Bell v. Bell ( 2014 )

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.
NO. COA14-200
NORTH CAROLINA COURT OF APPEALS
Filed: 2 September 2014
KATHY BELL,
Plaintiff,
v. Wilkes County
No. 10 CVD 1004
RALPH E. BELL,
Defendant.
Appeal by Defendant from judgment entered 20 August 2013 by
Judge Jeanie R. Houston in Wilkes County District Court. Heard
in the Court of Appeals 13 August 2014.
Vannoy, Colvard, Triplett & Vannoy, P.L.L.C., by Daniel S.
Johnson, for Plaintiff.
Charlotte Gail Blake for Defendant.
STEPHENS, Judge.
Procedural and Factual Background
Defendant Ralph E. Bell and Plaintiff Kathy Bell married in
1980 and separated on 22 May 2010. Their son, Chris Bell, was
an adult at the time of the separation. Plaintiff initiated
this action by the filing of a complaint for equitable
distribution and injunctive relief on 30 July 2010. At the time
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of their separation, Plaintiff had retired from full-time work,
but continued to work part time. Plaintiff had a 401(k)
retirement account. Defendant had become disabled in a work-
related accident in 2008 and received both Social Security
disability payments and a monthly lifetime retirement benefit
from his former employer. At about the time of the parties’
separation, Defendant had received a workers’ compensation
payment of just over $10,000. A final settlement of his
workers’ compensation claim after the parties separated provided
Defendant an additional $37,500 as well a fund for future
medical expenses. The parties owned three pieces of real
property: a house on eleven acres, encumbered by a mortgage
(“the Driftwood home”); a 5.2 acre tract of land on Baptist Home
Road, encumbered by an equity line of credit (“the land”); and a
house on four acres on Baptist Home Road, unencumbered by any
debt (“the Baptist Home house”). Plaintiff also owned two
pieces of real property which had been given to her by her
parents during the parties’ marriage.
On 30 August 2010, the trial court entered an interim
consent order dividing possession of certain personal property.
On 30 March 2011, Defendant fired a gun into Plaintiff’s home,
claiming a delusion that someone was holding Plaintiff and the
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parties’ son hostage. This event led to mental health
evaluations of Defendant as well as the filing of criminal
charges, for which Defendant received a probationary sentence.
Defendant continued to experience hallucinations and lost the
ability to care for himself. He allegedly violated his
probation and was later incarcerated in the North Carolina
Department of Correction.1 It also appears that Defendant was
involuntarily committed for some period of time.
On 28 February 2012, the court entered additional consent
orders, dividing certain personal and real property without
assigning value to the property. The court awarded to
Defendant, inter alia, the Driftwood home, the land, and all of
his retirement benefits and workers’ compensation settlement and
to Plaintiff, inter alia, her retirement account and several
vehicles in her possession, with each party’s award free from
the claims of the other. The court also ordered the Baptist
Home house be listed for sale, with each party to pay half of
the cost required to get the house in marketable condition. The
1
Despite a statement to the contrary in the equitable
distribution order filed 20 August 2013, the transcript
indicates that Defendant did not appear at the equitable
distribution hearing, although his counsel and guardian both
appeared on his behalf. The transcript of that hearing contains
at least one reference to Defendant having been recently
released on probation.
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court stated its intention to use “the proceeds [of the eventual
sale] to make up [any] difference in the equity owed to either
party.”
On 30 March 2012, the court ordered the parties to sell
approximately three acres of the land on Baptist Home Road to
raise funds for needed repairs on the Baptist Home house. On 15
June 2012, the court entered an order finding that Defendant was
mentally unstable and unable to participate in the equitable
distribution proceedings. A subsequent court-ordered mental
health evaluation determined that Defendant was incompetent, and
the court appointed Timothy B. Joines as guardian of Defendant’s
estate.
Joines appeared and testified on Defendant’s behalf at the
2 April 2013 equitable distribution hearing. At that time, the
Baptist Home house had not yet been sold, and Plaintiff
testified at the hearing that the parties had agreed at some
point to give the Baptist Home house to their son instead.
Plaintiff introduced in evidence a spreadsheet which listed
various marital property, including, inter alia, various
personal property kept by Plaintiff; the Driftwood home; various
retirement, workers’ compensation, and pension monies; and a
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list of expenses for which Plaintiff sought partial
reimbursement including attorney’s fees.
The court entered a final equitable distribution order on
20 August 2013 which awarded the Baptist Home house to the
parties’ son. The court ordered that the parties’ other
personal and real property be classified and divided as set out
in an attached exhibit. That exhibit was identical to the
spreadsheet introduced by Plaintiff. Defendant gave timely
notice of appeal from the final equitable distribution order.
Discussion
On appeal, Defendant argues that the trial court abused its
discretion in (1) classifying and distributing property
according to Plaintiff’s spreadsheet without making its own
independent findings of fact on conflicting evidence and (2)
removing the Baptist Home house from the marital estate and
awarding it to the parties’ son. We affirm in part and vacate
and remand in part.
I. Standards of review
Equitable distribution is governed by N.C.
Gen. Stat. § 50-20 [], which requires the
trial court to conduct a three-step process:
(1) classify property as being marital,
divisible, or separate property; (2)
calculate the net value of the marital and
divisible property; and (3) distribute
equitably the marital and divisible
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property. A trial court’s determination
that specific property is to be
characterized as marital, divisible, or
separate property will not be disturbed on
appeal if there is competent evidence to
support the determination. Ultimately, the
court’s equitable distribution award is
reviewed for an abuse of discretion and will
be reversed only upon a showing that it [is]
so arbitrary that it could not have been the
result of a reasoned decision.
Brackney v. Brackney, 199 N.C. App. 375, 381, 682 S.E.2d 401,
405 (2009) (citations and internal quotation marks omitted;
emphasis added and some alterations in original); see also Riggs
v. Riggs, 124 N.C. App. 647, 649, 478 S.E.2d 211, 212 (1996)
(“The trial court’s findings of fact . . . are conclusive if
supported by any competent evidence. The mere existence of
conflicting evidence or discrepancies in evidence will not
justify reversal.”) (citation and internal quotation marks
omitted; emphasis added), disc. review denied, 345 N.C. 755, 485
S.E.2d 297 (1997). In addition, “whether to impose sanctions
and which sanctions to impose under [N.C. Gen. Stat.] § 50-21(e)
are decisions vested in the trial court and reviewable on appeal
for abuse of discretion.” Crutchfield v. Crutchfield, 132 N.C.
App. 193, 195, 511 S.E.2d 31, 34 (1999).
II. Classification and distribution of certain marital property
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Defendant first argues that the trial court abused its
discretion in classifying and distributing property according to
Plaintiff’s spreadsheet without making its own independent
findings of fact on conflicting evidence. We disagree.
The equitable distribution order includes nine findings of
fact, including finding of fact 9 which states that “[a]ll of
the property listed on Exhibit A, attached hereto, is
incorporated herein by reference. The property listed on
Exhibit A is classified as listed and divided as stated on
Exhibit A.” Exhibit A as referenced in the order is identical
to Plaintiff’s Exhibit A. Defendant contends that the trial
court abused its discretion because it “simply adopted
[Plaintiff’s] classifications and valuations without making any
of its own independent findings, without providing any
explanation, and without acknowledging that the [trial c]ourt’s
Exhibit A was Plaintiff’s Exhibit A.” Defendant cites no case
law in support of his assertion that the trial court’s
“adoption” of Plaintiff’s classifications and valuations was an
abuse of discretion, or for his claim that the court was
required to explain or acknowledge its inclusion of Exhibit A as
part of the final equitable distribution order. We agree that
[r]ecitations of the testimony of each
witness do not constitute findings of fact
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by the trial judge, because they do not
reflect a conscious choice between the
conflicting versions of the incident in
question which emerged from all the evidence
presented. Where there is directly
conflicting evidence on key issues, it is
especially crucial that the trial court make
its own determination as to what pertinent
facts are actually established by the
evidence, rather than merely reciting what
the evidence may tend to show.
Moore v. Moore, 160 N.C. App. 569, 571-72, 587 S.E.2d 74, 75
(2003) (citations and internal quotation marks omitted; emphasis
in original). However, the equitable distribution order here
does not “merely recit[e] what the evidence may tend to show.”
See id. at 572, 587 S.E.2d at 75. Rather, the court found as
fact that “[t]he property listed on Exhibit A is classified as
listed and divided as stated on Exhibit A.” This finding of
fact indicates that the trial court made a “conscious choice”
that Plaintiff’s evidence regarding the proper valuation and
classification of the parties’ real and personal property was
the most credible. See id. at 571-72, 587 S.E.2d at 75.
After carefully reviewing the transcript of the equitable
distribution hearing, we are unsurprised that the court adopted
Plaintiff’s classifications and valuations. Plaintiff testified
extensively regarding the parties’ real and personal property,
as well as their sources of income and retirement accounts. In
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contrast, Joines, the only witness to present evidence on
Defendant’s behalf, testified only briefly and provided evidence
on only a few parts of the parties’ marital estate. The court’s
inclusion of the spreadsheet to list the classification and
valuation of the listed real and personal property was not an
abuse of discretion.
Defendant also specifically challenges (1) the
classification of Defendant’s workers’ compensation settlement,
(2) attorney’s fees awarded to Plaintiff, (3) valuation of
Plaintiff’s vehicle, and (4) the omission of the real property
given to Plaintiff by her parents. We address each sub-argument
in turn.
A. Defendant’s workers’ compensation settlement
Workers’ compensation awards
acquired by the injured spouse during the
marriage and before separation . . . will be
marital property unless the party claiming
it to be separate property (i.e., the
injured spouse) proves by a preponderance of
the evidence that the award, or some portion
of it, was intended to compensate him for
economic loss occurring after the date of
separation and is therefore his separate
property. . . .
In situations where a spouse is injured
during the marriage and prior to separation,
but does not receive a workers’ compensation
award until after the date of separation,
such an award nevertheless constitutes
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marital property to the extent that the
award represents compensation for economic
loss occurring during the marriage and prior
to separation. In such a case, because the
award is not acquired during the marriage
and prior to separation, the non-injured
spouse will not have the benefit of the
marital property presumption, and instead
must, in order to support classification of
the award as marital, prove by a
preponderance of the evidence that all or
some portion of the award is compensation
for economic loss occurring during the
marriage and before separation.
Freeman v. Freeman, 107 N.C. App. 644, 654, 421 S.E.2d 623, 628-
29 (1992) (citations omitted; emphasis in original).
Defendant contends that Plaintiff presented no evidence and
the trial court made no finding of fact about what portion of
Defendant’s workers’ compensation settlement was compensation
for economic loss during the parties’ marriage and before their
separation. However, our review of the record reveals that
Plaintiff’s Exhibit 12 at the equitable distribution hearing was
an “Agreement for Final Compromise Settlement and Release”
approved by the North Carolina Industrial Commission on 2 August
2011. That exhibit states, inter alia, that Defendant received
$10,330.66 during the parties’ marriage and before their
separation, and thus that award was properly classified as
marital property. See id.-11-
As for the settlement Defendant received after the parties
separated, Plaintiff’s Exhibit 12 indicates that the Industrial
Commission had determined that Defendant was no longer disabled
and thus no longer entitled to ongoing disability benefits as of
2 September 2008. Defendant’s only evidence regarding the
workers’ compensation awards was that they were received for
temporary disability. Thus, the uncontradicted evidence was
that the entirety of the second award was compensation for
economic loss occurring during the marriage and before
separation, and in turn, that property was properly classified
as marital property. See id. This argument is overruled.
B. Attorney’s fees
Defendant contends that the trial court did not make
sufficient findings of fact to support its award of attorney’s
fees in the amount of $985.79. We agree.
On 19 August 2011, Plaintiff moved for reasonable
attorney’s fees and reimbursement of mortgage payments made
while Defendant was living rent-free in the former marital
residence as sanctions under section 50-21(e). Under our
General Statutes, the trial court may impose a sanction, if it
finds, inter alia, that a party “has willfully obstructed or
unreasonably delayed or attempted to obstruct or unreasonably
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delay any pending equitable distribution proceeding . . . .”
N.C. Gen. Stat. § 50-21(e) (2013).
In a consent order entered 28 February 2012, the court
stated that Plaintiff’s attorney should submit to the court an
affidavit regarding fees and that the issue of attorney’s fees
would be addressed at the final equitable distribution hearing.
Plaintiff’s attorney submitted an affidavit listing the
attorney’s fees covered by the motion totaling $985.79. That
amount appears in Exhibit A labeled “Attorney Fee” along with
amounts for mortgage and tax payments and other expenses for
which Plaintiff sought reimbursement. However, the final
equitable distribution order contains no findings of fact that
Defendant “willfully obstructed or unreasonably delayed or
attempted to obstruct or unreasonably delay any pending
equitable distribution proceeding[.]” See id. Accordingly, we
vacate the portion of the equitable distribution order which
purports to award attorney’s fees to Plaintiff. On remand, the
trial court shall properly consider Plaintiff’s motion for
sanctions under section 50-21(e), make the necessary findings of
fact and conclusions of law as supported by the evidence, and
enter the appropriate ruling in its discretion. See
Crutchfield, 132 N.C. App. at 195, 511 S.E.2d at 34.
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C. Other property
Defendant also contends that the trial court abused its
discretion in not resolving disputed evidence on the value of
the Driftwood home and the value of Plaintiff’s car. The
evidence regarding the value of the Driftwood home was
conflicting. Plaintiff listed its value as $171,660 on her
Exhibit A and testified that its tax value in 2011 was $171,660,
while Joines testified that the most recent tax value of the
property was $149,850. On redirect examination, Plaintiff
testified that she thought the addition of a two-story garage
which included a bathroom with a Jacuzzi tub may have raised the
home’s value. The court asked Plaintiff, “[D]o you agree the
current tax value [is $]149,850, or do you know that?”
Plaintiff replied, “I don’t know that. I mean, I don’t
understand why it’s dropped so much.” As discussed supra, the
court’s finding of fact 9 and the listing of the value of the
property at $171,660 indicates that the trial court resolved the
conflict in the evidence in favor of Plaintiff’s suggested
valuation. As for the value of Plaintiff’s car, Defendant does
not explain what the disputed evidence was as to its value, and
Joines did not testify about the value of any vehicles.
Defendant’s arguments on these points are without merit.
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Defendant also contends that the court erred in failing to
address the real property given to Plaintiff by her parents in
the equitable distribution order. On cross-examination,
Plaintiff was asked about the two pieces of property and
testified that they were given to her by her parents during the
marriage and that the taxes on them were paid from marital
funds. At trial, Defendant never made any argument or offered
any evidence that the properties were anything other than
Plaintiff’s separate property. See N.C. Gen. Stat. § 50-
20(b)(2) (2013) (defining separate property, inter alia, as that
“acquired by a spouse by devise, descent, or gift during the
course of the marriage”). Defendant does not now contend that
either property should have been classified as marital. Because
the two properties were not included in the spreadsheet under
the heading “Marital Property,” it appears that the trial court
classified them as separate, rather than marital, property.
Defendant’s argument on this issue is overruled.
III. The Baptist Home house
As for Defendant’s second argument, Plaintiff concedes that
the trial court erred in removing the Baptist Home house from
the marital estate and awarding it to the parties’ son in the
absence of any stipulation of the parties. Accordingly, we
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vacate this portion of the final distribution award and remand
to the trial court for classification, valuation, and
distribution of the Baptist Home house as part of the marital
estate.
AFFIRMED in part; VACATED and REMANDED in part.
Judges CALABRIA and ELMORE concur.
Report per Rule 30(e).