Court Opinion

ID: 2728783
Source: CourtListenerOpinion
Date Created: 2014-09-08 21:36:13.13812+00
Date Added: 2024-06-11T09:53:11.385249
License: Public Domain

NO. COA13-937

                     NORTH CAROLINA COURT OF APPEALS

                          Filed: 15 April 2014

STEVEN G. GORDON,
     Plaintiff,

     v.                                Guilford County
                                       No. 09 CVD 10832
DEBORAH J. GORDON,
     Defendant.

     Appeal by plaintiff from Order entered on or about 24 April

2013 by Judge Jan H. Samet in District Court, Guilford County.

Heard in the Court of Appeals 6 February 2014.

     Randolph M. James, PC, by Randolph M. James, for plaintiff-
     appellant.

     Woodruff Law Firm, P.A., by Jessica Snowberger Bullock, for
     defendant-appellee.

     STROUD, Judge.

     Steven Gordon (“plaintiff”) appeals from an order entered

on or about 24 April 2013 finding him to be in civil contempt and

ordering him jailed unless he pays $20,000 to his former wife,

Deborah Gordon (“defendant”), within 60 days. We affirm.

                           I.     Background
                                    -2-
     Much of the background to this case was discussed in our

opinion   arising   from   the   last   contempt   order   that   plaintiff

appealed:

            The parties were married in 1983 and
            separated in 2007. On 21 August 2009, the
            parties   executed  a   mediated  settlement
            agreement, pursuant to which Plaintiff was
            required to pay Defendant a distributive
            award in the amount of $1,200,000.00 and to
            pay $5,600.00 per month in post-separation
            support    until   $1,000,000.00   of    the
            distributive award had been paid. In return,
            Defendant agreed to waive the right to
            receive additional post-separation support
            or alimony.

            On 24 August 2009, Plaintiff filed a
            complaint for divorce. On 28 October 2009,
            Defendant filed an answer in which she
            admitted the material facts alleged in
            Plaintiff’s     complaint       and     asserted
            counterclaims    for,    among   other   things,
            divorce, distribution of the parties’ IRA
            accounts,   breach    of    contract,   specific
            performance   of    the    mediated   settlement
            agreement, and attorney’s fees. In a reply
            filed   on   13    November    2009,   Plaintiff
            admitted that he had not made all the
            payments required by the mediated settlement
            agreement and asserted various defenses
            stemming from his alleged inability to
            obtain a bank loan or otherwise procure the
            funds needed to make the required payments.

            On 5 May 2010, the trial court entered a
            consent order which provided, in pertinent
            part, that:

             . . . .
                                         -3-
            Plaintiff shall pay to Defendant on the
            first day of each month beginning June 1,
            2010 the sum of $9000, by direct deposit to
            her   checking account until the earlier to
            occur of the following:

            (i) July 31, 2011 or

            (ii) The sale of 8640 Adkins Road, Colfax,
            NC

            . . . .

            On 12 April 2012, the trial court orally
            determined that Plaintiff was in contempt of
            the consent judgment by willfully failing to
            list the Adkins Road property for sale with
            Ms. Laney; stated that Defendant had chosen,
            instead, to list the property with an
            “inexperienced” agent who “doesn’t even come
            close to having the qualities, the skills
            necessary, the connections necessary to sell
            this price of a house;” and noted that, in
            the court’s “opinion [, Plaintiff] really
            [wasn’t] trying to satisfy this obligation”
            because he did not “believe that [he] should
            have to pay [Defendant any more] money.” As
            a result, the trial court told Plaintiff
            that he was being held in contempt of court
            for willfully failing to list the property
            with Ms. Laney and that, in the event that
            he failed to execute a listing contract with
            her within fourteen days, he would be jailed
            pending   compliance   with    the  relevant
            provision of the consent judgment.

Gordon v. Gordon, ___ N.C. App. ___, 746 S.E.2d 21, 2013 WL

3049072   at    *1-*3    (2013)   (unpublished)        (brackets     and   ellipses

omitted),      disc.    rev.   denied,    ___   N.C.    ___,   753    S.E.2d   679
                                             -4-
(2014).      Defendant     appealed      the       2012   contempt      order   to   this

Court. Id. at *4. We affirmed. Id. at *13.

       Since the 2012 order, there have been additional conflicts

between the parties over the money plaintiff owes defendant.

After November 2012, plaintiff failed to pay the $5,000 per

month that had been ordered by the trial court. As a result,

defendant filed a motion for contempt. The trial court issued an

order to show cause, finding that there was probable cause to

believe plaintiff was in contempt of the 2010 Consent Order.

Plaintiff responded, claiming that he was unable to make the

required payments.

       The   trial    court      held    a    hearing     on    defendant’s     contempt

motion on 26 February 2013. By order entered 24 April 2013, the

trial court made written findings of fact and conclusions of

law.   The    trial      court    held       plaintiff    in    civil    contempt     and

ordered      that   he   be   jailed         if   he   failed    to   pay   $20,000   in

arrearages within 60 days “until such time as he complies with

this order.” Plaintiff filed notice of appeal to this Court on

30 April 2013.

                              II.       Civil Contempt

       Plaintiff argues on appeal that the trial court erred in

holding him in contempt because it failed to find that he has the
                                    -5-
present ability to pay the $20,000 he concedes that he owes. We

disagree.

A.   Standard of Review and Burden of Proof

            Review in civil contempt proceedings is
            limited   to  whether   there  is  competent
            evidence to support the findings of fact and
            whether the findings support the conclusions
            of law. Findings of fact made by the judge
            in contempt proceedings are conclusive on
            appeal when supported by any competent
            evidence and are reviewable only for the
            purpose of passing upon their sufficiency to
            warrant the judgment. However, findings of
            fact to which no error is assigned are
            presumed   to  be   supported  by  competent
            evidence and are binding on appeal. The
            trial court’s conclusions of law drawn from
            the findings of fact are reviewable de novo.
            A show cause order in a civil contempt
            proceeding which is based on a sworn
            affidavit and a finding of probable cause by
            a judicial official shifts the burden of
            proof to the defendant to show why he should
            not be held in contempt.

Tucker v. Tucker, 197 N.C. App. 592, 594, 679 S.E.2d 141, 142-43

(2009)    (citations,   quotation    marks,   and   brackets   omitted).

Here, there was a show cause order with a judicial finding of

probable cause.    Therefore, the burden was on plaintiff “to show

why he should not be held in contempt.” Id. at 594, 679 S.E.2d

at 143.

B.   Present Ability to Pay
                                             -6-
        The trial court found plaintiff to be in civil contempt and

ordered him to pay $20,000 in arrearages within 60 days or be

sent to jail. Plaintiff argues that there was no finding and no

evidence that he was presently able to comply or take reasonable

steps to purge his contempt and that therefore he could not be

subjected to an indefinite term in jail for civil contempt.

                For civil contempt to be applicable, the
                defendant must be able to comply with the
                order or take reasonable measures that would
                enable him to comply with the order. We hold
                this means he must have the present ability
                to comply, or the present ability to take
                reasonable measures that would enable him to
                comply, with the order.

Jones v. Jones, 62 N.C. App. 748, 749, 303 S.E.2d 583, 584

(1983);         see    also   N.C.     Gen.    Stat.     §    5A-21(a)(3)      (2013).

“Reasonable           measures”   to   pay     an    outstanding     judgment    could

include “borrowing the money, selling defendant’s . . . property

.   .   .   ,    or    liquidating     other       assets,   in   order   to   pay   the

arrearage.”            Teachey v. Teachey, 46 N.C. App. 332, 335, 264

S.E.2d 786, 787-88 (1980).

                When a defendant has the present means to
                comply with a court order and deliberately
                refuses to comply, there is a present and
                continuing contempt and the court may commit
                such defendant to jail for an indefinite
                term, that is, until he complies with the
                order. Under such circumstances, however,
                there must be a specific finding of fact
                supported by competent evidence to the
                               -7-
         effect that such defendant possesses the
         means to comply with the court order. Our
         Supreme Court has indicated . . . that the
         court below should take an inventory of the
         property of the plaintiff; find what are his
         assets and liabilities and his ability to
         pay and work—an inventory of his financial
         condition—so that there will be convincing
         evidence   that  the   failure  to   pay  is
         deliberate and wilful.

Bennett v. Bennett, 21 N.C. App. 390, 393-94, 204 S.E.2d 554,

556 (1974).

    First, we must address plaintiff’s argument that the trial

court failed to find that he has the present ability to comply

with its order. The trial court specifically found that

         17. The     evidence   before   the   Court
         establishes conclusively that Plaintiff had
         the present ability to pay the $5,000
         monthly alimony for the months of November
         and December of 2012 and January and
         February of 2013.

         18. During the relevant period, Plaintiff
         had available to him from his business for
         his personal use at least $20,000 in cash
         used for the purchase of vehicles used as
         leased vehicles. He also had available at
         least $20,000 available to pay alimony
         through cash advances available through
         lines of credit associated with credit
         cards. Evidence also shows that Plaintiff
         had as much as $16,000 in business cash used
         to pay mortgage payments for his relatives’
         mortgages or rents.

The trial court then concluded that “Plaintiff had the present

ability to comply with the May 5, 2010 Consent Order Judgment
                                        -8-
directing    Plaintiff      to   pay    [the]    $5,000      per    month    alimony

payment.” (emphasis added.)

    Plaintiff contends that the trial court’s use of the word

“had” rather than the word “has” is fatal to its judgment, as

this shows that the Court failed to make findings as to his

present ability to pay. Plaintiff claims that although he may

have had the ability to pay $20,000 at some time in the past

prior to the hearing, at the time of the hearing he no longer

had such present ability. The hearing was held on 26 February

2013,   at   which   time    the   trial      court   took    the    matter    under

advisement; the order was entered on 24 April 2013.                        Plaintiff

does not claim that his circumstances changed between date of

the February 2013 hearing and entry of the order in April 2013;

his argument focuses only on the word “had.”

    Although we agree that a trial court must make findings as

to a contemnor’s present ability to pay before holding him in

civil contempt, we cannot take the word “had” out of the context

of the entire order. Perhaps some of the confusion as to verb

tense arises from the fact that at any civil contempt hearing,

the parties are presenting evidence of what has happened in the

past to prove the present state of affairs to enable the trial

court   to    make   findings      of    fact     about      what    the     present
                                      -9-
circumstances are and what will likely happen in the future. And

then the written order from that hearing is actually prepared

and   entered     after    the   hearing,   so    that    the    trial   court   is

necessarily referring to events that occurred and evidence that

was presented in the past, which was the present on the date the

events happened or on the date of the hearing. Time stubbornly

refuses to stand still even long enough for a hearing to be

completed or an order prepared and entered.                     We must read the

findings of fact with these considerations in mind.

      The findings in this case are similar to those we approved

in Hartsell v. Hartsell, 99 N.C. App. 380, 385, 393 S.E.2d 570,

574 (1990). In Hartsell, the trial court found that “‘defendant

had at all times been fully capable and able of complying with

all provisions of the Court’s decree’ and that ‘defendant had

the present ability and continuing capability to comply with all

remaining provisions of the Court’s decree with which he had not

heretofore complied.’” Id. at 385, 393 S.E.2d at 573 (brackets

omitted). Despite the trial court’s use of the word “had,” we

affirmed    the    trial    court’s   conclusion         that   the   defendant’s

failure    to   comply     was   willful    and   that    he    had   the   present

ability to comply because there was evidence that he had “the
                                           -10-
present ability to take reasonable measures that would enable

him to comply.” Id. at 386, 393 S.E.2d at 574.

    Taking the findings as a whole, it is clear that the trial

court considered plaintiff’s ability to comply as of the date of

the hearing and within the sixty days afforded to him to take

any additional measures he may need to take. The trial court

properly    took     an   inventory      of    plaintiff’s       recent      income    and

expenses in considering his ability to comply throughout the

relevant period, including February 2013, when the hearing was

held. See Bennett, 21 N.C. App. at 393-94, 204 S.E.2d at 556. It

made findings on his various sources of income, how he pays his

expenses, and other voluntary expenses he has undertaken to pay

rather than paying the judgment. Given the extensive evidence

presented      and   findings     made     regarding       plaintiff’s       income    and

expenses, we hold that the trial court’s finding on present

ability to pay is adequate.

    Plaintiff        further      argues      that      there   was    no   evidence    to

support    a   finding     that    he    had      the    present      ability    to   pay.

Plaintiff      claims     that     the     trial        court   “made       no   findings

regarding cash available to plaintiff as of the hearing or as of

the day the Order was entered.”                    This is true, but the trial

court also did not order plaintiff to pay immediately on the day
                                      -11-
of   the    hearing    nor    immediately     on    the    date    the   order     was

entered.     The trial court gave plaintiff 60 days after entry of

the order to acquire the $20,000, and the findings show that

plaintiff had various options to accomplish this.

      The   trial     court   found   that    plaintiff’s         2012   income    was

approximately $139,641. Plaintiff earned approximately $15,000

per month in November and December 2012. The trial court also

found that “the personal debts of the Plaintiff are paid through

the business and $180,000 in personal expenses were paid from

October 2011 through October 2012.”                The trial court found that

plaintiff voluntarily pays thousands of dollars in expenses for

his adult children and his mother, totaling more than $16,500

over the course of four months.               Plaintiff does not challenge

any of these findings as unsupported by competent evidence, so

they are binding on appeal. Tucker, 197 N.C. App. at 594, 679

S.E.2d at 143.

      Although      plaintiff    should     have    well    been     able    to    pay

defendant by temporarily ceasing to pay the expenses he had been

paying for his adult children and mother, the trial court also

made findings regarding his ability to take reasonable measures

that would enable him to comply by borrowing the funds.                            The

evidence    showed     that   plaintiff      had   two    credit    cards.    As    of
                                        -12-
December 2012, one had a cash advance available of $4,500 and

the other had an available cash advance of $4,590. The credit

cards also provided plaintiff with available lines of credit in

excess of $44,887.          Plaintiff does not argue that he expected

his   income      or     expenses     to     change     substantially       in     the

foreseeable future.          Plaintiff did contend at the hearing that

his   business,    Flash     Gordon     Motors      &   Leasing,    Inc.,    was    in

decline,   and     of     course     this    was    contested      by   defendant’s

evidence. In any event, the trial court heard and considered

this evidence, weighed its credibility, and made its findings,

which did not include a finding that the business was failing.

Therefore, it was fully appropriate for the trial court to base

its finding of present ability to pay on evidence of income and

expenses in the recent past.                See Parsons v. Parsons, ___ N.C.

App. ___, ___, 752 S.E.2d 530, 534 2013 (noting that future

expenses   “can        [generally]    only     be   predicted      based    on   past

experience”).          This evidence shows that plaintiff could take

reasonable steps to pay the full $20,000 he owes by paying a

portion of his $15,000 monthly income, taking out cash advances

from his credit cards, ceasing to voluntarily pay the expenses

of other family members, and/or transferring any expenses in

excess of his income to his credit cards for those months.
                                     -13-
    Plaintiff         further      challenges       the      trial        court’s

consideration    of    his    business    assets    in    finding    a    present

ability   to    comply.      He   contends   that    considering         business

expenditures “would effectively eliminate the corporate identity

of any closely-held corporation.” Again, we disagree.

    In determining a contemnor’s present ability to pay, the

appellate courts of this state have directed trial courts to

“take an inventory of the property of the plaintiff; find what

are his assets and liabilities and his ability to pay and work—

an inventory of his financial condition.” Bennett, 21 N.C. App.

at 393-94, 204 S.E.2d at 556. Considering how a contemnor pays

his expenses is an important part of this analysis.

    In Foy v. Foy, 69 N.C. App. 213, 316 S.E.2d 315 (1984), we

affirmed a trial court’s finding of willful noncompliance with

an alimony order. In reviewing the trial court’s willfulness

findings, we considered the defendant’s interest in a closely

held company as a possible source of funds for the defendant,

even though he did not receive any direct income.                Foy, 69 N.C.

App. at 215, 316 S.E.2d at 316-17. Plaintiff’s interest in his

company   is   far    more    clearly    established      than   that     of   the

defendant in Foy.
                                           -14-
      Here, the trial court’s findings indicated that plaintiff

had a history of using his corporate assets to pay for his

personal debts and personal expenses.                      In fact, the evidence

showed that he had used corporate assets to pay $180,000 in

personal     expenses       from    October       2011    through     October     2012.

Plaintiff does not argue that this finding is unsupported by the

evidence.    These     expenditures         relate       directly    to     plaintiff’s

assets and liabilities and to his ability to pay the arrearages.

Therefore,     the    trial        court    properly      considered        plaintiff’s

corporate assets and liabilities and did not impair or disregard

his business’s corporate identity in any way.

      Given this evidence            and the findings made by the trial

court, we hold that the trial court did not err in concluding

that within 60 days plaintiff could take reasonable steps to pay

the entire        $20,000    of the arrearages            between using       the cash

advances, charging any expenses not covered by the business to

one   of    his     credit    cards,       and    ceasing    to     voluntarily    pay

thousands of dollars to his other relatives.                        See Williford v.

Williford, 56 N.C. App. 610, 612, 289 S.E.2d 907, 909 (1982)

(“[P]ayment of alimony may not be avoided merely because the

husband     has     remarried       and     voluntarily       assumed       additional

obligations.”        (citation,        quotation          marks,      and      ellipses
                                        -15-
omitted)); Teachey, 46 N.C. App. at 335, 264 S.E.2d at 787-88

(noting that reasonable efforts could include borrowing money

and liquidating assets); Watson v. Watson, 187 N.C. App. 55, 67,

652    S.E.2d    310,   319    (2007)    (affirming         a     finding       of    civil

contempt where the trial court afforded the defendant 90 days to

take reasonable measures to pay the required sum), disc. rev.

denied, 362 N.C. 373, 662 S.E.2d 551 (2008).

       Plaintiff     argues    that     compliance         with    the    order       would

require him to take on debts he could never hope to pay off, but

neither the evidence nor the findings support plaintiff’s dim

view of his wherewithal. The trial court’s uncontested findings

show   that     he   earned    approximately     $15,000          per    month       in   the

months preceding the hearing, that plaintiff had the ability to

pay thousands of dollars per month to family members, and that

his debts and $180,000 of his personal expenses were paid by his

business.        Drawing      money   from     any    of    these        sources      could

properly    be   considered      “reasonable         measures”      to    pay    off      the

arrearages. See Teachey, 46 N.C. App. at 335, 264 S.E.2d at 787-

88.

C.     Crediting the amount seized from plaintiff

       Plaintiff next contends that the trial court erred in not

crediting him with the $7,322.42 seized by defendant from his
                                         -16-
checking account. These funds were seized by execution upon a

judgment   which       was    entered    upon   the    distributive    award    of

$1,025,000;     that    judgment    is    not   a   subject    of   this    appeal.

Plaintiff’s argument conveniently ignores the fact that these

funds were seized by execution to pay this outstanding judgment,

which is separate from his alimony obligation, as well as the 5

May 2010 consent order, which differentiates between the $5,000

per month he is required to pay in alimony and the $1,025,000

distributive award.1 The 5 May 2010 order specifically states

that the “alimony does not reduce the $1,025,000 distributive

award.”

       The 12 April 2012 judgment and order further clarified this

distinction. At that time, plaintiff still owed approximately

$894,023    toward      the     distributive        award.    The   trial     court

continued to require that plaintiff                 pay $5,000 per month         as

alimony until the distributive award was paid in full. The trial

court specifically stated that the monthly $5,000 payment “is

not a credit against the money judgment.”                It further clarified

that   “[t]he   requirement       that    Plaintiff     Husband     make    monthly

1
  Plaintiff also argues that the $5,000 per month ordered by the
trial court in the May 2010 consent order was not actually
“alimony.” Plaintiff specifically consented to the order which
identified this payment as “alimony.”    He never appealed from
that   order   and   cannot   now   collaterally   attack   that
determination.
                                          -17-
payments to Defendant Wife for support and maintenance does not

alter,     limit,   delay,    or    postpone     Defendant    Wife’s   rights   to

enforce the money judgment and to pursue all collection rights

and remedies.”2 As these prior orders make clear, the $7,322 was

seized by execution on the judgment entered as to the $1,025,000

distributive award.          The $7,322 seized did reduce the amount he

owed on the distributive award judgment, and plaintiff does not

get to count the amount seized by defendant twice.

                                III. Conclusion

      Based on plaintiff’s repeated, willful disregard of court

orders,    as   found   by    the   trial    court,   and    the   trial   court’s

adequate findings regarding plaintiff’s present ability to pay

$20,000 within 60 days, we conclude that the trial court did not

err   in   holding   plaintiff       in    civil   contempt   for   his    willful

disregard of the order requiring him to pay $5,000 per month to

defendant. We affirm the trial court’s order.

      AFFIRMED.

      Judges CALABRIA and DAVIS concur.

2
  Plaintiff did appeal that order and the subsequent June 2012
order holding plaintiff in contempt for willful failure to
comply with the 5 May 2010 order. Both orders were affirmed by
this Court. Gordon, 2013 WL 3049072 at *13. We further rejected
plaintiff’s characterization of the $5,000 monthly payment as an
“alternative penalty.” Id.