SELENA HAMMILL SHAW, Wake County
Plaintiff, No. 01 CVD 2231
v
.
RONALD DWAIN SHAW,
Defendant.
LEVINSON, Judge.
Ronald Dwain Shaw (husband) and Selena Hammill Shaw (wife)
were married in 1983 and divorced in 2003. Two children were born
of the marriage. In an order entered 13 January 2005, the trial
court (1) distributed the marital estate in an equitable
distribution, (2) awarded alimony, (3) denied husband's motion to
modify an earlier award of post-separation support, (4) refused to
sanction wife for discovery violations and perjury, (5) denied
husband's motion alleging wife committed indirect contempt for
failing to abide by a parenting agreement, and (6) denied husband'smotion for attorney fees.
In husband's first argument on appeal, he contends the trial
court erred by failing to conclude that wife had not engaged in
cohabitation. He argues that, as a matter of law, the evidence
compelled the court to conclude wife cohabited. We disagree.
N.C. Gen. Stat. § 50-16.9(b) (2005) provides:
If a dependent spouse who is receiving
postseparation support or alimony from a
supporting spouse under a judgment or order of
a court of this State remarries or engages in
cohabitation, the postseparation support or
alimony shall terminate. . . . [C]ohabitation
means the act of two adults dwelling together
continuously and habitually in a private
heterosexual relationship, even if this
relationship is not solemnized by marriage . .
. . Cohabitation is evidenced by the voluntary
mutual assumption of those marital rights,
duties and obligations which are usually
manifested by married people, and which
include, but are not necessarily dependent on,
sexual relations.
The trial court made the following relevant findings of fact:
77. Beginning in March 2001, Plaintiff began to date
Robert Evans. By September 2001, she and Mr. Evans were
involved in an exclusive monogamous sexual relationship.
In May 2002, Defendant filed a motion to modify the post
separation support payments and a subsequent motion to
modify in January 2004 alleging cohabitation by the
Plaintiff.
78. Beginning in September or October 2001, Defendant
began to notice that Plaintiff's car was parked in the
driveway of the marital residence and not inside the
garage. When Defendant called the marital residence to
speak with the children, the phone was often answered by
Mr. Evans. He began to learn that the minor childrenwere traveling with Mr. Evans and Plaintiff on several
trips. The children began to talk about visiting Mr.
Evans's parents down east for the holidays in the winter
of 2001. It was also apparent that Mr. Evans attended
church with Plaintiff and children on almost every other
weekend.
79. In October 2003, Defendant hired a private
investigator to confirm how much time Mr. Evans and
Plaintiff were spending together. The Defendant
presented evidence by Gary Richardson, private
investigator, related to his allegation that Plaintiff is
cohabiting with Robert Evans.
80. The private investigator conducted surveillance of
the Plaintiff and Mr. Evans for a period from October 14
- October 17, 2003 then from October 24 - 25, 2003. This
surveillance was discontinued each night prior to
midnight, except the last night of surveillance. On the
final night of surveillance the private investigator
observed Robert Evans leaving Plaintiff's residence at
12:20 a.m.
81. Mr. Evans spent the night with the Plaintiff at her
residence for two (2) nights between October 14 and
October 25. The Defendant alleged that on one of these
nights the minor children were present; however, the
children had gone to a neighbor's around 6:30 p.m. that
evening, ate dinner with her family and spent the night
with her.
82. Plaintiff and Mr. Evans went shopping together once
during the surveillance period at Wal-Mart and Mr. Evans
paid for the purchase. Mr. Evans, the Plaintiff, her
children, another female person and several children went
out to eat once during the surveillance and Mr. Evans
paid for the meal.
83. The private investigator, during his surveillance,
visited Mr. Evans' home located at 8801 Mansfield Drive
in Raleigh, North Carolina. The home appeared to be
lived in and the yard had been mowed.
84. Mr. Evans has a key to Plaintiff's home and a garage
door opener and he is the only person other thanPlaintiff to have those items. He sometimes helps the
children with their homework, occasionally picks the
children up from after school care at the YMCA, and takes
trips with the children and the Plaintiff. Mr. Evans
comes to Plaintiff's house to have meals with her and the
children three or four times a week when he is in town,
he sometimes purchases groceries for the meals, he pays
for meals whenever she and the children go out to eat
with him, and he pays for trips that they take together.
Mr. Evans is on the list of approved persons to pick up
the minor children from school and daycare, attends
school and extracurricular activities of the children,
attends church with Plaintiff and her children, has
visited Plaintiff's parents on more than ten occasions,
receives gifts from her family, and on at least one
occasion, went on a family vacation with Plaintiff's
extended family.
85. Plaintiff and the children had taken a trip to Disney
World with Mr. Evans during the children's track-out time
from October 4-11, 2003, and Mr. Evans paid for the trip.
Plaintiff and Mr. Evans also went on a weekend trip to
Atlanta the first weekend of October, 2003.
86. Mr. Evans does not pay any of her household bills
for Plaintiff and they have no financial accounts
together. Mr. Evans receives no mail at Plaintiff's
residence, keeps no clothing at her residence other than
a swimsuit, and he does not keep any toiletries at her
home.
87. The Defendant has failed to offer sufficient
evidence that Plaintiff and Mr. Evans are cohabitating
within the meaning of N.C.G.S. 50-16.9.
Finding of fact 87 is actually a conclusion of law, and we
therefore treat it is as such. See Gainey v. N.C. Dept. of
Justice, 121 N.C. App. 253, 257 n.1, 465 S.E.2d 36, 40 n.1 (1996).
Husband does not challenge any of the remaining findings of fact
and they are, therefore, binding on appeal. See Johnson v.Herbie's Place, 157 N.C. App. 168, 579 S.E.2d 110, 118 (2003)
(findings of fact not challenged on appeal are binding).
In making his argument that the evidence compelled a
conclusion that wife cohabited with another, husband relies largely
on two cases: Long v. Long, 160 N.C. App. 664, 588 S.E.2d 1 (2003),
and Oakley v. Oakley, 165 N.C. App. 859, 599 S.E.2d 925 (2004). In
Long, evidence was presented to suggest a dating relationship
between the alimony obligee and another person. Long, 160 N.C.
App. at 667, 588 S.E.2d at 3. This Court reversed the trial
court's determination that cohabitation had occurred where its
findings of fact were merely recitations of testimony. Long is
therefore not authority in support of husband's argument in the
instant case. In Oakley, although there was conflicting
testimony concerning the number of nights spent at wife's home,
the parties did not disagree about the essential facts giving
rise to the argument that wife had cohabited: an intimate
relationship; overnight trips; dinners; and watching television.
This Court, in affirming the trial court's conclusion that wife had
not cohabited, observed that the evidence did not show evidence of
activities beyond [the] sexual relationship and their occasional
trips and dates, Oakley, 165 N.C. App. at 863, 599 S.E.2d at 928,
and concluded that the there was no assumption of any 'marital
rights, duties, and obligations which are usually manifested bymarried people[.]' Long, 160 N.C. App. at 667, 588 S.E.2d at 3
(quoting G.S. § 50-16.9(b)).
It is, of course, the trial court that sits as the finder of
fact, evaluating what it chooses to believe or disbelieve, and
determining the weight to be given to that which it believes. See
Scott v. Scott, 336 N.C. 284, 291, 442 S.E.2d 493, 497 (1994). We
are therefore guided not by husband's contentions in his brief
about what the evidence and testimony suggested about all the facts
and circumstances surrounding the nature and extent of wife's
relationship with another man, but on what the trial court did
find. The inquiry is whether the findings of the trial court
support its conclusion of law that wife did not engage in
cohabitation. See Shear v. Stevens Building Co., 107 N.C. App.
154, 160, 418 S.E.2d 841, 845 (1992).
Here, the findings primarily reveal that Robert Evans assisted
in some ways with the children, and further reveal a dating and
sexual relationship; dinners together when [Evans] was in town;
and time together shopping, attending church, and traveling. Evans
maintained his own lived in residence and did not keep toiletries
or clothing in wife's home; did not receive mail there; and did not
pay household expenses. And wife and Evans did not maintain
financial accounts together. We conclude that the findings do not
compel a conclusion that there was a mutual assumption of maritalrights, duties, and obligations which are usually manifested by
married people.
Long, 160 N.C. App. at 667, 588 S.E.2d at 3. We
therefore reject husband's contention that wife engaged in
cohabitation as a matter of law, and overrule the relevant
assignments of error.
Husband next argues that the trial court erred when it
considered his motion to modify post-separation support (PSS),
filed in June 2002, based upon changes in his employment and
income. Specifically, husband contends the trial court erred by
not reducing the obligation to $500.00 each month because the court
found that wife's needs were only $876.00 per month and that
[husband] had the ability to pay only $500.00 per month. We
disagree.
Husband's motion to reduce PSS was based on a change of
employment and a corresponding reduction in income. See G.S. § 50-
16.9. Husband argues that, [i]t is illogical that [he] had the
ability to pay $1,349 per month [in PSS] at a time when his annual
income was only $60,000 if he only had the ability to pay $500 [for
alimony] when his salary is $27,000 more than the $60,000. In
other words, he faults the trial court for awarding $500 each month
in alimony at the time of trial, but denying his effort to reduce
the $1349/month PSS obligation for a period of time when he was
earning less income.
Husband suggests that he had an inability to pay the $1,349
each month in PSS at the time his motion to modify PSS was filed.
He bases his argument on the trial court's finding of fact
contained in paragraph 101 that he could pay $500.00 each month in
alimony for five (5) years following the trial. However, the
court's finding that he had the ability to pay $500 each month was
expressly related to alimony. It did not refer to, or have any
relationship with, the court's findings related to husband's motion
to reduce PSS or his ability to pay PSS during a period that
preceded the trial. Indeed, in finding of fact 89, the trial court
found that husband could pay the higher award of PSS the court
required of him leading up to the time of trial:
88. The [husband] ceased paying post-separation support
to the [wife] in May 2002. As of June 2002, when
[husband] filed a Motion to Terminate/Suspend Post-
separation support, the [husband] was in arrears in the
amount of $4,278.70. The [husband] is now currently in
arrears for post-separation support owed to the [wife]
pursuant to this Court's Order of May 17, 2001 in the
amount of $34,668.90.
89. During the period of time the [husband] has refused
to pay post-separation support to the [wife], he
maintained up to five (5) vehicles, three (3) rental
units and his own town home unit, took vacations with his
children, girlfriend and her child to the beach and
mountains, took a recent vacation to Jamaica, purchased
gifts for his girlfriend and her child, purchased
antiques for his home, and maintained an antique booth at
a flea market in Raleigh. Defendant had the ability to
pay post-separation support as ordered.
Moreover, conclusion of law 14, which is assigned as error forreasons not argued on appeal, states that husband had the ability
to comply with [the order] regarding payment of post-separation
support to [wife]. And husband overlooks a specific directive on
the part of the trial court that, as a part of the order on appeal
concerning sanctions, it concluded that, [w]ith regard to the
issue involving termination or reduction of post-separation
support, it is equitable to prohibit the [husband] from presenting
evidence as to his inability to pay. The relevant assignments of
error are overruled.
In a related argument, husband contends that findings of fact
89, 91, and 101 conflict. This contention is without merit.
Findings of fact 89 and 101 are set forth above. Finding 91
states:
91. The Plaintiff's Financial Affidavit and testimony
reflect non-prorated expenses of $2,886.19 and individual
expenses of $558 per month. These amounts do not include
amounts that [wife] testified she is currently unable to
afford or has had to reduce, such as a car payment and
insurance, clothing, vacations, and eating out. However,
many of these expenses are paid for by [her gentleman
friend] or are not supported by the documentary evidence
provided, such as eating out and grocery costs. The
[wife] is in need of $876 per month in order to meet her
reasonable monthly expenses.
Husband's argument is premised, again, on the erroneous
assumption that the court's findings concerning husband's ability
to pay for the periods before and after the trial must be the same.
On the contrary, finding of fact 89 is clearly in a portion of thecourt order concerning PSS, while paragraphs 91 and 101 are in a
portion of the order specifically concerning alimony. Findings 89,
91, and 101 are clearly not in conflict, and are clearly supported
by the record.
Husband next argues that the trial court, in effecting an
equitable distribution, erred by failing to consider the tax
consequences of withdrawals he made from a Charles Schwab account
held by the parties after the date of separation and before the
hearing.
Specifically, husband contends the trial court erred by
finding that any tax consequences to him were speculative, and by
failing to use the tax consequences as a distributional factor. We
conclude that the trial court did consider the tax consequences
associated with the husband's withdrawals within the meaning of the
statute
.
When reviewing an order on equitable distribution, this
Court's duty is to determine whether the trial court abused its
discretion. White v. White, 312 N.C. 770, 324 S.E.2d 829 (1985).
A ruling committed to a trial court's discretion is to be accorded
great deference and 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. at 777, 324 S.E.2d at 833. The trial court must
make findings concerning those factors enumerated in N.C. Gen.
Stat. § 50-20(c) (2005), where evidence has been presentedconcerning the same. See Rosario v. Rosario, 139 N.C. App. 258,
260-61, 533 S.E.2d 274, 275-76 (2000).
Section 50-20(c)(11)
requires the trial court to consider tax consequences that will
result from the distribution of property that the court actually
orders. Weaver v. Weaver, 72 N.C. App. 409, 416, 324 S.E.2d 915,
920 (1985), rev'd on other grounds, Armstrong v. Armstrong, 322
N.C. 396, 368 S.E.2d 595 (1988); see also Wilkins v. Wilkins, 111
N.C. App. 541, 432 S.E.2d 891 (1993).
Before its amendment in 2005, N.C. Gen. Stat. § 50-20(c)(11)
(2003) required that the trial court consider
[t]he tax
consequences to each party.
Here, the trial court made the following pertinent findings of
fact:
51. The parties are also the owners of a Charles Schwab
& Company, Inc. IRA, account number RH 8071- 2431 held in
Defendant's name alone. On the date of separation, the
balance in the account was $119,508.46. The account is
an investment account that is both broker managed and
stock holder managed. From the date of separation until
the date of liquidation, both Defendant and Schwab
managed the account. On the date of separation, the
Schwab account contained the following stocks, America
Online Latin America, Delias Corporation CL A, Global
Games Corp., Leam2.com Inc., Optical Cable Corp., PSS
World Medical, Inc., Skymall Inc. and Virtgame.com Corp.
52. In 2001, Defendant removed $37,000 from the Schwab
account. Defendant used these funds to pay attorneys'
fees and to furnish his town home, as Plaintiff refused
to give Defendant any furnishings for the town home from
the marital residence. In 2002, Defendant removed$28,000 from the Schwab account. He used this money to
pay bills and to live on after he lost his job with
Diagnostic Imaging. In December 2002, an order was
entered to restrain either party from removing additional
funds from the account. Defendant did not find out about
this order until March 2003 when his attorney at the
time, Brett Hubbard, informed him of the restraining
order. In January 2003, Defendant had removed an
additional $3500 from the account. The total that
Defendant received from the Schwab account is $68,500.00
and said distributions should be considered as an interim
allocation to the Defendant.
53. Plaintiff tendered Mr. Lewis Crawley as an expert in
stock valuation to testify with regards to this account.
Mr. Crawley has no training or special license to value
stock; therefore, he is not accepted as an expert in the
area of stock valuation. However, he can give layman's
testimony. Mr. Crawley analyzed the value of current
value of the stock that resulted in the distributions to
Defendant. His testimony was that the value of the stock
that was sold, if it was held today would be $107,060 if
the investments that were sold to make the distributions
to Defendant remained in the account today.
54. On the other hand, the value of the portfolio would
have decreased to approximately $6364 had the investments
remained in the stock funds that were in existence on the
date of separation. However, trades were made, prior to
the withdrawals, although it is unclear whether those
trades were made at the direction of Defendant or the
broker and those investments do not remain in the
portfolio.
55. There is no evidence before the Court as to whether
additional trades would have been made of those
investments after the distributions were made.
Therefore, it is pure speculation, which the Court will
not engage in, as to what the value of the account would
be were it not for the distributions. The distributions
were neither an effort by Defendant to preserve the
marital estate nor a waste of a marital asset by the
Defendant.
56. The current value of the Charles Schwab & Company,Inc. IRA account number RH 8071-2431 is $803.45. The
difference between the $119,508.46 date of separation
value less the $68,500 distribution to Defendant
($51,008.46) is passive and is a divisible loss to the
parties.
57. Defendant retained the services of George Lambert,
a partner with Williams, Overman, Pierce & Company to
determine the tax consequences associated with the
withdrawal of the funds from the Schwab account. Mr.
Lambert was accepted by the Court as an expert in the
field of certified public accounting.
58. Mr. Lambert prepared a chart which purported to show
the tax consequences the Defendant will suffer as a
result of his withdrawals from the Charles Schwab
account. The chart reflected that for the tax year, 2001
Defendant incurred an early withdrawal penalty in the
amount of $3,700 and federal and state taxes on the
$37,00[0] withdrawal in 200[1], such that his net benefit
of the distribution after taxes was $19,361. For the 2002
tax year, Defendant incurred an early withdrawal penalty
in the amount of $2800 and federal and state taxes on the
$28,000 withdrawal such that the net benefit from the
distribution was $16,028 for the tax year 2002. For the
tax year 2003, Defendant incurred an early withdrawal
penalty of $350 and state and federal taxes such that his
net benefit was $1969.
59. The chart presented by Mr. Lambert was inaccurate in
several respects: (a) the chart did not include rental
income earned by the Defendant; (b) the chart did not
include the tax loss currently available to Defendant to
reduce his taxable income, related to Defendant's prior
losses resulting from day trading; (c) the chart did not
take into account any federal taxes withheld at the time
of the withdrawals, and (d) the payments of
post-separation support listed on the chart were not
accurate.
60. Furthermore, Defendant has not filed federal or state
income tax returns for the years 2000, 2001, 2002, or
2003. Any tax consequences to Defendant are purely
speculative and, if incurred, are the result of a
unilateral decision by the Defendant. The taxconsequences will not be considered as a distributive
factor.
. . . .
75. The Court has considered the factors set forth in
N.C.G.S. 50-20(c), including but not limited to, economic
misconduct during the marriage alleged on the part of
[husband] pursuant to [N.C.G.S.] 50-20(c)(11a) and (12)
and the tax consequences alleged to be incurred by
[husband] by reason of his withdrawal from his retirement
account. Having considered all of the factors for an
unequal distribution, the Court finds that an equal
division of marital and divisible property is equitable.
Here, husband does not dispute that he unilaterally decided to
withdraw the monies from the account, and does not dispute that the
monies were used to pay for his attorney fees and living expenses.
We evaluate husband's argument on the assumption, and
without
deciding, that husband's withdrawal from the Schwab account may
have tax consequences because of the trial court's distribution of
the marital estate. See Weaver, 72 N.C. App. at 416, 324 S.E.2d at
920.
The plethora of findings related to the Schwab account and
husband's assertion that it should have made a distributional
factor in his favor make it abundantly clear that the trial court
did, in fact, consider whether the alleged tax consequences should
be considered in decreeing an unequal division of the
estate. The
trial court determined that, because the monies were withdrawn as
a result of his unilateral decision, any tax consequences shouldnot be used as a distributional factor in his favor.
The findings
reveal, too, that the trial court was skeptical of the expert
witness' testimony concerning the tax consequences. Read in toto,
the findings of the court reveal its unwillingness to utilize any
tax consequences as a distributional factor. This holds true
whether the court correctly concluded that the tax consequences
were speculative. Put simply, husband's argument that the trial
court did not consider the tax consequences of the withdrawals is
belied by the court's
findings.
Husband next argues that the trial court erred by failing to
sanction wife while imposing sanctions on him.
Because husband failed, inter alia, to comply with the Tenth
Judicial District rules, and because he failed to file his
equitable distribution inventory affidavit, he was prohibited from
presenting date of separation values for marital assets for
purposes of equitable distribution. The trial court found that
wife failed to answer questions [] truthfully and attempted to
conceal from [husband] and the court information about a
Certificate of Deposit (CD). She made attempts to evade and
conceal the proceeds of the asset. The trial court found that
[b]oth parties have engaged in conduct that hindered the timely
completion of discovery and exchange of information necessary to
bring this matter to a prompt conclusion. The trial court alsofound that wife gave misleading and false testimony concerning,
inter alia, her relationship with her gentleman friend and
husband's efforts to retrieve some household items.
Given these findings of the trial court, husband argues the
trial court was required under N.C. Gen. Stat. § 50-21(e) (2005) to
sanction wife. Section 50-21(e) provides:
Upon motion of either party or upon the
court's own initiative, the court shall impose
an appropriate sanction on a party when the
court finds that:
(1) the party has willfully obstructed or
unreasonably delayed, or has attempted to
obstruct or unreasonably delay, discovery
proceedings, including failure to make
discovery pursuant to G.S. 1A-1, Rule 37, or
has willfully obstructed or unreasonably
delayed or attempted to obstruct or
unreasonably delay any pending equitable
distribution proceeding; and
(2) The willful obstruction or unreasonable
delay of the proceedings is or would be
prejudicial to the interests of the opposing
party.
The trial court did not make all the findings that would be
required for it to sanction wife pursuant to Section 50-21(e).
Moreover, this Court has stated, whether to impose sanctions and
which sanctions to impose under G.S. 50-21(e) are decisions vested
in the trial court and reviewable on appeal for abuse of
discretion. Crutchfield v. Crutchfield, 132 N.C. App. 193, 195,
511 S.E.2d 31, 34 (1999). We do not discern an abuse of discretionin the trial court's decision not to impose sanctions on wife, and
we overrule the relevant assignments of error.
Husband
next argues the trial court erred by failing to find
wife in indirect civil contempt of the 18 June 2001 parenting
agreement. In particular, husband argues wife violated the no
derogatory comments provision and the right of first refusal
provision. Husband contends, relying on the court's findings, that
mother's conduct amounts to contempt as a matter of law. We
disagree.
Husband cites N.C. Gen. Stat. § 5A-21 (2005), and argues wife
is in civil contempt of the parenting agreement. We conclude that
husband has failed to show error on the part of the trial court.
Section 5A-21 provides:
(a) Failure to comply with an order of a court
is a continuing civil contempt as long as:
(1) The order remains in force;
(2) The purpose of the order may still be
served by compliance with the order;
(2a) The noncompliance by the person to whom the order is directed
is willful; and
(3) The person to whom the order is directed
is able to comply with the order or is able to
take reasonable measures that would enable the
person to comply with the order.
Here, the trial court found, in paragraphs 115 and 117, that:
In the June 18, 2001 consent order, the parties agreed
that neither party would make any statement in the
presence or hearing of the minor children that tends to
be derogatory to the other parent. While [wife's]
diary/journal reveals that [wife] questions the minorchildren about visits with their father and has told the
minor children that their father is dishonest and doesn't
pay the money that he owes her, and there was evidence
that [wife] calls [husband] while the minor children are
with him for visitation and attempts to discuss various
issues with [them], and that on one occasion, in the fall
of 2003, [wife] mouthed a[------] at [husband] while the
minor children were in the car with [husband], this
evidence is insufficient to prove a violation of the this
[sic] provision of the order on the part of either party.
. . . .
In the June 18, 2001 consent order, the parties agreed
that the other party would have a right of first refusal
to care for the children in the event the other parent is
unable to do so. While the children participate in
activities at the YMCA and [wife] sometimes allows [her
gentleman friend] to care for the children for short
periods of time while she runs errands or allows the
children to spend the night with [a female friend], there
is insufficient evidence to find that those acts are in
willful violation of the Court's order.
In observing that the trial court was not compelled on this
record to find her in contempt, wife points this Court to the
decision in Hancock v. Hancock, 122 N.C. App. 518, 471 S.E.2d 415
(1996), where this Court summarized the law as follows:
Willful has been defined as disobedience which
imports knowledge and a stubborn resistence,
and as something more than an intention to do
a thing. It implies doing the act purposely
and deliberately, indicating a purpose to do
it, without authority _ careless whether [the
contemnor] has the right or not - in violation
of law. . . . Willfulness involves more than
deliberation or conscious choice; it also
imports a bad faith disregard for authority
and the law. Evidence which does not show a
person to be guilty of purposeful and
deliberate acts or guilty of knowledge andstubborn resistence is insufficient to support
a finding of willfulness.
Id. at 523, 471 S.E.2d at 418 (internal quotation marks and
citations omitted).
We have reviewed the record and conclude that the trial
court's findings are supported by competent evidence in the record,
and that its conclusion that wife was not in willful violation of
the Parenting Agreement is supported by its findings of fact. The
relevant assignments of error are overruled.
We have considered husband's remaining arguments and conclude
that they are without merit.
Affirmed.
Judges HUNTER and MCCULLOUGH concur.
Report per Rule 30(e).
*** Converted from WordPerfect ***