{ "id": 4343254, "name": "DENISE H. BARTON, Plaintiff v. JOHN S. BARTON, Defendant", "name_abbreviation": "Barton v. Barton", "decision_date": "2011-09-06", "docket_number": "No. COA10-1160", "first_page": "235", "last_page": "252", "citations": [ { "type": "official", "cite": "215 N.C. App. 235" } ], "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": "607 S.E.2d 674", "category": "reporters:state_regional", "reporter": "S.E.2d", "case_ids": [ 12632351 ], "year": 2005, "pin_cites": [ { "page": "676", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/se2d/607/0674-01" ] }, { "cite": "560 S.E.2d 229", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "231", "parenthetical": "citation and internal quotations omitted" } ], "opinion_index": 0 }, { "cite": "149 N.C. App. 194", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9126498 ], "year": 2002, "pin_cites": [ { "page": "198", "parenthetical": "citation and internal quotations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/149/0194-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 50-20.1", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "pin_cites": [ { "page": "(d)" }, { "page": "(a)(2)" }, { "page": "(d)" } ], "opinion_index": 0 }, { "cite": "561 S.E.2d 571", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2002, "pin_cites": [ { "page": "577", "parenthetical": "internal citations omitted" } ], "opinion_index": 0 }, { "cite": "149 N.C. App. 723", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 9131533 ], "year": 2002, "pin_cites": [ { "page": "733", "parenthetical": "internal citations omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/149/0723-01" ] }, { "cite": "325 S.E. 2d 260", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 14, "year": 1985, "pin_cites": [ { "page": "270" }, { "page": "378" }, { "page": "267" }, { "page": "377" }, { "page": "267" }, { "page": "382" }, { "page": "270" }, { "page": "382-83" }, { "page": "270" }, { "page": "382" }, { "page": "270" }, { "page": "382-83" }, { "page": "270" } ], "opinion_index": 0 }, { "cite": "72 N.C. App. 372", "category": "reporters:state", "reporter": "N.C. 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App. 372, 325 S.E. 2d 260 (1985)" } ], "opinion_index": 0, "case_paths": [ "/nc-app/88/0285-01" ] }, { "cite": "698 S.E.2d 680", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 2010, "pin_cites": [ { "page": "688" } ], "opinion_index": 0 }, { "cite": "327 S.E.2d 910", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "pin_cites": [ { "page": "916" } ], "opinion_index": 0 }, { "cite": "74 N.C. App. 144", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523505 ], "year": 1985, "pin_cites": [ { "page": "154" } ], "opinion_index": 0, "case_paths": [ "/nc-app/74/0144-01" ] }, { "cite": "374 S.E.2d 376", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1988, "pin_cites": [ { "page": "378", "parenthetical": "quoting McLeod v. McLeod, 74 N.C. App. 144, 154, 327 S.E.2d 910, 916 (1985)" } ], "opinion_index": 0 }, { "cite": "323 N.C. 543", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2563389 ], "year": 1988, "pin_cites": [ { "page": "546", "parenthetical": "quoting McLeod v. McLeod, 74 N.C. App. 144, 154, 327 S.E.2d 910, 916 (1985)" } ], "opinion_index": 0, "case_paths": [ "/nc/323/0543-01" ] }, { "cite": "508 S.E.2d 300", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1998, "pin_cites": [ { "page": "419-20, 421" }, { "page": "306, 307" } ], "opinion_index": 0 }, { "cite": "131 N.C. App. 411", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 11200836 ], "year": 1998, "opinion_index": 0, "case_paths": [ "/nc-app/131/0411-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 50-21", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "pin_cites": [ { "page": "(b)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 50-20", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 2, "year": 2009, "pin_cites": [ { "page": "(a)" }, { "page": "(b)(1)" } ], "opinion_index": 0 }, { "cite": "409 S.E.2d 749", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 3, "year": 1991, "pin_cites": [ { "page": "751" }, { "page": "751", "parenthetical": "internal citations omitted" }, { "page": "751", "parenthetical": "\"Increases in value to separate property attributable to the financial, managerial, and other contributions of the marital estate are 'acquired' by the marital estate.\"" } ], "opinion_index": 0 }, { "cite": "104 N.C. App. 461", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8522246 ], "weight": 3, "year": 1991, "pin_cites": [ { "page": "465" }, { "page": "464-65" }, { "page": "465" } ], "opinion_index": 0, "case_paths": [ "/nc-app/104/0461-01" ] }, { "cite": "168 N.C. App. 398", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8469889 ], "year": 2005, "pin_cites": [ { "page": "400", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc-app/168/0398-01" ] }, { "cite": "587 S.E.2d 460", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 2003, "pin_cites": [ { "page": "464", "parenthetical": "discussing N.C. Gen. Stat. \u00a7 50-55" } ], "opinion_index": 0 }, { "cite": "161 N.C. App. 137", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8955795 ], "weight": 2, "year": 2003, "pin_cites": [ { "page": "142", "parenthetical": "discussing N.C. Gen. Stat. \u00a7 50-55" } ], "opinion_index": 0, "case_paths": [ "/nc-app/161/0137-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 1-567.14", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 1983, "opinion_index": 0 }, { "cite": "321 S.E.2d 872", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1984, "pin_cites": [ { "page": "880", "parenthetical": "discussing N.C. Gen. Stat. \u00a7 1-567.14 (1983)" }, { "page": "880" } ], "opinion_index": 0 }, { "cite": "312 N.C. 224", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4757161 ], "weight": 2, "year": 1984, "pin_cites": [ { "page": "236", "parenthetical": "discussing N.C. Gen. Stat. \u00a7 1-567.14 (1983)" }, { "page": "236" } ], "opinion_index": 0, "case_paths": [ "/nc/312/0224-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 50-55", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "weight": 3, "year": 2009, "pin_cites": [ { "page": "(a)(1)" }, { "page": "(a)(l)" } ], "opinion_index": 0 }, { "cite": "N.C. Gen. Stat. \u00a7 50-54", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "year": 2009, "pin_cites": [ { "page": "(a)(8)" } ], "opinion_index": 0 }, { "cite": "423 S.E.2d 747", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1992, "pin_cites": [ { "page": "751", "parenthetical": "citation omitted" } ], "opinion_index": 0 }, { "cite": "333 N.C. 148", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 2550326 ], "year": 1992, "pin_cites": [ { "page": "155", "parenthetical": "citation omitted" } ], "opinion_index": 0, "case_paths": [ "/nc/333/0148-01" ] }, { "cite": "N.C. Gen. Stat. \u00a7 50-40", "category": "laws:leg_statute", "reporter": "N.C. Gen. Stat.", "pin_cites": [ { "page": "et seq." } ], "opinion_index": 0 } ], "analysis": { "cardinality": 1083, "char_count": 39318, "ocr_confidence": 0.743, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.14739372836022485 }, "sha256": "f839f348ea8258cd7b657af2800cdb44c55cd14816199013612441cf13e0ddb3", "simhash": "1:1323400667cbbdd4", "word_count": 6201 }, "last_updated": "2023-07-14T18:49:09.394868+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges ELMORE and GEER concur." ], "parties": [ "DENISE H. BARTON, Plaintiff v. JOHN S. BARTON, Defendant" ], "opinions": [ { "text": "BRYANT, Judge.\nJohn and Denise Barton married on 12 April 1997. Prior to the marriage, Denise (plaintiff) had one minor child whose biological father was deceased. John (defendant) adopted the child. On 4 September 2006, the parties separated. On 28 December 2007, plaintiff filed a complaint seeking equitable distribution, and, defendant filed an amended answer and counterclaims for child custody, equitable distribution, and attorney fees. The parties entered into a Consent Order for Child Custody and Child Support, and, on 17 July 2008, the parties entered into a consent order for arbitration on the remaining issues.\nThe arbitration was to be conducted pursuant to the Family Law Arbitration Act, N.C. Gen. Stat. \u00a7 50-40 et seq. The parties preserved their right to appeal errors of law. The arbitration was held beginning 20 November 2008, and by the terms of the consent order, K. Edward Greene was designated as the arbitrator. Both parties were present and represented by counsel; both were permitted to testify, as well as, present exhibits. On 24 April 2009, the arbitrator signed the Arbitration Decision Award. On 28 April 2009, plaintiff filed a motion to confirm the arbitration award in the Wake County District Court. Defendant filed a motion to vacate or modify the award based on what defendant believed to be \u201cevident partiality by the arbitrator\u201d and \u201cevident miscalculation of figures[.]\u201d On 10 May 2010, following a 27 October 2009 hearing on the parties\u2019 motions, the District Court denied defendant\u2019s motion, confirmed the Arbitration Decision Award, and incorporated it into its order. Defendant appeals.\nOn appeal, defendant argues the trial court erred (I) in adopting the arbitration award and (II) in confirming the arbitration award.\nStandard of Review\n\u201c[T]he Uniform Arbitration Act, which as enacted and codified in our statutory law is virtually a self-contained, self-sufficient code . . . [which] provides controlling limitations upon the authority of our courts to vacate, modify or correct an arbitration award.\u201d Nucor Corp. v. General Bearing Corp., 333 N.C. 148, 155, 423 S.E.2d 747, 751 (1992) (citation omitted). \u201cIf the parties contract in an arbitration agreement for judicial review of errors of law in the award, the court shall vacate the award if the arbitrators have committed an error of law prejudicing a party\u2019s rights.\u201d N.C. Gen. Stat. \u00a7 50-54(a)(8) (2009). \u201c[T]he court shall modify or correct the award where ... (1) [t]here is an evident miscalculation of figures or an evident mistake in the description of a person, thing, or property referred to in the award....\u201d N.C. Gen. Stat. \u00a7 50-55(a)(1) (2009).\nIf an arbitrator makes a mistake, either as to law or fact unless it is an evident mistake in the description of any person, thing or property referred to in the award ... it is the misfortune of the party. . . . There is no right of appeal and the Court has no power to revise the decisions of judges who are of the parties\u2019 own choosing. An award is intended to settle the matter in controversy, and thus save the expense of litigation.\nCyclone Roofing Co. v. David M. LaFave Co., 312 N.C. 224, 236, 321 S.E.2d 872, 880 (1984) (discussing N.C. Gen. Stat. \u00a7 1-567.14 (1983)).\nIf a mistake be a sufficient ground for setting aside an award, it opens the door for coming into court in almost every case; for in nine cases out of ten some mistake either of law or fact may be suggested by the dissatisfied party. Thus ... arbitration instead of ending would tend to increase litigation.\nSemon v. Semon, 161 N.C. App. 137, 142, 587 S.E.2d 460, 464 (2003) (discussing N.C. Gen. Stat. \u00a7 50-55) (citing Cyclone Roofing Co., 312 N.C. at 236, 321 S.E.2d at 880). \u201cOn appeal of a trial court\u2019s decision confirming an arbitration award, we accept the trial court\u2019s findings of fact that are not clearly erroneous and review its conclusions of law de novo.\u201d First Union Secs., Inc. v. Lorelli, 168 N.C. App. 398, 400, 607 S.E.2d 674, 676 (2005) (citation omitted).\nI\nDefendant contends the trial court erred in adopting the arbitration award. Specifically, he contests the \u201cmarital property\u201d status conferred upon the following pieces of property: (A) the appreciation in Scott & Stringfellow account #1110; (B) the calculation of the amount of appreciation in Scott & Stringfellow account #1110; (C) the existence of any marital component in Scott & Stringfellow account #1110; (D) the ordered distribution of separate property; (E) the appreciation in value of Lot 8; (F) Countryview Road property; (G) the post-separation diminution in value of a Volvo; (H) a boat and trailer; (I) defendant\u2019s 401(k); (J) post-separation withdrawals from defendant\u2019s 401(k); (K) plaintiffs Prudential 401(k); (L) defendant\u2019s McCIatchy pension plan; (M) defendant\u2019s News and Observer supplemental executive retirement plan; and (N) the SECU IRA #3966.\nIn equitable distribution matters, property is classified as marital or separate depending upon the proof presented as to of the nature of the assets. Ciobanu v. Ciobanu, 104 N.C. App. 461, 465, 409 S.E.2d 749, 751 (1991). \u201c[T]he court shall determine what is the marital property and divisible property and shall provide for an equitable distribution of the marital property and divisible property between the parties . . . .\u201d N.C. Gen. Stat. \u00a7 50-20(a) (2009).\nMarital property is defined under North Carolina General Statutes, section 50-20(b)(l), in part, as follows:\n[A]ll real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned, except property determined to be separate property or divisible property .... It is presumed that all property acquired after the date of marriage and before the date of separation is marital property except property which is separate property ....\nN.C. Gen. Stat \u00a7 50-20(b)(l) (2009). \u201c[M]arital property shall be valued as of the date of the separation of the parties . . . .\u201d N.C. Gen. Stat. \u00a7 50-21(b) (2009). \u201cSeparate property\u201d is defined, in short, as follows:\n[A]ll real and personal property acquired by a spouse before marriage .... The increase in value of separate property and the income derived from separate property shall be considered separate property.\nN.C.G.S. \u00a7 50-20(b)(2) (2009).\nA. Appreciation in the Scott & Stringfellow account #1110 as marital property.\nDefendant argues that the arbitrator erred in conferring the status of marital property upon a $201,937.00 increase in the balance of Scott & Stringfellow account #1110. He contends that prior to the date of separation neither he nor plaintiff took any action which amounted to \u201csubstantial activity.\u201d Thus, the balance increase, which occurred between the date of marriage and the date of separation, was the result of passive rather than active appreciation. We disagree.\nGenerally, property \u201cacquired\u201d by a party before marriage remains that party\u2019s separate property, and increases in value to such separate property are \u201cacquired\u201d by that separate estate but \u201conly to the extent that the increases were passive ....\u201d Increases in value to separate property attributable to the financial, managerial, and other contributions of the marital estate are \u201cacquired\u201d by the marital estate.\nCiobanu, 104 N.C. App. at 464-65, 409 S.E.2d at 751 (internal citations omitted).\nOn appeal, defendant cites O\u2019Brien v. O\u2019Brien, 131 N.C. App. 411, 508 S.E.2d 300 (1998), where this Court upheld a trial court\u2019s determination that despite meetings between both spouses and the wife\u2019s broker, during which the spouses routinely chose between investment alternatives based on the broker\u2019s recommendation, such action did not elevate the status of the appreciation in the account from \u201cpurely passive\u201d appreciation to \u201cactive appreciation\u201d achieved by \u201csubstantial activity.\u201d Id. at 419-20, 421, 508 S.E.2d at 306, 307.\nAt the arbitration hearing, defendant testified that he met with his broker every month or two and that he authorized every trade. Further, defendant\u2019s evidence reflects frequent trading activity in account #1110 during the time of marriage and prior to the date of separation. While defendant presents O\u2019Brien as compelling the conclusion that his involvement in trading the assets within account #1110 did not amount to substantial activity as a matter of law, such is not the case. The O\u2019Brien Court reviewed the trial court order for abuse of discretion and held that, on the issue of active versus passive appreciation, competent evidence supported the trial court\u2019s findings of fact and the findings supported the trial court\u2019s conclusion of law.\nThe arbitrator in the instant case concluded that the appreciation in account #1110, after the date of marriage and prior to the date of separation, was property acquired by the marital estate. There was no evident miscalculation or mistake in the description of the $201,937.00 balance increase in Scott & Stringfellow account #1110. Defendant\u2019s argument is overruled.\nB. The calculation of the appreciation of account #1110\nDefendant contends that the arbitrator erred in concluding that the $201,937.00 balance increase in Scott & Stringfellow account #1110 contained no separate property component. Defendant contends that a $95,546.89 contribution to the account was comprised of funds acquired prior to the marriage and was, thus, separate property. We disagree.\nWhile defendant cites no authority, his argument proposes what is referred to as the source of funds rule: \u201c \u2018each party retainfs] as separate property the amount he or she contributed . . ., plus the increase on that investment due to passive appreciation.\u2019 \u201d McLean v. McLean, 323 N.C. 543, 546, 374 S.E.2d 376, 378 (1988) (quoting McLeod v. McLeod, 74 N.C. App. 144, 154, 327 S.E.2d 910, 916 (1985)). However, this Court has held that where \u201c[the] defendant failed to rebut the presumption under N.C. Gen. Stat. \u00a7 50-20(b)(1) that the funds in the account as of the date of separation were marital. . . the trial court properly classified the entire account balance as marital property.\u201d Stovall v. Stovall,_N.C. App._,_, 698 S.E.2d 680, 688 (2010).\nDefendant\u2019s records reflect $95,546.89 in contributions to Scott & Stringfellow account #1110 during the first quarter of 2003, during the time of marriage. [Def. Exhibit 42], Defendant testified that the funds originated from a brokerage account opened prior to the date of marriage at Wheat First Securities. Defendant\u2019s records show two accounts at Wheat First Securities \u2014 account 4695 and account 4717 \u2014 that were merged during the marriage. Prior to the balance transfer of the surviving account, account 4695, to Scott & Stringfellow account #1110 during 2003, defendant\u2019s records reflect several transfers within account 4695 during the course of the marriage. As in subpart A, given the activity within the Wheat First account, as well as the trading activity that occurred within Scott & Stringfellow account #1110 subsequent to the transfer of the Wheat First balance there was no evident mistake in the arbitrator\u2019s failure to classify the $95,546.89 rollover from Wheat First as separate property. See Ciobanu, 104 N.C. App. at 465, 409 S.E.2d at 751 (\u201cIncreases in value to separate property attributable to the financial, managerial, and other contributions of the marital estate are \u2018acquired\u2019 by the marital estate.\u201d). Therefore, there was no evident miscalculation in including the $95,546.89 contribution to Scott and Stringfellow account #1110 or mistake in the description of the $201,937.00 appreciation in account #1110 as marital property. Defendant\u2019s argument is overruled.\nC. The existence of any marital component in Scott & Stringfellow account #1110\nDefendant contends that any contribution of marital property to Scott & Stringfellow account #1110 can be traced out, exhausting any marital competent. Specifically, defendant contends that 682 shares of stock in McClatchy Newspapers, Inc. was marital property received for his employment during the marriage, and these funds were traced into Scott & Stringfellow account #1110 and completely traced out.\nFor the reasons stated in subparts A and B supra, we overrule this contention.\nD. Distribution of separate property\nDefendant argues that the arbitrator erred in ordering him \u201cto purchase separate assets from [plaintiff]\u201d for a total of $145,000.00. Defendant contends that the arbitrator failed to credit him with providing \u201call the consideration amounting to $291,212.00 for Lots 7 and 8\u201d from his separate funds. We disagree.\n\u201cOur courts have adopted a source of funds approach to distinguish marital and separate contributions to a single asset. Under the source of funds approach, each party retains as separate property the amount he contributed to purchase the property plus passive appreciation in value.\u201d McLean v. McLean, 88 N.C. App. 285, 288-89, 363 S.E.2d 95, 98 (1987) (citing Wade v. Wade, 72 N.C. App. 372, 325 S.E. 2d 260 (1985)).\nIn Wade, this Court reviewed an equitable distribution order in which it was confronted with the question of whether a court could award one spouse\u2019s separate property to the opposing party. Wade, 72 N.C. App. at 382, 325 S.E.2d at 270. The parties\u2019 house had been constructed after the date of marriage on land purchased by the plaintiff prior to the marriage. Id. at 378, 325 S.E.2d at 267. The Court reasoned that though the house was marital property and the land was plaintiff\u2019s separate property, they represented one asset. Id. at 377, 325 S.E.2d at 267. And, because of the presence of the marital property component, the trial court had the authority to include that asset in the distribution of assets. Id. at 382, 325 S.E.2d at 270.\nIf it is necessary in order to achieve an equitable distribution of the marital property that the court award that part of the [plaintiff\u2019s] asset which is separate in character to defendant, then we believe the court has it within its power in equity to do so to the extent necessary so long as plaintiff is reimbursed or given credit for the value of his separate property contribution. That part of the asset which is separate in character should be returned in kind to the person contributing it so far as it is practical, but if it is not practical or equitable to do so, then the court must be permitted to take whatever measures are necessary in distributing the property to achieve equity between the parties.\nId. at 382-83, 325 S.E.2d at 270.\nHere, the arbitrator ordered that defendant pay plaintiff $126,000.00 and $19,000.00 \u2014 a total of $145,000.00 \u2014 for plaintiffs separate portion of the properties located at 6909 Landingham Drive (Lot 7) and 6913 Landingham Drive (Lot 8), respectively. The uncontested findings of fact state that defendant purchased Lot 7 prior to the date of marriage and titled it in the names of himself and plaintiff as joint tenants with right of survivorship. On the date of marriage, Lot 7 was valued at $252,000.00. The arbitrator reasoned that in titling the property in the names of both parties, defendant made a gift to plaintiff of one-half of the property value; therefore, on the date of marriage, plaintiff\u2019s separate property interest in Lot 7 was valued at $126,000.00.\nLot 8 was also purchased by defendant prior to the date of marriage and titled in the names of both parties as tenants in common. On the date of marriage, Lot 8 was valued at $38,000.00. Under the same rationale applied to Lot 7, plaintiff\u2019s separate property interest in Lot 8 was valued at $19,000.00.\nOn the date of separation, the value of Lot 7 had increased to $320,000.00; Lot 8 had increased to $52,500.00. The arbitrator awarded Lot 7 and Lot 8 to defendant as marital property. However, defendant was ordered to pay plaintiff $126,000.00- \u2014 representing the value of plaintiffs separate interest in Lot 7, and $19,000.00 \u2014 representing the value of her separate interest in Lot 8.\nDefendant does not contest the arbitrator\u2019s conclusion that titling the properties in both his and plaintiff\u2019s names prior to the date of marriage represented a gift to plaintiff of one-half of the property interest. And, as Lot 7 and Lot 8 each contained a marital property component on the date of separation, the arbitrator had authority to distribute the properties in the award. See id. at 382, 325 S.E.2d at 270. The arbitrator had the power to distribute the property to defendant, including plaintiffs separate property component, so long as plaintiff was reimbursed for the value of her separate property interest. See id. at 382-83, 325 S.E.2d at 270. Therefore, there was no evident miscalculation or mistake in the description of the property conferred. Defendant\u2019s argument is overruled.\nE. The appreciation in value of Lot 8\nDefendant argues that the arbitrator erred in conferring the status of marital property upon the appreciation of Lot 8. Defendant contends that Lot 8 was purchased prior to the marriage, that no improvements were made to the property, and that \u201c[n]o evidence was presented of any marital contributions, monetary or otherwise, to account for the appreciation of each party\u2019s one half interest. . . .\u201d\nPresuming the accuracy of the argument, defendant does not indicate how he has been prejudiced. The trial court\u2019s order credits both parties with a separate property interest equal to one-half of the value of Lot 8 as of the date of marriage and labels as marital property the appreciation in Lot 8 which occurred during the marriage prior to the date of separation. Defendant was awarded Lot 8 and ordered to pay plaintiff for her separate property interest as well as a distributive award \u201cto equalize the division of marital. . . assets . .. .\u201d Reclassifying the appreciation of Lot 8 from marital to separate property would not diminish or increase either parties\u2019 individual one-half interest in the property and would not change the total value conferred each party pursuant to the trial court order. Therefore, we overrule this argument.\nF. The marital component of the Countryview Road property\nDefendant argues that the arbitrator erred in calculating the appreciation of the marital component of the property located at 6016 Countryview Road. Specifically, defendant contends that the arbitrator incorrectly calculated the fair market value of the Countryview property as of the date of marriage. We disagree.\n\u201cIn an equitable distribution proceeding, the trial court is to determine the net fair market value of the property based on the evidence offered by the parties. There is no single best method for assessing that value, but the approach utilized must be lsound[.]\u2019 \u201d Walter v. Walter, 149 N.C. App. 723, 733, 561 S.E.2d 571, 577 (2002) (internal citations omitted).\nDefendant testified that in August 1996, prior to his marriage, he purchased the property located at 6016 Countryview Road for $58,500.00. Also, prior to his marriage, he invested $6,500.00 in the property and bought out the interest of two partners who helped him refurbish the residence for $10,000.00, bringing his cost for the property to $75,000.00. The arbitrator found the value of the property, as of the date of marriage, to be $75,000.00. This valuation is not the result of an evident miscalculation; therefore, defendant\u2019s argument is overruled. See N.C.G.S. \u00a7 50-55(a)(1); see also, e.g., Semon, 161 N.C. App. 137, 587 S.E.2d 460 (overruling the appellant\u2019s argument where he merely argued that the arbitrator should have used a different methodology in valuing the marital property).\nG. The diminution of value of the Volvo\nDefendant argues that the arbitrator erred in finding that the depreciation in the value of a Volvo was divisible property. Plaintiff retained possession of the vehicle after the date of separation, and, after the parties separated, the vehicle was operated for an additional 40,000 miles. Defendant contends that the $13,000.00 post-separation decrease in the value of the vehicle was not divisible property. We disagree.\n\u201cDivisible property\u201d means . . . [a]ll 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.G.S. \u00a7 50-20(b)(4). \u201cUpon application of a party, the court shall determine what is the marital property and divisible property and shall provide for an equitable distribution of the marital property and divisible property between the parties in accordance with the provisions of this section.\u201d N.C.G.S. \u00a7 50-20(a).\nThe arbitrator found that on the date of separation, the value of the vehicle was $21,000.00. Defendant testified that after the date of separation, he drove the vehicle and had accidents that, on two occasions, resulted in \u201cminimal damage.\u201d The bumper sustained scrapes and the side of the vehicle a dent. At the time of the arbitration hearing, the car had not been repaired. The arbitrator made the uncontested finding that the post-separation decrease in the value of the vehicle was $13,000.00. Because the basis for the Volvo\u2019s decrease in value cannot be attributed to the actions of one spouse and occurred after the date of separation, the arbitrator\u2019s finding that the diminution in value is properly within the definition of divisible property is not an evident miscalculation or mistake in the description. See N.C.G.S. \u00a7\u00a7 50-20(b)(4), 50-55. Defendant\u2019s argument is overruled.\nH. Determination that the boat and trailer were marital property\nDefendant argues that the arbitrator erred in conferring marital property status upon a boat and trailer that were purchased during the marriage. Defendant contends that he withdrew $20,000.00 from Scott & Stringfellow account #1110 for the purchase, and, because account #1110 is his separate property, the boat and trailer remain his separate property.\nBecause of our holdings in subparts A and B above, we overrule defendant\u2019s argument.\nI. Defendant\u2019s McClatchy 401 (7c) plan had a marital component of $55,500.00\nDefendant argues that the arbitrator erred in concluding that his account in the McClatchy Company News and Observer Publishing Company Money Shelter 401(k) Plan retained a $55,500.00 marital component. Defendant contends that his 401(k) plan was not actively managed; therefore, any increase in value which occurred during the marriage was due to passive appreciation. On this basis, defendant contends that his McClatchy Company 401(k) plan is his separate property. We disagree.\nDefendant provided exhibits and testimony in support of his contention that $39,681.57 in marital contributions had been made to the McClatchy Company 401(k) plan. Therefore, defendant\u2019s 401(k) plan account contained a marital property component. Defendant determined that the marital property component of the 401(k) account was worth $19,301.52 on the date of separation and $13,169.02 at the time of that arbitration hearing. However, these figures do not reflect a decline in the value of the investments due solely to market forces. Indeed the 401(k) account appreciated $113,043.22 between the date of marriage and the date of the arbitration hearing. Prior to the date of separation, defendant elected to take early retirement withdrawals from his 401(k) account. The early retirement withdrawals made prior to the parties separation amounted to $42,196.04 but, according to defendant\u2019s calculations, reduced only the marital component of the 401(k) account. His records indicate that in the quarter prior to the first early retirement withdrawal, the balance of the marital property component was $55,308.89. The arbitrator determined that on the date of separation, the value of the marital property component of the McClatchy Company 401(k) plan was $55,500.00.\nHaving established that defendant\u2019s McClatchy Company 401(k) plan contained a marital property component upon the date of separation, defendant does not raise a question of law but contests the valuation of the marital property component. As he does not argue and we do not find that the arbitrator committed an evident miscalculation or evident mistake in the description of the property, defendant\u2019s argument is overruled.\nJ. Postseparation withdrawals from the McClatchy 401K\nDefendant argues that the arbitrator erred in using the rollover of defendant\u2019s McClatchy Company 401(k) plan to two individual retirement accounts (IRAs) held by Scott & Stringfellow as a factor to favor plaintiff in the distribution of assets. However, defendant does not contend how this finding prejudiced him, and we do not address it further.\nK. Plaintiff\u2019s Prudential 401(h) and related debt\nDefendant argues that the arbitrator erred in his determination that plaintiff\u2019s account in the North Carolina State Employee\u2019s 401(k) plan was valued at $58,524.00 on the date of separation. Defendant contends that the marital component of the account was valued at $87,523.38 on the date of separation. We agree.\nMarital property is to be valued as of the date of the separation of the parties. N.C.G.S. \u00a7 50-21(b). At the arbitration hearing, plaintiff testified that she began making contributions to the account during the marriage, thus making all contributions made prior to the date of separation marital property. The arbitrator found that on the date of separation, 4 September 2006, the marital component of plaintiff\u2019s 401(k) account was valued at $58,524.00. However, according to plaintiff\u2019s records, on 4 September 2006, her account balance in the State of North Carolina 401(k) Plan was $87,523.38. No evidence of separate property was presented. The arbitrator awarded plaintiff the balance of the 401(k) plan, $58,524.00. On appeal, plaintiff concedes that the figure the trial court confirmed as plaintiff\u2019s 401(k) account balance on the date of separation included plaintiff\u2019s contributions made after the date of separation, as well as, losses in the account occurring after the date of separation. Given that the trial court ordered defendant to pay plaintiff a distributive award \u201cto equalize the division of marital and divisible assets and debts[,]\u201d we remand this matter for modification of the award of the marital and separate property components of plaintiff\u2019s Prudential 401(k) plan as well as the distributive award payable to plaintiff in a manner consistent with this opinion.\nL. Date of separation value of defendant\u2019s McClatchy Company Pension Plan\nDefendant argues that the arbitrator erred in finding that the value of the joint life portion of defendant\u2019s McClatchy Company Pension Plan account on the date of separation was $20,648.00 and erred in assigning no value to the 100% survivor portion of the account. Defendant contends that on the date of separation, the joint life portion of the account was valued at $18,039.00 and the 100% survivor portion valued at $5,589.00. We agree in part.\nMarital property is to be valued as of the date of the separation of the parties. N.C.G.S. \u00a7 50-21(b). Plaintiff and defendant separated on 4 September 2006. The Arbitration Decision Award confirmed and incorporated by the trial court in its order states that defendant\u2019s McClatchy Company retirement plan account is marital property with a date of separation value of $20,648.00. The record reflects that a $20,648.00 lump sum value of defendant\u2019s joint and survivor annuity through the McClatchy Pension Plan corresponds to a benefit valued as of 1 July 2005. On the same page of the record, the lump sum annuity benefit valued as of 4 September 2006, the date of separation, is listed as $18,039.00. There is no other evidence in the record of a different account valuation as of the date of separation. The finding that the lump sum value of defendant\u2019s McClatchy Pension Plan joint and survivor annuity on the date of separation was $20,648.00 rather than $18,039.00 is an evident mistake. Therefore, we reverse and remand the matter for modification of the trial court\u2019s order to reflect a lump sum annuity benefit valued as of 4 September 2006, the date of separation, in the amount of $18,039.00. See N.C. Gen. Stat. \u00a7 50-55(a)(l). Because the arbitration award as confirmed by the trial court\u2019s order compels defendant to retain plaintiff as the beneficiary of the pension plan, we do not otherwise consider the valuation of the survivor annuity benefit.\nM. The marital component of defendant\u2019s News and Observer supplemental executive retirement plan\nDefendant argues that the arbitrator erred in finding that thirty percent of defendant\u2019s News and Observer Supplemental Executive Retirement Plan account was marital property. Defendant contends that the fraction used to determine the marital portion of the Executive Retirement Plan account was not in accordance with the directive as set out in N.C. Gen. Stat. \u00a7 50-20.1(d). Defendant asserts that the denominator of the fraction should reflect the duration of defendant\u2019s employment with the News and Observer from 1977 through 2000, rather than only the time defendant participated in the plan from 1989 through 2000. We disagree.\nUnder North Carolina General Statutes, section 50-20.1, \u201c[t]he award of vested pension, retirement, or other deferred compensation benefits may be made payable ... (2) [ojver a period of time in fixed amounts by agreement . . . .\u201d N.C. Gen. Stat. \u00a7 50-20.1(a)(2) (2009). \u201cThe award shall be determined using the proportion of time the marriage existed (up to the date of separation of the parties), simultaneously with the employment which earned the vested and nonvested pension, retirement, or deferred compensation benefit, to the total amount of time of employment.\u201d N.C. Gen. Stat. \u00a7 50-20.1(d) (2009). \u201cThis section . . . shall apply to all pension, retirement, and other deferred compensation plans and funds . . . .\u201d N.C.G.S. \u00a7 50-20.1(h). Known as the \u201cfixed percentage method,\u201d the Court has interpreted the description of the denominator in section 50-20.1(d) as \u201cbeing the total amount of time the employee spouse is employed in the job which earned the vested pension or retirement rights.\u201d Gagnon v. Gagnon, 149 N.C. App. 194, 198, 560 S.E.2d 229, 231 (2002) (citation and internal quotations omitted).\nDefendant began working for the McClatchy Company on 2 May 1977. Defendant testified that on 15 December 1989, he was admitted to participate in the News and Observer Supplemental Executive Retirement Plan, a non-qualified retirement plan funded entirely by the News and Observer. The plan had no formal service requirement for plan entry. Defendant testified that he believed his entry into the plan was intended as \u201cgolden handcuffs,\u201d \u201cgranted to [defendant] to retain [him] as an employee at the News & Observer.\u201d The arbitrator determined that the award was to be premised upon the time the marriage existed (simultaneous with the employment that earned the benefit) \u2014 34 months, as compared to the amount of time defendant participated in the retirement plan (from 15 December 1989 until 26 February 2000) \u2014 -123 months. Acknowledging that this is a non-qualified plan with no formal service requirement or qualification for plan entry and participation is conferred on a case-by-case basis, the arbitrator\u2019s determination that the amount of time defendant participated in the News and Observer Supplemental Executive Retirement Plan equals the total amount of time defendant earned the benefit conferred upon him by the plan \u2014 123 months is not an evident mistake. N.C.G.S. \u00a7 50-55(a)(1). Therefore, defendant\u2019s argument is overruled.\nN. The marital component of SECU IRA\nDefendant argues that the arbitrator erred by finding that the value of the Individual Retirement Account (IRA) held. in State Employees\u2019 Credit Union (SECU) account #3966 on the date of separation was $6,525.00. Defendant contends that, like the valuation of the McCatchy Pension Plan discussed in subpart L supra, the arbitrator evidently selected an account value other than the value on the date of separation. However, here, it is not evident that the value reflected for account #3966 at the date of separation was a mistake.\nDefendant testified that he participated in a defined benefit plan that was valued as a lump sum and rolled over to an IRA held by the SECU in account #3966. The amount rolled into the IRA was $109,425.00. Defendant testified that most of the property was separate. However, he worked for eight-and-a-half months during his marriage to accrue benefits under the defined benefit plan; therefore, the account balance rolled into account #3966 contained some component of marital property. Defendant testified that the amount of his required minimum distribution, calculated from the balances of two IRAs and a 401(k) plan, was deducted entirely from SECU account #3966. Defendant\u2019s evidence details both the calculation of the required minimum distribution as well as the deduction from the SECU account and indicates that on 30 June 2005 the balance of account #3966 was $109,425.08. Following the separation of the parties on 4 September 2006, account #3966 was valued at $55,461.84. Defendant testified that the account was \u201ctotally deleted\u201d at the time of the arbitration hearing, but, on 1 July 2005, the marital component of the account was $6,525.00. The arbitrator\u2019s determination that defendant\u2019s required minimum distribution did not reduce the marital property component of account #3966, valued at $6,525.00, was not an evident mistake. N.C.G.S. \u00a7 50-55(a)(1). Therefore, defendant\u2019s argument is overruled.\nII\nDefendant argues that the trial court erred in adopting the arbitration decision award because of the aforementioned asserted errors. However, while we reverse and remand this matter to the Wake County District Court for modification of two portions of the court\u2019s order, defendant does not argue nor do we find that the arbitrator or the trial court committed an error of law prejudicing defendant\u2019s rights, providing a basis to vacate the order. See N.C.G.S. 50-54(a)(8). Therefore, we overrule defendant\u2019s argument.\nAffirmed in part; reversed in part; and remanded.\nJudges ELMORE and GEER concur.", "type": "majority", "author": "BRYANT, Judge." } ], "attorneys": [ "Tharrington Smith, LLP, by Alice C. Stubbs, H. Suzanne Buckley, and Steve Mansbery, for plaintiff-appellee.", "Smith Debnam Narron Drake Saintsing & Myers, L.L.P., by Max R. Rod\u00e9en, for defendant-appellant." ], "corrections": "", "head_matter": "DENISE H. BARTON, Plaintiff v. JOHN S. BARTON, Defendant\nNo. COA10-1160\n(Filed 6 September 2011)\n1. Divorce \u2014 equitable distribution \u2014 arbitration award\u2014 appreciation in account\nThe increase in the balance of a couple\u2019s account between marriage and separation was active rather than passive, and the trial court did not err by adopting an arbitration award that found the appreciation to be marital.\n2. Divorce \u2014 equitable distribution \u2014 marital property\u2014 account contribution\nA contribution to an account held to be marital was not separate property, given the account activity that occurred during the marriage.\n3. Divorce \u2014 equitable distribution \u2014 stock account \u2014 tracing contribution\nThe Court of Appeals rejected an argument in an equitable distribution case that the contribution of stock to an account could be traced out and would exhaust any marital component of the account.\n4. Divorce \u2014 equitable distribution \u2014 separate assets \u2014 purchase ordered\nAn arbitrator did not err in an equitable distribution action by ordering defendant to purchase separate assets from plaintiff where real estate was awarded to defendant as marital property and defendant was ordered to pay plaintiff the value of plaintiff\u2019s separate interest.\n5. Divorce \u2014 equitable distribution \u2014 classification of property as marital \u2014 no prejudice\nAn argument concerning the classification of the appreciation of real estate as marital property was overruled where reclassifying the appreciation would not diminish or increase either party\u2019s interest or change the total value conferred on each party.\n6. Divorce \u2014 equitable distribution \u2014 appreciation of real property\nThe arbitrator did not miscalculate the appreciation of real property in an equitable distribution action where defendant contended that the arbitrator incorrectly valued the property at the date of the marriage. The valuation was not the result of an evident miscalculation.\n7. Divorce \u2014 equitable distribution \u2014 depreciation of car\nThe arbitrator in an equitable distribution action did not err by finding that the depreciation in the value of a car was divisible property. The basis for the decrease in value could not be attributed to the actions of one spouse and occurred after the date of separation.\n8. Divorce \u2014 equitable distribution \u2014 marital property \u2014 boat and trailer\nThe arbitrator did not err in an equitable distribution action by conferring marital property status upon a boat and trailer that were purchased during the marriage.\n9. Divorce \u2014 equitable distribution \u2014 marital property\u2014 401(k)\nThe arbitrator did not err in an equitable distribution action by concluding that defendants 401(k) account retained a marital component. Defendant did not raise a question of law but contested the valuation of the marital property component. He did not argue and the appellate court did not find that the arbitrator committed an evident miscalculation or evident mistake in the description of the property.\n10.Divorce \u2014 equitable distribution \u2014 arbitrator\u2019s finding \u2014 no prejudice\nDefendant\u2019s contention that an arbitrator erred in an equitable distribution action in the use of a 401(k) plan in the distribution of assets was not addressed where defendant did not contend that the finding prejudiced him.\n11. Divorce \u2014 equitable distribution \u2014 arbitrator\u2019s award value of 401 (k) \u2014 remanded\nIn an equitable distribution action, the confirmation of an arbitrator\u2019s award was remanded where plaintiff conceded that the value of her 401(k) confirmed by the trial court included contributions made after the date of separation, as well as losses occurring after separation.\n12. Divorce \u2014 equitable distribution \u2014 marital property \u2014 date of valuation\nMarital property is to be valued on the date of separation of the parties; in this case, an equitable distribution action was remanded where there was an evident mistake in valuation of a pension plan joint and survivor annuity.\n13. Divorce \u2014 equitable distribution \u2014 marital property\u2014 retirement plan\nThe arbitrator did not err in an equitable distribution action in the calculation of the marital portion of an executive retirement plan.\n14. Divorce \u2014 equitable distribution \u2014 marital property \u2014 IRA\nThe arbitrator in an equitable distribution case did not err in determining the value of the marital portion of an IRA.\n15. Divorce \u2014 equitable distribution \u2014 arbitration award\u2014 remanded for modification\nWhile an arbitration decision in an equitable distribution case was remanded for modification, there was no error prejudicing defendant\u2019s rights and providing a basis to vacate the order.\nAppeal by defendant from order entered 18 May 2010 by Judge Anna Worley in Wake County District Court. Heard in the Court of Appeals 23 February 2011.\nTharrington Smith, LLP, by Alice C. Stubbs, H. Suzanne Buckley, and Steve Mansbery, for plaintiff-appellee.\nSmith Debnam Narron Drake Saintsing & Myers, L.L.P., by Max R. Rod\u00e9en, for defendant-appellant." }, "file_name": "0235-01", "first_page_order": 245, "last_page_order": 262 }