Opinion
No. 04-1433.
Filed 18 October 2005.
Wilkes County No. 02 CVD 1630.
Appeal by defendant from orders entered 14 August 2003 and 25 May 2004 by Judge Jeanie R. Houston in Wilkes County District Court. Heard in the Court of Appeals 16 August 2005.
No brief for plaintiff-appellee. McElwee Firm, PLLC, by William H. McElwee, IV, for defendant-appellant.
Robert Neder ("defendant") appeals from orders entered 14 August 2003 and 25 May 2004 providing for distribution of marital property. We affirm the trial court's order.
Defendant and Hanna Neder ("plaintiff") were married on 19 November 2000. During the course of their marriage, plaintiff and defendant began construction on a home, titled as tenancy by the entirety. It is undisputed that funds for the home came primarily from separate property of defendant, who used money from the sale of a residence owned prior to the marriage and various investments. Defendant also used several credit cards listed in his name to pay for construction costs. Plaintiff contributed a few thousand dollars from the sale of a separate asset and income.
Defendant and plaintiff separated on 7 January 2002 and plaintiff filed for divorce. Both parties sought distribution of the marital property and both requested an unequal distribution in their favor. Plaintiff also requested post-separation support and alimony. A hearing was held on 4 April 2003 and the trial court found, in an amended order issued 14 August 2003, that the marital home was marital property. The trial court found that plaintiff suffered from significant depression and post-traumatic stress disorder, which she testified were caused by the marriage and defendant's behavior. Although defendant contributed significant amounts of separate property to the marriage, the trial court found that, as the home was titled as a tenancy by the entirety, there was a presumption of gift to the marital estate. The trial court found that certain marital indebtedness existed, including several credit card balances from Lowe's and Home Depot. The trial court ordered that the marital home be sold at a judicial sale, and the proceeds used to pay the marital debts, "including but not limited to the outstanding credit card indebtedness to Lowe's and Home Depot." The remaining funds from the sale were to be held pending final division by the court.
The marital home was sold in February 2004 at a value of $33,075.00. Plaintiff moved for distribution of the net sale proceeds on a fifty-fifty basis. Defendant made a counter-motion requesting an unequal distribution in his favor, as the marital residence was obtained primarily with his separate funds. Defendant contended that such a distribution was appropriate because of the short duration of the marriage, the inequity in contribution to the costs of the marital home, and the credit consequences to defendant of the expended funds. Defendant also argued that he had deeded the property as a tenancy by the entirety without realizing the consequences of that action.
A final order of distribution was entered on 25 May 2004 by the trial court. An equal division of the net proceeds from the sale of the residence was awarded to the parties. Defendant appeals.
I.
Defendant first contends the trial court should have made an unequal distribution of the proceeds from the sale of the former marital residence in defendant's favor, as defendant provided the majority of the funds for purchase and construction of the property. In related assignments of error, defendant contends the trial court erred in considering plaintiff's alleged health conditions as a factor in dividing the marital estate without sufficient evidence, and in permitting testimony as to defendant's misconduct during the course of the marriage. We disagree.
"`The North Carolina Equitable Distribution Act is a legislative enactment of public policy so strongly favoring the equal division of marital property that an equal division is made mandatory "unless the court determines that an equal division is not equitable."'" Crowder v. Crowder, 147 N.C. App. 677, 681, 556S.E.2d 639, 642 (2001) (quoting N.C. Gen. Stat. § 50-20(c) (1999)) (citation omitted). The trial court must consider a number of statutory factors in making its determination, including the "property, and liabilities of each party at the time the division of property is to become effective" and the "physical and mental health of both parties." N.C. Gen. Stat. § 50-20(c)(1), (3) (2003).
A party seeking an unequal division bears the burden of showing that an equal division would not be equitable by a preponderance of the evidence. See White v. White, 312 N.C. 770, 776, 324 S.E.2d 829, 832 (1985). "The trial court has wide discretion to determine what constitutes an equitable distribution of marital property: `the exercise of that discretion will not be upset absent clear abuse.'" Crowder, 147 N.C. App. at 681, 556 S.E.2d at 642 (citations omitted).
"[Therefore, i]n order to reverse the trial court's decision for abuse of discretion, we must find that the decision was unsupported by reason and could not have been the result of a competent inquiry. Accordingly, the findings of fact are conclusive [on appeal] if they are supported by any competent evidence from the record."
Id. (citations omitted).
We first address defendant's contention that his contributions of separate property to the marital home required unequal distribution of the marital assets.
In North Carolina, "[d]onative intent is properly presumed when a spouse uses separate funds to furnish consideration for property titled as an entireties estate." McLean v. McLean, 323N.C. 543, 551, 374 S.E.2d 376, 381 (1988). "This presumption is sufficiently strong that it is, and should be, rebuttable only by clear, cogent, and convincing evidence." Id. at 551-52, 374 S.E.2d at 381 (footnote omitted).
Here, defendant presented uncontested evidence showing that he provided the majority of the costs of the marital home from his separate property, and the trial court made findings to that effect. However, the record does not reveal clear, cogent, and convincing evidence to overcome the presumption of donative intent created by titling the property as a tenancy by the entirety. McLean, 323 N.C. at 551-52, 374 S.E.2d at 381. Therefore, the trial court did not err in finding that the home was marital property.
Defendant next contends the trial court erred in considering plaintiff's alleged health conditions without sufficient evidence as a factor in dividing the marital estate, and in allowing plaintiff to testify as to marital misconduct.
In Armstrong v. Armstrong, 322 N.C. 396, 368 S.E.2d 595 (1988), our Supreme Court held that when "evidence is presented from which a reasonable finder of fact could determine that an equal division would be inequitable, the trial court is required to consider the factors set forth in N.C.G.S. § 50-20(c), `but guided always by the public policy expressed . . . [in the Act] favoring an equal division.'" Id. at 404, 368 S.E.2d at 599 (citation omitted). "The trial court then must make findings and conclusions which support its division of marital property." Id. at 404, 368S.E.2d at 599. One of the factors for consideration under N.C. Gen. Stat. § 50-20(c)(3) is the "physical and mental health of both parties." Id.
Here, plaintiff testified that she had been diagnosed with depression, post-traumatic stress disorder, anxiety, and panic attacks, and that she was on Social Security disability. Plaintiff also testified to a knee replacement and that she suffered from cancer. The trial court properly made findings regarding plaintiff's poor health. However, as the final order reflects, the trial court did not conclude as a result of this finding that an equal division would be inequitable, and therefore ordered the mandatory equal division of marital assets. Crowder, 147 N.C. App. at 681, 556 S.E.2d at 642.
Defendant also contends the trial court erred in allowing plaintiff to testify as to marital misconduct.
Our Supreme Court has held that misconduct during the marriage which dissipates or reduces the value of marital assets for nonmarital purposes may properly be considered under N.C.G.S. 50-20(c)(12). Marital fault or misconduct which does not adversely affect the value of marital assets is not a just and proper factor within the meaning of N.C.G.S. 50-20(c)(12).Smith v. Smith, 314 N.C. 80, 81, 331 S.E.2d 682, 683 (1985). As discussed supra, one of the statutory factors for consideration by the trial court is the "physical and mental health of both parties." N.C. Gen. Stat. § 50-20(c)(3).
Here, plaintiff testified that her depression and post-traumatic stress disorder were caused by defendant's physical and mental abuse in the course of the marriage and that they did not exist prior to the marriage. The trial court's findings reflect that plaintiff believed the causation of these conditions was defendant's abuse. However, as discussed supra, the trial court did not conclude as a result of this finding that an equal division would be inequitable. Therefore, even assuming arguendo that the trial court erred in permitting such testimony, the trial court's order of equal division of marital assets precludes a finding that such testimony was prejudicial to defendant.
The trial court properly made findings as to the statutory factors presented and concluded that equal distribution would not be inequitable. We find no abuse of discretion in the trial court's conclusions.
II.
Defendant finally contends the trial court failed to consider the credit card debt incurred by defendant in making its final order of distribution. We find no merit to this argument.
In the amended order entered 14 August 2003, the trial court specifically made findings that marital debts included outstanding credit card debt, and further ordered that the remaining marital debts, "including but not limited to the outstanding credit card indebtedness to Lowe's and Home Depot[,]" be paid from the sale proceeds of the marital home. As the trial court had already addressed the issue of marital debt, including credit card debt, and had ordered such debts paid from the sale proceeds, there is no merit to defendant's argument that the trial court failed to consider this issue in the final distribution order dealing with the net proceeds remaining following the sale and payment of debts.
As we find no abuse of discretion on the part of the trial court, we affirm the order for the reasons stated herein.
Affirmed.
Judges McGEE and LEVINSON concur.
Report per Rule 30(e).