Appeal by defendant from judgment entered 26 January 2001 by
Judge Patrice A. Hinnant in Guilford County District Court. Heard
in the Court of Appeals 25 April 2002.
Woodruff & Associates, by Carolyn J. Woodruff, for plaintiff-
appellee.
John W. Lunsford for defendant-appellant.
MARTIN, Judge.
In December 1998, plaintiff filed a complaint against
defendant seeking divorce from bed and board, custody of their two
minor children, and spousal and child support. Defendant filed an
answer denying plaintiff's allegations and he asserted a
counterclaim for joint custody of the couple's children, a
deviation from child support guidelines, and equitable
distribution.
On 27 September 2000, the trial court conducted a hearing
limited to the issues of alimony, child support, visitation, and
distribution of the family's Self-Employment Pension. Brieflysummarized, the evidence at that hearing showed that the parties
were married on 17 December 1978 and that two children were born of
the marriage: Andrew, age 17, and Katherine, age 15. Defendant
formed a wholly-owned corporation, RACK Communications, Inc., which
provided public relations services for corporations sponsoring
NASCAR race teams. Plaintiff served as treasurer for RACK and
received a salary from the corporation. On 8 June 1998, plaintiff
testified that defendant told her that he had met another woman and
intended to leave the family. The couple attempted to reconcile,
but eventually the marriage ended. According to plaintiff,
defendant stopped providing for the family financially in July
1999. Defendant stopped paying plaintiff her salary from the
family business, and did not send any money to plaintiff in August
and September 1999. Plaintiff provided the trial court with a
breakdown of the family's monthly expenses. Additional evidence
necessary to an understanding of the issues raised in this appeal
will be summarized later in this opinion.
On 26 January 2001, the trial court entered judgment finding
that defendant had committed marital misconduct in the form of
adultery and abandonment of the family, granted custody of the
children to plaintiff, and awarded plaintiff child support,
alimony, and partial attorney's fees. Defendant was also ordered
to pay child support in arrears and to release to plaintiff his
remaining interest in his Self-Employment Pension. Defendant
appeals.
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I.
Though defendant cites no authority in support of his first
five assignments of error, he nonetheless takes issue with the
trial court's findings of fact that he abandoned his family; that
he engaged in an illicit sexual relationship with Lisa Shealy; that
he stayed away from the marital home to reside with Shealy and
continue his illicit relationship with her; that he failed to
provide subsistence to his family; and, finally, that plaintiff was
the custodian of the children. Defendant argues that these
findings were unsupported by admissible evidence because the
findings were based on the testimony of plaintiff, which defendant
claims included non-admissible hearsay and privileged marital
communications. These arguments have no merit.
First, evidence of defendant's adultery was not inadmissible
as a confidential marital communication. Although defendant does
not cite the statute, G.S. § 8-56 provides that “[n]o husband or
wife shall be compellable to disclose any confidential
communication made by one to the other during their marriage.” The
privilege is limited to confidential communications.
Hicks v.
Hicks, 271 N.C. 204, 155 S.E.2d 799 (1967). However, the evidence
of defendant's adultery in this case did not consist of privileged
confidential marital communications. Defendant's statement to
plaintiff that he had met another woman and planned to leave the
family was overheard by one of their children. In addition,
defendant admitted that during the period when he was deciding
whether to leave his marriage, he would go back and forth from hismarital home to Lisa Shealy's house. Plaintiff testified that
another woman repeatedly called her home.
In addition, defendant's statements to his wife were
admissions of a party opponent and were admissible pursuant to G.S.
§ 8C-1, Rule 801(d) (“A statement is admissible as an exception to
the hearsay rule if it is offered against a party and it is (A) his
own statement, in either his individual or a representative
capacity . . . .”). Defendant's assignments of error regarding the
findings of fact of the trial court are overruled.
II.
In his second argument, defendant combines five assignments of
error, contending the trial court erred in calculating the family's
standard of living and the parties' respective incomes, and that
accordingly the amount of plaintiff's alimony award was error. We
find no merit in these contentions.
G.S. § 50-16.3A(a) provides that the court “shall award
alimony to the dependent spouse upon a finding that one spouse is
a dependent spouse, that the other spouse is a supporting spouse,
and that an award of alimony is equitable after considering all
relevant factors, including those set out in subsection (b) of this
section.” G.S. § 50-16.3A(b) provides that the trial court “shall
exercise its discretion in determining the amount, duration, and
manner of payment of alimony” after consideration of “all relevant
factors, including:”
(1) The marital misconduct of either of the
spouses. Nothing herein shall prevent a court
from considering incidents of post
date-of-separation marital misconduct ascorroborating evidence supporting other
evidence that marital misconduct occurred
during the marriage and prior to date of
separation;
(2) The relative earnings and earning
capacities of the spouses;
(3) The ages and the physical, mental, and
emotional conditions of the spouses;
(4) The amount and sources of earned and
unearned income of both spouses, including,
but not limited to, earnings, dividends, and
benefits such as medical, retirement,
insurance, social security, or others;
(5) The duration of the marriage;
(6) The contribution by one spouse to the
education, training, or increased earning
power of the other spouse;
(7) The extent to which the earning power,
expenses, or financial obligations of a spouse
will be affected by reason of serving as the
custodian of a minor child;
(8) The standard of living of the spouses
established during the marriage;
(9) The relative education of the spouses and
the time necessary to acquire sufficient
education or training to enable the spouse
seeking alimony to find employment to meet his
or her reasonable economic needs;
(10) The relative assets and liabilities of
the spouses and the relative debt service
requirements of the spouses, including legal
obligations of support;
(11) The property brought to the marriage by
either spouse;
(12) The contribution of a spouse as
homemaker;
(13) The relative needs of the spouses;
(14) The federal, State, and local tax
ramifications of the alimony award;
(15) Any other factor relating to the economic
circumstances of the parties that the court
finds to be just and proper.
(16) The fact that income received by either
party was previously considered by the court
in determining the value of a marital or
divisible asset in an equitable distribution
of the parties' marital or divisible property.
Id. In addition, the court must “set forth the reasons for its
award or denial of alimony and, if making an award, the reasons forits amount, duration, and manner of payment.” N.C. Gen. Stat. §
50-16.3A(c). The award of alimony is within the trial court's
discretion and will not be disturbed on appeal absent a showing of
an abuse of discretion.
Sayland v. Sayland, 267 N.C. 378, 148
S.E.2d 218 (1966) (citation omitted).
In determining a party's income, our Supreme Court has stated:
where a substantial portion of a party's total
worth is stock in a closely held corporation,
certain information from the corporation's
business records may well be relevant to the
personal litigation involving that party. This
is particularly true where, as here, the trial
court must determine the true worth and income
of the parties.
Quick v. Quick, 305 N.C. 446, 460, 290 S.E.2d 653, 662 (1982).
See
also Ahern v. Ahern, 63 N.C. App. 728, 731, 306 S.E.2d 140, 142
(1983) (the trial court properly considered the supporting spouse's
total income, which included his “mode of living through the years,
largely at the company's expense,” based on his sole ownership of
the profitable business).
In the present case, the trial court found that defendant's
gross annual income for 1999, based on his W-2 statement, was
$62,107.00. However, there was also evidence that defendant
derives income from RACK in addition to his annual salary.
Defendant did not deny receiving a Chevrolet automobile for his
personal use from one of the RACK Communications clients. The
trial court found that defendant paid $41,000 in non-employee
compensation to Lisa Shealy, the woman with whom he was found to be
having an affair, ostensibly for her contract labor on behalf of a
RACK client. The trial court also found that defendant diverted$49,509.00 in corporate funds to himself as part of a repayment of
a “Shareholders Loan.” Form 1120 (Schedule L) of RACK
Communications' U.S. Corporate Income Tax Return for 1999 shows
“loans from shareholders” was reduced by $49,509 in that tax year.
Based on the evidence of record, the trial court determined that
defendant's annual income “is not less than $152,616.00.”
In addition, plaintiff testified that corporate money was used
to pay certain family expenses during the parties' marriage,
including health insurance, gas for the family vehicles, dry
cleaning, and clothing. When asked if he were aware that he failed
to send money to his family in August and September 1999, defendant
testified: “Sometimes I transferred from one business account to
the other, and I don't remember what months I did not do that.”
Defendant admitted that Chevrolet, a RACK client, partially paid
for a family trip to Daytona Beach, Florida. The trial court found
that plaintiff was employed by RACK Communications prior to
defendant's abandonment of his family, after which she was
“terminated by Defendant through no fault of her own.” The court
further found that plaintiff earned $1,000 per month as a
consultant for the Guilford County Schools, and that she currently
does not have the means to earn more. Finally, the trial court
found that plaintiff had expenses, which were itemized in the
judgment, totaling $4,000 per month. Based on these findings, the
trial court concluded that plaintiff was entitled to alimony in the
amount of $4,000 per month.
In addition, plaintiff testified that defendant stoppedsupporting the family in July 1999:
He stopped paying me a salary from RACK
Communications without any warning at all, and
he stopped paying any _ sending any money for
the month of August and September to us at
all. I had no income from him at all. He did
not send _ he was ordered to pay me money for
September, but he never paid it.
The trial court found that “[d]efendant willfully failed to provide
necessary subsistence according to his means and condition so as to
render the financial condition of Plaintiff intolerable.” On this
record, we discern no abuse of discretion in the award of spousal
support to plaintiff, including arrearages for past unpaid support
in the amount of $19,202.40. These assignments of error are
overruled.
III.
Defendant next argues the trial court erred in calculating
child support. An order of child support by the trial court will
be overturned “'only upon a showing that it was so arbitrary that
it could not have been the result of a reasoned decision.'”
Biggs
v. Greer, 136 N.C. App. 294, 297, 524 S.E.2d 577, 581 (2000)
(citing
White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833
(1985)). G.S. § 50-13.4(c) provides that the trial court may order
child support for the benefit of the minor child “in such amount as
to meet the reasonable needs of the child for health, education,
and maintenance.” In addition, “[t]he Court may make adjustments
for extraordinary expenses and order payments for such term and in
such manner as the Court deems necessary.” North Carolina Child
Support Guidelines (2002) (“Other extraordinary expenses include:(1) Any expenses for attending any special or private elementary or
secondary schools.”).
If the court orders an amount other than the
amount determined by application of the
presumptive guidelines, the court shall make
findings of fact as to the criteria that
justify varying from the guidelines and the
basis for the amount ordered.
N.C. Gen. Stat. § 50-13.4(c).
In the present case, the trial court, utilizing the North
Carolina Child Support Guidelines and attaching a schedule, ordered
defendant to pay child support payments for both children in the
amount of $1,810.00 per month. In addition to this child support
award, the trial court made the following finding of fact:
Further, Andrew has extraordinary
educational expenses necessarily incurred as a
result of his inability to function in public
school due to his emotional distress over his
father's abandonment and his difficulty in
coping with his father's behavior. Andrew was
enrolled in private school by and with the
consent of Defendant, and Defendant is
obligated to pay for all tuition, fees,
insurance and transportation (at this time,
Defendant has provided Andrew with a vehicle,
and should continue to provide that vehicle
and all vehicle insurance) related to those
educational expenses, whether at Oak Ridge
Military Academy or any other school found by
Plaintiff to be necessary for Andrew's well-
being. Plaintiff, as her share of Andrew's
expenses, should pay for all of Andrew's
uniforms and school clothing and books and
supplies not included in the regular tuition
and fees.
This finding supported the trial court's deviation from the North
Carolina Child Support Guidelines, and the order requiring
defendant to provide financial support to allow Andrew to continue
attending Oak Ridge Military Academy was not so arbitrary as toconstitute an abuse of the court's discretion. Defendant's
assignment of error is overruled.
IV.
Defendant next contends the evidence does not support the
trial court's finding that defendant “dropped insurance coverage on
his children.” However, the finding of fact states further that
defendant has “complied with the order of the Court that he provide
coverage for the children.” In addition, defendant admitted that
insurance coverage on the children was interrupted for a period of
time. The record supports the finding, and defendant's assignment
of error is overruled.
V.
Defendant next contends the trial court erred in failing to
follow the factors set forth in G.S. § 50-16.3A in determining that
plaintiff qualified for alimony from defendant. G.S. § 50-16.3A(b)
requires that the trial court consider “all relevant factors” when
making a determination of the amount and duration of alimony.
See
Rhew v. Rhew, 138 N.C. App. 467, 472, 531 S.E.2d 471, 474 (2000)
(“Although we do not suggest that the court is required to set out
specific findings as to each factor listed in section 50-16.3A(b),
the court must provide sufficient detail to satisfy a reviewing
court that it has considered 'all relevant factors.'”). The trial
court made detailed findings regarding the marital misconduct of
defendant, the relative earnings of the spouses, the mental and
emotional condition of plaintiff, the amount and sources of earned
and unearned income, the standard of living of the spouses duringthe marriage, the education of plaintiff, the relative assets and
liabilities of the spouses, the relative needs of the spouses, and
other factors. The trial court properly set out the relevant
factors as required by G.S. § 50-16.3A(b); moreover, as explained
above in Section II, the court did not err in ordering defendant to
pay past due amounts for alimony. Defendant's assignments of error
to the contrary are overruled.
VI.
Defendant next contends the trial court erred by ordering that
plaintiff receive the remainder of defendant's Self Employment
Pension because the distribution exceeded the scope of the 27
September 2000 hearing. However, at the start of the hearing,
plaintiff's counsel stated that plaintiff intended to address the
distribution of the retirement fund; counsel for defendant
responded, “That's fine.”
See Karp v. University of North
Carolina, 78 N.C. App. 214, 216, 336 S.E.2d 640, 641 (1985) (“In
North Carolina admissions of attorneys are binding upon their
clients, and are generally conclusive.”). Defendant cannot now
complain that the issue was improperly addressed because his
counsel consented to a hearing on the issue.
VII.
Finally, defendant contends the trial court erred in ordering
defendant to pay partial attorney's fees to plaintiff's counsel.
The trial court may order the supporting spouse to pay the
dependent spouse's counsel fees when the dependent spouse, who is
entitled to alimony, makes application for such fees. N.C. Gen.Stat. § 50-16.4 (2001).
The purpose of the allowance of counsel
fees is to enable the dependent spouse,
as
litigant, to meet the supporting spouse,
as
litigant, on substantially even terms by
making it possible for the dependent spouse to
employ adequate counsel.
Bookholt v. Bookholt, 136 N.C. App. 247, 252, 523 S.E.2d 729, 732
(1999) (citing
Williams v. Williams, 299 N.C. 174, 190, 261 S.E.2d
849, 860 (1980)) (emphasis in original). Before counsel fees may
be awarded, however, the trial court must make “a threshold finding
that the dependent spouse has insufficient means to defray her
litigation expenses.”
Id. In addition, the trial court must make
findings that the amount of the award is reasonable.
Upchurch v.
Upchurch, 34 N.C. App. 658, 239 S.E.2d 701 (1977),
disc. review
denied, 294 N.C. 363, 242 S.E.2d 634 (1978).
The proper order awarding counsel fees in a
child support or alimony action must contain a
finding or findings upon which a determination
of the reasonableness of the award can be
based, such as the nature and scope of the
legal services rendered, the time and skill
required, and the attorneys hourly rate in
comparison to the customary charges of
attorneys practicing in that general area.
Weaver v. Weaver, 88 N.C. App. 634, 641, 364 S.E.2d 706, 711
(citation omitted),
disc. review denied, 322 N.C. 330, 368 S.E.2d
875 (1988).
In the present case, the trial court found that defendant
fired plaintiff from her job with their wholly-owned corporation,
RACK Communications; plaintiff has since found work as a consultant
with the Guilford County Schools, earning $1,000 per month. The
trial court found that “[p]laintiff is unable by reason of herstatus as a dependent spouse and her financial condition to defray
the expenses of this action and is entitled to an award of court
costs, including attorney's fees.” The court then found that
plaintiff had expended $8,000 in attorney's fees, of which she had
paid $3,000. However, the trial court made no specific findings
from which a determination of the reasonableness of the attorney's
fee may be based. Rather, the court found only that the amount of
the fee is “more than reasonable in light of the record of court
appearances in this matter.” The trial court's findings of fact do
not indicate the amount of time the attorney devoted to the matter,
or the attorney's hourly rate, or the nature and scope of the legal
services rendered; accordingly, this Court can not determine
whether the award of partial attorney's fees is reasonable. We
therefore vacate that portion of the judgment awarding partial
attorney's fees to plaintiff, and remand this case to the trial
court for findings of fact as to the reasonableness of the
attorney's fee awarded plaintiff.
Defendant has made no argument nor cited authority for his
remaining assignments of error. These assignments of error are
therefore deemed abandoned. N.C.R. App. P. 28(b)(5).
Affirmed in part, vacated in part, and remanded.
Judges TYSON and THOMAS concur.
Report per Rule 30(e).
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