Smith v. Smith

431 S.E.2d 196, 334 N.C. 81, 1993 N.C. LEXIS 282
CourtSupreme Court of North Carolina
DecidedJuly 2, 1993
Docket372PA92
StatusPublished
Cited by7 cases

This text of 431 S.E.2d 196 (Smith v. Smith) is published on Counsel Stack Legal Research, covering Supreme Court of North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Smith v. Smith, 431 S.E.2d 196, 334 N.C. 81, 1993 N.C. LEXIS 282 (N.C. 1993).

Opinions

MEYER, Justice.

The issue that we must resolve in this case is whether an existing equitable distribution judgment in a former action may be collaterally attacked. We conclude that the Court of Appeals erred in allowing a collateral attack upon a judgment in a prior action, which ordered an equitable distribution, and hold that the judgment must be directly attacked by a motion in the prior case to modify or set aside the judgment.

An examination of the pleadings and affidavits filed in support of the motion for summary judgment reveals the following: On 18 February 1983, Wayne Smith brought an action for absolute divorce in District Court, Wayne County, against Gatsy N. Smith. Gatsy Smith answered and counterclaimed for alimony and equitable distribution of property. On 4 May 1984, the court granted Wayne Smith an absolute divorce. On that same day and in that same action, a consent judgment was entered. The consent judgment required, inter alia, that simultaneously with the execution of the [83]*83judgment, plaintiff and defendant both were to pay 50°/o of the federal and state taxes totalling in excess of $12,000, and that Wayne Smith was to pay Gatsy Smith $500.00 to cover 50% of the payment that she had made to a surveyor, Bobby Rex Kornegay, to keep a judgment from being entered against them. The consent judgment further provided:

That the parties own 37.7/16 [sic] acres of land and it is agreed that the plaintiff and defendant will deed to Durwood Eugene Smith [the brother of Wayne Smith] a 7/12 interest and to the defendant a 5/12 interest in said land.

Furthermore, the consent judgment provided that each of the parties was declared to be the owner of the property allotted to him or her, “free and clear of any claim from the other party.” The consent judgment concluded “[t]hat this property settlement is in full and complete settlement of any and all rights that the parties might have arising out of the marriage between them or the equitable distribution laws of this State or otherwise.” The judgment was consented to by all of the parties and signed by the trial judge.

Pursuant to the consent judgment, Gatsy Smith conveyed a 7/12 undivided interest in the property to Durwood E. Smith by deed dated 7 May 1984 and executed and recorded on 8 May 1984. Because the plaintiff in that action, Wayne Smith, had previously deeded his interest in the above property to Gatsy Smith on 5 June 1974, he did not sign the deed with Gatsy Smith to Durwood E. Smith.

In March 1985, almost a year after the consent judgment was entered in the prior divorce action, Gatsy Smith filed this action against Wayne Smith and Mr. and Mrs. Durwood Smith. Gatsy Smith claimed that Wayne Smith had never paid his part of the taxes or reimbursed her for the survey expense and had not intended to do so when the consent judgment was entered into. She further contended that Wayne Smith committed a fraud on the court in that Durwood Smith was never intended to be the beneficial owner of the 7/12 interest in the property and that Durwood Smith was holding the 7/12 interest in the property in trust for Wayne Smith. Gatsy Smith claimed that she had been defrauded by Wayne Smith and that he had never intended to carry through with anything he had agreed to in the consent judgment. Gatsy Smith prayed that Durwood Smith and his wife be declared to hold title to the subject property in trust for the use and benefit of Wayne Smith and, further, that an equitable lien be declared against the subject [84]*84property in the amount of $13,805.96. In the interim, Wayne Smith died and Michael A. Ellis was appointed the administrator of his estate.

In 1989, the trial court allowed Gatsy Smith’s motion to add Wayne Smith’s two legitimated minor children, Cornelius Smith and Chadwick Brian Smith, as defendants. The children, each represented by a guardian ad litem, filed crossclaims contending that the property in question was owned by Durwood Smith but was subject to an express trust in favor of Cornelius Wayne Smith. Mr. and Mrs. Durwood Smith answered the complaint and crossclaims by denying the minor children’s claims and asserting that Durwood Smith was the owner of the property free and clear of any express trust or equitable lien.

Mr. and Mrs. Durwood Smith subsequently filed a motion for summary judgment. At the hearing, Mr. and Mrs. Durwood Smith contended that all of the parties in this action were the same parties or were in privity with the parties in the prior action. Thus, defendants argued, all the parties were bound by the prior action and could not collaterally attack the equitable distribution judgment. After a hearing on the motion, the trial court allowed Mr. and Mrs. Durwood Smith’s motion for summary judgment and dismissed the complaint and both crossclaims.

Gatsy Smith and the two minor children appealed to the Court of Appeals, which, in an unpublished opinion pursuant to Rule 30(e), upheld the dismissal of the claim of Chadwick Brian Smith, but vacated and remanded the action to the trial court as to defendant Cornelius Smith and plaintiff Gatsy Smith. This Court granted Mr. and Mrs. Durwood Smith’s petition for discretionary review on 17 December 1992. We find no error by the trial court and thus reverse the Court of Appeals’ holding in regard to defendant Cornelius Wayne Smith and plaintiff Gatsy Smith.

Defendants Mr. and Mrs. Durwood Smith contend that Gatsy Smith and Cornelius Smith are barred by the doctrine of res judicata from bringing an action collaterally attacking the equitable distribution judgment. We agree.

North Carolina follows the general rule “ ‘that a final judgment, rendered on the merits, by a court of competent jurisdiction, is conclusive of rights, questions and facts in issue, as to the parties and privies, in all other actions involving the same matter.’ ” Masters [85]*85v. Dunstan, 256 N.C. 520, 523, 124 S.E.2d 574, 576 (1962) (quoting Bryant v. Shields, 220 N.C. 628, 634, 18 S.E.2d 157, 161 (1942)). In order for a person to be privy to an action, he must have acquired an interest in the subject matter of the action either by succession, inheritance, or purchase from a party subsequent to the action. Id. at 525, 124 S.E.2d at 577-78.

In the case sub judice, defendants Mr. and Mrs. Durwood Smith are in privity because, pursuant to the consent judgment of 4 May 1984 and the ensuing deed, they obtained title to the subject property from plaintiff Gatsy Smith subsequent to the earlier action. In addition, defendant Cornelius Smith is in privity because he is an heir of Wayne Smith, a party to the original action.

Under res judicata, no trust or equitable lien can be impressed upon property disposed of by an order of the court. In Walters v. Walters, 307 N.C. 381, 298 S.E.2d 338 (1983), this Court established the rule that:

whenever the parties bring their separation agreements before the court for the court’s approval, it will no longer be treated as a contract between the parties. All separation agreements approved by the court as judgments of the court will be treated similarly, to-wit, as court ordered judgments.

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Smith v. Smith
431 S.E.2d 196 (Supreme Court of North Carolina, 1993)

Cite This Page — Counsel Stack

Bluebook (online)
431 S.E.2d 196, 334 N.C. 81, 1993 N.C. LEXIS 282, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-smith-nc-1993.