Opinion
NO. COA11-1602
12-18-2012
HOLLY H. COPELAND, Plaintiff, v. BARRY DEAN COPELAND, Defendant.
Robertson, Medlin & Bloss, PLLC, by Stephen E. Robertson, for Plaintiff-Appellant. No brief filed for defendant-appellee.
An unpublished opinion of the North Carolina Court of Appeals does not constitute controlling legal authority.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.
Rockingham County
No. 09-CVD-1658
Appeal by plaintiff from judgment and order entered 21 July 2011 by Judge Frederick B. Wilkins, Jr., in Rockingham County District Court. Heard in the Court of Appeals 6 June 2012.
Robertson, Medlin & Bloss, PLLC, by Stephen E. Robertson,
for Plaintiff-Appellant.
No brief filed for defendant-appellee.
BRYANT, Judge.
Where some of the trial court's findings in an equitable distribution order are not supported by competent evidence, we affirm in part and reverse and remand in part.
Facts and Procedural History
Plaintiff Holly H. Copeland and defendant Barry Dean Copeland were married on 6 December 2001 and separated on 15 May 2008. Plaintiff filed a complaint on 22 July 2009 seeking absolute divorce and equitable distribution. On 23 September 2009, defendant filed an answer and counterclaim for equitable distribution. Thereafter, a judgment of absolute divorce was entered on 14 October 2009.
Following a hearing that began on 1 March 2011, the trial court entered an equitable distribution judgment and order on 21 July 2011 nunc pro tunc 15 March 2011. From this judgment and order, plaintiff appeals.
Plaintiff advances the following arguments on appeal: whether the trial court erred in its (I) subdivision and (II) valuation of the parties' real property; (III) valuation of the Bank of America joint checking account at separation; (IV) failure to classify the marital portion of the parties' 2008 income tax liability as marital debt; (V) valuation of the Sears credit card debt; and (VI) valuation of the parties' billy goat.
Standard of Review
When reviewing a trial court's equitable distribution order,
our trial courts have been granted wide discretionary powers . . . . It is well established that where matters are left to the discretion of the trial court, appellateMunn v. Munn, 112 N.C. App. 151, 155-56, 435 S.E.2d 74, 77 (1993) (citation omitted).
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. . . . 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.
"The trial court's findings of fact . . . are conclusive if supported by any competent evidence. The mere existence of conflicting evidence or discrepancies in evidence will not justify reversal." Riggs v. Riggs, 124 N.C. App. 647, 649, 478 S.E.2d 211, 212 (1996) (citation omitted).
I
First, plaintiff contends the trial court erred by subdividing the parties' real property. To support her argument, plaintiff argues the trial court erred by failing to make a finding regarding (a) either party's "ability to buy out the other to avoid an unnecessary subdivision[;]" and (b) whether the subdivision could be accomplished lawfully.
"Equitable distribution follows a statutorily-prescribed formula. The trial court first classifies the property as marital or separate; next, it determines the marital property's net value; last, it distributes that property between the parties." Taylor v. Taylor, 92 N.C. App. 413, 417, 374 S.E.2d 644, 646 (1988) (citation omitted). "An equal division of the marital property is mandatory, unless the court determines in the exercise of its discretion that such a distribution is inequitable." Beightol v. Beightol, 90 N.C. App. 58, 63, 367 S.E.2d 347, 350 (1988) (citation omitted).
Here, the marital real property at issue is comprised of the couple's marital residence situated upon 25.39 acres of land at 770 Barham Road, Reidsville, North Carolina. The trial court found that "[t]he realty of the parties is amenable to division and distribution between the parties and will allow each of the parties to realize the benefits of their efforts on improving, conserving, and using the same." The trial court ordered that the marital residence and one acre of it be conveyed to plaintiff, and the remainder conveyed to defendant. It concluded that "[a] division in kind, including marital realty, is practicable and feasible, will best protect the parties' interests, and along with a Distributive Award in the amount of $18,818.75 paid by plaintiff to defendant will fairly, equally, and equitably divide and distribute the marital estate of the parties."
(a)
Plaintiff relies on Edwards v. Edwards, 152 N.C. App. 185, 566 S.E.2d 847 (2002), for the contention that the trial court erred by not making an inquiry as to whether either plaintiff or defendant "could shoulder the existing debt on the property and buy out the other."
In Edwards, the trial court was tasked with the equitable division of the parties' primary marital asset, their lodge and land for hunting. Id. at 187, 566 S.E.2d at 849. The Edwards defendant argued, without citing any authority, that the trial court's division of the marital real estate was erroneous because it separated the lodge from the land. Our Court noted that the trial court made this specific finding to explain why it had divided the real property instead of leaving it intact:
Their hunting business was a major focus of both spouses, and the lodge also served as their primary residence. Taken together, the hunting land and lodge has the potential to be a money-making business. However, neither party has the financial ability to 'buy-out' the other party's share by paying a sizeable distributive award. Therefore, while economically desirable to keep the land and hunting lodge together, such a division is not possible, and the real estate must be substantially split in orderId. (emphasis in original). Our Court also held that the trial court considered factors set forth in G.S. § 50-20(c) (listing factors the court should consider in the distribution of marital and divisible property) and noted that the defendant's request to have additional land distributed to her along with the lodge in order to make hunting feasible was noted, "but not possible if an equitable division is [to be] made." Id. at 187, 566 S.E.2d at 849. Accordingly, the Edwards Court held that the trial court did not abuse its discretion and overruled the defendant's argument, noting that "the trial court endeavored to maximize the economic values of the respective distributive awards to the parties[.]" Id.
to achieve an equitable distribution.
Although the court in Edwards considered the financial ability of the parties to "buy-out" the other party's share of the distribution, plaintiff does not cite to any authority holding that the trial court must consider this as a factor in its determination of an equitable distribution. Per N.C.G.S. § 50-20(c) (2011),
[t]here shall be an equal division by using net value of marital property and net value of divisible property unless the court determines that an equal division is not equitable. If the court determines that an equal division is not equitable, the courtN.C.G.S. § 50-20(c) then lists factors the court must consider. The parties' ability to "buy-out" the other party's share in an unequal division is not an enumerated factor set out in N.C.G.S. § 50-20(c). Further, plaintiff concedes that Edwards does not involve the division of a single piece of real property, making it factually distinguishable from the instant case. Based on the foregoing, we hold plaintiff's reliance on Edwards is misplaced. Plaintiff's argument is overruled.
shall divide the marital property and divisible property equitably.
(b)
Next, we consider plaintiff's reliance on Troutman v. Troutman, 193 N.C. App. 395, 667 S.E.2d 506 (2008), to support her argument that it was unlawful for the trial court to divide property where there was uncontroverted evidence that the property was more valuable intact.
In Troutman, the defendant argued that the trial court erred by separating the property into adjacent parcels of land to be treated separately, rather than as one parcel. Id. at 402, 667 S.E.2d at 511. The property consisted of a total of 58.24 acres. The trial court separated the property into three parts: the 1.56 acres on which the marital home was located; an adjacent 8.99 acres; and, an adjacent 47.69 acres. Id. The trial court distributed the 1.56 acres and marital home to the plaintiff and ordered the other two parcels to be sold and proceeds divided between the parties, with the plaintiff receiving two-thirds and the defendant receiving one-third. Id. Specifically, the Troutman defendant argued the trial court's order committed "waste of the marital assets because the land is more valuable when considered as one large parcel." Id. Our Court held that absent evidence to support his contention that one large parcel was more valuable than the divided parts, the trial court's division would stand, and the defendant's argument was overruled. Id.
We find that plaintiff's reliance on Troutman is misplaced. Plaintiff interprets Troutman to hold that where there is any evidence that property is more valuable intact than divided, the trial court errs if it distributes the property by dividing the intact parcel. Plaintiff therefore urges that the division in the instant case should not stand where there is evidence that one large parcel is more valuable than its parts. However, plaintiff cites no express authority for the proposition she asserts. Moreover, we note that the trial court followed the three-step analysis required by statute when making an equitable distribution of marital assets. See Beightol, 90 N.C. App. at 63, 367 S.E.2d at 350. Therefore, absent a showing that the trial court acted arbitrarily, we will not upset the judgment of the trial court. Plaintiff's argument is overruled.
II
Next, plaintiff argues that the trial court erred by valuing the portion of property awarded to plaintiff at $269,000.00 where it was not supported by the record. We agree.
The record indicates that the market value of 770 Barham Road was estimated at $269,000.00 pursuant to a 3 February 2010 Uniform Residential Appraisal Report. The appraisal included "the house and other improvements and [approximately] two acres of land." (emphasis added). Although the appraisal report included the home and two acres of land, the trial court awarded plaintiff "the marital residence and one (1) acre of realty immediately surrounding it[.]" (emphasis added). The award also required plaintiff to pay for construction costs and maintain an easement as a separate means of ingress and egress to her property.
The 3 February 2010 appraisal report included, in addition to the house and two acres, a driveway, water system, and sewer system. There is also testimony in the record that the two properties as divided by the trial court share a septic system, a situation that may or may not be a Rockingham County code violation. The trial court should review and make findings on this issue.
Further, because the $269,000.00 valuation of plaintiff's portion of the marital real property included property not awarded to plaintiff, it is not supported by competent evidence in the record and should be remanded to the trial court for further proceedings.
III
In her third argument, plaintiff contends the trial court erred in its valuation of the couple's joint Bank of America checking account ("BoA account").
N.C. Gen. Stat. § 50-21(b) provides that:
(b) For purposes of equitable distribution, marital property shall be valued as of the date of the separation of the parties, and evidence of preseparation and postseparation occurrences or values is competent as corroborative evidence of the value of marital property as of the date of the separation of the parties. Divisible property and divisible debt shall be valued as of the date of distribution.N.C.G.S. § 50-21(b) (2011).
Here, the 21 July 2011 Equitable Distribution Judgment and Order valued the BoA account, an item of marital property, at $5,095.00. There is no evidence in the record as to the value of the BoA account on the date of separation, 15 May 2008. However, the record includes a BoA document entitled " Interest Checking Additions and Subtractions" indicating a balance of $5,094.65 on the BoA account as of 16 June 2008. Also, the record reflects a balance of $79.04 on 13 May 2008 of the BoA account. Plaintiff argues that the trial court erred by using the 16 June 2008 value rather than the 13 May 2008 value, which is closer in time to the date of separation.
Because our review is limited to whether there is any competent evidence to support the trial court's findings of fact, even if there is conflicting evidence or discrepancies, the document reflecting a post-separation balance of $5,094.65 on 16 June 2008 is competent as evidence of the value of the account on the date of separation. Therefore, the trial court did not abuse its discretion in its valuation of the BoA account, and plaintiff's argument is overruled. Riggs, 124 N.C. App. at 649, 478 S.E.2d at 212.
IV
Plaintiff contends the trial court erred by failing to make a finding regarding the date of separation value of the marital portion of the parties' 2008 tax liability.
Plaintiff requests that we remand with instructions to find that the date of separation value of the marital portion of the parties' 2008 tax liability was $3,212.00. However, plaintiff fails to provide any authority to support her argument other than directing us to an unpublished case, Draper v. Draper, 159 N.C. App. 465, 583 S.E.2d 426 (2003). See N.C. R. App. P. 30(e)(3) (2011) (an unpublished decision does not constitute controlling legal authority).
In Draper, the parties were married on 11 August 1973, separated on 30 October 1998, and divorced by entry of a judgment of divorce on 23 March 2000. The plaintiff argued the trial court erred in concluding there were marital debts of $720.00 owed to the Internal Revenue Service (IRS). Our Court held that the trial court did not err in categorizing this as marital debt because the defendant offered testimony regarding the parties' debt for joint 1998 tax liability to the IRS and the record contained a copy of the 1998 joint income tax return. Therefore, our Court overruled the plaintiff's argument and held the plaintiff failed to demonstrate that the trial court abused its discretion. Draper, 159 N.C. App. at 465, 583 S.E.2d at 426.
Plaintiff's reliance on Draper is misplaced. Draper merely supports the contention that it is not error for a trial court to deem an IRS tax liability as marital debt, not that a trial court must make a specific finding regarding the date of separation value of the marital portion of the parties' tax liability.
"A marital debt . . . is one incurred during the marriage and before the date of separation by either spouse or both spouses for the joint benefit of the parties." Huguelet v. Huguelet, 113 N.C. App. 533, 536, 439 S.E.2d 208, 210 (1994). "If the debt is separate, it is a factor to be considered under G.S. § 50-20(c)(1). If the debt is marital, the court has discretion to apportion or distribute the debt in an equitable manner." Edwards v. Edwards, 110 N.C. App. 1, 13, 428 S.E.2d 834, 839 (1993).
Here, the trial court's finding of fact number ten states that "[t]he remaining 2008 income tax liability, Item 178N H1 H2, is a result [of] plaintiff not paying her full share of the tax liability for that year, and the defendant did pay by wage withholding during that year all tax liability owed by him." The parties' date of separation was 15 May 2008. Based on their joint 2008 Income Tax Return, the parties' total 2008 tax liability was $12,428.00. While the 2008 Income Tax Return demonstrates that $3,862.00 in federal income tax was withheld from defendant's wages, there is no evidence that plaintiff paid any money towards the 2008 tax liability.
"Item 178N" refers to the parties' 2008 Federal and State Income Taxes; "H1" refers to plaintiff's contentions of indebtedness; "H2 refers to defendant's contentions of indebtedness.
In addition, the record indicates that during discussions with the parties' counsel in the equitable distribution hearing, the trial court stated:
[t]he incomes that the parties have had up to the date of separation . . . that income was going to be subject to income tax liability . . . .This discussion reveals that the trial court did in fact make a distinction between marital and separate tax liability based on the parties' date of separation.
. . .
After May the 15th [(the date of separation)], whatever income was earned by [plaintiff] is her income, whatever was earned by [defendant] is his income, and it was not going to a marital purpose.
. . .
I can't take the full tax burden for the year 2008 on this and say that was a marital debt. There was a portion of it that might have been divisible marital debt that occurred prior to May the 15th, but that's it.
. . .
The rest of it would be separate debt, and it's just that simple.
Based on the foregoing, we are unable to hold that the trial court erred in failing to make a specific finding of fact regarding the value of the marital portion of the parties' 2008 tax liability where the trial court's finding of fact number ten states that the remaining 2008 income tax liability is a result of plaintiff not paying her full share. Plaintiff's argument is overruled.
V
In her fifth argument, plaintiff contends the trial court erred in its assignment of $8,200 to defendant as marital debt from a Sears credit card. Because the record reveals no competent evidence supporting a debt of $8,200.00 owed to Sears, we reverse and remand for further findings.
VI
In her final argument, plaintiff contends that the trial court erred in valuing the parties' billy goat at $250.00, distributing the goat to plaintiff, and taxing that amount to Plaintiff. Plaintiff testified that she bought the goat, along with another goat, for a combined $40.00 because she wanted to begin raising goats. Defendant testified that a goat the size of the one in question would be worth an estimated $250.00. When questioned on how he came to that value, defendant responded that
[the goat] had an expansive horn spread. It was about thirty-four inches wide. If you go and value a skull mount for a Texas Longhorn or for a Kanniko goat, they have value based on how wide the horns are. So I think two hundred and fifty dollars is a very fair value.
Because "[o]ur review is limited to whether competent evidence supports the findings that were made[,]" and because defendant's sworn testimony supports the trial court's finding as to the value of the parties' goat, we affirm the trial court's finding. Ferguson v. Killens, 129 N.C. App. 131, 135, 497 S.E.2d 722, 724 (1998).
Affirmed in part, reversed and remanded in part.
Judges STEPHENS and THIGPEN concur.
Report per Rule 30(e).