Stovall v. Stovall

• Decision Date: 20 July 2010
• Docket Number: No. COA09-946.,COA09-946.
• Parties: Nancy Fagg STOVALL, Plaintiff,v.Manley Keith STOVALL, Defendant.
• Court: North Carolina Court of Appeals

698 S.E.2d 680

Nancy Fagg STOVALL, Plaintiff,v.Manley Keith STOVALL, Defendant.

No. COA09-946.

Court of Appeals of North Carolina.

July 20, 2010.

COPYRIGHT MATERIAL OMITTED

Appeal by defendant and plaintiff from Order of Equitable Distribution entered 14 January 2009 by Judge Angela B. Puckett in District Court, Stokes County. Heard in the Court of Appeals 27 January 2010.

Bennett & West, King, by Michael R. Bennett, for plaintiff-appellee.

Randolph and Fischer, Winston-Salem, by J. Clark Fischer, for defendant-appellant.

STROUD, Judge.

Defendant and plaintiff appeal their equitable distribution order. For the following reasons, we affirm.

I. Background

On or about 31 October 2005, plaintiff filed a verified complaint requesting equitable distribution.¹ On 30 October 2006, the parties consented to entry of an equitable distribution pretrial order. The equitable distribution hearing was held on 17 November 2008, and on 14 January 2009, the trial court entered an order of equitable distribution. Both parties filed a notice of appeal from the equitable distribution order.

II. Standard of Review

The standard of review on appeal from a judgment entered after a non-jury trial is whether there is competent evidence to support the trial court's findings of fact and whether the findings support the conclusions of law and ensuing judgment. The trial court's findings of fact are binding on appeal as long as competent evidence supports them, despite the existence of evidence to the contrary.

Pegg v. Jones, 187 N.C.App. 355, 358, 653 S.E.2d 229, 231 (2007) (citations and quotation marks omitted) aff'd per curiam, 362 N.C. 343, 661 S.E.2d 732 (2008). “The trial court's findings need only be supported by substantial evidence to be binding on appeal. We have defined substantial evidence as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Pulliam v. Smith, 348 N.C. 616, 625, 501 S.E.2d 898, 903 (1998) (citations and quotation marks omitted).

As to the actual distribution ordered by the trial court, “[w]hen reviewing an equitable distribution order, the standard of review is limited to a determination of whether there was a clear abuse of discretion. A trial court may be reversed for abuse of discretion only upon a showing that its actions are manifestly unsupported by reason.” Petty v. Petty, ---N.C.App. ----, ----, 680 S.E.2d 894, 898 (2009) (citations and quotation marks omitted) disc. review denied and appeal dismissed, 363 N.C. 806, 691 S.E.2d 16 (2010).

III. Credit for Debt

The trial court found that New Madison Tobacco Warehouse (“New Madison”) is a warehouse which “was purchased during the marriage in approximately 1997 by the Defendant under the name Madison Enterprises, Inc.” The trial court classified New Madison as marital property. New Madison was subject to two mortgages, one with the prior owner of New Madison and one with First Citizens Bank (“New Madison debts”). Defendant made payments on the New Madison debts after the date of separation; plaintiff did not. As to these payments, the trial court found, in part, as follows:

that in a general sense debt payments on the New Madison Tobacco Warehouse have occurred in the amount of approximately $20,000.00 per year for a period of eight (8) years since the date of separation, for a total of approximately $160,000.00 in reduction of a marital debt since the date of separation by the individual defendant from his individual payments.

The trial court further found “that the Defendant should receive a credit for $20,000.00 per year for a period of eight (8) years for his payments on the debts on the New Madison Tobacco Warehouse.” The trial court concluded

[t]hat the divisible property associated with the New Madison Tobacco Warehouse and the marital value of the New Madison Tobacco Warehouse must be divided equally, with the exception that the defendant is entitled to a credit for $160,000 for the payments of marital debt in accordance with the Pre-trial Order.

Both plaintiff and defendant assign error to the trial court's findings and conclusions which gave defendant a “credit” for debt payments of $160,000.00 toward the New Madison debts after the date of separation. Plaintiff argues that the trial court erred by considering these payments as a credit to defendant; defendant argues that the trial court failed to give him enough credit for these payments.

A. Pretrial Order

Our analysis of this issue is complicated by an ambiguity in the parties' stipulations in their pretrial order. We first note that

[c]ourts look with favor on stipulations designed to simplify, shorten, or settle litigation and save cost to the parties, and such practice will be encouraged. While a stipulation need not follow any particular form, its terms must be definite and certain in order to afford a basis for judicial decision, and it is essential that they be assented to by the parties or those representing them. Once a stipulation is made, a party is bound by it and he may not thereafter take an inconsistent position.

Moore v. Richard West Farms, Inc., 113 N.C.App. 137, 141, 437 S.E.2d 529, 531 (1993) (citations, quotation marks, and ellipses omitted). However, in this situation, the parties' stipulations have to a certain extent complicated this case, instead of simplifying it. The parties stipulated in the pretrial order that “an equal division would be equitable.” However, the parties also stipulated in the pretrial order that “Schedule I attached hereto is a list of the debts, if any, of the parties hereto that were in existence and were unpaid as of the date of the separation of the parties upon which the parties' agreements and disagreements with regard to specific debts are noted” and that

[t]he Presiding Judge shall rule ... [w]ith regard to Schedule I, which debts are marital, what were and are the outstanding balances of said marital debts which party should receive credit for the prior payment of said marital debts, and which party should pay the said marital debts that remain unpaid[.]

(Emphasis added.) Schedule I includes the New Madison debts. Thus, the parties had contradictory stipulations in the equitable distribution pretrial order; the parties agreed that an equal distribution would be equitable, but they also stipulated that the trial court should consider “credit for the prior payment of said marital debts[.]”

Essentially, plaintiff argues that under the stipulations the trial court could only treat the payments as divisible under N.C. Gen.Stat. § 50-20(b)(4)(d) and pursuant to the stipulations divide the divisible property equally; defendant argues that not only should the payments all be credited to him, but he should have been credited for more. Thus, we first have to interpret the terms of the pretrial order to determine if the trial court could consider the defendant's payments on the New Madison debts at all, given the stipulation to an equal distribution, and if the payments could be considered, in what manner they could be considered.

We believe that stipulations in pretrial orders should be construed in the same manner as a contract between the parties, and this Court has previously set out the general principles for construction as follows:

With all contracts, the goal of construction is to arrive at the intent of the parties when the contract was issued. The intent of the parties may be derived from the language in the contract.

It is the general law of contracts that the purport of a written instrument is to be gathered from its four corners, and the four corners are to be ascertained from the language used in the instrument. When the language of the contract is clear and unambiguous, construction of the agreement is a matter of law for the court and the court cannot look beyond the terms of the contract to determine the intentions of the parties. However, extrinsic evidence may be consulted when the plain language of the contract is ambiguous. Whether or not the language of a contract is ambiguous is a question for the court to determine. In making this determination, words are to be given their usual and ordinary meaning and all the terms of the agreement are to be reconciled if possible. Where the language presents a question of doubtful meaning and the parties to a contract have, practically or otherwise, interpreted the contract, the courts will ordinarily adopt the construction the parties have given the contract ante litem motam. The court must not, however, under the guise of construing an ambiguous term, rewrite the contract or impose liabilities on the parties not bargained for and found therein.

Lynn v. Lynn, --- N.C.App. ----, ----, 689 S.E.2d 198, 204-05 (2010) (citations, quotation marks, ellipses, and brackets omitted).

Here, the pretrial order is ambiguous, as it provides for an equal distribution, but then also provides for the trial court to consider “which party should receive credit for the prior payment of said marital debts,” a factor for unequal distribution. See N.C. Gen.Stat. § 50-20(c) (2010). It is apparent from the evidence and arguments presented at trial in this matter that both parties understood the pretrial order as requiring the trial court to consider how the post-separation debt payments by defendant should be treated in the distribution, and it is also clear that defendant was asking to have some recovery of these funds, while plaintiff opposed this; defendant argued before the trial court for greater credit for his payments and efforts to maintain New Madison, and plaintiff argued that the increase in equity of New Madison as a result of defendant's debt payments should be considered as divisible property and must be divided equally in accord with the stipulation to an equal distribution. Thus, both parties recognized that under the pretrial order, the trial court was to consider defendant's post-separation payments to some extent; however, plaintiff argued that the pretrial...