Heard in the Court of Appeals 12 December 2013.
[Copyrighted Material Omitted]
Appeal by defendant from Orders entered 26 July 2012 by Judge Beverly A. Scarlett
and 3 December 2012 by Judge Joseph M. Buckner in District Court, Orange
Sandlin & Davidian, PA, Raleigh, by Lisa Kamarchik, for plaintiff-appellee.
Wait Law, P.L.L.C., High Point, by John L. Wait, for defendant-appellant.
Alex Deshkovski  (" defendant" ) appeals from an equitable distribution and alimony order entered 26 July 2012 distributing property the trial court classified as marital and awarding Anjelika Dechkovskaia (" plaintiff" ) $3,500 per month in alimony for twelve years. Defendant also appeals from an order entered 3 December 2012 denying his motion for a new trial and for a stay of proceedings.
Plaintiff and defendant were married on 7 July 1990 in the Soviet Union, in what is now Belarus, separated on or about 25 February 2011, and divorced on 30 April 2012. They have two children— one born September 1991 and a minor child born December 2004. They are both highly educated and both work in scientific fields— defendant as a professor and lecturer, and plaintiff as a researcher. Defendant moved to the United States in 1996 to pursue his higher education, achieving a master's degree and two doctorates. Within a year, plaintiff followed defendant to the United States and, in 1997, began working as a scientific research assistant and lab technician.
On 4 March 2011, plaintiff filed a complaint in Orange County requesting permanent custody of the parties' minor child, child support, postseparation support, alimony, and equitable distribution. Plaintiff alleged in the complaint that defendant had committed marital misconduct by " engaging in indignities which have rendered the condition of the plaintiff intolerable and life burdensome in that defendant has controlled the plaintiff and the plaintiff's life throughout most of the marriage." Defendant denied the allegation, but did not allege that plaintiff had herself engaged in marital misconduct. The trial court awarded sole legal and physical custody of the parties' minor child to plaintiff and visitation for defendant by order entered 15 February 2012.
After a hearing on 30 April 2012, at which plaintiff was represented by counsel and defendant appeared pro se, the trial court resolved the equitable distribution and alimony issues by order entered 25 July 2012. The trial court classified various pieces of property acquired by the parties as marital property, including two houses titled in the name of the minor child. The trial court valued the parties' total estate at $591,702.00, found that an equal distribution of property would be equitable, and distributed the marital property accordingly. The trial court also found that defendant was a supporting spouse, that plaintiff was a dependent spouse, that defendant had committed marital misconduct by offering indignities to plaintiff during the marriage, and that defendant's post-separation conduct corroborated its finding of marital misconduct prior to separation. The trial court awarded plaintiff $3,500 per month in alimony for twelve years and attorney's fees.
On 13 August 2012, defendant, now represented by counsel, filed a motion for a new trial and stay of execution under Rules 59 and 62 of the North Carolina Rules of Civil Procedure. The trial court denied defendant's motion by order entered 3 December 2012. Defendant filed notice of appeal on 2 January 2013 both from the order denying
his post-trial motion and the order addressing equitable distribution and alimony.
II. Equitable Distribution
Defendant first argues that the trial court erred in its valuation of the marital estate because it included two houses in the estate not owned by either party on the date of separation. We agree.
[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 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.
The trial court's findings need only be supported by substantial evidence to be binding on appeal. We have defined substantial evidence as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. As to the actual distribution ordered by 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.
Peltzer v. Peltzer,
__ N.C.App. __, __, 732 S.E.2d 357, 359-60 (citations, quotation marks, and brackets omitted), disc. rev. denied, 366 N.C. 417, 735 S.E.2d 186 (2012).
The trial court determined that two houses purchased by the parties during the marriage were marital property despite being titled in the name of the parties' minor child. On the date of separation, neither party owned the houses at issue. The trial court specifically found that both properties were titled " in the minor child's name upon acquisition." Nevertheless, plaintiff now argues that even if the houses were titled in the minor child's name, defendant had an equitable interest in the property, such as a constructive trust, with the minor child as trustee.
" In an equitable distribution proceeding, only marital property is subject to distribution by the court. G.S. 50-20(a)." Lawrence v. Lawrence, 100 N.C.App. 1, 16, 394 S.E.2d 267, 275 (1990). For purposes of N.C. Gen.Stat. § 50-20, " marital property" " means all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned...." N.C. Gen.Stat. § 50-20(b)(1) (2011). Based upon the unchallenged finding by the trial court, it appears that the houses were titled to the minor child when they were purchased, and it is uncontested that only the parties' minor child held title to the two contested houses on the date of separation.
First, we must consider whether this issue has been preserved for our review. We conclude that it has. As discussed below, the trial court must join the title owner, in this case the minor child, as a necessary party to the action in order to adjudicate ownership of the two houses. " Otherwise the trial court would not have jurisdiction to enter an order affecting the title to that property." Upchurch v. Upchurch, 122 N.C.App. 172, 176, 468 S.E.2d 61, 64, disc. rev. denied, 343 N.C. 517, 472 S.E.2d 26 (1996). Our review of this issue has not been waived by defendant's failure to raise it below. See Kor Xiong v. Marks, 193 N.C.App. 644, 652, 668 S.E.2d 594, 600 (2008) ( " An appellate court has the power to inquire into jurisdiction in a case before it at any time...." ).
To the extent that plaintiff claims that the minor child holds the properties only in some sort of constructive trust for the marital estate, that issue cannot be determined unless the minor child— who holds title to the property— is made a party to the action.
See Upchurch, 122 N.C.App. at 176,468 S.E.2d at 63-64 (discussing the classification of property allegedly held in trust for the marital estate and holding that " when a third party holds legal title to property which is claimed to be marital property, that third party is a necessary party to the equitable distribution proceeding, with their participation limited to the issue of the ownership of that property." ). Where, as here, a minor child's property interests are adverse to that of his parent, the trial court must appoint a guardian ad litem to represent his interests. Kohler v. Kohler, 21 N.C.App. 339, 341, 204 S.E.2d 177, 178 (1974) (concluding that " an infant must appear by guardian or guardian ad litem" to determine his property interests); Irvin v. Harris, 189 N.C. 465, 468, 127 S.E. 529, 531 (1925) (observing that the better practice to determine property rights when the parent's interests are not identical to that of the minor child owner is to appoint a guardian ad litem). Without the presence of the minor as a party to the action, represented by a guardian ad litem or next friend, the trial court cannot divest him of his ownership interest in the real property. See Dorton v. Dorton, 77 N.C.App. 667, 676, 336 S.E.2d 415, 421 (1985) (" Defendant's mother was not a party to this action, and the trial court cannot deprive her of rights as a creditor without affording her the due process rights to notice and an opportunity to be heard." ); Lawrence, 100 N.C.App. at 16, 394 S.E.2d at 274 (holding that the trial court could not order the minor children of the divorcing parties to pay certain taxes when they are not parties to the action); Parker v. Moore, 263 N.C. 89, 90-91, 138 S.E.2d 821, 822 (1964) ( " Before funds belonging to infants and incompetents may be taken from them, the law requires that they be represented by guardian, guardian ad litem, or next friend as the situation may require." ). Moreover, once the minor child is made a party to the action, if the trial court were to determine that the houses were held in a constructive trust created during the marriage, it must make appropriate findings to that effect based on clear and convincing evidence. Glaspy v. Glaspy, 143 N.C.App. 435, 441, 545 S.E.2d 782, 786 (2001). No such findings have been made here. Therefore, the trial court lacked authority to classify the two houses as martial property, to include them in the valuation of the marital estate, and to distribute them to defendant.
Defendant also challenges the trial court's finding that the parties had stipulated that their marital residence had a net value of $210,000. He contends, and plaintiff concedes, that they had actually stipulated that the marital residence was worth $205,000. The $5,000 difference appears to be simply a typographical error, and de minimis at best, given that the trial court found the total marital estate to be worth $591,702. See Cohoon v. Cooper, 186 N.C. 26, 28, 118 S.E. 834, 835 (1923) (declaring that an error of 95 cents out of a $663 verdict would be de minimis ). Nevertheless, since we must remand on the other equitable distribution issue, the trial court should also correct this finding on remand.
To determine ownership of the two houses, the trial court must join the minor child as a party and appoint a guardian ad litem to represent his property interests. Because it failed to do so here, it had no authority to classify the houses as marital property and distribute them as such. Additionally, it made no finding that the houses were held in constructive trust for the martial estate. Although the findings of fact also do not reveal the parties' reasons, if any, for vesting title to real estate in a young child, the trial court on remand may also consider, as appropriate and if raised by the parties, whether an unequal distribution of the marital property may be equitable under N.C. Gen.Stat. § 50-20(c). Therefore, we must vacate the equitable ...