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Melson v. Crane

Court of Appeals of North Carolina.
May 1, 2012
725 S.E.2d 472 (N.C. Ct. App. 2012)


No. COA11–1237.


Paul MELSON, Plaintiff, v. Rebecca CRANE, Defendant.

Greene & Wilson, P.A., by Kelly L. Greene, for Plaintiff–Appellant. No Brief filed by Defendant–Appellee.

Appeal by Plaintiff from order entered 12 May 2011 by Judge Peter Mack in Craven County District Court. Heard in the Court of Appeals 7 March 2012. Greene & Wilson, P.A., by Kelly L. Greene, for Plaintiff–Appellant. No Brief filed by Defendant–Appellee.

Paul Melson (Plaintiff) appeals an equitable distribution order pursuant to N.C. Gen.Stat. § 7A–27(c). For the following reasons, we affirm.

Plaintiff and Rebecca Crane (Defendant) were married on 22 April 1995. When the parties married, they lived in the Research Triangle area, and both parties were employed. In June 2003, the parties moved to Craven County so that Plaintiff could open an investment office with Edward Jones. After Plaintiff opened his investment office, Defendant continued to work in the Research Triangle, but her employment eventually ended.

In May 2007, the parties experienced marital difficulties and Defendant moved out of the Craven County residence and into their Pamlico County residence. After several weeks, Defendant returned to the Craven County residence, and Plaintiff moved to the Pamlico County residence. The parties separated on 10 September 2007. At the time of separation, Defendant was unemployed and Plaintiff assumed the responsibility for marital obligations including mortgages on two pieces of real property and other living expenses.

On 11 October 2007, Plaintiff filed a complaint for equitable distribution and a temporary restraining order prohibiting Defendant from removing, disposing of, or converting any marital or separate assets. A temporary restraining order was entered on 30 October 2007 preventing both Plaintiff and Defendant from removing or otherwise disposing of marital or divisible property. On 2 November 2007 another temporary restraining order was entered that also restrained both parties and any agents of Edward Jones from removing or otherwise disposing of the marital accounts at Edward Jones. On 8 November 2007, Defendant filed an answer and counterclaim praying for post separation support, alimony, counsel fees and equitable distribution. On 12 May 2011, the trial court entered a final order which denied Defendant's claims for alimony, post separation support, and counsel fees, and distributed the marital property. Plaintiff gave timely notice of appeal.

Plaintiff argues that the trial court erred by entering an equitable distribution order which failed to properly classify, value, and distribute the parties' marital and separate property. We disagree.

“The division of property in an equitable distribution is a matter within the sound discretion of the trial court.” Cunningham v. Cunningham, 171 N.C.App. 550, 555, 615 S.E.2d 675, 680 (2005) (internal quotations and citation omitted). “When reviewing an equitable distribution order, the standard of review ‘is limited to a determination of whether there was a clear abuse of discretion.’ “ Petty v. Petty, 199 N.C.App. 192, 197, 680 S.E .2d 894, 898 (2009) (quoting White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)). “A trial court may be reversed for abuse of discretion only upon a showing that its actions are manifestly unsupported by reason.” White, 312 N.C. at 777, 324 S.E.2d at 833. Further, “[i]t is well established that a trial court's conclusions of law must be supported by its findings of fact .” Robertson v. Robertson, 167 N.C.App. 567, 574, 605 S.E.2d 667, 671 (2004). “[T]he findings of fact are conclusive [on appeal] if they are supported by any competent evidence from the record.” Beightol v. Beightol, 90 N.C.App. 58, 60, 367 S.E.2d 347, 348 (1988).

When making an equitable distribution of the marital assets, the trial court is required “(1) to determine which property is marital property, (2) to calculate the net value of the property, fair market value less encumbrances, and (3) to distribute the property in an equitable manner.” Id. at 63, 367 S.E.2d at 350 (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.” Id. (citations omitted). “When, however, 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) [.]” Armstrong v. Armstrong, 322 N .C. 396, 404, 368 S.E.2d 595, 599 (1988). “The clear intent of the legislature was that a party desiring an unequal division of marital property bear the burden of producing evidence concerning one or more of the twelve factors in the statute and the burden of proving by a preponderance of the evidence that an equal division would not be equitable.” White, 312 N.C. at 776, 324 S.E.2d at 832.

First, Plaintiff contends that the trial court erred when it awarded an unequal distribution in favor of Defendant. Plaintiff argues that “the trial court made no findings as to why it was ordering an unequal distribution, and moreover, made no express conclusion of law that it was in fact ordering an unequal distribution.” Our review of the record shows substantial evidence to support the trial court's unequal distribution.

The trial court found the following,

The defendant's assets, however, have been significantly diminished during the separation by the actions of the plaintiff. He was solely responsible for managing her investment account. He attached a substantial margin account to her investment account.... As a partial result of that margin account and the plaintiff's management, the account has declined in value by $57,503 .43. This account was accumulated as a result of the efforts of the defendant, not the plaintiff. The plaintiff has been financially irresponsible throughout the marriage and since the date of separation.... The court finds that the defendant should receive a portion of the value of real property by way of a distributive award paid by the plaintiff to her in the amount of $14,600.... The court further finds this distribution is fair in that the defendant's investments suffered dramatic losses under the management of the plaintiff; the plaintiff is left with all the vehicles and all of the real property; and the defendant has had to start her life over in another locale. Furthermore, the plaintiff is receiving the benefits of all of the payments that he made during the separation as the property is being distributed to him. This distribution will, in part, return to the defendant a portion of her investment losses sustained in the account she was able to accumulate while leaving the plaintiff in possession of most of the other disposable assets.

Plaintiff argues that the trial court did not use the factors required by N.C. Gen.Stat. § 50–20(c) (2011) to reach its conclusion. Although the trial court did not explicitly state the factors, it is clear that the trial court based its distributive award on the factors outlined in § 50–20(c). More specifically, N.C. Gen.Stat. § 50–20(c)(11a) (2011) permits the trial court to consider “[a]cts of either party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or convert the marital property or divisible property, or both, during the period after separation of the parties and before the time of distribution.” Here, the trial court determined that Plaintiff's acts contributed to Defendant's financial loss and Defendant was entitled to a distributive award.

Plaintiff also challenges Finding of Fact 15(H) which states that

“[a]t the time of trial, this account had a balance of $67,679.22. At the time of separation the balance was $125,182.65. This money the defendant managed to save from her earnings during the marriage.... The account diminished in value during the marriage because of market conditions, poor management by the plaintiff and because the account was attached to a large margin account. (emphasis added).
Plaintiff also challenges a portion of Finding of Fact 21 where the trial court states, “[t]he plaintiff has been financially irresponsible throughout the marriage and since the date of separation.” Our review of the transcript shows that the record is replete with evidence of Plaintiff's mismanagement of marital property. On cross-examination, Plaintiff was confronted on his management of funds before and after the marriage.

[Defendant's Counsel]: Well, the next statement we have is from January of 2007. Let's turn right there. By then your debt against these accounts is about $80,000, isn't it?

[Plaintiff]: Yes, sir.

[Defendant's Counsel]: And, of course, we don't have any statements from 2006 so we can tell how the debt varied, do we?

[Plaintiff]: Correct.

[Defendant's Counsel]: Do you know how it went up?

[Plaintiff]: We were using it to pay living expenses.

[Defendant's Counsel]: Well, if you have taken eleven grand a month out of these accounts—there wasn't but about a hundred and twenty in both of them—how long do you think you're going to do that?

[Plaintiff]: Not long.

[Defendant's Counsel]: Well, apparently, you've been doing it for two and a half years if I believe what you're telling me about paying living expenses with this money?

[Plaintiff]: Correct.

[Defendant's Counsel]: To the tune of $11,000 a month?

[Plaintiff]: Yes, sir.

[Defendant's Counsel]: Do you know how much money that is?

[Plaintiff]: Yes, sir.

[Defendant's Counsel] $11,000 times 30

[Plaintiff]: Yes, sir.

[Defendant's Counsel]:—is how much?

[Plaintiff]: $330,000.

[Defendant's Counsel]: And that's about three times what you have in these accounts, isn't it?

[Plaintiff]: Yes.

[Defendant's Counsel]: So explain to me how you borrowed three times what was in the accounts over this period of time for living expenses. Explain it to me.

[Plaintiff]: (No verbal response.)
Additionally, during the marriage, Plaintiff opened and operated an Edward Jones investment office and managed several marital accounts including Defendant's accounts. As for Defendant's account, the Plaintiff attached a margin account to Defendant's account and had the margin account statement sent directly to his office, keeping Defendant unaware of the status of the margin account. After the two separated, Defendant transferred her account to Raymond James. As to this account, Plaintiff testified to the following,

[Defendant's Counsel]: This account that you claim to have put $50,000 in ends in 92718, doesn't it?

[Plaintiff]: Yes, sir.

[Defendant's Counsel]: And when the two of you separated, it had more than $125,000 in it, right?

[Plaintiff]: It had a $67,000 margin loan on it.

[Defendant's Counsel]: Right.

[Plaintiff]: So it had 67,000

[Defendant's Counsel]: So it's gone

[Plaintiff]: It had $67,000 in it.

[Defendant's Counsel]:—now because it's the only account that the two of you had that was subject to a margin call? And after you split, the margin had to be paid, right?

[Plaintiff]: Not if she left it where it was.

[Defendant's Counsel]: So the account is worth less than half of what it was when you separated

[Plaintiff]: True.
Based on the foregoing, the trial court's findings that Plaintiff poorly managed the marital finances and contributed to Defendant's financial loss was supported by competent evidence.

Next, Plaintiff argues that the trial court erred in failing to award an unequal distribution in favor of Plaintiff. Plaintiff contends that he should have received a credit for post-separation payments made to preserve the marital estate because he presented substantial evidence of his payments. We decline Plaintiff's invitation to re-weigh the evidence. Additionally, “the trial court may, in its discretion, weigh the equities in a particular case and find that a credit or distributional factor would be appropriate under the circumstances.” Walter v. Walter, 149 N.C.App. 723, 732, 561 S.E.2d 571, 577 (2002) (emphasis added). Here, the trial court, in its discretion, found that although Plaintiff made payments that maintained the marital property, he was not entitled to credits or set offs where Defendant was unemployed and had no income; Defendant had viable post separation claims pending against Plaintiff; Plaintiff made these post separation payments to maintain his licensing and employment; and Plaintiff borrowed far more money than was necessary to pay the debts accumulated by the parties. Accordingly, the trial court did not abuse its discretion by failing to award a credit in favor of Plaintiff.

Next, Plaintiff contends that the trial court failed to classify, value, distribute divisible property where an appraiser testified to the value of marital personal property, after the date of separation, but before the divorce. Divisible property is,

[a]ll appreciation and diminution in value of marital property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of post separation actions or activities of a spouse shall not be treated as divisible property.
N.C. Gen.Stat. § 50–20(b)(4)(a) (2011). In the case sub judice, the appraiser testified at trial and appraised three cars and a boat owned by the parties. Plaintiff argues that these appraisals showed the value of the vehicles increased between date of separation and the entry of divorce. At the trial, the appraiser did not give exact values of the vehicles. Moreover, the appraiser gave the value of the vehicles if they were to be sold at auction. Plaintiff's evidence was not credible evidence of the increase or decrease of the value of the vehicles where the witness gave a price range of each vehicle that was not based on the fair market value, but based on the value if the vehicles were sold at auction. The trial court properly relied on the fair market value of the vehicles.

Plaintiff also argues that the financial losses from the various investment and retirement accounts were properly classified as divisible property. Plaintiff's argument is without merit where the trial court determined that he was partially responsible for the financial losses and distributed the marital property accordingly.

Plaintiff also asserts that the trial court erred by failing to find the value of marital personal property where Plaintiff presented evidence of the replacement value of the personal property. A review of the record shows that Plaintiff presented evidence of the value of the insurance coverage for all of the personal property in the marital home and not the actual value of the personal property. Additionally, “where all the personal property classified as marital is distributed to one party, as here, there is no purpose served in requiring the trial court to place a value on each individual item.” Atkins v. Atkins, 102 N.C.App. 199, 209, 401 S.E.2d 784, 789 (1991). Therefore, Plaintiff's argument is overruled.

Finally, Plaintiff argues that the trial court erred by failing to hold Defendant in civil contempt where she willfully, wantonly, and repeatedly violated numerous restraining orders without legal cause. “[T]he party initiating an action for civil contempt has the burden of proving the elements of civil contempt, including that the alleged contemnor's noncompliance with the court order was willful.” Shumaker v. Shumaker, 137 N.C.App. 72, 80, 527 S.E.2d 55, 60 (2000). Here, Plaintiff failed to show Defendant's noncompliance was willful where the trial court found that

An order was entered in this cause ... restraining both parties from disposing of marital or divisible property. Thereafter, both parties removed property from the King Street address. The defendant did dispose of some of this property after the entry of that order, in part because the plaintiff failed to claim or identify it and in part because she had no income and no other means of paying basic living expenses after the plaintiff abandoned her....
The trial court also held that Defendant's noncompliance was not willful and without just cause where she was ordered to return the remaining personal property in her possession, Plaintiff received some consideration for the value of this property, and both parties removed property during the course of the action. Based on the foregoing, Plaintiff did not meet his burden and the trial court properly determined that Defendant was not in contempt of court.

Affirmed. Judges BRYANT and HUNTER, JR. concur.

Report per Rule 30(e).

Summaries of

Melson v. Crane

Court of Appeals of North Carolina.
May 1, 2012
725 S.E.2d 472 (N.C. Ct. App. 2012)
Case details for

Melson v. Crane

Case Details

Full title:Paul MELSON, Plaintiff, v. Rebecca CRANE, Defendant.

Court:Court of Appeals of North Carolina.

Date published: May 1, 2012


725 S.E.2d 472 (N.C. Ct. App. 2012)