{ "id": 793212, "name": "LAURA LEIGH BOONE (STOTT) BROMHAL v. E. GREGORY STOTT", "name_abbreviation": "Bromhal v. Stott", "decision_date": "1995-10-06", "docket_number": "No. 520A94", "first_page": "702", "last_page": "707", "citations": [ { "type": "official", "cite": "341 N.C. 702" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "447 S.E.2d 481", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "opinion_index": -1 }, { "cite": "116 N.C. App. 250", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523314 ], "year": 1994, "opinion_index": -1, "case_paths": [ "/nc-app/116/0250-01" ] }, { "cite": "227 S.E.2d 120", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "page": "123" } ], "opinion_index": 0 }, { "cite": "30 N.C. App. 272", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553705 ], "year": 1976, "pin_cites": [ { "page": "276" } ], "opinion_index": 0, "case_paths": [ "/nc-app/30/0272-01" ] }, { "cite": "266 S.E.2d 812", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1980, "pin_cites": [ { "page": "814-15" } ], "opinion_index": 0 }, { "cite": "300 N.C. 286", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8561053 ], "year": 1980, "opinion_index": 0, "case_paths": [ "/nc/300/0286-01" ] }, { "cite": "35 S.E. 592", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1900, "pin_cites": [ { "page": "593" } ], "opinion_index": 0 }, { "cite": "126 N.C. 300", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8659455 ], "year": 1900, "pin_cites": [ { "page": "302" } ], "opinion_index": 0, "case_paths": [ "/nc/126/0300-01" ] }, { "cite": "23 S.E. 257", "category": "reporters:state_regional", "reporter": "S.E.", "weight": 2, "year": 1895, "pin_cites": [ { "page": "259" } ], "opinion_index": 0 }, { "cite": "117 N.C. 235", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8652966 ], "year": 1895, "opinion_index": 0, "case_paths": [ "/nc/117/0235-01" ] }, { "cite": "16 S.E. 325", "category": "reporters:state_regional", "reporter": "S.E.", "weight": 3, "year": 1892, "pin_cites": [ { "page": "341-42" }, { "page": "325-28", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "111 N.C. 340", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8651306 ], "year": 1892, "opinion_index": 0, "case_paths": [ "/nc/111/0340-01" ] }, { "cite": "69 N.C. L. Rev. 319", "category": "journals:journal", "reporter": "N.C. L. Rev.", "weight": 3, "year": 1991, "pin_cites": [ { "page": "319-20" }, { "page": "326" }, { "page": "349" } ], "opinion_index": 0 }, { "cite": "408 S.E.2d 518", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "329 N.C. 787", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2557060, 2554055, 2556786, 2555379, 2555903 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/nc/329/0787-02", "/nc/329/0787-03", "/nc/329/0787-04", "/nc/329/0787-05", "/nc/329/0787-01" ] }, { "cite": "403 S.E.2d 530", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1991, "opinion_index": 0 }, { "cite": "102 N.C. App. 706", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525525 ], "year": 1991, "opinion_index": 0, "case_paths": [ "/nc-app/102/0706-01" ] } ], "analysis": { "cardinality": 652, "char_count": 11844, "ocr_confidence": 0.741, "pagerank": { "raw": 6.805958991977164e-07, "percentile": 0.9638859253956504 }, "sha256": "2c15f888c6606ebdd56f147f37aeb026cc1949af26ee5dc7149493a3622c0a8e", "simhash": "1:213beea23773e357", "word_count": 1859 }, "last_updated": "2023-07-14T22:14:42.837437+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "LAURA LEIGH BOONE (STOTT) BROMHAL v. E. GREGORY STOTT" ], "opinions": [ { "text": "ORR, Justice.\nThis case arises out of a Separation Agreement (hereinafter \u201cAgreement\u201d) executed by the parties, which provides for an award of attorney\u2019s fees should a party fail to comply with the terms of the Agreement. The sole question presented by this appeal is whether the trial court erred in its award of attorney\u2019s fees to the plaintiff pursuant to this provision of the Agreement.\nThe record reflects that the parties married on 23 April 1977 and separated on or about 17 August 1987. Two minor children were born to the parties during the marriage. The parties entered into a Separation Agreement and subsequently a Modification Agreement. Defendant failed to comply with the child support provision of the Modification Agreement, giving rise to plaintiff\u2019s suit.\nThe complaint was filed on 28 December 1988 and an amended complaint was filed on 13 June 1989. In her complaint, plaintiff requested an order requiring defendant to pay the deficient child support and also sought reimbursement of attorney\u2019s fees pursuant to paragraph 27 of the Agreement, which provides:\nSuit costs. If either party shall fail to keep and perform any agreement or provision hereof, the other party shall be entitled to recover reasonable attorney\u2019s fees and any and all other expenses incurred in any action instituted to enforce provisions of this agreement.\nIn a judgment entered 3 November 1992, plaintiff was awarded $22,550.49, plus interest, for unpaid child support and reimbursement for one additional marital debt, and defendant was ordered to compensate plaintiff for attorney\u2019s fees' incurred at all stages of the case in the amount of $40,000.\nDefendant appealed this judgment to the Court of Appeals, which affirmed the trial court\u2019s order by a divided panel. The dissent was based solely on the issue of attorney\u2019s fees, which is now before this Court. Defendant contends that the provision in the Agreement for recovery of attorney\u2019s fees is invalid because it lacks statutory authority. We disagree.\nAlthough the Court of Appeals has addressed the issue before us in several cases, including Edwards v. Edwards, 102 N.C. App. 706, 403 S.E.2d 530, disc. rev. denied, 329 N.C. 787, 408 S.E.2d 518 (1991), this Court has not directly considered the contractual recovery of attorney\u2019s fees in the context of separation agreements. The majority at the Court of Appeals below, in reliance upon Edwards, based the statutory authority for approval of the recovery of attorney\u2019s fees on N.C.G.S. \u00a7 52-10.1, which controls separation agreements.\nAny married couple is hereby authorized to execute a separation agreement not inconsistent with public policy which shall be legal, valid, and binding in all respects. . . .\nN.C.G.S. \u00a7 52-10.1 (1991). There can be no question that this broad language in N.C.G.S. \u00a7 52-10.1 statutorily authorizes a married couple in executing a separation agreement to include any provision, including the one in question, unless that specific provision violates public policy. It is therefore necessary for us in addressing this issue to determine whether the inclusion of a provision for the recovery of attorney\u2019s fees in a separation agreement violates the public policy of the State of North Carolina.\nIn her article \u201cSemantics as Jurisprudence: The Elevation of Form Over Substance in the Treatment of Separation Agreements in North Carolina,\u201d 69 N.C. L. Rev. 319, 319-20 (1991) [hereinafter \u201cSharp\u201d], Sally Burnette Sharp, professor of law at the University of North Carolina at Chapel Hill, states:\nSeparation or marital settlement agreements are, quite correctly, said to minimize the psychological and economic costs of divorce, to create better prospects for post-divorce cooperation between the parties, to lessen the impact of divorce upon children, and to promote judicial economy. It is hardly surprising, therefore, to find that these agreements are the vehicle by which the distributional consequences of the overwhelming majority of divorces in this country are concluded.\nAs such, it is obvious that the General Assembly of North Carolina views the utilization of separation agreements as instruments of sound public policy in North Carolina in dealing with the growing number of divorces taking place in our society.\nOne of the assumptions in the Sharp article is that \u201csettlement agreements are fundamentally different from other kinds of contracts. They deal with issues of custody, support, and distribution of wealth that have consequences of immense significance, not only to the parties involved, but to the state as well.\u201d Id. at 326.\n[T]he state has strong and legitimate policy interests in settlement agreements that differ markedly from its interests in most other private contracts. In general, the state has an interest in protecting all citizens from bargaining contexts which are peculiarly conducive to overreaching tactics. Specifically, the state has a very real interest in the creation of some procedures by which it can ensure that settlement agreements make adequate provision for children and dependent spouses.\nId. at 349. The enforcement of provisions for the recovery of attorney\u2019s fees in settlement agreements helps ensure that provisions for support of children and dependent spouses in those agreements will be enforced by allowing a party to the agreement to seek enforcement in a court of law and to recover the legal expenses associated with that enforcement. Thus, parties would not be disadvantaged by choosing to resolve these issues privately in a settlement agreement instead of pursuing a court action for child support or custody or for alimony in which attorney\u2019s fees may be granted under N.C.G.S. \u00a7\u00a7 50-13.6 and 50-16.4. We conclude that the public policy of this State encourages settlement agreements and supports the inclusion of a provision for the recovery of attorney\u2019s fees in settlement agreements.\nTurning our attention to the facts of the case sub judice, enforcement of the particular provision for the recovery of attorney\u2019s fees at issue is not inconsistent with public policy. The Agreement in question was drafted by the defendant, an attorney licensed in North Carolina, and on 27 September 1989, both parties stipulated that the Separation Agreement and modifications made to it were valid and enforceable. There is also uncontested evidence that the trial court made extensive findings of fact and conclusions of law in regard to the necessity of the plaintiff bringing a lawsuit to enforce the provisions of the Separation Agreement and incurring substantial attorney\u2019s fees and costs in her effort to enforce the provisions. There is no issue brought forward by the defendant questioning the amount of attorney\u2019s fees awarded by the trial court. The sole contention, as previously noted, is that the trial court was without authorization to impose the attorney\u2019s fees.\nIn arguing that the provision at issue should not be enforced, defendant relies on a line of North Carolina cases where the appellate courts have refused to enforce attorney\u2019s fees indemnification clauses in contracts in the context of business-oriented lawsuits. These cases do not mandate that the provision at issue is against public policy. The policy reasons given for denying enforcement in the cases cited do not apply to the facts before us.\nThis Court first addressed a contractual provision indemnifying a party for attorney\u2019s fees in Tinsley v. Hoskins, 111 N.C. 340, 16 S.E. 325 (1892), which concerned a promissory note. In invalidating the provision, this Court stated that it could result in an oppressive penalty, serve as a shield for usury and promote litigation; that it \u201ctends to the oppression of debtors to sanction their incorporation in commercial instruments\"; and that \u201cstipulations like the one now sued upon, when incorporated into obligations of this particular character, are against public policy and therefore invalid.\u201d Id. at 341-42, 16 S.E. at 325-28 (emphasis added). Thus, this Court\u2019s decision in Tinsley was limited strictly to commercial instruments.\nWilliams v. Rich, 117 N.C. 235, 23 S.E. 257 (1895), extended the rationale to invalidate an attorney\u2019s fees indemnity provision in a deed of trust because such stipulations are in the nature of forfeitures, they encourage litigation, they \u201ccan readily be used to cover usurious agreements, and excessive exactions may be had under the guise of an attorney\u2019s fee.\u201d Id. at 240, 23 S.E. at 259.\nThe rule was established to protect debtors from the \u201copportunity for oppression\u201d by lending institutions in collecting on notes, mortgages and deeds of trust. Turner v. Roger, 126 N.C. 300, 302, 35 S.E. 592, 593 (1900).\nIn Enterprises, Inc. v. Equipment Co., 300 N.C. 286, 266 S.E.2d 812 (1980), this Court applied these same justifications to the commercial lease of specific goods by requiring statutory authority for a contractual provision indemnifying a party for attorney\u2019s fees. We enunciated the law in North Carolina as \u201c \u2018frown[ing] upon contractual obligations for attorney\u2019s fees as part of the costs of an action\u2019 \u201d and reviewed cases that had adhered to this general rule based on public policy considerations. Id. at 289-90, 266 S.E.2d at 814-15 (quoting Supply, Inc. v. Allen, 30 N.C. App. 272, 276, 227 S.E.2d 120, 123 (1976)). All of the cases reviewed involved a promissory note, a deed of trust, a guaranty on a promissory note or a commercial construction contract.\nHowever, the public policy justifications in debtor-creditor and commercial contract cases do not apply to a separation agreement. A separation agreement is different from a commercial, arms-length transaction. It cannot be analyzed in terms of the marketplace and bargaining power.\nAs Sharp notes in her article, separation agreements are in fact different from other types of contracts.\nStandard contract principles are designed to operate within the context of a rational, competitive market that assumes a relative parity of bargaining strength between the parties. To equate the \u201cmarket\u201d of settlement agreements, marriage dissolution- \u2014 a situation virtually always accompanied by extraordinary stress and rarely accompanied by mutual desires to achieve fair results\u2014 with the paradigmatic \u201cmarketplace\u201d in which strangers bargain at arms\u2019 length, is simply to ignore the realities of human nature, the adversarial process, and the realities of most divorce \u25a0bargaining.\nSharp, 69 N.C. L. Rev. at 350. The public policy rationale for frowning upon contractual provisions for the recovery of attorney\u2019s fees in the commercial and debtor-creditor context simply does not apply to separation agreements.\nThe provision for recovery of attorney\u2019s fees is therefore not inconsistent with public policy and is therefore legal, valid and binding under N.C.G.S. \u00a7 52-10.1.\nAccordingly, we affirm the order of the Court of Appeals affirming the trial court\u2019s award of attorney\u2019s fees to plaintiff.\nAFFIRMED.", "type": "majority", "author": "ORR, Justice." } ], "attorneys": [ "Brady, Schilawski, Earls and Ingram, by Michael F. Schilawski, for plaintiff-appellee.", "Jack P. Gulley for defendant-appellant." ], "corrections": "", "head_matter": "LAURA LEIGH BOONE (STOTT) BROMHAL v. E. GREGORY STOTT\nNo. 520A94\n(Filed 6 October 1995)\nDivorce and Separation \u00a7 520 (NCI4th)\u2014 separation agreement \u2014 attorney fee provision \u2014 public policy \u2014 validity\nA provision in a separation agreement for the recovery of attorney fees incurred to enforce provisions of the agreement does not violate public policy and is valid and binding under N.C.G.S. \u00a7 52-10.1.\nAm Jur 2d, Divorce and Separation \u00a7\u00a7 829, 838, 839.\nAppeal by defendant pursuant to N.C.G.S. \u00a7 7A-30(2) from the decision of a divided panel of the Court of Appeals, 116 N.C. App. 250, 447 S.E.2d 481 (1994), affirming judgment for the plaintiff entered by Willis, J., on 3 November 1992 in District Court, Wake County. Heard in the Supreme Court 21 June 1995.\nBrady, Schilawski, Earls and Ingram, by Michael F. Schilawski, for plaintiff-appellee.\nJack P. Gulley for defendant-appellant." }, "file_name": "0702-01", "first_page_order": 736, "last_page_order": 741 }