Return to nccourts.org
Return to the Opinions Page
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority. Citation is disfavored, but may be permitted in accordance with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

NO. COA06-1434

NORTH CAROLINA COURT OF APPEALS

Filed: 20 November 2007

RICKY O. FREEMAN,
    Plaintiff,

    v.                        Henderson County                                     No. 03 CVD 154
BETTY H. FREEMAN,
    Defendant.

    Appeal by defendant from order entered 5 May 2006 by Judge Robert S. Cilley in Henderson County District Court. Heard in the Court of Appeals 20 August 2007.

    Donald H. Barton, P.C., by Donald H. Barton, for plaintiff- appellee.

    C.R. “Skip” Long, Jr. for defendant-appellant.

    MARTIN, Chief Judge.

    Defendant (“wife”) appeals from an order of equitable distribution of marital and divisible property. Plaintiff (“husband”) and wife were married on 27 June 1987 and separated on 27 January 2002. One minor child was born of the marriage, and the parties shared joint custody of the child on a rotating, week-to- week basis. Husband filed a complaint seeking absolute divorce and equitable distribution on 30 January 2003. Wife filed an answer and counterclaim, admitting allegations related to the absolute divorce and seeking equitable distribution of the marital and divisible property. Husband filed a reply.    On 5 December 2003, a judgment granting husband an absolute divorce was entered, and some of the issues pertaining to distribution of property were resolved upon wife's motion for interim distribution. The issues associated with the equitable distribution claims were addressed at trial in 2006. The parties submitted schedules detailing the items of personal property to be distributed. Issues before the court also included the distribution of the marital home, referred to by the court as the “Tuxedo property,” and the marital debt. The trial court made findings of the marital debt as of the date of separation, of husband's payments decreasing those debts after separation, and of a cash advance taken by wife after separation. The court also found that the marital home had a value on the date of separation of $185,000 and its value had increased to $220,000 since the date of separation. The court considered several distributional factors and made the following distribution in its 5 May 2006 order: the personal property listed on the schedules was distributed between the parties; the marital debts were assigned to husband; the marital home, including its encumbrances, was awarded to husband; and wife was awarded $58,000 to be paid by husband within one year of the entry of the order. Wife appealed.

____________________
    Wife first argues that the trial court erred, in contravention of N.C.G.S. § 50-20, in its finding “[i]n as much as [husband's] payments reduced marital debts, after [the date of separation], the court considers them to be distributional factors.” Wife arguesthat husband's post-separation payments toward marital debt were improperly considered as a distributional factor. This argument raises the question whether the trial court in this case had the discretion to treat post-separation payments that decreased marital debt as a distributional factor.
    This Court has noted:
            The appropriate treatment of post separation payments made by one spouse toward marital debt will vary depending upon the facts of the particular case. . . . The trial court is in the best position to determine the most equitable treatment of post-separation payments toward marital debt; therefore, the determination is left to the discretion of the trial court.

Edwards v. Edwards, 110 N.C. App. 1, 13, 428 S.E.2d 834, 840 (1993). This Court also has held that it is within the trial court's discretion to treat post-separation payments toward marital debt as a distributional factor, Fox v. Fox, 103 N.C. App. 13, 21, 404 S.E.2d 354, 358 (1991), and that post-separation mortgage payments on marital property may not be treated as divisible property. Hay v. Hay, 148 N.C. App. 649, 655, 559 S.E.2d 268, 272- 73 (2002). Each of these preceding cases relied upon the language in N.C.G.S. § 50-20 as it existed before it was amended in 2002. Effective after 11 October 2002, the definition of divisible property appearing in § 50-20(b)(4)(d) was amended to include decreases in marital debt. 2002 N.C. Sess. Laws ch. 159, § 33.5. In light of this statutory change, this Court has concluded “[where husband's] payments decreased financing charges and interest related to marital debt, those payments-to the extent made after 11October 2002-constituted divisible property.” Warren v. Warren, 175 N.C. App. 509, 517, 623 S.E.2d 800, 805 (2006). This Court has further recognized that “[a] trial court must value all marital and divisible property . . . in order to reasonably determine whether the distribution ordered is equitable.” Cunningham v. Cunningham, 171 N.C. App. 550, 556, 615 S.E.2d 675, 680 (2005).
    In this case, the parties were separated in January 2002. To the extent that husband's post-separation payments decreasing marital debt were made on or before 11 October 2002, the trial court retained discretion to treat the decrease in debt as a distributional factor; however, to the extent payments were made after 11 October 2002, the court was required to treat the decrease in debt as divisible property and provide for its equitable distribution between the parties pursuant to N.C.G.S. § 50-20. The trial court's findings do not address the issue of when the decrease in marital debt occurred; thus, we are unable to determine whether the court correctly applied the law. Upon remand, the trial court shall make findings as to what portion of the decrease in marital debt occurred after 11 October 2002, and the court shall equitably distribute it as divisible property, in accordance with N.C.G.S. § 50-20.
    Wife also contends that the trial court erred when it failed to make any findings of fact on the distributional factor of the respective parties' needs to occupy the marital home as parents of the minor child with custody. North Carolina law requires that, “[i]f the court determines that an equal division is not equitable,the court shall . . . consider all of the following factors under this subsection: . . . (4) The need of a parent with custody of a child or children of the marriage to occupy or own the marital residence.” N.C. Gen. Stat. § 50-20(c) (2005). “In determining whether an equal distribution is equitable, the trial court must make findings of fact showing its due consideration of the evidence presented by the parties in support of the factors enumerated under section 50-20(c).” Daetwyler v. Daetwyler, 130 N.C. App. 246, 249, 502 S.E.2d 662, 665 (1998), aff'd, 350 N.C. 375, 514 S.E.2d 89 (1999) (per curiam). In this case, the parties share custody on a rotating, week-to-week basis. At the hearing, wife presented evidence that, as a parent of a child of the marriage with joint custody on a rotating basis, the marital home was well-suited to her needs in taking care of her son and she did not have any other home to which she could move. Furthermore, husband owned a home as his separate property and was living with his current wife at the time of the hearing. Based on this evidence, the court should have made a finding on this distributional factor. Upon remand, the trial court shall make additional findings of fact on this distributional factor in accordance with N.C.G.S. § 50-20(c).
    Wife also argues that the trial court erred in failing to consider, assign, and distribute the $35,000 divisible post- separation increase in the value of the marital home, in accordance with N.C.G.S. § 50-20(c). We first note that the court did consider, assign, and distribute the divisible portion of the marital home's worth. The court found: “The gross value of theTuxedo property on [the date of separation] was $185,000 . . . . The present gross value of the Tuxedo property is $220,000. . . . The court considers the increase in value since [the date of separation] to be divisible property.” Ultimately, the court decided: “The Tuxedo property, subject to the debt that encumbers it, is awarded to [h]usband.” The court's award clearly encompassed both the marital and divisible portions of the value of the house. Any argument as to the proper distribution of this divisible property cannot be reviewed in the absence of the necessary findings of fact determining the amount of divisible property as previously discussed in this opinion.
    Wife's final argument assigns error to the trial court's failure to secure the award due to wife from husband, citing N.C.G.S. § 50-20(e). The statute states “[t]he court may provide that any distributive award payable over a period of time be secured by a lien on specific property.” N.C. Gen. Stat. § 50- 20(e) (2005) (emphasis added). Wife admits that the law does not require a trial judge to secure the award with a lien; rather wife argues that the court abused its discretion in failing to do so.
            It is well established that where matters are left to the discretion of the trial court, appellate review is limited to a determination of whether there was a clear abuse of discretion. A trial court may be reversed for abuse of discretion only upon a showing that its actions are manifestly unsupported by reason.

White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985) (citations omitted). Quite to the contrary, in the present case, the trial court's decision was reasonable. It was unnecessary forthe court to require the award to be secured because N.C.G.S. § 1- 234 allows for a judgment of equitable distribution to be enforced as a lien against real property. N.C. Gen. Stat. § 1-234 (2005); see also Martin v. Roberts, 177 N.C. App. 415, 422, 628 S.E.2d 812, 817 (2006); Union Grove Milling & Mfg. Co. v. Faw, 103 N.C. App. 166, 168-69, 404 S.E.2d 508, 510 (1991). Accordingly, wife's assignment of error is overruled.
    Reversed in part and remanded for additional findings of fact as provided in this opinion.
    Judges McCULLOUGH and TYSON concur.
    Report per Rule 30(e).

*** Converted from WordPerfect ***