Opinion
No. 06-858.
Filed January 15, 2008.
Pasquotank County No. 01 CVD 17.
Appeal by plaintiff from order entered 17 March 2006 by Judge C. Christopher Bean in Pasquotank County District Court. Heard in the Court of Appeals 8 May 2007.
Frank P. Hiner, for plaintiff-appellant. Van H. Johnson, for defendant-appellee.
William H. Gatlin ("plaintiff") appeals from the 17 March 2006 order of the trial court modifying plaintiff's alimony obligation. We reverse.
Plaintiff and Elizabeth A. Gatlin ("defendant") were married on 23 January 1964 and separated on 13 April 1998. The children born during their marriage have reached the age of majority. On 29 April 1998, plaintiff and defendant entered into a separation agreement that was subsequently incorporated into the divorce judgment upon their divorce on 8 March 2001. Pursuant to the agreement, defendant received the marital residence and the 1996 Dodge Caravan vehicle. Defendant also received fifty percent of plaintiff's retirement, plaintiff's IRA, plaintiff's certificate of deposit ("CD"), and the joint savings account. Plaintiff received the 1997 Dodge Dakota vehicle, and the boat and boat trailer. He also retained fifty percent of his retirement, IRA, CD, and the joint savings account. The plaintiff also agreed to pay alimony in the amount of $1,300.00 per month and maintain existing life insurance and health insurance policies. At the time the parties agreed to alimony and insurance payments, plaintiff earned a gross income of approximately $50,000.00 per year. Plaintiff paid alimony as ordered, in the amount of $1,300.00 per month until he retired in January of 2005.
After retiring, plaintiff's gross monthly income decreased to $1,436.00. This included $1,276.00 from Social Security and $160.00 from the National Electric Benefit Fund. In February of 2005, plaintiff decreased the alimony payments to approximately $550.00. After February 2005, plaintiff ceased paying alimony. On 15 July 2005, plaintiff filed a motion to terminate his alimony liability. Plaintiff alleged a substantial change of circumstances since the date of the divorce judgment because his monthly income had decreased but his monthly expenses remained the same. Plaintiff alleged that defendant's financial means increased after she started receiving payments from her portion of plaintiff's retirement and her Social Security. On 17 March 2006, nunc pro tunc, 1 February 2006, the trial court ordered a modification of the alimony obligation by decreasing the monthly payment of $1,300.00 to a monthly payment of $500.00.
I. Imputed Income
Plaintiff argues the trial court erred by imputing income to defendant based upon the earning potential of investment income in plaintiff's CD. We agree.
The standard of review for findings made by the trial court is whether the findings are supported by any competent evidence. Hollerbach v. Hollerbach, 90 N.C. App. 384, 387, 368 S.E.2d 413, 415 (1988). "The trial court's findings of fact are conclusive if they are supported by competent evidence." Pataky v. Pataky, 160 N.C. App. 289, 309, 585 S.E.2d 404, 417 (2003). Where the trial court fails to make adequate findings, the order must be vacated and the case remanded for detailed findings of fact. Smith v. Smith, 103 N.C. App. 488, 491, 405 S.E.2d 912, 914 (1991).
In this case, the trial court made the following finding:
11. . . . Plaintiff has a Certificate of Deposit valued between $66,000.00 and $67,000.00 which represents, in part, his share of the marital estate that he has not been required to deplete to maintain his standard of living. Very conservatively, this amount of money invested in today's market should be able to generate not less than $300.00 per month. At this time Plaintiff's Certificate of Deposit does not generate much income because the interest rates were so low at the time of the initial investment, but the interest rates have risen each month since that time.
After conducting a thorough review of the transcript and record, we conclude that the trial court's finding was not supported by competent evidence. Prior to the end of the hearing, the trial court questioned plaintiff's attorney regarding the potential increase in earnings if plaintiff utilized investments other than a CD. There was no testimony during the hearing by any witness regarding the amount of income plaintiff's investments could generate. Further, there was no other evidence presented regarding potential investment strategies that could guarantee a rate of return of $300.00 per month. Therefore, the trial court's finding that plaintiff's CD valued at approximately $66,000.00, could generate $300.00 per month in investment income, was not supported by any competent evidence in the record.
II. Modification of Alimony Order
Plaintiff next argues the trial court erred by ordering plaintiff to make alimony payments to defendant in the amount of $500.00 per month because there was insufficient evidence to support a finding that plaintiff had the ability to pay this amount.
Pursuant to N.C. Gen. Stat. § 50-16.9 (2005) "[a]n order of a court of this State for alimony or postseparation support, whether contested or entered by consent, may be modified or vacated at any time, upon motion in the cause and a showing of changed circumstances by either party. . . ." "Even where the moving party has met [his] burden to show relevant changed circumstances, however, the trial court is not required to modify an alimony award, but may do so in its discretion." Honeycutt v. Honeycutt, 152 N.C. App. 673, 676, 568 S.E.2d 260, 262 (2002).
"As a general rule, the changed circumstances necessary for modification of an alimony order must relate to the financial needs of the dependent spouse or the supporting spouse's ability to pay." Cunningham v. Cunningham, 345 N.C. 430, 436, 480 S.E.2d 403, 406 (1997) (internal citations omitted). "Ordinarily, the parties will not be required to deplete their estates to pay alimony or to meet personal expenses." Beaman v. Beaman, 77 N.C. App. 717, 722, 336 S.E.2d 129, 132 (1985). "A spouse cannot be reduced to poverty in order to comply with an alimony decree." Quick v. Quick, 305 N.C. 446, 457, 290 S.E.2d 653, 661 (1982).
In this case, plaintiff's evidence established the changed circumstances that necessitated a modification of his alimony payments. Plaintiff's retirement reduced his monthly income from approximately $4,100.00 per month to $1,436.00 per month. At the time he filed his motion, plaintiff was required to pay $1,300.00 per month in alimony and his reasonable monthly needs and expenses were $1,792.62. Plaintiff established that the amount of income he received was insufficient to pay the alimony payments and provide for his monthly expenses. In modifying plaintiff's alimony payments, the trial court ordered plaintiff to pay alimony in the amount of $500.00 per month. Based on his monthly income, plaintiff would have a balance of $885.60 to meet his monthly expenses of $1,792.62. Therefore, plaintiff would have a deficit of approximately $900.00 each month to meet his expenses. In reaching its decision, the trial court relied upon plaintiff's CD as a means of income to the plaintiff, while at the same time, requiring plaintiff to withdraw from the CD in order to make the monthly alimony payments. Plaintiff, therefore, is required to reduce the balance of his CD each month to pay his alimony obligation but at the same time income would be imputed from the CD as if the balance remained the same. The trial court's order may require the plaintiff to deplete his estate in order to make the alimony payments. Beaman, 77 N.C. App. at 722, 336 S.E.2d at 661. The result is neither fair nor just to either party. Quick, 305 N.C. at 446, 290 S.E.2d at 661.
The trial court's order imputing income to plaintiff from his CD and modified alimony payment of $500.00 was not supported by competent evidence. Therefore, the order of the trial court is reversed and remanded to the trial court for a hearing for findings to determine an alimony payment based upon competent evidence.
Reversed.
Judges WYNN and TYSON concur.
Report per Rule 30(e).