Bodie v. Bodie

• Decision Date: 05 June 2012
• Docket Number: No. COA11–999.,COA11–999.
• Citation: 727 S.E.2d 11
• Parties: Barry Hoyt BODIE, Plaintiff v. Claire Voegler BODIE, Defendant.
• Court: North Carolina Court of Appeals

727 S.E.2d 11

Barry Hoyt BODIE, Plaintiff

v.Claire Voegler BODIE, Defendant.

No. COA11–999.

Court of Appeals of North Carolina.

June 5, 2012.

Appeal by plaintiff from order entered 3 August 2009 by Judge Mack Brittain in Transylvania County District Court and by defendant from order entered 25 February 2011 by Judge David K. Fox in Transylvania County District Court. Heard in the Court of Appeals 11 January 2012.

Dameron Burgin Parker Jackson Wilde & Walker, P.A., by Phillip T. Jackson, Marion, for Plaintiff.

Donald H. Barton, Brevard, for Defendant.

ERVIN, Judge.

Plaintiff Barry Hoyt Bodie appeals from an order distributing the parties' marital and divisible property and Defendant Claire Voegler Bodie appeals from an order denying her alimony claim. On appeal, Plaintiff argues that the trial court erred by failing to properly classify, value, and distribute certain items of property, while Defendant argues that the trial court erroneously rejected her alimony claim. After careful consideration of the parties' challenges to the trial court's orders in light of the record and the applicable law, we conclude that the trial court's equitable distribution order should be affirmed in part and reversed and remanded for additional findings in part and that the trial court's alimony order should be affirmed.

I. Background

A. Substantive Facts

The parties were married on 16 April 1996 and moved to Brevard, where Plaintiff began working as a physician at Western Carolina Urological Associates, in 1997. In 2008, Plaintiff transferred his practice to Transylvania Physician Services. The parties had one child in 1999. The parties separated 2 July 2005 and divorced on 15 September 2006.

After moving to Brevard, the parties purchased a home located at 98 Soquilli Drive. In January 2004, the Soquilli property was refinanced, resulting in a total indebtedness associated with that home of $256,000.00. A second mortgage in the amount of $26,000.00 was taken out on the Soquilli property later in 2004. The Soquilli property had an appraised value of $255,000.00 as of the date of separation, with an outstanding balance of about $241,000.00 associated with the first deed of trust and an outstanding balance of $26,000.00 associated with the second deed of trust. On 5 January 2009, the Soquilli property was appraised at $275,000.00. As of 15 July 2009, the balance on the first deed of trust was approximately $233,100.00, while the obligation associated with the second deed of trust had been fully satisfied.

Prior to the date of separation, the parties purchased a second marital home located on Country Club Circle. The Country Club Circle property had an appraised value of $450,000.00 on the date of separation, subject to an outstanding indebtedness of $460,000.00. As of 5 January 2009, the Country Club Circle property had an appraised value of $475,000.00 and was subject to an outstanding secured indebtedness totaling approximately $435,400.00. Additional facts relating to the parties' assets and liabilities will be provided at appropriate places throughout the remainder of this opinion.

B. Procedural History

On 3 August 2005, Plaintiff filed an action for child custody and equitable distribution. On 18 August 2005, Defendant filed an answer to Plaintiff's complaint and asserted various counterclaims. The parties' pleadings raised the following issues: child custody, child support, divorce from bed and board, post-separation support, alimony, and equitable distribution.

On 11 July 2006, the trial court entered an order requiring Plaintiff to pay the mortgage on the Country Club Circle property for the following year. On 18 December 2006, the trial court entered an order addressing the parties' custody and child support claims. On 9 November 2007, a consent order was entered providing that the two homes owned by the parties would be listed for sale and that the net proceeds resulting from the sale would be placed in the trust account of Plaintiff's attorney. On 12 February 2008, an order was entered giving Plaintiff possession of the Country Club Circle property.

On 3 August 2009, the trial court entered an equitable distribution order, from which Plaintiff attempted to appeal to this Court. On 7 December 2010, we dismissed Plaintiff's appeal as having been taken from an unappealable interlocutory order. Bodie v. Bodie, 208 N.C.App. 281, 702 S.E.2d 556 (2010) (unpublished). On 25 February 2011, the trial court entered an order denying Defendant's alimony claim. After all proceedings at the trial court level had been concluded, Plaintiff noted a second appeal to this Court from the equitable distribution order and Defendant noted an appeal to this Court from the alimony order.

II. Equitable Distribution Order

A. Post-separation Marital Debt Payments

In its order, the trial court found as a fact that:

10. The Court finds that Husband has paid $216,000.00 towards the mortgage, insurance, upkeep and taxes for the marital residences after the DOS and that these payments were for marital debt.

In his brief, Plaintiff argues that the “trial court made no determination about the existence or distribution of any divisible property, even though the trial court's findings of fact acknowledged the existence of at least $216,000.00 in divisible property.” Having made the finding of fact recited above, Plaintiff contends that the trial court should have classified the debt payments as divisible property and included the value of these payments in its subsequent distribution decision. We agree.

N.C. Gen.Stat. § 50–20(a) provides that, in an equitable distribution proceeding, “the court shall determine what is the marital property and divisible property and shall provide for an equitable distribution of the marital property and divisible property between the parties in accordance with the provisions of this section.” As a result:

The first step of the equitable distribution process requires the trial court to classify all of the marital and divisible property—collectively termed distributable property—in order that a reviewing court may reasonably determine whether the distribution ordered is equitable. In fact, “to enter a proper equitable distribution judgment, the trial court must specifically and particularly classify and value all assets and debts maintained by the parties at the date of separation.”

Robinson v. Robinson, ––– N.C.App. ––––, ––––, 707 S.E.2d 785, 789 (2011) (citing Cunningham v. Cunningham, 171 N.C.App. 550, 555–56, 615 S.E.2d 675, 680 (2005), and quoting Dalgewicz v. Dalgewicz, 167 N.C.App. 412, 423, 606 S.E.2d 164, 171 (2004)). “It is not enough that evidence can be found within the record which could support such classification; the court must actually classify all of the property and make a finding as to the value of all marital [and divisible] property.” Robinson, ––– N.C.App. at ––––, 707 S.E.2d at 790 (citing Warren v. Warren, 175 N.C.App. 509, 514–15, 623 S.E.2d 800, 804 (2006)).

According to N.C. Gen.Stat. § 50–20(b)(4)d, divisible property includes “[i]ncreases and decreases in marital debt and financing charges and interest related to marital debt.” For that reason, a trial judge deciding an equitable distribution case must make findings classifying and distributing increases and decreases in marital debt. In this case, after finding that Plaintiff “paid $216,000.00 towards the mortgage, insurance, upkeep and taxes for the marital residences after the DOS and that these payments were for marital debt,” the trial court failed to classify these payments as divisible property or make specific findings distributing this divisible property. We believe that the trial court's failure to make such findings and a related distribution decision constituted an error of law.

“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. Likewise, a spouse is entitled to some consideration for any post-separation use of marital property by the other spouse.” Walter v. Walter, 149 N.C.App. 723, 731, 561 S.E.2d 571, 576–77 (2002) (citing Edwards v. Edwards, 110 N.C.App. 1, 11, 428 S.E.2d 834, 838,disc. review denied,335 N.C. 172, 436 S.E.2d 374 (1993), and Becker v. Becker, 88 N.C.App. 606, 607–08, 364 S.E.2d 175, 176–77 (1988)). For that reason, the trial court may, after classifying post-separation debt payments as divisible property, distribute the payments unequally. Stovall v. Stovall, 205 N.C.App. 405, 413, 698 S.E.2d 680, 686 (2010) (stating that “the trial court properly classified defendant's post-separation payments as divisible property,” that the trial court concluded that “ ‘defendant is entitled to a credit of $160,000 for the payments of the marital debt,’ ” and that, although “the trial court labeled the $160,000.00 as a ‘credit[,]’ in actuality, it treated the $160,000.00 as divisible property and concluded that an equal distribution was not equitable”). Plaintiff 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. As a result, in order to properly evaluate the trial court's treatment of post-separation marital debt payments, the source of the funds used to make the payments should be identified.

The equitable distribution order at issue here does not include a finding that the post-separation payments in question constituted divisible property or any findings regarding the extent, if any, to which Plaintiff paid these marital debts using separate property. Although the trial court found that Plaintiff paid $216,000.00 towards the mortgage, insurance, upkeep and taxes on the marital residences after the date of separation; that a 401(k) retirement account associated with Plaintiff's employment at Western Carolina Urology had a date of separation “marital...