{ "id": 11791758, "name": "EDWARD LEE BARHAM, Plaintiff v. KELLI MOORE BARHAM, Defendant", "name_abbreviation": "Barham v. Barham", "decision_date": "1997-08-05", "docket_number": "No. COA96-742", "first_page": "20", "last_page": "33", "citations": [ { "type": "official", "cite": "127 N.C. App. 20" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "285 S.E.2d 831", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": 0 }, { "cite": "304 N.C. 390", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8568167, 8568205, 8568301, 8568272, 8568240 ], "year": 1981, "opinion_index": 0, "case_paths": [ "/nc/304/0390-01", "/nc/304/0390-02", "/nc/304/0390-05", "/nc/304/0390-04", "/nc/304/0390-03" ] }, { "cite": "278 S.E.2d 546", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "pin_cites": [ { "page": "556-57" } ], "opinion_index": 0 }, { "cite": "52 N.C. App. 203", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 12170120 ], "year": 1981, "pin_cites": [ { "page": "218-19" } ], "opinion_index": 0, "case_paths": [ "/nc-app/52/0203-01" ] }, { "cite": "454 S.E.2d 864", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "pin_cites": [ { "page": "869", "parenthetical": "citing Falls v. Falls, 52 N.C. App. 203, 218-19, 278 S.E.2d 546, 556-57, disc. review denied, 304 N.C. 390, 285 S.E.2d 831 (1981)" } ], "opinion_index": 0 }, { "cite": "118 N.C. App. 189", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11917312 ], "year": 1995, "pin_cites": [ { "page": "197", "parenthetical": "citing Falls v. Falls, 52 N.C. App. 203, 218-19, 278 S.E.2d 546, 556-57, disc. review denied, 304 N.C. 390, 285 S.E.2d 831 (1981)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/118/0189-01" ] }, { "cite": "448 S.E.2d 527", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "opinion_index": 0 }, { "cite": "337 N.C. 694", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2551555, 2551689, 2552697, 2552187, 2550815 ], "year": 1994, "opinion_index": 0, "case_paths": [ "/nc/337/0694-01", "/nc/337/0694-05", "/nc/337/0694-02", "/nc/337/0694-04", "/nc/337/0694-03" ] }, { "cite": "442 S.E.2d 352", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1994, "pin_cites": [ { "page": "357" } ], "opinion_index": 0 }, { "cite": "114 N.C. App. 538", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527801 ], "year": 1994, "pin_cites": [ { "page": "546" } ], "opinion_index": 0, "case_paths": [ "/nc-app/114/0538-01" ] }, { "cite": "328 S.E.2d 899", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "901" } ], "opinion_index": 0 }, { "cite": "74 N.C. App. 455", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8524950 ], "year": 1985, "pin_cites": [ { "page": "459" } ], "opinion_index": 0, "case_paths": [ "/nc-app/74/0455-01" ] }, { "cite": "261 S.E.2d 849", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1980, "pin_cites": [ { "page": "855", "parenthetical": "emphasis added" } ], "opinion_index": 0 }, { "cite": "299 N.C. 174", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574165 ], "year": 1980, "pin_cites": [ { "page": "181", "parenthetical": "emphasis added" } ], "opinion_index": 0, "case_paths": [ "/nc/299/0174-01" ] }, { "cite": "336 S.E.2d 129", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1985, "pin_cites": [ { "page": "133" } ], "opinion_index": 0 }, { "cite": "77 N.C. App. 717", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8525140 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc-app/77/0717-01" ] }, { "cite": "148 S.E.2d 218", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1966, "pin_cites": [ { "page": "222" } ], "opinion_index": 0 }, { "cite": "267 N.C. 378", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8559378 ], "year": 1966, "pin_cites": [ { "page": "383" } ], "opinion_index": 0, "case_paths": [ "/nc/267/0378-01" ] }, { "cite": "271 S.E.2d 921", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 5, "year": 1980, "pin_cites": [ { "page": "927" }, { "parenthetical": "Emphasis added" }, { "page": "928" }, { "page": "928" } ], "opinion_index": 0 }, { "cite": "49 N.C. App. 463", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522220 ], "weight": 3, "year": 1980, "pin_cites": [ { "page": "471" }, { "page": "473" }, { "page": "474" } ], "opinion_index": 0, "case_paths": [ "/nc-app/49/0463-01" ] }, { "cite": "467 S.E.2d 710", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "opinion_index": 0 }, { "cite": "342 N.C. 654", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 796035, 796042, 796108, 796021, 795900 ], "year": 1996, "opinion_index": 0, "case_paths": [ "/nc/342/0654-01", "/nc/342/0654-05", "/nc/342/0654-03", "/nc/342/0654-02", "/nc/342/0654-04" ] }, { "cite": "342 S.E.2d 859", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1986, "pin_cites": [ { "page": "867" } ], "opinion_index": 0 }, { "cite": "316 N.C. 447", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4703378 ], "year": 1986, "pin_cites": [ { "page": "460" } ], "opinion_index": 0, "case_paths": [ "/nc/316/0447-01" ] }, { "cite": "462 S.E.2d 844", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1995, "pin_cites": [ { "page": "850", "parenthetical": "quoting Marks v. Marks, 316 N.C. 447, 460, 342 S.E.2d 859, 867 (1986)" } ], "opinion_index": 0 }, { "cite": "120 N.C. App. 412", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11916078 ], "year": 1995, "pin_cites": [ { "page": "418", "parenthetical": "quoting Marks v. Marks, 316 N.C. 447, 460, 342 S.E.2d 859, 867 (1986)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/120/0412-01" ] }, { "cite": "287 S.E.2d 840", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1982, "pin_cites": [ { "page": "846" }, { "page": "846" }, { "page": "846" } ], "opinion_index": 0 }, { "cite": "305 N.C. 177", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8567141 ], "weight": 3, "year": 1982, "pin_cites": [ { "page": "187" }, { "page": "187" }, { "page": "187" } ], "opinion_index": 0, "case_paths": [ "/nc/305/0177-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7\u00a7 50-16.5", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "opinion_index": 0 }, { "cite": "419 S.E.2d 176", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1992, "pin_cites": [ { "page": "182" } ], "opinion_index": 0 }, { "cite": "107 N.C. App. 140", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8527264 ], "year": 1992, "opinion_index": 0, "case_paths": [ "/nc-app/107/0140-01" ] }, { "cite": "473 S.E.2d 6", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1996, "pin_cites": [ { "page": "7-8" } ], "opinion_index": 0 }, { "cite": "344 N.C. 166", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 867538 ], "year": 1996, "pin_cites": [ { "page": "169" } ], "opinion_index": 0, "case_paths": [ "/nc/344/0166-01" ] }, { "cite": "422 S.E.2d 446", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "447" } ], "opinion_index": 0 }, { "cite": "108 N.C. App. 90", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522670 ], "year": 1992, "pin_cites": [ { "page": "93" } ], "opinion_index": 0, "case_paths": [ "/nc-app/108/0090-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 50-13.4", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "page": "(c)" } ], "opinion_index": 0 }, { "cite": "228 S.E.2d 407", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "pin_cites": [ { "page": "410" } ], "opinion_index": 1 }, { "cite": "290 N.C. 669", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8564393 ], "year": 1976, "pin_cites": [ { "page": "674" } ], "opinion_index": 1, "case_paths": [ "/nc/290/0669-01" ] }, { "cite": "290 S.E.2d 653", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1982, "pin_cites": [ { "page": "658" } ], "opinion_index": 1 }, { "cite": "305 N.C. 446", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571060 ], "year": 1982, "pin_cites": [ { "page": "453" } ], "opinion_index": 1, "case_paths": [ "/nc/305/0446-01" ] } ], "analysis": { "cardinality": 979, "char_count": 30993, "ocr_confidence": 0.751, "pagerank": { "raw": 2.982329150524107e-07, "percentile": 0.8510961449876036 }, "sha256": "811684c4ea56e15e77b65850a3c41f1998fa43914f4d1e1e84efb9e942249a84", "simhash": "1:8bfb14269e4f8ed4", "word_count": 4986 }, "last_updated": "2023-07-14T19:43:16.540119+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge GREENE concurs.", "Judge WALKER concurs in part and dissents in part." ], "parties": [ "EDWARD LEE BARHAM, Plaintiff v. KELLI MOORE BARHAM, Defendant" ], "opinions": [ { "text": "McGEE, Judge.\nPlaintiff and defendant were married in June 1968 and divorced in August 1988. Two children were bom of the marriage. On 17 October 1990, the Wake County District Court ordered plaintiff to pay defendant permanent alimony of $686 per month and child support of $532 per month. In 1990, plaintiff owned one-half interest in Triangle Retirement Services, Inc. He drew $4000 monthly income solely from this corporation, and defendant had a gross annual income of $14,500. In the 1990 order, the court found defendant\u2019s reasonable needs, to maintain her accustomed standard of living, were in excess of $2500 per month but that plaintiff was unable to pay enough alimony to enable her to achieve her accustomed standard of living.\nIn 1994, both plaintiff and defendant moved to modify the 1990 order and defendant moved for attorney\u2019s fees. The motions were heard during the 24 May 1995 Domestic Session of Wake County District Court, Judge William C. Lawton presiding. The trial court found, as of the hearing date, plaintiff\u2019s annual net income drawn from the corporation was $62,000 ($77,500 gross) based on an agreement with a creditor bank in which an encumbered portion of the corporation\u2019s cash reserves could not be paid out as salary. Defendant earned a gross income of $2860 per month at the time of the hearing. By order entered 11 July 1995, the trial court decreased plaintiff\u2019s alimony obligation to $532 per month and increased his child support obligation to $699 per month and denied defendant\u2019s request for attorney\u2019s fees. On 28 September 1995 the trial court entered an order amending the 11 July 1995 order. Defendant appeals and plaintiff cross appeals from the 11 July 1995 order, as amended.\nI. Defendant\u2019s Appeal\nDefendant first contends the trial court erroneously calculated child support and alimony by failing to consider all of plaintiff\u2019s gross annual income in 1993 and 1994. Specifically, she contends the court erred by computing plaintiff\u2019s gross annual income based on the amount actually retained by him from the corporation ($62,000 net/$77,500 gross) rather than on the gross annual income he reported on his 1993 federal income tax return and his estimated gross annual income for 1994.\nA. Gross Income Calculation for Child Support\nN.C. Gen. Stat. \u00a7 50-13.4(c) provides, in pertinent part:\n(c) Payments ordered for the support of a minor child shall be in such amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case.\nG.S. \u00a7 50-13.4(c) (1995).\nThe amount of a parent\u2019s child support obligation is determined by application of The North Carolina Child Support Guidelines (Guidelines). G.S. \u00a7 50-13.4(c); Rose v. Rose, 108 N.C. App. 90, 93, 422 S.E.2d 446, 447 (1992). A trial court may deviate from the Guidelines when it finds, by the greater weight of the evidence, application of the Guidelines: (1) would not meet or would exceed the reasonable needs of the child considering the relative ability of each parent to provide support; or (2) would be otherwise unjust or inappropriate. G.S. \u00a7 50-13.4(c); Guilford County ex rel. Easter v. Easter, 344 N.C. 166, 169, 473 S.E.2d 6, 7-8 (1996). Here, the trial court found the Guidelines apply and neither party challenges that finding.\nThe Guidelines define \u201cincome\u201d as \u201cactual gross income of the parent, if employed to full capacity, or potential income if unemployed or underemployed.\u201d Guidelines, at 2 (1 October 1994). The Guidelines further describe \u201cgross income\u201d as follows, in pertinent part:\n(1) Gross income: Gross income includes income from any source, except as excluded below, and includes but is not limited to income from salaries, wages, commissions, bonuses, dividends, severance pay, pensions, interest, trust income, annuities, capital gains, social security benefits, workers compensation benefits, unemployment insurance benefits, disability pay and insurance benefits, gifts, prizes and alimony or maintenance received from persons other than the parties to the instant action. . . .\n(2) Income from self-employment or operation of a business: For income from self-employment, rent, royalties, proprietorship of a business, or joint ownership of a partnership or closely held corporation, gross income is defined as gross receipts minus ordinary and necessary expenses required for self-employment or business operation. Specifically excluded from ordinary and necessary expenses for purpose of these Guidelines are amounts allowable by the Internal Revenue Service for the accelerated component of depreciation expenses, investment tax credits, or any other business expenses determined by the Court to be inappropriate for determining gross income for purposes of calculating child support. In general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases, this amount will differ from a determination of business income for tax purposes.\nGuidelines, at 2-3 (emphasis added).\nIn this case the trial court did not include in plaintiffs actual gross annual income an encumbered cash reserve owned by plaintiffs corporation. On this issue the court found:\n27. While there is a sizeable cash reserve of Plaintiffs corporation (which would ordinarily be available to Plaintiff as an owner), this reserve is currently fully encumbered by a creditor bank of Plaintiffs corporation, and by contract cannot be used by Plaintiff or his current wife. It, therefore, is not considered by the Court as \u201cincome\u201d, though in the future, when the bank/creditor is out of the financial picture, this cash reserve fund of Plaintiffs closely held corporation may, indeed, be income. The current balance of this retained earnings account is now around $100,000.00.\nSimilarly, the trial court made the following conclusion of law:\n7. . . . While cash reserves are generally liquid and available to owners (a portion of which is generally counted on, however, for use in capital improvements) where the cash reserve is required to be deposited in and is held by a creditor/bank, it is not considerable as \u201cincome\u201d available in computing alimony and/or support.\nWe find the trial court\u2019s exclusion of plaintiffs corporation\u2019s encumbered cash reserve funds in its calculation of child support prejudicial error. The definition of gross income in the self-employment/business income context is \u201cgross receipts minus ordinary and necessary expenses required for self-employment or business operation.\u201d Guidelines, at 3. The critical question, then, is whether the cash reserves pledged to the bank by plaintiff\u2019s corporation constitute an ordinary and necessary expense under this definition.\nThis Court addressed a similar question in Lawrence v. Tise, 107 N.C. App. 140, 419 S.E.2d 176 (1992). In Lawrence, this Court held \u201c[m]ortgage principal payments ... are not an \u2018ordinary and necessary expense\u2019 within the meaning of the Guidelines.\u201d Id. at 149, 419 S.E.2d at 182. The Court listed the following types of expenses as those which are properly deducted as ordinary and necessary: \u201cexpenses for repairs, property management and leasing fees, real estate taxes, insurance and mortgage interest.\u201d Id. The encumbered cash reserve at issue here is more like the mortgage principal payments in Lawrence than the expenses held ordinary and necessary in Lawrence. Like the mortgage principal payments and unlike the other expenditures, the encumbered cash reserve constitutes value retained by plaintiff. It is not like expenses for repairs, property management and leasing fees, real estate taxes, insurance and mortgage interest all of which are spent money never to be regained by the spender. Although technically encumbered, the cash reserves are available to plaintiff under the Guidelines because it was his choice to pledge them to the bank in exchange for business financing. Since the court erred in calculating plaintiff\u2019s gross annual income under the Guidelines, we reverse this portion of the court\u2019s order and remand for a re-calculation of child support under the Guidelines.\nB. Gross Income Calculation for Alimony\nWe also find prejudicial error in the trial court\u2019s calculation of gross annual income in regard to its decision to reduce plaintiff\u2019s alimony payments.\nThe two alimony statutes applicable here, N.C. Gen. Stat. \u00a7\u00a7 50-16.5 and 50-16.9 were repealed and amended, respectively, on 1 October 1995. See 1995 Sess. Laws ch. 319, \u00a7\u00a7 1, 7. These changes are applicable only to actions filed on or after 1 October 1995 and do not apply to pending litigation, or to future motions in the cause seeking to modify orders or judgments in effect on 1 October 1995. 1995 Sess. Laws ch. 319, \u00a7 12. Since the order the parties seek to modify in this action was entered prior to 1 October 1995, i.e. 17 October 1990, the statutes as they existed prior to 1 October 1995 apply here.\nG.S. \u00a7 50-16.9 provided in pertinent part: \u201cAn order of a court of this State for alimony . . . may be modified ... at any time, upon motion in the cause and a showing of changed circumstances.\u201d See G.S. \u00a7 50-16.9(a) (1995) (Editor\u2019s Note). In general, the change of circumstances required for modification of an alimony order \u201cmust relate to the financial needs of the dependent spouse or the supporting spouse\u2019s ability to pay.\u201d Rowe v. Rowe, 305 N.C. 177, 187, 287 S.E.2d 840, 846 (1982). The G.S. \u00a7 50-16.5 factors used in making the initial alimony award should be used by the trial court when hearing a motion for modification. Rowe, 305 N.C. at 187, 287 S.E.2d at 846. The version of G.S. \u00a7 50-16.5 applicable here provided: \u201c(a) Alimony shall be in such amount as the circumstances render necessary, having due regard to the estates, earnings, earning capacity, condition, accustomed standard of living of the parties, and other facts of the particular case.\u201d See G.S. \u00a7 50-16.5(a) (1995) (Editor\u2019s Note). \u201c[T]he \u2018overriding principle\u2019 in cases determining the correctness of alimony is \u2018fairness to all parties.\u2019\u201d Fink v. Fink, 120 N.C. App. 412, 418, 462 S.E.2d 844, 850 (1995) (quoting Marks v. Marks, 316 N.C. 447, 460, 342 S.E.2d 859, 867 (1986)), disc. review denied, 342 N.C. 654, 467 S.E.2d 710 (1996).\nDefendant contends the trial court miscalculated plaintiff\u2019s actual gross annual income: (1) when it failed to utilize the gross annual income he reported in his federal income tax returns; and (2) when it did not count the cash reserves pledged to the bank by plaintiff\u2019s corporation as part of plaintiff\u2019s gross annual income.\nAlthough the amount of income reported for tax purposes is relevant evidence, this amount is not necessarily equivalent to annual gross income for alimony purposes. See Britt v. Britt, 49 N.C. App. 463, 471, 271 S.E.2d 921, 927 (1980). In Britt, this Court stressed the differences between actual income and taxable income stating: \u201c[b]ecause plaintiff\u2019s business expenses, including depreciation on his equipment, as well as his alimony payments, are deductible from his total income in determining his adjusted gross income . . . that figure is not appropriate for determining his actual ability to meet his alimony payments.\u201d Id. (Emphasis added).\nIn determining a supporting spouse\u2019s gross income, the critical issue is the supporting spouse\u2019s actual ability to make alimony payments. See id. In assessing plaintiff\u2019s ability to pay alimony, we apply the principle that \u201c[p]ayment of alimony may not be avoided merely because ... [a supporting spouse] has remarried and voluntarily assumed additional obligations.\u201d Britt, 49 N.C. App. at 473, 271 S.E.2d at 928 (quoting Sayland v. Sayland, 267 N.C. 378, 383, 148 S.E.2d 218, 222 (1966)). In addition, the rationale employed by this Court in reviewing a trial court\u2019s assessment of a dependent spouse\u2019s needs in Beaman v. Beaman, 77 N.C. App. 717, 336 S.E.2d 129 (1985) fairly applies in this context as well. In Beaman, this Court held a trial court erred in its alimony calculation by failing to determine the extent to which a dependent spouse\u2019s business and personal expenses were duplicative. Id. at 724, 336 S.E.2d at 133. The Court stated: \u201c \u2018 \u201cAlimony\u201d means payment for the support and maintenance of a spouse. . . .\u2019 It does not mean payment for the support and maintenance of a spouse\u2019s business ventures.\u201d Id.\nBy deducting the cash reserves pledged to the bank by plaintiff\u2019s corporation from his annual gross income the trial court, in effect, placed the burden of this voluntarily assumed business investment on defendant, the dependent spouse. Just as a supporting spouse is not required to pay for the maintenance and support of a dependent spouse\u2019s business ventures, a dependent spouse also should not be made to bear the financial burden of a supporting spouse\u2019s business investment. The trial court erred by excluding the cash reserves pledged to the bank by plaintiff\u2019s corporation from plaintiff\u2019s annual gross income.\nPlaintiff contends any error in this calculation was not prejudicial to defendant because the trial court based its calculation of alimony solely on a change in defendant\u2019s needs and not on plaintiff\u2019s ability to pay. We disagree. The trial court\u2019s findings of fact and conclusions of law do not indicate whether the increase in defendant\u2019s income was the dispositive factor justifying the reduction of alimony. In addition, no single factor under G.S. \u00a7 50-16.5(a) should be viewed in isolation in calculation of the proper amount of alimony as this statute requires the trial court to assess all of the enumerated factors along with \u201cother facts of the particular case.\u201d G.S. \u00a7 50-16.5(a). Similarly, in Britt, this Court held a determination of changed circumstances, based solely on the parties\u2019 incomes, was error because calculation of alimony requires a trial court to compare \u201c[t]he present overall circumstances of the parties\u201d with \u201cthe circumstances existing at the time of the original award.\u201d Britt, 49 N.C. App. at 474, 271 S.E.2d at 928. The trial court erred in calculating plaintiff\u2019s annual gross income. On remand, the court should evaluate the parties\u2019 motions for modification of alimony in light of a proper assessment of plaintiff\u2019s annual gross income.\nDefendant next contends the trial court erred by modifying her accustomed standard of living from that determined in the 1990 order. We agree.\nThe court made the following pertinent findings and conclusions in the 1995 order:\nFINDINGS OF FACT\n9. . . . Defendant remains a dependant spouse and Plaintiff remains a supporting spouse, for purposes of maintaining Defendant\u2019s current accustomed standard of living.\n10. Now some five years after the prior Court Order, it is difficult, if not impossible to artificially now maintain the fictional \u201caccustomed standard of living\u201d that existed on June 5, 1987-, so much has changed in the parties lives and their worlds in the ensuing 8 years. The Court needs now to concern itself with essentially the currently expected standard of living of Defendant and the parties\u2019 child, considering those same factors as were considered by the previous Court and are mandated by statute and case law to be considered.\n* * *\n19. Defendant has not ever returned to the standard of living she enjoyed during the parties\u2019 marriage. Until his remarriage to his current wife, Plaintiff did not enjoy a standard of living anywhere near that he enjoyed during the parties\u2019 marriage. . . .\n* * *\n24. Neither Plaintiff nor Defendant lived after separation at their married standard of living. Only when Plaintiff remarried did he begin to approximate his previous standard of living, due mainly to the income of his current wife. . . .\n* * *\nCONCLUSIONS OF LAW\n* * *\n2. Defendant is dependant on Plaintiff and remains in need of maintenance and support from Plaintiff to maintain a standard of living for today and based upon the estates, earnings, and conditions of the parties for today.\n(Emphasis added).\nThe critical issue is whether a trial court may rely on the parties\u2019 accustomed standard of living evaluated as of the hearing date rather than on the accustomed standard of living during the marriage when deciding whether to modify the amount of alimony under G.S. \u00a7 50-16.9.-\n\u201cAccustomed standard of living\u201d is one of the factors under G.S. \u00a7 50-16.5 that must be considered by a court on a motion for modification of alimony based on changed circumstances. See G.S. \u00a7 50-16.5(a); Rowe, 305 N.C. at 187, 287 S.E.2d at 846. Our Supreme Court has defined the phrase \u201caccustomed standard of living\u201d used in G.S. \u00a7 16.5 as follows:\nThe ... phrase clearly means more than a level of mere economic survival. Plainly, in our view, it contemplates the economic standard established by the marital partnership for the family unit during the years the marital contract was\u25a0 intact. It anticipates that alimony, to the extent it can possibly do so, shall sustain that standard of living for the dependent spouse to which the parties together became accustomed.\nWilliams v. Williams, 299 N.C. 174, 181, 261 S.E.2d 849, 855 (1980) (emphasis added). As explained in Williams, alimony is designed to enable the dependent spouse to achieve the standard of living she or he enjoyed during the marriage. Here, the trial court unequivocally disregarded this principle and, instead, based alimony on the standard of living the parties maintained after the divorce. This approach was error prejudicial to defendant and requires remand for proper determination of the alimony amount in light of the accustomed standard of living of the parties during the marriage.\nDefendant next contends the trial court erred by denying her attorney\u2019s fees in regard to plaintiffs motion for a decrease in alimony and her motion for an increase in alimony. To obtain an award of attorney\u2019s fees in a proceeding seeking a modification of alimony, \u201cthe party seeking the fees must show: (1) that he or she is a dependent spouse; (2) that he or she is entitled to the relief demanded based upon all the evidence; and (3) that he or she has insufficient means to defray the expenses of the proceeding. Cecil v. Cecil, 74 N.C. App. 455, 459, 328 S.E.2d 899, 901 (1985). Since we have reversed and remanded the court\u2019s modification of alimony, it remains to be determined whether defendant is entitled to the relief she seeks on this issue. Since entitlement to the relief sought is necessary for an award of attorney\u2019s fees in this context, we decline to address the attorney\u2019s fees issue further.\nDefendant next contends the trial court erred by failing to make its increase in child support effective as of the date of her motion filed on 15 July 1994. We disagree. Although a trial court \u201chas the discretion to modify a child support order as of the date the petition to modify is filed,\" Mackins v. Mackins, 114 N.C. App. 538, 546, 442 S.E.2d 352, 357, disc. review denied, 337 N.C. 694, 448 S.E.2d 527 (1994), it is not required to do so. The trial court did not abuse its discretion by not making its order modifying child support effective as of the date of defendant\u2019s motion.\nFinally, defendant contends the trial court erred by failing to apply the consumer price index to make proper cost of living adjustments when comparing her reasonable alimony needs as determined in the 1990 order to her reasonable needs as of the effective date of the 1995 order. We disagree.\nIn essence, defendant contends the trial court was required to evaluate the dollar amount of her reasonable needs as found in the 1990 order in a manner which reflects what this amount would be in 1995 dollars. She cites no cases which require such an updating of findings in a previous alimony order and we have found none. In fact, we have previously observed that the general reliability of consumer price index statistics has not been established. Snipes v. Snipes, 118 N.C. App. 189, 197, 454 S.E.2d 864, 869 (1995) (citing Falls v. Falls, 52 N.C. App. 203, 218-19, 278 S.E.2d 546, 556-57, disc. review denied, 304 N.C. 390, 285 S.E.2d 831 (1981)). Here, the trial court made findings regarding defendant\u2019s reasonable expenses and needs as of the 1995 hearing. In order to obtain an increase in alimony, defendant was required to carry her burden to show a change of circumstances pursuant to G.S. \u00a7 50-16.9. She was not entitled to an automatic updating of her reasonable needs and expenses based on the consumer price index. This assignment of error is without merit.\nII. Plaintiff\u2019s Cross Appeal\nIn his brief, plaintiff has expressly abandoned his cross appeal and, therefore, we do not address the issue presented therein. Reversed in part, affirmed in part, and remanded.\nJudge GREENE concurs.\nJudge WALKER concurs in part and dissents in part.", "type": "majority", "author": "McGEE, Judge." }, { "text": "Judge Walker\nconcurring in part and dissenting in part.\nI vote to affirm the trial court\u2019s order in its entirety. I respectfully dissent from the majority opinion which holds the trial court erred in concluding that plaintiff\u2019s gross income for the purpose of calculating his child support and alimony obligations did not include his corporation\u2019s cash reserve. I further dissent from the majority opinion which concludes the trial court erred in failing to properly determine the alimony \u201cin light of the accustomed standard of living of the parties during the marriage.\u201d\nThe Child Support Guidelines provide that\n[i]n general, income and expenses from self-employment or operation of a business should be carefully reviewed to determine an appropriate level of gross income available to the parent to satisfy a child support obligation. In most cases, this amount will differ from a determination of business income for tax purposes.\nGuidelines at 3 (emphasis added).\nHere, the trial court found that although plaintiff\u2019s corporation maintained a sizeable cash reserve, this reserve was fully encumbered by the creditor bank and could not be used by plaintiff or his current wife. The trial court also noted that although the cash reserve was reported as income for Subchapter S tax purposes, the reserve would only become income available to plaintiff if the assets of the corporation were sold. Because the trial court should only consider funds actually and presently available to an obligor in calculating child support and alimony obligations, the trial court\u2019s conclusion that \u201cwhere the cash reserve is required to be deposited in and is held by a creditor/bank, it is not considerable [sic] as \u2018income\u2019 available in computing alimony and/or support,\u201d should be affirmed.\nIn addition, the trial court did not abuse its discretion in reducing plaintiff\u2019s alimony obligation. The amount of alimony awarded by the trial court \u201cis not reviewable on appeal in the absence of an abuse of discretion.\u201d Quick v. Quick, 305 N.C. 446, 453, 290 S.E.2d 653, 658 (1982). While consideration must be given to the estates and earnings of both spouses, as well as the needs of the dependent spouse, the determination of the amount of alimony awarded \u201c \u2018is a question of fairness and justice to all parties.\u2019\u201d Id. (quoting Beall v. Beall, 290 N.C. 669, 674, 228 S.E.2d 407, 410 (1976)).\nHere, the trial court considered evidence of the parties\u2019 estates and earnings, in addition to defendant\u2019s needs as a dependent spouse. The trial court found that defendant\u2019s reasonable needs to enable her to maintain her standard of living as established in the 1990 order was in excess of $2,500.00 per month. The court further found that at the time of the 1990 order defendant was earning $1,208.00 gross income per month with a net income of $800.00 per month, and at the time of the 1995 order, defendant\u2019s gross earnings were $2,860.00 per month with a net income of $2,136.00 per month \u2014 more than twice her gross income at the time of the previous order. Further, defendant\u2019s debts had been reduced to one-eighth of what they had been in 1990, and she had also obtained substantial equity in her house. After considering this evidence and determining that plaintiffs gross income did not include his corporation\u2019s cash reserve, the trial court determined that a change of circumstances had occurred warranting a reduction in plaintiffs alimony obligation. Because the trial court properly considered all relevant factors in determining the amount of plaintiffs alimony obligation, it did not abuse its discretion in reducing such obligation.\nFinally, the trial court did not modify defendant\u2019s accustomed standard of living from that determined in the 1990 order. The trial court acknowledged that, at the time of the 1990 order, defendant needed an amount in excess of $2,500.00 per month to maintain her accustomed standard of living during the marriage, and that defendant never returned to such standard of living. However, according to defendant\u2019s affidavit, her reasonable living expenses in 1995 were found to be $2,643.00. When the alimony awarded to defendant by the trial court ($532.00) is added to defendant\u2019s present net income ($2,136.00), the result is an amount which exceeds $2,500.00. I conclude the trial court considered defendant\u2019s accustomed standard of living as set forth in the 1990 order and that further findings are not necessary in determining the amount of defendant\u2019s alimony award in the 1995 order.\nFor the above reasons, I would affirm the trial court\u2019s order.", "type": "concurring-in-part-and-dissenting-in-part", "author": "Judge Walker" } ], "attorneys": [ "Gulley, Kuhn & Taylor, L.L.P., by Jack P. Gulley, for plaintiff.", "Oliver & Oliver, PLLC, by John M. Oliver and Cindy G. Oliver, for defendant." ], "corrections": "", "head_matter": "EDWARD LEE BARHAM, Plaintiff v. KELLI MOORE BARHAM, Defendant\nNo. COA96-742\n(Filed 5 August 1997)\n1. Divorce and Separation \u00a7 392.1 (NCI4th)\u2014 child support guidelines \u2014 supporting spouse\u2019s income \u2014 funds encumbered by bank\nThe trial court erred when calculating child support under the North Carolina Child Support Guidelines by failing to consider all of plaintiffs gross income in 1993 and 1994 rather than the net amount retained after a creditor bank encumbered a portion of plaintiffs corporation\u2019s cash reserves. Neither party challenged the finding that the Guidelines apply; under the Guidelines, the definition of gross income in the self-employment/business income context is gross receipts minus ordinary and necessary expenses required for self-employment or business operation. The encumbered cash reserve constitutes value retained by plaintiff; it is not like expenses for repairs, property management and leasing fees, real estate taxes, insurance and. mortgage interest, all of which are spent money never to be regained by the spender. Although technically encumbered, the cash reserves are available to plaintiff under the Guidelines because it was his choice to pledge them to the bank in exchange for business financing.\n2. Divorce and Separation \u00a7 275 (NCI4th)\u2014 alimony \u2014 gross income \u2014 amount pledged to bank as business reserve\u2014 excluded\nThe trial court erred in calculating plaintiff\u2019s gross income when reducing his alimony payments under N.C.G.S. \u00a7\u00a7 50-16.5 and 50-16.9 as they existed prior to 1 October 1995 by not including the portion of plaintiffs gross income pledged to a bank in a reserve. The critical issue in determining a supporting spouse\u2019s gross income is the supporting spouse\u2019s actual ability to make alimony payments. By deducting the cash reserves pledged to the bank by plaintiff\u2019s corporation from his annual gross income, the trial court in effect placed the burden of this voluntarily assumed business investment on defendant, the dependent spouse. Just as a supporting spouse is not required to pay for the maintenance and support of a dependent spouse\u2019s business ventures, a dependent spouse also should not be made to bear the financial burden of a supporting spouse\u2019s investment. Although plaintiff contends that any error in the calculation was not prejudicial because the court based its calculation of alimony solely on a change in defendant\u2019s needs and not on plaintiff\u2019s ability to pay, the court\u2019s findings and conclusions do not indicate whether the increase in defendant\u2019s income was the dispositive factor; in addition, no single factor under N.C.G.S. \u00a7 50-16.5(a) should be viewed in isolation in calculation of the proper amount of alimony.\n3. Divorce and Alimony \u00a7 280 (NCI4th)\u2014 alimony \u2014 standard of living \u2014 modified to post-divorce level\nThe trial court erred when determining a change in alimony by modifying defendant\u2019s accustomed standard of living from that determined in the prior, 1990 order based on findings that defendant had not returned to the standard of living she enjoyed during the marriage and that plaintiff had only begun to approximate his previous standard of living after he remarried. Alimony is designed to enable the dependent spouse to achieve the standard of living she or he enjoyed during the marriage; here, the trial court unequivocally disregarded this principle and instead based alimony on the standard of living the parties maintained after the divorce.\n4. Divorce and Alimony \u00a7 538 (NGI4th)\u2014 modification of alimony reversed \u2014 attorney fees denied \u2014 not reviewed\u2014 entitlement to relief sought\nThe issue of whether the court erred by denying defendant attorney fees was not addressed where modification of her alimony was reversed. Entitlement to the relief sought is necessary for an award of attorney\u2019s fees.\n5. Divorce and Separation \u00a7 427 (NCI4th)\u2014 child support\u2014 increase \u2014 effective date\nA trial court did not abuse its discretion by not increasing child support effective as of the date of the motion. Although the court has the discretion to modify a child support order as of the date of the petition to modify, it is not required to do so.\n6. Divorce and Alimony \u00a7 291 (NCI4th)\u2014 alimony \u2014 changed circumstances \u2014 consumer price index \u2014 no automatic update\nThe trial court did not err by failing to apply the consumer price index to make cost of living adjustments when comparing defendant\u2019s reasonable alimony needs as determined in a 1990 order to her needs as of the effective date of this 1995 order. It has previously been observed that the general reliability of consumer price index statistics has not been established. The trial court made findings regarding defendant\u2019s reasonable expenses and needs as of the 1995 hearing. Defendant was required to carry her burden to show a change of circumstances and was not entitled to an automatic updating of her reasonable needs and expenses based on the consumer price index.\nJudge Walker concurring in part and dissenting in part.\nAppeal by defendant and cross appeal by plaintiff from order entered 11 July 1995 and amended 28 September 1995 by Judge William C. Lawton in Wake County District Court. Heard in the Court of Appeals 19 March 1997.\nGulley, Kuhn & Taylor, L.L.P., by Jack P. Gulley, for plaintiff.\nOliver & Oliver, PLLC, by John M. Oliver and Cindy G. Oliver, for defendant." }, "file_name": "0020-01", "first_page_order": 56, "last_page_order": 69 }