Draper v. Draper
| Decision Date | 05 August 2003 |
| Docket Number | NO. COA02-980.,COA02-980. |
| Court | North Carolina Court of Appeals |
| Parties | ANITA LOUISE DRAPER, Plaintiff-Appellant, v. JAMES K. DRAPER, Defendant-Appellee. |
Mary Elizabeth Arrowood for plaintiff-appellant.
James K. Draper, pro se.
Anita Louise Draper (plaintiff) filed a complaint against James K. Draper (defendant) on 5 August 1999 that included claims for an unequal division of marital property and interim distribution of defendant's retirement benefits. Defendant filed an answer and counterclaim for equitable distribution dated 14 September 1999. An equitable distribution hearing was held on 1 October 2001 and the trial court entered a judgment of equitable distribution on 27 November 2001. Plaintiff appeals.
The evidence in the transcript and record tended to show the parties were married on 11 August 1973, separated on 30 October 1998, and divorced by entry of a judgment of divorce on 23 March 2000. Defendant was a member of the United States Air Force fromOctober 1977 until his retirement on 1 November 1997. Defendant was receiving military retirement and disability benefits in the amount of $1,194.00 per month as of the date of separation. Defendant and plaintiff testified that forty percent of defendant's monthly benefits were military disability benefits. Defendant also stated that after taxes and excluding his disability benefits, he received approximately $550 a month net retirement benefits. The trial court found that plaintiff offered no evidence of the date of separation value or the present value of defendant's benefits and therefore declined to distribute the retirement plan as part of equitable distribution.
Plaintiff testified that she lived in the marital home for approximately three months immediately following separation and moved out in January 1999. Plaintiff's check for the mortgage payment in January 1999 was returned for insufficient funds and plaintiff took no action to cover the check. Defendant testified that he took possession of the house in February 1999. Defendant stated that he made the delinquent mortgage payment for January 1999 and continued making mortgage payments of $1,080 until the house was sold on 28 February 2000. Defendant also testified that the parties did not receive any proceeds from the sale of the house but were required to pay closing costs of $5,908.55. This amount consisted of a $5,303.11 debt for a heat pump air conditioning unit that had been installed in July 1998 and additional standard closing costs. Defendant stated that he paid this amount without contribution from plaintiff after obtaining a loan through the VACredit Union. The trial court found a negative value in the home of $5,909 due to the closing costs. Defendant also testified that he paid $993.63 in outstanding expenses for telephone, power, and cable bills incurred by plaintiff for her own personal benefit during her post-separation possession of the home. The trial court found that the parties did not have an agreement that defendant would make the January 1999 mortgage payment or utility bills on behalf of plaintiff. The trial court classified these payments as an advancement in the amount of $934.40 against plaintiff's share of the marital estate.
Plaintiff testified that the parties had a debt at the Pentagon Federal Credit Union on the date of separation of $9,000. Plaintiff also testified that there was approximately $1,100 owed on a Pentagon Federal Credit Union Mastercard as of the date of separation. Defendant testified that he paid $920 in 1999 for the parties' 1998 federal income tax liability. The trial court found marital debts consisting of: $9,006 owed to Pentagon Federal Credit Union; $1,105 owed to Pentagon Federal Credit Union; and a $720 1998 federal income tax liability.
Our standard of review is limited to whether the trial court's judgment is supported by the findings of fact and conclusions of law. Knight v. Knight, 76 N.C. App. 395, 396, 333 S.E.2d 331, 332 (1985).
In appellate review of a bench equitable distribution trial, the findings of fact regarding value are conclusive if there is evidence to support them, even if there is also evidence supporting a finding otherwise. The trial court has discretion in distributingmarital property, and "the exercise of that discretion will not be disturbed in the absence of clear abuse."
Crutchfield v. Crutchfield, 132 N.C. App. 193, 197, 511 S.E.2d 31, 34 (1999) (citations omitted). The decision of the trial court will not be disturbed unless the decision "`was so arbitrary that it could not have been the result of a reasoned decision.'" Edwards v. Edwards, 152 N.C. App. 185, 187, 566 S.E.2d 847, 849 (quoting White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)), cert. denied, 356 N.C. 611, 574 S.E.2d 679 (2002). The trial court, as the finder of fact in an equitable distribution trial, is the sole judge of the credibility of the evidence. Grasty v. Grasty, 125 N.C. App. 736, 739, 482 S.E.2d 752, 754, disc. review denied, 346 N.C. 278, 487 S.E.2d 545 (1997).
Plaintiff first argues the trial court erred in failing to value and equitably distribute defendant's retirement benefits. Plaintiff contends that evidence of a present valuation of defendant's retirement benefits was unnecessary and that the trial court should have utilized the fixed percentage valuation method to award her a portion of defendant's retirement benefits. Defendant concedes in his brief, and we agree, that plaintiff is entitled to receive a portion of defendant's retirement benefits because the parties were married throughout his twenty-year military career and the benefits that accrued before separation are marital property. In the Uniformed Services Former Spouses' Protection Act, the United States Congress authorized the states to classify militaryretirement pay as marital or separate. Armstrong v. Armstrong, 322 N.C. 396, 401, 368 S.E.2d 595, 597-98 (1988). Our General Assembly subsequently enacted N.C. Gen. Stat. § 50-20(b)(1) (2001), which states that marital property includes "vested and nonvested military pensions eligible under the federal Uniformed Services Former Spouses' Protection Act." See George v. George, 115 N.C. App. 387, 388-89, 444 S.E.2d 449, 450 (1994), cert. denied, 342 N.C. 192, 463 S.E.2d 236 (1995); Morris v. Morris, 79 N.C. App. 386, 386-87, 339 S.E.2d 424, 425, disc. review denied, 316 N.C. 733, 345 S.E.2d 390 (1986). The vesting of United States Air Force retirement benefits occurs after an enlisted member completes twenty years of military service. 10 U.S.C.A. § 8914 (1998); cf. George, 115 N.C. App. at 389, 444 S.E.2d at 450.
However, military disability payments "cannot be classified as marital property subject to distribution under state equitable distribution laws." Bishop v. Bishop, 113 N.C. App. 725, 733, 440 S.E.2d 591, 597 (1994) (citations omitted); see Mansell v. Mansell, 490 U.S. 581, 588, 594-95, 104 L. Ed. 2d 675, 685, 689 (1989). Military disability payments "must be classified as the retiree's separate property and, as such, treated as a distributional factor." Bishop, 113 N.C. App. at 734, 440 S.E.2d at 597. Where a party receives a combination of military retirement and military disability benefits, the trial court should make a determination of the amount of benefits that are subject to equitable distribution as marital property. While military disability payments may not be distributed as marital property, the trial court must consider thereceipt of such payments by a party as a distributional factor when making an equitable distribution between the parties.
Our Courts have employed two methods for dividing retirement benefits in equitable distribution: present value method (immediate offset method) and the fixed percentage method (deferred distribution method). Bishop, 113 N.C. App. at 731-32, 440 S.E.2d at 597. The trial court has the discretion to employ either method, but a valuation of the retirement benefits must be made as of the date of separation. Id. at 732, 440 S.E.2d at 597. Under the fixed percentage method of valuation,
the nonemployee spouse is awarded a percentage of each pension check based on the total portion of benefits attributable to the marriage. The portion of benefits attributable to the marriage is calculated by multiplying the net pension benefits by a fraction, the numerator of which is the period of the employee spouse's participation in the plan during the marriage . . . and the denominator of which is the total period of participation in the plan.
Seifert v. Seifert, 319 N.C. 367, 370, 354 S.E.2d 506, 509, reh'g denied, 319 N.C. 678, 356 S.E.2d 790 (1987). The fixed percentage method can result in a deferral of payments of benefits without unfairly reducing the value of the award. Id. at 370, 354 S.E.2d at 509.
The present value of the pension or retirement benefits is not considered in determining the percentage to which the nonemployee spouse is entitled. Moreover, because the nonemployee spouse receives a percentage of the benefits actually paid to the employee spouse, the nonemployee spouse shares in any growth in the benefits. Yet, the formula gives the nonemployee spouse a percentage only of those benefits attributable to the period of themarriage, and that spouse does not share in benefits based on contributions made after the date of separation.
Id. at 370-71, 354 S.E.2d at 509 (citation omitted).
[S]o long as the trial court properly ascertains the net value of the pension and retirement benefits to determine what division of the property will be equitable, application of the fixed percentage method does not . . . violate the mandate that the court must identify the marital property, ascertain its net value, and then...
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