Hudson International, Inc. v. Hudson

550 S.E.2d 571, 145 N.C. App. 631, 2001 N.C. App. LEXIS 746
CourtCourt of Appeals of North Carolina
DecidedAugust 21, 2001
DocketNo. COA00-613
StatusPublished
Cited by10 cases

This text of 550 S.E.2d 571 (Hudson International, Inc. v. Hudson) is published on Counsel Stack Legal Research, covering Court of Appeals of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudson International, Inc. v. Hudson, 550 S.E.2d 571, 145 N.C. App. 631, 2001 N.C. App. LEXIS 746 (N.C. Ct. App. 2001).

Opinions

TIMMONS-GOODSON, Judge.

Hudson International, Inc. (“Hudson International”), Old Saratoga, Inc., and Hudson Group Limited Partnership (“the Hudson businesses”), along with Christopher Hudson, Fitzgerald D. Hudson, Meriwether Hudson Morris, and William B.L. Hudson (“the Hudson children” or “the children”) (collectively “plaintiffs”) appeal an order entered by the Superior Court, Mecklenburg County, dismissing without prejudice their action for declaratory relief. For the reasons herein stated, we affirm the order of the Superior Court.

The relevant factual and procedural history is as follows: On 29 December 1997, Susan W. Hudson (“Susan”) filed an action in District Court, Wilson County, against her husband Fitzgerald D. Hudson (“Fitzgerald”), from whom she had separated, seeking alimony, post-separation support, attorneys’ fees, and equitable distribution. Fitzgerald filed a motion to dismiss the complaint, arguing that the parties’ antenuptial agreement invalidated the majority of Susan’s claims.

The District Court subsequently granted Susan postseparation support and further denied Fitzgerald’s motion to dismiss. In its post-separation support order, the court found as fact that Fitzgerald had retained an ownership interest in the Hudson businesses. The court further found that during his marriage, Fitzgerald had transferred the majority of his interest in the Hudson businesses to the Hudson children, while retaining positions as general partner and/or chief executive officer. The court also found that Fitzgerald had the “final direction and control of these entities in his capacities as general partner and chief executive officer.”

In its order denying Fitzgerald’s motion to dismiss, the court found that the proceeds from the parties’ marital residence had been used to build a large residence in Maine known as “Southerly.” The court further found that Fitzgerald titled “Southerly” in the name of one of his corporations, without Susan’s consent, in a [633]*633“calculated” effort “to divest the [p]laintiff of her marital property rights.”

In the interim, Hudson International filed the present action in Superior Court, Mecklenburg County, against Susan and Fitzgerald (collectively “defendants”) seeking declaratory relief as to whether defendants had any ownership interest in “Southerly” or any other property owned by the corporation. Hudson International alleged that it was the owner of “Southerly,” that Fitzgerald was not an officer in the corporation, and that his only title was an honorary one. The corporation further alleged that upon its attempt to sell the estate in question, Susan had asserted a claim that Southerly was a marital asset. Hudson International requested that the Superior Court, Mecklenburg County, declare that it was the sole owner of Southerly and that neither defendant has any ownership interest in the property.

On 30 June 1999, Susan filed a motion in District Court, Wilson County, seeking to amend her complaint to add the Hudson businesses and the Hudson children as defendants. Susan’s proposed amended complaint alleged that the Hudson businesses, children, and Fitzgerald conspired to deprive her of marital rights and requested that the court impose a constructive trust on any assets transferred to the Hudson businesses and the children during her marriage.

On 5. August 1999, Hudson International amended its Mecklenburg County complaint, as of right, to add the remainder of the Hudson businesses and the children as plaintiffs. The Wilson County court thereafter granted Susan’s motion to amend her complaint.

On 6 October 1999, Susan moved to dismiss the amended complaint for declaratory relief in Superior Court, Mecklenburg County, based upon a variety of legal theories and Rules 12(b)(1), (3), and (6) of our Rules of Civil Procedure. Susan also moved, in the alternative, to transfer the case to District Court, Wilson County, where the equitable distribution action remained pending. The Mecklenburg County court granted Susan’s motion to dismiss without prejudice. The court concluded, “pursuant to N.C. Gen. Stat. § 7A-244 and the decisions of Garrison v. Garrison, 90 N.C. App. 670, [369] S.E.2d 628 (1988) and Sparks v. [Peacock], 129 N.C. App. 640, 500 S.E.2d 116 (1998), that it lack[ed] authority to enter a declaratory judgment on the issues presented.” From this order, plaintiffs now appeal.

[634]*634By their first argument, plaintiffs contend that the trial court erred in dismissing the declaratory judgment action. Plaintiffs argue that the statute upon which the court relied, section 7A-244 of our General Statutes, concerns the administrative allocation of cases between the district and superior court divisions and is, therefore, not jurisdictional in nature. As such, plaintiffs contend that the proper course of action was not to dismiss the case but to transfer it to the proper division — District Court, Wilson County. We disagree.

Section 7A-244 of our General Statutes provides:

The district court division is the proper division without regard to the amount in controversy, for the trial of civil actions and proceedings for annulment, divorce, equitable distribution of property, alimony, child support, child custody and the enforcement of separation or property settlement agreements between spouses, or recovery for the breach thereof.

N.C. Gen. Stat. § 7A-244 (1999).

To support their argument that dismissal under section 7A-244 was improper, plaintiffs rely on Stanback v. Stanback, 287 N.C. 448, 215 S.E.2d 30 (1975). In Stanback, the superior court entered child custody and support orders in a case filed prior to the formation of the North Carolina district court. Subsequent to the creation of the district court, the Stanback defendant moved to modify the support order. The plaintiff filed a motion to transfer the case to the district court, which was denied.

The Supreme Court concluded that because the superior court had previously entered the support order, the order remained under its jurisdiction and thus it could not transfer the case to district court. In so holding, the Court stated in reference to section 7A-244:

It is plain these allocations are not jurisdictional since a judgment is not void or voidable for reason that it was rendered by a court of the trial division which by [section 7A-244] was the improper division for hearing and determining the matter. Hence, G.S. [§] 7A-244 is merely an administrative allocation of annulment, divorce, alimony, child support and child custody actions to the district court division, and does not divest the . .. Superior Court of jurisdiction to hear the motion in the cause filed by defendant in this action.

Id. at 457, 215 S.E.2d at 37 (emphasis added).

[635]*635Despite plaintiffs’ arguments to the contrary we find Stanback wholly distinguishable from the issues raised by the present appeal. The most obvious distinction is that Stanback concerned a matter by which the superior court acquired jurisdiction prior to the formation of the district court. Unlike the instant case, the Stanback superior court was the court of original jurisdiction over the child support issue and had, in fact, already reduced that issue to a written judgment.

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550 S.E.2d 571, 145 N.C. App. 631, 2001 N.C. App. LEXIS 746, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudson-international-inc-v-hudson-ncctapp-2001.