Bass v. Bass, No. COA08-1455 (N.C. App. 10/6/2009)
| Decision Date | 06 October 2009 |
| Docket Number | No. COA08-1455,COA08-1455 |
| Court | North Carolina Court of Appeals |
| Parties | JERRY L. BASS, Plaintiff v. JOY V. BASS, Defendant. |
Jess, Isenberg & Thompson, by Laura E. Thompson, for plaintiff-appellant.
Plaintiff appeals from Equitable Distribution Order entered 2 November 2007 and Alimony Order entered 14 March 2008 by Judge Napoleon Barefoot, Jr. in Brunswick County District Court. Plaintiff also appeals the denial of his Rule 59 Motion for New Trial entered 10 June 2008 with regard to alimony and attorney fees. After careful review, with regard to the equitable distribution order, we affirm in part, reverse in part, and remand for further proceedings not inconsistent with this opinion including the taking of additional testimony from the parties on issues remanded herein. With regard to the alimony order, we affirm in part, reverse the award of attorney fees, and remand for further findings by the trial court as to reasonable attorney fees. We affirm the trial court's denial of plaintiff's motion for a new trial.
Jerry Bass ("plaintiff") and Joy Bass ("defendant") were married on 10 December 1982 and separated on 3 October 2004. On 29 April 2005, plaintiff filed a complaint seeking divorce from bed and board and equitable distribution in the district court of Brunswick County, North Carolina. On 16 June 2005, defendant filed an answer and counterclaim seeking divorce from bed and board, post-separation support, alimony, attorney fees, and equitable distribution. On 20 May 2005, a Temporary Order of Interim Distribution was entered regarding possession of the parties' two homes, owned as marital property. On 11 May 2007, the court entered an interim distributive award ordering plaintiff to pay to defendant $6,500 on 1 May 2007, and $6,500 on 15 June 2007.
The trial court conducted hearings regarding equitable distribution on 13-14 June 2007, 11-12 July 2007, and 15 August 2007. On 1 November 2007, the court issued an Equitable Distribution Order, which was entered on 2 November 2007, requiring plaintiff to pay defendant a distributive award in the amount of $100,000. On 13 November 2007, plaintiff filed a Rule 59 motion for a new trial regarding equitable distribution, which was denied on 28 December 2007. On 14 March 2008, the court entered an Alimony Order requiring plaintiff to pay defendant $3,200 per month payable for eleven years, until remarriage or cohabitation of defendant, or death of either party, whichever occurs first. Plaintiff was also ordered to pay defendant's attorney fees. On 24 March 2008, plaintiff filed a Rule 59 Motion for New Trial regarding alimony and attorney fees, which was denied on 10 June 2008. Plaintiff filed notice of appeal on 13 June 2008.
"The standard of review of the percentage division of marital property in equitable distribution cases is for an abuse of discretion." Squires v. Squires, 178 N.C. App. 251, 256, 631 S.E.2d 156, 159 (2006). "A trial court's decision on the amount of alimony to be awarded is [also] reviewed for an abuse of discretion." Fitzgerald v. Fitzgerald, 161 N.C. App. 414, 420, 588 S.E.2d 517, 522 (2003).
It is well established that where matters are left to the discretion of the trial court, appellate 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. A ruling committed to a trial court's discretion is to be accorded great deference and will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.
White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985) (citations omitted). Additionally, "[i]t is well established that a trial court's conclusions of law must be supported by its findings of fact." Robertson v. Robertson, 167 N.C. App. 567, 574 605 S.E.2d 667, 671 (2004). "While findings of fact by the trial court in a non-jury case are conclusive on appeal if there is evidence to support those findings, conclusions of law are reviewable de novo." Lee v. Lee, 167 N.C. App. 250, 253, 605 S.E.2d 222, 224 (2004).
I.
Plaintiff has been employed by Watson Electrical Construction Company, LLP ("Watson Electric") since 1966 and owned valuable stock in the company at the time of equitable distribution.1 Plaintiff first argues that the trial court committed reversible error in finding that the increase in value of the Watson Electric stock, classified as marital property, between the date of separation and the date of trial was divisible property. The trial court evenly divided the stock value increase of $224,004.78 between the parties. Plaintiff alleges that the increase was due to his active efforts and was therefore not properly classified as divisible property.2
Equitable distribution follows a statutorily-prescribed formula. The trial court first classifies the property as marital or separate; next, it determines the marital property's net value; last, it distributes that property between the parties. Taylor v. Taylor, 92 N.C. App. 413, 417, 374 S.E.2d 644, 646 (1988).
Here, the trial court held that the stock value increase was divisible property. N.C. Gen. Stat. § 50-20(b)(4) states in pertinent part:
(4) "Divisible property" means all real and personal property as set forth below:
a. All appreciation and diminution in value of marital property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of postseparation actions or activities of a spouse shall not be treated as divisible property.
b. All property, property rights, or any portion thereof received after the date of separation but before the date of distribution that was acquired as a result of the efforts of either spouse during the marriage and before the date of separation, including, but not limited to, commissions, bonuses, and contractual rights.
c. Passive income from marital property received after the date of separation, including, but not limited to, interest and dividends.
N.C. Gen. Stat. § 50-20(b)(4) (2007) (emphasis added). Therefore, according to the statute, any increase in value of the stock that is due to plaintiff's active efforts cannot be deemed divisible property, but any passive increase in value is properly classified as divisible property. Id.
Here, the total value of the Watson Electric stock at the date of separation was $49,504.40. The total value of the stock at the date of trial was $273,509.18. The trial court found as fact "[t]hat nothing separate and apart from the performance of Watson Electric as a whole, created the stock of Watson Electric to increase post separation." Accordingly, the court found that the $224,004.78 increase in the marital property was divisible property.
The case of Godley v. Godley, 110 N.C. App. 99, 429 S.E.2d 382 (1993), is informative on this issue. There, the plaintiff-wife claimed that the trial court committed reversible error in finding that the defendant-husband's stock, which he owned as separate property during the marriage, had no active appreciation during the marriage. Id. at 109, 429 S.E.2d at 388-89. Had the increase been the result of active efforts of one spouse during the marriage, despite the fact that the stock was the husband's separate property, the increase would have been marital property and subject to division. See id. The trial court deemed the increase to be passive because
"[d]efendant was not a manager or other person directing or controlling any of the business operations of Godley Construction Company." The court then concluded that "[c]hanges in value of Defendant's interest in Godley Construction Company . . . are not the result of any active effort on the part of Defendant[.]" Defendant testified at trial that he worked for Godley Construction Company "[i]n a very limited basis."
Id. at 109-10, 429 S.E.2d at 389. While the stock in Godley was the husband's separate property, not marital property as we have in the present case, the court's evaluation of what constitutes a passive versus an active increase in stock is instructive. The Court focused on the husband's role in the company. Id. The fact that his involvement with the company was limited, and that he did not have any control over its operations, led the Court to determine that there was sufficient evidence to find that the increase was passive. Id.
Conversely, plaintiff in the case sub judice testified to his executive position in Watson Electric after the company emerged from bankruptcy, and his active role in rehabilitating the company. Plaintiff asserts that as the company grew, the stock gained in value, and it was, in part, due to his active efforts. Plaintiff testified as follows:
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