Order Granting Relief from Judgment Upheld by North Carolina Court of Appeals

The North Carolina Court of Appeal upheld a trial court which granted wife’s motion for reconsideration. In this case, both the husband and the wife had declared bankruptcy. There was a second mortgage on the former marital home. While both parties identified the second mortgage in their bankruptcy, wife asserted that she was not responsible for that second mortgage.

The parties had a hearing on post separation support. During this hearing, Husband’s attorney asserted that there was no mortgage encumbering the former marital home. The parties reached a settlement before the end of the post separation support hearing. They signed a memorandum of judgment which called for husband to pay $2500 to wife and to transfer his interest in the former marital home to wife.

Husband complied with the requirements of the memorandum of judgment by paying $2500 to wife and transferring his interest in the home to wife via a Quitclaim Deed. Wife subsequently learned that there was, in fact, a mortgage encumbering the property. She filed a motion for reconsideration pursuant to North Carolina Rules of Civil Procedure Rule 60 and asked the Court to set aside the Consent Order. The trial Court granted the motion for relief from Judgment and Husband appealed.

The North Carolina Court of Appeals found that the trial court properly granted Wife relief from the Consent Order pursuant to North Carolina Rules of Civil Procedure Rule 60(b)(3) because Husband’s attorney misrepresented the status of the encumbrance of the former marital home during the post separation support hearing and wife relied on that misrepresentation. The Court also ruled that Wife did not ratify the Consent Order by accepting the $2500 and Husband’s interest in the former marital home.

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