FRANCES HOGAN HARRIS,
Plaintiff,
v
.
Nash County
No. 00 CVD 369
ROGER EUGENE HARRIS,
Defendant.
W. Michael Spivey for plaintiff-appellant.
FARRIS AND FARRIS, P.A., by Thomas J. Farris, and THOMAS AND
FARRIS, P.A., by Albert S. Thomas, Jr., for defendant-
appellee.
TIMMONS-GOODSON, Judge.
Frances Hogan Harris (“plaintiff”) appeals the trial court
judgment and order awarding her $1,100.00 per month in permanent
alimony, distributing marital property, and denying her motion for
attorney's fees. We conclude that the trial court did not err in
its alimony judgment or in its order denying plaintiff attorney's
fees. However, because we also conclude that the trial court erred
in that portion of the judgment and order distributing the parties'
property, we affirm the judgment and order in part and we remand
for further findings of fact and recalculation of the distributive
award.
The facts and procedural history pertinent to the instantappeal are as follows: Plaintiff and Roger Eugene Harris
(“defendant”) were married on 14 July 1982 and separated on 30
January 2000. On 25 February 2000, plaintiff filed a complaint
against defendant, seeking, inter alia, alimony and equitable
distribution of marital and divisible property. On 7 March 2000,
defendant filed an answer and counterclaim for child custody and
equitable distribution. On 21 September 2001, the trial court
entered a judgment and order awarding an equal share of the marital
property to each party and awarding plaintiff $1,100.00 per month
in permanent alimony. On 31 October 2001, the trial court entered
an order denying plaintiff attorney's fees.
Plaintiff thereafter appealed the 21 September 2001 judgment
and order as well as the 31 October 2001 order. In an unpublished
opinion, this Court determined that the trial court failed to make
the sufficient and specific findings necessary to support its
judgment and order, and we thus vacated the judgment and order and
remanded the case to the trial court, with instructions to make
those “further findings as required by law.” Harris v. Harris, 157
N.C. App. 364, 578 S.E.2d 710 (2003) (unpublished) (“Harris I”).
The trial court did not take new evidence or hear further argument
from the parties on remand. On 4 December 2003, the trial court
entered a second judgment and order in the case, again awarding
plaintiff $1,100.00 per month in permanent alimony, again awarding
an equal share of the marital property to each party, and again
denying plaintiff's motion for attorney's fees. It is from this
judgment and order that plaintiff appeals.
(2) The relative earnings and earning
capacities 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;
. . . .
(10) The relative assets and liabilities of
the spouses and the relative debt service
requirements of the spouses, including legal
obligations of support;
. . . .
(13) The relative needs of the spouses;
(14) The federal, State, and local tax
ramifications of the alimony award; [and]
(15) Any other factor relating to the economic
circumstances of the parties that the court
finds to be just and proper.
N.C. Gen. Stat. § 50-16.3A(c) requires the trial court to “set
forth the reasons for its award or denial of alimony and, if making
an award, the reasons for its amount, duration, and manner ofpayment.” Unless otherwise excepted by the Rules of Civil
Procedure, N.C. Gen. Stat. § 50-16.3A(c) also requires that the
trial court “make a specific finding of fact on each of the factors
of subsection (b) . . . if evidence is offered on that factor.”
“'The well-established rule is that findings of fact by the trial
court supported by competent evidence are binding on the appellate
courts even if the evidence would support a contrary finding.'”
Kelly v. Kelly, ___ N.C. App. ___, ___, 606 S.E.2d 364, 368 (2004)
(quoting Scott v. Scott, 336 N.C. 284, 291, 442 S.E.2d 493, 497
(1994)).
In the instant case, with respect to defendant's income, the
trial court made the following pertinent finding of fact:
16. Defendant currently has a base cash
yearly income of $124,823.98; in addition, he
receives vehicle benefits totaling $2,583.00
per year; that is a reduction from $8,400.00
for vehicle benefits the previous year[.]
Plaintiff asserts that the trial court erred in this finding
of fact, in that the trial court ignored evidence of defendant's
deferred compensation. The record reflects that, at trial,
plaintiff provided copies of defendant's tax records and elicited
testimony from a certified public accountant in an effort to
demonstrate that defendant earned approximately $134,000.00 per
year, $10,000.00 of which was deferred to avoid tax implications.
However, the record also reflects that defendant testified that his
2001 bonus would not be deferred, that he earned $124,823.98 in
2000, and that he would be paid the same for 2001, although his
bonus had not yet been calculated. He further testified asfollows:
Q: [N]ow, as far as your paycheck, now that
you have stopped the deferred income and
the car and everything else and you
receive only cash compensation, what is
your net income, what is your - what gets
deposited into your account?
. . . .
A: I don't have a statement in front of me,
but I - I know this is correct. With
the current exemptions that I was using,
which is on federal married with five
exemptions, my take home pay is
$5,471.11.
Q: And so the $10,000.00 that used to get
deferred - I mean, the $1,000.00 per
month that was being taken out is now
been added back in and that's the total
amount; is that right?
A: That is correct.
In light of the foregoing, we conclude that the trial court's
finding of fact related to defendant's individual income is
supported by competent evidence. Plaintiff's contention that the
trial court was required to find facts in her favor because of the
introduction of contrary evidence is without merit. See Kelly, ___
N.C. App. at ___, 606 S.E.2d at 368; Beall v. Beall, 290 N.C. 669,
673, 228 S.E.2d 407, 409 (1976) (“When the trial judge is
authorized to find the facts, his findings, if supported by
competent evidence, will not be disturbed on appeal despite the
existence of evidence which would sustain contrary findings.”).
Therefore, we conclude that the trial court did not err in its
finding of fact related to defendant's income.
With respect to plaintiff's income, the trial court made thefollowing pertinent findings of fact:
11. Plaintiff has an undergraduate degree
from the University of North Carolina at
Chapel Hill and is presently working outside
the home as a substitute teacher;
. . . .
13. Plaintiff was employed outside the home
for approximately the first year of the
marriage but thereafter was a homemaker with
her primary responsibility being the care of
the children;
14. The parties agreed for her not to seek
employment outside the home while the children
were in elementary school; after the children
moved beyond elementary school, Plaintiff
alone determined, with the eventual
acquiescence of Defendant, that she did not
want to work outside the home and spend money
on business attire;
. . . .
16. Plaintiff is presently employed as a
substitute teacher at Faith Christian School,
earning $5.15 an hour[.]
. . . .
18. Plaintiff is presently in good physical
and mental condition and her ability to obtain
and retain meaningful full-time employment is
unimpeded; based on her education, appearance
and obvious intellect, Plaintiff clearly has
the means and ability to earn an amount well
in excess of minimum wage.
As detailed above, N.C. Gen. Stat. § 50-16.3A(b)(2) provides
that a party's earning capacity is a proper factor for the trial
court to consider when determining its alimony award. In the
instant case, plaintiff asserts that in making the above-detailed
findings of fact, the trial court failed to consider evidence
offered at trial tending to show that her employment as a schoolteacher was only part-time and that she earned only $500.00 for
four months of employment in 2000. However, we note that the trial
court specifically found that plaintiff's “primary responsibility”
is being the caretaker of her children, and in detailing its
considerations regarding the amount, duration, and manner of
alimony payment, the trial court recognized that “[p]laintiff's
earning capacity has been impaired by her years out of the job
market” and that her “earning power . . . will be affected to some
extent by her being the primary custodian of the minor children[.]”
In light of the foregoing, we are not convinced that the trial
court failed to consider all the evidence before it when making its
determination.
Plaintiff maintains that the finding of fact that she has the
“ability to earn an amount well in excess of minimum wage” is vague
and based upon speculation. We recognize that in Harris I, this
Court concluded that the trial court had failed to provide a
sufficiently specific finding of fact regarding plaintiff's earning
capacity when it found that plaintiff was “intellectually and
physically capable of earning substantial sums.” In that case, we
noted that we were unable to determine what the trial court meant
by “substantial” as well as how the finding affected the court's
alimony award in the absence of evidence of the parties' financial
needs. However, the record in the instant case reflects that, on
remand, the trial court detailed plaintiff's employment and earning
history in its findings of fact, including her present part-time
job. The trial court noted that plaintiff was capable of obtainingfull-time employment, and, as discussed below, the trial court made
sufficient findings of fact regarding plaintiff's financial needs
and expenses. In light of the foregoing, we conclude that the
trial court complied with our instructions on remand, and
therefore, we also conclude that the trial court did not err in its
findings related to plaintiff's earning capacity.
With respect to the amount and sources of unearned income of
the parties, the trial court made the following pertinent findings
of fact:
22. In order to maintain the previously noted
standard of living and prepare for retirement,
Plaintiff's parents provided substantial
funding for the parties through[out] the
marriage; without that regular assistance, the
parties could not have maintained their
standard of living or saved as they did for
retirement; to assist the parties and in
conjunction with their own estate planning, in
fact, Plaintiff's parents gifted more than
$46,000.00 to them in 1998 and more than
$52,000.00 in 1999; Plaintiff's parents also
gifted amounts for the children's private
schooling in years other than 1998 and 1999;
Plaintiff's parents established a trust
whereby Plaintiff's father was trustee but
Plaintiff had the authority to remove the
trustee at her will; the assets of the trust
were fully gifted to Plaintiff and also
provided interest income for the parties;
Plaintiff's parents made regular, substantial
gifts to Plaintiff, Defendant and their
children throughout the marriage;
. . . .
33. The Court has considered the following
factors in determining the amount, duration
and manner of payment of alimony:
. . . .
c. The parties' established standard of
living and the need of the parties forregular contributions and gifts from
Plaintiff's parents to sustain that
standard of living as set forth in the
findings of fact[.]
Plaintiff asserts that these findings of fact are not
supported by competent evidence. However, we note that plaintiff
testified at trial that her parents had made contributions to the
couple during their marriage, including payments for their
children's private schooling, contributions to stock investments,
and contributions to a trust fund. Although plaintiff testified
that the gifts were “[m]ostly for” her children or their benefit,
defendant testified that plaintiff's parents gave the family “[i]n
excess of” $46,000.00 in 1998 and $52,000.00 in 1999. Defendant
further testified that plaintiff's parents had given defendant and
plaintiff money every year of their marriage, and that plaintiff's
parents had been “very generous to [defendant and plaintiff] the
entire time [they were] married.” In light of the foregoing, we
conclude that competent evidence supports the trial court's
findings of fact related to the gifts provided to the marriage by
plaintiff's parents.
With respect to defendant's reasonable monthly expenses, the
trial court made the following pertinent findings of fact:
24. Defendant submitted an affidavit of his
monthly living expenses at the September 6,
2000 Hearing regarding spousal and child
support and other issues, with that affidavit
referenced by Defendant as still being
accurate, Defendant stated his current
expenses, not including child or spousal
support, are approximately $3,600.00 per
month. The affidavit from the earlier Hearing
listed monthly living expenses of
$3,546.69 . . . .
25. Defendant's monthly living expenses . . .
are approximately $2,750.00; such expenses are
reasonable and necessary under the
circumstances . . . .
Plaintiff asserts that the trial court's findings of fact
related to defendant's expenses are not supported by competent
evidence. However, we note that defendant testified that his
expenses were “[i]n the vicinity of $3,600.00 per month[,]” and
that his living expenses were the same as those he listed during
the post-separation support hearing. N.C. Gen. Stat. § 8C-1, Rule
201(b) (2003) allows the trial court to take judicial notice of
adjudicatory facts as long as those facts are “not subject to
reasonable dispute in that [they are] . . . capable of accurate and
ready determination by resort to sources whose accuracy cannot
reasonably be questioned.” Plaintiff contends that the trial court
erred by taking judicial notice of defendant's prior expense notes,
in that the notes were never admitted into evidence during the
post-separation support hearing, and plaintiff was not given an
opportunity to rebut defendant's assertions therein. However, we
note that a trial court may take judicial notice of adjudicative
facts whether requested or not, N.C. Gen. Stat. § 8C-1, Rule
201(c), and in the absence of prior notification by the trial court
of its intent, a party is entitled to request a post-decision
hearing regarding the propriety of the judicial notice. N.C. Gen.
Stat. § 8C-1, Rule 201(e). In the instant case, the record
reflects that plaintiff did not object to defendant's reference to
his earlier expense testimony, and there is no indication in the
record that plaintiff requested a hearing regarding the proprietyof the judicial notice following the trial court's alimony order.
Furthermore, the trial court's findings of fact demonstrate that it
carefully considered the evidence before it in an effort to
ascertain the amount of defendant's expenses that was “reasonable.”
The trial court did not accept defendant's expense assertions at
face value, finding instead that only $2,750.00 of the claimed
$3,546.69 in expenses was reasonable. In light of the foregoing,
we conclude that the trial court did not err with respect to its
findings of fact related to defendant's expenses.
With respect to plaintiff's reasonable monthly expenses, the
trial court made the following pertinent findings of fact:
26. Plaintiff submitted an affidavit listing
her current monthly living expenses . . . .
27. Plaintiff claims an expense of $1,603.00
for housing by estimating a monthly mortgage
payment based on a ten-year loan; however, a
ten year mortgage would substantially inflate
a monthly expense as compared with a more
normal fifteen or thirty year mortgage; in
actuality, Plaintiff has no mortgage payment,
is making no rent payment and either payment
would be purely speculative;
28. Plaintiff has also substantially
increased her auto maintenance and repair
expenses with that expense being $15.00
average per month as part of the household
expenses of the parties, but $177.00 per month
as an expense on her own; she also included a
$491.00 automobile expense when in actuality
there is none, and her medical expense
statement for herself alone is $421.00 which
is approximately $100.00 per month more than
the listed family's expense; in addition, her
retirement savings of $716.66 is speculative
in that Plaintiff is able-bodied, capable of
obtaining employment with its own retirement
plan, and is receiving ownership of 50 percent
of the three marital retirement plans;
Defendant, in fact, stopped his savings planat work in July, 2000 by declaring hardship.
29. The Court notes that Plaintiff has failed
to include expenses for utilities or cable
television and will, therefore, substitute
$275.00, the amount claimed by Defendant for
utilities, telephone and cable expense, in
lieu of the $23.38 listed by Plaintiff as her
telephone expense; she also did not list any
clothing expense while Defendant listed
$125.00 per month which shall also be included
as the amount of clothing expense for
Plaintiff; Plaintiff also failed to list
insurance payments other than for the
automobile while Defendant listed $100.00
which amount shall also be included as an
insurance expense for Plaintiff; the auto
insurance of $151.00 per month listed by
Plaintiff includes insurance for a child's
vehicle with the reasonable expense only for
Plaintiff therefore being approximately one-
half, or $76.00; the amounts of $491.00 for
her automobile, $1,603.00 for housing, $256.63
for a credit card, and $716.66 for retirement
savings are not sufficiently proven expenses;
the Court accepts her auto maintenance and
repair of $177.00 per month and her medical
expense of $421.00 per month; Plaintiff's
monthly living expenses are approximately
$2,150.00; such expenses are reasonable and
necessary under the circumstances.
Plaintiff asserts that the trial court erred in making its
findings of fact related to her expenses in that the trial court
ignored evidence introduced at trial and made findings of fact
unsupported by competent evidence. According to plaintiff, the
“most egregious” of the trial court's errors is the finding of fact
that plaintiff's housing expenses were “not sufficiently proven”
and “purely speculative.” We conclude that the trial court did not
err.
The record reflects that plaintiff moved into a smaller
residence following the parties' separation. The smaller residencewas purchased on plaintiff's behalf by her parents, who were also
making mortgage payments on the residence. Plaintiff introduced an
affidavit at trial indicating that her mortgage payment on the
residence would be $1,603.00 per month were she to pay the
mortgage. Plaintiff testified on cross-examination that this
amount was a “projected amount for a ten-year loan, a ten-year
mortgage to pay for the house . . . if I am capable of doing so.”
However, notwithstanding her at-trial assertion that she had “hopes
that [she] w[ould] be able to . . . buy it back” from her parents,
there is no indication that plaintiff would be required to pay the
mortgage on the residence. In light of the foregoing, we conclude
that there is competent evidence to support the trial court's
findings of fact regarding the smaller residence.
Plaintiff maintains that the trial court erred in making
several of the other findings of fact related to her expenses, in
that the trial court ignored competent evidence introduced by
plaintiff and failed to take into account the expenses plaintiff
was accustomed to during the marriage. We note that under former
N.C. Gen. Stat. § 50-16.5, the trial court's goal in awarding
alimony was to provide the dependent spouse with that amount of
alimony necessary to maintain the standard of living the spouse was
accustomed to during marriage. We also note that, under the
current alimony statutes, “[t]he standard of living of the spouses
established during the marriage” is a factor for the trial court to
consider when awarding alimony. N.C. Gen. Stat. § 50-16.3A(b)(8).
However, our Supreme Court has recognized that “a determinationthat one is the supporting spouse because he or she can maintain
the dependent spouse at the standard of living to which they were
accustomed through estate depletion could soon lead to inability to
provide for either party.” Williams v. Williams, 299 N.C. 174,
184, 261 S.E.2d 849, 856 (1980). Thus “[w]hile the court must
consider the needs of the spouse seeking alimony in the context of
the family unit's accustomed standard of living, it also must
determine that the supporting spouse has the financial capacity to
provide the support needed therefor.” Whedon v. Whedon, 58 N.C.
App. 524, 527, 294 S.E.2d 29, 31, disc. review denied, 306 N.C.
752, 295 S.E.2d 764 (1982). “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 he is not required
to accept at face value the assertion of living expenses offered by
the litigants themselves.” Id. at 529, 294 S.E.2d at 32.
In the instant case, the trial court expressly found that
“[t]he parties, on their present income, cannot maintain the
standard of living established during their marriage[.]” The trial
court's findings of fact demonstrate that it considered the
evidence introduced at trial, and, in its discretion, determined
the reasonableness of the parties' proffered expenses. The trial
court provided an explanation for its decrease or rejection of
certain listed expenses, and it included expenses in its
calculation that plaintiff failed to account for in her affidavit.
After excluding those expenses it found unreasonable or
speculative, including the housing allotment described above, thetrial court found that plaintiff's reasonable monthly expenses
totaled $2,150.00 per month. This amount is approximately $100.00
more than that amount remaining when the housing expenses are
excluded from the expense total provided by plaintiff in her
expense summary. In light of the foregoing, we conclude that the
trial court did not err with respect to its findings related to
plaintiff's reasonable monthly expenses.
With respect to the ramifications of federal, state, and local
tax on the alimony award, the trial court made the following
pertinent findings of fact:
33. The Court has considered the following
factors in determining the amount, duration
and manner of payment of alimony:
. . . .
l. The tax ramifications of an award of
$1,100.00 per month alimony; although no
evidence was presented as to an award of
that amount, the tax liability should not
exceed 28% federal and 7% state; evidence
was introduced by Plaintiff that she
would be in the 15% tax bracket upon an
award of $2,000.00 per month alimony, but
that was without consideration of her
separate assets or any earned or unearned
income[.]
We note that in Harris I, this Court rejected the trial
court's finding that “the federal, state, and local tax
ramifications of this alimony award are factors in the Court's
award of alimony[,]” concluding that the finding was insufficient
to permit appellate review of how tax implications affected the
alimony award. In the instant appeal, plaintiff asserts that trial
court erred by making the above-detailed finding of fact on remand,in that the finding of fact remains insufficient to permit
appellate review of how tax implications affected the alimony
award. However, after reviewing the finding of fact and the
evidence contained in the record, we cannot agree.
The record in the instant case reflects that although
plaintiff offered testimony at trial regarding the tax
ramifications on an alimony award, this testimony was limited to
alimony awards of $2,000.00 per month or greater. Plaintiff's tax
witness did not provide testimony regarding the tax implications of
an award of alimony in the amount of $1,100.00 per month, nor did
the witness indicate he had considered plaintiff's ability to earn
income or her other assets when he testified regarding the tax
implications of an alimony award. The trial court recognized this
in its finding of fact, and it noted that although plaintiff's
expert witness had provided calculations based upon plaintiff being
in the 15% bracket, plaintiff's tax liability “should not exceed
28% federal and 7% state” when the alimony award and other earnings
are considered. We conclude that this finding of fact is
sufficient to allow this Court to review the alimony award pursuant
to N.C. Gen. Stat. § 50-16.3A(c), and therefore, we conclude that
the trial court did not err with respect to the finding of fact
related to the tax ramifications of the alimony award.
In light of the foregoing conclusions, we hold that the trial
court's findings of fact are supported by competent evidence and
the trial court made those findings of fact required by N.C. Gen.
Stat. § 50-16.3A.
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