in the Court of Appeals 3 October 2017.
by plaintiff from judgment entered 15 August 2016 by Judge
Christy T. Mann in Mecklenburg County No. 14-CVD-2267
Office of Thomas D. Bumgardner, PLLC, by Thomas D.
Bumgardner, for plaintiff-appellant.
Hamilton Stephens Steele Martin, PLLC, by Amy E. Simpson, for
the trial court had jurisdiction to order plaintiff to sell
her separate property to satisfy a distributive award, order
that the transfer of a deed from plaintiff to a third-party
relative be avoided, and distribute marital debts owed by the
parties and where the trial court made sufficient findings of
fact to justify its distributive award, we affirm. However,
where the trial court's award included an alternative
money judgment against a non-party, we vacate that portion of
Andrea Crowell and defendant William Crowell were married on
11 July 1998. They were legally separated on 3 September 2013
and divorced in April 2015. No children were born of the
to the parties' marriage, defendant was president and
shareholder of several corporations: Inwood Properties, Inc.
("Inwood Properties"); Inwood Land LLC
("Inwood Land"); Inwood Homes; Inwood Realty Corp.;
St. Vrain Valley Associates LP ("St. Vrain");
Owl's Head Ranch, LLC; and WWC Valley. In March 2011,
Elizabeth Temple, defendant's daughter from a previous
marriage, was named president of the companies. At the time
of trial, the companies were owned and controlled by
defendant, Temple, and defendant's sons (also from a
previous marriage), with Temple and defendant's sons
holding "the same amount of shares."
the parties married, they developed a pattern of living
beyond their means. As a result, defendant began to take
salaries from his various companies which were not justified
by their revenues, plaintiff and defendant began liquidating
defendant's separate property, and plaintiff and
defendant took out loans against both parties' separate
time of separation, the marital debt which had been incurred
to fund the parties' marital lifestyle was significant.
Plaintiff and defendant owed money to almost every company in
which defendant maintained an ownership interest, including
(1) $422, 368.00 to Inwood Properties; (2) $258, 737.00 to
Inwood Land; and (3) $143, 285.00 to St. Vrain. The primary
marital asset, the marital residence, was sold in 2014 after
the parties' separation for $1, 075, 000.00, which sale
produced $230, 657.00 in net proceeds. From these proceeds,
plaintiff received a total interim distribution of $144,
794.00 and defendant received $85, 863.00.
time of separation, the trial court found that
plaintiff's separate property included two pieces of real
property-14212 Stewart's Bend Lane and 14228
Stewart's Bend Lane-located in Charlotte, North Carolina.
On or about 30 May or 1 June 2015, plaintiff transferred
14228 Stewart's Bend Lane to her son, Gentry Kirby. At
that time, the property had an equity of $100, 000.00, and
Kirby assumed the mortgage.
February 2014, plaintiff filed a complaint against defendant
for equitable distribution, alimony, and post-separation
support. Defendant filed an answer and included a
counterclaim for equitable distribution. The case came on for
trial before the Honorable Christy T. Mann in Mecklenburg
County District Court from 6 to 8 July 2016. At the time of
trial, defendant was seventy-six years old and suffered from
memory loss and dementia, and he had also been diagnosed with
Alzheimer's disease. Defendant did not appear at trial,
but his daughter, Temple, who is her father's power of
attorney, testified about matters and facts related to
defendant's assets, debts, income, and expenses.
Plaintiff appeared pro se. On 15 August 2016, the
trial court entered its equitable distribution judgment and
alimony order. Plaintiff appeals.
appeal, plaintiff contends that the trial court committed
reversible error by (I) entering a judgment affecting title
to real property without joining all necessary parties to the
action; (II) entering monetary judgments against a
third-party without joining the third-party to the action;
(III & IV) classifying and distributing the debts of
private corporations to a husband and wife without joining
the corporations as parties to the action; (V) creating a
distributive award without finding that the statutory
presumption of an in-kind distribution has been rebutted; and
(VI) ordering the liquidation of separate property to satisfy
a distributive award.
equitable distribution cases, "the standard of review on
appeal is whether there was competent evidence to support the
trial court's findings of fact and whether its
conclusions of law were proper in light of such facts."
Lee v. Lee, 167 N.C.App. 250, 253, 605 S.E.2d 222,
224 (2004) (quoting Shear v. Stevens Bldg. Co., 107 N.C.App.
154, 160, 418 S.E.2d 841, 845 (1992)).
Equitable distribution is vested in the discretion of the
trial court and will not be disturbed absent a clear abuse of
that discretion. Only a finding that the judgment was
unsupported by reason and could not have been a result of
competent inquiry, or a finding that the trial judge failed
to comply with the statute, will establish an abuse of
Wiencek-Adams v. Adams, 331 N.C. 688, 691, 417
S.E.2d 449, 451 (1992) (internal citations omitted). "A
trial court's findings of fact in an equitable
distribution case are conclusive if supported by any
competent evidence." Fitzgerald v. Fitzgerald,
161 N.C.App. 414, 419, 588 S.E.2d 517, 521 (2003) (citing
Mrozek v. Mrozek, 129 N.C.App. 43, 48, 496 S.E.2d
836, 840 (1998)).
distribution is a three-step process; the trial court must
(1) 'determine what is marital [and divisible]
property'; (2) 'find the net value of the
property'; and (3) 'make an equitable distribution of
that property.' " Robinson v. Robinson, 210
N.C.App. 319, 322, 707 S.E.2d 785, 789 (2011) (second
alteration in original) (quoting Beightol v.
Beightol, 90 N.C.App. 58, 63, 367 S.E.2d 347, 350
first argues that the trial court erred in entering a
judgment affecting title to real property-14212 Stewart's
Bend Lane-without joining all necessary parties to the
action. Plaintiff contends that because CKE Properties, Inc.
was the lawful owner of 14212 Stewart's Bend Lane on the
date of separation ("DOS"), the Mecklenburg County
District Court lacked jurisdiction to enter its order
affecting said property, and therefore, its valuation and
distribution constitutes reversible error. We disagree.
equitable distribution action, the trial court has authority
to distribute "presently owned" real and personal
property acquired during the marriage and before the date of
separation. N.C. Gen. Stat. § 50-20(b)(1) (2015).
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." Upchurch v.
Upchurch, 122 N.C.App. 172, 176, 468 S.E.2d 61, 63-64
(1996) (emphasis added) (citations omitted).
Separate property, on the other hand, is to be
considered by the trial court in making its distribution of
marital property. See Young v. Gum, 185
N.C.App. 642, 648, 649 S.E.2d 469, 474 (2007) (citation
omitted) (noting that the trial court is required to
"consider the separate property in making a distribution
of the marital property").
instant case, the trial court found as fact that this
property was plaintiff's separate property: "On the
DOS, Plaintiff/Wife owned a house and lot located at 14212
Stewart's Bend Lane, Charlotte, NC 28277 ("14212
Stewart's Bend"). 14212 Stewart's Bend is
Wife's separate property, as stipulated by the parties on
the FPTO [(Final Pretrial Order)]. (FPTO Property
Item 11)." In the distribution portion of its
order, the trial court ordered plaintiff to do as follows:
b) . . . 14212 Stewart's Bend:
Within thirty (30) days of the date of the execution of this
Judgment/Order Plaintiff/Wife shall sign a listing agreement
with a realtor selected by Defendant/Husband and will take
all efforts to sell 14212 Stewart's Bend for fair market
value. Plaintiff/Wife will cooperate with price reductions
and repair requests recommended by the real estate agent and
will accept any unconditional offer made within 2% of the
then asking price. All of the net proceeds shall be paid to
contends that the trial court did not have jurisdiction to
enter a judgment affecting 14212 Stewart's Bend Lane
because it was not owned by her, but by another legal entity,
CKE. In so doing, plaintiff relies on this Court's
opinion in Nicks v. Nicks, 241 N.C.App. 487, 774
S.E.2d 365, (2015).
Nicks, a husband and wife, prior to their
separation, implemented an estate plan consisting of a trust
and three LLCs, which eventually became a single-member LLC,
"Entrust." Id. at 491, 774 S.E.2d at 370.
The husband and wife were the only beneficiaries of the
trust, and the husband managed the LLC and had the right to
decide whether to make distributions of profits and assets
from the trust. Id. at 491- 92, 774 S.E.2d at 370.
In the trial court's findings of fact, it determined that
Entrust was marital property and ordered that its assets be
distributed to the husband, but that the husband pay the wife
a distributive award. Id. at 493-94, 774 S.E.2d at
371. On appeal, the husband argued the trial court erred in
distributing Entrust to him because neither Entrust, the LLC,
nor the trust itself were owned by either of the parties on
the date of separation; rather, the trust, not the husband,
owned a 100% interest in Entrust. Id. at 494-95, 774
S.E.2d at 372.
Court agreed with the husband's argument, concluding as
[T]he Trust-which holds legal title to Entrust-was never
named as a party to this action. We therefore hold that the
trial court lacked jurisdiction to order equitable
distribution of Entrust. See, e.g.,
Upchurch, 122 N.C.App. at 176, 468 S.E.2d at 64
("Otherwise the trial court would not have jurisdiction
to enter an order affecting the title to that
property.") (citation omitted).
Id. at 496, 774 S.E.2d at 373 (emphasis added). In
other words, because the party- the Trust-which held legal
title to the LLC-Entrust-was not named as a party to the
action in Nicks, the trial court lacked jurisdiction
to distribute that property which an unnamed party held legal
title to. Id.; see also Dechkovskaia v.
Dechkhovskaia, 232 N.C.App. 350, 352-54, 754 S.E.2d
831, 834-35 (2014) (holding the trial court had no authority
to classify and distribute houses which were titled in the
name of the parties' minor child without joining the
minor child as a party to the action).
argument in reliance on Nicks ignores the fact that
the trial court did not classify 14212 Stewart's Bend
Lane as marital property and distribute it as such.
See Upchurch, 122 N.C.App. at 176, 468 S.E.2d at
63-64 ("[W]hen 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." (emphasis
added) (citations omitted)). Rather, it considered the
separate property of plaintiff-CKE and its assets, including
14212 Stewart's Bend Lane-in making its distribution of
the marital property, namely, in ordering plaintiff to pay a
distributive award to defendant. See Young, 185
N.C.App. at 648, 649 S.E.2d at 474 (noting that the trial
court is required to "consider the separate property in
making a distribution of the marital property").
it is true that there is evidence in the record to indicate
that as of the DOS, CKE was the legal owner of 14212
Stewart's Bend Lane,  the trial court's classification of
this property as plaintiff's separate property does not
constitute reversible error where it was not
distributing the property as part of the
marital estate. See Upchurch, 122 N.C.App.
at 176, 468 S.E.2d at 63-64. Cf. Geoghagan v.
Geoghagan, __ N.C.App. __, ___, 803 S.E.2d 172, 175-76
(2017) (vacating an equitable distribution order where the
trial court ordered third-party LLCs "to refrain from
taking certain actions without joining them as necessary
parties to the proceedings"). Rather, the trial court
was considering plaintiff's separate property in
distributing the marital estate, specifically considering
plaintiff's ability to pay a distributive award to
defendant. As the "100% Owner" of CKE, which was
formed in 2002 and whose "[o]nly purpose . . . is to own
the real estate she purchased through a 1031 exchange using
her separate funds, " the trial court was allowed to
consider CKE's assets, including 14212 Stewart's Bend
Lane, in ordering plaintiff to sell the property in order to
pay the distributive award. Defendant's argument is
plaintiff contends the trial court erred by entering monetary
judgments against a third-party, namely, plaintiff's son,
Gentry Kirby, without joining him to the action. Plaintiff
contends that because Kirby was the lawful owner of 14228
Stewart's Bend Lane on the DOS, the trial court lacked
jurisdiction to enter a judgment affecting title to 14228
Stewart's Bend Lane or to enter an alternative money
judgment against Kirby because defendant did not assert a
claim against him in this action. We agree that the trial
court erred in entering an alternative money judgment against
contends that although the trial judge did not expressly
state in her ruling that she was applying the factors to be
considered in analyzing a transfer contended to be voidable
under the Uniform Fraudulent Transfer Act, N.C. Gen. Stat.
§§ 39-23.1 (2013) et seq.,  it is nonetheless
clear that the facts in this case fall within the statute and
the result is that plaintiff's transfer was fraudulent
and thus, voidable. Defendant also argues that Kirby was not
required to be made a party to this action in order for the
trial court's remedies to be applied because Kirby did
not take the property in good faith or for a reasonably
equivalent value. Cf. N.C. G.S. § 39-23.8(a)
(2013) ("A transfer or obligation is not voidable under
G.S. 39-23.4(a)(1) against a person that took in good faith
and for a reasonably equivalent value or against any
subsequent transferee or obligee.").
Uniform Fraudulent Transfer Act was designed to prevent
fraudulent transfers and allow a creditor to cancel a
transfer even after it has been made. See generally
id. §§ 39-23.1 et seq. Specifically,
N.C. Gen. Stat. § 39-23.4(a)(1) establishes as
fraudulent any transfer of property that is made with the
intent to hinder, delay, or defraud a creditor. Id.
§ 39-23.4(a)(1). A "creditor" is defined
broadly as "a person who has a claim." N.C. G.S.
§ 39-23.1(4); see Note, Benjamin M. Ellis,
Protecting the Right to Marital Property: Ensuring a Full
Equitable Distribution Award with Fraudulent Conveyance
Law, 30 Cardozo L. Rev. 1709, 1712 (2009) (proposing
that "a spouse should be considered a creditor-and thus
have recourse to fraudulent conveyance law-for the limited
purpose of setting aside conveyances that would otherwise
prevent the spouse from receiving a full equitable
distribution award"). The remedies available to a
creditor include "[a]voidance of the transfer or
obligation to the extent necessary to satisfy the
creditor's claim;" "[a]n attachment . . .
against the asset transferred"; or "[a]ny other
relief the circumstances may require." N.C. G.S. §
39-23.7(1), (2), (3)c.
conveyance will be deemed fraudulent and thus void in either
of the following instances:
If the conveyance is voluntary and made with the actual
intent upon the part of the grantor to defraud creditors, it
is void, although this fraudulent intent is not participated
in by the grantee . . . .
. . . .
. . . If the conveyance is upon a valuable consideration, but
made with the actual intent to defraud creditors on the part
of the grantor, participated in by the
grantee or of which he he [sic] has notice, it is
Norman Owen Trucking, Inc. v. Morkoski, 131 N.C.App.
168, 173, 506 S.E.2d 267, 271 (1998) (citation omitted)
(quoting Aman v. Walker, 165 N.C. 224, 227, 81 S.E.
162, 164 (1914)).
In determining intent [of the grantor] under subdivision
(a)(1) of this section, consideration may be given, among
other factors, to whether:
(1) The transfer or obligation was to an
. . . .
(3) The transfer or obligation was disclosed or concealed;
(4) Before the transfer was made or obligation was incurred,
the debtor had been sued or threatened with suit;
. . . .
(12) The debtor made the transfer or incurred the obligation
without receiving a reasonable equivalent value in exchange
for the transfer or obligation . . . .
N.C. G.S. § 39-23.4(b).
trial, plaintiff, who appeared pro se,
argued as follows:
May 30, 2015 I gifted [14228 Stewart's Bend Lane] to
[Kirby]. I was going to give it to him anyway. . . . I had
discussed gifting it earlier. But I gifted it now because it
was the time to do it, and they will tell you it was because
I did not want to sell it and split the money. I couldn't
have ever sold this this fast, nor did I feel the necessity
to kick my family out.
in the record also suggests that defendant was not made privy
to this ...