PATRICIA K. HOLTON, Plaintiff,
GEORGE F. HOLTON, JR., Defendant.
in the Court of Appeals 27 November 2017.
by plaintiff from orders entered 24 August 2016 and 11
January 2017 by Judge Kimberly Best-Staton in Mecklenburg
County No. 15 CVD 9853 District Court.
Offices of Wesley S. White, by Wesley S. White, for
and Smith, PLLC, by Peter E. McArdle, for defendant-appellee.
K. Holton (plaintiff) appeals from an order dismissing with
prejudice her complaint against her ex-husband, George F.
Holton, Jr. (defendant), on grounds that her claims for
equitable distribution (ED) and spousal support were waived
by the parties' prior separation and property settlement
agreement (hereinafter, the "separation
agreement"). Plaintiff also appeals from an order
denying her motions for a new hearing or, in the alternative,
to set aside the dismissal order.
the trial court's dismissal of plaintiff's complaint
was either premised upon its erroneous Rule 12(b)(6)
dismissal of her claim for rescission of the separation
agreement, or its improper Rule 12(b)(6) dismissals of her ED
and spousal support claims, we reverse. In light of our
holding, we dismiss as moot plaintiff's appeal from the
subsequent order denying her motions for relief from the
May 2015, plaintiff filed a complaint against defendant
seeking ED, postseparation support, and attorneys' fees.
In her complaint, she acknowledged that she signed the
separation agreement but raised allegations challenging its
validity on grounds of lack of mental capacity, duress,
fraud, and unconscionability. But she never enumerated a
separate claim for relief in the form of rescission of the
June 2015, defendant filed an answer in which he moved to
dismiss plaintiff's complaint and for Rule 11 sanctions
on grounds that her right to seek ED and spousal support were
waived by the separation agreement. On 7 August 2015,
plaintiff filed a response to defendant's motions,
alleging that when she signed the separation agreement,
"she was on medication that affected her mental
capacity"; that defendant "forced her to sign the
agreement, taking her to an attorney's office (that he
had hired), and telling her to 'sign here' ";
that she "did not understand the agreement, what it
purported to do, or what her rights where [sic]"; that
"[s]he did not, and was not allowed to consult with her
own attorney prior to executing the agreement"; and that
"the agreement was procured by fraud on the part of
[defendant] in that it omitted a substantial marital asset
from the provisions: Namely his retirement[.]"
Therefore, on the grounds of lack of mental capacity, duress,
fraud, and unconscionability, plaintiff requested that the
trial court "conduct an evidentiary hearing to determine
whether or not grounds exist for setting aside the Separation
Agreement that the Defendant is relying on in filing his
motion to dismiss." However, plaintiff's requested
evidentiary hearing was neither further pursued nor ever
September 2015, without leave of court, plaintiff filed an
amended complaint. The factual allegations of that complaint
were identical to those in her original complaint but she
added a fourth claim for relief in the form of rescission of
the separation agreement.
February 2016, the trial court heard defendant's motions
to dismiss and for Rule 11 sanctions. At the hearing,
plaintiff orally moved for retroactive leave to amend her
complaint to add the rescission claim. By written order
entered 6 June 2016, the trial court denied defendant's
motions and plaintiff's oral motion. In its order, the
trial court found that plaintiff's "original
complaint contains facts alleged sufficient to proceed on a
rescission claim" and thus concluded that
plaintiff's "claims are properly before the Court,
and [she] may proceed on those claims, " and that her
"claim for rescission relates back to the original
complaint . . . ." In denying plaintiff's oral
motion for retroactive leave to amend her complaint, the
trial court determined that "should Plaintiff desire to
proceed on an amended complaint, she must file a motion for
leave of court, but the Plaintiff's claims can move
forward as originally pled." Plaintiff never later moved
for leave to amend her complaint.
June 2016, defendant filed an amended motion to dismiss the
complaint. He acknowledged that the trial court had
previously denied his first dismissal motion due to
plaintiff's potential rescission claim but asserted
affirmative defenses that, since that time, the rescission
claim was now barred by the expiration of the applicable
statutory limitation period, and plaintiff failed to timely
prosecute that claim. Defendant also asserted that, absent
rescission of the parties' separation agreement that
barred plaintiff from seeking ED and spousal support, the
trial court lacked jurisdiction over her complaint. Defendant
filed written notice that the matter was scheduled to be
heard on 21 July 2016.
July 2016, plaintiff filed a response to defendant's
amended motion to dismiss in which she asserted that the
trial court's prior dismissal order established the
"law of the case" that her original complaint was
adequate to plead a claim for rescission, which was therefore
July 2016, the day defendant noticed his amended dismissal
motion hearing, defendant's counsel was present and
plaintiff's counsel appeared telephonically. While the
transcript of that hearing is absent from the appellate
record, the record discloses that the trial court rescheduled
the hearing with both parties' consent.
August 2016, the day the hearing was rescheduled, defendant
and his counsel were present but neither plaintiff nor her
counsel appeared. According to the four-page transcript of
that hearing, the trial court found that plaintiff's
complaint did put defendant "on notice of a motion to
rescind" but that "no motion to rescind or hearing
was officially filed." The trial court noted
defendant's argument that the statute of limitation had
now expired on plaintiff's potential rescission claim. In
ruling to grant defendant's dismissal motion, the trial
[THE COURT]: . . . So the Court is going to at this point
because [plaintiff's counsel] is not present - - he was
on the phone when we scheduled this hearing for the Court to
hear further argument on this issue - - the Court is going to
grant [defendant's] Motion to Dismiss.
. . .
[THE COURT]: And the Court will note that . . . procedurally
there was [sic] some missteps here. And so . . . Plaintiff[ ]
cannot prevail and the Motion to Dismiss is granted.
written order entered 24 August 2016, the trial court noted
that "neither Plaintiff nor Plaintiff's counsel
[were] present despite being properly noticed to ...