Cushman v. CushmanÂ

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-233
Filed: 5 January 2016
Pamlico County, No. 12 CVD 78
SHEILA A. CUSHMAN, Plaintiff,
v.
LARRY J. CUSHMAN, Defendant.
Appeal by defendant from order entered 9 September 2014 by Judge L. Walter
Mills in Pamlico County District Court. Heard in the Court of Appeals 20 October
2015.
J. Randal Hunter for plaintiff-appellee.
White & Allen, P.A., by David J. Fillippeli, Jr., and Ashley F. Stucker, for
defendant-appellant.
ZACHARY, Judge.
Larry Cushman (defendant) appeals from an order for equitable distribution
of the marital and divisible property acquired by defendant and Sheila Cushman
(plaintiff) during their marriage. On appeal, defendant argues that the trial court
erred by denying his pretrial motion for partial summary judgment, neglecting to
consider certain distributional factors, and failing to credit him for post-separation
payments. We conclude that the trial court’s denial of defendant’s pretrial motion for
CUSHMAN V. CUSHMAN
Opinion of the Court
partial summary judgment is not subject to appellate review following a hearing on
the merits, and that the trial court did not err in its equitable distribution order.
I. Background
The parties were married on 14 February 1970, separated on 31 May 2010, and
divorced on 24 June 2013. One child was born of the marriage, a daughter who was
thirty-three years old at the time of the parties’ equitable distribution hearing. On
21 April 2012, plaintiff filed a complaint for post-separation support, alimony, and
equitable distribution of the marital estate. On 6 August 2012 defendant filed an
answer and a motion for sanctions against plaintiff and the attorney who represented
plaintiff at that time, pursuant to N.C. Gen. Stat. § 1A-1, Rule 11. Defendant’s Rule
11 motion, which was based on plaintiff’s inclusion of claims for post-separation
support and alimony in her complaint, alleged that prior to the filing of the plaintiff’s
complaint, the parties had executed a separation agreement releasing all claims other
than one for equitable distribution. On 29 August 2012, plaintiff filed a voluntary
dismissal of the challenged claims.
At the time that the parties separated, defendant was a retired officer in the
United States Marine Corps. After the date of separation, defendant’s retirement
benefits continued to be deposited into a bank account held jointly by the parties until
September 2011, when defendant opened a separate bank account. On 27 September
2012, plaintiff filed a motion seeking an interim distribution of $45,848.00 for her
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past due share of defendant’s military retirement pay. On 2 October 2012, defendant
filed a response to plaintiff’s motion for interim distribution, in which defendant
agreed that plaintiff had an interest in his retirement benefits but argued that the
amount of her entitlement should be reduced. Defendant asserted that (1) because
the retirement checks were deposited into a joint account for the first nineteen
months of the parties’ separation, plaintiff had therefore “received and controlled all
of defendant’s retirement income” during this time, and that (2) plaintiff’s
entitlement should be reduced because defendant had “used the net income of his
retirement benefits” to make payments towards the mortgage owed on the former
marital residence and on a loan obligation of the parties’ adult daughter. Defendant’s
motion did not allege that his payments towards the mortgage or loan were made
with his separate funds.
On 21 April 2014, defendant filed a motion for partial summary judgment
regarding the identification, valuation, and distribution of marital assets. On 20 May
2014, defendant filed a sworn equitable distribution affidavit in which defendant
averred in relevant part that:
The parties entered into a Separation Agreement dated 16
May 2011 in which the parties settled all their claims
except for their claim for Equitable Distribution. Both
parties contemplated that they would equally divide their
marital property and debts as provided by North Carolina
General Statute 50-20(c). . . . [I]n order to establish an
Equitable Distribution of the marital assets and debts,
plaintiff will have to pay a distributive award to defendant
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of $2,109.05. That being the case, each party will have
assets valued at $175,551.76. It is respectfully submitted
that the division in this case should be an equal division by
using the net value of marital property and net value of
divisible property. It is respectfully contended that there
are no factors which would support a finding that an equal
division is not equitable.
(Emphasis added.) On 19 May 2014, the trial court conducted a hearing on equitable
distribution and defendant’s summary judgment motion. The trial court entered an
order on 9 September 2014 denying defendant’s motion for partial summary
judgment and distributing the marital estate.1 The trial court found that the parties
had “testified and stipulated to the Court that an equal division was equitable,” and
directed defendant to pay plaintiff a distributive award of $52,595.05. Details of the
trial court’s order for equitable distribution are discussed below, as relevant to the
issues raised on appeal. On 17 September 2014, defendant filed a “motion to vacate
order, for [a] new trial pursuant to Rule 59 . . . [and] to disqualify Judge Walter
Mills[.]” On 9 October 2014, defendant appealed to this Court before obtaining a
ruling on his Rule 59 motion.
II. Standard of Review
It is undisputed that
[t]he standard of review on appeal from a judgment entered
after a non-jury trial is whether there is competent
evidence to support the trial court’s findings of fact and
whether the findings support the conclusions of law and
1 The equitable distribution order stated that defendant’s Rule 11 motion was “continued to a
date uncertain for later hearing.”
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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.
Pegg v. Jones, 187 N.C. App. 355, 358, 653 S.E.2d 229, 231 (2007) (internal quotation
omitted), aff'd per curiam, 362 N.C. 343, 661 S.E.2d 732 (2008). “The trial court's
findings need only be supported by substantial evidence to be binding on appeal.”
Pulliam v. Smith, 348 N.C. 616, 625, 501 S.E.2d 898, 903 (1998) (citations omitted).
In addition, “[i]t is well established by this Court that where a trial court’s findings
of fact are not challenged on appeal, they are deemed to be supported by competent
evidence and are binding on appeal.” Juhnn v. Juhnn, __ N.C. App. __, __, 775 S.E.2d
310, 313 (2015) (citing In re K.D.L., 207 N.C. App. 453, 456, 700 S.E.2d 766, 769
(2010), disc. review denied, 365 N.C. 90, 706 S.E.2d 478 (2011)).
Furthermore, it is axiomatic that:
“The division of property in an equitable distribution is a
matter within the sound discretion of the trial court.”
When reviewing an equitable distribution order, the
standard of review “is limited to a determination of
whether there was a clear abuse of discretion.” “A trial
court may be reversed for abuse of discretion only upon a
showing that its actions are manifestly unsupported by
reason.”
Petty v. Petty, 199 N.C. App. 192, 197, 680 S.E.2d 894, 898 (2009) (quoting
Cunningham v. Cunningham, 171 N.C. App. 550, 555, 615 S.E.2d 675, 680 (2005),
and White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)), disc. review denied
and appeal dismissed, 363 N.C. 806, 691 S.E.2d 16 (2010).
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III. Denial of Motion for Partial Summary Judgment
Defendant argues first that the trial court erred by denying his “motion for
partial summary judgment as to the identification, classification, valuation, and
distribution of the marital assets and debts of the parties.” After the trial court
denied defendant’s pretrial motion, the court conducted a trial on the parties’ claims
for equitable distribution. Our Supreme Court has held:
The denial of a motion for summary judgment is an
interlocutory order and is not appealable. . . . To grant a
review of the denial of the summary judgment motion after
a final judgment on the merits, however, would mean that
a party who prevailed at trial after a complete presentation
of evidence by both sides with cross-examination could be
deprived of a favorable verdict. This would allow a verdict
reached after the presentation of all the evidence to be
overcome by a limited forecast of the evidence. In order to
avoid such an anomalous result, we hold that the denial of
a motion for summary judgment is not reviewable during
appeal from a final judgment rendered in a trial on the
merits.
Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985) (citing MAS Corp. v.
Thompson, 62 N.C. App. 31, 302 S.E. 2d 271 (1983) (other citations omitted). Harris
is controlling on the issue of the appealability of the trial court’s pretrial ruling on
defendant’s summary judgment motion. “Because this case was tried on the merits
after denial of defendants' motion for summary judgment, under Harris, defendants’
arguments regarding the summary judgment order cannot amount to reversible
error, and we, therefore, do not address them.” Houston v. Tillman, __ N.C. App. __,
__, 760 S.E.2d 18, 20-21 (2014).
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IV. Distributional Factors in N.C. Gen. Stat. § 50-20(c)
Defendant contends that the trial court erred by failing to consider the
distributional factors set out in N.C. Gen. Stat. § 50-20(c). This statute identifies
factors for the trial court to consider in its determination of whether an equal division
would be equitable and provides that:
There shall be an equal division by using net value of
marital property and net value of divisible property unless
the court determines that an equal division is not
equitable. If the court determines that an equal division is
not equitable, the court shall divide the marital property
and divisible property equitably. The court shall consider
all of the following factors under this subsection[.]
On appeal, defendant specifically maintains that the trial court erred by failing
to consider N.C. Gen. Stat. § 50-20(c)(11a), which directs the trial court to consider,
if it determines that an equal division would not be equitable, the “[a]cts of either
party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or
convert the marital property or divisible property, or both, during the period after
separation of the parties and before the time of distribution.” Defendant asserts that
the trial court was required to award him a credit under this subsection for
defendant’s post-separation expenditures for the mortgage and maintenance on the
former marital residence, and also for his post-separation payments towards a loan
obligation of the parties’ adult daughter. In addition, defendant claims that the trial
court should have considered plaintiff’s “waste and conversion” of marital assets. We
hold that on the facts of this case, the court was not required to consider or to make
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written findings addressing the distributive factors set out in N.C. Gen. Stat. § 50-
20(c).
This Court has held that when the parties in an equitable distribution case
agree to an equal division of the marital estate, the trial court should not consider
the distributional factors in N.C. Gen. Stat. § 50-20(c):
[W]here the parties, as here, stipulate that an equal
division of the marital property is equitable, it is not only
unnecessary but improper for the trial court to consider, in
making that distribution, any of the distributional factors
set forth in § 50-20(c). The trial court therefore correctly
refused to credit the husband with any mortgage payments
he made after the separation of the parties.
Miller v. Miller, 97 N.C. App. 77, 81, 387 S.E.2d 181, 184 (1990).
In this case, the trial court found in Finding No. 18(A) that:
Neither party contended that they were entitled to an
unequal distribution of marital assets and liabilities. In
fact, both of them testified and stipulated to the Court that
an equal division was equitable. Because distribution
factors are used only to determine whether an equal
division of assets would not be equitable, a trial court
should not consider, or make findings as to the
distributional factors in N.C.G.S. § 50-20(c), when the
parties have stipulated to an equal division of all marital
and divisible assets and liabilities. Therefore, neither party
is entitled to any credits for post separation payments.
This finding is supported by evidence that clearly establishes that defendant had
agreed to an equal division of the marital estate. As discussed above, defendant
executed a sworn affidavit averring in relevant part that:
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The parties entered into a Separation Agreement dated 16
May 2011 in which the parties settled all their claims
except for their claim for Equitable Distribution. Both
parties contemplated that they would equally divide their
marital property and debts as provided by North Carolina
General Statute 50-20(c). . . . It is respectfully submitted
that the division in this case should be an equal division by
using the net value of marital property and net value of
divisible property. It is respectfully contended that there
are no factors which would support a finding that an equal
division is not equitable.
(emphasis added). During the hearing, defendant was asked if he agreed to an equal
division and responded as follows:
PLAINTIFF’S COUNSEL: Mr. Cushman, . . . do you agree
than an equal division of assets and liabilities is the fair
thing for the judge to do between you and Ms. Cushman?
DEFENDANT: What asset are we talking about now?
PLAINTIFF’S COUNSEL: All of --
DEFENDANT: All assets?
PLAINTIFF’S COUNSEL: Anything you accumulated
during the marriage, would you agree that an equal
division is fair between the two of you?
DEFENDANT: I do, state law demands it I think.
PLAINTIFF’S COUNSEL: All right. So you agree and
stipulate that an equal division is what Judge Mills should
do?
DEFENDANT: Correct, sir.
Moreover, defendant’s counsel began his argument to the trial court by
explicitly asserting that an equal division of the parties’ assets would be equitable:
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TRIAL COURT: Any argument, Mr. Hooten?
DEFENSE COUNSEL: We agree that it ought to be an
equitable distribution case with equal division and I think
if Your Honor will look at the Equitable Distribution
Affidavit we prepared . . . an equal division would give each
party about $175,000 in assets[.]
(emphasis added). We conclude that the record evidence clearly supports the trial
court’s finding that the parties had agreed to an equal division of the marital estate.
Defendant argues on appeal that the evidence fails to establish that the parties
had entered into a formal stipulation. Defendant makes various arguments
challenging the validity of their agreement on this issue, including the failure of the
trial court to conduct an inquiry into the parties’ understanding of the legal
consequences of their agreement, and the fact that the record does not contain a
sworn written stipulation in which both parties signed a document agreeing to an
equal division. We determine that, given defendant’s repeated assertions at the trial
level that an equal division would be equitable, we need not decide whether the
parties’ agreement met the technical requirements for a legally binding “stipulation.”
It is undisputed that at the trial level - in defendant’s equitable distribution
affidavit, in defendant’s testimony, and in defense counsel’s argument - defendant
pursued the theory that an equal division of the marital estate would be equitable.
Our Supreme Court “has long held that where a theory
argued on appeal was not raised before the trial court, the
law does not permit parties to swap horses between courts
in order to get a better mount in the appellate courts. . . .
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The defendant may not change his position from that taken
at trial to obtain a steadier mount on appeal.”
Balawejder v. Balawejder, 216 N.C. App. 301, 307, 721 S.E.2d 679, 683 (2011)
(quoting State v. Holliman, 155 N.C. App. 120, 123, 573 S.E.2d 682, 685 (2002)
(internal citations and quotation marks omitted). In this case, defendant expressly
sought an equal division of the marital estate at the hearing on this matter, and may
not take the opposite position on appeal. Given that defendant agreed at the trial
level that an equal division of the marital estate would be equitable, the trial court
was not required to make findings demonstrating its consideration of the
distributional factors set out in N.C. Gen. Stat. § 50-20(c). Miller, 97 N.C. App. at 81,
387 S.E.2d at 184.
V. Defendant’s Post-Separation Payments Toward Marital Debt
Defendant argues next that the trial court erred by failing to “classify
[defendant’s] post-separation payments on the marital debt as divisible property and
distribute the same.” Defendant contends that his post-separation expenditures on
“the mortgage, Sallie Mae loan, and maintenance, upkeep and repairs to the marital
home,” constitute divisible property that the trial court was required to distribute.
We disagree.
On appeal, defendant argues that the trial court was required to classify, value,
and distribute three categories of post-separation payments: (1) payments towards
the mortgage on the former marital residence; (2) money spent on maintenance and
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repair of the former marital residence, and; (3) payments towards a debt incurred by
the parties’ adult daughter. We have held that “ ‘[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.’ ” Bodie v. Bodie, 221 N.C. App. 29, 34, 727 S.E.2d 11, 15-16
(2012) (quoting Walter v. Walter, 149 N.C. App. 723, 731, 561 S.E.2d 571, 576-77
(2002)). The crucial requirement for our purposes is that defendant is only entitled
to credit for payments made “from non-marital or separate” funds. As we observed
in Bodie, “[defendant] has not cited any cases, and we know of none, holding that a
spouse is entitled to a ‘credit’ for post-separation payments made using marital
funds.” Id.The trial court made the following findings of fact addressing defendant’s
contention that he was entitled to credit for these post-separation payments:
18. The Defendant contends that he is entitled to various
other credits for debts and expenses that he has paid since
the parties’ separation. He is not entitled to these credits.
In further support hereof, the Court finds as follows:
A. Neither party contended that they were entitled to an
unequal distribution of marital assets and liabilities. In
fact, both of them testified and stipulated to the Court that
an equal division was equitable. Because distribution
factors are used only to determine whether an equal
division of assets would not be equitable, a trial court
should not consider, or make findings as to the
distributional factors in N.C.G. S. § 50-20(c), when the
parties have stipulated to an equal division of all marital
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and divisible assets and liabilities. Therefore, neither party
is entitled to any credits for post separation payments.
B. The Defendant contends that he is entitled to various
credits relating to mortgage payments and expenses to
maintain the Pamlico County property. As set forth above,
he has stipulated that an equal division is equitable.
Furthermore, he continued to occupy the former marital
residence and be in complete control of it after the parties
separated. Also, this property has been sold, and both
parties, as to this marital asset, made the decision to divide
this money equally. Certainly, the repairs and
improvements done to the residence created equity in the
home, which was present as cash in the proceeds of the
sale, and again, subsequently divided equally by the
parties. The reduction in the principal amount of the
mortgage represents divisible property; however, there is
insufficient evidence to determine value. Therefore, this
property is not subject to distribution in this matter.
C. The Defendant contends that a certain student loan
incurred for the benefit of [Hailey] S. Cushman is a marital
debt for which he is entitled to credit because of payments
that he made on the debt following the separation. Neither
the Plaintiff nor the Defendant are obligated on the loan.
The debt was not incurred for the benefit of the Plaintiff or
the Defendant. It is a student loan incurred solely by the
parties’ daughter, [Hailey] S. Cushman, and is not subject
to this action.
We will consider separately the types of post-separation payments at issue in
this case. Regarding defendant’s payments for utilities and routine maintenance of
the marital residence, defendant does not dispute the trial court’s finding that
defendant “continued to occupy the former marital residence and be in complete
control of it after the parties separated.” Defendant has neither advanced any
argument that it would be fair for plaintiff to bear responsibility for defendant’s living
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expenses such as water and electricity after their separation, nor cited any authority
classifying such payments as divisible property. We conclude that the trial court did
not err by ruling that defendant was not entitled to credit for these expenses.
Regarding payments towards the loan obligation of the parties’ adult daughter,
we conclude that the trial court’s finding on this issue was supported by the evidence.
Defendant argues that the parties had agreed to assume responsibility for their
daughter’s loan as part of paying for her education and that, on the basis of their
personal agreement, this debt should be classified as marital property, and his post-
separation payments as divisible property. Plaintiff, however, testified that she did
not regard the loan as a marital responsibility. “The trial court is the sole judge of the
weight and credibility of the evidence.” Montague v. Montague, __ N.C. App. __, 767
S.E.2d 71, 74 (2014) (citing Phelps v. Phelps, 337 N.C. 344, 357, 446 S.E.2d 17, 25
(1994)). The trial court’s finding on this issue is supported by competent evidence
and should be upheld.
Defendant also asserts that his post-separation payments towards the
mortgage on the former marital residence and for repairs to the residence are
divisible property. Defendant has failed, however, to produce evidence of the dollar
amount, if any, of such payments that were made with his separate funds. Defendant
concedes that the post-separation payments were made using his retirement benefits
and, to an unspecified extent, from his Social Security benefits. Defendant testified
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Opinion of the Court
that the repairs to the former marital property were made “exclusively” using his
retirement funds, and that defendant had spent approximately $4,400 from his
“retirement fund” on home repair. Defendant does not, however, challenge the trial
court’s Finding No. 11:
11. The Defendant is retired from the United States
Marine Corps. The Plaintiff is entitled to 50 percent of the
Defendant’s gross disposable retirement pay. Her
entitlement to 50 percent of this gross disposable retired
pay vested at the time the parties separated on May 31,
2010. As set forth above, the parties have entered an order
distributing to the Plaintiff her share of the Defendant’s
gross disposable retired pay. She received her share of that
retired pay by way of a check from DFAS for the first time
on December 31, 2013. . . .
Because it is undisputed that plaintiff was entitled to half of defendant’s
retirement benefits, defendant’s “retirement fund” consisted of a commingled account
that included funds belonging to plaintiff. Defendant did not introduce any
documentation of the amount of his post-separation payments from his “retirement
fund” that could properly be considered defendant’s separate property. Similarly,
although defendant contends that his Social Security benefits are separate property
which defendant used to make some post-separation payments, defendant never
produced any documentation of the amount he spent from his separate funds.
Defendant also admitted at trial that he did not know the extent to which these
payments resulted in a reduction in the principal debt.
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“ ‘The burden of showing the property to be marital is on the party seeking to
classify the asset as marital and the burden of showing the property to be separate is
on the party seeking to classify the asset as separate.’ ” Johnson v. Johnson, __ N.C.
App. __, __, 750 S.E.2d 25, 29 (2013) (quoting Atkins v. Atkins, 102 N.C. App. 199,
206, 401 S.E.2d 784, 787 (1991)). The statutory mandates that “the trial court (1)
classify and value all property of the parties . . . (2) consider the separate property in
making a distribution of the marital property, and (3) distribute the marital property,
necessarily exist only when evidence is presented to the trial court which supports
the claimed classification, valuation and distribution.” Miller, 97 N.C. App. at 80,
387 S.E.2d at 184. Defendant neglected to introduce evidence establishing the
amount of the post-separation payments made from his separate funds. Because
defendant failed to meet his burden to introduce evidence on this issue, the trial court
did not err by making no findings specifically valuing or distributing defendant’s post-
separation payments. See Albritton v. Albritton, 109 N.C. App. 36, 41, 426 S.E.2d 80,
83-84 (1993) (“We see no reason to remand this case on the basis that the trial court
failed to make a specific finding . . . when it was plaintiff who failed to provide the
trial court with the necessary information. . . . [T]he trial court's failure to put a
specific value on defendant’s pension plan was not error.”).
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Moreover, given that it was defendant’s burden to produce evidence on this
issue, we will not remand for the taking of additional evidence. This Court has long
held that where
the party claiming the property, here a debt, to be marital
has failed in his burden to present evidence from which the
trial court can classify, value and distribute the property,
that party cannot on appeal claim error when the trial
court fails to classify the property as marital and distribute
it. . . . Furthermore, remanding the matter for the taking
of new evidence, in essence granting the party a second
opportunity to present evidence, ‘would only protract the
litigation and clog the trial courts with issues which should
have been disposed of at the initial hearing.’
Miller, 97 N.C. App. at 80, 387 S.E.2d at 184 (quoting In re Marriage of Smith, 448
N.E.2d 545, 550 (Ill. App. Ct. 1983)).
For the reasons discussed above, we conclude that the trial court did not err
and that its equitable distribution order should be
AFFIRMED.
Judges BRYANT and CALABRIA concur.
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