Because 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 dismissal order.
On 22 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 separation agreement.
On 25 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
On 9 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.
On 8 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
On 29 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.
On 20 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 timely asserted.
On 21 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.
On 3 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 court reasoned:
[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.
In its written order entered 24 August 2016, the trial court noted that "neither Plaintiff nor Plaintiff's counsel [were] present despite being properly noticed to appear" and made the following relevant findings:
2. Prior to the parties' divorce judgment ..., the parties executed a Separation Agreement and Property Settlement Agreement (hereinafter the "Separation Agreement") on April 18, 2013.
3. On May 22, 2015, Plaintiff filed a Complaint which included claims for Equitable Distribution and Post-Separation Support.
Those claims, however, had been previously waived in the parties' separation agreement.
4. Even though Plaintiff's Complaint did not include a claim for rescission of the parties' separation agreement, the Court has previously opined that her vague reference to the circumstances surrounding the contract was enough to survive Defendant's prior Motion to Dismiss.
5. But since the time the Court denied Defendant's prior Motion to Dismiss, the Statute of Limitations has expired on Plaintiff's claim for rescission. Plaintiff has made no efforts to advance a potential claim for rescission of the parties' separation agreement.
6. Plaintiff never filed a Motion to Amend her original Complaint. It is too late to file a claim for rescission of the parties' separation agreement.
7. Moreover, Plaintiff failed to take steps to challenge the validity of the parties' agreement within a reasonable time following the execution of that agreement, and she has ratified the agreement by her actions.
8. The Court does not have subject matter jurisdiction over the equitable distribution and post-separation support claims filed by Plaintiff. Those claims were resolved via the parties' separation agreement.
9. The Court grants Defendant's Amended Motion to Dismiss Plaintiff's claims for equitable distribution andpost-separation support. Since the parties are divorced and since those claims have already been resolved by the parties' separation agreement, they cannot be refiled.
Based on these findings, the trial court concluded that "[w]ithout rescission of the parties' separation agreement, Plaintiff cannot maintain claims for spousal support or equitable distribution against the Defendant" and thus granted defendant's amended dismissal motion and dismissed with prejudice plaintiff's complaint. Plaintiff timely appealed from this order.
Meantime, on 5 August 2016, two days after the rescheduled hearing on defendant's amended dismissal motion and before entry of the 26 August dismissal order, plaintiff filed, purportedly under Rule 60(b), a "Motion for re-hearing on Defendant's amended motion to dismiss; Motion in the alternative to vacate/set aside order for dismissal." After a 9 November 2016 hearing, the trial court denied plaintiff's motions by written order entered 11 January 2017. Plaintiff timely appealed from this order.
II. Alleged Errors
On appeal, plaintiff contends the trial court erred by dismissing with prejudice her action on the ground that she adequately pled and timely asserted a claim for rescission of the parties' separation agreement. Thus, she argues, the trial court had no basis for dismissing her complaint under Rule 12(b)(1) for lack of jurisdiction over the subject matter of her ED and spousal support claims. She also contends that the trial court erred by denying her Rule 60(b) motions for a new hearing and to set aside the dismissal order. Because we ultimately reverse the trial court's dismissal order, we dismiss plaintiff's appeal from the Rule 60(b) order as moot and thus need not address the propriety of that order.
See
Harbin Yinhai Tech. Dev. Co. v. Greentree Fin. Grp., Inc.
,
III. Analysis
Plaintiff contends the trial court erred by dismissing under Rule 12(b)(1) her ED and spousal support claims on the ground that she adequately pled in her complaint, and thus timely asserted, a claim for rescission of the separation agreement. Defendant contends that because plaintiff never adequately pled a rescission claim before the applicable three-year statutory limitation period had expired, the
A. Standard and Scope of Review
At the outset we note that the failures of both defendant and the trial court to identify which civil procedure rule or rules supported
Rule 12 requires that Rule 56 standards apply to a Rule 12(b)(6) motion for failure to state a claim when the trial court considers matters outside the pleading. N.C. Gen. Stat. § 1A-1, Rule 12(b) (2015) (providing that if, upon a Rule 12(b)(6) motion, the trial court considers "matters outside the pleading ..., the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56[.] ...");
see also
Stanback v. Stanback
,
In his amended dismissal motion, defendant asserted that plaintiff's potential rescission claim was now statutorily time-barred, implicating Rule 12(b)(6) ; that she failed to timely prosecute that claim, implicating Rule 41(b); and that, "[w]ithout rescission of the parties' agreement, Plaintiff cannot maintain any claims against" him, implicating either Rule 12(b)(1), on the grounds that the trial court lacked subject-matter jurisdiction over the remaining claims in her complaint, or Rule 12(b)(6), on the grounds that in light of the separation agreement, plaintiff's complaint fails to state valid claims upon which relief could be granted. In its dismissal order, the trial court found that plaintiff failed to plead a rescission claim before expiration of the applicable statutory limitation period, implicating Rule 12(b)(6) ; that plaintiff failed to timely prosecute her potential rescission claim, implicating Rule 41(b); that, because the separation agreement waived her rights to seek ED and spousal support, it lacked jurisdiction over the subject matter of the claims in her complaint, implicating Rule 12(b)(1) ; and that without rescission of the parties' separation agreement, plaintiff cannot maintain ED and spousal support claims, implicating Rule 12(b)(6).
As to the rescission claim, although the trial court's findings indicate that it may have determined under Rule 41(b) that plaintiff failed to timely and effectively prosecute that claim, neither the transcript nor the order contains findings addressing "(1) whether the plaintiff acted in a manner which deliberately or unreasonably delayed the matter; (2) the amount of prejudice, if any, to the defendant; and (3) the reason, if one exists, that sanctions short of dismissal would not suffice[,]" as required to effectuate a valid dismissal under Rule 41(b).
Wilder v. Wilder
,
As to the remaining claims, the trial court's order indicates that it found it lacked subject-matter jurisdiction over the ED and spousal support claims but it dismissed plaintiff's complaint with prejudice, and a dismissal under Rule 12(b)(1) must be made without prejudice, since a trial court without jurisdiction would lack authority to adjudicate the matter.
See
Flowers v. Blackbeard Sailing Club, Ltd.
,
B. Review Standard
We review
de novo
a Rule 12(b)(6) dismissal of a claim.
State Emps. Ass'n of N.C., Inc. v. N.C. Dep't of State Treasurer
,
C. Rescission Claim was Adequately Pled under Rule 12(b)(6)
The gravamen of plaintiff's argument is that the trial court erred by dismissing her complaint with prejudice on grounds that the allegations of her complaint were adequate to plead a claim for rescission of the separation agreement, which would therefore render its dismissal of her complaint improper. We agree.
Rule 8(a)(1) of our Rules of Civil Procedure requires that complaints include "[a] short and plain statement of the claim sufficiently particular to give the court and the parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved showing that the pleader is entitled to relief[.]" N.C. Gen. Stat. § 1A-1, Rule 8(a)(1) (2015). Additionally, Rule 9 provides that "[i]n all averments of fraud, duress or mistake, the circumstances constituting fraud or mistake
it gives sufficient notice of the events or transactions which produced the claim to enable the adverse party to understand the nature of it and the basis for it, to file a responsive pleading, and by using the rules provided for obtaining pretrial discovery to get any additional information he may need to prepare for trial.
Wray
,
Marital separation agreements are contracts and are similarly subject to rescission due to lack of mental capacity, duress, or fraud, and are unenforceable on grounds of unconscionability.
In her complaint, plaintiff only enumerated separate claims for postseparation support, ED, and attorneys' fees. But she acknowledged that she signed a prior separation agreement and alleged the following:
25. After the parties['] separation, Defendant/Husband caused the Plaintiff/Wife to sign an unconscionable and one-sided "separation agreement."
26. This agreement was signed at such a time when Plaintiff/Wife was on post-surgery medications that affected her memory and reasoning.
27. Plaintiff/Wife barely has a memory of signing the agreement.
28. The agreement omits marital assets favors [sic] Defendant/Husband to an unconscionable degree.
Under our notice-pleading standard, the allegations of plaintiff's complaint were adequate for her rescission claim to survive a Rule 12(b)(6) dismissal for failure to allege sufficient facts to state a claim. Despite not enumerating a separate rescission claim, when accepting the factual allegations surrounding the execution of the separation agreement as true, and liberally construing plaintiff's complaint, we conclude that
Further, as the trial court correctly determined in its June 2016 order denying defendant's first dismissal motion, because the allegations of plaintiff's complaint were adequate for her rescission claim to survive Rule 12(b)(6) scrutiny, that claim was thus asserted when she filed her 22 May 2015 complaint. Since her complaint was initiated within the three-year statutory limitation period applicable to a claim for rescission of a contract executed on 18 April 2013, the rescission claim was timely asserted and was not statutorily barred under Rule 12(b)(6).
Therefore, to the extent the trial court dismissed plaintiff's complaint under Rule 12(b)(1) based on its determination that it lacked jurisdiction over the subject matter of the ED and spousal support claims because plaintiff never adequately pled nor timely asserted a rescission claim under Rule 12(b)(6), its order must be reversed.
D. Other Rule 12(b)(6) Grounds
To the extent that the trial court dismissed plaintiff's complaint under Rule 12(b)(1) based on Rule 12(b)(6) grounds other than the sufficiency of allegations to support a rescission claim, or under Rule 12(b)(6) grounds that plaintiff's complaint failed to state claims for relief because the separation agreement waived her right to assert such claims, the trial court's order establishes that it considered matters outside the pleading, and thus its dismissal ruling is properly reviewed as one of summary judgment on appeal.
See, e.g.
,
Weaver v. Saint Joseph of the Pines, Inc.
,
A document attached to and incorporated within a complaint is not considered a matter outside the pleading.
See
However, where a plaintiff simply refers to a document that was not the subject of his or her action, and the defendant attaches that document or an affidavit concerning that document to support a Rule 12(b)(6) or Rule 12(c) motion, the trial court's consideration of that document converts the motion into one for summary judgment.
See
Horne v. Town of Blowing Rock
,
Here, the trial court's order establishes that it considered matters outside the pleadings, which were not the subject of plaintiff's action, in dismissing the complaint. Specifically, it found that the separation agreement was executed on 18 April 2013 and waived plaintiff's right to seek ED and postseparation support. These findings establish that the trial
While the trial court could have looked to matters outside the pleading to dismiss plaintiff's ED and spousal support claims under Rule 12(b)(1) without mandating summary judgment review, such a dismissal would necessarily be predicated on the Rule 12(b)(6) grounds that either plaintiff failed to plead a valid rescission claim, or that she was not entitled to relief because her ED and spousal support claims were waived by the separation agreement. Because the latter determination was necessarily based on the terms of the separation agreement itself or defendant's affidavit, the trial court's dismissals of plaintiff's ED and spousal support claims must be reviewed under the summary judgment standard.
Here, the allegations in plaintiff's verified complaint challenged the validity of the separation agreement on grounds of lack of mental capacity, duress, and unconscionability. In defendant's first verified responsive pleading, he denied these allegations and moved to dismiss her complaint by asserting the affirmative defenses that the separation agreement resolved the parties' marital estate and waived their statutory rights to seek ED and spousal support. As these pleadings raise genuine issues about the validity of the separation agreement, defendant was not entitled to judgment as a matter of law on the ground that plaintiff's ED and spousal support claims were waived in the separation agreement, and the matter was not appropriate for summary judgment.
See
Brown v. Lanier
,
IV. Conclusion
The trial court improperly dismissed plaintiff's rescission claim under Rule 12(b)(6). If the trial court's dismissal of plaintiff's complaint was made under Rule 12(b)(1) and predicated upon its erroneous Rule 12(b)(6) dismissal of her rescission claim, its order must be reversed. If the trial court's dismissals of the ED and spousal support claims were made under Rule 12(b)(6) on the ground that her complaint failed to state a claim for relief because the separation agreement waived her right to assert such claims, because the record establishes that the trial court considered matters outside the pleading in reaching its ruling, those dismissals are properly reviewed under the summary judgment standard. Because the pleadings raised genuine issues of material fact as to the validity of the separation agreement, defendant was not entitled to judgment as a matter of law and the trial court's dismissal of plaintiff's complaint with prejudice must therefore be reversed. In light of reversing the dismissal order, we dismiss as moot plaintiff's appeal from the subsequent order denying her motions for relief from the dismissal order.
REVERSED IN PART; DISMISSED IN PART.
Chief Judge McGEE and Judge MURPHY concur.