Defendant first argues that the trial court erred in finding
that the amounts he earned from the sale of the Colby interests
constituted earned income subject to the “escalator clause” of the
Agreement. We cannot agree.
We note that “'[t]his Court is bound by the trial court's
findings where there is competent evidence to support them
. If
different inferences may be drawn from the evidence, [the judge
sitting without a jury] determines which inferences shall be drawn,and the findings are binding on the appellate court.'”
Cauble v.
Cauble, 133 N.C. App. 390, 395-96, 515 S.E.2d 708, 712 (1999)
(quoting
Monds v. Monds, 46 N.C. App. 301, 302, 264 S.E.2d 750, 751
(1980) (internal citations omitted)). In
Cauble,
supra, we held
that in calculating the father's post-divorce child support
obligation, the trial court properly included the retained
proportional profits of the family's closely-held corporation in
the father's gross income.
Cauble, 133 N.C. App. at 396, 515
S.E.2d at 712. We find the reasoning of
Cauble to be applicable
here.
Defendant argues that his position in the Colby companies was
identical to the ordinary investor compiling a portfolio of
financial investments. We believe this comparison is misplaced.
Rather, as in
Cauble, Defendant was an active participant in
running a business. Like
Cauble, the fact that he used his control
to depress his salaried earnings does not obscure his clear
ascension to wealth that he was required to share in his child
support and alimony obligations. Indeed, Plaintiff here presents
a stronger argument than
Cauble, because accepting Defendant's
argument would permit parties to evade their alimony and child
support obligations by the simple stratagem of labeling any earned
wealth as “investment” rather than as income, effectively
eviscerating child support and alimony agreements. The income here
was the result of the
active labor efforts of the recipient, rather
than the
passive income shielded from the “escalator clause.”
Active appreciation refers to financial or
managerial contributions of one of the spousesto the separate property during the marriage;
whereas, passive appreciation refers to
enhancement of the value of separate property
due solely to inflation, changing economic
conditions or other such circumstances beyond
the control of either spouse. Furthermore,
the party seeking to establish that any
appreciation of separate property is passive
bears the burden of proving such by the
preponderance of the evidence.
O'Brien v. O'Brien, 131 N.C. App. 411, 420, 508 S.E.2d 300, 306
(1998), (internal citations omitted),
disc. review denied, 350 N.C.
98, 528 S.E.2d 365 (1999). The trial court analyzed the “escalator
clause” provisions appropriately under the
O'Brien test, noting
that:
All of the monetary gains the Defendant
received from the sale of his interests in the
Colby business entities were generated by the
Defendant's
active employment and performance
of services for the Colby business entities
and such gains are subject to the escalator
provisions of the “Agreement.”
Since this Court is bound by the trial court's findings where there
is competent evidence to support them,
Cauble,
133 N.C. App. at
395, 515 S.E.2d at 712, we find that Defendant's argument has no
merit. This assignment of error is overruled.
Next, Defendant argues that the trial court erred in excluding
the testimony of Wendy Eberly, CPA, who prepared Defendant's tax
returns and could have “clarified” his financial status. The trial
court excluded Ms. Eberly's testimony as a sanction for Defendant's
refusal to cooperate in pretrial discovery. The sanctions were
appealed and affirmed in an earlier unpublished opinion of this
Court.
See Deans v. Terry,
609 S.E.2d 498, 2005 N.C. App. LEXIS
486 (N.C. Ct. App., Mar. 1, 2005)
. We decline to re-litigate ourearlier
Deans opinion and the order of sanctions. Therefore, we
find that this argument has no merit, and it, too, is overruled.
In his third argument, Defendant contends that the trial court
erred in admitting his IRS 1040 for the year 2000, which was
clearly marked “Preliminary” and was not signed.
Admission of evidence is “addressed to the
sound discretion of the trial court and may be
disturbed on appeal only where an abuse of
such discretion is clearly shown.” Under an
abuse of discretion standard, we defer to the
trial court's discretion and will reverse its
decision “only upon a showing that it was so
arbitrary that it could not have been the
result of a reasoned decision.”
Gibbs v. Mayo, 162 N.C. App. 549, 561, 591 S.E.2d 905, 913 (quoting
Sloan v. Miller Bldg. Corp., 128 N.C. App. 37, 45, 493 S.E.2d 460,
465 (1997); and
White v. White, 312 N.C. 770, 777, 324 S.E.2d 829,
833 (1985)),
disc. review denied, 358 N.C. 543, 599 S.E.2d 45
(2004).
Under the terms of the parties' Agreement, Defendant was
required to provide copies of his Form 1040 tax returns to
Plaintiff every year. The trial court found that Defendant did not
comply with this requirement from 1997 through the filing of the
lawsuit. The trial court further noted that Defendant repeatedly
abused the discovery process and refused to comply with relevant
orders of the court, and that his conduct “amounted to a fraud upon
the Court, and . . . total disregard for the judicial process.”
Given Defendant's refusal to comply with court orders or the
Separation Agreement provisions, we cannot agree that the trial
court's reliance on the only available evidence of Defendant'searnings for the year 2000 “could not have been the result of a
reasoned decision.” This argument, seeking to reward the willful
refusal to comply with discovery obligations, has no merit, and is
overruled.
Finally, Defendant argues that the trial court erred in
granting the remedy of specific performance. We agree that
specific performance of a contract is available only where the
legal remedy is inadequate.
Whalehead Properties v. Coastland
Corp., 299 N.C. 270, 261 S.E.2d 899 (1980). However, the question
of adequacy is one of fact, to be analyzed and determined in each
case.
Id. It is not enough that there is some remedy at law;
equity will intervene if the legal remedy is not as efficient and
practical to meet the plaintiff's needs.
Id. We hold that the
trial court did not err in determining that Plaintiff was entitled
to specific performance, “as she has no adequate remedy at law.”
As we stated in
Rose v. Rose, 66 N.C. App. 161, 164-65, 310
S.E.2d 626, 629 (1984): “A damage award in this case, defendant
being insolvent, will not compensate plaintiff nor compel defendant
to perform his part of the bargain. The parties' contract had
clear and definite terms.” We note that the trial court found that
Defendant was deliberately squandering his assets, in the face of
his undisputed child support and alimony liabilities. The remedy
of specific performance, therefore, does no more than “compel
[defendant] to do precisely what he ought to have done without
being coerced by the court.”
McLean v. Keith, 236 N.C. 59, 71, 72
S.E.2d 44, 53 (1952) (citation omitted). In this case, the trial court made extensive findings before
ordering specific performance, stating,
inter alia, that
2. The Defendant has failed to abide by the
provisions of the “Agreement” [relating
to child support]. . . .
3. The Defendant has failed to abide by the
provisions of the “Agreement” [relating
to additional child support]. . . .
4. The Defendant has failed to abide by the
provisions of the “Agreement” [relating
to additional alimony]. . . .
5. The Defendant has failed to abide by the
provisions of the “Agreement” [furnishing
his financial and tax documents]. . . .
. . . .
13. The Defendant deliberately depressed his
income to an artificial low after the
filing of this action. . . .
14. The Defendant deliberately dissipated
resources by spending excessive amounts
of money on frivolous items for himself.
15. The Defendant has acted in bad
faith. . . .
. . . .
17. The Defendant has deliberately avoided
his financial responsibilities to the
Plaintiff.
18. The Defendant's actions since the filing
of this lawsuit have been in deliberate
disregard for his support obligations to
the Plaintiff. . . .
Given Defendant's refusal to comply with the Agreement as far
back as 1997, consistent resistance to discovery, squandering of
assets, length of litigation, and documented bad faith, we find no
error in the trial court's considered decision that an adequate
remedy would not be available at law. This argument has no merit,
and it is overruled.
The 8 November 2005 Judgment and Order of Judge Tin is
AFFIRMED.
Judges WYNN and HUDSON concur.
Report per Rule 30(e).
The judges concurred prior to 31 December 2006.
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