IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA22-1074
Filed 12 September 2023
Mecklenburg County, No. 22 CVD 3682
VIRGINIA CLUTE (f/k/a Virginia Gosney), Plaintiff,
v.
CHRISTOPHER P. GOSNEY, Defendant.
Appeal by plaintiff from order entered 31 August 2022 by Judge Paige B.
McThenia in Mecklenburg County District Court. Heard in the Court of Appeals 8
August 2023.
The Blain Law Firm, P.C., by Sabrina Blain, for plaintiff-appellant.
Law Office of Thomas D. Bumgardner, PLLC, by Thomas D. Bumgardner, for defendant-appellee.
ZACHARY, Judge.
Plaintiff Virginia Clute (“Wife”) appeals from an order granting the motion to
dismiss filed by Defendant Christopher P. Gosney (“Husband”), denying Wife’s
motion for attorney’s fees, and dismissing her amended complaint with prejudice
pursuant to Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. After careful
review, we affirm in part, reverse in part, and remand.
I. Background CLUTE V. GOSNEY
Opinion of the Court
Wife and Husband married in 1994. They had two children during their
marriage; however, “as a result of certain irreconcilable differences and
disagreements,” Wife and Husband separated in 2006.
On 5 April 2006, the parties entered into a separation agreement (“the
Agreement”), by which the parties intended to effectuate a “final settlement of all
marital and property rights.” As relevant to this appeal, Section 4.3 of the Agreement
provides for Husband’s contribution to the support of the parties’ children; Section
6.12 provides that “[e]ither party shall have the right to compel the performance of
the provisions of this Agreement by suing for specific performance in the courts where
jurisdiction of the parties and subject matter exists”; and Section 6.1 provides that
the Agreement will “not be incorporated, by reference or otherwise, into any final
judgment of divorce.” Husband and Wife signed the Agreement under seal before a
notary public.
Wife filed an amended complaint in Mecklenburg County District Court on 1
April 2022, advancing claims for breach of contract and for ongoing and retroactive
child support pursuant to the North Carolina Child Support Guidelines. In her
amended complaint, Wife alleged that Husband had violated the terms of the
Agreement governing his support obligations “[s]tarting in August of 2017” when
“Husband unilaterally reduced his child support payment from $908.00 to $600.00”;
“in June of 2021, [when] Husband unilaterally reduced his child support payment to
$150.00 per month; and as of December 2021, [when] Husband . . . stopped paying
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monthly child support all together[.]” Wife also alleged that Husband had failed and
refused to comply with additional terms of the Agreement: Namely, Wife alleged that
Husband had failed to contribute his share of the children’s uninsured medical
expenses; to provide the children with “[h]ospital, [m]edical and [d]ental [i]nsurance”
coverage; or to contribute toward the payment of the parties’ son’s college education
expenses, should the son choose to attend college. In her prayer for relief, Wife asked
the trial court to award her (1) specific performance on her breach of contract claim;
(2) attorney’s fees pursuant to the provisions of the Agreement, or alternatively, N.C.
Gen. Stat. § 50-13.6; and (3) the entry of “an Order of Child Support, including an
award of retroactive child support[.]”
On 27 May 2022, Husband filed a motion to dismiss “pursuant to Rules 12(b)(1)
and/or 12(b)(6) of the North Carolina Rules of Civil Procedure.” By order entered 31
August 2022, the trial court granted Husband’s motion to dismiss pursuant to Rule
12(b)(6); denied Wife’s “motion for attorney’s fees pursuant to Rule 11 of the North
Carolina Rules of Civil Procedure and the terms of the parties’ separation
agreement”; and dismissed Wife’s amended complaint with prejudice. From this
order, Wife timely filed written notice of appeal.
II. Discussion
A. Standard of Review
The question for the court when considering a motion to dismiss pursuant to
Rule 12(b)(6) “is whether, as a matter of law, the allegations of the complaint, treated
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as true, are sufficient to state a claim upon which relief may be granted under some
legal theory[.]” Leary v. N.C. Forest Prods. Inc., 157 N.C. App. 396, 400, 580 S.E.2d 1,
4 (citation omitted), aff’d per curiam, 357 N.C. 567, 597 S.E.2d 673 (2003). “The Court
must construe the complaint liberally and should not dismiss the complaint unless it
appears beyond a doubt that the plaintiff could not prove any set of facts to support
his claim which would entitle him to relief.” Id. (cleaned up).
The statute of limitations, however, “may be raised as a defense by a Rule
12(b)(6) motion to dismiss if it appears on the face of the complaint that such a statute
bars the plaintiff’s action.” Laster v. Francis, 199 N.C. App. 572, 576, 681 S.E.2d 858,
861 (2009). On appeal, this Court reviews the pleadings de novo “to determine their
legal sufficiency and to determine whether the trial court’s ruling on the motion to
dismiss was correct.” Leary, 157 N.C. App. at 400, 580 S.E.2d at 4.
B. Breach of Contract and Specific Performance
On appeal, Wife argues that her amended complaint “contained sufficient
allegations to proceed on her claims” because she “plead[ed] the elements of a claim
for [b]reach of [c]ontract” and advanced sufficient allegations to entitle her to the
remedy of specific performance of the parties’ Agreement.
“The elements of a claim for breach of contract are (1) existence of a valid
contract and (2) breach of the terms of that contract.” Becker v. Graber Builders, Inc.,
149 N.C. App. 787, 792, 561 S.E.2d 905, 909 (2002). “A marital separation agreement
which has not been incorporated into a court order is generally subject to the same
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rules of law with respect to its enforcement as any other contract.” Condellone v.
Condellone, 129 N.C. App. 675, 681, 501 S.E.2d 690, 695 (cleaned up), disc. review
denied, 349 N.C. 354, 517 S.E.2d 889 (1998). Thus, as a contract, “a separation
agreement not incorporated into a final divorce decree may be enforced through the
equitable remedy of specific performance.” Reeder v. Carter, 226 N.C. App. 270, 275,
740 S.E.2d 913, 917 (2013) (cleaned up). To bring a claim for breach of contract and
specific performance, “[t]he party claiming the right to specific performance must
show the existence of a valid contract, its terms, and either full performance on his
part or that he is ready, willing and able to perform.” Curran v. Barefoot, 183 N.C.
App. 331, 335, 645 S.E.2d 187, 190 (2007) (emphasis omitted).
Here, Wife alleges in her amended complaint that “[o]n April 5, 2006, the
parties entered into a Contract of Separation, Property Settlement, Waiver of
Alimony, Child Custody, and Child Support Agreement[.]” Pursuant to the terms of
the Agreement, Husband is obligated to “pay to . . . Wife as child support the sum of
$908.00 per month[.]” Husband must also “maintain in full force and effect the
policies of . . . insurance covering the children of the marriage” until “such child
graduates from college . . . or as long as his insurance carrier will allow him to provide
such coverage if it takes longer than 4 years for the child to graduate from college”;
“in the event coverage is no longer afforded through [Husband’s] employment, then
. . . he shall provide policies of . . . insurance coverage comparable to that presently
maintained.” Additionally, the Agreement provides that Husband shall pay a portion
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of the children’s uninsured medical expenses and college education expenses. Finally,
Wife alleges that “Husband is capable of complying with the terms of the Agreement
but has simply decided not to”; that his “breaches of the Agreement are willful and
intentional”; and that “Wife has complied and performed pursuant to the Agreement.”
For these alleged breaches, Wife seeks specific performance of the Agreement.
After careful review in the appropriate light mandated by our standard of
review, we conclude that Wife has sufficiently alleged the elements of breach of
contract as it relates to Husband’s obligations for monthly child support, health
insurance, and uninsured medical expenses under the Agreement. Wife has “show[n]
the existence of a valid contract, its terms, and either full performance on [her] part
or that [s]he is ready, willing and able to perform” sufficient to raise a claim for breach
of contract seeking the remedy of specific performance. Id.
We further conclude, however, that Wife has failed to allege a breach with
regard to the son’s future college expenses. Unlike the issues of support, health
insurance, and uninsured medical expenses, as regards the son’s future college
expenses, Wife does not allege that Husband has yet breached this provision of the
Agreement, merely that he has threatened to do so. But Wife’s claim of anticipatory
breach is inapt.
It is true that, as a general matter, “breach may occur by repudiation.
Repudiation is a positive statement by one party to the other party indicating that he
will not or cannot substantially perform his contractual duties.” Profile Invs. No. 25,
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LLC v. Ammons E. Corp., 207 N.C. App. 232, 236, 700 S.E.2d 232, 235 (2010) (cleaned
up), disc. review denied, 365 N.C. 192, 707 S.E.2d 240 (2011). “When a party
repudiates his obligations under the contract before the time for performance under
the terms of the contract, the issue of anticipatory breach or breach by anticipatory
repudiation arises.” Id. Yet “[f]or repudiation to result in a breach of contract, the
refusal to perform must be of the whole contract or of a covenant going to the whole
consideration, and must be distinct, unequivocal, and absolute.” D.G. II, LLC v. Nix,
211 N.C. App. 332, 338, 712 S.E.2d 335, 340 (2011) (cleaned up).
Upon review of the amended complaint, Plaintiff has not alleged that
Defendant’s “refusal to perform” was of the “whole contract, or of a covenant going to
the whole consideration[.]” Id. Plaintiff’s allegation of anticipatory breach pertains to
one discrete part of one section of the Agreement, Section 4.4, which provides for
“College Education for the Parties’ Children.” Therefore, we conclude that Wife has
failed to state a claim for anticipatory breach of the Agreement and the trial court
properly dismissed her claim for the son’s future college expenses. Leary, 157 N.C.
App. at 400, 580 S.E.2d at 4.
C. Statute of Limitations
We now determine whether the statute of limitations bars Wife’s claim
regarding Husband’s obligations concerning monthly child support, health insurance,
and uninsured medical expenses.
In his answer to the amended complaint, Husband asserts that
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[N.C. Gen. Stat. § 1-52(1)] sets the applicable statute of limitations at three years for actions arising out of contract. [Wife] has alleged [Husband] breached the contract with [Wife] in August of 2017. This action was not filed until [9 March 2022], some five years following [Husband]’s alleged breach. Thus, on the face of the [amended] complaint, Plaintiff has alleged facts that defeat her claims founded upon the parties’ alleged contract.
Generally, “[t]he statute of limitations for a breach of contract action is three
years[,]” pursuant to N.C. Gen. Stat. § 1-52(1). Ludlum v. State, 227 N.C. App. 92, 94,
742 S.E.2d 580, 582 (2013); see also N.C. Gen. Stat. § 1-52(1) (2021) (stating that an
action “[u]pon a contract” is subject to a three-year statute of limitations). However,
an action “[u]pon a sealed instrument” is subject to a ten-year statute of limitations.
N.C. Gen. Stat. § 1-47(2) (2021). Accordingly, when a “[s]eparation [a]greement [i]s
executed under seal, a ten-year statute of limitations, rather than the three-year
statute of limitations, is applicable to [the] plaintiff’s breach of contract claim.”
Crogan v. Crogan, 236 N.C. App. 272, 277, 763 S.E.2d 163, 166 (2014); see also Harris
v. Harris, 50 N.C. App. 305, 314, 274 S.E.2d 489, 494 (applying the ten-year statute
of limitations to an unincorporated separation agreement signed under seal), disc.
review denied and appeal dismissed, 302 N.C. 397, 279 S.E.2d 351 (1981).
In the case at bar, the contracting parties—Wife and Husband—signed the
Agreement under seal before a notary public. The Agreement plainly states that “the
parties hereto have hereunto set their hands and seals to this Agreement”; the word
“SEAL” appears in parentheses immediately adjacent to both Wife’s and Husband’s
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signatures on the final page of the Agreement. “Because the Separation Agreement
was executed under seal, a ten-year statute of limitations, rather than the three-year
statute of limitations is applicable to [Wife]’s breach of contract” claim. Crogan, 236
N.C. App. at 277, 763 S.E.2d at 166.
It is well settled that a “cause of action generally accrues and the statute of
limitations begins to run as soon as the right to institute and maintain a suit arises.”
Penley v. Penley, 314 N.C. 1, 20, 332 S.E.2d 51, 62 (1985). In her amended complaint,
Wife alleges that Husband “ha[d] failed to comply with the terms of the Agreement
. . . [s]tarting in August of 2017,” when he “unilaterally reduced his child support
payment from $908.00 to $600.00.” She further alleges that “in June of 2021,
Husband unilaterally reduced his child support payment to $150.00 per month[,] and
as of December 2021, Husband ha[d] stopped paying monthly child support all
together, in violation of the Agreement.” Moreover, Wife alleges that Husband has
ceased payment of his share of the children’s uninsured medical expenses for an
indeterminate period and has not provided health insurance coverage since 2021 or
reimbursed her for providing coverage since 2022.
The dates on which Husband is alleged to have breached the Agreement with
regard to his obligations for child support, health insurance, and uninsured medical
expenses are well within the ten-year statute of limitations applicable to a separation
agreement executed under seal. Thus, “there is no bar to recovery of unpaid child
support payments[,]” health insurance, and uninsured medical expenses pursuant to
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the Agreement “which came due during the ten years immediately prior to the filing
of [Wife’s] claim” on 1 April 2022. Belcher v. Averette, 136 N.C. App. 803, 806, 526
S.E.2d 663, 665 (2000) (citation omitted).
For the foregoing reasons, we conclude that the allegations of Wife’s amended
complaint, taken as true, are sufficient to state a claim upon which relief may be
granted. Wife’s claim for breach of contract—for which she requests specific
performance of Husband’s obligations as to child support, health insurance, and
uninsured medical expenses under the Agreement—is not tolled by the statute of
limitations. Accordingly, the trial court erred in dismissing Wife’s amended complaint
for breach of contract and specific performance pursuant to Rule 12(b)(6) of the North
Carolina Rules of Civil Procedure. We therefore reverse this portion of the trial court’s
order.
D. Child Support Pursuant to the NC Child Support Guidelines
We next address Wife’s claim for child support pursuant to the North Carolina
Child Support Guidelines, which she advances independent of her claim under the
Agreement. Wife contends that, like her claim for child support under the Agreement,
the trial court similarly erred by dismissing her alternative claim for support under
the Guidelines. We agree.
It is axiomatic that the trial court cannot modify the terms of an
unincorporated separation agreement, which stands as a contract between the
parties. See Lasecki v. Lasecki, 257 N.C. App. 24, 43, 809 S.E.2d 296, 310 (2017)
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(explaining that a “separation agreement is a contract between the parties and the
court is without power to modify it except . . . to provide for adequate support for
minor children, and . . . with the mutual consent of the parties thereto” (citation and
emphases omitted)). Moreover, to “accord sufficient weight to parties’ separation
agreements, as our common law directs[,]” when the parties “have executed a
separation agreement that includes [a] provision for child support, the court must
apply a rebuttable presumption that the amount set forth is just and reasonable[.]”
Pataky v. Pataky, 160 N.C. App. 289, 302–03, 585 S.E.2d 404, 412–13 (2003), aff’d per
curiam, 359 N.C. 65, 602 S.E.2d 360 (2004).
If, however, the trial court “determines by the greater weight of the evidence
that the presumption of reasonableness afforded the separation agreement allowance
is rebutted . . . the court then looks to the presumptive guidelines” to determine
whether “application of the guidelines would not meet or would exceed the needs of
the child[.]” Id. at 305, 585 S.E.2d at 415.
“[T]he three-year statute of limitations under Section 1-52(2) bars the recovery
of child support expenditures incurred more than three years before the date the
action for child support is filed.” Napowsa v. Langston, 95 N.C. App. 14, 21, 381 S.E.2d
882, 886, disc. review denied, 325 N.C. 709, 388 S.E.2d 460 (1989). Therefore, the
applicable statute of limitations for an action for support of a minor child pursuant
to N.C. Gen. Stat. § 50-13.4(c) is three years from the “filing of the action.” N.C. Gen.
Stat. § 1-52(2) (2021); see also Smith v. Smith, 247 N.C. App. 135, 150, 786 S.E.2d 12,
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24 (2016) (noting that the cause of action “only limits reimbursement to three years
prior to the filing of the action”).
In the present case, should the trial court determine that the parties’
Agreement does not adequately provide for the children’s needs, Wife’s claim for
ongoing and retroactive child support (independent of the child support provisions of
the Agreement) is not barred by the statute of limitations. Husband’s “obligation to
support his . . . children is a continuing obligation”; consequently, Wife “can recover
reimbursement for her past support expenditures . . . to the extent the expenditures
occurred three years or less before . . . the date she filed her claim for child support[,]”
together with prospective support, including that which accrued after the filing of
Wife’s amended complaint. Napowsa, 95 N.C. App. at 21, 381 S.E.2d at 886.
E. Attorney’s Fees
Wife also maintains that the trial court erred in dismissing her claim for
attorney’s fees pursuant to the terms of the Agreement, or in the alternative,
pursuant to N.C. Gen. Stat § 50-13.6.
Section 6.15 of the Agreement provides, inter alia, that “[i]n the event it
becomes necessary to institute legal action to enforce compliance with the terms of
this Agreement . . . the parties agree that at the conclusion of such legal proceeding
the losing party shall be solely responsible for all legal fees and costs incurred[.]” In
the alternative, Wife seeks statutory relief under N.C. Gen. Stat § 50-13.6, which
provides that “the court may in its discretion order payment of reasonable attorney’s
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fees to an interested party acting in good faith who has insufficient means to defray
the expense of the suit” in “actions for custody and support of minor children.” N.C.
Gen. Stat. § 50-13.6 (2021).
It remains to be determined whether Husband has breached the Agreement or
is obligated to pay child support independent of the child support provisions of the
Agreement. Thus, the issue of attorney’s fees shall be addressed by the trial court on
remand.
III. Conclusion
The trial court properly dismissed Wife’s claim for breach of contract as
concerns the son’s future college expenses; accordingly, we affirm the court’s order as
to this provision. Regarding the issues of child support, health insurance, and
uninsured medical expenses, however, the trial court erred in dismissing Wife’s claim
for breach of contract because “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[,]”
Leary, 157 N.C. App. at 400, 580 S.E.2d at 4, and the claim is not barred by the
applicable statute of limitations, Laster, 199 N.C. App. at 576, 681 S.E.2d at 861. If
the trial court determines that the Husband’s child support obligation under the
Agreement is not reasonable, the statute of limitations has not tolled Wife’s claim for
ongoing and retroactive child support independent of the child support provisions of
the Agreement. Thus, the trial court erred by dismissing this claim as well.
For the foregoing reasons, the trial court’s order is affirmed in part, reversed
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in part, and remanded for further proceedings.
AFFIRMED IN PART; REVERSED IN PART AND REMANDED.
Judges COLLINS and RIGGS concur.
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