Thompson v. Thompson

• Decision Date: 21 March 1989
• Docket Number: No. 8818DC572,8818DC572
• Court: North Carolina Court of Appeals
• Parties: Peggy Haith THOMPSON v. Robert THOMPSON.

Page 767

377 S.E.2d 767

93 N.C.App. 229

Peggy Haith THOMPSON v. Robert THOMPSON.

No. 8818DC572.

Court of Appeals of North Carolina.

March 21, 1989.

Hatfield & Hatfield by Kathryn K. Hatfield, Greensboro, for plaintiff-appellee.

King & Stockton by Michael Lee King, Salisbury, for defendant-appellant.

JOHNSON, Judge.

Plaintiff and defendant were married in 1966, separated in 1983, and divorced in 1985. One child was born of the union. In 1966, the couple first resided in a home on Cambridge Street in Greensboro which was owned by defendant prior to his marriage to plaintiff. In 1970, defendant sold the house and used part of the proceeds to finance the purchase of a larger residence on Asheboro Street in order to accommodate plaintiff's two children from a prior relationship who had come to live with the couple. This house was titled in the names of both plaintiff and defendant as tenants by the entireties. Defendant testified that premarital funds of his were used to renovate this residence. In 1979, the parties sold the Asheboro Street residence and used part of the proceeds to purchase a third house on Mystic Drive, also titled as entireties property.

Plaintiff instituted proceedings for divorce and equitable distribution on 21 December 1984. A judgment of absolute divorce was granted by the trial court, sitting without a jury, on 4 February 1985. On 23 March 1988, the court filed an equitable distribution order which held the real property on Mystic Drive to be marital property. Defendant appeals from this order.

The sole question presented by defendant for our review is whether the trial court erred in concluding as a matter of law that the Mystic Drive residence was totally marital property pursuant to G.S. sec. 50-20(b)(1) when evidence at trial established that the residence was purchased with both separate and marital funds.

The first step in the equitable distribution process is the classification of the parties' property as either separate or marital. G.S. sec. 50-20(a); Cornelius v. Cornelius, 87 N.C.App. 269, 360 S.E.2d 703 (1987). Marital property includes "all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, ..." G.S. sec. 50-20(b)(1). Separate property, which is not included in the category of marital property, means

all real and personal property acquired by a spouse before marriage or acquired by a spouse by bequest, devise, descent, or gift during the course of the marriage. However, property acquired by gift from the other spouse during the course of the marriage shall be considered separate property only if such an intention is stated in the conveyance. Property acquired in exchange for separate property shall remain separate property regardless of whether the title is in the name of the husband or wife or both and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance.

G.S. sec. 50-20(b)(2).

This Court, in previously construing G.S. sec. 50-20(b)(2), has determined that "where a spouse furnishing consideration from separate property causes property to be conveyed to the other spouse in the form of tenancy by the entireties, a presumption of a gift of separate property to the marital estate arises, which is rebuttable by clear, cogent, and convincing evidence." McLeod v. McLeod, 74 N.C.App. 144, 154, 327 S.E.2d 910, 916-17, cert. denied, 314 N.C. 331, 333 S.E.2d 488 (1985) (citation omitted). Further, the entireties conveyance itself sufficiently indicates the "contrary intention" under the statute to preserving separate property. Id. at 156, 327 S.E.2d at 918.

The correctness of this presumption has been upheld by our Supreme Court in the recent case of McLean v. McLean, 323 N.C. 543, 374 S.E.2d 376 (1988). The Court in McLean, in furnishing us with an extensive analysis of G.S. sec. 50-20(b)(2), resolves the ambiguity of the "interspousal gift" provision (the second sentence of G.S. sec. 50-20(b)(2)), and the "exchange" provision (the third sentence). After a full discussion of legislative intent, applicable case law, and the nature of the marital relationship and of the entireties estate, all of which we need not detail here, the Court in McLean adopted the marital gift presumption of McLeod for entireties property. McLean, supra.

Applying this settled...