Bell v. Bell

An unpublished opinion of the North Carolina Court of Appeals does not constitute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. COA14-200
NORTH CAROLINA COURT OF APPEALS

Filed: 2 September 2014

KATHY BELL,
Plaintiff,

v. Wilkes County
No. 10 CVD 1004
RALPH E. BELL,
Defendant.

Appeal by Defendant from judgment entered 20 August 2013 by

Judge Jeanie R. Houston in Wilkes County District Court. Heard

in the Court of Appeals 13 August 2014.

Vannoy, Colvard, Triplett & Vannoy, P.L.L.C., by Daniel S.
Johnson, for Plaintiff.

Charlotte Gail Blake for Defendant.

STEPHENS, Judge.

Procedural and Factual Background

Defendant Ralph E. Bell and Plaintiff Kathy Bell married in

1980 and separated on 22 May 2010. Their son, Chris Bell, was

an adult at the time of the separation. Plaintiff initiated

this action by the filing of a complaint for equitable

distribution and injunctive relief on 30 July 2010. At the time
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of their separation, Plaintiff had retired from full-time work,

but continued to work part time. Plaintiff had a 401(k)

retirement account. Defendant had become disabled in a work-

related accident in 2008 and received both Social Security

disability payments and a monthly lifetime retirement benefit

from his former employer. At about the time of the parties’

separation, Defendant had received a workers’ compensation

payment of just over $10,000. A final settlement of his

workers’ compensation claim after the parties separated provided

Defendant an additional $37,500 as well a fund for future

medical expenses. The parties owned three pieces of real

property: a house on eleven acres, encumbered by a mortgage

(“the Driftwood home”); a 5.2 acre tract of land on Baptist Home

Road, encumbered by an equity line of credit (“the land”); and a

house on four acres on Baptist Home Road, unencumbered by any

debt (“the Baptist Home house”). Plaintiff also owned two

pieces of real property which had been given to her by her

parents during the parties’ marriage.

On 30 August 2010, the trial court entered an interim

consent order dividing possession of certain personal property.

On 30 March 2011, Defendant fired a gun into Plaintiff’s home,

claiming a delusion that someone was holding Plaintiff and the
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parties’ son hostage. This event led to mental health

evaluations of Defendant as well as the filing of criminal

charges, for which Defendant received a probationary sentence.

Defendant continued to experience hallucinations and lost the

ability to care for himself. He allegedly violated his

probation and was later incarcerated in the North Carolina

Department of Correction.1 It also appears that Defendant was

involuntarily committed for some period of time.

On 28 February 2012, the court entered additional consent

orders, dividing certain personal and real property without

assigning value to the property. The court awarded to

Defendant, inter alia, the Driftwood home, the land, and all of

his retirement benefits and workers’ compensation settlement and

to Plaintiff, inter alia, her retirement account and several

vehicles in her possession, with each party’s award free from

the claims of the other. The court also ordered the Baptist

Home house be listed for sale, with each party to pay half of

the cost required to get the house in marketable condition. The

1
Despite a statement to the contrary in the equitable
distribution order filed 20 August 2013, the transcript
indicates that Defendant did not appear at the equitable
distribution hearing, although his counsel and guardian both
appeared on his behalf. The transcript of that hearing contains
at least one reference to Defendant having been recently
released on probation.
 -4-
court stated its intention to use “the proceeds [of the eventual

sale] to make up [any] difference in the equity owed to either

party.”

On 30 March 2012, the court ordered the parties to sell

approximately three acres of the land on Baptist Home Road to

raise funds for needed repairs on the Baptist Home house. On 15

June 2012, the court entered an order finding that Defendant was

mentally unstable and unable to participate in the equitable

distribution proceedings. A subsequent court-ordered mental

health evaluation determined that Defendant was incompetent, and

the court appointed Timothy B. Joines as guardian of Defendant’s

estate.

Joines appeared and testified on Defendant’s behalf at the

2 April 2013 equitable distribution hearing. At that time, the

Baptist Home house had not yet been sold, and Plaintiff

testified at the hearing that the parties had agreed at some

point to give the Baptist Home house to their son instead.

Plaintiff introduced in evidence a spreadsheet which listed

various marital property, including, inter alia, various

personal property kept by Plaintiff; the Driftwood home; various

retirement, workers’ compensation, and pension monies; and a
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list of expenses for which Plaintiff sought partial

reimbursement including attorney’s fees.

The court entered a final equitable distribution order on

20 August 2013 which awarded the Baptist Home house to the

parties’ son. The court ordered that the parties’ other

personal and real property be classified and divided as set out

in an attached exhibit. That exhibit was identical to the

spreadsheet introduced by Plaintiff. Defendant gave timely

notice of appeal from the final equitable distribution order.

Discussion

On appeal, Defendant argues that the trial court abused its

discretion in (1) classifying and distributing property

according to Plaintiff’s spreadsheet without making its own

independent findings of fact on conflicting evidence and (2)

removing the Baptist Home house from the marital estate and

awarding it to the parties’ son. We affirm in part and vacate

and remand in part.

I. Standards of review

Equitable distribution is governed by N.C.
Gen. Stat. § 50-20 [], which requires the
trial court to conduct a three-step process:
(1) classify property as being marital,
divisible, or separate property; (2)
calculate the net value of the marital and
divisible property; and (3) distribute
equitably the marital and divisible
 -6-
property. A trial court’s determination
that specific property is to be
characterized as marital, divisible, or
separate property will not be disturbed on
appeal if there is competent evidence to
support the determination. Ultimately, the
court’s equitable distribution award is
reviewed for an abuse of discretion and will
be reversed only upon a showing that it [is]
so arbitrary that it could not have been the
result of a reasoned decision.

Brackney v. Brackney, 199 N.C. App. 375, 381, 682 S.E.2d 401,

405 (2009) (citations and internal quotation marks omitted;

emphasis added and some alterations in original); see also Riggs

v. Riggs, 124 N.C. App. 647, 649, 478 S.E.2d 211, 212 (1996)

(“The trial court’s findings of fact . . . are conclusive if

supported by any competent evidence. The mere existence of

conflicting evidence or discrepancies in evidence will not

justify reversal.”) (citation and internal quotation marks

omitted; emphasis added), disc. review denied, 345 N.C. 755, 485

S.E.2d 297 (1997). In addition, “whether to impose sanctions

and which sanctions to impose under [N.C. Gen. Stat.] § 50-21(e)

are decisions vested in the trial court and reviewable on appeal

for abuse of discretion.” Crutchfield v. Crutchfield, 132 N.C.

App. 193, 195, 511 S.E.2d 31, 34 (1999).

II. Classification and distribution of certain marital property
 -7-
Defendant first argues that the trial court abused its

discretion in classifying and distributing property according to

Plaintiff’s spreadsheet without making its own independent

findings of fact on conflicting evidence. We disagree.

The equitable distribution order includes nine findings of

fact, including finding of fact 9 which states that “[a]ll of

the property listed on Exhibit A, attached hereto, is

incorporated herein by reference. The property listed on

Exhibit A is classified as listed and divided as stated on

Exhibit A.” Exhibit A as referenced in the order is identical

to Plaintiff’s Exhibit A. Defendant contends that the trial

court abused its discretion because it “simply adopted

[Plaintiff’s] classifications and valuations without making any

of its own independent findings, without providing any

explanation, and without acknowledging that the [trial c]ourt’s

Exhibit A was Plaintiff’s Exhibit A.” Defendant cites no case

law in support of his assertion that the trial court’s

“adoption” of Plaintiff’s classifications and valuations was an

abuse of discretion, or for his claim that the court was

required to explain or acknowledge its inclusion of Exhibit A as

part of the final equitable distribution order. We agree that

[r]ecitations of the testimony of each
witness do not constitute findings of fact
 -8-
by the trial judge, because they do not
reflect a conscious choice between the
conflicting versions of the incident in
question which emerged from all the evidence
presented. Where there is directly
conflicting evidence on key issues, it is
especially crucial that the trial court make
its own determination as to what pertinent
facts are actually established by the
evidence, rather than merely reciting what
the evidence may tend to show.

Moore v. Moore, 160 N.C. App. 569, 571-72, 587 S.E.2d 74, 75

(2003) (citations and internal quotation marks omitted; emphasis

in original). However, the equitable distribution order here

does not “merely recit[e] what the evidence may tend to show.”

See id. at 572, 587 S.E.2d at 75. Rather, the court found as

fact that “[t]he property listed on Exhibit A is classified as

listed and divided as stated on Exhibit A.” This finding of

fact indicates that the trial court made a “conscious choice”

that Plaintiff’s evidence regarding the proper valuation and

classification of the parties’ real and personal property was

the most credible. See id. at 571-72, 587 S.E.2d at 75.

After carefully reviewing the transcript of the equitable

distribution hearing, we are unsurprised that the court adopted

Plaintiff’s classifications and valuations. Plaintiff testified

extensively regarding the parties’ real and personal property,

as well as their sources of income and retirement accounts. In
 -9-
contrast, Joines, the only witness to present evidence on

Defendant’s behalf, testified only briefly and provided evidence

on only a few parts of the parties’ marital estate. The court’s

inclusion of the spreadsheet to list the classification and

valuation of the listed real and personal property was not an

abuse of discretion.

Defendant also specifically challenges (1) the

classification of Defendant’s workers’ compensation settlement,

(2) attorney’s fees awarded to Plaintiff, (3) valuation of

Plaintiff’s vehicle, and (4) the omission of the real property

given to Plaintiff by her parents. We address each sub-argument

in turn.

A. Defendant’s workers’ compensation settlement

Workers’ compensation awards

acquired by the injured spouse during the
marriage and before separation . . . will be
marital property unless the party claiming
it to be separate property (i.e., the
injured spouse) proves by a preponderance of
the evidence that the award, or some portion
of it, was intended to compensate him for
economic loss occurring after the date of
separation and is therefore his separate
property. . . .

In situations where a spouse is injured
during the marriage and prior to separation,
but does not receive a workers’ compensation
award until after the date of separation,
such an award nevertheless constitutes
 -10-
marital property to the extent that the
award represents compensation for economic
loss occurring during the marriage and prior
to separation. In such a case, because the
award is not acquired during the marriage
and prior to separation, the non-injured
spouse will not have the benefit of the
marital property presumption, and instead
must, in order to support classification of
the award as marital, prove by a
preponderance of the evidence that all or
some portion of the award is compensation
for economic loss occurring during the
marriage and before separation.

Freeman v. Freeman, 107 N.C. App. 644, 654, 421 S.E.2d 623, 628-

29 (1992) (citations omitted; emphasis in original).

Defendant contends that Plaintiff presented no evidence and

the trial court made no finding of fact about what portion of

Defendant’s workers’ compensation settlement was compensation

for economic loss during the parties’ marriage and before their

separation. However, our review of the record reveals that

Plaintiff’s Exhibit 12 at the equitable distribution hearing was

an “Agreement for Final Compromise Settlement and Release”

approved by the North Carolina Industrial Commission on 2 August

2011. That exhibit states, inter alia, that Defendant received

$10,330.66 during the parties’ marriage and before their

separation, and thus that award was properly classified as

marital property. See id.
 -11-
As for the settlement Defendant received after the parties

separated, Plaintiff’s Exhibit 12 indicates that the Industrial

Commission had determined that Defendant was no longer disabled

and thus no longer entitled to ongoing disability benefits as of

2 September 2008. Defendant’s only evidence regarding the

workers’ compensation awards was that they were received for

temporary disability. Thus, the uncontradicted evidence was

that the entirety of the second award was compensation for

economic loss occurring during the marriage and before

separation, and in turn, that property was properly classified

as marital property. See id. This argument is overruled.

B. Attorney’s fees

Defendant contends that the trial court did not make

sufficient findings of fact to support its award of attorney’s

fees in the amount of $985.79. We agree.

On 19 August 2011, Plaintiff moved for reasonable

attorney’s fees and reimbursement of mortgage payments made

while Defendant was living rent-free in the former marital

residence as sanctions under section 50-21(e). Under our

General Statutes, the trial court may impose a sanction, if it

finds, inter alia, that a party “has willfully obstructed or

unreasonably delayed or attempted to obstruct or unreasonably
 -12-
delay any pending equitable distribution proceeding . . . .”

N.C. Gen. Stat. § 50-21(e) (2013).

In a consent order entered 28 February 2012, the court

stated that Plaintiff’s attorney should submit to the court an

affidavit regarding fees and that the issue of attorney’s fees

would be addressed at the final equitable distribution hearing.

Plaintiff’s attorney submitted an affidavit listing the

attorney’s fees covered by the motion totaling $985.79. That

amount appears in Exhibit A labeled “Attorney Fee” along with

amounts for mortgage and tax payments and other expenses for

which Plaintiff sought reimbursement. However, the final

equitable distribution order contains no findings of fact that

Defendant “willfully obstructed or unreasonably delayed or

attempted to obstruct or unreasonably delay any pending

equitable distribution proceeding[.]” See id. Accordingly, we

vacate the portion of the equitable distribution order which

purports to award attorney’s fees to Plaintiff. On remand, the

trial court shall properly consider Plaintiff’s motion for

sanctions under section 50-21(e), make the necessary findings of

fact and conclusions of law as supported by the evidence, and

enter the appropriate ruling in its discretion. See

Crutchfield, 132 N.C. App. at 195, 511 S.E.2d at 34.
 -13-
C. Other property

Defendant also contends that the trial court abused its

discretion in not resolving disputed evidence on the value of

the Driftwood home and the value of Plaintiff’s car. The

evidence regarding the value of the Driftwood home was

conflicting. Plaintiff listed its value as $171,660 on her

Exhibit A and testified that its tax value in 2011 was $171,660,

while Joines testified that the most recent tax value of the

property was $149,850. On redirect examination, Plaintiff

testified that she thought the addition of a two-story garage

which included a bathroom with a Jacuzzi tub may have raised the

home’s value. The court asked Plaintiff, “[D]o you agree the

current tax value [is $]149,850, or do you know that?”

Plaintiff replied, “I don’t know that. I mean, I don’t

understand why it’s dropped so much.” As discussed supra, the

court’s finding of fact 9 and the listing of the value of the

property at $171,660 indicates that the trial court resolved the

conflict in the evidence in favor of Plaintiff’s suggested

valuation. As for the value of Plaintiff’s car, Defendant does

not explain what the disputed evidence was as to its value, and

Joines did not testify about the value of any vehicles.

Defendant’s arguments on these points are without merit.
 -14-
Defendant also contends that the court erred in failing to

address the real property given to Plaintiff by her parents in

the equitable distribution order. On cross-examination,

Plaintiff was asked about the two pieces of property and

testified that they were given to her by her parents during the

marriage and that the taxes on them were paid from marital

funds. At trial, Defendant never made any argument or offered

any evidence that the properties were anything other than

Plaintiff’s separate property. See N.C. Gen. Stat. § 50-

20(b)(2) (2013) (defining separate property, inter alia, as that

“acquired by a spouse by devise, descent, or gift during the

course of the marriage”). Defendant does not now contend that

either property should have been classified as marital. Because

the two properties were not included in the spreadsheet under

the heading “Marital Property,” it appears that the trial court

classified them as separate, rather than marital, property.

Defendant’s argument on this issue is overruled.

III. The Baptist Home house

As for Defendant’s second argument, Plaintiff concedes that

the trial court erred in removing the Baptist Home house from

the marital estate and awarding it to the parties’ son in the

absence of any stipulation of the parties. Accordingly, we
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vacate this portion of the final distribution award and remand

to the trial court for classification, valuation, and

distribution of the Baptist Home house as part of the marital

estate.

AFFIRMED in part; VACATED and REMANDED in part.

Judges CALABRIA and ELMORE concur.

Report per Rule 30(e).