The issue of confidentiality of financial records in a divorce matter recently came before the North Carolina Court of Appeals. The court affirmed a lower court's order unsealing the documents in a man's post-divorce proceeding against his ex-wife, in which he alleges that she breached confidentiality provisions in their pre-nuptial agreement. After one judge initially sealed the pleadings, a different judge unsealed them, citing the public's interest in open judicial proceedings. The appellate court affirmed this decision in France v. France, No. COA12-284, slip op. (N.C. App., Dec. 31, 2012).
The plaintiff, Brian France, was married to and divorced the defendant, Megan France, on two separate occasions. Their second marriage, which began in December 2007, included a pre-nuptial agreement. In exchange for certain financial benefits in the event of divorce, the defendant agreed to keep any financial information in her possession about the plaintiff confidential, unless she was compelled by law to disclose such information. Breach of the confidentiality provisions, according to the pre-nuptial agreement, would constitute a material breach creating a cause of action for damages.
The couple separated in 2008. While the details of their divorce were kept confidential, statements made on the record in court indicated that the plaintiff, who is the chief executive officer of the National Association for Stock Car Auto Racing (NASCAR), would pay the defendant $9 million, as well as child support of $10,000 per month and alimony, for a period of ten years, of $32,000 per month.
The plaintiff filed a complaint against the defendant in September 2008, seeking damages for an alleged breach of the confidentiality agreement. A judge granted his motion to seal a then yet-to-be-filed amended complaint, along with all future filings in the case, in December 2008, citing a public interest in protecting the parties’ privacy and in “protecting the sanctity of contracts” between people. Slip op. at 3-4. The plaintiff’s amended complaint, filed on December 31, 2008 under seal, laid out the specific alleged breaches by the defendant.
After discovery and motions proceeded for about a year, the plaintiff and defendant filed a joint motion to close the proceedings to the public. A different judge denied that motion in November 2009. The plaintiff appealed, and the North Carolina Court of Appeals affirmed that order in February 2011, but also held that the order sealing the documents remained in effect. The trial court stayed the proceedings while that appeal was pending.
When the trial court reconvened in 2011, a local newspaper and television station brought a second motion, after one filed in 2009, to unseal the case file. This time, the judge granted the motion, finding that the parties’ circumstances had changed, that the plaintiff was actually seeking to rescind the agreement that formed the basis of the order to seal, and that much of the information had become available to the public through the litigation process. On appeal, the appellate court found the fact that the judge had ordered the proceedings to take place in an open courtroom persuasive, and affirmed the ruling.
Thomas Huguenor, a family law specialist certified by the State Bar of California’s Board of Legal Specialization, has 35 years of experience guiding the people of San Diego through the family law process, including divorce and child support. For a free and confidential consultation, contact us online or at (858) 458-9500.
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