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Filings: NASCAR chair Brian France behind on divorce payments

- crexrode@charlotteobserver.com
Tuesday, Sep. 28, 2010

The fallout from the messy divorce of NASCAR chairman Brian France and his ex-wife continued in state appeals court Tuesday, with lawyers for Brian France arguing that the proceedings should largely be closed to the public and the couple's divorce agreement kept sealed.

But court documents filed before the hearing already give some information about the divorce agreement, details of which are sealed in Mecklenburg courts. According to documents filed by Megan France, the agreement gives her at least $40,000 a month in child care and alimony, as well as a $9 million "distributive award." According to those documents, Brian France has refused to make at least some of the payments, "despite a clear ability to do so."

Megan France also accuses her ex-husband of "harassing her in multiple ways," including hiring private investigators to follow her, and violating their agreement "concerning the care of, and joint decision making for" their young twins, according to filings by her lawyers. Those and other documents concerning the Frances' divorce are publicly available online through the N.C. Court of Appeals.

Brian France's attorney, Johnny Stephenson, said the parties were precluded by court order from commenting on allegations in the case.

"As much as Mr. France wishes he could correct inaccurate media reporting, he cannot," Stephenson said in a statement Tuesday night. "Instead, these matters will be addressed in court, where they belong."

It's highly unusual for ordinary divorce proceedings to be completely closed to the public, which is basically what Brian France is requesting. Ray Owens, an attorney for the Observer, said allowing Brian France to close a public court could set a radical precedent.

"If anybody can close the courtroom just by signing a confidentiality agreement, then they can theoretically all be closed," Owens said. "That's what makes his request so extraordinary."

France is the prominent head of a sprawling motorsports enterprise that has a cluster of motorsports teams based in the Charlotte region and the NASCAR Hall of Fame uptown. He took over the NASCAR chairman role from his father, Bill France Jr., in 2003.

Between 2001 and 2008, Brian and Megan France got married, got divorced, got married again, and got divorced again. The divorce agreement that is currently under seal is what they signed after their second divorce. It stipulates not only the money owed to Megan France but also custody terms for their young twins and provisions about their upbringing, including that they be raised in Mecklenburg County, according to filings by Megan France's lawyers.

The agreement also required that if Brian or Megan ever sued the other, they would use their "best efforts" to ensure that the divorce agreement was not made public.

The Observer has sued for the documents to be unsealed, arguing that Brian France has no compelling interest that supersedes the public's right to open courts. Lawyers for Brian France say that the agreement should be kept confidential because it relates to private financial matters and the couple's young children.

The case began in 2008, when Brian France won a ruling from Mecklenburg Judge Todd Owens, who granted him the right to file a sealed lawsuit against Megan accusing her of breaching the divorce agreement's confidentiality clause.

Judge Owens placed the entire complaint, including his own order sealing the record, under seal - an unusual move in a court system that typically allows widespread access to courtrooms and documents. Judge Owens' term ended two weeks after that.

Another Mecklenburg judge, Jena Culler, later overturned Judge Owens' order and ruled late last year that the documents be unsealed, affirming the public's right to open courts and information. The case has stagnated since then, with Brian France winning a measure to temporarily keep Culler's ruling from taking effect.

Attorneys for Brian France, Megan France and the Observer appeared before a three-judge panel of the N.C. appeals court Tuesday to argue about the public's right to access the courtroom and the files. Brian France was in the courtroom to listen to his lawyer's presentation. Megan France was not.

Stephenson, Brian France's attorney, said that unsealing the documents would rob Brian of his constitutional right to seek a remedy for harm done to him. If the information is open to the public, Stephenson said, then Brian will not be able to prove that it was Megan's actions that caused harm to him.

He didn't specify how his client would be harmed, although he has said in filings the agreement contains private financial information and information about the couple's children.

If the Coca-Cola formula were involved in litigation, Stephenson said, it would only be natural for the courts to seal information about the formula itself, since its release would cause irreparable harm.

"We believe that courts should be open," Stephenson said. "But where the open court prevents the litigants from getting the remedy to which they are entitled, the proceedings have to be closed."

Judge Linda McGee questioned why Brian France didn't use a private arbitrator instead of the public court systems, if he didn't want the divorce information to be public. Stephenson replied that the Frances had a constitutional right to the court system.

Judge Robert N. Hunter Jr. asked Stephenson if he considered the Observer to be representing the public. Stephenson replied that he also represents the public, and newspapers have no "exalted dignity" for doing so.

Ray Owens, the attorney for the Observer and news partner WCNC, argued that Brian France, unlike certain crime victims or other specific litigants, has no constitutional or compelling right to privacy that would supersede the public's right to open courts. Owens has said that the Observer is willing to work with France's lawyers to find a balance between France's concerns about privacy and the Observer's ability to present its position.

Closing the case outright could set a precedent for closing any case that involves information that someone doesn't want to reveal, Owens said.

Judge Hunter said that public figures have a lower right to privacy than others. But he asked Owens to explain the public's interest in knowing the details of the Frances' domestic proceedings, "other than the fact that we live in a celebrity-slips-on-a-banana-peel world."

Owens said that courts as a matter of principle should be open. He also said it's impossible to say for sure what is in the divorce agreement that could be pertinent to the public interest, since the agreement is sealed. But if the agreement contains, for example, Brian France's salary information, "I personally may have no interest in that, but there may be fans who pay ticket prices who want to know that," Owens said.

N.C. rule "is simple and powerful," he added, "that courts are open."

In Brian France's original complaint in 2008, his lawyers say that Megan France breached the divorce agreement by revealing confidential information to "third parties."

Lawyers for Megan France say that she has not breached the agreement. But they also say they have to consider the arguments of Culler, the Mecklenburg judge who ruled that the proceedings should be open. In previous filings, Megan's lawyers said that Brian France is just trying to draw attention away from the fact that he hasn't been paying alimony.

Brian France's fight for a private trial is "nothing more than a narcissistic attempt to have this Court enact special rules more to Mr. France's liking," Preston Odom, a former attorney for Megan France, wrote in a filing this spring. France's action "is yet another in a litany of those Mr. France has performed to forestall his inevitable day of reckoning for materially breaching the Separation Agreement."

The filing continues: "Mr. France apparently believes that he may engage the courts of this state in the same way he runs NASCAR. That is, he can make the rules, interpret them, and when he disagrees with them, change or ignore them."

Megan France had been using the Charlotte-based law firm James, McElroy & Diehl but over the summer switched to Davis & Harwell, a Winston-Salem firm specializing in family law.

According to filings from Megan France's previous attorneys, Brian France agreed in their divorce settlement to pay her a total of $9 million in "distributive" awards, as well as $32,500 a month in alimony for 10 years and $10,000 a month in child support.

Megan France's attorneys said in court filings that Brian had not made some of the payments, including $3 million of the distributive award, $52,000 in "governess expenses," and some of the alimony payments. That divorce agreement replaced a pre-nuptial agreement that the couple signed before they married; Brian France's attorneys have said in filings that the new agreement was much more favorable to Megan.