Appeal by plaintiff from order entered 19 April 2001 by Judge
Ann E. McKown in District Court, Durham County. Heard in the Court
of Appeals 27 March 2002.
Poe, Hoof & Reinhardt, by Martha New Milam; and Daniel B.
Hill, for plaintiff-appellant.
Maxwell, Freeman & Bowman, P.A., by John A. Bowman, for
defendant-appellee.
McGEE, Judge.
Steven D. Templeton (plaintiff) and Lynn D. Templeton
(defendant) were married on 12 August 1972. The parties separated
on 6 May 1996 and were divorced on 1 August 1997. There were three
children born of the marriage. Throughout most of the marriage,
plaintiff was the primary wage earner for the household. Plaintiff
worked at Central Carolina Bank for approximately twenty years and
was terminated from his employment on 21 March 1997. Plaintiff
relocated to Alabama and remarried. Plaintiff resigned from his
position at Compass Bank in Alabama after nineteen months and was
unemployed for four months. He began working for Southtrust Bank
in Alabama in August 1999 but resigned in December 1999 for healthreasons. Defendant was a teacher until 1981, when she left work to
be a full-time homemaker. After the parties separated, defendant
began working at Triangle United Way.
Following the separation, plaintiff and defendant had an oral
agreement regarding support to be paid by plaintiff to defendant.
Defendant remained in the marital home with two of the three
children. The oldest child was enrolled in college and lived on
campus during the academic year.
The parties submitted a memorandum of judgment to the trial
court on 24 July 1997, which provided for a continuation of the
support the parties had agreed to during the previous year. This
order was modified in December 1997. The issues of alimony and
equitable distribution were tried on 22 and 23 February 2000.
Counsel for both parties worked on drafts for proposed orders
through the end of 2000. The trial court entered an order and
judgment for the equitable distribution of property and for alimony
on 19 April 2001. Plaintiff appeals from this order.
I.
Plaintiff argues the trial court erred in failing to
characterize as advances on defendant's share of the marital
estate, those funds paid by him to or on behalf of defendant after
the date of separation and prior to entry of a court order for
spousal support and/or post-separation support. We disagree.
Plaintiff directs this Court to
Cobb v. Cobb, 107 N.C. App.
382, 420 S.E.2d 212 (1992) in support of his argument. In
Cobb,
the husband made several payments to the wife after the date ofseparation. There was never any written agreement as to what these
payments represented, and the trial court concluded the payments
were advances on the wife's share of equitable distribution. This
Court affirmed, noting that there "was never an order of alimony
pendente lite, permanent alimony, or child support" nor was there
any evidence the husband "wanted to make a gift of these payments"
to the wife.
Id. at 385, 420 S.E.2d at 213. In
Cobb, because
there was not an order for support, the Court's only choices were
to classify the payments as advances or as a gift.
However, in the case before us, there was an agreement between
the parties that the money plaintiff paid defendant was for spousal
support and for child support. This agreement was formalized in an
order on 24 July 1997. Therefore, we hold plaintiff's reading of
Cobb is inapplicable, and the trial court properly concluded the
payments should not be considered an advance on defendant's share
of the marital estate.
II.
Plaintiff next argues the trial court erred by characterizing
the post-separation appreciation of portions of retirement funds as
passive appreciation and then treating the appreciation as marital
property. Plaintiff contends the 1997 amendment to the Equitable
Distribution Act, which added the concept of divisible property, is
inapplicable to this case because the parties asserted their claims
prior to the amendment's enactment date of 1 October 1997.
Plaintiff therefore argues this case should be decided under the
pre-amendment law that post-separation appreciation of maritalproperty was neither marital nor separate and was to be considered
as a distributional factor.
See Truesdale v. Truesdale, 89 N.C.
App. 445, 366 S.E.2d 512 (1988).
Rather than distributing the sums representing
the [post-separation] appreciation, the trial
court must consider the existence of this
appreciation, determine to whose benefit the
increase in value will accrue, and then
consider that benefit when determining whether
an equal or unequal distribution of the
marital estate would be equitable.
Gum v. Gum, 107 N.C. App, 734, 738, 421 S.E.2d 788, 790 (1992).
In the case before us, the trial court considered the post-
separation appreciation of the retirement funds as a distributional
factor, but also divided the appreciation between the parties. In
the trial court's order under the heading "
Distributional
Factors[,]" the trial court stated it "considered evidence
presented to support each party's claims for an unequal
distribution of marital assets as follows[.]" The trial court then
listed six detailed factors relating to the distribution of
property. Under "
Any other Factor" the trial court considered
post-separation appreciation of the retirement account:
The Court finds that, if the Schwab IRAs are
divided between the parties, the increases in
the values of marital assets since DOS may
benefit both parties. But, the benefit to the
Plaintiff will be greater than the benefit to
the Defendant because he is receiving a larger
share of this asset.
After a consideration of all distributional factors, the trial
court divided the marital estate fifty-four percent to defendant
and forty-six percent to plaintiff. The retirement account was
divided fifty-five percent to plaintiff and forty-five percent todefendant. However, the appreciation or growth in the retirement
account since the date of separation was also divided, fifty-five
percent to plaintiff and forty-five percent to defendant. A trial
court, under the earlier version of N.C. Gen. Stat. § 50-20 which
applies to this case, could not "divide and distribute the amount
of post-separation increase."
Fox v. Fox, 114 N.C. App 125, 130,
441 S.E.2d 613, 616-17 (1994);
see also Truesdale, 89 N.C. App.
445, 366 S.E.2d 512. "[I]nsofar as the judgment of the trial court
attempts to do so, it is erroneous and is reversed."
Wall v. Wall,
140 N.C. App. 303, 311, 536 S.E.2d 647, 652 (2000). Therefore, we
reverse the judgment of the trial court dividing any increase in
value of the retirement account since the date of separation. We
remand for the trial court to consider any appreciation or increase
in value of the retirement account as a distributional factor in
making its overall equitable distribution. However, in accordance
with
Fox and
Truesdale, interpreting the earlier version of N.C.
Gen. Stat. § 50-20, the trial court is not permitted to divide and
distribute the amount of post-separation increase.
III.
Plaintiff next argues the trial court erred by considering the
estate and expenditures of plaintiff's second wife in making its
determination that an equal distribution of marital property was
not equitable. We disagree.
The "distribution of marital property is within the sound
discretion of the trial court and will not be overturned absent an
abuse of discretion."
O'Brien v. O'Brien, 131 N.C. App. 411, 416,508 S.E.2d 300, 304 (1998),
disc. review denied, 350 N.C. 98, 528
S.E.2d 365 (1999). "A ruling committed to a trial court's
discretion is to be accorded great deference and will be upset only
upon a showing that is was so arbitrary that it could not have been
the result of a reasoned decision."
White v. White, 312 N.C. 770,
777, 324 S.E.2d 829, 833 (1985).
In the case before us, the trial court considered numerous
factors and made extensive findings of fact in determining that an
equal division of property was inequitable. The trial court
included twenty statements in its finding that the unequal income
potential of the parties was a distributional factor supporting an
unequal distribution in favor of defendant. One of the twenty
statements was that plaintiff's current wife owns four homes and
plaintiff and his current wife had recent travel expenditures paid
for at his current wife's expense. We fail to see how this
statement, under the finding that the parties' unequal income
potential was a distributional factor supporting an unequal
distribution for defendant, results in an abuse of discretion by
the trial court. We overrule this assignment of error.
IV.
Plaintiff next argues the trial court erred in that its
alimony award is not supported by sufficient findings of fact and
conclusions of law. Plaintiff also argues the finding of fact that
defendant's share of defendant's fixed household expenses should be
two-thirds instead of one-half is contrary to the evidence
presented. Whether a spouse is entitled to alimony is reviewable by this
Court
de novo; the amount of alimony awarded is reviewable by this
court under an abuse of discretion standard.
Barrett v. Barrett,
140 N.C. App. 369, 371, 536 S.E.2d 642, 644 (2000). Pursuant to
N.C. Gen. Stat. § 50-16.3A(a) (1999), "a party is entitled to
alimony if three requirements are satisfied: (1) that party is a
dependent spouse; (2) the other party is a supporting spouse; and
(3) an award of alimony would be equitable under all the relevant
factors."
Barrett at 371, 536 S.E.2d at 644. The parties
stipulated plaintiff was a supporting spouse and defendant was a
dependant spouse. Plaintiff does not assign error as to whether
defendant was entitled to alimony; furthermore, we find the trial
court's findings of fact to be sufficient to support its conclusion
of law that an award of alimony would be equitable.
Plaintiff, however, does argue the amount of the alimony award
was in error. Again, we note this issue is reviewable by this
Court under an abuse of discretion standard. "The determination of
what constitutes the reasonable needs and expenses of a party in an
alimony action is within the discretion of the trial judge, and
[the trial judge] is not required to accept at face value the
assertion of living expenses offered by the litigants themselves."
Whedon v. Whedon, 58 N.C. App. 524, 529, 294 S.E.2d 29, 32,
disc.
review denied, 306 N.C. 752, 295 S.E.2d 764 (1982). The trial
court may resort to its "own common sense and every-day experiences
in calculating the reasonable needs and expenses of the party."
Bookholt v. Bookholt, 136 N.C. App. 247, 250, 523 S.E.2d 729, 731(1999).
Plaintiff argues the trial court erred in adjusting
defendant's reasonable share of household expenses from one-half of
the total to two-thirds of the total expenses. However, the trial
court is not bound by the expenses put forth by the parties, but
can substitute its own judgment. It was not an abuse of discretion
for the trial court to adjust defendant's share of the total
household expenses.
Plaintiff also argues that by excluding a bonus defendant
received in 1999 and by deducting defendant's contribution to a
retirement account, the trial court did not consider the
appropriate total income for defendant. However, the bonus
defendant received in a previous year was not guaranteed in future
years. Therefore, it was within the discretion of the trial court
to exclude that amount from an assessment of defendant's income.
Furthermore, while a trial court must consider defendant's total
income for purposes of an alimony award, the trial court has the
discretion to state what reasonable expenses a party may have. The
trial court determined the retirement contribution was a reasonable
expense for defendant.
Plaintiff also argues there was insufficient evidence for the
trial court to make a finding plaintiff depressed his income in bad
faith. "Alimony is ordinarily determined by a party's
actual
income, from all sources, at the time of the order."
Kowalick v.
Kowalick, 129 N.C. App. 781, 787, 501 S.E.2d 671, 675 (1998). In
order for a trial court to "base an alimony obligation on earningcapacity rather than actual income, the trial court must first find
that the party has depressed [his or her] income in bad faith."
Id., citing
Wachacha v. Wachacha, 38 N.C. App. 504, 509, 248 S.E.2d
375, 378 (1978)). "Evidence of intent such as 'bad faith'
generally can be proven, if at all, only by circumstantial
evidence."
Wachacha, 38 N.C. App. at 509, 248 S.E.2d at 378. In
the case before us, the trial court made a finding of bad faith,
and there is competent evidence to support this finding. We
overrule this assignment of error.
V.
Plaintiff next argues the trial court erred in depriving
plaintiff of due process of law by taking fourteen months from the
date the trial was concluded to enter a written judgment for
equitable distribution. We disagree. Plaintiff relies on
Wall,
140 N.C. App. at 314, 536 S.E.2d at 654, which held a delay of
nineteen months was more than a
de minimis delay. However,
plaintiff offers only speculative possibilities as to how
plaintiff's situation may have changed and as a result how
plaintiff was prejudiced by this delay. We therefore dismiss this
assignment of error.
Affirmed in part and remanded in part.
Judges WALKER and CAMPBELL concur.
Report per Rule 30(e).
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