Gordon v. Gordon

NO. COA13-937
NORTH CAROLINA COURT OF APPEALS
Filed: 15 April 2014
STEVEN G. GORDON,
Plaintiff,
v. Guilford County
No. 09 CVD 10832
DEBORAH J. GORDON,
Defendant.
Appeal by plaintiff from Order entered on or about 24 April
2013 by Judge Jan H. Samet in District Court, Guilford County.
Heard in the Court of Appeals 6 February 2014.
Randolph M. James, PC, by Randolph M. James, for plaintiff-
appellant.
Woodruff Law Firm, P.A., by Jessica Snowberger Bullock, for
defendant-appellee.
STROUD, Judge.
Steven Gordon (“plaintiff”) appeals from an order entered
on or about 24 April 2013 finding him to be in civil contempt and
ordering him jailed unless he pays $20,000 to his former wife,
Deborah Gordon (“defendant”), within 60 days. We affirm.
I. Background
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Much of the background to this case was discussed in our
opinion arising from the last contempt order that plaintiff
appealed:
The parties were married in 1983 and
separated in 2007. On 21 August 2009, the
parties executed a mediated settlement
agreement, pursuant to which Plaintiff was
required to pay Defendant a distributive
award in the amount of $1,200,000.00 and to
pay $5,600.00 per month in post-separation
support until $1,000,000.00 of the
distributive award had been paid. In return,
Defendant agreed to waive the right to
receive additional post-separation support
or alimony.
On 24 August 2009, Plaintiff filed a
complaint for divorce. On 28 October 2009,
Defendant filed an answer in which she
admitted the material facts alleged in
Plaintiff’s complaint and asserted
counterclaims for, among other things,
divorce, distribution of the parties’ IRA
accounts, breach of contract, specific
performance of the mediated settlement
agreement, and attorney’s fees. In a reply
filed on 13 November 2009, Plaintiff
admitted that he had not made all the
payments required by the mediated settlement
agreement and asserted various defenses
stemming from his alleged inability to
obtain a bank loan or otherwise procure the
funds needed to make the required payments.
On 5 May 2010, the trial court entered a
consent order which provided, in pertinent
part, that:
. . . .
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Plaintiff shall pay to Defendant on the
first day of each month beginning June 1,
2010 the sum of $9000, by direct deposit to
her checking account until the earlier to
occur of the following:
(i) July 31, 2011 or
(ii) The sale of 8640 Adkins Road, Colfax,
NC
. . . .
On 12 April 2012, the trial court orally
determined that Plaintiff was in contempt of
the consent judgment by willfully failing to
list the Adkins Road property for sale with
Ms. Laney; stated that Defendant had chosen,
instead, to list the property with an
“inexperienced” agent who “doesn’t even come
close to having the qualities, the skills
necessary, the connections necessary to sell
this price of a house;” and noted that, in
the court’s “opinion [, Plaintiff] really
[wasn’t] trying to satisfy this obligation”
because he did not “believe that [he] should
have to pay [Defendant any more] money.” As
a result, the trial court told Plaintiff
that he was being held in contempt of court
for willfully failing to list the property
with Ms. Laney and that, in the event that
he failed to execute a listing contract with
her within fourteen days, he would be jailed
pending compliance with the relevant
provision of the consent judgment.
Gordon v. Gordon, ___ N.C. App. ___, 746 S.E.2d 21, 2013 WL
3049072 at *1-*3 (2013) (unpublished) (brackets and ellipses
omitted), disc. rev. denied, ___ N.C. ___, 753 S.E.2d 679-4-
(2014). Defendant appealed the 2012 contempt order to this
Court. Id. at *4. We affirmed. Id. at *13.
Since the 2012 order, there have been additional conflicts
between the parties over the money plaintiff owes defendant.
After November 2012, plaintiff failed to pay the $5,000 per
month that had been ordered by the trial court. As a result,
defendant filed a motion for contempt. The trial court issued an
order to show cause, finding that there was probable cause to
believe plaintiff was in contempt of the 2010 Consent Order.
Plaintiff responded, claiming that he was unable to make the
required payments.
The trial court held a hearing on defendant’s contempt
motion on 26 February 2013. By order entered 24 April 2013, the
trial court made written findings of fact and conclusions of
law. The trial court held plaintiff in civil contempt and
ordered that he be jailed if he failed to pay $20,000 in
arrearages within 60 days “until such time as he complies with
this order.” Plaintiff filed notice of appeal to this Court on
30 April 2013.
II. Civil Contempt
Plaintiff argues on appeal that the trial court erred in
holding him in contempt because it failed to find that he has the
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present ability to pay the $20,000 he concedes that he owes. We
disagree.
A. Standard of Review and Burden of Proof
Review in civil contempt proceedings is
limited to whether there is competent
evidence to support the findings of fact and
whether the findings support the conclusions
of law. Findings of fact made by the judge
in contempt proceedings are conclusive on
appeal when supported by any competent
evidence and are reviewable only for the
purpose of passing upon their sufficiency to
warrant the judgment. However, findings of
fact to which no error is assigned are
presumed to be supported by competent
evidence and are binding on appeal. The
trial court’s conclusions of law drawn from
the findings of fact are reviewable de novo.
A show cause order in a civil contempt
proceeding which is based on a sworn
affidavit and a finding of probable cause by
a judicial official shifts the burden of
proof to the defendant to show why he should
not be held in contempt.
Tucker v. Tucker, 197 N.C. App. 592, 594, 679 S.E.2d 141, 142-43
(2009) (citations, quotation marks, and brackets omitted).
Here, there was a show cause order with a judicial finding of
probable cause. Therefore, the burden was on plaintiff “to show
why he should not be held in contempt.” Id. at 594, 679 S.E.2d
at 143.
B. Present Ability to Pay
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The trial court found plaintiff to be in civil contempt and
ordered him to pay $20,000 in arrearages within 60 days or be
sent to jail. Plaintiff argues that there was no finding and no
evidence that he was presently able to comply or take reasonable
steps to purge his contempt and that therefore he could not be
subjected to an indefinite term in jail for civil contempt.
For civil contempt to be applicable, the
defendant must be able to comply with the
order or take reasonable measures that would
enable him to comply with the order. We hold
this means he must have the present ability
to comply, or the present ability to take
reasonable measures that would enable him to
comply, with the order.
Jones v. Jones, 62 N.C. App. 748, 749, 303 S.E.2d 583, 584
(1983); see also N.C. Gen. Stat. § 5A-21(a)(3) (2013).
“Reasonable measures” to pay an outstanding judgment could
include “borrowing the money, selling defendant’s . . . property
. . . , or liquidating other assets, in order to pay the
arrearage.” Teachey v. Teachey, 46 N.C. App. 332, 335, 264
S.E.2d 786, 787-88 (1980).
When a defendant has the present means to
comply with a court order and deliberately
refuses to comply, there is a present and
continuing contempt and the court may commit
such defendant to jail for an indefinite
term, that is, until he complies with the
order. Under such circumstances, however,
there must be a specific finding of fact
supported by competent evidence to the
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effect that such defendant possesses the
means to comply with the court order. Our
Supreme Court has indicated . . . that the
court below should take an inventory of the
property of the plaintiff; find what are his
assets and liabilities and his ability to
pay and work—an inventory of his financial
condition—so that there will be convincing
evidence that the failure to pay is
deliberate and wilful.
Bennett v. Bennett, 21 N.C. App. 390, 393-94, 204 S.E.2d 554,
556 (1974).
First, we must address plaintiff’s argument that the trial
court failed to find that he has the present ability to comply
with its order. The trial court specifically found that
17. The evidence before the Court
establishes conclusively that Plaintiff had
the present ability to pay the $5,000
monthly alimony for the months of November
and December of 2012 and January and
February of 2013.
18. During the relevant period, Plaintiff
had available to him from his business for
his personal use at least $20,000 in cash
used for the purchase of vehicles used as
leased vehicles. He also had available at
least $20,000 available to pay alimony
through cash advances available through
lines of credit associated with credit
cards. Evidence also shows that Plaintiff
had as much as $16,000 in business cash used
to pay mortgage payments for his relatives’
mortgages or rents.
The trial court then concluded that “Plaintiff had the present
ability to comply with the May 5, 2010 Consent Order Judgment
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directing Plaintiff to pay [the] $5,000 per month alimony
payment.” (emphasis added.)
Plaintiff contends that the trial court’s use of the word
“had” rather than the word “has” is fatal to its judgment, as
this shows that the Court failed to make findings as to his
present ability to pay. Plaintiff claims that although he may
have had the ability to pay $20,000 at some time in the past
prior to the hearing, at the time of the hearing he no longer
had such present ability. The hearing was held on 26 February
2013, at which time the trial court took the matter under
advisement; the order was entered on 24 April 2013. Plaintiff
does not claim that his circumstances changed between date of
the February 2013 hearing and entry of the order in April 2013;
his argument focuses only on the word “had.”
Although we agree that a trial court must make findings as
to a contemnor’s present ability to pay before holding him in
civil contempt, we cannot take the word “had” out of the context
of the entire order. Perhaps some of the confusion as to verb
tense arises from the fact that at any civil contempt hearing,
the parties are presenting evidence of what has happened in the
past to prove the present state of affairs to enable the trial
court to make findings of fact about what the present
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circumstances are and what will likely happen in the future. And
then the written order from that hearing is actually prepared
and entered after the hearing, so that the trial court is
necessarily referring to events that occurred and evidence that
was presented in the past, which was the present on the date the
events happened or on the date of the hearing. Time stubbornly
refuses to stand still even long enough for a hearing to be
completed or an order prepared and entered. We must read the
findings of fact with these considerations in mind.
The findings in this case are similar to those we approved
in Hartsell v. Hartsell, 99 N.C. App. 380, 385, 393 S.E.2d 570,
574 (1990). In Hartsell, the trial court found that “‘defendant
had at all times been fully capable and able of complying with
all provisions of the Court’s decree’ and that ‘defendant had
the present ability and continuing capability to comply with all
remaining provisions of the Court’s decree with which he had not
heretofore complied.’” Id. at 385, 393 S.E.2d at 573 (brackets
omitted). Despite the trial court’s use of the word “had,” we
affirmed the trial court’s conclusion that the defendant’s
failure to comply was willful and that he had the present
ability to comply because there was evidence that he had “the
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present ability to take reasonable measures that would enable
him to comply.” Id. at 386, 393 S.E.2d at 574.
Taking the findings as a whole, it is clear that the trial
court considered plaintiff’s ability to comply as of the date of
the hearing and within the sixty days afforded to him to take
any additional measures he may need to take. The trial court
properly took an inventory of plaintiff’s recent income and
expenses in considering his ability to comply throughout the
relevant period, including February 2013, when the hearing was
held. See Bennett, 21 N.C. App. at 393-94, 204 S.E.2d at 556. It
made findings on his various sources of income, how he pays his
expenses, and other voluntary expenses he has undertaken to pay
rather than paying the judgment. Given the extensive evidence
presented and findings made regarding plaintiff’s income and
expenses, we hold that the trial court’s finding on present
ability to pay is adequate.
Plaintiff further argues that there was no evidence to
support a finding that he had the present ability to pay.
Plaintiff claims that the trial court “made no findings
regarding cash available to plaintiff as of the hearing or as of
the day the Order was entered.” This is true, but the trial
court also did not order plaintiff to pay immediately on the day
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of the hearing nor immediately on the date the order was
entered. The trial court gave plaintiff 60 days after entry of
the order to acquire the $20,000, and the findings show that
plaintiff had various options to accomplish this.
The trial court found that plaintiff’s 2012 income was
approximately $139,641. Plaintiff earned approximately $15,000
per month in November and December 2012. The trial court also
found that “the personal debts of the Plaintiff are paid through
the business and $180,000 in personal expenses were paid from
October 2011 through October 2012.” The trial court found that
plaintiff voluntarily pays thousands of dollars in expenses for
his adult children and his mother, totaling more than $16,500
over the course of four months. Plaintiff does not challenge
any of these findings as unsupported by competent evidence, so
they are binding on appeal. Tucker, 197 N.C. App. at 594, 679
S.E.2d at 143.
Although plaintiff should have well been able to pay
defendant by temporarily ceasing to pay the expenses he had been
paying for his adult children and mother, the trial court also
made findings regarding his ability to take reasonable measures
that would enable him to comply by borrowing the funds. The
evidence showed that plaintiff had two credit cards. As of
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December 2012, one had a cash advance available of $4,500 and
the other had an available cash advance of $4,590. The credit
cards also provided plaintiff with available lines of credit in
excess of $44,887. Plaintiff does not argue that he expected
his income or expenses to change substantially in the
foreseeable future. Plaintiff did contend at the hearing that
his business, Flash Gordon Motors & Leasing, Inc., was in
decline, and of course this was contested by defendant’s
evidence. In any event, the trial court heard and considered
this evidence, weighed its credibility, and made its findings,
which did not include a finding that the business was failing.
Therefore, it was fully appropriate for the trial court to base
its finding of present ability to pay on evidence of income and
expenses in the recent past. See Parsons v. Parsons, ___ N.C.
App. ___, ___, 752 S.E.2d 530, 534 2013 (noting that future
expenses “can [generally] only be predicted based on past
experience”). This evidence shows that plaintiff could take
reasonable steps to pay the full $20,000 he owes by paying a
portion of his $15,000 monthly income, taking out cash advances
from his credit cards, ceasing to voluntarily pay the expenses
of other family members, and/or transferring any expenses in
excess of his income to his credit cards for those months.
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Plaintiff further challenges the trial court’s
consideration of his business assets in finding a present
ability to comply. He contends that considering business
expenditures “would effectively eliminate the corporate identity
of any closely-held corporation.” Again, we disagree.
In determining a contemnor’s present ability to pay, the
appellate courts of this state have directed trial courts to
“take an inventory of the property of the plaintiff; find what
are his assets and liabilities and his ability to pay and work—
an inventory of his financial condition.” Bennett, 21 N.C. App.
at 393-94, 204 S.E.2d at 556. Considering how a contemnor pays
his expenses is an important part of this analysis.
In Foy v. Foy, 69 N.C. App. 213, 316 S.E.2d 315 (1984), we
affirmed a trial court’s finding of willful noncompliance with
an alimony order. In reviewing the trial court’s willfulness
findings, we considered the defendant’s interest in a closely
held company as a possible source of funds for the defendant,
even though he did not receive any direct income. Foy, 69 N.C.
App. at 215, 316 S.E.2d at 316-17. Plaintiff’s interest in his
company is far more clearly established than that of the
defendant in Foy.
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Here, the trial court’s findings indicated that plaintiff
had a history of using his corporate assets to pay for his
personal debts and personal expenses. In fact, the evidence
showed that he had used corporate assets to pay $180,000 in
personal expenses from October 2011 through October 2012.
Plaintiff does not argue that this finding is unsupported by the
evidence. These expenditures relate directly to plaintiff’s
assets and liabilities and to his ability to pay the arrearages.
Therefore, the trial court properly considered plaintiff’s
corporate assets and liabilities and did not impair or disregard
his business’s corporate identity in any way.
Given this evidence and the findings made by the trial
court, we hold that the trial court did not err in concluding
that within 60 days plaintiff could take reasonable steps to pay
the entire $20,000 of the arrearages between using the cash
advances, charging any expenses not covered by the business to
one of his credit cards, and ceasing to voluntarily pay
thousands of dollars to his other relatives. See Williford v.
Williford, 56 N.C. App. 610, 612, 289 S.E.2d 907, 909 (1982)
(“[P]ayment of alimony may not be avoided merely because the
husband has remarried and voluntarily assumed additional
obligations.” (citation, quotation marks, and ellipses
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omitted)); Teachey, 46 N.C. App. at 335, 264 S.E.2d at 787-88(noting that reasonable efforts could include borrowing money
and liquidating assets); Watson v. Watson, 187 N.C. App. 55, 67,
652 S.E.2d 310, 319 (2007) (affirming a finding of civil
contempt where the trial court afforded the defendant 90 days to
take reasonable measures to pay the required sum), disc. rev.
denied, 362 N.C. 373, 662 S.E.2d 551 (2008).
Plaintiff argues that compliance with the order would
require him to take on debts he could never hope to pay off, but
neither the evidence nor the findings support plaintiff’s dim
view of his wherewithal. The trial court’s uncontested findings
show that he earned approximately $15,000 per month in the
months preceding the hearing, that plaintiff had the ability to
pay thousands of dollars per month to family members, and that
his debts and $180,000 of his personal expenses were paid by his
business. Drawing money from any of these sources could
properly be considered “reasonable measures” to pay off the
arrearages. See Teachey, 46 N.C. App. at 335, 264 S.E.2d at 787-
88.
C. Crediting the amount seized from plaintiff
Plaintiff next contends that the trial court erred in not
crediting him with the $7,322.42 seized by defendant from his
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checking account. These funds were seized by execution upon a
judgment which was entered upon the distributive award of
$1,025,000; that judgment is not a subject of this appeal.
Plaintiff’s argument conveniently ignores the fact that these
funds were seized by execution to pay this outstanding judgment,
which is separate from his alimony obligation, as well as the 5
May 2010 consent order, which differentiates between the $5,000
per month he is required to pay in alimony and the $1,025,000
distributive award.1 The 5 May 2010 order specifically states
that the “alimony does not reduce the $1,025,000 distributive
award.”
The 12 April 2012 judgment and order further clarified this
distinction. At that time, plaintiff still owed approximately
$894,023 toward the distributive award. The trial court
continued to require that plaintiff pay $5,000 per month as
alimony until the distributive award was paid in full. The trial
court specifically stated that the monthly $5,000 payment “is
not a credit against the money judgment.” It further clarified
that “[t]he requirement that Plaintiff Husband make monthly
1
Plaintiff also argues that the $5,000 per month ordered by the
trial court in the May 2010 consent order was not actually
“alimony.” Plaintiff specifically consented to the order which
identified this payment as “alimony.” He never appealed from
that order and cannot now collaterally attack that
determination.
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payments to Defendant Wife for support and maintenance does not
alter, limit, delay, or postpone Defendant Wife’s rights to
enforce the money judgment and to pursue all collection rights
and remedies.”2 As these prior orders make clear, the $7,322 was
seized by execution on the judgment entered as to the $1,025,000
distributive award. The $7,322 seized did reduce the amount he
owed on the distributive award judgment, and plaintiff does not
get to count the amount seized by defendant twice.
III. Conclusion
Based on plaintiff’s repeated, willful disregard of court
orders, as found by the trial court, and the trial court’s
adequate findings regarding plaintiff’s present ability to pay
$20,000 within 60 days, we conclude that the trial court did not
err in holding plaintiff in civil contempt for his willful
disregard of the order requiring him to pay $5,000 per month to
defendant. We affirm the trial court’s order.
AFFIRMED.
Judges CALABRIA and DAVIS concur.
2
Plaintiff did appeal that order and the subsequent June 2012
order holding plaintiff in contempt for willful failure to
comply with the 5 May 2010 order. Both orders were affirmed by
this Court. Gordon, 2013 WL 3049072 at *13. We further rejected
plaintiff’s characterization of the $5,000 monthly payment as an
“alternative penalty.” Id.