Separation agreements in North Carolina are intended to lay out agreed-upon terms for spouses going through a divorce, and they are sometimes seen as a placeholder until a final decree of divorce can be entered. While it is possible to incorporate a separation agreement into a final decree in North Carolina, it is not required, and some agreements are not incorporated. What happens if one spouse or ex-spouse violates the terms of a separation agreement that was not incorporated into the divorce decree?
Clute v. Gosney
In Clute v. Gosney, Wife appealed the trial court’s order granting Husband’s motion to dismiss, denying her motion for attorney’s fees, and dismissing her amended complaint.
The parties separated in 2006 and entered into a Separation Agreement, effectuating a final settlement of all marital and property rights. Provisions in the Agreement included:
- Husband’s required contribution to the support of their children
- That either party could compel performance of the terms by suing for specific performance
- That the Agreement would not be incorporated into the final decree
After signing the Agreement, Wife filed an amended complaint that included claims for breach of contract and for ongoing and retroactive child support. She alleged that Husband violated the terms of the Agreement by unilaterally reducing his support obligation from $908 per month to $600, then to $150 per month before he stopped paying altogether. She also claimed that Husband failed to contribute his share to the children’s medical expenses, failed to maintain insurance coverage for the children, and threatened to withhold his contributions to their son’s college education. Husband filed a motion to dismiss, which the trial court granted. Wife appealed.
The Appeal
In North Carolina, a marital separation agreement that has not been incorporated into a divorce decree is subject to the same laws as any other contract. The terms are enforceable just as the terms of any contract are enforceable, and parties to the contract can sue the other for breach of the terms.
The Court of Appeals determined that Wife sufficiently alleged the elements necessary to go forward with a claim for breach of contract relating to child support, health insurance, and medical expenses. Regarding Husband’s threat to withhold money for the college education, the appellate court determined that a claim of anticipatory breach is not appropriate.
Statute of Limitations
Husband made the claim that the statute of limitations had run out for Wife’s claim because it had been more than three years. However, the statute of limitations in North Carolina for taking legal action on breach of sealed contracts, like the parties’ separation agreement, is ten years. Additionally, the statute of limitations begins to run when the breach of contract occurs, not when the contract is signed.
The Court of Appeals affirmed the trial court’s ruling regarding the college expenses. However, their dismissal of Wife’s claims regarding child support, health insurance, and medical expenses was in error. This portion of the case was reversed and remanded to the trial court for further proceedings. Separation agreements and the rules governing them can be complex. Consult with an experienced family law attorney for guidance.