Powers v Powers, (04-987) 08/02/2005

Appeal by defendant from order entered 15 January 2004 by Judge Mary F. Covington in District Court, Iredell County. Heard in the Court of Appeals 9 March 2005.

Jimmy Austin Powers, plaintiff-appellee, pro se.

Lassiter & Lassiter, P.A., by T. Michael Lassiter, Jr., for defendant-appellant.

    McGEE, Judge.

    Jimmy Austin Powers (plaintiff) and Tammy Renae Grant Powers (defendant) were married on 15 June 1991. They had two children. Plaintiff and defendant separated on 29 September 2001 and were divorced on 18 November 2002.
    Plaintiff filed a complaint for child custody, child support, divorce from bed and board, equitable distribution, and attorney's fees on 5 October 2001. Defendant filed a complaint on 8 October 2001, seeking child custody, child support, post-separation support, alimony and attorney's fees.
    The trial court entered an order on 19 February 2002 resolving all matters pending between plaintiff and defendant, exceptequitable distribution. A hearing on equitable distribution was held on 29 October 2003. At the 29 October 2003 hearing, evidence showed that plaintiff and defendant had purchased real property that included a mobile home for approximately $75,000 in 1996. Plaintiff and defendant had a first mortgage of approximately $50,000 on the real property and the mobile home. They began construction of a house on the real property around 1999. At the time plaintiff and defendant separated, "the house had only walls and a roof." The house had a value of $122,000 on the date of separation. Indebtedness for the house incurred prior to separation of the parties totaled $44,856.41. The entire debt was paid by plaintiff after the date of separation. There was no construction on the house, nor any active appreciation of the house, after the date of separation.
    In an order entered 15 January 2004, the trial court found that the "net value of the house on the date of separation after payment of the above described debts [was] $77,143.59." The trial court noted that it had not allowed "[h]earsay evidence as to the current value of the residence" and that "no evidence was offered of any active or passive appreciation of the residence since the date of separation." The trial court further found that "there should be an unequal division [of the marital estate] in favor of [plaintiff,]" noting that the trial court gave "great weight to the contention that [plaintiff] had to make all the debt payments." In distributing seventy-five percent of the marital estate to plaintiff and twenty-five percent to defendant, the trial courtconcluded as a matter of law that "an unequal division [of the marital estate] in [plaintiff's] favor [was] equitable." Defendant appeals.
    The trial court has wide discretion in determining an equitable distribution of marital property. Wall v. Wall, 140 N.C. App. 303, 307, 536 S.E.2d 647, 650 (2000). "Accordingly, the trial court's judgment 'will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.'" Edwards v. Edwards, 152 N.C. App. 185, 187, 566 S.E.2d 847, 849 (quoting White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)), cert. denied, 356 N.C. 611, 574 S.E.2d 679 (2002).

    Defendant first argues that the trial court abused its discretion in excluding a tax appraisal as evidence of passive appreciation in the value of the marital home after the date of separation. We agree that a tax appraisal showing the passive appreciation in the valuation of the house after the date of separation would be divisible property to be considered by the trial court in determining an equitable distribution of the marital estate. See N.C. Gen. Stat. § 50-20(a) (2003) (providing the trial court "shall determine what is the marital property and divisible property and shall provide for an equitable distribution of the marital property and divisible property between the parties"). However, defendant has not preserved this issue for appeal.
    "[I]n order for a party to preserve for appellate review theexclusion of evidence, the significance of the excluded evidence must be made to appear in the record and a specific offer of proof is required unless the significance of the evidence is obvious from the record." State v. Simpson, 314 N.C. 359, 370, 334 S.E.2d 53, 60 (1985); see also N.C. Gen. Stat. § 8C-1, Rule 103 (2003). A "defendant must make an offer of proof so that the substance and significance of the excluded evidence is in the record." State v. Ginyard, 122 N.C. App. 25, 33, 468 S.E.2d 525, 531 (1996). Without an adequate offer of proof, our Court can only speculate as to the content of the evidence. Id.
    In the present case, after establishing that the value of the house at the date of separation was approximately $122,000, defendant's attorney, in cross-examining plaintiff, asked plaintiff whether plaintiff had seen the most recent tax appraisal for the house. Plaintiff responded that he had received it but had not looked at it. Defendant's attorney asked plaintiff if plaintiff agreed that the tax value of the house at the time of the 29 October 2003 hearing was $168,000, but plaintiff never answered the question because his attorney objected. A discussion between defendant's attorney and the trial court ensued, and the trial court ruled that the tax appraisal was not relevant to the date of separation. However, at no time did defendant make any offer of proof as to the contents of the tax appraisal. Nor is the content of the tax appraisal apparent from the context such that a an offer of proof was not necessary. Thus, defendant has not preserved this issue for appeal and we dismiss defendant's assignment of error.

    Defendant next argues that the trial court erred in awarding an unequal distribution in favor of plaintiff pursuant to N.C. Gen. Stat. § 50-20(c) because there was insufficient evidence to support an unequal distribution. N.C.G.S. § 50-20(c) provides: "There shall be an equal division by using net value of marital property and net value of divisible property unless the [trial] court determines that an equal division is not equitable." If a trial court determines that an equal division of both the marital and divisible property is not equitable, the trial court "shall divide the marital property and divisible property equitably" and "shall consider all of the . . . factors under" N.C.G.S. § 50-20(c).
    Defendant argues that the trial court abused its discretion by improperly considering the contributions of plaintiff and defendant to the house and real property during the marriage. When making an unequal distribution, the trial court shall consider "[a]cts of either party to maintain, preserve, develop, or expand . . . the marital property or divisible property, or both[.]" N.C.G.S. § 50- 20(c)(11a). However, such contributions must have been made "during the period after separation of the parties and before the time of distribution." Id. Unless proven otherwise, contributions made by the parties during the marriage "are deemed to be equal[.]" Smith v. Smith, 314 N.C. 80, 86, 331 S.E.2d 682, 686 (1985). Indeed, "[e]quitable distribution, as enacted in North Carolina, [is] grounded in the notion that marriage is a partnership enterprise, both economic and otherwise, 'to which both spousesmake vital contributions and which entitles the homemaker spouse to a share of the property acquired during the relationship.'" Khajanchi v. Khajanchi, 140 N.C. App. 552, 556, 537 S.E.2d 845, 848 (2000) (quoting White, 312 N.C. at 775, 324 S.E.2d at 832).
        In other words, "[t]he goal of equitable distribution is to allocate to divorcing spouses a fair share of the assets accumulated by the marital partnership." The heart of the theory is that "both spouses contribute to the economic circumstances of a marriage, whether directly by employment or indirectly by providing homemaker services."

Smith, 314 N.C. at 86, 331 S.E.2d at 686 (citations omitted).
    Our review of the transcript in the present case shows that the trial court stated it was making an unequal distribution, at least in part, because of the improvements plaintiff had made to the house and real property during the marriage. The trial court made comments in announcing its decision that indicate it considered the contributions of plaintiff and defendant during the marriage as relevant in determining its unequal distribution of the marital assets. Specifically, the trial court stated: "[T]here was evidence that [plaintiff] improved [the house and property], and [defendant] did nothing to improve [the house or property during the marriage]." Though the trial court stated it had taken into consideration that defendant was the primary caretaker, the trial court further stated: "I don't know if [defendant] worked during the marriage or contributed to the marriage in any way other than being a mother to the children for 10 years[.]" The trial court also commented that no evidence had been presented to show that defendant "had contributed anything [to the marriage] other thanhaving two babies." As defendant asserts, these statements by the trial court violate the purpose behind equitable distribution of recognizing marriage as an economic partnership.
    However, we cannot conclude that the trial court's unequal distribution "could not have been the result of a reasoned decision[,]" White, 312 N.C. at 777, 324 S.E.2d at 833, because the trial court also based its unequal distribution on the fact that only plaintiff had paid the marital debts from the date of separation to the date of distribution. See N.C.G.S. § 50- 20(c)(11a); see also Fox v. Fox, 103 N.C. App. 13, 21, 404 S.E.2d 354, 358 (1991) ("Payment by one spouse on a marital home mortgage after the date of separation is a factor appropriately considered by the trial court under [N.C.G.S. §] 50-20(c)(11a) and (c)(12) in determining what division of marital property is equitable."). First, the trial court made the following finding of fact on the issue of unequal distribution:
        The Court has considered [plaintiff's] contentions for an unequal distribution . . . and specifically the contention that [plaintiff] has made all the debt payments since the date of separation and finds there should be an unequal division in favor of [plaintiff]. The Court gives great weight to the contention that [plaintiff] has had to make all the debt payments.

    Second, it is clear from the trial court's discussion in announcing its decision that the trial court placed great weight on the fact that plaintiff had paid these debts. The trial court stated that plaintiff had paid the mortgage on the house, and defendant had not "made any payments toward anything since the dateof separation, . . . [nor] had [defendant] contributed to completing the house since the date of separation." The trial court further stated that even though there was no evidence that either party had actively done anything to the house or the real property since the date of separation, plaintiff had paid the debts incurred during the marriage after the date of separation, and that defendant had not contributed anything. To the extent that the trial court based its unequal distribution on the debts paid by plaintiff after the date of separation, but before the date of distribution, the trial court's order was not in error.

    Defendant next argues that the trial court erred by giving plaintiff a credit for his post-separation payments and by distributing the marital estate unequally in plaintiff's favor. Defendant argues that while the trial court properly considered plaintiff's post-separation payments on the marital debt as a distributive factor, the trial court abused its discretion when, in addition to distributing the marital estate unequally in plaintiff's favor, it gave plaintiff a dollar for dollar credit for the total indebtedness he paid on the marital residence. We agree.
    The trial court found that the following debts were incurred by plaintiff and defendant prior to the date of separation: "$40,000.00 for the payment of the original mortgage; $2,000.00 for the doors, $850.00 for the siding; $400.00 for the siding work; $426.12 to Bob Messick, $672.00 to Bob Messick and $508.29 to Harmony Milling." These debts totaled $44,856.41. The trial courtfurther found that plaintiff had paid these debts after the date of separation, and that "the house and debt should be distributed to [plaintiff]." The trial court found that the house was valued at $122,000 as of the date of separation, and that after the total payment of the debts was credited to plaintiff, the trial court concluded that the net value of the house was $77,143.59. It was this house value of $77,143.59 that the trial court used in calculating the total marital estate, and in distributing seventy- five percent to plaintiff and twenty-five percent to defendant. As discussed above, the trial court based its decision to distribute the marital estate unequally on the fact that only plaintiff had paid the debts after the date of separation.
    Our Court has previously held that post-separation payments of marital debts may be treated in a variety of ways. "Post-separation payments may . . . be treated as a distributional factor." Khajanchi, 140 N.C. App. at 564, 537 S.E.2d at 853. "A trial court may also give the payor a dollar for dollar credit in the division of the property, or require that the non-payor spouse reimburse the payor for an appropriate amount." Hay v. Hay, 148 N.C. App. 649, 655, 559 S.E.2d 268, 273 (2002); see also Edwards v. Edwards, 110 N.C. App. 1, 13, 428 S.E.2d 834, 839-40, cert. denied, 335 N.C. 172, 436 S.E.2d 374 (1993). However, these methods for treating post-separation payments on marital debts are alternative methods that a trial court may use in its discretion when determining equitable distribution. See Hay, 148 N.C. App. at 653, 559 S.E.2d at 271-72 (rejecting the defendant's argument that thetrial court erred when it treated the defendant's post-separation mortgage payments as a distributional factor rather than giving the defendant a dollar for dollar credit for the amount paid).
    By giving plaintiff a dollar for dollar credit for the indebtedness he paid on the marital residence, and by distributing the marital estate unequally because only plaintiff had paid these debts, the trial court erred in twice giving plaintiff the benefit of having paid the debts. The trial court abused its discretion, and we reverse the order for equitable distribution. We remand for a new distribution of the parties' marital estate.
    Reversed and remanded.
    Judges BRYANT and STEELMAN concur.
    Report per Rule 30(e).

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