Court Opinion

ID: 2740196
Source: CourtListenerOpinion
Date Created: 2014-10-07 13:05:04.75112+00
Date Added: 2024-06-11T09:53:13.331873
License: Public Domain

An unpublished opinion of the North Carolina Court of Appeals does not constitute
controlling legal authority. Citation is disfavored, but may be permitted in accordance
with the provisions of Rule 30(e)(3) of the North Carolina Rules of Appellate Procedure.

                               NO. COA13-1347
                       NORTH CAROLINA COURT OF APPEALS

                             Filed:     7 October 2014

KIMBERLY ANN FLEMING,
     Plaintiff,

      v.                                      Gaston County
                                              No. 07 CVD 4408
DOUGLAS WADE FLEMING,
     Defendant.

      Appeal by plaintiff from order entered 4 June 2013 by Judge

James A. Jackson in Gaston County District Court.                   Heard in the

Court of Appeals 9 April 2014.

      Church Watson Law, PLLC, by Seth A. Glazer and Kary C.
      Watson, for plaintiff-appellant.

      Arthurs & Foltz, LLP, by Douglas P. Arthurs and Joy M.
      Chappell, for defendant-appellee.

      DAVIS, Judge.

      Kimberly Ann Fleming (“Plaintiff”) appeals from the trial

court’s child custody, child support,                equitable distribution,

and alimony order.         On appeal, she argues that the trial court

erred by (1) failing to comply with the requirements of N.C.

Gen. Stat. § 50-20; (2) failing to appropriately calculate the

income of Douglas Wade Fleming (“Defendant”) for purposes of
                                        -2-
determining his child support obligation; and (3) failing to

award alimony to her despite finding that she was a dependent

spouse, Defendant was a supporting spouse, and Defendant had

engaged in marital misconduct.            After careful review, we vacate

and remand for further proceedings.

                             Factual Background

      The parties were married on 22 June 2001 and separated on

12   September      2007,    shortly     after    Plaintiff      learned     that

Defendant was involved in an extramarital affair.                 Plaintiff and

Defendant subsequently divorced.              The parties have two minor

children together, twin daughters born in 2001.

      On 24 September 2007, Plaintiff filed an action against

Defendant     for   child    custody,    child    support,      post-separation

support, alimony, and equitable distribution.                   Defendant filed

an   answer   and   counterclaims      for    child   custody    and   equitable

distribution on 29 November 2007.                On 13 December 2007, the

trial court entered an order requiring Defendant to continue to

pay the first and second mortgages on the marital home, health

insurance     for   the     parties,    car    expenses,     taxes,    and   for

Plaintiff’s cellular phone service “in lieu of post-separation

support” to her.          A temporary custody order awarding primary
                                       -3-
physical custody of the children to Plaintiff was entered on 25

July 2008.

       Defendant owns North Carolina Mohawk Tire Company d/b/a Mr.

Nobody (“Mr. Nobody”), a tire and automotive business.                        Prior to

the parties’ marriage, Defendant acquired an interest in Mr.

Nobody by purchasing 5 of the outstanding 30 shares of stock in

the    business.      During   the    course      of   the     parties’      marriage,

Defendant acquired the remaining 25 shares of Mr. Nobody using

marital funds.

       Mr. Nobody has two locations, and during their marriage,

the parties purchased the two parcels of land where the business

operates.       Mr. Nobody pays rent to the parties for the use of

both    properties.       Defendant        is   employed      by    Mr.    Nobody    and

received monthly income from the business throughout the course

of    the    marriage.    During     the    marriage,        Mr.   Nobody    paid    for

numerous personal expenses of the parties, including the cost of

their vehicles and the insurance and taxes on those vehicles,

monthly      gas   expenses,   cell    phones       for   the      family,    and    for

insurance and taxes relating to both Mr. Nobody locations.

       The    parties’    respective       claims      for    child       custody    and

support,      equitable   distribution,         and    alimony      were     heard   in

Gaston County District Court in February 2012.                      On 4 June 2013,
                                       -4-
the trial court entered an order (1) giving the parties joint

legal   custody    of    the   minor     children    and     Plaintiff     primary

physical custody; (2) requiring Defendant to make monthly child

support payments to Plaintiff; (3) ordering Defendant to make a

distributive      cash     award    to    Plaintiff;         and     (4)   denying

Plaintiff’s request for alimony.              Plaintiff gave timely notice

of appeal to this Court.

                                   Analysis

I. Equitable Distribution

    Plaintiff’s      first     argument      on   appeal    is   that   the     trial

court erred in the equitable distribution portion of its order

by failing to comply with the statutory requirements set forth

in N.C. Gen. Stat. § 50-20.              Specifically, Plaintiff contends

the trial court erred by failing to make findings regarding the

classification or value of numerous items of property before

distributing them in its order, including the residence at 5034

Stone   Ridge     Drive;   the     Fleetwood      Southwind        motorhome;     the

parties’ household goods, furniture, furnishings, and personal

property; the Harley Davidson Sportster; three four-wheelers; a

dirt bike; and the parties’ bank accounts, retirement accounts,

investment accounts, and credit card debt.                 We agree.

           Our review of an equitable distribution
           order is limited to determining whether the
                                        -5-
              trial   court   abused   its  discretion  in
              distributing the parties’ marital property.
              Accordingly,   the   findings  of   fact are
              conclusive if they are supported by any
              competent evidence from the record.

                   However, even applying this generous
              standard   of   review,   there    are    still
              requirements with which trial courts must
              comply.      Under   N.C.G.S.    §   50-20(c),
              equitable   distribution   is   a   three-step
              process; the trial court must (1) determine
              what is marital and divisible property; (2)
              find the net value of the property; and (3)
              make   an  equitable   distribution    of   the
              property.

Robinson v. Robinson, 210 N.C. App. 319, 322, 707 S.E.2d 785,

789 (2011) (citations, quotation marks, and brackets omitted).

Thus,    in    order    to     enter    a    proper     equitable    distribution

judgment,      the     trial    court       must   first    “specifically     and

particularly classify and value all assets and debts maintained

by the parties at the date of separation” and in doing so, “be

specific and detailed enough to enable a reviewing court to

determine what was done and its correctness.”                     Id. at 323, 707

S.E.2d    at    789     (citations,         quotation    marks,     and   emphasis

omitted).

    Here, the trial court distributed various property to the

parties without first classifying or valuing those assets.                    See

Wirth v. Wirth, 193 N.C. App. 657, 664, 668 S.E.2d 603, 608-09

(2008) (“A trial court           must value all marital and divisible
                                         -6-
property      in     order     to     reasonably     determine         whether     the

distribution ordered is equitable.” (citation, quotation marks,

and ellipses omitted));             Cunningham v. Cunningham, 171 N.C. App.
550, 556, 615 S.E.2d 675, 680 (2005) (“[W]hen no finding is made

regarding the value of an item of distributable property, a

trial court’s findings are insufficient even if a determination

is   made    with    respect    to     the   percentage      of    a   distributable

property’s     value    to     which    each    party   is    entitled.”).          By

distributing certain items of property without classifying or

valuing      them,      the     trial        court   also         disregarded      its

responsibility to calculate the total net value of the marital

estate.      See Robinson, 210 N.C. App. at 323, 707 S.E.2d at 789-

90 (explaining that failure to make finding as to total net

value   of    marital   estate       renders   equitable      distribution       order

incomplete).

      With regard to the parties’ residence at 5034 Stone Ridge

Drive, the trial court ordered that the residence be placed on

the market and sold pursuant to the parties’ stipulation and

that the net proceeds — after the mortgage and equity line were

satisfied — be divided equally between the parties.                         Although

this Court has recognized “the trial court’s power to order the

sale of marital assets as part of an equitable distribution,” it
                                          -7-
has also recognized that the trial court must first value the

property before distributing it.                  See Wall v. Wall, 140 N.C.

App. 303, 307-08, 536 S.E.2d 647, 650 (2000) (holding that trial

court did not err in ordering sale of marital home because it

was classified, valued, and then distributed).

       Because     the    trial    court’s      equitable   distribution     order

distributes property to the parties without proper findings as

to the classification or value of the property, we must vacate

the equitable distribution order and remand for a new trial so

that the trial court may “hear arguments and receive evidence

from both parties . . . in order to address the errors discussed

above and to properly identify, classify, and value the parties’

property as required by statutory law and case law.”                      Dalgewicz

v.    Dalgewicz,    167    N.C.    App.   412,     424,   606 S.E.2d 164,    172

(2004), see also Robinson, 210 N.C. App. at 326, 707 S.E.2d at

791.

       While     Plaintiff       also   contends    that    the   trial     court’s

distribution of the parties’ property was not equitable because

the    trial   court      made    an    unequal    distribution    in     favor    of

Defendant without considering the statutorily required factors

set forth in N.C. Gen. Stat. § 50-20(c), she bases this argument

on the unequal distribution of that property which the trial
                                       -8-
court actually valued.           However, because the trial court failed

to value much of the parties’ property before distributing it,

we are unable to             determine whether the distribution was,          in

fact, unequal.         See Dalgewicz, 167 N.C. App. at 424, 606 S.E.2d

at 172 (explaining that this Court could not determine whether

trial   court’s    allegedly       unequal    distribution    was   inequitable

“[w]ithout the benefit of proper classification, valuation, and

listing of all the property owned by the parties”).                  Therefore,

we vacate the equitable distribution order and remand for a new

hearing so that the trial court may hear evidence and enter an

order   properly        classifying,    valuing,     and     distributing    the
                         1
parties’ property.

II. Child Support

    Plaintiff’s second argument on appeal is that the trial

court   erred     in    its     calculation    of   Defendant’s     income   for

purposes of determining his child support obligation.                 The North

Carolina Child Support Guidelines (“the Guidelines”) “apply as a

rebuttable presumption in all legal proceedings involving the

1
  We note our concern as to the 14-month delay between the
conclusion of the equitable distribution hearing and the entry
of the trial court’s equitable distribution order and “strongly
advise against lower courts allowing such a significant lapse of
time to occur between the hearing date and the entry of [the
equitable distribution] order.” Wright v. Wright, ___ N.C. App.
___, ___, 730 S.E.2d 218, 222 (2012).
                                     -9-
child support obligation of a parent              . . .    .”     Holland v.

Holland, 169 N.C. App. 564, 567, 610 S.E.2d 231, 234 (2005)

(citation and quotation marks omitted).             This Court reviews a

trial court’s child support order for abuse of discretion.                  Id.

“To support a reversal, an appellant must show that the trial

court’s actions were manifestly unsupported by reason.”                 Head v.

Mosier,   197   N.C.   App.   328,   332,   677 S.E.2d 191,   195    (2009)

(citation and quotation marks omitted).

    Pursuant to the Guidelines, “[c]hild support calculations .

. . are based on the parents’ current incomes at the time the

order is entered.”      Form AOC-A-162, Rev. 1/11.         With regard to a

parent’s income from self-employment or operation of a business,

the Guidelines provide, in pertinent part, that

           [g]ross income from self-employment, rent,
           royalties, proprietorship of a business, or
           joint ownership of a partnership or closely
           held   corporation,   is   defined   as   gross
           receipts   minus    ordinary   and    necessary
           expenses required for self-employment or
           business operation. . . . In general, income
           and   expenses    from    self-employment    or
           operation of a business should be carefully
           reviewed to determine an appropriate level
           of gross income available to the parent to
           satisfy a child support obligation. In most
           cases, this amount will differ from a
           determination of business income for tax
           purposes.

                Expense   reimbursements   or   in-kind
           payments (for example, use of a company car,
                                  -10-
          free housing, or reimbursed meals) received
          by a parent in the course of employment,
          self-employment, or operation of a business
          are   counted   as  income   if   they    are
          significant   and  reduce  personal    living
          expenses.

Id.

      Here, the trial court made the following findings regarding

Defendant’s income:

          18. Defendant is employed by North Carolina
          Mohawk Tire Co., Inc., of which he is the
          sole owner, and Defendant’s gross monthly
          income   is   Seven   Thousand Ninety-Seven
          Dollars and Sixty Cents ($7,097.60), which
          excludes various items paid on Defendant’s
          behalf by the business which augment his
          gross monthly income.

          19. Defendant’s federal income tax returns
          show the following income (2011 income tax
          returns were not completed as of trial):

               a. In 2008, Defendant’s total           taxable
                  income was $139,013.00

               b. In 2009, Defendant’s total           taxable
                  income was $166,020.00

               c. In 2010, Defendant’s total           taxable
                  income was $172,378.00.

      The trial court then calculated Defendant’s child support

obligation under the Child Support Guidelines by utilizing the

sum of $7,097.60 as his gross monthly income and ordered him to

make payments of $1,036.00 in child support to Plaintiff per

month.       The   sum   of   $7,097.60   is   the   figure   reported   on
                                                -11-
Defendant’s amended affidavit of financial standing and includes

$5,416.66       in    “wages/salary,”            $1,305.94        in     income      from    rent

payments, and $375.00 in health insurance.                              Although a party’s

financial affidavit is competent evidence on which the trial

court    may    base     its       findings        regarding      that     party’s      income,

Parsons v. Parsons, ___ N.C. App. ___, ___, 752 S.E.2d 530, 533

(2013), we are troubled by the court’s seemingly inconsistent

findings concerning Defendant’s gross income.

    In its findings, the trial court noted Defendant’s taxable

income as identified by his federal tax returns for the years

2008,     2009,        and        2010     as      $139,013.00,          $166,020.00,         and

$172,378.00, respectively.                  The trial court found, however, that

Defendant’s          gross    monthly       income       at   the      time     of   trial    in

February of 2012 was $7,097.60 — which converts to an annual

income of $85,171.20.                In determining that Defendant’s monthly

income    was     $7,097.60,         the     trial       court    did     not     address    the

sizable difference between Defendant’s past income as shown on

his individual income tax returns and the substantially lower

figure it found in its order.                       See Form AOC-A-162, Rev. 1/11

(explaining       that       child       support    is    based     on    parents’     current

income,     “should          be    verified        through       documentation        of     both

current and past income,” and that “[d]ocumentation of current
                                            -12-
income must be supplemented with copies of the most recent tax

return    to    provide       verification         of   earnings      over       a     longer

period”).

       Moreover,       in   its    finding     determining         Defendant’s          gross

monthly income to be $7,097.60, the trial court specified that

this sum “excludes various items paid on Defendant’s behalf by

the business which augment his gross monthly income.”                            As stated

above, the Guidelines require a trial court to include expense

reimbursements or in-kind payments that a party receives in the

course of employment, self-employment, or the operation of a

business if these payments are “significant and reduce personal

living expenses.”           Id.

       Here, while the trial court recognized that Mr. Nobody paid

for    “various      items”       for    Defendant      and    that       such       payments

increased      Defendant’s        income,    it    failed     to    account      for     that

increase in its calculation of his income.                     Thus, given that the

trial court (1) explicitly stated that its income calculation

for    Defendant       excluded         payments    made      by    Mr.    Nobody        that

augmented      his     income;      and      (2)    made      consecutive            findings

concerning Defendant’s income that showed — without explanation

— a substantially different income amount, we cannot conclude

that   the     trial    court      properly       calculated       Defendant’s         income
                                           -13-
pursuant to the Child Support Guidelines.                          See McFarland v.

Justus,    113   N.C.      App.    107,    109,     437 S.E.2d 668,     670   (1993)

(“When     findings      are      actually      antagonistic,         inconsistent     or

contradictory such that the reviewing court cannot safely and

accurately       decide      the     question,        the       judgment     cannot    be

affirmed.”).          As     such,    we     remand       for     findings      regarding

Defendant’s      actual     income    at     the    time     of   the     child    support

hearing    and    for      the    entry    of   a    child      support    order    using

Defendant’s actual income.                See Holland, 169 N.C. App. at 568,

610 S.E.2d at 235 (reversing and remanding child support order

where     findings      were      insufficient       to     support     trial      court’s

calculation of party’s income).2

III. Denial of Alimony

2
  We note that Defendant attempts to argue in his brief that the
trial court erred in ordering him to pay one-half of the
children’s   extracurricular   activity   expenses.     However,
Defendant’s argument is not properly before this Court.      See
N.C.R. App. P. 10(c) (explaining that where appellee fails to
cross-appeal, its arguments are limited to “any action or
omission of the trial court that was properly preserved for
appellate review and that deprived the appellee of an
alternative basis in law for supporting the judgment, order, or
other determination from which appeal has been taken”).    Thus,
in order to have properly preserved this issue for appellate
review, Defendant was required to file a cross-appeal from the
trial court’s order. Wilson v. Wilson, 214 N.C. App. 541, 546,
714 S.E.2d 793, 796 (2011).
                                   -14-
      Plaintiff’s    final   argument   on   appeal   is    that   the    trial

court erred in denying her request for alimony despite making

findings that (1) Plaintiff is a dependent spouse; (2) Defendant

is a supporting spouse; and (3) Defendant engaged in acts of

illicit sexual behavior.      We agree.

      The trial court is authorized to make an award of alimony

to a dependent spouse “upon a finding that one spouse is a

dependent spouse, that the other spouse is a supporting spouse,

and that an award of alimony is equitable after considering all

relevant factors.”      N.C. Gen. Stat. § 50-16.3A(a) (2013).               “If

the court finds that the supporting spouse participated in an

act   of   illicit   sexual    behavior,     as   defined     in   G.S.    50-

16.1A(3)a., during the marriage and prior to or on the date of

separation, then the court shall order that alimony be paid to a

dependent spouse.”     Id. (emphasis added).       A party’s entitlement

to alimony is reviewed de novo.           Barrett v. Barrett, 140 N.C.

App. 369, 371, 536 S.E.2d 642, 644 (2000).

      Here, the trial court made the following relevant findings

of fact regarding Plaintiff’s alimony claim:

           59. Plaintiff is the “dependent spouse” as
           that term is defined in N.C.G.S. § 50-16.1A,
           is   actually  substantially   dependent  on
           Defendant for her maintenance and support
           and is substantially in need of maintenance
           and support from Defendant.    Plaintiff has
                                     -15-
          begun to work again, however, and the
          distributive award set forth herein is made
          in contemplation of providing Plaintiff with
          some form of support.

          60. Defendant is the “supporting spouse” as
          that term is defined in N.C.G.S. § 50-16.1A,
          is capable of paying the alimony award set
          forth herein and should pay alimony to
          Plaintiff as set forth herein.

          61. For the last two years of the parties’
          marriage, and prior to their separation,
          Defendant had an affair with Traci Toney
          Hanna, to whom Defendant is now married.

          62. Defendant’s affair with Traci Toney
          Hanna   included  illicit   sexual  behavior
          between Defendant and Traci Toney Hanna, as
          defined by N.C.G.S. 50-16.1A(3)(a).

          63. Plaintiff did not condone Defendant’s
          sexual intercourse with Traci Toney Hanna.

    After making the above findings of fact, the trial court

entered the following conclusion of law:

          17.   Despite  Defendant’s   illicit   sexual
          behavior with Traci Toney Hanna, Plaintiff
          has, as of the trial in this cause, received
          a   sufficient   amount  and    duration   of
          maintenance from Defendant, which includes
          payments of Plaintiff’s housing expenses,
          gasoline, car expenses and health insurance
          and this Court does not award alimony to
          Plaintiff.

    By    finding    that   Plaintiff       is   the   dependent     spouse,

Defendant is the supporting spouse, and Defendant engaged in

illicit   sexual    behavior   yet     nevertheless    denying     Plaintiff
                                              -16-
alimony, the trial court disregarded the mandate of N.C. Gen.

Stat. § 50-16.3A(a).                See Morningstar Marinas/Eaton Ferry, LLC

v. Warren Cty., ___ N.C. App. ___, ___, 755 S.E.2d 75, 79 (2014)

(“Our appellate courts have consistently held that the use of

the    word   ‘shall’          in   a     statute     indicates    what        actions      are

required or mandatory.”).

       In denying Plaintiff’s claim for alimony, the trial court

explained its belief that she had “received a sufficient amount

and    duration      of     maintenance           from    Defendant      which       includes

payments      of     Plaintiff’s             housing      expenses,      gasoline,          car

expenses, and health insurance . . . .”                          While such a finding

could warrant a conclusion that Plaintiff was not entitled to

retroactive        alimony,         the      trial     court’s    determination           that

Plaintiff is a dependent spouse — by definition — means that at

the    time    of        trial,     Plaintiff         continued     to    be        “actually

substantially        dependent            upon    [Defendant]      for     .     .    .     her

maintenance        and    support       or    .   .   .   substantially        in    need    of

maintenance and support from [Defendant].”                         N.C. Gen. Stat. §

50-16.1A(2) (2013).                 Because the trial court also concluded

that   Defendant         was    a    supporting        spouse    who   had      engaged     in

illicit sexual behavior, it was required to award alimony to

Plaintiff and make specific findings of fact setting forth “the
                               -17-
reasons for its amount, duration, and manner of payment.”       See

N.C. Gen. Stat. § 50-16.3A(a)-(c).        Accordingly, we must also

vacate the portion of the 4 June 2013 order concerning alimony

and remand to the trial court so that it may enter an award of

alimony, supported by the statutorily required findings setting

out its reasons for the amount, duration, and manner of payment

of the alimony award.

                             Conclusion

    For the reasons stated above, we vacate the trial court’s

order and remand for further proceedings consistent with this

opinion.

    VACATED AND REMANDED.

    Judges ELMORE and McCULLOUGH concur.

    Report per Rule 30(e).