Appeal by defendant from orders entered 14 August 2003 and 25
May 2004 by Judge Jeanie R. Houston in Wilkes County District
Court. Heard in the Court of Appeals 16 August 2005.
No brief for plaintiff-appellee.
McElwee Firm, PLLC, by William H. McElwee, IV, for defendant-
appellant.
HUNTER, Judge.
Robert Neder (“defendant”) appeals from orders entered 14
August 2003 and 25 May 2004 providing for distribution of marital
property. We affirm the trial court's order.
Defendant and Hanna Neder (“plaintiff”) were married on 19
November 2000. During the course of their marriage, plaintiff and
defendant began construction on a home, titled as tenancy by the
entirety. It is undisputed that funds for the home came primarily
from separate property of defendant, who used money from the sale
of a residence owned prior to the marriage and various investments.
Defendant also used several credit cards listed in his name to payfor construction costs. Plaintiff contributed a few thousand
dollars from the sale of a separate asset and income.
Defendant and plaintiff separated on 7 January 2002 and
plaintiff filed for divorce. Both parties sought distribution of
the marital property and both requested an unequal distribution in
their favor. Plaintiff also requested post-separation support and
alimony. A hearing was held on 4 April 2003 and the trial court
found, in an amended order issued 14 August 2003, that the marital
home was marital property. The trial court found that plaintiff
suffered from significant depression and post-traumatic stress
disorder, which she testified were caused by the marriage and
defendant's behavior. Although defendant contributed significant
amounts of separate property to the marriage, the trial court found
that, as the home was titled as a tenancy by the entirety, there
was a presumption of gift to the marital estate. The trial court
found that certain marital indebtedness existed, including several
credit card balances from Lowe's and Home Depot. The trial court
ordered that the marital home be sold at a judicial sale, and the
proceeds used to pay the marital debts, “including but not limited
to the outstanding credit card indebtedness to Lowe's and Home
Depot.” The remaining funds from the sale were to be held pending
final division by the court.
The marital home was sold in February 2004 at a value of
$33,075.00. Plaintiff moved for distribution of the net sale
proceeds on a fifty-fifty basis. Defendant made a counter-motion
requesting an unequal distribution in his favor, as the maritalresidence was obtained primarily with his separate funds.
Defendant contended that such a distribution was appropriate
because of the short duration of the marriage, the inequity in
contribution to the costs of the marital home, and the credit
consequences to defendant of the expended funds. Defendant also
argued that he had deeded the property as a tenancy by the entirety
without realizing the consequences of that action.
A final order of distribution was entered on 25 May 2004 by
the trial court. An equal division of the net proceeds from the
sale of the residence was awarded to the parties. Defendant
appeals.
I.
Defendant first contends the trial court should have made an
unequal distribution of the proceeds from the sale of the former
marital residence in defendant's favor, as defendant provided the
majority of the funds for purchase and construction of the
property. In related assignments of error, defendant contends the
trial court erred in considering plaintiff's alleged health
conditions as a factor in dividing the marital estate without
sufficient evidence, and in permitting testimony as to defendant's
misconduct during the course of the marriage. We disagree.
“'The North Carolina Equitable Distribution Act is a
legislative enactment of public policy so strongly favoring the
equal division of marital property that an equal division is made
mandatory “unless the court determines that an equal division is
not equitable.”'”
Crowder v. Crowder, 147 N.C. App. 677, 681, 556S.E.2d 639, 642 (2001) (quoting N.C. Gen. Stat. § 50-20(c) (1999))
(citation omitted). The trial court must consider a number of
statutory factors in making its determination, including the
“property, and liabilities of each party at the time the division
of property is to become effective” and the “physical and mental
health of both parties.” N.C. Gen. Stat. § 50-20(c)(1), (3)
(2003).
A party seeking an unequal division bears the burden of
showing that an equal division would not be equitable by a
preponderance of the evidence.
See White v. White, 312 N.C. 770,
776, 324 S.E.2d 829, 832 (1985). “The trial court has wide
discretion to determine what constitutes an equitable distribution
of marital property: 'the exercise of that discretion will not be
upset absent clear abuse.'”
Crowder, 147 N.C. App. at 681, 556
S.E.2d at 642 (citations omitted).
“[Therefore, i]n order to reverse the trial
court's decision for abuse of discretion, we
must find that the decision was unsupported by
reason and could not have been the result of a
competent inquiry. Accordingly, the findings
of fact are conclusive [on appeal] if they are
supported by any competent evidence from the
record.”
Id. (citations omitted).
We first address defendant's contention that his contributions
of separate property to the marital home required unequal
distribution of the marital assets.
In North Carolina, “[d]onative intent is properly presumed
when a spouse uses separate funds to furnish consideration for
property titled as an entireties estate.”
McLean v. McLean, 323N.C. 543, 551, 374 S.E.2d 376, 381 (1988). “This presumption is
sufficiently strong that it is, and should be, rebuttable only by
clear, cogent, and convincing evidence.”
Id. at 551-52, 374 S.E.2d
at 381 (footnote omitted).
Here, defendant presented uncontested evidence showing that he
provided the majority of the costs of the marital home from his
separate property, and the trial court made findings to that
effect. However, the record does not reveal clear, cogent, and
convincing evidence to overcome the presumption of donative intent
created by titling the property as a tenancy by the entirety.
McLean, 323 N.C. at 551-52, 374 S.E.2d at 381. Therefore, the
trial court did not err in finding that the home was marital
property.
Defendant next contends the trial court erred in considering
plaintiff's alleged health conditions without sufficient evidence
as a factor in dividing the marital estate, and in allowing
plaintiff to testify as to marital misconduct.
In
Armstrong v. Armstrong, 322 N.C. 396, 368 S.E.2d 595
(1988), our Supreme Court held that when “evidence is presented
from which a reasonable finder of fact could determine that an
equal division would be inequitable, the trial court is required to
consider the factors set forth in N.C.G.S. § 50-20(c), 'but guided
always by the public policy expressed . . . [in the Act] favoring
an equal division.'”
Id. at 404, 368 S.E.2d at 599 (citation
omitted). “The trial court then must make findings and conclusions
which support its division of marital property.”
Id. at 404, 368S.E.2d at 599. One of the factors for consideration under N.C.
Gen. Stat. § 50-20(c)(3) is the “physical and mental health of both
parties.”
Id.
Here, plaintiff testified that she had been diagnosed with
depression, post-traumatic stress disorder, anxiety, and panic
attacks, and that she was on Social Security disability. Plaintiff
also testified to a knee replacement and that she suffered from
cancer. The trial court properly made findings regarding
plaintiff's poor health. However, as the final order reflects, the
trial court did not conclude as a result of this finding that an
equal division would be inequitable, and therefore ordered the
mandatory equal division of marital assets.
Crowder, 147 N.C. App.
at 681, 556 S.E.2d at 642.
Defendant also contends the trial court erred in allowing
plaintiff to testify as to marital misconduct.
Our Supreme Court has held that
misconduct during the marriage which
dissipates or reduces the value of marital
assets for nonmarital purposes may properly be
considered under N.C.G.S. 50-20(c)(12).
Marital fault or misconduct which does not
adversely affect the value of marital assets
is not a just and proper factor within the
meaning of N.C.G.S. 50-20(c)(12).
Smith v. Smith, 314 N.C. 80, 81, 331 S.E.2d 682, 683 (1985). As
discussed
supra, one of the statutory factors for consideration by
the trial court is the “physical and mental health of both
parties.” N.C. Gen. Stat. § 50-20(c)(3).
Here, plaintiff testified that her depression and post-
traumatic stress disorder were caused by defendant's physical andmental abuse in the course of the marriage and that they did not
exist prior to the marriage. The trial court's findings reflect
that plaintiff believed the causation of these conditions was
defendant's abuse. However, as discussed
supra, the trial court
did not conclude as a result of this finding that an equal division
would be inequitable. Therefore, even assuming
arguendo that the
trial court erred in permitting such testimony, the trial court's
order of equal division of marital assets precludes a finding that
such testimony was prejudicial to defendant.
The trial court properly made findings as to the statutory
factors presented and concluded that equal distribution would not
be inequitable. We find no abuse of discretion in the trial
court's conclusions.
II.
Defendant finally contends the trial court failed to consider
the credit card debt incurred by defendant in making its final
order of distribution. We find no merit to this argument.
In the amended order entered 14 August 2003, the trial court
specifically made findings that marital debts included outstanding
credit card debt, and further ordered that the remaining marital
debts, “including but not limited to the outstanding credit card
indebtedness to Lowe's and Home Depot[,]” be paid from the sale
proceeds of the marital home. As the trial court had already
addressed the issue of marital debt, including credit card debt,
and had ordered such debts paid from the sale proceeds, there is no
merit to defendant's argument that the trial court failed toconsider this issue in the final distribution order dealing with
the net proceeds remaining following the sale and payment of debts.
As we find no abuse of discretion on the part of the trial
court, we affirm the order for the reasons stated herein.
Affirmed.
Judges McGEE and LEVINSON concur.
Report per Rule 30(e).
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