264 N.C. App. 152
N.C. Ct. App.2019Background
- Lisa Crews filed a verified complaint alleging she and James Crews entered a separation and property settlement agreement (March 4, 2016) and that James breached it by failing to make alimony payments (stopped in August 2016).
- James counterclaimed seeking rescission for fraud, duress, unconscionability, alleged concealment of assets/relationships by Lisa, and claimed Lisa breached by withholding certain personal property (including Ferrari model cars).
- James moved for summary judgment; the trial court denied summary judgment, held the separation agreement enforceable, found James breached by failing to pay alimony, found Lisa did not materially breach, and ordered specific performance (payment of alimony).
- James appealed, challenging (1) the trial court’s order of specific performance (arguing findings insufficient as to inadequacy of legal remedy, James’s ability to perform, and Lisa’s performance), (2) denial of summary judgment, and (3) the court’s finding that Lisa was not cohabiting.
- The Court of Appeals affirmed: it held the trial court’s findings supported the conclusions that (a) the legal remedy was inadequate because James had already missed payments, (b) James’s ability to perform was adequately supported by the record (and James failed to raise inability to pay at trial), and (c) Lisa had not materially breached the agreement; the denial of summary judgment was not reviewable after a full evidentiary hearing.
Issues
| Issue | Plaintiff's Argument (Crews) | Defendant's Argument (Crews) | Held |
|---|---|---|---|
| Whether specific performance (alimony) was appropriate because remedy at law is inadequate | Missed payments by James make damages an inadequate remedy; equitable relief justified | Remedy at law is adequate or findings do not establish inadequacy | Held for Plaintiff — trial court’s finding that James stopped paying established inadequacy of legal remedy (citing precedent that missed payment can show inadequacy) |
| Whether trial court erred by not making findings on defendant’s ability to perform | Crews presented evidence showing James remained in business and did not show inability to pay; James offered no proof of inability to pay at trial | Trial court failed to make the required findings on James’s present ability to perform; record lacks specific findings | Held for Plaintiff — Court of Appeals concluded record and trial findings sufficiently support ability-to-perform inference and James did not raise inability to pay at trial (argument waived) |
| Whether Lisa materially breached the separation agreement (property dispute, Ferrari models) | Lisa substantially performed; any disputed items did not defeat the agreement’s purpose; court ordered return of cars but found no material breach | Claimed Lisa’s refusal to return unique model cars and other items was a material breach defeating agreement | Held for Plaintiff — trial court’s findings supported that Lisa did not materially breach; any failure to return certain items did not vitiate agreement |
| Reviewability of denial of summary judgment after full trial | N/A — plaintiff proceeded to full hearing on the merits | Argued trial court erred in denying summary judgment | Held for Plaintiff — denial of summary judgment not reviewable on appeal after a full evidentiary trial on the merits |
| Whether trial court erred in finding no cohabitation (affecting alimony termination) | Evidence did not establish cohabitation; trial court credited certain witnesses and independent evidence | James argued evidence supported cohabitation and the court erred in credibility findings | Held for Plaintiff — trial court’s credibility determinations and findings were supported by competent evidence; appellate court will not reweigh credibility |
Key Cases Cited
- Reeder v. Carter, 226 N.C. App. 270 (2013) (sets out three prerequisites for specific performance of separation agreements: inadequate legal remedy, obligor’s ability to perform, and obligee’s performance)
- Cavenaugh v. Cavenaugh, 317 N.C. 652 (1986) (when defendant offers evidence of inability to perform, trial court must make findings on ability to pay before ordering specific performance)
- Stewart v. Stewart, 61 N.C. App. 112 (1983) (a defendant’s initial failure to comply can establish inadequacy of legal remedy and justify equitable relief)
- Condellone v. Condellone, 129 N.C. App. 675 (1998) (trial court may infer ability to perform; specific present-cash-asset findings like those in civil contempt are not required for specific performance)
- Harris v. Walden, 314 N.C. 284 (1985) (denial of summary judgment is not reviewable on appeal after a final judgment following a full trial on the merits)