Delay of Entry of Order is Error

Wall v. Wall, 140 N.C. App. 303 (2000).

Former spouses in North Carolina can split their property in an action for Equitable Distribution (ED). In order for the Court to make a decision on distributing property, it needs an inventory affidavit of all property owned as a product of the marriage. Occasionally, and especially in cases involving high-income parties, the inventory list can be extensive. Many times, there can be arguments regarding values of property. This can lead to some delay between the day of the hearing and the day of entry of a Judgment.

• Facts: Plaintiff and Defendant separated in May of 1988. Plaintiff’s hearing for ED was heard in September, October, and November of 1996—an eight-year gap. Eventually  the trial court entered an Order in June of 1998—a further 19-month gap. After extended discovery and contentious back-and-forth, the trial court ordered an equal division. Defendant then appealed.

 

• Issue: Did the trial court err when it entered an ED order 19 months after the ED hearing?

 

• Holding:

 

• Rationale: Defendant contended that his due process rights, afforded to him under the United States Constitution as well as the North Carolina Constitution, were violated due to the 19-month delay in entry of the ED Order from the hearing date. The goal of ED is to wind up the marriage by distributing marital property with fairness, certainty, and finality. While the Court recognized that there must be some delay between hearing and entry of a judgment, at some point the delay becomes prejudicial to one party. In highly contested and complicated cases, a month or two may not amount to much prejudice so long as the parties’ situations and conditions have not changed. However, when the delay becomes 19 months, the order, if it is upheld, is no longer consistent with the goal of ED. Values of property may change in the span of 19 months; additionally, the parties need an opportunity to present any substantial changes in their situation. (Factors affecting distribution that the court considers include the health, age, and conditions of parties.)

 

• Lessons and Observations:

 

1. In practical matters, here is what might have happened in the case if it were not reversed: the decision on who gets what is made at hearing. But before any property or money changed hands, it sat waiting 19 months. Values can change over such a long span of time. One party would be harmed by the change in value. (For instance, if a home were to be sold, the value of the home would likely have changed 19 months later). Or one party’s health could have declined, which could affect the Court’s ruling on distribution if the Court knew about it.

 

1. The Court seemed to set a test for when there is too much delay between trial and entry of an Order: whether there has been a substantial change in the parties’ condition or the value of a property subject to distribution.