Kelly v. Kelly

• Decision Date: 06 August 2013
• Docket Number: No. COA12–1582.,COA12–1582.
• Citation: 747 S.E.2d 268
• Parties: Rebecca Stephens KELLY, Plaintiff, v. Reginald Brown KELLY, Defendant.
• Court: North Carolina Court of Appeals

747 S.E.2d 268

Rebecca Stephens KELLY, Plaintiff,

v.Reginald Brown KELLY, Defendant.

No. COA12–1582.

Court of Appeals of North Carolina.

Aug. 6, 2013.

Appeal by defendant from Order entered on or about 31 July 2012 by Judge William G. Stewart in District Court, Johnston County. Heard in the Court of Appeals 6 June 2013.

The Rosen Law Firm, Raleigh, by Lisa M. Angel, for plaintiff-appellee.

Doster, Post, Silverman & Foushee, P.A., Sanford, by Jonathan Silverman, for defendant-appellant.

STROUD, Judge.

Reginald Brown Kelly (“defendant”) appeals from an order denying his motion to modify alimony. Defendant argues on appeal that several of the trial court's findings are not supported by the evidence and that the findings are insufficient to support the trial court's conclusion that there has been no substantial change of circumstances since the initial alimony order was entered. We affirm.

I. Background

On 9 December 2004, the trial court entered a consent order (“Alimony order”) awarding defendant's ex-wife, Ms. Kelly (“plaintiff”), $12,000 per month in alimony. On 30 September 2011, defendant moved to modify his alimony obligation on the grounds that his ability to pay and his ex-wife's financial needs had substantially changed since entry of the alimony order. The trial court found no substantial change in circumstances and denied his motion. Defendant timely filed written notice of appeal.

II. Standard of Review

Decisions regarding the amount of alimony are left to the sound discretion of the trial judge and will not be disturbed on appeal unless there has been a manifest abuse of that discretion. When the trial court sits without a jury, the standard of review on appeal is whether there was competent evidence to support the trial court's findings of fact and whether its conclusions of law were proper in light of such facts.

Williamson v. Williamson, ––– N.C.App. ––––, ––––, 719 S.E.2d 625, 626 (2011) (citations and quotation marks omitted). An abuse of discretion has occurred if the decisionis “manifestly unsupported by reason or one so arbitrary that it could not have been the result of a reasoned decision.” Briley v. Farabow, 348 N.C. 537, 547, 501 S.E.2d 649, 656 (1998) (citations omitted).

III. Sufficiency of the evidence to support the findings

Defendant challenges findings of fact 10, 11, and 18 as unsupported by the evidence.¹ We disagree.

The findings challenged by defendant are:

10. That Defendant's employment is the same [as] at the time of the Alimony Order, namely that he is still working full time with Kelly and West, PA and although the gross revenues [have] changed over time, those fluctuations in revenue occurred historically and were known to Defendant at the time he entered into the Alimony Order.

11[a]. That any decrease in Defendant's income has only been in the past two years and it has not kept him from his ability to maintain a reasonable standard of living.

11[b]. That Defendant has increased his living expenses and debts since the Alimony Order but the Court finds those to be voluntary decisions by Defendant to live beyond his income, specifically, Defendant purchased a new home since the separation, refinanced the mortgages on his residence, added a huge garage to his residence in 2007, and used an equity line to finance dock repair at his beach house.

...

18. That Defendant's income has not decreased substantially since the Alimony Order.²

Each of these findings is supported by the evidence.

Findings No. 10 and 18 are probably the most important findings, as many of defendant's arguments are based upon the claim that his income has substantially decreased; his other arguments as to the general state of the economy, changes in the economics and competitiveness of law practices, and his worsened health are all simply reasons for the decline in income. If his income has not actually decreased substantially, these potential causes for a decrease in income become irrelevant. The 2004 alimony order recognizes that defendant's income has normally fluctuated. Thus, as to these pivotal findings, we note that

a court should proceed with caution in determining whether to modify a decree for alimony on the ground of a change in the financial circumstances of the parties.

Where the change in the circumstances is one that the trial court expected and probably made allowances for when entering the original decree, the change is not a ground for a modification of the decree. In accord with the view it is said that minor fluctuations in income are a common occurrence and the likelihood that they would occur must have been considered by the court when it entered a decree for alimony.

The fact that the husband's salary or income has been reduced substantially does not automatically entitle him to a reduction in alimony or maintenance. If the husband is able to make the payments as originally ordered notwithstanding the reduction in his income, and the other facts of the case make it proper to continue the payments, the court may refuse to modify the decree.

Britt v. Britt, 49 N.C.App. 463, 472, 271 S.E.2d 921, 927 (1980) (citations and quotation marks omitted).

The 2004 alimony order, based on the parties' mediated settlement agreement, contained detailed findings regarding defendant's employment as an attorney at the law firm he co-owned as well as his adjusted gross income for the years of 1998 to 2003 both from his law firm as well as from Lillington Rentals:

1998—$304,375

1999—$561,383

2000—$247,290

2001—$551,240

2002—$382,270

2003—$231,816

At the modification hearing, the evidence showed that defendant is still employed at the same firm, which still has the same number of attorneys, a “similar number” of non-lawyer employees, and the same areas of practice, with the addition of worker's compensation. He also still receives income from Lillington Rentals, a separate business entity owned by defendant and his law partner which owns the furniture and office equipment in the law office and receives rental income from the law firm. According to defendant's income tax returns, his net income (his adjusted gross income plus the yearly $144,000 in tax-deductible alimony) for the years of 2004 to 2011 was as follows:

2004—$1,697,417

2005—$659,867

2006—$577,650

2007—$797,889

2008—$311,788 ³

2009—$456,393

2010—$216,205

2011—$224,769

The pattern of earnings for these years is quite similar to years prior to the alimony order, and the income is reduced only in the two most recent years. Overall, defendant's average annual income over the six years prior to the alimony order was $379,729, while defendant's average annual income based upon the years since entry of the order was $617,747. Even excluding the income for 2004, which was unusually high due to one case, defendant's average annual income since 2005 was $463,509, or $83,780 more than his average income during the time period prior to alimony order based upon the amounts as stated in the order.

As noted by Britt, income variations as shown by defendant are “a common occurrence” and the fact that they would occur was more than a “likelihood,” as the alimony order shows that the income variations were “considered by the court when it entered a decree for alimony.” Britt, 49 N.C.App. at 472, 271 S.E.2d at 927. The trial court's determination that defendant's income has not substantially decreased is supported by the evidence, despite the fact that his income for the two most recent years is lower, and is not an abuse of discretion.

Findings 11a and 11b are also supported by the evidence. The evidence showed that defendant has not only continued meeting his financial obligations but also is making substantial discretionary purchases and investments. Despite any changes in income, defendant has continued making monthly alimony payments in the full amount and generally on time. In the years since 2004, defendant and his current wife have gone on several vacations to Aruba, Hilton Head, and Charleston. In 2007, defendant spent $150,000 to build a three-car garage and purchased a boat for $34,000. He spent roughly $50,000 to repair the dock at his beach home in 2011 and was able to make the maximum contribution to his 401K over several years. He was also able to pay off his unsecured debt that existed at the time of the prior consent order with proceeds from a “land deal.” Thus, even if defendant's expenses have increased, as the trial court found, the evidence also shows that these increases were voluntary. Each of the challenged findings is supported by the evidence.

IV. Failure to make more detailed findings of fact

Although defendant frames his next arguments as a challenge to the trial court's conclusion of law that defendant failed to demonstrate a substantial change of circumstances since the 2004 alimony order, his arguments actually continue his contentions regarding the adequacy of the trial court's findings of fact. First, defendant argues that the trial court erred because it “fail[ed] to consider [or find sufficient facts regarding] the substantial decreases in [his] income, ... the changed nature of his law practice, [and] the decreased income of this practice resulting from the recession....” (original in all caps). As to these facts, defendant does not claim that there was not sufficient evidence to support the trial court's findings, but that the trial court “failed to consider” certain evidence which he contends must be addressed in the findings of fact.

To a large extent, defendant argues that the trial court's findings were not based upon his evidence or his interpretation of the evidence, and in this regard, his arguments fail, as this Court cannot substitute its judgment for that of the trial court in weighing the evidence. “When the trial judge is authorized to find the facts, his findings, if supported by competent evidence, will not be disturbed on appeal despite the existence of evidence which would sustain contrary...