Klein v. Klein ( 2023 )

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA22-378
Filed 3 October 2023
Mecklenburg County, No. 20 CVD 7320
KIMBERLY KLEIN, Plaintiff,
v.
GARY KLEIN, Defendant.
Appeal by defendant from order and judgment entered 8 October 2021 and
orders entered 10 January 2022 by Judge Tracy H. Hewett in District Court,
Mecklenburg County. Heard in the Court of Appeals 10 January 2023.
James, McElroy & Diehl, P.A., by Preston O. Odom, III and Haley E. White, for
plaintiff-appellee.
Law Office of Thomas D. Bumgardner, PLLC, by Thomas D. Bumgardner, for
defendant-appellant.
STROUD, Chief Judge.
Defendant-husband appeals from three orders. The first order and judgment
grants equitable distribution, awards child support to plaintiff-wife, and awards
alimony to plaintiff-wife. The other two orders distribute specific retirement plans
and were entered after defendant-husband’s notice of appeal from the first order. For
the reasons below, we affirm the judgment and order and two orders regarding
retirement plans.
I. Background
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Opinion of the Court
Defendant-husband (“Husband”) and plaintiff-wife (“Wife”) were married on
29 October 2005. During the parties’ marriage, the parties had one child, David,1
who was born in 2012. During the marriage, Husband practiced as a physician,
having obtained his license in 1992. Up until 2011, Husband alternated employment
with private healthcare companies and federal agencies, and from 2011 onward
Husband was employed primarily as a physician with the Department of Defense.
Wife is self-employed and a business owner, and since 2014 has worked on a part
time basis while caring for David. “Throughout the marriage[,]” Husband provided
the primary financial support for the family.
In April 2020, Wife’s uncle, whom she considered and referred to as her father,
passed away. Wife wanted to provide support to her aunt, “whom she considers her
mother and [David’s] grandmother[,]” who was living in Virginia. Wife wanted to
travel to visit her aunt, but Wife and Husband disagreed about whether Wife should
be able to travel to Virginia with David. Wife wanted to take David with her to
Virginia to maintain his home-schooling, and Husband was scheduled to fly out of
state in early May for an undetermined length of time. However, Husband generally
refused to discuss the possibility of Wife travelling to see her aunt. Wife, upset by
Husband’s unwillingness to discuss the matter, the death of her uncle, and some
other circumstances of the parties’ marriage, decided to travel to Virginia regardless.
1 A pseudonym is used.
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On 22 April 2020, while Husband was at work, Wife left for Virginia with
David. Wife also left a letter on Husband’s desk, letting him know that she and David
were on their way to Virginia, “expressing her unhappiness with their marriage, and
outlining the issues that both parties needed to work on in order to attempt to save
their marriage.” Wife’s letter “was not an intention to separate but clearly spelled
out the possibility of continuing to work on the marriage.” Wife said in her letter that
she was “not abandoning [Husband] and [she was] not going [to Virginia] for a long
time.” Wife’s letter “gave no indication that [Wife] was abandoning [Husband] and
taking the minor child.” Husband and Wife spoke on the phone twice on 22 April
2020, and during these conversations, Husband confirmed he received Wife’s letter.
While Wife and David were in Virginia, supporting Wife’s aunt and planning
her uncle’s funeral, Wife received a letter from an attorney representing Husband
which “accus[ed] [Wife] of absconding with [David] and threaten[ed] to seek
emergency custody.” Husband had not indicated to Wife during the 22 April 2020
phone calls that he believed Wife had absconded with David. Aside from alleging
Wife absconded with David, the letter from Husband’s attorney also stated “[u]pon
[Wife’s] return, it is [Husband’s] desire to begin the separation process.” Wife
retained an attorney in Virginia and through counsel informed Husband she would
be returning to Charlotte with David after her uncle’s funeral. At some point in early
May, Husband vacated the marital home, and Wife returned to the home with David.
On 26 May 2020, Wife filed a complaint in District Court, Mecklenburg County,
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alleging claims for temporary and permanent child custody, temporary and
permanent child support, postseparation support, alimony, equitable distribution
including an unequal share of the marital property and an interim distribution, and
attorney’s fees. Wife alleged the parties separated on 23 April 2020 “when [Husband]
expressed his desire to separate while” Wife and David were in Virginia, as discussed
above. Wife also alleged a pattern of marital misconduct, including sexual
misconduct, by Husband. On 15 June 2020, Husband filed a motion to change venue
from Mecklenburg County to Union County and an answer to the complaint. Among
other things, Husband denied that he initiated the parties’ separation but admitted
that a dispute had arisen between the parties. Husband also denied any allegations
of marital misconduct and denied Wife was entitled to alimony, an unequal
distribution of the marital property, an interim distribution, or postseparation
support. Husband asserted counterclaims for child custody, equitable distribution,
and attorney’s fees. Husband later voluntarily dismissed his motion for change of
venue.
On 1 October 2020, the trial court entered a consent order resolving the parties’
claims for postseparation support, temporary child support, temporary child custody,
and an interim distribution (“Consent Order”). The Consent Order awarded joint
legal custody of David, with Wife having primary physical custody and Husband
secondary physical custody of David. The Consent Order directed Husband to pay
Wife $1,373.46 per month in child support and $3,900 per month in postseparation
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support, to continue providing medical insurance for David and Wife, and to pay child
support and postseparation support arrears of $23,806.24. The Consent Order also
directed Husband to pay Wife an interim distribution of $65,000, pay the parties’ joint
2019 income tax liabilities, and reserved the issue of attorney’s fees.
The claims for child custody, child support, equitable distribution, and alimony
were heard 14 June 2021 through 16 June 2021. The trial court entered a written
order on 8 October 2021 (“First Order”). The First Order (1) granted primary legal
and physical custody of David to Wife and secondary physical custody to Husband,
(2) ordered Husband to pay Wife $1,166.62 per month in child support pursuant to
the North Carolina Child Support Guidelines, (3) ordered Husband to pay Wife
$3,685.25 per month in alimony from 14 June 2021 until 14 June 2028, and (4)
equitably distributed the parties’ marital property. The First Order included an
attached Child Support Guideline Worksheet showing the calculation of child support
and an exhibit summarizing the equitable distribution of the parties’ marital
property. As to Husband’s two federal retirement accounts, the trial court specifically
reserved distribution of these accounts for entry of two additional court orders, a
“Court Order Acceptable for Processing” and a “Qualifying Retirement Benefits Court
Order.”2
2 The trial court reserved distribution of Husband’s Thrift Savings Plan through a “Qualified
Retirement Benefits Court Order,” but later titled the order distributing Husband’s
retirement plan as a “Retirement Benefits Court Order.”
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Husband filed notice of appeal from the First Order on 22 October 2021. The
trial court entered the two orders distributing Husband’s federal retirement accounts
on 10 January 2022 and Husband filed separate notices of appeal from each of the
orders regarding retirement accounts on 7 February 2022.
II. Jurisdiction
Since the First Order did not entirely dispose of the parties’ claims, we must
first consider whether it is an interlocutory order and whether this Court has
jurisdiction to consider the appeal. The First Order fully resolved the claims of child
custody, child support, and alimony, but it did not fully resolve the equitable
distribution claims. As to Husband’s two retirement plans, in the other two orders,
the trial court identified the plans, classified the plans, and directed the division of
the plans but did not complete the distribution of the plans. Instead, the First Order
noted that the trial court would enter two additional orders to bring about the division
of the retirement plans, specifically a “Court Order Acceptable for Processing” for
Husband’s Federal Employees Retirement System Pension and a “Qualifying
Retirement Benefits Court Order” for Husband’s Thrift Savings Plan. Thus, the First
Order is an interlocutory order, as it did not fully dispose of the case “but leaves it for
further action by the trial court in order to settle and determine the entire
controversy.” Veazey v. City of Durham, 231 N.C. 357, 362, 57 S.E.2d 377, 381 (1950).
Generally, there is no right to appeal from an interlocutory
order.” Flitt v. Flitt, 149 N.C. App. 475, 477, 561 S.E.2d
511, 513 (2002) (citations omitted). However, in 2013, our
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General Assembly enacted section 50-19.1, which provides:
Notwithstanding any other pending claims
filed in the same action, a party may appeal
from an order or judgment adjudicating a
claim for absolute divorce, divorce from bed
and board, child custody, child support,
alimony, or equitable distribution if the order
or judgment would otherwise be a final order
or judgment within the meaning of [Section]
1A-1, Rule 54(b), but for the other pending
claims in the same action.
N.C. Gen. Stat. § 50-19.1 (2015).
Kanellos v. Kanellos, 251 N.C. App. 149, 151-52, 795 S.E.2d 225, 228 (2016) (emphasis
removed).
All the claims in this case fall under the scope of North Carolina General
Statute § 50-19.1, which allows immediate appeal of an order which is final as to some
claims but not as to other claims in the same action. See N.C. Gen. Stat. § 50-19.1(2021). The First Order was a final and immediately appealable order as to the claims
of child custody, child support, and alimony, and Husband timely appealed within
thirty days of entry of the First Order. See N.C. R. App. P. 3 (noting appeals must be
made within 30 days). Husband’s appeal from the First Order as to the claims of
child support and alimony is properly before this Court under North Carolina General
Statute § 50-19.1. See N.C. Gen. Stat. § 50-19.1.
But the First Order was not a final, appealable order as to the claim of
equitable distribution and Husband’s first notice of appeal did not deprive the trial
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court of jurisdiction to enter the additional orders distributing the retirement plans.
The First Order specifically directed that the trial court would enter two additional
orders distributing Husband’s federal retirement plans:
164. . . . [Husband’s] interest in the FERS Pension
is a marital asset. [Wife] shall be distributed and assigned
a share of [Husband’s] benefits under the FERS . . . by
means of a Court Order Acceptable for Processing (“COAP”).
....
165. [Husband] is a participant in the Thrift
Savings Plan . . . . From this account, [Wife] shall be
distributed fifty percent (50%) of the account balance . . . .
[Wife’s] share of the account shall be distributed to her via
a Qualifying Retirement Benefits Court Order (“QRBCO”)
prepared by [Wife’s] attorney.
(Emphasis added.) Despite Husband’s appeal filed on 22 October 2021, the trial court
retained jurisdiction to complete its adjudication of the equitable distribution claims
under North Carolina General Statute § 50-19.1: “An appeal from an order or
judgment under this section shall not deprive the trial court of jurisdiction over any
other claims pending in the same action.” N.C. Gen. Stat. § 50-19.1 (emphasis added).
The equitable distribution claim remained “pending in the same action” and
the trial court was not deprived of jurisdiction over the equitable distribution claim
by Husband’s appeal of the First Order. See N.C. Gen. Stat. § 50-19.1 The trial court
still had jurisdiction to enter the two orders distributing Husband’s retirement plans.
Husband also filed notice of appeal from these two orders within thirty days of entry
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Opinion of the Court
of the orders, so Husband’s appeal from the two retirement plan orders is properly
before this Court. See N.C. R. App. P. 3.
III. Equitable Distribution
We first note Husband’s brief raises an unusual number of issues. Although
he summarizes his arguments in five “Issues Presented” in the brief, these broad
statements of the issues actually contain at least fifteen sub-issues, touching on
nearly every aspect of the equitable distribution, alimony, and child support portions
of the First Order. We have attempted to address each argument for which Husband
has presented a cognizable argument based upon the record and legal authority. See
N.C. R. App. P. 28. We will begin with Husband’s challenges to the portion of the
First Order regarding equitable distribution.
A. Standard of Review
This Court reviews the trial court’s First Order and two orders regarding
retirement to determine if “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.” Stovall v.
Stovall, 205 N.C. App. 405, 407, 698 S.E.2d 680, 683 (2010) (citation omitted). “The
trial court’s unchallenged findings of fact are presumed to be supported by competent
evidence and are binding on appeal.” Peltzer v. Peltzer, 222 N.C. App. 784, 787, 732
S.E.2d 357, 360 (2012) (citation omitted).
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“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.” Hill v. Hill, 244 N.C. App. 219,
224, 781 S.E.2d 29, 34 (2015) (quotation marks omitted).3 “The classification of
property in an equitable distribution proceeding requires the application of legal
principles, and we therefore review de novo the classification of property as marital,
divisible, or separate.” Green v. Green, 255 N.C. App. 719, 724, 806 S.E.2d 45, 50
(2017) (quotation marks omitted).
The equitable distribution award is reviewed for an abuse of discretion:
A trial court is vested with wide discretion in family law
cases, including equitable distribution cases. Accordingly,
a trial court’s ruling in an equitable distribution award . . .
will be disturbed only if it is so arbitrary that [it] could not
have been the result of a reasoned decision.
Wright v. Wright, 222 N.C. App. 309, 311, 730 S.E.2d 218, 220 (2012) (brackets in
original) (citations and quotation marks omitted). “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 discretion.” Wiencek-Adams v. Adams, 331 N.C. 688, 691, 417 S.E.2d 449, 451
(1992) (citations omitted).
3 This case is named “Hill v. Sanderson, 244 N.C. App. 219, 781 S.E.2d 29 (2015)” in Westlaw
and the South Eastern Reporter, but “Hill v. Hill, 244 N.C. App. 219, 781 S.E.2d 29 (2015)”
in the North Carolina Court of Appeals Reports. Therefore, we will refer to this case as “Hill
v. Hill, 244 N.C. App. 219, 781 S.E.2d 29 (2015).”
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B. Analysis
Husband argues the trial court made numerous errors in classification and
distribution of the parties’ marital property. North Carolina General Statute § 50-20
governs the equitable distribution of marital and divisible property. See N.C. Gen.
Stat. § 50-20 (2021). “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.” Watson v. Watson, 261 N.C. App. 94, 97, 819 S.E.2d 595, 598 (2018).
“Furthermore, in doing all these things the court must be specific and detailed enough
to enable a reviewing court to determine what was done and its correctness.” Id.Husband specifically challenges several findings of fact and alleges six errors
the trial court committed when classifying and distributing the parties’ property.
Husband argues the trial court (1) erred by misclassifying a familial gift of money as
a loan and distributing the marital debt to Husband; (2) erred by misclassifying a gift
of money by Husband to his colleague as a loan and distributing the “loan[;]” (3) erred
by distributing one of Wife’s retirement accounts to Wife as separate property because
Wife failed to sufficiently trace the funds, and “[t]he entire contents of the account
were marital[;]” (4) erred by classifying the proceeds of a lawsuit as marital property
instead of distributing those proceeds to Husband in full as his separate property; (5)
erred by failing to credit Husband for postseparation payments Husband made on the
parties’ mortgage and joint tax liability and for Wife’s $65,000 interim distribution;
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and (6) erred by distributing Husband’s federal retirement benefits because the trial
court lacked subject matter jurisdiction to enter subsequent orders after Husband
filed his first notice of appeal.
1. Familial Loan
Husband first challenges finding of fact 170 as “not supported by competent
evidence.” (Capitalization altered.) Finding of fact 170 states:
170. Loan for Purchase of [the Marital Home]:
a. In 2011, [Wife] and [Husband] desired to
purchase a home located at . . . . They were unable to
obtain a mortgage on their own, so [Wife’s] aunt and uncle
(“the Kellys”) agreed to purchase the house for the parties.
The Kellys, [Husband], and [Wife] agreed that [Husband]
and [Wife] would lease the house from the Kellys and pay
the monthly mortgage payments until they were able to
purchase the house from them. The Kellys paid a down
payment of $110,000.00 for the purchase of the . . . home.
[Wife’s aunt] and [Husband] agreed that [Husband] would
repay the $110,000.00 down payment shortly after the
purchase of the . . . home.
b. After leasing the house for three (3) years, the
parties desired to purchase the house from the Kellys, but
[Husband] said they could not purchase the house
for fair market value, so the Kellys and [the parties]
agreed that the parties could purchase the . . .
residence for the original purchase price and the
Kellys gifted the equity of $84,000.00 to [Wife],
[Husband], and the minor child.
c. Unbeknownst to [Wife], the $110,000.00 loan
for the down payment was never repaid to the Kellys.
d. [Wife] contends the $110,000.00 loan is a debt
subject to equitable distribution.
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e. [Husband] initially contended that the
$110,000.00 was a gift from the Kellys and not subject
to equitable distribution. [Husband] testified that
he never told anyone that he would pay back the
$110,000.00. However, [Wife] introduced an email from
the mortgage lender to Mrs. Kelly which stated: “I talked
to [Husband] after talking with you. He would be prepared
to repay you the monies you will have to expend for the down
payment and closing costs (as evidenced on the attached
Itemized Fee Worksheet). He could give these monies to you
immediately after closing.”
f. The Court finds [Husband’s] contention
that the $110,000.00 was a gift is not credible.
g. [Husband] testified that he has a moral
obligation to repay the $110,000.00 loan, but not a
legal obligation because the loan was not
memorialized in writing.
h. [Husband] ultimately changed his
testimony and testified that the $110,000.00 from the
Kellys was a loan.
i. The Court finds that the $110,000.00 loan
from the Kellys is a marital debt that should be distributed
to [Wife].
(Bolding added, italics in original).
We first note that subsections (a) through (h) of finding 170 are findings of fact.
“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.” Stovall, 205 N.C.
App. at 407, 698 S.E.2d at 683. The classification of the loan as marital in subsection
(i) is a conclusion of law, which we review de novo. See Green, 255 N.C. App. at 724,
806 S.E.2d at 50. This conclusion of law must be supported by written findings of
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fact. See Hunt v. Hunt, 112 N.C. App. 722, 729, 436 S.E.2d 856, 861 (1993).
In his challenge to the findings of fact in subsections (a) through (h), Husband’s
argument mostly addresses conflicting evidence as to the intentions of the parties,
the intentions of the Kellys, and the circumstances of the payment of the $110,000 by
the Kellys, but the trial court has the duty to consider the credibility of the evidence
and to resolve those conflicts in the evidence. See Williamson v. Williamson, 217 N.C.
App. 388, 392, 719 S.E.2d 625, 628 (2011) (“Because the trial court is in the best
position to weigh the evidence, determine the credibility of witnesses and the weight
to be given their testimony, we refuse to re-weigh the evidence on appeal.” (quotation
marks and brackets omitted)). The trial court found Husband’s claims about the loan
not to be credible. We cannot second-guess the trial court’s finding as to Husband’s
credibility in finding of fact 170(f). See id.Husband’s only specific substantive argument as to a lack of competent
evidence supporting finding 170 addresses the reference to the email from the
mortgage lender referenced in subsection (e). But even if we were to assume the trial
court should have sustained Husband’s objection to admission of the email as
evidence, and thus the portion of finding 170(e) referring to the contents of the email
was not supported by the evidence, the rest of finding 170 is supported by the
evidence.
Subsection (h) finds that Husband “ultimately changed his testimony and
testified that the $110,000.00 from the Kellys was a loan.” This finding is supported
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by the evidence. Husband initially testified the $110,000 from the Kellys was a gift,
and the parties “[n]ever borrowed” the money. However, during cross-examination,
the trial court had to repeatedly remind Husband to answer the questions he was
asked. Eventually, after being reminded he was under oath, Husband changed his
testimony and testified that he and Wife did, in fact, borrow $110,000 from the Kellys
for the purchase of the marital home. Husband then testified that, although he
acknowledged the parties borrowed the money, it was his “position that because there
was no legal instrument memorializing [the obligation to repay the loan], that [he
didn’t] have a legal obligation to repay” the $110,000 loan, only a moral obligation to
do so.
The remainder of Husband’s argument regarding finding of fact 170 addresses
the trial court’s classification of the payment as a loan, which we review de novo. See
Green, 255 N.C. App. at 724, 806 S.E.2d at 50. Husband, quoting Geer v. Geer, argues
“[l]oans from close family members must be closely scrutinized for legitimacy.” See
Geer v. Geer, 84 N.C. App. 471, 475, 353 S.E.2d 427, 430 (1987). Husband also argues
the “loan” was not “an obligation recognized by law” because there was no written
agreement signed by the parties. Husband cites no apposite legal authority to
support his argument there must be a written agreement to support a marital debt.4
4 While, as cited by Husband, Geer indicates that who is legally liable for a debt is a concern
that the trial court must remain cognizant of, see Geer, 84 N.C. App. at 475, 353 S.E.2d at
429, we note this Court has declined to extend the rationale in Geer and concluded the
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The case Husband cites for this proposition, Lewis v. Lester, is inapposite; it deals
with an agreement to transfer land and states: “It is settled law in North Carolina
that an oral contract to convey or to devise real property is void by reason of the
statute of frauds (G.S. § 22-2).” Lewis v. Lester, 235 N.C. App. 84, 87, 760 S.E.2d 91,
93 (2014).
Further, in Geer, the wife argued that “unsecured debts do not qualify as
marital property as defined in G.S. 50-20(b)(1) and therefore are not subject to
distribution by the court.” Geer, 84 N.C. App. at 475, 353 S.E.2d at 429. This Court
rejected this argument and affirmed the trial court’s classification of a debt to the
husband’s parents as a marital debt. Id. at 476, 353 S.E.2d at 430. Indeed, in Geer,
the evidence supported the trial court’s finding that
the parties borrowed $5,000.00 from defendant’s parents in
1970 for the purchase of a mobile home with the promise
that it would be repaid with interest. There is also evidence
to show that subsequently the parties bought defendant’s
parents’ Peugeot automobile by paying them $800 at the
time of the purchase and promising to pay the balance of
$3,700.00 plus 6% interest at a later time. Plaintiff did not
deny the existence or amount of the loan from defendant’s
parents in her testimony. This evidence is sufficient to
support the court’s finding that the loans from defendant’s
parents were legitimate debts and that the value of the two
enforceability of a loan is but a distributional factor to be considered in the trial court’s
discretion. See Mrozek v. Mrozek, 129 N.C. App. 43, 47, 496 S.E.2d 836, 839 (1998) (“Plaintiff
additionally argues that ‘loans from close family members must be closely scrutinized for
legitimacy.’ However, any concerns the trial court may have with respect to the fact that this
marital debt is owed to defendant’s parents or that defendant is the sole signatory and may
have an affirmative defense to repayment are more properly treated as distributional
factors.”) (citations omitted)
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debts totaled at least $9,000.00, inclusive of interest;
therefore, this finding of fact is conclusive on appeal.
Id. (emphasis added).
“Marital debt is one incurred during the marriage and before the date of
separation by either spouse or both spouses for the joint benefit of the parties.”
Comstock v. Comstock, 240 N.C. App. 304, 317, 771 S.E.2d 602, 612 (2015) (quotation
marks omitted). The trial court’s findings of fact support its classification of the
$110,000 as a marital debt. It was incurred during the marriage and before the date
of separation. It was used to purchase the marital home of the parties; this purchase
was clearly for the joint benefit of the parties. Husband ultimately admitted that the
$110,000 was a loan from the Kellys to purchase the parties’ marital home. The trial
court did not err by classifying the $110,000 from the Kellys as a loan, not a gift, and
a marital debt subject to distribution.
2. Loans to Husband’s Colleague
Husband next purports to challenge findings of fact 181, 184, and 185 as
unsupported by competent evidence, but Husband’s argument solely focuses on
finding of fact 181.5 See N.C. R. App. P. 28(b)(6) (“Issues not presented in a party’s
brief, or in support of which no reason or argument is stated, will be taken as
5 We also note finding of fact 184 is a conclusion of law that simply states an equal
distribution is equitable , see In re Helms, 127 N.C. App. 505, 510-11, 491 S.E.2d 672, 675-76
(1997), and finding 185 states the trial court attached and incorporated a chart summarizing
the distribution of the parties’ property.
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abandoned.”). Finding of fact 181 states:
181. During the marriage, [Husband] loaned
money to [Husband’s colleague] on two (2) occasions. The
total amount loaned to [Husband’s colleague] was
$15,000.00. [Husband] discussed the first loan with [Wife]
and the parties agreed to loan [Husband’s colleague]
$5,000.00. [Husband] told [Wife] that [Husband’s
colleague] would repay the money once he was able to.
[Husband] did not discuss the second loan of $10,000.00
with [Wife] prior to making the loan to [Husband’s
colleague]. Both loans were made from [Husband’s] SECU
Money Market Account # . . . . The Court finds that
[Husband’s] right to repayment of the $15,000.00 loan to
[Husband’s colleague] is a marital asset, is valued at
$15,000.00, and should be distributed to [Husband].
Husband argues finding of fact 181 is not supported by competent evidence.
Similar to the familial loan in finding of fact 170, Husband argues there was
insufficient evidence to classify the payment as a loan since there was no written
agreement memorializing the debt between the parties and Husband’s colleague, and
Wife could not testify as to any terms associated with the loan. Husband does not
argue that the payments were not made from a marital account or during the parties’
marriage.
There is competent evidence in the record to support the trial court’s findings
regarding the circumstances of the loan to Husband’s colleague. Wife testified the
parties made two payments to Husband’s colleague. Wife testified Husband told her
about the first $5,000 payment to Husband’s colleague and that she “thought it was
a loan . . . . [She] thought [Husband’s colleague] was going to pay it back.” (Emphasis
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added.) When asked whether Husband told her it was a loan, Wife testified she
believed he told her that. Wife also testified Husband did not discuss the second
$10,000 payment to Husband’s colleague with her, and she was unaware of any
“arrangements [Husband] and [his colleague] had with one another about the second
$10,000 payment[.]” Husband did not deny that he paid $15,000 to his colleague, but
he testified it was a gift to help fund the colleague’s needs and educational expenses,
and he never expected his colleague to pay the money back.
Again, the trial court had to make a credibility determination between the
parties. See Williamson, 217 N.C. App. at 392, 719 S.E.2d at 628. The testimony
presented as to these payments is more ambiguous than the testimony regarding the
loan from the Kellys, but there is nevertheless competent evidence to support the trial
court’s finding characterizing the payments to Husband’s colleague as a loan and not
a gift. There was competent evidence as to the purpose of the payments. See
generally Stovall, 205 N.C. App. at 407, 698 S.E.2d at 683 (noting competent evidence
is needed to support the trial court’s findings of fact). The parties received no
property or benefit from the colleague in return for the funds, but based upon Wife’s
testimony, the payment was a loan and the parties expected the colleague to repay
the loan. Husband’s arguments as to the enforceability of the loan, again, do not
change the classification of the loan; the enforceability of the loan was but a
distributional factor to be considered by the trial court. See Mrozek v. Mrozek, 129
N.C. App. 43, 47, 496 S.E.2d 836, 839 (1998).
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3. Charles Schwab IRA
Husband next argues finding of fact 168 is not supported by competent
evidence. Finding of fact 168 states:
168. [Wife] is the owner of a Charles Schwab IRA
(formerly USAA Traditional IRA . . .), which has marital
and separate components. The total balance on the date of
separation was $120,253.00. The total current balance is
$153,086.00. [Wife] presented compelling, credible
evidence tracing the source of funds held in the Charles
Schwab IRA, which showed that only twenty nine percent
(29%) of the balance of the Charles Schwab IRA is marital
and the remaining seventy one percent (71%) is [Wife’s]
separate property resulting from her employment at the
University of Pennsylvania, which ended in 1998. Twenty
nine percent (29%) of the current balance of the Charles
Schwab IRA equals $44,395, which should be distributed
to [Wife]. The remaining balance of $108,691.00 shall be
and remain [Wife’s] separate property.
First, Husband does not challenge the finding as to the total values of the
account. Husband contends there was “insufficient competent evidence” to classify
any portion of the IRA as Wife’s separate property. We accordingly narrow our review
of finding 168 to whether there is competent evidence to support the finding that the
account “has marital and separate components.” Stovall, 205 N.C. App. at 407, 698
S.E.2d at 683.
Once again, Husband’s primary argument is based mainly upon an objection
to introduction of evidence presented at trial which he characterizes as a “letter
prepared by her attorney.” Wife referred to this letter during her testimony regarding
the IRA. When the letter was first mentioned, Husband objected to certain
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statements in the letter as hearsay. However, later in the trial, Wife presented
additional testimony regarding the letter, as well as the 335 pages of account
statements that accompanied the letter, without any objection from Husband.
Husband did not renew his objection to any statements in the letter during Wife’s
extensive testimony regarding her contributions to the IRA prior to and during the
marriage at this point in the trial, and he never objected to the account statements
with the letter.6 Husband has therefore waived any argument on appeal as to Exhibit
44. See generally State v. Shamsid-Deen, 324 N.C. 437, 445, 379 S.E.2d 842, 847
(1989) (“Any benefit of the prior objection was lost by the failure to renew the
objection, and defendant is deemed to have waived his right to assign error to the
prior admission of the evidence.”).
The trial court’s findings are supported by the evidence. Wife testified the
funds in the Charles Schwab account began “as a TIAA-CREF account” when she
worked at the University of Pennsylvania, prior to the parties’ marriage. Wife
testified that she made no other contributions after she left the University. Then, in
2010, Wife transferred the balance of the TIAA-CREF account to Fidelity; the entire
balance was her separate property. Then, also in 2010, Wife opened up her USAA
retirement account and moved the funds in the Fidelity account to the USAA account.
6 When the trial court was reviewing the exhibits which had been admitted later in the trial,
Husband again “noted for the record” without elaboration his original objection to the letter
in Exhibit 44.
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Opinion of the Court
From 2011 through 2018, relatively small, recurring annual transfers were made
from the TIAA-CREF account to the USAA account; Wife testified that “the way the
contract worked,” the TIAA-CREF balance “could only come over in small payments
at a time[.]”
Further, Wife then testified while the account was at USAA, and during the
parties’ marriage, she made contributions to the account. In 2014, Wife transferred
her balance from a retirement account she contributed to while working at Novant
Health to the USAA account; Wife testified that the Novant Health funds created a
marital component in the USAA account. Wife also testified “69 percent of the total
deposits were separate, and 29 percent of the total deposits were marital[,]” and that
there was an additional 2% separate component from the small, recurring TIAA-
CREF transfers. The portions of finding of fact 168 regarding the marital and
separate components of the account are supported by competent evidence. See
Stovall, 205 N.C. App. at 407, 698 S.E.2d at 683.
4. Lawsuit Proceeds
Husband next challenges findings of fact 125 to 141 regarding classification of
proceeds of a lawsuit by Husband during the marriage and contends these findings
were not supported by competent evidence, but his argument does not actually
challenge the findings of fact. Instead, Husband argues the trial court erred by
classifying the lawsuit proceeds as marital instead of separate. Since Husband does
not challenge the findings of fact, they are binding on this Court. See Peltzer, 222
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N.C. App. at 787, 732 S.E.2d at 360 (noting unchallenged findings of fact are binding
on this Court).
Findings of fact 125 through 141 state:
125. Regarding the legal settlement and
[Husband’s] contention that the settlement proceeds are
his separate property, the Court finds that [Husband]
failed to meet his burden to prove that the settlement
proceeds are his separate property.
126. [Husband] failed to prove that the settlement
proceeds were to compensate for an injury or damages that
were personal to him. Instead, the preponderance of the
evidence shows that the efforts in the lawsuit were to
protect the plaintiffs’ income earning abilities while he was
married to [Wife].
127. Moreover, the settlement agreement failed to
allocate specific amounts for specific types of damage and
waived all claims–whether marital or separate.
128. In 2010, [Husband] and three other
physicians were dismissed from the American Association
of Physician Specialists (“AAPS”). As a result, they
retained . . . a law firm in Glen Allen, VA.
129. [Wife] was involved in the discussions with
attorneys at [the Virginia law firm], and the other
Plaintiffs/physicians in the case. The money [Wife] earned
through mEDhealth went to pay legal fees related to
[Husband’s] dismissal from the AAPS.
130. [The Virginia law firm] referred the case to G.
Donovan “Don” Conwell, an attorney in Florida.
131. The Court heard testimony from Attorney
Conwell. The Court also heard testimony from Dr. Castillo,
who was the lead plaintiff in the lawsuit against the AAPS.
132. Attorney Conwell testified, and the Court so
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Opinion of the Court
finds, that one objective of the lawsuit was to reinstate the
physicians in the AAPS. To that end, he filed a motion for
summary judgment to reinstate the physicians in the
AAPS, and the motion for summary judgment was granted.
The AAPS appealed, forcing Attorney Conwell and the
physicians to defend against the appeal. Attorney Conwell
and the physicians prevailed on appeal and were
reinstated to the AAPS.
133. Attorney Conwell testified, and the Court so
finds, that the lawsuit generally stated a demand for
damages for lost income, among other things. The case
settled upon a total amount to be paid and split between
the four physicians. There was no delineation of the award
for different injuries.
134. There was no evidence presented showing
that a portion of the settlement was intended to
compensate for a particular category or categories of
damages.
135. Dr. Castillo testified, and the Court so finds,
that as a result of being dismissed from the AAPS, the
physicians could not hold themselves out as being board
certified by the AAPS, and the lawsuit enabled them to
keep their certifications and licenses so that they were able
to continue to work and earn an income.
136. The physicians sought an injunction to
prevent the loss of their board certification and licensure.
137. The loss of the physicians’ board certification
would greatly impact their ability to work and earn an
income; it would result in the loss of the physicians’ ability
to practice their respective specialties.
138. Dr. Castillo testified, and the Court so finds,
that without the injunction, he would have lost not only his
licensure and his ability to serve and practice at his
hospital, but the ability to participate with most insurance
plans is dependent on licensure.
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Opinion of the Court
139. [Husband] received $587,063.63 from the
settlement and deposited into his SECU Account # . . . . Of
that, $325,463.48 went to reimbursing Dr. Castillo for
fronting legal fees for [Husband].
140. Based on the above, [Husband] failed to meet
his burden to show that the settlement proceeds are his
separate property.
141. However, even if [Husband] had met his
burden to show that the settlement proceeds are his
separate property, [Husband] failed to trace the funds held
in SECU Account # . . . on the date of separation back to
the funds received from the legal settlement.
Based upon the findings of fact, Husband and other physicians brought the
lawsuit to prevent the loss of their board certification and licensure because the loss
of board certification would “greatly impact [their] ability to work and earn an
income[.]” Yet Husband’s argument on appeal relies upon cases dealing with
classification of proceeds from personal injury claims. Husband notes that North
Carolina applies the “analytic approach” by focusing on what the proceeds are
intended to replace.
The analytic approach asks what the award was intended
to replace, and has been adopted by statute or case law in
eight of the nine community property states. Generally,
under the analytic approach the personal injury award
may be seen as composed of three potential elements of
damages: (1) those compensating the injured spouse for
pain and suffering, disability, disfigurement, or lost limbs;
(2) those compensating for lost wages, lost earning
capacity, and medical and hospital expenses; and (3) those
compensating the non-injured spouse for loss of services or
loss of consortium.
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Opinion of the Court
Johnson v. Johnson, 317 N.C. 437, 446-47, 346 S.E.2d 430, 435-36 (1986) (brackets in
original) (citations and footnotes omitted).
Ignoring the trial court’s unchallenged findings regarding the purpose of the
lawsuit – to protect Husband’s certification to practice and his ability to earn income
as a physician – Husband argues “[t]he overwhelming evidence established the
primary claim in [the] lawsuit was for defamation – personal injury to [Husband’s]
reputation and character.” Husband points to evidence he presented regarding injury
to his reputation and his “emotional distress and mental anguish.” But even if the
trial court’s unchallenged findings were not binding, and even if there was evidence
that Husband made claims for “emotional distress and mental anguish,” the trial
court’s findings of fact are supported by competent evidence. See Stovall, 205 N.C.
App. at 407, 698 S.E.2d at 683. The trial court found Husband failed to carry his
burden of proving the settlement proceeds were his separate property because he
“failed to prove that the settlement proceeds were to compensate for an injury or
damages that were personal to him.” See O’Brien v. O’Brien, 131 N.C. App. 411, 418,
508 S.E.2d 300, 305 (1998) (discussing the parties’ “dual burdens of proof” as to
classification of marital property).
Contrary to Husband’s characterization of his lawsuit, the evidence presented
at trial overwhelmingly indicates that the purpose of this suit was to seek an
injunction reinstating Husband’s status with the professional organization, because
without membership and certification by the organization, he would risk loss of his
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Opinion of the Court
license and be unable to continue practicing medicine. While the plaintiffs, including
Husband, had asserted a claim that included damages for non-economic loss, the
claim also asserted damages for economic loss, and the settlement simply grants a
sum of money but does not specify for which claims and what type of damages the
award is intended to address. Wife testified that this money was acquired during the
marriage, and both Wife and Dr. Castillo, a co-plaintiff, testified this lawsuit was to
recover compensation for economic loss; these findings are therefore supported by
competent evidence. See generally Stovall, 205 N.C. App. at 407, 698 S.E.2d at 683.
Husband’s argument is overruled.
5. Credit for Payments Toward Marital Debt
Husband next argues he was not given proper credit for payments he made to
the parties’ joint tax liability of $27,000.7 Husband agreed to pay the parties’ 2019
joint income tax liability in the Consent Order, and he asserts he was entitled to a
credit for paying Wife’s share of the parties’ joint 2019 tax liability from his separate
property, as the taxes were paid from Husband’s SECU account.
Husband’s argument is based upon his claim that the funds in the SECU
account were his separate property. We have already addressed the classification of
7 We note Husband asserts the Consent Order “required [Husband] to pay the parties’ joint
tax liability in the amount of $27,087.23.” However, the interim distribution order does not
state the amount that Husband was required to pay; the order simply states that whatever
tax liability resulted from the parties’ joint 2019 taxes were to be paid from Husband’s SECU
account.
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Opinion of the Court
the funds in the SECU account as marital; this account held the proceeds of the
lawsuit discussed above. Husband contended the proceeds were his separate
property, but as addressed above, the trial court properly held the proceeds in the
SECU account were marital property. Thus, Husband paid the 2019 tax liability – a
marital obligation – from the SECU account and he paid it from marital funds, not
from his separate funds. Husband’s argument that he did not receive a credit or offset
for post-separation payments is without merit. See generally Bodie v. Bodie, 221 N.C.
App. 29, 34, 727 S.E.2d 11, 15 (2012) (“A spouse is entitled to some consideration, in
an equitable distribution proceeding, for any post-separation payments made by that
spouse (from non-marital or separate funds) for the benefit of the marital estate.”
(emphasis added) (quotation marks omitted)).
6. Federal Retirement Benefits
Husband’s final argument as to the equitable distribution is that the trial court
was without jurisdiction to enter the two orders distributing his federal retirement
benefits after his notice of appeal from the First Order, or in the alternative, that
these orders violate North Carolina and federal law. We have already addressed
Husband’s argument regarding jurisdiction of the trial court above; the trial court
had jurisdiction to enter the orders under North Carolina General Statute § 50-19.1.
See N.C. Gen. Stat. § 50-19.1. We have also previously addressed Husband’s
arguments regarding the substance of the equitable distribution contained in the
First Order, and we have affirmed the equitable distribution provisions in the First
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Opinion of the Court
Order. The First Order directed the entry of the two retirement plan orders.
Husband has not raised any argument that the two retirement plan orders failed to
comply with the provisions of the First Order.
Husband’s alternative arguments – perhaps they may be better characterized
as general statements of objections – regarding the two retirement plan orders are
presented in one-half of a page in his brief. These arguments are generally that the
two orders “are not supported by competent evidence” and that they do not correctly
address any “post separation salary adjustments.”
Husband has not identified any specific findings of fact in the two orders he
challenges as unsupported by the evidence, nor has he presented any specific
argument regarding the conclusions or decrees of the two orders. Husband has
consequently waived any challenges to the findings and conclusions in these orders,
and we therefore affirm the two orders, Court Order Acceptable for Processing and
Retirement Benefits Court Order. See generally Eaton v. Campbell, 220 N.C. App.
521, 522, 725 S.E.2d 893, 894 (2012) (“Because defendants’ limited and unsupported
arguments give us no reason to disturb the trial court’s judgment in which its
conclusions of law are supported by its findings of fact which are, in turn, supported
by the record evidence, . . . we affirm.” (citation omitted)).
IV. Child Support
Husband next challenges the portion of the First Order establishing child
support and argues the child support provisions of the First Order should be reversed
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Opinion of the Court
because these provisions were “not entered in accordance with the Child Support
Guidelines.” (Capitalization altered.) For the reasons below, the trial court correctly
applied the Child Support Guidelines and did not abuse its discretion.
A. Standard of Review
Generally, “[c]hild support orders entered by a trial court are accorded
substantial deference by appellate courts and our review is limited to a determination
of whether there was a clear abuse of discretion.” Ferguson v. Ferguson, 238 N.C.
App. 257, 260, 768 S.E.2d 30, 33 (2014) (quotation marks omitted). “Under this
standard of review, the trial court’s ruling will be overturned only upon a showing
that it was so arbitrary that it could not have been the result of a reasoned decision.”
Id. “The trial court must, however, make sufficient findings of fact and conclusions
of law to allow the reviewing court to determine whether a judgment, and the legal
conclusions that underlie it, represent a correct application of the law.” Id.In a child support proceeding, “our review of the trial court’s findings is limited
to whether those findings are supported by competent evidence in the record.” Kaiser
v. Kaiser, 259 N.C. App. 499, 510, 816 S.E.2d 223, 231 (2018) (citations omitted).
“Findings of fact made by the trial judge are conclusive on appeal if supported by
competent evidence, even if there is evidence to the contrary.” Johnson v. Johnson,
259 N.C. App. 823, 827, 817 S.E.2d 466, 471 (2018) (quotation marks omitted).
Conclusions of law are reviewed de novo, and “[i]f the trial court labels a conclusion
of law as a finding of fact, the appellate court still employs de novo review.” Thomas
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Opinion of the Court
v. Burgett, 265 N.C. App. 364, 367, 852 S.E.2d 353, 356 (2019) (citations omitted).
B. Analysis
Child support is governed by North Carolina General Statute § 50-13.4. See
N.C. Gen. Stat. § 50-13.4 (2021). As noted by Husband:
Payments ordered for the support of a minor child shall be
in such amount as to meet the reasonable needs of the child
for health, education, and maintenance, having due regard
to the estates, earnings, conditions, accustomed standard
of living of the child and the parties, the child care and
homemaker contributions of each party, and other facts of
the particular case.
N.C. Gen. Stat. § 50-13.4(c). Here, child support was determined by “applying the
presumptive [child support] guidelines[,]” N.C. Gen. Stat. § 50-13.4(c), and the trial
court incorporated Worksheet B, calculating child support under the Guidelines, and
attached it to the First Order.8 See N.C. Gen. Stat. § 50-13.4(c1) (requiring the
prescription of “uniform statewide presumptive guidelines for the computation of
child support obligations”).
Husband argues the trial court failed to follow the Guidelines and (1) erred in
calculating Wife’s gross income, (2) erred by assigning some expenses as childcare
costs, and (3) erred by requiring Husband to pay education expenses. Husband
8 The North Carolina Child Support Guidelines use standardized worksheets to calculate a
child support obligation. See N.C. Child Support Guidelines, AOC-A-162, at 5 (2020).
Worksheet B is published by the North Carolina Administrative Office of the Courts, Form
AOC-CV-628. See Worksheet B Child Support Obligation Joint or Shared Physical Custody,
AOC-CV-628 (2020).
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Opinion of the Court
argues these findings, as well as those findings that rely upon the unsupported or
erroneous findings, should be vacated and the trial court abused its discretion in
entering the child support portion of the Order. For the reasons below, the trial court
did not abuse its discretion when entering the child support provisions of the First
Order.
1. Wife’s Gross Income
Husband first argues the trial court failed to calculate Wife’s gross income, as
defined by the Child Support Guidelines. “[D]eterminations of gross income are
conclusions of law reviewed de novo.” Thomas, 265 N.C. App. at 367, 852 S.E.2d at
356. The North Carolina Child Support Guidelines define “gross income” as “actual
gross income from any source,” including “self-employment . . . ownership or operation
of a business . . . and annuities.” N.C. Child Support Guidelines, AOC-A-162, at 3
(2020). “When income is received on an irregular, non-recurring, or one-time basis,
the court may average or prorate the income over a specified period of time[.]” Id.
Additionally, “[t]he court must determine the parent’s gross income as of the time the
child support order was originally entered, not as of the time of remand nor on the
basis of the parent’s average monthly gross income over the years preceding the
original trial.” State ex rel. Midgett v. Midgett, 199 N.C. App. 202, 207, 680 S.E.2d
876, 879 (2009) (citations, quotation marks, and brackets omitted).
The trial court only made one finding regarding Wife’s gross income in the First
Order: “[Wife] is self-employed as a consultant . . . . She earns a total gross monthly
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Opinion of the Court
income of $6,861.25, which is comprised of $6,630.00 wages/salary; $165.00 business
income; and $66.25 from cosmetic sales for LimeLife.” This finding is consistent with
Wife’s 4 June 2021 financial affidavit and her testimony at trial. Husband argues
the trial court (1) failed to account for pension and annuity payments Wife received
in 2020 and (2) failed to make findings regarding ordinary and necessary business
expenses from Wife’s self-employment income. We first address Wife’s pension and
annuity payments.
Husband argues the trial court erred because Wife listed $46,512 received as
distributions from pensions and annuities on her 2020 individual tax return, which
was absent from Wife’s 2021 financial affidavit, and the trial court’s First Order does
not account for any of Wife’s pensions and annuities income. Wife’s financial
affidavit, in and of itself, is competent evidence. See Rea v. Rea, 262 N.C. App. 421,
427, 822 S.E.2d 426, 431 (2018) (noting the wife’s financial affidavit is competent
evidence). As to the $46,512 in annuities Wife claimed on her 2020 taxes, but the
trial court did not find as income, Wife testified she “cashed in an annuity in order to
pay off some of [her] bills and credit card debt that [she] had as mostly legal fees and
some other purchases[.]” Wife testified the $46,512 was withdrawn from a pension
retirement account she cashed in to pay her legal bills, and also testified that the
$46,512 was “cashed out of [her] IRA[.]” Regardless of the exact account the $46,512
was withdrawn from, there was evidence in the record to show that the $46,512 was
a non-recurring, one-time early withdrawal from one of Wife’s retirement accounts.
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Opinion of the Court
The trial court is not required to treat the conversion of an asset into cash as
income for purposes of a child support calculation. Depending upon the evidence in
the particular case, the trial court has the discretion to treat a non-recurring, early
withdrawal from a retirement account as income for purposes of child support, but
here, Husband has failed to demonstrate any abuse of discretion in the trial court’s
findings as to Wife’s income. See McKyer v. McKyer, 179 N.C. App. 132, 144, 632
S.E.2d 828, 835 (2006) (applying the 2006 Child Support Guidelines). “[T]he mere
fact that a non-recurring payment has occurred, in the absence of evidence that the
payment was ‘income’ at all, is alone insufficient to establish that the payment was
necessarily non-recurring income.” Id. Here, similar to McKyer, Husband simply
asserts “[t]he trial court did not make findings to reflect how often [Wife] receives
such irregular or non-recurring income as required by the guidelines[,]” but Husband
“makes no argument as to why receipt of the [payment] constitutes ‘income.’” Id.Additionally, although the Guidelines require “current income must be
supplemented with copies of the most recent tax return to provide verification of
earnings over a longer period[,]” N.C. Child Support Guidelines, AOC-A-162, at 3
(2020), “this Court has established that child support obligations are ordinarily
determined by a party’s actual income at the time the order is made or modified.”
Holland v. Holland, 169 N.C. App. 564, 568, 610 S.E.2d 231, 234 (2005) (quotation
marks and emphasis omitted). Wife’s tax return was filed in April 2021, based on her
income from the year prior to entry of the First Order. Wife then filed an updated
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Opinion of the Court
financial affidavit on 4 June 2021. The hearing on the parties’ claims took place 14
June 2021 through 16 June 2021, and the trial court entered its First Order on 8
October 2021.
Here, the trial court had competent evidence of Wife’s income in 2021
available, and the trial court did not err by utilizing the most recent figures from the
current year to calculate Wife’s income. See Rea, 262 N.C. App. at 427, 822 S.E.2d at
431; Holland, 169 N.C. App. at 568, 610 S.E.2d at 234. The trial court did not err by
entering a finding without accounting for Wife’s retirement withdrawal when the
trial court applied the Guidelines, using Wife’s current income, because “[u]nder the
Child Support Guidelines, [c]hild support calculations . . . are based on the parents’
current incomes at the time the order is entered.” Midgett, 199 N.C. App. at 207, 680
S.E.2d at 879 (quotation marks and emphasis omitted). Husband’s arguments as to
the trial court’s treatment of Wife’s early retirement withdrawal are overruled.
Husband also argued the trial court erred in determining Wife’s gross income
by “failing to make findings regarding the ‘ordinary and necessary’ expenses incurred
for self-employment or operation of a business.” The Guidelines define “[g]ross
income from self-employment . . . as gross receipts minus ordinary and necessary
expenses required for self-employment or business operation.” N.C. Child Support
Guidelines, AOC-A-162, at 3 (2020). “Expense reimbursements or in-kind payments
. . . received by a parent in the course of employment, self-employment, or operation
of a business are counted as income if they are significant and reduce personal living
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Opinion of the Court
expenses.” Id.Husband asserts the trial court failed by making findings as to Wife’s “ordinary
and necessary” business expenses because Wife paid for “regular business expenses
like internet, phone, [her] computer, support, and some legal fees” through her
business but the trial court made “no findings regarding the reasonableness of these
expenses in the determination of [Wife’s] income.” Husband notes “the trial court
received substantial evidence regarding mEDhealth’s profits and losses” upon which
such findings could be made. However, Husband does not clearly articulate an
argument. Husband does not identify any specific unreasonable expense the trial
court might have disregarded nor does he state how the trial court should have
treated any specific expense.
Additionally, Husband’s argument is somewhat baffling, since Wife’s gross
income would be reduced by deduction of these alleged business expenses from her
business income, leaving Wife with a lower income for purposes of the child support
obligation. A lower income would simply reduce Wife’s share of the child support
obligation and increase Husband’s child support obligation based upon the percentage
of the total child support obligation assigned to Husband. Here, Husband notes the
trial court “received substantial evidence” of Wife’s self-employment income and
simply points to the absence of findings to assert the trial court erred. But “the trial
court need not make a finding as to every fact which arises from the evidence.” Matter
of M.S.E, 378 N.C. 40, 54, 859 S.E.2d 196, 209 (2021). The trial court made sufficient
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Opinion of the Court
ultimate findings of fact as to the parties’ incomes as needed to calculate Guideline
child support. In this case, there is no indication that either party requested to
deviate from the Guidelines, and the trial court did not do so sua sponte. As a result,
the trial court was not required to make findings on Wife’s reasonable expenses
arising from her self-employment as they relate to her income and relative ability to
pay child support. See generally Ferguson, 238 N.C. App. at 260-61, 768 S.E.2d at 33-
34. The trial court made the required finding as to Wife’s gross income based upon
the evidence. See N.C. Child Support Guidelines, AOC-A-162, at 3 (2020). Husband’s
argument that the trial court erred by failing to make findings regarding Wife’s
business expenses and the impact of these expenses on her income is overruled.
2. Work-Related Child Care Costs
Husband next argues the trial court “erred in allocating summer camp
expenses as work-related child care costs[,]” (capitalization altered), because there
was evidence in the record indicating not all of Wife’s claimed child care expenses
“had any relationship to her employment responsibilities.” Husband asserts,
therefore, “[t]he trial court’s inclusion of summer camp expenses was not in
accordance with the child support guidelines and constitutes an abuse of discretion.”
We disagree.
“Reasonable child care costs that are, or will be, paid by a parent due to
employment or job search are added to the basic child support obligation and prorated
between the parents based on their respective incomes.” N.C. Child Support
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Guidelines, AOC-A-162, at 4 (2020). The trial court found Wife “ha[d] a monthly
work-related childcare cost of $386.58” and entered an adjustment to Worksheet B
for these expenses when determining the parties’ child support obligation under the
Guidelines.
This finding is supported by competent evidence. Wife’s June 2021 financial
affidavit is included in the record. In this affidavit, Wife attested that her monthly
work-related childcare costs averaged over a full year were $386.58 per month. Wife
also testified that these figures were calculated based on David’s usual after-school
care and “the average of all of” the summer camps David participates in “because
they’re all different prices.” Wife then testified that she uses after-school childcare
and summer camps to facilitate meeting her professional obligations. Wife testified
that David “goes to summer camp so that [she] can work, [and] so that he can have a
camp experience.” When questioned whether “[t]he summer camp has nothing to do
with childcare so you can perform your work responsibilities, correct[,]” Wife
answered “[n]o. It has something to do with it, but it also has to do with [David]
wanting/needing those same activities, just like lots of kids, activities for growth and
opportunity, being with friends, learning new skills, whatever it is.” Wife continued
“[a]nd I also would not be able to work and bring in the income, which would then just
decrease my income and increase [Husband’s] need to support us.” (Emphasis added.)
Wife’s financial affidavit and her testimony are competent evidence to support
the trial court’s finding that Wife has $386.56 in “monthly work-related childcare
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cost[s,]” see Rea, 262 N.C. App. at 427, 822 S.E.2d at 431, and “[f]indings of fact made
by the trial judge are conclusive on appeal if supported by competent evidence, even
if there is evidence to the contrary.” Johnson, 259 N.C. App. at 827, 817 S.E.2d at
471. Husband’s argument is overruled.
3. Private School Tuition and Expenses
Husband next argues the trial court made insufficient findings regarding
tuition expenses, including that the trial court failed to make a finding accounting for
increases in tuition and failed to make a finding regarding registration and
institution fee expenses. Husband also argues the trial court did not explain why he
“should be solely responsible for these costs or provide analysis of this shared expense
between the parties.” For the reasons below, Husband’s argument does not have
merit.
The trial court found “the minor child attends school . . . at a cost of $1,211.25
per month. This is a reasonable extraordinary expense for the minor child.
[Husband] should continue to pay the minor child’s private school tuition expense at”
the child’s school. The trial court included this expense in the Child Support
Guidelines Worksheet attached to the First Order. The trial court then ordered
Husband to pay “monthly school tuition (including the registration and institution
fee expenses) directly to the minor child’s school.”
The Child Support Guidelines provide for extraordinary expenses:
Other extraordinary child-related expenses (including (1)
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expenses related to special or private elementary or
secondary schools to meet a child’s particular education
needs . . . ) may be added to the basic child support
obligation and ordered paid by the parents in proportion to
their respective incomes if the court determines the expenses
are reasonable, necessary, and in the child’s best interest.
N.C. Child Support Guidelines, AOC-A-162, at 5 (2020) (emphasis added). “According
to the child support guidelines, the trial court may make adjustments for
extraordinary expenses and order payments for such term and in such manner as the
court deems necessary.” Ferguson, 238 N.C. App. at 265, 768 S.E.2d at 36 (quotation
marks and brackets omitted). The trial court has the authority to add extraordinary
expenses to the basic child support obligation set under the Guidelines and prorate
these expenses based on the parties’ incomes, so long as the trial court determines
the expenses “are reasonable, necessary, and in the child’s best interest.” Id.
(quotation marks and citation omitted). Adjustments for extraordinary expenses are
not deviations from the Guidelines, and therefore, “absent a party’s request for
deviation, the trial court is not required to set forth findings of fact related to the
child’s needs and the non-custodial parent’s ability to pay extraordinary expenses.”
Id. (quotation marks omitted).
The trial court found “[i]t is in [David’s] best interests that he continues to
attend [his current school][,]” and Husband does not challenge the trial court’s
findings regarding his current school. The trial court found David had attended his
private school since kindergarten, the parties agreed he should continue to attend the
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school, and the school’s religious values motivated their decision to send David to that
school. David was “thriving” at this school and “has established strong, close
relationships with his teachers and peers.” Consistent with the Guidelines, the trial
court added David’s education expenses to the basic child support obligation on
Worksheet B and prorated those expenses based on the parties’ respective incomes.
See N.C. Child Support Guidelines, AOC-A-162, at 5 (2020).
The trial court did not abuse its discretion by not making a finding regarding
any increase in tuition. Any increase in tuition, should it occur, may be addressed in
a future proceeding upon a motion to modify Husband’s support obligation. See N.C.
Gen. Stat. § 50-13.7 (2021). Additionally, we cannot determine the basis of Husband’s
argument the trial court failed to make specific findings regarding “registration and
institution fee expenses.” As best we can tell from the record, the bill for tuition from
the school includes various fees, and some of those fees are characterized as
registration and institution fees, but it is not clear what amount of fees Husband is
responsible for, or how often those fees are due. Finding 60 states that “the minor
child attends school at [name of school redacted] at a cost of $1,211.25 per month.”
Husband did not challenge this finding of fact, and it is binding on appeal. See Peltzer,
222 N.C. App. at 787, 732 S.E.2d at 360. This argument is without merit.
As to Husband’s argument that the trial court did not explain why he “should
be solely responsible for these costs or provide analysis of this shared expense
between the parties[,]” Husband’s argument shows a misunderstanding of the effect
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of the calculations on Child Support Guidelines Worksheet B. Husband is not “solely
responsible” for the tuition costs, and the Worksheet itself is an “analysis of this
shared expense between the parties.” Additionally, Husband does not challenge the
use of Worksheet B to calculate his support obligation.
On Worksheet B, the parties’ total support obligation was “adjust[ed]” by
$1,211.25 for private school “expenses paid directly by” Husband. Worksheet B
accounts for the total child support obligation and the percentages owed by each
party, based upon their individual incomes and the custodial time with the child, and
prorates the parties’ obligations based upon their share of their total income,
including adjustments for expenses paid for both parties. Here, the trial court
included adjustments for $386.58 per month in “[w]ork-related child care costs” to be
paid by Wife, $244.21 per month in “[h]ealth [i]nsurance premium costs – child’s
portion” to be paid by Husband, and, as an extraordinary expense, $1,211.25 per
month in tuition costs to be paid by Husband.
The calculation of child support accounted for the allocation of all these
expenses paid by both parties, based upon their respective percentage responsibility
for the total support obligation. Consequently, the Worksheet accounts for the full
$1,211.25 per month paid by Husband for David’s education costs, prorates it between
the parties based on their income, and Husband’s ultimate child support obligation
takes into account the expenses he pays. The trial court did not abuse its discretion
in utilizing Worksheet B or its calculation for child support, and Husband’s argument
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is without merit.
V. Alimony
We next address Husband’s challenge to the portion of the First Order
establishing alimony. Continuing his blunderbuss approach, Husband purports to
challenge nearly every potential aspect of the alimony award: the findings of fact
the trial court made; the findings of fact the trial court did not make; Wife’s status as
a dependent spouse; the parties’ accustomed standard of living; Wife’s current income
and expenses; the possibility that Wife may earn a greater income in the future; the
trial court’s consideration of factors under North Carolina General Statute § 50-
16.3A; and of course the amount of alimony awarded. To the extent we can separate
the wheat from the chaff, we will address the arguments properly presented.
A. Standard of Review
Husband’s arguments address both entitlement and the amount of alimony the
trial court awarded. “[A]limony is comprised of two separate inquiries[,]” whether a
spouse is entitled to alimony and if so, the amount. Barrett v. Barrett, 140 N.C. App.
369, 371, 536 S.E.2d 642, 644 (2000).
“[W]hen the trial court sits without a jury, the standard of review on appeal is
whether . . . competent evidence . . . support[s] the trial court’s findings of fact and
whether its conclusions of law were proper in light of such facts.” Collins v. Collins,
243 N.C. App. 696, 699, 778 S.E.2d 854, 856 (2015) (ellipses and brackets in original)
(citations and quotation marks omitted). “If the court’s findings of fact are supported
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by competent evidence, they are conclusive on appeal, even if there is contrary
evidence.” Id. “The trial court’s unchallenged findings of fact are presumed to be
supported by competent evidence and are binding on appeal.” Peltzer, 222 N.C. App.
at 787, 732 S.E.2d at 360.
“Whether a spouse is entitled to an award of alimony or post-separation
support is a question of law. This Court reviews questions of law de novo. Under a
de novo review, the court considers the matter anew and freely substitutes its own
judgment for that of the [trial court].” Collins, 243 N.C. App. at 699, 778 S.E.2d at
856 (citations and quotation marks omitted).
Decisions regarding the amount of alimony are left
to the sound discretion of the trial judge and will not be
disturbed on appeal unless there has been a manifest abuse
of that discretion. 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. An abuse of discretion has occurred if the
decision is manifestly unsupported by reason or one so
arbitrary that it could not have been the result of a
reasoned decision.
Kelly v. Kelly, 228 N.C. App. 600, 601, 747 S.E.2d 268, 272-73 (2013) (citations and
quotation marks omitted).
B. Status of Wife as Dependent Spouse
We have grouped Husband’s arguments based on the findings his arguments
address.
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1. Findings Regarding the Parties’ Accustomed Standard of Living and
Wife’s Reasonable Needs
Husband first contends Wife “is not a dependent spouse because she is not
actually and substantially dependent upon [Husband] for her maintenance and
support.” (Capitalization altered.) But there are two types of dependent spouses; a
dependent spouse is one “who is actually substantially dependent upon the other
spouse for his or her maintenance and support or is substantially in need of
maintenance and support from the other spouse.” N.C. Gen. Stat. § 50-16.1A(2)
(2021) (emphasis added). “A party is ‘actually substantially dependent’ upon her
spouse if she is currently unable to meet her own maintenance and support.”
Carpenter v. Carpenter, 245 N.C. App. 1, 4, 781 S.E.2d 828, 832 (2016) (quoting
Barrett, 140 N.C. App. at 370, 536 S.E.2d at 644). “A spouse is ‘substantially in need
of maintenance’ if he or she will be unable to meet his or her needs in the future, even
if he or she is currently meeting those needs.” Barrett, 140 N.C. App. at 371, 536
S.E.2d at 644-45.
Husband first contends the “trial court did not make factual findings regarding
the parties’ accustomed standard of living during the marriage.” (Capitalization
altered.) Husband also contends that the “trial court’s findings related to [Wife’s]
dependency and the parties’ expenses are not supported by competent evidence.
Findings of fact 68 through 88 should be vacated.” Thus, Husband claims the trial
court did not make sufficient findings of fact regarding the parties’ standard of living
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during the marriage while also claiming that the trial court’s findings of fact
addressing exactly that should be vacated. Essentially, Husband seems to contend
the trial court should have been more specific as to the details of the parties’
accustomed standard of living during the marriage as opposed to their current needs
and expenses.
Findings of fact 68 through 79 address the parties’ income and expenses. We
will not quote these findings, which are highly detailed findings, including several
tables summarizing the reasonable expenses for each party and the child, contained
in two single-spaced pages of the order. Husband does not articulate any specific
argument challenging any of these findings as unsupported by the evidence, and
therefore they are binding on appeal. See Peltzer, 222 N.C. App. at 787, 732 S.E.2d
at 360. The trial court also made extensive, detailed findings regarding the parties’
property and financial circumstances during the marriage in the portion of the First
Order addressing equitable distribution. Those findings address the parties’ marital
home, vehicles, bank accounts, retirement plans, jewelry, art collection, household
goods, debts, life insurance policies, business interests, credit cards, and frequent
flyer miles. Clearly, the trial court considered all these findings in coming to its
evaluation of the accustomed standard of living and its conclusion regarding Wife’s
status as a dependent spouse.
2. Findings Regarding Wife’s Capacity to Earn Future Income
Husband also contends the trial court “failed to make any findings regarding
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[Wife’s] capacity to earn future income.” First, the trial court need not make specific
findings regarding capacity to earn income unless a spouse is suppressing her income
in bad faith and the court imputes income. See Kowalick v. Kowalick, 129 N.C. App.
781, 787, 501 S.E.2d 671, 675 (1998) (“Alimony is ordinarily determined by a party’s
actual income, from all sources, at the time of the order. To base an alimony
obligation on earning capacity rather than actual income, the trial court must first
find that the party has depressed her income in bad faith.” (emphasis in original)
(citation omitted)). The trial court’s findings show Wife was appropriately and
gainfully employed and there was no basis for imputation of income. In addition, the
trial court made the following findings addressing Wife’s work history and future
earning potential, and these findings are supported by the evidence:
d. For the majority of the parties’ marriage,
[Wife] made substantial sacrifices that advanced
[Husband’s] career and increased his earning capacity.
[Wife] agreed to relocate many times for [Husband’s] career
even though she was required to find a new employment as
a result of the relocations. In addition to agreeing to
relocate, [Wife] assisted [Husband] in editing his journal
articles and reviewing documents for his articles and
research. [Wife] took care of the household and the minor
child while [Husband] attended numerous conferences and
meetings. All of these contributions increased [Husband’s]
income and earning capacity.
e. [Wife] sacrificed her career to a large extent
to care for the household and the minor child. The parties
agreed that [Wife] would work part-time in order to be the
primary caretaker for the minor child.
f. [Husband] has a higher income than [Wife].
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His earning capacity will remain the same or increase.
g. [Wife] cares for the parties’ child the majority
of the time. [Wife’s] earning capacity is limited due to her
role as the primary caregiver for the minor child. [Wife]
could not increase her income without traveling and
increasing her work hours, which she cannot do as long as
she . . . is the minor child’s primary caregiver.
h. [Wife] is 47 years old. Her earning capacity
will likely stay the same with a potential to increase once
the minor child is sixteen (16) years old and takes on more
responsibility for his care and transportation.
(Emphasis in original.) The trial court addressed the proper factors, based upon the
evidence. See N.C. Gen. Stat. § 50-16.3A (2021).
The trial court made sufficient findings of fact regarding the parties’
accustomed standard of living during the marriage as well as Wife’s current
reasonable needs for support, and Wife’s capacity to earn future income. These
findings are supported by the evidence. This argument is without merit.
3. Marital Misconduct
The trial court made detailed findings regarding the alimony factors stated in
North Carolina General Statute § 50-16.3A. See N.C. Gen. Stat. § 50-16.3A(b). As
noted above, Husband has generally challenged all the findings regarding the
alimony factors as unsupported by the evidence, but he does not make a specific
argument on most of them, so we will not address those factors. Husband does
address the trial court’s findings as to marital misconduct in detail.
Husband purports to challenge “[f]indings of fact 40 through 43, 46, 79, 84, and
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152” and argues “[t]he evidence regarding marital misconduct was pure conjecture
and all attendant findings should be vacated.” We preliminarily note findings 40
through 43 were in the section of the First Order addressing child custody, and
although Husband nests additional arguments here, including challenging various
statements of the minor child as hearsay, we need not address his evidentiary
arguments because as relevant to alimony, these findings all address Husband’s
credibility, or lack thereof, and even if we disregard findings 41 through 43, the trial
court’s other findings make its assessment of Husband’s lack of credibility
abundantly clear. For purposes of Husband’s argument as to entitlement to alimony,
we do not address these findings.
The challenged findings state in relevant part:
79. In determining the amount, duration, and
manner of payment of alimony, the Court finds, in addition
to the above findings, as follows:9
....
i. [Wife] was a faithful and dutiful wife,
who supported and loved [Husband] through a
difficult revelation in their marriage.
9 The majority of finding of fact 79 has nothing to do with marital misconduct, and instead
simply recounts evidence regarding the length of the marriage, how much the parties worked,
and the disparity in the parties’ income. These are factors the trial court was required to
consider in determining whether Wife was entitled to alimony and the amount of alimony
she was entitled to receive. See N.C. Gen. Stat. § 50-16.3A(a)-(b). Husband’s argument
focuses on the challenges quoted here; Husband does not articulate an argument against the
omitted findings and they are binding on appeal. See Peltzer, 222 N.C. App. at 787, 732
S.E.2d at 360; see also N.C. R. App. P. 28(b)(6) (“Issues not presented in a party’s brief, or in
support of which no reason or argument is stated, will be taken as abandoned.”).
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j. [Wife] did not commit marital
misconduct.
k. [Husband] has committed acts of
“marital misconduct” as that term is defined in
N.C.G.S. § 50-16.1A(3)(a) and (f). Specifically:
[Husband] committed acts of illicit sexual behavior
with at least one woman other than [Wife] during
the parties’ marriage. [Husband] wasted marital
assets for non-marital purposes in furtherance of his
illicit sexual activities as detailed further in Finding
of Fact 152, below.
l. [Wife] did not condone [Husband’s]
illicit sexual behavior or other marital misconduct as
described herein.
m. [Husband’s] marital misconduct set
forth above rendered the condition of [Wife]
intolerable and her life burdensome.
....
152. [Wife] analyzed the expenditures from
[Husband’s] USAA Checking Account # . . . and presented
evidence of [Husband’s] marital waste. [Husband] spent
substantial sums of money for non-marital purposes,
including but not limited to, lingerie and sex store
purchases for individuals other than [Wife]; pornography;
numerous hotel charges; PayPal charges to at least one
female, for sex; spyware that he installed on [Wife’s] phone;
charges for a secret email account; numerous background
checks for potential sexual partners; Match.com; among
other similar expenditures for non-marital purposes.
In addition to the challenged findings, the trial court made two findings relevant to
Husband’s marital misconduct that Husband does not challenge:
153. Of the $123,869.00 that [Husband] claimed
was used for home improvements, only $29,603.00 was
used for home improvements.
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154. Accordingly, $29,603.00 was used for marital
purposes and should be distributed equally to the parties.
The remainder was used by [Husband], for non-marital
purposes in furtherance of his illicit extramarital activities
and should be distributed to [Husband].
Husband’s argument focuses mostly on the finding of illicit sexual behavior, finding
79(k).
Marital misconduct may be a factor considered by the trial court in
determining alimony, see N.C. Gen. Stat. § 50-16.3A(b)(1), but “[i]f the court finds
that the supporting spouse participated in an act of illicit sexual behavior, as defined
in G.S. 50-16.1A(3)a., during the marriage and prior to or on the date of separation,
then the court shall order that alimony be paid to [the] dependent spouse.” N.C. Gen.
Stat. § 50-16.3A(a) (emphasis added). “Illicit sexual behavior” is distinguished from
other forms of marital misconduct as it mandates an award of alimony to a dependent
spouse, whereas other forms of marital misconduct may simply be considered as a
factor, in the trial court’s discretion, in determining alimony. See Romulus v.
Romulus, 215 N.C. App. 495, 521-22, 715 S.E.2d 308, 325 (2011); see also N.C. Gen.
Stat. § 50-16.3A(b)(1).
Here, the trial court found Husband had committed both illicit sexual behavior
and indignities. As noted above, Husband’s marital misconduct under Subsection 50-
16.1A(3)a. mandates an award of alimony, but indignities under Subsection 50-
16.1A(3)f. is a factor the trial court may consider when determining entitlement to
alimony. See N.C. Gen. Stat. § 50-16.3A(a).
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Husband’s main argument here centers on finding 79(k). Husband argues Wife
“had no personal knowledge of any fact found by the trial court regarding illicit sexual
activity by [Husband]” and that she “could not identify any individual with whom
[Husband] had the relationship.” Wife counters by noting the evidence of Husband’s
tremendous expenditures for lingerie, sex toys, hotels, pornography, “SmartSextalk,”
secret emails, a subscription to Match.com, and online payment to someone named
“Jenna.” Wife relies upon Rea v. Rea, which states that “[i]t is well-established that
direct evidence of illicit sexual behavior or indignities as a result of that behavior is
not required but can be shown by circumstantial evidence.” Rea, 262 N.C. App. at
424, 822 S.E.2d at 429. This case has different facts from prior cases, such as Rea,
addressing the sufficiency of circumstantial evidence under the “opportunity and
inclination” doctrine to support a finding of “illicit sexual behavior,” so we must
consider if the evidence in this case will also suffice to support the trial court’s
findings.
In Rea, this Court explained,
Where adultery is sought to be proved by
circumstantial evidence, resort to the
opportunity and inclination doctrine is
usually made. Under this doctrine, adultery is
presumed if the following can be shown: (1)
the adulterous disposition, or inclination, of
the parties; and (2) the opportunity created to
satisfy their mutual adulterous inclinations.
Thus, if a plaintiff can show opportunity and
inclination, it follows that such evidence will
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tend to support a conclusion that more than
mere conjecture exists to prove sexual
intercourse by the parties.
Coachman v. Gould, 122 N.C. App. 443, 447, 470 S.E.2d
560, 563 (1996) (citation and quotation marks omitted).
The evidence at trial included a private investigator
(“PI”) who testified that on 6 August, before separation, she
witnessed and photographed Husband kissing Ms. Smith.
The investigative report, admitted as an exhibit, shows
that the investigator parked near Husband’s truck in the
parking lot of a shopping mall at 1:09 p.m. and waited until
3:45 p.m., when Husband and Ms. Smith arrived, and Ms.
Smith parked her car next to Husband’s truck. Husband
and Ms. Smith kissed. Husband then got into his own
truck, and both vehicles left at the same time. Thereafter,
on 18 and 19 August, two nights in a row only ten days
after the parties’ separation, the PI saw Husband’s and Ms.
Smith’s vehicles parked overnight at a hotel. Although the
overnight stays at the hotel were shortly after the parties
separated, “[n]othing herein shall prevent a court from
considering incidents of post date-of-separation marital
misconduct as corroborating evidence supporting other
evidence that marital misconduct occurred during the
marriage and prior to date of separation[.]” N.C. Gen. Stat.
§ 50-16.3A(b)(1) (2015).
Furthermore, Wife testified that prior to their
separation Husband began to repeat specific suspicious
behaviors he exhibited in 2011 when he had a prior affair;
these actions prompted her to hire the PI. For example,
Husband failed to come home one night. Wife also saw
Husband and Ms. Smith together, including at Husband’s
temporary residence, shortly after the date of separation,
and when Wife confronted the Husband about the other
woman, he said, “she was a better woman than” Wife. We
conclude there was competent evidence to support finding
of fact 11(a) and (b). This argument is overruled.
Id. at 424-25, 822 S.E.2d at 429-30 (formatting altered).
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In Rea, there was evidence the husband was having a relationship with a
specific woman, Ms. Smith. See id. The two of them were observed together overnight
at a hotel twice. See id. Other cases using the “opportunity and inclination” doctrine
present similar facts. See, e.g., Wallace v. Wallace, 70 N.C. App. 458, 319 S.E.2d 680(1984); Horney v. Horney, 56 N.C. App. 725, 289 S.E.2d 868 (1982); Owens v. Owens,
28 N.C. App. 713, 222 S.E.2d 704 (1976).
The statutory definition of “illicit sexual behavior” is quite specific:
Illicit sexual behavior. For the purpose of this section, illicit
sexual behavior means acts of sexual or deviate sexual
intercourse, deviate sexual acts, or sexual acts defined in
G.S. 14-27.20(4), voluntarily engaged in by a spouse with
someone other than the other spouse[.]
N.C. Gen. Stat. § 50-16.1A(3)a. The term “sexual act” as used in this context is also
specifically defined, by reference to North Carolina General Statute § 14-27.20(4):
(4) Sexual act. — Cunnilingus, fellatio, analingus, or anal
intercourse, but does not include vaginal intercourse.
Sexual act also means the penetration, however slight, by
any object into the genital or anal opening of another
person’s body. It is an affirmative defense that the
penetration was for accepted medical purposes.
N.C. Gen. Stat. § 14-27.20 (2021).
Some of the terms of North Carolina General Statute § 50-16.1A are not so
well-defined. For example, “deviate sexual acts” apparently means something other
than the “sexual acts” as defined by North Carolina General Statute § 14-27.20(4),
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but no case has explained exactly what it is.10 In this case, the facts of the
“opportunity” and “inclination” do not present the traditional situation with evidence
of someone observing an overnight stay at a hotel or residence, see Rea, 262 N.C. App.
at 424, 822 S.E.2d at 429, but the circumstantial evidence of Husband’s illicit sexual
behavior is still compelling. Finding 152 summarizes this extensive evidence:
152. [Wife] analyzed the expenditures from [Husband’s]
USAA Checking Account . . . and presented evidence of
[Husband’s] marital waste. [Husband] spent substantial
sums of money for non-marital purposes, including but not
limited to, lingerie and sex store purchases for individuals
other than [Wife]; pornography; numerous hotel charges;
ATM withdrawals of large sums of cash that lined up with
the hotel charges; PayPal charges to at least one female,
for sex; spyware that he installed on [Wife’s] phone;
charges for a secret email account; numerous background
checks for potential sexual partners; Match.com; among
other similar expenditures for non-marital purposes.
Taking all these purchases in context, along with the testimony of both
Husband and Wife about their relationship and the circumstances of Husband’s many
10 In Haddon v. Haddon, it seems the alleged “deviate sexual acts” were between the husband
and the wife, not with a third party, but we do not know what they did as the Court was
apparently too appalled by the evidence to describe it:
Evidence of abnormal and unnatural sexual conduct was
offered by both plaintiff and defendant. There was conflicting
evidence on the question of whether such conduct was abhorrent
and intolerable to the plaintiff. However, the plaintiff did offer
abundant evidence that defendant’s persistent sexual conduct
was intolerable to her and that she was forced against her will
to engage in them with defendant.
Haddon v. Haddon, 42 N.C. App. 632, 635, 257 S.E.2d 483, 485 (1979).
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nights away in hotels, a permissible inference for the trial court to make from
Husband’s “opportunity and inclination” to commit illicit sexual behavior was to find
Husband had committed illicit sexual behavior with at least one woman during the
marriage. The evidence of Husband’s activities was circumstantial, but the trial court
properly considered the weight of the evidence and made findings of fact which are
supported by this evidence. The evidence showed “inclination” to engage in sexual
activity with other women, as demonstrated by the online services and purchases of
lingerie and sex toys not used with Wife, as well as “opportunity” for sexual activities
with the many hotel nights which corresponded with the dates of cash withdrawals
and other purchases. See Rea 262 N.C. App. at 424-25, 822 S.E.2d at 429-30. There
was evidence of a PayPal payment “for sex” to “at least one female.” Further, the
evidence showed that some of the online services used by Husband are specifically
intended to allow customers to contact women for the purpose of arranging sexual
encounters. Husband did background checks on “potential sexual partners.”
Husband spent nearly $100,000 on these purchases, including hotels, lingerie, and
sex toys. The large ATM withdrawals of cash matched up to the nights of the hotel
charges. Although caselaw discussing inclination and opportunity warns against
application of the doctrine where the evidence might only support a conjecture “that
an adulterous affair had taken place[,]” in this case the evidence supports a
reasonable inference of both Husband’s opportunity and inclination to engage in illicit
sexual behavior during the parties’ marriage. See Wallace, 70 N.C. App. at 461-62,
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319 S.E.2d at 682-83 (citation omitted); see also Coachman v. Gould, 122 N.C. App.
443, 446-47, 470 S.E.2d 560, 563 (1996).
There was competent evidence to support the trial court’s finding that
Husband engaged in illicit sexual behavior during the marriage. Additionally,
Husband did not articulate an argument against the trial court’s finding Husband
committed indignities and his “marital misconduct set forth above rendered the
condition of [Wife] intolerable and life burdensome[,]” so this finding of fact is binding
on appeal. See N.C. R. App. P. 28(b)(6) (“Issues not presented in a party’s brief, or in
support of which no reason or argument is stated, will be taken as abandoned.”).
While indignities do not mandate an award of alimony as illicit sexual behavior does
under North Carolina General Statute § 50-16.3A(a), the trial court’s findings also
support the trial court’s conclusions that “[a]n award of alimony from [Husband] to
[Wife] is equitable” and “[Wife] is entitled to an award of alimony from [Husband].”
See N.C. Gen. Stat. § 50-16.3A(a) (“The court shall award alimony to the dependent
spouse upon a finding . . . that an award of alimony is equitable after considering all
relevant factors, including those set out in subsection (b) of this section.”), see also
N.C. Gen. Stat. § 50-16.3A(b)(1) (requiring the trial court to consider marital
misconduct as an equitable factor in establishing entitlement and amount of
alimony). We therefore affirm the First Order regarding alimony.
VI. Conclusion
We affirm the First Order as to the equitable distribution of the parties’
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property as well as the trial court’s two orders regarding retirement, Court Order
Acceptable for Processing and Retirement Benefits Court Order distributing
Husband’s federal retirement plans. We also conclude the trial court did not abuse
its discretion when applying the Child Support Guidelines and affirm the First Order
as to the trial court’s child support determination. As to the portion of the trial court’s
First Order awarding alimony, we conclude the evidence supports the trial court’s
finding that Husband committed “acts of illicit sexual behavior with at least one
woman” other than Wife during the marriage and the trial court’s findings also
support the trial court’s conclusion that an award of alimony was equitable. The trial
court did not err in finding Husband committed marital misconduct, did not err in
determining Wife was entitled to alimony, and did not abuse its discretion in
awarding alimony to Wife. The alimony provisions of the First Order are also
affirmed.
AFFIRMED.
Judges ZACHARY and COLLINS concur.
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