Curtis v. Curtis
| Decision Date | 01 May 2012 |
| Docket Number | No. COA11–1350.,COA11–1350. |
| Citation | 725 S.E.2d 472 |
| Parties | Charles Michael CURTIS, Plaintiff, v. Lori Ellen CURTIS, Defendant. |
| Court | North Carolina Court of Appeals |
Charles Michael CURTIS, Plaintiff,
v.
Lori Ellen CURTIS, Defendant.
No. COA11–1350.
Court of Appeals of North Carolina.
May 1, 2012.
Appeal by defendant from order entered 5 May 2011 by Judge Sherri W. Elliott in Caldwell County District Court. Heard in the Court of Appeals 21 March 2012.
Bruce L. Cannon for the plaintiff.
Wesley E. Starnes for the defendant.
THIGPEN, Judge.
Lori Ellen Curtis (“Defendant”) appeals from an equitable distribution order. After a review of the record, we reverse and remand the portions of the trial court's order (1) calculating Defendant's share of Charles Michael Curtis' (“Plaintiff”) 401(k) plan; (2) valuing Defendant's former business, Mind Body Connection, at $5,000.00; and (3) finding that Defendant's personal injury settlement was marital property. For all other issues, we affirm.
Plaintiff and Defendant were legally married on 12 September 1992. The parties subsequently separated, and, on 9 February 2007, Plaintiff filed this action seeking an absolute divorce and equitable distribution of marital property. The parties divorced on 15 June 2007. For purposes of valuation, the parties stipulated to a valuation date of 9 January 2006.
Plaintiff filed bankruptcy on 14 August 2006, during the separation of the parties. Plaintiff was granted a discharge under Title 11 of the Bankruptcy Code, and his bankruptcy concluded on 11 April 2008. On 13 July 2010, the parties entered into a Consent Order to peremptorily set this action for an equitable distribution hearing on 10 August 2010. After the hearing, the trial court entered an order on 5 May 2011. In the order, the trial court concluded that an equal division of marital property was equitable and granted each of the parties certain items of marital property. Defendant appeals from this order.
On appeal, Defendant contends the trial court erred (I) in its calculation of Defendant's portion of Plaintiff's BellSouth 401(k) savings plan; (II) by finding that $50,000 withdrawn by Plaintiff from his 401(k) was used to satisfy a marital debt; (III) by ordering 55.64 acres of real property be sold on the open market; (IV) by failing to consider the use of marital funds to satisfy Plaintiff's separate debt on the South Carolina home; and (V) by making certain findings of fact that are not supported by competent evidence.
The following is a summary of our standard of review:
On appeal, when reviewing an equitable distribution order, this Court will uphold the trial court's written findings of fact as long as they are supported by competent evidence. However, the trial court's conclusions of law are reviewed de novo. Finally, this Court reviews the trial court's actual distribution decision for abuse of discretion.
Mugno v. Mugno, 205 N.C.App. 273, 276, 695 S.E.2d 495, 498 (2010) (citations and quotation marks omitted).
Defendant first contends the trial court erred in its calculation of Plaintiff's BellSouth 401(k) savings plan because the calculation is contrary to N.C. Gen.Stat. § 50–20.1. We agree.
Pursuant to N.C. Gen.Stat. § 50–20.1(d) (2011), an award of retirement benefits:
shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties), simultaneously with the employment which earned the vested and nonvested pension, retirement, or deferred compensation benefit, to the total amount of time of employment. The award shall be based on the vested and nonvested accrued benefit, as provided by the plan or fund, calculated as of the date of separation, and shall not include contributions, years of service, or compensation which may accrue after the date of separation....
“The numerator of this fraction, termed a coverture fraction, represents the total number of years of marriage, up to the date of separation, which occurred simultaneously with the employment which earned the vested and nonvested pension. The denominator represents the total years of employment during which the pension accrued.” Robertson v. Robertson, 167 N.C.App. 567, 572, 605 S.E.2d 667, 670 (2004) (quotation and quotation marks omitted). The valuation method prescribed by N.C. Gen.Stat. § 50–20.1(d) is known as the “fixed percentage method.” Gagnon v. Gagnon, 149 N.C.App. 194, 198, 560 S.E.2d 229, 231 (2002) (citations omitted). “Under this method if, after valuing the marital estate, the court finds a distributive award of retirement benefits necessary to achieve an equitable distribution, the nonemployee spouse is awarded a percentage of [the retirement benefits] ... based on the total portion of benefits attributable to the marriage.” Seifert v. Seifert, 319 509, rehearing denied, 319 N.C. “The portion of benefits attributable to the marriage is calculated by multiplying the net ... [retirement] benefits by” the coverture fraction. Id. (citation omitted).
In this case, the trial court made the following unchallenged findings of fact:
17. That the plaintiff had $23,114.04 in a BellSouth 401(K) plan on the date of separation with a loan balance of $5,186.00, which has been paid in full by the plaintiff.
18. That the plaintiff had $9,000.00 in his 40l(K) plan on the date of marriage.
19. That as of August 6, 2010, the balance in the 40l(K) plan was $36,790.00 and subject to no loans.
20. That the marital and divisible portion of the 40l(K) plan is $27,790.00, which asset is divided between the parties.
21. Defendant is entitled to $7,225.40 of Plaintiff's Bellsouth 40l(K) savings plan.
+----------------------------------------+
¦Calculation: ¦$36,790.00 ¦
+------------------+---------------------¦
¦Less ¦-$9,000.00 ¦
+------------------+---------------------¦
¦ ¦(agreed value at DOM)¦
+------------------+---------------------¦
¦Total ¦$27,790.00 ¦
+------------------+---------------------¦
¦Wife's entitlement¦26% ¦
+------------------+---------------------¦
¦Total award ¦$7,225.40 ¦
+----------------------------------------+
Parties were married 52% of the time the Plaintiff was employed with Bellsouth. 52% x 50% = 26%. Thus by the percentage accrual method, a Qualified Domestic Relations Order would award $7,225.40 of this account to Defendant which the Court does so award to the defendant via that method.
Here, Defendant contends “the trial court should have applied the coverture fracture to the entire [401(k) ] amount of $36,790.00” instead of subtracting Plaintiff's separate interest of $9,000 and then applying the coverture fracture. We reject this argument because $36,790.00 was the balance in the 40l(k) plan as of 6 August 2010, approximately 4.5 years after the date of separation. See Cooper v. Cooper, 143 N.C.App. 322, 327, 545 S.E.2d 775, 778 (2001) (holding that “[t]he trial court erred in assigning a marital estate value to the 401(k) account other than its value on the date of separation”).
However, we agree the trial court erred in its calculation of Defendant's portion of Plaintiff's 401(k). Pursuant to N.C. Gen.Stat. § 50–20.1(d), the trial court should have applied the coverture fracture to the “accrued benefit ... calculated as of the date of separation[.]” N.C. Gen.Stat. § 50–20.1(d); see also Seifert, 319 N.C. at 370, 354 S.E.2d at 509. Accordingly, we reverse the portion of the order calculating Plaintiff's 401(k) plan and remand for the trial court to make calculations regarding Plaintiff's 401(k) plan that are consistent with this opinion.
Defendant next contends the trial court erred by finding that $50,000 withdrawn by Plaintiff from his 401(k) plan was used to satisfy a marital debt. Related to this argument, Plaintiff argues findings of fact numbers 16 and 23 are not supported by competent evidence. We disagree.
“A trial court's findings of fact in an equitable distribution case are conclusive if supported by any competent evidence.” Williamson v. Williamson, ––– N.C.App. ––––, ––––, 719 S.E.2d 628, 631 (2011) (quotation omitted). “The credibility of the evidence in an equitable distribution trial is for the trial court.” Quesinberry v. Quesinberry, –––N.C.App. ––––, ––––, 709 S.E.2d 367, 373 (2011) (quotation omitted). “The trial court, as the finder of fact in an equitable distribution case, has the right to believe all that a witness testified to, or to believe nothing that a witness testified to, or to believe part of the testimony and to disbelieve part of it.” Id.
In this case, the trial court made the following relevant findings of fact:
12. That the plaintiff was relieved from numerous debts, marital and separate, by the bankruptcy in an amount of approximately ONE HUNDRED THOUSAND DOLLARS ($100,000.00). The defendant benefited from the plaintiff's bankruptcy filing specifically as it related to the Greer, South Carolina property and unsecured debt. As Schedule F in Plaintiff's Exhibit # 2 indicates, all the debts were incurred after the parties' marriage except approximately $9,000.00 which was prior to 1992.
13. That the plaintiff sought release of FIFTY THOUSAND DOLLARS ($50,000.00) from his 401(K) plan to comply with his bankruptcy plan.
...
16. That the debts discharged in the bankruptcy were primarily marital debt as all but $9,000.00 was incurred during the parties' marriage so very little was plaintiff's separate debt.
...
23. That the plaintiff began receiving the $896.00 per month [from Plaintiff's defined benefit plan with Bell South] in February 2008. That as of the date of this hearing on August 10, 2010, the plaintiff has received 30 monthly payments for a total of $26,880.00. The marital portion of these payments is $13,977.60. Defendant's marital share of the payments is calculated as follows: $896.00 X 26% = $232.96 per month. This amount is actually high since the plaintiff contributed to Pension Plan for 10 years prior to marriage, but equitable since some amount of the $50,000 withdrawn to satisfy the bankruptcy may have been...
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