Gordon v. Gordon

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.