Laches and Separation Agreements

Suozzo v. Suozzo, 2022-NCCOA-620.

Facts: Plaintiff wife and Defendant husband entered into a separation agreement wherein Defendant was to pay Plaintiff $200,000 in monthly installments over 240 months. This arrangement began in March 2006 and would terminate in March of 2026. For the first 18-36 months, Defendant made the monthly payment. Sometime in 2008, Defendant stopped making those payments. Plaintiff chose to file a breach of contract claim against Defendant but not until 2019, more than ten years since Defendant stopped paying. The trial court awarded Plaintiff $100,789 in damages, calculated by granting only the missed payments due within three years of the commencement of Plaintiff’s action—as any unpaid installments due prior to February 2016 were barred by the statute of limitations—and the payments that became due while the action was pending through judgment. Defendant appealed.

Issue: Does the doctrine of laches apply, barring Plaintiff’s damages?

Holding: No.

Rationale: The doctrine of laches is an equitable doctrine that prevents an unjust result when there is some change in the condition of property or the parties due to a lapse of time. Whether the doctrine is applied is dependent on the facts and circumstances of each case. In breach of contract claims, the doctrine essentially prevents recovery by stating that the condition of the parties or the property at issue in the contract have changed over time such that recovery would be unjust. To show that, the delay must be unreasonable, and the delay must have put the party seeking the application of the doctrine in a disadvantageous position or be injurious or prejudicial. Defendant argued that the doctrine of laches ought to apply to prevent Plaintiff from recovering any of the past due payments. His claim was predicated on the delay in time, and that he could not foresee that he would be open to a lawsuit for repayment. But since he provided no evidence to show his financial status—no proof of income, savings, inability to pay—the Court of Appeals was not persuaded that the doctrine should have applied.

Lessons and Notes: Other that the lapse in time, one of the hallmarks of a defense of laches is some representation or statement by the other party that puts the party seeking application of laches in a prejudicial position. That is a complex sentence that can be broken down by a simple example. If I enter into an agreement to pay you alimony for the next 19 years at $1000 a month, but half-way through you agree that it is acceptable for me to pay $500 from here on out, and then I take the $500 a month savings to put towards a down payment on a car and acquire a loan for the remainder, the doctrine of laches is available to me if you decide to sue me after the 9.5 years have passed for not paying the full $1000 for that time. I was put in a worse position due to your representation that it was acceptable for me to pay $500 rather than the agreed upon $1000.