Lee v. Lee

• Citation: 605 S.E.2d 222,167 NC App. 250
• Court: Court of Appeal of North Carolina (US)
• Decision Date: 07 December 2004
• Parties: Edna Barfield LEE, Plaintiff v. Linwood Earl LEE Sr., Defendant.

605 S.E.2d 222

167 NC App. 250

Edna Barfield LEE, Plaintiff v. Linwood Earl LEE Sr., Defendant.

No. COA04-6.

Court of Appeals of North Carolina.

December 7, 2004.

Mills & Economos, L.L.P., by Larry C. Economos, Greenville, for plaintiff-appellant.

W. Gregory Duke, Greenville, for defendant-appellant. HUNTER, Judge.

Edna Barfield Lee ("plaintiff") appeals from an order entered 20 May 2003 pursuant to a hearing on a Rule 60(b)(6) motion. On appeal, plaintiff contends error in the trial court's order that plaintiff pay all fees and penalties associated with the lump sum transfer of funds from Linwood Earl Lee Sr.'s ("defendant") retirement account, and that plaintiff pay defendant an additional sum of money monthly from her pension benefits. Defendant appeals from the same order, contending the trial court abused its discretion in denying defendant's Motion to Set Aside Judgment pursuant to Rule 60. As we find insufficient evidence to support the trial court's conclusion as to the additional payments by plaintiff, we reverse the order in part and remand for additional findings.

On 11 June 1998, plaintiff and defendant entered into a consent order to settle all outstanding claims between the parties pursuant to their separation and divorce. This consent order included settlement of all equitable distribution claims and specified that "[t]he parties' respective retirement plans shall be divided pursuant to qualified domestic relations order (QDRO) as outlined and detailed in the Findings of Fact contained in this Order."

The relevant findings of fact specified preparation of three QDROs, the first and third of which were contested by defendant in this action. The first ("QDRO 1"), divided defendant's retirement account. Plaintiff, on the five-year anniversary of the account, 1 January 2003, was to receive the greater of $402,393.00 (hereinafter "lump sum payment") or one-half of whatever monies were in the account on that date. The third QDRO ("QDRO 3") provided defendant with thirty-six percent of the plaintiff's monthly pension upon her retirement. After review and consent of the respective parties of each order, QDRO 1 was entered on 27 June 1998 and QDRO 3 was entered on 27 June 2001. QDRO 2 was not contested by either party.

On 10 March 2003, defendant filed a Motion in the Cause for Rehearing, and in the alternative, a Rule 60 Motion to Set Aside the terms of the equitable distribution settlement. Plaintiff responded with a motion for contempt. The trial court heard the respective motions on 23 April 2003 and entered an order on 20 May 2003 which: (1) denied defendant's request for judgment pursuant to his Rule 60(b) motion; (2) granted plaintiff's motion for contempt for failure to sign the necessary forms to effectuate the distribution of the lump-sum payment; (3) ordered all fees and penalties associated with the transfer of the lump sum payment to be paid by plaintiff; and (4) ordered plaintiff to pay defendant the difference between the actual amount received from plaintiff's pension plan and thirty-six percent of her current monthly benefit, a sum of $326.96 per month. Both parties appeal from this order.

I.

We first address plaintiff's two assignments of error, that the trial court erred in (1) ordering plaintiff to pay all fees and penalties associated with the lump sum transfer of funds from defendant's retirement account, and (2) entering an order of additional payments to defendant from plaintiff's pension.

1. Order of Payment of Fees and Penalties by Plaintiff

Plaintiff contends in her first assignment of error that the trial court erred in ordering plaintiff to pay all fees and penalties associated with the lump sum transfer of funds from defendant's retirement account. Plaintiff argues that the trial court's conclusion of law was not supported by the evidence and findings of fact. We disagree.

"It is well settled in this jurisdiction that 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." Shear v. Stevens Building Co., 107 N.C.App. 154, 160, 418 S.E.2d 841, 845 (1992). While findings of fact by the trial court in a non-jury case are conclusive on appeal if there is evidence to support those findings, conclusions of law are reviewable de novo. Id.

Here, plaintiff contends there was no competent evidence to support the trial court's findings of fact No. 8 and 9. The trial court found in No. 8 that: "[t]he QDRO which provides for the distribution of $402,393.00 to Plaintiff does not specify who will be assessed any taxes and/or surrender penalties." A review of QDRO 1 supports such a finding, as the order contains no mention of taxes or penalties. Plaintiff also contends there is no evidence to support Finding No. 9: "[t]here will be no tax consequences as a result of the transfer, but there will be a surrender fee of approximately $10,000.00." Here, after a careful review by this Court of both the record on appeal and the trial transcript, it appears that there is no competent evidence to support Finding No. 9. None of the evidence before the trial court addressed the issue of surrender fees, nor established the lack of tax consequences.

However, this Court concludes upon de novo review that Finding No. 8 supports the trial court's correction of the order in concluding that "any fees, penalties, etc[.] associated with the transfer of the $402,393.00 to Plaintiff shall be paid by Plaintiff."

"`[T]he court has inherent power to amend judgments by correcting clerical errors or supplying defects so as to make the record speak the truth. The correction of such errors is not limited to the term of court, but may be done at any time upon motion, or the court may on its own motion make the correction when such defect appears.'"

Snell v. Board of Education, 29 N.C.App. 31, 32, 222 S.E.2d 756, 757 (1976) (quoting Shaver v. Shaver, 248 N.C. 113, 118, 102 S.E.2d 791, 795 (1958)). "Although Rule 60(a) clearly grants the authority to the trial court to make clerical corrections, our appellate courts have consistently rejected attempts to change substantive provisions under the guise of making clerical changes." Buncombe County ex rel. Andres v. Newburn, 111 N.C.App. 822, 825, 433 S.E.2d 782, 784 (1993). "A change in an order is considered substantive and outside the boundaries of Rule 60(a) when it alters the effect of the original order." Id.

In Ice v. Ice, this Court found that an award of interest on a distributive award was not a substantive change, as "[t]he subject of the litigation ... was the amount of the distributive award; interest was only incidental and tangential[.]" Ice, 136 N.C.App. 787, 792, 525 S.E.2d 843, 847 (2000). The Ice Court found the situation analogous to that in Ward v. Taylor, 68 N.C.App. 74, 314 S.E.2d 814 (1984), where a previous order was amended to allow a surveyor to recover costs associated with the surveying work done for trial, on the grounds that the "`[initial] failure to allow and tax costs may be considered an "oversight or omission" in an order.'" Ice, 136 N.C.App. at 792, 525 S.E.2d at 846 (quoting Ward, 68 N.C.App. at 80, 314 S.E.2d at 819-20).

Here, fees and penalties arising from the transfer of the lump sum payment were not assigned to either party or addressed in QDRO 1. However, such an assignment of taxes was made in both QDROs 2 and 3. The failure to include such an assignment in QDRO 1, while including it in QDROs 2 and 3, suggests that such an exclusion was an "oversight or omission." Additionally, as in Ice, the issue of fees or taxes related to the distribution do not affect the substance of the award itself. "[T]he amount of money involved is not what creates a substantive right; rather, it is the source from which this money is derived." Ice, 136 N.C.App. at 792, 525 S.E.2d at 847. Here, any amount at stake would stem from the incidental fees or penalties, not from the underlying substantive matter of the distributive award. Accordingly, the trial court's conclusion of law was supported by the findings of fact and was a proper correction effectuated through Rule 60(a).

2. Order of Additional Pension Payments to Defendant

Plaintiff contends in her second assignment of error that the trial court's order of additional pension payments by plaintiff to defendant was not properly supported by evidence and findings of fact, and that the trial court lacked authority to make such an order. The trial court ordered that:

4. Plaintiff shall pay to Defendant the difference between the $118.00 per month Defendant currently receives and 36% of her current monthly benefit, which is $1,236.00. In other words, $1,236.00 × 36% = $444.96-118.00 = $326.96. Plaintiff shall pay the sum of $326.96 per month commencing June 1, 2003.

Plaintiff argues that the evidence recited in Finding No. 4, regarding the formula used by the plan's administrators in calculation of the amount sent to defendant was not properly before the trial court. She therefore contends it was not competent evidence to support Finding No. 4 or, by extension, Findings No. 15 and 16, which rely upon it. Finding No. 4 states:

4. That DuPont determined Plaintiff's accrued retirement benefits as of December 31, 1997 to be $1,051.98 per month. Plaintiff subsequently left the employment of DuPont on disability as of November 30, 2001. DuPont subsequently determined that Defendant's thirty-six percent (36%) of the monthly benefit was $118.00 per month. DuPont's Benefits Department arrived at this figure by multiplying the monthly benefit of $1,051.98 by the lesser of the Plaint's [sic] conversion factor for determining actuarial equivalence (32.99042%) or the Plan's early retirement reduction factor (100%) = $1,501.98 [sic] × 32.99042% = $347.05. This amount was then multiplied by the 36% specified in the Order;

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