Filed 19 July 2011 This case not for publication
Appeal by Plaintiff from orders entered 2 March 2010 and 25 June 2010 by Judge Christopher W. Bragg in Union County District Court. Heard in the Court of Appeals 27 April 2011.
Robertson, Medlin Bloss, PLLC, by John F. Bloss, for Plaintiff. Wyrick Robbins Yates Ponton LLP, by K. Edward Greene and Tobias S. Hampson, for Defendant.
Union County No. 04-CVD-483.
Factual and Procedural Background
On 12 March 2004, Plaintiff Carroll Douglas Smith filed a complaint in Union County District Court against Defendant Melissa Bernard Smith seeking an unequal equitable distribution of the parties' marital and/or divisible property in his favor. Defendant filed her answer on 30 April 2004, in which she counterclaimed for "an equitable distribution of the parties' marital property which awards her greater than one-half."
On 3 February 2006, the parties entered into an "Equitable Distribution Pretrial Order," in which the parties stipulated to the value, classification, and distribution of a majority of the parties' property.
Following a February 2006 hearing in Union County District Court, the Honorable Christopher W. Bragg presiding, the trial court entered an equitable distribution order in which it (1) found that an equal distribution would not be equitable and ordered a 60 percent to 40 percent division of marital property in Plaintiff's favor; (2) distributed in-kind net assets totaling $369,074.00 to Plaintiff and $61,759.00 to Defendant, which was an 86 percent to 14 percent division; and (3) facilitated an equitable distribution of the 60/40 division by awarding Defendant a distributive award of $110,574.52, which was to be paid in four equal annual installments.
Plaintiff appealed the order to this Court, arguing that the trial court erred by (1) distributing and valuing a pontoon boat; (2) setting "the deadline for the first installment" of the distributive award prior to the entry of the order; and (3) failing to make sufficient findings regarding Plaintiff's ability to pay the distributive award. This Court overruled Plaintiff's first argument, but "agree[d] with Plaintiff that the trial court failed to make the required findings of fact and conclusions of law in awarding a cash distributive award to Defendant and  remand[ed] for additional findings." Smith v. Smith, No. COA08-78, 2008 N.C. App. LEXIS 2032, at *9 (Nov. 18, 2008) (unpublished). However, rather than remanding for findings regarding Plaintiff's ability to pay the distributive award, this Court held that "[t]he trial court's statement that `a like kind distribution/exchange of property is not feasible due to the nature of the property'" was "insufficient to support the rebuttal of the presumption in favor of an in-kind distribution" and "remand[ed] th[e] matter for additional findings of fact on whether the presumption of an in-kind distribution was rebutted." Id. at *12. This Court also ordered the trial court to "reconsider the payment schedule for the distributional award and set an appropriate schedule upon further findings." Id. at *12-13.
Along with her appeal in this case, Defendant filed (1) a motion requesting this Court to take judicial notice of the record and briefs filed with the previous appeal in this matter, and (2) a motion to amend the record on appeal in this case to include Plaintiff's appellate brief from the previous appeal, the cover page of the record on appeal from the previous appeal, and a documentary exhibit incorporated into the record on appeal from the previous appeal. We hereby grant Defendant's unopposed motion requesting this Court to take judicial notice of the record and briefs filed with the previous appeal in this matter. However, because taking judicial notice of those documents from the first appeal puts before this Court all of the documentation requested by Defendant, thereby obviating the need to also amend the record on appeal in this case, we deny Defendant's motion to amend.
Section 50-20(e) of our General Statutes provides that "it shall be presumed in every action that an in-kind distribution of marital or divisible property is equitable." N.C. Gen. Stat. § 50-20(e) (2009). "This presumption may be rebutted by the greater weight of the evidence, or by evidence that the property is a closely held business entity or is otherwise not susceptible of division in-kind." Id.
On remand, the trial court conducted a hearing, but declined to take additional evidence. On 2 March 2010, the court entered its "Order on Remand of Equitable Distribution," in which it made the following "Additional Findings of Fact":
1. The total value of the marital estate is $430,833.
2. Based on the Parties' Pretrial Order, an auction conducted by the parties on their personal property as to value and division and so stipulated as well as additional stipulations during trial, $403,557 (94%) of the property of the marital estate was classified, valued and distributed by stipulation with $334,848 distributed to Plaintiff and $58,708 distributed to Defendant. . . .
3. Based on the Parties' Pretrial Order as well as the auction and stipulation and additional stipulations as to classification, value and distribution during trial, the [c]ourt only had discretion to distribute $27,276 (6%) [$430,833-$403,557=$27,276] of the marital estate.
. . . .
5. The [c]ourt found that a 60%/40% (P=$258,499.80, D=$172,333.20) in favor of Plaintiff was equitable.
6. While the Equitable Distribution Statute favors in-kind distributions, the [c]ourt finds that the presumption of a like-kind distribution/exchange of property is rebutted and not feasible because 94% ($403,557 of $430,833) of the marital property was valued and distributed by stipulations of the Parties' Pretrial Order, the auction and stipulation and stipulations during trial.
7. . . . . The only method to achieve a 60/40 split of the marital estate, based on the Parties'  Order, the auction and stipulation and stipulations made during trial, and the distribution of "missing" personal property to Plaintiff, is for Plaintiff to pay a $110,574.52 cash distributive award to Defendant.
8. The [c]ourt finds that Plaintiff at the time of trial had $176,000 in equity in the marital home plus $192,092 in savings and other financial holdings.
9. Plaintiff has had control and use of the vast majority of the marital estate, including the marital home and all furnishings, since the Parties' date of separation on or about February 7, 2004.
10. At the hearing conducted on December 1, 2009, no evidence was introduced that Plaintiff did not have the means and ability to make the cash distributive award in four (4) annual payments as previously ordered by the [c]ourt.
11. The [c]ourt finds the Plaintiff, with a total of $368,092 of assets, has the ability to make the cash distributive award of $110,574.52 in four (4) annual payments of $27,643.63 with the first payment due within 120 days of the filing of this Order and the three subsequent payments due on or before January 1, 2011, 2012 and 2013.
. . . .
13. Defendant is entitled to the statutory rate of interest applied to the cash distributive award relating back to February 6, 2006, the final date of the [equitable distribution] trial.
Based on the foregoing findings, the trial court concluded (1) that "[t]he presumption of a like-kind distribution is overcome with Plaintiff having distributed to him the assets as set forth in the stipulations of the parties in their Pretrial Order, the auction and stipulation and in court stipulations"; and (2) that "with the distributions as stipulated and the presumption rebutted, to achieve equity between the parties, the [c]ourt can only make a distributive award." The trial court then ordered that the prior equitable distribution order be "supplemented with the findings, conclusions and Order as set forth herein."
On 12 March 2010, Plaintiff filed a "Rule 59 Motion for New Trial," arguing, inter alia, that the trial court should not have made the distributive award because (1) the parties did not stipulate to a distribution of 94 percent of the property, and (2) there was no evidence that Plaintiff had the ability to pay the distributive award. The trial court denied Plaintiff's motion in an order entered 25 June 2010. From the equitable distribution order on remand, as well as the order denying his Rule 59 motion and the contempt order, Plaintiff filed notice of appeal.
On that same date, the trial court entered an order finding Defendant in contempt of the initial equitable distribution order based on Defendant's failure to comply with a portion of that order.
On appeal, Plaintiff (1) does not address the contempt order, and (2) mentions the order denying his Rule 59 motion in the notice of appeal and in the conclusion of his appellate brief, but fails to make any arguments regarding that order in the body of the brief. As such, Plaintiff's issues regarding those orders are deemed abandoned. N.C. R. App. P. 28(b)(6).
On appeal, Plaintiff first argues that the trial court failed again to make sufficient findings to rebut the presumption that an in-kind distribution is equitable. Plaintiff contends that the trial court erroneously found that the parties stipulated to the distribution of 94 percent of the property. Specifically, Plaintiff asserts that the parties stipulated to the value of a Bayer/Vanguard 401(k) account (the "Vanguard account"), but that they did not stipulate to its distribution. Therefore, Plaintiff argues, the trial court's additional findings are erroneous and do not support the conclusion that the presumption in favor of in-kind distributions has been rebutted.
Based upon our review of the record, there is no evidence to support the trial court's finding that the Vanguard account was distributed pursuant to stipulation. However, despite the accuracy of Plaintiff's assertion that the trial court's findings regarding the parties' stipulations did not support its conclusion that the presumption of in-kind distribution has been rebutted, we will not, as Plaintiff requests, remand this case for further findings regarding the rebuttal of the in-kind presumption.
Although it appears that other of the 94 percent of the property was also not distributed pursuant to stipulation, because Plaintiff has only challenged the trial court's finding regarding the Vanguard account, the trial court's finding that distribution of the rest of the 94 percent of the property was stipulated is binding on this Court. Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) ("Where no exception is taken to a finding of fact by the trial court, the finding is presumed to be supported by competent evidence and is binding on appeal." (citations omitted)).
We conclude instead that it would be pointless to remand the matter for reconsideration because there is no evidence to support a finding that the in-kind presumption has been rebutted. Arnold v. Ray Charles Enters., Inc., 264 N.C. 92, 99, 141 S.E.2d 14, 19 (1965) (holding that although the trial court omitted a material finding of fact which would ordinarily require remand, remand would be futile because there was no evidence to support the finding). Rather, it would be more appropriate for this Court to reverse the trial court's equitable distribution order because of the un-rebutted presumption favoring in-kind distribution and order the trial court to distribute the property at issue in accordance with the statutory presumption, i.e., distribute the Vanguard account between the parties to facilitate the 60/40 split rather than distributing the Vanguard account to Plaintiff and ordering a balancing distributive award to Defendant. We find this outcome unwarranted, however, in light of the positions taken by the parties on appeal.
Since the trial court initially distributed the Vanguard account to Plaintiff and made a distributive award to Defendant to facilitate the distributive scheme, no party, but particularly not Plaintiff, has challenged that general distributive scheme. In his first appeal, Plaintiff did not ask that the distribution be reversed; rather, he argued that the distributive award should be "reconsidered and recalculated," i.e., diminished to take into account the alleged tax ramifications of the trial court's order, which Plaintiff asserted required him to liquidate a portion of his retirement account. Through this argument, Plaintiff impliedly acquiesced in the distribution and a balancing distributive award, but sought a decrease in the valuation of the Vanguard account and a corresponding decrease in the amount of the distributive award.
Furthermore, Plaintiff did not ask that the Vanguard account be distributed in-kind as a means to avoid the distributive award. In that first appeal, Plaintiff had the opportunity to argue that the distribution and distributive award were erroneous, but failed to do so. Rather, Plaintiff asserted that "[i]n principle, this distributive award is appropriate to achieve the 60/40 division that the trial court deemed to be `equitable' in this case." He then argued that the distributive award was too high in light of Plaintiff's alleged lack of liquid assets to satisfy the award.
Indeed, Plaintiff assigned error to the award, but did not argue it in his appellate brief.
Similarly, in this appeal, Plaintiff fails to argue that the trial court's entry of a distributive award was error. Instead, Plaintiff (1) again argues that the award is too high in light of his alleged inability to pay with liquid assets, and (2) argues that the trial court "failed to make sufficient findings to support its determination that the presumption that an in-kind distribution was equitable had been rebutted." Although, in this second argument, Plaintiff asserts that the trial court's determination on the presumption was insufficiently supported by its findings, it is notable that Plaintiff does not go further to contend that the determination itself was erroneous and should be reversed. Plaintiff's argument on this matter can be appropriately characterized as acceptance of the result, but dissatisfaction with the trial court's reasoning in support of the result.
We concede and agree with Plaintiff's interest in obtaining an order based on adequately-supported findings and conclusions. Further, we acknowledge the statutory presumption favoring in-kind distributions, see N.C. Gen. Stat. § 50-20(e), and we recognize the trial court's duty to make findings, "supported by evidence in the record, that an equitable distribution would be impractical." Wirth v. Wirth, 193 N.C. App. 657, 669, 668 S.E.2d 603, 611 (2008). Nevertheless, we conclude that, in light of the parties' manifest acceptance of the distributive scheme, requiring some additional finding by the trial court to support the conclusion that the in-kind presumption has been rebutted — and reversing or remanding in the absence of such a finding — would unnecessarily subordinate substance to form, as well as waste this State's already-scarce judicial resources. It is obvious from his arguments on both appeals that Plaintiff has no interest in a redistribution of the property. And even if Plaintiff somehow lately acquired such an interest, despite having never expressed it in his appeals, he would almost certainly be barred from arguing in support of that interest based on his consistent advocacy at trial for distribution of the entire Vanguard account to him, see Inman v. Inman, 136 N.C. App. 707, 714-15, 525 S.E.2d 820, 824-25 (party may not argue position on appeal that is inconsistent with that party's argument at trial), cert. denied, 351 N.C. 641, 543 S.E.2d 870 (2000), as well as his failure to raise that argument in the first appeal. See Kelly v. Kelly, 167 N.C. App. 437, 446-47, 606 S.E.2d 364, 371 (2004) (barring an argument raised by appellant on the second appeal where appellant failed to raise that argument on the first appeal).
In this case, we find it most suitable (as to the parties' apparent interests) and economical (as to this State's resources) to conclude that, based on the parties' arguments before this Court (and, more notably, those arguments not before this Court), the presumption in favor of in-kind distributions has been rebutted. Accordingly, we do not accept Plaintiff's invitation to remand this case again for further findings to support the trial court's correct, albeit partially unsupported, conclusion that the presumption has been rebutted.
We are left, then, with Plaintiff's remaining arguments that (1) the trial court failed to make sufficient findings regarding "the means by which [Plaintiff] is able to pay the amount of the distributional award," and (2) the trial court erred by "imposing an obligation on [Plaintiff], on remand, to pay interest from the date of the trial."
Regarding this first remaining argument, we note that the trial court found that "Plaintiff at the time of trial had $176,000 in equity in the marital home." As previously held by this Court, "the money derived from refinancing the mortgage on the marital home [is] a source of liquid funds available to [a] defendant." Allen v. Allen, 168 N.C. App. 368, 376, 607 S.E.2d 331, 337 (2005). Further, the trial court also distributed to Plaintiff $33,661.61 in "liquid, non-tax-deferred, assets" (as calculated by Plaintiff). In light of the fact that Plaintiff's "liquid, non-tax-deferred, assets" exceed the amount of the first annual payment of $27,643.63, and the fact that Plaintiff's equity in the marital home exceeds the total amount of the $110,574.52 distributive award, we conclude that the trial court's findings on remand adequately support its determination that Plaintiff "has the ability to make the cash distributive award."
Plaintiff's final argument on appeal is that the trial court erred on remand by ordering Plaintiff to pay interest on the distributive award from the date of the equitable distribution trial. Plaintiff contends that because the issue of post-trial interest was not before this Court on the first appeal, the trial court had no authority to address that issue on remand. We disagree. This Court specifically ordered that the trial court "reconsider the current payment schedule for the distributional award and set an appropriate schedule upon further findings." Smith, 2008 N.C. App. LEXIS 2032, at *12-13. In our view, consideration of the "payment schedule" necessarily entails the decision to award interest. Further, the "structure and timing" of a distributive award, along with "the decision of whether to order the payment of interest on a distributive award," is within the trial court's discretion. Mrozek v. Mrozek, 129 N.C. App. 43, 49, 496 S.E.2d 836, 840 (1998). Because the trial court was instructed to reconsider the payment schedule on remand, we conclude that the trial court did not err by considering and awarding interest on the distributive award.
The order of the trial court on remand herein is
Judges STEELMAN and HUNTER, ROBERT N., JR., concur.
Report per Rule 30(e).