Opinion
No. COA12–988.
2013-04-16
Tamara L. CONGDON, Plaintiff, v. David Gordon CONGDON, Defendant.
Economos Law Firm, PLLC, by Larry C. Economos, for defendant appellant. No brief for plaintiff appellee.
Appeal by defendant from order filed 2 December 2011 by Judge Joseph A. Blick, Jr., in Pitt County District Court. Heard in the Court of Appeals 29 January 2013. Economos Law Firm, PLLC, by Larry C. Economos, for defendant appellant. No brief for plaintiff appellee.
McCULLOUGH, Judge.
David Gordon Congdon (“defendant”) appeals from the equitable distribution order filed by the trial court on 2 December 2011. For the following reasons, we affirm.
I. Background
Tamara Lynn Congdon (“plaintiff”) and defendant were married on 11 February 1978. After over 30 years of marriage, plaintiff and defendant separated on 28 August 2009. On 30 August 2010, plaintiff filed a complaint in Pitt County District Court seeking divorce and equitable distribution of marital and divisible property, unequal in her favor. Defendant responded by filing an answer and counterclaim seeking equitable distribution, unequal in his favor, on 4 November 2010. Plaintiff and defendant divorced on 11 January 2011.
The equitable distribution action came on to be heard at the 13 July 2011 Civil Session of Pitt County District Court, the Honorable Joseph A. Blick, Jr., presiding. The trial court's equitable distribution order was filed on 2 December 2011. Defendant appealed.
II. Analysis
Defendant's sole contention on appeal is that the trial court erred in categorizing two accounts valued at $74,368.52 as plaintiff's separate property not subject to equitable distribution.
The two accounts in dispute are an East Carolina Bank (“ECB”) checking account, valued at $56,451.30, and a Local Government Federal Credit Union (“LGFCU”) savings account, valued at $17,917.22.
At the outset, we note that,
[e]quitable distribution is vested in the discretion of the trial court and will not be disturbed absent a clear abuse of that discretion. Only a finding that the judgment was unsupported by reason and could not have been a result of competent inquiry, or a finding that the trial judge failed to comply with the statute, will establish an abuse of discretion.
Wiencek–Adams v. Adams, 331 N.C. 688, 691, 417 S.E.2d 449, 451 (1992) (citations omitted). When the trial court addresses issues of equitable distribution, N.C. Gen.Stat. § 50–20 (2011) “requires the trial court to conduct a three-step process: (1) classify property as being marital, divisible, or separate property; (2) calculate the net value of the marital and divisible property; and (3) distribute equitably the marital and divisible property.” Brackney v. Brackney, 199 N.C.App. 375, 381, 682 S.E.2d 401, 405 (2009) (citing Cunningham v. Cunningham, 171 N.C.App. 550, 555, 615 S.E.2d 675, 680 (2005)).
In this case, defendant only challenges the trial court's classification of the two accounts as plaintiff's separate property in step one of the process.
The burden of showing the property to be marital is on the party seeking to classify the asset as marital and the burden of showing the property to be separate is on the party seeking to classify the asset as separate. A party may satisfy [their] burden by a preponderance of the evidence.
Langston v. Richardson, 206 N.C.App. 216, 220, 696 S.E.2d 867, 871 (2010) (quoting Atkins v. Atkins, 102 N.C.App. 199, 206, 401 S.E.2d 784, 787 (1991)), cert. denied, appeal dismissed,365 N.C. 191, 707 S.E.2d 231 (2011). Marital property is defined to include “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned, except property determined to be separate property or divisible property....” N.C. Gen.Stat. § 50–20(b)(1). In contrast, separate property is defined to include “all real and personal property acquired by a spouse before marriage or acquired by a spouse by devise, descent, or gift during the course of the marriage.” N.C. Gen.Stat. § 50–20(b)(2). On appeal, “[a] trial court's determination that specific property is to be characterized as marital, divisible, or separate property will not be disturbed ... ‘if there is competent evidence to support the determination .’ “ Brackney, 199 N.C.App. at 381, 682 S.E.2d at 405 (quoting Holterman v. Holterman, 127 N.C.App. 109, 113, 488 S.E.2d 265, 268,disc. review denied, 347 N.C. 267, 493 S.E.2d 455 (1997)).
Here, defendant specifically contends that the trial court's findings of fact 23, 26, 27, and 28 are not supported by competent evidence. These mixed findings of fact and conclusions of law provide:
23. Mr. Link left Plaintiff real property upon his death, as well as various financial accounts. The total amount Plaintiff received from her grandfather as a result of his death was “several hundred thousands”.
....
26. Plaintiff kept the proceeds of her inheritance separate from Defendant, and at no time did she add his name to the accounts containing those funds. Her grandfather specifically requested that the Plaintiff keep these funds separate and apart from the Defendant because of his perception of the Defendant's spendthrift habits. At the date of separation, Plaintiff had $74,368.52 in assets that remained from the inheritance.
A. An account worth $56,451.30 at East Carolina Bank, account # 206 in Plaintiff's sole name.
B. An account at LGFCU worth $17,917.22, in Plaintiff's sole name, [w]hich was opened with the funds placed in the East Carolina Bank account # 9232.
27. An asset list in Schedule E of the pretrial order as stipulated by the parties, was a “Lady's 1.9 ESI marquise diamond ring set in a yellow band.” Parties further stipulated its value at $17,000.00. Although alleged at trial to have been purchased with separate funds belonging to the Plaintiff, no direct or documentary evidence was presented tracing any of the funds used for said purchase to the separate funds of the Plaintiff. By failing to satisfy the burden of the Plaintiff by the preponderance of the evidence, said “lady's 1.9 ESI marquise diamond ring” is classified as martial [sic] property.
28. Concerning the $74,368.52 in assets Plaintiff asserted were her separated inherited property, Defendant met his burden of proof that the assets were owned by the parties at the date of the separation. Plaintiff then met her burden of proof to show the disputed assets were acquired by funds from her inherited assets. As a result, the Court finds the disputed assets are Plaintiff's separate property.
Based on these mixed findings and conclusions, defendant contends the trial court abused its discretion in distributing the funds in the two accounts to plaintiff as separate property in decretal 5.
Upon review of the record, we find that the trial court's findings are supported by competent evidence. Moreover, we find no abuse of the trial court's discretion.
At trial, plaintiff testified that her grandfather, Fred Link, added her name to his financial accounts with full rights of survivorship prior to his death. In doing so, plaintiff testified that her grandfather intended that the funds in the accounts be inherited in plaintiff's name alone. When plaintiff's grandfather died on 22 June 1993, plaintiff inherited “over a couple hundred thousand dollars at the very least.” Plaintiff testified that since that time, she has maintained the inherited funds in her own separate accounts.
Exhibits tendered to the trial court support plaintiff's testimony regarding her inheritance.
Regarding the specific accounts at issue here, plaintiff testified that the $56,451.30 in the ECB checking account and the $17,917.22 in the LGFCU savings account were funds inherited from her grandfather. Because plaintiff and defendant had moved seven or eight times since the time plaintiff inherited the funds, plaintiff was unable to precisely trace the money back to 1993. Yet, plaintiff testified that she knew the funds in the ECB checking account and the LGFCU savings account were inherited because they were always maintained in accounts solely in her name. Defendant's name was never added to the accounts containing the inherited funds. Plaintiff specifically recalled establishing the ECB checking account with inherited funds previously held in an account she maintained separate from defendant in Maine. Plaintiff further testified the LGFCU savings account was funded with inherited funds transferred from ECB.
Defendant contends that plaintiff's testimony is insufficient to meet her burden of showing that the funds in the two accounts were her separate property acquired through inheritance. Citing Fountain v. Fountain, 148 N.C.App. 329, 559 S.E.2d 25 (2002), defendant argues that plaintiff was required to present evidence tracing the funds from the date of inheritance to the date of separation in order to prove that the funds were separate property. We find defendant's argument unpersuasive. In Fountain, this Court addressed whether the commingling of marital funds and funds derived from separate property transmuted the funds derived from separate property into marital property. Id. at 333–35, 559 S.E .2d at 29–30. This Court held that the commingling of the funds did not necessarily transmute the funds derived from separate property into marital property where the funds derived from separate property could be traced from the initial deposit into its form at the date of separation. Id. at 333, 559 S.E.2d at 29.
In the present case, the facts are different. Here, there was no commingling of separate and marital funds. Evidence presented at the equitable distribution hearing tended to show that plaintiff inherited the funds in question from her grandfather and always maintained the funds in accounts held solely in her name. We hold this to be competent evidence supporting the trial court's findings and conclusions. Furthermore, we find that the trial court engaged in a competent inquiry in accordance with N.C. Gen.Stat. § 50–20. Thus, we hold the trial court did not abuse its discretion.
Defendant asserts in his brief that plaintiff testified that other funds were also deposited at LGFCU. While this is true, plaintiff later clarified that she maintained a checking account and savings account at LGFCU and that the inherited funds were kept separate in the savings account.
III. Conclusion
For the reasons set forth above, we affirm the equitable distribution order of the trial court.
Affirmed. Judges HUNTER (ROBERT C.) and DAVIS concur.
Report per Rule 30(e).