Haywood v. Haywood

GREENE, Judge.

The plaintiff appeals from an equitable distribution order entered 7 September 1990.

This appeal is the second appeal of this case to this Court. For the procedural history of this case prior to this appeal, see Haywood v. Haywood, 95 N.C. App. 426, 427-28, 382 S.E.2d 798, 799, disc. rev. denied, 325 N.C. 706, 388 S.E.2d 454 (1989). The facts which are relevant for the disposition of this appeal are contained in the context of the discussion of each assignment of error.

The issues are whether (I) the trial court was required to make findings of fact on whether the plaintiff had rebutted the gift presumption regarding (A) the Plymouth Road lot and (B) the 200 12th Street lot; (II) the plaintiff rebutted the defendant’s showing that the 100 gold Krugerrands are marital property; (III) the defendant’s master’s degree is property under the equitable distribution statute; and (IV) the trial court was required to make findings on the plaintiffs evidence concerning his personal debts and medical problems.

I

(A) Plymouth Road House and Lot

The plaintiff argues that although the Plymouth Road house is marital property, because the parties acquired the lot upon which the house sits in exchange for his separate property, the lot remains his separate property.

The evidence at trial tends to show that on 9 April 1975, Arden Properties, Inc., which was controlled by the plaintiffs parents, gave the plaintiff a $20,000 note payable to the plaintiff on demand. The parties were married on 3 March 1978, and in March, 1980, the plaintiff signed over his note to Thunder Oil Corporation, a corporation predominately owned by the plaintiffs parents, in exchange for the lot located on Plymouth Road in Durham, North Carolina which Thunder Oil transferred to the parties as tenants by the entireties. According to our Supreme Court,

[i]f a spouse uses separate funds to acquire property titled by the entireties, the presumption is that a gift of those separate funds was made, and the statute’s interspousal gift provision applies. Unless that presumption is rebutted by clear, cogent and convincing evidence, the statute dictates that the gift ‘shall be considered separate property only if such an intention is stated in the conveyance.’ N.C.G.S. § 50-20(b)(2) (1987 [& Supp. 1991]).

McLean v. McLean, 323 N.C. 543, 552, 374 S.E.2d 376, 382 (1988). Therefore, because the plaintiff used his demand note to acquire the Plymouth Road lot which in the deed was titled by the entireties, the presumption arises that the plaintiff made a gift of his separate property to the marital estate. Consistent with McLean, the trial court found that the deed “to the parties as tenants by the entireties contained no reservation of interest nor was it encumbered by any deed of trust and was a gift to the marriage and is therefore marital property.” The plaintiff, however, introduced evidence to rebut the presumption, and the trial court failed to make a finding on that evidence.

As with evidence of N.C.G.S. § 50-20(c) (1987 & Supp. 1991) factors, when a party claims property to be separate and supports his or her claim with evidence, the trial court must consider the evidence and make a finding which demonstrates that the trial court has considered the evidence. See Taylor v. Taylor, 92 N.C. App. 413, 419, 374 S.E.2d 644, 648 (1988); cf. Armstrong v. Armstrong, 322 N.C. 396, 404-06, 368 S.E.2d 595, 599-600 (1988) (findings required when party presents evidence of distributional factor). Without a finding of fact showing that the trial court has considered the party’s evidence, a reviewing appellate court is unable to determine whether the trial court properly applied the law in determining the property to be marital. Coble v. Coble, 300 N.C. 708, 712, 268 S.E.2d 185, 189 (1980). Here, the plaintiff testified that at the time of the conveyance he did not intend to make a gift of his separate property to the marital estate. This testimony is some competent evidence to rebut the presumed gift of his separate property to the marital estate. Lawrence v. Lawrence, 100 N.C. App. 1, 9, 394 S.E.2d 267, 270 (1990); Draughon v. Draughon, 82 N.C. App. 738, 739-40, 347 S.E.2d 871, 872 (1986), cert. denied, 319 N.C. 103, 353 S.E.2d 107 (1987); see Thompson v. Thompson, 93 N.C. App. 229, 232, 377 S.E.2d 767, 768-69 (1989) (defendant testified that he did not intend to have wife’s name placed on deed). Accordingly, because the plaintiff produced some competent evidence to rebut the presumption of gift to the marital estate, the trial court was required to consider the evidence and make a finding as to whether the plaintiff had rebutted the presumption with clear, cogent, and convincing evidence, such determination being within the trial court’s discretion. Thompson, 93 N.C. App. at 232, 377 S.E.2d at 768-69; Draughon, 82 N.C. App. at 739-40, 347 S.E.2d at 872. The trial court erred in failing to make the required finding. If on remand the trial court determines that the Plymouth Road lot is marital property, the trial court must nonetheless consider as a distributional factor that the plaintiff contributed his separate property to the marital estate. N.C.G.S. § 50-20(c)(12) (1987 & Supp. 1991); Lawrence, 100 N.C. App. at 23, 394 S.E.2d at 279 (Greene, J., concurring) (means for acquiring marital property important in determining equitable distribution).

The plaintiff also argues that the trial court erred in finding that the Plymouth Road house had a value of $225,000 at the date of distribution. We disagree. A trial court’s findings of fact are conclusive on appeal when there is any competent evidence in the record to support them. Nix v. Nix, 80 N.C. App. 110, 112, 341 S.E.2d 116, 118 (1986). There is some competent evidence in the record to support the trial court’s finding that the marital home located on Plymouth Road had a value of $225,000 at the date of distribution. The plaintiff does not argue that the trial court distributed the marital home on the basis of its value at the date of distribution. In fact, the trial court valued the property at the date of separation at $106,578.63 and distributed that amount as marital property. N.C.G.S. § 50-21(b) (1987 & Supp. 1991) (trial court must value marital property as of date of separation); Mishler v. Mishler, 90 N.C. App. 72, 77, 367 S.E.2d 385, 388, disc. rev. denied, 323 N.C. 174, 373 S.E.2d 111 (1988) (trial court must distribute date of separation value of marital property). The trial court must nonetheless consider evidence of the value of the marital property at the date of distribution because the post-separation appreciation in the value of marital property is a distributional factor under N.C.G.S. § 50-20(c)(lla) or (12) (1987 & Supp. 1991). Mishler, 90 N.C. App. at 77, 367 S.E.2d at 388; Truesdale v. Truesdale, 89 N.C. App. 445, 448, 366 S.E.2d 512, 514 (1988). The plaintiff does not argue that the trial court failed to consider the post-separation appreciation as a distributional factor. The plaintiff argues, however, and we agree that on remand the trial court must consider the defendant’s post-separation mortgage payments on the Plymouth Road house as a distributional factor under N.C.G.S. § 50-20(c)(lla) or (12) as opposed to giving the defendant a credit for those payments. Fox v. Fox, 103 N.C. App. 13, 20-21, 404 S.E.2d 354, 358 (1991); Miller v. Miller, 97 N.C. App. 77, 80-81, 387 S.E.2d 181, 184 (1990).

(B) 200 12th Street House and Lot

The plaintiff argues that the trial court erroneously classified the house built on the 200 12th Street lot located in Butner, North Carolina as marital property because the house was built before the parties’ marriage. We disagree. Contrary to the plaintiff’s testimony, the defendant testified and the trial court found that this house was built during the parties’ marriage. We agree with the plaintiff, however, that the 200 12th Street lot has not been properly classified as marital property.

It is undisputed that the plaintiff used separate property to acquire the 200 12th Street lot which was titled by the entireties. Therefore, the presumption arises that the plaintiff made a gift of his separate property to the marital estate. McLean, 323 N.C. at 552, 374 S.E.2d at 382. The plaintiff testified, however, that he did not intend to make a gift of his separate property to the marital estate. As stated with regard to the Plymouth Road lot, because the plaintiff produced some competent evidence to rebut the presumption of gift to the marital estate, the trial court was required to consider the evidence and make a finding as to whether the plaintiff had rebutted the presumption with clear, cogent, and convincing evidence. The trial court erred in failing to make the required finding. If on remand the trial court determines that the 200 12th Street lot is marital property, the trial court must consider as a distributional factor that the plaintiff contributed his separate property to the marital estate. N.C.G.S. § 50-20(c)(12); Lawrence, 100 N.C. App. at 23, 394 S.E.2d at 279 (Greene, J., concurring).

II

100 Gold Krugerrands

The plaintiff argues that the trial court erred in classifying the 100 gold Krugerrands as marital property. We agree.

The trial court must identify and classify “property as marital or separate ‘depending upon the proof presented to the trial court of the nature’ of the assets.” Atkins v. Atkins, 102 N.C. App. 199, 206, 401 S.E.2d 784, 787 (1991) (citation omitted). The party seeking to have property classified as marital or separate bears the burden of showing by a preponderance of the evidence that the property is marital or separate. Id. The party claiming the property to be marital meets this burden by showing that the property

(1) was ‘acquired by either spouse or both spouses’; and (2) was acquired ‘during the course of the marriage’; and (3) was acquired ‘before the date of the separation of the parties’; and (4) is ‘presently owned.’

Id. (citation omitted). If the party claiming the property to be marital shows these four elements by a preponderance of the evidence, the burden shifts to the party claiming the property to be separate to show by a “preponderance of the evidence that the property meets the definition of separate property under N.C.G.S. § 50-20(b)(2) (1987 [& Supp. 1991]).” Ciobanu v. Ciobanu, 104 N.C. App. 461, 466, 409 S.E.2d 749, 752 (1991); Atkins, 102 N.C. App. at 206, 401 S.E.2d at 788. “If both parties meet their burdens, then under the statutory scheme of N.C.G.S. § 50-20(b)(l) and (b)(2), the property is excepted from the definition of marital property and is, therefore, separate property.” Atkins, 102 N.C. App. at 206, 401 S.E.2d at 788; Ciobanu, 104 N.C. App. at 466, 409 S.E.2d at 752 [Atkins allocation of burdens of proof consistent with recent amendment to N.C.G.S. § 50-20(b)(l) (Supp. 1991) establishing rebut-table presumption that property acquired between dates of marriage and separation is marital).

The defendant showed and the trial court found that the 100 gold Krugerrands stored in Canada are marital property. The plaintiff acquired the coins during their marriage and before their separation, and they are presently owned and stored in Canada in a safety deposit box with the joint right of withdrawal. Atkins, 102 N.C. App. at 206, 401 S.E.2d at 787. The plaintiff, however, responded to this evidence by showing that he had obtained the coins in exchange for his separate property, namely, stocks he had owned prior to the parties’ marriage.

Under N.C.G.S. § 50-20(b)(2) (1987 & Supp. 1991), “[property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance.” The plaintiff’s evidence showed that in November, 1976, the plaintiff posted his separate stock as security for a line of credit at NCNB. The parties were married on 3 March 1978. On 14 July 1978, the plaintiff sold his stock for $21,312.12 which amount he deposited into his checking account at NCNB. On that same day, NCNB wired $21,175 from the plaintiff’s account to Marine Midland Bank, the bank for Carrera and Company, a trader in precious metals. Carrera and Company then shipped the coins to NCNB. According to the NCNB bank official who handled this transaction, the coins replaced the plaintiff’s stock as security for the plaintiff’s line of credit. This evidence, which the defendant does not dispute, shows that the coins were acquired in exchange for the plaintiff’s separate property, and because no contrary intention was expressed in the conveyance, the coins are the plaintiff’s separate property. That the plaintiff stored the coins in a joint safety deposit box is not an express “contrary intention” “in the conveyance” that the coins “be considered to be marital property.” See Manes v. Harrison-Manes, 79 N.C. App. 170, 172, 338 S.E.2d 815, 817 (1986) (husband’s conduct of adding wife’s name to bank account and annuity was not evidence of express contrary intention in conveyance); Brown v. Brown, 72 N.C. App. 332, 336, 324 S.E.2d 287, 289 (1985) (husband’s conduct of depositing money into joint savings account was not evidence of express contrary intention in conveyance). Accordingly, because the plaintiff rebutted the defendant’s showing that the coins are marital property, the coins are the plaintiff’s separate property, and the trial court erred in classifying them as marital property.

Ill

Defendant’s Master’s Degree

The plaintiff argues that the defendant’s master’s degree in economics and business should be classified as marital property. We disagree. Because educational degrees, like professional and business licenses, are personal to their holders, are difficult to value, cannot be sold, and represent enhanced earning capacity, the vast majority of courts which have addressed the issue have held that such degrees are not property for purposes of equitable distribution. L. Golden, Equitable Distribution of Property § 6.19 (1983); cf. Sonek v. Sonek, 105 N.C. App. 247, 255, 412 S.E.2d 917, 922 (1992) (Greene, J., concurring). Our legislature has accepted in part and rejected in part this majority rule.

“The primary goal of statutory construction is to arrive at legislative intent.” Alberti v. Manufactured Homes, Inc., 329 N.C. 727, 732, 407 S.E.2d 819, 822 (1991). The legislature has provided that “[a]ll professional licenses and business licenses which would terminate on transfer shall be considered separate property.” N.C.G.S. § 50-20(b)(2) (1987 & Supp. 1991). By this statute, the legislature “has recognized that such licenses are in fact property for purposes of the equitable distribution statute.” Sonek, 105 N.C. App. at 255, 412 S.E.2d at 922. The legislature, however, did not classify educational degrees as property for purposes of equitable distribution; rather, it provided that trial courts shall consider evidence of “[a]ny direct or indirect contribution made by one spouse to help educate or develop the career potential of the other spouse” in distributing marital property. N.C.G.S. § 50-20(c)(7) (1987 & Supp. 1991). When N.C.G.S. § 50-20(b) is construed in pari materia with N.C.G.S. § 50-20(c)(7), Great Southern Media, Inc. v. McDowell County, 304 N.C. 427, 430-31, 284 S.E.2d 457, 461 (1981), the relationship of these statutory provisions demonstrates the legislature’s intent that educational degrees are not property, either marital or separate, under our equitable distribution statute, but rather are factors to be used in the distribution of marital property. Furthermore, viewed under the statutory construction doctrine of expressio unius est exclusio alterius, which means the expression of one thing is the exclusion of another, Alberti, 329 N.C. at 732, 407 S.E.2d at 822, the legislature’s failure to mention educational degrees under the definitions of marital and separate property demonstrates an intent consistent with the majority rule to exclude educational degrees from the definition of property for purposes of equitable distribution. Accordingly, educational degrees are not property under the equitable distribution statute.

Although the defendant’s advanced degree is not property for purposes of equitable distribution and therefore cannot be valued, the trial court was nonetheless required to treat as a distributional factor the plaintiff’s direct and indirect contributions, if any, towards the defendant’s acquisition of her degree. N.C.G.S. § 50-20(c)(7); Geer v. Geer, 84 N.C. App. 471, 478, 353 S.E.2d 427, 431 (1987) (career enhancing contributions); Harris v. Harris, 84 N.C. App. 353, 358-59, 352 S.E.2d 869, 873 (1987) (earning potential). The plaintiff produced evidence which shows the following: That the defendant sought her advanced degree for its enhanced earnings potential; that she left her job paying nearly $20,000 per year to acquire the degree; that while the defendant was in school, the plaintiff contributed more to their household expenses than did the defendant and paid for the defendant’s medical insurance, hospital and periodontal bills, medication, and for all gifts the parties gave to people other than themselves; that the defendant relied on the plaintiff’s support while attending school; that without that support, the defendant would not have been able to get the advanced degree in the manner in which she did; and that the defendant acquired her advanced degree just two months before the parties separated.

When a party introduces evidence of a distributional factor under N.C.G.S. § 50-20(c), the trial court must consider the factor and make a finding of fact with regard to it. Armstrong, 322 N.C. at 405-06, 368 S.E.2d at 600. In this case, the trial court, contrary to the dissenting opinion, did not make a finding of fact regarding this distributional factor. It merely concluded that “[t]he equitable distribution of the marital property of the parties requires that the marital property of the parties should be divided equally between the plaintiff and the defendant.” This conclusion is insufficient. Id. at 406, 368 S.E.2d at 600. Because the trial court did not make the required finding of fact regarding the distributional factor implicated by the plaintiff’s evidence, this Court cannot determine from the record whether the trial court correctly applied the law in reaching its conclusion. Id. The trial court erred in failing to make the required finding.

IV

Other Distributional Factors

We likewise agree with the plaintiff that the trial court erroneously failed to make findings regarding the plaintiff’s evidence concerning his personal debts and medical problems including hypoglycemia and a herniated disk. On remand, the trial court must make findings on these distributional factors. N.C.G.S. § 50-20(c)(l), (3) (1987 & Supp. 1991); Armstrong, 322 N.C. at 406, 368 S.E.2d at 600; Geer, 84 N.C. App. at 475, 353 S.E.2d at 429.

We have considered the plaintiff’s remaining assignments of error and find them to be without merit. In summary, we remand this case for new findings, conclusions, and order of distribution consistent with this opinion.

Affirmed in part, reversed in part, and remanded.

Judge Parker concurs. Judge WYNN dissenting in part with separate opinion.