holding that for equitable distribution, the court's role is to classify, value, and distribute property, not simply to order that it be sold
How later courts described this case
- holding that for equitable distribution, the court's role is to classify, value, and distribute property, not simply to order that it be sold
Written by the judges who cited it.
The opinion
IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA16-486
Filed: 18 April 2017
Chatham County, No. 13 CVD 195, 11 CVD 701
WAYNE MORGAN MILLER, Plaintiff,
v.
CYNTHIA BAILEY MILLER aka CYNTHIA BAILEY, Defendant.
AND,
CYNTHIA BAILEY MILLER, Plaintiff,
v.
WAYNE MORGAN MILLER, Defendant.
Appeal by plaintiff Wayne Morgan Miller from judgment and orders entered
17 March 2014, 16 July 20141, and 17 November 2015 by Judge Lunsford Long in
District Court, Chatham County. Heard in the Court of Appeals 3 November 2016.
Doster, Post, Foushee, Post & Patton, P.A., by Norman C. Post, Jr., for plaintiff-
appellant.
Cynthia Bailey, pro se.
STROUD, Judge.
1 Husband’s notices of appeal for these earlier orders are in a referred motion to amend the
record on appeal, which we have granted.
MILLER V. MILLER
Opinion of the Court
Plaintiff Wayne Morgan Miller (“Husband”) appeals from several orders
entered by the district court related to his divorce from defendant Cynthia Bailey
Miller (“Wife”). Husband raises both procedural and substantive issues with the trial
court’s equitable distribution order. Although the trial court properly entered its
order vacating the divorce judgment under Rule 60(b) and therefore had jurisdiction
over the equitable distribution claims, we remand for the trial court to address
substantive issues contained in the equitable distribution order itself.
Facts
The parties were married on 4 July 1983 and had no children. On 27 July
2011, Wife filed her complaint for divorce from bed and board and equitable
distribution; the parties were still living together at that time. Husband filed his
answer on 23 September 2011, which alleged in part that “[n]o facts exist to justify
an unequal division of marital property.” His answer also alleged that the parties
were “not living separate and apart.” Wife filed a motion to amend her complaint,
and after the trial court granted the motion, Wife filed her amendment on 12 October
2011, adding detailed factual allegations to the fault grounds of her divorce from bed
and board claim. On 3 January 2012, the trial court began the hearing on Wife’s
claim for divorce from bed and board. That same day, a “Memorandum of
Judgment/Order” was apparently entered without prejudice which granted Wife
exclusive possession of the marital home, prohibited the parties from disposing of
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Opinion of the Court
personal property, and provided that “[t]his matter is continued until January 23,
2012”.2 On 19 January 2012, Husband filed his answer to the amended complaint.
On 30 January 2012, the hearing on divorce from bed and board concluded, and on
15 March 2012, the district court entered an order granting Wife a divorce from bed
and board and exclusive possession of the marital home, giving Husband ten days to
vacate the home. The district court found Wife’s testimony “more credible” than
Husband’s. The trial court found that Husband had admitted to committing adultery
during the marriage and that he was “an excessive user of alcohol[.]” When drunk,
Husband called Wife “stupid” and many derogatory and profane names. He had also
told her that he wished she were dead and “threatened to punch [Wife] in her face on
occasions when the [Wife] asked him questions about their properties.”
In the divorce from bed and board order, the trial court also found that Wife
had found evidence of Husband’s affair at their Virginia residence, including a used
condom, an earring, and “lips painted with lipstick on the bathroom mirror [and] the
words ‘Love You’ underneath them.” The trial court also found that Husband had
been asked “whether he recently acquired a Virginia driver’s license, and he falsely
said ‘no’ under oath.” Husband had also registered a vehicle in Virginia, using a
2Only the first page of this memorandum of order is in the record; the second page where the
signatures of the parties and judge would normally appear is not. We note this problem mainly
because the last page is missing from several of the orders in the record, but fortunately, none of those
orders are directly material to the legal issues presented. We are also not positive exactly what
“matter” was continued until 23 January, but it was probably the divorce from bed and board hearing.
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Opinion of the Court
Virginia address, although he had been living in North Carolina since “as early as
June of 2010.” He also “continued to have his ex-girlfriend of 26 years ago as a
beneficiary on his life insurance policy.”
A series of motions, countermotions, and orders arising from disputes
regarding various items of personal property and Husband’s move out of the marital
home followed. The parties finally began living separate and apart on 21 March 2012.
On 16 April 2012, the trial court entered an order appointing a referee to inventory
the parties’ marital and separate personal property. In addition, on the same date,
the trial court entered a “Consent Order to Add Supplemental Pleading” which stated
in relevant part as follows:
1. Since the filing of the complaint certain facts and
events have occurred which makes it just to file a
supplemental proceeding, to wit: the parties hereto have
legally separated.
2. The Parties consent to republish the Second Claim
for Relief as set forth in the original complaint in which
both parties join in the relief sought. The Parties hereto do
so move and the motion is granted by the Court.
3. The Defendant does not pray that an unequal
division of the marital property be made.
4. Said Second Claim as contained in Plaintiff’s
Complaint is hereby republished as of the date of entry of
this Consent Order.
5. The Defendant’s defense to dismiss the Equitable
Distribution claim due to it being filed before the date of
separation is hereby withdrawn by the Defendant.
The parties engaged in extensive discovery related to equitable distribution,
the referee’s report was filed, and both parties filed various motions regarding
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Opinion of the Court
discovery and valuation of property, which led to the trial court entering several
orders based on these motions. On 12 June 2012, Husband filed a motion for interim
distribution, requesting sale of the marital home, as well as distribution of various
items of personal property to him. On 3 December 2012, the trial court apparently
entered a consent order on a “Memorandum of Judgment/Order” form in which the
parties agreed that the fair market value of the marital home as of the date of
separation was $250,173.00; they also agreed that the fair market value of the
Virginia real property as of the date of separation was $87,200.00.3 The parties
attended mediation of the equitable distribution claim on 17 December 2012 but did
not reach an agreement.
On 22 March 2013, Husband filed a complaint for absolute divorce. Wife filed
a motion for extension of time to answer. Husband filed a motion for summary
judgment on 22 April 2013, alleging that “there is no genuine issue of a material fact
and [Husband] is entitled to an absolute divorce as a matter of law.” Husband’s
motion also noted: “In addition, [Husband] requests that the Court take judicial
notice of the entire files in those actions between the same parties hereto being 12
CVD 288, and 11 CVD 701.”4 Wife filed her answer on 16 May 2013, admitting the
3 Again, the signature page of this consent order is not in our record.
4 File No. 11 CVD 701 is Wife’s claim for divorce from bed and board and equitable distribution;
File No. 12 CVD 288 is Wife’s claim for a domestic violence protective order which was filed on 21
March 2012. Husband moved out of the martial home as a result of the ex parte domestic violence
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Opinion of the Court
date of separation and alleging that the parties “currently have pending claims for
equitable distribution in Chatham County District Court Case No. 11 CVD 701.” The
district court entered an order on 22 May 2013 granting Husband’s claim for an
absolute divorce while noting that “[a]ll existing issues raised in 11 CVD 701 between
the same parties hereto should survive this absolute divorce.”
On 3 June 2013, Husband filed a motion to continue the equitable distribution
trial scheduled for the next day and a motion for the trial judge to be recused on the
basis that Husband thought the judge was unable to “complete the proceedings in a
fair and impartial manner.” The trial court denied the motions but the trial was
continued to 24 June 2013 after Husband’s counsel was granted leave to withdraw
from the case. On 24 June 2013, Husband’s new counsel appeared but the trial was
again continued.
On 1 July 2013, Husband’s new counsel made an oral motion to amend his
pleadings to seek an unequal distribution in Husband’s favor; Wife did not oppose
this motion and the trial court entered an order allowing it on 19 July 2013. But on
5 August 2013, Husband’s legal strategy changed course and he filed a motion to
dismiss Wife’s equitable distribution claim for lack of subject matter jurisdiction,
since the parties were not yet separated when the claim was filed. Husband alleged
that he had not counterclaimed for equitable distribution and that the divorce from
protective order entered on 21 March 2012, which was a few days earlier than he would have been
required to move based upon the order for divorce from bed and board.
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Opinion of the Court
bed and board action in which Wife filed her claim was resolved on 15 March 2012
upon entry of the order granting divorce from bed and board. He also alleged that
Wife had not filed any supplemental pleadings containing an equitable distribution
claim and that the parties had already been divorced, ending Wife’s ability to bring a
claim for equitable distribution.
Wife sought to preserve her equitable distribution claim on all fronts. In the
divorce from bed and board case, she filed an affidavit opposing Husband’s motion to
dismiss her equitable distribution claim; in the absolute divorce case, she filed a Rule
60(b) motion asking the district court to set aside the absolute divorce judgment and
allow her to file a new answer including a counterclaim for equitable distribution in
the divorce case. The district court held a hearing on the motions filed by both parties
on 23 October 2013 and rendered a ruling in open court, with both parties present,
declaring that the court was granting Wife’s motion to set aside the divorce judgment
and allowing her to file a counterclaim for equitable distribution and dismissing
Husband’s motion to dismiss Wife’s equitable distribution claim in the divorce from
bed and board case.
Before the court filed a written order based upon its rendition of the ruling on
23 October 2013, Husband was remarried, on 28 October 2013, in Virginia. On 10
December 2013, Husband filed a motion to re-open evidence, noting that at the time
of the hearing on 23 October 2013, he had not re-married, but that subsequent to the
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Opinion of the Court
hearing and prior to the entry of an order vacating the divorce judgment, he had
remarried. Thus, Husband argued that he “should be afforded an opportunity to
present evidence to [the district court] as to his remarriage since the entry of an order
vacating his divorce judgment would not be in any way equitable and would create
great legal hardship for him, additionally the entry of such order would interfere with
his right to remarry.” Further, Husband alleged that “[t]he entry of an order vacating
the divorce judgment is unnecessary given that [the district court] is prepared to
enter an order dismissing [Husband’s] motion to dismiss equitable distribution in 11
CVD 701 for lack of subject matter jurisdiction, and thus [Wife] will not be
prejudiced.”5
Husband also submitted his requested findings of fact for the court’s “order
vacating the divorce judgment entered in this action[,]” including that he began living
with Dorothy Virginia Brinkley in January 2013 and that they then married on 28
October 2013. He noted that when he heard the trial court’s
declaration made in open Court on October 23, 2013, that
being that it was going to vacate the otherwise properly
entered judgment of absolute divorce in this action, he
informed Ms. Brinkley of this and Ms. Brinkley expressed
concern about being unable to marry [Husband] for a
considerable period of time in the event that an order was
actually entered vacating the divorce judgment and
[Husband] was concerned about being able to maintain his
relationship with Ms. Brinkley without being able to marry
5 Since Husband appealed from the trial court’s order dismissing his motion in 11 CVD 701,
his allegation that vacating the divorce judgment would be “unnecessary” and Wife would not be
prejudiced seems disingenuous at best.
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Opinion of the Court
her for a considerable period of time. [Husband] loved Ms.
Brinkley and did not want to lose the relationship. Ms.
Brinkley was seventy-one years old as of October 23, 2013.
The trial court held a hearing on 23 January 2014 regarding Husband’s motion
to reopen evidence. Husband testified that he married Ms. Brinkley five days after
the 23 October 2013 hearing, on 28 October 2013, and they had created and signed a
prenuptial agreement during the time between the hearing and the marriage.6 After
hearing the additional evidence, the trial judge noted that his “inclination is to find
the evidence is not persuasive[.]”
Near the end of the hearing, after Wife’s counsel noted that he had never faced
this situation, the court agreed, noting: “I don’t think any human being ever has, so
we’re all sailing uncharted seas here.” In trying to figure out how to address the
motions at issue, Husband’s counsel argued that the court needed “to make findings
about the new evidence that [it] heard and it all needs to be embodied in one order,
and you can say that despite, uh it-it being equitable relief that, in your discretion,
you don’t think [Husband] having two wives is a problem.”
The trial court replied:
I don’t believe there’s any prejudice to him that cannot be
ameliorated by a remarriage, and I believe he married with
full knowledge of the Court’s intent and that [the], um,
marriage should not be an impediment to the granting of
the motion under these circumstances, and the motion
should be allowed.
6 October 23, 2013 was a Wednesday, and Husband was remarried on the following Monday,
28 October 2013, so they got the prenuptial agreement drafted and executed in just two business days.
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Opinion of the Court
After more back and forth with Husband’s trial counsel, the Court reiterated its
position:
THE COURT: ---- he attempted to enter a marriage
with full knowledge of the Court’s intent, and I think it was
a tactical marriage, entered for tactical reasons only, as
demonstrated by the circumstances and by the prenuptial
agreement and what its provisions appear to be. It doesn’t
appear to be a bona fide marriage that has any legitimate
purpose other than to circumvent the Court’s intended
ruling, and you can put that in the order if you like, [Wife’s
counsel]. And he can live with the consequences on him
and her because he made the decision to contract it. So,
that’s my decision.
On 17 March 2014, the court entered its order granting Wife’s Rule 60(b)
motion and setting aside the 22 May 2013 divorce judgment. In its very long and
detailed order, the court addressed much of the procedural history of the various
cases as summarized above and found that the hearing had been held on the motion
on 23 October 2013 and before Wife’s counsel completed drafting an order, Husband
“proceeded to get remarried[.]” The order granting Wife’s 60(b) motion included
numerous findings, including that:
16. At the time of the entry of the Absolute Divorce
Judgment in this action, both parties were operating under
the unequivocal belief that both parties had pending claims
for equitable distribution in the companion court action.
This was evident based upon the actions of both parties in
vigorously and continuously pursuing their equitable
distribution claims in the companion court action for the 13
month period prior to the entry of the Absolute Divorce
Judgment in this court action. This was also evident given
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Opinion of the Court
the court filings of both parties in this court action,
including the fact that [Husband] and his then counsel . . .
submitted the Absolute Divorce Judgment to the Court for
signature which contained express language stating that
both parties have “pending, equitable distribution claims”
in the companion court action and that these claims should
be reserved for future hearing.
17. Nevertheless, after entry of the Absolute Divorce
Judgment in this court action, [Husband] filed a Rule
12(b)(1) Motion to Dismiss as to [Wife’s] equitable
distribution claim in the companion court action. The
Motion to Dismiss was filed in the companion court action
on August 5, 2013.
18. Contrary to his earlier indications, [Husband] now
contends that [Wife] does not have a valid, pending claim
for equitable distribution in the companion court action
and further contends that it is too late for [Wife] to file a
new claim for equitable distribution in this action, in the
companion court action or otherwise since the parties are
now divorced.
19. In order to prevent the great injustice of [Wife]
potentially being denied the right to proceed with an
equitable distribution claim due to this newfound
contention of [Husband], it is necessary to set aside the
Absolute Divorce Judgment in its entirety and to allow
[Wife] to file a counterclaim for equitable distribution in
this court action.
(Emphasis in original).
In addition, while the order noted that Wife initially filed her request for
equitable distribution prematurely, the court also found that “[i]n the Consent Order
to Add Supplemental Pleading, [Husband] expressly joined in the request for an
equitable distribution[.]” The order includes detailed findings addressing all of the
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Opinion of the Court
many “Actions Taken in the Companion Court Action by Both Parties in Pursuit of
their Respective Equitable Distribution Claims” and then finds:
42. At the time of the entry of the Absolute Divorce
Judgment in this court action, both parties reasonably
believed that the Consent Order to Add Supplemental
Pleading effectively established the parties’ respective
equitable distribution claims in the companion court
action, and [Wife] had no knowledge otherwise until the
Rule 12(b)(1) Motion to Dismiss was raised.
The court found that Wife “reasonably relied” on Husband’s statements and actions
and reasonably believed “that both parties had valid equitable distribution claims
pending[.]” Additionally, the trial court concluded in its findings that the parties had
a “mutual belief” that they both had claims for equitable distribution pending at the
time the trial court entered its absolute divorce decree.
The trial court also explicitly described its concerns regarding whether its
ruling dismissing Husband’s motion in the divorce from bed and board action would
be sufficient to protect Wife’s claim:
118. The Court believes that [Husband’s] Rule 12(b)(1)
Motion to Dismiss in the companion court action should be
denied. The decision as to denying said Motion in the
companion court action was made after much thought and
consideration. However, the Court does have concerns as
to whether the appellate courts will come to the same
conclusion despite the clearly expressed intent of the
parties contained in the Consent Order to Add
Supplemental Pleading. The concern is strong enough for
the Court to believe that this Rule 60(b) Order should be
entered to ensure that [Wife] can file a counterclaim in this
action so that she can pursue her right to equitable
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Opinion of the Court
distribution. To refuse the granting of this Rule 60(b)
Order in this action would allow [Husband] to potentially
benefit from a mutual mistake.
119. [Husband] has the right to appeal the Court’s
decision in the companion court action (as to the denial of
his rule 12(b)(1) Motion to Dismiss). This Court is fully
aware that the North Carolina Court of Appeals or a higher
authority could determine that this Court should have
granted [Husband’s] Rule 12(b)(1) Motion to dismiss in the
companion court action. The legal issues raised in the
companion court action are very complex and the matter
could be decided either way on appeal. The likelihood of
the North Carolina Court of Appeals determining that no
valid equitable distribution claims exist in the companion
court action weighs heavily on this Court due to the great
prejudice that would result to [Wife] under the
circumstances. The Court cannot simply wait to set aside
the Absolute Divorce Judgment pending a decision from
the North Carolina Court of Appeals in the companion
court action due to the great risk and prejudice that [Wife]
would face by delaying the ruling in this matter. The only
way to ensure that [Wife] has a valid equitable distribution
claim is to set aside the Absolute Divorce Judgment
entered in this action and allow [Wife] to file a
counterclaim for equitable distribution. Justice requires
that this occur now.
The court also entered its order denying Husband’s 12(b)(1) motion to dismiss
Wife’s equitable distribution claim in the divorce from bed and board action on 17
March 2014. In that even more extensive order, the trial court made the following
relevant conclusions of law:
4. Rule 15(d) of the North Carolina Rules of Civil
Procedure allows for defective pleadings to be corrected by
the filing of a supplemental pleading.
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Opinion of the Court
5. Rule 13(e) of the North Carolina Rules of Civil Procedure
allowed [Husband] the right to pursue his own
counterclaim for equitable distribution by supplemental
pleading.
6. The entry of the Consent Order to Add Supplemental
Pleading, the “republishing” of the second claim for relief
in [Wife’s] original complaint (for equitable distribution) as
of April 16, 2012, and the parties’ act of joining in the relief
sought therein effectively established [Wife’s] claim for
equitable distribution.
7. Further, [Wife’s] various court filings after entry of the
Consent Order to Add Supplemental Pleading further
support the conclusion that [Wife] effectively established a
valid claim for equitable distribution[.]
8. The entry of the Consent Order to Add Supplemental
Pleading, the “republishing” of the second claim for relief
in [Wife’s] original complaint (for equitable distribution) as
of April 16, 2012, and [Husband’s] act of joining in the relief
sought therein effectively established [Husband’s] claim
for equitable distribution.
9. Further, [Husband’s] various court filings after entry of
the Consent Order to Add Supplemental Pleading further
support the conclusion that [Husband] effectively
established a valid claim for equitable distribution[.]
10. In the event the Consent Order to Add Supplemental
Pleading and any subsequent filings in this court action did
not effectively establish a claim for equitable distribution
for either party or in the event that it is determined that
no valid claim for equitable distribution was filed by either
party in this court action, then [Husband] is still estopped
from defeating [Wife’s] right to pursue a claim for equitable
distribution[.]
11. The principles of equitable estoppel prevent the
dismissal of [Wife’s] claim for equitable distribution.
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Opinion of the Court
12. [Wife] has clean hands in this court action.
13. Justice requires that [Wife] be deemed to have the
right to proceed with a claim for equitable distribution.
On or about 7 April 2014, Wife filed an amended or supplemental answer to
Husband’s complaint for absolute divorce including a counterclaim for equitable
distribution and a motion to consolidate the divorce claim with the 2011 action for
divorce from bed and board. Husband filed a motion to dismiss Wife’s counterclaim
for equitable distribution, arguing that “he believes that the Court erred in vacating
the divorce judgment in this action and that the counterclaim is being filed after the
parties were properly divorced.” Husband also noted that he “additionally opposes
[Wife’s] claim for an unequal distribution in her favor.” The trial court filed an order
granting Wife’s motion and denying Husband’s motion to dismiss on 16 July 2014,
although it appears the order was never signed by the judge.7
The equitable distribution trial began on 29 September 2014 and was held over
the course of four nonconsecutive days before coming to conclusion over a year later,
on 17 November 2015. On 19 March 2015, the court made a partial ruling, and the
trial court entered its judgment and order granting Husband an absolute divorce from
Wife and dissolving the marriage. The order noted that the trial court “shall retain
jurisdiction over the matter of equitable distribution in order to enter and enforce any
7 The order in our record is file stamped but not signed by the trial court.
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Opinion of the Court
final orders in these consolidated proceedings[.]” That same date, the trial court
entered several “Court Order[s] Acceptable for Processing” (“COAP”) for both parties’
employee annuities and former spouse survivor annuities, addressing distribution of
the retirement benefits of both parties. Husband filed a motion requesting findings
of fact and modifications to the court’s proposed equitable distribution judgment and
order on 17 September 2015.
The district court entered its equitable distribution judgment and order on 17
November 2015. The court found that as of the date of separation and presently
Husband and Wife were the joint owners of marital property in Siler City, North
Carolina (“the marital home”). After noting that both parties testified that they did
not want the property distributed to them, the court found that the marital home
“should be listed for sale . . . within sixty (60) days after the entry of this Order at a
price agreed upon by the parties, or in the event the parties are unable to agree, a
price recommended by the realtor.” The proceeds were to be divided equally between
the parties. The court similarly found the parties to be joint owners of seven acres of
land in Virginia (the “Virginia Property”) and ordered that this marital property be
sold as well, with the proceeds again split equally between the parties. If either
property had not sold before the expiration of the six month listing agreement, the
parties were to return to court for further review.
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The court also found that “[a]s of the date of separation [Husband] and Randy
A. Winkleman were parties to a Timber Agreement dated November 20, 2009, which
entitled [Husband] to receive fifty percent of the proceeds from timbering certain
property located in . . . Pennsylvania.” The court concluded that the Timber
Agreement was marital property and that it should be distributed to Husband at its
current value of $5,000.00.
In addition, the trial court’s order adopted the COAP’s, which divided the
monthly retirement benefits each party receives under the Civil Service Retirement
System (CSRS) equally and requires Husband to pay Wife $13,009.50, one-half of the
difference between the monthly CSRS annuity payments received by the parties from
the date of separation through 30 September 2014. In addition, the court ordered
Husband to pay Wife a distributive award of $13,462.00 within 30 days of the entry
of the order.
Finally, the trial court classified Husband’s 2011 Suburban vehicle as his
separate property with a value of $49,000.00 and found that both it and the secured
debt attached to it of $64,638.82 were acquired after Wife filed her action for divorce
from bed and board and not for the joint benefit of the parties. Wife filed a motion on
3 December 2015 to amend and correct issues related to the judgment and order and
for reconsideration of all of the issues raised on 17 November 2015. Husband timely
appealed the equitable distribution judgment and order to this Court.
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Opinion of the Court
Husband filed a motion to amend the record on appeal on or about 15 July
2016, claiming that he “inadvertently failed to include” his notices of appeal from: (1)
the denial of his Rule 12(b)(1) motion to dismiss, filed 28 March 2014, (2) the order
granting Wife Rule 60(b) relief, filed 18 March 2014, and (3) orders granting Wife’s
motion to consolidate and strike and denying Husband’s motion to dismiss, filed 29
July 2014. On 18 August 2016, Wife filed a motion to amend the record on appeal,
asking to include: (1) a copy of the 11 July 2016 OPM notice regarding the award of
monthly annuity and survivor annuity; and (2) a copy of Husband’s 22 July 2016
COAP filing, a copy of the sanitized order for the record redacting certain personal
and private information, and a copy of the un-redacted version for the file. By
separate order, we have granted both motions to amend the record.
Discussion
On appeal, Husband raises multiple issues, both procedural and substantive,
with the trial court’s equitable distribution order. We first address the procedural
concerns and then address some of the substantive issues.
I. Subject Matter Jurisdiction Over Equitable Distribution Claims
First, Husband argues that the trial court erred both by denying his motion to
dismiss the equitable distribution claim Wife filed prior to the date of separation for
lack of subject matter jurisdiction and its order vacating the divorce judgment
pursuant to Rules 60(b)(1), (3), and (6), thus allowing Wife the opportunity to file a
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Opinion of the Court
new equitable distribution claim after separation and prior to entry of the absolute
divorce. Essentially, the trial court entered these two orders which have the same
practical effect -- preservation of Wife’s equitable distribution claim -- by two different
legal routes, in full recognition of jurisdictional problems caused by the filing of Wife’s
equitable distribution claim before the parties had separated. Thus, Wife’s equitable
distribution claim must be dismissed only if both orders were in error and reversed.
We will therefore address only the order granting Wife’s Rule 60 motion since it is
dispositive.
“Rule 60(b) has been described as a grand reservoir of equitable power to do
justice in a particular case. The North Carolina Supreme Court has stated that its
broad language gives the court ample power to vacate judgments whenever such
action is appropriate to accomplish justice.” Jim Walter Homes, Inc. v. Peartree, 28
N.C. App. 709, 712, 222 S.E.2d 706, 708 (1976) (citations, quotation marks, and
ellipses omitted). “Our courts have long held that a Rule 60(b) motion is addressed
to the sound discretion of the trial court and its ruling will not be disturbed absent
an abuse of that discretion.” Venters v. Albritton, 184 N.C. App. 230, 234, 645 S.E.2d
839, 842 (2007) (citations and quotation marks omitted). Under Rule 60(b)(6), the
trial court “may relieve a party or his legal representative from a final judgment,
order, or proceeding for . . . [a]ny other reason justifying relief from the operation of
the judgment.” N.C. R. Civ. P. 60(b)(6). “The grounds for setting aside judgment
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Opinion of the Court
pursuant to Rule 60(b)(6) are equitable in nature. What constitutes cause to set aside
judgment pursuant to Rule 60(b)(6) is determined by whether (1) extraordinary
circumstances exist; and (2) whether the action is necessary to accomplish justice.”
Trivette v. Trivette, 162 N.C. App. 55, 63, 590 S.E.2d 298, 304 (2004) (citations
omitted).
Husband relies in part on Howell v. Howell, 321 N.C. 87, 91, 361 S.E.2d 585,
588 (1987), where our Supreme Court reversed an order by this Court upholding a
trial court order granting the defendant’s motion to set aside the effect of a divorce
judgment “to the extent that it barred her claim for equitable distribution[.]” The
Supreme Court noted in Howell, however, that it disagreed with this Court “on a
narrow ground.” Id. Specifically, our Supreme Court stated:
Ms. Howell did not seek to have the trial court, and
the trial court did not, set aside the divorce judgment.
Rather, pursuant to Ms. Howell’s motion, the trial court
ordered that she be given “relief from the effect of the
divorce judgment . . . to the extent of allowing her to assert
a counterclaim against the plaintiff for equitable
distribution. . . .” Because the trial court did not set aside
the divorce judgment itself, its terms and validity still
abide. Likewise, the legal effects of the divorce judgment
still obtain. Neither Rule 60(b)(6) nor any other provision
of law authorizes a court to nullify or avoid one or more of
the legal effects of a valid judgment while leaving the
judgment itself intact.
In so ruling we are not insensitive to the plight of
Ms. Howell and, if her testimony is believed, her
apparently diligent reliance on counsel’s advice. We simply
are unwilling to hold that a court may leave intact a
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Opinion of the Court
judgment of absolute divorce, yet order that one or more of
the legal effects of that judgment may somehow be avoided.
Such a holding would empower a court to say, for example,
that a divorce decree would not have the legal effect of
permitting the parties to remarry or of dissolving other
various rights arising out of the marital relation. These
kinds of judicial rulings would negate the provisions of
N.C.G.S. § 50–11 by which the legislature has prescribed
the legal effects of judgments of absolute divorce. These
effects are beyond the power of a court to change.
Id. at 91-92, 361 S.E.2d at 588 (footnote omitted).
Husband claims that the Howell Court “implicitly concluded that the failure to
timely file an equitable distribution claim was not an extraordinary circumstance.”
The Supreme Court’s own language in Howell, though, refutes this argument, as the
Court specifically stated that it was reversing this Court “on a narrow ground.” Id.
at 91, 361 S.E.2d at 588. The Howell decision is based upon the fact that the
defendant, Ms. Howell, asked for relief from an effect of a divorce judgment while
leaving the divorce decree itself intact. Id. at 92, 361 S.E.2d at 588. The Supreme
Court never addressed whether failure to file a timely equitable distribution claim
was or was not an extraordinary circumstance.
Here, by contrast, the trial court completely vacated the divorce decree, using
its discretion under Rule 60(b) and explicitly weighing the equities of the situation to
both parties. Husband even alleged in his motion to reopen the evidence -- so that he
could present evidence of his remarriage days after the court’s rendition of its ruling
-- that “[t]he entry of an order vacating the divorce judgment is unnecessary given
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Opinion of the Court
that [the district court] is prepared to enter an order dismissing [Husband’s] motion
to dismiss equitable distribution in 11 CVD 701 for lack of subject matter jurisdiction,
and thus [Wife] will not be prejudiced.” (Emphasis added). He then appealed from
that very ruling with the obvious goal of prejudicing Wife by eliminating her equitable
distribution claim. Fortunately, the trial court recognized Husband’s legal strategy
of setting up a jurisdictional defect which he could then exploit on appeal, since a lack
of subject matter jurisdiction cannot be waived and can be raised at any time.
Furthermore, Husband’s requested findings and statements at the hearing
show that he was well aware that the trial court had decided to vacate the divorce
judgment and would be entering an order accordingly when he arranged to have a
prenuptial agreement prepared and signed immediately and got married only five
days later. His calculated actions, which were obviously intended to eliminate Wife’s
equitable distribution claim, created the predicament of bigamy that he now claims
to face, and the trial court rightfully concluded that “extraordinary circumstances
exist” in this case and that vacating the divorce decree was an action “necessary to
accomplish justice.” Trivette, 162 N.C. App. at 63, 590 S.E.2d at 304. Since we have
concluded the trial court was well within its discretion to enter its decree setting aside
the divorce judgment with Rule 60(b), the trial court had subject matter jurisdiction
over Wife’s equitable distribution counterclaim as stated in her amended answer to
the divorce complaint.
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Opinion of the Court
II. In-Kind Distribution and Distributive Awards
Next, Husband argues that the trial court erred by failing to provide for an in-
kind distribution and ordering the sale of real property regarding the marital home
and the Virginia property. We agree.
When the trial court sits without a jury, the
standard of review on appeal is whether there was
competent evidence to support the trial court’s findings of
fact and whether its conclusions of law were proper in light
of such facts. While findings of fact by the trial court in a
non-jury case are conclusive on appeal if there is evidence
to support those findings, conclusions of law are reviewable
de novo. Our review of an equitable distribution order is
limited to determining whether the trial court abused its
discretion in distributing the parties’ marital property.
Accordingly, the findings of fact are conclusive if they are
supported by any competent evidence from the record.
Robbins v. Robbins, __ N.C. App. __, __, 770 S.E.2d 723, 728, disc. review denied, __
N.C. __, 775 S.E.2d 858 (2015) (citations, quotation marks, and brackets omitted).
In this case, the trial court’s equitable distribution order contained the
following findings of fact regarding the sale of the marital home and the Virginia
Property and the payment of a distributive award:
10. As of the date of separation and presently, the
parties were and are the joint owners of real property
located at 566 Melvin Clark Road, Siler City, North
Carolina and more fully described in the Warranty Deed
filed at Book 1456, Page 1104 of the Chatham County
Registry on April 30, 2009 [the “marital home”]. Prior to
the date of separation, this had been the parties’ marital
residence. The [marital home] is marital property.
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Opinion of the Court
11. The [marital home] was unencumbered as of the
date of separation and currently. The parties stipulated
that the fair market value of the [marital home] as of the
date of separation and currently is $250,173. Both
[Husband] and [Wife] testified that they did not want to be
distributed the [marital home]. [Husband] testified that
the property should be distributed to [Wife] and [Wife]
requested that the property be sold.
12. This Court finds that the [marital home] should be
sold with the help of Elizabeth Anderson of Caldwell
Banker in Pittsboro, North Carolina, and the net proceeds
divided equally between the parties at closing. The
[marital home] should be listed for sale, as is, with Ms.
Anderson within sixty (60) days after the entry of this
Order at a price agreed upon by the parties, or in the event
the parties are unable to agree, a price recommended by
the realtor. The listing agreement should be for a term of
six months and Ms. Anderson should be entitled to receive
her standard commission of six percent. In the event the
[marital home] has not been sold prior to the expiration of
the listing agreement, the parties should return to Court to
determine if the listing agreement should be extended or if
the property should be sold by auction[.]
....
14. From the date of separation through November of
2013, Defendant resided in the [marital home] and enjoyed
the benefits associated with the said residence. From the
date of separation through the date of trial, [Wife] also
testified that she had paid $18,011 for property taxes,
materials, labor, insurance and utilities to maintain and
preserve the property. After November of 2013, neither
party has resided in the residence[.]
....
16. As of the date of separation and presently, the
parties were and are the joint owners of 7 acres of
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Opinion of the Court
unimproved land located in Augusta County, Virginia (the
“Virginia Property”). The Virginia Property is marital
property[.] The Virginia Property was unencumbered as of
the date of separation and currently. The parties
stipulated that the fair market value of the Virginia
Property as of the date of separation and currently is
$87,200. Both [Husband] and [Wife] testified that they did
not want to be distributed the Virginia Property[.] [Wife]
requested that the property be sold.
17. This Court finds that the Virginia Property should
be sold with the help of a real estate agent selected by
[Wife] and the net proceeds divided equally between the
parties at closing. The Virginia Property should be listed
for sale, as is, within sixty (60) days after the entry of this
Order at a price agreed upon by the parties, or in the event
the parties are unable to agree, a price recommended by
the realtor. The listing agreement should be for a term of
six months and the realtor should receive a standard
commission for the sale of land[.] In the event the Virginia
Property has not been sold prior to the expiration of the
listing agreement, the parties should return to Court to
determine if the listing agreement should be extended or if
the property should be sold by auction.
....
28[.] During their marriage, both [Husband] and [Wife]
were federal employees and received retirement benefits
under the Civil Service Retirement System (“CSRS”). The
CSRS is administered by the United States Office of
Personnel Management (“OPM”). Prior to the date of
separation, [Husband] and [Wife] retired and each of them
began receiving monthly annuity payments from OPM
through the CSRS.
....
32. Based upon a valuation performed by Williams
Overman Pierce, LLP, the total value of [Husband’s] CSRS
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Opinion of the Court
defined benefit plan as of the date of separation was
$1,354,235 with a survivor benefit awarded to [Wife]. The
value of the marital portion of said benefit plan as of the
date of separation was $1,014,655. The balance of the
benefit plan valued at $339,580 was [Husband’s] separate
property[.]
33. Based upon a valuation performed by Williams
Overman Pierce, LLP, the total value of [Wife’s] CSRS
defined benefit plan as of the date of separation was
$11,004,191 [sic]8 with a survivor benefit awarded to
[Husband]. The value of the marital portion of said benefit
plan as of the date of separation was $797,026. The
balance of the benefit plan valued at $207,165 was [Wife’s]
separate property[.]
34. On March 19, 2015, this Court entered two separate
CSRS COAP’s equally dividing the marital portion of the
parties’ annuity payments from OPM through the CSRS,
and awarding each party a former spouse survivor annuity
under CSRS in the same amount to which the party would
have been entitled if the divorce had not occurred[.]
....
36. The parties stipulated that from the date of
separation through September 30, 2014, [Husband] owed
[Wife] the sum of [$13,009.50] to compensate her for the
difference in the annuity payments the parties had
received since the date of separation. This Court finds that
[Husband] should and has the ability to pay the sum of
[$13,009.50] to [Wife] within thirty (30) days after the
entry of this Order.
....
47. Based upon the spreadsheet hereto attached as
8 We note this clerical error to ensure it is not repeated in the order entered after remand, as
the marital and separate portions of Wife’s benefit plan (as stated in the same finding) add up to
$1,004,191.00, not $11,004,191.00.
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Opinion of the Court
Exhibit 4, the amount of the distributive award [Husband]
should pay to [Wife] to achieve an equal division of the
marital and divisible property and debt is $13,462.
On the Spreadsheet attached as Exhibit 4 of the order, the trial court did not
list a value for the marital home or the Virginia property but instead listed “50% of
Net Proceeds” in the column for each party. Likewise, instead of finding a value for
the parties’ retirement plans, the trial court stated “Equal Division -- CSRS COAP”
in the column for each party. Thus, the total value of the marital estate listed on the
spreadsheet includes only those items of property which were assigned a value on
that spreadsheet, so that total value excludes the four largest marital assets. The
trial court determined the distributive award based upon that partial “total” value of
the marital estate.
In addition, the trial court made the following conclusions of law:
9. An in-kind distribution of the marital and divisible
property and debt is not practical given that neither party
desires to be distributed certain assets and the assets are
capable of being sold in the marketplace with the
assistance of qualified realtors.
10. The presumption of an in-kind distribution has been
rebutted for the reasons set forth herein.
11. The payment of a distributive award by [Husband]
to [Wife] is fair and reasonable, and [Husband] has the
ability to pay the distributive award ordered herein[.]
“Under [N.C. Gen. Stat. § 50-20(c)], equitable distribution is a three-step
process; the trial court must (1) determine what is marital and divisible property; (2)
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Opinion of the Court
find the net value of the property; and (3) make an equitable distribution of that
property.” Robinson v. Robinson, 210 N.C. App. 319, 322, 707 S.E.2d 785, 789 (2011)
(citation, quotation marks, and brackets omitted). In order to properly conduct this
process, it is clear that the second step is for the trial court to actually place a value
on the property to be distributed. See, e.g., Thomas v. Thomas, 102 N.C. App. 127,
129, 401 S.E.2d 367, 368 (1991) (“By appointing commissioners to sell the property
and divide the net proceeds after paying expenses and costs, the trial judge did not
satisfy the requirement of the statute that the judge must place a value on the
property.”); Soares v. Soares, 86 N.C. App. 369, 371-72, 357 S.E.2d 418, 419 (1987)
(holding trial court erred by ordering sale of marital home for not less than the
appraised value without first determining its value.).
The trial court’s role is to classify, value, and distribute property, not simply to
order that it be sold. In doing so, “the trial court must consider the property’s market
value, if any, less the amount of any encumbrance serving to offset or reduce the
market value.” Robinson, 210 N.C. App. at 323, 707 S.E.2d at 789. Here, the parties
had actually stipulated to the values of the marital home and the Virginia Property
as of the date of separation and neither was encumbered by a mortgage. The trial
court found that neither party wanted the real property, and the record reflects that
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Opinion of the Court
Wife wanted the property to be sold.9 We understand that neither party wanted the
real properties to be distributed to them for various reasons, but they also had not
agreed to sell the properties. Sometimes the law does not allow the parties to get
what they want; but sometimes they might find that that they get what they need.10
This is one of those times. What they need -- and what the law requires -- is an order
classifying, valuing, and distributing all of the martial and divisible property. See
Fitzgerald v. Fitzgerald, 161 N.C. App. 414, 418, 588 S.E.2d 517, 520 (2003) (“In
making an equitable distribution of marital assets, the trial court is required to
undertake a three-step process: (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.” (Citation and quotation
marks omitted)). The trial court must value and distribute each parcel of real
property to a party, and a distributive award may be needed to equalize the division
or to make the distribution equitable. Then, the party who receives distribution of
the real property is free to keep it or sell it. We therefore reverse and remand for
the trial court to value each marital and divisible asset -- including the real property
and the retirement plans -- as of the date of separation and the date of division, and
9 In his 12 June 2012 motion, Husband had requested that the marital home be sold, but by
the time of trial, he no longer requested sale.
10With apologies to The Rolling Stones. Jagger, Mick and Richards, Keith. “You Can't Always
Get What You Want.” The Rolling Stones, Let It Bleed. (London Records 1969).
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Opinion of the Court
to determine the total net value of the entire marital estate, whether an equal division
will be equitable, and if any distributive award will be needed, and to enter an order
accordingly.
III. Distributional Factors
Next, Husband argues that the trial court erred by failing to make findings
and give proper consideration to his evidence of distributional factors. Wife seems to
agree, noting that she “is not in disagreement with [Husband] that the Court order
of November 17, 2015 lacks Findings of Facts and Conclusions of Law regarding the
distributive award.”11 (Emphasis omitted).
Pursuant to [N.C. Gen. Stat. § 50-20(c)], there shall
be an equal division of marital and divisible property
unless the court determines that an equal division is not
equitable. If the court determines that an equal division is
not equitable, the court shall divide the marital property
and divisible property equitably. When making an
unequal distribution, the trial court must consider the
factors enumerated in G.S. § 50-20(c) and must make
findings which indicate that it has done so. It is not
necessary that the findings recite in detail the evidence
considered but they must include the ultimate facts
considered by the trial court.
11 Despite this statement, Wife’s Reply brief stresses that her Appellee brief “does not agree
with the Appellant’s attorney position.” Her Appellee brief also argues that the trial court “offered an
explanation” of why it ordered sale of the real property and that the court considered Wife’s health
and age in that she was “physically incapable of taking care of . . . approximately 15 acres” while
Husband is “in a much better position physically to care for” the real property. According to the
transcript, the trial court did discuss this rationale, but the order on appeal did not make these
findings, and as discussed above, ordering that the real property be sold is not a distribution.
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Opinion of the Court
Britt v. Britt, 168 N.C. App. 198, 204, 606 S.E.2d 910, 914 (2005) (citations, quotation
marks, brackets, and ellipses omitted). “[W]hen evidence of a particular
distributional factor is introduced, the court must consider the factor and make an
appropriate finding of fact with regard to it.” Fox v. Fox, 114 N.C. App. 125, 135, 441
S.E.2d 613, 619 (1994); see also Warren v. Warren, 175 N.C. App. 509, 518-19, 623
S.E.2d 800, 806 (2006) (remanded for further findings of fact where evidence offered
relating to N.C. Gen. Stat. § 50-20(c)(9), (11a), and (12) but court made no findings
regarding those factors). The requirement to make such findings regarding the
factors for which evidence is presented “exists regardless whether the trial court
ultimately decides to divide the property equally or unequally.” Warren, 175 N.C.
App. at 518, 623 S.E.2d at 806.
Furthermore,
N.C. Gen. Stat. § 50–20(e) (2013) creates a
presumption that an in-kind distribution of marital or
divisible property is equitable, but permits a distributive
award ‘to facilitate, effectuate, or supplement’ the
distribution. If the trial court determines that the
presumption of an in-kind distribution has been rebutted,
it must make findings of fact and conclusions of law in
support of that determination. Should a party successfully
rebut the equity of an in-kind distribution, a trial court
may order a distributive award pursuant to N.C. Gen. Stat.
§ 50-20(c) (2013). This statute sets forth distributional
factors that the trial court must consider before ordering a
distributive award. One of those factors is the liquid or
nonliquid character of all marital property and divisible
property. In other words, the trial court is required to
make findings as to whether the defendant has sufficient
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Opinion of the Court
liquid assets from which he can make the distributive
award payment.
Sauls v. Sauls, 236 N.C. App. 371, 375, 763 S.E.2d 328, 331 (2014) (citations,
quotation marks, brackets, and italics omitted).
At trial, the court and Wife’s counsel stated the following regarding the
distributional factors evidence presented:
THE COURT: Heard a lot of evidence about
distributional factors along the way.
[Wife’s Counsel]: Yes, we have.
THE COURT: And the court order has -- the
Court of Appeals says that the court order has to address
each distributional factor in which any evidence was
presented and make findings of fact about that and then
make conclusions about the meaning of all the
distributional factors. So someone’s going to have to
identify every distributional factor we’ve talked about, not
just the one’s we’re about to talk about. Okay?
(Emphasis added).
The trial court made the following finding -- perhaps more properly
characterized as a conclusion of law -- regarding distribution in its equitable
distribution order:
46. Based upon the above findings and after
considering the distributional factors raised by the parties
at trial, this Court finds that an equal division of the
marital and divisible property and debt is equitable. Based
upon the in-kind division of the marital and divisible
property set forth above and the equal division of the
proceeds from the sale of the [marital home], the Virginia
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Opinion of the Court
Property and the sale of the tangible personal property,
this Court finds it necessary to order a distributive award
for [Husband] to pay to [Wife] in order to equitably divide
the parties’ marital and divisible property.
Thus, while the court noted that it “consider[ed] the distributional factors” and
concluded that an equal division was equitable, the order does not include sufficient
findings about the distributional factors for us to review this conclusion. In addition,
the trial court concluded that a distributive award was necessary to equalize the
division of the marital and divisible assets of the parties, although that conclusion
was based in part upon its erroneous decree that the real properties be sold instead
of distributing them. The trial court then concluded:
6. An equal division of the marital and divisible
property and debts is equitable.
....
11. The payment of a distributive award by
[Husband] to [Wife] is fair and reasonable, and [Husband]
has the ability to pay the distributive award ordered
herein[.]
The order did not identify the distributional factors “we’re about to talk
about[,]” much less “every distributional factor we’ve talked about” during the trial,
as the trial court correctly noted should be addressed by the order. Those
distributional factors are listed in N.C. Gen. Stat. § 50-20(c) (2015). Evidence was
presented about several of these factors, most notably the liquidity of the marital
estate (N.C. Gen. Stat. § 50-20(c)(9)); Wife’s early retirement (N.C. Gen. Stat. § 50-
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Opinion of the Court
20(c)(12) (catchall provision)); the physical health of the parties (N.C. Gen. Stat. § 50-
20(c)(3)); and the “[a]cts of either party to maintain, preserve, develop, or expand; or
to waste, neglect, devalue or convert the marital property . . . during the period after
separation of the parties and before the time of distribution” (N.C. Gen. Stat. § 50-
20(c)(11a)); but the trial court erred by failing to make any findings regarding that
evidence. See Warren, 175 N.C. App. at 518, 623 S.E.2d at 806. On remand, the trial
court must make findings regarding all distributional factors for which evidence was
presented and determine in its discretion whether an equal division is equitable,
since the trial court’s analysis of this issue may change on remand considering the
distribution instead of sale of the real property, as well as other matters addressed
on remand.12
IV. Timber Agreement
Husband next argues that the trial court’s valuation of the Timber Agreement,
which was an agreement between plaintiff and his cousin involving timber on land in
Pennsylvania that the trial court classified as marital property, was not supported
12 In a related argument, Husband contends that the trial court erred by concluding that he
had the ability to pay 50% of the costs to maintain the real property in addition to payment of the
distributive awards within 30 days of entry of the order. We will not address this issue in detail since
the new order on remand will address a new distribution of the real property and other related issues
such as distributional factors including “[a]cts of either party to maintain, preserve, develop, or
expand; or to waste, neglect, devalue or convert the marital property . . . during the period after
separation of the parties and before the time of distribution.” N.C. Gen. Stat. § 50-20(c)(11a).
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Opinion of the Court
by competent evidence, and Wife seems to agree.13 Husband argues that “[i]t is
completely unknown as to what the status or condition of that timber will be
beginning in January 2018, when it will actually be cut or valued and [Wife]’s
testimony as to the value, which was the only information before the trial court, was
completely speculative.”
The trial court made the following finding about the Timber Agreement:
39[.] As of the date of separation [Husband] and
Randy A. Winkleman were parties to a Timber Agreement
dated November 20, 2009, which entitled [Husband] to
receive fifty percent of the proceeds from timbering certain
property located in . . . Pennsylvania. The Timber
Agreement is marital property, and the value of the Timber
Agreement to the parties as of the date of separation and
currently is $5,000.
The court then concluded that Husband “shall be distributed as his sole and separate
property the Timber Agreement and all benefits associated therewith.”
Husband is correct that the evidence regarding the Timber Agreement was
speculative, at best. The timber in question was on land which the parties had owned
during the marriage, but Husband had sold in 2009 to his cousin. Wife testified that
she was unaware of the sale until later and that it was done without her signature.
Neither party knew exactly what sort of timber was there or how much, although
13 Again, in her reply brief, Wife claims that she does not agree with any of Husband’s
arguments on appeal. But in her Appellee brief, as to this issue she stated, “The Appellee concurs
with the Appellant’s attorney. There is no creditable [sic] evidence before the Court.”
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Opinion of the Court
Wife estimated the value to be $10,000.00. The Timber Agreement itself was quite
unusual, as noted by the trial court:
THE COURT: “If the buyer should endure any financial
hardship, the buyer, Randy Winkleman, divorce,
bankruptcy, foreclosure, the buyer shall initiate the sale as
soon as possible to ensure the seller will receive any
proceeds owed to him under this agreement.” That’s an odd
provision.
[Husband’s trial counsel]: It’s a very odd contract.
THE COURT: Uh-huh (yes).
[Wife]: Well, apparently when Mr. Miller bought this from
my in-laws the same timber agreement existed between
them and his parents.
THE COURT: I wonder if this is recorded anywhere in the
Register of Deeds office.
[Wife]: There’s no indication that there is.
In any event, the future value of timber, planted during marriage on marital
property but which will not mature until some years in the future, is too speculative
to be considered a vested property right for purposes of equitable distribution. See
Cobb v. Cobb, 107 N.C. App. 382, 386, 420 S.E.2d 212, 214 (1992) (“In the case at bar,
we find that the future value of the timber is more analogous to an option which may
be lost as a result of future events . . . . Appellee may never realize the future value
of the timber if, for example, the trees are destroyed by fire or insects, or if appellee
decides to sell the property or to not cut the trees at all.”). This Court concluded in
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Opinion of the Court
Cobb that the future value of timber that would not mature until many years later
should not be considered marital property or a distributional factor, since
“characterizing growing trees as a vested property right is far too speculative,” and
“[an] equitable distribution trial would become overwhelmingly complicated.” Id. at
386, 387, 420 S.E.2d at 214, 215. We therefore conclude that the valuation of the
Timber Agreement in this case at $5,000.00, which involved timber of an unknown
variety, age, and quantity, was not supported by competent evidence.
V. Classification of 2011 Suburban and Debt as Separate Property
Finally, Husband argues that the trial court erred in classifying the 2011
Suburban and debt secured by it as his separate property and debt. Specifically,
Husband contends that “[t]he record does not support the Court’s finding that the
vehicle was not acquired for the joint benefit of the parties and the judgment contains
no findings or conclusions indicating that the Defendant rebutted the marital
property presumption[.]” Husband also argues that the court below erred because it
“apparently believ[ed] that property acquired prior to separation, but after the filing
of an action for divorce from bed and board falls outside of the marital property
definition.”
Here, the trial court valued Husband’s 2011 Suburban at $49,000.00 with a
secured debt of $64,638.82. The trial court classified it as Husband’s separate
property and debt. The court’s findings include the fact that the Suburban and debt
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Opinion of the Court
was “acquired/incurred by [Husband] after [Wife] filed the 2011 Proceeding [for
divorce from bed and board] and were not acquired/incurred for the joint benefit of
the parties.”
Although the trial court noted that the Suburban was acquired after Wife filed
her claim for divorce from bed and board, the relevant date for classification of
property for equitable distribution purposes is the date of separation. See N.C. Gen.
Stat. § 50-20(b)(1) (2015) (“ ‘Marital property’ means all real and personal property
acquired by either spouse or both spouses during the course of the marriage and
before the date of separation of the parties, and presently owned, except property
determined to be separate property or divisible property[.]”) (emphasis added).
Furthermore, “[t]he spouse claiming that the property is separate bears the burden
of proof, as under N.C. Gen. Stat. § 50-20(b)(1), it is presumed that all property
acquired after the date of marriage and before the date of separation is marital
property[.]” Allen v. Allen, 168 N.C. App. 368, 374, 607 S.E.2d 331, 335 (2005)
(quotation marks omitted). The presumption may, however, “be rebutted by the
greater weight of the evidence.” N.C. Gen. Stat. § 50-20(b)(1).
Here, at the equitable distribution hearing, Husband testified that the
Suburban was purchased on or about 12 November 2011 while the parties still
resided together and that he did not believe the marriage was over when he
purchased the vehicle. The date of separation was 21 March 2012. Thus, the
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Opinion of the Court
Suburban was purchased before the parties were separated and is presumed to be
marital property. Although the trial court also heard testimony that Husband
purchased the vehicle on his own and financed the vehicle himself, that Wife never
drove the vehicle, and that Husband put all 33,000 miles on it, the court made no
findings indicating that Wife rebutted the marital property presumption. There was
no evidence that Husband purchased the Suburban with separate funds. Based upon
the record, it appears that the Suburban and its associated debt should have been
classified as marital. On remand, the trial court must clearly make findings to
support its classification, valuation, and distribution of the Suburban and its debt.
But we note that on remand, the trial court may, in its discretion, also consider the
circumstances of Husband’s purchase of the Suburban and associated debt he
incurred as a factor favoring an unequal distribution in favor of Wife, thus
accomplishing the same result in the actual distribution. In other words, the trial
court should do the “equity” in equitable distribution in the distribution phase of the
order, not in the classification of the property or debt as marital or separate.
Conclusion
If ever there was a case where it was proper for the trial court to use the “grand
reservoir of equitable power to do justice in a particular case” under Rule 60(b), this
is it. Jim Walter Homes, Inc., 28 N.C. App. at 712, 222 S.E.2d at 708 (citation and
quotation marks omitted). We commend the trial court’s extensive and detailed
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MILLER V. MILLER
Opinion of the Court
orders addressing the facts and equities of this very unusual situation. The trial
court acted well within its discretion when it entered a decree vacating the divorce
decree under Rule 60(b) and thus had jurisdiction over Wife’s equitable distribution
claim. We also appreciate the complexity of the case and the difficulty of dealing with
all of the issues raised over several years of litigation. But for the reasons noted
above, we must reverse the equitable distribution order and remand for the trial court
to enter a new equitable distribution order which addresses the substantive issues in
a manner consistent with this opinion. On remand, the trial court may in its
discretion receive additional evidence limited to the issues of classification, valuation
and distribution of property as necessary for preparation of a new equitable
distribution order.
AFFIRMED IN PART, REVERSED AND REMANDED IN PART.
Judges McCULLOUGH and ZACHARY concur.
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