Failure to Amend a Qualified Domestic Relations Order under Rule 60

In Williams v. McDonald, the North Carolina Court of Appeals, in an unpublished opinion, reviewed Plaintiff’s appeal from the trial court’s order granting Defendant’s 12(b)(b) motion to dismiss Plaintiff’s complaint.

Williams v. McDonald,  COA20-10 (N.C. App 2020).

Facts:  Plaintiff and Defendant, after sixteen years of marriage, entered into a Separation Agreement and Property Settlement Agreement on November 22, 2002. In the Separation Agreement, the parties agreed to execute two qualified domestic relations orders (QDROs), entered by the Court by consent on September 24, 2012. The first QDRO divided Defendant’s VF Corporation Pension Plan by assigning Plaintiff benefits equal to 50 percent of the marital portion of the plan. The second QDRO divided Defendant’s interest in a Blue Bell Savings Plan that rolled into a VF Corporation Tax-Advantaged Savings Plan for Salaried Employees.

Plaintiff, in his complaint, alleged that the parties entered into a Separation Agreement and Property Settlement Agreement on November 22, 2002. Plaintiff alleged that the Court had entered a QDRO providing for the division of Plaintiff’s Blue Bell 401(k) on September 24, 2012, and no claim for equitable distribution or for entry of a QDRO was pending in the matter. Plaintiff further alleged that the Court had entered a QDRO on September 24, 2012, providing for the division of Plaintiff’s VF Corporation Pension Plan, and no claim for equitable distribution or for entry of a QDRO was pending in the matter. Plaintiff alleged in the complaint that Defendant had failed to and refused to abide by the terms of the Separation Agreement by continuing to refuse to execute QDROs assigning Plaintiff “50% of her benefits payable under the VF Pension Plan multiplied by the coverture fraction provided for in the Separation Agreement,” and “dividing Defendant’s Blue Bell 401(k) account as provided for in the Separation Agreement.”

Defendant filed an answer on October 15, 201, alleging that Defendant had no obligation to amend the QDROs executed by both parties and their counsel under the Separation Agreement. Defendant’s answer contained a 12(b)(6) motion to dismiss for failure to state a claim because the 401(k) and Pension Plan were divided under September 24, 2012 QDROs. Additionally, the motion to dismiss argued that the statute of limitations had run for filing a breach of contract claim, the court lacked subject matter jurisdiction to enter the QDROs, and the QDROs were void ab initio.

The trial court’s hearing on October 1, 2019 granted the Defendant’s motion to dismiss.

Plaintiff argued the trial court was in error in granting Defendant’s motion to dismiss as the previous QDROs were void due to lack of subject matter jurisdiction as no claim had been asserted which would provide the trial court with subject matter jurisdiction to enter any orders distributing Defendant’s interest in the retirement accounts.

Issue: Whether the trial court erred granting Defendant’s 12(b)(6) motion to dismiss the Plaintiff’s claim as Plaintiff’s complaint “reveals on its face the absence of facts sufficient to make a good claim.”

Holding:  No, there was no error by the trial court in granting Defendant’s motion to dismiss as the complaint “reveals on its face the absence of facts sufficient to make a good claim.”.

Rationale:  The North Carolina Court of Appeals review of a trial court’s grant of a motion to dismiss under 12(b)(6) is de novo, considering “whether, as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory.” Harris v. NCNB Nat’l Bank of N.C., 355 S.E.2d 838, 840 (N.C. App. 1987). North Carolina Rule 12(b)(6) states that dismissal of a complaint is proper when (1) the complaint on its face reveals that no law supports the plaintiff’s claim, (2) the complaint on its face reveals the absence of fact(s) sufficient to make a good claim, or (3) when some fact disclosed in the complaint necessarily defeats the plaintiff’s claim. Oats v. JAG, Inc, 333 S.E. 2d 222, 224 (N.C. 1985).

Plaintiff’s complaint failed to allege necessary facts allowing the trial court to assess the validity of the claims, to interpret the Separation agreement, or to amend the QDROs. Copies of the Separation Agreement were not before the Court for review, and neither party attached copies of the integral legal documents to their pleadings. Copies of the QDROs were filed by Defendant as a supplement to the record on appeal. The record does not show that the trial court had the benefit of reviewing the QDROs, and the record did not contain a copy of the Separation Agreement. Plaintiff referenced specific portions of the Separation Agreement and summarized the terms in the Separation Agreement but failed to provide the specific legal language or terms the trial court was requested to interpret. By failing to include the legal documents necessary to determine whether a claim existed, Plaintiff’s complaint revealed the “absence of facts sufficient to make a good claim.” Privette v. Univ of N.C. at Chapel Hill, 385 S.E.2d 185, 190 (N.C. App. 1989).

The N.C. Court of Appeals noted that the Defendant’s brief, that the proper statutory procedure for modification of a trial court’s order is under N.C. Rules of Civil Procedure Rule 60. Under N.C.R.C.P. 60 motions “shall be made within a reasonable time, and for not more than one year after the . . . order . . . was entered. In this case, Plaintiff did not file a Rule 60 motion to modify the QDROs that were entered over eight years prior, in September 2012. By failing to file a Rule 60 motion to modify the order within a reasonable time, Plaintiff is barred from relief under the statutory procedure.

This Court found that the record did not support Plaintiff’s contention that the trial court lacked jurisdiction to enter the QDROs. The record contained copies of the QDROs entered by the court by consent of the parties in 2012 to “divide and dispose of the relevant accounts as provided in the Separation Agreement.” The record does not indicate what action prompted the trial court to enter the QDROs, nor does it support arguments that the trial court lacked jurisdiction to enter the QDROs.

The Court notes that Plaintiff’s complaint admits that the trial court entered the Blue Bell QDRO as provided in the Separation Agreement disclosing facts necessary to defeat Plaintiff’s claim concerning the Blue Bell QDRO. Defendant’s complaint alleges that the VF QDRO was not entered as provided in the Separation Agreement, then in a subsequent paragraph that the QDRO did assign “a portion of Defendant’s benefit which equates to 50% of the marital portion of Defendant’s accrued benefit under the plan . . . multiplied by the covetre fraction.” Plaintiff argues that the terms of the VF QDRO do not reflect the terms of the Separation Agreement. Plaintiff fails to explain why the terms of the VF QDRO do not reflect the terms of the Separation Agreement, fails to include what the coverture fraction used in either document is, nor did he produce the Separation Agreement or the VF QDRO for the trial court’s review. This Court found that based solely on the language of the complaint the VF QDRO complied with the Sepaation Agreement and reveals facts that defeat his claim.