Opinion
Nos. COA02-479, COA02-205
Filed 20 May 2003 This case not for publication
Appeals by defendant from judgment entered 19 September 2001 and amended judgment entered 20 December 2001 by Judge Earl J. Fowler, Jr., in Buncombe County District Court. Heard in the Court of Appeals 21 January 2003.
Robert E. Riddle, P.A., by Diane K. McDonald and Robert E. Riddle for plaintiff-appellee. Dameron, Burgin Parker, P.A., by Phillip T. Jackson for defendant-appellant.
Buncombe County No. 98 CVD 2294.
Defendant Linda K. Roberson appeals from the district court's equitable distribution judgment and the district court's granting of summary judgment dismissing her claims for post-separation support and alimony. Because the district court did not make sufficient findings of fact in its equitable distribution judgment regarding certain property and debt that was in dispute, we remand for further findings. We reverse the grant of summary judgment as to alimony and post-separation support on the grounds that the record reveals the existence of genuine issues of material fact. Plaintiff Joe B. Roberson and defendant Linda K. Roberson were married on 12 June 1983. No children were born of the marriage. During the marriage, plaintiff practiced dentistry and defendant was a nurse anesthetist. The parties separated on 5 April 1998 and were divorced on 13 July 1999.
On 22 May 1998, plaintiff filed a complaint seeking equitable distribution. On 26 June 1998, defendant answered and counterclaimed for post-separation support, alimony, attorney's fees, and equitable distribution.
On 17 November 1998, plaintiff filed a motion for summary judgment as to defendant's claim for alimony. On 27 April 1999, the district court judge entered an order denying summary judgment on the ground that genuine issues of material fact existed, but limited the scope of the order solely to defendant's claim for post-separation support. On 30 January 2001, plaintiff filed a second motion for summary judgment as to defendant's claims for post-separation support and alimony, contending that defendant was not a dependant spouse. The district court granted this motion initially in an order filed on 7 November 2001 indicating that defendant had not responded to the motion, but finding that defendant's deposition testimony established that she was not and had not been a dependant spouse. Defendant gave notice of appeal from this order on 6 December 2001. On 20 December 2001, the district court filed an amended judgment that merely added a statement that the court had also considered "motions and affidavits filed by the Defendant." Defendant filed a notice of appeal from the amended judgment on 14 January 2002.
On 19 September 2001, the trial court entered an equitable distribution judgment. Defendant gave notice of appeal from that judgment on 18 October 2001.
Case No. 02-205, defendant's appeal from the equitable distribution judgment, and Case No. 02-479, defendant's appeal from the grant of summary judgment, were previously consolidated for hearing. They are now consolidated for decision.
Case No. 02-205: Equitable Distribution Judgment
Defendant's appeal of the equitable distribution judgment on 18 October 2001 was interlocutory because the trial court had yet to rule on defendant's claim for alimony. Embler v. Embler, 143 N.C. App. 162, 167, 545 S.E.2d 259, 263 (2001) (dismissing appeal of equitable distribution order when claim for alimony had not yet been addressed). Defendant has filed a petition for writ of certiorari. Because the trial court addressed the alimony claim shortly thereafter and an appeal from the order is presently before this Court, we will allow the petition and consider defendant's appeal of the equitable distribution judgment.
In making an equitable distribution determination, a trial court must first identify and classify all property as marital, divisible, separate, or mixed property. Conway v. Conway, 131 N.C. App. 609, 613, 508 S.E.2d 812, 816 (1998) (in distributing marital assets, the trial court is required by N.C. Gen. Stat. § 50-20 to classify property as marital, separate, or mixed), disc. review denied, 350 N.C. 593, 537 S.E.2d 210 (1999); N.C. Gen. Stat. § 50-20(a) (2001) (requiring court to determine what property is marital and divisible). This Court will not disturb a trial court's classification if there is competent evidence to support that determination: "On appeal, we review the record to determine whether the trial court's findings of fact are supported by any competent evidence, regardless of the existence of evidence which may support a contrary finding." Stewart v. Stewart, 141 N.C. App. 236, 247, 541 S.E.2d 209, 217 (2000).
Once the trial court has classified the property, it must then determine the net value of the marital property, which equals the fair market value less any encumbrances. Conway, 131 N.C. App. at 613, 508 S.E.2d at 816. The trial court is not, however, required to value wholly separate property. Id. at 615, 508 S.E.2d 812 ("there is no requirement that the trial court determine the numeric value of separate property").
After valuation, the trial court shall order the property to be distributed equally unless equity requires an unequal distribution. White v. White, 312 N.C. 770, 776, 324 S.E.2d 829, 832 (1985) (equal division is "mandatory" unless the trial court finds that equal division is not equitable). This Court reviews the trial court's determination regarding the distribution of the property for abuse of discretion. Id. at 777, 324 S.E.2d at 833.
I
With respect to the equitable distribution judgment, defendant first argues that the trial court erred in determining that $48,000.00 received by defendant in settlement of a lawsuit was a marital asset. We disagree.
The classification of property as marital or separate must be supported by adequate findings of fact, which must, in turn, be supported by the evidence. Caudill v. Caudill, 131 N.C. App. 854, 858, 509 S.E.2d 246, 249 (1998). Property is marital if it (1) was acquired by either or both spouses; (2) during the marriage; (3) before the date of the separation of the parties; and (4) is presently owned. Id. at 857, 509 S.E.2d at 248. Under N.C. Gen. Stat. § 50-20(b)(1) (2001), it is presumed that "all property acquired after the date of marriage and before the date of separation is marital property" unless the spouse claiming that such property is in fact separate demonstrates that the property was (1) acquired by that spouse by bequest, devise, descent, or gift from a third party during the course of the marriage; (2) acquired by gift from the other spouse during the course of the marriage and the intent that it be separate property is stated in the conveyance; or (3) was acquired in exchange for separate property and no contrary intention that it be marital property is stated in the conveyance. N.C. Gen. Stat. § 50-20(b)(2) (2001).
Here, the parties stipulated that "[d]efendant recovered the sum of $48,000 from a lawsuit for interference with her career, however there were a number of debts outstanding (including an IRS bill) which the [d]efendant has paid either before or after the date of separation." The district court then concluded that the entire $48,000.00 constituted marital property.
In claiming that the $48,000.00 was not a marital asset, defendant argues on appeal that the funds were not "presently owned" at the date of separation as required by N.C. Gen. Stat. § 50-20(b)(1) (2001). Defendant has not properly preserved this issue for appellate review since defendant did not make this argument to the trial court. Crist v. Crist, 145 N.C. App. 418, 423, 550 S.E.2d 260, 264 (2001) (declining to address argument not asserted before trial court).
Defendant argued to the trial court that the settlement proceeds represented both lost wages and punitive damages and contended that the punitive damages portion constituted separate property. See Johnson v. Johnson, 317 N.C. 437, 453, 346 S.E.2d 430, 439 (1986) (trial court must determine what portion of a personal injury settlement constituted compensation for injury to separate property and what portion constituted compensation for injury to marital property). Defendant, however, bore "the burden of showing what amount or proportion of the whole represents compensation for loss of, or injury to, [her] `separate property,' to wit, compensation for [her] pain and suffering, disfigurement, loss of earning capacity subsequent to separation, lost wages subsequent to separation, hospital and medical expenses incurred subsequent to separation." Id. at 454, 346 S.E.2d at 439. Since defendant failed to offer any evidence to support an apportionment of the settlement between marital and separate property, the trial court correctly determined that the proceeds were marital property. This assignment of error is overruled.
II
Second, defendant argues that the trial court erred in failing to find that certain credit card debts were marital debts. We remand for further findings as to this issue.
A trial court is required to classify debt as either marital or separate debt and then, following classification, value both types of debt. Byrd v. Owens, 86 N.C. App. 418, 424, 358 S.E.2d 102, 106 (1987) ("If the debt is classified as separate, the court must value it and then, pursuant to N.C.G.S. Sec. 50-20(c)(1) consider it in making a distribution."). "Marital debt" is debt that is incurred during the marriage and before the date of separation, by either spouse or both spouses, for the joint benefit of the parties. Riggs v. Riggs, 124 N.C. App. 647, 652, 478 S.E.2d 211, 214 (1996), disc. review denied, 345 N.C. 755, 485 S.E.2d 297 (1997). The party who claims that any debt is marital bears the burden of proof on that issue and must show both the value of the debt on the date of separation and that it was incurred during the marriage for the joint benefit of the husband and wife. Id.
Defendant argues that her uncontradicted testimony indicated that both the MBNA and First USA credit card debts represented expenses incurred in relation to her employment during the marriage and prior to the parties' separation and are therefore marital debt. Defendant paid these debts using the $48,000.00 settlement proceeds. Similarly, defendant contends that the trial court erred in failing to list the Lowe's credit card debt as a marital debt. Defendant testified that this credit card was used to make improvements to the parties' Tryon, North Carolina home, which the parties stipulated was marital property. Plaintiff did not offer evidence to refute defendant's proof regarding the credit cards.
The trial court did not classify or value the MBNA, First USA, and Lowe's credit card debts. Instead, the trial court noted only generally that defendant had testified that she paid some large credit card debts during the marriage out of her settlement proceeds, but that "there was some dispute in the parties' respective testimony as to the exact breakdown of what various charges were for." It was the trial court's responsibility to resolve that dispute; it did not do so. We, therefore, remand for the trial court to make findings of fact regarding whether the MBNA, First USA, and Lowe's credit card debts constituted marital or separate debt and for a valuation of those debts. See Byrd, 86 N.C. App. at 424, 358 S.E.2d at 106 (reversing equitable distribution order for failure to classify and value debt).
III
Defendant argues that the trial court erred in finding that all of the Sun Life IRA account and $41,235.00 of the Edward Jones SEP account were marital property. We disagree as to the IRA account, but remand for further findings as to the SEP account.
With respect to the IRA account, it appears from the record that defendant liquidated her account with the Franciscan Health System of South Carolina, Inc. profit sharing plan. Instead of immediately rolling the profit sharing funds over into the Sun Life IRA, defendant used some or all of those funds to pay her taxes. She then earned enough money in her employment to reconstitute the profit sharing plan funds before the 60-day deadline for rolling over the funds. The actual source of the funds for the IRA was thus defendant's earnings and not any separate property. See Wade v. Wade, 72 N.C. App. 372, 382, 325 S.E.2d 260, 269 (property obtained with marital funds is marital property), disc. review denied, 313 N.C. 612, 330 S.E.2d 616 (1985). This assignment of error is overruled.
As to the SEP account, the record reveals that the account was created using a mixture of defendant's separate funds and marital funds. Defendant testified that she started the account in 1994 with $10,000.00 of separate funds and $17,000.00 or $18,000.00 in marital funds. According to defendant, no further money was deposited after 1994, but the account increased in value to $51,235.00.
An increase in value of separate property may be due to either "passive" or "active" appreciation. Passive appreciation of separate property — an enhancement of value due solely to inflation, changing economic conditions, or other circumstances beyond the control of either spouse — remains separate property. Stewart, 141 N.C. App. at 248, 541 S.E.2d at 217. Any increase in value due to active appreciation — referring to "financial or managerial contributions of one of the spouses to the separate property during the marriage" — is marital property. Id.
Since defendant's testimony established that the increase in value of the SEP account was passive, rather than active, appreciation, the district court should have classified as separate property not just the initial deposit, but also a pro rata share of the increase in value. Wade, 72 N.C. App. at 382, 325 S.E.2d at 269 ("[W]hen both the marital and separate estates contribute assets toward the acquisition of property, each estate is entitled to an interest in the property in the ratio its contribution bears to the total investment in the property.") We, therefore, remand for further findings regarding what portion of the increase in value of the SEP account should be considered separate property.
IV
With respect to plaintiff's dental practice, defendant argues that the trial court erred in failing to make findings whether plaintiff's dental practice, including the practice's bank account, constituted marital or separate property and by failing to calculate a value for the marital portion of that practice. Since defendant did not offer sufficient evidence for the trial court to make the necessary findings, we overrule this assignment of error.
Defendant acknowledges that the dental practice was in part separate property, but contends that the increase in value of that practice throughout the marriage was the result of active appreciation and thus marital property. As this Court has previously held, "[i]n order for the court to value `active appreciation' of separate property and distribute the increase as marital property, the party seeking distribution of the property must offer credible evidence showing the amount and nature of the increase." Conway, 131 N.C. App. at 616, 508 S.E.2d at 817-18. Here, although defendant made various contentions regarding contributions that she and her husband made to the practice during the marriage, she offered no evidence of any increase in value of the practice during the marriage. Because defendant did not provide the necessary evidentiary basis for the trial court to find the amount of any increase in value, the trial court did not err in refusing to find any portion of the value of the dental practice to be marital property. Id., 508 S.E.2d at 818 (finding no error when plaintiff did not show an increase in value of the defendant's medical license as of the date of separation).
In addition, plaintiff offered competent evidence that the practice's bank account was not held for the joint benefit of the spouses. See Riggs, 124 N.C. App. at 649, 478 S.E.2d at 212 (a trial court's determination whether property is marital or separate will not be disturbed on appeal if there is competent evidence to support the findings). This assignment of error is, therefore, overruled.
V
Further, defendant argues that the trial court erred in calculating the value of the Candler, North Carolina home, contending that the trial court should not have used the value specified in an appraisal report. The parties stipulated that the trial court could consider the reported appraisal of $220,000.00 without need for the appraiser's testimony, but agreed that defendant could introduce evidence that the property had a higher value. Defendant has not shown that the trial court abused its discretion in accepting the value contained in the appraisal and rejecting defendant's non-expert opinion as to the house's value. This assignment of error is overruled.
VI
Finally, defendant argues that the trial court erred in ordering an equal division of the marital estate. Since this case must be remanded for further findings, we will refrain from addressing this issue. After making the additional findings required by this opinion regarding classification and valuation, the trial court must then again address the question of distribution.
We do point out, however, that the trial court's factual findings regarding the distribution appear inadequate. With respect to the distribution portion of the judgment, the trial court did not make specific ultimate findings of fact, but rather recited each party's testimony and contentions. As we have previously held, recitations of evidence and testimony do not constitute proper findings of fact. Davis v. Weyerhaeuser Co., 132 N.C. App. 771, 776, 514 S.E.2d 91, 94 (1999) ("it is the [finder of fact's] duty to find the ultimate determinative facts, not to merely recite evidentiary facts and the opinions of experts"); Bailey v. Sears Roebuck Co., 131 N.C. App. 649, 653, 508 S.E.2d 831, 835 (1998) (recitations of the testimony of each witness do not constitute findings of fact). On remand, the trial court must make specific findings of fact, rather than recitations of evidence, regarding each of the factors specified in N.C. Gen. Stat. § 50-20(c) (2001) on which the parties have offered evidence. Rosario v. Rosario, 139 N.C. App. 258, 260-61, 533 S.E.2d 274, 275-76 (2000) (a trial court must make specific findings as to the ultimate facts found regarding each factor for which evidence was presented).
Case No. 02-479: Alimony I
With respect to her claim for alimony, defendant first argues that the trial court erred in granting plaintiff's motion for summary judgment when another judge had already denied a previous motion for summary judgment requesting the same relief, citing Hastings v. Seegars Fence Co., 128 N.C. App. 166, 493 S.E.2d 782 (1997). Under Hastings, one trial judge may not reconsider and grant a motion for summary judgment previously denied by another judge. Id. at 168, 493 S.E.2d at 784. The trial court may rule on a second summary judgment motion only if it presents legal issues different from those asserted in the earlier motion. Id.
On 27 April 1999, a district court judge denied summary judgment as to defendant's claim for post-separation support on the grounds that "[i]t appears that there are genuine issues of material fact, and the Plaintiff is not entitled to judgment as a matter of law." On 20 December 2001, a second district court judge entered summary judgment as to both defendant's claim for post-separation support and claim for alimony.
Under Hastings, the trial court was not free to enter summary judgment as to post-separation support when it had been previously denied because of a finding of genuine issues of material fact. The 20 December 2001 amended judgment must be reversed to the extent it addresses post-separation support. The first summary judgment order did not, however, address defendant's claim for alimony. The district court was not, therefore, limited under Hastings insofar as the motion for summary judgment challenged defendant's right to alimony.
II
Defendant argues alternatively that the trial court erred in granting plaintiff's motion for summary judgment when there existed genuine issues of material fact regarding defendant's claims for post-separation support and alimony. We agree.
As we have already concluded, the 27 April 1999 order established that issues of fact existed as to post-separation support. With respect to the claim for alimony, however, the district court based its 20 December 2001 grant of summary judgment solely on a finding that defendant was not a dependant spouse. We review this finding de novo. Barrett v. Barrett, 140 N.C. App. 369, 371, 536 S.E.2d 642, 644 (2000).
As this Court explained in Barrett, a party may be a dependant spouse either because "he or she is currently unable to meet his or her own maintenance and support" or because "he or she will be unable to meet his or her needs in the future, even if he or she is currently meeting those needs." Id. at 371, 536 S.E.2d at 644-45. In this case, defendant's deposition testimony established that she is not "actually substantially dependent," N.C. Gen. Stat. § 50-16.1A(2) (2001), because defendant has been able to meet her own maintenance and support throughout the marriage and separation.
Defendant has, however, raised a genuine issue of material fact regarding whether defendant would be able to meet her needs in the future — in other words, whether she was "substantially in need of maintenance." N.C. Gen. Stat. § 50-16.1A(2) (2001). Both defendant's deposition testimony and her affidavit filed in opposition to the motion for summary judgment provided evidence that defendant's earnings would be decreasing substantially, leaving her with a deficit of as much as $3,141.37 per month. This projected income-expenses deficit is sufficient to defeat plaintiff's motion for summary judgment as to the issue whether defendant was a dependent spouse. Barrett, 140 N.C. App. at 372, 536 S.E.2d at 645 ("[An income-expenses deficit of $783.50 per month] in and of itself supports the trial court's classification of her as a dependant spouse.").
The 19 September 2001 equitable distribution judgment is reversed in part and remanded for further findings of fact. The 20 December 2001 amended judgment is reversed and the case remanded for further proceedings on defendant's claims for post-separation support and alimony.
Affirmed in part; reversed and remanded in part.
Judges WYNN and BRYANT concur.
Report per Rule 30(e).