Court Opinion

ID: 3167120
Source: CourtListenerOpinion
Date Created: 2016-01-05 13:05:50.816912+00
Date Added: 2024-06-11T07:38:46.622699
License: Public Domain

IN THE COURT OF APPEALS OF NORTH CAROLINA

                                    No. COA15-233

                                 Filed: 5 January 2016

Pamlico County, No. 12 CVD 78

SHEILA A. CUSHMAN, Plaintiff,

              v.

LARRY J. CUSHMAN, Defendant.

        Appeal by defendant from order entered 9 September 2014 by Judge L. Walter

Mills in Pamlico County District Court. Heard in the Court of Appeals 20 October

2015.

        J. Randal Hunter for plaintiff-appellee.

        White & Allen, P.A., by David J. Fillippeli, Jr., and Ashley F. Stucker, for
        defendant-appellant.

        ZACHARY, Judge.

        Larry Cushman (defendant) appeals from an order for equitable distribution

of the marital and divisible property acquired by defendant and Sheila Cushman

(plaintiff) during their marriage. On appeal, defendant argues that the trial court

erred by denying his pretrial motion for partial summary judgment, neglecting to

consider certain distributional factors, and failing to credit him for post-separation

payments. We conclude that the trial court’s denial of defendant’s pretrial motion for
                                CUSHMAN V. CUSHMAN

                                   Opinion of the Court

partial summary judgment is not subject to appellate review following a hearing on

the merits, and that the trial court did not err in its equitable distribution order.

                                        I. Background

      The parties were married on 14 February 1970, separated on 31 May 2010, and

divorced on 24 June 2013. One child was born of the marriage, a daughter who was

thirty-three years old at the time of the parties’ equitable distribution hearing. On

21 April 2012, plaintiff filed a complaint for post-separation support, alimony, and

equitable distribution of the marital estate. On 6 August 2012 defendant filed an

answer and a motion for sanctions against plaintiff and the attorney who represented

plaintiff at that time, pursuant to N.C. Gen. Stat. § 1A-1, Rule 11. Defendant’s Rule

11 motion, which was based on plaintiff’s inclusion of claims for post-separation

support and alimony in her complaint, alleged that prior to the filing of the plaintiff’s

complaint, the parties had executed a separation agreement releasing all claims other

than one for equitable distribution. On 29 August 2012, plaintiff filed a voluntary

dismissal of the challenged claims.

      At the time that the parties separated, defendant was a retired officer in the

United States Marine Corps. After the date of separation, defendant’s retirement

benefits continued to be deposited into a bank account held jointly by the parties until

September 2011, when defendant opened a separate bank account. On 27 September

2012, plaintiff filed a motion seeking an interim distribution of $45,848.00 for her

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                                   Opinion of the Court

past due share of defendant’s military retirement pay. On 2 October 2012, defendant

filed a response to plaintiff’s motion for interim distribution, in which defendant

agreed that plaintiff had an interest in his retirement benefits but argued that the

amount of her entitlement should be reduced. Defendant asserted that (1) because

the retirement checks were deposited into a joint account for the first nineteen

months of the parties’ separation, plaintiff had therefore “received and controlled all

of defendant’s retirement income” during this time, and that (2) plaintiff’s

entitlement should be reduced because defendant had “used the net income of his

retirement benefits” to make payments towards the mortgage owed on the former

marital residence and on a loan obligation of the parties’ adult daughter. Defendant’s

motion did not allege that his payments towards the mortgage or loan were made

with his separate funds.

      On 21 April 2014, defendant filed a motion for partial summary judgment

regarding the identification, valuation, and distribution of marital assets. On 20 May

2014, defendant filed a sworn equitable distribution affidavit in which defendant

averred in relevant part that:

             The parties entered into a Separation Agreement dated 16
             May 2011 in which the parties settled all their claims
             except for their claim for Equitable Distribution. Both
             parties contemplated that they would equally divide their
             marital property and debts as provided by North Carolina
             General Statute 50-20(c). . . . [I]n order to establish an
             Equitable Distribution of the marital assets and debts,
             plaintiff will have to pay a distributive award to defendant

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                                    CUSHMAN V. CUSHMAN

                                       Opinion of the Court

               of $2,109.05. That being the case, each party will have
               assets valued at $175,551.76. It is respectfully submitted
               that the division in this case should be an equal division by
               using the net value of marital property and net value of
               divisible property. It is respectfully contended that there
               are no factors which would support a finding that an equal
               division is not equitable.

(Emphasis added.) On 19 May 2014, the trial court conducted a hearing on equitable

distribution and defendant’s summary judgment motion. The trial court entered an

order on 9 September 2014 denying defendant’s motion for partial summary

judgment and distributing the marital estate.1 The trial court found that the parties

had “testified and stipulated to the Court that an equal division was equitable,” and

directed defendant to pay plaintiff a distributive award of $52,595.05. Details of the

trial court’s order for equitable distribution are discussed below, as relevant to the

issues raised on appeal. On 17 September 2014, defendant filed a “motion to vacate

order, for [a] new trial pursuant to Rule 59 . . . [and] to disqualify Judge Walter

Mills[.]” On 9 October 2014, defendant appealed to this Court before obtaining a

ruling on his Rule 59 motion.

                                        II. Standard of Review

       It is undisputed that

               [t]he 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

       1 The equitable distribution order stated that defendant’s Rule 11 motion was “continued to a
date uncertain for later hearing.”

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                                CUSHMAN V. CUSHMAN

                                   Opinion of the Court

             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) (internal quotation

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.”

Pulliam v. Smith, 348 N.C. 616, 625, 501 S.E.2d 898, 903 (1998) (citations omitted).

In addition, “[i]t is well established by this Court that where a trial court’s findings

of fact are not challenged on appeal, they are deemed to be supported by competent

evidence and are binding on appeal.” Juhnn v. Juhnn, __ N.C. App. __, __, 775 S.E.2d

310, 313 (2015) (citing In re K.D.L., 207 N.C. App. 453, 456, 700 S.E.2d 766, 769

(2010), disc. review denied, 365 N.C. 90, 706 S.E.2d 478 (2011)).

      Furthermore, it is axiomatic that:

             “The division of property in an equitable distribution is a
             matter within the sound discretion of the trial court.”
             When 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, 199 N.C. App. 192, 197, 680 S.E.2d 894, 898 (2009) (quoting

Cunningham v. Cunningham, 171 N.C. App. 550, 555, 615 S.E.2d 675, 680 (2005),

and White v. White, 312 N.C. 770, 777, 324 S.E.2d 829, 833 (1985)), disc. review denied

and appeal dismissed, 363 N.C. 806, 691 S.E.2d 16 (2010).

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                                CUSHMAN V. CUSHMAN

                                   Opinion of the Court

                   III. Denial of Motion for Partial Summary Judgment

      Defendant argues first that the trial court erred by denying his “motion for

partial summary judgment as to the identification, classification, valuation, and

distribution of the marital assets and debts of the parties.” After the trial court

denied defendant’s pretrial motion, the court conducted a trial on the parties’ claims

for equitable distribution. Our Supreme Court has held:

             The denial of a motion for summary judgment is an
             interlocutory order and is not appealable. . . . To grant a
             review of the denial of the summary judgment motion after
             a final judgment on the merits, however, would mean that
             a party who prevailed at trial after a complete presentation
             of evidence by both sides with cross-examination could be
             deprived of a favorable verdict. This would allow a verdict
             reached after the presentation of all the evidence to be
             overcome by a limited forecast of the evidence. In order to
             avoid such an anomalous result, we hold that the denial of
             a motion for summary judgment is not reviewable during
             appeal from a final judgment rendered in a trial on the
             merits.

Harris v. Walden, 314 N.C. 284, 286, 333 S.E.2d 254, 256 (1985) (citing MAS Corp. v.

Thompson, 62 N.C. App. 31, 302 S.E. 2d 271 (1983) (other citations omitted). Harris

is controlling on the issue of the appealability of the trial court’s pretrial ruling on

defendant’s summary judgment motion. “Because this case was tried on the merits

after denial of defendants' motion for summary judgment, under Harris, defendants’

arguments regarding the summary judgment order cannot amount to reversible

error, and we, therefore, do not address them.” Houston v. Tillman, __ N.C. App. __,

__, 760 S.E.2d 18, 20-21 (2014).

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                                CUSHMAN V. CUSHMAN

                                   Opinion of the Court

               IV. Distributional Factors in N.C. Gen. Stat. § 50-20(c)

      Defendant contends that the trial court erred by failing to consider the

distributional factors set out in N.C. Gen. Stat. § 50-20(c). This statute identifies

factors for the trial court to consider in its determination of whether an equal division

would be equitable and provides that:

             There shall be an equal division by using net value of
             marital property and net value of divisible property unless
             the court determines that an equal division is not
             equitable. If the court determines that an equal division is
             not equitable, the court shall divide the marital property
             and divisible property equitably. The court shall consider
             all of the following factors under this subsection[.]

      On appeal, defendant specifically maintains that the trial court erred by failing

to consider N.C. Gen. Stat. § 50-20(c)(11a), which directs the trial court to consider,

if it determines that an equal division would not be equitable, the “[a]cts of either

party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or

convert the marital property or divisible property, or both, during the period after

separation of the parties and before the time of distribution.” Defendant asserts that

the trial court was required to award him a credit under this subsection for

defendant’s post-separation expenditures for the mortgage and maintenance on the

former marital residence, and also for his post-separation payments towards a loan

obligation of the parties’ adult daughter. In addition, defendant claims that the trial

court should have considered plaintiff’s “waste and conversion” of marital assets. We

hold that on the facts of this case, the court was not required to consider or to make

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                                     Opinion of the Court

written findings addressing the distributive factors set out in N.C. Gen. Stat. § 50-

20(c).

         This Court has held that when the parties in an equitable distribution case

agree to an equal division of the marital estate, the trial court should not consider

the distributional factors in N.C. Gen. Stat. § 50-20(c):

               [W]here the parties, as here, stipulate that an equal
               division of the marital property is equitable, it is not only
               unnecessary but improper for the trial court to consider, in
               making that distribution, any of the distributional factors
               set forth in § 50-20(c). The trial court therefore correctly
               refused to credit the husband with any mortgage payments
               he made after the separation of the parties.

Miller v. Miller, 97 N.C. App. 77, 81, 387 S.E.2d 181, 184 (1990).

         In this case, the trial court found in Finding No. 18(A) that:

               Neither party contended that they were entitled to an
               unequal distribution of marital assets and liabilities. In
               fact, both of them testified and stipulated to the Court that
               an equal division was equitable. Because distribution
               factors are used only to determine whether an equal
               division of assets would not be equitable, a trial court
               should not consider, or make findings as to the
               distributional factors in N.C.G.S. § 50-20(c), when the
               parties have stipulated to an equal division of all marital
               and divisible assets and liabilities. Therefore, neither party
               is entitled to any credits for post separation payments.

This finding is supported by evidence that clearly establishes that defendant had

agreed to an equal division of the marital estate. As discussed above, defendant

executed a sworn affidavit averring in relevant part that:

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                                CUSHMAN V. CUSHMAN

                                   Opinion of the Court

             The parties entered into a Separation Agreement dated 16
             May 2011 in which the parties settled all their claims
             except for their claim for Equitable Distribution. Both
             parties contemplated that they would equally divide their
             marital property and debts as provided by North Carolina
             General Statute 50-20(c). . . . It is respectfully submitted
             that the division in this case should be an equal division by
             using the net value of marital property and net value of
             divisible property. It is respectfully contended that there
             are no factors which would support a finding that an equal
             division is not equitable.

(emphasis added). During the hearing, defendant was asked if he agreed to an equal

division and responded as follows:

             PLAINTIFF’S COUNSEL: Mr. Cushman, . . . do you agree
             than an equal division of assets and liabilities is the fair
             thing for the judge to do between you and Ms. Cushman?

             DEFENDANT: What asset are we talking about now?

             PLAINTIFF’S COUNSEL: All of --

             DEFENDANT: All assets?

             PLAINTIFF’S COUNSEL: Anything you accumulated
             during the marriage, would you agree that an equal
             division is fair between the two of you?

             DEFENDANT: I do, state law demands it I think.

             PLAINTIFF’S COUNSEL: All right. So you agree and
             stipulate that an equal division is what Judge Mills should
             do?

             DEFENDANT: Correct, sir.

      Moreover, defendant’s counsel began his argument to the trial court by

explicitly asserting that an equal division of the parties’ assets would be equitable:

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                                  Opinion of the Court

             TRIAL COURT: Any argument, Mr. Hooten?

             DEFENSE COUNSEL: We agree that it ought to be an
             equitable distribution case with equal division and I think
             if Your Honor will look at the Equitable Distribution
             Affidavit we prepared . . . an equal division would give each
             party about $175,000 in assets[.]

(emphasis added). We conclude that the record evidence clearly supports the trial

court’s finding that the parties had agreed to an equal division of the marital estate.

      Defendant argues on appeal that the evidence fails to establish that the parties

had entered into a formal stipulation.            Defendant makes various arguments

challenging the validity of their agreement on this issue, including the failure of the

trial court to conduct an inquiry into the parties’ understanding of the legal

consequences of their agreement, and the fact that the record does not contain a

sworn written stipulation in which both parties signed a document agreeing to an

equal division. We determine that, given defendant’s repeated assertions at the trial

level that an equal division would be equitable, we need not decide whether the

parties’ agreement met the technical requirements for a legally binding “stipulation.”

      It is undisputed that at the trial level - in defendant’s equitable distribution

affidavit, in defendant’s testimony, and in defense counsel’s argument - defendant

pursued the theory that an equal division of the marital estate would be equitable.

             Our Supreme Court “has long held that where a theory
             argued on appeal was not raised before the trial court, the
             law does not permit parties to swap horses between courts
             in order to get a better mount in the appellate courts. . . .

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                                   Opinion of the Court

               The defendant may not change his position from that taken
               at trial to obtain a steadier mount on appeal.”

Balawejder v. Balawejder, 216 N.C. App. 301, 307, 721 S.E.2d 679, 683 (2011)

(quoting State v. Holliman, 155 N.C. App. 120, 123, 573 S.E.2d 682, 685 (2002)

(internal citations and quotation marks omitted). In this case, defendant expressly

sought an equal division of the marital estate at the hearing on this matter, and may

not take the opposite position on appeal. Given that defendant agreed at the trial

level that an equal division of the marital estate would be equitable, the trial court

was not required to make findings demonstrating its consideration of the

distributional factors set out in N.C. Gen. Stat. § 50-20(c). Miller, 97 N.C. App. at 81,

387 S.E.2d at 184.

               V. Defendant’s Post-Separation Payments Toward Marital Debt

      Defendant argues next that the trial court erred by failing to “classify

[defendant’s] post-separation payments on the marital debt as divisible property and

distribute the same.” Defendant contends that his post-separation expenditures on

“the mortgage, Sallie Mae loan, and maintenance, upkeep and repairs to the marital

home,” constitute divisible property that the trial court was required to distribute.

We disagree.

      On appeal, defendant argues that the trial court was required to classify, value,

and distribute three categories of post-separation payments: (1) payments towards

the mortgage on the former marital residence; (2) money spent on maintenance and

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                                   Opinion of the Court

repair of the former marital residence, and; (3) payments towards a debt incurred by

the parties’ adult daughter. We have held that “ ‘[a] spouse is entitled to some

consideration, in an equitable distribution proceeding, for any post-separation

payments made by that spouse (from non-marital or separate funds) for the benefit

of the marital estate.’ ” Bodie v. Bodie, 221 N.C. App. 29, 34, 727 S.E.2d 11, 15-16

(2012) (quoting Walter v. Walter, 149 N.C. App. 723, 731, 561 S.E.2d 571, 576-77

(2002)). The crucial requirement for our purposes is that defendant is only entitled

to credit for payments made “from non-marital or separate” funds. As we observed

in Bodie, “[defendant] has not cited any cases, and we know of none, holding that a

spouse is entitled to a ‘credit’ for post-separation payments made using marital

funds.” Id.

      The trial court made the following findings of fact addressing defendant’s

contention that he was entitled to credit for these post-separation payments:

              18. The Defendant contends that he is entitled to various
              other credits for debts and expenses that he has paid since
              the parties’ separation. He is not entitled to these credits.
              In further support hereof, the Court finds as follows:

              A. Neither party contended that they were entitled to an
              unequal distribution of marital assets and liabilities. In
              fact, both of them testified and stipulated to the Court that
              an equal division was equitable. Because distribution
              factors are used only to determine whether an equal
              division of assets would not be equitable, a trial court
              should not consider, or make findings as to the
              distributional factors in N.C.G. S. § 50-20(c), when the
              parties have stipulated to an equal division of all marital

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                                 CUSHMAN V. CUSHMAN

                                   Opinion of the Court

             and divisible assets and liabilities. Therefore, neither party
             is entitled to any credits for post separation payments.

             B. The Defendant contends that he is entitled to various
             credits relating to mortgage payments and expenses to
             maintain the Pamlico County property. As set forth above,
             he has stipulated that an equal division is equitable.
             Furthermore, he continued to occupy the former marital
             residence and be in complete control of it after the parties
             separated. Also, this property has been sold, and both
             parties, as to this marital asset, made the decision to divide
             this money equally. Certainly, the repairs and
             improvements done to the residence created equity in the
             home, which was present as cash in the proceeds of the
             sale, and again, subsequently divided equally by the
             parties. The reduction in the principal amount of the
             mortgage represents divisible property; however, there is
             insufficient evidence to determine value. Therefore, this
             property is not subject to distribution in this matter.

             C. The Defendant contends that a certain student loan
             incurred for the benefit of [Hailey] S. Cushman is a marital
             debt for which he is entitled to credit because of payments
             that he made on the debt following the separation. Neither
             the Plaintiff nor the Defendant are obligated on the loan.
             The debt was not incurred for the benefit of the Plaintiff or
             the Defendant. It is a student loan incurred solely by the
             parties’ daughter, [Hailey] S. Cushman, and is not subject
             to this action.

      We will consider separately the types of post-separation payments at issue in

this case. Regarding defendant’s payments for utilities and routine maintenance of

the marital residence, defendant does not dispute the trial court’s finding that

defendant “continued to occupy the former marital residence and be in complete

control of it after the parties separated.”        Defendant has neither advanced any

argument that it would be fair for plaintiff to bear responsibility for defendant’s living

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                                   Opinion of the Court

expenses such as water and electricity after their separation, nor cited any authority

classifying such payments as divisible property. We conclude that the trial court did

not err by ruling that defendant was not entitled to credit for these expenses.

      Regarding payments towards the loan obligation of the parties’ adult daughter,

we conclude that the trial court’s finding on this issue was supported by the evidence.

Defendant argues that the parties had agreed to assume responsibility for their

daughter’s loan as part of paying for her education and that, on the basis of their

personal agreement, this debt should be classified as marital property, and his post-

separation payments as divisible property. Plaintiff, however, testified that she did

not regard the loan as a marital responsibility. “The trial court is the sole judge of the

weight and credibility of the evidence.” Montague v. Montague, __ N.C. App. __, 767

S.E.2d 71, 74 (2014) (citing Phelps v. Phelps, 337 N.C. 344, 357, 446 S.E.2d 17, 25

(1994)). The trial court’s finding on this issue is supported by competent evidence

and should be upheld.

      Defendant also asserts that his post-separation payments towards the

mortgage on the former marital residence and for repairs to the residence are

divisible property. Defendant has failed, however, to produce evidence of the dollar

amount, if any, of such payments that were made with his separate funds. Defendant

concedes that the post-separation payments were made using his retirement benefits

and, to an unspecified extent, from his Social Security benefits. Defendant testified

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                                  Opinion of the Court

that the repairs to the former marital property were made “exclusively” using his

retirement funds, and that defendant had spent approximately $4,400 from his

“retirement fund” on home repair. Defendant does not, however, challenge the trial

court’s Finding No. 11:

             11. The Defendant is retired from the United States
             Marine Corps. The Plaintiff is entitled to 50 percent of the
             Defendant’s gross disposable retirement pay.            Her
             entitlement to 50 percent of this gross disposable retired
             pay vested at the time the parties separated on May 31,
             2010. As set forth above, the parties have entered an order
             distributing to the Plaintiff her share of the Defendant’s
             gross disposable retired pay. She received her share of that
             retired pay by way of a check from DFAS for the first time
             on December 31, 2013. . . .

      Because it is undisputed that plaintiff was entitled to half of defendant’s

retirement benefits, defendant’s “retirement fund” consisted of a commingled account

that included funds belonging to plaintiff.        Defendant did not introduce any

documentation of the amount of his post-separation payments from his “retirement

fund” that could properly be considered defendant’s separate property. Similarly,

although defendant contends that his Social Security benefits are separate property

which defendant used to make some post-separation payments, defendant never

produced any documentation of the amount he spent from his separate funds.

Defendant also admitted at trial that he did not know the extent to which these

payments resulted in a reduction in the principal debt.

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                                   Opinion of the Court

      “ ‘The burden of showing the property to be marital is on the party seeking to

classify the asset as marital and the burden of showing the property to be separate is

on the party seeking to classify the asset as separate.’ ” Johnson v. Johnson, __ N.C.

App. __, __, 750 S.E.2d 25, 29 (2013) (quoting Atkins v. Atkins, 102 N.C. App. 199,

206, 401 S.E.2d 784, 787 (1991)). The statutory mandates that “the trial court (1)

classify and value all property of the parties . . . (2) consider the separate property in

making a distribution of the marital property, and (3) distribute the marital property,

necessarily exist only when evidence is presented to the trial court which supports

the claimed classification, valuation and distribution.” Miller, 97 N.C. App. at 80,

387 S.E.2d at 184. Defendant neglected to introduce evidence establishing the

amount of the post-separation payments made from his separate funds. Because

defendant failed to meet his burden to introduce evidence on this issue, the trial court

did not err by making no findings specifically valuing or distributing defendant’s post-

separation payments. See Albritton v. Albritton, 109 N.C. App. 36, 41, 426 S.E.2d 80,

83-84 (1993) (“We see no reason to remand this case on the basis that the trial court

failed to make a specific finding . . . when it was plaintiff who failed to provide the

trial court with the necessary information. . . . [T]he trial court's failure to put a

specific value on defendant’s pension plan was not error.”).

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                                   Opinion of the Court

      Moreover, given that it was defendant’s burden to produce evidence on this

issue, we will not remand for the taking of additional evidence. This Court has long

held that where

             the party claiming the property, here a debt, to be marital
             has failed in his burden to present evidence from which the
             trial court can classify, value and distribute the property,
             that party cannot on appeal claim error when the trial
             court fails to classify the property as marital and distribute
             it. . . . Furthermore, remanding the matter for the taking
             of new evidence, in essence granting the party a second
             opportunity to present evidence, ‘would only protract the
             litigation and clog the trial courts with issues which should
             have been disposed of at the initial hearing.’

Miller, 97 N.C. App. at 80, 387 S.E.2d at 184 (quoting In re Marriage of Smith, 448

N.E.2d 545, 550 (Ill. App. Ct. 1983)).

      For the reasons discussed above, we conclude that the trial court did not err

and that its equitable distribution order should be

      AFFIRMED.

      Judges BRYANT and CALABRIA concur.

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