Court Opinion

ID: 9606105
Source: CourtListenerOpinion
Date Created: 2023-08-22 02:46:54.598706+00
Date Added: 2024-06-11T18:02:32.684587
License: Public Domain

Judge Greene
concurring in part and dissenting in part.
I concur in the majority’s treatment of all but the “Camp Branch Road” property and buildings. I dissent from the majority’s holding that defendant’s use of his separate property to acquire the Camp Branch property and buildings “by the entirety” is presumed to be a “gift” to the marital estate. N.C.G.S. Sec. 50-20(b)(2) provides in part:
Property acquired in exchange for separate property shall remain separate property regardless of whether the title is in *294the 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. [Emphasis added.]
There is only one reasonable reading of this provision: However acquired property is titled, the manner of titling does not itself affect the separate status of property acquired in exchange for separate property; but an acquisition of property with separate funds nevertheless may be considered marital property if such an intent is “expressly stated in the conveyance.” To hold that titling property by the entirety itself constitutes the necessary express intent renders the statutory provision a non sequitur.
The source of the majority’s erroneous notion of a “marital gift presumption” is McLeod v. McLeod, 74 N.C. App. 144, 327 S.E. 2d 910, cert. denied, 314 N.C. 331, 333 S.E. 2d 488 (1985). In construing the above-quoted provision of Section 50-20(b)(2), the McLeod court reasoned that the Legislature’s addition of the “express contrary intent” exception embodies the common law analysis of Mims v. Mims, 305 N.C. 41, 286 S.E. 2d 779 (1982):
Prior to Mims that provision read, ‘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.’ G.S. 50-20(b)(2) (1981). Given that language, the Mims court wrote ‘it does appear . . . that in the context of a divorce and the ‘equitable distribution’ of all ‘marital property’ the Legislature has opted for a rule that where land or personalty is purchased with the ‘separate property’ of either spouse, it remains the ‘separate property’ of that spouse regardless of how the title is made.’ Mims, 305 N.C. at 53, 286 S.E. 2d at 787. In apparent response to this reading of the statute as it was written, the Legislature amended the separate provision to state that property acquired in exchange for separate property shall remain so regardless of title ‘and shall not be considered to be marital property unless a contrary intention is expressly stated in the conveyance.’ [emphasis in original] [citation omitted]. . . . Thus the legislature appears to have availed itself of the reasoning in Mims whereby when spouses title their real property without regard to the source of the consideration a gift will be presumed. [Emphasis added.]
*295McLeod, 74 N.C. App. at 155-56, 286 S.E. 2d at 917-918 (quoting Mims, 305 N.C. at 53, 286 S.E. 2d at 787).
The McLeod construction of the statute in light of Mims is neither required by Mims itself nor permitted by the plain language of Section 50-20(b)(2). In order to incorporate the Mims result, the Legislature would have to completely delete that portion of the statute which states the manner of titling is irrelevant. The Legislature did not do this nor did it specifically “avail itself’ of the Mims reasoning: Instead of creating a presumption of gift to the marital estate as in Mims, the Legislature instead provided a method by which a spouse could make such a gift by expressing the specific intent to confer a gift in the conveyance itself.
As its interpretation contravened the language of Section 50-20(b)(2), the McLeod court was also constrained to create an apparent exception to the “source-of-funds” analysis previously adopted by this court in Wade v. Wade, 72 N.C. App. 372, 325 S.E. 2d 260 (1985). See McLeod, 74 N.C. App. at 154, 327 S.E. 2d at 916-17 (explicitly adopting marital gift presumption rather than follow Wade). Given the McLeod court’s explicit refusal to follow Wade, it is perplexing that the court subsequently stated that “the marital gift presumption follows naturally from this court’s previous decisions in Loeb [citation omitted] and Wade. ... In Loeb the Court held that property acquired during the marriage is presumably marital . . . .” Id. at 157, 327 S.E. 2d at 918 (citation omitted) (emphasis added).
More important, our Supreme Court has expressly overruled the basic presumption of marital property underlying both Loeb and McLeod. See Johnson v. Johnson, 317 N.C. 437, 454 n.4, 346 S.E. 2d 430, 440 n.4 (1986). While the Johnson Court did not, strictly speaking, specifically address the notion of a “marital gift” presumption, it expressly overruled the more basic presumption of marital property from which the McLeod court stated the “marital gift” presumption “follows naturally.” Cf. McLeod, 74 N.C. App. at 157, 327 S.E. 2d at 918. Furthermore, the Johnson Court’s favorable citation of Wade in its footnote clearly demonstrates its belief that the Wade “source-of-funds” analysis does not allow a “marital gift” presumption. 317 N.C. at 454 n.4, 346 S.E. 2d at 440 n.4 (in overruling the marital property pre*296sumption of Loeb and McLeod, the Court cited Wade as “contra” Loeb and McLeod).
I recognize that the provisions of Section 50-20(b)(2) also provide that “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.” This provision may indeed “create a presumption that gifts between spouses are marital property.” McLeod, 74 N.C. App. at 155, 327 S.E. 2d at 917 (emphasis added). However, the provision provides no support for the McLeod notion that simply “titling” property jointly creates a “gift” to the other spouse in the first place. Given the statutory provision that joint title is irrelevant to the classification of property acquired in exchange for separate property, the express “contrary” intent required by the statute is itself the vehicle by which a spouse may evidence the intent to confer a “gift” on the other spouse. The McLeod interpretation simply assumes its desired conclusion as a basic premise.
The illogic of McLeod is further revealed by the limitation of McLeod expressed in Manes v. Harrison-Manes, 79 N.C. App. 170, 338 S.E. 2d 815 (1986). The Manes court wisely declined to extend the McLeod presumption to jointly-held “personal” property “as to do so would seem to defeat the legislative intent of G.S. 50-20 (b)(2).” 79 N.C. App. at 172, 338 S.E. 2d at 816. However, there is no principled distinction which would justify treating real and personal property so differently under Section 50-20(b)(2). Cf. Mims, 305 N.C. at 53, 286 S.E. 2d at 787 (noting the statutory provision applies “where land or personalty is purchased with the separate property of either spouse”). It is not the extension of McLeod, but McLeod itself, which “defeat[s] the legislative intent of G.S. 50-20(b)(2).”
Defendant’s counsel vigorously argued this court should overrule McLeod as a direct contravention of the specific provisions of Section 50-20(b)(2). In affirming the trial court’s disposition of the Camp Branch property and buildings, the majority ignores counsel’s arguments and the plain language of Section 50-20(b)(2). I accordingly dissent from the majority’s affirmance of the trial court in this respect and would remand so that, under Section 50-20 (b)(2), plaintiff, not defendant, would be required to demonstrate the conveyance contains the express intent that the Camp Branch *297property was acquired as a gift by defendant to the marital estate.