Lesh v. LeshÂ

IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA17-399

Filed: 16 January 2018

Currituck County, No. 14 CVD 308

TIMOTHY LESH, Plaintiff,

v.

MARGARET S. LESH, Defendant.

Appeal by plaintiff from order entered 27 January 2017 by Judge Meader W.

Harriss, III, in Currituck County District Court. Heard in the Court of Appeals 19

September 2017.

The East Carolina Law Group, by Timothy P. Koller, for plaintiff-appellant.

The Twiford Law Firm, PC, by Courtney S. Hull, for defendant-appellee.

DAVIS, Judge.

The primary issue in this appeal is whether federal law prohibits a veteran’s

military disability benefits from being considered as income for purposes of satisfying

a distributive award to his former spouse pursuant to an equitable distribution order.

Timothy Lesh (“Mr. Lesh”) appeals on federal preemption grounds from the trial

court’s order denying his motion pursuant to Rule 60(b) of the North Carolina Rules

of Civil Procedure to set aside a portion of the parties’ equitable distribution order

and holding him in civil contempt for failing to make payments required under that
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order. Because we conclude that federal law does not preclude the treatment of his

disability payments as income for this purpose, we affirm.

Factual and Procedural Background

Mr. Lesh was married to Margaret S. Lesh (“Ms. Lesh”) on 14 October 1989.

On 1 December 2012, the parties separated, and they divorced on 16 September 2014.

On 1 August 2014, Mr. Lesh filed a complaint for absolute divorce in Currituck

County District Court. Ms. Lesh filed an answer and counterclaim on 27 August

2014, seeking post-separation support, alimony, and equitable distribution of the

parties’ marital property.

On 22 and 23 February 2016, a hearing was held before the Honorable Meader

W. Harriss, III. On 13 April 2016, the trial court entered an order (the “Equitable

Distribution Order”) distributing 75% of the marital estate to Mr. Lesh and 25% to

Ms. Lesh. The court further concluded that “[i]n order for [Ms. Lesh] to receive her

share of the net marital estate, it is necessary for [Mr. Lesh] to pay [Ms. Lesh] a

distributive award in the sum of $31,590.59, which reflects her 25% of the estate

minus the $3,010.00 value of the marital property hereby distributed to her and in

her possession.” The trial court ordered that this distributive award “be paid in

monthly installments in the amount of $877.22, the first of which is due April 1, 2016

to continue to be due the first of the month every month until said sum is paid in full.”

The Equitable Distribution Order further permitted Mr. Lesh to “pay off the

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remaining balance of the lump sum at any time, in lieu of continuing monthly

installment payments.”

On 11 May 2016, Mr. Lesh filed a notice of appeal from the Equitable

Distribution Order. However, he dismissed his appeal on 28 July 2016. On 8 August

2016, Mr. Lesh filed a motion in the cause pursuant to Rule 60(b) seeking to set aside

the portion of the Equitable Distribution Order requiring his monthly payments of

the distributive award. In this motion, he contended that the Equitable Distribution

Order was an “irregular” judgment because it would require him to use his military

disability benefits to make the distributive award payments despite the fact that

federal law preempted the trial court’s ability to require him to do so.

On 7 September 2016, Ms. Lesh filed a motion for contempt, requesting that

the trial court hold Mr. Lesh in contempt for “fail[ing] and refus[ing] to comply with

[the Equitable Distribution] Order in that [he] ha[d] not made any payments to

[her] . . . and his failure to comply [wa]s willful, without just cause or excuse.” A

hearing on Mr. Lesh’s motion in the cause and Ms. Lesh’s motion for civil contempt

was held on 17 October 2016. On 27 January 2017, the trial court entered an order

captioned “Amended1 Order of Contempt” denying Mr. Lesh’s motion under Rule

60(b) and granting Ms. Lesh’s motion for civil contempt. Mr. Lesh filed a timely notice

of appeal.

1 It appears that an initial contempt order was entered on 18 January 2017. However, that
initial order is not contained in the record on appeal.

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Analysis

On appeal, Mr. Lesh argues that the trial court erred by (1) denying his Rule

60(b) motion to set aside the portion of the Equitable Distribution Order requiring

monthly distributive payments based on his contention that his only source of income

is his military disability benefits, which under federal law cannot be distributed as

divisible property; and (2) holding him in civil contempt for failing to make the

monthly payments required by the Equitable Distribution Order. We address each

argument in turn.

I. Denial of Rule 60(b) Motion

Mr. Lesh argues that the trial court erred by denying his motion under Rule

60(b)(6) because the Equitable Distribution Order was an irregular judgment.

Specifically, he contends that the order was irregular because it required him to make

monthly payments of the distributive award despite the trial court’s awareness that

the entirety of his monthly income was comprised of his military disability benefits.

Ms. Lesh, conversely, contends that this portion of his appeal lacks merit due

to the fact that he withdrew his appeal of the Equitable Distribution Order and

therefore lost his right to challenge the validity of that order. She further contends

that his motion in the cause was defective due to the fact that Rule 60(b)(6) cannot

be used as a substitute for appeal.

A. Applicability of Rule 60(b)(6)

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Rule 60(b) states, in pertinent part, as follows:

(b) Mistakes; inadvertence; excusable neglect; newly
discovered evidence; fraud, etc. — On motion and upon
such terms as are just, the court may relieve a party or his
legal representative from a final judgment, order, or
proceeding for the following reasons:

(1) Mistake, inadvertence, surprise, or excusable
neglect;

(2) Newly discovered evidence which by due
diligence could not have been discovered in time
to move for a new trial under Rule 59(b);

(3) Fraud (whether heretofore denominated intrinsic
or extrinsic), misrepresentation, or other
misconduct of an adverse party;

(4) The judgment is void;

(5) The judgment has been satisfied, released, or
discharged, or a prior judgment upon which it is
based has been reversed or otherwise vacated, or
it is no longer equitable that the judgment should
have prospective application; or

(6) Any other reason justifying relief from the
operation of the judgment.

N.C. R. Civ. P. 60(b).

Rule 60(b)(6) “serves as a grand reservoir of equitable power by which a court

may grant relief from a judgment whenever extraordinary circumstances exist and

there is a showing that justice demands it.” Dollar v. Tapp, 103 N.C. App. 162, 163-

64, 404 S.E.2d 482, 483 (1991) (citation and quotation marks omitted). We have held

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that “[a] party seeking to set aside an irregular judgment may properly do so by filing

a motion for relief from judgment pursuant to Rule 60(b)(6).” Brown v. Cavit Scis.,

Inc., 230 N.C. App. 460, 464, 749 S.E.2d 904, 908 (2013) (citation omitted). “It is well

settled, however, that Rule 60(b)(6) does not include relief from errors of law or

erroneous judgments.” Garrison ex rel. Chavis v. Barnes, 117 N.C. App. 206, 210, 450

S.E.2d 554, 557 (1994) (internal citations omitted). “We review the denial of a motion

pursuant to Rule 60(b)(6) for an abuse of discretion.” Sharyn's Jewelers, LLC v.

Ipayment, Inc., 196 N.C. App. 281, 284, 674 S.E.2d 732, 735 (2009) (citation omitted).

Our Supreme Court has explained the distinction between irregular,

erroneous, and void judgments as follows:

A judgment may be valid, irregular, erroneous, or
void. . . . An irregular judgment is one rendered contrary to
the course and practice of the court, as for example, at an
improper time; or against an infant without a guardian; or
by the court on an issue determinable by the jury; or where
a plea in bar is undisposed of; or where the debt sued on
has not matured; and in other similar cases (citing
authorities). An erroneous judgment is one rendered
according to the course and practice of the court, but
contrary to law, or upon a mistaken view of the law, or upon
an erroneous application of legal principles, as where,
judgment is given for one party when it [should] have been
given for another; or where the pleadings require several
issues and only one is submitted; or where the undenied
allegations of the complaint are not sufficient to warrant a
recovery; and in other cases involving a mistake of law
(citing authorities). . . . A void judgment is one that has
semblance but lacks some essential element, as jurisdiction
or service of process.

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Wynne v. Conrad, 220 N.C. 355, 359-60, 17 S.E.2d 514, 518 (1941) (internal citations

and quotation marks omitted).

“The correct procedure for attacking a judgment is dependent upon the type of

defect asserted.” Burton v. Blanton, 107 N.C. App. 615, 616, 421 S.E.2d 381, 383

(1992).

The last subsection of Rule 60(b) authorizes the court to
relieve a party from the operation of a judgment for any
other reason not enumerated in the first five clauses.
While Rule 60(b)(6) and the first five clauses of this rule
are mutually exclusive, clause (6) should not be
characterized as a catchall provision. Rule 60(b)(6) is not
intended as substitute relief for reasons that would be
deficient if asserted under one of the other five clauses, or
where the facts would more appropriately support one of the
five preceding clauses.

G. Gray Wilson, North Carolina Civil Procedure § 60-11 (3d ed. 2007) (internal

citations omitted and emphasis added); see also Norton v. Sawyer, 30 N.C. App. 420,

426, 227 S.E.2d 148, 153 (“Rules 60(b)(1) and 60(b)(6) were mutually exclusive, so

that any conduct which generally fell under the former could not stand as a ground

for relief under the latter.”), disc. review denied, 291 N.C. 176, 229 S.E.2d 689 (1976).

“A Rule 60(b)(4) motion is . . . proper where a judgment is ‘void’ as that term is

defined by the law.” Burton, 107 N.C. App. at 616, 421 S.E.2d at 382. As noted above,

“[a] judgment is void . . . when the issuing court has no jurisdiction over the parties

or subject matter in question or has no authority to render the judgment entered.”

Id. (citations omitted).

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In the present case, Mr. Lesh is erroneously invoking Rule 60(b)(6) to set aside,

in part, a judgment that he is contending is void — based on his assertion that the

trial court lacked the authority to order him to make distributive award payments

from funds that are exempt from distribution under federal law. Such an argument

would have been procedurally proper under Rule 60(b)(4). However, he has failed to

show that the Equitable Distribution Order was irregular and thus subject to being

set aside under Rule 60(b)(6).

However, because Mr. Lesh’s substantive argument is based on a recent United

States Supreme Court case — Howell v. Howell, __ U.S. __, 137 S. Ct. 1400, 197 L.

Ed. 2d 781 (2017) — that had not been decided at the time of the trial court’s

Equitable Distribution Order or its order denying his Rule 60(b) motion, we elect to

exercise our discretion under Rule 21 of the North Carolina Rules of Appellate

Procedure and treat his appeal as a petition for certiorari. See Zaliagiris v. Zaliagiris,

164 N.C. App. 602, 606, 596 S.E.2d 285, 289 (2004) (treating appeal as a petition for

writ of certiorari), disc. review denied, 359 N.C. 643, 617 S.E.2d 662 (2005); see also

Hill v. StubHub, Inc., 219 N.C. App. 227, 232, 727 S.E.2d 550, 554 (2012) (granting

certiorari where judicial review would promote judicial economy and appeal involved

issues of first impression in North Carolina), disc. review denied, 366 N.C. 424, 736

S.E.2d 757 (2013).

B. Federal Preemption

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Mr. Lesh’s argument is that the doctrine of federal preemption prohibits state

courts from ordering persons receiving military disability benefits to make

distributive payments to their former spouses where the trial court has reason to

know that the funds used to make the distributive payments will include those

benefits. In order to analyze Mr. Lesh’s argument, it is helpful to review the federal

statutes and applicable case law bearing on this issue.

Pursuant to 10 U.S.C. § 3911, et seq., “[m]embers of the Armed Forces who

serve for a specified period, generally at least 20 years, may retire with retired pay.”

Mansell v. Mansell, 490 U.S. 581, 583, 104 L. Ed. 2d 675, 681 (1989). The amount of

retired pay a veteran is entitled to receive is calculated according to the number of

years served and rank achieved. Id. In addition, pursuant to 38 U.S.C. §§ 310 and

311, “[v]eterans who became disabled as a result of military service are eligible for

disability benefits[,]” which are calculated “according to the seriousness of the

disability and the degree to which the veteran’s ability to earn a living has been

impaired.” Id. at 583, 104 L. Ed. 2d at 681-82.

However, federal law prevents a veteran from receiving both retired pay and

disability benefits. Thus, “[i]n order to prevent double dipping, a military retiree may

receive disability benefits only to the extent that he waives a corresponding amount

of his military retirement pay.” Id. at 583, 104 L. Ed. 2d at 682.

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Generally, “federal law . . . preempt[s] state law with regard to all military

payments except ‘disposable retired or retainer pay’ . . . .” Hillard v. Hillard, 223

N.C. App. 20, 23, 733 S.E.2d 176, 179 (2012), disc. review denied, 366 N.C. 432, 736

S.E.2d 490 (2013). The Uniformed Services Former Spouses’ Protection Act

(“USFSPA”) authorizes state courts to treat “disposable retired or retainer pay” as

property divisible upon divorce that can be distributed to a former spouse. See id.

However, although the USFSPA classifies military retired pay as “disposable

retired or retainer pay,” the statute does not include military disability benefits

within the definition of “disposable retired or retainer pay.” Id. at 22-23, 733 S.E.2d

at 179 (emphasis added). Thus, military disability benefits “cannot be classified as

marital property subject to distribution” and are instead “treated as the retiree’s

separate property.” Id. at 23, 733 S.E.2d at 179 (citations omitted).

“Because disability benefits are exempt from federal, state, and local taxation,

military retirees who waive their retirement pay in favor of disability benefits

increase their after-tax income. Not surprisingly, waivers of retirement pay are

common.” Mansell, 490 U.S. at 583-84, 104 L. Ed. 2d at 682 (internal citation

omitted).

Mr. Lesh’s argument straddles two lines of cases from the United States

Supreme Court. The first line of cases follows Mansell and stands for the proposition

that federal law preempts state courts from ordering the division of military disability

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benefits and the distribution of these benefits to a veteran’s former spouse. The

second line of cases follows Rose v. Rose, 481 U.S. 619, 95 L. Ed. 2d 599 (1987), and

permits state courts to consider military disability benefits as income for purposes of

calculating a veteran’s ability to fulfill support obligations.

As noted above, Mr. Lesh is contending in this appeal that the United States

Supreme Court’s recent decision in Howell constituted a substantive change in the

law on this subject. Therefore, in order to fully address Mr. Lesh’s argument, we

must first review the state of the law as it existed prior to Howell and then determine

whether — and to what extent — Howell changed the law as it applies to Mr. Lesh’s

obligations under the Equitable Distribution Order.

In Mansell, a husband and wife entered into a property settlement upon their

divorce in which the husband agreed to pay the wife 50% of his total military

retirement pay, “including that portion of retirement pay waived so that [he] could

receive disability benefits.” Mansell, 490 U.S. at 585-86, 104 L. Ed. 2d at 683. Four

years later, the husband made a motion to modify the divorce decree, requesting that

the trial court remove the provision requiring him to share his total retirement pay

with his ex-wife. Id. at 586, 104 L. Ed. 2d at 683. The trial court denied the request,

and California’s appellate courts affirmed this decision. Id. at 587, 104 L. Ed. 2d at

684.

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The United States Supreme Court reversed. The Court examined the statutory

definition of “disposable retired or retainer pay” contained in 10 U.S.C. § 1408(a)(4)

and the complementary provisions contained in 10 U.S.C. § 1408(c) that limit

property divisible upon divorce to “disposable retired pay.” Id. at 590-92, 104 L. Ed.

2d at 686-87. The Supreme Court then stated as follows:

[T]he view that the [USFSPA] is solely a garnishment
statute and therefore not intended to pre-empt the
authority of state courts is contradicted not only by
§ 1408(c)(1), but also by the other subsections of § 1408(c).
Sections 1408(c)(2), (c)(3), and (c)(4) impose new
substantive limits on state courts’ power to divide military
retirement pay. Section 1408(c)(2) prevents a former
spouse from transferring, selling, or otherwise disposing of
her community interest in the military retirement pay.
Section 1408(c)(3) provides that a state court cannot order
a military member to retire so that the former spouse can
immediately begin receiving her portion of military
retirement pay. And § 1408(c)(4) prevents spouses from
forum shopping for a State with favorable divorce laws.
Because each of these provisions pre-empts state law, the
argument that the Act has no pre-emptive effect of its own
must fail. Significantly, Congress placed each of these
substantive restrictions on state courts in the same section
of the Act as § 1408(c)(1). We think it unlikely that every
subsection of § 1408(c), except § 1408(c)(1), was intended to
pre-empt state law.

Id.

The Court further ruled that “the legislative history, read as a whole, indicates

that Congress intended both to create new benefits for former spouses and to place

limits on state courts designed to protect military retirees.” Id. at 594, 104 L. Ed. 2d

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at 688. Thus, the Court held that “the [USFSPA] does not grant state courts the

power to treat as property divisible upon divorce military retirement pay that has

been waived to receive veterans’ disability benefits.” Id. at 594-95, 104 L. Ed. 2d at

689.

Since Mansell, North Carolina courts have held that military disability

benefits cannot be considered marital property and therefore are not subject to

distribution. See, e.g., Halstead v. Halstead, 164 N.C. App. 543, 547, 596 S.E.2d 353,

356 (2004) (“Disability benefits should not, either in form or substance, be treated as

marital property subject to division upon the dissolution of marriage.”); Bishop v.

Bishop, 113 N.C. App. 725, 734, 440 S.E.2d 591, 597 (1994) (holding that defendant’s

military income based on “service related disability retirement” could not be classified

as marital property).

Although Mansell is controlling on the issue of whether military disability

benefits can be distributed, it does not answer the separate question of whether such

benefits can be considered income for purposes of determining the financial ability of

a veteran to pay a distributive award. On this latter question, we must examine the

United States Supreme Court’s decision in Rose in which the United States Supreme

Court addressed the extent to which trial courts can consider military disability

benefits as “income” for purposes of calculating support obligations.

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In Rose, a disabled veteran whose main source of income was his military

disability benefits was held in contempt for failing to pay child support to his ex-wife.

He argued that the state court was preempted from enforcing the child support

payment by 38 U.S.C. § 3101(a), which provided that veterans’ benefits payments

could not be subject to attachment, levy, or seizure. Rose, 481 U.S. at 620-22, 95 L.

Ed. 2d at 605. He contended that because his only means of satisfying his child

support obligation was by using his veterans’ disability benefits, the court was

effectively ordering him to make payments in violation of federal law. Id.

The Supreme Court rejected this argument, concluding that the state court

could “consider disability benefits as part of the veteran’s income in setting the

amount of child support to be paid.” Id. at 626, 95 L. Ed. 2d at 608 (emphasis

omitted). The Court “d[id] not agree that . . . the state court’s award of child support

from appellant’s disability benefits does major damage to any clear and substantial

federal interest created by this statute.” Id. at 628, 95 L. Ed. 2d at 609 (quotation

marks omitted). In so ruling, the Court held that “[n]either the Veterans’ Benefits

provisions of Title 38 nor the garnishment provisions of the Child Support

Enforcement Act of Title 42 indicate unequivocally that a veteran’s disability benefits

are provided solely for that veteran’s support.” Id. at 636, 95 L. Ed. 2d at 614. Thus,

the United States Supreme Court has permitted military disability benefits to be

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classified as income for purposes of the fulfillment of a veteran’s child support

obligations.

We are also guided by the North Carolina Supreme Court’s decision in

Comstock v. Comstock, 240 N.C. 304, 771 S.E.2d 602 (2015). In Comstock, the

defendant possessed a U.S. Trust IRA as his separate property, and the trial court

concluded that it could not be classified as a marital asset. However, in ordering

distributive payments during equitable distribution, the trial court included the trust

account in determining the defendant’s available income for purposes of satisfying

the distributive award. Id. at 321, 771 S.E.2d at 614.

On appeal, the defendant argued that the trial court had improperly

considered the trust account as income from which he could pay a distributive award.

Our Supreme Court rejected his argument, stating the following:

Here, the U.S. Trust IRA was not a marital asset as the
parties stipulated that it was defendant’s separate
property. As such, it was not subject to division through
equitable distribution . . . . However, defendant’s U.S.
Trust IRA, a separate liquid asset, was available as a
resource from which the trial court could order a
distributive award.

Id. at 321, 771 S.E.2d at 614 (internal citation omitted). Thus, because the trial court

did not distribute the asset and was instead merely considering it as a source of

income for purposes of distributive payments, our Supreme Court held that the

distributive award did not violate North Carolina law. Id.

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Our analysis of Mansell, Rose, and Comstock leads us to the following

conclusion: In equitable distribution cases where a trial court is considering a

veteran’s income for the purpose of ordering payment of a distributive award, the

court may treat the veteran’s military benefits as income from which he can make

distributive payments, but the court cannot actually treat the military disability

benefits as marital property to be divided. See id. at 321, 771 S.E.2d at 614. The only

remaining question is whether the United States Supreme Court’s decision in Howell

materially alters this conclusion. We conclude that it does not.

In Howell, a husband and wife divorced, and an Arizona trial court entered an

order awarding the wife 50% of the husband’s future Air Force retirement pay, which

she began to receive when he retired the following year. Thirteen years later, the

Department of Veterans Affairs determined that the husband was partially disabled

due to an earlier service-related injury. In order to receive military disability

benefits, the husband elected to waive an equivalent amount of his military veteran’s

retirement pay. Howell, __ U.S. at __, 137 S. Ct. at 1401, 197 L. Ed. 2d at 783. After

the wife petitioned to enforce the original order, the Arizona court entered an order

restoring her share of the husband’s retired pay. The Arizona Supreme Court

attempted to distinguish Mansell in holding that federal law did not preempt the trial

court’s order distributing the husband’s military disability benefits to the wife. Id. at

__, 137 S. Ct. at 1401, 197 L. Ed. 2d at 783.

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On appeal, the wife contended that she had a vested interest in her ex-

husband’s military veteran’s retirement pay despite the fact that he had elected to

waive these payments in the future. Id. at __, 137 S. Ct. at 1404, 197 L. Ed. 2d at

787. She argued that because the husband had waived $250 of this retirement pay

by election in order to instead receive military disability benefits, he had reduced her

50% share in his benefits. Thus, she asserted, she was entitled to a 50% share of her

husband’s total retirement pay, including the military disability benefits. Id. at __,

137 S. Ct. at 1404, 197 L. Ed. 2d at 787-88.

The United States Supreme Court held that the Arizona court could not order

the husband to indemnify his divorced spouse for the loss of her portion of his

retirement pay resulting from his waiver. The Court held that pursuant to 38 U.S.C.

§ 5301 “federal law . . . [has] completely pre-empted the application of state

community property law to military retirement pay.” Id. at __, 137 S. Ct. at 1403,

197 L. Ed. 2d at 786 (citation and quotation marks omitted).

We see nothing in this circumstance that makes the
reimbursement award to [the wife] any the less an award
of the portion of military retirement pay that [the husband]
waived in order to obtain disability benefits. And that is
the portion that Congress omitted from the Act’s definition
of “disposable retired pay,” namely, the portion that federal
law prohibits state courts from awarding to a divorced
veteran’s former spouse. That the Arizona courts referred
to [the wife’s] interest in the waivable portion as having
“vested” does not help. State courts cannot “vest” that
which (under governing federal law) they lack the
authority to give. Accordingly, while the divorce decree

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might be said to “vest” [the wife] with an immediate right
to half of [the husband’s] military retirement pay, that
interest is, at most, contingent, depending for its amount
on a subsequent condition: [the husband’s] possible waiver
of that pay.

Id. at __, 137 S. Ct. at 1405-06, 197 L. Ed. 2d at 788 (citation and quotation marks

omitted).

The Supreme Court further held that because 38 U.S.C. § 5301 prohibits

military benefits from being assignable by state courts, the Arizona court was

prohibited from requiring the husband to reimburse or indemnify the wife for the cost

of his waiver after the entry of the divorce decree. Id. at __, 137 S. Ct. at 1406, 197

L. Ed. 2d at 788. In so ruling, the Court stated as follows:

Neither can the State avoid Mansell by describing the
family court order as an order requiring [the husband] to
“reimburse” or to “indemnify” [the wife], rather than an
order that divides property. The difference is semantic and
nothing more. The principal reason the state courts have
given for ordering reimbursement or indemnification is
that they wish to restore the amount previously awarded
as community property, i.e., to restore that portion of
retirement pay lost due to the postdivorce waiver. And we
note that here, the amount of indemnification mirrors the
waived retirement pay, dollar for dollar. Regardless of their
form, such reimbursement and indemnification orders
displace the federal rule and stand as an obstacle to the
accomplishment and execution of the purposes and
objectives of Congress. All such orders are thus preempted.

Id. at __, 137 S. Ct. at 1406, 197 L. Ed. 2d at 788.

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Therefore, while Howell reaffirms and clarifies the holding in Mansell, it has

no effect on the Rose line of cases. Thus, Howell does not change our analysis in the

present case.

Here, as discussed above, the Equitable Distribution Order required Mr. Lesh

to pay Ms. Lesh a distributive award in the amount of $31,590.59 by means of

monthly installments of $877.22. The trial court did not attempt to treat Mr. Lesh’s

military disability benefits as marital property. Indeed, to the contrary, the

Equitable Distribution Order expressly stated the following:

b. Husband’s Military Medical Retirement: The parties
stipulated that because Husband receives military
disability retired pay, which is exempt from division
pursuant to 10 U.S.C. 1408, said property is separate.

Accordingly, the military disability benefits were excluded by the trial court in

calculating the total amount of marital property eligible to be divided upon the

parties’ divorce.

In attempting to rely upon Howell, Mr. Lesh is apparently contending that the

trial court’s order effectively requires him to “reimburse” or “indemnify” Ms. Lesh the

amount that she would have received had he not elected to waive his retirement pay

in order to receive his military disability benefits. However, this characterization of

the Equitable Distribution Order is incorrect. The trial court’s Equitable Distribution

Order simply does not involve the type of issue addressed in Howell.

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Nothing in Howell alters the holding in Rose that military disability benefits

are not required to be excluded from the definition of income for purposes of

calculating the resources a party can draw upon to fulfill child support obligations.

See Rose, 481 U.S. at 636, 95 L. Ed. 2d at 614. As our Supreme Court held in

Comstock, a similar principle applies to distributive awards. Therefore, the trial

court properly determined that federal law did not preempt the portion of the

Equitable Distribution Order requiring Mr. Lesh to make distributive payments.

Accordingly, Mr. Lesh’s argument on this issue is overruled.2

II. Civil Contempt

Mr. Lesh’s final argument is that the trial court erred by holding him in civil

contempt for his failure to make the monthly distributive payments required by the

Equitable Distribution Order. We disagree.

The standard of review for contempt proceedings is limited
to determining whether there is competent evidence to
support the findings of fact and whether the findings
support the conclusions of law. When the trial court fails to
make sufficient findings of fact and conclusions of law in
its contempt order, reversal is proper.

Thompson v. Thompson, 223 N.C. App. 515, 518, 735 S.E.2d 214, 216 (2012) (internal

citations omitted). N.C. Gen. Stat. § 5A-21 states as follows:

2 In her appellate brief, Ms. Lesh has sought sanctions against Mr. Lesh pursuant to Rule 34
of the North Carolina Rules of Appellate Procedure for appealing the denial of his Rule 60(b)(6) motion.
In our discretion, we decline to impose sanctions under Rule 34. See State v. Hudgins, 195 N.C. App.
430, 436, 672 S.E.2d 717, 721 (2009) (“In our discretion, we do not impose sanctions upon counsel
pursuant to Rule 34.”).

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Opinion of the Court

(a) Failure to comply with an order of a court is a
continuing civil contempt as long as:

(1) The order remains in force;

(2) The purpose of the order may still be served by
compliance with the order;

(2a) The noncompliance by the person to whom the
order is directed is willful; and

(3) The person to whom the order is directed is able
to comply with the order or is able to take reasonable
measures that would enable the person to comply
with the order.

N.C. Gen. Stat. § 5A-21 (2015).

Mr. Lesh contends that the trial court erred by concluding that (1) he had the

present ability to pay the distributive award; and (2) his failure to comply with the

order was willful. In its 27 January 2017 order, the trial court made the following

pertinent findings of fact:

6. [Mr. Lesh] has failed to comply with the terms of the
aforesaid Order in that [Mr. Lesh] has failed to pay the
distributive award to [Ms. Lesh] or make any payments
thereon.

7. [Mr. Lesh]’s non-compliance with the aforesaid Order
has been willful and without legal justification or
excuse in that since the entry of the aforesaid Order,
[Mr. Lesh] has had the means and ability whereby to
comply with the terms of the aforesaid Order of the
Court and presently has the means and ability with
which to comply with the aforesaid Order or is able to
take measures that would enable him to comply with
the said Order.

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Opinion of the Court

8. [Mr. Lesh] should be ordered to comply with the order
of the Court and held in contempt for his violation
thereof.

Based on these findings of fact, the trial court made the following pertinent

conclusions of law:

2. The failure of [Mr. Lesh] to comply with the Orders of
this Court as hereinabove described is willful,
deliberate, and without just cause.

3. [Mr. Lesh] is in civil contempt of this Court’s Orders
directing him to pay a distributive award to [Ms. Lesh]
in the sum of $31,590.59, to be paid in monthly
installments in the amount of $877.22, commencing on
April 1, 2016 and continuing on the first of the month
every month until said sum is paid in full.

....

5. [Mr. Lesh] should pay attorney’s fees on behalf of [Ms.
Lesh] in the sum of $660.04.

On appeal, Mr. Lesh has not specifically challenged any of the trial court’s

findings of fact. Therefore, they are binding on appeal. See Koufman v. Koufman,

330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) (“Where no exception is taken to a finding

of fact by the trial court, the finding is presumed to be supported by competent

evidence and is binding on appeal.”). Therefore, we review the trial court’s order to

determine if the unchallenged findings of fact support its conclusions of law.

First, with regard to the “present ability to pay” prong, this Court has held that

[a] factual finding that the [individual] has had the ability

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Opinion of the Court

to pay as ordered supports the legal conclusion that
violation of the order was willful; however, standing alone,
this finding of fact does not support the conclusion of law
that [the individual] has the present ability to purge
himself of the contempt by paying the arrearages.

Thompson, 223 N.C. App. at 519, 735 S.E.2d at 217 (citation and quotation marks

omitted).

Mr. Lesh attempts to rely on cases in which this Court has held that the trial

court failed to make specific findings that a defendant possessed the present ability

to pay the full court-ordered support obligation. See Spears v. Spears, __ N.C. App.

__, __, 784 S.E.2d 485, 495 (2016) (trial court’s finding that defendant had ability to

“pay more” of his support obligation was insufficient to conclude that defendant had

the ability to “pay all” of his support obligation (quotation marks omitted and

emphasis added)); Teachey v. Teachey, 46 N.C. App. 332, 333-35, 264 S.E.2d 786, 787-

88 (1980) (trial court’s finding that defendant “has possessed the means with which

to comply with the Order” was insufficient to support conclusion that defendant “had

the present ability to pay” (emphasis added)).

Here, conversely, Mr. Lesh does not argue that the 27 January 2017 order

failed to contain findings as to his present ability to pay. Nor could he make such an

argument as the court expressly found both that Mr. Lesh “has had the means and

ability whereby to comply with the . . . Order” and that he “presently has the means

and ability with which to comply with the . . . Order or is able to take measures that

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Opinion of the Court

would enable him to comply with the . . . Order.” (Emphasis added). Unlike the

findings of fact in Spears and Teachey, this finding meets the requirements of N.C.

Gen. Stat. § 5A-21.

Moreover, we note that this finding is supported by competent evidence. Mr.

Lesh filed an affidavit in which he stated that he receives monthly income of

$5,109.24 and that his monthly expenses (assuming the monthly payment of the

distributive award was included) would total $5,001.43. Therefore, even after

payment of the distributive award and his other monthly bills, Mr. Lesh would still

retain $107.81 per month. While Mr. Lesh contends that such a breakdown of his

monthly income fails to take into account the fact that his income consists of his

military disability benefits (and is therefore exempt from distribution), this

contention is merely derivative of his federal preemption argument, which we have

rejected.

Second, Mr. Lesh argues that the willfulness prong has not been met. “This

Court has held that willfulness is (1) an ability to comply with the court order; and

(2) a deliberate and intentional failure to do so.” Moss v. Moss, 222 N.C. App. 75, 80,

730 S.E.2d 203, 206 (2012) (citation and quotation marks omitted). A court may find

a party’s noncompliance to be willful “if there is both knowledge and a stubborn

resistance of a trial court directive.” Williams v. Chaney, __ N.C. App. __, __, 792

S.E.2d 207, 210 (2016) (citation and quotation marks omitted). “However, if the prior

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Opinion of the Court

order is ambiguous such that a defendant could not understand his respective rights

and obligations under that order, he cannot be said to have knowledge of that order

for purposes of contempt proceedings.” Id. at __, 792 S.E.2d at 210.

Mr. Lesh does not argue that he lacked knowledge of the Equitable

Distribution Order or that the order contained any ambiguity. Instead, he simply

repeats his federal preemption argument regarding his military disability benefits.

Because that argument lacks merit, he has failed to show that the trial court erred

in determining that his failure to make the distributive payments was willful. See

Hartsell v. Hartsell, 99 N.C. App. 380, 393, 393 S.E.2d 570, 578 (1990) (affirming

order holding defendant in civil contempt where evidence supported findings that his

noncompliance with court order was willful), aff’d per curiam, 328 N.C. 729, 403

S.E.2d 307 (1991).

Conclusion

For the reasons stated above, we affirm the trial court’s 27 January 2017 order.

AFFIRMED.

Judges BRYANT and INMAN concur.

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