Appeal by plaintiff from order dated 19 October 2001 and from
two separate, amended judgments dated 19 October 2001 by Judge
Joseph M. Buckner in New Hanover County District Court. Heard in
the Court of Appeals 19 May 2003.
Wyrick Robbins Yates & Ponton LLP, by Charles W. Clanton and
Heidi C. Bloom, for plaintiff-appellant.
Cheshire, Parker, Schneider, Bryan & Vitale, by Jonathan
McGirt, for defendant-appellee.
BRYANT, Judge.
Jean Marie (plaintiff), formerly Jean H. Rice, appeals from anorder denying her request for a new evidentiary hearing and from
amended equitable distribution and alimony judgments dated 19
October 2001.
On 5 July 1995, plaintiff brought an action against her
husband Charles E. Rice, III (defendant) seeking a divorce and
equitable distribution of the marital property. Plaintiff later
amended her complaint to also request alimony. Plaintiff and
defendant had married on 14 February 1982, separated on 16 April
1994, and were divorced on 27 October 1995. In an equitable
distribution judgment filed 12 November 1998, the trial court
concluded that the evidence and distributional factors found by the
trial court supported an unequal division of the marital estate in
defendant's favor. In a concurrent judgment, the trial court
denied plaintiff's claim for alimony on the basis that she was not
a dependent spouse. Plaintiff appealed from these judgments, and
this Court reversed the November 12 equitable distribution and
alimony judgments and remanded the case to the trial court for
additional findings and conclusions on the valuation of defendant's
law practice and the former marital residence, the issue of fault,
and the parties' accustomed standard of living. See Rice v. Rice,
138 N.C. App. 710, 536 S.E.2d 662 (2000) (COA99-513) (unpublished)
[hereinafter Rice I]. On remand, plaintiff requested a new
evidentiary hearing, but the trial court denied the motion in its
19 October 2001 order. The trial court then entered an amended
equitable distribution judgment, which included the following
findings:
Defendant's Law Practice
A. . . . Defendant was a partner in a
law practice known as Jackson & Rice
from June 1992 through April 1993,
and beginning in May 1993, . . .
[d]efendant began practicing as a
sole practitioner. As of the date
of separation, . . . [d]efendant's
solo law practice had been in
existence less than one year.
B. . . . Defendant was expected to
receive a share of the fees from two
cases . . . handled by the Jackson &
Rice firm, but these fees had not
been received by the Jackson & Rice
firm before that firm
dissolved. . . . Defendant
ultimately received these
“carryover” fees in four
installments, as follows:
(1) The sum of $50,000.00
approximately five months prior
to the date of separation
. . . .
(2) The sum of $100,000.00 on April
19, 1994, of which sum . . .
[d]efendant transferred to
. . . [p]laintiff the sum of
$22,554.96 on May 2, 1994.
(3) Two further payments totaling
approximately $42,811.00 in
June 1994, of which . . .
[d]efendant transferred to
. . . [p]laintiff the sum of
$11,773.10 on June 24, 1994.
C. The “carryover” fees received after
the date of separation, totaling
$142,811.00, although arguably
derived from “marital” effort, were
not acquired before the date of
separation. Accordingly, these fees
do not fall within the definition of
marital property[] and are properly
excluded from the marital estate.
However, the [trial] [c]ourt will
consider these post-separation funds
as a “distributional factor,” also
to be included in . . .
[d]efendant's separate estate.
In subsequently valuing defendant's law practice at $7,400.00, the
trial court in essence adopted the valuation of plaintiff's expert
but subtracted the $100,000.00 carryover fee received by defendant
on 19 April 1994, which plaintiff's expert had included in his
calculations, based on the trial court's conclusion that these
funds were defendant's separate property.
With respect to the parties' Parmele Boulevard property, the
trial court concluded it was a mixed asset, part marital and part
separate, and found:
B. The fair market value on [the] date
of marriage was $90,000[.00].
C. The property was encumbered by a
mortgage at the date of marriage,
with a principal balance due of
$28,125[.00]. The [trial] [c]ourt
accepts the parties' classification
of this mortgage as a marital debt.
D. The net value on the date of
marriage was $61,875[.00].
E. The fair market value on the date of
separation was $185,000[.00].
F. On the date of separation, the
principal balance of the mortgage
was $16,443[.00] . . . [and] was
paid off shortly after the date of
separation with “carryover” fees
from Jackson & Rice . . . . This
use of . . . [d]efendant's separate
funds to reduce marital debt should
be treated as a distributional
factor . . . .
G. The net value on the date of
separation was $168,557[.00].
H. Between the date of marriage and the
date of separation, the net value of
this property increased by
$106,682[.00]. . . .
I. Between the date of marriage and thedate of separation, the principal
balance of the mortgage . . . was
actively reduced by $11,682[.00]
through the use of marital funds.
This portion of the active increase
in net value should be classified as
marital property.
(1) . . . Plaintiff has apparently
contended that a portion of the
funds used to reduce the
principal balance of the
mortgage during the marriage[]
were her separate funds from an
inheritance. However, mortgage
payments during the marriage
were paid from the parties'
joint account, into which . . .
[p]laintiff occasionally
deposited and commingled her
separate, inherited
funds. . . . Plaintiff has
failed to trace any such
separate funds through the
joint account as having been
specifically “applied” to
payment of the mortgage . . . .
Accordingly, . . . [p]laintiff
has failed to establish by a
preponderance of the evidence
the “source of funds” that she
now claims to have been her
separate property.
J. During the marriage, the parties
spent approximately $30,000[.00] for
improvements to the property, of
which approximately $12,000[.00] (or
40%) was marital and $18,000.00 (or
60%) was the separate property of
. . . [p]laintiff. These
improvements actively increased the
net value of the property by
$11,500[.00] as of the date of
separation. Accordingly,
$4,600[.00] of this portion of the
active increase in net value should
be classified as marital . . . and
$6,900[.00] . . . as [plaintiff's]
separate property . . . .
K. The remaining $83,500[.00] of the
total increase in net value as of
the date of separation appears tohave been the result of passive
appreciation . . . . Although there
is no exact way to divide this
passive appreciation between the
marital estate and the separate
estate of . . . [p]laintiff, the
[trial] [c]ourt will attempt to
provide a proportionate return on
the “investment” of each estate.
L. During the marriage, the “principal”
(active) contribution of . . .
[p]laintiff's estate to the net
value of this property totaled
$68,775[.00] (i.e., $61,875[.00] +
$6,900[.00]), and the “principal”
(active) contribution of the marital
estate was $16,282[.00] (i.e.,
$11,682[.00] + $4,600[.00]). The
combined “principal” (active)
contribution of the marital and
separate estates during the marriage
totaled $85,057[.00]. The
proportion of this combined total
that was marital was 19.14% and the
proportion . . . that was separate
was 80.86%.
M. Applying the percentages derived
from the preceding subparagraph to
the total passive appreciation
during the marriage (i.e.,
$83,500[.00]), the marital share of
the passive appreciation is
therefore $15,982[.00], and . . .
[p]laintiff's separate share . . .
is . . . $67,518[.00].
O. Adding the active and passive shares
of the total increase in net value
between date of marriage and date of
separation results in a marital
share of $32,264[.00] (i.e.,
$16,282[.00] + $15,982[.00]) and in
a separate share for . . .
[p]laintiff of $136,293[.00] (i.e.,
$68,775[.00] + $67,518[.00]).
In the amended alimony judgment dated 19 October 2001 and
written from the perspective of the date of trial, the trial court
considered the parties' respective incomes, expenses, earningcapacities, and estates. With respect to plaintiff's earning
capacity, the trial court also considered the potential rental
income plaintiff could have earned from the Parmele Boulevard
residence because plaintiff was living in Mobile, Alabama at the
time of the hearing. Based on its findings, the trial court
ultimately concluded that plaintiff was not a dependent spouse. On
the issue of fault, the trial court found as follows:
Defendant stipulated that he committed
adultery under the statutory definition after
the parties separated, and the [trial] [c]ourt
finds that he committed adultery within the
meaning of N.C. Gen. Stat. § 50-16.2(1). This
“fault” on the part of . . . [d]efendant does
not appear to have had any effect on the
marital economy or the accustomed standard of
living of the parties prior to the date of
separation.
Accordingly, the trial court denied plaintiff's request for alimony
and attorney's fees.
______________________________
The issues are whether the trial court: erred in (I)
classifying the carryover fees received by defendant after the date
of separation as his separate property; (II) valuing defendant's
law practice; (III) calculating the marital estate's portion of the
passive appreciation in the net value of the Parmele Boulevard
property; and abused its discretion in (IV) finding certain
distributional factors; (V) awarding defendant his entire pension
even though it was part marital property; and (VI) denying
plaintiff alimony.
Equitable Distribution
I
[1] In her first assignment of error, plaintiff argues thatthe trial court erred in classifying the carryover fees, received
by defendant after the date of separation, as his separate property
because defendant had a vested property interest in the carryover
fees prior to the date of separation.
As an initial matter, we note that due to the timing of this
action, our analysis is based on the equitable distribution law as
it existed prior to 1 October 1995. In determining the equitable
distribution of the parties' property under the prior law, the
trial court must first classify property as either marital or
separate.
Godley v. Godley, 110 N.C. App. 99, 108, 429 S.E.2d 382,
388 (1993);
see also N.C.G.S. § 50-20(a) (2001) (the current
version of the statute provides for divisible property as a third
classification). “[T]he party claiming the property to be marital
must meet the burden of showing by a preponderance of the evidence
that the property was acquired by either spouse or both spouses
during the marriage, before the date of separation, and is
presently owned.”
Godley, 110 N.C. App. at 108, 429 S.E.2d at 388;
N.C.G.S. § 50-20(b)(1) (1995). The dispositive factor as to when
property was acquired is whether the right to receive the property
vested prior to the date of separation.
Godley, 110 N.C. App. at
115, 429 S.E.2d at 392; N.C.G.S. § 50-20(b)(1)-(2) (1995)
(“[m]arital property includes all vested . . . deferred
compensation rights” whereas “[t]he expectation of nonvested . . .
deferred compensation rights shall be considered separate
property”);
compare N.C.G.S. § 50-20(b)(1) (2001) (the current
statutory scheme recognizes both vested and nonvested deferred
compensation rights as marital property). Vesting occurs when “theright to the enjoyment of [an interest], either present or future,
is not subject to the happening of a condition precedent.”
Black's
Law Dictionary 816 (7th ed. 1999). Our case law has further
defined a vested interest as “a right which is otherwise secured,
established, and immune from further legal metamorphosis,”
Gardner
v. Gardner, 300 N.C. 715, 718-19, 268 S.E.2d 468, 471 (1980); in
other words, it is a right that cannot be canceled,
Fountain v.
Fountain, 148 N.C. App. 329, 337 n.11, 559 S.E.2d 25, 32 n.11
(2002) (holding that “the stock options were vested . . . because
the right to exercise the options could not be canceled”).
In this case, the trial court concluded that although the
$142,811.00 in carryover fees received by defendant were derived
from marital efforts, they were received after the date of
separation and therefore represent his separate property. The
trial testimony pertinent to this issue, however, reveals that a
settlement offer was conveyed to the Jackson & Rice law firm and
subsequently accepted by the firm on behalf of its clients, and a
settlement check was thereafter received by the firm and deposited
into the firm's account prior to the date of separation. The firm
being in receipt of the settlement check, the
condition precedent
for defendant's entitlement to a share of those fees had thus been
met.
See Black's Law Dictionary 816. This is notwithstanding the
condition subsequent created by the dissolution of the law
partnership and the settlement of the firm's affairs. Accordingly,
defendant's right, as partner of the firm, to a share in the fees
was secured and established prior to the date of separation and
could not be canceled.
See Gardner, 300 N.C. at 718-19, 268 S.E.2dat 471. This determination is consistent with our case law holding
that “funds received after the date of separation may appropriately
be classified as marital property under certain circumstances when
the right to receive those funds is acquired during the marriage
and before separation.”
Smith v. Smith, 111 N.C. App. 460, 483-84,
433 S.E.2d 196, 210 (1993) (finding time stock sold as opposed to
post-date-of-separation time when check representing the proceeds
of the stock sale was received determinative in concluding that
proceeds were marital property),
rev'd in part on other grounds,
336 N.C. 575, 444 S.E.2d 420 (1994);
see Johnson v. Johnson, 317
N.C. 437, 346 S.E.2d 430 (1986) (settlement received after the date
of separation upon a spouse's claim for personal injuries sustained
during the marriage is marital property if it represents
compensation for economic loss);
Talent v. Talent, 76 N.C. App.
545, 554-55, 334 S.E.2d 256, 262 (1985) (funds collected by one
spouse after the date of separation on a loan made during marriage
with marital funds are marital property);
see also Godley, 110 N.C.
App. at 108, 115, 429 S.E.2d at 387-88, 391-92 (finding no vested
interest where the defendant had a contractual right to receive
commissions but no commissions had become due on the date of
separation because several hundred acres of the land from the sale
of which the defendant would be paid remained to be sold). Thus,
under the statutory provisions in effect at the time this action
was filed, the trial court erred in classifying the $142,811.00 as
defendant's separate property.
In a related issue plaintiff contends that since the trial
court erred in classifying the carryover fees received from theJackson & Rice firm after the date of separation, it also erred in
granting only defendant credit and assigning to him a
distributional factor justifying an unequal division of the marital
property for paying off marital debt with these funds. To the
extent this was done by the trial court, it must be reversed, and
the issue is remanded for treatment in accordance with this
opinion.
II
[2] Plaintiff further contends the trial court erred in
valuing defendant's law practice at $7,400.00. In her brief to
this Court, plaintiff states that because the $100,000.00 carryover
fee received by defendant on 19 April 1994 and included by
plaintiff's expert in the valuation of the practice was marital
property, the trial court's assessed value would only be correct if
it had included the fee “as a personal marital asset outside the
practice.” But since the trial court failed to do so, plaintiff
asserts that the amount, due to its marital nature, should have
been included in the valuation of the law practice. As we
determined that the trial court did indeed err by failing to
classify the carryover fees as marital property, plaintiff's
assertions are correct and must be addressed on remand.
III
[3] In her next assignment of error, plaintiff appears to
argue that the trial court erred in distributing to the marital
estate a portion of the passive appreciation in the net value of
the Parmele Boulevard property based on reductions in the mortgage
principal
and improvements to the property paid for with maritalfunds. Plaintiff asserts that the marital estate's share of the
passive increase in the property's net value may only be based on
reductions in the principal mortgage balance. Plaintiff, however,
cites no authority supporting this proposition.
“Increases in value to separate property attributable to the
financial, managerial, and other contributions of the marital
estate are 'acquired' by the marital estate.”
Ciobanu v. Ciobanu,
104 N.C. App. 461, 465, 409 S.E.2d 749, 751 (1991). Furthermore,
under the source of funds theory:
[W]hen both the marital and separate estates
contribute assets towards the acquisition [or
improvement] of property, each estate is
entitled to an interest in the property in the
ratio its contribution bears to the total
investment in the property. Thus, both the
separate and marital estates receive a
proportionate and fair return on [their]
investment.
Wade v. Wade, 72 N.C. App. 372, 382, 325 S.E.2d 260, 269 (1985);
see Godley, 110 N.C. App. at 109, 429 S.E.2d at 389;
see also supra
(the trial court's extensive findings with respect to the
classification and valuation of the marital and separate interests
in the Parmele Boulevard property). Accordingly, there is no
difference between financial contributions to reduce the mortgage
principal and those to improve the property itself. Because both
types of active contributions entitle the marital estate to a
proportionate return on its investment, the trial court properly
applied the source of funds rule as required by this Court in
Rice
I and plaintiff's assignment of error is overruled.
IV
[4] Plaintiff also assigns error to the followingdistributional factors found by the trial court:
A. . . . Plaintiff is 51 years of age and
appears to be in good health, such that
she is capable of earning a sufficient
amount of income to support herself.
. . . .
N. After the Deed of Trust was paid off in
June of 1994, [p]laintiff had no Deed of
Trust expense. The Deed of Trust
payments were $450.00 per month. She has
enjoyed substantially free housing for
the four years from the payoff of the
Deed of Trust . . . until the hearing in
June of 1998.
O. Plaintiff currently does not live in the
residence and could at least rent the
property for several thousand dollars
during the summer vacation season. . . .
. . . .
Q. . . . Defendant assisted with the
upbringing of [p]laintiff's daughter by
helping to pay for her private school
tuition, college expenses, and trips.
As to the first distributional factor, plaintiff asserts that
it ignores this Court's recognition in
Rice I that plaintiff
suffered from arthritis and hypertension. The trial court,
however, only made a qualified statement about plaintiff's health,
finding that the state of her health was such that she was capable
of earning a sufficient amount of income to support herself. As
plaintiff simply attacks an isolated phrase and makes no assertion
in her brief that her arthritis and hypertension affected her work
ability, we find no error with respect to this factor.
[5] Plaintiff next contends that factor Q was inappropriate
because N.C. Gen. Stat. § 50-20(f) prohibits consideration during
an equitable distribution proceeding of the “support of thechildren of both parties.”
N.C.G.S. § 50-20(f) (2001) (same as
1995 version). We disagree. Defendant was not the father of
plaintiff's daughter and had no legal obligation to care for the
daughter. As such, the distributional factor found by the trial
court did not address defendant's child support obligations but
instead recognized his voluntary assumption of responsibilities and
was therefore properly considered under the catch-all provision of
N.C. Gen. Stat. § 50-20(c)(12) (2001) (same as 1995 version).
[6] Plaintiff also argues that factors N and O were improper
because the trial court considered her potential income and
liabilities for the four-year period between the date of separation
and the hearing. N.C. Gen. Stat. § 50-20(c)(1) requires the trial
court to consider “[t]he income, property, and liabilities of each
party at the time the division of property is to become effective.”
N.C.G.S. § 50-20(c)(1) (2001) (consistent with 1995 version). This
Court has held that “[t]he factors listed under subsection (c)
indicate that the legislature intended to grant the trial court the
authority to consider the future prospects of the parties, as well
as their status at the time of the hearing, in determining whether
an equal division of marital assets would be equitable.”
Harris v.
Harris, 84 N.C. App. 353, 359, 352 S.E.2d 869, 873 (1987);
see also
Dolan v. Dolan, 148 N.C. App. 256, 259, 558 S.E.2d 218, 220
(post-separation rental income can be a distributional factor),
aff'd, 355 N.C. 484, 562 S.E.2d 422 (2002) (per curiam);
Chandler
v. Chandler, 108 N.C. App. 66, 69, 422 S.E.2d 587, 590 (1992).
Accordingly, consideration of these post-separation factors is
proper; nevertheless, for the reasons stated below in ourdiscussion of the alimony judgment, we conclude it was error for
the trial court to consider plaintiff's potential rental income in
this case.
[7] Finally, plaintiff asserts the trial court abused its
discretion in failing to consider certain distributional factors
for which the parties offered evidence.
See Haywood v. Haywood,
106 N.C. App. 91, 100, 415 S.E.2d 565, 571 (1992) (“[w]hen a party
introduces evidence of a distributional factor under N.C.G.S.
§ 50-20(c), the trial court must consider the factor and make a
finding of fact with regard to it”),
rev'd in part on other
grounds, 333 N.C. 342, 425 S.E.2d 696 (1993). Plaintiff, however,
failed to include any page number references to the transcript or
exhibits in her brief to this Court, thereby preventing meaningful
review of the voluminous record on appeal.
See N.C.R. App. P.
28(b)(5)-(6) (appellate briefs shall contain “all material facts
. . . supported by references to pages in the transcript to the
proceedings”);
Naddeo v. Allstate Ins. Co., 139 N.C. App. 311, 316,
533 S.E.2d 501, 504 (2000) (“such references [are] invaluable in
directing the [C]ourt's attention to the pertinent portions of the
record”). Thus, this assignment of error is overruled.
V
[8] In addition, plaintiff assigns error to the trial court's
distribution to defendant of his entire pension even though a
portion of the pension was marital property. In support of her
argument, plaintiff relies on statutory provisions that were yet to
be enacted at the time this action was filed. The statute
applicable to this case provides for a distributive award of apension:
a. As a lump sum by agreement;
b. Over a period of time in fixed amounts by
agreement;
c. As a prorated portion of the benefits made
to the designated recipient at the time the
party against whom the award is made actually
begins to receive the benefits; or
d. By awarding a larger portion of other
assets to the party not receiving the
benefits, and a smaller share of other assets
to the party entitled to receive the benefits.
N.C.G.S. § 50-20(b)(3) (1995). Accordingly, the trial court had
various distributive choices that did not restrict it to a
proportionally equal division of the pension itself as advocated by
plaintiff. Thus, this assignment of error is without merit.
Alimony
VI
[9] In
Rice I, this Court determined that N.C. Gen. Stat. §
50-16.1,
et seq., applicable to actions filed before 1 October
1995, applies to the parties' alimony action.
Rice I, 138 N.C.
App. 710, 536 S.E.2d 662
. According to section 50-16.1(3), a
dependent spouse “means a spouse, whether husband or wife, who is
actually substantially dependent upon the other spouse for his or
her maintenance and support or is substantially in need of
maintenance and support from the other spouse.” N.C.G.S. § 50-
16.1(3) (1995) (repealed). Conversely, a “'[s]upporting spouse'
means a spouse . . . upon whom the other spouse is actually
substantially dependent or from whom such other spouse is
substantially in need of maintenance and support.” N.C.G.S. § 50-
16.1(4) (1995) (repealed). If the court determines that one spouse is
not actually dependent on the other for such
support, the court must then determine if one
spouse is “substantially in need of
maintenance and support” from the other, i.e.,
whether one spouse would be unable to maintain
his or her accustomed standard of living,
established prior to separation, without
financial contribution from the other.
Talent, 76 N.C. App. at 548, 334 S.E.2d at 258-59 (citations
omitted). In doing so, the trial court must make findings as to
the following:
(1) the standard of living, socially and
economically, to which the parties as a family
unit became accustomed during the several
years prior to their separation; (2) the
present earnings, prospective earning
capacity, and any other condition, such as
health, of each spouse at the time of the
hearing; (3) whether the spouse seeking
alimony has a demonstrated need for financial
contribution from the other spouse in order to
maintain the parties' accustomed standard of
living, taking into consideration the spouse's
reasonable expenses in light of that standard
of living; and (4) the financial worth or
“estate” of both spouses. The court must also
consider fault and other facts of the
particular case such as the length of the
marriage and the contribution made by each
spouse to the financial status of the family
over the years.
Id. (citation omitted). Once a determination of dependency has
been made, N.C. Gen. Stat. § 50-16.2 provides that “[a] dependent
spouse is entitled to an order for alimony when . . . [t]he
supporting spouse has committed adultery.” N.C.G.S. § 50-16.2(1)
(1995) (repealed). This statute does not include any requirement
that the adultery have an economic impact.
In
Rice I, this Court reversed the alimony judgment and
remanded for findings on the parties' accustomed standard of
living, the issue of fault based on defendant's admitted adultery,and plaintiff's health. In reviewing the amended alimony judgment
before us, we note that the trial court once again failed to make
any findings with respect to the accustomed standard of living
during the marriage. Instead, the trial court simply made findings
regarding the separate “estates” of the parties during the
marriage. As the point in evaluating the parties' accustomed
standard of living is to consider the pooling of resources that
marriage allows, the trial court's findings are insufficient.
See
Talent, 76 N.C. App. at 548, 334 S.E.2d at 259 (“the court must
determine and consider . . . the standard of living, socially and
economically, to which the parties
as a family unit became
accustomed during the several years prior to their separation”)
(emphasis added);
see Williams v. Williams, 299 N.C. 174, 181, 261
S.E.2d 849, 855 (1980) (term “contemplates the economic standard
established by the marital partnership for the family unit during
the years the marital contract was intact”).
In addition, it was improper for the trial court to consider
plaintiff's potential rental income of the Parmele Boulevard
residence. As this Court found in
Rice I:
In March of 1998, three months before the
trial, plaintiff accepted a job with Adams
Mark Motel in Mobile, Alabama for a gross
annual income of $42,000[.00]. At the time of
the trial, plaintiff was in the probationary
period with Adams Mark Motel and was not
certain whether she would remain in Mobile.
Rice I, 138 N.C. App. 710, 536 S.E.2d 662. In light of the
uncertainty as to plaintiff's continued employment and residence,
it was premature for the trial court to expect plaintiff to
supplement her income with the rental of her North Carolinaresidence.
[10] Finally, plaintiff contends the trial court abused its
discretion in its treatment of the issue of fault for purposes of
alimony. In the amended alimony judgment, the trial court
concluded that defendant's adultery, found as fact by the trial
court, did “not appear to have had any effect on the marital
economy or the accustomed standard of living of the parties prior
to the date of separation” and should therefore be disregarded.
Pursuant to
Rice I, the trial court was directed to consider
defendant's adultery for purposes of analyzing (a) the fault
element listed in
Talent as one of the factors to consider in
determining plaintiff's status as a dependent spouse and (b), if
plaintiff was found to be dependent, whether alimony must be
awarded pursuant to section 50-16.2(1). Economic impact of marital
fault would have an effect on the determination of dependency;
however, it bears no weight on the second prong of the analysis as
provided by section 50-16.2(1). In this case, it is clear that the
trial court only considered fault for purposes of dependency, and
because it concluded that plaintiff was not a dependent spouse, the
trial court did not need to reach the issue of fault under section
50-16.2(1) addressed in
Rice I. Accordingly, we find no abuse of
discretion as to this issue.
Because of the errors found with respect to the amended
alimony judgment, the alimony portion of this case is also
remanded, with instructions to enter findings and conclusions
consistent with this opinion. Furthermore, in light of the need to
remand this case, we do not address plaintiff's remaining issueswith respect to the alimony judgment.
Reversed and remanded.
Chief Judge EAGLES concurs.
Judge LEVINSON concurs in part and dissents in part.
LEVINSON, Judge, concurring in part and dissenting in part.
I concur with the majority opinion in all respects except the
following.
First, I disagree with the majority's conclusion that the
trial court erred by considering “plaintiff's potential rental
income” as a distributional factor. At issue is the trial court's
distributional factor O, which provides in its entirety:
Plaintiff currently does not live in the
residence and could at least rent the property
for several thousand dollars during the summer
seasons. The Plaintiff failed to explain or
justify to the satisfaction of the [c]ourt her
failure to maximize the income from this
property (which is especially puzzling in
light of the Plaintiff's asserted “need” for
alimony from the Defendant).
The majority reasons that, because plaintiff accepted an out-of-
state job three months before the trial, “it was premature for the
trial court to expect plaintiff to supplement her income with the
rental of her North Carolina residence.” I disagree.
The trial court is afforded wide discretion in entering
equitable distribution orders, enabling the court to fashion its
orders with regard to the specific facts and circumstances of a
given case. Wall v. Wall, 140 N.C. App. 303, 307, 536 S.E.2d 647,
650 (2000). Further, the trial judge is in a better position than
this Court to evaluate witnesses' credibility and the evidence. In
the present case, the evidentiary facts underlying factor O areundisputed - that the plaintiff was in the probationary period of
a new job, was living out of state, and had not rented her house
for the summer.
Moreover, the trial court is charged with the exercise of
discretion to determine whether O, standing alone or in combination
with other factors, supports an unequal division of the marital
estate. The majority acknowledges the trial court's obligation
under G.S. § 50-20(c)(1) to consider “[t]he income, property, and
liabilities of each party at the time the division of property is
to become effective[,]” and quotes Harris v. Harris, 84 N.C. App.
353, 359, 352 S.E.2d 869, 873 (1987), for the proposition that “the
legislature intended to grant the trial court the authority to
consider the future prospects of the parties, as well as their
status at the time of the hearing, in determining whether an equal
division of marital assets would be equitable.” That being so, the
majority's conclusion that the trial court abused its discretion is
puzzling. In conducting our review, this Court may disagree with
a trial court's determination of whether the evidence should
support an unequal division of the marital estate. However, this
does not necessarily manifest error on the part of the trial judge
who sits in the best position to make such a decision. “[T]he
trial court's rulings in equitable distribution cases receive great
deference and may be upset only if they are so arbitrary that they
could not have been the result of a reasoned decision.” Lawing v.
Lawing, 81 N.C. App. 159, 162, 344 S.E.2d 100, 104 (1986). In the
present case, I conclude the trial court did not abuse its
discretion by considering plaintiff's decision not to rent herproperty when she could have done so. Accordingly, I would hold
that plaintiff failed to demonstrate error with respect to factor
O.
For similar reasons, I disagree with the majority's conclusion
that it was an abuse of discretion for the trial court to consider
“plaintiff's potential rental income of the Parmele Boulevard
residence” in its determination that plaintiff was not a dependent
spouse. The majority concludes that because of the “uncertainty as
to plaintiff's continued employment and residence, it was premature
. . . to expect plaintiff to supplement her income with the rental
of her North Carolina residence.” However, our trial courts are
necessarily vested with wide discretion in alimony determinations
and frequently assign varying degrees of significance to evidence
that does not necessarily lend itself to one interpretation over
another. In the present case, the court's evaluation of the
potential rental income, like its evaluation of many other facts
and circumstances, is clearly permissible. Again, the relevant
facts regarding plaintiff's failure to rent out her North Carolina
home were not disputed. I would hold that the trial court properly
considered plaintiff's potential rental income in making its
determination of whether plaintiff was a dependent spouse.
With respect to the potential rental income issue for the
equitable distribution and alimony determinations, the majority has
erroneously replaced its own judgment for that of the trial court.
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