Divorce--equitable distribution--unequal division--ultimate facts not considered
The trial court's judgment awarding plaintiff an unequal division of the marital estate in an
equitable distribution action is reversed, because the trial court's statement in the order that it
considered all statutory factors under N.C.G.S. § 50-20(c) and its specific listing of some of those
factors is not sufficient to allow appellate review when the findings do not include ultimate facts
considered by the trial court in applying those factors, such as findings regarding the actual
income and liabilities of the parties, the amount of plaintiff's contribution of separate funds to the
marital home, and the tax consequences to the parties.
Jennifer R. Pope for plaintiff-appellee.
Lanier and Fountain, by Timothy R. Oswalt, for defendant-
appellant.
EDMUNDS, Judge.
Defendant appeals from a judgment awarding plaintiff an
unequal division of their marital estate. We reverse.
The parties were married on 2 May 1986 and separated on 12
September 1997. On 2 October 1997, plaintiff filed this action
seeking a divorce from bed and board, child custody, alimony, and
equitable distribution of the marital estate. Defendant answered
on 14 November 1997 and counterclaimed, seeking divorce from bed
and board, child custody, and equitable distribution. On 11 August
1998, the trial court entered an order awarding plaintiff a divorce
from bed and board, post-separation support, twenty-eight percent
of defendant's net retirement income, and possession of the maritalhome.
On 19 March 1999, signed nunc pro tunc 28 May 1999, the trial
court entered judgment incorporating the prior order and awarding
plaintiff an unequal division of the marital estate. Disregarding
retirement income (which had been distributed in the August 1998
order) and the marital home (which defendant already had deeded to
plaintiff at the time of the March hearing), the March 1999
judgment distributed to plaintiff approximately $12,000 in assets
and $2,100 in debts and distributed to defendant approximately
$26,250 in assets and $26,700 in debts. The trial court also
denied plaintiff permanent alimony and awarded plaintiff attorney's
fees. Defendant appeals the unequal distribution.
Defendant argues that the findings of fact and evidence in the
record are insufficient to support an unequal division of the
marital estate. N.C. Gen. Stat. § 50-20(c) (1999) provides:
“There shall be an equal division by using net value of marital
property . . . unless the court determines that an equal division
is not equitable. If the court determines that an equal division
is not equitable, the court shall divide the marital property . . .
equitably.” The statute then sets forth twelve distributional
factors for the court to consider when making its determination.
See id.
In the case at bar, the trial court made the followingpertinent findings of fact:
4. That the Court has previously ruled
on the issues of postseparation support,interim allocation of marital assets, divorce
from bed and board, and determination of child
support owed, in an Order entered August 11,
1998, and said Order is adopted herein.
5. That the issues before the Court at
this time are alimony, attorney fees,
equitable distribution of the remaining
marital property and debts, and payment of
child support arrearages.
. . . .
7. That the defendant is an able bodied
person, still gainfully employed, and earning
seventy-two (72%) per cent in monthly military
retirement income; that the plaintiff is an
able bodied person, still gainfully employed
as an office assistant and now receiving
twenty-eight (28%) per cent of the defendant's
disposable military retirement income.
8. That it is not necessary for the
Court to value the defendant's military
retirement because the Court has chosen to
make an in kind distribution of said asset as
set forth in the previous Order of this Court.
9. That since the entry of the Order on
August 11, 1998, the defendant has deeded his
interest in and to the real estate and the
marital home . . . to the plaintiff.
. . . .
11. That the plaintiff seeks an unequal
distribution in the division of marital assets
and debts. In considering whether an equal
division is equitable, the Court has
considered all of the statutory factors raised
by both parties, including:
a. The marriage's eleven year four
month duration.
b. The income and liabilities of each
party.
c. The plaintiff's contention that she
helped the career potential of the defendant.
d. The plaintiff's contribution of
separate funds to the marital home.
e. The tax consequences to the parties.
f. The post separation use and
maintenance of the marital home and payment of
mortgage payments.
Additionally, in both its findings of fact and conclusions of
law, the trial court described and provided a fair market value of
the parties' assets. The court then listed and distributed the
marital debt of the parties, again providing descriptions and
amounts due.
Our courts have established several basic principles
pertaining to equitable distribution. In Armstrong v. Armstrong,
our Supreme Court discussed the requirement that a trial court make
specific findings as to the ultimate facts (rather than the
evidentiary facts) found by the trial court to support its
conclusion regarding equitable distribution:
Although the trial court was not required to
recite in detail the evidence considered in
determining what division of the property
would be equitable, it was required to make
findings sufficient to address the statutory
factors and support the division ordered.
“The purpose for the requirement of
specific findings of fact that support the
court's conclusion of law is to permit the
appellate court on review 'to determine from
the record whether the judgment -- and the
legal conclusions that underlie it --
represent a correct application of the law.'”
When the findings and conclusions are
inadequate, appellate review is effectively
precluded. We do not imply that a trial court
must make exhaustive findings regarding the
evidence presented at the hearing; rather “the
trial court should be guided by the same rules
applicable to actions for alimony pendentelite and to actions for child support, thus
limiting the findings of fact to ultimate,
rather than evidentiary facts.”
322 N.C. 396, 405-06, 368 S.E.2d 595, 600 (1988) (emphasis added)
(internal citations omitted). Ultimate and evidentiary facts have
been defined as follows:
“Ultimate facts are the final facts required
to establish the plaintiff's cause of action
or the defendant's defense; and evidentiary
facts are those subsidiary facts required to
prove the ultimate facts. . . .
. . . .
. . . An ultimate fact is the final
resulting effect which is reached by processes
of logical reasoning from the evidentiary
facts.”
Peoples v. Peoples, 10 N.C. App. 402, 409, 179 S.E.2d 138, 142
(1971) (first two omissions in original) (quoting Woodard v.
Mordecai, 234 N.C. 463, 470, 472, 67 S.E.2d 639, 644, 645 (1951)
(citations omitted)).
If evidence is presented only as to one of the section 50-20
statutory factors and that evidence weighs toward an unequal
distribution, a finding as to that single factor will support the
trial court's conclusion of unequal distribution. See, e.g., Jones
v. Jones, 121 N.C. App. 523, 466 S.E.2d 342 (1996); Patterson v.
Patterson, 81 N.C. App. 255, 343 S.E.2d 595 (1986); Andrews v.
Andrews, 79 N.C. App. 228, 338 S.E.2d 809 (1986), disapproved of on
other grounds by Armstrong, 322 N.C. 396, 368 S.E.2d 595. However,
if evidence is presented as to several statutory factors, the trial
court must make findings as to each factor for which evidence was
presented. See, e.g., Collins v. Collins, 125 N.C. App. 113, 479S.E.2d 240 (1997); Surrette v. Surrette, 114 N.C. App
. 368, 442
S.E.2d 123 (1994); Little v. Little, 74 N.C. App. 12, 327 S.E.2d
283 (1985); Alexander v. Alexander, 68 N.C. App. 548, 315 S.E.2d
772 (1984). Finally, a finding stating that the trial court has
merely given “due regard” to the section 50-20 factors is
insufficient as a matter of law. See, e.g., Daetwyler v.
Daetwyler, 130 N.C. App. 246, 502 S.E.2d 662 (1998), aff'd per
curiam, 350 N.C. 375, 514 S.E.2d 89 (1999); Mrozek v. Mrozek, 129
N.C. App. 43, 496 S.E.2d 836 (1998); Collins, 125 N.C. App. 113,
479 S.E.2d 240.
Apart from these basic principles, opinions have diverged as
to the necessary specificity of a trial court's findings. For
example, in Judkins v. Judkins, the following findings were held
sufficient to support an unequal distribution:
“That the Court has considered all of the
factors as set forth in G.S. 50-20(c) to
include the following:
1. The earning ability of each party;
2. The need of the custodial parent for the
use and possession of the marital residence
and furniture located therein;
3. The value of defendant's separate
property;
4. The defendant's expectation of additional
pension.
That based on the foregoing, the Court is of
the opinion and finds as a fact that an
unequal division of the marital assets and
liabilities is equitable . . . .”
113 N.C. App. 734, 741, 441 S.E.2d 139, 142-43 (1994) (omission in
original). Similarly, in Atkinson v. Chandler, the Court examined the
sufficiency of the following findings:
6. At the time the Parties were married, the
Defendant was employed by the United States
Navy and retired on December 1, 1995 with
twenty (20) years and one month of service and
retired at the rank of an E5.
7. The Defendant receives military
retirement and disability retirement of
approximately $800.00 (eight hundred dollars)
per month.
8. The Parties had approximately six (6)
years of marriage and overlapping military
service but pursuant to George v. George the
Defendant's military pension was not vested
until after the parties separated, therefore,
this is the Defendant's separate property.
9. At the time the Parties were married, the
Plaintiff was employed as a civilian at AAFES
and was residing in a home located at 1314
Folger Avenue, Fayetteville, NC which had been
awarded to her pursuant to a previous
separation and divorce.
10. During the course of the marriage, the
mortgage was retired by payment of $5,028.53.
11. The Plaintiff is retired from AAFES and
the marital interest of her pension is
$11,540.00 and this amount is vested because
it was accumulated during the marriage.
12. During the course of the marriage, the
Parties acquired First Union Accounts,
accounts at UCB, IRAs and the Plaintiff had a
prior IRA of $1,570.00 prior to the marriage
of the Parties and the Plaintiff's non-marital
interest in her retirement is $33,000.00.
13. Prior to the marriage the Defendant had
acquired a Buick Century in October, 1988 and
payments were made during the marriage; this
automobile had been previously wrecked and had
a reduced value and high mileage on the date
of separation and has a value of $3,742.00.
14. The Parties acquired a 1993 Buick during
the marriage with a value of $11,725.00
including a debt of $2,383.
15. The Plaintiff has separate property
totaling $54,589.49 which includes a UCB IRA
account, the house located at 1314 Folger
Street, Fayetteville, North Carolina and her
AAFES retirement of approximately $33,000.00.
16. The Defendant has as his separate
property his entire military retirement valued
at $153.236.00 [sic].
17. Pursuant to all the factors set forth in
N.C.G.S. § 50-20(c) the Court has considered
the age, the health of the Parties, the
current retirement status, the part-time
income of the Defendant, separate property and
a portion of the pension that was earned
during the marriage and has determined that an
unequal division in favor of the Plaintiff is
appropriate and there should be no
distributive award in this matter.
130 N.C. App. 561, 567, 504 S.E.2d 94, 97-98 (1998). With regard
to these findings, the Atkinson Court stated:
We find that these findings of fact
sufficiently set forth those statutory factors
the court considered in its decision not to
equally divide the parties' property. While
finding of fact #17 does not detail the
specific evidence the court considered
regarding the parties' income, health and
liabilities, we do not believe such a specific
recitation was necessary in this case since
the court's finding, when read in conjunction
with the other findings in its order,
adequately apprises us of the evidence
ultimately considered by the court.
Accordingly, we hold that the trial court made
adequate findings of fact as to the evidence
presented by both parties and that it did so
in accordance with N.C.G.S. § 50-20(c).
Id. at 567-68, 504 S.E.2d at 98.
The holdings in Judkins and Atkinson are consistent with an
earlier statement by this Court: “[A] trial judge is not required,in the findings of fact, to recite each factor and state the
reasons for considering it or rejecting it. Rather, all that is
required is for the trial judge to list the factors, statutory and
non-statutory, that are supported by the evidence and which justify
an unequal distribution.” Patterson, 81 N.C. App. at 259-60, 343
S.E.2d at 599 (citation omitted) (emphasis added).
In contrast, our Supreme Court has held that the following
finding was insufficient:
34. That in evaluating the
defendant's/husband's share of Patco, Inc.,
the Court has considered the estimate of the
defendant himself as given in an insurance
application approximately six months prior to
the separation of the parties (plaintiff's
exhibit 10), the book value of the business in
1980 through November, 1984, the relative
ownerships of the stock in the company in 1980
through 1984 (it being noted that defendant is
the sole (or 96%) stockholder of the company
having purchased the interest of his brother
with the company redeeming his stock by
treasury stock), has considered the
capitalization of earnings of the company, has
considered the earning capacity of the company
as demonstrated in the last four-to-five year
period of time, the present economic outlook
for the business and industry, the good will
that has accumulated to the business through
the hard work and competent efforts of the
defendant, and the financial position of
Patco, Inc., as demonstrated by its unaudited
statements for 1980 through April 30, 1984.
The value of the defendant's interest in
Patco, after consideration of all these
factors, at the relevant time for evaluation
for equitable distribution in this matter was
at least $85,000.
Patton v. Patton, 318 N.C. 404, 405-06, 348 S.E.2d 593, 594-95
(1986). The Court stated:
In providing for distribution of marital
property, N.C.G.S. § 50-20(j) states, “[T]hecourt shall make written findings of fact that
support the determination that marital
property has been equitably divided.” In the
recent case of Poore v. Poore, the Court of
Appeals stated that in its order of
distribution of marital property, the trial
court “should make specific findings regarding
the value of a spouse's professional practice
and the existence and value of its goodwill,
and should clearly indicate the evidence on
which its valuations are based, preferably
noting the valuation method or methods on
which it relied.” Certainly the requirement
of specific findings is no less applicable in
an equitable distribution order involving a
spouse's interest in a closely-held
corporation.
The purpose for the requirement of
specific findings of fact that support the
court's conclusion of law is to permit the
appellate court on review “to determine from
the record whether the judgment--and the legal
conclusions that underlie it--represent a
correct application of the law.” Furthermore,
this requirement “is not designed to encourage
ritualistic recitations by the trial court,”
but “is designed to dispose of the issues
raised by the pleadings and to allow the
appellate courts to perform their proper
function in the judicial system.”
. . . .
Applying these principles to the case
before us, finding of fact No. 34 appears to
be merely an enumeration of the factors
considered by the trial court in determining
the value of defendant's interest in Patco,
lacking any indication of what value, if any,
the trial court may have attributed to each of
the enumerated factors. The trial court's
conclusion that the value of defendant's
interest in Patco “was at least $85,000” is
nebulous, if not meaningless. The finding of
fact is not clear as to how much more than
$85,000 the interest may be worth.
Distributions of this nature require more
precise findings and determinations of
ultimate facts. Therefore, in our view,
finding of fact No. 34 is too vague and
conclusory to permit appellate review.Id. at 406-07, 348 S.E.2d at 595 (alteration in original) (internal
citations omitted).
Similarly, in Collins, this Court reviewed the following:
18. The parties presented evidence on
numerous contentions for an unequal division.
After giving due regard to the contentions of
the parties and all the factors set forth in
G.S. § 50-20(c), an equal division of the
marital property would be inequitable based on
the following factors (G.S. § 50-20(c)(6),
(11a) and (12)):
(a) The plaintiff co
ntributed
approximately $34,000.00 to his deferred
compensation plan during the marriage
from income which was earned prior to the
marriage but deferred. These funds were
his separate property, and were spent
during the marriage for the support of
the family.
(b) The plaintiff us
ed his separate
funds to make the downpayment on the
. . . residence of $20,000.00, and he
expended in excess of $77,000.00 of his
separate funds to complete the residence
. . . .
(c) The plaintiff is
assuming
responsibility for repaying the equity
line obtained by the defendant against
the . . . residence which, at the date of
trial, had a balance of $14,963.65. The
plaintiff should be awarded credit for
one-half the repayment of this marital
debt because not all of these funds were
used for marital purposes.
(d) The Court does n
ot find the
failure of the plaintiff to return
[defendant's] property to be willful and
will not find him to be in contempt of
court, but finds that the defendant is
entitled to a credit of $4,500.00 for the
damage done to certain of her personalty
and for the loss of use of the property
since the expiration of the 50B order.125 N.C. App. at 115, 479 S.E.2d at 241-42 (alterations in
original). In remanding the case to the trial court, this Court
stated:
When evidence is presented in support of any
of the section 50-20(c) factors tending to
show that an equal division of the marital
property would be inequitable, the trial court
must consider that evidence in determining an
equitable division. To insure that this
evidence has been considered by the trial
court, there must be findings reflecting their
consideration. It is not necessary that the
findings “recite in detail the evidence
considered” but they must include the ultimate
facts considered by the trial court.
In this case there is evidence in the
record that the plaintiff is in good health
and the defendant is not in good health.
There is also evidence that the plaintiff is
employed and the defendant is not employed.
The health and incomes of the parties are
factors that must be considered, when evidence
is presented, by the trial court in making a
distribution of the marital property. The
judgments in this case do not include any
findings that this evidence was considered in
making the distribution and this was error.
The finding that “due regard [was given] to
the contentions of the parties and all the
factors set forth in G.S. § 50-20(c)” is not
sufficient. This case must, therefore, be
remanded to the trial court for the entry of a
new equitable distribution judgment after
consideration of the parties' incomes and
health. The new judgment must be entered on
the record before this Court and findings
included revealing a consideration of the
evidence relevant to the parties' incomes and
health.
Id. at 117, 479 S.E.2d at 242-43 (alteration in original) (internal
citations omitted).
These cases demonstrate that the degree of specificity
required in a court order pertaining to equitable distributioncannot be established with scientific precision. Nevertheless, we
are guided by our Supreme Court's holding in Patton requiring that
findings be sufficiently specific to allow appellate review.
Viewed in this light, we hold that the findings in the case at bar
are insufficient. The trial court stated in Paragraph 11 that it
considered all statutory factors and specifically listed some of
those factors. However, the findings do not include ultimate facts
considered by the trial court in applying those factors. For
example, the trial court did not make any findings regarding the
actual income and liabilities of the parties, the amount of
plaintiff's contribution of separate funds to the marital home, and
what the tax consequences to the parties would be. In addition,
although the trial court found as a fact that “plaintiff[]
conten[ded] that she helped the career potential of the defendant,”
the trial court did not determine whether plaintiff's contentions
were accurate and, if so, the extent of plaintiff's contribution.
We are not unmindful of the heavy caseload in the state's
district courts and realize that the district court judges do not
have the luxury of spending unlimited time on each case. We are
also aware that, almost without exception, district court judges
provide considered expertise in a demanding and complex area of the
law where the litigants' feelings often are inflamed. We are,
however, unable to discharge our appellate responsibilities unless
the trial courts reach reviewable conclusions of law based upon
findings of fact supported in the record. See Patton, 318 N.C.
404, 348 S.E.2d 593. This case is remanded to the trial court for further
proceedings consistent with this opinion.
Reversed.
Judge SMITH concurs.
Judge GREENE concurs with separate opinion.
ARLENE ROSARIO,
Plaintiff,
v
.
&
nbsp;Onslow County
&
nbsp; No. 97 CVD 2697
LUIS M. ROSARIO,
Defendant.
GREENE, Judge, concurring.
I fully concur with the majority but write separately to
emphasize that the findings of facts regarding the section 50-20(c)
factors must do more than simply list the statutory factors
considered by the trial court. The findings must reveal "due
consideration of the evidence presented by the parties in support
of the factors." Daetwyler v. Daetwyler, 130 N.C. App. 246, 249,
502 S.E.2d 662, 665, disc. review denied in part, 349 N.C. 528, 526
S.E.2d 174 (1998), aff'd per curiam in part, 350 N.C. 375, 514
S.E.2d 89 (1999). This mandate does not require the trial court to
make findings of the evidentiary facts, as findings of the ultimate
facts considered by the trial court are sufficient. Id. at 249
n.1, 502 S.E.2d at 665 (providing, as an example, that evidentiary
facts may include testimony from doctor regarding medical condition
of plaintiff and plaintiff's medical bills; while ultimate facts
may include that plaintiff is in poor health and has incurred
particular expenses as a result).
In this case, for the reasons given by the majority, the
judgment does not contain sufficient ultimate findings of fact insupport of the factors listed in the judgment. Furthermore, the
judgment is deficient because it suggests the trial court may have
considered factors not included in its judgment. The trial court,
in finding of fact number 11, listed six items it considered and
noted they were among those it had considered.
(See footnote 1)
The judgment must
include ultimate findings on all the evidence presented in support
of any factor.
The judgment of the trial court must, therefore, be reversed
and remanded to the trial court for entry of a new equitable
distribution order containing findings of the ultimate facts for
each of the section 50-20(c) factors upon which the parties
presented evidence.
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