Sherrill v. Sherrill ( 2020 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA20-106
Filed: 21 July 2020
Watauga County, No. 18 CVD 657
JAMIE D. SHERRILL, Plaintiff,
v.
JOSEPH C. SHERRILL, Defendant.
Appeal by defendant from order entered 26 November 2019 by Judge Hal G.
Harrison in Watauga County District Court. Heard in the Court of Appeals
10 June 2020.
Rivenbark Attorney at Law, P.C., by Nancy M. Rivenbark, for plaintiff.
Miller & Johnson, PLLC, by Andrea M. Fink, for defendant.
ARROWOOD, Judge.
Joseph C. Sherrill (“defendant”) appeals from trial court order awarding
attorney fees to Jamie D. Sherrill (“plaintiff”) following a child custody dispute.
Defendant argues the trial court erred in awarding attorney fees by: (1) finding
plaintiff has insufficient means to defray the costs of the lawsuit; (2) denying
defendant’s motion to dismiss; (3) making erroneous findings as to plaintiff’s income;
and (4) miscalculating plaintiff’s expenses. For the following reasons, we reverse and
remand.
I. Background
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Opinion of the Court
Plaintiff and defendant were marred on 31 August 2014 and separated on
19 November 2018. Two children were born into the marriage (hereinafter the
“minor children”). On 30 November 2018, plaintiff filed a motion for ex parte
emergency custody of the minor children. On 8 and 30 July 2019, a hearing was held
on the matter of permanent child custody. On 9 August 2019, the trial court entered
a written order awarding custody of the minor children to plaintiff. On
31 October 2019, the trial court held a hearing addressing plaintiff’s motion for
attorney fees.
At the hearing, defendant conceded the issues of whether plaintiff was an
interested party, and whether she had acted in good faith. Thus, the only issue before
the trial court was whether plaintiff had insufficient means to defray the costs of the
child custody suit. Plaintiff presented evidence including her own testimony and that
of her mother, as well as proof of her income, debt, and expenses. Plaintiff testified
that she currently worked as a kindergarten teacher and as a part-time adjunct
professor at Appalachian State University, but would soon be leaving the university
position in the following months. At the time of the hearing, however, she received a
net monthly income of $3,482.07 as a kindergarten teacher and $1,336.42 as a part-
time professor, for a total monthly income of $4,818.49. Plaintiff also received
$900.00 in child support from defendant per month. Plaintiff further presented and
testified to an expense sheet she prepared which detailed her expenses and those of
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Opinion of the Court
the minor children. Pursuant to the expense sheet, plaintiff’s expenses totaled an
amount of $3,758.64 monthly. Plaintiff testified she was currently able to meet her
expenses.
At the close of plaintiff’s presentation of evidence, defense counsel moved to
dismiss plaintiff’s claim for attorney fees on the ground that plaintiff had not proven
she had insufficient means to defray the costs of the litigation. Defendant did not
offer any evidence. The trial court denied the motion. The trial court subsequently
entered a handwritten order granting plaintiff’s claim for attorney fees. In its order,
the trial court found that plaintiff will lose the income she earns at Appalachian State
University and calculated her net monthly earnings to include only the income she
earned as a kindergarten teacher and payments she received for child support. It
further found that plaintiff’s monthly expenses were $3,758.64, and that her monthly
income would decrease due to additional withholdings. Based on its findings, the
trial court concluded plaintiff had insufficient means to defray the costs of this action.
On 26 November 2019, a typewritten order memorializing the handwritten order was
entered and defendant timely filed a notice of appeal.
II. Discussion
Defendant raises several arguments on appeal, in which he essentially
contends the trial court erred in awarding attorney fees by: (1) miscalculating
plaintiff’s income and finding plaintiff has insufficient means to defray the costs of
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litigation; (2) miscalculating plaintiff’s expenses; and (3) denying defendant’s motion
to dismiss.
“In a custody and support action, once the statutory requirements of [N.C. Gen
Stat. §] 50-13.6 have been met, whether to award attorney’s fees and in what amounts
is within the sound discretion of the trial judge and is only reviewable based on an
abuse of discretion.” Savani v. Savani, 102 N.C. App. 496, 505, 403 S.E.2d 900, 905-
906 (1991) (citing Atwell v. Atwell, 74 N.C. App. 231, 237-38, 328 S.E.2d 47, 51 (1985)).
However, “[w]hether [the] statutory requirements [of N.C. Gen. Stat. § 50-13.6] have
been met is a question of law, reviewable on appeal.” Taylor v. Taylor, 343 N.C. 50,
54, 468 S.E.2d 33, 35 (1996) (quotation marks omitted) (quoting Hudson v. Hudson,
299 N.C. 465, 472, 263 S.E.2d 719, 724 (1980)). “In addition, the trial court’s findings
of fact must be supported by competent evidence.” Conklin v. Conklin, __ N.C. App.
__, __, 825 S.E.2d 678, 680 (2019). “Only when these requirements have been met
does the standard of review change to abuse of discretion for an examination of the
amount of attorney’s fees awarded.” Schneider v. Schneider, 256 N.C. App. 228, 229,
807 S.E.2d 165, 166 (2017) (quoting Doan v. Doan, 156 N.C. App. 570, 575, 577 S.E.2d
146, 150 (2003)).
N.C. Gen. Stat. § 50-13.6, provides, in pertinent part:
In an action or proceeding for the custody or support, or
both, of a minor child, . . . the court may in its discretion
order payment of reasonable attorney’s fees to an
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interested party acting in good faith who has insufficient
means to defray the expense of the suit. . . .
N.C. Gen. Stat. § 50-13.6 (2019). “We have interpreted this provision as requiring
that before attorney’s fees can be taxed in an action for custody or in an action for
custody and support, the facts required by the statute—that the party seeking the
award is (1) an interested party acting in good faith, and (2) has insufficient means
to defray the expense of the suit—must be both alleged and proved.” Taylor, 343 N.C.
at 54, 468 S.E.2d at 35 (citing Hudson, 299 N.C. at 472, 263 S.E.2d at 723). “A party
has insufficient means to defray the expense of the suit when he or she is ‘unable to
employ adequate counsel in order to proceed as litigant to meet the other spouse as
litigant in the suit.’ ” Lawrence v. Tise, 107 N.C. App. 140, 153, 419 S.E.2d 176, 184
(1992) (quoting Hudson, 299 N.C. at 474, 263 S.E.2d at 725).
In the case before us, defendant conceded that plaintiff was an interested party
and had acted in good faith. Defendant only challenges the trial court’s findings
supporting its conclusion that plaintiff has insufficient means to defray the costs of
the underlying child custody suit. We first address defendant’s contention the trial
court erred calculating plaintiff’s income. Specifically, we consider that part of his
argument contesting the trial court’s disregard of the income plaintiff received as an
adjunct professor.
In its order, the trial court made the following findings of fact:
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Opinion of the Court
5. As a result of this custody proceeding, the Plaintiff has
been required to relocate her residence to Burke
County to the home of her parents. This move
required her to change her employment to the Burke
County School system as a teacher. Furthermore, she
will lose the income she earns at Appalachian State
University as an adjunct professor in the amount of
$1,300.00 monthly.
6. Plaintiff has net monthly earnings of $3,482.07,
together with $900.00 per month child support from
the Defendant. The parties share equally in all
uninsured medical expenses for their two (2) minor
children. Plaintiff has monthly expenses of $3,758.64.
Her monthly income will decrease due to additional
withholdings.
7. Plaintiff’s parents are requiring Plaintiff to pay the
charges incurred on the credit card [that they allowed
Plaintiff to charge all of her legal fees on] as follows:
a. Attorney fees – $15,985.50;
b. Costs – $234.00.
....
10. Plaintiff has insufficient means to defray all of these
costs and fees.
In making its finding that “Plaintiff has net monthly earnings of $3,482.07,” the trial
court appears to have included only the income plaintiff receives from her position as
a kindergarten teacher, and omitted the $1,300.00 it found that she was receiving at
the time from Appalachian State University. However, a review of this Court’s cases
makes clear that the trial court, when calculating a party’s income, must calculate
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Opinion of the Court
the income as it exists at the time of trial, not base its calculations on anticipated
future earnings.
For instance, in Savani, we found that the trial court’s finding that the plaintiff
had insufficient means to defray the expense of the action was supported by
competent evidence where the evidence showed that “[a]t the time of the hearing,
defendant had a gross income of $5,250.00 per month [and] [t]he plaintiff presented
evidence showing a gross income of $1,189.00 per month.” 102 N.C. App. at 503, 403
S.E.2d at 904-905 (emphasis added). In Lawrence, in considering a party’s claim for
attorney fees, this Court noted that “[t]he evidence reveals that Mother incurred legal
fees in connection with this action in the amount of $6741.00; that her monthly gross
income is $215.00 and that her monthly expenses exceed her gross income[.]” 107
N.C. App. at 153, 419 S.E.2d at 184 (emphasis added). We thus considered only her
current gross income and expenses. See also Hennessey v. Duckworth, 231 N.C. App.
17, 23, 752 S.E.2d 194, 199 (2013) (upholding an award of attorney fees where “the
trial court found that plaintiff is currently unemployed”) (emphasis added).
Here, plaintiff’s own testimony revealed that, at the time of the hearing, she
worked as a kindergarten teacher and a part-time adjunct professor at Appalachian
State University. She received a net monthly income of $3,482.07 as a kindergarten
teacher and $1,336.42 as a part-time professor, and thus had a total monthly income
of $4,818.49. The trial court’s finding that “Plaintiff has net monthly earnings of
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$3,482.07” is thus unsupported by the evidence. Though plaintiff testified she would
soon be leaving the university position in the following months, the trial court was
required to calculate plaintiff’s earnings as they existed at the time of the hearing,
not as they would allegedly stand in the future. We thus hold the trial court erred in
finding plaintiff had net monthly earnings of $3,482.07. Had the trial court correctly
calculated plaintiff’s monthly earnings from employment, the amount would have
exceeded her monthly expenses of $3,758.64, and the trial court may not have
concluded plaintiff had insufficient means to defray the costs of the action. See
Taylor, 343 N.C. at 55, 468 S.E.2d at 36 (upholding a denial of attorney fees where
the plaintiff’s income exceeded her expenses).
Though the dissent would affirm this matter on the basis there was no abuse
of discretion, we note that before this Court can apply that standard, we must first
address whether the trial court properly complied with the mandate of N.C. Gen.
Stat. § 50-13.6, which is a question of law subject to de novo review. In the case before
us, the trial court, in miscalculating plaintiff’s income by disregarding a substantial
portion of it, could not have properly determined whether plaintiff had “insufficient
means” to defray the costs of the suit under the statute. Moreover, our holding today
is not that the trial court could not have reasonably reached the same conclusion had
it properly calculated plaintiff’s income. Indeed, it is conceivable that the trial court
could have included the income plaintiff was currently receiving from Appalachian
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Opinion of the Court
State University and still concluded that she had insufficient means to defray the
costs of the suit if it found, for instance, that requiring plaintiff to pay her attorney’s
fees would result in the unreasonable depletion of her estate. See Lawrence, 107 N.C.
App. at 153-54, 419 S.E.2d at 185 (awarding attorney’s fees because the plaintiff’s
income was not sufficient to pay her legal expenses and she was “not required to
deplete her small estate in order to pay those expenses.”). However, that is not what
happened in this case. We thus hold that in determining whether a party is entitled
to attorney fees under N.C. Gen. Stat. § 50-13.6, the trial court must consider the
party’s income as it existed at the time of trial, and we remand on that basis. Because
we reverse on this ground, we decline to consider defendant’s other arguments.
III. Conclusion
For the foregoing reasons, we reverse the trial court’s order and remand for
further determination in a manner not inconsistent with this opinion.
REVERSED AND REMANDED.
Judge YOUNG concurs.
Judge DILLON dissents by separate opinion.
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No. COA20-106 –Sherrill v. Sherrill
DILLON, Judge, dissenting.
I do not believe that Judge Harrison abused his discretion by ordering
Defendant to pay attorneys’ fees in this case. Accordingly, I dissent.
The majority takes issue that Judge Harrison considered the fact that Plaintiff
was about to lose income she earned as an adjunct professor at Appalachian State
University because she was having to move away. She testified that her income as
an adjunct was sporadic and varied from semester to semester. Judge Harrison did
not ignore this income in his order, but made a finding as to what she was earning
when he entered the order in late November 2019. He also found, though, that this
income was about to end. I do not think it was an abuse of discretion for Judge
Harrison to consider this fact in considering whether Plaintiff had sufficient means
to defray her legal expenses.
The majority suggests that it is error for a trial court to consider anything other
than a party’s current income, without regard as to whether the income is likely to
be recurring. I disagree. What if the party was a real estate broker and earned a
one-time, large commission in the month of the hearing or if the party earned a one-
time capital gain?1 I believe it is appropriate for the trial court to consider that
1 By way of example, consider a party whose attorneys’ fees are $50,000.00 and normally
makes just enough to live on. If that party happens to earn a one-time $10,000 bonus in the month of
the hearing, I do not think it is an abuse of discretion for the trial court not to assume that the party
has $10,000 in excess income each month and could pay her attorney’s fees in five months. It would
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DILLON, J., dissenting
certain income is not likely to continue in exercising its discretion in determining
whether a party has the ability to pay her attorneys’ fees, so long as the trial court
does not ignore the fact that the party earned the non-recurring income, as occurred
here. Indeed, the statute requires the trial court to determine whether a party
seeking attorneys’ fees “has insufficient means to defray the expense of the suit.” N.C.
Gen. Stat. § 50-13.6 (2019).
Also, Defendant argues that the trial court should have considered the $900 of
child support that he was paying Plaintiff as part of Plaintiff’s income. Judge
Harrison did consider this income to find that Plaintiff’s income slightly exceeded her
expenses. But Judge Harrison also found that Plaintiff’s tax withholding was
increasing, which would reduce her net cash flow, a finding that was supported by
evidence in the record.2
Defendant, though, further argues that it was error for Judge Harrison to order
Defendant to defray Plaintiff’s attorneys’ fees where he made a finding that Plaintiff’s
income slightly exceeded her expenses. Defendant cites cases supporting this
proposition. However, in these cases, we simply held that it was not an abuse of
discretion for a trial court to deny a request for attorneys’ fees based on findings that
certainly be appropriate for the trial court to still award some amount of fees based on a finding,
supported by the evidence, that the party will not have excess income going forward.
2 Defendant notes that it was a non-CPA who testified that the withholdings were increasing.
However, Defendant does not argue that he objected to the testimony. Accordingly, it was not
inappropriate for Judge Harrison, as the fact-finder, to consider the testimony in making his findings.
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DILLON, J., dissenting
the party requesting the fees has income that exceeds her expenses. But those cases
do not hold that it would necessarily be an abuse of discretion for a trial court to
award attorneys’ fees in certain situations where the party may currently have a
slight surplus in her net income. And here, Judge Harrison found that Plaintiff’s
temporary surplus would be diminishing because of the increase in tax withholdings.
I, therefore, conclude that Judge Harrison’s order was not an abuse of
discretion. Perhaps other judges would not have ordered fees to be paid on the same
findings. But I do not believe that Judge Harrison exceeded his discretionary
authority.
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