in the Court of Appeals 31 October 2018
by plaintiff from judgment entered 1 December 2017 by Judge
Donna H. Johnson in District Court, Cabarrus County No. 15
Ferguson, Hayes, Hawkins & Demay, PLLC, by Edwin H.
Ferguson, Jr., for plaintiff-appellant.
Price Wall Gray Jones & Carlton, PLLC, by Lori P. Jones
and Hope Derby Carmichael, for defendant-appellee.
appeals from an equitable distribution order valuing the
"marital portion" of a townhome she owned prior to
marriage at $90, 000.00 and distributing it to Wife and
distributing $90, 000.00 of marital debt on the same property
to her. Because the parties stipulated in the pretrial order
that the townhome was Wife's separate property, the trial
court erred by classifying part of its value as marital
property and making its distribution based upon this
classification and valuation. We reverse and remand.
and Wife were married on 6 September 2003 and separated on 21
March 2015. On 2 July 2015, Wife filed a complaint against
Husband with claims for equitable distribution with an
unequal division in her favor, postseparation support, and
alimony. Husband answered and joined in Wife's
request for equitable distribution but requested an unequal
division in his favor. A pretrial order was entered on 13
November 2017 with detailed schedules of property and issues
in contention. In this order, as relevant to the issues on
appeal, Husband and Wife stipulated that the
"Townhome" with a "Net Value" of
"186, 000.00" was the separate property of
Wife. At trial, the parties agreed that the
balance of the debt secured by the townhome as of the date of
separation was $90, 000.00, all of which was incurred during
the marriage, but they did not stipulate to the
classification and distribution of this debt. Wife contended
the debt was marital, and Husband contended that at least
some portion of the debt was Wife's separate debt.
December 2017, the trial court entered the equitable
distribution order. The trial court considered the
parties' contentions for unequal distribution but
determined that an equal distribution was equitable. The
trial court determined that the "marital component"
of the townhome was $90, 000.00 and distributed it as marital
property to Wife and distributed the $90, 000.00 mortgage
debt to Wife. The trial court calculated that the value of
the gross marital estate including this "marital"
value of the townhome and thus calculated the net value of
the marital estate as "(-)$8, 566.62" and awarded
an equal division of the marital property and debt. As a
result, Wife owed Husband a distributive award of $539.31.
Wife timely appealed.
Court has jurisdiction to review this equitable distribution
order under North Carolina General Statute § 50-19.1:
Notwithstanding any other pending claims filed in the same
action, a party may appeal from an order or judgment
adjudicating a claim for absolute divorce, divorce from bed
and board, child custody, child support, alimony, or
equitable distribution if the order or judgment would
otherwise be a final order or judgment within the meaning of
G.S. 1A-1, Rule 54(b), but for the other pending claims in
the same action.
N.C. Gen. Stat. § 50-19.1 (2017).
Standard of Review
The 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
Clark v. Dyer, 236 N.C.App. 9, 13, 762 S.E.2d 838,
Classification and Valuation of "Marital Component"
of the Townhome
appeal, Wife challenges several of the trial court's
findings of fact and related conclusions of law, all relating
to the classification of the townhome.
Upon application of a party for an equitable distribution,
the trial court shall determine what is the marital property
and shall provide for an equitable distribution of the
marital property in accordance with the provisions of N.C.
Gen. Stat. § 50-20. In so doing, the court must conduct
a three-step analysis. First, the court must identify and
classify all property as marital or separate based upon the
evidence presented regarding the nature of the asset. Second,
the court must determine the net value of the marital
property as of the date of the parties' separation, with
net value being market value, if any, less the amount of any
encumbrances. Third, the court must distribute the marital
property in an equitable manner.
Chafin v. Chafin, __ N.C.App. __, __, 791 S.E.2d
693, 698 (2016) (quotation marks, brackets, and ellipsis
challenges portions of the following findings and related
conclusions of law:
[4. b.] 7) Around 2000, Ms. Clemons purchased a townhome
located [in] Concord for about $160, 000.00. Just prior to
the marriage, Ms. Clemons mortgaged the property. The
mortgage was paid off, but the source of the funds are
unknown. The parties mortgaged the property during the
marriage. The parties agreed that the mortgage on the
property at the date of separation was $90, 000.00. The tax
value on the townhome was $161, 190.00 on March 20, 2006.
There was no appraisal done on the home at or near the date
of separation. Therefore, the marital portion is at least
equal the marital debt of $90, 000.
. . . .
[4.] g. On Schedule L, the parties agreed that those items,
which includes the former marital residence, is the separate
property of Ms. Clemons with the exception of the marital
component noted above.
. . . .
[5. e.] 1) The former marital residence was owned by
Ms. Clemons prior to the marriage. She mortgaged the property
prior to the marriage to invest in Mr. Clemon's [sic]
business. Later the home was mortgaged at least once more for
$90, 000.00. Limited documentation was available regarding
the marital component.
challenges portions of these findings as unsupported by the
evidence or contrary to the stipulations in the pretrial
of fact 4 (g) noting "the exception of the marital
component noted above" is not supported by competent
evidence in the record and is contrary to the parties'
stipulation. The pretrial order does not include any mention
of a "marital component" of the townhome or any
issue of valuation of a "marital component" or
valuation of an increase in value of the townhome during the
marriage. And there was no evidence which could support
classification or valuation of a "marital
component." The parties stipulated only that the
townhome was Wife's separate property, with a date of
separation value of $186, 000.00. Neither party introduced
evidence needed to value a "marital component" of
the townhome, most likely because they had stipulated that it
was entirely separate.
well-established that stipulations in a pretrial order are
binding upon the parties and upon the trial court. See
Crowder v. Jenkins, 11 N.C.App. 57, 63, 180 S.E.2d 482,
486 (1971) ("[S]tipulations by the parties have the same
effect as a jury finding; the jury is not required to find
the existence of such facts; and nothing else appearing, they
are conclusive and binding upon the parties and the trial
judge."). "Accordingly, the effect of a stipulation
by the parties withdraws a particular fact from the realm of
dispute." Plomaritis v. Plomaritis, 222
N.C.App. 94, 101, 730 S.E.2d 784, 789 (2012) (brackets and
quotation marks omitted).
equitable distribution cases, stipulations in the pretrial
order are intended to limit the evidence needed and to define
the issues the trial court must decide. See id. at
106-07, 730 S.E.2d at 792 ("We also note that this is an
equitable distribution case, where a pre-trial order
including stipulations such as those in this case is required
by N.C. Gen. Stat. § 50-21(d) and Local Rule 31.9. In
equitable distribution cases, because of the requirements of
statute and local rules, the stipulations are frequently
quite extensive and precise and are specifically intended to
limit the issues to be tried, and the same is true in this
case. Neither party has cited, and we cannot find, any prior
opinion by our Court in which a trial court has ex mero
motu set aside a pre-trial order or a party's
stipulations after completion of the trial upon the
issues which the stipulations addressed." (citation
omitted)). And as noted by the dissent, although it is
possible for either the trial court or parties to set aside
stipulations under certain conditions, none of those
conditions are present here.
dissent takes Wife's counsel's brief comment about a
"marital component" out of context and construes it
as an agreement to assign a "marital component" to
the value of the townhome, but this was not what her counsel
was saying. Wife's counsel was actually arguing that the
$90, 000.00 debt was entirely marital or had a
marital component, not the townhome. At trial, Husband took
the position that the $90, 000.00 debt was not
marital; Wife contended that it was marital.
"marital component" comment occurred during
Husband's cross examination testimony about the $90,
000.00 debt. Wife's counsel asked Husband:
[Mr. Ferguson:] And this $90, 000 loan or $90, 000 debt
various times was used to make improvements on the property.
[Husband:] Well, --
[Mr. Ferguson:] Yes or ...