Domestic Relations – Equitable Distribution Order – Service of Process

Defendant was properly served, but the equitable distribution order is null and void due to the absence of necessary parties.

We vacated the equitable distribution order and remanded the for ex mero motu joinder of Strickland Building Group, LLC, as a necessary party.

Defendant Husband appealed from an order and judgment regarding equitable distribution entered after a bench trial at which he was not present. Defendant also asked this Court to review the trial court’s advisory opinion that it would have denied Defendant’s Rule 60(b) motion had Defendant not appealed the equitable distribution order before the trial court’s ruling on the Rule 60(b) motion. Defendant argued that service of the summons and complaint was not proper, and that the equitable distribution order was erroneous in various ways.

Defendant first argued that the equitable distribution order is void and that the trial court lacked personal jurisdiction over Defendant because Plaintiff failed to serve Defendant with the summons and complaint. First, Defendant argued that the Mailbox Service Agreement is not a valid contract because it is not signed by a UPS Store representative. We held that the Mailbox Service Agreement is a valid contract, and the authority granted to the UPS Store “to accept all mail, including . . . certified items” remained effective in May and June of 2020 when Plaintiff served Defendant.

Defendant next argued that even if the Mailbox Service Agreement was a valid contract, paragraph 12 makes clear that authorization for the UPS Store to accept mail “that is only to be delivered to him or his authorized agent” must be provided on an additional form, Form 1583, and Defendant did not give such authorization. We concluded that the Rule 4(j)(1)2 requirements of service of process were met. Furthermore, because service of process was proper, Defendant’s argument that the trial court lacked personal jurisdiction over him because service was not properly effectuated is without merit.

Defendant next argued that the equitable distribution order is void because the trial court failed to join his father, Charles E. Strickland, and the Strickland Building Group as necessary parties to the action. The findings support the trial court’s conclusion that “[t]here was no credible evidence presented that showed Wife believed, or had reason to believe, that Husband’s Father was a part owner of Strickland Building Group, LLC.” However, the trial court’s conclusions failed to address whether the Strickland Building Group should have been joined as a party. Indeed, the findings support the conclusion that Strickland Building Group was a third party holding legal title to a bank account and the Hopedale Property which Plaintiff claimed to be marital property. Accordingly, Strickland Building Group is a necessary party to the equitable distribution proceeding. Although Strickland Building Group is, for the purposes of this litigation, purportedly wholly owned by Defendant, “[a] corporation, even one closely held, is recognized as a separate legal entity . . . [even when its members are] engaged in litigation which is personal in nature[.]” Quick v. Quick, 305 N.C. 446, 460, 290 S.E.2d 653, 662 (1982), superseded in part by statute on other grounds, N.C. Gen. Stat. § 50-13.4(f)(9) (1983). And as with a corporation, our courts “are not free, for the sake of convenience, to completely ignore the existence of a legal entity, such as [an] LLC.” Keith v. Wallerich, 201 N.C. App. 550, 558, 687 S.E.2d 299, 304 (2009) (citation omitted).

Therefore, although Strickland Building Group was an LLC owned by Defendant, the trial court was not free to ignore the corporate form nor the existence of the LLC when entering the equitable distribution order. Furthermore, “[w]hen there is an absence of necessary parties, the trial court should correct the defect ex mero motu upon failure of a competent person to make a proper motion. Accordingly, it was necessary for the trial court to ex mero motu join the Strickland Building Group and make findings as to whether it was marital or separate property before distributing it and its assets and determining that an unequal distribution of marital assets was equitable. Therefore, the equitable distribution order is “null and void” due to the absence of necessary parties. Thus, the trial court’s conclusion that Defendant is not entitled to an order setting aside the equitable distribution order is not supported.

Vacated and remanded.

Strickland v. Strickland (Lawyers’ Weekly No. 012-130-24, 24 pp.) (Allegra Collins, J.) Appealed from Mecklenburg County District Court (e Tracy H. Hewett, J.) Sodoma Law, P.C., by David E. Simmons, for Plaintiff-Appellee. Dozier Miller Law Group, by Robert P. Hanner, II, and Kelly A. Nash, for Defendant-Appellant. North Carolina Court of Appeals Unpublished