If a motion to dismiss is filed, but it is never ruled on and neither party takes any further action, was the case ever dismissed?
Until earlier this month, North Carolina didn’t have an official answer to that question.
For years, clerks of court simply have removed dormant cases from trial court dockets by closing them through an administrative process.
But no North Carolina court ever had ruled on so-called administrative closures as a matter of law, nor had they addressed how courts should handle those cases if a party to the lawsuit either moves to re-engage or files a new civil action.
The North Carolina Court of Appeals finally decided the issue in this month in Khashman v. Khashman. The three-judge panel essentially gave its blessing to what trial courts and clerks of court have been doing all along.
The panel ruled that administrative closings are neither dismissals nor final adjudications. Rather, they should be regarded as merely “inactive.” The panel held that parties are not barred from restoring the case to the court’s active calendar, if they follow the proper procedure.
The appeals court decision upholds a lower court’s decision to dismiss a lawsuit filed by Candace Khashman against her ex-husband because a prior action she had filed never received final adjudication.
The appeals court’s decision in Khashman was met with curiosity by many of those who follow the court closely.
For one thing, the appeals court made its ruling on the first-impression issue in an unpublished opinion. The court also chose to focus on an issue that neither side raised in their briefs and which hadn’t been cited by the trial judge.
Appellate attorney Drew Erteschik of Poyner Spruill in Raleigh said it’s not unheard of for the Court of Appeals to issue a first-impression ruling in an unpublished case. “But generally, courts don’t make those kinds of rulings in an unpublished ruling,” he said.
The dispute between Candace Kashman and Samer Khashman, president and CEO of the Charlotte-based business software company Technology Partners Inc., stems from a 2006 separation and property settlement agreement.
The couple was able to settle a number of issues in the agreement, including spousal support, child support, child custody and claims against the marital estate. Candace Khashman, a stay-at-home mom, also agreed to waive her right to alimony and equitable distribution.
But when Samer Khashman sued for absolute divorce the following year, Candace Khashman responded with a counterclaim for rescission of the separation agreement, which accused her former spouse of constructive fraud.
Candace Khashman’s rescission claim alleged that Samer Khashman misrepresented his income and assets, engaged in unfair and coercive bargaining tactics and procured an agreement that was only beneficial to himself, while deceiving her in the process.
She later voluntarily dismissed the counterclaim shortly before the district court entered a judgment of absolute divorce. But when Samer Khashman filed for primary custody of their child, Candace Khashman resurrected the counterclaim. This time, the counterclaim also included demands for child custody and support.
In 2012, the district court awarded Samer Khashman custody of the child. But the trial judge never ruled on the motion to dismiss the counterclaim Candace Khashman filed in 2011. The clerk of court administratively closed the case in 2014.
That same year, Candace Khashman sued her ex-husband in Mecklenburg County Superior Court, again alleging constructive fraud. The trial court dismissed the case with prejudice last year, finding that it lacked subject matter jurisdiction, the complaint was barred by the statute of limitations and that Candace Khashman should have included her new allegations in the 2007 complaint because the 2014 lawsuit was based on the same facts.
Difference of opinion
But when the case reached the Court of Appeals, the panel determined the trial judge reached the right conclusion but for the wrong reasons.
Writing for the court, Judge Ann Marie Calabria said the case should have been dismissed because Candace Khashman’s 2007 counterclaim was administratively closed. Calabria said that meant it was technically still pending. And because the 2007 case and the 2014 case included identical parties, and the subject matter and legal issues are substantially similar, the new lawsuit was improper.
Noting that the case raised an issue of first impression, Calabria wrote the court based its ruling on the approach federal courts have adopted with regard to administratively closed cases. Calabria cited the 1st U.S. Circuit Court of Appeals’ 1999 decision in Lehman v. Revolution, which held that parties maintain the ability to revive an inactive case, if they submit an appropriate application.
Therefore, Calabria said Candace Khashman’s 2014 lawsuit should have been dismissed without prejudice because she could still rekindle the 2007 suit.
“Whether you call it a cherry or an apple, plaintiff is taking multiple bites at it,” Calabria said.
Candace Khashman’s attorney Kenneth Davies, a Charlotte-based solo practitioner, was not available for comment.
Calabria’s opinion also took the unusual step of laying out exactly how Candace Khashman could revive the earlier suit.
“As indicated above, plaintiff’s rescission counterclaim has been administratively closed, but the claim (and defendant’s motion to dismiss it) could be revived by a motion to add it to the district court’s docket for final adjudication,” Calabria said. “In addition, plaintiff may be able to seek an amendment to her pleadings in district court and add the constructive fraud claim for damages.”
Samer Khashman’s attorney Matthew Villmer of Weaver, Bennett & Bland in Matthews said if Candace Khashman follows the appeals court’s advice, the case will likely get back underway in the district court — 10 years after the Khashmans signed their separation agreement.
“From my client’s perspective, that would be about the fourth time Ms. Khashman has had a bite at this apple,” Villmer said. “We’re in conversations about whether we want to try to test this issue of first impression at a level higher than the Court of Appeals.”
(The dispute over the settlement agreement is not the only legal dustup involving the Khashmans. Earlier this year, a Mecklenburg County jury awarded $2 million to Samer Khashman after finding his ex-wife had slandered him).
Whatever happens with Candace Khashman’s district court case, Michael Harrell a family law litigator with Manning Fulton & Skinner in Raleigh, said he found it “curious” that the Court of Appeals didn’t publish the decision, given it addresses issues that have not been addressed by N.C. appellate courts before.
“As for the result, it makes sense to me,” Harrell said. “I have routinely heard judges tell both attorneys and pro se litigants at administrative calendar calls that the entry of an order closing the case does not preclude a party from taking subsequent action on it. So I’m not surprised by the result.”
The 17-page decision is Khashman v. Khashman (Lawyers Weekly No. 012-157-16). An opinion digest is available at nclawyersweekly.com.
Follow Jeff Jeffrey on Twitter at @NCLWJeffrey