Face v. Face (N.C. 2026): No Rule 19 Joinder of Revocable Trust in Equitable Distribution When All Settlors Are Parties; Necessary-Party Nonjoinder Is Not Subject-Matter Jurisdiction

I. Introduction

Face v. Face is a Supreme Court of North Carolina decision resolving a question of first impression at the intersection of equitable distribution and trust administration: whether a revocable trust must be joined as a necessary party under Rule 19 in an equitable distribution proceeding when all the trust’s settlors are already parties.

The parties—Kathleen K. Face (plaintiff-appellee) and S. Allen Face (defendant-appellant)—created the S. Allen Face, III and Kathleen K. Face Revocable Trust Dated September 15, 2011 (the “Revocable Trust”) and conveyed three marital properties into it. After separation and divorce, they litigated equitable distribution. Defendant later sought to set aside the equitable distribution order via a Rule 60(b) motion, arguing the trial court lacked authority to distribute trust-titled property because the Revocable Trust was a “necessary party” under Rule 19.

The Court of Appeals affirmed the denial of the Rule 60(b) motion and largely affirmed equitable distribution, reasoning that the parties’ pretrial stipulations “effectively revoked the Trust.” On discretionary review limited to the joinder issue, the Supreme Court affirmed the result but adopted a different—and categorical—Rule 19 rule.

II. Summary of the Opinion

  1. Rule 19 nonjoinder is not “subject matter jurisdiction.” The Court held that failure to join a necessary party under Rule 19 does not deprive a court of subject matter jurisdiction.
  2. No Rule 19 joinder of a revocable trust when all settlors are parties. The Court announced a new rule: when all settlors of a revocable trust are named parties to an equitable distribution proceeding, Rule 19 does not require joinder of the revocable trust. A judgment against the settlors regarding trust-held property will “effectively bind” the revocable trust without impairing others’ rights.
  3. Doctrinal cleanup. The Court distinguished Upchurch v. Upchurch as involving an irrevocable trust concept (constructive/resulting trust), not a revocable trust, and expressly overruled Wenninger v. Wenninger “to the extent” it suggested otherwise.

The Court therefore “modify[ied] and affirm[ed]” the Court of Appeals’ judgment—preserving the outcome while replacing the Court of Appeals’ revocation-based rationale with a Rule 19 categorical rule grounded in the settlors’ complete control over revocable-trust property.

III. Analysis

A. Precedents Cited

1. Standards of review and methodology

  • Davis v. Davis (abuse of discretion for denial of Rule 60(b) motions) supplied the baseline review framework, while the Court emphasized that embedded legal determinations are reviewed de novo.
  • Jay v. Jay supported de novo review for “Interpreting the Rules of Civil Procedure,” framing Rule 19 interpretation as statutory interpretation.
  • Cherry Cmty. Org. v. Sellars (quoting Shepard v. Bonita Vista Props., L.P., aff’d per curiam, 363 N.C. 252 (2009)) reiterated the fact/conclusion separation for bench-trial review, though the Supreme Court’s core holdings were largely legal, not factual.

2. Necessary-party doctrine vs. subject matter jurisdiction

  • Stancil v. Bruce Stancil Refrig., Inc. was central: the Court relied on it for the proposition that “a failure to join a necessary party does not result in a lack of jurisdiction over the subject matter.” The Supreme Court used this to correct the Court of Appeals’ “subject matter jurisdiction” characterization.
  • McLaughlin v. Martin and the constitutional reference (N.C. Const. art. IV, § 12) anchored the principle that subject matter jurisdiction is conferred by the constitution and General Assembly, not by Rule 19 compliance.
  • Nation Ford Baptist Church Inc. v. Davis supported a capacious view of subject matter jurisdiction: if a claim can “possibly be adjudicated” and some relief “possibly be granted,” jurisdiction exists. This undercut defendant’s attempt to convert a completeness-of-relief problem into a jurisdictional defect.
  • In re K.J.L. was used to contrast true subject matter jurisdiction defects (nonwaivable, raisable at any time) with nonjurisdictional procedural defects such as nonjoinder.

3. Waiver, appellate intervention, and equity’s pragmatic roots

  • The Court traced North Carolina’s long-standing reluctance to treat necessary-party issues as waived: Vaughan & Barnes v. Davenport (appellate court sometimes remands on its own motion when “manifest justice” requires), Edmondson v. Henderson, and Town of Morganton v. Hutton & Bourbonnais Co..
  • The Court acknowledged contrary waiver authority in Lanier v. Pullman Co. (quoting Watkins v. Kaolin Mfg. Co.). Rather than adopting a rigid waiver rule, the Court exercised discretion to reach the merits, emphasizing equitable distribution’s need to “accurately identify the title and interest” in property.
  • Federal analogues were cited to show a similar appellate practice under federal Rule 19: Provident Tradesmens Bank & Tr. Co. v. Patterson, NLRB v. Doug Neal Mgmt. Co., and Enter. Mgmt. Consultants, Inc. v. U.S. ex rel. Hodel. Importantly, the Court added a state-law limiter via M.E. v. T.J.: North Carolina appellate courts are not mandated to correct joinder defects sua sponte before reaching the merits.
  • To define “necessary party,” the Court relied on classic formulations: Strickland v. Hughes (“so vitally interested” that a valid judgment cannot be rendered “completely and finally” without the party) and Equitable Life Assurance Soc'y of the U.S. v. Basnight (“rights which must be ascertained and settled” first).
  • The Court positioned Rule 19 as an equity-based doctrine designed to ensure “complete administration” of rights, citing W.F. Kornegay & Co. v. Farmers & Merchs. Steamboat Co.. It reinforced equity’s practical orientation with Moore v. Moore (quoting Zebulon v. Dawson), and used early equity practice cases—Marshall v. Lovelass, Southal v. Shields, and Ingram v. Lanier—to illustrate pragmatic exceptions.

4. Trust-specific precedent and the decisive distinction: revocable vs. irrevocable

  • Defendant invoked Upchurch v. Upchurch, which held that “when a third party holds legal title to property which is claimed to be marital property, that third party is a necessary party” (with participation limited to ownership). The Supreme Court distinguished Upchurch because it addressed potential ownership by a constructive or resulting trust—concepts treated as irrevocable for joinder purposes—rather than a revocable trust controlled by the parties themselves.
  • The Court expressly overruled Wenninger v. Wenninger to the extent it failed to recognize that this revocable/irrevocable distinction matters under Rule 19.
  • Although not a joinder precedent, Corliss v. Bowers was cited for the broader legal concept that a power of revocation is functionally akin to ownership (in that context, for tax attribution), reinforcing the Court’s conceptual framework that revocable-trust assets are not meaningfully separate from the settlor for claims binding the settlor.

B. Legal Reasoning

1. The Court reframed the problem: “joinder,” not “revocation”

The Court of Appeals had upheld nonjoinder by concluding the pretrial stipulations “effectively revoked the Trust.” The Supreme Court expressly declined to decide that question. Instead, it treated the decisive issue as whether a judgment can bind the relevant interests and provide complete relief without adding the trust as a named litigant.

This move matters: revocation under N.C.G.S. § 36C-6-602(c) can be fact- and instrument-dependent, whereas Rule 19 can be resolved categorically if the legal relationship makes the absent entity effectively bound. The Court chose administrability and clarity in equitable distribution practice over litigating revocation mechanics within a joinder dispute.

2. Two distinct holdings operating together

First, the Court held that Rule 19 nonjoinder is not jurisdictional. This prevents litigants from weaponizing “subject matter jurisdiction” rhetoric to collaterally attack equitable distribution orders via Rule 60(b) long after litigation choices and stipulations.

Second, on the merits of Rule 19, the Court reasoned that the foundational premise of “necessary party” doctrine is that an unjoined party is not bound, which could impair “complete administration.” But with a revocable trust, the Court treated the settlor(s)’ complete control as collapsing the practical separation between settlor and trust for purposes of binding effect.

3. The “complete, exclusive control” model of revocable trusts

The Court drew heavily from the North Carolina Uniform Trust Code to characterize revocable trusts:

  • Under N.C.G.S. § 36C-6-603(a), “the rights of the beneficiaries are subject to the control of” the settlor, and “the duties of the trustee are owed exclusively to” the settlor. This supported the Court’s premise that there is no independent beneficiary interest requiring protection by joinder when the settlors are in court.
  • Under N.C.G.S. § 36C-8-808, the settlor “has, at all times, the power to direct or consent to the actions of the trustee,” even contrary to the trust’s terms. This underwrote the Court’s conclusion that a court order directed at settlors can be implemented through their control of the trust machinery.

The Court then used tax and bankruptcy analogies to reinforce that revocable trusts are commonly treated as non-separate from the settlor for property-control purposes: it referenced tax attribution (including Corliss v. Bowers and N.C.G.S. § 105-160.5) and bankruptcy estate inclusion (11 U.S.C. § 541(a)(1)). These analogies were not controlling law on Rule 19, but they functioned as cross-doctrinal confirmation of the Court’s practical premise: revocability equates to ownership-like control.

4. The operative rule and its internal limit

The Court’s rule is expressly limited: it applies when all settlors of the revocable trust are already parties to the equitable distribution proceeding. On that condition, a judgment “will effectively bind the revocable trust without interfering with anyone else’s rights.”

That limitation is crucial because Rule 19 is fundamentally protective of absent parties. By focusing on “all settlors,” the Court implicitly assumes: (i) no non-settlor person holds control rights equivalent to the settlor’s; and (ii) beneficiary interests are not independently “vital” during the settlor’s lifetime given § 36C-6-603(a).

5. Engagement with the dissent

Justice Berger’s dissent framed the majority’s approach as an end-run around N.C.G.S. § 36C-6-602(c) (revocation methods), warning that the majority “effectively authors a statutory amendment” and invites “piercing trusts through procedural maneuvering.”

The majority responded by drawing a line between (a) whether the trust must be joined to adjudicate equitable distribution rights (joinder), and (b) how the resulting order is executed consistent with statutory trust formalities (implementation). The majority insisted it was not holding that revocation can occur without § 36C-6-602(c) compliance; rather, it held that joinder is unnecessary because settlors are already bound and control the trust.

C. Impact

1. Equitable distribution practice: reduced procedural traps

The most immediate impact is practical: spouses frequently place marital homes or investment property into joint revocable trusts for probate avoidance. After Face v. Face, equitable distribution actions should not be derailed—or reopened through Rule 60(b) attacks—merely because counsel did not name the revocable trust as a separate party, so long as all settlors are already before the court.

2. Clarification of “jurisdiction” rhetoric in family-law collateral attacks

By holding that Rule 19 defects are not subject matter jurisdiction, the Court narrows the category of post-judgment “void” arguments. Litigants remain free to raise Rule 19 issues, and appellate courts may still address them in the interest of justice, but the label “jurisdictional” is no longer available as a universal solvent for finality.

3. Doctrinal realignment: Upchurch limited; Wenninger overruled in part

The decision confines Upchurch v. Upchurch to scenarios involving genuinely third-party titleholders or non-revocable trust arrangements where an absent person’s rights could be impaired. It also supplies a bright-line correction to any reading of Wenninger v. Wenninger that treated revocable trusts like independent third-party titleholders for Rule 19 purposes.

4. Open questions and future litigation vectors

  • Not all revocable trusts are the same factually. The Court’s rule turns on “all settlors” being parties. Cases involving multiple settlors beyond the spouses, or questions about capacity, agency, or disputed settlor status, may reintroduce joinder disputes.
  • Execution mechanics remain important. The Court expressly left room for statutory compliance questions when implementing a judgment affecting revocable-trust assets (e.g., how instruments are signed and delivered under § 36C-6-602(c) and the trust terms). Post-judgment enforcement proceedings may become the locus for fights the Court declined to have within the joinder analysis.
  • Creditor and third-party purchaser contexts. Although the opinion emphasized not interfering with “anyone else’s rights,” future cases may test whether third-party interests (lenders, lienholders, purchasers) create Rule 19 necessities distinct from the revocable trust’s internal structure.

IV. Complex Concepts Simplified

  • Equitable distribution: The statutory process in divorce for classifying (marital/separate/divisible), valuing, and distributing property between spouses.
  • Rule 19 “necessary party”: A person/entity whose legally protected interest is so connected to the dispute that the court cannot fairly and finally resolve the case without them being a party.
  • Subject matter jurisdiction: The court’s legal authority to hear the type of case at all (here, district court authority over equitable distribution via N.C.G.S. § 7A-244), distinct from whether all relevant parties were joined.
  • Revocable trust vs. irrevocable trust: A revocable trust can be changed or undone by the settlor; under N.C.G.S. § 36C-6-603(a) and § 36C-8-808 the settlor controls it and trustees owe duties exclusively to the settlor. An irrevocable trust (including constructive/resulting trust contexts) is treated as holding rights that may not be controlled by the litigants, making absent-party protection more pressing.
  • Rule 60(b) motion: A post-judgment mechanism to seek relief from an order for specified reasons (often invoked to argue “voidness” or fundamental defect). Face limits the use of Rule 60(b) as a vehicle for rebranding nonjoinder as a jurisdictional nullity.

V. Conclusion

Face v. Face establishes two consequential principles for North Carolina civil and family procedure: (1) failure to join a necessary party under Rule 19 is not a subject matter jurisdiction defect; and (2) a revocable trust need not be joined in equitable distribution when all settlors are already parties, because their binding status and statutory control over the trust make separate joinder unnecessary to achieve complete relief.

The decision strengthens finality and efficiency in equitable distribution involving common estate-planning vehicles, while preserving the equity-based discretion to address truly vital absent interests. At the same time, by sidestepping the revocation-by-stipulation question that divided the Court of Appeals and the dissent, the opinion shifts future disputes toward enforcement and statutory-compliance issues rather than threshold joinder doctrine.