{ "id": 8359921, "name": "E. D. ELDRANGE DRAUGHON v. LOUISE BILL DRAUGHON", "name_abbreviation": "Draughon v. Draughon", "decision_date": "1986-09-16", "docket_number": "No. 8612DC228", "first_page": "738", "last_page": "742", "citations": [ { "type": "official", "cite": "82 N.C. App. 738" } ], "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": "335 S.E. 2d 316", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1985, "opinion_index": 0 }, { "cite": "314 N.C. 543", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4689381, 4687407, 4695924, 4688661, 4687388 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/314/0543-04", "/nc/314/0543-05", "/nc/314/0543-03", "/nc/314/0543-02", "/nc/314/0543-01" ] }, { "cite": "331 S.E. 2d 266", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 4, "year": 1985, "pin_cites": [ { "page": "270" }, { "page": "272" } ], "opinion_index": 0 }, { "cite": "75 N.C. App. 414", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8526019 ], "weight": 3, "year": 1985, "pin_cites": [ { "page": "419" }, { "page": "422" } ], "opinion_index": 0, "case_paths": [ "/nc-app/75/0414-01" ] }, { "cite": "288 S.E. 2d 805", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1982, "opinion_index": 0 }, { "cite": "304 N.C. 725", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8571202, 8571266, 8571300, 8571179, 8571230 ], "year": 1982, "opinion_index": 0, "case_paths": [ "/nc/304/0725-02", "/nc/304/0725-04", "/nc/304/0725-05", "/nc/304/0725-01", "/nc/304/0725-03" ] }, { "cite": "282 S.E. 2d 529", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1981, "opinion_index": 0 }, { "cite": "54 N.C. App. 94", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8520307 ], "year": 1981, "opinion_index": 0, "case_paths": [ "/nc-app/54/0094-01" ] }, { "cite": "180 S.E. 2d 450", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1971, "opinion_index": 0 }, { "cite": "11 N.C. App. 133", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8553167 ], "year": 1971, "opinion_index": 0, "case_paths": [ "/nc-app/11/0133-01" ] }, { "cite": "333 S.E. 2d 488", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "opinion_index": 0 }, { "cite": "314 N.C. 331", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 4686660, 4695653, 4695471, 4689718, 4689592 ], "year": 1985, "opinion_index": 0, "case_paths": [ "/nc/314/0331-03", "/nc/314/0331-01", "/nc/314/0331-05", "/nc/314/0331-02", "/nc/314/0331-04" ] }, { "cite": "327 S.E. 2d 910", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "year": 1985, "pin_cites": [ { "page": "918" }, { "page": "916-17" } ], "opinion_index": 0 }, { "cite": "74 N.C. App. 144", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8523505 ], "weight": 2, "year": 1985, "pin_cites": [ { "page": "156" }, { "page": "154" } ], "opinion_index": 0, "case_paths": [ "/nc-app/74/0144-01" ] } ], "analysis": { "cardinality": 527, "char_count": 10739, "ocr_confidence": 0.738, "pagerank": { "raw": 3.4313122644216393e-07, "percentile": 0.8791614877933038 }, "sha256": "0fdd5e8da062c0d5c7dbe92780e25abf229c7808b43e9842e46e31044d5f3c84", "simhash": "1:e5e5f04b36e7a75c", "word_count": 1784 }, "last_updated": "2023-07-14T22:29:18.916973+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judges Wells and Eagles concur." ], "parties": [ "E. D. ELDRANGE DRAUGHON v. LOUISE BILL DRAUGHON" ], "opinions": [ { "text": "ARNOLD, Judge.\nDefendant contends that the trial court erred in not classifying certain money as separate property pursuant to G.S. 50-20(a) and (b). She submits that the court should have found that during the marriage, she acquired separate property in the sum of $8,983.37 from her mother which was used to help pay the mortgage on the family residence held as tenants by the entirety, but that the sum remained separate property. We do not agree.\nUnder the Equitable Distribution Act, separate property includes all real and personal property acquired by a spouse by bequest, devise, descent, or gift during marriage and this property remains separate property when exchanged for other property \u201cregardless of whether the title is in the name of the husband or wife or both unless a contrary intention is expressly stated in the conveyance.\u201d G.S. 50-20(b)(2). In McLeod v. McLeod, 74 N.C. App. 144, 156, 327 S.E. 2d 910, 918, cert. denied, 314 N.C. 331, 333 S.E. 2d 488 (1985), this Court in construing G.S. 50-20(b)(2) held that \u201c[w]hen property titled by the entireties is acquired in exchange for separate property the conveyance itself indicates the \u2018contrary intention\u2019 to preserving separate property required by the statute.\u201d Moreover, the Court stated that \u201cwhere a spouse furnishing consideration from separate property causes property to be conveyed to the other spouse in the form of tenancy by the en-tireties, a presumption of a gift of separate property to the marital estate arises, which is rebuttable by clear, cogent, and convincing evidence.\u201d Id. 74 N.C. App. at 154, 327 S.E. 2d at 916-17.\nIn the present case, the trial court concluded that the $8,983.37 became marital property upon its use to pay the mortgage. Defendant contends that the use of this sum to pay the mortgage is distinct from buying a residence, and that since McLeod concerned the purchase of a home, that case is not controlling here. We disagree. Defendant also notes that she testified she never intended the mortgage payment to constitute a gift of her inheritance to her husband or the marital estate. She contends this testimony was sufficient to rebut the presumption of a gift of separate property to the marital estate by clear, cogent, and convincing evidence. This evidence may be clear and cogent, but evidently it was not convincing to the trial court. The credibility of a witness is a matter to be resolved by the trier of fact. Laughter v. Lambert, 11 N.C. App. 133, 180 S.E. 2d 450 (1971). Upon appellate review of a case heard without a jury the trial court\u2019s findings of fact are conclusive on appeal if there is evidence to support them, even though evidence might sustain findings to the contrary. Dixon v. Kinser and Kinser v. Dixon, 54 N.C. App. 94, 282 S.E. 2d 529 (1981), disc. rev. denied, 304 N.C. 725, 288 S.E. 2d 805 (1982). We have reviewed the evidence and find that it supports the court\u2019s findings. The court properly concluded, based upon the case law, that defendant\u2019s sum was a gift to the marital estate in the form of a mortgage payment.\nDefendant also contends that the trial court erred in failing to place a net value upon plaintiffs business in its valuation of the marital property as required by G.S. 50-20(c). The trial court made the following findings of fact concerning plaintiffs business:\nIX. That the Court received into evidence testimony concerning the valuations of the landscaping business owned and operated by the plaintiff. The business is a sole proprietorship and was started about 2 years ago. The plaintiff owns certain tangible equipment used in the business, to wit: a 1979 Massey Ferguson tractor, a Super Pan, a York Rake, a Drag Blade, a 1972 % ton dump truck, a 1977 Ford Van, a 1967 Fairlane 500 Ranchero, and hand tools. This equipment has a net value, as established by the Court, as shown on the attached Exhibit \u201cA,\u201d adopted herein by reference. B.. D. Landscaping is operated by the plaintiff who performs the labor, employs additional part time labor, and is solely responsible for the direction and success of the business. B. D. Landscaping has a handful of customers for whom it landscapes yards mainly for new houses. Aside from the personal labor and management of the plaintiff, the Court is unable to designate any value to \u201cGood Will\u201d of the business and as a result, the Court is unable to place a value on the business except for the tools and equipment owned by plaintiff and used in his business.\nThe trial court did establish a net value for the business equal to the net value of the tangible assets of that business. Therefore, defendant is correct in asserting that the court improperly valued the business.\nThis Court addressed the issue of the proper valuation of a solely owned professional practice in Poore v. Poore, 75 N.C. App. 414, 331 S.E. 2d 266, disc. rev. denied, 314 N.C. 543, 335 S.E. 2d 316 (1985). Though that case concerned a dental practice, the valuation methods discussed and approved in that opinion are applicable to the present issue of the proper valuation of a solely owned business. See J. McCahey, Valuation and Distribution of Marital Property, Sec. 22.08 (1985).\nWe first note that the task of a reviewing court on appeal is to determine whether the approach used by the trial court reasonably approximated the net value of the business interest. Poore, 75 N.C. App. at 419, 331 S.E. 2d at 270. If it does, the valuation will not be disturbed. Id. In Poore, we stated that\nIn ordering a distribution of marital property, a court should make specific findings regarding the value of a spouse\u2019s professional practice and the existence and value of its goodwill, and should clearly indicate the evidence on which its valuations are based, preferably noting the valuation method or methods on which it relied. On appeal, if it appears that the trial court reasonably approximated the net value of the practice and its goodwill, if any, based on competent evidence and on a sound valuation method or methods, the valuation will not be disturbed.\n75 N.C. App. at 422, 331 S.E. 2d at 272.\nIn the present case, defendant\u2019s evidence tends to show that plaintiffs business had goodwill and that the value of the business, including its goodwill, was $61,500.00. This valuation was prepared by an accounting firm using a capitalization of earnings method. Plaintiffs evidence as to the value of his business consisted of his testimony regarding the history of the business and the condition and value of the tangible assets at the date of separation. From this evidence the trial court concluded that the net value of the business equaled the net value of the business\u2019s tangible assets. However, we are unable to determine from the court\u2019s findings what method it used in determining that the business had no goodwill and whether their determination was based on a sound method of valuation. We must remand this cause for further findings as to the value of plaintiffs business.\nDefendant further contends that the trial court erred in failing to place a net value on plaintiffs tools and on plaintiffs life interest in real property, thereby failing to make an equitable distribution of the marital property. We find it necessary to also remand these issues for further findings.\nThe trial court did place a net value of $1,000.00 on plaintiffs tools. Defendant again apparently asserts that the court\u2019s findings were improper and not supported by the evidence. We agree. Defendant testified that plaintiffs tools were worth $8,295.00. Plaintiff testified that his tools in his possession were worth between $1,200.00 and $1,500.00 and that tools in his wife\u2019s possession were worth between $500.00 and $600.00. The court\u2019s finding that the net value of the tools was $1,000.00 is not supported by the evidence and was error.\nPlaintiff testified on cross-examination that he owned a life estate interest in, a house and lot, and that the fair market rental value of the house was $250.00 per month. Evidence indicated that plaintiffs son owns the property in fee and has been receiving the rents from the property in the sum of $150.00 per month. The trial court failed to determine whether the life estate was marital property or separate property. This failure to make such a determination was error. G.S. 50-20(b).\nFor the reasons set forth above, we vacate the order for equitable distribution of the marital property, and we remand this cause for further proceedings not inconsistent with this opinion.\nVacated and remanded.\nJudges Wells and Eagles concur.", "type": "majority", "author": "ARNOLD, Judge." } ], "attorneys": [ "Blackwell, Swaringen & Russ, by John Blackwell, Jr. and Margaret R. Russ, for plaintiff appellee.", "Harris, Sweeny & Mitchell, by Ronnie M. Mitchell, for defendant appellant." ], "corrections": "", "head_matter": "E. D. ELDRANGE DRAUGHON v. LOUISE BILL DRAUGHON\nNo. 8612DC228\n(Filed 16 September 1986)\n1. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 wife\u2019s inheritance used to pay mortgage \u2014 gift\u2014no separate property\nThe trial court did not err in determining that a sum of nearly $9,000 inherited by defendant from her mother and used to help pay the mortgage on the family residence held as tenants by the entirety was not separate property but constituted a gift to the marital estate, notwithstanding defendant testified that she never intended the mortgage payment to constitute a gift to her husband or to the marital estate.\n2. Divorce and Alimony 8 30\u2014 equitable distribution \u2014 sole proprietorship of husband-valuation by court improper\nIn a hearing to determine distribution of marital property, the trial court improperly valued plaintiffs business, a landscaping business which was a sole proprietorship, by determining that the net value of the business equaled the net value of the business\u2019s tangible assets without giving any consideration to the goodwill of the business.\n3. Divorce and Alimony \u00a7 30\u2014 equitable distribution \u2014 husband\u2019s tools \u2014 valuation by court improper\nIn a hearing to determine distribution of marital property, the net value placed by the trial court on plaintiffs tools was unsupported by the evidence, and the court erred in failing to determine whether a house and lot was marital property or separate property.\nAppeal by defendant from Hair, Judge. Order entered 27 November 1985 in District Court, Cumberland County. Heard in the Court of Appeals 26 August 1986.\nPlaintiff instituted this action seeking an absolute divorce and an equitable distribution of the marital property. Judgment of divorce was entered on 3 June 1985. Upon hearing on the matter of the distribution of the marital property, the trial court ordered an equal distribution of the marital property. From the judgment of the trial court concerning the property distribution, defendant appeals.\nBlackwell, Swaringen & Russ, by John Blackwell, Jr. and Margaret R. Russ, for plaintiff appellee.\nHarris, Sweeny & Mitchell, by Ronnie M. Mitchell, for defendant appellant." }, "file_name": "0738-01", "first_page_order": 766, "last_page_order": 770 }