Freeman v. Freeman

• Decision Date: 20 October 1992
• Docket Number: No. 9111DC822,9111DC822
• Citation: 421 S.E.2d 623,107 N.C.App. 644
• Parties: Charlie Tillman FREEMAN v. Grace Turlington FREEMAN.
• Court: North Carolina Court of Appeals

Page 623

421 S.E.2d 623

107 N.C.App. 644

Charlie Tillman FREEMAN v. Grace Turlington FREEMAN.

No. 9111DC822.

Court of Appeals of North Carolina.

Oct. 20, 1992.

Harrington, Ward, Gilleland & Winstead by Eddie S. Winstead, III, Sanford, for plaintiff-appellee/appellant.

Staton, Perkinson, Doster, Post, Silverman & Adcock by Jonathan Silverman and Diane W. Stevens, Sanford, for defendant-appellant/appellee.

GREENE, Judge.

Defendant appeals and plaintiff cross-appeals from an equitable distribution order filed on 28 June 1991.

Plaintiff (Husband) is fifty-eight years old and retired. He receives retirement, pension, and social security benefits totalling $913.37 per month. Defendant (Wife) is fifty-six years old and is employed as a clerk in the business office of Moore Regional Hospital where she earns $21,000.00 per year. Husband and Wife were married on 23 December 1955. During the marriage, Husband was employed by GKN Automotive as an assembly worker. Wife worked in the Lee County school system and as a bank teller. Wife also earned an associate's degree, a bachelor's degree, and a Masters in Business Administration over a ten-year period during the marriage at a total cost of less than $10,000.00, which, according to Wife, was paid from interest earned on funds received from the sale of a tract of land owned jointly by Husband and Wife.

On 6 August 1985, Husband suffered a work-related injury to his right hand for which he made a workers' compensation claim. The claim was accepted as compensable, and Husband received payment of all medical bills and expenses and benefits for temporary total disability while out of work. On 19 July 1988, Husband's doctor determined that Husband had reached his maximum medical improvement and rated Husband as having a forty percent permanent disability of the right hand. On 8 February 1989, Husband entered into an agreement for a final compromise and release of his workers' compensation claim with his employer and its insurance company. Pursuant to this agreement, Husband received a lump sum payment of $32,500.00 in March, 1989, as compensation for permanent partial disability of his right hand, plus payment of all medical bills and expenses incurred for treatment of his injuries from the date of Husband's maximum medical improvement up to the date of the agreement. Husband deposited the settlement proceeds into a certificate of deposit at Wachovia Bank and Trust Company in Sanford. The record does not reveal whether the certificate of deposit was in Husband's name only or in the names of both Husband and Wife. In her brief, Wife states that Husband placed the funds in an "individual account."

On 24 May 1989, approximately three months after Husband's receipt of the workers' compensation settlement, Husband and Wife separated. At the time of the parties' separation Husband was unemployed, having permanently retired from employment on 1 January 1987 due to various health problems. Husband remained in the jointly owned marital home located on 108 acres of land. Husband filed a complaint on 17 September 1989 seeking divorce from bed and board, equitable distribution of marital property, and sole possession and use of the marital residence. On 14 November 1989, Wife filed a counterclaim seeking dismissal of Husband's claim, divorce from bed and board, sole and exclusive use of the marital residence, and equitable distribution.

At the time of separation, Husband and Wife jointly owned a fifty-eight acre tract of land in another area of the county which had been leased for farming purposes. After separation, Husband unilaterally began cutting timber from the tract. Husband received $15,500.00 from the sale of the timber, of which, according to Husband's testimony, $15,000.00 was used by Husband to purchase a 1990 Oldsmobile. The automobile contract of sale indicates that Husband made a cash downpayment of $13,500.00 toward the purchase of the car and financed $1,000.00. Wife purchased a 1989 Toyota after the parties' separation, using $21,700.00 of funds taken from a certificate of deposit owned by the parties. On 11 March 1990, Wife filed a motion for injunctive relief in order to stop Husband from cutting the timber, and a temporary restraining order was entered the same day. This order was extended on 19 March 1990, and the parties resolved their agreement regarding the timber by consent order entered in April, 1990, pursuant to which Husband agreed to vacate the marital residence, giving Wife sole possession, and Wife agreed to withdraw her motion for injunctive relief. The order stated that at the time of equitable distribution, the trial court could consider Husband's expenses incurred living outside the marital home and Wife's expenses in maintaining the marital home.

When Wife attempted to return to the marital residence, she discovered that Husband had barricaded all of the doors. Wife had to obtain the services of a locksmith to gain entry. After Wife moved in, Husband came to the marital residence with a sledge hammer and attempted to smash in the front door. Wife thereafter obtained a domestic violence restraining order against Husband. During the time that Wife was living in the marital residence pursuant to the consent order, she expended approximately $1,500.00 for miscellaneous repairs and maintenance of the residence and approximately $3,500.00 for the installation of a security system in the home. Husband moved in with his brother, to whom he paid $300.00 per month for rent and utilities.

On 25 May 1990, Husband filed an action for absolute divorce and equitable distribution of the marital property. Wife filed an answer and counterclaim seeking the same relief on 23 July 1990. The parties were granted an absolute divorce on 20 August 1990. Their equitable distribution claims were severed and consolidated for trial. After a trial, an equitable distribution order was filed on 28 June 1991. In its order, the trial court made the following pertinent findings of fact:

10. That with regard to the sum of $37,000.00 currently invested in a certificate of deposit with Wachovia Bank and Trust Company of Sanford, North Carolina, the Court finds that:

a) That the sum of $5000.00 was received as farm rent for the year 1990.

b) That said $32,500.00 was received in the settlement of a workers['] compensation claim between [Husband], his employer GKN Automotive Components and the employer's insurer, Crown Insurance Company. This amount was paid one lump sum pursuant to an agreement for final compromise and settlement and release entered into between [Husband], GKN and Royal Insurance on February 8, 1989.

c) That said proceeds were for pain and suffering, loss of use of [Husband's] arm, and permanent partial disability.

d) That prior to the entry of the settlement with the insurance carrier, said insurance company had paid all outstanding medical bills of the plaintiff, had paid his average weekly wage for loss [sic] income for a period of 48 weeks and had reimbursed [Husband] for all travel and related expenses incidental to treatment for the injury to his arm.

e) That said settlement proceeds were received by [Husband] in March, 1989, approximately two months prior to the date of separation.

The trial court concluded that the entire workers' compensation settlement is Husband's separate property. The court also found that Husband's new car was purchased after separation with marital funds and valued the car at $14,500.00; that Wife's new car was purchased after separation with marital funds and valued it at $21,700.00; that, "while [Husband] has retired he is capable of supporting himself if required to do so for financial reasons"; that "the education accomplishments of [Wife] were substantial but did not require large expenditures of money from accumulated savings or from [Husband's] current income"; and that [Husband] has expended $300.00 per month since May, 1990, as expenses for rent and utilities which "could be considered by the court pursuant to the order ... entered April 2, 1990."

The trial court concluded that an equal division of the marital property was equitable, and, among other things, ordered the parties to each pay one-half of the approximately $1,500.00 expended by Wife in the post-separation maintenance of the marital home. The court concluded that the expenses to install the security system in the marital home "were incurred by [Wife] for her own use and satisfaction after the date of separation, and were not incurred to maintain the marital home." The court made no provision in its order for distribution of the $300.00 per month expended by Husband for rent and utilities while living with his brother. In distributing the marital property, the trial court awarded to Wife items of property valued at $330,414.00, including the marital residence and surrounding 108 acres valued at $268,375.00, and awarded to Husband items of property with a total value of $88,996.40. The court concluded that, because the value of property awarded to Wife exceeds in value the items of property awarded to Husband, "it is equitable that [Wife] pay to [Husband] ... a distributive award in the total sum of $116,338.05 within nine months of the date of entry of this Order." From the equitable distribution order, Husband and Wife appeal.

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The issues presented are (I) whether proceeds from a lump sum workers' compensation settlement received by a spouse during marriage as compensation for permanent partial disability caused by a work-related injury sustained during the marriage constitutes marital property or separate property under North Carolina's Equitable Distribution Law; (II) whether the trial court erred in (A) determining that Wife's security system expenditures do not constitute maintenance of the marital home; (B) classifying Wife's new car as marital property; and (C) valuing Husband's new car at $14,500.00; and (III) whether the trial...