Setzler v. Setzler , 244 N.C. App. 465 ( 2015 )


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  •               IN THE COURT OF APPEALS OF NORTH CAROLINA
    No. COA15-209
    Filed: 15 December 2015
    Catawba County, No. 12 CVD 1337
    JOHN BRYAN SETZLER, Plaintiff,
    v.
    EVETTE LYNN SETZLER, Defendant.
    Appeal by plaintiff from orders entered 2 January and 9 May 2014 by Judge
    Jane V. Harper in Catawba County District Court. Heard in the Court of Appeals 8
    September 2015.
    Wesley E. Starnes for plaintiff-appellant.
    Morrow Porter Vermitsky Fowler & Taylor, PLLC, by John F. Morrow, Sr.,
    Natalie M. Vermitsky, and John C. Vermitsky, for defendant-appellee.
    BRYANT, Judge.
    The trial court did not err in awarding attorney’s fees under N.C. Gen. Stat. §
    50-13.6 where the court found that defendant acted in good faith in filing her custody
    action. Additionally, where the findings of fact are supported by competent evidence
    and, in turn, support its conclusions of law, we affirm the trial court’s order
    concluding that defendant was not cohabiting as defined in N.C. Gen. Stat. § 50-
    16.9(b) and denying plaintiff’s motion to terminate alimony.
    SETZLER V. SETZLER
    Opinion of the Court
    Plaintiff-father and defendant-mother were married on 25 April 1992. During
    their marriage, the couple had two children. The parties subsequently separated on
    12 April 2012. On 11 May 2012, plaintiff filed his Complaint seeking child custody,
    divorce from bed and board, equitable distribution, injunctive relief, and interim
    distribution.   Defendant then filed an Answer and Counterclaim seeking child
    custody, child support, post separation support, permanent alimony, equitable
    distribution, and attorney’s fees.
    On 30 May 2013, the parties were divorced, and on 13 June 2013, a judgment
    of equitable distribution and an order of permanent alimony was entered. On 3
    September 2013, plaintiff filed a motion, pursuant to N.C. Gen. Stat. § 50-16.9, to
    terminate his alimony alleging that defendant was cohabiting with William Wallace
    Respess. Defendant filed a reply to plaintiff’s motion to terminate alimony on 13
    September 2013. On 2 January 2014, following an evidentiary hearing, the trial court
    entered an order denying plaintiff’s motion to terminate alimony. Plaintiff timely
    filed notice of appeal of this order.
    On 22–25 April 2014, an evidentiary hearing was held on the issue of custody
    and support. At this hearing, plaintiff advocated for primary custody of the children,
    as did defendant.     An order of custody was entered, which awarded permanent
    primary custody of the children to plaintiff and permanent secondary custody of the
    children to defendant. Additionally, it was ordered that the children would live
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    SETZLER V. SETZLER
    Opinion of the Court
    primarily with their father and that plaintiff father would have final decision-making
    authority regarding the children.
    Defendant also made a claim for attorney’s fees, which plaintiff opposed. The
    trial court entered an order granting defendant’s request for attorney’s fees. On 14
    April 2014, plaintiff filed a Motion for Non-Disbursement which was denied on 27
    May 2014. On 30 June 2014, plaintiff entered an amended notice of appeal from the
    2 January 2014 Order on Alimony and the 27 May 2014 orders as to child custody,
    attorney’s fees, and Plaintiff’s Motion for Non-Disbursement.
    ______________________________________________________
    On appeal, plaintiff argues that the trial court erred when it concluded that (I)
    defendant was acting in good faith in bringing her child custody action; and (II)
    defendant was not engaging in cohabitation.
    I
    Plaintiff first argues that the trial court erred in concluding that defendant
    was acting in good faith in bringing her child custody action, and therefore, the trial
    court had no statutory authority to award attorney’s fees to defendant. We disagree.
    North Carolina General Statutes, section 50-13.6 provides the following:
    [i]n an action or proceeding for the custody or support, or
    both, of a minor child, including a motion in the cause for
    the modification or revocation of an existing order for
    custody or support, or both, the court may in its discretion
    order payment of reasonable attorney’s fees to an
    interested party acting in good faith who has insufficient
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    SETZLER V. SETZLER
    Opinion of the Court
    means to defray the expense of the suit.
    N.C. Gen. Stat. § 50-13.6 (2013) (emphasis added). Therefore, the trial court is
    required to make two findings of fact in order to award attorney’s fees under N.C.G.S.
    § 50-13.6: “that the party to whom attorney’s fees were awarded was (1) acting in
    good faith and (2) has insufficient means to defray the expense of the suit.” Burr v.
    Burr, 
    153 N.C. App. 504
    , 506, 
    570 S.E.2d 222
    , 224 (2002) (citation omitted).
    The Supreme Court of North Carolina has defined good faith as “honesty of
    intention, and freedom from knowledge of circumstances which ought to put [one]
    upon inquiry” that a claim is frivolous. Bryson v. Sullivan, 
    330 N.C. 644
    , 662, 
    412 S.E.2d 327
    , 336 (1992) (quoting Black’s Law Dictionary 693 (6th ed. 1990)). Because
    the element of good faith “is seldom in issue . . . a party satisfies it by demonstrating
    that he or she seeks custody in a genuine dispute with the other party.” 3-13 Lee’s
    North Carolina Family Law § 13.92 (2014).
    Here, it is undisputed that defendant was in a genuine dispute with plaintiff—
    plaintiff initiated a claim for custody and defendant brought a counterclaim for
    custody. Rather than challenging the evidence, offering any case law or precedent,
    or arguing that the legal conclusion of good faith was not supported by the facts found
    by the trial judge, plaintiff’s sole argument seems to be that a person who requests
    more time with her children in her claim for custody is acting in bad faith when she
    should know that she is a poor parent. Almost seven pages of plaintiff’s brief are
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    SETZLER V. SETZLER
    Opinion of the Court
    dedicated to factual findings regarding defendant’s struggle with drug addiction. In
    order to accept plaintiff’s position, this Court would have to find that some parents
    should simply know that, because they are unfit parents or have made mistakes in
    the past, they will lose any attempts to modify custody arrangements, and therefore
    any attempts to do so could not be made in good faith. To support such an outcome
    would be to negate the efforts made by parents, such as defendant, to correct previous
    mistakes and become better parents and would serve to bar such parents from
    bringing custody actions.   This position espoused by plaintiff is unsupportable and
    contrary to settled law. This portion of plaintiff’s argument is overruled.
    The second finding of fact the trial court must make when awarding attorneys’
    fees under N.C.G.S. § 50-13.6 is that the party to whom attorneys’ fees are being
    awarded “has insufficient means to defray the expense of the suit.” Burr, 153 N.C.
    App. at 
    506, 570 S.E.2d at 224
    .
    Here, defendant’s first Financial Affidavit filed 26 September 2012 reflects
    defendant’s total net monthly income, gross less deductions, as $1,516.67, with
    anticipated fixed household expenses listed as $3,979.68. On 17 May 2013, defendant
    filed an Amended Financial Affidavit, which listed her total net monthly income, after
    deductions, as $820.00, with total anticipated fixed household expenses totaling
    $3,669.68. The Amended Financial Affidavit also noted the following:
    On 10/12/12 . . . [d]efendant was award [sic] lump sum post
    separation support in the amount of $33,000.00, which was
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    SETZLER V. SETZLER
    Opinion of the Court
    payable on or about 12/1/12. The post separation award
    was for $5,500.00 per month for a period of six months,
    which will be exhausted at the time of this hearing on
    6/3/13.
    On 22 May 2013, defendant filed a 2nd Amended Financial Affidavit, which
    again listed defendant’s total net income available after deductions as $820.00, with
    total anticipated household expenses listed as $3,735.68. The 2nd Amended Affidavit
    also listed a “one time cost of $790.00 for brakes and rotors.” The Financial Affidavits
    filed by defendant also noted that (1) defendant owns no real estate individually, and
    (2) defendant and plaintiff together own real estate having an approximate value of
    $2,319,393.00 and an approximate mortgage debt of $2,397,000.00.
    In Lawrence v. Tise, this Court reversed and remanded a trial court order
    denying an award of attorney’s fees where the trial court’s finding that plaintiff-
    mother had the means to pay her attorney was not supported by the evidence. 
    107 N.C. App. 140
    , 153–54, 
    419 S.E.2d 176
    , 185 (1992). In Lawrence, the evidence
    revealed, inter alia, that plaintiff-mother
    incurred legal fees . . . in the amount of $6741.00; that her
    monthly gross income is $215.00 and that her monthly
    expenses exceed her gross income . . . and that she owns a
    home which she purchased in 1986 for $50,000.00 which
    has a mortgage of $40,000.00, and an adjoining vacant lot
    with a tax value of $10,000.00.
    
    Id. at 153,
    419 S.E.2d at 184.
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    SETZLER V. SETZLER
    Opinion of the Court
    Here, as in Lawrence, the evidence similarly shows that defendant had
    insufficient means to defray the costs of her suit. In the trial court’s Attorney’s Fee
    Order, entered 27 May 2014, the trial court found in Finding of Fact No. 4 that
    defendant had “insufficient means to defray the attendant expenses of her suit for
    custody.” In Finding of Fact No. 8, the trial court stated as follows: “In the tax year
    2013, Plaintiff’s earned income was $613,464 (about $51,122 per month) and
    [d]efendant’s earned income was $1,560 per month. Both parties have about the same
    earned income now as they did in 2013.” In Finding of Fact No. 7, the trial court
    found, after reviewing three Attorney’s Fees Affidavits, that, from 4 December 2013
    up to April 2014, defendant had incurred some $8,419 in attorneys’ fees and $1,228
    in costs. The third affidavit, which covered the April trial and costs and preparation
    of defendant’s closing argument, showed that defendant incurred fees in the amount
    of $16,075 and costs of $1,109.
    Additionally, unlike the plaintiff-mother in Lawrence, here, defendant owns no
    real estate or other property individually. See Lawrence, 107 N.C. App. at 
    153, 419 S.E.2d at 184
    . The only property defendant does have an interest in she owns
    together with her husband and the mortgage debt encumbering the property exceeds
    the current market value of the property by approximately $77,000.00.
    Accordingly, the trial court’s findings of fact support its conclusions of law,
    specifically, that “[d]efendant is without sufficient funds with which to defray the
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    SETZLER V. SETZLER
    Opinion of the Court
    necessary expenses attendant to her suit for custody, [and] . . . [d]efendant is entitled
    to an award of attorney’s fees pursuant to N.C. Gen. Stat. § 50-13.6.”
    The trial court’s findings of fact that defendant was acting in good faith and
    has insufficient means to defray the expense of the suit support its conclusion of law
    awarding attorneys’ fees to defendant. Accordingly, plaintiff’s argument is overruled.
    II
    Plaintiff next argues that the trial court erred by concluding that defendant
    did not engage in cohabitation. Specifically, plaintiff contends that defendant and
    Respess have mutually and voluntarily assumed “those marital rights, duties, and
    obligations which are usually manifested by married people.” N.C. Gen. Stat. § 50-
    16.9(b) (1995).
    In reviewing orders entered by a trial court in non-jury proceedings, this Court
    is “strictly limited to determining whether the record contains competent evidence to
    support the trial court’s findings of fact and whether those findings, in turn, support
    the trial court’s conclusions of law.” Smallwood v. Smallwood, ___ N.C. App. ___, ___,
    
    742 S.E.2d 814
    , 820 (2013) (internal quotation marks and citation omitted). Further,
    in performing this review, this Court may not “engage in a de novo review of the
    evidence and substitute its judgment for that of the trial court.” 
    Id. (citing Coble
    v.
    Coble, 
    300 N.C. 708
    , 712–13, 
    268 S.E.2d 185
    , 189 (1980)). Neither is it for this Court
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    SETZLER V. SETZLER
    Opinion of the Court
    “to determine de novo the weight and credibility to be given to evidence disclosed by
    the record on appeal.” Coble, 300 at 
    712–13, 268 S.E.2d at 189
    .
    Section 50-16.9(b) of the General Statutes states in pertinent part that “[i]f a
    dependent spouse who is receiving postseparation support or alimony from a
    supporting spouse . . . remarries or engages in cohabitation, the postseparation
    support or alimony shall terminate.” N.C. Gen. Stat. § 50-16.9(b). The statute defines
    “cohabitation” as:
    the act of two adults dwelling together continuously and
    habitually in a private heterosexual relationship, even if
    this relationship is not solemnized by marriage, or a
    private homosexual relationship. Cohabitation is
    evidenced by the voluntary mutual assumption of those
    marital rights, duties, and obligations which are usually
    manifested by married people, and which include, but are
    not necessarily dependent on, sexual relations.
    
    Id. The North
    Carolina Supreme Court has formulated a two-part test for
    cohabitation: “[t]o find cohabitation, there must be evidence of: (1) a ‘dwelling
    together continuously and habitually’ of two adults and (2) a ‘voluntary mutual
    assumption of those marital rights, duties and obligations which are usually
    manifested by married people.’ ” Bird v. Bird, 
    363 N.C. 774
    , 779–80, 
    688 S.E.2d 420
    ,
    423 (2010) (quoting N.C.G.S. § 50-16.9(b) (2009)).
    This two-part test must also be applied in light of the legislative policy
    underlying N.C. Gen. Stat. § 50-16.9(b). For the first element of the test, the statutory
    text:
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    SETZLER V. SETZLER
    Opinion of the Court
    reflects several of the goals of the “live-in-lover statutes,”
    terminating alimony in relationships that probably have
    an economic impact, preventing a recipient from avoiding
    in bad faith the termination that would occur at
    remarriage, but not the goal of imposing some kind of
    sexual fidelity on the recipient as the condition of
    continued alimony. The first sentence [of the statute]
    reflects the goal of terminating alimony in a relationship
    that probably has an economic impact. “Continuous and
    habitual” connotes a relationship of some duration and
    suggests that the relationship must be exclusive and
    monogamous as well. All of these factors increase the
    likelihood that the relationship has an economic impact on
    the recipient spouse.
    Craddock v. Craddock, 
    188 N.C. App. 806
    , 810, 
    656 S.E.2d 716
    , 719 (2008) (quoting
    2 Suzanne Reynolds, Lee’s North Carolina Family Law § 9.85, at 493–94 (5th ed.
    1999)) [hereinafter Lee’s Family Law].
    For the second element of the cohabitation test, the goal is “to terminate
    postseparation support and alimony when the relation has an economic effect and
    when someone is acting in bad faith to avoid termination.” Smallwood, ___ N.C. App.
    at ___, 742 S.E.2d at 818 (quoting Lee’s Family Law § 9.85, at 494). This is because
    “the more indicia of ‘marital rights, duties, and obligations,’ the more chance that the
    decision not to marry is motivated only by a desire to continue receiving alimony.”
    Id. at ___, 818 (quoting Lee’s Family Law § 
    9.85, supra, at 494
    ).
    The trial court implicitly concluded that the first element of the cohabitation
    test was met, in that the trial court found that “the relationship between [d]efendant
    and Mr. Respess is habitual and monogamous and has had an economic impact, to
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    SETZLER V. SETZLER
    Opinion of the Court
    [d]efendant’s benefit.” Therefore, the core issue is whether the trial court’s conclusion
    that defendant and Respsess did not voluntarily and mutually assume those marital
    rights, duties, and obligations which are usually manifested by married people was
    supported by its factual findings.
    When determining whether a couple voluntarily assumes those marital rights,
    duties, and obligations which are usually manifested by married people, the trial
    court must consider the totality of the circumstances. Smallwood, ___ N.C. App. at
    ___, 742 S.E.2d at 819 (citation omitted). “Under the ‘totality of the circumstances
    test,’ a court must evaluate all the circumstances of the particular case, with no single
    factor controlling.” 
    Id. (citing Fletcher
    v. Fletcher, 
    123 N.C. App. 744
    , 750, 
    474 S.E.2d 802
    , 806, (1996).
    In Smallwood, this Court held that the plaintiff and her paramour, Robinson,
    did not engage in marital conduct when, inter alia, the following facts were found by
    the trial court below: (1) Robinson maintained his own residence and did not keep
    clothes or other personal items at the plaintiff’s residence; (2) Robinson did not pay
    any expenses for the plaintiff’s residence, nor attend to any other chores at the
    plaintiff’s residence; and (3) Robinson and plaintiff did not refer to each other as
    husband and wife. Id. at ___, 742 S.E.2d at 818–19.
    Additionally, this Court has held that when the “parties [do] not share
    financial obligations, exchange gifts or purchase items for each other without being
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    SETZLER V. SETZLER
    Opinion of the Court
    reimbursed for the money spent[,]” this factor can support a trial court’s determination
    that a couple has not assumed those marital rights, duties, and obligations which are
    usually manifested by married people. Russo v. Russo, No. COA11-162, 
    2011 WL 6035580
    , *5 (N.C. Ct. App. Dec. 6, 2011) (unpublished) (emphasis added) (citations
    and quotation marks omitted).
    In its Order Denying Motion to Terminate Alimony and Denying Motion for
    Civil Contempt entered 2 January 2014, the trial court made the following findings
    on the issue of cohabitation:
    (3) Defendant/Wife began a sexual relationship with
    William Wallace Respess sometime in March of 2013. The
    couple has been monogamous since said time. They spend
    virtually all overnights together except when Defendant’s
    children are with her. They usually stay at Mr. Respess’
    residence. They have traveled together several times,
    sharing a room. They have spent time with both of their
    families, as well as numerous friends of both, and have
    entertained friends several times at Mr. Respess’
    residence. They have had family photographs made, some
    including Defendant’s daughters. They are engaged to be
    married and plan on marrying in mid-May, 2014,
    immediately after Mr. Respess is divorced from is [sic]
    present wife, from whom he separated in March of 2013.
    (4) Defendant/Wife maintains her own residence, where
    Mr. Respess never spends the night. Neither party keeps
    clothes or other personal items at the home of the other.
    (5) Financially, Mr. Respess has provided funds to
    Defendant or paid bills for her directly, on numerous
    occasions. Mr. Respess has made payments so Defendant
    would not lose her town home, her internet service, or the
    furniture she was buying on time. Some of the funds he
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    SETZLER V. SETZLER
    Opinion of the Court
    has provided were for everyday living expenses. The
    consent judgment entered by Plaintiff and Defendant on
    June 13, 2013, included a provision for Defendant to
    receive a 2007 BMW vehicle which she would “immediately
    trade . . . for a newer vehicle to be titled in her name.”
    Defendant was unable to get credit for this purchase,
    despite Mr. Respess’ willingness to co-sign the note, and
    Mr. Respess then bought the 2008 Buick automobile she
    had chosen, in his name. He also assisted her with car
    payments on this car (which she drives) and has added it
    to his car insurance policy.
    (6) Both Defendant and Mr. Respess described all of the
    above transactions as “loans.” While the Court is not
    convinced that their original intent was that these funds
    be “loans,” it is undisputed that Defendant, upon receiving
    $200,000 via a Qualified Domestic Relations Order from a
    retirement account of Plaintiff/Husband’s (pursuant to the
    consent judgment), promptly paid Mr. Respess all that they
    agreed she owed him. That amount was paid on October 5,
    2013, in the amount of $19,844.00; part of said funds was
    attorney fees Defendant owed for Mr. Respess’
    representation of Defendant in this matter.
    (7) Mr. Respess has also given Defendant a diamond
    engagement ring (in September, 2013), two outfits, a
    blouse, and two pieces of luggage. Mr. Respess has paid all
    the costs of the parties’ trips together. When they eat out
    together, Mr. Respess pays. When they cook in together,
    he usually pays for the groceries.
    (8) Mr. Respess and Defendant expect him to function as a
    stepparent to Defendant’s daughters, and he has already
    begun assuming that role. For example, Mr. Respess
    attended the school orientation for the girls in August
    along with . . . Defendant. Defendant and Mr. Respess
    attend Sunday School together on the Sundays when the
    girls are not with Defendant.
    (9) Defendant and Mr. Respess have told no one that they
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    SETZLER V. SETZLER
    Opinion of the Court
    are married. They tell everyone they are engaged. They
    have no joint banking accounts.
    ...
    (12) Here the relationship between Defendant and Mr.
    Respess is habitual and monogamous and has had an
    economic impact, to Defendant’s benefit. But the Court is
    not convinced that the Defendant’s motivation, in not
    marrying Mr. Respess, is to continue receiving alimony.
    First, of course, is the legal impediment of Mr. Respess’
    current marital status. But also, this couple plans to marry
    as soon as they legally can, which will result in the loss, by
    Defendant/Wife, of more than four years of the five years
    alimony for which she bargained. If Defendant wanted to
    keep the alimony coming, these marriage plans should not
    be made. Continuing to receive alimony does not appear to
    be her primary motivation, much less her only one.
    (13) The above consideration, along with the separate
    residential arrangements, offset the other facts which
    would favor allowing Plaintiff/Husband’s Motion to
    Terminate Alimony.
    Here, like the couple in Smallwood, defendant and Respess each maintained
    their own respective residences and Respess did not keep any clothes or personal
    items at defendant’s home. Additionally, like the couple in Smallwood, defendant
    and Respess have not told anyone that they are married. Finally, it is worth noting
    that in Russo, an unpublished opinion, this Court noted that when parties did not
    share financial obligations or exchange gifts or purchase items for one another
    without being reimbursed for the money spent, this was a strong indication that the
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    SETZLER V. SETZLER
    Opinion of the Court
    couple did not assume “those marital rights, duties, and obligations which are usually
    manifested by married people.” Russo, 
    2011 WL 6035580
    at *5.
    Here, Respess provided funds to defendant or paid bills for her on numerous
    occasions, but she repaid him for this assistance. The trial court found that, while
    the parties’ description of these transactions as “loans” was not a convincing one,
    defendant did pay Respess a sum of $19,844.00 on 5 October 2013, which was the
    amount the couple agreed defendant owed Respess. Thus, the trial court’s legal
    conclusion that defendant and Respess did not assume those marital rights, duties,
    and obligations which are usually manifested by married people was supported by
    the trial court’s findings of fact.
    The trial court’s conclusion is also supported by the trial court’s reasonable
    inference that defendant’s motivation in not marrying Respess was not made in bad
    faith in order to keep the alimony coming. A trial judge is entitled, after considering
    all the evidence, to draw “inferences as are reasonable and proper under the
    circumstances, even though another different inference, equally reasonable, might
    also be drawn therefrom.” Hodges v. Hodges, 
    257 N.C. 774
    , 780, 
    127 S.E.2d 567
    , 571
    (1962) (citation and quotation marks omitted).
    As stated previously, the primary legislative policy in making cohabitation, not
    just remarriage, grounds for termination of alimony was to evaluate the economic
    impact of a relationship on the dependent spouse and, consequently, avoid bad faith
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    SETZLER V. SETZLER
    Opinion of the Court
    receipts of alimony. The trial court’s inference finding that a desire to continue
    receiving alimony was not a primary motive in not remarrying is yet another factual
    finding that supports the trial court’s conclusion defendant and Respess were not
    cohabiting.
    Again, we reiterate that this Court does not review the trial court’s order de
    novo, nor can we substitute our judgment for that of the trial court. See Coble, 300
    N.C. at 
    712–13, 268 S.E.2d at 189
    . Here, competent evidence in the record supports
    the trial court’s findings of fact and those findings of fact in turn support the
    conclusions of law. Accordingly, plaintiff’s argument is overruled.
    We find that the record supports the orders of the trial court concluding (I)
    defendant’s child custody action was brought in good faith, and she is entitled to
    attorney’s fees; and (II) defendant and Respess did not engage in cohabitation for
    purposes of terminating plaintiff’s alimony payments to defendant.
    AFFIRMED.
    Judges GEER and TYSON concur.
    - 16 -
    

Document Info

Docket Number: 15-209

Citation Numbers: 781 S.E.2d 64, 244 N.C. App. 465, 2015 N.C. App. LEXIS 1034

Judges: Bryant

Filed Date: 12/15/2015

Precedential Status: Precedential

Modified Date: 10/19/2024