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  "name": "DEBORAH W. HAY, Plaintiff v. EDWARD C. HAY, JR., Defendant",
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    "judges": [
      "Judges McGEE and BRYANT concur."
    ],
    "parties": [
      "DEBORAH W. HAY, Plaintiff v. EDWARD C. HAY, JR., Defendant"
    ],
    "opinions": [
      {
        "text": "HUNTER, Judge.\nEdward C. Hay, Jr. (\u201cdefendant\u201d) appeals from an equitable distribution judgment, amended equitable distribution judgment, and a second amended equitable distribution judgment awarding an unequal division of the marital estate in defendant\u2019s favor. For reasons stated herein, we affirm the judgments of the trial court.\nDefendant and Deborah W. Hay (\u201cplaintiff\u2019) were married on 6 August 1972. Three children were bom of the marriage. On 17 July 1997 the parties separated, and on 9 September 1998 the parties were divorced. On 7 January 1998, plaintiff filed a complaint seeking alimony, temporary and permanent post-separation support, attorney\u2019s fees, writ of possession, equitable distribution, child custody, and child support. The issues of child support and custody, post-separation support, writ of possession and attorney\u2019s fees were heard on 17 April 1998 and are not a part of this appeal. Plaintiff\u2019s claim for equitable distribution was not heard on that date.\nFollowing the hearing, the trial court entered an order on 23 April 1998 in which it stated that defendant \u201cshall make the monthly mortgage payments of $1,900 on the marital home.\u201d Upon defendant\u2019s motion to amend the order, the trial court entered an order on 29 June 1998 in which it noted that \u201c[t]he court did not intend the obligation to continue the mortgage payment to be in the nature of child support nor as postseparation support and to avoid any confusion at the time of equitable distribution should clear up this ambiguity.\u201d The trial court ordered that defendant should make the monthly mortgage payments \u201c. . . \u2018in order to preserve the marital estate.\u2019 \u201d\nPlaintiff\u2019s claim for equitable distribution was heard on 1 June 2000, and the trial court entered judgment on 3 July 2000. The trial court made extensive findings of fact regarding the assets and liabilities of the parties, including that defendant had continued to pay the monthly mortgage payments on the marital home following the parties\u2019 separation. The trial court concluded the marital property should be divided in favor of defendant and awarded defendant $111,684.32 in marital property, and awarded plaintiff $92,362.18 in marital property. The trial court then assessed the marital debts, and assigned $28,215.00 of the debts to defendant and $16,000.00 to plaintiff. The trial court noted defendant had paid three of the debts assigned to him, and that this fact was considered as a distributional factor.\nDefendant filed a motion for a new trial or amendment of the judgment on 10 July 2000. On 19 July 2000, the trial court entered an amended equitable distribution judgment wherein it amended one finding of fact unrelated to this appeal. On 4 August 2000, defendant\u2019s motion for new trial or amendment of the judgment was heard. The trial court entered a second amended equitable distribution judgment on 16 August 2000 which attempted to clarify the debt distributed to the parties. The trial court amended its findings of fact to remove from defendant\u2019s list of debts assigned to him those debts which he had paid. The trial court noted that defendant\u2019s payment of the debts was either considered as a distributional factor or the amount of the debts was deducted from assets distributed to him. The trial court made adjustments accordingly in the amount of marital property distributed to each party, awarding plaintiff $91,162.18 of the marital property, and defendant $110,484.32. Defendant appeals.\nDefendant brings forth four assignments of error on appeal: (1) the trial court erred in failing to award defendant a dollar for dollar credit of the total sum of monthly mortgage payments which defendant paid post-separation; (2) alternatively, the trial court erred in failing to treat the payments and the depreciation in the mortgage balance as divisible property; (3) the trial court erred in treating the marital debts paid by defendant as distributional factors as opposed to marital property to be divided; and (4) the trial court erred in failing to order an unequal division of the assets in defendant\u2019s favor after finding that an unequal division in his favor would be equitable.\nInitially, we note \u201cthe trial court is vested with wide discretion in family law cases, including equitable distribution cases.\u201d Wall v. Wall, 140 N.C. App. 303, 307, 536 S.E.2d 647, 650 (2000). \u201cThus, a trial court\u2019s ruling \u2018will be upset only upon a showing that it was so arbitrary that it could not have been the result of a reasoned decision.\u2019 \u201d Id. (citation omitted).\nDefendant first argues the trial court erred in failing to give him a dollar for dollar credit for his monthly mortgage payments following the parties\u2019 separation. Specifically, defendant maintains the trial court\u2019s failure to do so was a failure to follow the mandate of the order regarding child support and post-separation support and resulted in one trial judge overruling another. In the alternative, defendant argues the trial court should have at least treated the payments and the decrease in the mortgage balance as divisible property. We disagree with both arguments.\nWe first reject defendant\u2019s argument that the trial court effectively overruled a prior ruling of another trial court when it failed to give defendant a dollar for dollar credit for post-separation mortgage payments, but instead considered the payments as a distributional factor. The original trial court order regarding child support and post-separation support ordered defendant to make monthly mortgage payments of $1,900.00 on the marital home. The trial court thereafter entered an amended order to clarify this issue, stating that \u201c[t]he court did not intend the obligation to continue the mortgage payment to be in the nature of child support nor as postseparation support.\u201d It entered a clarification which ordered defendant to pay the mortgage \u201c. . . \u2018in order to preserve the marital estate.\u2019 \u201d\nNowhere in the original order or amended order did the trial court state its intent that defendant receive a dollar for dollar credit for such payments. Nor will we read such an intent into the trial court\u2019s order, particularly where the trial court was without authority to conclusively determine issues pertaining to equitable distribution when the matters before it were child support and custody, post-separation support, writ of possession and attorney\u2019s fees. The trial court which subsequently considered plaintiff\u2019s motion for equitable distribution was in no way bound by the decision regarding child support and post-separation support in making its determination of an equitable distribution. We therefore do not interpret the trial court\u2019s equitable distribution judgment as overruling the prior order.\nMoreover, the trial court had discretion to consider defendant\u2019s payments \u201c. . . \u2018to preserve the marital estate\u2019 \u201d as a distributional factor, as opposed to giving defendant a credit. N.C. Gen. Stat. \u00a7 50-20(c)(lla) (1999) plainly states that in distributing the marital property, the court shall consider \u201c[a]cts of either party to maintain, preserve, develop, or expand . . . the marital property or divisible property, or both, during the period after separation of the parties and before the time of distribution.\u201d N.C. Gen. Stat. \u00a7 50-20(c)(lla). \u201cPayment by one spouse on a marital home mortgage after the date of separation is a factor appropriately considered by the trial court under G.S. 50- 20(c)(lla) and (c)(12) in determining what division of marital property is equitable.\u201d Fox v. Fox, 103 N.C. App. 13, 21, 404 S.E.2d 354, 358 (1991) (rejecting defendant\u2019s argument that he was entitled to credit for mortgage payments on marital home and for taxes and insurance on home).\nThis Court has recently reiterated that post-separation payments on marital debts may be treated as a distributional factor. Khajanchi v. Khajanchi, 140 N.C. App. 552, 564, 537 S.E.2d 845, 853 (2000). Further, \u201ceven if post-separation debt payments are treated as a distributional factor, the trial court may, in its discretion, choose to give no weight to that particular factor.\u201d Id. We held in Khajanchi that the trial court was well within its discretion in treating the defendant\u2019s post-separation mortgage payments and payments on other marital debts as a distributional factor. Id.; see also Wall, 140 N.C. App. at 313, 536 S.E.2d at 653-54 (trial court did not abuse discretion in treating post-separation mortgage and other payments required to maintain marital property as distributional factor to which it gave little weight); Miller v. Miller, 97 N.C. App. 77, 80-81, 387 S.E.2d 181, 184 (1990) (rejecting plaintiffs argument that he was entitled to credit for post-separation mortgage payments; such payments are properly considered as distributional factors under N.C. Gen. Stat. \u00a7 15-20(c)).\nBy his second argument, defendant contends in the alternative that the trial court should have at least considered the payments made and the decrease in the mortgage debt as divisible property under N.C. Gen. Stat. \u00a7 50-20(b)(4) (1999). He argues that his mortgage payments resulted in an appreciation in the value of the marital property, and should therefore fall within the following category of divisible property:\nAll appreciation and diminution in value of marital property and divisible property of the parties occurring after the date of separation and prior to the date of distribution, except that appreciation or diminution in value which is the result of postseparation actions or activities of a spouse shall not be treated as divisible property.\nN.C. Gen. Stat. \u00a7 50-20(b)(4)a. We likewise reject this argument.\nThe Equitable Distribution Act was amended in 1997 to include this category of \u201cdivisible property\u201d in an effort to equitably account for post-separation events. Khajanchi, 140 N.C. App. at 556, 537 S.E.2d at 848. Although the issues in Khajanchi were decided under pre-1997 law, we noted:\nAs a result of those amendments, the trial courts were directed to classify, value and distribute certain real and personal property received after the date of separation, including the appreciation and diminution in the value of marital property, passive income from marital property, and certain increases in marital debt.\nId. However, under the plain language of N.C. Gen. Stat. \u00a7 50-20(b)(4)a, appreciation that results from the activities or actions of one spouse is not treated as divisible property. Therefore, assuming defendant\u2019s mortgage payments resulted in an appreciation in the value of the marital home, it was the result of his actions, and any resulting appreciation does not fall within the category of \u201cdivisible\u201d property as defined by N.C. Gen. Stat. \u00a7 50-20(b)(4).\nIt is not clear from the plain language of N.C. Gen. Stat. \u00a7 50-20(b)(4) how the legislature intends for trial courts to treat property falling within the subsection (a) \u201cactions or activities of a spouse\u201d exception. For instance, such property cannot constitute separate property, as it does not fit within the definition of separate property as set forth in N.C. Gen. Stat. \u00a7 50-20(b)(2). What is clear, however, is that the law affords trial courts wide discretion in determining how to treat post-separation mortgage payments by one spouse. As discussed above, a trial court may treat such payments as a distributional factor. See N.C. Gen. Stat. \u00a7 50-20(c)(lla); (12). Atrial court may also give the payor a dollar for dollar credit in the division of the property, or require that the non-payor spouse reimburse the payor for an appropriate amount. See Loving v. Loving, 118 N.C. App. 501, 505-06, 455 S.E.2d 885, 888 (1995). Our legislature has not expressed a preference for one particular method of treatment. In the present case, it was within the trial court\u2019s discretion to treat defendant\u2019s post-separation mortgage payments to preserve the marital estate as a distributional factor.\nMoreover, defendant\u2019s argument that the payments are divisible property within the meaning of N.C. Gen. Stat. \u00a7 50-20(b)(4)d, defining such property as \u201c[i]ncreases in marital debt and financing charges and interest related to marital debt\u201d is also without merit. Defendant\u2019s mortgage payments have not increased the marital debt, financing charges, or interest on the marital debt. This provision therefore has no application to this issue. These assignments of error are overruled.\nIn his third argument, defendant argues the trial court erred in failing to treat some of the marital debts as marital property to be divided, instead treating the debts solely as distributional factors. He contends the trial court neglected to properly value and distribute three debts incurred during the marriage \u2014 Wachovia Visa, Citibank, and Colorado College \u2014 which defendant paid following the parties\u2019 separation. We disagree.\n\u201c \u2018The court has the discretion, when determining what constitutes an equitable distribution of the marital assets, to also apportion or distribute the marital debts in an equitable manner.\u2019 \u201d Smith v. Smith, 111 N.C. App. 460, 510, 433 S.E.2d 196, 226 (1993) (citation omitted), reversed in part on other grounds, 336 N.C. 575, 444 S.E.2d 420 (1994). \u201cThe manner in which the court distributes or apportions marital debts ... is a matter committed to the discretion of the trial court.\u201d Id.\nAs with the post-separation payment of a mortgage debt, the trial court has discretion to consider the post-separation payment of credit card debts as a distributional factor. See N.C. Gen. Stat. \u00a7 50-20(c)(12); Khajanchi, 140 N.C. App. at 564, 537 S.E.2d at 853. In Khajanchi, we noted that \u201cthe trial court had discretion to treat defendant\u2019s post-separation payments of the Hallmark debt, the mortgage payments, the car payments, and other marital debts as distributional factors.\u201d Id. As previously noted, the trial court also has discretion to give a dollar for dollar credit to the post-separation debt payor or to require reimbursement from the non-payor spouse. See Loving, 118 N.C. App. at 505-06, 455 S.E.2d at 888.\nThe trial court\u2019s judgment in the case sub judice reveals it properly treated the marital debts as property to be divided, taking into account as a distributional factor that defendant had already paid some of the debts. In its original judgment, the trial court added all of the marital assets and determined their total value to be $204,046.50. It then listed and totaled all of the marital debts. The trial court proceeded to divide the marital assets between the parties, noting that an unequal distribution of property in favor of defendant was equitable. The trial court gave plaintiff $92,362.18 of the marital assets, and defendant $111,684.32 in marital assets. The trial court then divided all of the marital debts, with the majority of debt going to defendant. The trial court noted, however, that three of the debts assigned to defendant had been paid by him since the date of separation, and that this fact was considered by the trial court as a distributional factor. Therefore, it properly considered the decrease in the marital debts by virtue of defendant\u2019s payments. The Wachovia Visa, Citibank, and Colorado College debts were nonetheless valued and listed under the category of marital debts assigned to defendant.\nFollowing the 4 August 2000 hearing on defendant\u2019s motion for new trial or amendment of the judgment, the trial court entered its second amended equitable distribution judgment in an effort to clarify its treatment of the debts. The trial court\u2019s original finding of the total value of all marital debts, including the Wachovia Visa, Citibank, and Colorado College debts remained unchanged. Therefore, it is clear from both the trial court\u2019s original judgment and second amended judgment that it treated those debts as divisible property, in that they were classified as part of the marital debts to be distributed.\nHowever, in its second amended judgment, the trial court did not list the paid debts in its finding of debts to be distributed to defendant, but stated instead that debts which defendant had paid were either subtracted from the assets distributed to him, or the fact that defendant paid them was considered as a distributional factor. The trial court was well within its discretion to treat defendant\u2019s post-separation payment on the marital debts in this manner.\nAs part of this argument, defendant further contends the trial court did not consider the debts as marital property because it treated them separately and failed to include them in the \u201cnet marital estate.\u201d During the 4 August 2000 hearing on defendant\u2019s motion for new trial or amendment of the judgment, the trial court explained that it elected to first value and distribute all marital assets, and second, to value and distribute all marital debts. We see no reason why the trial court cannot account for and distribute the marital assets in one step, then account for and distribute the marital debts in a second step, so long as all marital property and debts are being valued and distributed in a manner which the court determines to be equitable. The law simply requires that the marital debt be valued and distributed; the manner in which the trial court elects to apportion those debts is within its sound discretion. See Smith, 111 N.C. App. at 510, 433 S.E.2d at 226. These arguments are overruled.\nBy his fourth assignment of error, defendant claims the trial court erred in failing to order an unequal division of the marital estate in favor of defendant after it found an unequal division in his favor would be equitable. We likewise reject this argument. In finding of fact number eleven, the trial court did find that an unequal division of the marital property in favor of defendant would be equitable. The trial court did, in fact, award an unequal division of the marital property in defendant\u2019s favor. In its second amended judgment, defendant received $110,484.32 of the marital property after the trial court subtracted $2,400.00 in marital debt assigned to defendant. Plaintiff received $91,162.18 of the marital property and $7,400.00 in debt. Although defendant argues he did not receive an unequal division in his favor considering the debts and mortgage payments which the court properly considered as distributional factors, such factors are merely items which the court considers in determining an equitable distribution, and are not valued for purposes of determining the net marital estate to be divided. See N.C. Gen. Stat. \u00a7 50-20(c).\nMoreover, the fact that the final judgment was not significantly in defendant\u2019s favor does not constitute an abuse of the trial court\u2019s discretion. As the trial court noted at the 4 August 2000 hearing, although the unequal division was probably not to the extent desired by defendant, \u201cit\u2019s not overwhelming in [defendant\u2019s] favor .... It\u2019s not overwhelming in [plaintiff\u2019s] favor.... [I]t was a little more in his favor . . . but not a great deal.\u201d We discern no abuse of discretion in the trial court\u2019s judgment.\nFinally, defendant includes in his heading to argument two in his brief the statement that the trial court erred in failing to include as divisible property the fair market rental value of the marital residence. However, defendant fails to set forth any argument or authority in support of this assertion, and it is therefore deemed abandoned. N.C.R. App. P. 28(b)C5).\nAffirmed.\nJudges McGEE and BRYANT concur.",
        "type": "majority",
        "author": "HUNTER, Judge."
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    ],
    "attorneys": [
      "Kelly & Rowe, P.A., by E. Glenn Kelly, for plaintiff-appellee.",
      "Robert E. Riddle, PA, by Robert E. Riddle, for defendant-appellant."
    ],
    "corrections": "",
    "head_matter": "DEBORAH W. HAY, Plaintiff v. EDWARD C. HAY, JR., Defendant\nNo. COA 01-187\n(Filed 19 February 2002)\n1. Divorce\u2014 equitable distribution \u2014 post-separation mortgage payments \u2014 distributional factor\nThe trial court did not err by failing to give an equitable distribution defendant a dollar for dollar credit for post-separation mortgage payments and did not overrule an earlier judge where the earlier judge\u2019s order requiring continuation of the payments did not state an intent to grant a credit, that judge was without authority to conclusively determine equitable distribution matters on the issues before him, and the second court had discretion to consider payments made to preserve the marital estate as a distributional factor rather than giving defendant a credit. N.C.G.S. \u00a7 50-20(c)(lla).\n2. Divorce\u2014 equitable distribution \u2014 post-separation mortgage payments \u2014 appreciation not divisible property\nThe trial court did not err in an equitable distribution action by not considering post-separation mortgage payments as divisible property. Appreciation resulting from the activities or actions of one spouse is not treated as divisible property under N.C.G.S. \u00a7 50-20(b)(4)a, and it was within this trial court\u2019s discretion to treat post-separation mortgage payments made to preserve the marital estate as a distributional factor. Moreover, defendant\u2019s mortgage payments have not increased the marital debt, financing charges, or interest on the marital debt and N.C.G.S. \u00a7 50-20(b)(4)d has no application.\n3. Divorce\u2014 equitable distribution \u2014 debts paid during separation \u2014 property to be divided\nThe trial court did not err in a equitable distribution action in its treatment of debts incurred during the marriage and paid by defendant following the separation. The trial court in its discretion properly considered the debts as property to be divided, taking into account as a distributional factor defendant\u2019s payments. The law simply requires that the marital debt be valued and distributed; the manner in which the court elects to apportion those debts is within its sound discretion.\n4. Divorce\u2014 equitable distribution \u2014 unequal division\u2014 debts \u2014 consideration of\nThe trial court did not abuse its discretion in an equitable distribution action in its unequal division of the marital estate where the debts and mortgage payments to which defendant pointed in arguing that he did not receive an unequal division in his favor are merely factors the court considered in determining an equitable distribution, and are not valued for purposes of determining the net marital estate to be divided.\nAppeal by defendant from judgments entered 3 July 2000, 19 July 2000 and 16 August 2000 by Judge Danny E. Davis in Buncombe County District Court. Heard in the Court of Appeals 6 December 2001.\nKelly & Rowe, P.A., by E. Glenn Kelly, for plaintiff-appellee.\nRobert E. Riddle, PA, by Robert E. Riddle, for defendant-appellant."
  },
  "file_name": "0649-01",
  "first_page_order": 679,
  "last_page_order": 688
}
