Smith v. Smith

Decision Date19 April 2016
Docket NumberNo. COA15–185.,COA15–185.
Citation247 N.C.App. 135,786 S.E.2d 12
CourtNorth Carolina Court of Appeals
Parties Craig Steven SMITH, Plaintiff, v. Vera Cranford SMITH, Defendant.

James, McElroy & Diehl, P.A., Charlotte, by Preston O. Odom, III, G. Russell Kornegay, III, and John Paul Tsahakis, for plaintiff.

William L. Sitton, Jr., Attorney at Law, Charlotte, by William L. Sitton, Jr. ; and Brendle Law Firm, PLLC, by Andrew S. Brendle, for defendant.

GEER, Judge.

Plaintiff Craig Steven Smith appeals from the trial court's equitable distribution judgment, three corresponding qualified domestic relations orders, and a permanent child support and custody order. Plaintiff primarily argues on appeal that the trial court erred by requiring him to pay his children's private school tuition without finding that his children have a reasonable need for private schooling that a public school education cannot provide. Because the parties' combined yearly income exceeds the level at which the presumptive North Carolina Child Support Guidelines ("the Guidelines") apply, we hold that the trial court was not required to make findings mandated by the Guidelines. Instead, we hold that the trial court's conclusion that private school is a reasonable need of the children is fully supported by the court's findings of fact that private school is part of the children's accustomed standard of living, that the parties are capable of paying the tuition, and that the parties have previously agreed that their children would be educated in private school. We therefore affirm the trial court's order that plaintiff pay his children's private school tuition. Because the parties have shown that the trial court failed to make adequate findings of fact with respect to certain aspects of the child support and equitable distribution orders, we reverse those orders and remand for further findings of fact. We find no error with respect to the custody order and affirm it.

Facts

Plaintiff and defendant married on 1 August 1992. They met while employed as certified public accountants at the same company in New Orleans, Louisiana. They later moved to Houston, Texas where plaintiff took a job with PricewaterhouseCoopers ("PwC"). Three children were born to their marriage: Margaret ("Meg") on 13 October 1996; Emilie on 16 January 1999; and Lara on 8 April 2002.

In August 2003, they moved from Houston to Charlotte, North Carolina so that plaintiff could pursue his career as an equity partner with PwC. Within a few years after the move to Charlotte, plaintiff's income as an equity partner substantially increased from approximately $150,000.00 in 2003 to over $500,000.00 by 2007. During the same period, defendant's salary decreased from around $80,000.00 to approximately $38,000.00, as she became the primary caregiver for the children and plaintiff became the primary supporting parent.

Ever since the children began school, plaintiff and defendant shared a mutual desire to educate their children in private schools. When the parties relocated to Charlotte, they enrolled their three children at Providence Day School ("PDS"), where they presently remain enrolled.

The parties separated on 1 June 2007, when defendant left the marital home a few months after plaintiff discovered that defendant was having an extramarital affair and was pregnant from that affair. From the date of separation until February 2009, the parties shared physical custody of the children, with each parent having the children for nearly an equal amount of time. However, beginning in February 2009 and continuing until the trial court entered a temporary custody order in February 2011, defendant unilaterally restricted plaintiff's time with the children to every other weekend.

Also upon separation, plaintiff began objecting to the children's continued enrollment at PDS. He agreed for them to finish the 20072008 school year at PDS, but expressed his desire to enroll them at a less expensive private school, even though he never made a significant effort to identify one. Plaintiff did not voluntarily contribute to the PDS tuition after the 20072008 school year. Defendant therefore paid the children's tuition for the 20082009 and 20092010 school years with money from the children's individual Uniform Transfers to Minors Act ("UTMA") accounts in the amounts of $53,810.00 and $49,804.18, respectively, for each school year. She also utilized individual savings accounts to pay the 20092010 tuition.

Plaintiff filed for absolute divorce on 8 May 2009, which the trial court granted on 17 September 2009. In his complaint for divorce, plaintiff also sought primary custody of the children and an unequal equitable distribution of the marital property in his favor. Defendant filed an answer and counterclaim on 19 June 2009, seeking continued primary custody, retroactive and prospective child support, and an unequal distribution of the marital property in her favor.

The trial court entered a final equitable distribution pretrial order on 1 June 2010. In this order, the parties stipulated to classifying three of plaintiff's PwC retirement accounts—a 401(k) plan, a "Keough" plan, and a "RBAP" plan—as marital property until the date of separation and any post-separation accruals in those accounts as plaintiff's separate property. Also, on 23 December 2010, the parties stipulated in writing that they would equally divide the net equity received from the sale of the marital residence.

On 21 February 2011, the trial court entered a temporary child support order, requiring plaintiff to pay $5,000.00 in child support to defendant on the first of each month beginning 1 August 2010 and all of the children's private school tuition at PDS going forward. Also on 21 February 2011, the trial court entered a temporary custody order essentially maintaining the custody arrangement created by defendant in February 2009. This order provided that plaintiff would have the children for approximately six overnights a month and for four weeks of the children's summer vacation.

On 22 July 2013, the trial court entered its final equitable distribution order in which it ordered an unequal distribution in favor of defendant. The order was based on findings including, but not limited to, the extent of defendant's inheritance, the value of plaintiff's PwC partnership interest as of the date of separation, and the classification and valuation of plaintiff's PwC retirement accounts. With regard to defendant's inheritance, the trial court acknowledged her maternal inheritance of over $916,000.00, which she contributed to the marriage. However, the trial court made no findings relating to defendant's substantial paternal inheritance, aside from three parcels of real property. In relation to plaintiff's PwC partnership valuation, although the court "question[ed] the accuracy and validity of both parties' methods of computing the value," it ultimately concluded that "Defendant/Wife's methodology appears to be the most appropriate of the two."

The trial court further found, despite prior stipulations to the contrary, that the post-separation accruals in plaintiff's three PwC retirement plans were divisible property. Plaintiff thereafter filed several post-trial motions on 1 August 2013, which the court granted pursuant to Rules 52 and 59 of the Rules of Civil Procedure. As a result, the trial court entered an amended equitable distribution order on 20 November 2013 reclassifying these post-separation accruals as plaintiff's separate property. Then, on 28 January 2014, the trial court entered three qualified domestic relations orders ("QDROs"), distributing defendant's shares of these retirement plans accordingly.

Upon entering a permanent custody order on 9 July 2014, the trial court reversed course from the temporary custody arrangement and granted the parties joint and equal physical custody on a week-on-week-off basis. In addition, the trial court awarded "permanent joint legal care, custody, and control of the minor children" to both the parties. Also on 9 July 2014, the trial court entered a permanent child support order, in which the trial court reduced plaintiff's monthly support contribution from $5,000.00 to $4,000.00 as a result of the changed custody arrangement. It further required plaintiff to pay $95,520.65 in retroactive child support to defendant for the time period from the date of separation through 30 June 2009.

Because of the parties' substantial combined income, the trial court determined that the presumptive requirements of the child support Guidelines were not applicable. With regard to private school tuition, the trial court found that "[i]t continue[d] to be in the best interest of the minor children to be enrolled at [PDS]," and that plaintiff "is well-able and capable of providing substantial support on behalf of the minor children to maintain that standard of living that they have enjoyed prior to the parties' separation...." Based on its findings, the trial court ordered that plaintiff "be solely responsible for every tuition and expense payment due and payable to [PDS]," but required defendant to reimburse plaintiff for 25% of the tuition expenses going forward. Additionally, plaintiff was required to pay $116,409.18 in reimbursements to defendant for tuition for the 2007–2008, 2008–2009, and 2009–2010 school years paid out of her account and the children's accounts.

Plaintiff timely appealed the permanent custody and support orders, as well as the final equitable distribution order and corresponding QDROs to this Court. Shortly thereafter, defendant timely filed a cross-appeal, challenging the custody, support, and equitable distribution orders, as well.

Discussion

As a general matter, where the trial court sits without a jury, "the judge is required to ‘find the facts specially and state separately its conclusions of law thereon and direct the entry of the appropriate judgment.’ " Coble v. Coble, 300 N.C. 708, 712, 268 S.E.2d 185, 188–89 (...

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