiff was unemployed, which was improper absent a finding that Plaintiff "was 'deliberately depressing his income' or 'indulging in excessive spending in disregard of his marital obligation to support his dependent spouse[.]'" Id. at___, 786 S.E.2d at 302 (citations omitted).

         The hearing on remand was held on 10 and 11 May 2016. At the time of the hearing, Plaintiff was still employed by Frontline, and was making approximately $135, 000.00 annually. However, as of 23 May 2016, Plaintiff was no longer employed by Frontline, and was allegedly working as a driver for Uber, earning only a small fraction of his former income. Plaintiff filed a motion to reopen the case on 26 May 2016, arguing that his change in employment status should be considered by the trial court before it made its rulings on the amount of child support and alimony. Plaintiffs motion to reopen was scheduled for 29 June 2016; however, the trial court entered its order from the 10 and 11 May 2016 remand hearing on 14 June 2016, approximately two weeks before the scheduled hearing on Plaintiffs motion to reopen the evidence.

         Plaintiff filed a Rule 60(b) motion on 20 June 2016 for relief from the 14 June 2016 order, arguing that he had not had any "meaningful hearing on his pending motion to reopen" and therefore entry of the 14 June 2016 order was premature. The trial court entered an amended remand order on 13 July 2016, nunc pro tunc 14 June 2016.

         The trial court heard Plaintiff's motion to reopen the case and Plaintiff's Rule 60(b) motion for relief from the 14 June 2016 order concurrently, on 11 July 2016, and entered an order denying both of Plaintiff's motions on 13 July 2016. Plaintiff appeals.

         II. Analysis

         Plaintiff argues the trial court erred by: (1) "failing to reduce child support despite reduced needs of children, substantially decreased income of Plaintiff, and increased income of Defendant[;]" (2) "failing to give [Plaintiff] credit for overpayment of child support pursuant to court order[;]" (3) "granting Defendant additional judgment and attorney's fees when these issues were affirmed by the Court of Appeals[;]" (4) "ordering specific performance of alimony in [the] amount ordered[;]" (5) that even if the trial court did not err in awarding Defendant $10, 905.00 in attorney's fees, it erred in ordering Plaintiff to pay those fees because there was insufficient evidence that Plaintiff had the ability to specifically perform payment in that amount; and (6) the trial court abused its discretion by denying Plaintiff's motion to reopen the case in light of relevant new evidence, and by denying his Rule 60(b) motion for relief from the 14 June 2016 order. We affirm.

         A. Child Support from August 2014 through June 2015

         Plaintiff contends that the "trial court committed reversible error by failing to reduce child support despite reduced needs of children, substantially decreased income of Plaintiff, and increased income of Defendant." We disagree.

         In Lasecki I, this Court looked to Pataky v. Pataky, 160 N.C.App. 289, 585 S.E.2d 404 (2003), to determine the appropriate standard of review of child support previously established in an unincorporated separation agreement:

In Pataky v. Pataky, this Court established the following test for determining the appropriate amount of child support where the parties have executed an unincorporated separation agreement:
[I]n an initial determination of child support where the parties have executed an unincorporated separation agreement that includes provision for child support, the court should first apply a rebuttable presumption that the amount in the agreement is reasonable and, therefore, that application of the guidelines would be inappropriate. The court should determine the actual needs of the child at the time of the hearing, as compared to the provisions of the separation agreement. If the presumption of reasonableness is not rebutted, the court should enter an order in the separation agreement amount and make a finding that application of the guidelines would be inappropriate. If, however, the court determines by the greater weight of the evidence that the presumption of reasonableness afforded the separation agreement allowance has been rebutted, taking into account the needs of the children existing at the time of the hearing and considering the factors enumerated in the first sentence of G.S. § 50-13.4(c), the court then looks to the presumptive guidelines established through operation of G.S. § 50-13.4(c1) and the court may nonetheless deviate if upon motion of either party or by the court sua sponte, it determines application of the guidelines would not meet or would exceed the needs of the child or would be otherwise unjust or inappropriate.
The first sentence of N.C. Gen. Stat. § 50-13.4(c) provides:
Payments ordered for the support of a minor child shall be in such amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case.

Lasecki I, ___ N.C. App. at___, 786 S.E.2d at 291 (citations omitted) (some emphasis added). We review a trial court's decision to order child support payments in an amount different from the amount agreed to in the provisions of an unincorporated separation agreement only for "'a clear abuse of discretion.'" Bottomley v. Bottomley, 82 N.C.App. 231, 235, 346 S.E.2d 317, 320 (1986) (citation omitted).

         Further, an unincorporated separation agreement is generally treated as any other contract, and the equitable remedy of specific performance may be ordered only if no adequate remedy exists at law, Condellone v. Condellone, 129 N.C.App. 675, 681-82, 501 S.E.2d 690, 695 (1998), and the party who is ordered to specifically perform is capable of doing so. Cavenaugh v. Cavenaugh, 317 N.C. 652, 657, 347 S.E.2d 19, 22-23 (1986). An order directing 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." Harbor gate Prop. Owners Ass'n v. Mountain Lake Shores Dev. Corp., 145 N.C.App. 290, 295, 551 S.E.2d 207, 210 (2001) (citations omitted).

         Plaintiff states in his brief: "A party's ability to pay child support is determined by the party's income at the time the award is made. Atwell v. Atwell, 74 N.C.App. 231, 235, 328 S.E.2d 47, 50 (1985)." This citation is flawed in the current context in multiple ways. First, it is an incomplete citation of the law as set forth in Atwell:

Briefly, under N.C. Gen. Stat. Sec. 50-13.4(c)(1984), "an order for child support must be based upon the interplay of the trial court's conclusions of law as to (1) the amount of support necessary to 'meet the reasonable needs of the child' and (2) the relative ability of the parties to provide that amount." These conclusions must be based upon factual findings sufficiently specific to indicate that the trial court took "due regard" of the factors enumerated in the statute, namely, the "estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case."

Id. at 234, 328 S.E.2d at 49 (citations omitted). A party's ability to pay is thus determined based upon multiple factors, and the language in Atwell cited by Plaintiff is within the context of explaining:

Only when there are findings based on competent evidence to support a conclusion that the supporting spouse or parent is deliberately depressing his or her income or indulging in excessive spending to avoid family responsibilities, can a party's capacity to earn [as opposed to that party's actual current income] be considered.

Id. at 235, 328 S.E.2d at 50 (citations omitted).

         More importantly, Atwell is a case involving a court order initially determining child support, not a request to deviate from a child support amount previously agreed upon in an unincorporated separation agreement. The trial court has continuing jurisdiction to revisit and modify its own child support orders.

A judicial decree in a child custody and support matter is subject to alteration upon a change of circumstances affecting the welfare of the child and, therefore, is not final in nature. Consequently, the jurisdiction of the court entering such a decree continues as long as the minor child whose custody is the subject of the decree remains within its jurisdiction. The Superior Court of Rowan County rendered the original support and custody judgment in this action and under the above principles maintained continuing jurisdiction over further proceedings. Unless that court was somehow divested of its continuing jurisdiction, it was the only court which could modify the earlier judgment upon a motion in the cause and a showing of a change of circumstances.

Stanback v. Stanback, 287 N.C. 448, 456, 215 S.E.2d 30, 36 (1975) (citations omitted) (emphasis added). A trial court has no such broad authority to modify the child support provisions of an unincorporated separation agreement based upon a showing of changed circumstances. See Lasecki I, ___ N.C.App. at ___, 786 S.E.2d at 291. The present case does not involve modification of court-ordered child support.

         1. Policy and Precedent

         We initially review the policies and precedent supporting our current law concerning a trial court's authority to either modify the child support provisions of an unincorporated separation agreement, or to order specific performance of child support payments in amounts different from those previously established in an unincorporated separation agreement. Prior opinions of our appellate courts have at times blurred the distinction between review of an order based upon breach of an unincorporated separation agreement and review of an order based upon a prior child support order of the trial court, and Plaintiff appears to misunderstand the authority of the trial court in this regard. "It is well-settled that 'a parent can assume contractual obligations to his child greater than the law otherwise imposes . . . and such agreements are binding and enforceable.'" Ross v. Voiers, 127 N.C.App. 415, 417, 490 S.E.2d 244, 246 (1997). Further:

To accord sufficient weight to parties' separation agreements, as our common law directs, the benchmark for comparison must be the amount needed for the children at the time of the hearing, compared with that provided in the agreement. Further, "in the absence of evidence to the contrary, " the court must respect a presumption that "the amount mutually agreed upon is just and reasonable."

Pataky, 160 N.C.App. at 303, 585 S.E.2d at 413 (citations omitted). Further,

"A separation agreement is a contract between the parties and the court is without power to modify it except (1) to provide for adequate support for minor children, and (2) with the mutual consent of the parties thereto where rights of third parties have not intervened." However, our Courts have been quick to note:
[N]o agreement or contract between husband and wife will serve to deprive the courts of their inherent as well as their statutory authority to protect the interests and provide for the welfare of infants. They may bind themselves by a separation agreement or by a consent judgment, but they cannot thus withdraw children of the marriage from the protective custody of the court.

Id. at 296, 585 S.E.2d at 409 (citations omitted) (emphasis added).

         Relative to the present case, and contrary to Plaintiff's position, the trial court was without authority, absent Defendant's consent, to modify the separation agreement solely for the purposes of reducing his child support obligation. Even with Defendant's consent, Plaintiff and Defendant could not, by contract, deprive the trial court of its inherent authority and obligation to insure their minor children were properly provided for. Boyd v. Boyd, 81 N.C.App. 71, 75, 343 S.E.2d 581, 584 (1986) ("[i]t is well established that the provisions of a separation agreement relating to . . . support of minor children are not binding on the court, which has the inherent and statutory authority to protect the interests of children"). In the present case, Plaintiff and Defendant have not mutually consented to modification of the separation agreement. Therefore, the trial court's rulings in the present case must be based solely upon its inherent and statutory authority to provide for the welfare of Plaintiff's and Defendant's minor children.

         Traditionally, the authority of the trial court to order the supporting parent to pay child support in an amount different than established in an unincorporated separation agreement has been recognized as a means of insuring adequate maintenance of the children involved -- not as a means of lessening the agreed-upon contractual duties of the supporting parent based upon changed circumstances. Stated differently, the question for the trial court was limited to whether the needs of the children were being adequately met by the amount of child support agreed upon in the unincorporated separation agreement, or whether the amount of child support should be increased in order to meet the children's needs.

Within the statutory framework, the North Carolina Supreme Court established a two-step process in claims for child support in the presence of a prior, unincorporated agreement. Our trial courts were required to first determine the current amount necessary to meet the needs of the children and, if this amount "substantially exceeds" the amount provided in the agreement, this would rebut the presumption that the amount in the separation agreement was reasonable. In the absence of such a showing, affording "due regard to the factors contained in G.S. § 50-13.4(b) and (c), " the court was not allowed to change the amount of child support from what was set forth in the separation agreement. (referring to statutory factors existing in 1986).

Pataky, 160 N.C.App. at 300-01, 585 S.E.2d at 412 (citations omitted) (emphasis added).

         This Court has recognized that public policy only requires the trial court to insure that the amount of child support being provided for in an unincorporated separation agreement is adequate to the needs of the children involved:

A separation agreement is modified by increasing child support payments where the party with custody establishes that the separation agreement provisions do not adequately protect the interests of and provide for the welfare of the children. But no principal of public policy intervenes to relieve a party from the obligations of a separation agreement requiring support payments in excess of or other payments in addition to that required by law.

McKaughn v. McKaughn, 29 N.C.App. 702, 704, 225 S.E.2d 616, 618 (1976) (citations omitted) ...


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