Sharp v. Sharp

514 S.E.2d 312, 133 N.C. App. 125, 1999 N.C. App. LEXIS 371
CourtCourt of Appeals of North Carolina
DecidedMay 4, 1999
DocketNo. COA98-639
StatusPublished
Cited by6 cases

This text of 514 S.E.2d 312 (Sharp v. Sharp) 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
Sharp v. Sharp, 514 S.E.2d 312, 133 N.C. App. 125, 1999 N.C. App. LEXIS 371 (N.C. Ct. App. 1999).

Opinions

LEWIS, Judge.

Plaintiff Beth Sharp and her husband, Thaddeus Pender Sharp, III (“Pender”), married on 24 January 1970 and separated on 18 November 1996. Plaintiff alleges that in 1981 she and Pender purchased an interest in a farming partnership, Sharp Farms, for [126]*126$120,000. She alleges that the partnership held title to real and personal property acquired during the marriage and that she and Pender worked for the benefit of the partnership throughout their marriage. Pender; his brother, defendant Alan D. Sharp (“Alan”); and their father, Thaddeus P. Sharp, Jr. (“Thad”), were the three original members of the partnership. Plaintiff further alleges that on 31 October 1996, Pender withdrew from the partnership at a price substantially less than the fair market value of his interest and divested himself of his interest in partnership-owned real estate. Pender became an employee of the newly formed Sharp Farms, Inc., a corporation comprised of Thad and Alan.

On 19 December 1996, plaintiff filed an action for divorce from Pender, and Pender counterclaimed seeking equitable distribution. Although these pleadings are not included in the record, both parties apparently agree that such action was Wilson County File No. 96 CVD 2031. Plaintiff voluntarily dismissed her 1996 claim.

Plaintiff filed the complaint that is the subject of this appeal in early June of 1997. She named Pender, Thad, Alan, the partnership (“Sharp Farms”), and the corporation (“SF Inc.”) as defendants. The 1997 complaint sought an unequal division of marital property, an interim distribution of marital property, imposition of a constructive trust, the nullification of certain transfers of property by Pender, the reconveyance of property, and consolidation of the 1997 action with Pender’s 1996 counterclaim for equitable distribution.

Defendant Pender answered separately from defendants Thad, Alan, Sharp Farms, and SF Inc. Defendants Thad, Alan, Sharp Farms, and SF Inc. objected to plaintiff’s motion to consolidate and demanded a trial by jury of all allowable issues. Plaintiff entered a voluntary dismissal of all claims except her actions for equitable distribution and constructive trust and her motion for consolidation. On 22 January 1998, Judge Sarah F. Patterson heard plaintiff’s motion to consolidate, Pender’s motions to dismiss and to compel discovery, and the other defendants’ motion to sever. The trial court allowed plaintiff’s motion to consolidate, noting that the legal issues of equitable distribution were the same. The trial court denied the defendants’ motion to sever the constructive trust issue from the equitable distribution actions, saying, “The issue of constructive trust is not a cause of action which is to be severed from other actions, but rather is a request for equitable relief within the equitable distribution action itself.” The trial court continued, explaining that since the [127]*127equitable distribution action was the only issue and a non-jury issue, the motion seeking a jury trial was also denied.

Defendants Thad, Alan, Sharp Farms, and SF Inc. argue first that the trial court should have allowed their request for a jury trial and second that the trial court abused its discretion in denying their motion to sever. We note that an order denying a motion for a jury trial is immediately appealable. See In re McCarroll, 313 N.C. 315, 316, 327 S.E.2d 880, 881 (1985). This opinion addresses the dispute between plaintiff and defendants Thad, Alan, Sharp Farms, and SF Inc.; references to “defendants” hereafter indicate defendants exclusive of Pender Sharp.

This case requires us to address the question of first impression of whether a third party to an equitable distribution action has a state constitutional right to a trial by jury in an action for constructive trust.

In order to determine whether there exists a constitutional right to trial by jury of a particular cause of action, we look to article I, section 25, which ensures that there is a right to trial by jury where the underlying cause of action existed at the time of adoption of the 1868 constitution, regardless of whether the action was formerly a proceeding in equity.

Kiser v. Kiser, 325 N.C. 502, 510, 385 S.E.2d 487, 491 (1989). “A constructive trust is a common law property right arising in equity to prevent a person from holding property under circumstances ‘making it inequitable for him to retain it.’ ” Lamb v. Lamb, 92 N.C. App. 680, 685-86, 375 S.E.2d 685, 688 (1989) (quoting Wilson v. Crab Orchard Dev. Co., 276 N.C. 198, 211, 171 S.E.2d 873, 882 (1970)). This property right arises immediately upon the wrongful act. See Cline v. Cline, 297 N.C. 336, 343, 255 S.E.2d 399, 404 (1979). A constructive trust has been described also as a duty imposed by the courts to prevent unjust enrichment, see Guy v. Guy, 104 N.C. App. 753, 757, 411 S.E.2d 403, 405 (1991), and as a remedy fashioned by the court, see Weatherford v. Keenan, 128 N.C. App. 178, 179, 493 S.E.2d 812, 813 (1997), disc. review denied, 348 N.C. 78, 505 S.E.2d 887 (1998).

Actions seeking to impose trusts in situations where it would be unfair for the legal title-holder to retain the property were recognized in North Carolina prior to 1868. See, e.g., Smith v. Smith, 60 N.C. 581 (1864); Garner v. Garner, 45 N.C. 1 (1852). Furthermore, constructive trust claims are routinely heard by juries in modern times. See, [128]*128e.g., Lane v. Lane, 115 N.C. App. 446, 448, 445 S.E.2d 70, 71, disc. review denied, 338 N.C. 311, 452 S.E.2d 311 (1994); Watkins v. Watkins, 83 N.C. App. 587, 589, 351 S.E.2d 331, 333 (1986); Ferguson v. Ferguson, 55 N.C. App. 341, 343, 285 S.E.2d 288, 290, disc. review denied, 306 N.C. 383, 294 S.E.2d 207 (1982). We hold that under Kiser, a third party litigant to an equitable distribution proceeding has a state constitutional right to a jury trial in an action seeking to impose a constructive trust.

Plaintiff seeks a constructive trust as one count of her complaint; she also seeks equitable distribution of her marital property. The result we reach today mandates that the trial judge allow defendants, here third parties to the marital property distribution, to have their case heard by a jury. This result is entirely consistent with our prior case law.

A judge in an equitable distribution action may recognize both legal and equitable interests in property and distribute such interests to the divorcing parties, even if such distribution requires an interest be “wrested from the hands of the legal titleholder by the imposition of a constructive trust.” Upchurch v. Upchurch, 128 N.C. App.

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Bluebook (online)
514 S.E.2d 312, 133 N.C. App. 125, 1999 N.C. App. LEXIS 371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sharp-v-sharp-ncctapp-1999.