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1. Divorce_equitable distribution_antenuptial agreement_interpretation
The trial court did not err in an equitable distribution case by interpreting the language of
an antenuptial agreement so that a notice requirement applied to one paragraph only.
2. Divorce_equitable distribution_post-separation mortgage
payments_reimbursements
The trial court was within its discretion in an equitable distribution case in requiring that
defendant be reimbursed for post-separation mortgage payments made while plaintiff was in
exclusive possession of the marital home.
3. Divorce_equitable distribution_post-separation mortgage payments_non-divisible
property
The trial court erred in an equitable distribution action by characterizing post-separation
mortgage payments as a distribution of divisible property. However, a remand was not necessary
because the trial court had the authority to reimburse defendant for those payments.
4. Divorce_equitable distribution_post-separation mortgage payments
The trial court did not err in an equitable distribution action by determining that
reimbursement of post-separation mortgage payments was equitable. The payments were not
divisible property and the court was not required to consider the statutory factors concerning
whether the payments were equitable.
Judith K. Guibert for plaintiff-appellant.
Wyrick Robbins Yates & Ponton LLP, by K. Edward Greene and
Adrienne Allison, for defendant-appellee.
ELMORE, Judge.
Marcus Cooke (plaintiff) and Susan Cooke (defendant) were
married on 14 February 1991, separated on 25 June 2001, and
divorced on 3 December 2002. On the date of their marriage, the
parties signed an antenuptual agreement (the agreement), which was
drafted by plaintiff's counsel. The parties executed the agreement
in Tennessee, the state in which they were married.
In relevant part, the agreement states:
2. Property Rights. After the marriage
between the parties, each of them shall
separately retain all respective rights in his
or her own property disclosed and listed in
Exhibits “A” and “B”, including any
appreciation thereon and including
(See footnote 1)
property
acquired during the marriage with the proceeds
of such separate property (as listed in
Exhibits “A” and “B”) and separate property
acquired during the marriage that each, after
giving notice to the other, shall segregate
and maintain as his or her separate property.
Each of them shall have the absolute and
unrestricted right to dispose of their own
property including the proceeds from the
disposition of any property or the
reinvestment of such proceeds, free from all
claims that may be made by the other by reason
of their marriage, and with the same effect as
if no marriage had been consummated between
them.
3. Disposition of Property. Each party hereto
may freely sell or otherwise dispose of his or
her own property, whether listed in Exhibits
“A” and “B” or property acquired during the
marriage, designated and segregated by such
party as his or her separate property
including any appreciation thereon, and
including the proceeds . . . .
4. Property and Disposition During Marriage.
Each party during his or her lifetime shall
keep and retain sole ownership, control and
enjoyment of his or her own property whether
listed in Exhibit “A” and “B” or property
acquired during the marriage, designated and
segregated by such party as his or her
separate property including any appreciation
thereon, and including the proceeds from the
disposition of any such property or the
reinvestment of such proceeds free and clear
of any claim by the other arising out of the
marriage of the parties . . . .
* * *
6. Relinquishment of Right to Inherit. With
regards to the property set forth in Exhibit
“A” and “B”, and any other property acquired
during the marriage designated and segregated
by such party as his or her separate property
and any appreciation on such properties, and
including the proceeds from the disposition of
any such property or the reinvestment of such
proceeds, each party hereby releases and
relinquishes to the other . . . and is hereby
forever barred from any and all rights,
interests, or claims by way of past, present
and future support, division of property,
right of dower, inheritance, descent,
distribution, allowance for support, and all .
. . rights or claims whatsoever, in or to the
aforementioned property of the other, whether
real or personal, which may, in any manner,
arise or accrue by virtue of said marriage.
Plaintiff's assets owned prior to marriage were listed in Exhibit
A and defendant's assets owned prior to marriage were listed in
Exhibit B. Defendant listed her investment assets, valued at
$57,436.00, which included tax-free bonds with a value of
$4,870.00, individual retirement accounts with a value of
$7,398.00, qualified retirement plans with a value of $4,888.00,
and other investments with a value of $40,280.00. Defendant also
listed bonds and stocks/stock options with values of $0.00. At thetime the parties separated, plaintiff had a net worth of
$492,794.00 and defendant had a net worth of $1,232,169.00.
Included in defendant's net worth were marketable securities with
a value of $452,458.00 and a retirement account with a value of
$544,000.00.
The parties relocated to North Carolina during their marriage,
and purchased a home in Chapel Hill (the marital home). The
mortgage on the marital home was in defendant's name only.
After the parties separated in 2001, plaintiff continued to
reside in the marital home, and defendant purchased a second home
in which she lived with the parties' daughter. Plaintiff
exclusively occupied the marital home after June, 2001, but did not
pay the mortgage in September, October, and December of 2001. He
paid half the mortgage in November of 2001. Defendant paid a total
of $11,959.00 in mortgage payments after her separation from
plaintiff and while plaintiff had exclusive possession of the
marital home. The trial court calculated that defendant received
a tax benefit of $1,151.35 in reduction of her tax liability for
2001 as a result of those mortgage payments.
By consent order entered 14 December 2001, the parties agreed
to list the marital home for sale, and a later order required
plaintiff to make all subsequent mortgage payments on the marital
home. Plaintiff made several offers to buy defendant's half
interest in the marital home, and the parties ultimately agreed
upon a price of $133,500.00. Plaintiff's counsel then drafted a separation and property
settlement agreement, which both parties executed on 18 February
2002. The property settlement agreement states that the parties
agreed that the value of defendant's interest in the marital home
was $133,500.00, and that plaintiff would pay defendant that amount
in exchange for a quitclaim deed conveying her interest in the
marital home to plaintiff. The property settlement agreement also
states, in relevant part, “This Agreement as entered into between
the parties shall not affect either parties' rights regarding the
manner in which any prior payment relative to the [marital]
residence should be treated in the pending equitable distribution
action.”
Plaintiff appeals three separate orders entered by Judge
Anderson over the course of his litigation with defendant. We
address each order individually.
26 September 2002 Order
Plaintiff first argues that the trial court erred by granting
partial summary judgment to defendant in its 26 September 2002
order. On 10 May 2002, plaintiff moved for equitable distribution
of “certain property which qualifies as marital property as defined
by N.C.G.S. § 5-20 et seq.” Plaintiff asserted that, pursuant to
the antenuptual agreement, all “property accumulated during the
marriage (except property listed on the parties' exhibits and
appreciation thereon, and property acquired during the marriage by
inheritance or gift and maintained by a party as his or herseparate property with notice of such intent) is marital property
subject to equitable distribution.” In response, defendant moved
for partial summary judgment, which the trial court granted in its
26 September 2002 order. The trial court agreed with defendant
that the “Antenuptual Agreement establishe[d] that the only
property that was marital property and subject to distribution by
[the trial court] was the marital residence and certain items of
tangible personal property purchased through the parties' joint
account.” Defendant's investment property, including her
retirement accounts, was therefore not subject to equitable
distribution.
This appeal arises from a decree of partial summary judgment,
and our review is therefore de novo. Howerton v. Arai Helmet,
Ltd., 358 N.C. 440, 470, 597 S.E.2d 674, 693 (2004). “The trial
court should grant summary judgment 'if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to
any material fact and that any party is entitled to a judgment as
a matter of law.'” McCutchen v. McCutchen, 360 N.C. 280, 285-86,
624 S.E.2d 620, 625 (2006) (quoting N.C. Gen. Stat. § 1A-1, Rule
56(c) (2005)). We consider the evidence “in a light most favorable
to the non-moving party.” Howerton, 358 N.C. at 470, 597 S.E.2d at
693. Our review entails a two-part analysis: “[s]ummary judgment
is appropriate if (1) the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, show that there is no genuine issue as to any materialfact; and (2) the moving party is entitled to judgment as a matter
of law.” Gaunt v. Pittaway, 139 N.C. App. 778, 784, 534 S.E.2d
660, 664 (2000).
[1] Plaintiff urges us to reconsider the trial court's
interpretation of the language of the antenuptual agreement. “The
principles of construction applicable to contracts also apply to
premarital agreements[.]” Harllee v. Harllee, 151 N.C. App. 40,
46, 565 S.E.2d 678, 682 (2002) (citations omitted). Plaintiff
would have us read the notice requirement in Paragraph 2 as
applying to the other paragraphs, effectively expanding the
property that would fall into the pot of marital property subject
to equitable division. Specifically, some or all of defendant's
sizable investment portfolio would be subject to division.
When “interpreting contract language, the presumption is that
the parties intended what the language used clearly expresses, and
the contract must be construed to mean what on its face it purports
to mean.” Stewart v. Stewart, 141 N.C. App. 236, 240, 541 S.E.2d
209, 212 (2000) (citing Hartford Accident & Indem. Co. v. Hood, 226
N.C. 706, 710, 40 S.E.2d 198, 201 (1946)).
Our review of the antenuptual agreement rendered the same
result as the trial court's review: that the notice requirement
imposed in Paragraph 2 applies only to Paragraph 2 and not to the
other paragraphs of the agreement. The word “notice” is used in
Paragraph 2 and does not appear in Paragraphs 3, 4, and 6, which
each address the disposition of “separate property.” A plain
reading of the agreement suggests that the parties intended thenotice requirement only to apply to the particular category of
rights addressed in Paragraph 2. “Notice” is simply not stated as
a requirement in Paragraphs 3, 4, and 6 and there is no language
that directs us to read “notice” into those paragraphs. Instead,
we read Paragraphs 3, 4, and 6 as creating particular categories of
rights for the disposition of property, entirely distinct from the
rights created in Paragraph 2. We find no ambiguity in the
language of the agreement, nor do we find that the trial court's
construction of the document creates an absurd result.
Accordingly, we affirm the order of the the trial court granting
partial summary judgment.
5 January 2006 Order
[2] We turn next to plaintiff's appeal from the order entered
5 January 2006. This order resolved “defendant's claims against
plaintiff for payments made against the mortgage for the benefit of
plaintiff after separation,” and granted defendant the right to
recover a judgment of $10,807.65 from plaintiff.
“[T]he trial court is vested with wide discretion in family
law cases, including equitable distribution cases.” Wall v. Wall,
140 N.C. App. 303, 307, 536 S.E.2d 647, 650 (2000). “Thus, a trial
court's ruling will be upset only upon a showing that it was so
arbitrary that it could not have been the result of a reasoned
decision.” Id. (citations and quotations omitted). “[T]he law
affords trial courts wide discretion in determining how to treat
post-separation mortgage payments by one spouse. . . . A trialcourt 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) (citation omitted).
Here, the trial court was within its discretion to require
plaintiff to reimburse defendant for post-separation mortgage
payments that defendant made while plaintiff was in exclusive
possession of the marital home. The property settlement agreement
specifically stated that it did not affect how defendant's “prior
payments” should be treated in the equitable distribution action,
leaving the trial court wide latitude to determine the parties'
rights with regard to those prior payments. Although plaintiff
makes additional arguments that he overpaid for his half-interest
in the property, he signed a property settlement agreement that
states that he agreed to the price. We will not evaluate the
fairness of the agreement's terms, and therefore do not address
these arguments.
The trial court made twenty-five findings of fact before
reaching its conclusion. These findings of fact are supported by
competent evidence, and the conclusion is supported by these
findings of fact. It is evident that the order was the result of
a reasoned decision, and as such we affirm it.
31 March 2006 Order
[3] The trial court issued its final order and judgment on 31
March 2006. The order awards “judgment against Plaintiff in favorof Defendant in the amount of $10,807.65,” which “judgment
represents a distribution of the divisible property created by
Defendant's post-separation payments of the indebtedness secured by
the marital residence” while it was in plaintiff's exclusive
possession. The court reasoned that it was equitable to distribute
all of “said divisible property” to defendant because she paid it
“with her separate funds, and it would be inequitable to distribute
any of said divisible property to Plaintiff.”
Plaintiff correctly asserts that the trial court erred in
categorizing the post-separation payments as “a distribution of
divisible property.” N.C. Gen. Stat. § 50-20(b)(4)(d) was amended
in 2002 to expand the definition of “divisible property” to include
decreases in marital debt. See N.C. Gen. Stat. § 50-20(b)(4)(d)
(2005); Warren v. Warren, 175 N.C. App. 509, 516-17, 623 S.E.2d
800, 805 (2006). The amendment applies only to payments made after
11 October 2002. Warren, 175 N.C. App. at 517, 623 S.E.2d at 805.
The payments pre-date the amendment and therefore do not fall
within the statutory definition of “divisible property.”
However, this error does not necessitate reversal or remand.
As discussed above, the trial court had authority to reimburse
defendant for her post-separation mortgage payments under Hay.
Although we acknowledge the error, we need not remand.
[4] Plaintiff also argues that the trial court erred by
determining reimbursement to defendant was equitable because N.C.
Gen. Stat. § 50-20(c) requires a trial court to divide marital and
divisible property equitably upon consideration of the factorslisted therein. N.C. Gen. Stat. § 50-20(c) (2005). Because the
post-separation mortgage payments were not “divisible property,”
the trial court was not required by section 50-20(c) to consider
the statutory factors when considering whether payment was
equitable. Instead, the trial court was only required to make a
“reasoned decision,” as in Wall and Hay, that defendant was
entitled to reimbursement for the mortgage payments.
Accordingly, we affirm the orders of the district court.
Affirmed.
Judges MCGEE and STEPHENS concur.
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