Fitzgerald v. Fitzgerald

• Decision Date: 02 December 2003
• Docket Number: No. COA02-1500.,COA02-1500.
• Citation: 588 S.E.2d 517,161 NC App. 414
• Parties: Dwight M. FITZGERALD, Plaintiff v. Katherine T. FITZGERALD, Defendant.
• Court: North Carolina Court of Appeals

588 S.E.2d 517

161 NC App. 414

Dwight M. FITZGERALD, Plaintiff v. Katherine T. FITZGERALD, Defendant.

No. COA02-1500.

Court of Appeals of North Carolina.

December 2, 2003.

Starnes & Killian, P.L.L.C., by Mark L. Killian, Hickory, for plaintiff-appellant.

Sigmon, Sigmon, Isenhower & Poovey, by C. Randall Isenhower, Newton, for defendant-appellant.

HUNTER, Judge.

Dwight M. Fitzgerald ("plaintiff") appeals from an amended judgment and order of equitable distribution and alimony filed 3 June 2002. Katherine T. Fitzgerald ("defendant") brings forward a cross-assignment of error to the same amended judgment and order. We reverse and remand to the trial court on both the equitable distribution and alimony portions of the judgment and order.¹

Plaintiff and defendant were married on 1 June 1974 and separated on 4 April 1998. A judgment of absolute divorce was entered on 2 June 1999. The parties stipulated that plaintiff was a supporting spouse and defendant was a dependent spouse and that defendant was entitled to alimony.

The evidence presented at a hearing beginning on 12 March 2002 tends to show plaintiff has been employed as a general surgeon since 1974 and as of the date of separation had a fifty-percent (50%) partnership interest in his surgical practice, Catawba Surgical Associates, P.A. Both parties presented expert testimony on the valuation of plaintiff's ownership interest in the surgical practice. Plaintiff's expert valued plaintiff's interest at $89,500.00, based on quarterly financial reporting from 31 March 1998. Defendant's expert valued plaintiff's ownership interest at $170,000.00. The trial court, without making any findings as to how it arrived at its valuation of plaintiff's ownership interest in the surgical practice, found plaintiff's interest to be valued at $125,000.00 on the date of separation.

Plaintiff also introduced two appraisals of the marital home. The first appraisal, dated 7 December 1999, estimated the home's value at $395,000.00. The second appraisal, dated 1 July 2001, also appraised the home at a value of $395,000.00. Neither party presented evidence as to the fair market value of the house on the date of separation. Again, without making any findings as to how it arrived at its figure, the trial court found that the marital home had a fair market value on the date of separation of $375,000.00. Furthermore, the trial court made no findings as to the valuation of the marital home on the date of distribution and did not consider any post-separation appreciation in the value of the marital home as a distributional factor.

Defendant testified that she had returned to work in 1994 and that she had no retirement assets. On cross-examination, she admitted she had a vested interest in a profit-sharing plan through her employer, which had vested in 1997. Plaintiff subsequently introduced into evidence a statement from defendant's employer showing defendant's vested account balance in the profit-sharing plan since 1997. Defendant had not listed this profit-sharing plan in her equitable distribution affidavit filed with the trial court on 12 October 1999. The trial court made no finding regarding defendant's interest in the profit-sharing plan and it was not included in the equitable distribution order.

The trial court found plaintiff's net marital estate was $215,468.00 and defendant's net marital estate was $77,347.00, and that an equal distribution would require plaintiff to pay a distributive award of $69,060.50. In determining whether an equal distribution was equitable, the trial court considered a number of factors including: (1) plaintiff had made both first and second mortgage payments on the marital home from the date of separation to the date of distribution, including approximately $160,000.00 in excess of his required post-separation support, as well as making other household bill payments and payments for upkeep and repairs to the marital home; (2) plaintiff is a medical doctor earning at least $270,400.00 per year and was earning at least $250,000.00 at the date of separation, while defendant has a high school diploma and a two-year radiology technician degree with some phlebotomist training and was presently capable of earning $30,000.00 per year; (3) separate property of defendant was put into plaintiff's medical practice; (4) the duration of the marriage and age of the parties; and (5) defendant gave up her pursuit of her career to care for the children. The trial court then found, based on a consideration of these factors, that the equities worked in favor of plaintiff, equal distribution was not equitable, and ordered plaintiff to pay a distributive award of $60,000.00.

With respect to the alimony portion of the judgment and order, the trial court found defendant needed at least $6,000.00 per month in alimony and that plaintiff was capable of paying that amount. The trial court ordered plaintiff to pay permanent alimony of $6,000.00 per month until defendant's death, remarriage, or cohabitation to be paid into the office of the Clerk of Superior Court.

The issues are whether: (I) the trial court erred by failing to consider evidence of defendant's profit-sharing plan; (II) the trial court erred by failing to make specific findings regarding its valuation of the marital home on the date of separation and any increase in value as of the date of distribution; (III) the trial court was required to make specific findings regarding its valuation of plaintiff's ownership interest in his surgical practice; and (IV) the award of permanent alimony was supported by the findings of fact. The sole issue from defendant's cross-appeal is whether (V) the findings of fact and conclusions of law are insufficient to support an unequal distribution in favor of plaintiff.

I.

Plaintiff first contends the trial court erred in failing to consider evidence of defendant's profit-sharing plan provided by her employer and by failing to make findings of fact classifying, valuing, and distributing defendant's interest in the profit-sharing plan. We agree and remand this case to the trial court to equitably distribute defendant's interest in the profit-sharing plan.

In making an equitable distribution of marital assets, the trial court is required to undertake a three-step process: "(1) to determine which property is marital property, (2) to calculate the net value of the property, fair market value less encumbrances, and (3) to distribute the property in an equitable manner." Beightol v. Beightol, 90 N.C.App. 58, 63, 367 S.E.2d 347, 350 (1988). In this case, defendant admitted to having a profit-sharing plan vesting in 1997, and plaintiff introduced evidence to show the vested balance from 1997 to 2000. This is property that the trial court was required to classify, value, and divide.

Defendant argues that plaintiff has waived equitable distribution of the profit-sharing plan by not including it in the pre-trial order, citing as authority Hamby v. Hamby, 143 N.C.App. 635, 547 S.E.2d 110 (2001). In Hamby, this Court held that where a party entered into a pre-trial agreement classifying a deferred compensation plan as marital property, and that agreement was subsequently incorporated into a pre-trial order, the party waived any argument that the deferred compensation plan was separate property. Id. at 643, 547 S.E.2d at 115. That case is, however, distinguishable from the case sub judice, as in this case plaintiff had entered into no agreement concerning defendant's profit-sharing plan, and in fact, could not have entered into such an agreement as defendant failed to disclose its existence until the hearing. Thus, the equitable distribution portion of the order must be remanded for the trial court to include the profit-sharing plan in its consideration of how to equitably distribute the parties' property.

II.

Plaintiff next contends the trial court erred in finding the fair market value of the marital home on the date of separation was $375,000.00, and by failing to consider any post-separation increase in the value of the home as a distributional factor. We agree.

A trial court's findings of fact in an equitable distribution case are conclusive if supported by any competent evidence. See Mrozek v. Mrozek, 129 N.C.App. 43, 48, 496 S.E.2d 836, 840 (1998). "In an equitable distribution proceeding, the trial court is to determine the net fair market value of the property based on the evidence offered by the parties." Walter v. Walter, 149 N.C.App. 723, 733, 561 S.E.2d 571, 577 (2002) (footnote omitted). Furthermore, "[w]here there is evidence of active or passive appreciation of the marital assets after the date of separation, the court must consider the appreciation of the asset as a [distributive] factor." Fox v. Fox, 103 N.C.App. 13, 21, 404 S.E.2d 354, 358 (1991).

In this case, both parties concede they presented no evidence of the fair market value of the marital home on the date of separation and the only evidence presented on the value of the house were two appraisals valuing the house at $395,000.00, one performed over a year after the parties' separation and one performed more than three years after the separation. Nothing in the findings of the trial court supports a fair market value of the house on the date of separation of $375,000.00. Thus, as there is no evidence upon which to base a finding of the fair market value of the house on the date of separation, we must remand this case to the trial court for the taking of further evidence and findings of fact on this issue. See Coleman v. Coleman, 89 N.C.App. 107, 108-09, 365 S.E.2d 178, 179-80 (1988). Even if the trial court properly valued the house on the date of separation, it erred in failing to consider any post-separation increase in value of the property, evidenced by the appraisals, as a distributional factor.

III.

Plaintiff further contends the trial court erred in failing to make specific findings regarding...