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Bradshaw v. Bradshaw

Court of Appeals of North Carolina

April 2, 2019


          Heard in the Court of Appeals 17 October 2018.

          Appeal by defendant from declaratory judgment entered 6 February 2018 by Judge Meader W. Harriss, III, in District Court, Camden County, No. 17 CVD 9.

          Shilling, Pass & Barlow, by Andrew T. Shilling, and The Twiford Law Firm, by Lauren Arizaga-Womble, for plaintiff-appellee.

          Ward and Smith, P.A., by John M. Martin; and Darlene Gill Chambers, P.C., Attorney at Law, by Darlene Gill Chambers, for defendant-appellant.

          STROUD, JUDGE.

         Defendant-husband appeals from a declaratory judgment rendering void for public policy reasons a 1993 Virginia separation agreement and property settlement agreement. The parties reconciled after signing the agreement, moved to North Carolina, and separated again in 2013. North Carolina's public policy allows property settlement agreements to survive reconciliation, so the Virginia Agreement is enforceable in North Carolina. We reverse the trial court's order and remand.

         I. Background

         Husband and Wife married in 1987 in Virginia and separated in 1991. In October 1993, the parties entered into a Stipulation and Agreement in Virginia governed by Virginia law ("the Agreement"). The Agreement was a comprehensive agreement with provisions addressing separation, spousal support, and property division. As relevant to this appeal, the Agreement made "full and complete settlement of all property rights between them and their right to equitable distribution pursuant to Virginia Code Annotated §20-107.3" and provided that "from the time of execution of this Agreement neither Husband nor Wife shall have any interest of any kind or nature whatsoever in or to any of the marital property of the parties or the property of the other except as provided in this Agreement and Stipulation." The parties waived "any and all rights to equitable distribution or any monetary award pursuant to Virginia Code Annotated §20-107.3." The Agreement divided the parties' property and also provided that "each party hereafter may own, have and enjoy, independently of any claim or right of the other party, all items of real and personal property now or hereafter belonging to him or her[.]" (Emphasis added.) Each party "forever waive[d], now and forever" any rights to "spousal support and maintenance or alimony" (original in all caps) from the other, except that Husband agreed to "immediately pay directly to Wife the sum of $25, 000.00" as a "one time lump sum spousal support payment."

         The reconciliation provision of the Agreement is the primary subject of the issues on appeal:


20. In the event of reconciliation and resumption of the marital relationship between the parties, the provisions of this Agreement for settlement of property rights, spousal support, debt payments and all other provisions shall nevertheless continue in full force and effect without abatement of any term or provisions hereof, except as otherwise provided by written agreement duly executed by each of the parties after the date of the reconciliation.

         In 1994, the parties reconciled, and, in 1997, they moved to North Carolina. In 2013, the parties separated for the second time. They never entered into any written agreement modifying or revoking the Agreement.

         On 30 January 2017, Wife filed a complaint seeking absolute divorce and equitable distribution, but not postseparation support or alimony. Husband filed an answer admitting the allegations relevant to absolute divorce but denying those relevant to equitable distribution, and he counterclaimed for a declaratory judgment that the Agreement "remains in full force and effect" and bars Wife's claim for equitable distribution. Regarding the Agreement, Husband alleged:

6. On October 19, 1993, the parties entered into a Stipulation and Agreement (Attached as Exhibit A) which in pertinent part:
a. provided for the distribution between the parties of all marital and separate property of the parties
b. accepted the division as fair and reasonable and waived equitable distribution, postseparation support, and alimony claims
c. stated that in the event of reconciliation this settlement shall continue in full force and effect unless decided otherwise and by a new written agreement formally entered
d. at the time the parties executed said Agreement Defendant paid Plaintiff the required $25, 000 lump sum postseparation support payment and each party initialed the amount paid[.]

         Wife replied to Husband's counterclaim and admitted the allegations of Paragraph 6 "to the extent that the parties entered into a Separation Agreement on October 19, 1993." She responded to the sub-parts of Paragraph 6, admitting that "the Separation Agreement provided for the distribution of all marital and separate property between the parties owned at the time of the Agreement" but alleging that the Agreement did not apply to "property acquired after the date of reconciliation, including active appreciation of the Defendant's separate property . . . ." Wife also admitted that Husband had paid her the $25, 000.00 lump sum postseparation support payment. Wife also cross-claimed for a declaratory judgment that "the Separation Agreement entered into between the parties on October 19, 1993, does not bar future claims of equitable distribution and spousal support after reconciliation of the parties." She alleged that

11. The Defendant through counsel is alleging that the property acquired after the date of reconciliation is not marital property and the Separation Agreement applies to after reconciliation acquired property which is contrary to our Equitable Distribution Statutes.
12. The Plaintiff's position, supported by the law of this state, that the separation agreement divided the property that was in the parties' possession at the time of the entry of the agreement and that at any property acquired after date of reconciliation, including active appreciation, is subject to equitable distribution.

         Wife filed a motion to sever the equitable distribution claim from the absolute divorce claim, which was granted by the trial court. The trial court granted Wife's motion for summary judgment for absolute divorce and reserved the pending claims for equitable distribution and declaratory judgment. The material facts were not in dispute before the trial court, and the declaratory judgment claims presented only the legal question of the enforceability of the Agreement. The trial court requested the parties to submit briefs addressing these issues:

(1) Whether the Stipulation and Agreement is still valid and enforceable under Virginia Law; if yes, then:
(2) Whether paragraph 20 of the Stipulation and Agreement titled "Reconciliation" violates North Carolina Public ...

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