Sluder v. Sluder ( 2019 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA18-920
Filed: 19 March 2019
Buncombe County, No. 11 CVD 3725
JAMES BRYAN SLUDER, Plaintiff,
v.
MARILYN W. SLUDER, Defendant.
Appeal by defendant from order entered 4 April 2018 by Judge Andrea E. Dray
in Buncombe County District Court. Heard in the Court of Appeals 29 January 2019.
Siemens Family Law Group, by Diane K. McDonald, for plaintiff-appellee
Charles R. Brewer for defendant-appellant
BRYANT, Judge.
Defendant Marilyn W. Sluder appeals from the trial court’s order on equitable
distribution concluding that a refinanced mortgage was a marital debt to be paid
equally by defendant and plaintiff James Bryan Sluder. Where the findings of fact
are supported by competent evidence and support the conclusions of law, we affirm
the trial court’s ruling.
Plaintiff and defendant were married on 25 June 1994 until they separated on
1 July 2007. An absolute divorce was entered on 29 October 2012. During the course
of their marriage, the parties acquired several items of property, including real estate
properties. One of the properties was a residential property on Panorama Drive. On
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Opinion of the Court
the date of separation, the parties had an existing mortgage of $207,780.21 on the
Panorama Drive property.
Prior to any court involvement, the parties entered into a mutual separation
and property settlement agreement regarding the division of their marital assets and
debts on 28 February 2008. The separation agreement listed, inter alia, the
Panorama Drive property as marital property “formerly used by the parties as their
family residence” and noted that the parties agreed to be “equally responsible for
mortgage payments.” The parties also agreed that plaintiff “shall be allowed to reside
in home at [the Panorama Drive property] and be responsible for utilities, general
maintenance, keeping the house clean and in market ready condition” until the date
of sale.
On 25 June 2008, four months after the parties executed the separation
agreement, plaintiff refinanced the existing mortgage on the Panorama Drive
property to pay off the parties’ marital debts. Plaintiff filed a complaint seeking an
absolute divorce and equitable distribution on 18 July 2011. Defendant filed an
answer and a counterclaim for equitable distribution. The trial court addressed the
issue of equitable distribution in three separate orders; collectively serving as the
trial court’s equitable distribution judgment.
On 2 March 2012, the trial court entered an order for partial settlement for
equitable distribution, in which the parties agreed to list the Panorama Drive
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Opinion of the Court
property for sale and specifically set out that plaintiff agreed “to complete the staining
of the deck, paint[] the hallway and pressure wash of the deck and other small
repairs” in exchange for defendant’s agreement “to make stain and paint available
for the above repairs.”
On 10 July 2012, the trial court entered a consent judgment for equitable
distribution, in which the parties agreed to list the Panorama Drive property.
Defendant also agreed to pay plaintiff $22,500, which “shall be paid first after the
payment of the ordinary expenses of sale of real estate from the proceeds of the sale
of the Panorama [Drive] property. The subsequent percentage division of the
proceeds of the Panorama [Drive] property remains undecided by the parties and
shall be an issue for the [trial c]ourt.”
On 1 October 2012, the trial court entered a judgment and order for equitable
distribution. The parties “had agreed that each would pay one-half of the mortgage[]
on [the Panorama Drive property]” and the trial court ordered them to split the
proceeds upon sale of the Panorama Drive property after payment of reasonable
expenses––“[p]laintiff [will] receiv[e] 47% of the proceeds and [d]efendant [will]
receiv[e] 53% of the proceeds[.] . . . [T]his result in part is based on the fact that the
parties have agreed that [d]efendant can list the property as a realtor and will receive
at least 3% for the sale price.” The trial court permitted defendant, who had
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experience in the real estate business, to handle the sale of the Panorama Drive
property, which included the sole discretion of setting the sale price.
In early 2017, the parties were in dispute involving the sale of the Panorama
Drive property, and the trial court issued an order on 18 April 2017 allowing
defendant and her mother to purchase the property. The contract was signed by the
parties in May 2017. Defendant took possession of the property and paid one-half of
the mortgage payments until September 2017. Although defendant had stopped
making mortgage payments, she continued to reside at the property.
A hearing was held before the trial court on 23 January 2018 to address
whether the refinanced mortgage should be designated as a separate debt of plaintiff.
On 20 March 2018, the trial court issued an “Order In the Cause” and concluded that
“the refinanced debt on the Panorama Drive property was the refinance of a marital
debt[,]” and therefore, was not a separate debt of plaintiff. Defendant appeals.
_________________________________________________________
On appeal, defendant argues the trial court erred by ordering that plaintiff and
defendant are equally responsible for payment of the mortgage where plaintiff
refinanced the existing mortgage after date of separation. We disagree.
Equitable distribution is vested in the discretion of the trial
court and will not be disturbed absent a clear abuse of that
discretion. Only a finding that the judgment was
unsupported by reason and could not have been a result of
competent inquiry, or a finding that the trial judge failed
to comply with the statute, will establish an abuse of
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discretion.
Wiencek-Adams v. Adams, 331 N.C. 688, 691, 417 S.E.2d 449, 451 (1992) (citations
omitted). “Under N.C.G.S. § 50-20(c), equitable distribution is a three-step process;
the trial court must (1) determine what is marital [and divisible] property; (2) 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) (internal
quotation marks and citation omitted).
We have stated that “[t]he standard of review on appeal
from a judgment entered after a non-jury trial is whether
there is competent evidence to support the trial court’s
findings of fact and whether the findings support the
conclusions of law and ensuing judgment. The trial court’s
findings of fact are binding on appeal as long as competent
evidence supports them, despite the existence of evidence
to the contrary.”
Johnson v. Johnson, 230 N.C. App. 280, 282, 750 S.E.2d 25, 27 (2013) (quoting Peltzer
v. Peltzer, 222 N.C. App. 784, 786, 732 S.E.2d 357, 359 (2012)).
In the instant case, the trial court’s Order In the Cause, in relevant part, makes
the following unchallenged findings of fact:
15. On June 25, 2008, [p]laintiff refinanced the
mortgage identified in the Separation Agreement which
had a balance of $207,780.21. He took the mortgage out in
his name alone. In addition, enough money was borrowed
to pay some existing debt[s] to writ; an Advanta credit card
in the amount of $14,264.31, a Countrywide equity line in
the amount of $17,152.66 and a Lowes credit card in the
amount of $1,309.05.
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....
20. Both parties[’] ED Affidavit also listed as the same
marital debt, debts to Advanta, P.O. Box 31032, Tampa, FL
3363, both affidavits carried a notion that the Advanta debt
was paid off in the refinance of [the] Panorama Drive
property in 2008 in the amount of $14,264.31. Also paid off
in the refinance of 2008 was a Countrywide loan in the
amount of $17,152.66.
....
38. While it is arguable that the parties could have
chosen to litigate whether the refinanced mortgage on the
Panorama Drive property became the separate debt of
[p]laintiff, the parties did not litigate that matter. That the
[trial c]ourt’s ED Judgment on 10/1/12 does not designate
the refinanced mortgage debt as a separate debt of
[p]laintiff.
39. That based on the competent and credible evidence
presented at the time of the hearings that resulted in the
ED Judgment of 10/1/12, the [trial c]ourt was aware of the
debt on the Panorama Drive property and that the [trial
c]ourt was able to consider said debt in determining an
equitable distribution of the estate.
40. That the [trial c]ourt was also aware, at the time of
the entry of the ED Judgment of 10/1/12, that the debt on
the Panorama Drive property was the refinance of the
previous debt on the property and that this was both
marital property and marital debt and that the Panorama
Drive property could not be sold without the payment of
the lien. . . .
The trial court then concluded, inter alia, “[t]hat the refinanced debt on the Panorama
Drive property was the refinance of a marital debt.”
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Opinion of the Court
We agree with the trial court’s conclusion. This Court has previously
recognized that “any debt incurred by one or both of the spouses after the date of
separation to pay off a marital debt existing on the date of separation is properly
classified as a marital debt.” Huguelet v. Huguelet, 113 N.C. App. 533, 536, 439
S.E.2d 208, 210 (1994). Additionally, while defendant contends that the refinanced
mortgage was a separate debt because it was in plaintiff’s name and it occurred after
date of separation, there was competent evidence to support that the parties also
agreed that the refinanced mortgage was marital debt.
The record reveals that on 2 March 2012, the order for partial settlement on
equitable distribution was entered, with the consent of the parties and their
respective counsel, in which the parties agreed to “expressly waive[] the necessity for
the [trial c]ourt to make any detailed [f]indings of [f]act to identify, classify, value or
distribute a portion of their marital property and debts[.]” Prior to this order, the
parties separately submitted affidavits delineating their assets. On defendant’s
affidavit, she certified that the Panorama Drive property was a marital asset and
that the refinanced mortgage of $250,000 was a marital debt.
During the 23 January 2018 hearing, plaintiff stated that he refinanced the
parties’ existing mortgage due to high interest rates and because the parties could
not reach a decision on the property––“it was just [in] our best financial interest to
consolidate our existing four debts and then that way we had a payment to share till
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[sic] we got everything situated.” In fact, defendant acknowledged, during an earlier
equitable distribution hearing in 2012, that because she was under financial strain
before the property was listed for sale, “we refinanced” the property to get a lower
rate; presumably indicating that she agreed to the refinancing. Defendant stated
that her name was left off the refinanced mortgage because her “credit score was not
as good as [plaintiff’s credit score].” Therefore, defendant cannot now assert on
appeal that the refinanced mortgage should be considered separate debt when it was
incurred to pay off marital debt, and she agreed it was, in fact, marital debt.
Accordingly, the trial court’s findings of fact are supported by the evidence in
the record, which in turn supported the trial court’s conclusion that the refinanced
mortgage was a marital debt. The trial court’s ruling is
AFFIRMED.
Judges DAVIS and INMAN concur.
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