Invited Error Bars Appellate Relief for Unruled Motions to Set Aside Stipulations in Equitable Distribution

Case: Smith v. Smith

Court: Supreme Court of North Carolina

Date: 21 March 2025

Opinion by: Justice Allen

Disposition: Modified and affirmed

Introduction

In Smith v. Smith, the Supreme Court of North Carolina addressed whether a trial court’s failure to expressly rule on a motion to set aside pretrial stipulations required a new equitable distribution hearing. The dispute centered on a parcel at 4080 Racetrack Road in Grifton, North Carolina, which the parties had once jointly stipulated was marital property but later treated as disputed. The trial court ultimately classified Racetrack Road as the defendant’s separate property without expressly ruling on the defendant’s motion to set aside the earlier stipulation.

A divided Court of Appeals affirmed, reasoning that the pretrial order’s Schedule E showed no operative agreement as to classification. On discretionary review triggered by a dissent, the Supreme Court affirmed the judgment but expressly declined to adopt the Court of Appeals’ reasoning. Instead, it held that any procedural error was invited by the plaintiff when her counsel consented to proceeding with trial and to having the motion “considered” during the evidentiary hearing. The decision clarifies that the invited error doctrine forecloses appellate relief where a party induces or acquiesces in the very procedural course later challenged—here, proceeding to trial without an express, pretrial ruling on a motion to set aside stipulations.

Summary of the Opinion

The Supreme Court affirmed the equitable distribution order classifying Racetrack Road as the defendant’s separate property.
It did not adopt the Court of Appeals’ rationale that the pretrial order implicitly displaced the earlier stipulation. Instead, it resolved the case under the invited error doctrine.
Because plaintiff’s counsel told the court, “I’m fine with the court just hearing the evidence and considering those motions … during this trial,” the plaintiff could not later argue that the absence of a direct ruling on the motion to set aside the stipulation required a new hearing.
The Court reiterated the legal framework governing stipulations and the limited grounds and procedures for setting them aside, but expressly declined to decide whether the pretrial order itself superseded the earlier stipulation.
Plaintiff’s separate challenge to a finding regarding her financial contributions to the marital home failed in light of the affirmed classification of Racetrack Road as separate property.

Detailed Analysis

Factual and Procedural Background

The parties married in 2002 and separated in 2018. Litigation ensued over alimony, post-separation support, equitable distribution, and other claims, though only equitable distribution is at issue on appeal.
At issue is a tract at 4080 Racetrack Road, purchased by the defendant before marriage. On 14 January 2019, the parties filed stipulations designating Racetrack Road and the marital residence as marital property, with agreed values.
On 2 August 2022, the defendant moved to strike and set aside those stipulations “due to mistake,” asserting pre-marital acquisition, sole ownership, no conveyance to plaintiff, and that using the land as collateral for the marital residence did not change its separate character.
On 29 August 2022, the trial court approved a pretrial order whose Schedule E recorded a dispute over the classification of Racetrack Road (while maintaining agreed value). The equitable distribution hearing began immediately thereafter.
At the outset of trial, plaintiff’s counsel stated: “I’m fine with the court just hearing the evidence and considering those motions or that motion in relation to those stipulations during this trial.”
The trial court entered an equitable distribution order classifying Racetrack Road as the defendant’s separate property, without expressly ruling on the motion to set aside the 2019 stipulations.
A divided Court of Appeals affirmed. The majority reasoned that Schedule E showed there was no stipulation on classification to bind the trial court; the dissent would have required adherence to the 2019 stipulation absent a direct ruling setting it aside.

Precedents Cited and Their Roles

Brackney v. Brackney, 199 N.C. App. 375 (2009): The Court restated the three-step equitable distribution process—classification, valuation, and distribution—and the standards of review (competent evidence for classification/valuation; abuse of discretion for the ultimate distribution).
White v. White, 312 N.C. 770 (1985) and Wiencek-Adams v. Adams, 331 N.C. 688 (1992): These decisions anchor the abuse-of-discretion standard in equitable distribution, emphasizing reversal only for decisions that are “so arbitrary that [they] could not have been the result of a reasoned decision.”
In re J.M., 384 N.C. 584 (2023): Defines “competent evidence” as evidence a reasonable mind could accept as adequate—relevant to reviewing classification findings when challenged.
Smith v. Beasley, 298 N.C. 798 (1979) and Rural Plumbing & Heating, Inc. v. H.C. Jones Constr. Co., 268 N.C. 23 (1966): Establish the nature and binding effect of stipulations as agreements that remove issues from dispute and bind the parties (and the tribunal) unless set aside.
State v. Powell, 254 N.C. 231 (1961): Clarifies that stipulations must be definite and assented to by the parties or their representatives to support judicial decision-making.
Plomaritis v. Plomaritis, 222 N.C. App. 94 (2012) and Lowery v. Locklear Constr., 132 N.C. App. 510 (1999): Summarize procedures and grounds for setting aside stipulations: motions should be made by a direct proceeding, seasonably; and may be granted for mistake, misrepresentation, undue influence, duress, fraud, inadvertence, and where enforcement would cause injury without material prejudice to the other party.
State v. Payne, 280 N.C. 170 (1971) and Frugard v. Pritchard, 338 N.C. 508 (1994): Provide the rule of invited error—parties cannot complain on appeal about errors they induced. Frugard is the Court’s key civil analogue: a party who secured an evidentiary ruling cannot later assign it as error after a verdict.

Legal Reasoning

The Supreme Court’s analysis proceeds in two tracks: reaffirming the general law of stipulations and motions to set them aside, and then resolving this case on the narrow ground of invited error.

Stipulations remain binding unless set aside: The Court reiterated that stipulations are binding judicial admissions that streamline litigation by removing issues from dispute. They can be set aside, but only under recognized grounds (e.g., mistake, fraud) and typically through a direct, seasonable motion with notice, as summarized in Lowery and Plomaritis. The Court acknowledged that the trial court did not expressly rule on the motion to set aside the 2019 stipulations.
Declining to adopt the Court of Appeals’ implied-ruling theory: The Court found unpersuasive the idea that accepting Schedule E (noting a classification dispute) implicitly set aside the earlier stipulation. Acceptance of a pretrial order may merely memorialize that the parties assert a dispute—not necessarily adjudicate the validity of preexisting stipulations. The Court expressly “need not decide” the legal significance of Schedule E in this case.
Invited error controls the outcome: The pivotal move is the Court’s reliance on invited error. Plaintiff’s counsel stated, “I’m fine with the court just hearing the evidence and considering those motions or that motion in relation to those stipulations during this trial.” That invitation to proceed without a separate, antecedent ruling foreclosed appellate complaint about the very absence of such a ruling. Under Payne and Frugard, a litigant cannot induce a procedure and then claim reversible error because the court followed it.
Application to the classification determination and subsidiary findings: Because the plaintiff’s principal challenge hinged on the asserted binding effect of the 2019 stipulation, the invited error doctrine blocked relief. Her additional attack on a finding that she “contributed none of her own monies toward the marital home” also failed, given the affirmed classification of Racetrack Road as separate property and the Court’s decision not to disturb the distribution order.
Standards of review preserved: The Court recited the usual equitable distribution standards (competent evidence; abuse of discretion) but ultimately did not reweigh evidence or resolve the merits of classification beyond the procedural bar. It preserved, rather than altered, the established framework.

Impact and Practical Implications

The decision’s chief contribution is doctrinal: it brings the invited error doctrine to the fore in the stipulation-setting-aside context of equitable distribution. Its practical effects include:

For litigants and counsel:
- Do not acquiesce to proceeding to trial on the merits while deferring a direct ruling on a motion to set aside stipulations if you intend to preserve appellate arguments premised on the stipulation’s continued force.
- Object clearly to moving forward without a ruling, request an explicit decision, and, if necessary, seek a short continuance or a bifurcated hearing to ensure a “direct proceeding” resolves the motion.
- Choose words carefully. Express statements like “I’m fine with the court just hearing the evidence and considering those motions … during this trial” will almost certainly trigger invited error.
For trial courts:
- When a motion seeks to set aside stipulations, resolve it explicitly and on the record, with findings if necessary, before relying on the parties’ evolving positions at trial.
- Pretrial orders noting disputes should not be assumed to operate as rulings setting aside stipulations; the Supreme Court declined to adopt that approach.
For appellate practice:
- Issue preservation remains paramount. The invited error doctrine will bar relief even where the trial court might otherwise have erred procedurally.
- The opinion leaves open, for a case without invited error, whether and when an unruled motion to set aside stipulations requires remand.
Substantive equitable distribution:
- The opinion does not alter North Carolina’s definitions of marital, divisible, and separate property or the treatment of pre-marital assets used as collateral. It resolves this case without expanding or contracting substantive classification rules.

Complex Concepts Simplified

Stipulation: A binding agreement between parties about certain facts or issues. It streamlines trial by removing agreed matters from dispute. Once entered, it binds the parties and the court unless properly set aside.
Setting aside a stipulation: A party may ask the court to relieve them from a stipulation by filing a timely, direct motion, typically before trial, showing grounds like mistake, fraud, or inadvertence, and demonstrating that setting it aside will not materially prejudice the other side.
Invited error: A rule that a party cannot complain on appeal about an error that party induced or assented to at trial. It promotes fairness by preventing sandbagging.
Equitable distribution classification: The first step in equitable distribution requires the court to classify each asset as marital, divisible, or separate. For example, property acquired before marriage is generally separate; marital property is typically acquired during the marriage and before separation.
Competent evidence: Evidence that a reasonable person could deem adequate to support a finding. Appellate courts will not reweigh it if some competent evidence supports the trial court’s determination.
Abuse of discretion: A deferential appellate standard. The distribution will be reversed only if it is so arbitrary that it could not have resulted from a reasoned decision.
Pretrial order (Schedule E): A document that organizes the issues for trial, often recording areas of agreement and dispute. It is not, by itself, a ruling that sets aside earlier stipulations unless the court expressly so orders.

Key Takeaways

Parties are bound by their stipulations unless those stipulations are properly set aside.
To set aside a stipulation, make a timely, direct motion and seek an explicit ruling before trial proceeds on the merits.
If you invite the court to proceed without such a ruling, the invited error doctrine will bar you from complaining on appeal that the court failed to rule.
The Supreme Court did not endorse the view that a pretrial order’s acknowledgment of a dispute automatically nullifies a prior stipulation.
Standards governing classification, valuation, and distribution in equitable distribution remain unchanged.

Unresolved Questions and Limits of the Holding

Whether, absent invited error, a trial court’s failure to rule on a motion to set aside stipulations requires remand remains open.
Whether and when a pretrial order can supersede or modify earlier stipulations is not decided here; trial courts should issue clear, explicit rulings.
The opinion does not refine the substantive law on when loans secured by separate property affect classification; that issue was not reached.

Conclusion

Smith v. Smith reinforces a straightforward but powerful procedural rule: litigants cannot manufacture appellate error by inviting it at trial. In the equitable distribution context, where stipulations play an outsized role in streamlining complex property disputes, the Court preserves the traditional requirements for setting stipulations aside while making clear that a party who chooses to proceed without an express ruling cannot later complain about the absence of one. The decision provides immediate guidance to family law practitioners, underscores the importance of explicit pretrial rulings on stipulation-related motions, and maintains the integrity of appellate review by applying invited error to foreclose relief where the complaining party induced the procedure now challenged.