Loeb v. Loeb

• Decision Date: 02 January 1985
• Docket Number: No. 8315DC1177,8315DC1177
• Parties: Ben F. LOEB, Jr. v. Anne N. LOEB.
• Court: North Carolina Court of Appeals

Page 33

324 S.E.2d 33

72 N.C.App. 205

Ben F. LOEB, Jr. v. Anne N. LOEB.

No. 8315DC1177.

Court of Appeals of North Carolina.

Jan. 2, 1985.

Susan H. Lewis, Chapel Hill, and George W. Miller, Jr., Durham, for plaintiff-appellee.

Hunter, Wharton & Howell by John V. Hunter, III, Raleigh, for defendant-appellant.

BECTON, Judge.

This case deals with the inclusion of property acquired by gift from a third party in an equitable distribution of marital property.

The parties were married in 1961 and lived together until their separation in March 1981. During the course of their marriage, the plaintiff husband, Ben F. Loeb, Jr., worked as an attorney, first with a private law firm in Tennessee, then with the State of North Carolina. From 1964 until 1981, the defendant wife, Anne N. Loeb, generally did not work outside the home. The parties have two children.

The husband contributed his entire income to the support of the family and the accumulation of the parties' savings and assets. The parties handled their finances exclusively through joint savings and joint checking accounts. Over the years the wife's mother, Mrs. Nelson, gave the parties joint title to several tracts of real property in Tennessee as tenants by the entirety, and cash gifts individually that were deposited in their joint savings and joint checking accounts.

During their marriage, the parties acquired the following: (1) joint title to a 196-acre farm in Tennessee (by deed from Mrs. Nelson); (2) joint title to a 36-acre farm in Tennessee (by deed from Mrs. Nelson); (3) joint title to an interest in a lot and building in Paris, Tennessee (by deed from Mrs. Nelson); (4) joint title to a residential lot in Chapel Hill (purchased with funds from their joint checking and savings accounts); (5) title in the wife's name alone to a condominium in Chapel Hill (purchased for cash, consisting of the proceeds from (a) a signature note in the wife's name, (b) a moneymarket certificate in the wife's name, which was purchased with funds from a joint account, (c) stocks and bonds in the wife's name (purchased with the proceeds from stock originally held jointly or in the husband's name); (6) AT & T stock held in the wife's name (purchased with funds from the parties' joint checking account); (7) Commercial Bank stock held in the wife's name (purchased with funds from the parties' joint checking account); (8) certificates of deposit at Orange Savings and Loan in both parties' names (purchased with funds from the parties' joint savings and checking accounts); (9) a certificate of deposit at Home Federal Savings and Loan in both parties' names (purchased with funds from the parties' joint savings and checking accounts); (10) a money market certificate at NCNB in the husband's name (purchased with funds from the parties' joint savings and checking accounts); (11) a house and lot in Chapel Hill (purchased with proceeds from the sale of the parties' first marital home in Chapel Hill, which, in turn, had been purchased with funds from joint savings and checking accounts); (12) a voluntary retirement account in the husband's name alone; (13) title in the wife's name alone to a 96-acre farm in Tennessee (by deed from her parents); (14) the husband's North Carolina State Employees' Retirement Account. The trial court made specific findings on the monetary value of each item listed above; these are included in the record on appeal.

On 30 September 1982 the husband instituted an action for absolute divorce from the wife and asked for an equitable distribution of the marital property. The Equitable Distribution Act (the Act), as codified at N.C.Gen.Stat. Sec. 50-20, applies to all actions for absolute divorce instituted on or after 1 October 1981. G.S. Sec. 50-20 (Supp.1983). The absolute divorce was granted on 13 December 1982. The equitable distribution issue was tried in April 1983; the Order dividing the parties' marital property was entered on 3 June 1983. The trial court found that (1) items 1-12 were marital property; (2) item 13 was the wife's separate property; and (3) item 14 was the husband's separate property. It then distributed the marital property equally between the parties according to value, awarding the wife items 1-3 and 5-7, and awarding the husband items 4 and 8-12. Because of a slight discrepancy in the value of their respective property, the trial court ordered the husband to make a distributive award to the wife in the amount of $4,577 "to render an equal and equitable distribution."

After the trial, but before the entry of the Order, the wife filed a motion for a new trial or for leave to reopen the evidence. The motion was denied on 27 July 1983. The wife appeals from the 3 June 1983 Order and the 27 July 1983 denial of her motion.

I

Under the Act, the trial judge, before equitably dividing the parties' property, must distinguish between "marital property," as defined in G.S. Sec. 50-20(b)(1) and "separate property," as defined in G.S. Sec. 50-20(b)(2). See Alexander v. Alexander, 68 N.C.App. 548, 315 S.E.2d 772 (1984). "Separate property" is not subject to equitable distribution. G.S. Sec. 50-20(c); S. Sharp, Equitable Distribution of Property in North Carolina: A Preliminary Analysis, 61 N.C.L.Rev. 247, 249 (1983). The wife assigns error to the trial court's classification of the Tennessee tracts of land given to the parties jointly by the wife's mother during the course of the marriage as "marital property." We find no error.

Under the original version of G.S. Sec. 50-20(b)(1), which was in effect at the time the husband filed for absolute divorce, "marital property" was defined as "all real and personal property acquired by either spouse during the course of the marriage and presently owned, except property determined to be separate property in accordance with subdivision (2) of this section." G.S. Sec. 50-20(b)(1) (Supp.1981). "Separate property," in pertinent part, included "all real and personal property acquired by a spouse ... by bequest, devise, descent, or gift during the course of the marriage." G.S. Sec. 50-20(b)(2) (Supp.1981).

In construing the provisions of a statute, we find the legislative intent controlling. Jolly v. Wright, 300 N.C. 83, 265 S.E.2d 135 (1980). The language of the statute itself and the purpose behind the legislation supply the strongest indicia of the legislative intent. State ex rel. Utilities Comm'n v. Public Staff, 309 N.C. 195, 306 S.E.2d 435 (1983); In re Kirkman, 302 N.C. 164, 273 S.E.2d 712 (1981). The introductory provision of the Act reveals its equitable purpose: "Upon application of a party, the court shall determine what is the marital property and shall provide for an equitable distribution of the marital property between the parties...." G.S. Sec. 50-20(a) (Supp.1981). The Act reflects a trend nationwide towards recognizing marriage as "a partnership, a shared enterprise to which both spouses make valuable contributions, albeit often in different ways." Sharp, supra, at 247.

Guided by the legislative intent, we hold that the language of the Act, both in the original version and as amended, see G.S. Sec. 50-20 (Supp.1983), creates a presumption that all property acquired by the parties during the course of the marriage is "marital property." Accord Painter v. Painter, 65 N.J. 196, 320 A.2d 484 (1974) (similar statutory language); see Sharp, supra, at 250 [72 N.C.App. 210] & n. 16-17. Absent a statutorily-mandated standard of proof, we adopt the standard of proof required to rebut a presumption of gift between spouses in cases involving title to real property arising prior to the effective date of the Act. See Mims v. Mims, 305 N.C. 41, 286 S.E.2d 779 (1982). The "marital property" presumption may, therefore, be rebutted by clear, cogent, and convincing evidence that the property comes within the "separate property" definition. See id. The burden of proof necessarily falls on the party claiming the "separate property."

In the case before us, the wife contends that the jointly held Tennessee tracts are her "separate property." The first question is whether jointly held property qualifies as "marital property." The 1981 version of the "marital property" definition reads, in pertinent part, "all real and personal property acquired by either spouse...." G.S. Sec. 50-20(b)(1). We find that jointly held property should be read into the 1981 "marital property" definition, especially in light of G.S. Sec. 50-20(b)(2) (Supp.1981), which specifies that "separate property" remains separate "regardless of whether the title is in the name of the husband or wife or both." (Emphasis added.) Accord Grant v. Grant, 424 A.2d 139 (Me.1981) (interpreting similarly worded "marital property" definition); see Sharp, supra, at 252 & n. 30 (majority rule among common-law states). The General Assembly has subsequently clarified its legislative intent by amending the "marital property" definition to include "all real and personal property acquired by either spouse or both spouses...." G.S. Sec. 50-20(b)(1) (Supp.1983). (Emphasis added.) Thus, the parties' jointly held Tennessee tracts were presumed to be "marital property."

To rebut the presumption, the wife had the burden of proving by clear, cogent, and convincing evidence that the tracts came within the "separate property" definition. "Separate property" is defined, in significant part, as "all real and personal property ... acquired by a spouse by ... gift during the course of the marriage." G.S. Sec. 50-20(b)(2) (Supp.1981). (Emphasis added.) The General Assembly's choice of the singular term, "a," is crucial. We discern that the legislature intended to exclude from the definition of "separate property" a gift of property to both parties from a third party during the course of the marriage. Accord Ackley v. Ackley, 100 A.D.2d 153, 472 N.Y.S.2d 804 (N.Y.App.Div.1984) (same outcome--"gift from a party other than the spouse"); In re Marriage of Wendt, 339...