Cooper v. Cooper
| Decision Date | 01 May 2001 |
| Docket Number | No. COA00-518.,COA00-518. |
| Parties | Jean COOPER, Plaintiff-Appellee, v. Paul D. COOPER, Defendant-Appellant. |
| Court | North Carolina Court of Appeals |
Robert E. Riddle, PA, by Robert E. Riddle, Asheville, for plaintiff-appellee.
Hyler & Lopez, P.A., by George B. Hyler, Jr. and Ann Logan Swearingen, Asheville, for defendant-appellant.
Paul D. Cooper ("defendant"), appeals the trial court's equitable distribution judgment awarding an equal division of marital assets between defendant and Jean Cooper ("plaintiff").
The parties were married 17 April 1989. No children were born of the marriage. On 12 June 1998, the parties divorced, and plaintiff filed an action seeking equitable distribution. The matter was heard on 20 July 1999. The trial court entered an equitable distribution judgment dividing the marital property equally on 31 August 1999. The trial court made the following findings regarding the value of the marital property:
With respect to the division of assets, the trial court made the following findings of fact:
17. ... that the Defendant has an income of $3,215.00 per month net income as compared to the Plaintiff's taxable income of approximately $23,000 in 1998. The Court has considered the length of the marriage, to wit: 8 years.... The [Defendant] is 50 years of age and disabled but receiving Social Security Disability. The [Plaintiff] is 47 years of age and is in generally good health. The plaintiff obtained a real estate license during the marriage but did her classes at night while she was working and earning an income. The Plaintiff offered evidence of her contributions to the marital estate by way of assuming most of the household responsibilities and the Defendant's unilateral withdraw of the 401k [sic] funds. Considering all of these factors the Court finds that they do not weigh in either parties' favor and that an equal division of the marital estate is equitable.
Defendant argues that the trial court's findings of fact with respect to the marital debts, Social Security benefits, 401(k) plan, and total value of the marital estate are erroneous, and are unsupported by competent and substantial evidence in the record. We agree and remand for further findings on the value of the marital estate to be divided.
A trial court is "vested with wide discretion in family law cases, including equitable distribution cases." Wall v. Wall, 140 N.C.App. 303, 307, 536 S.E.2d 647, 650 (2000) (). The trial court's decision regarding distribution of a marital estate "`will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.'" Khajanchi v. Khajanchi, 140 N.C.App. 552, 558, 537 S.E.2d 845, 849 (2000) (quoting White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)).
We agree with defendant that the trial court's findings of fact regarding marital debts, Social Security disability benefits, and the 401(k) account are erroneous. We vacate those portions of the judgment and remand for further findings as set forth below.
In finding of fact number 10, the trial court finds that, at the time of separation, the parties had two credit card debts: (1) Wachovia Bank Card with a balance of $7,653.00; and (2) First USA Bank Card with a balance of $9,095.00. The trial court determines the total of the two debts to be $16,845.00. In fact, the sum of these debts is $16,748.00. Aside from this apparent clerical error, the trial court's finding of fact 7(I) values the marital debt as, "[d]ebts to Wachovia Bank and First USA Bank Card totaling $10,985.31."
It is unclear from the record why there is a discrepancy in the trial court's findings of fact regarding the parties' marital debt. The difference in the amounts in findings of fact 7(I) and 10 is approximately $5,760.00, a significant sum that affects the outcome of the distribution.
Moreover, the trial court distributed to plaintiff $10,895.31 in marital debts. The trial court distributed to defendant $7,727.31 in marital debts. The total of these amounts is $18,622.62. This amount is inconsistent with the trial court's finding as to the total value of marital debts in either finding of fact 10 or 7(I). We remand this matter to the trial court for clarified findings as to the actual value of the marital debts and their division between the parties.
Defendant further argues that the trial court erred in valuing defendant's Social Security disability benefits within the marital estate, and distributing the benefits as part of the marital estate. We agree.
In Johnson v. Johnson, 117 N.C.App. 410, 450 S.E.2d 923 (1994), the defendant-wife argued that the plaintiff-husband's State "disability retirement benefits" should be classified as marital property for purposes of equitable distribution. Id. at 411-12, 450 S.E.2d at 925. We noted that G.S. § 50-20(b)(1) classifies vested "`pension, retirement, and other deferred compensation rights'" as marital property. Id.
The issue in Johnson of whether disability retirement benefits fell within the definition of marital property was an issue of first impression in this State. Id. We stated:
Cases from other jurisdictions are divided as to how disability benefits should be allocated. `Some states have held that they are similar in nature to personal injury awards and should be categorized under the same rules.' Lawrence J. Golden, Equitable Distribution of Property, § 6.11 n. 123 (1983 & Brett R. Turner, Supp.1993). Other states perceive the benefits as replacing lost earnings and as marital property. J. Thomas Oldham, Divorce, Separation And The Distribution Of Property, § 8.03[1] (1994). We agree with the states finding that disability benefits which truly compensate for disability are separate property.
Id. at 414, 450 S.E.2d at 926.
The court in Johnson held that disability benefits which "are truly `disability' benefits," intended to replace loss of earning capacity, should be the separate property of the disabled spouse:
When a spouse contributes a portion of his monthly salary to a retirement fund, both spouses actually contribute marital labor to this fund. If the spouse retires early and begins receiving retirement benefits, it follows that if the spouses divorce, the non-retired spouse still is entitled to a portion of those retirement benefits because that spouse contributed to their acquisition. Here, no marital labor contributed to plaintiff's acquisition of the `disability retirement benefits.' Plaintiff did not contribute money specifically to a disability fund. Disability benefits are personal to the spouse who receives them and are that person's separate property.
Id. at 414-15, 450 S.E.2d at 927, 450 S.E.2d at 927 (emphasis supplied).
In this case, the Social Security Notice of Decision contained in the record establishes that defendant's benefits were awarded for "severe" physical disabilities such as liver disease, a right shoulder injury, and depression. This Decision, issued 23 February 1998, finds that defendant's disabilities prevented him "from performing substantial gainful activity of a sustained basis." The Decision further states that, based on defendant's "residual functional capacity, and vocational factors, there are no jobs existing in significant numbers which he can...
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